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Friday, July 29, 2016 Vol. 11 No. 293
CONSTITUENT ASSEMBLY CHEAPER, FASTER THAN CONSTITUTIONAL CONVENTION
Duterte drops Con-con for Con-ass–Alvarez
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By Jovee Marie N. dela Cruz
resident Duterte now wants Congress to constitute itself into a constituent assembly (Con-ass) to amend the 1987 Constitution, House Speaker Pantaleon D. Alvarez said on Thursday.
INSIDE
All-new Toyota Fortuner 2.8 V 4X4: Still undisputed
Alvarez said Mr. Duterte told him and Senate President Aquilino L. Pimentel III that he prefers the “cheaper” Conass over the constitutional convention (Con-con) to jump-start the country’s shift to a federal form of government.
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@joveemarie
The Speaker made the announcement on the sidelines of his meeting with the Management Association of the Philippines, where he made a pitch for federalism. “We may convene as Con-ass within
₧7B The budget needed for a constitutional convention
a year but Congress will first prioritize the passage of the 2017 budget,” he said. “There will be no conflict with the Senate’s and House’s primary role of enacting laws. We can work around our See “Con-con,” A2
E1
Montero Sport headto-head Challenge goes to Pampanga
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Miss U hosting gets green light from Duterte By Ma. Stella F. Arnaldo
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Special to the BusinessMirror
BEVY of forTEO: “The eign beauties government w i l l be deis not going to spend a single scending on the major centavo on this. tourism destinations We have a lot of in the country when private-sector [individuals and the Miss Universe enterprises] beauty contest is held interested in the Miss Universe in January 2017. beauty pageant.” In a hastily called press conference on Thursday, Tourism Secretary Wanda Corazon T. Teo said “it’s 100-percent [go]” for the popular beauty pageant, which will be telecast live around the world on January 30. She added that President Duterte wants the pageant to be held “in the provinces to avoid traffic here [in Metro Manila]. He doesn’t want to inconvenience the people here.” She also said Mr. Duterte will be meeting with the National Security Council to draw up the security plans for the beauty pageant, which will have some 100 contestants from around the world, aside from members of the Miss Universe Organization, Manila organizers, sponsors and other VIP guests. Teo again stressed that “the government is not going to spend a single centavo on this. We have a lot of private-sector [individuals and enterprises] interested in the Miss Universe beauty pageant.” See “Miss U,” A2
‘GOVT-MRTH WAR OVER LRV PURCHASE STILL ON’
chevrolet introduces new sail
market would rebalance more quickly. It won’t be until 2017 before the crude oversupply is gone.” See “Oil,” A12
See “Govt-Mrth,” A2
Exchange in Makati City on Thursday. Asian stock benchmarks were mostly lower on Thursday, as investors digested an upbeat Federal Reserve assessment of the US economy that raised the prospect of further rate hikes. AP/Aaron Favila E2
the secret ingredient in M ecoboost a z d a ford’s
Skyactiv-D: Breaking
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E3
Oil tumbles to three-month low on unexpected crude-supply gain O il dropped to a three-month low in New York, after government data showed that US crude stockpiles unexpectedly climbed last week, halting the longest streak of declines on record. Futures fell as much as 2.8 percent in New York, after crude inventories rose 1.67 million barrels, according to an Energy Information Administration report. Analysts surveyed by Bloomberg had forecast a 2-million-barrel
PESO exchange rates n US 47.1560
decline. Refineries reduced operating rates, which had been at the highest level of the year. US refiners usually don’t begin to curb processing until August, as the summer driving season nears its end. “You should expect further inventory gains, as refinery runs decline,” said Rob Haworth, a senior investment strategist in Seattle at US Bank Wealth Management, which oversees $133 billion of assets. “We all thought the
@lorenzmarasigan
he transportation department might have won the battle on the procurement of 48 new train cars for the Metro Rail Transit (MRT) Line 3, but it has yet to win the war. Cherie Mercado-Santos, the spokesman of the transport agency, said her camp was “elated” with the decision of the Court of Appeals to junk the injunction case filed by MRT Holdings II Inc. (MRTH-II) that sought to stop the government from the P3.76-billion procurement of new light-rail vehicles (LRVs) from a supplier in China. “It is a victory, but it does not totally end there, because we still have a pending case in Singapore,” she told the BusinessMirror. “At least, our procurement of the new trains is now unhampered.” On Wednesday the appellate court held that the petitioner, MRTH-II, failed to prove that it would suffer “grave injustice and irreparable injury” if the government is not prevented from acquiring new train cars from Dalian Locomotive and Rolling Stock of China. The group, led by MRTH-II Chairman Robert John L. Sobrepeña, earlier argued that the loss of MRT Corp.’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 transportation department’s procurement of train cars from Dalian, according to the petitioner, was in contrast to the principle of having a single point of responsibility, which underlays the construction, operation and maintenance of MRT Line 3.
BEARISH MARKET A trader talks on his mobile phone, as he walks in front of the electronic board that shows a graph going south at the Philippine Stock
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By Lorenz S. Marasigan
2.8%
The drop in oil futures in New York
n japan 0.4475 n UK 62.3497 n HK 6.0794 n CHINA 7.0699 n singapore 34.8452 n australia 35.3198 n EU 52.1640 n SAUDI arabia 12.5776
Source: BSP (28 July 2016 )
A2 Friday, July 29, 2016
Con-con. . .
Continued from A1
regular schedules to convene as a Con-ass for the proposed constitutional amendments,” Alvarez added. According to him, the plebiscite for the new Constitution will be included in the midterm elections in 2019. He added that the country’s new leaders under the federal form of government would be elected by 2022. While the President initially preferred the Con-con, Alvarez said the Duterte administration is more inclined to first fund the salary increases of policemen and soldiers. “We have a problem in terms of budget if we choose the Con-con, because the government needs money to implement the President’s promise to increase the salary of our police and military personnel,” he said. The Speaker said Con-ass is “cheaper and faster” than Con-con, which could cost up to P7 billion. “[Budget Secretary Benjamin E.] Diokno said it will be hard for them to allocate P6 billion to P7 billion for the Con-con, but what is important here is the provisions and output—the revised Constitution—is acceptable to the people,” he said. Alvarez said Congress’s annual budget can be allotted for Con-ass. Earlier, President Duterte and Alvarez both pushed for a Concon because they do not want incumbent lawmakers to revise the 1987 Constitution. There are three modes of amending the
Govt-MRTH. . . Continued from A1
When sought for comment, Sobrepeña said his camp has yet to receive a copy of the order of the appellate court, and will still review the possible repercussions of the said decision. But for Santos, the decision of the court to junk the injunction case against the government is an affirmation that her camp is on the right track. “This affirms what we have been doing for the train system. The program to fast track the capacity-augmentation program is included on
BMReports BusinessMirror
Constitution—through Con-ass, Con-con or people’s initiative. Under Con-ass, Congress, through its “constituent power,” constitutes itself into a body and would perform the task of amending the charter. Amending the Constitution via Con-con will require the election of delegates. Registered voters may also launch a petition to change the Constitution. It should be signed by 12 percent, or 6.6 million, of 54.4 million registered voters.
Federalism’s benefits
Alvarez told businessmen that “structural change” is necessary to end intergenerational conflicts and achieve lasting peace, which will allow all Filipinos to enjoy the country’s economic growth. “Through adoption of a federal form of government, the division of national and state powers will be clearly delineated,” he said. Under federalism, Alvarez said the national government can focus on national concerns, particularly defense, foreign policy, national police and monetary policies. “The states, meanwhile, can focus on local concerns by empowering them to adopt tailor-fit solutions to their unique local problems,” Alvarez said. According to the Speaker, the federal system offers “positive business opportunities.” “States will be free from unnecessary bureaucratic restraints from central government while it will be able to focus on their local situation’s competitive advantages; interstate competition will decrease our priority list. But we still have to resolve the case in Singapore,” Santos said. The group of Sobrepeña in 2014 lodged arbitration proceedings Singapore International Arbitration Centre against the government for procuring additional trains despite an existing build-leasetransfer (BLT) agreement with MRTC. MRTC is the corporate owner of the train line. It is a unit of MRT Holdings Inc. The arbitration case in Singapore will determine who has the rights to the capacity expansion for the MRT 3. The case was filed during the term of Transportation Secretary Joseph Emilio A. Abaya. Sobrepeña, in 2014, claimed that the owner-
prices and increase quality of goods and services,” he said. Also, Alvarez added that states will have more freedom to craft and implement specific and tailor-fit economic policies appropriate to their situation. He said the proposed federal government for the country will create 11 to 12 federal states, which could also have their own tax and criminal laws. “Like in America, for example, California and New York have their own taxation and they have independence to manage their economy, to manage their natural resources, their own justice system. Here our states can also create their own laws based on their customs and traditions,” Alvarez added. The lawmaker also said federalism will reduce red tape inimical to business. “Red tapes causes delays and uncertainties, which are bad for business. The current Manila-centric system, insofar as the creation, imposition and interpretation of rules and regulations are concerns,” he said. “Through federalism, by granting more and specific powers to the state governments, the red tape that leads all the way to Manila will be shaved off, thus reducing delays and uncertainties inimical to business,” Alvarez added. Perry L. Pe, president of the Management Association of the Philippines (MAP), backed the proposal to change the country’s form of government. “It’s the devolution to empower the regions as the Speaker said. It is really to
empower all these areas and really to craft their own destiny as he says. It’s the most fantastic feature of the federalism,” Pe said. “Federalism is very healthy, very healthy for business. We will support that as far as the MAP is concerned,” he added. While his group prefers changing the charter via Con-con, Pe said they will still support the decision of President Duterte to convene a Con-ass. “We would rather have the Con-con but the problem is that I believe in their analysis that it is expensive and very time-consuming,” he said. “Also, you heard the Speaker say there’s no guarantee that the people you will elect in a Con-con are not related to the lawmakers,” Alvarez added. Pe said the federal form of government is “fantastic” because each region will now have be able craft their own tax systems. “Other regions could have their own free port. That would be helpful to business.” PDP-Laban Rep. Alfredo B. Benitez of Negros Occidental, author of a resolution calling for Con-ass, said it does not reuqire another “costly and divisive” national elections. “There have been clamor for change in the system of government, shift to a federal form of government; provision of more autonomy and empowerment of the local government; less restrictive economic policies; and other proposals that necessitate in the present Constitution,” Benitez said. “We just need to be transparent with our proposed federal form of government,” he added.
shareholders of MRTC could provide additional trains for MRT 3 at no additional cost to the government, as it invoked MRTC’s legal right to supply the LRVs under the BLT agreement. Before starting the procurement of the new trains, MRTH had already proposed the purchase of new train cars for the train line, but the previous government left it untouched. Under the BLT agreement signed almost two decades ago, the MRTC would only lose its preferential right to supply LRVs in either one of two instances: if it is in breach of its obligation under the contract; or if it consents to the government’s use of LRVs, which were
not provided by the private company. The procurement of the 48 new train cars from Dalian has been mired with controversy, including a graft case against former transportation officials. Sobrepeña also claimed that the new trains were without their own signaling systems, hence, the government’s new responsibility of providing the new cars with communications capacities. So far, out of the 48 train coaches scheduled to be delivered to Manila, not a single LRV has been deployed. These trains were not tested in China, so the government was left without a choice but to have them tested on the tracks of the MRT before being used for commercial operations.
Support for federalism
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Miss U. . .
Continued from A1
She called the news conference to dispel rumors arising from a recent published report (not in the BusinessMirror) that Mr. Duterte said holding the Miss Universe beauty pageant was “not a priority” for his administration, and that he wouldn’t spend money on the project. According to Tourism Undersecretary for Media Affairs Katherine de Castro, the total cost holding the beauty pageant in the Philippines is $11 million (P518.76 million). She said this includes “franchise fee and the production cost.” Some of the interested financiers include Okada Manila, the integrated casino and resort project of Japanese billionaire Kazuo Okada at the Pagcor Entertainment City in Pasay; and the Sy family, who owns the Mall of Asia Arena, where the main pageant is supposed to be held. The tourism chief added that she is just waiting for Malacañang to issue an executive order formalizing the holding of the beauty contest. “Once it is announced that the Miss Universe pageant in 2017 will be held here, everyone will be looking where the Philippines is…I’m sure we’re going to have increased tourist arrivals,” Teo said. She added that the tourism destinations being considered for inclusion in the pageant are Davao, Cagayan de Oro, Boracay, Cebu, Palawan and Vigan. Tourism studies show that being a mainly US production, the Miss Universe pageant is most popular among Americans, than in any other market. The US is consistently the second-largest market of foreign visitors to the Philippines. Of the 5.3 million total visitor arrivals in 2015, the US market accounted for 779,217, which was an increase of 7.8 percent from 2014. American are also the second-largest group of tourist spenders in the country, with some P42.31 billion going into the economy last year.
