Businessmirror July 30, 2018

media partner of the year

United nations

2015 environmental Media Award leadership award 2008

BusinessMirror A broader look at today’s business

www.businessmirror.com.ph

n Monday, July 30, 2018 Vol. 13 No. 289

Liberalization tops wish list of bizmen for Arroyo

T

By Elijah Felice E. Rosales

the country can no longer bear to lose investment opportunities resulting from restrictions on foreign ownership.

Among the bills Lopez wants the Arroyo speakership to priori-

tize is House Bill 4595, filed by Rep. Arthur C. Yap of the Third District of Bohol. HB 4595 seeks to lift foreign equity and capitalization requirements in Republic Act 8762, or the Retail Trade

“The business community is comfortable with Speaker Arroyo because she is an economist, and we know that she will focus on the economic issues. One issue that has been discussed in Congress is the share of foreign equity, [and] we have to liberalize that.”

—Barcelon

Liberalization Act. According to Lopez, if the measure is neglected, then the countr y can bid farewell to potentia l investors in the retail industr y.

How about police power in local PPPs? Alberto C. Agra

ead

L AlbertoPPP C. Agra

L

ast Monday I wrote about Expropriations in local PPPs. I posited that local government units can expropriate private property and contribute the use of that property in a public-private partnership. In the PPP contract, the LGU can recover from the private sector proponent (PSP) what it will pay as just compensation to the private landowner.

Continued on A11

DOT chief quotes DU30: No casinos on Boracay

By Ma. Stella F. Arnaldo

“I confirmed it with the President, and his stand is, ‘there would be no casinos in Boracay.’ The President’s stand has not changed.”

—Romulo Puyat

@akosistellaBM Special to the BusinessMirror

T

By Jovee Marie N. dela Cruz @joveemarie

F

See “Budgets,” A2

P25.00 nationwide | 5 sections 28 pages | 7 days a week

Continued on A2

Budgets of 4 economic agencies up for scrutiny OLLOWING the changes in the leadership of the House of Representatives, the House Committee on Appropriations on Sunday said deliberations for the proposed P3.757-trillion national budget for 2019 will begin as scheduled on Tuesday, July 31.

Among the first to be scrutinized by the appropriations panel are the proposed budgets of the Department of Budget and Management (DBM), National Economic and Development Authority (Neda), Department of Finance (DOF) and the Bangko Sentral ng Pilipinas (BSP).

business news source of the year

@alyasjah

HE country’s trade chief and top business groups want the new House leadership to prioritize the passage of measures that will open up the economy to foreign participation.

Trade Secretary Ramon M. Lopez said he expects the House of Representatives to put in effort in passing several liberalization measures under Speaker Gloria Macapagal-Arroyo. He argued

2016 ejap journalism awards

A retail outlet in Makati City announces a preholiday sale in this BusinessMirror file photo. Liberalization of the foreign-equity limits in the retail sector is among the key reforms that foreign business groups are looking forward to in the new House leadership under Speaker Gloria MacapagalArroyo. NONIE REYES

PESO exchange rates n US 53.3540

HERE will be no casinos on Boracay. Period.

The Department of Tourism (DOT) sought to reassure the public that President Duterte has not changed his mind on keeping casinos out of Boracay Island, as the countdown to the popular destination’s announced reopening on October 26 has begun.

The agency also stressed that only hotels and resorts that have DOT accreditation will be allowed to reopen.

“The President recently reiterated to the DOT his earlier position against the entry of casino operations in Boracay,” said Tourism Secretary Bernadette Fatima Romulo Puyat in an interview with the BusinessMirror over the weekend.

“This is in line with the desire of the DOT and tourism stakeholders

in Boracay to further develop the island as a sustainable and familyoriented destination,” she added.

The DOT chief said she asked Duterte to clarify this issue just last Friday, July 27: “I confirmed it with the President, and his stand is, ‘there would be no casinos in Boracay.’ The President’s stand has not changed.”

Also last Friday, officials from the Leisure and Resorts World Corp. (LRWC), the local partner of Macau’s Galaxy Entertainment Group Ltd., said it was still on track Continued on A7

n japan 0.4797 n UK 69.9524 n HK 6.7987 n CHINA 7.8641 n singapore 39.1417 n australia 39.3539 n EU 62.1254 n SAUDI arabia 14.2266

Source: BSP (27 July 2018 )

News

BusinessMirror

A2 Monday, July 30, 2018

Losses to farmers, fishers from 3 storms near ₧1.8B

L

By Jasper Emmanuel Y. Arcalas

tial damage report, which is yet to be validated, released over the weekend.

The report noted that DA regional field offices are now conducting field validation “to determine the extent of damage and losses brought by the three weather disturbances, as well as the needs of the affected farmers and fishermen.”

Most of the production losses were recorded in the rice sector,

which accounted for 79 percent of the total, according to the DA. A total of 51,834 rice farmers in at least 18 provinces lost 20,242 metric tons (MT) valued at P1.41 billion.

T he storms affected about 97,016 hectares of rice fields in the provinces of La Union, Pangasinan, Bataan, Bulacan, Nueva Ecija, Pampanga, Tarlac, Zambales, Cavite, Batangas, Laguna, Rizal, Quezon, Occidental Mindoro, Oriental Mindoro, Antique, Aklan and Negros Occidental.

“Region 3 remains the most a f fe c te d reg ion i n ter m s of r ice d a mage a nd losses t hat amount to P770.56 million [55 percent], while Pangasinan is the most affected province at P492.58 million [35 percent],” the report read.

“The increase in the overall values is attributed to the reports from the provinces of Pangasinan and Zambales,” it added.

The DA said a total of 6,983 bags of palay used for seedbeds were washed out. The report also indicated that the fisheries sector lost P236.06 million, or 13 percent of the total damage.

The typhoons affected 1,731

fishermen in the provinces of Abra, Benguet, Ifugao, Kalinga, Mountain Province, Ilocos Norte, La Union, Pangasinan, Cagayan, Bataan, Bulacan, Pampanga, Cavite and Antique.

“The increase in values for this commodity comes from the reports of the province of La Union and Pangasinan,” it said.

Production losses in the corn sector reached 4,350 MT valued at P61.14 million.

The three weather disturbances affected 1,847 hectares of corn fields in the provinces of Pangasinan, Bataan, Nueva Ecija, Pampanga, Tarlac, Zambales and Negros Occidental.

“The increase in values is due to the reports from the provinces of Pangasinan and Nueva Ecija,” the report read.

Da mage to t he high-va lue crops sector rose to P73.71 million with a production volume loss of 1,939 MT. The storms damaged assor ted vegetables planted on 759 hectares.

“As for livestock and cassava, the amount of production loss remains the same at P4.36 million and P1.34 million, respectively,” the report said.

administration with P659.3 billion, higher by P72.2 billion or 12.3 percent than its cash-based equivalent in the 2018 budget.

Other agencies with big allocations are the Departments of Public Works and Higways with P555.7 billion, Interior and Local Government with P225.6 billion, National Defense with P183.4 billion, Social Welfare and Development with P173.3 billion, Health with P141.4 billion, Transportation with P76.1 billion, Agriculture (DA) with P49.8 billion, the Judiciary with P37.3 billion and the Autonomous Region in Muslim Mindanao (ARMM) with P32.3 billion.

By sector allocation, Social Services accounts for 36.7 percent of the entire budget, reaching

P1.377 trillion. This is followed by Economic Services (28.4 percent, P1.068 trillion), General Public Services (18.9 percent, P709.1 billion), Debt Burden (11.0 percent, P414.1 billion) and Defense (5.0 percent, P188.2 billion). Meanwhile, cash-based appropriations for infrastructure are set at P874.8 billion, equivalent to 4.5 percent of GDP.

By Expense Class, the P3.757 trillion cashbudget is divided as follows: Personnel Services (31.5 percent, P1.185 trillion), Capital Outlays (20.0 percent, P752.7 billion), Allotment to LGUs (17.1 percent, P640.6 billion), Maintenance Expenditures (15.0 percent, P562.9 billion), Debt Burden (11.0 percent, P414.1 billion), Support

to GOCCs (5.0 percent, P187.1 billion), and Tax Expenditures (0.4 percent, P14.5 billion).

House Committee on Appropriation Chairman Karlo Alexei B. Nograles of Davao has confirmed officially receiving Malacañang’s proposed National Expenditure Program (NEP) from Speaker Arroyo’s office. Submitted by the Palace to Congress last Monday, the NEP will serve as the basis for the 2019 GAA. “As promised under Speaker Gloria Macapagal-Arroyo, the per-agency debates on the P3.757-trillion national budget for 2019 will start this week. The House recognizes the importance of the immediate passage of the national budget and we in the Appropriations panel are bent on approving the best possible General Appropriations Act [GAA] in a timely manner,” Nograles said.

“Now, we are poised to continue the streak of approving the budget on time, without any reenacted budget under President Duterte,” said Nograles. The proposed 2019 national budget is cash-based as opposed to traditional, multiyear obligations-based budgeting. The DBM has described it as the more efficient budgeting method since it limits incurring obligations and disbursing payments for goods delivered and services rendered, inspected and accepted within the fiscal year.

@jearcalas

OSSES incurred by farmers and fishermen in at least seven regions battered by two tropical storms and a depression are nearing P1.8 billion, according to the initial report of the Department of Agriculture (DA).

In its latest report, the DADisaster R isk Reduction and Management Operations Center (DA-DRRM OpCen) said the total damage to the farm sector caused by Tropical Storm Henry, Severe Tropical Storm Inday and Tropical Depression Josie rose to P1.79 billion.

The regions affected by the three weather disturbances are: Cordillera Administrative Region, Regions 1, 2, 3, 4A, 4B and 6.

“The increase in the overall damage and losses is attributed to reports from the provinces of La Union, Pangasinan, Bataan, Bulacan, Nueva Ecija and Zambales; particularly on rice, corn, high-value crops and fisheries,” DA-DRRM OpCen said in its ini-

Budgets. . .

Continued from A1

Also scheduled to be tackled by the House this week are the proposed budgets of the Philippine Charity Sweepstakes Office, Philippine Amusement and Gaming Corp., Department of Agriculture, National Food Authority, National Irrigation Administration, Philippine Coconut Authority, Fertilizer and Pesticide Authority and Department of Agrarian Reform.

Under the proposed 2019 GAA, Education will remain a top priority of the Duterte

₧236.06M

The estimated losses of the fisheries sector, or 13 percent of the total damage

SOUTHWEST MONSOON AFFECTING WESTERN SECTIONS OF LUZON AND VISAYAS as of 5:00 am - July 29, 2018

www.businessmirror.com.ph

Liberalization tops wish list of bizmen for Arroyo Continued from A1

“We won’t maximize the potentials in investment,” he told the BusinessM irror. This sentiment was echoed by John D. Forbes, senior advisor of the American Chamber of Commerce of the Philippines (AmCham). In a text message to the BusinessMirror, he listed amendments to the retail trade liberalization law as one piece of legislation American investors are looking forward to.

HB 4595 has yet to make significant progress in Congress, as it is pending deliberations in the House Committee on Trade and Industry.

Public utility Another piece of legislation Lopez and Forbes urged Arroyo to act on is HB 5828, which was coauthored by the Speaker herself. HB 5828 consolidates House Bills 4389, 4468, 4501, 4787, and 4996, and amends the Public Service Act (PSA) by redefining utilities, particularly excluding telecommunications.

Article 12, Section 11 of the 1987 Constitution holds that public utilities must be solely operated by firms that are 60 percent owned by Filipinos. Removing telecommunications from the strict definition of utilities is seen to boost competition in the sector.

To properly define what utilities are, Rep. Yap of Bohol, who is House Committee on Economic Affairs chairman, earlier asked the President to certify as urgent the amendments to the PSA or the Commonwealth Act 146.

According to Yap, telecommunication companies are “not utilities in the same sense as power distribution and sewerage distribution are.”

He said telecoms in Hong Kong, Korea, Malaysia, Singapore, Indonesia, Vietnam and other parts of the world are not considered as utilities.

Hence, there is a need for a proper definition “so they [telecoms] can be removed from the ambit of constitutional prohibitions.” In co-sponsoring the measure earlier, Arroyo had said that amending the 80-year-old law will provide a better quality of services to the Filipino people.

“Consumers often experience high prices and poor quality of basic services in the Philippines, because only a few local players or oligarchs effectively control the market. Competition and foreign investment are inhibited, because limitations that should only apply to the operation of a utility are usually also applied to all public services,” Arroyo had said.

“The key to solving this problem is to develop a clear statutory definition of a public utility by amending the Public Service Act,” she added.

HB 5828 defines public utility as “a person that operates, manages and

controls for public use” distribution of electricity, transmission of electricity and water pipeline distribution system or sewerage pipeline system. The bill passed the House’s third and final reading September of last year and is now awaiting Senate action.

‘Speaker knows her economics’ George T. Barcelon, chairman of the Philippine Chamber of Commerce and Industry, claimed business executives have no problem working with Arroyo. He said the Speaker knows her economics, and believes liberalization measures will be prioritized under her leadership.

“The business community is comfortable with Speaker Arroyo because she is an economist, and we know that she will focus on the economic issues.

One issue that has been discussed in Congress is the share of foreign equity, [and] we have to liberalize that,” Barcelon told the BusinessMirror.

“At the same time, I hope the TRAIN 2 [second Tax Reform for Acceleration and Inclusion], as what the President made clear in his Sona [State of the Nation Address], within the year is passed,”he added.

