Businessmirror july 31, 2017

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Monday, July 31, 2017 Vol. 12 No. 291

DOT counting on Pinoy expats to promote PHL By Ma. Stella F. Arnaldo

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@akosistellaBM Special to the BusinessMirror

HE Department of Tourism (DOT) is reviving a project targeted at Filipino-Americans to be at the front lines of promoting the Philippines to their family and friends.

The project, “Invite a Friend Home”, is a call to action for Filipinos living in North America, par ticu larly young professionals, millennials and social-media influencers, according to a news

TAX REFORMS UNDER SENATE MICROSCOPE By Butch Fernandez

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@butchfBM

enators are keen to conduct a closer scrutiny of expanded tax impositions submitted for the approval of Congress by the Duterte administration to bankroll its “Build, Build, Build” projects. Senate Minority Leader Franklin M. Drilon confirmed in a radio interview last Sunday lawmakers are concerned the Palace-endorsed fuel tax-hike proposals will likely trigger inflation and drive up prices of basic commodities. Asked about the senators’ reservations over the Malacañang taxreform package, Drilon replied: “In the first place, we cannot approve everything the Palace submits to us hook, line and sinker.” He said senators, for instance, will need to closely review the Palace plan to increase excise taxes on fuel products, gas and diesel, citing its big impact on prices of prime commodities. “Inflation is

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statement from the DOT. Tourism Secretary Wanda Corazon T. Teo explained that the DOT plans to run the project every quarter of the year via a raffle draw, where the lucky balikbayan (return-

ing Filipino) gets to “invite a friend to his or her home, the Philippines”. While the mechanics for the incentive program is still in the works, the DOT chief already instructed the Philippines’s tourism office in Los Angeles to spread the word among Fil-Am communities. “We are hoping to award two lucky

PPP Lead Alberto C. Agra

he Center for Global Best Practices (CGBP) stands out as a leader in public-private partnership (PPP) knowledge building and sharing. From 2011 to this month, CGBP has organized 16 seminars on PPPs and joint ventures. Before the current year ends, it will host another one. Its last seminar on PPP, just this month, was attended by more than 100 representatives from government agencies, local governments, private companies, cooperatives, banks, land developers and law firms. Around 1,500 PPP stake-holders have learned about the basics of PPPs, and the various modalities of this alternative development strategy, as well as the challenges of PPP projects. The participants have gained insights on the future and opportunities of PPPs while, at the same time, appreciating the risks of dealing with the government. Continued on A15

BMReports

Hedging vs risks: Can govt afford more debt? By Rea Cu

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@ReaCuBM

Part One

the biggest factor that triggers price increases,” Drilon said. The senator added price hikes affecting basic goods are caused by increased taxes on fuel products, especially diesel, which is used by public transport. “Diesel fuel is also used by fishermen, tricycle drivers and trucks ferrying goods to the markets, that is why we will need to look at its effects on the people.” See “Tax reforms,” A2

Continued on A2

PESO exchange rates n US 50.5460 n japan 0.4545

PPP Conversations #7 with Center for Global Best Practices

See “DOT,” A2

HE country’s debt status is explained to be headed to continued sustainability as the ratio of national government debt to GDP is expected to be further reduced to 40.6 percent for 2017, and to a lower figure of 40.47 percent by the year 2018, according to the Bureau of the Treasury (BTr). According to National Treasurer Rosalia V. de Leon, the declining trajectory of government debt is expected to be sustained in the coming years, as the government will implement mitigating measures in terms of addressing risks with its borrowing plan, among others. “The declining trajectory will be sustained as 2017 national government debt to GDP will be further reduced to 40.6 percent and to 40.47 percent in 2018. Debt sustainability will be strengthened as we mitigate risks associated with our borrowing program, namely, foreign-exchange risk, interest-rate risk and refinancing risk,” de Leon told the BusinessMirror through electronic mail. For this year, the government is expecting a GDP ratio of 6.5 percent to 7.5 percent by the end of the year, while it targets a ceiling of 7 percent to 8 percent in 2018. Based on BTr data, for 2016, the debt-to-GDP ratio of the country reached 42.1 percent coming from the high 2010 figure of 52.4 percent.

The number of senators who have expressed reservations over the proposed tax rates, according to Angara

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428,767 T The number of US tourists who visited the Philippines in January to May

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In this July 30 photo, a guard stands at the entrance of the Bureau of the Treasury in Intramuros, Manila.

n UK 66.0485 n HK 6.4725 n CHINA 7.4984 n singapore 37.1935 n australia 40.2498 n EU 59.0276 n SAUDI arabia 13.4797

NONIE REYES

Source: BSP (28 July 2017 )

BMReports BusinessMirror

A2 Monday, July 31, 2017

www.businessmirror.com.ph

Hedging vs risks: Can govt afford more debt? Continued from A1

80:20 ratio

Tax reforms. . .

Continued from A1

Moreover, Drilon said the senators will also look at the Palace plan to increase taxes on sugar products, saying this was not included in the first batch of so-called tax reforms earlier endorsed to Congress by Malacañang. Drilon added the sugar tax hike was only “inserted in the deliberations at the Lower House”. “In fact, many were surprised when the tax on sugar was introduced”, the senator said, noting it proposes a new P10 sugar tax, in addition to the P6 fuel-tax hike. “We need to look into this because it is one of the reasons that prices of basic necessities will go up.” The senator added there is a need for deeper scrutiny because initial estimates indicate that prices of prime commodities may go up by 10 percent to 20 percent. “We can’t say for sure yet, but initial estimates showed fuel-tax hike may lead to a 1.5-percent increase in inflation,” said Drilon, adding, “If inflation now is 3.5 percent on the average, it might go up to 5 percent, which means prices of basic commodities will also go up.” According to Drilon, senators recognize it is time to conduct a “thorough review” of the existing tax system, starting with the “administrative aspect” to find out why taxes collected are deemed insufficient. “What more do we need to do so we won’t have to raise present tax rates,” he said, suggesting adoption of “administrative devices to increase collection without increasing the rates. That is our objective.” This developed as Sen. Juan Edgardo M. Angara, Senate Ways and Means Committee chairman, assured the senators’ willingness to consider Malacañang’s inputs to the tax reforms version being crafted by lawmakers, even as Angara asserted the new tax law must be “just and progressive”. But Angara anticipates many questions will be asked by senators when they meet as a Committee of the Whole to tackle the Palace tax package. “There will be many questions on the expenditure side. They want to know where the funding will go and if it is really needed.” In a separate radio interview, Angara estimated at least 10 senators have expressed “reservations” over the proposed tax rates still being finalized in the tax package. For instance, he said they intend to increase workers’ take-home pay by adjusting tax-bracket exemptions but the reduced tax collection will be recovered from other sources, like raising gasoline excise under a gradual P3-P2-P1 formula to implement the proposed P6 fuel-tax hike. “We will strive to improve tax measures and make them less burdensome, while retaining tax exemptions of certain sectors, like cooperatives and self-help sectors,” Angara added, “Even as we spare the lower income bracket from higher tax impositions.” Senate leaders earlier decided to convene a Committee of the Whole to take over the hearings being conducted by the Ways and Means Committee to enable all senators to participate in the committee level deliberations on the tax measure.

Land-use. . .

Continued from A16

as far back as 2011, at the tail-end of the Arroyo administration. The proposed bill, however, was placed on the backburner. The Neda earlier explained the passage of a Nalua will provide the interagency National Land Use Committee (NLUC) a solid authority to set land-use policies and guidelines. Currently, the NLUC is only backed up by Executive Orders 770 and 770-A, issued on December 1, 2008, and September 30, 2009, respectively. The Neda also earlier explained that, under the Nalua, the country would be able to declare certain areas for human settlement, agriculture and industrial production, physical infrastructure and environment protection. The Nalua, in short, will help resolve issues such as overcrowding of cities, low agriculture and industrial production, inadequate infrastructure and environmental degradation. The law can also help resolve various types of land disputes. However, should the Nalua become a stringent one, del Rosario fears the housing problem will worsen and will “definitely” increase the number of ISFs in Philippine cities, such as Metro Manila, Metro Cebu and Metro Davao. This is mainly due to the rapid urbanization of Philippine cities. Del Rosario said Metro Manila’s urbanization rate is nearly 60 percent every year. Del Rosario added the rate is still projected to increase and could reach 80 percent annually in three to five years’ time. “The urbanization rate is almost 60 percent [and at this rate] we will have a problem with housing. This is the reason we are focused on socialized housing, to allow us to adjust to the high urbanization rate in the Metropolis,” del Rosario said. “[This is why we need], more or less, exemptions [in the Nalua] or a threshold. If that threshold is breached, it means we can do some of our flexibilities.”

Passing the Nalua

THE passage of the Nalua was mentioned by President Duterte in his second State of the Nation Address (Sona) in the hope that the bill will finally be passed by Congress. The bill has also been included in the list of 13 priority bills identified by the Legislative-Executive Development Advisory Council Executive Committee for approval this year. The HUDCC, for its part, will also be preparing a position paper that, according to del Rosario, will be backed not only by government statistics but also private-sector data. With only a week after the Sona, there is no assurance Congress will certainly pass the Nalua. But one thing is for sure, the fight for the Nalua will not be painless. The only hope is that the Filipino dream will not be a casualty of this battle.

ACCORDING to de Leon, the reduction in debt-to-GDP ratio over the years can be attributed to several government efforts. These efforts include moves to sustain economic growth in the country, improve fiscal position with narrowing the deficit as a percentage of GDP, better collection through improved tax and revenue efforts, prudent as well as proactive liability management including lengthening of maturity profile, retiring high-coupon bonds and bias toward peso financing. The sustained contraction in debt is based on the government’s various debt indicators, which was explained to show the Philippine NG headed toward debt sustainability. “Our various debt indicators will show that the Philippine national government is headed toward continued debt sustainability,” she added. The NG’s thrust to program borrowings is an “80:20 ratio”. This means 80 percent of funds will be sourced or borrowed from local markets, while 20 percent will come from offshore accounts. It is a move to take advantage of the liquid market, in the country and further minimize risks brought about by external shocks. “First, we are implementing our borrowing program with a heavy

DOT. . .

Continued from A1

winners—a balikbayan and a nominee-friend—beginning September this year. The travel reward may be used anytime between January and April 2018,” Teo said, describing the effort as the DOT’s way of saying thanks to overseas Filipinos. Tourism officials told the BusinessMirror, the project is also “timely”, as it takes advantage of the current depreciated value of the peso versus the US dollar, making it less expensive for foreign tourists, especially those living in the US, to travel to the Philippines. According to a survey made by the DOT in 2016, tourists from the US lists shopping as their favorite activity (30 percent of those surveyed) in the Philippines, followed by sightseeing (18.4 percent). Of the American visitors who went shopping, some 47 percent went to the department stores, while 30 percent went to the tourism duty-free stores and 17 percent

reliance toward domestic sources of debt in order to take advantage of ample domestic liquidity and mitigate against potential external shocks,” De Leon explained. “In that regard, our borrowing program employs an 80 percent to 20 percent domesticexternal financing mix.”

THE NG has also improved efforts

ACCORDING to Freedom from Debt Coalition President Eduardo C. Tadem, $167 billion worth of new loans will be acquired by the Duterte administration to fund its massive

“Build, Build, Build” infrastructure program. Under the program, the NG debt stock is expected to swell at an estimated 136 percent compared to the 2016 level. Tadem further pointed out that an estimated annual additional revenues amounting to P200 billion will come from new tax measures. These measures include the Tax Reforms for Acceleration and Inclusion. “Liability-management strategy is working, capacity to pay is improving,” Tadem said in his presentation during the Philippine Debt Situation Forum held at the Polytechnic University of the Philippines in Manila on June 27. He pointed out that average annual GDP-growth rate for the last six years stood at 6 percent, with debt indicators improving. Tadem said debt ratios are moving on a downward trend, indicating the country’s better capacity to pay. It should be noted that the country’s moves to reduce its debt and service began in 1990. The first debt and debt-service reduction operation the World Bank financed was the Debt Management Program Loan to the Philippines, the World Bank Group’s Independent Evaluation Group said. “Its main objective was to help restore the Philippines’s creditworthiness by reducing the destabilizing pressures exerted by an excessive debtservice burden.” To be continued

purchased goods in souvenir shops. (See “American tourists place PHL as 4th top favored destination,” in the BusinessMirror, July 23, 2017.) The said project was conceived by former Tourism Secretary Mina Gabor and launched in 1994. Erstwhile titled, “Bring Home a Friend”, the project likewise focused on the US, the Philippines’s second top source market for foreign visitor arrivals. From January to May 2017 visitor arrivals from the US grew by about 12.8 percent to 428,767, and accounted for about 15 percent of the 3 million total foreign visitors for the period. Teo said the “Invite a Friend Home” project, highlights the Filipinos’ world-renowned warm welcome. “And what is more inviting than getting free flights, hotel night stay, while touring with friends in beautiful destinations, [such] as Siquijor, Masbate, Negros Province, Palawan, Cebu, Baguio, Davao or Ilocos?” she said, enjoining tourism-industry stakeholders to support the project. The renewed project initially

targets next-generation FilipinoAmericans and Filipino expatriates living in the US who are mostly into leisure travel. Philippines Tourism Attache for Los Angeles Richmond Jimenez echoed Teo’s message that the program is a “great way” to thank fellow Filipinos in the US who continue to not only go to the Philippines themselves but always bring along a friend or relative for the visit. “Our people is our strength. With our beautiful destinations as backdrops, it is in the company of great people that makes every visit to the Philippines more memorable and worth coming back for,” Jimenez added. In the DOT survey last year, data showed some 57 percent of travelers visiting the Philippines from the US likely return for another visit. These visitors from the US also stay long in the country at an average of 11.22 nights. The same survey showed 54.4 percent of these Fil-Ams went to the Philippines upon a friend’s recommendation, and 14.2 percent have friends or relatives in the country.

Aside from the Invite a Friend Home project, the DOT, in partnership with the Department of Foreign Affairs, also cohosts the annual Ambassadors and Consuls General Tour. A recent tour, which ran from July 11 to 16, brought its Fil-Am participants to Davao City to meet and greet President Duterte. In his prepared speech before the balikbayan, Duterte expressed hope that the delegates would “become Filipino Ambassadors who shall carry a fresh perspective of the new and improved Philippines when you go back to the United States. You shall bring with you the message to the rest of the world that the Philippines has made significant strides in developing its trade, investments, tourism and cultural sectors and in making our country a safer and a more secure place to live”. Duterte also urged the Fil-Am tourists to continue in helping promote the Philippines “as an ideal location for business to thrive and as a great destination for tourists to experience”.

Peso preference

WITH a peso-denominated debt portfolio, the government reduces its risk of shocks coming from foreign-exchange movements. BTr data showed that, as of March this year, 65.8 percent of total borrowings are peso-denominated. “This is an improvement from the 2010 peso-denominated debt percentage of 58.1 percent, and we forecast this level to reach 67.5 percent by end of 2018,” de Leon said. In terms of interest rate, the government has minimized its risk to adverse changes in the interest rate environment, since it maintains a structure wherein less than a tenth of the country’s total debt is based on floating rates. “Third, we have minimized our exposure to adverse changes in the interest-rate environment by maintaining an interest structure where less than a tenth of our total debt is based on floating rates,” de Leon noted.