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Friday, July 29, 2016
A3
Lopez looks to aid miners, farmers via resource devt office
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By Jonathan L. Mayuga
@jonlmayuga
nvironment Secretary Regina Paz L. Lopez has vowed to invest in enterprise development, in partnership with rural communities, through the Natural Resources Development Corp. (NRDC). The NRDC is an attached agency of the Department of Environment and Natural Resources (DENR). It was created by virtue of Executive Order 786, signed on March 19, 1982, by the late strongman Ferdinand E. Marcos. Tasked to undertake business or development projects, NRDC, among others, is mandated to engage in the production of charcoal pig iron and small- and mediumscale steel mills as production of wood for fuel; encourage private sector to engage in reforestation and industrial forestry operations; and ensure a stable market for natural resources-based products by coordinating the production and marketing activities of critical natural resourcesbased products. It is also mandated to promote investment in natural resources-based industries by providing financial, technical and/ or management support/assistance; conduct research and development on natural resources-based products; and engage in the production and marketing of minor forest, aquatic and marine products. Lopez told reporters during the kickoff of her weekly “Meet the Beat” news conference in Quezon City on Wednesday that through NRDC, the DENR can create joint-venture agreements with rural communities to start business ventures anchored on the use and exploitation of the country’s natural resources. “I like business. To my delight, I found out that one of the GOCCs [governmentowned and -controlled corporations] is called Natural Resources Development Corp. We should go into business,” Lopez said. Many people in rural areas continue to experience hunger and poverty, she noted, despite the fact that mining companies are raking in huge profits in mining areas at the expense of the environment and natural resources. Worse, Lopez added, people suffer from environmental degradation, instead of benefiting from mining operations. In Palawan, she said the adverse impact of mining far outweighed its benefits, as far as communities are concerned, with the losses incurred mostly in agriculture, fishing and health. A case in point is the Bicol area, where
people could have benefited more had the area used in small-scale mining had been used for the development of residential areas or ecotourism. Lopez said she was saddened about the plight of poor farmers and fishermen affected by the adverse impact of nickel mining in their incomes and livelihood. An environmental advocate, Lopez suspended the permits of at least four nickel-mining companies since assuming the top DENR post as part of a mining audit that goes beyond the usual technical or physical audit by including in the criteria environmental and social impact. Two of these are in Palawan, the country’s last ecological frontier, Berong Nickel Corp. and Citinickel Development Corp. A week after her appointment to the DENR post, Lopez ordered two large-scale nickel mines operating in Palawan indefinitely suspended in view of the writ of kalikasan issued by the Supreme Court, Executive Order 1, issued by the provincial government of Palawan suspending all mining activities in the province, and the numerous complaints of the people against mining operations. Suspended were Diversified Metals Corp., Benguet Corp., and Nickel Mines Inc. Two other nickel-mining companies have been suspended since 2014. These are Eramen Minerals Inc. and LNL Archiepelago Minerals Inc.—all of which operate in Santa Cruz, Zambales. Just this week, Lopez declared that the $5.9-billion Tampakan Copper-Gold Project, dubbed as potentially Asia’s biggest mining gold-copper mining project in Southern Philippines, would not start mining operations under her watch. Lopez had earlier assured miners of suspended nickel-mining companies help and support, particularly indige-
nous peoples (IPs), whose environment and natural resources were destroyed by mining. She said miners could find jobs in rehabilitation efforts in areas affected by mining operation, such as cleanup of rivers and reforestation of mined-out areas. “[For] people who worked at the mining companies, we will get them involved in rehab. They have families, and they are poor. There is money for rehab. The rivers are silted, farmlands are [destroyed]. The companies are mandated to fix it. So we will use the fund for them to fix it,” she said. According to Lopez, poverty and hunger are strongly felt in areas where mining is prevalent, such as Palawan. She said she want to help the poor by making them entrepreneurs using natural resources as their primary capital, through the various programs of the government. Lopez said she wants to revive the NRDC by lending small capital or entering in a joint-venture agreement with rural communities. “NRDC can do it, which means we can [create] joint venture with IPs. If they lack resources, we can give it,” she said. Lopez said she would ask President Duterte’s approval to start her plan to develop rural enterprises through the NRDC. “If that is allowed, the DENR can be a great tool in poverty alleviation in areas where there are environmental concerns. Business is the way to go. I can feel it,” Lopez said. She added that the DENR would help partners in the implementation of the National Greening Program (NGP) develop NGP sites for ecotourism, adding that she wanted to replicate the success of the La Mesa Nature Reserve, which she said is earning P40 million a year. “I want to replicate that kind of entrepreneurial venture in all our NGP areas. Not just planting of the trees, but doing business, value-adding,” Lopez said. She said rural communities would be the primary beneficiary of such business venture with the DENR through the NRDC. “If we [DENR] can invest in business, then we should and we let the community get the money,” she ended.
I like business. To my delight, I found out that one of the GOCCs [governmentowned and -controlled corporations] is called Natural Resources Development Corp. We should go into business.”—Lopez
South China Sea row won’t affect PHL electronics–Seipi By Catherine N. Pillas
c_pillas29
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he territorial dispute between Manila and Beijing will not reduce shipments of electronics exports to China—the third-largest buyer of Philippine products, according to the Semiconductor and Electronics Industries in the Philippines Inc. (Seipi). Despite the tussle between the Philippines and China over the West Philippine Sea, Seipi said it will not revise its forecast growth of 2 percent to 5 percent for electronic exports this year. “We just had our second-quarter meeting on July 5. The export-growth target this year is still 2 percent to 5 percent. [Revenues could range] between $29.5 billion and $30.35 billion,” Seipi President Dan C. Lachica said. Lachica said the local electronics industry is on track to achieving this target, despite the escalation of tension between the Philippines and China after an international tribunal rejected Beijing’s South China Sea claims. “China is still [our] biggest export destination, but I don’t see the South China Sea issue as a major concern for electronics exports. Demand is nearly inelastic due to the shift in digital economy, and the consequent need for electronics products,” he said. In May data from Seipi showed that shipments to China amounted to $291 million, or 12.9 percent, of $2.26 billion in export
“I don’t see the South China Sea issue as a major concern for electronics exports.”—Lachica receipts from electronics during the period. Hong Kong, a special administrative region of China, is the top export market of Philippine electronics. It accounted for 19.4 percent of electronic and semiconductor export revenues in May. Semiconductors and electronic components are still the country’s top export products, accounting for 48 percent of total export receipts in May, which amounted to $4.7 billion. The industry hauled in export receipts of $28.9 billion in 2015. Earlier, Lachica said new growth areas would allow receipts from electronics exports to breach the $30-billion mark. He said the increase in outward shipments of electronics will be driven by the industry’s shift to electronic-data processing, information and telecommunication electronics, consumer products and automotive electronics. Lachica noted that semiconductor and electronics exports continue to exceed the earnings of the business-process outsourcing sector and overseas Filipino workers.
7-percent growth in second quarter possible—DBS Bank By Bianca Cuaresma @BcuaresmaBM
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he Philippine economy’s growth may approach the 7-percent territory anew in the second quarter of the year should import growth come out robust again in June, an international bank said. In a recent research note on the Philippines’s economic prospects, Singaporebased DBS Bank Group Research said imports could likely put additional boost to the country’s GDP growth. “Given that the surge in domestic demand in first-quarter 2016 seems to be a one-off front-loading ahead of the elections, we had thought that 7-percent GDP growth in the first half of 2016 to be highly unlikely,” the DBS Bank said.
“Yet, going by the May imports data [at 39.3 percent year-on-year], secondquarter 2016 GDP growth is set to be well above our initial estimate of 5.8 percent. If import growth was to come in robust again in June, 7 percent may not be out of reach after all,” the bank added. Data from the Philippine Statistics Authority (PSA) this week showed the country’s total payments for imported goods hit $6.7 billion in May. The Philippines, meanwhile, posted a 6.9-percent GDP growth in the first quarter of 2016. “The front-loading of investments is likely to have continued in the second quarter of 2016. On a year-on-year basis, imports of capital goods doubled in May. This suggests investment growth might have been closer to 20 percent
All indications would point to a more robust eco growth in the second quarter of 2016.”— Guinigundo
yet again in second-quarter 2016, after the 25.6 percent recorded in the first quarter of 2016,” the bank said. “Whether or not this robust growth in imports will be sustained remains to be seen,” it added. The regional banking giant also sees that the most likely scenario is for
imports to normalize in the second half of the year. “Full-year import growth may be a high single digit, but we don’t expect it to be anywhere close to the 14 percent seen last year,” the bank said. With the strong development in the country’s imports as an indicator, the DBS Bank said there are upside risks to its full-year GDP growth forecast of 6.3 percent, especially with the plans of increased spending from the new administration. Bangko Sentral ng Pilipinas (BSP) Deputy Governor for the Monetary Stability Sector Diwa C. Guinigundo earlier said growth for the second quarter of the year will likely be higher than the 6.9-percent GDP expansion seen in the first quarter of the year. “That is because of the latest readings
we saw,” Guinigundo said. Guinigundo cited four indicators that the central bank is monitoring and pointing to a stronger growth in the second quarter. The deputy governor said the Purchasing Managers Index of the country hit a peak of 59 during the quarter—an indicator of a strongly expanding manufacturing sector. Consumers’ and Business’ Expectations surveys were also more bullish during the quarter, while vehicle and energy sales rose during the period. Guinigundo also cited the effect of higher government spending during the period, as well as the impact of electionrelated activity during the period. “All indications would point to a more robust eco growth in the second quarter of 2016,” Guinigundo said.
A4 Friday, July 29, 2016 • Editor: Max V. de Leon
AseanFriday BusinessMirror
Jokowi taps ex-generals amid terrorism threat, China tensions
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resident Joko Widodo has tapped two men with military backgrounds for key security posts, a move that signals a potentially tougher approach on both terrorism and defending Indonesia’s maritime rights against encroachment by China. In his second Cabinet reshuffle since coming to office less than two years ago, Widodo, known as Jokowi, appointed former military chief Wiranto to one of the most powerful positions in Cabinet. The 69-year-old, who goes by one name, becomes coordinating minister for politics, legal and security affairs, replacing Luhut Panjaitan, who moves into the increasingly important maritime affairs role. In doing so, Jokowi drew criticism for picking retired general Wiranto, who has been accused of human-rights abuses. The president was probably rewarding Wiranto for his support during a tumultuous period after he took office and seeking to reduce his reliance on any one party in parliament. He’s also looking to bolster his credentials as a tough-talking president against Islamic extremist groups at home and China’s actions in the disputed South China Sea. “I expect Indonesia to become more assertive, maybe not become a claimant state, but it will certainly become more assertive in protecting its sovereignty if challenged,” said Tirta Mursitama, professor of international relations at Bina Nusantara University in Jakarta. When Jokowi stood on the deck of a warship in the gas-rich Natuna Islands in June, the same vessel that a week earlier had detained a Chinese trawler and its crew, he signaled Indonesia was responding more forcefully over an area that feeds
The president now has more leeway to enact his policy agenda, but the Cabinet reshuffle reflects the price he has paid to secure this power.” —Verisk Maplecroft into the South China Sea. “The ability of Indonesia’s military and maritime security agency to guard the sea must be improved,” Jokowi said from the KRI Imam Bonjol, which patrols the waters around the islands. While Indonesia is not a claimant in the South China Sea, the 200-nautical-mile exclusive economic zone it derives from the Natuna Islands overlaps waters that Beijing sees as its own. There have been several skirmishes this year between vessels from the two countries, and Indonesia has said it plans to mark its independence day on August 17 by destroying three impounded Chinese fishing boats. Indonesia
has also spoken of plans to station more fighter jets in the area. Luhut, who accompanied the president during the trip to the Natunas, said at the time that Jokowi may encourage some of the 6,000 vessels fishing in the Java Sea to move north to waters around Natuna rather than leave the fishing grounds to “other” people. The teaming of Wiranto with Luhut could add firepower to Indonesia’s territorial claims, Mursitama said. “Maritime issues aren’t just about fishing anymore, but they also involve geopolitics, defense and international relations.” “The post requires somebody with a strong grip on all those issues and both Luhut and Wiranto, with their military backgrounds, have a very good understanding of geopolitics and international relations,” he said. Greg Fealy, an associate professor at the Australian National University, said the appointment of Wiranto, who in 2003 was charged by the United Nations for crimes against humanity, could also prove problematic. “There are big questions about his human-rights record in East Timor,” Fealy said. The aide-de-camp to the former dictator Suharto has been accused of gross humanrights abuses for his alleged role in the violence that swept through East Timor before and after the former Indonesian territory declared independence in 1999. Wiranto, who along with several other high-ranking officers was charged by the UN with crimes against humanity over the military’s alleged murder of independence supporters, was the head of the Indonesian armed forces at the time. He has always denied any wrongdoing. “It will create quite serious damage to Jokowi’s international image,” said Andreas Harsono, an Indonesia researcher for Human Rights Watch, speaking of Wiranto’s appointment.
Race riots
IT may also cause unease at home in a country that has seen periods of military intervention in the past, including the violent suppression of race riots in 1998 that saw ethnic-Chinese Indonesians targeted. Jokowi has established a firm grip over parliament with a more than two-thirds majority, but struggled through his first year in office. Parties that had been his rivals during the 2014 election campaign now stand with his coalition, including the country’s second-largest party Golkar. It scored a Cabinet post in the latest reshuffle with the appointment of Airlangga Hartarto as industry minister. Wiranto, who ran for the presidency in 2004 as the candidate for Golkar, the party to which former dictator Suharto was aligned, and then for vice president in 2009 with Hanura, a party he controls, has backed Jokowi through his first two years in office.