The TRAIN 2 will slash corporate income tax (CIT) to 25 percent from 30 percent and will also rationalize tax incentives. It will also create the Fiscal Incentives Regulatory Board tasked to approve fiscal incentives and headed by the finance chief.

Forbes also listed the reduction of CIT as one measure his group wants Arroyo to put first. He hopes, however, that the rationalization of fiscal incentives will be able to maintain the country’s export competitiveness.

On top of this, AmCham’s wish list of action it hopes the new House leadership will prioritize: amendments to the build-operate-transfer law; TRAIN 1B or amnesty with bank secrecy reforms; amendments to the Central Bank Act; and amendments to the agricultural tariffication law.

Lopez, for his part, wants Arroyo to push for amendments to the Corporation Code; renewal of the Magna Carta for Micro, Small and Medium Enterprises that lapses this year; and the institutionalization of the Pondo sa Pagbabago at Pag-asenso program.

Arroyo was elected House Speaker on Monday, and took her oath just minutes before President Duterte was to deliver his third State of the Nation Address. She got the approval of 184 lawmakers, and is expected to deliver priority legislations of this administration. In a speech last Thursday, President Duterte said he hopes there will be changes with Arroyo at the helm of the House of Representatives.

With a report by Jovee Marie N. dela Cruz

Cabinet body okays Cebu Bus Rapid Transit project

By Cai U. Ordinario

T

@cuo_bm

HE Philippines may soon have its first bus-rapid transit system as the interagency Investment Coordination Committee (ICC) Cabinet Committee (Cabcom) recently approved the resumption of the implementation of the Cebu BRT, according to the National Economic and Development Authority (Neda).

Socioeconomic Planning Secretary Ernesto M. Pernia told the BusinessMirror that the resumption of the Cebu BRT was among the projects approved by the ICC Cabcom last Friday.

The Department of Transportation (DOTr) earlier suspended the implementation of the Cebu BRT to look for alternative mass transport options for the Queen City of the South. “For Cebu BRT, ICC approved the resumption of implementation which the DOTr suspended as it was studying the alternatives like rail,” Neda Undersecretary for Investment Programming Rolando G. Tungpalan told the BusinessMirror over the weekend. “[You may] recall the Cabinet and ICC gave the DOTr until June to come up with recommendations on options or proceed with the World

Bank/French Development Agency [AFD]-funded Cebu BRT,” he added.

Tungpalan said the DOTr, World Bank and AFD conducted a joint site visit with a third-party consultant, after which they determined that BRT was the “most doable” masstransport option.

He said the ICC Cabcom approved the revised implementation plan of the DOTr for the Cebu BRT. The first phase of the project will be operational by June 2021, a year before the President steps down from office. “[The site visit] led to moving forward with BRT as the most doable option that could address congestion in the near term , while other projects—rail—are being planned,” Tungpalan said.

“The DOTr committed to complete the feasible sections of BRT, for Phase 1 to be operational by June 2021,” he added.

The $228.5-million BRT project will be financed by a $116-million loan from the World Bank and the rest will be financed by AFD and the Philippine government in counterpart funding.

The Cebu BRT project aims to improve the urban passenger transport system in Cebu City in terms of the quality and level of service, safety and environmental efficiency.

Davao Bypass

Apart from the Cebu BRT, the ICC Cabcom also approved changes to the Davao City Bypass project, in order to address the rapid development of the city.

The proposed Davao City Bypass Construction Project which is within Davao City has an approximate 44.6-kilometer length, including the tunnel section, which will start from the DavaoDigos section of the Pan Philippine Highway in Toril, Davao City, and will terminate intersecting the Davao-Agusan National Highway in Panabo City.

“Davao is expanding [so there was a need for] widening from two lanes to four lanes, so [this is a] major scope change,” Tungpalan said.

Apart from the Cebu BRT and the Davao City Bypass, the other projects approved by the ICC Cabcom will mean changes in the Panguil Bay Bridge, as well as the Flood Risk Management projects for Cagayan, Tagoloan and Imus rivers.

The changes to other projects approved by the ICC Cabcom, Tungpalan pointed out, are still within the bounds that the ICC allows.

Tungpalan said the “other projects involved cost overrun and additional funding but remain economically viable.”

News

BusinessMirror

www.businessmirror.com.ph

Monday, July 30, 2018 A3

DOF upbeat on prospects for quick passage of rice tariffication bill

T

By Rea Cu

@ReaCuBM

HE Department of Finance (DOF) has expressed optimism that Congress would pass soon enough the rice tariffication bill, after President Duterte has declared the proposal to liberalize rice imports an urgent and priority measure, in line with efforts to ease inflation and bring down prices of the food staple by as much as P7 per kilo.

Finance Secretary Carlos G. Dominguez III said liberalizing rice imports through the passage into law of the rice tariffication bill pending in Congress is vital in helping low-income households cope with inflation, given that rice accounts for 20 percent of their consumption.

“Along with a national ID [identification] system, the passage of the rice tariffication bill will complement the social mitigation measures we are implementing now to further ease the impact of inflation on poor households,” Dominguez said.

Based on estimates by the Bangko Sentral ng Pilipinas, allowing

cheap rice imports with tariffs will immediately lower the inflation rate by 0.4 percentage points.

The House of Representatives appropriations committee has already ​approved the funding provision for the consolidated version of its rice tariffication bill, while its counterpart version in the Senate is still being discussed at the committee level.

Package 1B, Package 2

Earlier in the month, DOF Undersecretary Karl Kendrick T. Chua explained that the DOF is hoping for three measures to be approved by

Congress within the year, with two measures under the Comprehensive Tax Reform Program (CTRP), namely Package 1B and Package 2, and the other being the Rice Tarrification Act. Under House Bill (HB) 4904 or the rice tariffication bill is the proposal to amend the Agricultural Tariffication Act of 1996, prescribing import volumes to be removed and imports to be opened to private entities.

Measures under Package 1B include increasing the motor vehicle users charge, an estate tax amnesty program, as well as a measure on general tax amnesty, amendments to the bank secrecy law and auto-

Safety nets. . .

matic exchange of information.

Package 2 of the CTRP, which aims to reduce corporate incometax rates from 30 percent to 25 percent while rationalizing the country’s fiscal incentives regime, was submitted by the DOF to Congress in January this year. The measure is under HB 7458 at the House of Representatives.

In his third State of the Nation Address (Sona), the President said rice tariffication was among the long-term solutions the government is working on to lower inflation, provide farmers with additional resources and reduce rice

Continued from A12

For basic education, there is a P32.1billion outlay for the Government Assistance to Students and Teachers in Private Schools, “in which government ‘buys’ seats in private schools for students in areas where there is a shortage of public schools.”

Financing free public college will be covered by the P51-billion allocation for the implementation of the Universal Access to Quality Tertiary Education.

The government will also be picking the tab for irrigation fees waived by the Duterte-

prices by up to P7 a kilo.

“We need to switch from the current quota system in importing rice to a tariff system where rice can be imported more freely. I ask Congress to prioritize this crucial reform, which I have certified as urgent today,” the President said in his Sona.

The President also reiterated his commitment to a comprehensive tax reform, and called on the Congress “to continue the job,” starting with the approval of his administration’s proposed reforms in the corporate tax system and the rationalization of fiscal incentives. signed free irrigation law. Andaya said P2.6 billion is allocated for this in next year’s draft P3.757-trillion national budget. Another category in social protection spending provides safety nets for displaced individuals, Andaya said. Under this is the P3.3-billion TUPAD program of the Department of Labor and Employment for dismissed workers.

The lower chamber is expected to start its

The Chief Executive described such reforms, which comprise Package 2 of his tax-reform program, as “urgent,” and said he hopes to sign the bill into law before the year ends.

Dominguez said the DOF will “extend all the technical support that Congress needs in heeding the President’s call for the passage of Package 2 this year, especially for the benefit of our small and medium enterprises.”

“President Duterte has always been the principal advocate of inclusive growth and of the means to achieve it. Tax reform is a key tool to reach that objective,” Dominguez added. deliberations for the proposed 2019 P3.757trillion national budget on Tuesday. Under the 2019 national budget, Social Services accounts for 36.7 percent of the entire budget, reaching P1.377 trillion. This is followed by Economic Services (28.4 percent, P1.068 trillion), General Public Services (18.9 percent, P709.1 billion), Debt Burden (11.0 percent, P414.1 billion) and Defense (5.0 percent, P188.2 billion). Jovee Marie N. dela Cruz

A4 Monday, July 30, 2018 • Editor: Vittorio V. Vitug

Economy BusinessMirror

www.businessmirror.com.ph

Neda prioritizing PPP projects to entice private-sector investments in regions

T

By Cai U. Ordinario

@cuo_bm

HE National Economic and Development Authority (Neda) is preparing a “menu” of possible public-private partnership (PPP) projects to entice the private sector to invest in various regions.

In a recent briefing, Neda Undersecretary for Region Development Adoracion M. Navarro said they are encouraging more local government units (LGUs) to submit project lists.

This also serves as the national government’s answer to the private sector that felt left out in the Duterte administration’s massive infrastructure program. “ The investment program is dynamic. It evolves. One feature that might evolve is the type of financing,” Navarro said.

“We at the regional development office are preparing something to encourage more PPPs in the regions. Even if these are small projects, we will be able to present this as numerous PPP projects. The private sector may find this very attractive,” she added.

Navarro said one of the first regions to submit a list was the Davao region. The list included the Mati City Agri-Fisheries Center; development of cacao plantation farm; establishment of cacao processing plant; and development of the Tagum City Aquaculture Complex.

The list also included the construction of a waste-to-energy facility; a possible monorail in the city; and the Davao airport project, among others.

“That’s a sample for one region and again, inputs are coming in and we hope to come up with projects in all the regions to make these available to the project sector,” Navarro said.

Navarro said there is a host of available PPP options for LGUs. They can go with the build-operate-transfer (BOT) route, which

is consistent with the build-operate-andtransfer law and its implementing rules and regulations.

The BOT law provides various permutations of PPP contractual arrangements.

Apart from BOT, these options include build and transfer; build-lease-andtransfer; and build-own-and-operate.

The list also includes build-transferand-operate; contract-add-and-operate; develop-operate-and-transfer; rehabilitate-operate-and-transfer; and rehabilitate-own-and-operate.

They can also resort to joint ventures which are allowed under the joint-venture guidelines of the government. Navarro also said LGUs can even come up with their own PPP code to facilitate their engagements with the private sector.

Meanwhile, Neda Public Investment Staff Officer in Charge-Director Hazel Iris S. Baliatan said of the 4,490 available projects, most already have funding. The bulk, or 4,095 projects and programs (PAPs), will be funded using locally generated funds.

Around 227 PAPs will be funded through other sources, such as purely private investment and internally generated funds; around 68 will be financed through official development assistance; and 39 will be funded through PPP. However, Baliatan said around 61 projects still do not have funding sources. The government, the Neda said, was already in the process of finding the appropriate financing for these projects.

Delayed approval of FINL has no negative impact on ‘BBB’ program

T

HE two-month delay in the approval of the Foreign Investment Negative List (FINL) will not have a direct impact on the government’s massive infrastructure initiative, the National Economic and Development Authority (Neda) said.

Socioeconomic Planning Secretary Ernesto M. Pernia told the BusinessMirror that the delay in FINL, approval by the President has “no direct connection” to the “Build, Build, Build” (BBB), as well as Public Infrastructure Program.

In a briefing on Thursday, Pernia said the President has yet to approve the FINL, which the Neda submitted two months ago. However, he assured the updated FINL will be signed soon.

“We have proposed to the President, who wanted actually to liberalize the current investment negative list,” Pernia said.

“We have already drafted an EO [executive order], and that EO is ready for signing. It will be signed pretty soon.”

The updated FINL includes, among others, allowing foreign contractors to participate in locally funded projects.

This will also allow local developers and contractors to bring in foreign contractors and other experts to participate in infrastructure projects.

Under the current rules, foreign contractors cannot participate in locally funded construction projects. But once the updated FINL is signed, foreign contractors can already operate in the Philippines.

Earlier, the Asian Development Bank said allowing foreign companies and contractors to participate in the government’s BBB program can speed up and improve the implementation of its massive infrastructure program through International Competitive Bidding. “[The updated FINL includes] contracts for the construction and repair of locally funded public works projects. Remember that before, foreign contractors cannot be involved in locally funded projects but now

that will be eased,” Pernia said.

Apart from contractors, the FINL will also ease foreign restrictions on private recruitment, whether for local or overseas employment; teaching in the higher education levels; retail trade enterprises; and domestic market enterprises.

Pernia said the updated FINL will make it possible for a 100-percent owned telecommunications firm to operate in the country.

The Neda chief said while some laws need to be amended to make these changes possible, there are already a number of bills filed in Congress that will support the FINL. “Some of these have to be legislated.

There are bills in Congress, [and] some of them are in advanced stages that will allow us to liberalize these other items,” Pernia said.

The Neda is tasked to review and revise the country’s Regular Foreign Investment Negative List, which contains restrictions on foreign investments and the practice of professions based on the constitution and Philippine laws.

The RFINL contains investment areas/ activities where foreign-equity participation is limited by mandate of the Constitution and specific laws. It also consists of investment areas and activities where foreign-equity participation is limited for reasons of defense, security, risk to public health and morals, and protection of small- and medium-sized domestic market enterprises.