Risk appraisal

TROPICAL STORM (HAITANG) ESTIMATED AT 385 KM WEST SOUTHWEST OF BASCO, BATANES SOUTHWEST MONSOON AFFECTING WESTERN SECTION OF NORTHERN AND CENTRAL LUZON (As of 4:00 AM - July 30, 2017)

in terms of managing its refinancing risks, with the average maturity of outstanding debt floating within the government’s medium-term target of seven to 10 years. “As an update, we can see the average maturity of our outstanding debt, from both domestic and external sources, hovering at the upper bound of our medium-term target of seven to ten years,” de Leon said. She further pointed out that interest payments (IP) made by the government has been significantly decreased. De Leon said interest payments as percent to revenues reached 13.8 percent in 2016, from 24.4 percent in 2010. Interest payment as a percentage of expenditures, meanwhile, reached 12 percent last year from the 19.3 percent in 2010. “With lower debt burden, more fiscal space is created for productive and growth-enhancing spending, like infrastructure and social services. These trends will continue as IP/revenue will decline to 13.8 percent in 2017 and to 12.9 percent in 2018. Similarly, IP/expenditures will further decline to 11.5 percent in 2017 and to 10.8 percent in 2018,” she added.

Fresh debt

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Editor: Vittorio V. Vitug • Monday, July 31, 2017 A3

AFP 2 barangays away from liberating Marawi

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By Elijah Felice E. Rosales

@alyasjah

he military is two barangays and a square kilometer away from regaining the whole of Marawi City, Lanao del Sur, from the clutches of Islamist extremists, according to the spokesman of the Armed Forces.

In a recent news briefing, AFP Spokesman Restituto F. Padilla Jr. said there are only two barangays hindering the liberation of Marawi City. “The area of operation is confined to about two barangays or, to be exact, two-and-a-half barangays, and confined to about less than 1 square kilometer of the most problematic area,” Padilla said. Padilla added government troops are eager to deliver the coup de grâce against Islamist extremists, in spite

of conceding more than 100 lives to the enemies in the two-month-old conflict. “Our troops are in a very high state of morale, all leaning forward to finish this operation at the soonest time possible,” the military’s spokesman said. “Despite the number of casualties and wounded that we have had in the past few weeks, this does not deter the troops and our ground commanders from pursuing the mission and accomplishing the

much-needed liberation of Marawi [City],” Padilla added. The death toll of the conflict has reached 630 as of last Friday, of which 114 were security forces killed in action and 45 were civilians killed by terrorists. However, Padilla admitted the leadership of the Islamic State (IS)pledged Maute Group is still in hiding in Marawi City, keeping the terrorist group intact for the last few attacks. On top of this, Padilla said

the Maute Group still has around 60 terrorists battling the military. Isnilon Hapilon, the purported leader of IS fighters in Southeast Asia, was reportedly nesting in one of the mosques in Marawi City. Citing intelligence reports, Defense Secretary Delfin N. Lorenzana on July 3 said Hapilon is still in hiding in Marawi City, contradicting a previous report by the military that said the purported IS leader has made his way out of the conflict zone.

Left-oriented indigenous peoples schools told to get DepEd permit

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PHILEX SUPPORTS ‘TULONG KAPATID PARA SA MGA BAYANI SA MARAWI’ Philex Mining Corp., one of the oldest and

largest gold and copper producers in Southeast Asia, recently donated to the “Tulong Kapatid Para Sa Mga Bayani Sa Marawi”, a joint effort between the MVP Group and the Duterte Cabinet Spouses Association Inc. (CSA) to give financial aid to the families of the soldiers killed in action in Marawi City. On hand for the turnover ceremony were Kristine Dino (from left), Edith Lorenzana, Defense Secretary Delfin N. Lorenzana, Philex Chairman Manuel V. Pangilinan, Betty Medialdea, CSA President Marissa Lim Aguirre and Philex Senior Vice President for Public and Regulatory Affairs and MVP Group Media Bureau Head Lawyer Mike Toledo.

hree indigenous peoples (IP) schools were branded by Malacañang as “left-oriented” and were told to obtain a permit to operate from the Department of Education (DepEd). Presidential Communications Assistant Secretary Ana Maria Paz R. Banaag said a number of lumad schools in Mindanao are operated by leftist educators. “There are three main groups of left-oriented indigenous peoples schools, according to the Department of Education,” Banaag said in a recent news briefing. Banaag said the Alternative Learning Center for Agriculture and Livelihood Development (Alcadev), the Center for Lumad Advocacy and Services and the Salugpongan Com-

munity Learning Center are under the maneuver of subversive elements. The Palace official added the Alcadev refuses to acquire a permit to operate from the DepEd. “Aside from left-leaning lumad schools, we have schools established by the DepEd itself, which are complying with our curriculum and other requirements of the [department],” Banaag said. Banaag issued the statement days after President Duterte said he would bomb IP schools in Mindanao for allegedly teaching communism and subversion. “It is, likewise, clear that the President does not intend to bomb lumad children. On the contrary, he said they should get out of the schools, as he was referring to structures and not to children,”

the Palace official added. On the other hand, the spokesman of the Armed Forces said it is unlikely for Duterte to order the bombing of IP schools. “It was just a matter of strongly communicating a strong position, on behalf of [the] government, to warn [these] illegal educational centers who are not complying with government regulation,” AFP Spokesman Restituto F. Padilla Jr. said. “[The President’s threat is] not intended to really destroy the community, but to extend a message—a strong message—to the people behind the organization of [these] illegal learning institutions to comply with government regulation,” Padilla added. Elijah Felice E. Rosales

Economy

A4 Monday, July 31, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon

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‘Ease restrictions on foreign investments’

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By Jovee Marie N. dela Cruz

@joveemarie

vice chairman of the House Committee on Appropriations urged the leadership of the 17th Congress to include a study on easing constitutional restrictions on foreign investments in the drafting of the proposed revisions to the 1987 Constitution.

Nacionalista Rep. Luis Raymund Villafuerte of Camarines Sur made a statement following the announcement of the Congress’s leaders that a technical working group (TWG) will be created to fast-track President Duterte’s push for a shift to a federal system of government in the absence of a 25-man constitutional commission (Con-com). “A study on easing constitutional restrictions on foreign investments in support of the government’s high—and inclusive—growth agenda is needed,” Villafuerte said. “Federalism and foreign investments will sustain the economy’s growth momentum and enable the government to put flesh into the President Duterte’s vision to disperse growth and development to the regions,” he added. However, Majority Leader Rodolfo Fariñas of Ilocos Norte said

VILLAFUERTE: “A study on easing constitutional restrictions on foreign investments in support of the government’s high—and inclusive—growth agenda is needed.”

both houses will still discuss further the details and composition of the TWG. “We only agreed in principle, but not on the details, which we thresh our as soon as possible,” said Fariñas in a text message to the BusinessMirror. Last week Fariñas said the TWG will be composed of six to 12 members from each chamber. He said the TWG is expected to create a working draft that shall be deliberated upon by Congress when it convenes into a constitu-

ent assembly (Con-ass). Earlier, Speaker Pantaleon D. Alvarez said the 17th Congress will convene as Con-ass early next year. Villafuerte, one of the key proponents of federalism in the lower chamber, said federalism is the way to attain the President’s goal of ensuring equitable regional growth and countryside development. “However, federalism should be complemented by liberalizing foreign ownership in many sectors of our economy, which can only be done through Charter change,” he said. Citing government data, Villafuerte said over the 2011-2015 period, the Philippines attracted just $20.4 billion in foreign direct investments, which is “a pittance” compared to Singapore’s $305.6 billion, Indonesia’s $107.6 billion, Malaysia’s $56.6 billion and Thailand’s $42.0 billion. “ The 40-percent ownership limit is a deal breaker for foreign investors willing to bring in massive amounts of capital into the country. Even if we amend the Foreign Investment Negative List to accommodate more investments, we are still limited by constitutional restrictions on foreign ownership,” Villafuerte said. “ I n t h i s e me r g i n g e r a of regional integration and borderless trade, we need to catch up with our neighbors ASAP and the way to do it is to do what they did, which is to open wide the economy to foreign investors,” Villafuerte said.

File photo shows workers in a local car-assembly plant.

DENR to reveal fate of mining projects facing cancellation By Jonathan L. Mayuga @jonlmayuga

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he Department of Environment and Natural Resources (DENR) is expected to announce at a news briefing on Monday the fate of mining projects that are facing possible cancellation. The news briefing, which will also highlight the DENR’s partnership with the Volunteers Against Crime and Corruption (VACC), will include updates on the motion for reconsideration filed by mining companies. Environment Secretary Roy A. Cimatu has earlier promised to reveal his decision on the appeals made by officials of mining companies whose mining operations were ordered closed or suspended for failing the mining audit conducted by Cimatu’s predecessor, Regina Paz L. Lopez. The DENR chief has been inspecting mines as part of an ongoing review of Lopez’s controversial closure and suspension orders. The mining industry suffered huge setbacks as a result of a 10-month crackdown waged by Lopez, prompting mining stakeholders to call on the Department of Finance (DOF) to convene the Mining Industry Coordinating Council (MICC) and conduct a review of Lopez’s orders. Aside from the MICC’s review, the DENR is also reviewing Lopez’s orders. Some companies claimed Lopez’s order was inconsistent with the findings and recommendations of her own audit teams, while others said closure or suspension was “too harsh” for violations they allegedly committed. Antimining groups, led by Alyansa Tigil Mina, Defend Ilocos and Kalikasan-People’s Network for the Environment (Kalikasan-PNE), want Cimatu to heed President Duterte’s strong statement against irresponsible mining during his State of the Nation Address (Sona) on July 24, and enforce Lopez’s orders. Last Saturday Cimatu was quoted in a DENR press release ordering mining companies to integrate biodiversity conservation into their operations as part of their adherence to the principle of responsible mining being espoused by the Duterte administration. “Responsible mining companies should seek not merely to minimize and mitigate but, where possible, to enhance the biodiversity in areas where they operate,” Cimatu said. Biodiversity considerations was one of three major criteria of Lopez’s mine audit last year. In a statement, Cimatu reiterated his “unwavering” support for Duterte’s resolve to prioritize environmental protection and his nonnegotiable policy against irresponsible mining. Cimatu made the statement in the

wake of an international study, which led to the discovery of new mammal species in Luzon, the largest island in the Philippines. The study by the Field Museum of Chicago (FMC), titled “Doubling diversity: A cautionary tale of previously unsuspected mammalian diversity on a tropical oceanic island”, involves 56 newly discovered mammal species, 93 percent, or 52 of them, are found nowhere else in the world. It was conducted by a team of Filipino and American researchers led by Dr. Lawrence Heany, and was published in the scientific journal Frontier of Biogeography. Heany is an ecologist, and evolutionary biologist and curator of mammals at FMC. “The study has arguably amplified the President’s call to mining companies to strictly comply with existing rules and regulations,” Cimatu said. He added that taking a proactive stance on biodiversity conservation efforts being implemented by the DENR would “serve well the mining sector in showing its sincerity in its response to the President’s call and goodwill beyond the immediate host communities where they operate.”

According to Cimatu, the discovery of additional mammal species in Luzon was a big boost to the new mining policy direction of the Duterte administration, which puts premium on the protection and preservation of the nation’s flora and fauna species and their habitats. “Integrating biodiversity conservation into their mining project cycle would surely help mining companies restore, possibly to near-original condition, mining-affected forests in the country,” he added. He said the mining sector will “benefit immensely” in giving a positive image to the general public as such move would “amplify their efforts” to reduce biodiversity loss and provides significant contributions to national and global conservation initiatives. Director Mundita S. Lim of the DENR’s Biodiversity Management Bureau (BMB), for her part, said the FMC findings support the President’s directive to mining companies to adopt more responsible measures in their operations. “We urge the mining industry to take this opportunity to take the center stage with us in striking a balance vis-à-vis mining. Our potentials are limitless if we can continue to conserve and sustainably manage our biodiversity,” Lim said.

B.O.C.’S ‘WONDER BOY’ Dr. Siegfried Manaois (left) of the Bureau of Customs (BOC) District Collection II, tagged as the “Wonder Boy” of the BOC, accepting his commendation from MICP Collector lawyer Jet Maronilla, after surpassing his target collection in the period of May 2017 amounting to more than P1.7 billion.

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AseanMonday BusinessMirror

Editor: Max V. de Leon • Monday, July 31, 2017 A5

Amazon reaches for millions in Southeast Asia’s cyber space

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INGAPORE—Amazon is introducing express delivery to Singapore in its first direct effort to tap into surging online shopping in fast-growing Southeast Asia.

The American e-commerce company announced last Thursday it will begin operating a distribution facility bigger than a football field in the wealthy island nation. It promises to deliver tens of thousands of types of items within two hours for free, if customers spend at least 40 Singapore dollars ($29.52). That’s a step up from past international shipping options offered by Amazon, where items sometimes took weeks to arrive. Amazon is late to capitalize on the region’s rising middle class. The biggest local competitor is Lazada, which is backed by Chinese giant Alibaba and launched in the region in 2012. It operates in Indonesia, Malaysia, Thailand, the Philippines, Vietnam and Singapore. Henry Low, the Asia Pacific director of Amazon Prime Now, said the company is keen to expand elsewhere in Southeast Asia, a market of more than 600 million people. “I’m super excited about future possibilities,” Low added. The number of Internet users in

Southeast Asia is expected to rise from 260 million now to 480 million by 2020, according to research by Google and stateowned investor Temasek Holdings. It forecasts that the value of e-commerce in the region will soar to 88 billion by 2025, from 5.5 billion in 2015. “The offline-to-online shift will continue, and we strongly believe in the great success of e-commerce [with] the rising middle class in many Southeast Asian markets,” said Hanno Stegmann, CEO of the Asia Pacific Internet Group, the Asian arm of Rocket Internet, which founded Lazada. As Amazon gears up in Singapore, Rocket Internet already is looking at other emerging markets. Its current focus is on Daraz, an e-commerce platform aimed at the 400 million people living in Myanmar, Pakistan and Bangladesh. Still, there’s plenty of room for growth in Southeast Asia, where e-commerce accounts for only 2.6 percent of the retail market, said Sebastien Lamy, a partner at management consultancy Bain & Company. That’s compared with 15 percent to 25

A staff member collects merchandise for customers’ orders from shelves at the newly opened Amazon Prime Now facility in Singapore on July 27. Amazon introduced express delivery in Singapore in its first direct effort to win over Southeast Asian digital natives and new Internet users. The American e-commerce company announced last Thursday it will begin operating a 9,290-square-meter distribution facility in the wealthy island-nation. AP

percent seen in the US and China. Even if online commerce is just getting started, it’s already having an impact in Singapore, whose glitzy malls are the backbone of the local economy and tourism. Mall vacancies along Orchard Road and in other areas are rising, abandoned by shoppers like Rahil Bhagat, a content producer.