‘Less dependent’
“Thanks to some shrewd political maneuvering to expand his power base, President Jokowi is less dependent on any one faction of the traditional elite. The president now has more leeway to enact his policy agenda, but the Cabinet reshuffle reflects the price he has paid to secure this power,” said Hugo Brennan, Asia analyst at Verisk Maplecroft. Brennan said, however, that Wiranto’s appointment could draw criticism given Jokowi’s pledge to resolve past humanright abuses. “The need to co-opt influential elites is understandable, but this selection will not sit well with many who voted for Jokowi.” The elevation of Wiranto as the country prepares for the execution of 14 drug-crime death-row prisoners shows a disregard for human rights, Amnesty International said in a statement on Wednesday. Bloomberg News
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Swiber’s wind-up flags rising risks Singapore bondholders face
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ingapore bondholders face further shakeups after Swiber Holdings Ltd. said it has applied to be wound up. The move comes after Indonesian firm PT Trikomsel Oke and Pacific Andes Resources Development Ltd., based in Hong Kong, defaulted on three bonds totaling S$415 million ($307 million) since late 2015, the first cracks in Singapore dollar-denominated notes since 2009. “As a Singapore company, the Swiber windup petition certainly is much higher profile, and raises the ante on the risks involved in buying corporate bonds in Singapore dollars,” said Todd Schubert, head of fixed income research at Bank of Singapore Ltd. Singapore Exchange Ltd., which operates the local bourse, will undertake a thorough investigation into the developments at Swiber and will take any action if a breach of listing rules is found, it said in a statement on Thursday. Bank of Singapore’s Schubert said that it was unusual that Swiber was applying to be wound up so soon after paying off bondholders. Swiber had in June redeemed S$130 million 5.125 percent notes due 2016 and in July redeemed S$75 million 7 percent notes. It has four more Singapore dollar bonds worth a total of S$460 million that are outstanding, according to Bloombergcompiled data.
Low recovery
“Swiber’s bondholders face low-recovery prospects in a wind-up as they will likely rank behind other creditors such as employees, suppliers and lenders in addition to senior creditors,” said Schubert at Bank of Singapore. Singapore-based restructuring consultant GEM Advisory said bondholders should get “reasonable representation” in Singapore courts given that the amounts are significant, but added that any liquidation of vessels in the current economic environment will bring the “lowest return” to the creditors. S&P Global Ratings said relationship banks are taking a hard look at the viability of companies’ underlying business and seem more inclined to decide whether to extend funding on a commercial basis. “They won’t necessarily provide backup funding or stave off a bankruptcy just because they have skin in the game,” said Xavier Jean, an analyst at S&P in an e-mail. Bloomberg News
China unscathed after Asean meetings as tribunal win turns pyrrhic victory
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aring to take on China in a territorial dispute in the South China Sea, the Philippines went to an international tribunal for justice and won big. But it turned out to be a pyrrhic victory. Beijing came back with such ferocity and manipulative diplomacy that other Southeast Asian countries that have similar disputes with it are apparently backing down. One by one, their positions became clear at meetings this week of Asia-Pacific and Southeast Asian nations, a gathering that was supposed to unanimously call out China for a host of actions in the resource-rich South China Sea—building artificial islands and military airstrips, sending warships, staging live-firing exercises and shooing away fishermen from other countries. And so, the four-day conclave in Vientiane, the Laotian capital, ended on Tuesday with China’s muscles bulging more than ever, and the vaunted unity of the 10-member Association of Southeast Asian Nations in disarray. “Neither China nor A sean emerged from the Vientiane meetings with honor,” said Ian Storey, a senior fellow at the Institute of Southeast Asian Studies, a Singapore-based think tank. “It’s a sad state of affairs when expectations of Asean being able to do anything to lower tensions in the South China Sea are zero, and instead the focus is on whether it can get its act together.” Philippine Foreign Secretary Perfecto R. Yasay Jr. sought to put a positive spin on the developments. “Whether or not you will say that this is a triumph of China or a triumph of the Philippines, or a defeat of China or a defeat of the Philippines, the fact is clear,” he told reporters in Manila on Wednesday. “This is a victory for Asean for upholding the very principles of international law and...more important, pursuing our negotiations in the dispute in a
peaceful manner.” “Be that as it may, the actual resolution of this dispute between China and the Philippines is a matter between China and the Philippines,” he said, reflecting a position that suits China perfectly. The first coup de grace China dealt was at an Asean foreign ministers’ meeting, where it successfully prevented a joint communiqué from mentioning the July 12 ruling by The Hague-based arbitration panel in favor of the Philippines. While the communiqué did express concerns about the tensions in the South China Sea, it did so without naming China. A millstone around the neck of Asean—Southeast Asia’s main grouping—is that it can issue statements only when there is consensus among all 10 members. China leveraged that by ensuring that Cambodia and Lao PDR would not provide that consensus. Both countries receive massive aid from China, which recently announced a $600-million package to Cambodia. “As an association, Asean loses power and relevance when it punts on the most important regional issues,” said John Ciorciari, a Southeast Asia expert at the University of Michigan. “Yet, Asean operates by consensus, and when push comes to shove, national interests tend to trump regional solidarity.” “Aid has won China some close friends in Southeast Asia, and Cambodia in particular has been quite willing to cast vetoes on communiqué language inimical to Chinese interests,” he said. China does not accept the arbitration panel’s ruling, and says all disputes should be settled bilaterally through negotiations. It did not participate in the panel’s hearings, and insists that almost all of the South China Sea, which is ringed by claimants China, Vietnam, Malaysia, Brunei, the Philippines and Taiwan,
In this file photo, Laotian Prime Minister Thongloun Sisoulith (sixth from left) and Laotian Foreign Minister Saleumxay Kommasith (sixth from right) join their hands with Southeast Asian foreign ministers (from left) an unidentified delegate from Malaysia, Aung San Suu Kyi of Myanmar, Vivian Balakrishnan of Singapore, Don Pramudwinai of Thailand, Pham Binh Minh of Vietnam, Perfecto R. Yasay Jr. of the Philippines, Trade Minister Jock Seng Pehin Lim of Brunei Darussalam, Sakhonn Prak of Cambodia, Retno Marsudi of Indonesia and Asean Secretary-General Le Luong Minh, as they pose for a group photo during the opening ceremony of the 49th Asean Foreign Ministers’ Meeting in Vientiane, Lao PDR. AP
Neither China nor Asean emerged from the Vientiane meetings with honor.” —Institute of Southeast Asian Studies belongs to it historically. It also accuses outside parties— the United States, Japan and Australia—of needling Asean countries
and raising tensions. After Asean’s failure to rebuke China, those three countries issued a joint statement in Vientiane saying they strongly oppose “any coercive unilateral actions that could alter the status quo and increase tensions.” China lashed out at them on Wednesday, with Foreign Minister Wang Yi saying in a statement that the three countries were “fanning the flames” of regional tension. “Now it is the time to test whether you are peacekeepers or troublemakers,” he said. Diplomats who attended the Laos meetings said it was interesting to see that claimant-countries appeared less enthusiastic than others in wanting to rebuke China. Even the Philippines was not too forceful in asking for strong language in the
joint Asean statement. It repeatedly pointed out that the ruling by the arbitration panel was the result of its “unilateral” lawsuit, implying that Asean should not get involved. Malaysia’s foreign minister didn’t even show up for the meetings. At a later meeting of Asean and AsiaPacific nations, Brunei Darussalam took pains to praise China’s leadership, according to diplomats who attended the meeting. And on Tuesday, Vietnam’s deputy foreign minister, Le Hoai Trung, told The Associated Press that his country prefers bilateral dialogue with China, which Beijing wants. The Philippines is in a tight spot because even though it went to the tribunal and won, that was under the previous government of Benigno Aquino III. President Duterte,
Aquino’s successor, has made friendly overtures to Beijing and is leaning toward bilateral negotiations. But the bottom line is that the tribunal’s decision, although legally binding, is non-enforceable. The arbitration panel didn’t take a position on who owns the disputed territories, which include reefs and rocky outcroppings in the vast sea. It concluded only that many of them are legally rocks, even if they’ve been built into islands, and therefore do not include the international rights to develop the surrounding waters. Now it is up to China to decide what concessions it wants to make, and how much pressure the smaller countries can take. “At this point, it [the ruling] is not a magic stick...it’s not a solution to everything, but rather it needs to be combined with other measures,” said Tran Viet Thai, deputy director of the Institute of Strategic Studies, a Vietnamese government think tank. China is showing no signs of slowing down its efforts to exert control over the South China Sea. State-run companies are joining forces to offer luxury cruises in the waters. Three companies dealing in shipping, tourism and construction will contribute to running as many as eight cruise liners by June 2017 to service a region through which an estimated $5 trillion in global trade passes each year. They’re also building four docks, which will be able to handle 2 million passengers a year. One of China’s main cell-phone carriers, China Telecommunications Corp., has extended 4G service to several disputed South China Sea islands. Its competitor China Mobile Communications Corp. already offers similar services. Along with creating new islands by piling sand on top of coral reefs, China has built airstrips, harbors and lighthouses that is says will benefit fishermen and ship owners who transit the strategic waterway. AP
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Obama extols Clinton, excoriates Trump Germany takes lessons on refugees after WWII
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Democratic presidential nominee Hillary Clinton hugs President Barack Obama after joining him on stage during the third day of the Democratic National Convention in Philadelphia on Wednesday. AP/J. Scott Applewhite
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e was serious. He was funny. He was sarcastic. And he was definitely having a good time. On Wednesday night in Philadelphia, President Barack Obama proved once again that he is one of the best orators to take the political stage, as he extolled his accomplishments, accused Republican Donald Trump of being unfit for the presidency and argued that Hillary Clinton—“not me, not Bill, nobody”—is the most qualified person ever to seek the White House. “I hope you don’t mind, Bill,” Obama said, looking up at former President Bill Clinton in the audience, “but I’m just telling the truth, man.” Obama came to Philadelphia to praise his former secretary of State, whom he described as tough and resilient, as someone who “never, ever quits…no matter how much people try to knock her down,” as someone who, like Ginger Rogers, did everything Fred Astaire did,
“but backwards and in heels.” Keeping with perhaps his most enduring theme, Obama offered a relentlessly positive view of America. “While this nation has been tested by war and recession,” he said, “I stand before you again tonight, after almost two terms as your president, to tell you I am more optimistic about the future of America than ever before.” This, of course, was the perfect way to tee up his critique of Trump. Like former New York Mayor Michael Bloomberg who endorsed Clinton earlier in the evening, Obama seemed to be having tremendous fun at Trump’s expense. “I have to say this,” the president said, “people outside the United States do not understand what’s going on in this election, they really don’t.”
