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Thursday, June 1, 2017 Vol. 12 No. 231

Tax bill breezes through House, but not in Senate

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By Jovee Marie N. dela Cruz

@joveemarie

he House of Representatives swiftly passed on Wednesday a bill seeking to reform the country’s tax regime, but its enactment would have to wait longer as the measure is expected to face rough sailing at the Senate.

Four months after it was introduced by the Department of Finance (DOF), House Bill (HB) 5636, or the Tax Reform for Acceleration and Inclusion (TRAIN),

passed on third reading. A total of 246 lawmakers voted “yes”, nine voted “no”, while one abstained. House Committee on Ways and Means Chairman and PDP-Laban

246 The number of lawmakers who voted for HB 5636

Rep. Dakila Carlo E. Cua of Quirino said, “After all of the deliberations, I am very much convinced that this is a pro-poor package and we can trust the President that this will really help the lives of the Filipinos.” The measure will be transmitted

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LABOREM EXERCENS

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n 2000, then-UN Secretary-General Kofi Annan was facing a global tide of discontent against globalization. The year earlier, trade unions, civil-society organizations and religious groups from the United States and other countries succeeded in shutting down the Ministerial Conference of the World Trade Organization (WTO). The anti-WTO activists claim that the global trading order under the dominant “Washington Consensus” doctrine of trade and investment liberalization in a borderless world economy had benefited only a few and had triggered a “Race to the Bottom” among big corporations. The Race to the Bottom means global investors can easily fly in and out of liberalized markets in search of cheap production sites, such as the export-processing zones where trade unions are discouraged or held at bay.

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NFA GETS OK Employers less likely to hire TO IMPORT woman who wears head scarf 250,000 MT OF RICE VIA‘G2P’ By Sarah Green Carmichael

By Jasper Emmanuel Y. Arcalas @jearcalas

T Konica MInolta distributors conference U-BIX Corp. Chairman Edilberto B. Bravo (right) gives a short talk during the awarding ceremony coinciding with the 2017 Hybrid Value Konica Minolta Distributors Conference held at a hotel in Makati City. With him is Konica Minolta Partner Sales Division Head Koji Yoshida, who was inadvertently misidentified in the BusinessMirror’s Wednesday issue. ALYSA SALEN

DTI backs streamlining of FINL By Catherine N. Pillas

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@c_pillas29

he Department of Trade and Industry (DTI) said it has thrown its support behind moves at the House of Representatives to open up more sectors, such as broadcasting, telecommunication and public utilities, to foreign-equity participation. Trade Secretary Ramon M. Lopez expressed his support for bills seeking to amend the public-service law during the Inclusive Innovation Conference 2017 organized by the DTI. The Department of Finance

(DOF) has been pushing for a “more liberal” foreign investment negative list (FINL) so the country could attract more investors. “The amendments won’t be part of the current FINL yet, but a big chunk of the change in the list can be through the [amendment] of the public-service law,” Lopez said. He said he supports four bills filed at the House of Representatives, which seek to change the definition of “public utilities”. Under House Bills (HB) 4389, 4468, 4501 and 4787, filed by Reps. Gloria Macapagal-Arroyo, Joey S. Salceda, Arthur C. Yap and Feliciano R. Belmonte Jr., respectively,

PESO exchange rates n US 49.8670

public utilities will be limited to electric-power transmission and distribution, water distribution and sewerage systems. All other “public services”, including electric-power generation and supply, crude oil and petroleum, transportation, broadcasting, telecommunications and value-added services, will no longer be under the public utilities category. The definition of public utility in the public-service law, or the Commonwealth Act 146, was “too ambiguous”, as it allowed public utilities to be interchanged with public services. See “DTI,” A2

he interagency National Food Authority Council (NFAC) has approved the recommendation of the National Food Security Committee (NFSC) to allow the NFA to import 250,000 metric tons (MT) of rice, according to an official of the food agency. NFA Spokesman Marietta Ablaza told the BusinessMirror that the NFAC approved the NFSC’s recommendation to import the volume via the government-to-private sector (G2P) scheme. However, Ablaza said the NFAC has yet to approve the terms of reference (TOR) for the bidding. “The NFAC has allowed the NFA to import 250,000 MT of rice through open tender. The import committee will still meet for the approval of the terms of reference of the bidding,” Ablaza said in an interview. “After the meeting, the TOR will still be presented to the NFAC for approval, which could be done through a referendum to fast-track the process,” she added. Ablaza said the TOR will be published only after the NFAC has given the green light for it. On May 18 the NFSC recommended the importation of 250,000 MT of rice following the pronouncement made by Cabinet Secretary Leoncio B. Evasco Jr., who also chairs the NFAC, that the council has decided to allow the NFA to import rice via the G2P scheme. See “NFA,” A2

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arlier this year the European Union’s highest court ruled that employers could prohibit employees from wearing visible religious symbols at work, as long as they banned all religious wear, and did not single out a particular religion. However, the case centered on two Muslim women who had been fired for refusing to remove their head scarves while on the job, and the ruling was seized on by politicians in Germany, France and the Netherlands as a “head scarf ban”. It’s the latest event in Europe’s long-simmering tensions over the various forms of Muslim veiling. A recent discussion paper by Doris Weichselbaumer, a professor at Johannes Kepler University Linz, in Linz, Austria, sheds light on some of the issues that women who choose to cover their hair may face when applying for a job. She talked with Harvard Business Review about her findings. What follows is an edited and condensed version of our conversation. First, tell us a little about the experiment you conducted with head scarves and résumés. I created job applications for three fictitious female characters who held strictly identical qualifications. They differed only with respect to their name and the photograph that was attached to the résumé. Germany was an ideal location for the experiment because job seekers here typically do attach their picture to their résumé. While all of the photos showed

the same woman, I gave one applicant a German name, “Sandra Bauer”, and two applicants a Turkish name, “Meryem Öztürk”. One of the Meryems was shown with a head scarf. I used a modern style of arranging the head scarf to signal that the applicant was a young, modern woman who could easily fit into a secular environment. About 1,500 applications were sent out in response to job advertisements during the course of the experiment. We found that when “Meryem Öztürk” wore a head scarf, she had to send 4.5 as many applications as “Sandra Bauer” to receive the same number of callbacks for interviews. When the Turkish applicant did not wear a head scarf, was she treated the same as the German applicant? No. Meryem Öztürk without a head scarf still had to send 1.4 as many applications as Sandra Bauer. Were you surprised by these results? I was surprised by a couple of things. First, the level of discrimination was very high, but maybe that was to be expected, given the current climate toward Muslims. Second, discrimination against the head scarf was highest in the occupation with the highest status and the highest qualification necessary, even though firms had problems filling vacancies there. So neither higher levels of qualifications nor a tighter labor market seem to help women with a head scarf. Instead, they seem to be more accepted in low-status jobs.

n japan 0.4500 n UK 64.1290 n HK 6.3991 n CHINA 7.2772 n singapore 36.0363 n australia 37.2207 n EU 55.7912 n SAUDI arabia 13.2986

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Source: BSP (31 May 2017 )

A2 Thursday, June 1, 2017

BMReports BusinessMirror

Tax bill breezes through House, but not in Senate Continued from A1

to the Senate for further scrutiny. HB 5636 was certified as urgent by the Palace on Monday. With the passage of HB 5636, House Deputy Speaker Romero S. Quimbo of Marikina City said more than a million workers will no longer be required to pay income taxes. “It’s a big relief to the ordinary worker who, for years, has been paying for almost all of the tax collection of the government. This we must celebrate! But the victory is bittersweet,” Quimbo said. “While I voted in favor of HB 5636, I did so with deepest reservations because of the additional taxes on diesel, kerosene and LPG, which, unfortunately, will affect most the poor,” he added. Quimbo urged the Senate to “carefully consider and revisit” the new taxes that will be introduced that will affect the poor. “While the House has managed to reduce the originally proposed excise taxes on fuel, I believe that this is still not enough. I hope the Senate will fight to remove taxes on diesel, kerosene, and LPG,” he said. Quimbo added the current taxreform system approved by the House is “incomplete”. “Without any reform on tax administration—curbing corruption in the bureaus of Internal Revenue [BIR] and Customs [BOC], new tax laws will not be effective in hiking government revenues,” he said. Party-list Rep. Carlos Isagani Zarate if Bayan Muna said the tax measure will “definitely hit the poor hard” because it would mean higher prices of basic goods and services. “Instead of lifting the tax burden, this [bill] further imposes additional burden on ordinary citizens,” he said. “President Rodrigo Duterte promised to ease the burden of Filipino citizens in paying income taxes. However, this is not the overall aim of HB 5636. HB 5636 is far from the promise of President Duterte,” Zarate added. While it exempted those earning P250,000 yearly from income tax, Zarate said the bill removed the previous personal tax deduction, as well as the deduction to medical and health insurance. It will also impose taxes on the fringe benefits of

NFA. . .

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Based on an assessment by the NFSC of the local harvest and supply situation, the government imports only the shortfall in local harvest for buffer stocking purposes. The NFA’s importation of 250,000 MT of rice through the G2P scheme is covered by Republic Act 9184, or the Government Procurement Reform Act, which provides that the lowest bidder would be named as supplier.

workers. “The government stands to lose up to P152 billion in revenues by 2019 because of the adjusted income tax structure, but the government is seen to earn at least P320 billion through complementary tax reforms, such as excise taxes and removal of VAT exemptions that would be shouldered primarily by ordinary citizens, especially the poor,” he added. Zarate said taxes, expenses and basic commodities will significantly increase for most Filipinos via higher excise taxes on petroleum products, particularly on LPG, diesel and gas, as well as sugar-sweetened beverages (SSBs). “According to the DOF, without tax reform, the people will likely remain poor. With regressive taxation, which mainly characterizes the tax reforms in HB 5636, the people will be poorer and burdened further,” he said. Under the bill, workers earning P250,000 will be exempted from paying personal income taxes. Also, an 8-percent tax on the selfemployed and professionals will now be imposed on gross receipts in excess of P250,000. The measure provides automatic adjustment of taxable income levels and their corresponding base every three years beginning 2022, based on a three-year cumulative consumer price index inflation rate. The bill said the tax exemption for 13th- month pay and other benefits would increase from P82,000 to P100,000. A ssistant Minor it y L eader and Party-list Rep. Eugene de Vera of ABS proposed the grant of t a x e xempt ion for P10 0,0 0 0 worth of 13th-month pay and other cash benefits. The proposal to lift expanded VAT exemptions for cooperatives was also scrapped after 150 congressmen opposed the removal of the incentive. According to Cua, the lower chamber retained the VAT exemptions of cooperatives to “make the tax package pro-poor”. Finance Undersecretary Karl Kendrick T. Chua said that, with the retention of cooperatives’ VAT exemptions, the government stands to lose P6 billion annually. “For the co-ops, we estimate around P6 billion at least annually,

not counting the unestimated leakage,” Chua said. The bill also includes a P6 tax on petroleum products that could cause prices of basic goods to rise. The P6-per-liter excise-tax increase will come in three tranches of P3, P2 and P1, respectively, in three years starting 2018. The measure provides new schedules and brackets for auto excise tax in the package. The DOF is pushing for the excise on vehicles to address traffic in the country. Under the proposal, the excise tax will be implemented in two schedules. For the lower bracket, if the net manufacturer’s price/importer’s selling price is P600,000, the excise tax will be 3 percent by 2018 and will increase to 4 percent by 2019. For the higher bracket, if the net manufacturer’s price/importer’s selling price is over P3.1 million, the excise tax will be P1,468,000 plus 90 percent of the value in excess of P3.1 million in 2018. For 2019, if the net manufacturer’s price/importer’s selling price is over P3.1 million, the excise tax will be P1.82 million plus 120 percent of the value in excess of P3.1 million. Also, the bill provided that the SSBs will be levied an excise tax of P10 per liter of volume capacity, subject to a 4-percent yearly increase after January 1, 2018. The bill said the lease of a residential unit with a monthly rental not exceeding P10,000 shall no longer be subjected to VAT exemptions. However, it called for the conditional removal of VAT exemption for socialized housing. Under the bill, the removal of VAT exemption for socialized housing will now be conditioned upon the establishment of a housing voucher system, which should benefit buyers of socialized housing. HB 5636 included provisions on e-receipts issuance and transmission, fuel marking, point-of-sale machines linkage to the BIR and linkage between the BIR and government agencies/bureaus/offices. Cua said these address perennial tax administration problems, such as sales underdeclaration. The bill also imposes a 20-percent final income tax on the Philippine Charity Sweepstakes Office and

Evasco said the shift to G2P from government-to-government will “ensure a corrupt-free and competitive bidding process at the NFA.” As of May 20, Ablaza said the rice stockpile of the NFA is enough to fill the country’s requirement for seven days. Based on the BusinessMirror’s comput at ion, t he NFA needs to import at least 752,560 MT of rice to meet its LegislativeExecutive Development Advisory Council (Ledac)-mandated stock requirement of 30 days at

the onset of the lean months. Thenational daily rice requirement is pegged at 32,720 MT. Ablaza also said the NFA imports committee is set to finalize and approve the guidelines for the importation of 805,000 MT of rice by private traders under the 2017 minimum access volume (MAV) scheme of the World Trade Organization. The MAV guidelines will also be approved by the NFAC before its publication, Ablaza added. Earlier Evasco said the NFAC

lotto winnings.