Rahil started buying video games and accessories online from the US in 2009. Now, he makes 75 percent of his purchases, from car parts to quinoa, online. “Physical shopping has lost its appeal,” he told The Associated Press. “Even if I visited a brick-and-mortar store, I would be checking online to see if it’s cheaper. It usually is.” AP

Nations agree to boost fight against IS in Southeast Asia

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ANADO, Indonesia—A six-nation summit cohosted by Indonesia and Australia agreed last Saturday to set up a forum to strengthen cooperation between intelligence services to counter extremist threats in Southeast Asia. Security ministers and officials from Indonesia, Australia, Malaysia, Brunei, the Philippines and New Zealand held a one-day meeting in Manado, the capital of Indonesia’s North Sulawesi province, focusing on the Islamic State (IS) group attack on the southern Philippine city of Marawi. Indonesia’s top security minister, Wiranto, told a news conference that the six countries agreed to establish the Foreign Terrorist Fighters Forum to strengthen information sharing and cooperation between law enforcement and intelligence services. The Marawi occupation has raised fears that the IS group’s violent ideology has taken root in the Philippines’s restive south and could destabilize neighboring countries. More than 600 people have been killed in the conflict, including foreign fighters, and the city has been devastated by government air strikes against the militants. Indonesia and Malaysia also face the threat of citizens who went to Syria and Iraq to fight with IS returning home and carrying out attacks. “We cannot keep silent because terrorism has become a real threat to humanity,” said Wiranto, who uses one name. “Not a single country is free from the threat of terrorism and, therefore, this threat must be faced together.” He added immigration procedures should also be strengthened to prevent militants from traveling in the region. Australian Attorney General George Brandis said in his opening speech that the conflict in Marawi “reminds us in the most immediate, possible way of the urgency and the proximity of the threat that is faced by all of us”. AP

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Banking&Finance BusinessMirror

Monday, July 31, 2017 • Editor: Jun B. Vallecera

news@businessmirror.com.ph

Parallel forex market easily trumps PDS

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he Bangko Sentral ng Pilipinas (BSP) is appalled that far more people patronize the so-called parallel market for foreign exchange (forex) than they do the formal forex market known as the PDS, and vowed last Friday to liberalize the rules further to encourage consumers to keep clear of unregulated markets.

According to BSP Governor Nestor A. Espenilla Jr., they were evaluating data from the PDS and compared it against the parallel market and found that the volume of transactions alone staggers the mind. He said that, while the formal market represented by the PDS is capable of handing $600 million worth of transactions daily, the parallel market, sometimes known as the black market, can easily process $1 billion or more. This market includes the various and unregulated money-service businesses. “This is outrageous. For transactions to be happening in the unregulated parallel markets, this has got to change,” Espenilla said. Espenilla vowed to take greater care of the formal forex market that represents a “very important focus” during his term as central bank governor. Espenilla assumed the top post at the BSP only on July 3 this year. “Looking at the PDS…what’s being dealt…the order of the magnitude is about $600 million. But when we started collecting data [from] the money-service

businesses, it’s in the order of more than $1 billion,” he said, scandalized. Part of the reforms Espenilla is looking at include the liberalization of existing rules on forex transactions to make the exchange more risk-based but transparent. “We recognize that the forex market today remains restrictive, difficult, opaque, shallow. It is a throwback to the time when

forex was scarce and reserves were meager and market confidence was very low,” the governor said. “Today, it’s an entirely different picture. To preserve those rules in a market that is rapidly growing is to impede the growth of the market itself. It simply adds to the cost of doing business and just creates a bigger and bigger black market,” he added. The governor also said he will focus on reshaping the local financial system to respond quickly to the needs of the economy, particularly giving emphasis on evolving technological advances in the industry. Key reforms to developing the local debt market is also expected from Espenilla, seeing this as a “crucial component” to sustain the economy’s growth momentum. “Our growth cannot be just founded on lending by banks, as bank regulator, I know how unstable that situation can be. Banks are inherently short-funded. To be funding these long-term assets creates strategic instability that is very uncomfortable for regulators,” Espenilla said. Bianca Cuaresma

Case clippings

By Justice S J Ranada Jr. PROHIBITED DRUGS–strict compliance with Section 21 The continuous chain of custody is not broken because of the absence of the media representation when the inventory was prepared, and the absence of the Department of Justice representative at the time of arrest. Verily, under varied field conditions, the strict compliance with the requirements of Section 21, Article II of Republic Act 9165 may not always be possible. What is of utmost importance is the preservation of the integrity and evidentiary value of the seized items. Belmonte v People 28 Jun 2017

GR 224143 Perlas-Bernabe, J

‘Foreign labor allowed by law’ T

he Department of Finance (DOF) said local labor should not worry about the government importing foreign workers to help build the various public infrastructures as only highly technical or managerial workers are given visas to work in the country under the law. According to Finance Undersecretary Antonette C. Tionko, work visas are only issued to foreign workers that posses highly technical or managerial skills needed by the government or private corporations. “This shouldn’t happen because the law only allows special work permits to be issued to aliens who are either highly technical or managerial. Other than that, the law doesn’t allow them to be given visas to work. That is very clear,” Tionko told financial reporters. The Labor Code of the Philippines, under Section 2 Article 40, says alien employ-

ment permits (AEPs) are issued whenever the Department of Labor and Employment (DOLE) finds that no Filipino applicant is able to perform the same service at the time of application. “The employment permit may be issued to a nonresident alien or to the applicant employer after a determination of the nonavailability of a person in the Philippines who is competent, able and willing at the time of application to perform the services for which the alien is desired,” it said. Earlier, Budget Secretary Benjamin E. Diokno said the construction sector has a shortage of skilled workers that needs to be addressed quickly given the push for the buildup of the various public infrastructures. Diokno said if the need arises, the government may import skilled workers with advanced knowledge in construction,

which includes countries, such as China or South Korea. According to Finance Secretary Carlos G. Dominguez III, although it is not government policy to import labor, if there is a need for highly skilled workers, then these will be brought in. “No, that is not government policy to import labor. But if you need special skills and they are not available in the country, then you bring them in and we do,” Dominguez said. The National Economic and Development Authority (Neda) earlier presented a multiyear infrastructure program involving a total 4,895 priority projects requiring P3.608 billion. “There is a law that allows foreign workers to work in this country. I’m not saying we will import hoards of people. I’m saying we will follow the law. The law is there,” he added. Rea Cu

Perspectives The transformative power of regtech

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hange is air. Following years which focus financial services industry on cost containment and managing impact new regulations, firms are now turning their attention back to strategic growth. Acquisitions product development initiatives are once again priorities, while a renewed customer service-delivery client acquisition sets fuel growth strategies. Yet, as environment continues its rapid pace change, effective management, ongoing regulatory impacts reducing compliance costs remain top of mind. In many cases, organizations looking technology help meet these disparate business goals. While software solutions have long been used to address regulatory requirements, rising compliance costs due to the new regulations implemented over the past eight years have driven the industry to seek newer, more powerful solutions. “In recent years,

we have seen the cost of regulatory compliance increase steeply,” says John Ivanoski, Global Lead of Regtech at KPMG International. “Current estimates put compliance spend at more than $70 billion in the US alone—and that number will only increase. The industry has to respond.” Enter regulatory technology or regtech. Whereas previous technologies delivered according to specified requirements, agility is at the heart of regtech solutions. This means that not only are regtech solutions able to adapt to the needs of an ever-changing regulatory environment, the technologies, once integrated into a business’ processes, are able to deliver against a broader range of business challenges. For example, the robotics process automation (RPA) that provides the capability to deliver real-time compliance and automated reporting can also provide the agility needed to help respond to competitive pressures in the marketplace, deliver a better customer experience and achieve greater consumer protection. As a result, regtech is uniquely positioned to assist companies to not only control costs and manage regulatory requirements, but also to address other critical areas that can

help improve customer service, develop new offerings and achieve greater competitive differentiation.

Making the most of business data

One area where regtech is well positioned to help accelerate growth goals is in drawing meaningful, actionable information from masses of data. The financial services industry has long looked for more efficient and effective ways to achieve full value from “big data”, such as customer information, risk and financial data, operational information and more. However, despite the considerable value that can be gleaned from these sources, the safe and practical use, storage and management of this data has long been a challenge. Additional risks from possible cyber attacks, noncompliance with regulatory obligations, and the impact of human bias in data management have further hindered such efforts. Regtech solutions take another approach: instead of a big data mind-set, regtech promotes “smart data”. By using new technologies such as cognitive computing and machine learning, regtech solutions can more effectively structure and find meaningful patterns in the volumes of accessible data.

Eternal Chapels celebrates inauguration in Cagayan de Oro City

Shown in the photo are (from left) Numeriano B. Rodrin, Eternal Chapels president; Benjamin V. Ramos, vice chairman; Cagayan de Oro City Councilor George Goking, D. Edgard A. Cabangon; Mayor Oscar S. Moreno, Msgr. Eutiquiano M. Legitimas; D. Antoinette C. Cabangon–Jacinto, Eternal Chapels treasurer; Councilor Maria Lourdes Gaane; and Councilor Bong Lao.

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he Eternal Chapels Mortuary and Chapel Services at Eternal Gardens Greenhills in Barangay Bulua, Cagayan de Oro City had its Blessing and Inauguration on July 29. Cagayan de Oro City Mayor Oscar S. Moreno headed the local government officials who graced the event. They were welcomed by Eternal Chapels executives,

led by Chairman and CEO D. Edgard A. Cabangon. The celebration began with a thanksgiving mass celebrated by Msgr. Eutiquiano M. Legitimas, parish priest of the Immaculate Conception Parish in Bulua, followed by the blessing of the hearses, four viewing chapels, the mortuary facility and the chapel office.

Dominguez finds ₧20 million to fund mining-industry audit

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he Mining Industry Coordinating Committee (MICC) said it supports the review of mining operations in the country to curb irresponsible mining. According to Department of Finance (DOF) Undersecretary Bayani H. Agabin, the MICC fully supports President Duterte and the ongoing review of mining laws and of mining operators in the country. “The MICC has several technical working groups that will review the fiscal regime [as] part of the tax-reform package. With respect to the multistakeholder review, the MICC approved the terms of reference, this will now allow the MICC to procure the experts and we hope to start the process soon,” he added. The MICC is cochaired by the DOF and the Department of Environment and Natural Resources (DENR). Earlier, the DENR after the conduct of an audit, ordered suspended or closed 28 mining operations under the watch of thenEnvironment Secretary Regina L. Lopez. The Commission on Appointments subsequently rejected Lopez’s portfolio appointment and eventually replaced by Roy A. Cimatu. The MICC technical working group (TWG) had asked for P50 million for the conduct of a

three-month review of the mining contracts, along with the enlistment of experts from various sectors not related to mining. “The initially proposed P50-million budget, [would] be taken from the emergency funds of Malacañang but this was not allowed. So the cochairs of the MICC agreed, from their own [respective] budgets, to contribute P10 million each to start the review process,” he said. Agabin said that, with P20 million, the MICC can start with half the total number of mining operations in the country, prioritizing those ordered closed or suspended by the DENR. “We have a short-list [of experts] already, but we want to look at additional candidates,” Agabin said. Finance Secretary Carlos G. Dominguez III also said the President is basically telling miners to observe the law. “I think the essential message to the miners is, follow the law. If you have a contract with the government and that contract is subject to the mining law, which says after you do an open-pit mine you have to rehabilitate the area, you have to do it. That is easily what he [the President] is saying,” Dominguez said.

Significant impacts in this area include the ability to gain better insights into regulatory practices, automating complex reporting, conducting meaningful analyses of critical compliance risk areas, and creating an end-toend view of compliance, reporting and data. However, once enabled, the benefits of using a cognitive system in business processes reach far beyond regulatory compliance and reporting. With the cognitive technologies used to process both the structured and unstructured data (such as the contents of proprietary systems and shared information from online sources, customers and the Internet of Things), financial services firms are better enabled to “unlock” the vast potential inherent in their data stores. For example, firms can perform more detailed and effective customer and counterparty credit analyses and underwriting of small business loans. Provided that data security and cyberattack countermeasures are kept as priorities, there is also considerable potential in this area to use this data and the patterns it holds to achieve greater competitive advantage. “The quality of the information used as a foundation for business decisions is a critical concern for today’s CEOs,” John Ivanoski

says. “With a cognitive system to find and confirm meaningful patterns in an ocean of data, CEOs can be confident in the validity of actionable information and respond more swiftly to market changes and opportunities.” Businesses are already taking note. Current research shows that 85 percent of CEOs recognize the importance of integrating automated business processes with artificial intelligence (AI) and cognitive processes.

Regtech supporting innovation

Many discussions of the importance of regtech focus on its ability to answer immediate business needs, drive operational efficiencies and reduce costs in regulatory compliance and risk management. Regtech firms, regulators and financial services firms alike are focused on finding ways to use new and evolving technologies to solve regulatory challenges; and areas such as regulatory compliance transformation, automation of complex reporting, risk monitoring and analytics, and automation of risk management are obvious points of focus. However, the implications and benefits of the technologies harnessed by regtech goes far beyond regulatory applications.

Agriculture/Commodities BusinessMirror

news@businessmirror.com.ph

Editor: Jennifer A. Ng • Monday, July 31, 2017

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DA to boost Lake Lanao’s fish output

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By Jasper Emmanuel Y. Arcalas @jearcalas

he Department of Agriculture (DA) is set to disperse 5 million fingerlings of various noninvasive species in Lake Lanao next month in its bid to increase the food supply of Lanao del Sur.

Agriculture Secretary Emmanuel F. Piñol said the operation, which is under the DA’s Balik Sigla sa mga Ilog at Lawa (Basil) Program, is also part of the DA’s initiative to aid farmers and fishermen in the area who were displaced by the ongoing war in Marawi City. “My directive to Agriculture Undersecretary [for Fisheries] Eduardo B. Gongona is that within

two weeks we will be seeding Lake Lanao with about 5 million fingerlings of indigenous and noninvasive fish species. We will be doing this in a town that is secured,” Piñol said in a recent news briefing. Piñol added they are already coordinating with the Department of National Defense to identify areas that are not affected by the ongoing conflict between government

security forces and terrorists. “While the war is ongoing people do not have food to eat. And what we want to happen is that by the time that peace returns in the area, the people have something catch already,” he said. “If we can do this, then it will be a big impact to our contribution to the rehabilitation of Lanao and Marawi.” The DA chief also committed to provide about 500 fishing boats to the fisermen of Marawi City in the next three to four months, so that they have something to use by harvest time. Piñol also said the DA has turned over P10 million to the farmers and fishermen of Marawi City on July 22 under the Survival and Recovery loan program. The Basil project is the DA’s response to President Duterte’s order to dismantle fish pens in the lake, which deprived small fishermen of space where they can freely fish or put up cages, the Bureau of Fisheries and Aquatic Resources said.