He challenged the vow Trump made last week in Cleveland, “I alone can fix it,” implying that the Republican nominee’s egotism is somehow un-American. “Our power doesn’t come from some self-declared savior promising that he alone can restore order,” Obama said. “We don’t look to be ruled. Our power comes from those immortal declarations first put to paper right here in Philadelphia all those years ago: We hold these truths to be self-evident, that all men are created equal; that together, we the people, can form a more perfect union.” He also took on Trump’s main calling card, his career. “He calls himself a business guy, which is true, but I have to say, I know plenty of businessmen and women who’ve achieved success without leaving a trail of lawsuits, and unpaid workers, and people feeling like they got cheated.” The president gave a nod to both the partisan criticism that has dogged his former rival and her legitimate failings. “Look, Hillary’s got her share of critics,” he said. “She’s been caricatured by the right and by some folks on the left; accused of every-
thing you can imagine—and some things you cannot. But she knows that’s what happens when you’re under a microscope for 40 years. She knows she’s made mistakes, just like I have; just like we all do. That’s what happens when we try.” Obama made a point of appealing to the supporters of Vermont Sen. Bernie Sanders, Clinton’s tough primary competitor, telling them, “If you’re serious about our democracy, you can’t afford to stay home just because she might not align with you on every issue. You’ve got to get in the arena with her, because democracy isn’t a spectator sport.” “That’s right,” he ad-libbed, “feel the Bern.” His speech had the feel, as well, of a presidential swan song. “Tonight, I ask you to do for Hillary Clinton what you did for me. I ask you to carry her the same way you carried me. Because you’re who I was talking about 12 years ago, when I talked about hope—it’s been you who’ve fueled my dogged faith in our future, even when the odds are great; even when the road is long. Hope in the face of difficulty; hope in the face of uncertainty; the audacity of hope!” Los Angeles Times/TNS
Trump to Russia: Hack Hillary’s e-mails
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ASHINGTON—Donald Trump dared a foreign government to commit espionage on the US to hurt his rival on Wednesday, smashing yet another taboo in American political discourse and behavior. “Russia, if you’re listening, I hope you’ll be able to find the 30,000 emails that are missing,” he said, referring to deleted e-mails from the private account Hillary Clinton used as secretary of State. “I think you’ll probably be rewarded mightily by our press.” Trump made the taunt during a lengthy and unusual news conference in Doral, Florida, in which he also suggested the Geneva Convention treaties protecting prisoners of war are outdated, told a reporter asking a question to “be quiet” and said the fact that the Democratic National Committee may have been hacked was because foreign leaders lack respect for the US government. He also called President Barack Obama “the most ignorant president in our history,” alleged that Russian President Vladimir Putin had disparaged Obama with “the Nword” and inaccurately paraphrased Obama speaking in a stereotype of African-American dialect. “His views of the world, as he says,
‘don’t jive,’” Trump said. Obama had recently used the word “jibe” in contrasting his views with Trump’s. Trump was hoping to use the news conference to deride Democrats for failing to focus on Islamic State (IS) during their nominating convention this week and Clinton for holding no news conferences in nearly a year. The comments urging Russia to hack Clinton immediately drew widespread attention because they lend the impression that Trump is actively encouraging another country to commit a crime against the US to directly affect the presidential election. If the e-mails are hacked and Trump wins, it also could make him appear beholden to foreign interests. The unprecedented comments in a campaign that has pushed multiple boundaries came after days of increased interest in Trump’s relationship with Russia, his statements that he might renege on US commitments to defend North Atlantic Treaty Organization (Nato) allies against Russian aggression and his frequently espoused admiration for Putin. “This undoubtedly sends a message to Russia that Trump is, at best, a fan, and at worst, manipulable and a bit of a loose cannon,” said Olga Oliker, director of the Russia and
Eurasia program at the Center for Strategic and International Studies. “Russia will look at this, whether it’s political theater or not, as [confirmation] that Trump would be better for them than Clinton, who would take a measured approach and discourage things that run counter to US interests.” Trump’s comments probably did not meet the standard for criminal incitement but showed poor judgment, said Susan Hennessey, a national security and governance fellow at the Brookings Institution. “Someone who is asking to be elected to the presidency should be more respectful of this nation’s institutions,” said Hennessey, a former lawyer for the National Security Agency. State Department Spokesman John Kirby refused to comment, saying that the nation’s diplomats were staying out of politics. Allies of Trump, including former House Speaker Newt Gingrich, asserted that the candidate was joking. But Trump, given the chance to clarify while he was still in front of reporters, did not back down when asked whether it concerned him that another government may have Clinton’s e-mails. “No, it gives me no pause,” he
said, adding that what gives him pause is Clinton’s destruction of the messages. “If Russia or China or any other country has those e-mails, I’ve got to be honest with you, I’d love to see them,” he added. Shortly after the news conference, Trump tweaked his position further on Twitter, suggesting that any hacked e-mails should be shared with law enforcement rather than him or the public: “If Russia or any other country or person has Hillary Clinton’s 33,000 illegally deleted e-mails, perhaps they should share them with the FBI [Federal Bureau of Investigation]!” Experts suspect that Russian agents are behind the hack and release of Democratic Party officials’ e-mails last week that showed party leaders discussing ways to undermine Vermont Sen. Bernie Sanders’s primary campaign against Clinton. The Democratic Party is supposed to be neutral, and the revelations in the e-mails—including discussions about using Sanders’s faith against him—led to the abrupt resignation of Rep. Debbie Wasserman Schultz, Democrat-Florida, as party chairman. The e-mails also showed details of the high-level access given to the party’s biggest donors. TNS
t’s pretty early to be able to say how the arrival of more than 1 million migrants and asylum-seekers from Syria and other war-torn states over the past 18 months will affect Germany. It helps, however, that this isn’t the first time such a thing has happened. After World War II, some 8 million refugees from Germanspeaking regions in eastern Europe arrived in what became West Germany, forming part of one of the largest migration movements in human history. New findings by Sebastian Braun at the Global Economy Institute in Kiel and Henning Weber, a research economist at the Bundesbank, show that the main element that helped to integrate those people into the work force was time. After 1945, unemployment in the regions of Germany most heavily settled soared to two and a half times the level in the rest of West Germany, partly as a result of the new workers displacing existing labor, the researchers’ report shows. Hoping that they’d one day be able to return to their homes—in areas of eastern Europe like Silesia populated by Germans since the Middle Ages—many refugees stayed in the parts of West Germany closest to their origin, such as Bavaria, Lower Saxony and Schleswig-Holstein. Over time, however, Germany’s “Wirtschaftswunder” economy boomed and unemployment in those regions fell from around 17 percent in 1950 to below 2 percent by the early 1960s. Labor participation rose strongly over the period, reaching more than 70 percent.
Europe’s refugee crisis caveats?
Germany’s economy was then, literally, in ruins, following the destruction of the war, meaning that reconstruction provided obvious employment opportunities. That’s hardly the case now, and in fact Germany—Europe’s largest economy—is close to running at full capacity. In addition, the postwar immigrants had arguably far fewer linguistic and cultural obstacles to clear. Yet, numerically at least, the scale of the task now is much smaller than that in the 1950s. According to Braun and Weber, further lessons from the past are as follows: The more migrants arrive at once, the higher the costs of integrating them into the labor market are. And regional distribution matters. If workers can—or must— move fairly freely in search of work, the impact on the labor market will be relatively muted. In postwar Germany, finding a job in a different region wasn’t easy; today information about available work is much easier to come by. That doesn’t mean that the 21st-century migrants to Europe will fold seamlessly into the labor force, Weber explained by phone. The impact of 2015’s arrivals have hardly begun to be felt in the labor market as it takes time before they are allowed to work, and indeed unemployment is still at record lows. From April 2015 to March 2016, just 21,400 refugees found work in Germany, according to Labor Agency statistics. “The adjustment back then took a very long time,” he said. “My impression is that it won’t go much faster today.” Bloomberg News
‘Patience running out’ amid V’zuela recall delays
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enezuela’s socialist administration is flirting with confrontation and violence if it continues to drag its feet on a presidential recall, opposition leaders said on Wednesday. The warning came as thousands of foes of President Nicolas Maduro marched on the headquarters of the National Electoral Council (or CNE) demanding that a date be set for the next stage of the referendum. In Caracas, the crowds were blocked from reaching downtown, but CNE member Luis Emilio Rondon reportedly told organizers that the council had passed one of the preliminary steps of the recall and that there would be an official announcement on Monday. The nationwide demonstrations were called after the CNE failed to deliver the expected go-ahead on Tuesday. Miranda Gov. Henrique Capriles, one of the main proponents of the recall, warned CNE President Tibisay Lucena not to delay the announcement any longer. “We’ll wait until Monday for your answer, Mrs. Lucena,” he told a crowd of supporters. Otherwise, “you’ll be responsible for what happens in this country. The patience of Venezuelans is running out.” “We will keep insisting on a peaceful solution, but the people who live in the slums know better than anyone else that if there’s no solution, anything can happen,” he added. The march was smaller than previous demonstrations, the Associated Press reported, and broke up peacefully amid afternoon rains. The show of force came as Venezuela is staggering beneath a deep economic, social and political crisis in the wake of plummeting oil revenue. Major polls show that Venezuelans—weary of rampant violence and chronic shortages of basic goods—are ready to oust Maduro.
If the recall happens before January 10, new elections would be triggered. After that, however, Maduro’s vice president would finish out his term through 2019. That’s a scenario the opposition wants to avoid. It’s far from clear whether the CNE, which is accused of being beholden to the president will let the vote happen in a timely fashion. And there are still major hoops for organizers to jump through. In the next phase, recall proponents will have just three days to collect 3.9 signatures, or 20 percent of registered voters. And there are also legal challenges. The administration is accusing organizers of acting in bad faith and packing the petition with thousands of fraudulent signatures—from madeup names to the dead. Late on Tuesday, Jorge Rodriguez, a mayor and member of the ruling party’s recall “verification commission,” asked the electoral body to strip the opposition coalition of its political status, saying it “had committed the country’s largest electoral fraud.” Even with suspect signatures, however, the opposition claims that it turned in more than 400,000 valid signatures last month, or more than double the amount necessary, to get the process under way. Jesus “Chuo” Torrealba, the general secretary of the opposition group known as the MUD, said the administration wouldn’t dare dissolve the party during these tense times. “That would mean that the government gave up on politics and gave up on [even] the appearance of being a democracy,” he said. “That’s a scenario like North Korea or Fidel’s Cuba. That’s a scenario that doesn’t exist in Venezuela.” Whether authorities will use the legal challenge to delay the recall remains to be seen. But it’s another indicator of the multiple forces that the opposition is up against. TNS
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As Macau gamblers return
Asia’s worst property market buoyed
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he worst may be over for Asia’s worst-performing property market. Macau’s housing prices, which have plunged by a third since 2014, may get a boost amid signs that a twoyear casino slump in the Chinese gambling mecca is near its end. A private equity fund managed by Gaw Capital Partners sold almost 90 percent of the units it offered on the first day at a development in early July, with evidence of buoyant demand from local buyers. Billionaire Sheldon Adelson, whose firm owns Macau’s largest casino operator, expressed optimism on a recovery in the hardhit betting industry, fueled by recreational gamblers and tourists, joining analysts at JPMorgan Chase and Co. in predicting a turnaround. The fortunes of the former Portuguese colony are deeply entwined with gambling. The gaming industry, dominated by casino companies, such as Adelson’s Las Vegas Sands Corp. and Wynn Resorts Ltd., accounts for half of GDP and a large chunk of employment in city dubbed the Las Vegas of Asia. As China’s anti-corruption push in 2014 drove big spenders away, housing in Macau suffered a deeper and more prolonged slump than in Hong Kong, where prices are down 11 percent from a peak in September. “There is almost a direct correlation between the decline in gross gaming revenues and pricing in the mass residential market,” said Macau-based Tom Ashworth, principal of Sniper Capital Ltd., which manages the London-listed Macau Property Opportunities Fund Ltd. “There are signs of a pickup,” with the market potentially at a “bottom,” he said. Jones Lang LaSalle Inc.’s (JLL) Jeff Wong is also calling the bottom of Macau’s property market amid strong demand from domestic buyers, who now account for virtually all home purchases. A 10-percent tax on foreign buyers and banking regulations that restrict mortgages to 50 percent of a property value has seen Chinese buyers and other speculators exit
the market, according to Wong, head of JLL’s Macau residential practice. “We are at the bottom already,” Wong said. “Many undervalued properties are being absorbed by end users or long-term investors.” Though those demand curbing measures are likely to stay in place, there are signs the mood in the housing market is lifting. In April and May, sales transactions reached 2,123, the highest two-month period since 2013, and exceeding the 1,739 units sold in the same period in 2014, when prices hit their peak, according to data provided by Sniper Capital.
30-percent discount
Gaw Capital sold 175 of 200 units on offer at the unveiling on July 2 of Oscar Crescent, a development in Macau’s Taipa district. Prices at the luxury development, which features Miele appliances and views of the Macau Jockey Club, range from HK$8,500 ($1,095) to HK$11,500 per square foot. All but one were bought by locals. “These prices are 30 percent off what we could have sold them for two years ago,” said Goodwin Gaw, chairman of Gaw Capital. “They are equivalent to most New Territory prices,” he said, referring to a district of Hong Kong with the city’s least costly housing. Though direct comparisons aren’t possible, JLL’s Wong said that equivalent properties in Hong Kong’s upscale Mid-Levels district would cost more than two-and-ahalf times as much. Prices for the most expensive units at Macau’s One Central, a waterfront luxury retail, residential and hotel complex developed by Hongkong Land Holdings Ltd. and Shun Tak Holdings Ltd., have dropped to about HK$13,000 per square foot from HK$20,000 at their peak, Wong said.
a Macau property Bloomberg News
Macau’s boom
During Macau’s boom that peaked in 2014, housing prices more than quintupled over a six-year period, as Sands China Ltd., MGM China Holdings Ltd. and Galaxy Entertainment Group Ltd. opened casinos that lured high-stakes mainland gamblers. Then prices hit the skids as Chinese President Xi Jinping’s clampdown on corruption and tighter government restrictions on Chinese using credit cards to finance their wagers started to bite, depressing gaming revenue. Macau’s GDP contracted 20.3 percent in 2015, and shrunk 13 percent in the first quarter of this year. Home prices have declined almost 35 percent from a high in April 2014. In a July 24 note, JPMorgan said Macau’s gross gaming revenue will “finally” turn positive by the fourth quarter from a year earlier, increasing 2 percent. New projects, such as Wynn
90%
The percentage of housing units a housing-development company sold in early July Palace, Wynn Macau Ltd.’s new casino on the Cotai Strip, and Sands China Ltd.’s Parisian have the “best chance” to underpin demand, JPMorgan said. Year-on-year gross gaming revenues fell in June for 25 consecutive months. That could help improve demand for housing, which is dominated by Hong Kong developers such as Hongkong Land and Shun Tak and property funds. Grant Govertsen, an analyst at Union Gaming Group Llc. is among those closely watching for the opening in August of the Wynn Palace for any sign of a pickup in
U.K. seeks new model for trade ties with E.U.
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rime Minister Theresa May said she’s not wedded to any particular model for the nature of the United Kingdom’s trading relationship with the European Union (EU) once it’s completed a withdrawal from the bloc. “I’m looking at this with an open mind,” May said on Wednesday at a news conference in Rome after talks with her Italian counterpart, Matteo Renzi. “We should be developing the model that suits the United Kingdom and the European Union, not adopting necessarily a model that’s on the shelf already.” May’s remarks suggest her new government, in power for just under two weeks, has yet to home in on a set of precise requirements for Britain’s post-Brexit relationship with the bloc’s other 27 members. May, making the third trip to an EU capital since she took over from David Cameron, also said she “intends to be able to” guarantee the rights of EU citizens living in the UK after withdrawal. May’s task is to deliver the exit from the union and consequent reduction in immigration that British voters demanded while limiting the cost to an economy that’s already showing signs of damage from last
month’s referendum result. The pound plunged to its lowest in more than three decades against the dollar following the vote, and recent surveys suggest it delivered an immediate blow to business and consumer sentiment. Growth data published on Wednesday showed the UK economy had a strongerthan-expected performance in the second quarter, which mostly fell before the referendum.
