Businessmirror june 02, 2016

VP hopefuls square off in debate

“I used to run marathons and do those things that I thought were going to be beneficial for me at this time in my life. When I got to this point in my life I did not realize...how beneficial it was going to be because I feel great.”—Smokey Robinson, crediting the habits that were instilled in him as a child with helping him maintain a healthy, active lifestyle—including being able to tour the country at 76. AP

media partner of the year

United nations

2015 environmental Media Award leadership award 2008

“The global economy is at risk of falling into a crisis beyond the ordinary business cycle if we take the wrong step.... I will think about what to do with the consumption tax, but at this juncture I have not reached a conclusion.”—Japanese Prime Minister Shinzo Abe, on a planned salestax hike next year, even as rumors swirled that he was having second thoughts with parliamentary elections looming. The last time Japan raised its sales tax, to 8 percent from 5 percent in April 2014, the economy sank into recession. AP

“It’s not an act of bravado. Being jailed is not easy and I know it.”

—Egyptian activist Sanaa Seif, writing on her Facebook page before turning herself in. When the 22-year-old was summoned for questioning on accusations of inciting protests, she refused to answer the investigating judge’s questions. She told him she would not participate in the “charade” and said the courts and prosecutors all follow the will of the government. AP

BusinessMirror A broader look at today’s business

www.businessmirror.com.ph

n

Thursday, June 2, 2016 Vol. 11 No. 236

BUSINESS GROUPS WANT TELCO DUOPOLY CLOSELY MONITORED

PCC should flex muscle on 700-MHz deal–PCCI

B

By Catherine N. Pillas

@c_pillas29

usiness groups—long tired of the poor Internet service in the country as most Filipinos are— received the news on Globe Telecom Inc. and PLDT’s acquisition of the prized 700-megahertz (MHz) band with little hope that the deal would lead to better services soon.

The key for better services is more competition.”

—Barcelon

This is why they want the Philippine Competition Commission (PCC) and the National Telecommunications Commission (NTC) to closely monitor the duopoly in the Continued on A2

INSIDE

RIVER OF HUNGRY SALMON AWAITS IN ARCTIC RUSSIA

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

Stock-market realities Outside the box

I

John Mangun

n a world where conversations are often limited to 140-character tweets, knowledge suffers. This is particularly true for the financial markets. “Financial literacy” is mainly confined to “This is an insurance policy” and “This is a bank account.” There is little depth and that is why people are generally ignorant about the markets.

Continued on A10

PNP-FEO’S NEW RULES ON TRADE OF REGULATED CHEMICALS READY

By Rene Acosta

LIFE

T

D1

commissioning RITES Crew members of the new Philippine Navy Strategic Sealift Vessel BRP Tarlac (LD601) rush to board their vessel

during the commissioning ceremony with three other vessels to coincide with the Philippine Navy’s 118th anniversary on Wednesday at South Harbor in Manila. The 7,200-ton ship is the country’s largest to date, and is capable of transporting personnel, equipment and aid during humanitarian assistance and disaster-response operations. AP/Bullit Marquez

health&fitness

Life’s ironies

Siegfred Bueno Mison, Esq.

THE PATRIOT This column, which will come out every Thursday starting today, will be a compilation of articles narrating real life stories of persons and events—as the author experienced them or those narrated to him— to inspire all Filipinos [whether in government or in the private sector; whether here or abroad] to help the Philippines in their own small way and to believe that there is still hope in the Filipino. A10

@reneacostaBM

HE National Police’s Firearms and Explosives Office (FEO) completed drafting the implementing rules of the law covering the importation, use and manufacture of regulated chemicals.

In an interview on Tuesday, Senior Supt. Cesar Hawthorne Binag, FEO chief, said the proposed rules for Presidential Decree (PD) 1866, as amended by Republic Act 9516, has been submitted to Director General Ricardo Marquez, National Police chief. Marquez has asked the PNP Legal Service to review it.

PD 1866 codifies the laws on the possession, manufacture, trade, acquisition or disposition of firearms, ammunitions, explosives or instruments used in the manufacture of firearms, ammunition or explosives.

The drafting and eventual implementation of the rules for PD 1866 was among the measures pushed by the FEO, as it worked to address the concerns raised by chemical-based companies, which complained that strict government regulations have forced them to incur losses.

The companies, mostly manufacturers registered with the See “New rules,” A2

New budget chief seeks widest deficit since 2010 I

ncoming Budget Secretary Benjamin E. Diokno will seek to widen the fiscal deficit to the most since 2010, to allow for higher infrastructure spending to boost the economy.

A “comfortable deficit target” is 3 percent of GDP, Diokno said in an interview on Wednesday, without specifying a time frame.

Full-year 2016 GDP growth could be about 6.2 percent, as expansion may slow in the second half, as election-related spending

PESO exchange rates n US 46.7240

tapers off, he said.

The potential for a wider deficit is a departure from the fiscal discipline adopted by the outgoing administration of President Aquino, which helped the Philippines win its first investment-grade ratings.

Investors may agree to the wider deficit target, as the government plans to use the additional spending for public infrastructure, Diokno said.

Incoming President Rodrigo R. Duterte, who will take office on

3% The “comfortable deficit target” of GDP for the next administration, according to Diokno

June 30, will ensure spending targets will be met to pump-prime the economy, he said. The budget deficit was 0.9 percent of GDP in 2015.

Mr. Aquino had pledged to limit the shortfall to 2 percent of GDP. Duterte expanded his administration to include a former coup plotter and held off on offering a position to incoming Vice President Maria Leonor G. Robredo.

Nicanor E. Faeldon, a former marine captain who took part in the 2003 uprising against ex-Presi-

dent Gloria Macapagal-Arroyo and a second coup attempt in 2007, will head the Bureau of Customs, the government’s second-largest revenue agency, Duterte told a briefing in Davao on Tuesday. The Bureau of Internal Revenue, which collects more than 70 percent of state funds, will be led by lawyer Cesar R. Dulay, he said.

Diokno, who was budget secretary under former President Joseph Estrada, will reprise his role, See “Deficit,” A2

n japan 0.4222 n UK 67.6517 n HK 6.0128 n CHINA 7.1027 n singapore 33.9268 n australia 33.7768 n EU 52.0272 n SAUDI arabia 12.4604

Source: BSP (1 June 2016 )

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A2 Thursday, June 2, 2016

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PCC should flex muscle on 700-MHz deal–PCCI Continued from A1

telco industry, and make sure the reverse would not happen—worse service or higher fees because a potential market competitor has been erased in the picture.

“The key for better services is more competition. [But since there is this deal already], the PCC, even if they don’t know the details yet, should advise the NTC that the consumers and subscribers will see an improvement and not translate to higher fees,” Philippine Chamber of Commerce and Industry (PCCI) President George T. Barcelon told the BusinessMirror.

Barcelon said the competition authority should flex its muscle and give guidance to the NTC in the P69.1-billion deal among PLDT,

New rules. . .

Globe and diversified conglomerate San Miguel Corp. on the 700-MHz band announced on Monday.

The PCCI head expressed reservations that despite the return of a portion of the coveted 700 MHz to the government—and the pledge of the two telcos—there is no assurance of better service to the paying public.

The country’s two major telecommunication firms earlier this week acquired the telco assets of San Miguel.

But this deal may still have to undergo review by the newly formed competition authority.

Management Association of the Philippines (MAP) President Perry Pe said how the PCC would act on this deal is keenly awaited by the business community.

“The MAP expects any decision

to be rendered swiftly because of public interest,” Pe said.

PCC Chairman Arsenio M. Balisacan told reporters on the sidelines of MAP’s general meeting on Tuesday that the commission is guided by a previously issued memorandum circular in handling the matter.