The amendment of the list is headed by the Neda secretariat, as provided for under Section 8 of Republic Act 7042, or the Foreign Investments Act of 1991, which states that amendments may be made upon the recommendation of the secretary of national defense or the secretary of health, or the secretary of education, endorsed by the Neda, approved by the President and promulgated by a presidential proclamation. Cai U. Ordinario

www.businessmirror.com.ph • Editor: Angel R. Calso

The World BusinessMirror

Monday, July 30, 2018

A5

‘Nafta talks now making amazing progress’ Northern California wildfire raging into its fourth day

T

he US is now making “absolutely amazing’’ progress toward renegotiating the North American Free Trade Agreement (Nafta), and a deal could come as early as this fall, according to White House Council of Economic Advisers Chairman Kevin Hassett.

“My guess is that we will see something by the fall,” Hassett said in an interview that aired on Saturday on Fox News. (Fall in the US is variously described as running from September 1 to November 30, or from the autumnal equinox on September 22 to the winter solstice on December 21.)

While cautioning that he was “not a negotiator” involved in the talks between the US, Mexico and Canada, Hassett said his colleagues who are renegotiating the deal have

indicated things are going well.

“It’s absolutely amazing the progress that they’re making,” he said.

Hassett’s upbeat comment was echoed by US Trade Representative Robert Lighthizer, who said on July 26 in congressional testimony that it’s possible Nafta partners will reach a tentative agreement in August to revamp the pact.

President Donald J. Trump has also recently said that the US is making solid progress in talks with

Mexico, but has indicated that his administration may pursue a bilateral deal with that country first before negotiating separately with Canada.

Trilateral structure

Such a move would upend the decades-old trilateral Nafta deal and likely stretch out negotiations far longer. Mexico’s incoming president Andrés Manuel López Obrador has said he wants to keep the trilateral structure of Nafta in place.

The current Mexican administration, Canada as well as the US Congress have said they support the final agreement having a trilateral structure. López Obrador in a letter sent to Trump earlier this month also urged for Nafta to remain a three-way deal. Some Republican members of Congress have urged Trump to reach a deal quickly and pull back from a trade war that’s hurt their constituents.

“Let’s get it done before September,” Tennessee Sen. Lamar Alexander said Saturday on Fox News. “Nafta’s been good for Tennessee.” Bloomberg News

R

EDDING, California—Thousands of dazed evacuees struggled to keep their emotions in check while trying to take care of themselves and their pets as a deadly wildfire in Northern California raged into its fourth day.

Anna Noland, 49, was evacuated twice in three days before learning through video footage that the house she last saw under dark and windy skies had burned.

She expected to spend Saturday night at a shelter at Simpson College in Redding while she searches for another place to live.

“I think I’m still in shock,” Noland said.

“It’s just unbelievable knowing you don’t have a house to go back to.”

Noland is among the 38,000 people evacuated after the Carr Fire roared into the outskirts of Redding in Shasta County, leaving five people dead, including two firefighters, a woman and her two great-grandchildren, ages 4 and 5.

“My babies are dead,” Sherry Bledsoe said through tears after she and family members met with Shasta County sheriff’s deputies.

A vehicle problem ignited the fire on Monday, but it wasn’t until Thursday

that the fire exploded and raced into communities west of Redding before entering city limits.

On Saturday it pushed southwest of Redding, the largest city in the region, toward the tiny communities of Ono, Igo and Gas Point, where scorching heat, winds and bone-dry conditions complicated firefighting efforts.

The fire, which grew slightly on Saturday to 131 square miles (340 square kilometers), is the largest fire burning in California. Nearly 5,000 structures were threatened and the fire was just 5 percent contained.

The latest tally of 536 destroyed structures was up from 500 earlier in the day, and sure to rise. A count by The Associated Press found at least 300 of those structures were homes.

Bonnie and Jerry Kieffaber grabbed most of their medications when they left their home in Redding on Thursday, but they forgot his insulin. Days later, police won’t let them back inside because it’s still too dangerous.

Bonnie Kieffaber, 69, says being away from home is expensive.

“All of our food was there, and now we’re draining our checking account try-

ing to keep gas in the car and buy food, too,” she said while grabbing a hot meal at a Red Cross shelter.

“It’s exhausting,” she said. “The heat and the stress of it all, and praying for everybody and all of our friends.”

The firefighters killed in the blaze included Don Ray Smith, 81, of Pollock Pines, a bulldozer operator who was helping clear vegetation in the path of the wildfire. Redding fire Inspector Jeremy Stoke was also killed, but details of his death were not released.

Sherry Bledsoe’s two children, James Roberts, 5, and Emily Roberts, 4, were stranded with their great-grandmother Melody Bledsoe, 70, when walls of flames swept through the family’s rural property on Thursday on the outskirts of Redding.

The three were among more than a dozen people reported missing after the furious wind-driven blaze took residents by surprise and leveled several neighborhoods. Shasta County Sheriff Tom Bosenko said he expects to find several of those people alive and just out of touch with loved ones. Officers have gone to homes of several people reported missing and found cars gone— a strong indication they fled. AP

A6

Monday, July 30, 2018 • Editor: Angel R. Calso

The World BusinessMirror

www.businessmirror.com.ph

Strong quake hits Indonesian island

J

AKARTA, Indonesia—A strong and shallow earthquake early Sunday killed at least 14 people and injured more than 160 on Indonesia’s Lombok Island, a popular tourist destination next to Bali, officials said.

The quake damaged more than 1,000 houses and was felt in a wider area, including on Bali, where no damage or casualties were reported.

The US Geological Survey said the quake struck at a depth of only 7 kilometers (4.4 miles). Shallow earthquakes tend to do more damage than deeper ones.

East Lombok district was the hardest hit with 10 deaths, including a Malaysian tourist, said Sutopo Purwo Nugroho, a spokesman for Indonesia’s Disaster Mitigation Agency. The number of casualties could increase as data was still being collected from other locations on the island, he said.

At least 162 people were injured, including 67 hospitalized with serious injuries, Nugroho said.

The quake caused blackouts in East Lombok and North Lombok districts and triggered a large landslide from Mount Rinjani. Rescuers were evacuating more than 800 tourists from the mountain.

In East Lombok and the provincial capital of Mataram, the quake lasted about 10 seconds, causing residents to flee their homes onto streets and fields, Nugroho said.

He said most of the fatalities and injuries were caused by falling slabs of concrete.

Photos released by the disaster agency showed damaged houses and the entrance to the popular Mount Rinjani National Park, which was immediately closed for fear of landslides.

Television footage showed resi-

Villagers walk near destroyed homes in an area affected by the early-morning earthquake at Sajang village, Sembalun, East Lombok, Indonesia, on July 29. A shallow, 6.4-magnitude earthquake early Sunday killed at least 14 people on Indonesia’s Lombok Island, a popular tourist destination next to Bali, officials said. AP Photo/ Rosidin

dents remaining outside, fearing aftershocks, as the injured were being treated on mattresses taken out

of their partially damaged houses and patients were wheeled out of a hospital.

Eka Fathurrahman, the police chief in East Lombok, said the Malaysian woman who died was part

of a group of 18 Malaysian tourists who had just visited Mount Rinjani when the quake jolted their guesthouse and toppled a concrete wall.

Six other people were injured at the guesthouse.

Fathurrahman said many injured people who were treated outside a damaged clinic were evacuated to the main hospital farther away after more ambulances reached the devastated location in East Lombok’s Sembalun village.

“Residents refused to enter their houses as prolonged aftershocks are still being felt,” he said.

Indonesia’s meteorology and geophysics agency recorded more than 130 aftershocks.

Like Bali, Lombok is known for pristine beaches and mountains.

Hotels and other buildings in both locations are not allowed to exceed the height of coconut trees.

Indonesia is prone to earthquakes due to its location on the Pacific “Ring of Fire,” an arc of volcanoes and fault lines in the Pacific Basin. In December 2004 a massive 9.1-magnitude earthquake off Sumatra triggered a tsunami that killed 230,000 people in a dozen countries. AP

Technology giants face terror law in EU crackdown on Internet hate Heartbreak: Funerals begin for Greece’s wildfire victims

G

oogle, Twitter Inc. and Facebook Inc. have taken significant steps to expunge Islamic State propaganda and other terrorist content from their platforms.

But taking no chances, the European Union (EU) is set to propose a tough new law anyway—threatening Internet platforms, big and small, with fines if they fail to take down terrorist material, according to people familiar with the proposals that could be unveiled as soon as September.

While the details of the measures are still being thrashed out, they would likely be based on the EU guidance from earlier this year, said the people, who asked not to be identified because the details aren’t yet public.

The EU in March issued guidelines giving Internet companies an hour from notification by authorities to wipe material, such as gruesome beheading videos and other terror content from their services, or face possible legislation

if they fail to do so.

“It’s true that the positive role that some of the big companies are playing today is incomparable to the situation three years ago,” said Gilles de Kerchove, the EU’s anti-terrorism czar. “But so is the scale, breadth and complexity of the problem.” An additional step in the response is “essential,” he said, given the diverse online aspects of the recent attacks in Europe.

Big strides

Large tech firms say they’ve been making big strides in the fight to wipe terror propaganda, videos and other messages from their sites, partly thanks to automated tools that in some cases can detect such content before users even see it.

“We haven’t had any major incidents to rush legislation,” said Siada El Ramly, head of Edima, a European trade association representing online platforms including Google, Facebook and Twitter.

Online ser vices take the fight against terrorist content extremely seriously, said Maud Sacquet, senior manager for public policy at the Computer and Communications Industry Association, an industry group that includes Google and Facebook as members.

“This proposal seems rushed and its publication in the fall much too early to take into account the outcomes of already ongoing EU initiatives,” she said.

A commission spokesman declined to provide more details on the proposals.

Violent extremism

In April Google said more than half of the YouTube videos it removes for violent extremism have fewer than 10 views. Face-

book said the same month that in the first quarter of this year it either removed, or in a small amount of cases flagged for informational purposes, a total of 1.9 million pieces of Islamic State and al-Qaeda content. Twitter says it has suspended a total of more than 1 million accounts, with 74 percent of accounts suspended before their first tweet.

Some European memberstates have been vocal about the dangers of online radicalization and the spread of terror propaganda, particularly in the wake of deadly terror attacks in some European capitals in recent years.

In a speech in April, French President Emmanuel Macron called on Internet giants to speed up their process to remove terror content.

Germany didn’t wait around and last year pushed ahead with new rules that threaten social networks with fines of as much as €50 million ($58 million) if they fail to give users the option to complain about hate speech and fake news or refuse to remove illegal content.

Gaming the systems

For companies, detecting harmful content is a constant battle as some groups continue to try to game their systems to spread their messages online as widely as possible. One tool that’s helped: a shared industry database, among Google, Twitter, Facebook and other companies, of known terrorist videos and images so they can see what each other’s platforms have taken down and remove the same content on their own web sites.

Europol has said the cooperation with the big Internet platforms on taking down terror content that they flag is “excellent.” The agency works with

more than 70 Internet and media companies and on average they remove more than 90 percent of the content that’s flagged to them within two to three hours.

While big platforms have been able to speed up their removals, any legislation could hit smaller companies with fewer tools disproportionately harder. And excluding them from the scope of the law could make them more attractive for terrorist groups and their fans to carry their communications over to those platforms.

No clarity

For Edima, the concern is the threat of fines could force companies to err on the side of overremoval if there isn’t sufficient clarity around when time frames for removal begin or what groups are considered terror organizations, for instance.

“We’re concerned that if we don’t have clarity” in the new rules “that platforms could be forced to become the judge and jury as to how to classify that content,” El Ramly said.

Still, some critics say the big Internet giants need to do more. The nonprofit organization Counter Extremism Project, which aims to combat the threat of extremist ideologies, said in April that gaps remained in Facebook and others companies’ approaches to combating extremism.

The group said Facebook has only emphasized the removal of Islamic State and al-Qaeda content and has provided insufficient transparency about its progress in removing content from other extremist groups.

Facebook didn’t respond to requests for comment. Google and Twitter didn’t comment on the EU’s legislation. Bloomberg News

A

THENS, Greece—Funerals for the victims of Greece’s lethal wildfire began on Saturday with the burial of an elderly priest who drowned as he sought safety from the flames in the sea off the coastal community of Mati.

Hundreds of people attended Father Spyridon Papapostolou’s funeral in his parish of Halandri, a northern suburb of Athens, the Greek capital.

Papapostolou, his wife and daughter were among hundreds who entered the water to protect themselves from the fast-moving flames. But the 83-year-old cleric passed out and drowned, while his wife and daughter survived.

“Father Spyridon was certainly ready for this trip, but not in this way, he didn’t deserve it,” his niece, Ifigenia Christodoulou, told The Associated Press. “I hope that he prays for all us from up there, just as he has done all these years.”

Dimitra Bavavea directed her anger at the “unjust” way that so many people—86—had lost their lives.

The fire was the deadliest wildfire in Europe since 1900, according to the International Disaster Database run by the Centre for the Research on the Epidemiology of Disasters in Brussels.

“My sorrow is great as is my rage for those who left people to burn to death so unjustly,” she said. “I hope that those who died are in heaven and I thank you Father Spyridon for all that you have offered us.”