Norway, Canada
The extent of the drag on the UK economy of Brexit will depend on the precise relationship enjoyed by Britain after withdrawal, with UK media speculating May wants to broker an agreement somewhere between those of Norway and Canada. Norway is a member of the European Economic Area, giving it access to the single market. It has no say over the rules and must contribute to its budget, while accepting free labor movement. Canada negotiated a free-trade agreement that has yet to be ratified, but will limit most trade tariffs between it and the EU. It doesn’t require free labor flows, and services are also not included in the pact. “It will take time to work out
the nature of our relationship, and that’s why we should take to time to prepare for these negotiations so that both sides can identify their objectives and opportunities,” May said. “Yesterday I chaired the first meeting of the Cabinet committee on exiting the European Union to prepare and plan for an orderly departure.”
‘Clear message’
The UK premier has indicated she’d like to preserve as much free trade as possible, as well as socalled passporting for the country’s financial-services industry, while being able to restrict the free movement of EU citizens to the UK. “We had a very clear message from the British people in the Brexit vote that they want us to bring in some controls on free movement,” May said. “We will deliver on that.” As to people who have already taken advantage of the EU’s freemovement rules, May said: “I want to be able to guarantee their rights in the UK, I expect to be able to do that, I intend to be able to do that, to guarantee their rights. “The only circumstances in which that would not be possible would be if the rights of British citizens living in other EU member-
states were not guaranteed,” May said. “But I hope that this is an issue that we can address early on.”
‘More complicated’
Renzi said there are about 600,000 Italians living in the UK and many are concerned about their future. “I am worried they might eventually decide to make my life more complicated to work here as an EU citizen,” Silvia Schiavinato, 32, who’s been living in London for six years and works as a marketing assistant, said in an interview. “I am also wondering if I really want to keep living in a country where I don’t feel welcome or wanted any more.” May has indicated she won’t start the formal withdrawal process before the end of this year and is first embarking on a series of visits to meet her counterparts in other member states to help her gauge what’s possible. She’s already held talks with her counterparts from Germany, France and Ireland. “This requires a lot of good will, a clear timeline and clarity of the path ahead,” Renzi said. “For this reason we are particularly interested in giving our greatest help to make the path ahead as efficient as possible.” Bloomberg News
gambling activity that could feed through to the housing market. Macau Chief Executive Fernando Chui also said the economy may be turning the corner. “Macau’s gaming industry and the whole economy will continue to adjust, but the decline may shrink to 7.2 percent this year and even resume growth in 2017,” the city’s top government official said in a televised session of the city’s legislature on Wednesday. “It’s a good time for Macau to re-position after a 25-month gaming revenue drop.”
Property ‘bear’
Not everyone is optimistic about the prospects for a gaming industry turnaround, as spending from Chinese high rollers, or the so-called very important persons, remains muted. “The two markets, property and gaming, go hand in hand,” said Alfred Lau, a Hong Kong-based analyst at Bocom International Holdings Co. “We do expect a pick up in
mass-gaming revenue to continue, but it is not strong enough to bring up overall gaming revenues,” because the VIP segment is still weak, he said. “I am not only a property bear, I am a gaming bear.” While prices are stabilizing, it will take some time for the market to claw its way back, Sniper Capital’s Ashworth said. “People are holding back and waiting,” he said. “This won’t be a Vshaped recovery. Confidence will return once gaming revenues stabilize.” Richard Yue, Hong Kong-based chief executive officer at fund manager Arch Capital Management Company Ltd., which is developing the seven-tower One Oasis project close to the Cotai Strip with Hong Kong builder Nan Fung Development Ltd., agrees. “For the timing being, we believe the market has bottomed out,” he said. “We have a couple of phases left to go, and not in a rush to complete everything. The market will only get better with time.” Bloomberg News
India closer to simplifying tax regime
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rime Minister Narendra Modi’s Cabinet met a key opposition demand on proposed legislation that would clear the way for a national sales tax, putting India closer to passing its most ambitious economic reform since the 1990s. The Cabinet decided late on Wednesday to eliminate an additional 1-percent charge on interstate sales that was included in a constitutional amendment bill to create a goods-and-services tax (GST). The opposition had argued that the additional levy would undermine the goal of creating a single market among India’s 1.3 billion people. The development is welcome and could help “pave the way for political consensus and early passage of the bill,” Harishanker Subramaniam, a tax specialist at EY India, wrote in an e-mail. Modi’s party has indicated it will push the measure next week for discussion and possibly a vote before the current session of parliament ends on August 12. If the amendment clears the upper house, it needs to be ratified by more than half of India’s states. Then parliament must pass another bill to implement the tax. Political bickering has held up the constitutional amendment in India’s upper house of parliament for more than a year. The GST, initially proposed by the main opposition Congress party a decade ago, would lower the cost of doing business in the world’s fastest-growing economy.
“This really is an important reform,” said Jan Dehn, London-based head of research at Ashmore Group Plc., which manages out $51 billion in emerging markets. “It would dramatically increase efficiency in the country and could lead to a wave of mergers and acquisitions. India’s home market is huge, but fragmented. GST would unify it.”
Obstacles remain
Senior Congress party leaders Anand Sharma and Ghulam Nabi Azad weren’t available for comment when reached by phone on Thursday. Several obstacles remain. Besides the 1-percent tax, Congress is demanding that the tax rate is capped at 18 percent and written into the constitutional amendment. The government has indicated that it will consider this demand even though it prefers to leave the rate out given the difficulties of adjusting it in the future. Congress has said it’s open to placing the rate in subsequent legislation after all the state governments pass the constitutional amendment. Congress also wants an independent dispute resolution panel headed by a retired judge to intervene in case of disputes over revenue sharing once GST is implemented. The current bill gives this power to the GST Council, a body comprising the finance minister and his counterparts in India’s states. Bloomberg News
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Friday, July 29, 2016
Kids detained during conflict tortured, died–rights report
314
The number of children who the United Nations said had been charged or convicted of terrorrism-related charges and were being held in detention facilities as of December 2015
Syrian refugee children play on a homemade swing at a Syrian refugee camp in the eastern Lebanese town of Saadnayel, Bekaa Valley, Lebanon, on July 19. AP/Bilal Hussein
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NITED NATIONS— Children caught in six conflict-affected areas are often held for months or even years as national security threats, and untold numbers have been tortured or died in custody, according to a Human Rights Watch (HRW) report. The 36-page report released on Thursday documents the arrest and detention of children for alleged association with opposition and
rebel groups or for alleged involvement in conflict-related offenses in Afghanistan, Congo, Iraq, the Israeli-Palestinian conflict, Nigeria
and Syria. HRW said governments, often empowered by new counterterrorism legislation, apprehend children under the age of 18 who allegedly pose security threats, frequently in violation of international legal standards. “Many children are detained on the basis of groundless suspicion, flimsy evidence, or broad security sweeps,” the rights group said. “Some are detained because of alleged terrorist activities by family members.... Many have been subjected to coercive interrogations and torture, and in places like Syria, an unknown number have died in custody.” In 2014 UN Secretary-General Ban Ki-moon reported that detentions took place in 17 of 23 conflict situations covered by his annual report on children and
armed conflict, it said. “Governments are trampling on children’s rights in a misguided and counterproductive response to conflict-related violence,” said Jo Becker, the group’s advocate for children’s rights. “The indefinite detention and torture of children needs to stop.” Since January 2015, HRW said Afghan security forces have detained hundreds of children on suspicion of being Taliban fighters, attempting suicide attacks, manufacturing or placing improvised explosive devices, or otherwise assisting opposition armed groups. It noted that Afghanistan maintains more than 200 detention facilities and the number of youngsters being held “may be significantly higher.” The group quoted a UN report saying Congolese armed forces arrested and detained at least 257 children during 2013 and 2014. It said 29 children interviewed last December by HRW reported being detained in appalling conditions in a military prison. All were accused of fighting for a rebel group, but only two said they were “active fighters,” it said. The report said Iraqi security forces have detained children on suspicion of armed activity, including association with the Islamic State extremist group. It cited UN figures saying 314 children, including 58 girls, had been charged or convicted of terrorrism-related charges and were being held in detention facilities as of December 2015. HRW said Israel prosecutes between 500 and 700 Palestinian children in military courts every year, charging the vast majority with throwing stones at soldiers or troops in the West Bank. In several cases it investigated, the rights group said children reported being hit and kicked in custody by the police and being forced to spend hours in the cold, handcuffed to chairs in police compounds. In Nigeria HRW said that since Boko Haram began its attacks in 2009 it has recruited hundred, and possibly thousands, of youngsters and used dozens, mostly girls, as suicide bombers. AP
Merkel faces critics after violent attacks
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hancellor Angela Merkel is breaking off her vacation to defend herself against renewed criticism of her refugee policies following a rash of violent attacks in Germany. Merkel, who had planned to remain out of public view during the summer break, will answer questions on Thursday afternoon for the first time since the four assaults—a shooting spree, ax attack, suicide bombing and machete assault—left 13 dead this month. Three of the attacks were committed by asylum seekers. “The chancellor certainly can’t keep her head low after such events,” said Ulrich Sarcinelli, a politics professor at the University of Koblenz-Landau. While Merkel will have to address the terror threat, “she’ll do everything not to escalate the general agitation.” While many in the political establishment and national media have maintained a restrained unity, some lawmakers in Merkel’s Christian Democratic Union (CDU)-led bloc and politicians from the anti-immigration Alternative for Germany party (AfD) have pressed their criticism that Merkel’s accommodating stance toward refugees over the past year has created a threat to security. After an easing of the influx of migrants softened public anxiety in Germany, Merkel will seek to get ahead of any public backlash and limit the political fallout. The most likely political beneficiary is the AfD, which has already nabbed supporters from the CDU concerned about public safety. Merkel’s annual summer press conference is an open-ended session where she’s likely to be questioned as well on a host of other crises, including the UK’s decision to leave the European Union, struggling Italian banks and the tense political situation in Turkey following the failed military coup. A deal the EU struck with Turkey this year is a key reason for the decrease in the flow of refugees to Germany. Merkel made a brief statement on Saturday after the first two at-
high priest’s death in July last year and only allowed to see the body after Nyima tied a ceremonial Tibetan scarf to the bars of the prison gate and tried to hang herself. Nyima and her mother were only given a few moments with Tenzin Delek’s body. But other monks in prison, who had dressed his body in monks’ robes and laid it on a platform, told them that his nails were black and he had a deep hollow behind his head. Nyima said her uncle’s lips had also turned black. She arrived in the northern hill town of Dharmsala via Nepal on Sunday after two weeks on the road with the help of smugglers whom she paid $9,700 for the trip.
Dharmsala is home to the Dalai Lama, the supreme spiritual leader of Tibetan Buddhists. She said she made the difficult decision to leave her aging mother and 6-year-old daughter behind to tell her uncle’s story to the world. “We don’t trust what China is telling us and demand a thorough investigation into his death,” she said. Tenzin Delek Rinpoche was sentenced to death in 2002 on charges of terrorism and inciting separatism in connection with a blast in Chengdu earlier that year, but the sentence was commuted to life and later to 20 years in prison. He had denied any involvement and repeatedly claimed he was innocent.
The family was not given a medical report after his death, and Nyima and her mother, Dolkar, were put under house arrest for two weeks to prevent them from spreading the news of Tenzin Delek’s death. Chinese authorities also forbade any search for Tenzin Delek’s reincarnation, denying Tibetans their traditional right. There was no immediate response to Nyima’s claims from Chinese officials. Calls to the Sichuan provincial public security bureau’s media section rang unanswered. A man at the press office of the police department in the city of Chengdu said he was not aware of the case. AP
tacks to reassure the public that the government had public safety under control, pledging that “we will find what exactly was behind this act.” The motives behind the assaults vary. The most deadly involved a July 22 shooting spree by an 18-year-old born and raised in Munich who opened fire at a shopping center in the city, gunning down nine before killing himself. Following a police operation that put the Bavarian capital into lock down, authorities said the killer acted alone and had been obsessed with mass shootings. He was neither a migrant nor had any connection to a terror organization. Two other attacks in Bavaria— one by a 17-year-old asylum-seeker from Afghanistan on July 18 who seriously injured commuters on a train with an ax and another by a 27-year-old Syrian refugee who blew himself up outside a music festival—were either inspired by or connected to Islamic State. The fourth attack, by a Syrian refugee who killed a woman south of Stuttgart, was unrelated to terror activity, the police said.
Public anxiety
Still, the welter of violence has fed into public anxiety over the influx of more than a million migrants in 2015. Criticism of Merkel’s open-door stance hit a tipping point in January after a series of sexual assaults on New Year’s Eve in Cologne, committed by a group of mostly migrant men. The first real political test for Merkel will come in September, when her home state of Mecklenburg-Western Pomerania holds elections. The AfD was already polling at 19 percent in the state prior to the assaults, while the CDU was at 25 percent. Merkel, who usually spends the beginning of her summer vacation visiting the Wagner opera festival in Bayreuth and then afterward hiking in the Alps, has thus far spent the break at her home in the Uckermark region outside Berlin. Bloomberg News
MH370 captain’s simulator had Indian Ocean route
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YDNEY—Australian officials confirmed on Thursday that data recovered from a home flight simulator owned by the captain of Malaysia Airlines Flight MH370 showed that someone had used the device to plot a course to the southern Indian Ocean, where the missing jet is believed to have crashed. There has been confusion over exactly what was found on Capt. Zaharie Ahmad Shah’s flight simulator since New York Magazine reported last week that a Federal Bureau of Investigation (FBI) analysis of the device showed Zaharie had conducted a simulated flight to the southern Indian Ocean less than a month before the plane vanished along a similar route. The magazine cited the discovery as strong evidence that the disappearance was a premeditated act of mass murdersuicide at the hands of the captain.