Agriculture = Productivity + Profits

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n support Agriculture Secretary Emmanuel F. Piñol’s attempt to get a much-higher budget for 2018 to fulfill the Duterte administration’s vision of “a comfortable life for all”, and in line with Arangkada’s “evergreen” call for “bold inclusive reforms for agribusiness for the next decade”, I would like to again highlight the urgently needed steps to be taken to develop agriculture into the industry it should be. The following recommendations, while not exhaustive, point to sensible ideas that merit public policy considerations without delay: Market access—New free-trade agreements (FTAs), including the Asean Economic Community, and other preferential trade privileges, including the Generalized Scheme of Preferences Plus (GSP+), provide unprecedented market access, if Filipino agribusinesses can successfully compete in a more liberalized environment. To take advantage of new market opportunities, measures are needed to improve market information, technology transfer, marketing, export promotion and broader trade facilitation measures. The country must double down and boost agriculture research and development, which accounts for only 0.1 percent of GDP. In other countries, this figure exceeds 1 percent. Priority should be given to high-value export winner crops, such as avocado, banana, cacao, coffee, mango, marine products, mongo beans, peanuts, pineapple, red hot chili, squash and tobacco. Current and further expansion of high value-added crops, like coconut and palm oil, must be encouraged by the Philippine government to maximize the potential of nontraditional exports. Access to finance—The agribusiness sector boasts a small pool of bankable projects, mostly concentrated with the larger commercial farm owners in possession of traditional collateral, secure property rights and financial track records. Hampering investments and access to credit poses a daunting challenge for the sector. Many agribusinesses are small and financially weak, requiring business-development support, collateral substitutes and other credit enhancements to improve their risk profile. Given these long-standing challenges and ingrained market failures, fresh proposals by both public and private sectors are needed to unleash capital for agricultural development. In this context, a more comprehensive approach to crop insurance is recommended, including micro-insurance schemes. Freeing up the land market—In another significant area of market distortions, the property-rights regime contains major deficiencies and greatly undermines the investment climate. The business of agricultural production relies heavily on exploiting and developing land for human needs. Indicative of inefficiencies in the land market, a staggering 11 million parcels of untitled properties litter a country of 24 million parcels. Land-use planning, zoning and overall management are weak, undermining property development and associated tax collection vital to public investments. After six decades, the country’s land reform remains incomplete, creating uncertainties for agribusinesses, limiting collateralized lending in finance and discouraging investments in agricultural production. Land redistribution has created a new class of landed poor, who lack the resources, access to finance, postharvest facilities, market information and associated support services to cultivate the productive benefits of newly acquired land. Strong measures are needed to unshackle the land market in the Philippines. As I (and many others) have mentioned before, increased agricultural productivity would necessitate improving the security of

Visayan Sea eyed as PHL’s first fisheries management area By Jonathan L. Mayuga

Henry J. Schumacher

europe Beat property rights by amending the antigrowth and development provisions in the Comprehensive Agrarian Reform Law and removing the restrictions on sale and conveyance on agricultural land patents. Nobody will invest in agriculture if land titles are not available. Infrastructure investments­—As emphasized in the Arangkada report, long-standing farm infrastructure requires ongoing investment to allow more local value-added for agribusinesses. These priorities areas include: farm-to-market roads, postharvest processing facilities, irrigation, sanitary phytosanitary inspection facilities, food terminals, cold storage and food-processing factories. The lack of postharvest facilities cries out for more private-sector investment, as part of efforts to manage overall supply chains. Farm-to-market roads provide much-needed linkages. Yet, only 3.5 percent of barangay roads are paved. Of particular concern, the Philippines faces a large gap in irrigation infrastructure. Only 1.7 million hectares (some 57 percent of the 3 million hectares of total irrigable area) of the country’s agriculture lands receive irrigation. Large-scale investments are needed to rehabilitate, modernize and restructure the country’s large surface irrigation schemes, so as to improve their productivity and efficiency in water usages. Rationalization of extension services—With low productivity, the business of agricultural production would benefit from adopting new and innovative technologies. Even with advances in research and development, the latest research and information on improved agricultural practices (including intercropping) have not reached farmers sufficiently. As such, agricultural extension services provide a vital link in the mass diffusion of agricultural research, transfer of appropriate knowledge and sharing of best practices. However, the structure of extension services requires rationalization in the Philippines. Creating cooperatives to gain productivity and profits—From a European perspective, we have always strongly believed in cooperatives. They have made European agriculture, the financing of farming and the marketing of farm products, what European agriculture stands for today. Europe and other parts of the world have moved on from the old-style of collectivized farming; today’s cooperatives are thoroughly commercial, prioritizing supply and value chains, efficiency and profits. Cooperatives can also help farmers manage the effects of climate change and play a strong role in getting crop-insurance going, and make climate-smart technologies more affordable. Cooperatives could, with the support of government financing, buy greenhouses to prolong their production season and shield crops against erratic weather. The needed heavy budget allocation for agricultural productivity and profit will generate more investments in agriculture, farmers will get easier access to finance, there will be lower unemployment, and supply or value chains will be created. Comments are welcome; contact me at Schumacher@mca.com.ph.

Provincial Government of Lanao del Sur web site

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@jonlmayuga

ocal government officials in central Philippines want the Visayan Sea to be designated as a fisheries management area (FMA) so it could be protected from illegal fishing and destructive fishing practices. Governors and mayors belonging to “Guardians of the Visayan Sea” have recently committed to protect and restore one of the richest fishing grounds in the Philippines. Oceana Philippines, an ocean conservation advocacy non-governmental organization, said it is “excited” about crafting a management framework for the Visayan Sea. The group noted that the Bureau of Fisheries and Aquatic Resources (Bfar) has also committed to declare it as the country’s very first FMA under Republic Act 10654, or the amended Fisheries Code. Gloria Estenzo Ramos, vice president of Oceana Philippines, one of the conveners of the Guardians of the Visayan Sea, said the coming together of various stakeholders is “timely” as it can boost the protection and conservation of its rich biodiversity. “The Visayan Sea is one of the country’s rich fishing grounds. Most of our captured fish, especially sardines, come from the Visayan Sea,” Ramos told the BusinessMirror in a telephone interview. The Visayan Sea also hosts a variety of highvalue species, such as tuna, herring, mackerel, blue swimming crab and sardines. Scientists reported a steady decline in seafood supply in the Visayan Sea since the 1980s, due mostly to the prevalence of blast fishing, plus the encroachment of trawls, purse seines and ring nets in municipal waters. Through the initiative, a more science-based approach to finding a solution to the problem is possible, according to Ramos. She said stakeholders who wish to stop

destructive and illegal fishing activities can take a cue from Task Force Lawod organized by the Province of Negros Occidental in 2014. Through the task force, illegal fishing activities in Negros Occidental declined by as much as 90 percent. “We already have a best practice as far as law enforcing is concerned. This can help prevent illegal fishing and strengthen our law enforcement in the Visayan Sea,” Ramos said. Ramos also said Bfar Director Eduardo Gongona signed the covenant of commitment and cooperation for the protection and conservation of the Visayan Sea, with Negros Occidental Gov. Alfredo Marañon Jr., Iloilo Gov. Arthur Defensor Sr. and Cebu Gov. Hilario Davide III, who was represented by Provincial Environment and Management Office Head Baltazar Tribunalo Jr. “Our goal is to be food sufficient and, later on, to be a food-exporting country. We have to protect and develop our marine resources, especially for food security, to feed millions of people,” Gongona said during the governor’s meeting in Sicogon Island in Carles, Iloilo, on July 22. “This is a challenge, but we can do it. If we do our job together, with strong partnership with local government units, we can achieve more,” he added. The BFAR, the local government units and stakeholders will craft a fisheries management framework plan. As an FMA, the Visayan Sea will have a management framework for enforcement activities, establish reference points for major fish species and convene a science research group for the monitoring of fish stocks. The Bfar also committed to provide a dedicated monitoring control and surveillance (MCS) vessel for the Visayan Sea to strengthen seaborne patrolling and the enforcement of fisheries laws.

Maine expanding program to vaccinate raccoons in the wild

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ORTLAND, Maine—Wildlife officials are boosting a program to vaccinate raccoons in the wild in an effort to prevent the spread of rabies in Maine and northward into Canada. About 351,000 ora l rabies vaccination baits are going to be distributed over a 2,400-square-mile area in northeastern Maine between August 3 and 7, said Emily Spencer of the Maine Center for Disease Control and Prevention. That compares to 125,000 doses over a 900-square-mile area last year. One of the reasons for the program’s expansion is to prevent the northern spread of raccoon-variant rabies that has been found north of the border in parts of Canada where rabies has been absent for a couple of decades, said Dr. Michele Walsh, Maine state veterinarian. But the program also benefits Maine, where there already have been 30 cases this year of animal rabies in 15 of Maine’s 16 counties, she said. Those rabies cases include several that made the news, including a woman bitten by a rabid fox on her porch in Monmouth and man who battled a crazed fox in Topsham. In another case, a jogger was attacked by a rabid raccoon that she killed with her bare hands in Hope. The Wildlife Services program within the US Department of Agriculture’s Animal and Plant Health Inspection Service began the vaccination program in 2003. The program is part of an effort from the Canadian border to Alabama to prevent raccoon rabies from moving into new areas. There has been an overall decrease in rabies in places like New England, where the oral vaccinations have been distributed to wildlife, said R. Andre Bell, a United States Department of Agriculture spokesman. AP

A10 Monday, July 31, 2017 • Editor: Lyn Resurreccion

The World BusinessMirror

www.businessmirror.com.ph

US economic growth rebounds in Q2

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he US economy’s secondquarter rebound puts the expansion back on its familiar, steady path more than it heralds anything new and exciting.

GDP grew at a 1.9-percent annual pace for the first half, below the expansion’s 2.2-percent average rate through the end of 2016, Commerce Department figures showed last Friday in Washington. Stripping out trade and inventories—the two most volatile components of the GDP calculation—so-called final sales to domestic purchasers rose 2.4 percent in the April-toJune period, the same as in the first quarter. With a solid labor market keeping household spending in the driver’s seat and business investment and trade providing further help, demand looks set to expand around the rate it’s pretty much been growing. The results also indicate President Donald J. Trump has his work cut out for him in finding ways to perk up the momentum and push g row th toward his 3-percent-plus goal. “The economy is moving along at a pace that’s unexciting but not worrisome,” said Michael Feroli, chief US economist at JPMorgan Chase and Co. in New York. “I wouldn’t want to emphasize that growth is accelerating based on the second quarter. The economy is plodding along at a slow and steady pace.”

months as both wages and benefits cooled.

Consumer survey

Highlights of second-quarter GDP

GDP rose at a 2.6-percent annualized rate from prior quarter (estimated at 2.7 percent); first-quarter growth revised to 1.2 percent from 1.4 percent. Consumer spending, biggest part of the economy, grew 2.8 percent (matching estimated) after 1.9-percent gain that was revised up. Nonresidential fixed investment climbed 5.2 percent after 7.2-percent rise. Trade added 0.18 percentage point to growth as exports rose faster than imports; inventories subtracted 0.02 point. Consumer spending, which accounts for about 70 percent of the economy, picked up following an upward revision in the first quarter as household finances also got a boost from stock and home-equity gains and low prices. The GDP report showed disposable incomes, adjusted for inflation, posted the best back-to-back quarters since the first half of 2015. Business investment in equipment rose at an 8.2 percent pace, the most in almost two years, signaling companies are optimistic about demand in the US, as well as overseas. The overall pace of nonresidential investment eased amid a slowdown in the structures category that followed a boom in oil-and-gas wells in the prior period.

Retail sales rise in the US as the economy expands. Bloomberg

1.9% The percentage growth in US GDP in the first half of the year

One of the soft spots last quarter was residential investment, which fell by the most since 2010, following a strong gain in the previous period. Builders are contending with a shortage of available la-

bor and lots, and warm weather in the first quarter may have pulled forward some activity. Inventories were a minute drag after subtracting 1.46 points from the first quarter. Leaner stockpiles bode well for third-quarter growth as they will allow businesses to ramp up in coming months as demand grows. In addition to the first- and second-quarter GDP figures, the government issued annual revisions that showed economic growth from 2014 to 2016 was marked up to an average annual rate of 2.2 percent from 2.1 percent. While last quarter’s rebound

Trump wish of Russian detente dies as Putin expels diplomats D

onald J. Trump’s first meeting with Vladimir Putin this month seemed to give the US president everything he wanted. The two appeared to get along. There was a modest cease-fire deal on Syria. Moscow’s meddling in the US election was raised, but both leaders were eager to move on. Three weeks later, relations between the US and Russia are at their lowest since the Cold War, with no clear path out. Putin’s decision last Friday to expel “hundreds” of personnel from the US embassy and consulates in Russia signaled Moscow’s frustration at Trump’s inability to deliver on promises to improve ties six months into his administration, a failure underscored by congressional passage last Thursday of new and tougher sanctions legislation that the President said last Friday he intends to sign. Despite the president’s efforts, a federal probe into the election interference is only accelerating and the Republican-led Congress, wary of both Putin and where that investigation may lead, crafted provisions in the new legislation that would restrict the president’s ability to lift sanctions. Moscow’s latest move “suggests a period of much more intense and damaging conflict lies ahead,” said Matthew Rojansky, a Russia expert and director of the Kennan Institute at the Woodrow Wilson Center in Washington. “This is a dangerous moment.” Russia’s Foreign Ministry said in a statement the US had until September 1 to bring the number of diplomatic and technical personnel in Russia to 455, the same number it said Russia has in the US.

‘Out-of-control Russophobes’

Soon after the expulsion was announced, Russian Deputy Foreign Minister Sergei Ryabkov cited the influence of “out-of-control Russophobes who are now setting the tone on Capitol Hill.” “The anti-Russian juggernaut put into motion by the Obama administration not only hasn’t stopped, as Trump promised during his election campaign, but it’s gaining speed,” Leonid Slutsky, head of the international affairs committee in the State Duma, the lower house of parliament, said on Russian state television.

The US reaction was more muted. The embassy in Moscow denounced the move but didn’t comment further. A State Department official, who asked not to be identified, said Secretary of State Rex Tillerson and his Russian counterpart, Sergei Lavrov, spoke last Friday morning, without divulging details of the conversation. In a statement released early last Saturday, the agency said the US will work with “friends and allies to ensure our messages to Russia, Iran and North Korea are clearly understood.” Trump also tweeted early last Saturday, saying “Russia was against Trump in the 2016 election” and linking to a news story from Fox and Friends. The Russian move was one of several setbacks for Trump in a week in which the Senate failed to pass legislation repealing former President Barack Obama’s health-care plan, North Korea launched another intercontinental ballistic missile and the Pentagon appeared to push back on the president’s tweeted plan to bar transgender service members.

Russia’s role

The erosion in ties also may make it more difficult for Trump to achieve foreign-policy breakthroughs on key issues, including rallying international support against North Korea, pressuring Iran over its ballistic missile program and expanding cease-fire zones in Syria. Russia has a role to play in all three areas, leaving the US with fewer options if the two nations are unable to reach an accord. “This is a serious problem for US national security interests linked to the wide range of issues on which Russians and Americans have to find ways to work together,” Rojansky said via e-mail. While Putin had faced pressure to move against the US ever since the Obama administration expelled 35 Russian diplomats and seized two of the country’s compounds in late December in retaliation for the election meddling, the Russian president had held off. Trump’s former national security adviser, Michael Flynn, allegedly discussed the possibility of easing sanctions before the new administration even took office and was ousted for failing to disclose that to Vice President Mike Pence.

Trump continued to extol the benefits of working with Russia even as the federal probe into Russian interference—and into whether anyone close to Trump colluded in it—ground on. With the inquiry, now led by special counsel Robert Mueller, touching key Trump aides, including son-in-law Jared Kushner, the president has railed against the probe as “fake news” and a “phony Russian Witch Hunt.” At the same time, he’s said “President Obama did nothing after being informed in August about Russian meddling.”