Memorandum Circular (MC) 16-001 indicates transitory rules governing mergers and acquisitions, while the implementing rules and regulations (IRR) of the Philippine Competition Act is still being crafted.

According to the MC, a merger or acquisition agreement, wherein the transaction value exceeds P1 billion, and which will be executed before the effectivity of the IRR, should notify the commission of details, such as:

Continued from A1

Philippine Economic Zone Authority (Peza), claimed that the tight regulations being observed by the FEO have slowed their production, adversely affecting exports.

The stricter rules were apparently attributed to the absence of rules covering regulated chemicals. Binag, who recently replaced Senior Supt. Elmo Francis Sarona as FEO head, said the rules should balance the need of the affected stakeholders with public safety over the sale and manufacture of firearms and controlled substances.

He said it should also standardize its implementation through a uniform and single format, standard requirement and standard implementation.

On the technical aspect, the rules should also categorize chemicals, which of them

should be covered by the law and identify the logistics provider, meaning those who should move them. The FEO currently regulates 99 chemicals and the manufacturers wanted the number to be pruned to 29.

Since the rules have not been approved, the temporary suspension of regulation or moratorium on 24 controlled chemicals was extended upon the approval of Marquez.

The Bureau of Customs has been notified about the extension in a letter to Commissioner Albert D. Lina.

The moratorium was extended until the rules have been approved by interior secretary and 15 days after the mandatory publication in the Official Gazette or a newspapers of nationwide circulation has been made.

The parties to the merger or acquisition; the type of transaction (whether a merger or an acquisition); the consideration; the key terms of the transaction; and the timing for the execution or implementation of the transaction.

Balisacan declined to comment on the issue further, but said the PCC awaiting submission of details from the parties involved in the most significant deal in the telecommunications industry since PLDT’s acquisition of the previously Gokongwei-led Digitel Telecoms Inc. in 2011.

While the finality of the telco “mega-deal” is still up in the air, if the two players seek exemption from prohibited mergers and acquisition, they must prove that the deal will lead to market efficiency.

Alvarez. . .

“Their exemption is for us to determine; the commission has the power to examine transactions, especially those that have an impact on public interest,” Balisacan said.

Section 21 of the Philippine Competition Act outlines exemptions from prohibited mergers and acquisition. Among the exemptions are if the parties can establish that the deal has brought about or is likely to bring about gains in efficiencies that outweigh the limitation on competition.

This burden to prove efficiency is pressing, as the deal gave Globe and PLDT access to the sought-after 700-MHz spectrum that regulators have given to SMC’s Liberty Telecoms Holdings Inc. unit. This practically dashed hopes for a third

Continued from A12

A good number of incumbent lawmakers said the nonpassage of several measures could be blamed to outgoing President Aquino’s apparent disdain to preside over Ledac meetings, even as the leadership of House of Representatives and the Senate held regular monthly meeting to identify and update the status of their respective priority legislative agenda.

But some of these priority measures set

by Congress, however, were opposed by the Palace, which resulted to the nonpassage or vetoing of the bills.

Among the bills opposed by the Palace under Mr. Aquino were amendments of the economic provisions of the Constitution or economic Charter change, the bill mandating adjustments

in individual and corporate income-tax rates and the proposal to raise by P2,000 the pension of Social Security System members, among others.

Also participating in the Ledac meetings are the Vice President, the Senate President, the House Speaker, seven Cabinet members, three senators, three House members and one representative each from the local governments, the youth and the private sector.

Alvarez also said the House, under his leadership, will prioritize a measure changing the country’s form of government from republican to federalism, revival of death penalty and amendments to the Juvenile Justice Welfare Act, or the so-called Pangilinan law.

player coming in soon.

Operating mobile-Internet services under the 700-MHz spectrum is cheaper and more efficient than operating under higher-frequency bands. Under the deal, the 90-percent shareholding of San Miguel in the 700-MHz band will be distributed to the two telcos and the government.

Both firms assert that they will use the assets to improve their services, with PLDT’s Smart Communications, Sun and TNT, as well as Globe and its Touch Mobile brand, pledging faster mobile Internet-browsing speeds in four to six months.

“Bigness [of a firm] doesn’t imply inefficiency; there has to be a determination of anticompetitive elements,” the PCC chairman remarked.

Deficit. . .

Continued from A1

while former National Treasurer Leonor M. Briones will head education. Judy Taguiwalo, a university professor imprisoned during the dictatorship of then-President Ferdinand E. Marcos, will be the social-welfare secretary.

Briones and Taguiwalo are the only two women to receive Cabinet posts so far. Duterte described his team to be people “of integrity and honesty.”

The incoming president hasn’t offered a position to Robredo, yet, because he doesn’t want to offend her rival in the race and his friend Ferdinand “Bongbong” R. Marcos Jr..

His friendship with the son of the former dictator is a “political reality,” he said. In the Philippines candidates for the two top offices run independently of each other, so Robredo was not on a ticket with Duterte. Bloomberg News

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Thursday, June 2, 2016 A3

State-owned shelter firms getting ready to ‘securitize’ receivables

By VG Cabuag

G

@villygc

OVERNMENT-OWNED shelter firms are making preliminary actions to harmonize their processes and documentation to “securitize” their receivables, possibly during the next five years.

Pag-IBIG Fund or Home Development Mutual Fund President Darlene Marie Berberabe, in an interview, said there are preliminary steps taken by the Housing and Urban Development Coordination Council, which include the harmonization of the documents being asked from the borrowers so these can also be sold or securitized in the future.

“In fact, we are also attempting to sell our receivables or buy the banks’ housing receivables, but they don’t want to sell it to us because they have so much money,” Berberabe said.

Berberabe said the entire industry is looking at the performance of mass-housing developer 8990 Holdings Inc., which was able to securitize P11 billion of its housing receivables from its homebuyers, called “contract to sell” (CTS).

“So there are preliminary steps we need to take for us to securitize our receivables, as well,” Berberabe added.

Securitization is a financialengineering method where the issuer of debt pools all of his debts, in the housing sector’s case involving residential mortgages, and sell these to a third party or create a financial security, such as a debt paper or a bond.

In 2014 8990 Holdings asked the approval from the regulators, the Securities and Exchange Commission (SEC), for its P1-billion securitized notes. Some 85 percent of these will be converted into a 12-year note with a yield of 7.5-percent coupon rate.

The remaining 15 percent will be used as subordinated debt or a credit enhancement used in case the house owner preterminates his contract or decides to pay the unit in full. That proposal did not get the regulators’ nod.

Several other securitization proposals in the past also did not receive the go signal from their respective government regulators.

“In fairness to the SEC, they actually understood it [securitization proposal], and they prescribed certain things that we needed to do and when we looked at it, we felt that if this is the case, why don’t we just redo everything? We have to understand why things aren’t happening as efficiently as we want to,” 8990 President and CEO Januario Jesus Gregorio III Atencio said.

The company did not push through with the issuance of bonds, but decided to sell their receivables entirely to certain banks. Its most recent agreement was with BDO Unibank Inc., the country’s largest lender, for the sale of its P3-billion CTS receivables. Last year it sold P1 billion to BPI Family Bank, P2 billion for Security Bank and P5 billion for China Bank.

Under the proposed securitization, 8990’s subsidiaries will sell CTS receivables to a specialpurpose company. The said banks will then issue three tranches of asset-backed securities to investors.

The vehicle shall use the cash flows from the receivables to make principal and interest pay-

₧11B

The amount of housing receivables 8990 Holdings was able to “securitize”

ments to the investors of the securities until each tranche is completely paid in order of seniority.

Pag-IBIG’s Berberabe, however, said the agency may not do its own securitization at this time since it still has so much cash on hand. She said other developers can do it and accelerate the current housing backlog today at around 5 million units.