Malaysia immediately rejected the report as false. Malaysia’s national police chief, Khalid Abu Bakar said Malaysian police had never handed any document or information to any authority abroad, including the FBI—a perplexing statement, given that Malaysia’s own transport minister confirmed two years ago that Malaysia was working with the FBI to analyze data from the simulator’s hard drives. Adding to the confusion, Australia’s Joint Agency Coordination Center—which is overseeing the search for the plane off Australia’s west coast—subsequently issued a vague statement that seemed to imply such a route had been found on Zaharie’s machine. The agency then cautioned that evidence of the route did not prove that Zaharie had planned to steer the plane off course and showed only “the possibility of planning” for such an event. AP
Journalist jailed in China is US citizen, State Deparment says
Tibetan priest died of torture, niece says D B HARMSALA, India—The niece of a prominent Tibetan religious leader has fled China and arrived in exile in northern India to reveal what her family says is the truth about the man’s death in a Chinese prison. Nyima Lhamo told The Associated Press late on Wednesday that her family believes Tenzin Delek Rinpoche died as a result of torture and not from a heart attack as Chinese officials said. Nyima, 26, said her uncle told her mother during prison visits that he was repeatedly beaten and starved and asked to demonstrate his religious powers by police officials. The family was informed of the
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EIJING—US diplomats have not been granted permission by China to meet with James Wang, a jailed magazine publisher and naturalized American citizen, since his 2014 arrest in southern China, the Obama administration said on Wednesday. A court in Shenzhen this week sentenced Wang, also known as Wang Jianmin, to five years in prison on charges of running an illegal business, bribery and collusion after he sent copies of his sensitive political magazine to mainland China. State Department Spokesman John Kirby said the US was not permitted to attend Wang’s trial and will continue to request visits. Wang’s lawyer Chen Nansha said on Thursday Wang might not appeal the verdict. Wang also holds residency in
Hong Kong—a semiautonomous Chinese territory—and last entered China with his Hong Kong identity card before his arrest, Chen said. China does not recognize dual citizenship and likely tried Wang as a Chinese citizen, particularly as he entered the country with Chinese documents. Wang, along with editor Guo Zhongxiao, who was also arrested in mainland China in 2014, published New Way Monthly and Faces, two journals that often delved into high-level Communist Party intrigue. Their arrests and convictions, following the temporary disappearance of five Hong Kong booksellers, has raised questions about Hong Kong’s status as a free press haven and has cast a chill over the territory’s freewheeling political book trade. AP
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The World BusinessMirror
Editor: Lyn Resurreccion • Friday, July 29, 2016
A9
Pope says the world’s North Korea: US crossed red at war, urges Europe line, relations on war footing to greet refugees
Pope Francis is helped by Vatican Master of Ceremonies Mons. Guido Marini as he stumbles on the altar, as he celebrates a mass in Czestochowa, Poland, on Thursday. AP/Gregorio Borgia
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Foreign veterans of the Korean War and their family members salute during a commemorative ceremony marking the 63rd anniversary of the Armistice Agreement and United Nations Forces Participation in the Korean War in Seoul, South Korea, on Wednesday. South Korea is accusing rival North Korea of floating propaganda leaflets via a river in the first such incident. AP/Ahn Young-joon
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YONGYANG, North Korea— North Korea’s top diplomat for US affairs told The Associated Press on Thursday that Washington “crossed the red line” and effectively declared war by putting leader Kim Jong Un on its list of sanctioned individuals, and said a vicious showdown could erupt if the US and South Korea hold annual war games as planned next month. Han Song Ryol, director general of the US affairs department at the North’s Foreign Ministry, said in an interview that recent US actions have put the situation on the Korean Peninsula on a war footing. The United States and South Korea regularly conduct joint military exercises south of the Demilitarized Zone, and Pyongyang typically responds to them with tough talk and threats of retaliation. Han said North Korea believes the nature of the maneuvers has become openly aggressive because they reportedly now include training designed to prepare troops for the invasion of the North’s capital and “decapitation strikes” aimed at killing its top leadership. Han says designating Kim himself for sanctions was the final straw. “The Obama administration went so far to have the impudence to challenge the supreme dignity of the DPRK [Democratic People’s Republic of Korea] in order to get rid of its unfavorable position during the political and military showdown with the DPRK,” Han said. “The United States has crossed the red line in our showdown,” he said. “We regard this thrice-cursed crime as a declaration of war.”
Although North Korea had already been heavily sanctioned internationally for its nuclear weapons and long-range missile development programs, Washington’s announcement on July 6 was the first time Kim has been personally sanctioned. Less than a week later, Pyongyang cut off its final official means of communications with Washington—known as the New York channel. Han said Pyongyang has made it clear that everything between the two must now be dealt with under “war law.” Kim and 10 others were put on the list of sanctioned individuals in connection with alleged humanrights abuses, documented by the United Nations Human Rights Commission, that include a network of political prisons and harsh treatment of any kind of political dissent in the authoritarian state. US State Department officials said the sanctions were intended in part to highlight those responsible for the abuses and to pressure lower-ranking officials to think twice before carrying them out. Pyongyang denies abuse claims and says the United Nations report
was based on fabrications gleaned from disgruntled defectors. Pointing to such things as police shootings of black Americans and poverty in even the richest democracies, it says the West has no moral high ground from which to criticize the North’s domestic political situation. It also says US allies with questionable human-rights records receive less criticism. Han took strong issue with the claim that its not the US, but Pyongyang’s continued development of nuclear weapons and missiles that is provoking tensions. “Day by day, the US military blackmail against the DPRK and the isolation and pressure is becoming more open,” Han said. “It is not us, it is the United States that first developed nuclear weapons, who first deployed them and who first used them against humankind. And on the issue of missiles and rockets, which are to deliver nuclear warheads and conventional weapons warheads, it is none other than the United States who first developed it and who first used it.” He noted that US-South Korea military exercises conducted this spring were unprecedented in scale, and that the US has deployed the USS Mississippi and USS Ohio nuclear-powered submarines to South Korean ports, deployed the B-52 strategic bomber around South Korea and is planning to set up the world’s most advanced missile-defense system, known by its acronym THAAD, in the South, a move that has also angered China. Echoing earlier state-media reports, Han ridiculed Mark Lippert, the US ambassador to South Korea, for a flight on a US Air Force F-16 based in South Korea that he said was an action “unfit for a diplomat.” “We regard that as the act of a villain, who is a crazy person,” Han said of the July 12 flight. “All these facts show that the United States is intentionally aggravating the tensions in the Korean Peninsula.” Han warned that Pyongyang is viewing next month’s planned USSouth Korea exercises in this new context and will respond if they are carried out as planned.
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The number of North Korean top officials, including leader Kim Jong Un, who were on the list of sanctioned individuals in connection with alleged human-rights abuses “Nobody can predict what kind of influence this kind of vicious confrontation between the DPRK and the United States will have upon the situation on the Korean Peninsula,” he said. “By doing these kinds of vicious and hostile acts toward the DPRK, the US has already declared war against the DPRK. So it is our self-defensive right and justifiable action to respond in a very hard way. “We are all prepared for war, and we are all prepared for peace,” he said. “If the United States forces those kinds of large-scale exercises in August, then the situation caused by that will be the responsibility of the United States.” Last year’s Ulchi Freedom Guardian exercises involved 30,000 American and 50,000 South Korean troops, and followed a period of heightened animosity between the rival Koreas sparked by landmine explosions that maimed two South Korean soldiers. In the end, the exercises escalated tensions and rhetoric, but concluded with no major incidents. Han dismissed calls for Pyongyang to defuse tensions by agreeing to abandon its nuclear program. “In the view of cause and effect, it is the US that provided the cause of our possession of nuclear forces,” he said. “We never hide the fact, and we are very proud of the fact, that we have very strong nuclear deterrent forces not only to cope with the United States’s nuclear blackmail but also to neutralize the nuclear blackmail of the United States.” AP
RAKOW, Poland—Pope Francis, deeply saddened by the slaying of an elderly priest during Mass in a church in the French countryside, warned grimly on Wednesday that the world is at war, but cautioned against labeling it a war among religions. At the start of his first-ever trip to Eastern Europe, where antimigrant sentiments have been rising, he also encouraged Europe to welcome refugees from war, hunger and religious persecution, and called for “courage” and “compassion.” Francis is celebrating World Youth Day in Poland, where the conservative government has shut the doors to migrants and many fear that accepting Muslim refugees would threaten the nation’s security and its Catholic identity. As he started the five-day trip, he told an audience of Poland’s president, diplomats and other dignitaries that what is needed is “a spirit of readiness to welcome those fleeing from wars and hunger, and solidarity with those deprived of their fundamental rights, including the right to profess one’s faith in freedom and safety.” While the speech had in mind the hundreds of thousands of migrants fleeing Syria, Iraq and other Mideast countries, as well as impoverished nations in Africa, his reference to practicing one’s faith in safety could also be seen as an allusion to the slaying of the 85-year-old French priest by two extremists in Normandy on Tuesday. The murder compounded security fears surrounding Francis’s trip, which were already high due to a string of violent attacks in France and Germany. Polish officials say they have deployed tens of thousands of security officials to cover the event. Francis spoke to reporters as he flew from Rome to Krakow. Asked about the slaying of the priest, Francis replied: “It’s war, we don’t have to be afraid to say this.” He then sought to avoid any misunderstanding of his definition of war. “I only want to clarify that, when I speak of war, I am really speaking of war,” he said. “A war of interests, for money, resources, dominion of peoples.” “I am not speaking of a war of religions. Religions don’t want war. The others
want war,” he added. He also reiterated earlier remarks likening the current violence to a Third War III in “segments.” In the evening, as thousands of young people cheered in the square outside Krakow’s archbishop’s residence in hopes of getting a glimpse of Francis, the pope’s spokesman elaborated on the remarks about a world in war. “He wanted to specify very clearly, he doesn’t mean a war of religions,” Spokesman Rev. Federico Lombardi said. Upon arrival at Krakow airport, Francis was greeted by Poland’s President Andrzej Duda, First Lady Agata Kornhauser-Duda and other state officials, and hundreds of faithful who had waited for hours to see him. Prime Minister Beata Szydlo knelt and kissed his papal ring. After a brief ceremony Francis then traveled in an open car through the city, waving at cheering crowds as he headed to the Wawel Castle for the main welcoming ceremony. There, President Duda, a Catholic hailing from Krakow, hailed Francis as a “support, a road sign” in life for young people. “The world today badly needs values, it needs faith and good, all of which your Holiness is bringing,” Duda declared in the castle courtyard. “We are all waiting for your word.” Francis then urged Polish authorities “to overcome fear” and show “great wisdom and compassion” in dealing with migrants, whose arrivals in huge numbers on Greek, Italian and other southern European shores in the last few years has strained European nations’ coffers, fueled the popularity of anti-migrant political parties and spawned fears that terrorists could show up on the continent by blending in with the refugees. His pilgrimage will bring him later in the week to Auschwitz and Birkenau, the death camp complex run by German Nazi occupiers in Poland during World War II. Francis wants to pray silently at the sites and will also visit the place in Auschwitz where a priest gave his life to save a fellow camp inmate. Other highlights of the pope’s visit include a Saturday evening vigil with hundreds of thousands of youths who are expected to gather at a meadow, and a closing Mass on Sunday morning. AP
Reagan shooter Hinckley will leave hospital for good
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ILLIAMSBURG, Virginia—In little more than a week, the only living man to have shot an American president could pack his bags and leave a Washington psychiatric hospital for the last time. John Hinckley Jr. has already been living with his 90-year-old mother at her home overlooking a golf course in Williamsburg, Virginia, for 17 days each month. Thanks to a judge’s order on Wednesday, he’ll be able to live there full time, starting as early as August 5. Hinckley was 25 and had suffered from psychosis and depression for several years when he shot President Ronald Reagan and three others outside a Washington hotel on March 30, 1981. He was found not guilty by reason of
insanity and committed to Saint Elizabeths hospital. Now 61, Hinckley has graying hair and suffers from arthritis and high blood pressure. He enjoys painting and photography, and cares for feral cats. During his time in Williamsburg, he drives himself around town in a Toyota Avalon, going to movies and eating at fast-food restaurants. The community has been reluctant to embrace him—he’s been turned away from volunteer opportunities because of his notoriety and from restaurants where he’s applied for parttime jobs. Some neighbors are wary of his presence, although the police chief said there’s no need for his officers to pay special attention to Hinckley. AP
A10 Friday, July 29, 2016 • Editor: Angel R. Calso
Opinion BusinessMirror
editorial
Ending Asia’s coal addiction
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sian nations lead the world in new investment in wind, solar and nuclear power. And all that clean energy should help them meet their commitments to cut greenhouse gases. Standing in the way, however, are ongoing plans to build thousands of new coal plants—even though the market for coal power is shrinking fast.