Limiting leeway

Even though the US Constitution and tradition give the president leeway on international affairs, Congress increasingly has sought to limit Trump’s ability to make unilateral decisions over Russia policy. Late Thursday the US Senate voted 98-2 for final passage of a House-approved bill that strengthens existing sanctions on Russia and gives Congress the power to block Trump from lifting them. While the White House had given mixed messages about whether Trump would sign the legislation, the overwhelming support for it meant lawmakers could have overridden a presidential veto. “President Donald J. Trump read early drafts of the bill and negotiated regarding critical elements of it,” the White House said in a statement released last Friday. “He has now reviewed the final version and, based on its responsiveness to his negotiations, approves the bill and intends to sign it.” The congressional support for the sanctions measure, a rare show of bipartisanship in the fractured politics of Washington, showed how few Republicans are willing to defend Trump’s vision of better ties with Moscow in light of the election-year hacking, Russian aggression in Ukraine and the country’s ties to Iran. “The message coming from Congress on a bipartisan basis is: These are hostile regimes and sanctions are warranted,” House Speaker Paul Ryan said last Thursday, referring to the legislation targeting Russia, Iran and North Korea. “We want to make sure they’re tough sanctions, we want to make sure they’re durable sanctions.” Bloomberg News

showed the slowdown at the start of 2017 was temporary, it also means the economy will need to speed up to about 2.5-percent growth in the second half to reach the Federal Reserve’s 2.2-percent median projection for this year, according to Michael Hanson, chief US macro strategist at TD Securities in New York. Faster wage growth would help spur household spending, though the latest data issued last Friday were slightly disappointing in that respect: The employment-cost index rose 0.5 percent in second quarter, slowing from a 0.8-percent advance in the previous three

Survey data from the University of Michigan released last Friday also weren’t encouraging. Less enthusiasm about prospects for the economy and personal finances sent household sentiment to a nine-month low of 93.4 in July. While 51 percent of consumers—matching the largest share since November 2000—indicated their finances had improved recently, the proportion of Americans anticipating financial gains in the coming year dropped to 34 percent, from 42 percent in June. While lawmakers’ latest attempt at health-care reform failed this week, Trump has said he’s focused on tax changes that would help the middle class, and White House officials and congressional leaders have been meeting weekly to agree on a framework to rewrite the tax code. Vice President Mike Pence said on Twitter Trump “has been fighting to restore jobs, opportunity & prosperity to the US, & is already making a remarkable difference.” The tweet linked to a news headline saying US growth was more than double the previous quarter. “If a well-constructed tax-reform deal is enacted this year or next, the economy may fire on all cylinders and accelerate closer to President Trump’s 3-percent goal, but for now, we are firmly entrenched at around [2.25] percent,” Stephen Stanley, chief economist at Amherst Pierpont Securities Llc. said in a note. That’s still above the economy’s current sustainable trend, he said. Bloomberg News

UK seeking smoother Brexit to keep ‘life as normal’ longer

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rime Minister Theresa May is keeping Britain on track for a “hard” Brexit, but she wants the journey away from the European Union (EU) to be longer and smoother than initially planned. After weeks of wrangling since her Conservative Party lost its parliamentary majority, May’s government still seems determined to leave the single market and customs union that give Britain free, frictionless trade with the bloc. What’s changed is that, according to Chancellor of the Exchequer Philip Hammond, there’s now a consensus among senior ministers that even if the UK will depart the EU in March 2019, nothing should change the next day. Instead, the Cabinet wants the status quo to run for two or three years. “We have to develop a plan that will deliver for the British people business as usual, life as normal,” Hammond told the BBC last Friday. A transition would be welcomed by businesses keen for time to adjust or put off being encumbered by tariffs and regulatory obstacles. Firms and banks will now hope they have the space to prepare. “Much of the language does echo what we have been saying in recent weeks,” said Christopher Grummett, a spokesman for the Confederation of British Industry. “We have been calling for the UK to have full access to the single market and a customs union until a final deal is in force.” May would also have longer to land a permanent trade deal with the EU, and her government would be better placed to work out the technical details of the divorce, such as establishing new customs practices and immigration rules.

Position shift

Hammond’s plan reflects a public change in position from some of those who campaigned most ardently for Brexit. In just two weeks, Trade Secretary Liam Fox pivoted from saying he could accept a transition of a “few months” to acknowledging that it could run until 2022, the year of the next election.

Environment Secretary Michael Gove also signed up to a stopgap. The political question is who inside May’s government won. Hammond’s predecessor as chancellor, George Osborne, greeted the news as a victory for those who want the UK to stay close to the EU. “Does Brexit mean Brexit?” he tweeted. “Gov position is as we predicted two months ago: no deal in 2019; no bespoke transition; EEA [European Economic Area] & customs union members.” Hammond even went as far as to open the door to European judges having a say over the implementation of any transitional deal—something that has been taboo for the most ardent supporters of Brexit. He hinted at a tribunal along the lines of the one used by members of the European Economic Area.

Door open

The chancellor’s comments also came the day after Home Secretary Amber Rudd, who also supported remaining in the EU, said there would be no sudden clampdown on migrants after Brexit. Others argued Britain is still bound for a rupture with its top trading partner. “Hammond is now openly and repeatedly saying we will leave the single market and the customs union—none of which he was saying a month ago,” said Anand Menon, professor of European politics at King’s College London. Liberal Democrat leader Vince Cable, who leads the most pro-EU of the mainstream parties, agreed: “Hammond is simply proposing to delay the car crash by another two years. he said in a statement. “An extreme Brexit in 2022 rather than in 2019 is still an extreme Brexit. He should be arguing in Cabinet to protect our free trade with the world’s largest market.” The silence from euroskeptic Conservative lawmakers lends weight to the idea that they believe they’re winning. The advocates of Brexit have resisted a long transition period for fear that Britain’s departure would be permanently delayed. Bloomberg News

news@businessmirror.com.ph

The World BusinessMirror

Monday, July 31, 2017 A11

S. Korea seeks US nod to bolster arms vs North

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EOUL, South Korea—South Korea announced last Saturday that it would soon start talks with the Trump administration about allowing Seoul to build more powerful ballistic missiles to counter the North, but current and former US officials said the move would have little effect on the most urgent problem facing Washington: North Korea’s apparent ability to strike California and beyond. The South’s newly elected president, Moon Jae-in, called for the relaxation of limits on its missile arsenal hours after the North launched an intercontinental ballistic missile 2,300 miles into space, which landed its warhead just off the coast of Hokkaido, the northernmost Japanese island. Experts quickly calculated that the demonstrated range of that test shot, if flattened out over the Pacific, could easily reach Los Angeles and, perhaps, as far as Chicago and New York, though its accuracy is in doubt. The new missiles that South Korea wants, in addition to being able to strike deep into the North, could be a way of pressuring China to restrain Pyongyang because the missiles would probably be able to hit Chinese territory as well. Moon’s top national security adviser, Chung Eui-yong, called his White House counterpart, Gen. H.R.

McMaster, early last Saturday Seoul time to propose that the allies immediately start negotiations to permit South Korea to build up its missile capabilities. McMaster agreed to the proposal, which would probably involve increasing the payload on South Korea’s ballistic missiles, according to officials in both countries. South Korea needs approval from the US to build more powerful missiles under the terms of a bilateral treaty. There are still questions over whether the North can shrink a nuclear weapon to fit atop its intercontinental missiles, or keep it from burning up on reentry into the atmosphere. But at the Pentagon and inside US intelligence agencies, there was a sense that the North had now crossed a threshold: demonstrating that if the US ever threatened the

regime of Kim Jong Un, the North Korean leader and grandson of the country’s founder, it had the ability to threaten death and destruction in the continental US. The US has lived with that threat from Russia and China for decades, but the past four US presidents have all said the country could not take that risk with a government as unpredictable as North Korea’s. Hours after last Friday’s test, former US officials said President Donald J. Trump’s options were limited. “In the White House, you have a threshold decision: Can you get them back to the table or not,” Mark W. Lippert, then-President Barack Obama’s ambassador to Seoul, said last Saturday about negotiating with the North Koreans—a step Trump said during the 2016 campaign, and again several months ago, he was willing to try. Lippert added he supports Washington’s current diplomatic efforts, as well as UN sanctions against the North. But so far, the North has not responded, perhaps calculating that it first wanted to demonstrate it was a permanent member of the club of nuclear-armed nations, and able to strike US cities, to strengthen its position before any negotiation. Lippert, speaking at a conference in Kent, Connecticut, said that barring negotiations, “the question gets binary pretty quick: containment or some kind of military operations”. Others question whether this administration, immersed in its own internal upheavals, can focus on the problem. “It takes a president of the US who has the intellectual, global and historical depth” to deal with the Korean crisis, said R. Nicholas Burns,

who served as undersecretary of state for political affairs in the Bush administration. Some believe the US will simply learn to live with the North’s new capability, despite the words of Trump and his predecessors. “We are left in a situation where they believe we will ultimately acquiesce,” said Christopher R. Hill, a US diplomat who led nuclear negotiations with North Korea during the last Bush administration, which resulted in the dismantlement of part of a plutonium reactor. Hill is now dean of the Korbel School at the University of Denver. Moon, considered a dovish leader, also ordered his government last Saturday to cooperate with the US to install an advanced US missile-defense battery known as Terminal High Altitude Area Defense (THAAD), whose deployment in South Korea had been suspended since he took office in May. Moon’s actions signaled that the growing missile threat from North Korea was spurring an arms buildup in Northeast Asia. Japan earlier said that it was considering buying ballistic missile-defense systems from the US. But China has adamantly opposed installing the THAAD missiledefense system in South Korea, arguing that it would only make tensions with North Korea more volatile and could undermine China’s own nuclear deterrent by giving the US another means to monitor its missiles. Last Saturday the Chinese Ministry of Foreign Affairs condemned the resumed deployment of THAAD, in a statement that was in some ways more strongly worded than its statement earlier in the day criticizing North Korea’s missile test. “China is gravely concerned with

the course of action taken by South Korea,” a spokesman for the Foreign Ministry, Geng Shuang, said in the statement. “Deploying THAAD won’t solve South Korea’s security concerns, won’t solve the related issues on the Korean Peninsula and will only further complicate issues.” In Washington, Trump accused China of failing to curb North Korea’s aggression and signaled he would restrict trade with Beijing as a consequence. “I am very disappointed in China,” Trump said in a Saturday-night post on Twitter. “Our foolish past leaders have allowed them to make hundreds of billions of dollars a year in trade, yet they do NOTHING for us with North Korea, just talk. We will no longer allow this to continue.” “China could easily solve this problem!” Trump said. Last Friday just as news of the North Korean test was breaking, the man who engineered the opening of America’s diplomatic relations with China, former Secretary of State Henry A. Kissinger, argued that the administration needed a new and different approach to convincing the Chinese to take a more forceful stance. “I believe we have a better chance of getting to the nuclear problem with North Korea if we first come to an agreement with China about what follows after the collapse of the North Korean regime,” Kissinger said. That would include a commitment from the US to withdraw most of its troops from the Korean Peninsula after a North Korean collapse, to allay the Chinese fear that, with the buffer of North Korea gone, the US military would be right on its border. New York Times News Service

Police disrupt plot in Sydney to ‘bring down an airplane’

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ANBERRA, Australia—The Police disrupted the first alleged plot in Australia to bring down an airplane and arrested four men in raids on Sydney homes, officials said last Sunday. Prime Minister Malcolm Turnbull said security has been increased at Sydney Airport since last Thursday because of the plot. The increased security measures also were extended to all major international and domestic terminals around Australia overnight. “I can report last night that there has been a major joint counterterrorism operation to disrupt a terrorist plot to bring down an airplane,” Turnbull told reporters. “The operation is continuing.” Australian Federal Police Commissioner Andrew Colvin said details were scant on the specifics of the attack, the location and timing. “In recent days, law enforcement has been become aware of information that suggested some people in Sydney were planning to commit a terrorist attack using an improvised devise,” Colvin said. Deakin University security expert Greg Barton said the first plot to target aircraft in Australia, which is the highest aspiration of many extremists, was a “pretty big threshold moment”. The plotters were apparently making a peroxide-based explosive device rather than using nitrate-based chemicals that can be detected by airport security swab tests, Barton added. AP

Green Monday BusinessMirror

A12 Monday, July 31, 2017

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

‘Noisy’ environmental advocates

An endangered species in PHL S

By Jonathan L. Mayuga

@jonlmayuga

herwin de Vera, a vocal critic of destructive development projects, said he was not surprised when he was told by family and friends that a group of suspiciouslooking men were looking for him on the University of Northern Philippines (UNP) campus in Vigan City, Ilocos Sur, last week. The suspicious-looking men went to the UNP, inquiring with the campus security guards regarding his visit to the UNP on July 18 and 19. De Vera was a student leader during his college days some years back at the UNP. A political activist, de Vera is currently an environmental advocate, and a very vocal one at that, opposing large-scale mining and massive land-conversion of forests and agricultural areas into agroforestry plantations in Ilocos Sur. He said he sensed he was being tailed for days while wandering in Vigan City a couple of days ago. And he was no longer surprised. “I knew they were military intelligence. They have been tailing me,” he told the BusinessMirror in a telephone interview last Sunday.

Military target?

It was not his first rodeo, so to speak. “In 2005 I had to hide, along with my family, because the threat was very real,” he said. The reason: “Because of my environmental advocacy. Because I am an activist,” de Vera added. De Vera is currently the regional coordinator of “Defend Ilocos,” an environmental group based in Ilocos Sur. It is a vocal critic of largescale and illegal mining operations in the Ilocos Region. The group has been critical of the government’s inaction against magnetite sand or black sand mining in rivers and coastal areas in the region. Lately the group has been starting to create noise against the encroachment of a plantation being pushed by a town mayor in Ilocos. The plantation—which is cultivating eucalyptus trees covering 600 hectares of forest—threatens not only the rich biodiversity of Ilocos Sur but also the livelihood of upland farmers, who stand to be affected once the invasive alien species and monocropping system impacts on the environment, de Vera said. De Vera added the farmers have been afraid to oppose the project. But with the group’s advocacy, the farmers have started to understand and speak against it.

Being Defend Ilocos’s acting spokesman, de Vera, the soft-spoken and light-mannered leader, is also currently the face of the group, bravely speaking out against destructive development projects. As expected, like other militant groups, Defend Ilocos has a lso been ver y voca l against “militarization” of rural communities in the region. He said being an activist doesn’t make one a member of the communist New People’s Army (NPA). In the Philippines, activists and environmental advocates claim to be targets of threats, harassments, intimidation, or worse, extrajudicial killings— because they are suspected as sympathizers, if not members, of the Maoist, revolutionary NPA. T he A r me d Forces of t he Philippines (AFP) has time and aga in denied t he a l legations linking the militar y to the killings, dismissing the charges as communist propaganda.

Risky business

With or without martial law, even before the Duterte administration, environmental advocacy in the Philippines in a very risky business. Especially when one is against “business interests,” activist and environmental advocate Clemente Bautista said. In a n inter v iew, Baut ista, n at ion a l coord i n ator of K a lik asan-People’s Net work for the Env ironment (K alikasanPNE), sa id he w a s once t he subject of harassment because of his environmental advocacy. He was tailed by “suspiciouslooking men” believed to be military intelligence operating in Metro Manila. Bautista believes that he was being targeted for the same reason de Vera was being “tailed” by military intelligence—his environmental advocacy. “It was because of my environmental advocacy during the Aquino administration. We suspect that my organization’s work or campaign against large-scale mining and exposé of other destructive programs of the government [was the reason],” he said.

A rally spearheaded by Defend Ilocos environmental group that gathered around 3,000 antimining protesters in Vigan City in November 2015. Defend Ilocos

According to Bautista, it was during the preparation of the Asia Pacific Economic Cooperation (Apec) summit in the Philippines when suspicious-looking men started to tail him, because of the “noise” they were creating. “We [conducted] different activities. We launched [a series] of protests in the venue [during] preparation activities, highlighted different issues like dirty coal plants and big mines,” he said. He added his group also spearheaded rallies in front of offices of mining companies in Metro Manila, particularly Australian and Canadian mining companies that were part of the Apec meeting. Bautista said environmental advocates in t he Phi l ippines are “endangered species,” too, like jour na lists and politica l and socia l activ ists.