Greece’s public order minister continued to defend authorities’ response to Monday’s blaze. Minister Nikos Toskas told state broadcaster ERT it was impossible to evacuate the area’s 15,000 people in the 90 minutes that Monday’s blaze roared through the area.

In more sad news, the bodies of twin girls who their father initially believed had survived the fire have been identified, private investigator

George Tsoukalis told the AP. He said nine-year-old twins Sophia and Vasiliki Philipopoulos were found in the arms of their grandparents, who also perished in the fire.

A day after the fire, Yiannis Philipopoulos issued a public appeal to try to locate his missing daughters, saying that he had spotted them alive in TV news footage among a group of people getting off a fishing boat that had rescued them.

The twins’ tragic death was also confirmed by Smile of the Child, an independent child welfare agency that also confirmed the death of 13-year-old Dimitris Alexopoulos, whose body was among those found by firefighters.

Coroner Nikolaos Kalogrias told the AP that identification of the fire remains continues at a steady pace.

Greek authorities haven’t given an account of exactly how many people are still missing.

Toskas said fire crews did all they could to save as many lives as possible, but that town planning errors over the last 60 years had created conditions that made it difficult for fire crews to do their job.

Toskas said over half of buildings in the Mati area, 30 kilometers (19 miles) east of Athens, were constructed without permits. In addition, some beaches were fenced off, blocking people fleeing the flames from reaching the water.

He said the government’s priority now is to take measures so that something like this never happens again.

Toskas did not appear to heed the call of his boss, Prime Minister Alexis Tsipras, to follow his lead in accepting political responsibility for the disaster.

But locals in the stricken resort of Mati were unimpressed by Tsipras’s declaration.

“I want to know what ‘I accept political responsibility’ means...Will he go to jail? What’s the payback?” Vissarion Pantelides, 79, said on Saturday. AP

The Nation BusinessMirror

www.businessmirror.com.ph

Duterte urged to clamp down on erring miners

By Jonathan L. Mayuga @jonlmayuga

A

private think tank is calling on President Duterte to clamp down on erring mining companies for destroying the environment and compromising the country’s natural resources.

Terry Ridon, convenor of Infrawatch PH, an infrastructure-oriented think tank, said in a statement that Duterte “needs not look too far” since the Department of Environment and Natural Resources (DENR) already has a list of erring mining companies.

Ridon, formerly a member of Duterte’s cabinet as head of the Presidential Commission for the Urban Poor, cited Duterte’s policy pronouncement during his third State of the Nation Address where he again chided the mining industry for causing environmental destruction.

Ridon said the President only needs to revisit the list created by former DENR Secretary Regina Paz L. Lopez and determine whether the mining companies in the list have already undertaken measures to protect the environment and contribute to what the President has said as “what needs to be given to my countrymen.”

“It’s clear that the President made no distinction on who are the irresponsible miners—whether largescale or small-scale mining—the policy direction of the President is to preserve the environment and con-

tribute to what the people truly deserve. Anyone operating below this standard should be shut down and have its license revoked,” Ridon said.

More than the payment of taxes, mining companies should also determine whether their activities are truly acceptable to communities within their mining areas.

“We have heard the repeated complaints about indigenous communities being displaced to accommodate mining concessions. Consistent with the President’s pronouncements, the people’s lives should be front and center in any policy related to mining activities,” Ridon said.

While Duterte was vocal about the environmental destruction attributed to irresponsible mining, close to two dozen miners who were recommended for closure or suspension may eventually go scot-free with the result of a Mining Industry Coordinating Council (MICC) third-party review, which found that only four of 27 miners failed its audit.

While the DENR has yet to come up with its own findings, Secretary Roy A. Cimatu said the MICC review findings will be taken into consideration once the DENR harmonizes the results of the mining audits.

Cimatu has been visiting mines in various parts of the country to personally inspect how miners are doing business. He said the DENR is seriously looking at reinventing mining to do away with the destruction caused by open-pit or surface mining method.

DOT chief quotes DU30: No casinos on Boracay continued from a1 to complete its integrated casino resort on Boracay despite the latter’s six-month closure. The casino resort is targeted for completion by 2021. Earlier this year, LRWC was able to secure a provisional license from the Philippine Amusement and Gaming Corp.

(Pagcor) to set up its Boracay casino.

Prior to the closure of Boracay, other casinos that had been operating in Boracay were at the Movenpick Resort and Spa and at the Crown Regency Resort and Convention Center. Megaworld Corp.’s Savoy Hotel also has a Pagcor license to set up a casino, as well as Archibald Po of Hotel Soffia, although sources said the latter was still looking for a suitable property to set up the casino.

Meanwhile, the DOT reiterated that no resort or hotel will be allowed to reopen in Boracay on October 26 if it is not accredited by the government agency.

This developed as the interagency Task Force Boracay on Friday decided to set up a one-stop shop for the island’s stakeholders to process their business licenses, environmental compliance certificate (ECC) and accreditation from the DOT, starting this week.

ECC cancellation

IN an interview, DOT Assistant Secretary for Tourism Regulation, Coordination and Resource Generation Ma. Rica C. Bueno said this was the resolution the task force came up with after questions were raised on the sudden cancellation by the Department of Environment and Natural Resources (DENR) of the ECCs of all resorts and establishments on the island.

“During the meeting, the DENR explained that when they were reviewing the ECCs, they found that there were

establishments operating which had no ECCs, establishments operating which had ECCs but still had violations and new ECC applications. So they cancelled all ECCs to put everyone on the same level,” she said.

She said the DENR gave assurances the processing of the ECCs is fast, and that on the average, the agency processes about 90 applications/reviews a day on Boracay. Sen. Nancy S. Binay, chairman of the Committee on Tourism, on Thursday said the government should waive the fees for Boracay stakeholders who are reapplying for ECCs. The DENR failed to inform the DOT and the Department of the Interior and Local Government of its plan to cancel ECCs, which also caught industry stakeholders by surprise. It raised issues on the DENR suddenly making all Boracay establishments “violators.” (See “DOT, DILG blindsided by DENR’s cancellation of ECCs in Boracay,” in the BusinessMirror, July 25.)

“To facilitate the processing of local permits from the local government units, environmental clearances from the DENR, and accreditation from the DOT, a one-stop shop will be set up.

The venue [for the processing center] will be announced soon,” she added.

The DOT accreditation will be the last step that Boracay stakeholders will take before they are allowed to reopen on October 26. “As for the DOT accreditation, the establishments have to be [first be] compliant with all permits and environmental clearances,” Bueno stressed. She also noted that in a previous meeting by DOT officials with stakeholders, the latter agreed that they were not fully compliant if they didn’t seek DOT accreditation.

Editor: Vittorio V. Vitug • Monday, July 30, 2018 A7

3 accused in Maguindanao massacre cannot become state witnesses–CA

T

By Joel R. San Juan

@jrsanjuan1573

he Court of Appeals (CA) stood firm on its decision not to allow three of the 197 accused in the 2009 Maguindanao massacre to become state witnesses.

In a six-page resolution penned

by Associate Justice Ramon Cruz, the CA denied the partial motion for reconsideration filed by government prosecutors seeking a reversal of its May 27, 2015, decision.

“The arguments raised by petitioner in its motion have already been judiciously considered before we rendered our judgment, as these were among the issues presented in their petition. The motion has not raised any new substantial legitimate ground or reason which would warrant a modification, much less, a reversal of our decision,” the CA said.

In its May 27, 2015, decision, the CA upheld the order issued by Quezon City Regional Trial Court (RTC) Branch 221 Judge Jocelyn

Solis-Reyes, who is presiding over the Maguindanao massacre trial, denying the motion of the Department of Justice (DOJ) to drop Police Insp. Rex Ariel Diongon, PO1 Rainier Ebus and Mohammad Sangki as accused in the case to become state witnesses.

The CA said the decision whether to admit an accused as state witness relies solely on the judge handling the case.

It pointed out that while the prosecution has control over the witnesses it would present and the application for the discharge of the said three accused, the trial court already acquired jurisdiction over them upon their arraignment.

Furthermore, the CA reiter-

ated that the discharge of the accused to become state witnesses is not necessary.

The CA agreed with Judge Reyes that their testimonies are substantially the same with other witnesses, namely, Raul Sangki, Norodin Zailon Mauyag, Akmad Abubakar Esmael and Lakmodin Saliao.

Likewise, the CA also gave credence to the findings of the lower court that there are other prosecution witnesses who can testify on the commission of the crimes and the participation of the other accused mentioned by the three supposed witnesses.

“It must be emphasized that the RTC may still reconsider the discharge of accused Mohammad Sangki, PO1 Ranier Ebus and P/Insp. Rex Ariel Diongon once all the prosecution’s witnesses have been presented and there is absolute necessity for the testimonies of the aforementioned accused,” the CA said.

The CA earlier explained that the Department of Justice should have excluded the three from its amended list of respondents if it really intended to discharge them as witnesses, since the DOJ has the authority to do so under Republic

Act 6981.

The CA noted that under Section 12 of Republic Act 6981, the DOJ has the power to exclude a witness outright from the information and to admit him or her into the Witness Protection Program.

Concurring with the CA ruling were Associate Justices Franchito Diamante and Amy Lazaro-Javier.

The massacre took place on November 23, 2009, in Ampatuan, Maguindanao, where 58 people, including 32 journalists, were killed.

The journalists were accompanying the family and supporters of thenBuluan Vice Mayor Andal Ampatuan Jr. to the provincial capitol to file the latter’s certificate of candidacy when their convoy was waylaid by more than 100 armed men and brought to Barangay Saniag in Ampatuan town where they were massacred.

Several members of the powerful Ampatuan clan have been accused of masterminding the gruesome killing.

After eight years, the case is still being prosecuted before the QC RTC where 197 individuals, including members of the Ampatuan clan, are being tried for 58 counts of murder.

‘Minor revamp’ expected in House a week after GMA elected Speaker

Chinese deportees’ escorts yield gold items

LEADER of the House of Representatives on Sunday said a “minor revamp” will be implemented starting Monday following the changes in the leadership of the lower chamber.

Deputy Speaker Rolando Andaya Jr. of Camarines Sur said the revamp includes the election of the new House majority floor leader and four to five committee chairmen.

According to Andaya, House SecretaryGeneral Cesar Strait Pareja and House sergeant-at-arms (Ret.) Lt. Gen. Roland Detabali will also be replaced.

“We need these changes because we have new speaker, Rep. Gloria Macapagal-Arroyo,” said Andaya in a radio interview.

Andaya and Deputy Speaker Fredenil Castro of Capiz are both being considered as the majority leader, replacing Rep. Rodolfo Fariñas of Ilocos Norte.

Meanwhile, Oriental Mindoro Rep. Reynaldo Umali and Surigao del Sur Rep. Johnny Pimentel, who chaired the House Committee on Justice and House Committee on Good Government and Public Accountability, respectively, are most likely to be removed, being “loyal” allies of former Speaker Pantaleon D. Alvarez.

IRPORT Customs officials seized 1.9 kilos of assorted solid gold items in the possession of two Chinese policemen escorting eight of their nationals earlier arrested

by Immigration agents for engaging in illegal online gambling in the country.

Customs on-duty supervisor Charlon Tejada said they issued a receipt showing that the airport customs district is holding the jewelry found on Chinese police officers Yang Jie and Shi Senlin.

The foreigners were apparently told by the sellers to show the receipts to authorities in case they are denied permission to bring the impounded gold out of the country.

Tejada said the gold items were seen at the initial security x-ray manned by members of the Office of Transportation Security at the departure area of the Ninoy Aquino International Airport Terminal 2. They then alerted the Customs duty examiner.

District collector Mjimel Talusan said the seized items comprise nine gold coins, one piece of gold coin with the figure of Queen Elizabeth ll, a $100 dollar gold coin, two pieces of gold bars, two pieces of 99-percent pure gold bars and six pieces of gold bracelets.

All the items were wrapped in plastic and concealed in a box.

“The airport Customs district has in its temporary custody the 1.9 kilos of assorted gold items, of which a proper receipt was issued to the two Chinese policemen for them to secure a permit from the BSP [Bangko Sentral ng Pilipinas] prior to the gold’s release,” Talusan said.

She said Section 117 of the Regulated Importation and Exportation of CMTA RA 10863 prohibits the export of gold items without the necessary permit.

The Chinese police officers told Tejada they found the assorted gold items from the Chinese deportees, hidden somewhere in the condominium they were renting during a raid by the Philippine government agents in line with the illegal online gambling campaign.

The Chinese policemen claimed that the gold were brought out of China illegally and they were bringing them back to their original source. Recto Mercene

A

Work flow

Meanwhile, Andaya assured the public that the possible delay of enacting new leader for the minority bloc will not interfere with the House of Representatives’ work.

“Our work won’t be affected. We’ll still continue. Let’s say the minority bloc will still not have their leader, they’re still congressmen.

They can still voice their opinions on their own,” Andaya said.

According to Andaya, the recent minority bloc—members whom did not vote for House Speaker Gloria Macapagal-Arroyo—should choose their leader because the majority bloc cannot intervene with their decision.

“The majority bloc members cannot intervene on how the minority bloc will vote to know to possible nominees if ever they will have a nomination,” he added.

Currently, 12 Liberal Party members are eyeing

themselves as part of the minority bloc, and chose Marikina City Rep. Miro Quimbo as their leader.

According to the House rules, the minority bloc will be composed of congressmen and party members who did not vote for the elected Speaker.

Meanwhile, Alvarez’s camp is repositioning itself as part of the minority bloc, with Fariñas as their bet for minority leadership.