In China demand for coal appears to have peaked in 2014, far earlier than expected. In India electricity from coal plants coming online in 2020 is expected to cost more than solar energy does today. Yet, both countries—and also Japan, the region’s third-biggest economy—continue to add capacity. China has enough projects on the books to build a new coal plant every week for nearly seven years, according to Greenpeace. By 2020, it could have 400 gigawatts more coal-fired power than it need—more than all coal power in the US combined. And India’s expanding coal fleet will be bigger than what’s needed to meet the country’s electricity demands through 2022. As for Japan, if it moves ahead with all its coal projects on the drawing board, it risks stranding nearly $60 billion worth of assets, as the sector succumbs to overcapacity and competition from other forms of energy with lower marginal costs, such as nuclear and renewables. The downsides of all this excess capacity are obvious: More coal burning means tens of thousands more people dying from air pollution, and much more carbon dioxide flowing into the atmosphere. In India and China, coal also crowds wind and solar power off the grids. Already some 15 percent of China’s wind power goes unused. Given these realities, one might hope that market forces would derail any new coal construction. Yet, in China especially, there’s institutional resistance to changing course. While the Chinese government has put a cap of sorts on new coal capacity, this doesn’t cover all provinces and all types of coal-fired plants. Closing these loopholes will take some political will, given that local governments too often view new plants as an easy way to generate economic growth and preserve mining jobs. In China—as well as in India and Japan—plans haven’t been adjusted to account for the rapidly falling costs and additional capacity of wind and solar power. Japan could be doing more to show that it can run its nuclear-power plants safely, further shrinking any demand for coal. Asian governments also need to push harder to get utilities to make room for renewable energy—either by setting minimum operating hours for the grid to use solar and wind or, as China already has, forcing utilities to pay for unused renewable energy. Operations should be transparent, so the public can see when and why utilities choose to use coal over wind and solar. In India increasing interstate trading of electricity should give solar and wind generators more opportunities to sell their energy. Bloomberg Editorial
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07292016
Only until tomorrow James Jimenez
spox
V
oter registration for the 2016 Barangay and Sangguniang Kabataan elections ends tomorrow, the 30th of July 2016. If history repeats itself—and it always does—that means a great number of people have been trooping to the Commission on Elections (Comelec) offices trying to beat the deadline. It’s a fair bet that many of them will be invoking the new President’s distaste for making the public wait in long queues. The Comelec hasn’t been shy about following the President’s lead in dropping the use of honorifics, and there’s no reason to believe that it will not echo his desire to do away with long lines. In fact, the elimination of long queues has been a kind of Holy Grail for the commission for quite some time now. Thus, prior to the 2016 elections, the Comelec actually started voter registration in 2014, giving people more than a year and a half to register as voters. Satellite registration —the practice of
holding registration events outside of Comelec offices—became a regular thing. Early in the period, despite constant reminders coming from all quarters, relatively few people paid any attention. The Comelec work week was even adjusted to make sure that people could register on Sundays. And yet, it was only as the deadline approached that people started turning up in huge numbers and the lines started to grow in length yet again. Interestingly, it wasn’t just regular folks coming in late; deadline
The Commission on Elections hasn’t been shy about following the President’s lead in dropping the use of honorifics, and there’s no reason to believe that it will not echo his desire to do away with long lines. In fact, the elimination of long queues has been a kind of Holy Grail for the Commission for quite some time now. beaters came from everywhere. Members of the media, prominent netizens and even the occasional high-ranking government official were among those who tried squeeze in before registration shut its doors on the last day of October 2015. Everyone, in other words, including those who had actually helped spread the message of registration. In the end, it didn’t matter that voter-registration sites had been set up in malls, or that registration took place nearly every day—weekends and holidays included—or that the mass media had made the voter-
registration message a daily fixture in their broadcasts. People came when they knew they were running out of time. With only a little more than 1.6 million registrations logged by the beginning of this week, I think it’s safe to say that things haven’t changed all that much. On a somewhat related note, scads of voter IDs languish in Comelec offices nationwide. In the fifth district of Manila, for instance, more than 50,000 IDs lie unclaimed. So, here are some pro tips: first, the Comelec does not send out voter IDs by mail. Neither are voter IDs supposed to be released to barangay officials, no matter what assurances to the contrary you might receive. Second, voter IDs have to be claimed—either personally or through an authorized representative—at the local Comelec office where you are registered. And finally, just a gentle reminder: you don’t need the voter ID for voting. What you need is to be registered to vote. So go do that first. You only have until tomorrow. James Arthur B. Jimenez is director of the Commission on Elections’s Education and Information Department.
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The saint as cinema Tito Genova Valiente
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Women Stepping UP
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his phrase is contained in a page of an operations manual that young graduates and otherwise successful job applicants have to read and memorize. So much so that they actually say “Good morning, ma’am/sir,” even if they can see you are obviously a woman or obviously a man. And this is the start of the demise of the young brains we tried to train in schools. Depending on the course taken, students are trained in critical thinking, creative thinking and even humanities. They are trained in the rigors of math and science—which are exact disciplines—and allowed to create and stretch the brain in creative writing, arts and even communications. Then they graduate and look for a job. Because of high turnovers in the job market, companies have manuals for everything—opening and closing a store; how to fill a juice dispenser; how to pour water into a coffee brewer—everything is written, so there are no mistakes. Then there are manuals for customer service: dealing with an irate customer; saying sorry at the right time; and managing senior citizens and persons with disability (PWDs), etc. These rigid company standards have also caused the demise of the gray matter. You only need to read and memorize. You need not analyze and come up with a better solution. It’s all there in a manual. Your brain only needs to read and memorize. We were in discussion with one of our key managers in a previous business, and he observed the same scenario. So much so that he decided to just hire fresh graduates and draw on their brains like a blank canvas. Rewire them to think. Rewire them to analyze and use different parts of their brain. And he has come up with great results. Many employers, especially in the retail industry, lament this development in personnel training. Most companies complain of high employee turnover, no loyalty and, most of all, no leadership skills for potential managers. “Even the managers who used to come from international food chains are already of lower grades,” he says. And the better ones have been recruited to work abroad because of their language proficiency and their experience working in Manila stores. Yet, we as customers demand good service. As employers, we want good employees who think, learn on the job and who stay. How do we find them? Or do we mold them ourselves? Then you call for customer service from your friendly credit-card provider. You are greeted by a recorded voice that gives you options—press 1 or 2 and here you are waiting for the prompt, “speak to an officer”—which now takes about six to eight presses of different options. This is so even if
Please e-mail your letters to the editor to oped@businessmirror. com.ph. Letters chosen for publication in this section are edited for brevity and clarity.
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he allies of President Duterte (PDU30) are asking for emergency powers since Day One of his administration. I am not sure if this call for emergency powers is an admission in advance that PDU30 will be incapable in resolving the notorious Metro Manila traffic congestion without such emergency powers. But, this seems to be implied from the media pronouncements of no less than the transportation
the bank holds a substantial amount in deposits of your money—they let you speak to a voice. But when you bring cash and open an account, they let you speak to a real person. So even top executives need to go on this journey of “recorded messages,” causing the sales department of a bank the surprise that her customer has complaints about credit-card interests and penalties, and is now pulling out her account. Because credit cards let you speak to a voice, not a real person! Indeed, it is the age of Artificial Intelligence (AI). And it has caused our youth’s brains to all go to waste, too. In a hundred years, we may have bigger thumbs and fingers to operate phones and tablets, and smaller mouths, because we may hardly use them anymore. And bigger ears that listen to recorded messages, too. What is an employer of the future doing? He needs to operate with less people and depend on technology— because at least machines don’t leave you when a next job offer comes. So smart businesspeople will depend less on real people. Because the youth of today grew up without experiencing customer service — they find it normal to listen to recordings of instructions, and find it normal to talk to computers and machines. Ah, gone are the days of real customer service. The market does not demand it anymore, I guess. And this is why I need to visit old haunts, old restaurants that seem to be stuck in a time machine. They have waitstaff who have been there for over 20 years, the food is good and consistent—even without fanfare of who the chef is. And they call you by your name or a simple ma’am or sir—and they do not need manuals. Just natural people skills. I am afraid we are developing a generation that is so removed from the art of service. Sooner or later, we can be replaced by machines, too. And the Pinoy trait of niceness and people skills will soon be a thing of the past. If we are not careful, our biggest differentiator of the Pinoy malasakit and Pinoy “friendliness” may soon be a thing of the past. Good evening, ma’am/sir. Pacita “Chit” Juan is a governor of the Management Association of the Philippines (MAP), the president of Women’s Business Council of the Philippines, and a leader of BPW or Business and Professional Women (Makati). She is an advocate of women empowerment through business. You can find her on LinkedIn (Pacita Juan), Twitter (@chitjuan) or e-mail puj@echostore.ph.
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t the end of the film Ignacio de Loyola, a music so haunting, so sad and so grand fills the moviehouse. It is what I am looking for all throughout this film that is too small for the epic of a life of a man who founded an Order noted for its exquisite zeal and ardor. Films always create expectations. They may come from the subject matter itself couched in the title and the poster images of the film or spread through the press releases that accompany cinematic ventures. In our country, by the token of the many institutions created by the Jesuits and the practices—retreat, formation seminars, media campaigns— stories about Ignacio or Saint Ignatius abound. We can marvel at our memories of those stories about the saint, again be they products of the myth created around him. By myth, we do not mean “false” stories, but the rather grand and awesome adventures attributed through the mist of years and narratives to the man. We want those scenes onscreen. We have labored as students and believers listening to and learning from
the stories. A film about the person has come. We desire no less the visuals of those memories and those lessons. Images, moving (as in motion) and moving us (as in emotion) are top of our list. We do not want long voiceovers because, for many of us, the life and works of Saint Ignatius have already been voiced over by our mentors and recollection guides. Be that as it may, I would still recommend this film, directed by Paulo Dy, for the simple reason that some images make us think. Ignacio, if we are to belabor the point, founded an Order, which has formed schools that have taught men and women to be critical thinkers. One scene shows Ignacio visiting once more a whorehouse. He is already recovering at this point. Inside the room, the man spends the time
conversing with the woman. These scenes have been done in many cinemas, but in Ignacio, the filmmaker pulls off what could have been a ridiculous episode: Ignacio asks the woman to look at the empty chair, as he tells the woman to try if she could see Christ there. The woman looks first, grimaces a bit and, after a while, says, yes, she sees Christ there. Ignacio does not stop there. He asks the woman what is Christ telling her. The audience need not listen to what the woman will say, because then and there, cinema has leaped from the screen to the consciousness of the viewer. The actors have done their work, the man playing the role of Ignacio demonstrating a calmness, a kind of tension rolled into infinity that we do not witness in the previous scenes.
The Sona and financial literacy Alvin P. Ang
EAGLE WATCH
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ne of the critical policy statements released by President Duterte during his first State of the Nation Address was this mandate: “A mandatory financial education for all migrant families and their communities shall be pursued.” This was not highlighted by the analysts and the media, and was drowned in with other statements stressed by the President. However, to researchers in economic and financial literacy, this is an important pronouncement; it is actually one of the policy outcomes that have been coming out in our studies. Similarly, other national studies have impliedly shown the need for financial education. Our take is that it would be critical to not just focus on overseas Filipinos and their families but push for this policy to a broader scale, including everyone. The October 2015 Financial Inclusion and Capability Survey for the Philippines, made by the World Bank, found that 23 percent of Filipinos run out of money for food and other necessities. Moreover, for those with higher income and who are those in the middle class, those earning P50,000 still run short of money for basic necessities. Among these households running short of money, the use of credit is near universal at 94 percent. Credit is also availed at the informal sources rather than banks, cooperatives or microfinance institutions. Last, the World Bank study found that only 20 percent of Filipinos have savings and only 10 percent have bank accounts. These results are corroborated by our research, titled the “Remittance Investment Climate for Rural Households”
(Ricart). This research, originally funded through a grand prize in the Global Development Research Awards in 2011 and supported by other donors, has covered four municipalities: Magarao in Bicol, Maribojoc in Bohol, and Pandi and Guiguinto in Bulacan. Ricart had extracted critical findings on the behaviors of Filipinos in regard to money. Originally focusing on the remittance behavior of overseas Filipino workers (OFWs) and the use of money by their relatives, the study has been adjusted to consider also the money behaviors of nonremittance receiving households. Among the key findings of the study are a) Remitters, migrant and nonmigrant families rely on their own ideas in handling money; b) They assess their
Political will, not emergency powers
secretary himself. Ironically, those seeking these emergency powers seem to have no faith in PDU30. PDU30 is the beacon of political will in the country. Therefore, PDU30 should simply spread his virus to all governors, mayors and barangay chiefs in the Philippines. No amount of emergency powers can replace the power of political will. Giving in to the need for emergency powers is equivalent to surrender or an affirmation that the rule of law is optional in the Philippines. The supposed solution also creates a dangerous precedent in light of the many similar problems that our poor nation faces or will face in the future. Harness political will as the solution, it is the bitter pill that all decent elected politicians should swallow. National and local executives must exercise political will to uphold the rule of law. PDU30 himself declared during his campaign that in our country, adherence to the
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rule of law seems to be optional. There is no need for emergency powers to solve the traffic-congestion problem on Edsa and many other roads in Metro manila, or the whole country for that matter. The traffic-congestion problem is rooted on several factors, but, first and foremost, is the fact that roads in the Philippines are not being used as roads. Philippine roads are often someone’s private parking space or waiting area. Public-utility transport operators and drivers treat the roads as their own tricycle, jeepney and bus terminals. Vendors use the roads as their own market stalls. Another related problematic fact is that sidewalks are also subjected to the same private uses. When these unlawful acts are tolerated or ignored, pedestrians are driven to walk in the road lanes for vehicles. This is unsafe and adds to the limitations placed on road use. Bayani Fernando was right,
but it was not sustained. Big-time mall operators, like SM and Robinsons, should allocate or allot a space in their private lot for the loading and unloading of those people or mallgoers who ride public transport, so as not to obstruct non-mallgoers’ traffic on Edsa and other thoroughfares. It is within the power of the mayors to address this, especially in the planning or building permit-application stage. Francis Tolentino knew this, so maybe Emerson S. Carlos could take over on this now. The Department of Environment and Natural Resources also has the authority to require designs, systems and facilities that will prevent traffic congestion caused by the malls when these mall developers seek approval of their environmental compliance certificate. Traffic congestion is an environmental issue, since this contributes to the increase in harmful air emissions in the area. The ball is in the hands of Secretary Regina Paz L. Lopez.