Deadly place

According to Kalikasan-PNE, with at least 28 land and environmental defenders killed in 2016, the Philippines remains one of the deadliest countries in the world—and the deadliest in Asia—for environmental and land defenders. Citing the report, entitled “Defenders of the Earth”, released early this month by Global Witness, a London-based international nongovernmental organization (NGO), Leon Dulce, campaign coordinator of Kalikasan-PNE, said the Philippines has been the deadliest place for environmental advocates for four years in a row and the trend is expected to worsen by 2017 “with no fundamental change in the country’s environmental policies on one hand and increasingly fascist police and military campaigns of President Rodrigo Duterte, on the other.” Dulce said in just the first half of 2017 that Kalikasan-PNE, one

of the partner-organizations of Global Witness that helped generate documented repor ts of human-rights abuses committed against environmental advocates, monitored at least 10 more cases of environment-related killings.

K i l l i ngs of env i ron ment a l advocates is not unique to the Philippines. The report declared 2016 as the deadliest year for environment and land defenders, with least 200 people killed across the globe, more than twice the number of journalists, which reached 79. Bautista said at least four people, from the number, were murdered every week last year alone. The trend is both increasing, up from 185 in 2015, and spreading, with murders reported in 24 countries compared to 16 in 2015.

and Natural Resources (DENR). He lamented that Lopez was dropped like a hot potato by Duterte. “ There was lack of support on the part of Duterte,” he said. Bautista said there were promising refor ms dur ing Lopez’s short-lived term in the DENR. He said the mining audit would have a strong impact on the subsequent order to suspend and close erring mines. The suspension and closure orders, he added, was never implemented. Bautista alleged that under ne w env i ron ment sec ret a r y, a former chief of staff of the Armed Forces of the Philippines, the reversal of Lopez’s supposed reforms, human-rights and environmental crimes worsened as evidenced by the killings cited in the report.

According to the report, mining was the bloodiest trade, with at least 33 murders linked to the sector. The killings linked to logging, on the other hand, also increased from 15 to 23 in one year, while 23 killings were connected to agribusiness projects. Almost 40 percent of those murdered were indigenous people, with the police and military as the primary suspects in at least 43 murders. The Philippines has been among those with the highest number of killings since 2013, when Global Witness first launched the international report. The international NGO has recorded a total of 144 cases of killings in the country since 2002. According to Bautista, initially under the Duterte administration, environmental advocates had high hopes with the appointment of Regina Paz L. Lopez as secretary of the Department of Environment

Comparing the killings during the post-Marcos era administrations, the killings of environmental advocates were worst under the Duterte administration, Bautista claimed. The group, however, started monitoring killings involv ing env ironmenta l and land defenders only under the Arroyo administration. Killings under the nine-year Arroyo administration were at a rate of four persons per year. Under Aquino’s six-year term, t here were 11 repor ted k i l lings. Under Duterte, he said Kalikasan-PNE recorded 19 during his 13-month rule. K a l i k asan-PNE noted t hat the worsening impunity against environmental defenders under the current administration were rooted in the fundamentally unchanged economic policies, especially on extractive and destructive projects, enforced during counterinsurgency operations.

Global trend

Mining-related

Worst under Duterte’s term

“Mining-related killings accounted for 47 percent of the cases we monitored during the first year of the Duterte administration. Suspected state armed forces were accused of being involved in 41 percent of these cases and 65 percent were perpetrated on Mindanao, where plunder and militarization were most w idespread,” Dulce was quoted in a statement released by Kalikasan-PNE as saying. Among those hardest hit by the increasing militarization are the indigenous Lumad people of Mindanao, the group said. “A striking case was the murder of Jimmy Saypan, a Lumad peasant leader from the Compostela Valley who was killed on October 10, 2016, by suspected military elements,” the report said. Saypan was among the leaders of the Compostela Farmers Association, which led barricades and protests against the Agusan Petroleum and Minerals Corp., a company affiliated with San Miguel Corp. According to Global Witness campaigner Ben Leather, “States are breaking their own laws and failing their citizens in the worst possible way. Brave activists are being murdered, attacked and criminalized by the very people who are supposed to protect t hem. Gover n ment s, companies and investors have a duty to guarantee that communities are consulted about the projects that affect them, that activists are protected from violence and that perpetrators are brought to justice.” Dulce said, “ The Duterte administration must be held accountable for t he worsening c l i m ate of i mpu n it y aga i nst Filipino environmental defenders. Military, paramilitary and police forces should immediately be pulled out of rural communities to stem the militarization, and a full-blown investigation into the country’s security and cou nter i nsu rgenc y prog ra ms should be launched.” According to Kalikasan-PNE, Duterte’s continuing diatribes against mining oligarchs and other environmental plunderers should lead to the investigation of corporate interests that have benefited from militarization. “If we do not hold the big mines and other extractive and destructive projects accountable over human-rights atrocities, we will only perpetuate their business-asusual operations,” the group said. Environmental groups have been demanding for justice for their fallen comrades since alleged extrajudicial killings targeting environmental advocates have started. They said justice remains an elusive dream, and environmental advocates are now becoming an endangered species.

Holcim Philippines marks Environment Month with eco activities

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olunteers from buildi ng- solut ion s prov ider Holcim Philippines Inc. and par tner-organizations planted close to 2,000 seedlings nationwide as part of the company’s celebration of the Environment Month in June. In Luzon, the Batangas and Bulacan plant employees planted 400 seedlings in a forested area in the municipalities of Mabini and Norzagaray, respectively. Holc i m Ph i l ippi nes’s head off ice personnel, meanwhile, trooped to Pampanga to plant 500 seedlings of fruit-bearing trees

in the Mount Arayat watershed. Holcim Philippines volunteers planted 800 more seedlings of various fruit-bearing and hardwood trees in the rehabilitated quarry sites of affiliate Holcim Mining and Development Cor p. in Davao and Misamis Oriental. The company also conducted an internal roadshow of its plans for increased alternativefuels usage and reduced water consumption and emissions to improve its environmental performance as part of its commitment to contribute to the UN’s Sustainable Development Goals.

In a related development, Holcim’s Davao Plant extended its support to the Adopt-A-Philippine-Eagle Project for five more years, in line with the company’s environmental advocacy. Holcim’s Davao Plant signed a memorandum of agreement with the Philippine Eagle Foundation, where the company committed to provide P125,000 annually until 2022 to fund the care of Philippine Eagle “Hiyas,” and contribute to the research and conservation activities of the foundation and maintenance of the Philippine Eagle Center.

Adopted by Holcim Davao in 2014, Hiyas is one of 33 Philippines eagles cared for by the Center. She is set to be paired with a male Philippine eagle named “Magilas.” The foundation leads the conservation and breeding efforts of the Philippine Eagle, the country’s national bird. It is one of the largest of its kind in the world but also among the most critically endangered. T he foundation operates the 8.4 -hect a re Ph i l ippine Eagle Center in Malagos, Davao City, that houses and cares for this species and other rare animals.

Volunteers from Holcim Philippines’s Davao Plant and partner-organizations pose for a photo during the company’s nationwide tree planting to celebrate Environment Month in June.

Biodiversity Monday BusinessMirror

Asean Champions of Biodiversity Media Category 2014

Monday, July 31, 2017 A13

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

PHL to host Asean Biodiversity Heroes awarding ceremony

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he government of the Philippines will host the inaugural awarding ceremony of Asean Biodiversity Heroes, which recognizes outstanding individuals from the Southeast Asian region who have contributed significantly to biodiversity conservation and advocacy efforts in their respective countries. Ten heroes from Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam will be honored at the awarding ceremony to be held on August 7 at the New World Manila Bay Hotel. Besides receiving their awards, the Asean Biodiversity Heroes will share their experiences on biodiversity conservation in a forum to be attended by representatives from the government, business, youth and conservation sectors, as well as the diplomatic community. “I am proud that in this year of Philippine chairmanship of Asean, biodiversity occupies an important place in the collective Asean agenda,” said Ambassador Elizabeth P. Buensuceso, permanent representative of the Philippines to Asean and chairman of the Committee of Permanent Representatives to Asean. “By recognizing the important contributions of 10 individuals from Asean member-states in promoting biodiversity conservation, the Asean Biodiversity Heroes Award creates fertile ground where inspiration can take root and prod other individuals to also act as heroes and initiate wider public involvement within the Asean community,” Buensuceso said. She added, “It is fitting that this recognition comes at a time when Asean itself is celebrating its 50th anniversary. This landmark year not only calls for us to look back at the gains of the last half-century, but also forces us to examine the course of our present actions and their consequences on future generations. “In the same spirit of introspective ref lection, the Asean

Biodiversity Heroes Award serves as a reminder for each of us to ask ourselves, what can I do to serve the common good? How can I help? And this is perhaps the most striking aspect of the award, in that it celebrates the power t h at e ver y i nd iv idu a l wields to effect real and positive change in the lives of countless others, both within and beyond the Asean region.” One of the commemorative activities for the Golden Anniversary of Asean, the Heroes project is supported by the Asean Secretariat; the Philippines’s Department of Foreign Affairs; the European Union, through the Biodiversity Conservation and Management of Protected Areas in Asean project; and Hari Foundation Inc. (HFI), the corporate social responsibility arm of Hyundai Asia Resources Inc. The Asean Centre for Biodiversity (ACB) serves as awards secretariat. ACB Executive Director Roberto V. Oliva explained that in selecting the Asean Biodiversity Heroes, “the nominating agencies considered the relevance of the nominees’ contributions to biodiversity conservation, the impact of these contributions to biodiversity conservation efforts in their respective countries and the region, the replicability of their actions and the recognition they received in communities where they belong.” Each Asean Biodiversity Hero shall receive a cash prize worth of $5,000, a special heroes medal, a trophy and a certificate. They will also receive the Hyundai Icon for Biodiversity Award from HFI. The heroes from the 10 Asean member-states will be known as the faces of biodiversity conservation in the Asean region. They will be invited to speak i n for u ms, work shops, news conferences and other relevant events to share their experiences in conserving biodiversity with the aim of inspiring others to do the same.

Guardians of the Visayan Sea convened

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overnors and mayors from the Visayas committed to protect and restore the Visayan Sea, one of the richest fishing grounds in the Philippines, from illegal commercial and destructive fishing. Director Eduardo Gongona of the Bureau of Fisheries and Aquatic Resources (BFAR) signed the covenant of commitment and cooperation for the protection and conservation of the Visayan Sea, with Negros Occidental Gov. Alfredo Marañon Jr., Iloilo Gov. Arthur Defensor Sr. and Cebu Gov. Hilario Davide III, represented by Provincial Environment and Management Office (Pemo) Head Baltazar Tribunalo Jr. “Our goal is to be food sufficient, and later on, to be a food exporting country. We have to protect and develop our marine resources, especially for food security, to feed millions of people. This is a challenge, but we can do it. If we do our job together, with strong partnership with local government units, we can achieve more,” Gongona said during the governor’s meeting on Sicogon Island in Carles, Iloilo, on July 22. Bounded by the provinces of Iloilo, Negros Occidental, Cebu and Masbate, the Visayan Sea is one of the country’s richest fishing grounds, hosting a variety of high-value species, such as tuna, herring, mackerel, blue swimming crab and sardines. However, scientists reported a steady decline in seafood supply from the 1980s onward—due mostly to the prevalence of blast fishing, plus the encroachment of trawls, purse seines and ring nets in municipal waters. The BFAR, the local government units (LGUs) and stakeholders will craft a fisheries management framework plan with the BFAR committing to declare the Visayan Sea as a fisheries-managed area (FMA), probably the first one to be declared as FMA under the provisions of the newly amended Fisheries Code (Republic Act 10654). As an FMA, the Visayan Sea will have a management framework for enforcement activities,

establish reference points for major fish species and convene a science research group for the monitoring of fish stocks. The BFAR also committed to provide a dedicated monitoring control and surveillance (MCS) vessel for the Visayan Sea to strengthen seaborne patrolling and the enforcement of fisheries laws. “This is very much appreciated because the mere presence of these vessels will act as a strong deterrent to illegal-fishing activities in the Visayan Sea,” Marañon said. Defensor was joined by several mayors from the province and called the defenders of Visayan Sea as the Visayan Sea Guardians. The event was, likewise, participated by advocates led by lawyer Tony Oposa, who said the core group composed of the BFAR, LGUs and nongovernmental organizations created a 500-day action plan to start seaborne patrols, scientific research and information campaigns in the area. “We are the center of the center of marine biodiversity on Earth, and the Visayan Sea is our geographical heart. It is the crown jewel of Earth’s natural resources, and a common heritage for humankind,” Oposa said. He said the MCS vessel will help speedup seaborne patrol and information dissemination on fisheries laws in the area. Global marine conservation group Oceana emphasized the need for law enforcement in the Visayan Sea, and implement vessel-monitoring measures and the banning of active gear, such as bottom trawling in municipal waters. “The Visayan Sea is an important traditional source of fish, not just for the Visayas but for the whole country. It is an ecosystem complete with all major marine habitats—from mangrove forests, seagrass beds, coral reefs to pelagic habitats. It is our shared responsibility to ensure sustainable management of one of our richest fishing grounds,” said lawyer Gloria Estenzo Ramos, vice president for Oceana Philippines.

Visitors tour the dense mangrove forest in Bakhawan Eco-Park in New Buswang, Kalibo, Aklan. Photos Lyn Resurreccion

The exposed roots of mangrove trees.

Kalibo mangroves eco-park an environmental marvel

K

By Jun N. Aguirre | Correspondent

ALIBO, Aklan—The Kalibo Bakhawan Eco-Park, a mangrove forest in Kalibo, Aklan, in Western Visayas region, is helping the town mitigate disasters, such as flooding and air pollution. Medelyn Quadra of the Provincial Environment and Natural Resources Office (Penro) said it also balances the ecology of the province. The 220-hectare mangrove forest in Barangay Old Buswang in Kalibo is rich in biodiversity being a habitat of a variety of species, such as fishes, shellfish, crabs and birds, and help protect the area against natural disasters and siltation, and a nutrient enhancer, among others. Quadra, in a recent science journalists’ forum led by the Department of Science and Technology in Kalibo, said Aklan is rich in mangrove species. The world has 70 mangrove species, while the Philippines has 35 where 26 can be found in Aklan. Each mangrove tree is an incredible carbon sink, she said. “It helps minimize air pollution brought about by the transport system in the flourishing tourism industry [by absorbing carbon dioxide],” Quadra, who is in charge of mangrove protection in the province, told the BusinessMirror in a recent interview. According to the local government of Kalibo, more than 3,000 units of tricycles roam around the town, especially during daytime. The number did not include vans, jeepneys and other transportation modes. Quadra said the mangrove forest “was cited by the Climate Reality Project [CRP] for [being a best defense] against flooding, especially during supertyphoons.” She was referring to Supertyphoon Yolanda in 2013 that ravaged the Visayas area. She said, “Kalibo has been protected against flooding and storm surge [or tsunami] by the thick mangrove forests,” which has extended 1 kilometer to the sea. She added that a Department of Environment Natural Resources (DENR) study revealed that

220 has. The area of Kalibo Bakhawan Eco-Park mangrove forest in Barangay Old Buswang in Kalibo, Aklan Kalibo is a low-lying area prone to flooding. A resident earlier said that before the mangrove forest was built in the 1990s, the area had been susceptible to storm surges because it had no barrier—the mangroves. According to the Outreach web site, mangroves help in mitigating disaster risk and damage, complementing other measures in a coastal-defense strategy. They can reduce storm surge levels by up to half a meter for each kilometer of mangrove that the storm surge passes through. Also, the height of wind and swell waves is reduced by 13 percent to 66 percent within the first 100 meters of mangroves. Even during “everyday” conditions, when waves may be small, they still contribute to coastal erosion if their energy is not dissipated by a dense tangle of mangrove roots and branches. Mangroves can help to stabilize sediments, both through their active growth and deposition of organic matter and by capturing sediments. In earl ier inter v iew, Matt Bonns, an American and general manager of CRP, said that through the leadership of the late-Rep. Allen S. Quimpo, the mangrove forest manifested to the world of climate advocates its positive impact on the environment. In 1990s then-congressman Q u i mpo pa r t nered w it h t he DENR to turn the then barren land into a mangrove forest.