Both Alvarez and Fariñas are part of Partido Demokratiko Pilipino-Lakas ng Bayan, which is the same political party of House Speaker Arroyo.

Adding to the fire is current Minority Leader Danilo Suarez of Quezon, who insisted his leadership is still valid up until the end of the 17th Congress. Suarez is one of the 184 lawmakers who voted for Arroyo as Speaker.

Rules

“They are doing a disservice by resisting and not following the rules,” Quimbo said of Suarez’s bid to keep the position of Minority Leader despite voting for Arroyo.

According to Quimbo, under Rule II, Section 8 of the rules of the House of Representatives, members who voted for the winning candidate automatically become part of the majority.

“If you are the previous minority leader and you voted for the winning candidate, then you are no longer part of the minority. How can you lead a group if you are no longer part of them? That is the situation of Congressman Suarez,” he said.

Quimbo said that the minority cannot be controlled by the majority and that it “needs to be protected from any raiding coming from the majority” to protect the essence of democracy.

“The Constitution wants checks and balance in Congress. This is not a political war or a quarrel for positions. This is the essence of democracy. There is no democracy if only one person is speaking in the Congress,” he added.

Quimbo said the letter sent by 12 LP members to Arroyo was to inform her of the change in leadership in the minority. He later added that it will the Speaker’s call at the end of the day.

“But we ask Congressman Suarez to give Speaker GMA a good start.… This is her chance to lead right,” he added. Jovee Marie N. dela Cruz, Mark Joseph Fernandez and Joahna Lei Casilao

A

Green Monday BusinessMirror

A8 Monday, July 30, 2018

www.businessmirror.com.ph • Editor: Lyn Resurreccion

PHL biodiversity under siege from biopirates

T

By Michael A. Bengwayan Special to the BusinessMirror

Both vegetables and fruit are known to have diabetic remedies but the US pharmaceutical company, Cromak Research Inc. of New Jersey, beat the Philippine government to the draw. The diabetic remedy was granted US patent number 5,900,240, preventing the Philippines from making any similar drug decoction from crops its originally owned.

here are pirates on the loose. Not on seas but on land. They are not after gold, war booty or kegs of rum. They are after every life form in Asia.

The biopirates, swashbuckling silently but recklessly with incalculable stakes for humankind, are genomic companies and their pharmaceutical partners rushing to privatize microorganisms, plants and animals.

The region’s biodiversity is the target. Nontimber forest plants, agricultural crops and medicinal plants, along with the indigenous knowledge that go with them from indigenous peoples, are being looted by monopoly companies that make millions of dollars patenting and processing them into marketable by-products.

Philippine antibiotic

The most widely known case of biopiracy in the Philippines was the theft of an antibiotic drug from a microorganism, which was isolated from a soil in a cemetery in Iloilo in 1949 by a Filipino scientist Abelardo Aguilar, who hailed from the province.

While working with the American drug company Eli Lilly Co., one of biggest pharmaceutical firms in the United States, Aguilar discovered the drug, naming the soil isolate Ilosone in honor of Iloilo. Eli Lilly made use of Ilosone to produce the world-known antibiotic erythromycin and promised Aguilar a hefty share as well as royalties from the earnings.

Aguilar never received any centavo from his former employer even with the Philippine government’s intervention. Today, erythromycin earns for Eli Lilly, which now owns the patent for the soil isolate, some $120 million yearly.

Biopiracy is the exploration,

Cancer cure

extraction and screening of biological diversity and indigenous knowledge for commercial, genetic and biochemical purposes.

It is done by multinational firms and governments of developed countries with covert cooperation with scientists from victim nations. They patent and map chromosomes of genetic resources without informing, consulting and acknowledging and duly compensating the sources.

Theft of painkiller

In 1995 Cary Fowler and Pat Mooney of the University of Arizona bared in their book Shattering: Food, Politics and the Loss of Genetic Diversity, a stunning biopiracy, shrouded with obscurity, because of the involvement of some Philippine government scientists in the discovery of painkiller from a Philippine snail and its having patented by a foreign company.

The drug, called SNX 111, was considered the most powerful painkiller ever discovered—being 1,000 times stronger than morphine— is a product of peptides from the Philippine sea snail (Conus magus) found in Palawan.

It was pirated allegedly with the help of researchers from a government state university for the USbased pharmaceutical Neurex Inc. and University of Utah. It was reported that sales of the painkiller have reached $80 million annually with nary a centavo for the Philippines.

SNX 111 is worth more outside the United States as it is highly in demand in battlefields that dot so many spots in the world today.

Neurex has, likewise, patented

Ampalaya, or bitter melon, from the book Flora de Filipinas

by Francisco Manuel Blanco, OSA. Wikimedia Commons

the use of the snail toxins to treat victims of stroke under US patent numbers 5,189,020, 5,559,095 and 5,587,454, Fowler and Mooney bared in their 270 page book.

Biopirates are mostly biologists, botanists, agriculturists and medical doctors paid by the corporate world. They seek to exploit biological information. The raw material they need is DNA, the blueprint of life of plant and animal genes. They are the gene hunters and have invaded many Asian shores, including the Philippines.

Good-bye, ‘talong, ampalaya’

Absurd as it may be, Filipinos, especially Ilocanos who are fond of pinakbet, a vegetable dish with

fish sauce, may soon be buying their ampalaya or bitter melon (Momordica charantia) in the future from American seed companies.

The reason: ampalaya is now owned by the United States government after patenting it with US patent numbers 5,484,889 for the US National Institute of Health; JP6501089 for the US Army and EP 552257 for the New York University.

That is not all. A decoction from ampalaya, talong (eggplant, Solanum melongena) and lomboy, or rose apple tree (Suzgium cumini), that was discovered to remedy diabetes, is now owned by a US firm.

No thanks to the government’s turtle-paced medical science and technology program.

Duterte to agencies: Preserve biodiversity P

hilippine President Duterte emphasized during his third State of the Nation Address (Sona) that the protection of the environment must be prioritized by the government, and the wealth that nature offers should be used to sustain all generations.

“I exhort all concerned agencies and local government units to uphold the concept of intergenerational responsibility in [the exploration] and utilization of our mineral wealth, the protection and preservation of our biodiversity, anchored on the right to a balanced and healthy ecology,” he said on July 23.

Duterte also highlighted the prohibition of open pit mining, which he said is destroying the country’s environment.

“It [open-pit mining] will destroy the world of tomorrow for our children,” he added.

The President noted the importance of the environment in his speech.

“Nature endowed us with this wealth to be tapped for the benefit of all generations. My policy in the utilization of these resources is nonnegotiable: The protection of the environment must be top priority and extracted resources must

be used for the benefit of the Filipino people, not just a select few. Do not just give me taxes. I can get it from other sources. Give me what needs to be given to my countrymen,” he said.

The Executive Director of the Asean Centre for Biodiversity (ACB), Dr. Theresa Mundita S. Lim, expressed her gratitude to the President for highlighting the importance of biodiversity conservation in the Philippines.

“It was the first Sona in Philippine history in which the significance of biodiversity protection and preservation were mentioned and emphasized, and I greatly thank our President for that,” Lim said. “The Philippines is one of the three megadiverse countries in the Asean region. However, it is also a global biodiversity hot spot which means we could lose our rich and diverse biological resources, as well as their potential for creating wealth for the nation, if we do not conserve and are not able to harness these sustainably.“ The President also shared that the Cabinet has approved for immediate endorsement to Congress, the passage of a law creating the “Department of Disaster Management,” an

interagency department that will focus on improving the country’s disaster preparedness and resiliency.

“As I had stated last year, we must learn from the experiences from the Supertyphoon Yolanda, and other mega disasters, and from global best practices. We need a truly empowered department characterized by a unity of command, sciencebased approach and full-time focus on natural hazards and disasters, and the wherewithal to take charge of the disaster-risk reduction; preparedness and response; with better recovery and faster rehabilitation,” Duterte said.

Lim welcomed this and added, “It is also in this light that we have to scale up our conservation efforts to improve our country’s resiliency to natural hazards since the protection of biodiversity is also protecting natural adaptation measures against disasters and climate-change impacts. For example, a biodiversity-rich forest is likely to be less vulnerable to climate risks and impacts than degraded forests. While climate-change is a major threat to biodiversity, the conservation of biological resources and restoration of ecosystems contribute to climate

change mitigation and adaptation.”

Duterte also lauded the hosting of the 50th anniversary of Asean by the Philippines in 2017.

“The success of the 50th anniversary and the 31st Summit of the Asean would have not been possible without the support of the government.

The well-organized and peaceful celebration of these events in our country is a testament of not just the ‘world-renowned Filipino hospitality’ as the President mentioned, but also of the good relations among the Asean member-states,” said Lim.

National efforts to combat biodiversity loss

According to the second edition of the Asean Biodiversity Outlook of the ACB, in the Philippines, government agencies and foreignfunded projects are instrumental in raising awareness of, and mainstreaming biodiversity efforts into national sectoral development plans.

Incentives and programs have been created to facilitate biodiversity concerns in industry practices. Various conservation projects in the country targeted critical biodiversity hot spots, such as protected forest, coastal and marine areas.

In 2004, while doing a study report for London’s Minority Rights International, published as “The Intellectual and Cultural Property Rights of the Indigenous and Tribal Peoples of Asia,” this writer came to know of a Philippine yew tree (Taxus sumatrana) found only on Mount Pulag, Benguet, that was patented by scientists from a US university.

The tree contains taxol, a cancer-curing derivative, used in treating ovarian and breast cancer. The biopirates were able to gain permit from the Department of Environment and Natural Resources (DENR) Cordillera region office to collect tree samples on Mount Pulag. I included this in my Minority Rights International publication.

The tree’s bark, when boiled as tea by the indigenous Ibalois and Kalanguyas who dwell on the foot of Mount Pulag, produces a bloodlike decoction drank to cure internal ailments, something I tried many times and indeed soothed tiredness.

Protecting the ‘gasoline tree’

Biopiracy attempts continue. In 2008 Edenspace, the fifth-biggest pharmaceutical company in the US, offered to pay for the knowledge on how to grow gasoline and extract it from a tree called Pittosporum resineferum to the environmental group Cordillera Ecological Center (CEC) that discovered and developed it as an energy source for indigenous peoples pushing for rural development.

The tree locally called hanga or dael produces high heptane, e-pine and dihydroterpene, flammable components of gasoline, enabling

it to be used as substitute to liquefied petroleum gas for cooking and fuel for gasoline engines.

CEC refused the US company’s request but offers continued to come from Japan, India, Taiwan, Singapore, Malaysia and Brunei Darussalam.

CEC continues to grow gasoline from the trees.

This writer, who heads CEC, discovered the tree’s potential as fuel and developed its oil as sustainable alternative energy as well as perfected the agronomical cultural practices in raising the trees, as well.

Food crops threatened

The Convention of Biodiversity (CBD) said the Philippines is one of 18 mega-biodiverse countries in the world, containing two-thirds of the earth’s biodiversity and between 70 percent and 80 percent of the world’s plant and animal species.

But it warns its plant life is thinning as 99 species are critically endangered, 187 endangered, 176 vulnerable, as well and 64 others are threatened species.

Three Philippine indigenous rice species and two yam species were recently added by the International Union for the Conservation of Nature to its Red List. IUCN, based in Switzerland, is the international watchdog of world biodiversity.

CBD added that the Philippine list also includes threatened faunal species: 42 species of land mammals, 127 species of birds, 24 species of reptiles and 14 species of amphibians.

The main culprit to the fast decimation of the country’s biodiversity is mainly due to loss and destruction of habitat, poor conservation policies and implementation of laws and lack of peoples’ reverence and respect to the environment and wildlife.

Bengwayan has a masters degree and PhD in Development Studies and Environmental Resource Management from University College Dublin, Ireland, as a European Union fellow.

He is currently a fellow of Echoing Green Foundation in New York.

After the storm A dragonfly lands on a dry lemon grass at a farm in Magsaysay, Bayombong, Nueva Vizcaya. The presence of insects indicate friendly environment in areas where they thrive. Ceasar M. Perante A national protected areas system safeguards ecosystems, wildlife and genetic resources.

There are also programs implemented to restore ecosystem services.

The Philippine Biodiversity Strategy and Action Plan directs biodiversity conservation action with funding from the national budget.

The Philippines hosts the ACB, an intergovernmental organization that facilitates coordination and cooperation among the Asean member-states in conserving the rich biodiversity of the Asean region.

On June 22 Duterte signed the Republic Act 11038, or the Expanded National Integrated Protected Areas System Act of 2018, a law that

aims to strengthen the management of protected areas in the Philippines.

The Department of Environment and Natural Resources explained that the law significantly increased the protected area coverage (with 94 additional protected areas) in the country, and seeks to institutionalize funding for the management of protected areas through the annual General Appropriations Act. The ACB was established in 2005 by the Asean member-states as a response to biodiversity loss in the region. The Centre supports and coordinates the implementation of activities in the Asean leading to the conservation and sustainable use of biological diversity, for the benefit of the region and the AMS.

Biodiversity Monday BusinessMirror

Asean Champions of Biodiversity Media Category 2014

Editor: Lyn Resurreccion • www.businessmirror.com.ph

Monday, July 30, 2018

A9

A wetland of international importance

Saving Naujan Lake B

By Jonathan L. Mayuga

@jonlmayuga

iodiversity advocates on Mindoro Island are pushing for the enactment of a law that will strengthen the protection of the Naujan Lake National Park (NLNP), one of the first national parks in the Philippines.