“No rush”

Senators set more public hearings to further scrutinize the Duterte administration-endorsed re venue - generat i ng mea su re TRAIN targetting to raise some P500 million from higher taxes. Emerging from Wednesday’s Senate hearing on the Palace tax proposal, Sen. Juan Edgardo M. Angara, Ways and Means Committee chairman, said: “We need to hold more hearings [on the tax measure].” “We are crunching figures because the impact of this tax measure will be harder on the poor sector.” Angara added, “as we need to cushion the impact of rising cost of basic needs.” The senator assured, however, the committee will work on the Palace money measure during the upcoming recess targeting to submit the TRAIN bill for plenary deliberations soon after Congress reconvenes regular sessions on July 24. “We are prioritizing the bill because it is a Palacecertified measure, but we need to scrutinize the House version because of its impact on the public,” Angara added. Senate President Pro Tempore Ralph G. Recto, however, indicated he will push for adoption of additional tax-relief measures to further mitigate the impact of the planned higher tax impositions. Recto estimated that proposed mitigating measures are projected to add up to P200 million in incometax relief, even as the government is looking to take back P500 million from the TRAIN bill revenues, “like giving 200 to one pocket but taking 500 from the other pocket”. He said senators are also awaiting submission of details on socalled safety nets, like cash transfer, for the poor sector. In the same interview, Recto confided the Palace-backed TRAIN bill’s early approval by Congress is likely to take some time, projecting plenary deliberations to “stretch until year-end”. “The earliest could be 2018,” Recto told the BusinessMirror. “The debates could stretch until December, so how can they implement it in January when there is still the publication requirement?” directed the NFA management to amend the MAV guidelines to require participating traders to allocate 30 percent of their quota for the cheaper 25 percent brokens rice. He said this will ensure that cheap rice will be readily available and is “consistent with the President’s pro-poor policy”. The NFA imports rice to augment its buffer stock during the lean months of July to September, when palay harvest significantly goes down due to bad weather.

DTI. . .

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In this way, the 60-40 foreign-equity limitation that only applies to public utilities also applies to public services. Lopez added the changes can help streamline the government’s FINL. Finance Secretary Carlos G. Dominguez III earlier pledged a “very liberal” FINL in their ongoing review of the restrictions, which started this month. The FINL enumerated the investment areas and activities reserved exclusively for Filipinos, as well as industries where foreign equity of up to a maximum of 40 percent is allowed, as provided for by the 1987 Constitution. The last regular FINL was issued in May 2015 by former President Benigno S. Aquino III. Under the 2015 Negative List, 100-percent foreign participation is allowed only for retail trade enterprises and still subject to certain conditions in the Retail Trade Liberalization Act and also in the rice and corn industry under certain conditions. The 2015 list also allows full foreign participation in the exploration, development and utilization of natural resources through financial or technical assistance agreements with the President.

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Marawi crisis. . . Indonesian Vice President Jusuf Kalla, Thai Deputy Prime Minister Somkid Jatusripitak, Asean Secretary-General Le Luong Minh and World Bank Managing Director Joaquim Levy, among others. This year’s conference will focus on how Asian leaders should deal with the uncertainty of globalization and free trade, especially at the time of populist tendencies among leaders. It will also touch on how protectionist and exclusionary policies worldwide are clouding the global economic outlook.

House backing

Meanwhile, both majority and minority blocs in the House of Representatives on Wednesday backed the declaration of martial law in Mindanao. The two blocs gave their support following the meeting of the Committee of the Whole tackling the martial-law report of Duterte. Speaker Pantaleon D. Alvarez cited the need for martial law, not only to crush the threat of terrorism in Mindanao, but also to address the roots of the decades-long conflict in the South. “A strategic and decisive response is necessary to enable the entire country to meet the challenge,” he said. According to Alvarez, the support of the House for the declaration of martial law should not be taken to mean that the problem in Mindanao can be addressed purely through military might. “The situation is far more complex. Besides military action, we have to address the historical, social, economic and political roots of the problem. After all, the most potent weapon against terrorism, insurgencies and rebellion is nation-building,” Alvarez said. The Maute terrorist group, he added, has already devastated thousands of lives in Mindanao and supporting the President in dealing with threat is necessary. “We have to do this because it is the right thing to do.”

Casualties

The military reported that it has already killed 89 terrorists as of Tuesday evening as it continued its operations to clear Marawi City from members of the Maute Group, hoping it could meet its deadline of freeing Lanao del Sur’s capital from the clutches of the group by weekend, the earlies. Military Spokesman Brig. Gen. Restituto Padilla also said on Wednesday government troops have rescued at least 960 civilians who have been trapped in the continuing sporadic clashes that began on Tuesday last week. Padilla said that, of the 89 killed from the Maute, 42 bodies have been recovered by the operating troops, who also seized at least 91 firearms, most of them high-powered guns. On the other hand, 21 soldiers have also been killed, while 72 others have been wounded. Padilla said the troops were continuing to clear the city from militants, while at the same time, they were moving trapped civilians away from the

SMC deal. . .

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scenes of the clashes. The soldiers were also recovering the bodies of civilians killed by the terrorists and were assisting government agencies and private organizations in the relief operations.

MILF support

The President has allowed the Moro Islamic Liberation Front (MILF) to open up and secure so-called peace corridors for humanitarian aid to transport relief items, as well as to place rescued residents trapped in the continuing gunbattle to retake Marawi City from the Maute Group fighters. Duterte approved this proposal following his meeting on Monday with the leaders of the MILF, attended by its chairman, Alhaj Murad Ebrahim, and with the implementing panels of the MILF and the counterparts in government led by its chairman, Irene M. Santiago. The approval was officially announced on Wednesday during the launch of the Mindanao Hour in Malacañang. “President Duterte approved the idea of creating a peace corridor to ensure the safety of the civilians and the delivery of the needed humanitarian aid for the displaced persons in the ongoing armed conflict in Marawi City,” Santiago said. Duterte designated Santiago to oversee the humanitarian efforts in and around Marawi City and in Iligan City. On that Monday meeting, the MILF vowed to cooperate with the government in securing the areas where these peace corridors will be established, Santiago said. She said members of the implementing panels would meet anew within the week to formalize the modalities and parameters of the peace corridor. During the Mindanao Hour, Presidential Spokesman Ernesto C. Abella said various government agencies have also made respective moves to cushion, or adjust to, the impact of the Marawi City clashes. The Department of Energy, for instance, said it has imposed a price freeze until June 7 on kerosene and household liquefied petroleum gas in Northern Mindanao and the Autonomous Region in Muslim Mindanao. The National Power Corp. reported restoring power at different degrees in the affected areas in central Mindanao, and included full restoration outside the battle areas in the second legislative district of Lanao del Sur, which covers 16 towns, as well as in the entire Lanao del Norte. Only about 20 percent of the electricity supply was restored in Marawi City and in the surrounding first legislative district. Education Secretary Leonor M. Briones has ordered all June 5 classes postponed to a later date that would be announced for the affected areas. Justice Secretary Vitaliano N. Aguirre II has sent Undersecretary Renante Orceo to Iligan City to oversee the creation of a panel of prosecutors for the cases related to the Maute Group. Elijah Felice E. Rosales, Manuel T.

Cayon, Rene Acosta

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The competition commission had planned to review the deal involving the coacquisition of San Miguel’s telco assets by the two largest telco players in the country. Citing provisions of the transitory rules of the competition law, the two telcos, however, barred the antitrust body from doing so by filing separate injunction cases against the PCC. Globe’s petition was not approved by the 6th Division of the Court of Appeals, while that of PLDT was approved. Hence, the specific request against the finally payment by the Pangilinanled corporation. “Without any legal impediment or court order, Globe has proceeded and completed the transaction,” Globe General Counsel Froilan M. Castelo said. He added: “Globe insists that it is in compliance of all regulatory requirements in completing the contractual obligation in the acquisition of the telco assets of San Miguel; and that Globe did not violate any rule or prevailing law at the time the transaction was signed.” PLDT officials, on the other

hand, refused to comment. But for Castelo, PCC is also barred from commenting on the telco deal, as there exists a gag order issued by the appellate court. “This is contemptuous and the PCC should be held liable for this,” he said. The PCC, however, will not back down, saying that the deal is a matter of public interest and should be taken both seriously and carefully. There are possible scenarios should the competition body be successful in completing the review: the transaction could either be approved, disapproved, or conditionally approved. Each has a largely different implication from the others, and unraveling the whole transaction would be a huge and costly mess for the parities involved. T he d e a l u nd e r q u e s t ion allowed San Miguel to take home P69.1 billion, and the two telcos a swathe of frequencies, which are seen to improve the quality of telecommunications services in the Philippines.

Economy

A4 Thursday, June 1, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

Road Board exec to LTO: Modernize your processes

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By Lorenz S. Marasigan

@lorenzmarasigan

ECAUSE there is a chronic delay in the collection of funds for the rehabilitation and maintenance of roads and bridges nationwide, the Road Board is pushing for the immediate modernization and automation of the Land Transportation Office (LTO), which handles the collection of road charges. According to Jose A ntonio Aguas, chief of staff and head of operations of Road Board, there is a need for the modernization of the systems in the LTO, saying its processes are still manual. “In fact, even the actual deposit of the MVUC, or the Motor Vehicle User’s Charge, funds, to the Bureau of Treasury [BOTr] is literally manual,” he said. There is a quarter-long backlog

in the collection of funds because of the manual process. “Right now, we have [a] threemonth delay in [the] collection of funds, because the actual deposit is done manually. There are 180 LTO collecting agencies in the Philippines each of everyone deposits to the Bureau of Treasury,” he added. The Road Board is collecting about P1 billion a month from the LTO. Every time car owners register

₧1B The monthly collection of the Road Board from LTO’s collection of the MVUC

their motor vehicles, a large portion from the total fee goes to the MVUC, otherwise known as the road users’ tax. MVUC collections are earmarked exclusively for road maintenance, including the improvement of road drainage, the installation of adequate and efficient road-safety devices and air pollution. Upon the collection, the LTO remits all the collections to the BOTr, which, in turn, deposits the revenues in four special trust accounts provided by law—80 pecent goes to the Special Road Support Fund and 5 percent for Special Local Road Fund.

The remaining 7.5 percent goes to the Special Control Fund and the other 7.5 percent is allocated to the Special Vehicle Pollution Control Funds. This particular fund is also intended to assist the Department of Transportation (DOTr) to carry out its mandate for the Clean Air Act. Earlier, Sen. Joseph G. Victor Ejercito filed a resolution urging the DOTr to establish and implement online registration for motor vehicles to promote transparency in LTO with regard to its manner of transacting with the public. The online car registration will also simplify the procedure, thereby reducing red tape and expedite transactions with the agency. The resolution said the LTO has been surrounded by allegations of corruptions irregularities and modus operandi in performing its mandate of registering motor vehicles and issuance of driver’s license. However, in reality, the public spends an average of two to four days to register a motor vehicle due to inefficiency and inadequacy of LTO employees and facilities.

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PHL online hiring grew 7 percent YOY in April O nline hiring in the Philippines chalked up a 7percent growth between April 2016 and 2017, according to the latest Monster Employment Index (MEI), a monthly gauge of online job-posting activity in the Philippines. The retail sector saw the steepest growth in online hiring recording a 33-percent year-on-year (YOY) increase in e-recruitment in April. The engineering, construction and real-estate sector reported a -6-percent YOY decline in online hiring, a further drop from March’s -5 percent. When looking at occupational groups, customer-service roles continued to take lead in online demand at 30-percent YOY, a sharp 8-percent increase since March’s 22 percent. The group has also recorded consistent positive growth since December 2015. “A strong domestic demand, regional trade recovery and a laborintensive economy has kept the country’s labor market upbeat, in line with the MEI,” said Sanjay Modi, managing director of Monster.com in the Asia Pacific and Middle East. “The country’s young work force is key and will play a pivotal role in boosting the economy, with local demand for workers in call

centers and the business-process outsourcing remaining high on the list. The job market is also expected to grow with the prospective inflow of investment worth $925 million from the Middle East, which is estimated to produce around 26,000 jobs across various sectors.” The MEI, launched in May 2015, has been collecting data since February 2014. It is a broad and comprehensive monthly analysis of online job-posting activity in the Philippines conducted by Monster Philippines (MP). Based on a real-time review of millions of employer job opportunities culled from a large, representative selection of online career outlets, including MP, the MEI presents a snapshot of employer online-recruitment activity nationwide. MEI said it has taken due care in compiling and processing the data available from various source, but does not guarantee the accuracy, adequacy or completeness of any information. Its parent company, Monster Worldwide Inc. (NYSE: MWW), is a premier global online employment solution that, for more than a decade, “strives to inspire people to improve their lives”. Recto Mercene, Catherine N. Pillas

DENR-BMB lauds House moves to hasten passage of E-Nipas bills By Jonathan L. Mayuga @jonlmayuga

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N official of the Department of Environment and Natural Resources (DENR) on Wednesday lauded congressional moves to consolidate two bills that seek to expand the coverage of the National Integrated Protected Areas System (Nipas) Act to fast-track the bill’s approval. “With the consolidation of the two bills, we expect faster deliberation of the proposed measure,” Director Theresa Mundita S. Lim of the DENR’s Biodiversity Management Bureau (BMB) told the BusinessMirror in an interview. A bill that seeks to widen the coverage of Expanded Nipas to include 92 protected areas (PA) under Nipas passed the third and final reading in the Senate early in May. At the House, E-Nipas will add 94 PAs. While there are a total of 240 PAs under Nipas, only 13 are backed by legislation. A House technical working group (TWG) under the natural resources committee led by Rep. Josephine Ramirez Sato of Occidental Mindoro met with DENR-BMB officials last Monday to tackle the consolidation of two E-Nipas bills. The DENR-BMB is the primary agency that has administrative jurisdiction over PAs and national parks. Lim was represented by Assistant

BMB Director Tony Manila during the meeting. “There are individual bills filed in the House. The natural resources committee, which is in charge of the bills, decided to come up with a consolidated bill. The authors of the individual bills agreed to come up with the consolidated bill,” Lim said. “I was able to talk to LPGMA Party-List Rep. [Arnel] Ty, the chairman of committee on natural resources who is very supportive of the bill’s passage,” she added. Lim also lauded the effort of members of the TWG in discussing the provisions in the would-be consolidated E-Nipas bill. “They met all day, and I was very happy to hear about their diligence in working on the bill,” she added. The two bills up for consolidation are Sato’s House Bill 177 and Partylist Rep. Rodel Batcabe of Ako’s House Bill 133. The TWG, she said, has decided to exclude some PAs from the original list previously covered by the bills, which was the consensus of the bills’ authors and coauthors. As part of a consensus among members of the natural resources committee, it was learned that seven of the 101 PAs in the original bill may no longer be included in the E-Nipas coverage. These are five PAs in Palawan, namely, El Nido Managed Resource Protected Area; Mount Mantalin-

Quiapo shopping trip A woman carries her child

while checking on some of the native products on sale at a stall under the bridge in Quiapo, Manila. Most of the stalls in the area sell different house decorations mostly made of seashells, abaca and other materials from different provinces. ALYSA SALEN

gahan Protected Landscape; Rasa Island Wildlife Sanctuary; Malampaya Sound Protected Landscape and Seascape; and Puerto Princessa Subterranean River National Park. It was agreed that the five PAs will be under the management and administration of the Palawan Strategic Environment Plan. Also excluded in the E-Nipas coverage are the Chico Island Wildlife Sanctuary and Naro Island Wildlife Sanctuary in Masbate province. Rep. Scott Davies Lanete is drafting a separate legislation for the two PAs. The Ticao-Burias Pass Protected Seascape (TBPPS), meanwhile, will be included as proposed by Rep. Fernando Gonzales of the Third District of Albay, Rep. Evelina Escudero of the First District of Sorsogon and Rep. Maria Vida Bravo of the First District of Masbate. The TBPPS is a PA shared by Albay, Sorsogon and Masbate provinces. The exclusion of several PAs in the list of PAs will still expand the coverage of the E-Nipas to include 92 PAs in the Senate version or the 94 PAs in the House version if enacted. This will be a big boost to government effort in protecting and conserving the country’s rich biodiversity, Lim said. Some of the PAs covered by the ENipas are homes to unique species of fauna and flora, as well as national symbols, Lim said.