“If we are holding long-term mortgages, we should be able to turn that into money we can immediately reinvest in the housing sector, instead of waiting for the contract to be fully paid. The whole market is looking at it,” Berberabe said.

Pag-IBIG Fund has about 15 million members, more than a quarter of whom are overseas Filipino workers.

In 2014 its home-loan takeouts reached P40.6 billion, the highest since 2011. For the year, Berberabe said the agency targets to lend P60.56 billion and increasing that figure to more than P70 billion by next year.

Atencio said the securitization method is a game changer for the entire housing sector since, previously, banks are not as keen on giving loans to a property company, especially to mass-housing developers since they consider the low- to midincome class has a high risk of debt default.

Atencio said 15 years ago in 2000, the developers were convincing banks to lend them money by using CTS receivables as their collateral to secure an interim loan.

“We may be struggling with the securitization today, but I’m betting that in 2025, this thing will be common, but somebody has to start it,” Atencio said.

BPO can’t prop peso up the way OFWs do

By Bianca Cuaresma @BcuaresmaBM

A

s the revenues from the business-process outsourcing (BPO) sector strongly approach the level of dollar remittances by overseas Filipino workers (OFWs), an economist said this will only have “marginal impact” on the strength of the local currency, compared to the effect of the greenbacks sent home by migrant workers.

“OFW remittances clock in at roughly $26 billion a year.

Although BPO revenues are approaching this number, we must remember that a lot of the income generated by these companies are probably repatriated to their company’s country of origin. It will help provide some foreignexchange liquidity, but not the same magnitude as that of the OFW remittances,” Bank of the Philippine Islands (BPI) research officer Nicholas Antonio Mapa told the BusinessMirror.

The remittances by our OFWs have been a long-standing source of strength to the country’s domestic consumption, thereby propping up the country’s over-

$26B The Average remittances by overseas Filipino workers every year

all GDP growth in recent years, he said.

Amid the slowdown in the growth of OFW remittances due to international developments, as well as the “maturity” of remittance volume, economists are currently looking at the fastrising BPO sector to offset the slowdown in OFW remittances.

Mapa, however, said that, while both sectors provide dollar liquidity to the country, they do not have the same effect on the economy—especially on the value of the peso against the dollar.

“The flows that actually remain in the Philippines after repatriation of earnings by foreign companies may be low and, thus, there may be only a marginal impact on the peso’s strength.

There will still undoubtedly be pressure for the peso to strength-

en, but, perhaps, not as sizable as most government officials drum it up to be,” he added.

Mapa said the BPO sector faces a “bigger threat” of outmodedness in the country in the long run.

“Currently, we do a lot of voice services that could very well be outdated as technology takes over. Phone banking may give way to apps on smartphones and this may be worth noting in order to prepare ourselves to capture other segments of the BPO call-center industry, perhaps in higher value-added services,” Mapa said.

Mapa told the BusinessMirror the BPO industry must learn to continuously evolve and adapt to avoid becoming obsolete.

“Always looking to innovate or break into new market segments as early as now will ensure that we will continue to elicit topof-mind awareness when foreign players need to offshore certain services,” he said.

“The government must also look to help develop this industry by way of improved IT infrastructure to ensure that our bandwidth is competitive not just for consumer use, but for the BPO industry, as well,” he added.

RIZALINA Mantaring (right), Sun Life of Canada (Philippines) Inc. president and CEO, with Januario Jesus Atencio, president and CEO of 8990 Holdings Inc., fields questions during the Sun Life media conference held at hotel in Makati City. ROY DOMINGO

Asean

BusinessMirror

A4 Thursday, June 2, 2016 • Editor: Max V. de Leon

www.businessmirror.com.ph

Malaysia, China see fruits of industrial-park initiative

C

hina-Malaysia twin industrial parks are set to boost investment and cooperation between the two countries, as well as in the region under the China-proposed Belt and Road initiative, officials said.

Companies from both countries signed a series of agreements on investments related to the Qinzhou Industrial Park in Guangxi, China, and the Kuantan Industrial Park in Malaysia, respectively, including an investment by Guangxi Investment Group to set up an aluminum component manufacturing facility in Malaysia.

Officials said the high level of interest shown thus far toward the twin parks underscores the longstanding partnership the two nations have enjoyed in driving economic growth in the region.

Zhang Xiaoqin, vice governor of Guangxi, told an investment

promotion conference here that the twin parks would bring about new growth and opportunities.

Since the two sides joining hands to expand the Kuantan Port less than two years ago, the port has seen doubling in both the volume of cargo it handled and its revenue, Zhang said.

The Kuantan Industrial Park was launched in 2013 and is the first in Malaysia to be jointly developed with China. Its target industries include energy-saving and environment-friendly technologies, alternative and renewable energies, high-end equipment manufacturing and the manufacture of advanced materials.

In the Kuantan Industrial Park a modern integrated steel plant to produce high carbon steel and H-shaped steel is scheduled to become operational in 2017, with an annual production capacity of 3.5 million tons.

A porcelain production plant with a total investment of $600 million is also expected to be built.

In Qinzhou the infrastructure for the first area of the industrial park is now ready for projects to move in.

Ong Ka Chuan, minister II of Malaysia’s International Trade and Industry Ministry, said Malaysia should seek the opportunities to participate in the Belt and Road initiative, to boost connectivity with the Belt and Road countries, particularly within Southeast Asian countries through institutions like the Asian Infrastructure Investment Bank.

Meanwhile, the two-day World Economic Forum (WEF) for the Asean kicked off in the Malaysian capital of Kuala Lumpur on Wednesday.

The Asean is composed of Brunei Darussalam, Cambodia, Indonesia,

Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. The association was set up on August 8, 1967, to accelerate economic, social and cultural development in the region.

Leaders of A sean membercountries are expected to attend the Kuala Lumpur forum, themed “Shaping the Asean Agenda for Inclusion and Growth.”

The program of the forum will involve three major topics: driving sustainable growth and social inclusion; mastering the fourth industrial revolution; and strengthening regional relationships.

The agenda of the meetings and speeches in the framework of the forum will include enhancing productivity through technology shifts, strengthening social-protection systems and promoting stability through efficient governance.

According to the WEF, the forum is set to launch new reports on the future of jobs in Asean countries, as well as other issues of economic development within the association. PNA

REPATRIATION Malaysian military personnel carry a coffin during a repatriation ceremony for Australian soldiers at Subang military air base in Kuala Lumpur, Malaysia, on Tuesday. The Australian soldiers, many who were casualties during the Vietnam War, were buried in Malaysia along with some dependents. AP

Golden Glory plans Singapore IPO for Myanmar property push

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olden Glory Group Pte., a developer of Myanmar real estate, is planning an initial public offering (IPO) in Singapore this year as the opening of the frontier market spurs property demand in Southeast Asia’s fastestgrowing economy.

The Singapore-based company is targeting an $80-million to $100million initial share sale, raising capital to help fund land-bank acquisitions in Myanmar, CEO Christopher Wu said in an interview in Yangon.

Myanmar’s economic opening is creating opportunities for property developers, like Golden Glory, whose fund-raising efforts could also offer foreign investors a way to participate in the country’s growth. Golden Glory is currently developing a mixed-development project in Yangon called Polo Club (Asia) Residence and an industrial

$100M

The amount of capital to be raised

by Singapore’s Golden Glory for land-bank acquisitions in Myanmar

park about 20 kilometers from the capital Naypyidaw.

Wu, 53, said the property market is “picking up speed” following last year’s elections. Separately, new laws and eased foreign sanctions are also attracting overseas investors to an economy the International Monetary Fund (IMF) estimates will grow 8.6 percent

this year, the most in Asia.

Door opens

“The door has opened,” Wu said.