The Mindoro Biodiversity Conservation Foundation Inc. (MBCFI) is working closely with the Department of Environment and Natural Resources (DENR) in support of the move to have the NLNP declared a full-pledged protected area under Republic Act 7586, or the National Integrated Protected Areas System (Nipas) Act of 1992, and its amended version, RA 11038, or the Expanded Nipas Act that was signed

by President Duterte on June 22.

As part of its 10th founding anniversary celebration on July 13, the MBCFI, led by its Executive Director Grace Diamante, turned over relevant documents to the NLNP Protected Area Management Board (PAMB). This include the Protected Area Sustainability Assessment, Initial Protected Area Plan, draft presidential proclamation, draft bill and documentation.

In a telephone interview on July 12, Diamante underscored the importance of declaring the NLNP a full-pledged component of Nipas and E-Nipas.

“Once proclaimed, the NLNP would be the first protected area in Oriental Mindoro to become a full component of E-Nipas,” Diamante told the BusinessMirror.

Henry Adornado, the regional director of the DENR for Mimaropa, confirmed during a telephone interview on July 16 that the DENR has received the documents from the MBCFI. “Naujan has an existing proclamation, but it is only as an initial component. The documentary requirement leading to the enactment of a law has just been completed and will be forwarded to higher office,” he said.

Situated in the municipality of Naujan in Oriental Mindoro province, at the heart of the NLNP is Naujan Lake, the fifth-largest freshwater lake in the country, and perhaps one of the most important lakes in the Philippines.

It is critical to the completion of the link of the migration pathways for migratory bird species passing the East-Asian Australasian Flyway.

Protected area

Naujan Lake is a wetland of international importance and is listed as a Ramsar Site since 1999 because of its strategic location. A Ramsar Site is a wetland designated of international importance under the Ramsar Convention, an intergovernmental environmental treaty established in 1971 by the United Nations Educational, Scientific and Cultural Organization, and came into force in 1975.

The lake is an important wintering area for an assortment of species of migratory birds passing through the Philippines during the migration period, usually between the months of September and April.

Recognizing its rich biological diversity, then-President Ramon Magsaysay signed Presidential Proclamation 282 on March 27, 1956, making the NLNP among the very first protected areas in the Philippines long before the Nipas Act became a law in 1992.

The NLNP covers a total of 21,655 hectares, including the Naujan Lake, which has a total of 8,125 hectares surface area.

The lake is shared by a total of 24 barangays in the towns of Naujan, Victoria, Socorro and Pola in Oriental Mindoro.

Economic importance

A source of income and livelihood of communities, the Naujan Lake is a growth driver in Oriental Mindoro.

Besides providing food, mainly several species of migratory and native fish, the lake also provides the raw water supply to the communities for domestic use and irrigation.

It also facilitates the fastest means of transportation through the use of motorized boats so the people could bring their produce from one barangay or town to another across the lake.

Threatened

Although already a protected area, the Naujan Lake remains highly vulnerable to the rapid growth and development being experienced in Oriental Mindoro, particularly owing to the encroachment of human population around the lake.

Like most protected areas, the NLNP—being rich in natural resources—is prone to abuse.

The lake is experiencing environmental degradation because of the poor management and enforcement of environmental laws, and the unchecked farm practices that poison the lake’s water with chemical fertilizers and pesticides.

Vast watershed

The watershed in which the Naujan Lake exists covers about 30,000 hectares.

It is fed by the Macatoc, Borbocolon, Malayas, Malabo, Maambog, Malbog and Cusay Creeks in the East; by Bambang, Tigbao and Tagbakin Creeks in the West; and Subaan and Singulan Rivers in the South, according to the NLNP profile prepared by the DENR-Biodiversity Management Bureau (BMB).

Besides providing water for domestic use and irrigation, and food, like freshwater fish, lakes are important in providing communities with a natural defense against climate change’s worst impacts—flood.

Lakes, like marshes and, most especially, peats, help prevent flash floods and can mitigate climatechange effects, like sea-level rise and flood brought about by storm surge.

Unique wetland

The NLP is a unique wetland because it harbors numerous unique flora and fauna in various habitats—from terrestrial, freshwater and coastal to the marine ecosystem. It hosts several island-endemic species—those found only in Mindoro and nowhere else in the world.

A prominent land cover in NLNP is marshland, which measures about 585 hectares, or 3 percent of NLNP, and a portion of it is peatland.

In such habitat, 16 species of migratory birds are found in the park, including the threatened Philippine duck.

The mystical Mount Halcon towers behind houses along Naujan Lake in Victoria, Oriental Mindoro. MBFCI

Trees and plants

Because of its river systems, lakes, marshes and peats, Naujan Lake supports the rich biological diversity that thrives within the NLNP. According to the DENR-BMB, while only 15 percent of the total area of the park is classified as forestland, its vegetation is impressive—because it is covered with a mixture of forests, shrubs and grassland.

It is home to 443 indigenous and 74 native species of trees and plants, many of which are, however, threatened or potentially endangered.

According to the DENR-BMB, terrestrial and aquatic wildlife also thrive in the NLNP.

Birds, mammals, reptiles

It has 105 species of birds, 21 species of mammals and 33 species of reptiles and amphibians.

These include the endemic and threatened Philippine duck and the globally significant population of tufted ducks, as well as other migratory water birds, such as terns, herons, egrets, bitterns and stilts.

Endemic and threatened birds, such as the Mindoro imperial pigeon, Mindoro bleeding-heart pigeon, black-hooded coucal and Mindoro hornbill, are also found in the area. The endemic Philippine freshwater crocodile was discovered in the NLNP.

Native, endemic fish

The Naujan Lake is known for having a good number of native fish, including the endemic goby fish, or biya.

The DENR-BMB said a total of 30 fish species have been recorded in the lake, including 11 migratory fish species, making it an important breeding, nursing and feeding ground for migratory fish, as well.

Meanwhile, 18 of the fish species recorded in NLNP are of economic importance. Two of them are classified as globally threatened— the pait (vulnerable) and com-

mon sawfish, also known as barakan or pakangan (critically endangered) in Bicol—on the Red List of Threatened Species of the International Union for Conservation of Nature (IUCN).

Not part of E-Nipas

Unfortunately, despite the NLNP’s rich biological diversity, it is not included in the 94 protected areas that received stronger protection with the signing of the E-Nipas Act in June.

Kathy Lene S. Cielo, Conservation Awareness Raising and Education (CARE) program manager of MBCFI, told the BusinessMirror that the exclusion of NLNP from the E-Nipas may have been due to its not being considered a priority because of the concerns on population density around the lake.

Nevertheless, she said the exclusion may be a blessing in disguise to allow lawmakers pass a separate law on NLNP. “The enactment of a law will prevent destructive development projects within the NLNP. Just recently, a geothermal project was approved. There is also human encroachment which we need to stop,” she said in a telephone interview on July 15.

E-Nipas coverage

E-nipas basically expanded the coverage of RA 7586 and provided a stricter penalty and higher fines to violators, which include the local officials who may be slapped with criminal and administrative charges that could lead to perpetual disqualification from public office.

There are 240 protected areas across the country. However, most are considered as a mere initial component of E-Nipas because of lack of legislation to back their declaration.

Of the 94 protected areas classified as national parks under ENipas, only five are in Mimaropa region that is composed of the provinces of Mindoro, Marinduque,

The enactment of a law will prevent destructive development projects within the NLNP [Naujan Lake National Park]. Just recently, a geothermal project was approved. There is also human encroachment, which we need to stop.”

—Cielo

Romblon and Palawan.

These are the Marinduque Wildlife Sanctuary, Apo Reef Natural Park, Mount Calavite Wildlife Sanctuary, Mounts Iglit-Baco National Park and Mount Guiting Guiting Natural Park.

With E-Nipas, there are now a total of 107 protected areas and national parks that are backed by legislation.

Threatened wildlife

The DENR-BMP document revealed that many species within NLNP are threatened with extinction. Three species are classified as critically endangered, one endangered, six vulnerable and two are restricted-range species. Twelve species are known as congregatory species.

Some of the threatened species in the NLNP are the critically endangered black-hooded coucal, the endangered Mindoro variablebacked frog that is only found in Mindoro, the vulnerable Philippinehawk eagle, Philippine duck, ashy ground-trush and the Philippine sailfin lizard.

Protection needed

A large number of ducks and waterfowl occur in the NLNP, and the lake supports numerous fish fauna.

Errol Gatumbato, technical advisor of MBCFI, told the BusinessMirror through e-mail that it is necessary to protect the entire NLNP because the Naujan Lake supports a good number of waterfowls and several terrestrial endemic species due to diverse habitats in the area.

This is to ensure the existence of habitats and their associated species, some of which are already threatened by extinction.

Fishing ground

According to Gatumbato, the lake itself is a major freshwater fishing ground in Mindoro Island.

“Numerous lakeshore communities are dependent on the lake for livelihood,” he said.

On the terrestrial side, the remaining forest patches in the NLNP are part and parcel of the watershed that supply freshwater to its four municipalities—Naujan, Socorro, Pola and Victoria.

Act of Congress needed

Gatumbato noted that since the NLNP is only an initial component of the then-Nipas Act, it requires a new presidential proclamation and

an act of Congress for the NLNP to become a fully fledged national park under the E-Nipas Act. “Such proclamation by both the President and Congress will ensure the permanency of the NLNP’s boundaries and management regime, including site-specific provisions that would address issues and challenges in the area. The funding may also be made available, as well as the provision of regular personnel to handle day-to-day activities in the protected area. These are some of the reasons why it is being proposed that the NLNP shall be declared [a full component protected area],” he said.

He said if NLNP is declared as a full component of Nipas and ENipas, it will reduce, if not eliminate, all forms of threats, which include illegal fishing, pollution, and encroachment for settlement and agricultural development, and excessive or overfishing in the area.

Increasing number of people

“On the other hand, the increasing [human] population in the terrestrial side of the protected area is creating more pressures in the remaining natural forest that is already fragmented and mostly comprised of secondary forest. The governments, both national and local, should provide investment for the protection of the NLNP, including funds for sustainable livelihood of communities,” he said.

The Philippine Congress and the DENR should allocate sufficient funds for the effective management of the protected area, while ensuring that protection efforts are being implemented in the area, he said.

More important, the local government units, in particular, should engage communities in the development of sustainable livelihood, especially ecotourism, while other stakeholders, like nongovernment organizations, should participate in activities related to community organizing and development, and conservation awareness and education, he said.

For her part, Diamante believes that the degradation of the NLNP means losing one of Mindoro’s national treasures.

“It would likely lead to habitat destruction and subsequent extinction of species. The productivity of the different ecosystems found in the protected area will also diminish, thereby reducing the ecological and economic values they provide to the people,” Diamante noted.

A10 Monday, July 30, 2018 • Editor: Angel R. Calso

Opinion BusinessMirror

www.businessmirror.com.ph

editorial

The Bangsamoro Organic Law

A

lthough no one likes to say it, the Autonomous Region in Muslim Mindanao (ARMM) has not been successful after nearly 30 years and several legal adjustments.

There has been plenty of time to achieve peace and prosperity, which are the two practical measures for ARMM’s success. Unfortunately, calm failed to come to Mindanao for both Muslims and Christians, and those living in the ARMM saw their standard of living stagnate since the ARMM implementation.

Finger-pointing has been the game for decades, and no one wanted to bear the blame. But to the average citizens of the island and of Cotabato City, Zamboanga, Iligan, Cagayan de Oro and Marawi, the ARMM was not a dream fulfilled.

The efforts of the Aquino administration to make significant changes with the former version of the law, commonly known as the Bangsamoro Basic Law (BBL), failed perhaps because it was not the right law at the right time. Perhaps the tragedy of the war in Marawi changed the climate of the discussion enough that we now have the Bangsamoro Organic Law (BOL).

The BBL was criticized on all sides for not going far enough and also going too far in giving the region more autonomy from the Philippine national government. The same discussion has surrounded the BOL. But this time, everyone knew that something had to be done. It was, of course, a compromise when no one gets everything that they want, but everyone gets what they can live with.

The differences between the ARMM law and the BOL include the provision that the new law grants 75-25 wealth sharing between the Bangsamoro and national governments—higher than the current 70-30 scheme under the ARMM law. This means 75 percent of the national internal revenue collection would go to the Bangsamoro, and 25 percent to the central government. However, that does not address the problem that the ARMM government has failed at generating enough revenue to pay its bills.

Therefore, an annual block grant of a 5-percent share of the national internal revenue, or some P59 billion, will also be automatically appropriated to the region without any condition.

With the adoption of the BOL, there is an implicit agreement by the current ARMM government that these numbers make fiscal sense. We hope so.

The Bangsamoro will still not have its own military and police forces, as these will continue to be under the national government.

The Bangsamoro government will have near absolute control of its economy, including the development of natural resources in the region. The Bangsamoro government must adhere to the provisions of the Philippine Constitution. The Bangsamoro government will have exclusive powers over some areas, including budgeting, administration of justice, agriculture, customary laws, creation of sources of revenue, disaster-risk reduction and management, economic zones, ancestral domain, grants and donations, human rights, local government units, public works, social services, tourism, and trade and industry.

Now it is up to the Bangsamoro people to step up, chart their own destiny, and make a success of their community and land.