Fresh start Sen. Cynthia A. Villar (fifth from left), managing director of the Villar Social Institute for Poverty Alleviation and Governance,

or Villar Sipag, extends livelihood and financial assistance to six Saudi overseas Filipino workers (OFWs) who were repatriated from Saudi Arabia two months ago. Villar also called on the Department of Foreign Affairs and Overseas Workers and Welfare Administration to speed up the repatriation of more distressed OFWs abroad. ROY DOMINGO

Skyway, Naiax prepare for back-to-school traffic

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TARTING from June 5 to 16 the operator of the Skyway System and the Ninoy Aquino International Airport Expressway (Naiax) will implement its traffic safety and security operations tagged as Oplan Balik Eskwela 2017. The traffic safety and security management department of Skyway O&M Corp. (Somco) expects the traffic buildup at the major entry and exit points of Skyway System and Naiax and other trafficprone stretches of the tollway when schools open on June 5. Motorists are advised to anticipate heavy traffic during the morning hours on Alabang Viaduct up to Skyway Main Toll Plaza B, C-5 and Nichols toll plazas and on the Magallanes area on the northbound at-grade section; and at Skyway Alabang toll plaza up to Skyway Main Toll Plaza A, Skyway Main Plaza B and the approach of Runway Toll Plaza, the Magallanes, Don Bosco, Amorsolo and Buendia Off-ramps and the Naiax Old Toll Plaza on the elevated section. During the early evening hours, traffic peaks at the Naiax Phase 1, Doña Soledad and Dr. A. Santos Offramps of the elevated section. Meanwhile, evening peak traffic

hours at the southbound direction are expected at the MagallanesNaiax entry ramp, C5-Bicutan-Sucat-Alabang at-grade section; and at the Magallanes-Naiax entry ramp, approach of Doña Soledad and Dr. A Santos Off-ramps, Skyway Main Toll Plaza A and Skyway Off-ramp to Alabang, on the elevated section. In coordination with the local police units, the National Police Highway Patrol Group and the concerned local units, all involved departments and the traffic-safety units of Somco will be in full force during this period to ensure a safer and more convenient travel. Support groups like Lifeline Rescue Ambulances, Blue Light Ambulances, Automobile Association of the Philippines Lingkod Towing Services and the Quick Response Team, among others, will be strategically deployed on the tollway to help the Somco operatives manage the flow of traffic and keep the Skyway and Naiax motorists safe. Adequate number of traffic control personnel and ambulant tellers will be deployed on traffic-dense plazas to speed up entry/exit transactions and minimize vehicle queueing. Highly visible traffic and security patrols and road-maintenance per-

sonnel will be on hand to promptly assist distressed motorists or clear road-crash sites. Days-off and leave applications are momentarily suspended. The Skyway Command Centers will intensify their round-the-clock operations in monitoring the traffic situation and reporting unusual incidents or emergencies. Somco will also coordinate with and assist Manila Toll Expressway Systems Inc. (MATES) and Star Tollway Corp. (STC), operators of South Luzon Expressway and Star Tollway, respectively, in their traffic safety operations in the early days of school opening when students and summer vacationers from the southern provinces troop back to Metro Manila. Meanwhile Somco, MATES and STC remind motorists to keep their vehicles roadworthy and obey all tollway traffic rules to avoid unfortunate road incidents. Since students make up a large part of pedestrian traffic in the interchanges, parents and teachers are advised to remind the children to be careful and alert when commuting and to obey rules, like using proper pedestrian crossing and waiting in the designated loading areas for public-utility vehicles. Claudeth Mocon-Ciriaco

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Editor: Jennifer A. Ng • Thursday, June 1, 2017

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Traders told to import more garlic By Jasper Emmanuel Y. Arcalas

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@jearcalas

he Department of Agriculture (DA) on Wednesday warned garlic importers that their sanitary and phytosanitary-import clearances (SPS-ICs) will be revoked if they will not bring into country their allocation.

Agriculture Undersecretary for Operations Ariel T. Cayanan said Agriculture Secretary Emmanuel F. Piñol issued the directive after DA officials met with garlic im-

porters to discuss their problems in importing the produce. “Before, the problem was the slow processing of SPS-ICs. So, I asked them if they have problems

with the current process and they said they don’t have any complaints,” Cayanan told reporters on the sidelines of the launching of the DA’s Urban Agriculture program on May 31. “So the answer of the secretary is that if they will not import until next week, we will cancel the permits issued to them and just allow those who are willing to import,” he added. Cayanan said the DA will closely monitor the volume of garlic that enters the country this week to determine whether it will revoke SPS-ICs. “It all boils down to the situation next week. We will observe the situation and if there are already imports in transit and

a huge volume of imports is expected, then there’s no need to cancel the permits,” he said. Cayanan said traders had cited the lack of garlic in major foreign sources, particularly China, where harvest has yet to peak, and the delays in ports of origin, as major factors behind the

low volume of imports. The Bureau of Plant Industry (BPI), an attached agency of the DA, approved 1,143 SPS-ICs covering 57,150 metric tons (MT) of garlic from January to May. However, as of May 25, only 12,440.34 MT have been brought into the country by private garlic importers, BPI data showed. Of the 12,440.37 MT imported from January to May this year, 12,206.86 MT were bought from China, according to BPI data. The remaining volume was purchased from India. “That data is as of last week. I think by next week there would be 20 containers coming in,” Cayanan said. The Philippines’s local garlic

production can only fill up 8 percent of the total demand, with the bulk being augmented by imports, which are sourced mostly from China and India. Cayanan said the DA could s ou rc e g a r l ic f rom B at a ne s a nd I locos to aug ment Metro M a n i l a’s s up ply a nd c ut retail prices. “We learned that Batanes has 13 MT of available garlic. In Ilocos, there is an available 19 MT. So the challenge for us is how to bring it to Metro Manila,” he said. Latest data from the Philippine Statistics Authority showed that the price of native garlic and imported garlic was pegged at P250 per kilogram and P200 per kg, respectively.

Africa corn silos Lanao del Sur farmers to get food overflow in south as aid, emergency loans from govt food crisis hits east

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Bloomberg

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frica’s corn harvest this year is a tale of two extremes, as worries about overflowing silos and rotting crops in the “south contrast with the east, where supermarkets are running short of the staple food”. Zambia and South Africa are both predicting record output of the grain, while Zimbabwe may meet its domestic needs for the first time since it began seizing land from white farmers in 2000. Yet, in East Africa, 17 million people may be facing hunger, and concerns about food shortages are driving up prices as governments scramble to secure imports. “It all comes down to weather,” said Wessel Lemmer, a senior agricultural economist at Barclays Africa Group Ltd.’s Absa unit in Johannesburg. “There’s usually an inverse relationship between rainfall in South and East Africa but this year has been more at the extreme end of that cycle.” Volatile weather conditions, prompted by the 2015-2016 El Niño weather pattern and exacerbated by climate change, have caused extremes of drought and heavy rain across subSaharan Africa. The resulting variations in crop yields are stretching the continent’s storage capacity and transport links while highlighting cross-border trade barriers that make it difficult for food to get where it’s most needed.

Local politics

“Transport costs, import-export bans, restrictions on genetically modified grain and local politics all hinder trade,” said Jacques Pienaar, a Bloemfontein, South Africa-based analyst at Commodity Insight Africa. “In Africa you can only move so much produce.” Corn, or maize as it’s called locally, is a central part of life across much of sub-Saharan Africa, usually ground and mixed with water to form a porridge or stiff dough. It’s called pap in South Africa, sadza in Zimbabwe and ugali in Kenya. In East Africa, countries including Kenya, Uganda, Somalia and Ethiopia face a food-production deficit equivalent to about 30 percent of consumption, according to the Nairobi-based Alliance for a Green Revolution in Africa. The effects of the drought have been amplified by conflict—about 5.5 million people are facing severe hunger in South Sudan while Somalia is on the brink of famine with 3.2 million people at risk, according to the United Nations’s World Food Program. Kenya’s reserves of corn dropped to less than a day’s worth of consumption earlier this month, with annual food inflation reaching 21 percent in April, squeezing a country where almost half of the population live on less than $2 a day. The government is planning to import 450,000 tons of the grain to plug the deficit and is subsidizing supplies. Yet, imports from South Africa, the continent’s top producer, are unlikely because Kenya, like most African countries, doesn’t allow genetically modified corn, according to Wandile Sihlobo, an economist at the Pretoria-based Agricultural Business Chamber. About 85 percent of South Africa’s corn is GMO, he said. Bloomberg News

he Department of Agriculture (DA) said it is set to extend food aid and emergency loans to farmers and fishermen affected by the ongoing fighting in Lanao del Sur. Agriculture Secretar y Emmanuel F. Piñol said he has directed all regional offices of the DA in Mindanao to start milling rice, which will be distributed to the farmers, fishermen and their families displaced by the conflict. “A poultry company based in Davao City, Anas Breeder Farm, which is now producing canned ready-to-eat rice with chicken afritada or adobo has pledged to produce enough volume to be able

Piñol to provide halal food to evacuees who belong to the farm sector,” Piñol said in a statement. “Anas Breeder Farm owner Jonathan Ng Suy said the firm’s donation will be coursed through

the DA and will be continued for a certain period of time,” he added. Piñol said this is the first time that the canned ready-to-eat rice meal will be offered to the public as it is not yet commercially available. “The distribution of the rice and the canned goods will be based on the listing of farming and fishing families available through the national directory of farmers and fishermen from the Department of Budget and Management [DBM],” he said. The DA chief said the Agricultural Credit Policy Council (ACPC) will also be directed to validate the list of Lanao del Sur farmers and fishermen and to

provide emergency-loan assistance through its survival and recovery (SURE) loans program. “Each family will be entitled to a Survival Loan of at least P5,000 and when things get back to normal, they could apply for a loan under the recovery program amounting to at least P20,000,” Piñol said. In view of the difficulty in locating farmers and fishermen affected by the conflict, the DA said it will relay mainly on the listing of DBM for the extension of the loans. Piñol said the distribution of the rice, canned goods and other food items will be done by the Department of Social Welfare and Development. Jasper Emmanuel Y. Arcalas

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Thursday, June 1, 2017

PHL path to greater renewableN

By Lenie Lectura

Aurielaki | Dreamstime.com

INE years since the Renewable Energy (RE) Act of 2008 was passed into law, consumers and RE developers have reaped the benefits of the law, according to state officials.

However, it can’t be denied that there is a pressing need to further improve certain aspects of the law to further boost investor confidence and, at the same time, assure consumers that their payment for subsidies is worth it. “Actually, there were positives, but there were also certainly lots of room for improvement,” said Jose Layug Jr., chairman of the National Renewable Energy Board (NREB), in an interview. The NREB is the advisory body tasked by the law to recommend policies, rules and standards to govern the implementation of the law, which granted fiscal and nonfiscal incentives to RE projects. “Definitely, we saw new power plants coming in. These additional capacities helped augment the country’s power supply,” added Layug, referring to new power facilities powered by renewable energy sources such as solar, wind, biomass and run-of-river (ROR) hydro. Based on data provided by the Department of Energy (DOE), RE accounts for 26 percent of the country’s power-generation mix.

Of FiTs and meters

SEN. Sherwin Gatchalian, chairman of the Senate Committee on Energy, called on concerned stakeholders to fully enforce the RE law. Gatchalian, in particular, emphasized the following major policies: feed-in tariff (FiT) system, Renewable Portfolio Standards (RPS), Green Energy Option and Net Metering scheme. Of these, only FiT and net metering have been implemented. The country’s FiT system guarantees compensation for RE producers through a long-term fixed price over a 20-year spread, a subsidy that is shouldered by power consumers. The RPS, to note, is a marketbased policy that requires distribution utilities and other industry participants to source a portion of their power supply from eligible RE resources. Net metering allows households to sell back excess electricity generated by their RE systems and use them as credits to lower their electricity bill. The Green Energy Option is a mechanism to empower end users to choose RE in meeting their energy requirements. “My assessment of the RE law is that we are the first one in South-

“We must send a strong message to everyone in the power industry that the time of low-cost solar has arrived, and the era of fossil fuel is near its end.”—Solar Philippines President Leandro Leviste east Asia that enacted a comprehensive RE law, and that’s good,” Gatchalian said. “However, of the nine key provisions of the law, only one-and-a-half is only being implemented, which are the FiT and net metering scheme. The seven-and-a-half have yet to be implemented, though majority of which will be implemented this year, like the RPS.”