“More foreign companies are setting up offices,” strengthening demand for residences, as well as office premises, while more and more people are looking for investment opportunities to beat the rate of inflation, he said.

Inflation in Myanmar is projected to be the highest in Southeast Asia over the next two years, coming in at 9.5 percent this year and 8.5 percent in 2017, according to the Asian Development Bank.

The IMF said last month it considered the country’s inflation rate an economic vulnerability as domestic demand continues to be strong and supply bottlenecks remain.

To read about how Myanmar’s currency has fared this year, click here. Golden Glory’s Yangon project

will include hundreds of high-end residential units, service apartments, a five-star hotel, shops and offices, according to the company’s web site.

Its industrial park will focus on light industries, including garments and textiles, as well as paper and pulp. Golden Glory would join listed companies in Singapore with exposure to Myanmar, such as property developer Yoma Strategic Holdings Ltd., controlled by businessman Serge Pun, and petroleum explorer Interra Resources Ltd. The company’s chairman and shareholder is Khin Maung Aye, who’s also the chairman of Myanmar conglomerate Lat War Group of Cos. The conglomerate was established in 1999 as a garment and textile contract manufacturer, and has since expanded into real estate, paper and pulp, and power generation. Bloomberg News

AEC and the human capital Asean-EU Perspective

HENRY J. SCHUMACHER

T

he launch of the Asean community and the integration of regional economies through the free movement of skilled have prompted the focus on global and Asean competitiveness. The World Economic Forum in its 2015-2016 Global Competitiveness Report is highlighting the following issues: n Reforms are needed to improve productivity to break out of the “new normal”; n Competitiveness drives resilience—the report shows that competitiveness—understood as higher productivity—is a key driver of growth and resilience; n Leveraging the human factor—at the heart of an economy’s competitiveness is its capacity to leverage talent. High unemployment figures weigh heavily on societies, risking not only prolonged lower demand, but also the deskilling of a significant segment of the labor force and growing discontent.

Let’s have a brief look how the Philippines features in Asean: Global Competitiveness Index 2015/16 Country Score Country ranking

(out of 140 countries) Singapore Malaysia Thailand Indonesia Philippines Vietnam Lao PDR Cambodia Myanmar

5.68 5.23 4.64 4.52 4.39 4.30 4.00 3.94 3.32

2 20 32 37 47 56 83 90 131

In this context, the Department of Labor and Employment (DOLE) with support of the ILO-Manila organized a very well attended Employers’ Sectoral Consultation last week to discuss issues and concerns that may affect the future of work, for instance, pay and productivity, incentive to work versus tax, wage determination, hiring and firing, and redundancy cost, among others.

While the Department of Trade and Industry presented its Comprehensive National Strategy with updates on the 47 industry road maps and on the export development plan, the Joint Foreign Chambers (JFC)presented the Arangkada Policy Notes/Briefs on the Seven Big Winners. We presented agribusiness, business-process outsourcing (BPO), creative industries, infrastructure, manufacturing, mining, tourism, medical travel and retirement, highlighted key challenges and made quite a number of recommendations.

One of the issues the JFC Team highlighted was the need to move carefully on job contracting. We understand that the new administration may have radical ideas regarding “contractualization.” We strongly suggest that the new management of the DOLE looks at the paper written

by Ernie O. Cecilia in the Philippine Daily Inquirer on May 1, called “Job Contracting 101.” Ernie explains the changing environment in which we do business today given the information and communications technology advances. He highlights legitimate job contracting where the employees are secure and obtain the benefits under the law. Most important is his focus on job creation and the dangers involved if contractualization is not fully understood. Let me quote an important paragraph from his paper: “Strictly speaking, the whole of the BPO industry with some 1.2 million employees today is a contractual arrangement between principals and the BPO companies. The BPO industry contributes tremendously to GDP growth. I doubt if government is willing to disband the BPOs, Palscon [Philippine Association of Local Service Contractors Inc.] and the cooperatives that help create jobs for Philippines.”

He then focuses on 5-5-5 and end of contract (endo), saying that this seems to be the real issue. In the Philippines probationary employment must not exceed six months. Some businesses, however, directly hire people for five months and terminate them; and then repeat the process. This practice, or better abuse, has a derogatory label—5-5-5 or endo. This practice or abuse, we all agree, needs to be addressed.

Aussie sentenced to life for drug sale in Vietnam

A

court in southern Vietnam has sentenced an Australian man to life in prison for drug trafficking.

Nathan Andrew James was convicted in a one-day trial by the People’s Court in Ho Chi Minh City this week, a court official said on Wednesday on condition of anonymity because she was not authorized to speak to the media.

James, 34, was arrested in October 2013 while checking into a flight to Australia after customs officials at the airport discovered 1.5 kilograms (3.3 pounds) of heroin hidden in his luggage.

The indictment said James owed some money to a man named Tim, who offered to write off the debt if James agreed to take the heroin hidden in two suitcases from Vietnam to Australia.

James told the court that he had

received the suitcases from the man, but denied that he knew heroin was hidden in them, an explanation that was rejected by the court, the official said.

James could have been sentenced to death, but the court took into consideration his history of mental disorders, she said.

The Australian Department of Foreign Affairs and Trade said in a statement on Wednesday that it has provided consular assistance to a man convicted in Vietnam. It did not name him.

That assistance included attending court proceedings and visiting him in prison. The statement gave no other details, citing privacy obligations.

Vietnam has one of the world’s toughest drug laws, where trafficking 100 grams of heroin is punishable by death. PNA

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Thursday, June 2, 2016 A5

Bleaching hits corals in Snake Island reefs

A

By Jonathan L. Mayuga

@jonlmayuga

team of experts conducting orientation and photo documentation in Kalumpang or Snake Island in Honda Bay, Palawan, has expressed alarm over the massive coral bleaching occurring in the area.

Theresa Mundita S. Lim, director of the Department of Environment and Natural Resources' (DENR) Biodiversity Management Bureau (BMB), said initial report revealed that as much as 90 percent of the corals in three different sites around Snake Island were already affected.

Ironically, the discovery of the dying corals came after the operationalization of Snake Island as the national marine research station of the DENR. Specifically, the activity conducted from May 10 to 13, aims to showcase the three major coastal ecosystems in the area, including coral reef, sea grass beds and mangroves.

“On a rough estimate, the coral bleaching observed on the said three areas has an average of about 75-percent to 90-percent coverage,” according to the report, a copy of which was obtained by the BusinessMirror.

The team—composed of representatives from the DENR-BMB through the Coastal and Marine Division, DENR-Palawan Provincial Environment and Natural Resources Office (PENRO), Palawan Council for Sustainable Development, Studio H2O and the UP Marine Science Institute—dived in the three sites around Snake Islands to take photos, but was surprised to see the condition of the corals.

The coral bleaching, according to the report, could be an effect of El Niño.

The same sites were earlier assessed by another team from the DENR’s Ecosystem Research and Development Bureau (ERDB) just two weeks ago and found the corals to be still in good condition.

Lim, the country’s top biodiversity expert, said there is a need to identify remaining coral-reef areas that are still healthy.

“We need to put in place appro-

₧500M The allocation received by the DENR’s Biodiversity Management Bureau to rehabilitate damaged corals this year

priate management regime in the area. We need to protect remaining reef areas that are not yet affected to protect the source of our recruitment in the process of rehabilitating the corals,” she said.

Lim said the discover y is “alarming” and needs immediate action by the DENR-BMB and various stakeholders.

“We need to look into it. This could also be happening in other areas,” she added.

According to scientists, coral bleaching happens with the loss of intracellular endosymbionts through either expulsion or loss of algal pigmentation.

The corals that form the structure of the great reef ecosystems of tropical seas depend upon a symbiotic relationship with algaelike unicellular flagellate protozoa that are photosynthetic and live within their tissues.