This time, the Philippines has a president from the island who perhaps knows and appreciates the Bangsamoro struggle better than those in the past.

Since 2005

BusinessMirror A broader look at today’s business

A letter of peace from the CBCP Atty. Jose Ferdinand M. Rojas II

RISING SUN

Part Three

T

his is the third part of my narration of the contents of the pastoral letter by His Excellency Most Rev. Romulo Valles, DD, the archbishop of Davao and president of the Catholic Bishops’ Conference of the Philippines. Released on July 9, the letter is titled “CBCP Pastoral Exhortation: Rejoice and be glad!”

This is relevant in our introspection about the events happening in our society.

He writes: We all know about the suffering of the victims of drug addicts, but can we not find it in ourselves to look at the drug dependents themselves as sick people who need help, as well?

Should we just watch while victims are killed mercilessly and dumped like garbage? Did it ever cross our minds that, with every drug suspect killed, a widow and orphaned

Bayanihan Federalism

✝ Ambassador Antonio L. Cabangon Chua

Atty. Lorna Patajo-Kapunan

Founder Publisher Editor in Chief Associate Editor News Editor Senior Editors

T. Anthony C. Cabangon Lourdes M. Fernandez Jennifer A. Ng Vittorio V. Vitug Lorenzo M. Lomibao Jr., Gerard S. Ramos Lyn B. Resurreccion, Efleda P. Campos Dennis D. Estopace

Online Editor Social Media Editor

Ruben M. Cruz Jr. Angel R. Calso

Creative Director Chief Photographer

Eduardo A. Davad Nonilon G. Reyes

Chairman of the Board & Ombudsman President VP-Finance VP Advertising Sales Advertising Sales Manager Group Circulation Manager

Judge Pedro T. Santiago (Ret.) Benjamin V. Ramos Adebelo D. Gasmin Marvin Nisperos Estigoy Aldwin Maralit Tolosa Rolando M. Manangan

BusinessMirror is published daily by the Philippine Business Daily Mirror Publishing, Inc., with offices on the 3rd floor of Dominga Building III 2113 Chino Roces Avenue corner De La Rosa Street, Makati City, Philippines.

Tel. Nos. (Editorial) 817-9467; 813-0725. Fax line: 813-7025.

(Advertising Sales) 893-2019; 817-1351, 817-2807.

(Circulation) 893-1662; 814-0134 to 36. E-mail: news@businessmirror.com.ph.

www.businessmirror.com.ph

Printed by brown madonna Press, Inc.–San Valley Drive KM-15, South Superhighway, Parañaque, Metro Manila MEMBER OF

children are created—families who cannot even afford to bury their dead? Do we not care when poor homes are searched without a warrant, or when suspects are arrested without an arrest warrant and then jailed without a case filed?

He asks if people don’t really care about the sufferings of those convicted of drug-related crimes and who are now packed like sar-

‘P

legally speaking

ower to the People, Power to the Regions,” otherwise known as “Bayanihan Federalism,” is the title of the draft Constitution submitted by the 22-member Consultative Committee to President Duterte days before the President delivered his State of the Nation Address on July 23, 2018.

In the Preamble of the draft Constitution, our nation is referred to as the “Federal Republic of the Philippines.” The Federal Republic shall consist of 16 Federated Regions, the Bangsamoro and the Federated Region of the Cordilleras (Article XI, Section 1). Except for the Bangsamoro and the Federated Region of the Cordilleras, the legislature of each Federated Region shall be known as the Regional Assembly in which the legislative power is vested. The Regional Assembly shall be composed of duly elected members, half of the membership of which shall come from each province, highly urbanized city and independent chartered city, and half representing political parties through proportional representation. Each province,

highly urbanized city and independent chartered city shall have one representative to be elected by provincial or city voters. The voters of the region shall elect the representatives from the political parties. The four political parties that obtained the highest number of votes shall be entitled to seats in the Assembly in proportion to the votes cast in their favor and following their closed list (Article XI, Section 5).

The executive power of the Federal Republic is vested in the president (Article VIII, Section 1), who has the same qualifications as in the 1987 Constitution but with the additional qualification that he/she must be “holder of a college degree or its equivalent on the day of the election” (Article VIII, Section 2). The vice president

dines in oven-hot jails. Can we live with the thought that they are rotting in jail while we know that what they need is rehabilitation?

The archbishop added: Can we not hear the sufferings of the indigenous people who are being driven away from their ancestral land just so big corporations can put up dams and mining sites? How about our brothers and sisters who need to leave their homes and their livelihood so they could avoid the crossfire between the rebels and government forces? Aren’t we affected by the death of our soldiers who are victims of unending violence due to the stalled peace talks?

Sometimes, he said, we cannot feel the pain of others because we have become numb.

For those who boast about their intelligence and look down on the Christian faith, for those who say that God is stupid, Saint Paul has the answer: “For the foolishness of God is wiser than human wisdom, and the weakness of God is stronger than human strength.”

(1 Corinthians 1:25) For those who disrespect our faith, Saint Paul said: “But God

chose the foolish things of the world to shame the wise; God chose the weak things of the world to shame the strong. God chose the lowly things of this world and the despised things—and the things that are not—to nullify the things that are, so that no one may boast before him.” (1 Corinthians 27-29) In the letter, the Archbishop reminded those who are affected by the insults coming from people in power: “But to you who are listening, I say: Love your enemies, do good to those who hate you, bless those who curse you, pray for those who mistreat you. If someone slaps you on one cheek, turn to them the other also. If someone takes your coat, do not withhold your shirt from them.”

(Luke 6:27-29) “Revenge, exchanging evil for evil, is not the way of the Lord.

Only goodness can defeat evil.”

(Romans 12:21) And until Jesus’ last breath, He only uttered kind words for those who made Him suffer: “Father, forgive them for they do not know what they are doing.”

(Luke 23:34) To be continued

shall have the same qualifications as the president (Article VIII, Section 3). A significant change in the draft constitution is the term of office (Article VIII, Section 4[a], which is four years and reelection to one term, instead of the present six-year term without reelection. Likewise significant is that “the president and the vice president shall be elected as a team. A vote for the presidential candidate shall be counted as a vote for his vice presidential candidate” (Article VIII, Section 4[c]. The president and vice president shall be elected by direct vote of the people.

The Federal legislative power is vested in Congress, which shall consist of a Senate and a House of Representatives. Every Federated Region shall be represented by at least two senators elected by the qualified voters in the Federated Region; provided, that each region shall have the same number of senators. The term of office of the senators shall be four years (Article XII, Section 4). No senator shall serve for more than two consecutive terms. The House of Representatives shall be composed of not more than 400 members.

Sixty percent of the members of the House of Representatives shall be elected by plurality of votes where each single-member legislative electoral district shall

have one seat in the House of Representatives. The remaining 40 percent of the members of the House of Representatives shall be voted nationwide through a system of proportional representation. Every voter shall vote for a registered political party with a closed list of nominees; political parties that obtain at least 5 percent of the valid votes cast under the proportional party representation system shall be considered elected and shall be allocated seats in proportion to the number of votes they received (Article VII, Section 5).

Article XII of the draft Constitution defines the Distribution of Powers between the Federal Government and the Federal Region. Under Section (1) thereof, the Federal Government shall have exclusive power over: (a) defense, security of land, sea and air territory; (b) foreign affairs; (c) international trade; (d) customs and tariffs; (e) citizenship, immigration and naturalization; (f) national socioeconomic planning; (g) monetary policy and federal fiscal policy, banking, currency; (h) competition and competition regulation bodies; (i) interregional infrastructure and public utilities, including telecommunications and broadband networks; (j) postal service; See “Kapunan,” A11

www.businessmirror.com.ph

Opinion

Clear and concise

201 file

BusinessMirror

Siegfred Bueno Mison, Esq.

Filbert Tsai

C

lear and concise financial reporting is the clear message coming out from the Disclosure Committee’s “Principles of Effective Communication” published in 2014 as part of the International Accounting Standards Board’s Disclosure Initiative. The temptation is real. Auditors love overloading financial statements with disclosures to protect their personal interests as part of the growing scrutiny of audit institutions globally.

Lengthy boilerplate accounting policies, dumping irrelevant statements of accounting estimates and judgments, plus the truckload of tabular disclosures scattered all over the financial statements—these are the common issues that I see every single time I review financial statements for clients that I serve as consultant. It would appear that the message of “clear and concise reporting” didn’t make it to the Philippines from the western shores.

Let’s be clear—financial statement disclosures are critical elements in aiding users of financial statements to understand the story behind the numbers.

Notes to the financial statements are meant to provide supplemental information to the financial statement that aid in understanding the financial statements including the reporting entity’s accounting policies, judgments and estimates (Philippine Auditing Standards 1.112). However, it is important to stress the fact that it is not a checklist that everything needs to be ticked.

While, yes, disclosure checklists are prepared every year by large global accounting firms, they are meant to serve as guides for disclosure completeness. Disclosure checklists are one of the most important tool kits in an experienced financial statements preparer toolbox. These help us determine all the required disclosure. However, the sad reality is that most financial statements are prepared by inexperienced or junior accountants who find it difficult to weigh the disclosures necessary to put into financial statements. Thus, using “disclosure checklists” is a common practice of the junior auditor’s ticking-and-bashing exercise in preparing (or auditing) financial statements.

Disclosures are only relevant if they help the users of the financial statements understand the choices that the reporting entity has made. This would mean that obvious policies, judgments, estimates and even tabular notes should be wiped-out from the financial statements. Here are a few thoughts to consider when preparing financial statements: Scrap the obvious and put-in the crucial policies. The quality of a financial statement is not measured by the number of pages but its ability to tell the story. Only policies that make a difference are worth mentioning.

Kapunan. . .

continued from A10

(k) time regulation, standards of weights and measures; (l) promotion and protection of human rights; (m) basic education; (n) science and technology; (o) tegulation and licensing of professions; (p) social security benefits; (q) federal crimes and justice system; (r) law and order; (s) civil, family, property and commercial laws, except as may be otherwise provided for in the Constitution; (t) prosecution of graft and corruption cases; (u) intellectual property; and (v) elections.

Under Article XII, Section 2,

THE PATRIOT

DEBIT CREDIT

While, yes, disclosure checklists are prepared every year by large global accounting firms, they are meant to serve as guides for disclosure completeness.

Disclosure checklists are one of the most important tool kits in an experienced financial statements preparer toolbox.

These help us determine all the required disclosure. However, the sad reality is that most financial statements are prepared by inexperienced or junior accountants who find it difficult to weigh the disclosures necessary to put into financial statements. Thus, using “disclosure checklists” is a common practice of the junior auditor’s ticking-andbashing exercise in preparing (or auditing) financial statements.

Disclose the relevant stories and leave the fluff. Stop bluffing the users with a tome of carefully selected wordings. Tell the real story without covering it with a veil of cloud.

Tables are nice but words can be better. Don’t stuff the financial statements with tables all over!

Accountants love their spreadsheets, albeit, tables—but don’t overload the financial statements with tabular disclosures when narratives can work much better.

Users aren’t stupid. Probably the last thing I want to say, but hey, stop disclosing that cash is cash and consists of cash. Be descriptive if you need to or add a paragraph in the notes, but stop assuming that users are ignorant.

‘A

lways know the condition of your flock”—this is the first principle in the book The Way of the Shepherd.

The authors, Kevin Leman and William Pentax, said one of the foremost things that any organization needs to know, rather extensively, is its very own people. It is critical for organizations to know their personnel for a more effective management and more responsive leadership. No matter how technologically equipped a company may be, it will rise and fall with its employees. After all, the soldier is the Army and no Army is better than its soldiers, according to US Army General George S. Patton Jr. Hence, it is a basic rule in leadership—know your own people first, before knowing the enemy (or the competition).

I recently attended a workshop—“Leading the Multigenerational Workforce”—that presented a lot of information about the differences among people born in different generations (traditionals, baby boomers, generation X, generation Y and millennials). Persons in each generation are generally characterized with a certain mindset or personality due to certain specific events. For instance, the advent of the Internet in the late-1990s, giving users easy and fast access to a lot of information, impacted on the millennial’s attributes of being impatient yet creative and efficient in terms of multitasking in the workplace.

The workshop also had a series of practical exercises where groups composed of members of different generations had to associate pictures of people and events with the period when they appeared or happened. The exercises somehow revealed that not all persons under one generation will exhibit the behavior or knowledge expected

of them. Thus, one baby boomer participant was able to identify pictures of Cary Grant, but also identified Daniel Padilla at the same time, quite unexpectedly.

A leader would err if he makes a stereotype of his people based on generational differences. Hence, as leaders, we need to get more information about our people aside from personality profiles based on generation, gender, race and religion, to name a few.

Human-resources departments have been referring to their individual employee records as 201 file without knowing why it is called as such. Interestingly, the term “201 file” originated from the Army.

Form 201 in the US Army is a set of documents containing a person’s comprehensive profile, including all past and current information necessary to know almost everything about him. “But why not call it a 101 file?” someone may ask. The number 2 stands for the intelligence branch in the military. Other numbers such as 1 is

Monday, July 30, 2018 A11

for administration and personnel, 3 is for operations and 4 is for supply in the Army. I can surmise that 201 file came into being because it is the very first (01) file that the intelligence branch (2) would have on its personnel. It is the Army’s intelligence record of supposedly anything and everything about its personnel.