Consumer benefits

FOR consumers, Layug noted the more expensive bunker fuel was displaced with a cheaper overall rate of RE. “So, to a large extent, RE has helped in terms of minimizing the cost to consumers, but of course it’s an annual determination. It was high oil price in 2014 and 2015,” Layug said. “Now, oil prices are low so it’s an annual determination.” Layug added, however, that overall, “with technology cost of RE going down, it certainly will yield more benefit to the consumers.” Take for instance, solar. Solar Philippines President Leandro Leviste said solar-power costs have fallen mainly on account of the decrease in the cost of solar panels, low interest rates, high levels of sunlight and advances in technology, among others. “We must send a strong message to everyone in the power industry that the time of low-cost solar has arrived, and the era of fossil fuel is near its end,” Leviste said. Fossil fuel includes coal, which averages P4 per kilowatt-hour (kWh); gas, P6/kWh; and diesel, at P8/kWh. “The debate is over… given solar is cheaper, and we’re building projects to prove it,” Leviste said.

In an interview, DOE Undersecretary Felix William Fuentebella said the promotion of RE and reduction of electricity rates are both central to the Electric Power Industry Reform Act (Epira) of 2001. The Renewable Energy Act of 2008 also supports the empowerment of consumers to choose renewable energy in meeting their energy requirements. “For the consumers, it enhances the power of choice to choose between conventional and RE,” he said. “Nagkakaroon tayo ng [We were able to have an] alternative.” Solar-power providers, meanwhile, said huge savings are being realized by their industrial and commercial clients. “Definitely they are able to save on electricity bills. Wilcon told us that it was able to save up to 50 percent in electricity bills when they started using our solar panels,” GreenHeat Corp. Director Glenn Tong said.

Challenges

ON the part of RE developers, the law provides incentives in order to encourage participation in the development of RE sources. These incentives are provided under the FiT system, in which RE developers are offered a fixed rate per kWh for electricity generated by their projects over a period of 20 years. The RE developers’ entitlement is taken from a FiT Allowance (FiTALL) billed to all on-grid electricity consumers. In short, consumers are the ones who shoulder the FiT rate through the FiT Allowance, which appears as a separate line item in power distributors’ bills. The distribution utilities (DUs) or retail electricity suppli-

ers (RES) are responsible in collecting this charge. Afterward, the collections will be remitted to the FiT Allowance fund that is being administered by the National Transmission Corp. (TransCo), which then applies rate adjustments on a yearly basis. The Energy Regulatory Commission (ERC)-approved FiT rates are as follows: P9.68 per kWh and P8.69 per kWh under the FiT-Solar 1 and 2; P8.53 per kWh and P7.4 per kWh under the FiT-Wind 1 and 2; P6.63 per kWh for biomass; and P5.9 per kWh for ROR hydro. The ERC earlier issued a “degressed” FiT rate of P5.8705 per kWh and P6.5969 per kWh for January to December 2017 hydro and biomass plants, respectively, with commercial operations within the year. Based on latest data provided by the ERC, a total of 47 RE projects are eligible under the FiT system. As of May 2017, these 47 RE projects have an installed capacity of 1,122.15 megawatts (MW). The 47 RE projects make up seven wind projects (426.9 MW), 24 solar (525.95 MW), 11 biomass (135.15 MW), and five run-of-river hydro (ROR Hydro) (34.6 MW).

“Indeed, RE developers who were declared eligible for FiT rates are now enjoying the benefits of getting paid under the FiT system, albeit delayed,” Layug said. He, however, pointed out that there are challenges being encountered by RE developers. These include roadblocks in permitting process and delay of payments to RE developers. On top of these, some RE projects are either on hold or under review because of unclear policy directions. “Definitely from a government perspective, we need to be more efficient in granting permits and licenses, and there should be more coordination among government agencies,” Layug explained. “It is also the best way to lower cost of development of RE projects, which translates to cheaper electricity prices.” The NREB, he emphasized, will be more proactive in providing guidance and coordination among involved agencies to fast-track the processing of regulatory approvals.

‘Consequential costs’

THE delay in the approval of TransCo’s 2016 FiT-ALL application filed before the ERC has resulted in P6.6-billion backlog payments

owed by the government to RE developers for the year 2016. TransCo had filed its 2016 FiTAll application in 2015. Gatchalian said the government owes RE developers P6.6 billion. The amount includes P230 million in interest payments. The senator points to “these unwarranted delays in the ERC approval” as the reasons why TransCo has not been able to pay RE developers. “And because of these delays, we have to pay consequential costs,” he said. “I hate to say it, but because of the delays of ERC, we will be paying P230 million in interest payments.” The lawmaker said during a recent hearing of the Joint Congressional Power Commission (JCPC) the country will fail to attract serious investors “if we don’t fulfill our contractual obligations.” “And FIT-All is one of them,” Gatchalian said. A week after the hearing, the ERC released an order. The regulators approved a FiT-ALL rate of 18.3 centavos per kWh for 2016. The amount is 5.09 centavos per kWh higher than the provisionally approved rate of 12.4 centavos per kWh.

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e-energy source still brightly lit

“It’s about time we found a balance between promoting clean energy and securing the country’s energy needs without making consumers bear the cost of a punishing subsidy for years in favor of RE producers. We have a responsibility as a major power producer to do our share in pushing for a sustainable clean energy economy but it has to be done in the most efficient way possible for the consumers.”— SMC President Ramon S. Ang

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Unburdening consumers

The FiT-All increase will be reflected in consumers’ June bills. Even before the ERC issued a decision on TransCo’s 2016 FiTAll application, the state-run firm has applied for another increase in the FiT-All rate for 2017, this time asking to further hike the rate to 22 centavos per kWh. ERC Commissioner Josefina Patricia Magpale-Asirit assured the JCPC that a resolution on FiTAll 2017 rate application would be issued soon. “Barring intervention from oppositors, a resolution on the 2017 FiT-All rate decision could be out in September this year,” she said.

Unclear policy

LOPEZ-led First Gen Corp.’s hydro power projects are under review mainly due to the government’s unclear policy direction on incentives. “Our hydro platform pipeline of projects is currently being reviewed given the policy stance of the government of not providing FiT incentives,” First Gen President Francis Giles Puno said. The ERC, in its March 2017 order, issued the degressed FiT rates

to cover January to December 2017 for ROR hydro plants from P5.9 to P5.8705 per kWh and biomass plant from P6.63 to P6.5969 per kWh. According to the ERC, there are only five hydro plants with FiTeligible COC (certificate of compliance) as of May this year. Of the 250-MW installation target for ROR hydro, only 34.6 MW was subscribed, leaving 215.4 MW of unsubscribed capacity. “If anything we feel that renewable energy sources like hydro, with its lengthy development and construction phase, will in fact require assurance of a market,” Puno said. First Gen was looking to expanding its greenfield operations in Mindanao by developing three ROR hydroelectric power plants with a combined generation capacity of 95 MW, namely: the 32-MW Bubunawan and 33-MW Tagaloan plants in Bukidnon and the 30MW Puyo in Agusan del Norte. “But the pronouncement of DOE is unclear to us because hydro FiT is not fully taken up,” Puno said. “So the whole idea was to be able to construct the hydroelectric plants that we have been

developing and for it to be allocated the unutilized portion of the FiT allocations.” And because there is a chunk of unutilized capacity in the first round of FiT for hydro power, Puno said the government must realize that hydro-power development is actually a very long gestation, given the fact that hydro-power prospects are located in remote areas. “Hydro takes long, and you have to assure investors that there will be a market for that electricity. In order for us to go ahead, we have to be assured that there is a market,” Puno said. “And so, until that clarification is there, then we’re slowing down what should be an accelerated development, but once it’s clear then we will proceed because we have also acquired quite a number of new concessions.”

Additional round

IF the DOE chief would have his way, there will be no additional round of FiT. “What I’m saying is it’s already too much because FiT, it runs up to 20 years and it’s overburdening our consumers,” Cusi said. “We want to bring down our electricity rates, but how can we bring them down if

we keep on giving FiT?” Another round of FiT is being sought by RE developers, particularly by solar players that have not qualified in the second round of solar FiT equivalent to 390 MW, which is in excess of the 500-MW FiT installation. Cusi clarified that his agency is not against providing incentives to RE developers, rather it should be through other means. “I’ve already talked with the Climate Change Commission and some international organizations so our people will not be burdened.” Gatchalian, for his part, urged the DOE to officially proclaim that it is not inclined to grant incentives in the form of FiT. “What’s important here is certainty, attracting investors…. It cannot be a verbal policy. It has to be a written policy,” Gatchalian said. “We have contractual agreements with the proponents and [they have] contractual agreements with their funders and, in the overall scale of things, we’re attracting investors.” “If we cannot fulfill one contractual agreement in the power sector, how can we attract in other sectors?” Gatchalian asked.

IN response to Gatchalian’s musing, Cusi said that there is no need to issue a formal declaration on this. There are power firms that will pursue RE projects sans the FIT. These include San Miguel Corp. and Alsons Power, among others. “It’s about time we found a balance between promoting clean energy and securing the country’s energy needs without making consumers bear the cost of a punishing subsidy for years in favor of RE producers,” SMC President Ramon Ang said. “We have a responsibility as a major power producer to do our share in pushing for a sustainable clean-energy economy, but it has to be done in the most efficient way possible for the consumers.” Alsons Consolidated Resources Inc. Chairman and President Tomas Alcantara said the demand for solar power has drastically brought down the production cost. “I think as far as solar is concerned the cost of production has gone a long way,” Alcantara said. “The cost of photovoltaics [has] really been cut as much as 50 percent to 60 percent. So people who started with solar, they were forced to buy equipment at very high cost, and this is where FiT goes.” However, according to Alcantara, “right now with FiT becoming a thing of the past, then technology has to address the issue of capital cost.” The NREB said last year that it was looking at other mechanism to replace FiT. These include RPS, grants from multilateral agencies, or setting up a fund. “The FiT Allowance and FiT rates are there to push RE. It’s there as a preliminary mechanism to encourage investments in RE. I think we have done that. We have been successful at that. Moving forward, I think we need to look at other mechanisms,” Layug said.

Unburdening consumers

MEANWHILE, Laban Konsyumer Inc. (LKI) President and former DTI Undersecretary Victor Dimagiba said FiT payment should be sourced from DOE’s budget. “The intention of the law is good, but the impact to consumers should be thoroughly reviewed,” Dimagiba said in an interview. “We recently wrote the DOE secretary on this.” He said in his letter that the newly approved FiT-All will unduly burden the consumers. “The ERC approval adds another burden on already overburdened consumers,” Dimagiba said, adding such is the basis for their recommendation. “Government, through the DOE, as lead agency mandated to implement the provisions of the RE Act, can still continue to dem-

onstrate its support to RE by looking into other areas,” Dimagiba said adding, “considering means other than increasing the FiT-All every year for the balance of the 20-year period.” He also urged the DOE to consider other modes of FiT payment, “that may include, but not limited to, say, an itemized budget item in the General Appropriations Law.” “For the balance of the 20 years, we proposed to the DOE to consider other options.” Dimagiba cited three options: for DOE to source from its own budget, to amend the RE law to specify that the FiT mechanism should not be passed on to consumers, and for the country to tap international funds or grants.

Push for RE

DESPITE the challenges, the DOE continues to push for RE development to diversify the country’s power sources. In fact, the DOE envisions to add at least 20,000 MW of RE capacities by 2040 to sustain economic gains and continuously elevate the quality of life in the country. To achieve this, the agencies concerned must be aggressive in carrying out their respective goals toward building RE capacities. “There is a need to identify and analyze key challenges to further guide our stakeholders in our policies, regulatory and institutional framework,” Cusi said. As an initial step, the agency gathered renewable-energy stakeholders from both the public and private sectors to launch the Renewables Readiness Assessment (RRA) for the country. The RRA is a collaboration among the DOE, the International Renewable Energy Agency (Irena) and other renewable-energy stakeholders. Cusi said he considers the RRA as “vital” in the government’s vision toward attaining 20,000 MW of RE capacities by 2040. He added that formulating RRA involves research, interviews, focus-group discussions and several multistakeholder consultations. The goal, Cusi said, is to provide a comprehensive and detailed analysis of the country’s RE profile in order to recommend measures to deal with the pertinent issues in the industry. Cusi said the Philippine RRA will also contribute to a database of the status of renewables readiness across member countries of Irena. “The DOE is committed to provide a level playing field among RE developers to assure the country of its indigenous and sustainable energy for the consuming public,” Cusi said.

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The World BusinessMirror

Thursday, June 1, 2017

briefs Sri Lanka mudslides, floods death toll climbs past 200

COLOMBO, Sri Lanka—The death toll from mudslides and floods in Sri Lanka has climbed past 200, with 96 others missing, the government said on Wednesday. The Disaster Management Center said 202 people were confirmed dead. More than 77,000 have been displaced and over 1,500 homes destroyed since rains began swamping the southern and western areas of the Indian Ocean island nation last Friday. Sri Lanka’s army, navy and air force are continuing relief and rescue efforts, supported by divers and navy personnel who have arrived from India. The UN office in Sri Lanka said 16 hospitals directly affected by floods or landslides have been evacuated fully or partially. AP

Pentagon missile defense program scores a win

WASHINGTON—The Pentagon’s oft-criticized missile defense program has scored a triumph, destroying a mock warhead over the Pacific Ocean with an interceptor that is key to protecting US territory from a North Korean attack. Vice Adm. Jim Syring, director of the Pentagon agency in charge of developing the missile defense system, called Tuesday’s test result “an incredible accomplishment” and a critical milestone for a program hampered by setbacks over the years. “This system is vitally important to the defense of our homeland, and this test demonstrates that we have a capable, credible deterrent against a very real threat,” Syring said in a written statement announcing the test result. Despite the success, the $244-million test didn’t confirm that under wartime conditions the US could intercept an intercontinentalrange missile fired by North Korea. Pyongyang is understood to be moving closer to the capability of putting a nuclear warhead on such an intercontinental ballistic missle and could develop decoys sophisticated enough to trick an interceptor into missing the real warhead.