Coral bleaching happens because of stress caused by a number of factors, including climatechange effects, such as increase in ocean temperature, sea-level rise or ocean acidification.

Corals are important habitatforming marine species. They serve as breeding grounds of fish and serves as nursery for small fish. Corals can die if it fails to recover from extensive damage caused by bleaching.

DENR-BMB PHOTO

Lim said coral bleaching in Honda Bay could also be an effect of the disturbance in the marine ecosystem, such as significant loss of the all-important parrotfish in the area.

Parrotfish are voracious herbivores that eat the algae off of coral reefs with their beak-like teeth.

“This could be because of overfishing or destructive fishing methods in the area. There are important fish species that help coral remain healthy,” she said.

Lim said the corals may still recover, depending on the extent of the damage.

According to Lim, biodiversity is important in strengthening the resilience of an ecosystem to climate change.

“If there are illegal fishing activities, such as dynamite or cyanide fishing, we need to stop it.

Rehabilitation will depend on the cooperation of the LGUs, private sector and community. If they will

not cooperate, the entire ecosystem in Honda Bay will be lost,” she said.

According to Lim, there is a need to conduct a more thorough assessment in Honda Bay, as well as the diversity of fish and other marine life in the area.

She said the assessment should identify what are the factors that led to the bleaching of corals.

“If there are developments in Honda Bay that caused the bleaching, we must stop it. Rehabilitating corals will take time, but if all humaninduced events are stopped, such as in Tubbataha, we can see signs of recovery in just a year,” she said.

Snake Island is being developed by the DENR for several years now. As early as 1991, the DENR has introduced developments projects in the area.

It sits at the heart of Honda Bay, which means “deep bay” in Spanish. It is situated on the eastern shore of the island of Palawan near

Puerto Princesa City.

The bay is used for both subsistence and commercial fishing, as well as recreation, being a major tourist destination in Palawan.

In 2002 the DENR constructed an Offshore Monitoring Station and medium-sized structures in the area.

Environment Secretary Ramon JP Paje, signed DAO 2011-12 on November 3, 2011, which established Snake Island as the DENR’s national coastal and marine center for research. Snake Island was converted from an ecotourism destination to research center.

An initial amount of P3 million was authorized for immediate release by the DENR chief for the renovation and enhancement of the facility in Snake Island.

The initial fund was augmented by another P5 million to cover the salaries and wages of six laborers specifically tasked to guard the island, maintain its cleanliness, and effec-

tively implement the closure order to any tourism activity in the island.

The Snake Island now has at least 17 hectares of mangrove area composed of nine species.

The center of the widest portion of the island is extensively planted with mangrove trees. The cross section of which measures approximately 700 meters from west to east and is submerged in water, forming a chestdeep lagoon during high tide.

Around the island, various species of caesionid (dalagang bukid) and jacks (talakitok), are very common near the surface and at middle of the water column, while different sizes of fish such as groupers (lapulapu), acanthurids (labahita), siganids (danggit) and damsel fish (palata) are observed near the sea bottom.

The DENR-BMB was given a budget of P500 million this year to jumpstart a national program to rehabilitate damaged corals in various parts of the country.

Asia defense spending rises in China’s shadow G

lobal defense contractors are circling for business in Asia, with countries from Australia to Vietnam upgrading and adding everything from submarines to fighter jets, as China expands its military reach.

Defense budgets will keep rising, according to IHS Jane’s, which forecasts spending in the Asia-Pacific region will climb 23 percent to $533 billion annually by 2020. That will put it on par with North America, which is expected to account for a third of global defense spending by then, from almost half now.

The figures reflect a shifting strategic dynamic, as China pushes for greater influence and the US seeks to preserve decades of dominance in the western Pacific.

While military spending in Asia is coming off a low base—especially in Southeast Asia—and remains a relatively small proportion of gross domestic product, nations that for years relied on old and at-times outdated ships and planes are starting to renovate their fleets.

“There is a wide-ranging need for modernization across most of the armed forces in the region,” said Dan Enstedt, CEO of Saab Asia Pacific, whose products include submarines, missiles, radars and fighter jets. “There are many examples of old and increasingly obsolete equipment fleets that are unable to keep pace with changing national secu-

$533B The forecast combined annual defense budgets of Asia-Pacific countries by 2020

rity needs.”

Military outlays in Asia and Oceania—which includes Australia and New Zealand—grew 5.4 percent in 2015, outpacing a 1-percent rise in global spending, according to the Stockholm International Peace Research Institute. Indonesia boosted spending last year by 16 percent, the Philippines by 25 percent and Vietnam by 7.6 percent.

Bucking trends

“The unusual thing about Asia is that it is bucking the global trends,” said Richard Bitzinger, who studies military modernization as a senior fellow at the S. Rajaratnam School of International Studies in Singapore. “The trend is generally upward, though a lot of countries are erratic.”

Much of the spending is on air and naval capacity amid China’s assertiveness in the East China Sea, where it claims islets contested by Japan, and the South China Sea, where its land reclamation program has spooked other claimants.

China may declare an air defense

identification zone over the South China Sea, similar to one it set up over the East China Sea in late 2013, the South China Morning Post reported on Wednesday, citing an official it did not identify.

“The growth of China’s national power, including its military modernization, means China’s policies and actions will have a major impact on the stability of the IndoPacific,” according to Australia’s Defence White Paper published in February. A quarter of Australia’s defense investment over the next decade will be devoted to maritime capabilities, for “the most comprehensive regeneration of our Navy since the Second World War.” For a guide to China’s disputes in the East China Sea and South China Sea, click here.

President Barack Obama’s recent trip to Vietnam may lead to business opportunities, as he lifted a four-de-

cade ban on the sale of lethal weapons. The US embassy has hosted two defense contractor symposiums in Hanoi, including one last month, attended by companies, including Boeing Co. and Lockheed Martin Corp.

Doug Greenlaw, a vice president at Lockheed, said in an interview in February at the Singapore Airshow that Asia is at the core of the company’s strategy.

“The economies in Asia are growing faster than in the rest of the world—that tends to really drive security spending, so we see Asia as a growth market,” Greenlaw said.

“We have great partnerships with the countries across Asia.”

Indonesia’s goals

Still, much of the spending comes off a low base. The Philippines spent 1.3 percent of GDP last year, up from 1.1 percent in 2014, according to Sipri, while Vietnam was largely flat at

2.3 percent of GDP. China’s outlays were 1.9 percent of its economy, well below US expenditure last year of 3.3 percent of its economy.

Indonesia’s President Joko Widodo said in February he’d increase spending to 1.5 percent of GDP, if economic growth reached 6 percent this year, which looks unlikely given the 4.9 percent first-quarter expansion. Indonesia spent about 0.9 percent of GDP last year.

“Budget constraints are always a reality” given the sheer scale of modernization required in some instances, said Saab’s Enstedt.

Thailand may be one growth center this year. Defense spending will increase 7.3 percent and account for 7.6 percent of the overall budget, the Bangkok Post reported last month.

Thai list

A shift to procurement from China and Russia may signal the Thai junta is “liberating” itself from the US, a traditional supplier, the paper said. On the shopping list: 12 MI-17 transport helicopters from Russia, and four South Korean-made T-50 TH training aircraft.

Australia in April awarded an A$50billion ($36-billion) contract for 12 submarines to France’s DCNS Group, in one of the world’s biggest defense deals. The government is considering tenders for nine warships worth about A$35 billion and a A$3 billion deal for 12 offshore patrol vessels.

Indonesia, Japan, China, Vietnam, Singapore, Pakistan and Vietnam are building or buying submarines, and Thailand has indicated it will. Pakistan last year agreed to buy eight diesel electric submarines from China for an undisclosed price, much to the consternation of neighbor India, which has its own submarine program.