As I always say, moments do not a movie make. We need the plot to sustain itself. The film Ignacio de Loyola suffers from the same problem that attend biopic: the tendency to make heroic tales into hagiography. In the case of many heroes, we do not want them as saints, for being human is enough. In the case of Ignacio, we know he has become a saint. We do not want that to be a given. The struggles, the frailties, the evil deeds in fact, are required, because we want to learn how he has moved from such vulgar ordinariness into heights not in the introspection but in the action. Those marvelous and magnificent men who have followed him are the best proof of his transitions.
E-mail: titovaliente@yahoo.com.
handling money skills as “good;” and c) They do not need help in handling money. To validate their capacities in handling money, respondents were asked if they record their income and expenses. The most common reply is that there is no record kept but they have a general idea of how much money is received and spent during a month. Juxtaposing the two group of findings easily conclude that there is a gap in financial capacities regardless of income source and income levels. To further strengthen these findings, we are currently working on our fourth round of Ricart, with the support of the Japan International Cooperation Agency Research Institute. This will be done in the municipalities of Dingras in Ilocos Norte and Bansalan in Davao del Sur. Another national study, AmBisyon 2040, showed that about 80 percent of the population aspires only for a simple and comfortable life. Among the 80 percent, some 61 percent wanted a medium-size house; 59 percent a vehicle; 73 percent education of children; 48 percent to have jobs that finance their day-to-day needs; 66 percent to have enough cash for day-to-day needs; and 28 percent to have savings for unexpected expenses. These findings show that ordinary Filipinos are simply aiming to meet basic necessities, and their goals for savings are simple. The government is aware of these challenges. Republic Act (RA) 10679, or the “Act Promoting Entrepreneurship and Financial Education” (authored by Sen. Juan Edgardo M. Angara) had been enacted in August 2015. The aim of RA 10679 was to include entrepreneurship and financial education to be integrated in the edu-
cational system. It is also to be included in the K to 12 curriculum to ensure broader impact to the population. The recent approval of the implementing guidelines of the Personal Equity and Retirement Act is a contributory step for investments. Likewise, private sector has been doing its part with the different efforts of seminars on financial literacy and investments. Advocacies have mostly focused on OFWs and the middle class. This is where the challenge lies: Our data has shown that the majority of the population needs financial education. The inclusion of financial education in the school curriculum will not impact immediately to the population that presently needs financial knowledge the most. Meanwhile, the available channels and mechanisms today are focused mostly on those who have financial capacities only. An overwhelming majority needs to be taught simple personal financial discipline—of just recording income and expenses—and not the intricacies of the stock market or mutual funds (which others think can come later). Ordinary wage earners, such as janitors, security guards, clerks, teachers and even government employees, are severely affected by debts. The government and the private sector should combine their efforts in helping these people. These are the people really needing financial freedom. We will not be surprised why the Family Income and Expenditure Survey showed that there are more poor employed people. We hope that we could all join hands in designing a financial-literacy program to change our money behaviors—from borrowers to savers, and from day-to-day living to focusing on the future.
My appeal to PDU30 and his advisers, please bring back the pedestrian sidewalks and roads to the people. These infrastructure must be devoted for the purpose upon which they were built. No private individual or entity should be allowed to monopolize them. The few who obtain benefits from their unlawful use of the sidewalks and roads must sacrifice and give way for the common good. Let us bring back decency in everybody, and not allow ourselves to be victimized further by the noisy and the selfish. Please remember Filipinos in Singapore, Saudi Arabia and other countries exert efforts to follow the law and avoid violations. Why not here in their own country. It is unjust and unfair to the private subdivisions for the government to target their private enclave. Except for a few corrupt homeowners there, many of them worked very hard to enjoy their private space. Let us try the
common-sense solution first—rid the sidewalks and road of all obstructions before invading the privacy of those who may have nothing to do with the problem in the first place. FYI, I am a provinciano from Laguna and do not live in the posh villages. Political will to uphold the rule of law must prevail at all times. Please remove all obstructions on Edsa, C-5, Commonwealth and Quezon Avenues, all other major thoroughfares, all roads and sidewalks in Baclaran, Divisoria, Cloverleaf and similar bottleneck areas, and all over the country. Pagkatapos, bantayan lang po ng mga autoridad 24/7. Let it be a sustained effort on the part of the government, and let it be a way of life for the people to free the sidewalks and roads so everybody could benefit from their use. Daghang salamat. Fernandino Concepcion Laguna
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Philippine PEN to launch Joel Pablo Salud’s book of humorous essays
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he Philippine Center of the International PEN (Poets and Playwrights, Essayists, Novelists) will launch Joel Pablo Salud’s book of essays, The Chief is in the House: My little journal of angst and peeves, on July 30, 5 p.m., at the Solidaridad Bookshop, Padre Faura, Ermita, Manila. Salud is acclaimed writer and journalist. He is currently the editor in chief of the Philippines Graphic magazine and a member of the Manila Critics Circle. Published by the UST Publishing House, The Chief is in the House is a collection of 50 essays that, according to the blurb, “displays a vast range of subjects—from the author’s rambunctious world within the walls of the newsroom to controversies that
hounded and continue to hound the country and the world at large. It’s an experiment on humor, but one that puts context into what is otherwise needless verbiage.” This event is open to the public. Admission is free. For inquiries, contact Solidaridad at (632) 254-1086.
Friday, July 29, 2016
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‘AIIB can help mend Manila-Beijing ties’ T By Cai U. Ordinario
@cuo_bm
he Asian Infrastructure Investment Bank (AIIB) can help foster cooperation between the Philippines and China in the wake of the recent ruling on the South China Sea by an arbitral tribunal, according to a local economist. In a post at the East Asia Forum, Philippine Institute for Development Studies (PIDS) senior research fellow Adoracion M. Navarro said a multilateral approach through the AIIB can help mend relations between Manila and Beijing. Last month the International Tribunal for the Law of the Sea upheld the country’s rights in the South China Sea. China, however, rejected the ruling. “It is difficult to speculate at this point how the situation will evolve. But the Duterte administration may
30% China’s voting power in AIIB, with the rest divided among the other members
decide to look beyond bilateral negotiations to the multilateral AIIB as another option for infrastructure
financing,” Navarro said. “The AIIB can provide improved transparency and ameliorate other governance concerns surrounding Chinese investment,” she added. The AIIB can also help the Duterte administration finance the country’s infrastructure needs, particularly the President’s proposal to create the Mindanao rail. The Mindanao rail project has not been included in the Public Investment Program, which is the government’s medium-term publicinvestment blueprint. Navarro said AIIB’s improved transparency policies can assure the government that issues concerning Chinese investment in the past will be repeated. She said some of these investments resulted in controversial projects, such as the North rail. “While China holds almost 30 percent of the voting power within the AIIB, the rest is divided among the other members, which already have subscriptions. The ‘no political interference’ clause in the AIIB Articles of Agreement is expected to provide comfort to both the Filipino and Chinese public,” she added. Navarro said the Philippines can also explore cofinancing with
the AIIB, similar to the cofinancing agreements it signed w ith multilateral banks. The AIIB has cofinancing agreements with the Asian Development Bank, the European Bank for Reconstruction and Development, and the World Bank. The Philippines officially signed up as the 57th founding member of the AIIB on December 31, 2015. As a founding member of the AIIB, Navarro said, the Philippines’s capital contribution is $196 million, payable in five years or $39 million per year, and it must pay the initial tranche in 2016. In February, Difference Group Founder and CEO Dan Steinbock said the Philippines must pursue greater economic cooperation with China to insulate the economy from “global uncertainties.” Steinbock added that for one, Chinese capital can do a lot to help rebalance growth in the Philippines. He said countries like Vietnam, which also has territorial disputes with China, is able to explore greater economic cooperation with Beijing. This, Steinbock said, makes it possible for Manila to strike the same kind of partnership with Beijing, given that China is one of the Philippines’s major trade partners.
Nonprofit schools regain tax-exemption privilege By David Cagahastian
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@davecaga
nternal Revenue Commissioner Caesar R. Dulay has effectively revoked a memorandum order issued by his predecessor, which required nonstock, nonprofit educational institutions to renew every three years their constitutionally granted tax exemption. Dulay issued Revenue Memorandum Order 44-2016, which amends Revenue Memorandum Order 20-2013 issued by former Internal Revenue Commissioner Kim Henares, to restrict the claims of tax exemptions of these nonstock, nonprofit educational institutions. Under Henares’s repealed memorandum, nonstock, nonprofit educational institutions have to renew their tax exemptions every three years.
Oil. . .
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Oil has slipped more than 15 percent since early June after almost doubling from a 12-year low in February. While the global oversupply has eased amid supply disruptions from Nigeria to Canada, high inventories of both crude and refined fuels coupled with signs of faltering demand growth have stifled the recovery.
Rising stockpiles West texas Intermediate (WTI) oil for September delivery dropped $1.11, or 2.6 percent, to $41.81 a barrel at 1:17 p.m. on the New York Mercantile Exchange. Prices touched $41.73 earlier, the lowest since April 20. Total volume traded was down 13 percent from the 100-day average. Brent for September settlement fell $1.38, or 3.1 percent, to $43.49 a barrel on the London-based ICE Futures Europe exchange. Futures reached $43.40, the
But Dulay’s memorandum dated July 25 clarified the nature and tax status of these educational institutions, and excluded these taxpayers from the requirement to renew their tax-exemption rulings every three years. Dulay cited the provisions in the 1987 Constitution, which provides the tax exemption of nonstock, nonprofit educational institutions, particularly Section 4 of Article XIV, as reiterated in Section 30 of the National Internal Revenue Code. “It is clear and unmistakable from the aforequoted constitutional provision that nonstock, nonprofit educational institutions are constitutionally exempt from tax on all revenues derived in pursuance of their purpose as an educational institution and used actually, directly and exclusively for educational purposes,” Dulay’s memorandum said.
“This constitutional exemption gives the nonstock, nonprofit educational institutions a distinct character. And for the constitutional exemption to be enjoyed, jurisprudence and tax rulings affirm the doctrinal rule that there are only two requisites: that the school must be nonstock and nonprofit; and, that the income is actually, directly and exclusively used for educational purposes. There are no other conditions and limitations,” it added. However, Dulay said that, for purposes of updating the records of the Bureau of Internal Revenue and monitoring the tax exemption of nonstock, nonprofit educational institutions, those with tax-exemption rulings or certificates issued prior to June 30, 2012, are required to apply for new taxexemption rulings, which will no longer be required to be renewed every three years.
lowest since May 10. The global benchmark traded at a $1.68 premium to WTI. US crude inventories climbed to 521.1 million barrels in the week ended on July 22, leaving supplies at the highest seasonal level in decades, EIA data show. Stockpiles at Cushing, Oklahoma, the delivery point for WTI and the biggest US oil-storage hub, increased by 1.11 million barrels to 65.2 million, the EIA data show. Crude production in the US rose by 21,000 barrels a day to 8.52 million last week, marking the longest series of gains since January. US oil explorers have boosted the number of active rigs by 55 since the start of June to 371, with 14 added last week, Baker Hughes Inc. said on July 22.
distillate fuel, a category that includes diesel and heating oil, slipped 780,000 barrels to 152 million. “The crude number was a big surprise,” said Craig Bethune, a fund manager at Manulife Asset Management Ltd. in Toronto who focuses on energy and natural resources investments. “This was a very negative report. The only positive headline was the distillate number.”
Refinery activity Refineries bolstered operating rates by 0.8 percentage point to 92.4 percent of capacity. Gasoline supplies rose 452,000 barrels to 241.5 million, the highest since April, the report showed. Stockpiles of
Oil-market news Iraq is negotiating with Exxon Mobil Corp. and Petrochina Co. to develop two oil fields in the south of the country. as it seeks to maintain overall production at about 4.8 million barrels a day for the rest of 2016, Deputy Oil Minister Fayyad Al-Nima said. Brazil’s interim government is studying the benefits of scrapping nationalistic oil legislation that was championed by now suspended President Dilma Rousseff and her leftist Workers’ Party. Bloomberg News