Pound falls as poll shows Conservatives may miss win

The pound declined after a poll showed Prime Minister Theresa May’s Conservative Party may miss winning a majority at next week’s general election and face a hung parliament. Sterling dropped against all its Group-of-10 peers after a YouGov poll in the Times, based on a new model, showed the prime minister’s party may fall short of an overall majority by 16 seats. The pound has been strengthening in past weeks, despite a slowing economy and increased security risks, as earlier surveys suggested a bigger Tory lead. “The slide in the pound is another example of markets not being prepared for a close election, let alone a hung parliament,” said Sean Callow, a senior currency strategist at Westpac Banking Corp. in Sydney. “Speculative short positions have been unwound, leaving sterling looking for fresh direction. So speculators may reload short-pound positions if the election is indeed a lot closer than was implied by the sharp rally when the election was announced.” Bloomberg News

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Daughter of woman in S. Korea C scandal returns to Seoul

China factory gauge holds up

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EOUL, South Korea—She is probably the most loathed 20-year-old in South Korea, the privileged daughter of the woman at the center of a political scandal that brought down a president. After several months in detention in Denmark, Chung Yoo-ra is returning to her home country to be questioned about bribery allegations involving corporate giant Samsung, as well as her studies at a prestigious Korean university. Prosecutors also hope her extradition will provide them evidence to expand their case against former President Park Geun-hye, who was removed from office in March and is now being tried on charges of bribery, extortion and abuse of power. Once Chung arrives at the airport on Wednesday, she is expected to head straight to a prosecution office in Seoul for questioning about the corruption scandal that centers on Chung’s mother, Choi Soon-sil, a longtime confidante of the former president. Some of the reasons for the anger swirling around Chung:

Confidante’s daughter

Chung is the only child of Choi, who has been charged with taking tens of millions of dollars from companies in bribes and through extortion and also manipulating state affairs from the shadows during Park’s presidency. Her parents are divorced and her father, Chung Yoon-hoe, was Park’s top aide for more than a decade before she became president in 2013. Chung was part of the South Korean squad that won the team equestrian gold medal at the 2014 Asian Games and had been training in Germany, living there with her infant son and mother, when the corruption allegations emerged last October. Choi returned to Seoul to face the investigation, while Chung sought refuge in Denmark. She was arrested in the northern city of Aalborg in January and fought extradition, but Denmark ruled in favor of South Korean prosecutors.

$26M The amount in bribes from Samsung allegedly taken by South Korea’s thenPresident Park Geun-hye and her confidante Choi Soon-sil

She told reporters in January that she didn’t know any key details about the corruption scandal or her mother’s dealings with Park. “Mom did everything and I didn’t know anything,” she said.

Samsung link

Prosecutors have alleged that Ewha Womans University admitted Chung despite questionable qualifications and granted her academic favors because of her mother’s presidential ties. Crucially, prosecutors may also question Chung over allegations of bribery between Park and corporate giant Samsung. A ccord i ng to prosec utors, Park colluded with Choi to take about $26 million in bribes from Samsung and was promised tens of millions of dollars more from Samsung and other large companies. Prosecutors say the bribery included $7 million Samsung provided to a sports-consulting firm controlled by Choi that f ina nced C hung’s equest r ia n training in Germany. Prosecutors believe Samsung scion Lee Jae-yong, who has also been arrested, sponsored Choi’s family in exchange for Park’s support of a 2015 merger between two Samsung affiliates that allowed Lee to promote a father-to-son,

South Korea’s Chung Yoo-ra, the daughter of Choi Soon-sil, the confidante of former President Park Geun-hye, competes during the equestrian dressage team competition for the 17th Asian Games in Incheon, South Korea, in 2014. Lee Sang-hak/Yonhap via AP

transfer of corporate wealth and leadership at the group. Park and Choi have denied the bribery accusations in court. Lee has also denied using the payments to win support for the merger, saying Samsung was just responding to Park’s requests to support culture and sports.

Public fury

The allegations that Chung was sponsored by Samsung and received academic favors helped drive the popular anger that led to Park’s ouster. Students at the university demonstrated for days, demanding to know why Chung was given good grades for classes she did not attend. Many students were also among the millions who protested against Park for weeks. They were angry that Chung got a free pass into an elite school because of her wealth and connections, while others navigate

Arrested, missing China activists spark criticism of Trump on rights

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HANGHAI—The arrest and disappearance of three labor activists investigating a Chinese company that produces Ivanka Trump-branded shoes in China prompted a call for her brand to cease working with the supplier and raised questions about whether the first family’s commercial interests would muddy US leadership on human rights. The men were working with a US nonprofit to publish a report next month alleging low pay, excessive overtime and possible misuse of student labor, according to China Labor Watch Executive Director Li Qiang, who lost contact with the investigators over the weekend. China Labor Watch has been exposing poor working conditions at suppliers to some of the world’s best-known companies for nearly two decades, but Li said his work has never before attracted this level of scrutiny from China’s state security apparatus. The arrest and disappearances come amid a crackdown on perceived threats to the stability of China’s ruling Communist Party,

particularly from sources with foreign ties, such as China Labor Watch. Faced with rising labor unrest and a slowing economy, Beijing has taken a stern approach to activism in southern China’s manufacturing belt and to human-rights advocates, generally, sparking a wave of critical reports about disappearances, public confessions, forced repatriation and torture in custody. China Labor Watch’s investigation also had an unusual target: a brand owned by the daughter of the president of the US. “Ivanka’s brand should immediately cease its work with this supplier, and the Trump administration should reverse its current course and confront China on its human rights abuses,” Adrienne Watson, spokesman for the Democratic National Committee, said in a Wednesday e-mail. Ivanka Trump must decide, she added, “whether she can ignore the Chinese government’s apparent attempt to silence an investigation into those worker abuses”. Ivanka Trump’s lifestyle brand

imports most of its merchandise from China, trade data show. She and her father both have extensive trademark portfolios in China, though neither has managed to build up a large retail or real estate presence here. The sister of Jared Kushner, a Trump adviser and husband of Ivanka, traveled to China this past month to court investment from Chinese families for a real-estate project in New Jersey. “The eagerness of members of the family to do business in China while airbrushing very troubling human rights and labor-rights records of the country is troubling,” said Nicholas Bequelin, East Asia director for Amnesty International. We’ll have to wait and see, he added, “to what extent business is trumping any kind of consideration of the diplomatic capital of the US in promoting human rights, labor rights and democracy”. Amnesty International called for the release of Hua Haifeng on Wednesday, as well as his two colleagues, who are feared to have been detained. AP

the country’s hypercompetitiveschool environment on their own. Young people were also enraged about what Chung reportedly wrote on Facebook in 2014: “Blame your own parents for not having what it takes. Don’t ask for rich parents to do this and that for you. Money is also a form of competitiveness.” The Education Ministry ordered Ewha to cancel Chung’s enrollment after concluding the school had manipulated its admissions process to accept her. Former school president Choi Kyung-hee is now on trial over her alleged role in providing Chung with favorable treatment. “We invest blood and sweat into our studies to get into a good school, and it’s disheartening to see how everything was so easy for Chung,” high-school student Moon Jeong-ju told The Associated Press during a November protest. Bloomberg News

hina’s official manufacturing gauge held up in May, buoyed by an improving global outlook. Manufacturing purchasing managers index (PMI) remained at 51.2 for a second straight month in May, compared with a median estimate of 51 in a Bloomberg survey of economists. Nonmanufacturing PMI rose to 54.5. Numbers higher than 50 indicate improving conditions While some early indicators for May suggested a slowdown in growth is taking hold, the PMI data signal continuing momentum that gives policy makers more room to rein in financial risks. W hile economists forecast growth will meet or exceed the government’s target of at least 6.5 percent this year, projections also point to a continued slowdown after the first quarter’s surprise acceleration to a 6.9-percent pace. “China’s economy is stabilizing ahead of a modest slowdown in the second half,” said Callum Henderson, a managing director for Asia-Pacific at Eurasia Group in Singapore. “The service PMI was still very strong at 54.5, evidence that the Chinese consumer remains active.” “Whether or not growth has steadied in May, the path for the months ahead is down,” Tom Orlik, chief Asia economist at Bloomberg Intelligence in Beijing, wrote in a report. “The official PMI is indicating stability, but most other early gauges point to a further moderation in growth in May. China’s markets have also only recently recovered their footing, following the deleveraging scare.” “ T he g loba l economy w i l l continue to recover and that’ll bolster Chinese manufacturers,” said Tommy Xie, an economist at OCBC Bank in Singapore. “PMI this year will probably stay above 50. But the deleveraging campaign will inevitably slow growth as tightening measures have already pushed up borrowing costs for factories.” “While Chinese growth may have slowed from earlier this year, it looks to have stabilized at a level that is still solid and consistent with the official 6.5-percent GDP target,” said Shane Oliver, head of investment strategy at AMP Capital Investors in Sydney. “Policy is likely to continue to focus on fine tuning the economy, but it doesn’t need big adjustments.” Bloomberg News

Bombing in diplomatic area of Kabul kills 64, wounds scores

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A BUL , A fghanistan—A massive explosion rocked a highly secure diplomatic area of Kabul on Wednesday morning, killing 64 people and wounding as many as 320, sending a huge plume of smoke over the Afghan capital. The target of the attack—which officials said was a suicide car bombing—was not immediately known but Ismail Kawasi, spokesman of the public health ministry, said most of the casualties were civilians. No group immediately claimed responsibility for the blast. Both the Taliban and the Islamic State group have staged large-scale attacks in the Afghan capital in the past. A statement from the Ministry of Interior Affairs says it “condemns in the strongest terms the terrorist attack” that killed so many, including women and children. “These heinous acts go against the values of humanity, as well [as] values of peaceful Afghans,” the statement added. “These attacks also demonstrate the extreme level of atrocity by terrorists against innocent civilians.” The explosion took place at the

peak of Kabul’s rush hour when roads are packed with worktime commuters. It appeared to have gone off close to a busy intersection in the Wazir Akbar Khan district but Najib Danish, deputy spokesman for the Interior Ministry, did not have a more precise location. The neighborhood is considered Kabul’s safest area, with foreign embassies protected by dozens of 10-foot-high blast walls and government offices, guarded by police and national security forces. The German Embassy, the Foreign Ministry and the Presidential Palace are all in the area, as are the British and the Canadian embassies. The Chinese, Turkish and Iranian embassies are also located there. The Foreign Ministry in Berlin said it had no immediate information on possible casualties or damage to the German Embassy, but was working on trying to get more details from Afghanistan. The blast was so heavy that more than 50 vehicles were either destroyed or damaged at the site of the attack. “We don’t know at this moment what was the target of the attack,” Danish said. AP

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

The World BusinessMirror

Thursday, June 1, 2017

A9

Dubke resigns as WH aide

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A SHI NGTON —B ac k from overseas and confronting an unforgiving political environment, President Donald J. Trump appears increasingly isolated inside the White House, according to advisers, venting frustration over the performance of his staff and openly talking about shaking it up. But as he considers casting off old aides, Trump is finding it challenging to recruit new ones. The disclosures from investigations stemming from Russian meddling in last year’s election— coupled with the president’s habit of undercutting his staff—have driven away candidates for West Wing jobs that normally would be among the most coveted in American politics, according to people involved in the search. By the time the first change in what may be a broader shake-up was announced on Tuesday, the White House was left without a replacement. Michael Dubke, the White House communications director, said he would step down, but four possible successors contacted by the White House declined to be considered, according to an associate of Trump who, like others, asked not to be identified discussing internal matters. At the same time, talks with two former advisers, Corey Lewandowski and David N. Bossie, about joining the White House staff grew more complicated. Bossie, a former deputy campaign manager, signaled that he does not plan to join the staff, citing family concerns, one person close to the discussions said on Tuesday. It was not clear what that might mean for Lewandowski, who was the campaign manager until being fired last summer but who has remained close to Trump. A mid t his f lu id situation, Trump faces several consequentual decisions this week. He interviewed two more candidates on Tuesday to replace James Comey, whom he fired as Federal Bureau of Investigation (FBI) director this month. The latest candidates were John S. Pistole, a former deputy FBI director who was administrator of the Transportation Security Administration under President Barack Obama, and Christopher A. Wray, who served as assistant attorney general overseeing the criminal division under President George W. Bush.