Funds from both international and local government agencies started to pour in. Quadra told a recent science journalists’ forum led by the Department of Science and Technology in Kalibo that P174,000 was the initial investment used in planting mangrove propagules, seedlings and manpower wages. A group of mangrove planters among the residents of the Barangay Old Buswang has been organized and planted mangrove trees. The DENR also gave permission to Kalibo Save the Mangrove (Kasama) to manage the mangrove forest for 25 years and renewable every 25 years. “ The Climate Reality Project, founded by former US Vice President A l Gore, recognizes the work of Quimpo and the farmers of the Kalibo Save the Mangrove as the town has been protected from f looding, especially during the onslaught of Superyphoon Yolanda,” Bonns said at the K alibo Bakhawan Eco-Park on April 15. On the same occasion, Bonns personally handed to the Quimpo family a leadership green ring—a sign of excellence on environmental protection. Quimpo also received a posthumous citation from the CRP in a ceremony at the Senate on April 22. Sen. Loren B. Legarda, chairman of Senate committee of environment, handed the plaque. The conferment of the posthumous award to Quimpo on April 22, the observance of Earth Day, coincided with the start of implementation of the Paris Agreement on Climate Change in the Philippines. The agreement, which was adopted in Paris in 2015, had its global implementation on April 22, 2016. Prior to his death in December 2016 due to liver cancer, Quimpo served as environmental adviser of the CRP-Philippines. Angelo Quimpo, current president of the Kasama and son of the late congressman, said the ecopark would be renamed as “Congressman Allen Quimpo Bakhawan Park” based on a resolution by the members of the board of directors of the organization. The young Quimpo said that besides environmental protection, the mangrove forest also contributes to the food security of the residents. “The mangrove has become a nursery for variety of fishes,

shellfish and crabs, among others. As early as 4 a.m., the poor residents of the adjacent barangays come to Bakhawan to fish for free. We had a monitoring personnel there to inspect that their catch is enough for their day to day living. We are strict against overfishing,” Quimpo said. The mangrove facility also sells charcoal briquette, which are made from the excess cut of mangroves in the area, thereby adding to the income of the residents. For the benefit of mangrove workers, the Korean International Cooperative Agency, Noryangjin Fisheries Market Cooperative of Seoul, South Korea, and the provincial government of Aklan and Kasama inaugurated a coldstorage facility on June 21. The cold-storage facility is expected to be operational in 2018 to help maintain the freshness of the fish generated from the mangrove. “ We ex pect the cold-storage facility to further help K asama members in their har vest of fish from the mangrove forest,” A ngelo said. Besides the town’s celebration of the Kalibo Ati-Atihan Festival, the Bakhawan Eco-Park is considered a prime tourist destination in the town. It is the pride of Kalibo, Quadra said. Based on K asama’s record, t he m a n g ro ve e co - pa rk h ad 98,0 0 0 v isitors in 2016 a nd 83,000 in 2015. Among its visitors were the Miss Earth candidates who even planted mangrove propagules. To promote the area and attract more tourists, early this year Kasama partnered with Ariel Abriam, a tourism expert in Boracay. He was behind the success of the Ariel’s Point, a cliff-diving destination in Buruanga, Aklan. It should be noted that Kalibo is known as the gateway to Boracay Island, one of the best beaches in the world. “Abriam is in charge of the tourism promotion of the mangrove forest, while Kasama is in charge of its environmental conservation,” the young Quimpo said. At least 13 residents have been employed to promote the mangrove as a tourist site and another 13 are in charge of environmental protection. The Kalibo Bakhawan Eco-Park project manifests that with determination and the support of stakeholders it would be an environmental, livelihood and tourism success.

A14 Monday, July 31, 2017 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Keep politicians out of ‘government’?

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he late United States Senator and presidential candidate Eugene McCarthy once said, “The only thing that saves us from the bureaucracy is its inefficiency.” It is almost impossible to find any positive support about the government bureaucracy and the civil servants that occupy those positions of authority. Yet when you look at stable countries that have weathered all manner of political and social upheaval and chaos, the nations that are able to survive are those with the strongest nonpolitical government institutions. In 2010 Belgium experienced a period of 589 days without an elected government. The parliamentary system failed to achieve a majorityruled government and there was effectively no one in political power. But driver’s licenses continued to be issued. Public-health services continued. Roads were still repaired. As the first few weeks passed, there were dire predictions that the country could actually fail and fall into anarchy, affecting all of Europe. This did not happen. Granted that a caretaker government run by a former prime minister was installed to handle day-to-day affairs, for nearly two years there were no Belgium politicians managing government affairs. Of course, the bureaucracy is often one of the most corrupt, wasteful, abusive and even dangerous ideas ever conceived in human history. But then again, the same might be said about politics. However, we can certainly find examples of when both can bring out the best of what society can be. The problem may be in the unholy alliance between “politics” and “government”. The bureaucracy depends on the politicians for its daily bread. The politicians can use the bureaucracy to further their own agendas. The politicians, though, hold the upper hand. Queen of the Seven Kingdoms—Cersei Lannister from the television series the Game of Thrones—said this: “What good is power, if we can’t protect the ones we love?” Speaker of the House Pantaleon D. Alvarez wrote a letter to the Bureau of Customs (BOC) commissioner “strongly” recommending the appointment of an individual for the position of “Customs Operation Officer V”. This is not a high-level position, requiring three years of experience and a bachelor’s degree. The salary grade is 20, or P43,250 per month. Why then would it be necessary for the fourth-highest ranking member of the government to offer a suggestion for a midlevel promotion to the head of a government agency? Does Alvarez deserve the intense vitriol that he is getting? Maybe, or maybe not. But you can certainly understand the concerns from the staff of the BOC wondering what the next strong recommendation letter will be about. More important, what will be the potential “quid pro quo”—a favor expected in return for something—for accepting or rejecting the recommendation? A well-run and honest bureaucracy is essential to the application of the rule of law at an administrative level. It is what ensures that things get done but also what ensures that they get done in as fair a way as possible. How can the public trust the bureaucracy that they have to face every day if the politicians have the ability to influence the organization? Politicians should let the bureaucracy do its job. Yes, it needs to monitored, punished for failure to perform, and rewarded for a job well done. While not illegal, or perhaps improper, maybe it is time for elected officials to step back from any direct intervention in “government”. Since 2005

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On joy, forgiveness, and the Old Testament Atty. Jose Ferdinand M. Rojas II

RISING SUN

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oday is a good day to reflect on spiritual truths in the midst of personal and external difficulties that may be bothering our minds. Reading through the online religious site aleteia.org, I found this message from Archbishop Charles Chaput, which he delivered some days ago at the Napa Institute conference in Napa, California. He talked about joy and its power to change our world. He said there really is no use whining about the times, because we are all part of the times. This was an idea from Saint Augustine, as a matter of fact. The archbishop also called on Christians to see the world’s problems as they are and not to allow these to “crush the joy that is our birthright”. I find this advice especially comforting because it sends a hopeful message during a time of challenges. It is not very easy to do, and the archbishop admitted that himself, but he also said that as Christians, it is our mission to allow God to act in

our society through our own actions. We have the sacred task of engaging and converting the world, he said. One powerful tool that could help us is prayer. “If we don’t pray, then we can’t know and love God.” Another tool is the Bible, what he called an “antidote to the noise of life.” He also encouraged everyone to read and pray over Pope Francis’s 2013 apostolic exhortation, Evangelii Gaudium and to read Cardina l Rober t Sarah’s book The Power of Silence. nnn

Aside from joy, one other thing that is badly needed for these times

I find this advice especially comforting because it sends a hopeful message during a time of challenges. It is not very easy to do, and the archbishop admitted that himself, but he also said that as Christians, it is our mission to allow God to act in our society through our own actions.

of discord is forgiveness. Saint Paul writes to the Ephesians, “Be angry but do not sin; do not let the sun go down on your anger; and do not make room for the devil” (Ephesians 4:25-27). One of the suggestions on how to practice mercy in the Jubilee Year prompts Christians to forgive: “Create a short end-of-day ritual to ask for [and extend] forgiveness with those you live with.” It is always a good idea not to go to bed mad! You can, for example, hold your partner’s hands before you go to sleep and say sorry for something that you may have done. Or gather your children before bedtime to tell them to settle quarrels. You could even call or text someone you had an argument with during the day, just to ask if things are okay

between you. Anger and resentment weigh heavily on our hearts, and the habit of releasing them at the end of the day cleanses your spirit and gives good effects to the body itself. It is good to remember that when we make peace, the devil is defeated. nnn

There is a free online course on the Old Testament that is being offered by Yale University. Yale’s religion Prof. Christine Hayes is teaching “An Introduction to the Old Testament”. The course takes the students through the Hebrew Bible over the course of 24 lectures and promises to examine the Old Testament “as an expression of the religious life and thought of ancient Israel, and a foundational document of Western civilization.” Those who are interested may look it up on YouTube (search Christine Hayes). nnn

We remember the late-President Maria Corazon C. Aquino who died on the 1st of August in 2009. She was the 11th President of the Philippines, and the first woman president of the country and of Asia. We remember her legacy from the People Power Revolution of 1986, which restored democracy to our beloved country.

‘Unhappiness’: Ground for dissolution of marriage Atty. Lorna Patajo-Kapunan

legally speaking

A

T the opening of the Second Session of the 17th Congress, House Speaker Pantaleon D. Alvarez, just ahead of President Duterte’s second State of the Nation Address (Sona), endorsed to Congress his list of priority legislation. On top of his list is House Bill (HB) 5268, “An Act Providing for the Regime of Total Separation of Property as the Governing Regime in the Absence of a Marriage Settlement or when the Regime Agreed Upon is Void, Amending for the Purpose Articles 75 and 147 of Title IV of Executive Order 227, Otherwise Known as the Family Code of the Philippines.” Under the proposed bill, the default property regime, in the absence of a marriage settlement/prenuptial agreement, shall now be the Total Separation of Property. Under the existing Article 75 of the Family Code, in the absence of a marriage settlement/prenuptial agreement, by default, the property regime is Absolute Community of Property. Under the Absolute Community Regime, everything that is brought into the marriage, including properties acquired during marriage, are

coowned by husband and wife in equal terms. In the old civil code, before its amendment by the Family Code, the default regime was the system of Conjugal Partnership of Gains (CPG) under which the husband and wife retain ownership and administration of their separate properties (i.e., husband’s capital/ wife’s paraphernal properties) but put in a common fund the proceeds, products, fruit and income from their separate properties and those acquired by either or both spouses

through their efforts or by chance, and upon dissolution of the marriage, the net gains shall be divided equally between them (Article 106, Family Code). Under Alvarez’s HB 5268, both the Absolute Community of Property Regime and the CPG Regime, are now abolished as default property regimes and will be replaced by the regime of total separation of property. This system provides that each spouse shall own, dispose of, possess, administer and enjoy his or her own separate property, without need for consent of the other. Additionally, separate earnings shall be owned by each spouse separately. The Total Separation of Property Regime will apply also to unions without the benefit of marriage or under a VOID marriage, which presently divides ownership of wages and salaries in equal shares under Article 147 of the Family Code. Furthermore, in the interest of protecting the Family, the proposed bill provides that both spouses shall remain legally bound to provide for the support of the family through their separate properties. The Speaker has denied speculations that he has personal motives in pushing for a Separation of Property Regime as he is estranged from his legal

wife and admits to having an extra marital relationship, albeit allowed by the Manobo Church of which he claims to be a member. Obviously unhappy with his current domestic situation, Alvarez announced that he will file a bill making “unhappiness” a ground for dissolution of marriage. He said it was time for Congress to pass a bill allowing couples not happily married to easily void their union by mutual agreement, through a joint petition by the married couple before the Court, which the judge should dispose of “in just one day” (not months or years). The joint petition, would also state “the agreement on the custody over properties and the children”. The Speaker also announced the filing of a bill “that would remove the term illegitimate children to make children born out of wedlock legitimate”. The Speaker also pushed for a bill that would institutionalize civil unions for both heterosexual and same-sex couples. Under the proposed legislation, couples who avail themselves of civil unions will be given the “property relations, right to support each other, the right to adopt children”, among others (Rappler.com, July 24, 2017). Republic Act (RA) 5268 and See “Kapunan,” A15

Opinion BusinessMirror

opinion@businessmirror.com.ph

The BIR and the CPA

PPP Conversations #7 with Center for Global Best Practices By Alberto Agra

Joel L. Tan-Torres

PPP Lead

DEBIT CREDIT

O

n the occasion of the 113th founding anniversary of the Bureau of Internal Revenue (BIR) on August 2, I will share tidbits on the many engagements that the accountancy profession, the Board of Accountancy (BOA) and the Certified Public Accountants (CPAs), have had with this venerable institution over the years. With regard the leaders of the BIR, in the more recent decades, there have been at least seven commissioners of the BIR who were CPAs. They are Misael Vera, Beethoven Rualo, Dakila Fonacier, Lilian Hefti, Sixto Esquivias, Kim Henares and yours truly. The portraits of these CPA commissioners are now on display at the Commissioners Hall at the BIR National Office. CPAs also abound in the over 9,500 work force (as of December 31, 2015 in the BIR Annual Report) of the BIR, with a large number in the management, assessment and information-technology groups. The BIR also recently announced that it will be hiring over 10,000 personnel to beef up its manpower. These will include several thousands of CPAs. The BOA has been providing assistance to the BIR in its recruitment campaign with the regular participation of the BIR in the job fair held during the mass oath-taking of the new CPAs at the Philippine International Convention Center. The Department of Finance is also planning to implement the Philippine Tax Academy as prescribed in Republic Act 10143. During my term as BIR commissioner, I initiated the passage of this law creating the Philippine Tax Academy for the training and development of the tax officials and collectors of the BIR, Bureau of Customs and the Local Government Treasurers. With the creation of the Tax Academy, the tax collectors of the various tax-collecting agencies will have a dedicated training institution that will address their learning requirements. Government CPAs comprise a great number of these tax collectors who will benefit from the Philippine Tax Academy, CPAs can also be tapped as training resource persons when the academy is organized. It is also worthwhile noting that the tax-reform proposals under House Bill 5636 (Tax Reform for Acceleration and Inclusion, or TRAIN) include two measures that

Kapunan. . .