The greater reach of China’s air force is helping driving sales of planes.

China has deployed combat aircraft on Woody Island in the disputed Paracel chain, where it built a runway of about 3,000 meters in the 1990s, and has completed one airstrip of three it plans in the Spratly Islands.

India needs dozens of warplanes after it scaled back a big order for Dassault Aviation SA’s Rafale jets to 36. Though no quantity has been announced, Boeing, Lockheed Martin and Saab have made pitches to build combat planes in India. About a third of India’s 650 fighter jets are more than 40 years old.

“All the major defense names— Boeing, BAE, Lockheed Martin, Saab—they’ve all strengthened and established local presences in the market here in the past five years,” said Jon Grevatt, an analyst at IHS Jane’s in Bangkok.

“I don’t think defense contractors worry whether a requirement is a prestige purchase or is a genuine requirement. They’re not worried as long as they sell.” Bloomberg News

TheBroa La Niña post-El Niño: Is PHL

Business

A6 Thursday, June 2, 2016

By Rene Acosta, David Cagahastian, Manuel T. Cayon, Rea Cu, Jovee Marie N. dela Cruz, Lenie Lectura, Recto Mercene, Claudeth Mocon-Ciriaco, Jonathan L. Mayuga, Cai U. Ordinario, Mary Grace Padin & Joel R. San Juan

M

ANILA and Davao City—Two names make many people cringe in fear: Ondoy and Yolanda. These are the names of supertyphoons that brought misery, even nearly seven years after Typhoon Ondoy (international code name Ketsana) brought parts of Metro Manila under water.

After the heat, however, weathermen like Anthony Lucero are saying the country is facing a wet season under La Niña.

Philippine Atmospheric, Geophysical and Astronomical Services Administration’s (Pagasa) Lucero said there is a 50-percent chance of La Niña’s developing after the onslaught of El Niño in the country.

“We will know for sure in July,” said Lucero, Pagasa’s climate monitoring and prediction section chief.

La Niña is characterized by the cooler temperature in the Equatorial Pacific and is associated with above-normal rainfall levels. The expert said in three out of four cases where a strong El Nino occurs, La Niña follows.

“This means there is a strong possibility that La Niña may occur after El Niño,” Lucero said in a phone interview. El Niño, to note, is marked by unusually warm weather and could eventually lead to drought.

Impact

WEATHER changes impact more the poor, especially those in rural areas.

While Cid Terosa of the University of Asia and the Pacific (UA&P) School of Economics said La Niña would not be enough to dampen overall GDP, “it can impoverish many in the rural areas.”

“La Niña will lower the contribution of agriculture to GDP growth even more,” Terosa, UA&P senior economist, told the BusinessMirror.

He noted that from 2011 to 2015, the contribution of agriculture to GDP growth was below 0.5 percent.

Terosa said the country should expect “about 1-percentage-point increase in the poverty rate” if La Niña hits the country.

However, Alvin Ang of the Ateneo de Manila University said, “The impact won’t be so much on agriculture but will be more on the infrastructure and agriculture support.” Ang, who teaches Economics at Ateneo, explained typhoons could boost government spending in La Niña-affected areas.

“Offhand, the rains are welcome to replenish the catch basins as long as no significant storm will occur,” Ang told the BusinessMirror. “Nonetheless, government, particularly LGUs [local government units], must fully survey their areas to ensure that whatever damage comes will be minimized.”

Spending

ACCORDING to Communications Secretary Herminio B. Coloma Jr., the government is “implementing a comprehensive program on mitigating the harmful effects of the possible onset of the La Niña scenario as part of its overall strategy on climate-change resiliency.”

“This covers agriculture, flood control and disaster risk-reduction measures at the grassroots level,” Coloma said.

Under the 2016 national budget, a total of P129 billion has been allocated for disaster risk-reduction programs. This amount is 4.3 percent of the total budget for 2016.

Of this amount, P59 billion will go to the Department of Public Works and Highways (DPWH) to construct and maintain 1,090 structures nationwide. About P503.8 million will go to the Metropolitan Manila Development

Authority (MMDA) to repair and construct 66 flood and drainage structures in Metro Manila.

Other portions of the budget are also appropriated for measures that can indirectly provide relief to possible victims of the La Niña phenomenon.

The administration of President Aquino also embarked on a greening program which reforested 683,483 hectares of land during the past six years, aside from allocating at least P129 billion to directly address the possible effects of the La Niña phenomenon expected this year.

According to figures from the Department of Budget and Management (DBM), some 683,483 hectares of land were reforested from 2011 to 2013, or more than 250 percent more than the reforested land during the 10 years of the Arroyo administration.

The national greening program will be allotted P8.2 billion to buy 415.46 million seedlings, which will be planted over 246,524 hectares of land; while P397 million will be spent for the training of local government officials under the geohazard assessment program, which will come up with geohazard maps detailing the risk assessments and educate barangays on the use of these maps.

NDRRMC

THE National Disaster Risk Reduction and Management Council (NDRRMC) announced it is stepping up its preparations for the rainy season, wary the La Niña may bring monsoon rains that could trigger Ondoy-like flooding in Metro Manila.

NDRRMC Spokesman Romina Marasigan said this early they have been coordinating with the local disaster offices around the country, reminding them to step up and revisit their respective disaster-preparedness plans for the rainy season and even for other calamities.

At the same time, the NDRRMC is using the coordinative effort to determine and identify the gaps in all of the disaster plans of the local, provincial and regional disaster offices and assist them in fixing them or ask them to make readjustments as needed.

“Our coordination with local disaster offices and even officials is continuing in order to make sure that they are ready and prepared for the rainy season, including against typhoons and even possible flooding,” Marasigan said.

She said a full council meeting has been scheduled in the middle of June to assess the preparation and readiness of the government for the rainy season and La Niña, with the possibility of stronger typhoons as scenarios.

Initially, part of the disasterpreparedness plans has been the initiation of flood-control measures, particularly in Metro Manila, wherein silted creeks and waterways were cleaned and declogged of trash and other debris.

Around the country, equipment and supplies have been moved and prepositioned for humanitarian assistance and disaster response, while additional evacuation centers were put up, cleaned and identified.

“These [steps would] ensure we will have effective response

₧129B The total amount allocated under the 2016 national budget for disaster riskreduction programs

once strong typhoons struck and the possibility of flooding occurs,” Marasigan said, adding the NDRRMC is also communicating and coordinating with other agencies of the government without letup for the preparation.

Chief’s review

THE incoming chief of the country’s two disaster-response agencies said he would review the current direction of the disaster preparations and forecasting with focus on plucking out the best highlights during the worse disasters that ravaged the country so far.

Retired Brig. Gen. Ricardo Jalad, named to head the NDRRMC, said he would be interested to look at why the Army “seemed to be the last recourse and resort during calamities.”

“It’s the experience of the Army that it is usually the one that eventually does most of the operations to reach the affected places and conduct rescue,” Jalad said.

“It’s also the same with the nongovernmental organizations that are also the first responders, rather than the government.”

According to him, what is usually lost during disasters “are the capability cooperation and coordination of government agencies.”

Jalad said this commonly happens “because the rescuers and many government personnel have become victims themselves.”

When asked why it was usually the Army that could act quickly, Jalad said “it is because of our location away from disasters.”

He said he would also study the practice of the Compostela Valley provincial government when it would move its rescue and disaster teams away from the path of the typhoon, for instance, to enable them to move easily and quickly to the ground zero of the disaster.

Jalad said he would use the strength and capability of the two disaster agencies under him, the NDRRMC and the Office of Civil Defense, of which he is the executive director.

For now, the directions of the two agencies are “to improve capabilities of rescue and disaster teams, and to strengthen the coordination among government agencies.”