Trump also must decide by Thursday whether to move the US embassy in Israel to Jerusalem, as he promised during the campaign, or sign a new sixmonth waiver delaying such a move while he tries to negotiate Middle East peace. And he has vowed to announce this week whether he will pull the US out of the Paris climate-change agreement negotiated by Obama. Whether Trump will actually reorganize his White House team remained uncertain. He has often talked about expelling people from his orbit, only to decide not to, as he did with Stephen K. Bannon, his chief strategist, a few weeks ago. Seemingly reinvigorated, Bannon is now among those leading the effort to convince the president that he needs to overhaul his operation to focus more intensely on the nationalist policy goals that animated his candidacy. Sean Spicer, the White House press secretary, on Tuesday held his first White House briefing since the president returned from a nine-day international trip, amid talk that Spicer’s own role may change. But Spicer denied that the president was dissatisfied with his staff. “I think he’s very pleased with the work of his staff,” Spicer said. “I think that he is frustrated, like I am and like so many others, to see stories come out that are patently false, to see narratives that are wrong, to see quote-unquote fake news. When you see stories get perpetrated that are absolutely false, that are not based on fact, that is troubling.” He added the president was upset at the use of “unnamed sources over and over again”. But just hours earlier, Trump posted a link on Twitter to a report on the “Fox and Friends” web site based on an unnamed source seemingly intended to defend Jared Kushner, his son-in-law and senior adviser. Trump was rebutting reports that Kushner had talked about setting up a secret communications channel to Moscow during the transition after the election. The Fox article highlighted by Trump reported that the Russians, not Kushner, suggested the channel and that it was meant as a one-time vehicle to talk about the war in Syria. New York Times News Service

Robots may defuse demographic time bomb in Germany, Japan

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apan and Germany may be sitting on a ticking demographic time bomb where aging populations begin to drag down economic growth. Good thing they’re also prime candidates for robot revolutions. Inc rea sed autom at ion a nd more use of robotic technology in these manufacturing powerhouses could help cushion the impact, according to Moody’s Investors Service. “To the extent that robots can undertake activity that require labor, they will compensate for the negative impact that a slower growth in labor force would have otherwise had on growth,” Moody’s analysts wrote in the report this month. Dependency ratios—the share of those older than 65 years of the total population—are projected to soar in both Germany and Japan. But these countries have two things going for them. Manufacturing exports in Germany, Europe’s largest economy, already make up more than a third of gross domestic product; in Japan that stands at 12 percent. They’re also both early robot adopters. About three-quarters of total global sales of industrial robotics machinery are concentrated in five countries: China, Japan, the United States, South Korea and Ger many, w ith adoption

concentrated in the automotive and electronics sectors. Among these, the three Asian countries bought abound half of global industrial robots since 2013, led by China, Moody’s says. At a time when some politicians are playing up concerns that globalization is killing domestic employment, robotics could lead to the return of some jobs that were outsourced to lower labor-cost destinations. Still, the number of jobs that will return would be less compared to the livelihoods lost earlier, Moody’s says in the report. Emerging-market countries could be the losers. Countries like Hungary, the Czech Republic and Slovakia where exports of high-tech manufacturing goods account for more than 50 percent of GDP—16 percent to 20 percent of which go to Germany alone—could be at risk. Low-wage countries like India and Indonesia would also face challenging times. “In addition, manufacturing processes could also move to other production centers that are better equipped to absorb the new technology and can compete in the supply of high-tech products,” the report says. “In either case, some emerging-market economies may lose export-market share because the new technology could change modes of production and trade patterns.” Bloomberg News

Greenpeace activists hang a banner on climate issues along a road above the beach of Isolabella, ahead of a Group-of-Seven summit on May 26 and 27, in the Sicilian town of Taormina, southern Italy. AP/Andrew Medichini

Trump advisers wage tug-of-war before decision on climate deal

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ASHINGTON—A divided White House staff, anxious corporate executives, lawmakers and foreign leaders are fiercely competing for President Donald J. Trump’s ear this week as he nears a decision on whether to pull the United States out of the Paris climate accord, the landmark agreement that commits nearly every country to combat global warming. For a president not steeped in policy intricacies, the decision is vexing. On both sides are voices he profoundly respects: chief executives of some of the world’s largest companies urging him to remain part of the accord and ardent conservatives like Stephen Bannon, his chief strategist, and Scott Pruitt, his Environmental Protection Agency administrator, tugging him toward a withdrawal from the 195-country agreement. Exxon Mobil Chief Executive Darren W. Woods wrote recently that remaining in the agreement would be prudent, part of a nearly united corporate front. Within the administration, Gary D. Cohn, the director of the National Economic Council; the president’s daughter Ivanka Trump; and his secretary of state, Rex W. Tillerson, say the US can remain a party to the accord even as the administration moves to eviscerate the Obama-era climate policies that would have allowed the United States to meet its pollution-reduction targets under the agreement. In a major climate speech on Tuesday, the Secretary-General António Guterres, exhorted world leaders to stick to their commitments to the accord, calling for “increased ambition” in the face of threats to disengage. But the voices calling for a clean break from Paris are no less urgent, tugging at the president’s gut-level instincts by arguing that remaining a party to the agreement would shackle the US economy and betray his core supporters.

22

The number of Republican senators who signed a letter urging US President Donald J. Trump to abandon the agreement

“Everybody who hates Trump wants him to stay in Paris. Everybody who respects him, trusts him, voted for him, wishes for him to succeed wants him to pull out,” said Grover Norquist, an antitax activist who had earlier posted on Twitter the “Top 5 reasons USA should withdraw from Paris ‘climate’ debacle”. Trump said on Twitter over the weekend that he would announce his decision this week, and White House officials said the president spoke again on Tuesday with Pruitt, who is responsible for unwinding the pollution-reduction efforts the prior administration had put in place during the negotiations in Paris. “He wants a fair deal for the American people,” Sean Spicer, the White House press secretary, said of Trump. “He will have an announcement on that shortly.”

Trump has given few public indications of his thinking. Inside the West Wing, advisers have believed for weeks that the president was inclined to do what he promised during the campaign: In rallies, he repeatedly vowed to “cancel” what he called the jobkilling agreement. Ivanka Trump, however, has spent the past several weeks making sure that her father has heard from both sides, according to an administration official familiar with her efforts. Her husband, Jared Kushner, a senior adviser in the White House, also favors staying as long as doing so does not legally limit the steps the president is taking to move away from the restrictive environmental standards former President Barack Obama put in place. On the other side, Bannon has been one of the most aggressive advisers lobbying the president to pull out of the agreement. Since the administration is already moving quickly to reverse the policies implemented to comply with the accord, staying in would be pointless, he argues, but would risk costing the president support from his core supporters. Meanwhile, advice is pouring in from outside the White House— much of it unsolicited. On Capitol Hill, 22 Republican senators signed a letter urging the president to abandon the agreement. Staying in “would subject the United States to significant litigation risk that could upend your administration’s ability to fulfill its goal of rescinding the Clean Power Plan”, they wrote. Sen. Lindsey Graham, Republican-South Carolina, chided his colleagues from his party, saying on CNN that pulling out of the Paris accord would amount to “a statement that climate change is not a problem, is not real”. Democratic senators took to Twitter—Trump’s favorite communication medium—over the weekend to make their case. But the corporate voices for remaining in the agreement may be the most influential. “By expanding markets for innovative clean technologies, the agreement generates jobs and economic growth. US companies are well positioned to lead in these markets,” a host of corporate giants wrote in full-

page advertisements that ran recently in The New York Times, the New York Post and The Wall Street Journal. Woods, the Exxon Mobil chief executive, wrote to Trump this month after the two men spoke by phone about investments that the company was planning in the Gulf of Mexico, according to a company spokesman, Alan Jeffers. As disagreement over whether to withdraw appeared to intensify, Woods wanted to communicate his stance directly. “By remaining a party to the Par is Ag reement, the United States will maintain a seat at the negotiating table to ensure a level playing field so that all energy sources and technologies are treated equitably in an open, transparent and compet it ive global market so as to achieve economic growth and poverty reduction at the lowest cost to society,” Woods wrote. He included an earlier letter that the company had sent expressing support for the agreement to George David Banks, the special assistant to the president for international energy and environment, who had asked the company to share its views. Env i ron ment a l ly or iented groups like Ceres, the Business Council for Sustainable Energy and the Center for Climate and Energy Solutions have brought together big companies like Apple, Ingersoll Rand, Mars, National Grid and Schneider Electric to appeal to the president to stay in. Many of them operate globally and worry that if the US abandons the deal, it would be harder to operate in existing markets and break into new ones. “It’s the right thing—we finally had a workable framework,” said Stephen Harper, global director of environment, energy and sustainability policy for Intel, who has attended several of the global climate meetings. “More than half of our market is outside the United States—our biggest market right now is China.” Tom Werner, the chief executive of SunPower, a solar-panel maker, sent letters to Trump and other administration officials arguing that companies have already made plans based on the Paris standards. “It was important to speak up,” he said. New York Times News Service

A10 Thursday, June 1, 2017 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

We must fight and defeat malnutrition

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he Philippines is seen becoming an upper middle-income economy in the next five years, behind the Duterte administration’s economic reforms and right policies. We hope this foreseen high growth would translate to equity for all Filipinos. Without economic inclusion, the poor will remain poor while the rich will become richer. Helping the poor benefit from high economic growth is the only way out for the Philippines, which is currently as bad compared to poor African countries in terms of nutrition numbers. There’s a grave malnutrition problem facing the country. Consider these facts: In 1989 Filipino children under five were 27.3-percent underweight and 44.5-percent stunted. By 2005 we reduced these challenges to 20 percent and 32.9 percent, respectively. But 10 years later in 2015 the prevalence of underweight children under five went up to 21.5 percent, and stunting to 33.4 percent. No wonder Filipinos are generally an inch shorter than the average Asean height, and are 4 inches shorter than Singaporeans, the tallest people in the region. The impact of stunting on children is quite disturbing. It starts in the first two years of life and the effect is irreversible. The consequences include delayed motor development, impaired mental development, and poor performance in school. That’s how this simple nutritional challenge becomes a huge problem with grave repercussions to the country’s future labor force. BusinessMirror columnist Joselito T. Sescon made a study in 2014 on malnutrition trends in the country to identify factors that strongly influence malnutrition trends. He discovered that food-price inflation has significant and adverse effects on all malnutrition indicators: A one percent change in food-price inflation means 0.036-percent change in the prevalence of underweight children under five years, 0.878-percent change in prevalence of stunting and 0.169 percent in wasting. Sescon said, “Food prices, excluding rice, have stronger effect on stunting on children under five, as a one percent increase in food-price inflation means 1.854-percent increase in stunting. The largest effect is reserved for underemployment, since a 1-percent change in underemployment means a 3.5-percent increase in stunting of children. Among children aged 6 to 10 years old, my estimates showed a 1-percent change in food-price inflation (including rice) means 0.054-percent change in underweight, 0.17-percent change in wasting of children 6 to 10 years old and no effect on stunting. “However, the indicator on children in subsistence families is quite puzzling. The results showed that poverty or subsistence condition does not automatically lead to malnutrition. Children’s malnutrition must have cut across among families in subsistence, poverty, transient poverty and even to nonpoor but vulnerable families above the poverty line. What the data is saying is that the challenge is so prevalent, we cannot pinpoint exactly where the problem is coming from.” The study suggested that we must have blanket interventions to children under five, starting from their conception, to prevent malnutrition. The approach, then, is to consider the challenge of malnutrition as a public good and for the government to directly intervene. For instance, it can roll out a nationwide feeding program for all public elementary schools. Aware of the negative impact of malnutrition to human capital, the Duterte administration needs to have the same zeal to fight it as the one being waged against illegal drugs. That’s because fighting and defeating malnutrition will bring us bigger dividends in the future far better than the potential gains from our current war on drugs.

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What the stock market cares about John Mangun

OUTSIDE THE BOX

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he stock market has always been like a beautiful, mysterious woman found as a character in one of those 1930s/1940s detective films or novels. Author Raymond Chandler in Farewell, My Lovely describes “her” this way: “It was a blonde. A blonde to make a bishop kick a hole in a stained glass window.” Stock-market investing is enticing. It offers an opportunity to make money that seemingly does not require much sweat or hard work. What could be better? And we know exactly what the game is about. “You like money. You’ve got a great big dollar sign there where most women have a heart.”—The Killing (1956). But investors are not blind to the reality any more than Humphrey Bogart was in The Maltese Falcon (1941). “We didn’t exactly believe your story, Miss O’Shaughnessy. We believed your

two hundred dollars. I mean, you paid us more than if you’d been telling us the truth, and enough more to make it all right”. Seasoned traders know that today’s profit can be followed by tomorrow’s losses. The greatest danger of stock-market investing is forgetting to hold a constant attitude of caution and preparation against the worst possible outcome. “If there’s one thing in this world I hate, it’s a doublecrossing dame.”—The Killers (1946) All right. Enough of the movie quotes for the moment. You get the

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in England because that event was obviously a continuation of a trend that has been going on for years. In 1992 then-US President George H. W. Bush fainted after vomiting in Japanese Prime Minister Kiichi Miyazawa’s lap. The US stock market fell rapidly. To make things worse, a “troll” called CNN television posing as the president’s physician and claimed that Bush had died. Of course, CNN immediately posted this “news” as fact without verifying with the White House. And you thought “fake news” was a new journalism disease. The event of a death of a US president is probably going to be a “trend changer”. A president getting stomach flu is not. A car bomb in Baghdad. A North Korean missile launch. A call for a president’s impeachment. None of these events are trend changers, and that is all the stock market cares about.

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Excellent contribution to the country’s legal system

✝ Ambassador Antonio L. Cabangon Chua Publisher

idea. Nevertheless, the one quality that all of these “femme fatale”— French for “fatal woman”—carry is unpredictability. You can never know exactly what she is thinking or what she is going to do next. Sort of like the stock market to a certain extent. At least, that is what many people think. But then again, you never saw Bogart as the “hard-boiled detective with a heart of gold” ever get taken advantage of by one of these “wicked women” at the end of the movie. Some people expressed surprise that the local stock market did not react negatively to the declaration of martial law, describing it as a “black swan” event that could not be predicted. Actually, it was not a “swan”; it was a “hidden lion”, waiting in the bushes. President Duterte said almost from the beginning that martial law was on the table if he was pushed hard enough. So the declaration was not a surprise. But the market does not react to events unless those events might probably signal a change in trend. Global markets did not react negatively to the recent terrorist attack

I

N habitually bashing President Duterte for his declaration of martial law in Mindanao, some of his critics always mention former President Ferdinand E. Marcos’s martial-law record as if it was really that bad without realizing that he made an excellent contribution to the country’s legal system. For instance, the laws he issued are today still embedded in our legal system, and they continue to guide and safeguard the nation and its people. From September 21, 1972, up to February 26, 1986, Marcos crafted and formulated with the help of experts 7,883 presidential decrees and other legal issuances. Justice Manuel Lazaro said these laws set the rules, regulations and penalties for almost every facet of lawful and ethical human conduct —from birth to grave. They are categorized as follows: Presidential Decrees (PD) (1 to 2036); Letters of Instruction (1 to 1525); Letters of Implementation (1 to 157); General Orders (1 to 61); Executive Orders (EO) (366 to 1093); Administrative Orders (349 to 504);

Proclamations (1081 to 2486); and Memo Circulars (599 to 1297). “These are laws and policies that impacted as well on the economic, social, political and national security life of the nation; they are designed not only for the past, but also for the present, as well as the future; and they are exclusive of the hundreds of laws that he authored and sponsored as congressman and senator for almost two decades,” Justice Lazaro added. Out of the 7,883 Presidential issuances, only 67 PDs or less than .01 percent have either been repealed or modified. The minimal percentage of 67 PDs either repealed or modified by EO 187 issued by former President Corazon C. Aquino were the decrees increasing the penalties for certain offenses against public order and