Some leaders rely heavily on information in the 201 file. I remember one leader who signed personnel orders based on 201-file information “interpreted” to him by his inner circle. Limiting himself within the confines of his office, he assigned, promoted, awarded and even punished his men without actually knowing much about them. But a true servant leader, one who makes the effort to identify the needs of others, engages the people around him so as to get to know them better. He talks to them. Informal and casual conversations provide honest feedback.

But, a servant leader can only have these kinds of candid conversations if he is accessible.

I remember one associate, referred to as MMT in our Firm, who had difficulty with one of my law partners. No matter how hard she tried, MMT just cannot meet my partner’s standards. “I just can’t get through him,” she once told me. Upon my suggestion, she invited my partner to dinner together with some associates. Sure enough, after that relaxing dinner, things between my partner and MMT greatly improved. The professional, strictly business relationship between them became more of a personal, stewardshiplike relationship.

In the Bible, John 10:14 tells us, “I am the good shepherd; I know my sheep and my sheep know me.”

Our God does not need a 201 file for Him to know us. He knows our intentions, our thoughts and even our plans way beforehand. Amazingly, He knew us already since

the day we were created and even before birth, as it was written in Jeremiah 1:3, “Before I formed you in the womb I knew you, and before you were born I consecrated you.” Psalm 139:1-3 says it all— “You have searched me, Lord, and you know me. You know when I sit and when I rise; you perceive my thoughts from afar. You discern my going out and my lying down; you are familiar with all my ways.”

As leaders, we can never come close to how much He knows us, His children. But a servant leader can always try. He always finds ingenious ways to open opportunities for others to talk to Him. And it is during those minute interactions and intimate conversations that a leader gets to really understand the needs, and more important, the aspirations of his own people.

Eventually, his people will follow him, not because they have to, but because they want to. The more a leader knows about his people, the more he understands their needs.

In the Army, I tried to spend a considerable amount of time with my soldiers. I ate all sorts of talbos with them, slept in the jungles with them, played chess and basketball with them and even shared a few drinks with them on certain occasion. As I led them in combat, never did I feel the danger, confidently knowing that they have my back.

Most, if not all, of my classmates in the academy would perhaps have a common aspiration to what the Bible says in John 10:27—“My sheep listen to my voice; I know them, and they follow me.” When a leader takes care of his people, the more they will follow him, not only because they like him, but because they trust him, just like a sheep to a shepherd. Truly knowing our people, our sheep, goes beyond what is contained in a 201 file.

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

How about police power in local PPPs?

By Alberto Agra

PPP Lead Continued from A1

T

his power of LGUs is anchored on the 1991 Local Government Code (1991 LG C) and affirmed in Memorandum Circular 120, s. of 2016 (MC 120) issued by the Department of the Interior and Local Government. A reading of the template PPP ordinance attached to MC 120 reveals that an LGU can do more for a PPP project.

Police power by LGUs in a PPP can be exercised during the whole life of the project. The partner-host LGU may, in the PPP contract, bind itself to grant the business permit and/or waive the payment of business permits and other regulatory fees. The appropriate zoning ordinance may be enacted or amended to reflect the real property usages of the PPP project.

Filbert Tsai is the chief strategy officer of continu.ee, a membership-based e-learning platform for professionals that provides quality continuing professional education courses. He is also the chief strategist at UpSmart Strategy Consulting Inc., a corporate troubleshooting firm focusing on helping struggling companies get back to their normal operations.

This column accepts contributions from accountants, especially articles that are of interest to the accountancy profession, in particular, and to the business community, in general. These can be e-mailed to boa.secretariat.@gmail.com.

Available options for LGUs. Aside from cash contributions, an LGU, under the model ordinance, “may extend goodwill, free carry, grant a franchise, concession, usufruct, right-of-way, equity, subsidy or guarantee, provide cost-sharing and credit enhancement mechanisms, exercise police power, give tax incentives or tax holidays, perform devolved powers, expropriate and reclassify and enact or integrate zoning ordinances.” To-

day’s column is on “police power.”

What is the police power of LGUs? The general welfare clause is the delegation in statutory form of the police power of the State to LGUs. The exercise of police power

by LGUs is defined under Section 16 of the 1991 LGC. The law states: “Every local government unit shall exercise the powers expressly granted, those necessarily implied therefrom, as well as powers necessary, ap-

propriate, or incidental for its efficient and effective governance, and those which are essential to the promotion of the general welfare. Within their respective territorial jurisdictions, local government units shall ensure and support, among other things, the preservation and enrichment of culture, promote health and safety, enhance the right of the people to a balanced ecology, encourage and support the development of appropriate and self-reliant scientific and technological capabilities, improve public morals, enhance economic prosperity and social justice, promote full employment among their residents, maintain peace and order, and preserve the comfort and convenience

within their regional territory, the Federated Region shall have exclusive power over: (a) socioeconomic development planning; (b) creation of sources of revenue; (c) financial administration and management; (d) tourism, investment and trade development; (e) infrastructure, public utilities and public works; (f) economic zones; (g) land use and housing; (h) justice system; (i) local government units; (j) business permits and licenses; (k) municipal waters; (l) indigenous peoples’ rights and welfare; (m) culture and language development; (n) sports development; and (o) parks and recreation.

Powers not exclusively given to either the Federal Government

or to the Federated Regions are shared powers. They fall within the relative competencies of the Federal Government and the Regional Government and can be exercised jointly or separately.

In case of dispute or conf lict in their exercise, the federal power shall prevail (Article XII, Section 4).

Article XIII of the draft Constitution defines the taxing powers of the Federal Government and the Federated Regions.

The Federal Government shall have the power to levy and collect all taxes, duties, fees, charges and other impositions except the power to tax granted to the federated regions. The Federated Regions

shall have the power to levy and collect the following taxes, licenses and fees: (a) real property tax; (b) estate tax; (c) donor’s tax; (d) documentary stamp tax; (e) Professional Tax; (f) Franchise Tax; (g) Games and Amusement Tax; (h) Environmental Tax, Pollution Tax, and similar taxes; (i) Road Users Tax; (j) Vehicle Registration Fees; (k) Transport Franchise Fees; and (l) Local taxes and other taxes, which may be granted by federal law.

The Federated Regions shall be given a share of not less than 50 percent of all the collected income taxes excise taxes, valueadded tax, and customs duties, which shall be equally divided

among them and automatically released (Section 4). There shall be an Equalization Fund, which sha l l not be less t han t hree percent of the annual General Appropriations Act. The Fund shall be distributed based on the needs of each region, with priority to those that require support to achieve financial viability and economic sustainability as determined by the Federal Intergovernmental Commission (Section 5).

The Executive and Legislative departments under a Federal System is difficult to comprehend.

Add to this is an entire overhaul of the Judiciary (to be discussed in my next column), which is totally

of their inhabitants.”

What are the ways? Police power by LGUs in a PPP can be exercised during the whole life of the project. The partner-host LGU may, in the PPP contract, bind itself to grant the business permit and/or waive the payment of business permits and other regulatory fees. The appropriate zoning ordinance may be enacted or amended to reflect the real property usages of the PPP project.

For projects within the exclusive purview of the LGU, it may create a regulatory authority that will determine the tariffs and fees that end-users will pay for using the project—expressway, bridge, monorail or sewerage. The LGU can grant an exclusive concession to a PSP, however, it cannot compel the citizenry to use the facility.

The LGU may also provide security and police assistance to its PPP project. It may also abate or cause the abatement of a nuisance obstructing its project with the PSP. So, LGUs can do it. Through police power, LGUs have more skin in the game. alien to our present judicial system.

I take some comfort in recent surveys that claim that 67 percent of Filipinos are against Charter change and 62 percent are not in favor of shifting from a unitary system of government to a federal one. Charter change also does not appear to be in the priority agenda of the Senate, which understandably is protecting its turf. And, finally, a draft is what it is—it is only a draft. And, hopefully, in the slim chance that it gets the required approval of Congress (voting separately), it will be rejected by the sovereign Filipino people, which has the final say on the matter.

Hope springs eternal!

2nd Front Page BusinessMirror

A12 Monday, July 30, 2018

www.businessmirror.com.ph

Burned by TRAIN, senators seek solid data

S

ENATORS are still committed to back the Duterte administration’s second round of measures under the Tax Reform for Acceleration and Inclusion (TRAIN), but signaled they are skeptical of any assurance that impact assessments presented to them can be relied on this time.

Responding to a query from the BusinessMirror over the weekend, senators conveyed their intent to seek firm assurances from Executive endorsers of TRAIN 2 about the validity of their assumptions. Lawmakers want to avoid a repeat of the TRAIN’s blindsiding the nation after economic man-

agers underestimated the extent by which “external factors,” such as global oilprice hikes and rice-supply issues, could compound the inflationary impact of the tax-reform law.

The senators agreed this miscalculation compounded the inflation impact of the TRAIN, which took effect

on January 1, 2018, and included higher excise taxes on fuel. The resulting costlier petroleum in the country was aggravated by spikes in oil prices in the world market. This, along with price increases in rice—hounded by supply issues on account of the National Food Authority (NFA) failure to

import enough stock—were among those that caused inflation to post higher-thanexpected levels in April, May and June.

Sen. Aquilino L. Pimentel III said he is keen to find out where the “wrong predictions” came from, alluding to the aftermath of the TRAIN. “I said before that we need to know the names of those analysts who made the wrong predictions,” Pimentel said, “so that we will not depend on them in the future.”

The former Senate President said Finance Undersecretary Karl Kendrick T.Chua should provide names “because it was [Usec Chua] who explained to us the predictions of these experts as to long-term trends.”

‘No guarantees’

Sen. Gregorio B. HonasanII , however, told the BusinessMirror it would be “unrealistic” for the Senate to seek guarantees from the Executive officials endorsing TRAIN 2 this early.

“No...it is unrealistic to ask for guarantees from anybody considering so many eco-pol [economic political] variables and imponderables and not only because of TRAIN 1 experience,” Honasan said in an SMS. Meantime, Honasan suggested that lawmakers reviewing the controversial revenue measure can exercise “best effort prioritization and serious fact checking.”

Sen. Joseph Victor G. Ejercito indicated he may not even vote for TRAIN 2 if its proponents fail to provide “accurate and well-studied data.” The Department of Finance and National Econom-

ic and Development Authority have been citing statistics indicating that many of the fiscal incentives enjoyed for decades by certain sectors have not been productive in drawing new investments or expanding business or more jobs; however, lawmakers keep hearing warnings from business groups that an ill-considered removal of certain tax perks—a key plank of the next-round reforms—could drive away business or prevent those eyeing the Philippines from actually coming in.

“I will not even think about considering the TRAIN 2 package unless I get clear guarantees from our economic managers that this measure will not result in more hardships for the Filipino people,” Ejercito said in a text message to the BusinessMirror.

Ejercito asserted that “government economists need to provide us with accurate and well-studied data and, more importantly, exhibit complete transparency and honesty.”

Sen. Richard J. Gordon said the Senate need not require guarantees from anyone when it makes laws. “We all have to base our judgment on national interest, not on just popularity or suasion,” said Gordon, adding, “we have to decide what is best for the nation like a good father of a family.”

For his part, Sen.Francis G. Escudero said the Executive officials seeking lawmakers’ support for early passage of TRAIN2 “cannot make that guarantee.” Besides, Escudero added, “I do not think the Senate will believe any such guarantees from them.” Butch Fernandez

Safety nets for poor get ₧153B in budget

T

HE government will allocate P152.8 billion next year for social protection of the poor and for those made vulnerable by economic shocks following the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) law, a ranking House officer said on Sunday.

Deputy Speaker Rolando G. Andaya Jr. said the P88.1 billion will be allocated for 4Ps, or Pantawid Pamilyang Pilipino Program, and P23.2 billion for the Social Pension for Indigent Senior Citizens.

Andaya said P37.6 billion will be allotted for the unconditional cash transfer (UCT) and P3.9 billion for the Pantawid Pasada Program for public-utility vehicles (PUV) drivers, which are both mitigating measures under the TRAIN law.

“The budget proposed for these programs will reach P152. 8 billion in 2019...as [the government] ramps up social protection for poor households, victims of calamities, homeless families and those made vulnerable by economic shocks,” he said in a statement. “But if we will compute other ‘entitlement programs’ that will provide subsidy to certain sectors, which will not be coursed directly to them but which they will benefit from, the total funding could reach double that amount,” Andaya added.

The 4Ps grants a monthly stipend to an indigent family on the condition that the children regularly attend school and get regular health check-ups. Also covered are calamity victims, homeless families, indigenous peoples and those affected by economic shocks.

The UCT, on the other hand, is a monthly assistance—set to increase to P300 next year, from the present P200—to partially cover the prices of goods driven up by the TRAIN. The social pension program grants a P6,000 yearly aid to indigent 60 year olds and above who are not receiving Government Service Insurance System or Social Security system pension.

The Pantawid Pasada is a coping mechanism for PUV drivers whose operating costs have gone up due to oil price hikes.

Other expenditures

Meanwhile, Andaya said among the other social protection expenditures for 2019 is the P67.4 billion that the government will pay PhilHealth for the insurance coverage of poor households and seniors, and the P3.5 billion for the Department of Social Welfare and Development’s feeding program for almost 1.9 million children.

Other subsidies are in the form of investments, Andaya said, “the biggest of which is in the development of the nation’s human capital—education.”

See “Safety nets,” A3