continued from A14

the other proposals of the Speaker on marriage, in my opinion, will not “make marriage stronger” as claimed. It will encourage collusion of the spouses, trivialize the marital bonds, condone extramarital relations and foment litigation over inheritance by illegitimate children who will now have equal rights with legitimate children. Rather than reinvent the wheel, Alvarez should just be reminded that there are a number of proposed divorce legislations (pending for the last six Congresses, filed and refiled numerous time) seeking to legalize divorce in this country (the only one in the world without divorce) by simply providing that the grounds for Legal Separation, Annulment of Marriage and Declaration of Nullity of Marriage should be made grounds for divorce. No need for collusion of the spouses to get a quickie dissolution. No need to change the property regime. No need to legislate unhappiness as additional ground. Indeed, there is no basis for the Speaker to claim that a divorce law would be “too complicated” or that his proposed legislation is “based on Filipino sensibilities” (Rappler, Ibid). As a practicing lawyer on family law, among others, for the last three decades, I have experienced from

will directly affect the accountancy profession and the CPA. One of these is the taxation of the professionals. The TRAIN proposes that self-employed individuals and professionals, including CPAs, whose gross sales or gross revenues are below the threshold of P3,000,000 shall be subject to an 8-percent income tax on gross sales or gross revenues in excess of P250,000 and this will be in lieu of value-added tax and percentage tax. If their gross sales are above the threshold of P3,000,000, they shall be taxed in the same manner as corporations as to the applicable tax rate, minimum income tax and allowable deductions. Another proposal in the TRAIN that will directly affect the CPAs, especially the external auditors, is the revision of the audit threshold prescribed in Section 212 of the Tax Code. From the current provision of annual gross sales of P600,000, the proposal increases the threshold amount for the requirement of the audit by an independent CPA of the accounts of businesses to that of gross quarterly sales exceeding P750,000, or P3 million of annual sales. The over 180,000 BOA-registered CPAs continue their engagements with the BIR in all four main sectors of practice of accountancy of commerce and industry public practice, academe and government. They can be counted to be partners with the BIR in nation-building. Congratulations to the BIR on its 113th year. Joel L. Tan-Torres is the chairman of the Professional Regulatory Board of Accountancy. He is a Certified Public Accountant who placed No. 1 in the May 1979 CPA Board Examinations. He is concurrently a tax partner of Reyes Tacandong & Co., CPAs. He was the former commissioner of the Bureau of Internal Revenue from 2009 to 2010. 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.

clients the difficulty of being trapped in a loveless, oppressive relationship especially where the wife (and children) are victims of domestic violence which now includes economic violence (i.e., failure of the husband to give support) under RA 9262. I am certainly for civil divorce, which is substantially similar to church annulments, but less expensive. I also understand that there can be no discrimination under the law for same-sex couples who want to enter into a civil union. I am in favor of recognizing the legal consequences of such civil unions, especially as to property rights. These are serious legal issues that need deliberation, debate and careful crafting of legislation as they would entail not only amending time-honored principles in our Family Code and settled jurisprudence but also traditional doctrines of the Catholic Church. I hope the Speaker is not merely reacting to the President’s Sona statement that he can count in his five fingers those “without kabit” in the House. I hope, as well, that this is not just the Speaker being prompted by the unhappiness of his mistress who probably wants a regime of property separate from the Speaker’s legal wife. It certainly would make gender equality advocates “unhappy” if the Speaker’s priority bill becomes a setback to a genuinely needed divorce law in this country.

Monday, July 31, 2017 A15

Continued from A1

A

T the helm of CGBP is a dynamic, creative and driven leader. CGBP President and founder Henry Aquende shares his thoughts on PPP. His definition of PPP is broad and not restricted to any particular law or modality. He posits that any business-oriented partnership between government and the private sector is a PPP. He considers PPPs not as an end but a means to accelerate country development. Aquende recognizes the growing interest on learning about PPPs while he expresses caution over PPP successor risk—when

the next administration discontinues projects entered into by the predecessor. What is your concept of PPP?

Portus perspective Siegfred Bueno Mison, Esq.

THE PATRIOT

T

he way we choose to view our jobs is of utmost importance— it can drastically change both our performance and attitude. One such person, Erik Jon Portus, has successfully practiced the value of having a bigger perspective—the Portus perspective. Before joining Philippine Airlines (PAL) as a flight steward in 2007, Erik was a professor at the University of Saint La Salle Bacolod. Now, he is part of the PAL Learning Center (PLC), a group that teaches classroom instructions and practical exercises to countless of flight attendants. He has his share of frustrations but has no regrets being an Inflight Training and Development Specialist. He said, “When I see our passengers smile and thank us for the good service rendered by the crew members who were the same trainees we once formed, that alone is good enough return.” Such perspective reflects how Erik sees himself as a trainer. He considers the things he is doing at PLC as something beyond himself, his students and PAL. He sees the bigger picture to the extent that he is a part of a big team effort to achieve a higher

goal—to make passengers smile and be thankful. There is an anecdote about a US president who visited the Nasa Space Center. When he saw janitors carrying brushes, brooms and mops, he asked them, “What are you doing here in Nasa?” The first janitor replied, “Mr. President, I am cleaning Nasa toilets so I can earn a decent living for my family.” The second dutifully answered, “Mr. President, I am doing what my Nasa supervisor tells me—clean this, clean that.” And the third happily exclaimed, “Mr. President, I’m helping Nasa put a man on the moon.” If a member of a PAL cabin crew is similarly asked, a good cabin crew will likely answer that he is helping transport passengers safely from one point to another. Others might answer that they are rendering excellent customer service to help PAL achieve

It is when the private sector does business with the government through partnership agreements. How do you size up the learning initiatives on PPP? How do you assess the level of PPP knowledge and interest of stakeholders? We are fortunate to have a PPP Center, which does information campaign on the topic and those seminars initiated by the CBGP in collaboration with PPP expert and practitioner lawyer lberto C. Agra. There is more awareness now on PPP and there is a continued interest among different stakeholders on the topic, heightened by the new government’s thrust on hybrid PPPs. What makes PPP a viable and preferred development strategy? PPP can be likened to different modes of transportation that

bring you to your final destination. Without appropriate transportation, your speed of travel will be so slow. The Philippines needs PPP to speed up the development in the country. What are the challenges and risks of PPP? In general, implementation is a challenge while one of the biggest risks is the continuity of the project when a new government takes over. An example among many others is the right of way issue for road infrastructures. What is your message to the public? For the private sector, get involved in PPPs to help your country. For the government sector, be an enabler. Build opportunities to identify and create as many PPP projects the private sector can partner with the government.

a five-star rating from Skytrax by year 2020. But using the Portus perspective, a better cabin crew will say they are doing all of these things for PAL to touch people’s lives, to make them happy and to provide a home away from home during those few precious hours onboard a PAL flight. Serving coffee onboard a flight is not just about responding to the request of a passenger, but making him happy and feel at home. Each passenger has a story. Each flight is a series of pleasant and not-so-pleasant experiences. What makes the difference is how we choose to absorb and reflect on those experiences. As a trainer, Erik saw the things he was doing at PLC as something beyond just training or teaching. He understood the bigger picture, knowing that ultimately, he is a part of the team effort to achieve a higher goal. And that higher goal, applying the Portus perspective, is to help each cabin crew understand how to genuinely serve others and display the kind of service that Filipinos are known for. Training or teaching requires a lot of time, and most of all, patience. Some friends were surprised when they learned that I still taught in law school when I was the head of the Bureau of Immigration. Now, with PAL, I still teach. Since 1998, I have never stopped teaching. Every now and then, whenever I encounter some of my former students, I am elated to see them

in significant positions in the government and in the corporate sector. They tell me how much I have made an impact on their lives. One former student, Mildred Solis, even went as far as writing me a card that contained powerful words of encouragement, among others, “Because of you, Succession [law subject where Solis was my student] had become the crucible by which both my strength and my spirit were measured. You have touched numerous souls and I was lucky to have been one of them.” I come from a family of schoolteachers; my grandparents Ramon and Maria Bueno were professors, my mother was a college professor for more than 30 years, and my father and siblings were in different teaching capacities in their respective professions. For me, teaching was never about the paycheck. I teach to inspire and be inspired. When he was managing the Initial Cabin Crew Training Batch 17-02 and the extent of the preparation was causing so much stress, Erik coped by literally being out of town every single weekend for three months. However, according to him, among the many places he has been during those past three months, Room 214 of PLC was his favorite destination. How we see things and react to situations will ultimately depend on our perspective. We will enjoy doing whatever work we do if only we all practice the Portus perspective.

Three security breakthroughs the ARF can deliver Ricardo Saludo

DIPLOMASIA

F

or all its prominence, the Asean’s Regional Forum (ARF) has more bark than bite. No one actually expects any major breakthroughs at the annual discussions among foreign ministers of Asean and its dialogue partners: Australia, Canada, China, the European Union, India, Japan, New Zealand, Russia, South Korea and the United States.

But maybe, just maybe, it would be different this August. For one thing, this year’s 24th ARF faces more significant and challenging security issues, all requiring urgent action: n North Korea’s recent launches of two ballistic missiles possibly able to hit the US; n The eruption of Islamic Statedriven terrorism in southern Philippines; and n The hoped-for ministerial endorsement by Asean and China of the framework for a binding Code of Conduct in the South China Sea. Plus: this week’s meeting happens to culminate on the 50th anniversary of Asean’s founding on August 8, 1967. So, wishfully thinking, what might ARF conjure at its discussions from Wednesday to next Tuesday, especially on those three big security concerns?

Talking again in Korea

The visit last week of North Korean Vice

Foreign Minister Choe Hui Choi shows the value Pyongyang gives ARF, which it has attended since 2000. As reported by The Diplomat magazine, its diplomats have been pressing Philippine officials for Asean not to put strong pressure on Pyongyang in its meetings this year, chaired by Manila. So far, the grouping has expressed concern over North Korea’s weapons development, but not called for stopping it, as Washington, Tokyo, Seoul, and maybe even Beijing might want to hear. Can ARF do more? How about another round of talks between North Korea and America, plus maybe one or some other nations in the “six-party talks”, which last had discussions in December 2008. It convened the US, Japan, North Korea, South Korea, China and Russia talks. Pyongyang and Washington themselves last met officially in 2012 in Beijing. In June North Korea’s Ambassador to India Kye Chun Yong said in a TV

interview: “Under certain circumstances, we are willing to talk in terms of the freezing of nuclear testing and missile testing.” Kye said North Korea was prepared to hold such negotiations with the US “anytime”—but without preconditions from Washington. Now, wouldn’t it be nice if at ARF, American and North Korean delegates announce talks even at an unspecified date and place? That would give all Asia a giant sigh of relief, if only because the talks would seem to preclude military action from America, as it had subtly threatened if Pyongyang developed the capability to nuke the continental US.

Coding conduct at sea

Second on the ARF wish list may already be on the informal calendar: the endorsement by Asean and Chinese foreign ministers of the framework for the long-awaited binding Code of Conduct to reduce tensions and address incidents in the South China Sea. Asean and China first called for the Code of Conduct back in November 2002, after the nonbinding Declaration of Conduct was signed in Phnom Penh. Its framework was finally completed in May, after one-and-a-half decades of off-and-on talks. Last week Voice of America, quoting a Cambodian source, said the framework would be endorsed in the meetings between Asean and its dialogue partners next week. There has been no denial of the report. Several factors seem to have prodded China to agree to the framework. Foremost is improved ties with the Philippines, which has also stalled implementation of its pact to increase US

military deployment and access to bases in the country. Thus, the People’s Liberation Army (PLA) may feel it can accept Code of Conduct constraints on PLA deployment in the South China Sea, since American forces would no longer build up massively in the Philippines. Also reassuring China are improved ties with Malaysia, too, and bilateral talks with the Philippines, not global pressure, to resolve territorial issues. Bottom line: Having mended fences with rival claimants, Beijing must now do its part to build confidence and reduce tensions by endorsing the Code of Conduct framework next week and ideally signing the Code at the Asean summit with global leaders in November.

Fighting Islamic State

The last ARF breakthrough would hopefully be a declaration by Asean and some big powers to join forces and collaborate in various areas against Islamic State (IS) and other extremist groups now escalating their attacks, propaganda, fund-raising and recruitment in Southeast Asia. The main impetus for this is, of course, the two-month-old Marawi siege by IS-driven terrorists on the southern Philippine island of Mindanao. Already, Indonesian, Malaysian and Philippine navies are conducting joint patrols, and America and China have donated weapons to the Philippines. ARF can formally declare a common front against terrorism. Then, later in August, Asean defense ministers can translate the ARF statement into concrete initiatives. Korea, Code and counterterrorism. Let’s do it, ARF.

2nd Front Page BusinessMirror

A16 Monday, July 31, 2017

www.businessmirror.com.ph

Land-use law to solve housing ills?

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By Cai U. Ordinario

@cuo_bm

HE American dream of owning a home is also the Filipino’s dream.

This is according to Eduardo del Rosario, newly appointed chief of the Housing and Urban Development Coordinating Council (HUDCC). However, owning a home in the Philippines is not easy, mainly because of the finatncial considerations needed to pay for a home. A lso, t here’s t he Nat iona l Land Use Act (Nalua). Del Rosario believes the proposed law

threatens the implementation of affordable housing, such as government-sponsored socialized-housing projects. “It seems the [proposed] LandUse Act would prevent the conversion of lands for housing needs. This is the emerging sentiment,” del Rosario said. “That is why [the bill] is still being fine-tuned. But we support it because we don’t want land conversion to be abused.”

The HUDCC chief added the government needs a “certain degree of flexibility, especially in places where socialized housing is absolutely necessary”.

Housing needs

ACCORDING to del Rosario, the Philippines has a housing backlog of 6 million units. The figure includes those for about 1.5 million informal-settler families (ISFs). However, the national government has only been able to build 192,000 housing units on average annually in the past six to seven years, he said. This is something the Duterte administration would like to change, del Rosario said. The HUDCC is targeting a 30-percent increase in the number of housing

units constructed, he added. This means the government is eyeing to build some 250,000 units between July this year and July 2018. This will also be the annual target for the following years under the current administration. Del Rosario hopes that in five years, the government will be able to build 1.5 million to 2 million housing units. He said the HUDCC will also launch a nationwide housing program, dubbed Balai, or Building a Legacy for the Advancement and Integrity of Filipinos. The program aims to improve government efforts in addressing Filipinos’ housing needs, as well as engage with the private sector. Del Rosario admits that the housing backlog is huge and the govern-

ment cannot do it alone. They need to work with the private sector. Addressing Filipinos’ housing needs is important not only because of Filipinos but also the Philippines’s international commitments. The Philippines is among the 189 countries who committed to the Global Agenda 2030, or the 17 Sustainable Development Goals (SDGs), in September 2015. The Global Goals aim, among others, to end poverty and hunger, promote universal health, education for all and lifelong learning, achieve gender equality, sustainable water management, ensure sustainable energy for all, decent work for all, resilient infrastructure and reduce income inequality between and among countries. The first target under SDG 11—

make cities inclusive, safe, resilient and sustainable—is ensuring access for all to adequate, safe and affordable housing and basic services, as well as the “upgrade” of slums. This is also part of the New Urban Agenda adopted last year by world leaders in Quito, Ecuador. The Philippines, represented by former HUDCC Chairman and Vice President Maria Leonor G. Robredo, signed the declaration.

Land use

AMID all these plans and programs is the proposed Nalua. The bill has been passed on from Congress to Congress for over two decades. The National Economic and Development Authority (Neda) had high hopes the Nalua will be passed See “Land-use,” A2