From September 21, 1972, up to February 26, 1986, Marcos crafted and formulated with the help of experts 7,883 presidential decrees and other legal issuances. Justice Manuel Lazaro said these laws set the rules, regulations and penalties for almost every facet of lawful and ethical human conduct—from birth to grave.

security, e.g., PDs 38, 1735, 1834, 1974 and 1996. Interestingly, the rationale and purpose of the PDs repealed or modified were resurrected in enacting Article 134-A of the Revised Penal Code, as amended by Republic Act 6968 (law on coup d’état). Notably, 7,816 issuances are still effective and enforced up to the present. These laws still apply and govern the nation today, Justice Lazaro said. He argued that these laws are eloquent proof of the wisdom, vision, dedication and foresight Marcos possessed in formulating them as instruments of good and effective governance. According to Justice Lazaro, no president in the country’s legal history has codified more laws as Marcos did that are still effective and are being enforced today. Worth mentioning are the 15 codified laws, with social and economic

relevance. These are the Local Tax Code (PD 231); Labor Code of the Philippines (PD 442); Real Property Tax Code (PD 464); Child and Youth Welfare Code (PD 603); Insurance Code (PD 612); Revised Forestry Code (PD 705); Code of Sanitation (PD 856); Coconut Industry Code (PD 961); Water Code (PD 1067); Code of Muslim Personal Laws of the Philippines (PD 1083); National Building Code (PD 1096); Philippines Environment Code (PD 1152); Fire Code (PD 1185); Government Auditing Code (PD 1445); Tariff and Customs Code (PD 1464); and Code of Agrarian Reform (PD 444). “More importantly,” Justice Lazaro added, “there is the Judicial Development Fund, the wellspring of the financial benefits of the members of the judiciary. There is also the Philippine Amusement and Gaming Corp., a consistent source of revenues for the country.” Compared to the Marcos years, the economic situation now is still retrogressing, instead of progressing. The country is in the worst cycle of deficit spending and borrowing. There’s nothing wrong in borrowing money as long as you use it to build more assets for the country. But if you squander it, pocket it and enrich yourself, the people will suffer. To reach the writer, e-mail cecilio.arillo@ gmail.com.

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In the power of the Holy Spirit

Receive the Holy Spirit

Msgr. Sabino A. Vengco Jr.

Alálaong Bagá

Dr. Rene E. Ofreneo

LABOREM EXERCENS Continued from A1

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ofi Annan and his staff at the United Nation Development Programme (UNDP) accepted some of the criticisms raised by the anti-World Trade Organization activists. At the same time, they adopted a balanced approach to globalization by declaring that globalization has a great capacity to do good, as well as harm (see 1999 UNDP Human Development Report). To tame the global Race to the Bottom, Kofi Annan launched a Global Compact Initiative (CGI). The idea is simple but strategic. Bring to the table over 40 of the biggest global corporations or multinationals and ask them to sign on to a global covenant where these corporations make firm commitment to respect human, labor and environmental rights wherever they operate in the planet. The well-publicized GCI launching in July 2000 was followed by an international UNDP program promoting the GCI among the biggest corporations in the different UN member-countries. There are 10 GCI guiding principles: n Human rights: Businesses should 1) support and respect the protection of internationally proclaimed human rights; and 2) make sure that they are not complicit in human-rights abuses. n Labor rights: Businesses should 3) uphold the freedom of association and the effective recognition of the right to collective bargaining; 4) the elimination of all forms of forced and compulsory labor; 5) the effective abolition of child labor; and 6) the elimination of discrimination in respect of employment and occupation. n Environment: Businesses should 7) support a precautionary approach to environmental challenges; 8) undertake initiatives to promote greater environmental responsibility; and 9) encourage the development and diffusion of environmentally friendly technologies. n Anticorruption: 10) Businesses should work against corruption in all its forms, including extortion and bribery. The foregoing GCI global campaign has been supplemented by the UN’s search for global standards on business observance of human, labor and environmental rights. In this regard, the UN Rapporteur on Business and Human Rights Prof. John Ruggie of Yale came up with the “respect-protect-remedy” (RPR framework). The RPR framework simply states that: n It is the duty of all businesses to respect human, labor and environmental rights of the people wherever they operate; n It is the duty of governments to protect human, labor and environmental rights; and n It is the duty of all stakeholders to find remedies for any business violation of human, labor and environmental rights. The RPR framework incorporates and further strengthens the 10 GCI principles into 31 guidelines. The most

important among these 31 principles is the unequivocal statement about the duty of business, to wit: “Business enterprises should respect human rights. This means that they should avoid infringing on the human rights of others and should address adverse human rights impacts with which they are involved.” This means they have to comply with all applicable laws even if enforcement of such laws in some countries is weak. In fact, business compliance has become less voluntary. This is so because in 2011, the UN Human Rights Council adopted the RPR framework and guidelines en toto. The implications for governments of UN member-states is that they have to operationalize the RPR framework, for example, clarify regulatory frameworks on business operations, government-private-sector relations in procurement, rules on business engagement in “hot spots”, such as mining in populated areas (especially by indigenous peoples), conduct of popular consultations on projects affecting different stakeholders (such as operations of energy-intensive plants), and so on. Above all, there is a need to develop a national compliance program and consciousness-raising program for businesses and all stakeholders. Now, how can the above RPR framework work in the Philippines? In the early 2000s, the Employers Confederation of the Philippines (Ecop) joined the GCI as an advocate. Not much has happened since. This year the theme of the Ecop’s Annual Conference of Employers is Corporate Social Responsibility, which is aligned with the GCI/ Ruggie Framework. For this column, the best approach is for the Duterte administration to forge a social contract with the top 50 or 100 corporations of the country and come up with specific business commitments on concrete doables under the RPR Framework. The doables should include the following: n Curbing labor abuses and tendency of business establishments to resort to short-term hiring arrangements to avoid obligations to the workers. Imagine if the top 100 corporations themselves shall take the leadership in helping regularize as many workers and support their collective demand for decent work conditions and compensation. If the social compact is led by no less than our decisive and powerful President, how can the leaders of the business community refuse? The endo system shall die naturally.

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S the finale to our celebration of Easter, Pentecost 50 days after the resurrection of Jesus focuses on the outpouring of the Holy Spirit upon the apostles. The gospel account by John (20:19-23) used every year powerfully summarizes the meaning of the coming of the Spirit upon us all, leading to the birth of the Church.

Peace be with you IN the evening of “that first day of the week,” that unforgettable day when Jesus rose from the dead, as the disciples were behind locked doors out of fear, Jesus suddenly came and stood in their midst. Although forewarned (John 14:1-27), his death had thrown them into confusion; Mary Magdalene’s report about the empty tomb was not enough to release them from the deep bend. Jesus alone could do that. His salutation of “Peace be with you” spelled it out, the message of messianic fulfilment itself. Forgiveness and healing for humanity, reconciliation and communion with God —Jesus was delivering personally

New York Times News Service

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EOUL, South Korea—President Donald J. Trump’s trip to Europe was truly historic. He left our most important allies there so uncertain about America’s commitment to their security from Russia and to shared values on trade and climate change that German leader Angela Merkel was prompted to tell her countrymen that Europe’s days of relying on the US are “over to a certain extent”, and, therefore, Germany and its European allies “really must take our fate into our own hands”. No US president before had ever put a crack in the Atlantic alliance on his inaugural tour. Historic. Merkel is just the first major leader to say out loud what every American ally is now realizing: The United States is under

new management. “Who is America today?” is the first question I’ve been asked on each stop through New Zealand, Australia and South Korea. My answer: We’re not the US anymore. We’re the new UAE: the United American Emirate. We have an emir. His name is Donald. We have a crown prince. His name is Jared. We have a crown princess. Her name is Ivanka. We have a consultative council (Congress) that rubber-stamps whatever the emir wants. And like any good monarchy, our ruling family sees no conflict of interest between its personal businesses and those of the state. So any lingering Kennedyesque thoughts about us should be banished, I explained. Let every nation know, whether it wishes us well or ill, that we shall pay no price, bear no burden, meet no hardship, support no friend, oppose no foe to assure the success of liberty—

the promised and awaited salvation. As the risen one accepted by the Father, He could now show that the reason for the gloom of His followers is actually the basis for their new joy. The wounds in His hands and side make obvious the continuity from the crucified one to the living Lord now with them. His flesh bears the signs of His sacrifice of love that restored the broken covenant between God and humankind and made peace a reality. To recognize their Lord by the signs of his passion is to enter into the joy that faith brings, enabling them to overcome the “scandal” of the cross and to appreciate His death as the loving sacrifice of the Son to his Father.

Reunited with the Father in glory and given all the power in heaven and on earth, Jesus can now share the Holy Spirit with those in the world who believe in Him (7:39). He breathed on them and said, “Receive the Holy Spirit.” God’s breath gave life to man (Genesis 2:7); now the breath of the one through whom “all things were made” (John 1:3) enlivened his disciples into new creatures, regenerated in a paschal world where the Holy Spirit has returned and where anyone who receives the Word of the Lord is reconciled with God. This Word is “spirit and life” (6:63). Jesus was identified by John the Baptizer as “the Lamb of God, who takes away the sin of the world” (1:29). He went about preaching conversion and the forgiveness of sins, claiming to himself the divine power to actually forgive sin as he absolved the woman caught in adultery (8:11). Now in giving the Holy Spirit to his disciples he is conferring on them his full power. As he promised, when he returns to the Father they will do what he does and more (14:12), because in their ministry of reconciliation the word of forgiveness is to be offered to everyone. Alálaong bagá, receiving the Holy Spirit means mission. For the

Spirit is the power of God creating and recreating humankind, healing and reconciling the world to Him. That is why the Church, the katipunan (assembly) of Christ’s disciples reborn and reshaped by the Spirit, is a community of forgiven sinners now commissioned to extend forgiveness to others and to announce to all peoples the gospel of reconciliation. In the multiplicity of gifts and charisms from the Spirit in the Church, everyone is called to be somehow an instrument of the peace the risen Lord has brought definitively to the world. The risen Lord is now in our midst in the efficacious signs of His presence and continuing action in the liturgy of the Church, most especially in the Eucharist. We participate in His peace and covenant with God even as we give each other the sign of peace. In the power of the Holy Spirit, the bread and wine become His body and blood for the life of the Church; in the same power His disciples themselves today are transformed to be peace-makers and ambassadors of reconciliation to the world (2 Corinthians 5:20). Join me in meditating on the Word of God every Sunday, from 5 to 6 a.m. on dwIZ 882, or by audio-streaming on www.dwiz882.com.

Imposition of VAT and excise taxes on goods brought into FEZs is unconstitutional

RR 2-2012 was initially questioned before the regional trial court for being unconstitutional, particularly the imposition of VAT and excise taxes on petroleum and petroleum products brought into FEZs. The Court ruled in favor of the petitioners, holding that RR 2012 is unconstitutional because it imposes taxes that, by law, are not due in the first place pursuant to the existing laws, which granted tax and duty-free incentives to FEZ locators. The Court further ruled that a revocation of these incentives by administrative regulations directly contravenes the express intent of Congress. Also, the regulations encroached upon the prerogative to enact, amend, or repeal laws,

which the Constitution exclusively granted to Congress. In GR 210588, which was promulgated in November 2016, the Supreme Court (SC) agreed with the decision of the lower court. Among others, the SC declared that RR 2-2012 illegally imposes taxes upon FEZ enterprises, which by law enjoy tax-exempt status. Likewise, the regulation effectively amended the law and thereby encroaches upon the legislative authority exclusively reserved by the Constitution for Congress. The SC cited that the law and its implementing rules grant the following: First, the law provides that importations of raw materials and capital equipment into the FEZs shall be tax and dutyfree. The specific transaction of importation is exempt from taxes and duties. Second, the law grants FEZ a preferential rate in the payment of income tax, in lieu of all national and local taxes. The tax exemption enjoyed by FEZ enterprises covers internal-revenue taxes imposed on goods brought into the FEZ, including VAT and excise tax. Further, the Philippine VAT system adheres to the cross-border doctrine. No VAT shall be imposed to form part of the cost of the goods destined for consumption outside the Philippine customs territory. FEZ cannot be directly charged for the VAT on its sales, nor can VAT be passed on to them indirectly as added cost to their purchases. Based on existing laws, enterprises within FEZs are, by legal fiction, foreign

territories. They are considered outside the customs territory. Finally, the SC held that the State’s inherent power to tax is vested exclusively in the legislature. The power to tax includes the power to grant tax exemption. Thus, the imposition of taxes, as well as the grant and withdrawal of tax exemptions, shall only be valid pursuant to a legislative enactment. The enactment of RR 2-2012, being an executive issuance, is a clear violation of doctrine of separation of powers among the departments of the government. Recently, the BIR issued Revenue Memorandum Circular 38-2017 to circularize the SC decision in GR 210588. With this, the BIR recognized that RR 2-2012 is null and void for being unconstitutional. Indeed, while the commissioner holds the power to interpret, implement and administer tax laws, he cannot go beyond the provisions of the tax laws. We hope that no similar issuance will be made in the future as said actions will always be detrimental to taxpayers.

democratic election it can, but to deter “terrorism”, something that tanks and planes are useless against. 3.) Pay us in trade concessions. And it doesn’t matter how lame those concessions are. All that matters is that Emir Trump can claim “concessions”. See the recent “trade concessions” to Trump from China. (Pay no attention to that laughter from Beijing.) 4.) Pay us by freeing any US citizen you arrested on trumped-up charges to annoy Barack Obama and to intimidate human-rights activists. See Egypt’s President Abdel-Fattah el-Sissi’s release of a US-Egyptian charity worker, Aya Hijazi, who was working with homeless children. 5.) Pay us by grossly flattering our emir about how much of an improvement he is over Obama. See President Duterte of the Philippines and Bibi Netanyahu of Israel.