Jalad was the commander of the 2nd Mechanized Brigade stationed in Iligan City when Typhoon Sendong struck northern Mindanao in 2011 and killed or sent missing almost 2,000 residents. Iligan City was one of the hardest hit by that typhoon.

Jalad was later assigned as the commander of the 5th Infantry Division in Isabela.

MMDA skeptical

HOWEVER, an official of the MMDA expressed doubts the metropolis is ready for another Ondoy-like disaster.

Bal Melgar, MMDA Flood Control

In this October 4, 2009, file photo, a man searches for recyclables through debris from Typhoon Ondoy in Marikina City. Ondoy killed at least 288 people and damaged the homes of 3 million. AP/Wally Santana

and Sewerage Office chief, said the agency is exerting all efforts not to let another type of disaster become a bitter lesson for urban dwellers.

Melgar said the agency’s flood-control team continuously cleaned, desilted and dredged rivers, canals, ponds, creeks, esteros and other major waterways all over the metropolis. He said there are 273 creeks and rivers they focused their energy into.

Melgar noted that uncontrolled dumping of waste was one

of the aggravating factors during the massive flooding brought by Ondoy in 2009.

The cleanup of waterways aimed to maximize Metro Manila’s waterways being able to convey bigger volumes of flood waters, he explained.

Melgar also assured that all 54 MMDA pumping stations are fully functional. Each engine, he said, is capable of pumping 350 drums of flood water per second.

“These pumping stations are vital for flood mitigation because

Manila’s elevation is only a little higher than the main sea level,” he explained.

Melgar pointed out there is a design capacity within the flood-control structures, enabling the excess waters to overflow and cause flood when they reach their limit.

“Our flood-control structures have a design capacity that can only accommodate a certain rainfall intensity,” he explained. But the MMDA has yet to use the newly installed pump engines.

aderLook

sMirror

www.businessmirror.com.ph | Thursday, June 2, 2016

A7

L ready for deluge of misery?

PEOPLE and vehicles navigate through neck-deep waters in the aftermath of Typhoon Ondoy in Marikina City. nonie reyes

es (DENR) believes LGUs could be more prepared against rain-induced disasters, such as flood and landslide, if their respective personnel use geohazard maps.

Director Leo Jasareno of the DENR’s Mines and Geosciences Bureau (MGB) said if properly used, the geohazard maps will help LGUs minimize casualties and make communities more resilient to natural calamities.

The geohazard maps, at 1:10,000, are in place for raininduced floods and landslides, according to Jasareno.

“As the records will show, based on the most recent strong typhoons like Lando, the level of preparedness of LGUs has been demonstrated,” Jasareno said. “Iyong acid test ng LGUs during the past big typhoon incidents shows that they have shown preparedness.”

According to Jasareno, Central Luzon is still the most flood-prone regions in the country. Nueva Ecija, Pampanga and Bulacan are among the most vulnerable.

“In general, the entire Central Luzon is the most flood-prone,” he said, citing the National Capital Region (NCR) as one of these areas.

Some parts of Isabela, including Ilagan, which is attributable to the overflow of the Cagayan River, are also prone to massive flooding, as is Mindoro Oriental.

In Mindanao, Jasareno cited Maguindanao, Agusan del Norte and Butuan. Towns in Southeastern Mindanao should also be ready for potential landslide events, Jasareno said.

Prone to landslides are towns in the eastern seaboards from Nueva Vizcaya, Aurora and Quezon in the Cordillera region, including Benguet and Southern Leyte.

Market readiness

Melgar reiterated his call for households to adhere to the doorto-door garbage- collection scheme where they can only take out their refuse when the garbage trucks arrive.

The MMDA said that the majority of the more than 8,000 metric tons of garbage collected in Metro Manila on a daily basis is comprised of plastic.

Local initiative

AN official of the Department of Environment and Natural Resourc-

ACCORDING to the Department of Finance (DOF), the insurance industry has evolved and learned from the bitter lessons brought by Ondoy and Yolanda.

Finance Undersecretary Gil S. Beltran noted that interest rates had minimal or no movement after Ondoy and Yolanda hit the country.

Time deposit and lending rates decreased, according to Beltran, undersecretary on policy development and management services group.

“Interest rates barely moved after Ondoy and Yolanda,” he told the BusinessMirror. Beltran explained that in 2014 after Yolanda, time-deposit rates even declined from 1.5 percent in November 2013 to 1.1 percent the next year.

He said lending rates “also de-

clined from 5.7 percent to 5.6 percent early the next year.”

Beltran also explained that after the country experienced the typhoons, the volume of loans being borrowed increased from 7.6 percent in November 2013 to 8.9 percent

by December of that year. This was partly due to the increase in number of people needing financial services or assistance after the calamity.

“If at all, loan volumes rose by 8.9 percent in December 2013, from 7.6 percent in November, when the typhoon struck,” he said.

Beltran said the insurance industry is better prepared now compared to when Ondoy and Yolanda hit, “in the sense that there is an increase in the coverage of microinsurance among the Filipino people.”

According to him, there are now 37.5 million Filipinos covered by microinsurance, compared with the 20 million covered before Yolanda in 2013 and the 3.1 million in 2009 for Ondoy.

The continued developments in microinsurance and the broadening of its coverage in the country also better prepared the industry. It was also noted that the efforts of the Insurance Commission in fostering the developments for microinsurance aided in the preparation against problems La Niña can bring.

Power sector

ENERGY stakeholders, meanwhile, are set to hold meetings with owners and operators of power plants, particularly hydro, to discuss the measures that would be put in place to prepare for the rainy season.

“There are coordination meetings scheduled with plant operators of hydro,” Energy Assistant Secretary Patrick Aquino said.

The National Power Corp.

(NPC), which manages 17 large dams, including Angat, and 11 watersheds in the country, has launched an information, education campaign (IEC) in preparation for La Niña.

“Actually, we were already coordinating with the communities where the dams are nearby located to help them prepare for La Niña,” NPC President Gladys Cruz-Santa Rita said.

She said the IEC focuses on flood forecasting and warning system for dam operation.

Aside from IEC, the NPC is currently conducting preventive maintenance of rainfall and waterlevel equipment to ensure efficient data gathering during events of severe weather disturbance.

It also regularly conducts damsafety inspections to ensure stabil-

ity and integrity of dam and appurtenant structures.

The NPC has also put in place emergency action plans with the coordination of the local government units.

Meanwhile, the Manila Electric Co. (Meralco) declared it is fully prepared for La Niña. The utility firm said it continues to invest heavily on weather- and storm-resiliency projects for improved resiliency.

In particular, Meralco is currently replacing its wood posts to concrete or steel.

“It has been advised already that we are bracing for La Niña, anticipating severe weather conditions, including strong typhoons,” Meralco Spokesman Joe Zaldarriaga said.

“Patuloy ang investments namin sa aming distribution facilities, making sure we are ready to face any type of weather condition.”

Customs

FOR the Bureau of Customs (BOC), Commissioner Alberto Lina said there is a need for the agency to hire a meteorologist to alert them of incoming typhoons and prepare them for possible disruptions of port operations in the country.

“So that if there would be a typhoon, whether there is a Customs district there or not, we would know,” Lina said in justifying the need for a meteorologist.

Lina admitted that knowing the changes in the weather is crucial in the agency’s day-to-day operations.

However, he said currently there is a shortage of meteorologists in the country, as some of the experienced weather analysts from the Pagasa have sought greener pasture.

“If there is heavy flooding, we have no [revenue] collection [because there is no operation so we are] affected,” Lina lamented.

The hiring of meteorologists is being done even by some private logistics firms and airlines, he said.

Since the BOC is in the logistics, Lina explained, it is but logical for the agency to get a weather expert to advise them and help them plan early if there is an approaching bad weather.