6.) Be Russia, and you pay nothing. Now, if you do any one of these six things, the United American Emirate’s commitment to you—and it’s ironclad— is that you can do anything you want “out back”. You can deprive your people of whatever human rights you like out back. You can be as corrupt as you want out back. You can steal as many elections as you like out back. Just keep the arms purchases coming, the Nato dues rising, the phony trade concessions flowing and the compliments gushing—or be Vladimir Putin—and anything goes. Too harsh? Not at all. Being in Korea and seeing how much this country has grown out of poverty over the last 50 years by adopting all our values— so much so that it just impeached its president for corruption after a peaceful “candlelight” mass protest based entirely on American democratic software—it

makes you weep to think that, virtually, the only thing Trump’s had to say about Korea is that it’s a freeloader on our army (not even true) and needs to pay up. Does Trump have a point that German economic policies have dampened its imports and disadvantaged southern Europe? Yes, he does. And Nato members should fulfill the alliance’s longterm spending targets. But how much is Germany spending to absorb 1 million Syrian refugees so they won’t be joining ISIS? How much security is that buying the world? The US took 18,000 Syrians. Trump’s friend Putin took zero, but Trump never thinks about such things. It took us decades to build the Atlantic alliance, and it has brought us so many tangible and intangible benefits in the form of security, stability, growth and friendships. Trump could actually break it, not just crack it.

Atty. Julie Ann L. Aranda

Tax Law for Business

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emember Revenue Regulations (RR) 2-2012? This was issued during the previous administration purportedly due to rampant smuggling of petroleum and petroleum products, resulting in substantial revenue losses. Based on said regulations, it became mandatory for the government to immediately implement corrective measures to stop this smuggling activity to ensure the collection of correct taxes. Despite the tax and dutyfree status of goods brought into free port and economic zones based on existing laws, the regulations required the payment of value-added and excise taxes on all petroleum and petroleum products that are imported and/or brought directly from abroad to the Philippines, including those brought into free port and economic zones (FEZs). To recover the value-added tax (VAT) and excise tax, the same regulations allow the importer to apply for the refund of the tax payments. However, no claim for refund can be granted unless it is properly shown to the satisfaction of the Bureau of Internal Revenue (BIR) that said petroleum or petroleum products have been sold to a duly registered FEZ locator and have been utilized in the registered activity/operation of the locator, or that such have been sold and have been used for international shipping or air transport operations, or that the entities to which the said goods were sold are statutorily zero-rated for VAT, and/or exempt from excise taxes.

Trump’s United American Emirate By Thomas L. Friedman

Thursday, June 1, 2017 A11

unless we’re paid in advance. And we take cash, checks, gold, Visa, American Express, bitcoin and memberships in Mar-a-Lago. The Trump doctrine is very simple: There are just four threats in the world: terrorists who will kill us, immigrants who will rape us or take our jobs, importers and exporters who will take our industries—and North Korea. Threats to democracy, free trade, the environment and human rights are no longer on our menu. Therefore, no matter how unsavory you are as a foreign leader, you can be the United American Emirate’s best friend if you: 1.) Pay us by buying our weapons. I warn you, though, Saudi Arabia has set the bar very high, starting at $110 billion. 2.) Pay us in higher defense spending for North Atlantic Treaty Organization (Nato)—not to deter Russia, which is using cyber warfare to disrupt every

The author is a senior associate of Du-Baladad and Associates Law Offices (BDB Law), a memberfirm of WTS Global. The article is for general information only and is not intended, nor should be construed as a substitute for tax, legal or financial advice on any specific matter. Applicability of this article to any actual or particular tax or legal issue should be supported, therefore, by a professional study or advice. If you have any comments or questions concerning the article, you may e-mail the author at julie.aranda@bdblaw.com.ph or call 403-2001 local 312.

2nd Front Page BusinessMirror

A12 Thursday, June 1, 2017

PLDT, Globe preempted court ruling in completing ₧69.1-B SMC deal–PCC

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By Elijah Felice E. Rosales @alyasjah & Lorenz S. Marasigan @lorenzmarasigan

he government’s antitrust body on Wednesday reiterated its position that Globe Telecom Inc. and PLDT Inc. should not have proceeded with their acquisition of San Miguel Corp.’s (SMC) telecommunication assets, as the courts have yet to rule on the issue.

In a statement, the Philippine Competition Commission (PCC) decried Globe and PLDT’s move to carry on the third and last tranche of payment for its P69.1-billion joint purchase of SMC’s telco assets. “The PCC stands by its position that Globe and PLDT should not have proceeded with the payment of their final installment on the telco deal, considering pending cases filed before the Supreme

Court [SC] and Court of Appeals,” the statement read. “Completing the payment for the telco assets is a move that unduly preempts the forthcoming rulings of the SC and CA,” it added. The PCC said big-ticket deals, like multibillion-peso acquisitions, must undergo strict review by the government, given the impact it will have to public interest. “As with any transaction required

www.businessmirror.com.ph

MARAWI CRISIS FORCES DUTERTE TO SKIP VISIT TO JAPAN NEXT MONTH

The PCC may be fairly new and companies are still adjusting to the regulatory framework of the Philippine Competition Act, but they must strictly adhere to the law. Globe and PLDT should not be exempted.”—PCC to be notified to PCC, the P69.1billion deal needs to be reviewed through a market competition lens to safeguard consumer welfare over the long term,” the agency said. The PCC said the deal would have been completely reviewed had Globe and PLDT submitted the required notification. “The PCC may be fairly new and companies are still adjusting to the regulatory framework of the Philippine Competition Act, but they must strictly adhere to the law. Globe and PLDT should not be exempted,” it concluded. Globe and PLDT on Tuesday confirmed they have already completed the final tranche of the deal, defending their move as part

of the contract signed with the Ramon Ang-led San Miguel. The telcos paid the P13-billion balance to the diversified conglomerate this week. The antitrust body in April filed a petition of certiorari before the high court, seeking to lift the injunction issued by the 12th Division of the Court of Appeals with respect to the review of the transaction. A side f rom d issolv ing the writ of preliminary injunction issued by the appellate court, the antitrust body’s petition before the high court also sought to bar PLDT from completing the last tranche of payment to San Miguel. See “SMC deal,” A2

MARTIAL LAW COST DAVAO P20M IN TOURISM RECEIPTS

Executive Secretary Salvador C. Medialdea (right) delivers his speech beside Defense Secretary Delfin N. Lorenzana (center) and Military Vice Chief of Staff Lt. Gen. Salvador Melchor Mison Jr. during a session of the Committee of the Whole to review the recent declaration of martial law in Mindanao at the House of Representatives in Quezon City. President Duterte declared martial law in the south through mid-July, but lawmakers had asked for a public session of Congress to determine whether it is still necessary. AP/Aaron Favila

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he Marawi City crisis that led to the declaration of a Mindanao-wide martial law has forced President Duterte to cancel his visit to Japan next month to address the 23rd Nikkei International Conference on the Future of Asia. Presidential Spokesman Ernesto C. Abella said the Department of Foreign Affairs (DFA) has already informed its Japanese counterpart and conference organizers of Manila’s decision. He added the recent developments in Marawi City and in Mindanao requires more of Duterte’s time and attention. “We thank the Japanese government and organizers for their consideration, and both sides mutually agreed that a visit to Japan

could be rescheduled in the future. The lines of communication between the DFA and its Japanese counterpart remain open and active in this regard,” Abella said. “The Philippines highly values its close friendship and deep bilateral relations with Japan. President Duterte hopes to meet Prime Minister Shinzo Abe, whom he has fond admiration and respect, especially when the Japanese leader visited him in his hometown in Davao [City],” Abella added. The 23rd Nikkei International Conference on the Future of Asia will be attended by numerous leaders from around the globe, including Vietnamese Prime Minister Nguyen Xuan Phuc, Lao Prime Minister Thongloun Sisoulith, See “Marawi crisis,” A2

Employers less likely to hire woman who wears head scarf Continued from A1

Tourism Secretary Wanda Corazon T. Teo assures stakeholders the Department of Tourism (DOT) will continue monitoring on the ground to execute further appropriate remedial measures in ensuring that tourists, both foreign and local, are kept out of harm’s way, following the imposition of martial rule in Mindanao. Also in the photo are DOT Undersecretary Benito Bengzon Jr. (right) and Assistant Secretary Frederick M. Alegre (left). The meeting between DOT officials and stakeholders was held on May 29 at the DOT office in Makati City. DOT PHOTO By Ma. Stella F. Arnaldo

@akosistellaBM Special to the BusinessMirror

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AVAO CITY, a prime tourism destination in Mindanao, has reported losses reaching P20 million from the cancellations of bookings in hotel rooms and event spaces, due to the declaration of martial law in Mindanao. In a te x t message to t he BusinessMirror, GeneRose Tecson, Davao City’s provincial tourism officer, said: “During our meeting last Saturday, May 27, with various leaders from Davao’s tourism industry, the hotels and convention venues pegged revenue losses at P20 million due to cancellations of hotel rooms and events.” She added, “the bigger hotels, of course, experienced more cancellations because their clientele comes from outside Mindanao. But we are hoping that these cancellations convert into rebookings once the situation has normalized.” She said the cancellations were from domestic travelers, Koreans and some Japanese. “But we have had people calling our office from all over the world asking about

the situation in Davao, which, of course, is business as usual.” Tecson believes the situation will improve soon: “We are expecting a group of no less than 50 pax from the local government of Nanning, China, from June 8 to 10. They will be holding a trade and cultural show on June 9.” She stressed that, despite the martiallaw declaration in Mindanao, the group has not canceled its trip. T his developed as the Department of Tourism (DOT) on Wednesday expressed confidence that the industry will be able to withstand the current adverse impact of the martial-law declaration in Mindanao and rebound when the situation has settled. The agency is also working on informing foreign tourists of alternative destinations to Mindanao, according to its news statement. “This is just a temporary setback,” said Tourism Secretary Wanda Corazon T. Teo as she met with industry stakeholders at the DOT office on Monday. “We express full confidence in our Armed Forces of the Philippines [AFP] and Philippine National Police [PNP] to completely return Marawi City to normalcy.”

Clashes between government troops and the Maute Group, a rebel group said to have some ties to Islamic jihadists, are ongoing in Marawi City despite President Duterte’s declaration of martial law in Mindanao. Martial law was declared on May 23, after the government troops’ operation to extract Isnilon Hapilon, who heads the Abu Sayyaf, from Marawi City was foiled. Resorts even in Cebu, and local carriers reported to the DOT cancellations in bookings by foreign tourists. (See, “Tourism industry hit by martial-law declaration” in the BusinessMirror, May 30, 2017.) On his part, Jay Aldeguer, president and CEO of Cebu-based The Islands Group, which has hotels in Cebu and Palawan, said: “So far the effect of martial law has not yet taken place yet on the retail side. Our hotels have not had cancellations except for a couple in Palawan. So far, only our Davao outlet [Island Souvenirs] has seen a drop in sales. Most travelers may have already arrived, therefore, the minimal effect.” But he added, “We do, however, see some effect in the coming months due to the reported can-

cellations of hotels and resorts. If this goes on for more than a month, two things can happen; either it continues to make headlines and scare travelers off or people forget there is a crisis going on in an isolated part of the country. Sadly there has been so many of terror incidents all over the world that people are beginning to accept and are moving on quicker. If this happens, then the tourism industry won’t be as affected.” The DOT has tried to remain optimistic in the face of the cancellations of hotel and resort bookings. “A lthough cancellations have been reported, we want to inform our visitors of the wide selection of alternative destinations in Mindanao and elsewhere in the country,” Teo said. She reiterated that Mindanao can recover and regain its visitors, citing Davao City’s tourist arrivals of 459,104 for the first quarter of 2017, which is 13-percent higher from the same period last year. The DOT projects visitor arrivals in Region 12 (Davao region) to reach 3.7 million this year. (See, “Duterte phenomenon seen lifting Tourist arrivals in Davao,” in the BusinessMirror,” May 1, 2017.)

This experiment uses a method that seems like it’s becoming increasingly popular—testing different versions of résumés. Why has this technique gained ground with researchers? The first stage of the hiring process, when personnel managers select candidates for job interviews on the basis of written applications, allows a particularly cleancut test of labor-market opportunities. If two applicants of identical merit are treated differently solely because of some characteristic that is irrelevant for their ability to do the job (such as their name), economists can usually chalk that difference up to discrimination. How did you decide to study religious discrimination? Diversity trainers were telling me, “Nothing is more controversial with employers than religion at the workplace.” Companies have become accustomed to addressing issues, like age discrimination or gender bias, but not religion. Moreover, given current migration and refugee movements, it is important for Western societies to fully integrate Muslims and Muslim migrants. For this, the incorporation of these groups into the labor market and a respective labormarket policy will be crucial. Muslim women, particularly if they wear a head scarf, have a story to tell about the discrimination they encounter in the labor market—but, unfortunately, they often remain unheard by the majority population. You recently published other research on discrimination against migrant job applicants

in Austria. How do your headscarf findings dovetail, if at all, with that research? Both of these studies used the same methodology to experimentally test discrimination. Also, in both of these studies I made use of the custom that in German-speaking countries it is standard to attach photos to an application. In the Austrian study I used photos to indicate the ethnic background of applicants while holding beaut y con s t a nt . Si m i l a r to t he German head scarf study, the Austrian experiment revealed that some migrant groups face particularly high levels of discr imination. In the Austr ian study it was black applicants who faced the largest disadvantages in the labor market. W hat can companies do to rectify this kind of discrimination? One obvious suggestion is for companies to stop encouraging applicants to attach photographs to their résumés, or even to tell applicants not to submit photos at all. But that will not address the deep well of suspicion and resentment many Muslims face in Western countries. Some recent surveys suggest that Islamophobia has reached a new peak in Germany. In the US, anti-Muslim hate crimes seem on the rise again. Political parties in different countries are thriving on fostering biases against vulnerable minorities like Muslim migrants. Achieving greater social acceptance for minorities is going to be a long process—and will not just be an economic question, but a political struggle, as well. The New York Times News Service