Lina pointed out that monitoring the weather is very important and that even in some advanced countries, the first thing that people watch on television when they wake up in the morning is the weather channel.

While disaster preparedness is beyond the BoC’s initial scope, the agency can assist in expediting the logistical requirements of goods intended for those affected by calamities.

During the onslaught of Yolanda, the BoC issued a memorandum enjoining all personnel to consolidate all efforts in the solicitation of relief goods they intend to donate.

The agency also tasked the General Services Division and the Customs Police Division to ensure the proper security, storage and movement of goods within the BOC compound at the Port Area.

Foreign aid

DEPARTMENT of Foreign Affairs (Dfa) Spokesman Charles Jose said that in the aftermath of Yolanda, the “Philippine government further developed its disaster riskreduction management system, which includes its capability to process and efficiently implement foreign aid.”

The DFA, as a member-agency of the response cluster of the NDRRMC, is the lead agency of the International Humanitarian Assistance Cluster (IHAC).

The IHAC’s core members include the DFA, the OCD, the departments of Education, Finance, Health, National Defense, Social Welfare and Transportation and Communications. It also has the BoC, Burea of Immigration and officials of the Armed Forces of the Philippines as members.

The IHAC aims to ensure efficient and effective implementation of rules and regulations attendant to international humanitarian assistance.

Since its inception in the fourth quarter of 2014, Jose said IHAC has met seven times to draft the guidelines, which are being subject to finalization.

“The policies of these guidelines were developed in the aftermath of Yolanda and are primarily geared toward natural disasters,” Jose said.

The guidelines that govern IHAC cover the three components of IHAC, namely, international humanitarian workers, financial donations and relief goods and equipment.

These guidelines primarily aim to provide coordination between the various agencies involved in IHAC, according to Jose.

Lawmakers speak

A lawmaker on Wednesday said the negative impacts of La Niña can be addressed through proper land-use planning.

House Committee on Agrarian Reform Chairman and Liberal Party Rep. Teddy Baguilat of Ifugao said the government should ensure all establishments are not located in hazardous areas.

“Both El Niño and La Niña are disastrous consequences of climate change,” Baguilat said. “The negative impacts can be mitigated if we have proper land-use planning to ensure that residential and commercial establishments are not located in hazardous areas.”

He cited the need to pass the National Land Use Act, which he said will also protect critical watersheds from being degraded further.

“Watersheds are important in minimizing erosions and landslides, which La Niña can engender.”

The proposed act provide for a “rational, holistic and just allocation, utilization, management and development of the country’s land resources to ensure their optimum use consistent with the principle of sustainable development.”

House Committee on Climate Change Chairman and Party-list Rep. Rodel Batocabe of Ako Bicol said there must be a paradigm shift in the country’s policy on treating La Niña or El Niño.

“These phenomena are the new normal which must be addressed continuously through continuing programs and appropriations,” Batocabe said. “It is not enough that we just merely tag programs and projects as climate-change projects.”

Currently, Batocabe said the budget for the various climatechange mitigation and adaptation programs of the government, particularly those aimed at ensuring food security, was included in the 2016 General Appropriations Act.

The Pagasa has warned that climate change might affect food production in the country as the dry and wet spells brought about

by El Niño and La Niña will greatly and directly impact the agricultural production.

The Joint House Special Committees on Food Security and Climate Change, citing Thelma Cinco, head of Pagasa’s impact assessment and applications section, said the country will experience an average of 19 weather disturbances yearly, especially during the last quarter of 2016.

According to Pagasa’s Lucero, if La Niña does develop, the Philippines would feel its full impact by November to February 2017. He identified 10 provinces lying along the eastern coast of the country as the most vulnerable during this period.

The weather agency is “working with our regular budget,” he said, adding Pagasa also received about P450 million as replenishment for its quick-response fund.

Such fund, however, has already been fully utilized for rehabilitation efforts after Lando and Nona, as well as El Niño, he said.

The decision to implement other interventions, as well as the request for additional budget, may be left to the next administration, DA Field Operations Service Director Christopher Morales told the BusinessMirror.

Roehlano M. Briones of the Philippine Institute for Development Studies (Pids), meanwhile, said the next administration need not worry as despite El Niño’s wrath, the economy grew.

Even after El Niño had a large local effect in the agriculture sector and area, “nakita mo naman buong economy nag-grow 6.9 percent yearon-year on quarter one,” Briones, Pids senior fellow, told the BusinessMirror. “So even at its worst, GDP as a whole, maaaring not that strong ang impact [of La Niña]. The worst case will be we’ll have a similar contraction of agricultural GDP because of the La Niña.”

Briones further explained that after recovering under a rainy season, “magkakaroon ng continued contraction.”

“I’m not that pessimistic kasi flooding I think is more of an urban problem compared to the impact [of La Niña] on agriculture,” he said. “It takes a lot of flooding to seriously damage a rice crop kasi it’s really a water-intensive crop.”

BusinessMirror

World The

A8 | Thursday, June 2, 2016 • Editor: Lyn Resurreccion

Surveys reveal China factory output weak H 6.7 ONG KONG—China’s factory activity was feeble last month, according to two surveys released on Wednesday, indicating that official efforts to reverse a downturn in the world’s second-biggest economy are struggling.

The country’s massive manufacturing sector, which employs many millions of workers, eked out a tiny expansion in May, according to an official index by the Chinese Federation of Logistics & Purchasing, which came in at 50.1, level with April’s reading.

The index is based on a survey of factory purchasing managers and uses a 100-point scale, on which numbers above 50 indicate expansion and below 50 indicate contraction.

It’s the third straight month the index has shown marginal growth.

Beijing has unleashed stimuli to battle a prolonged slowdown but has little to show for its efforts, with growth falling to a seven-year low of 6.7 percent in the first quarter of the year. Its efforts are being hobbled by weak demand from consumers in China and in wealthy export markets, with exports shrinking by 1.8 percent in April, according to figures

The percentage of growth of China in the first quarter of the year

released last month.

The official data, released by China’s national statistics agency, also showed production expanded while new orders grew at a slower rate. But in a sign of weak global demand, new export orders showed no change.

Separately, the private Caixin/ Markit survey was more pessimistic, with activity falling to 49.2 in May, from 49.4 the previous month.

Total new business fell for the first time in three months while new export orders declined for the sixth straight month, Caixin said. AP

In this May 31 photo, a staff member works in the workshop of an optical fiber and cable-manufacturing company in Wuhan in central China’s Hubei province. China’s factory activity was feeble last month, according to two surveys released on June 1. AP

Americans unsure about ability to pay for long-term care–poll

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HICAGO—Demand for longterm care is expected to increase as the nation ages, but the majority of Americans 40 and older lack confidence in their ability to pay for it.

The annual cost of long-term care expenses range from $17,680 for adult day care to more than $92,000 for a private room in a nursing home, according to Genworth Financial.

Yet, an Associated Press-NORC Center for Public Affairs Research survey finds that a third of Americans 40 and older have done no planning for their own long-term care needs, such as setting aside money to pay for a home aide or to help with daily activities or a room in a nursing home.

Why? The poll says about 4 in 10 don’t think they will ever need long-term care.

“I’m very healthy at 68 and I really don’t have any impending and current problems. I’m self-sufficient,” said Brad Woolsey of a small community near San Francisco, California.

That mind-set runs counter to figures from the US Administration on Aging, which says nearly 70 percent of people turning 65 will need help with daily activities in their golden years.

Worried, unsure

MEDICAID, the health insurance for the poor and people with disabilities, is the primary payer of long-term care, spending $146 billion in 2013. Nearly $89 billion was just for seniors.

But the survey found that nearly 4 in 10 respondents mistakenly expect

to turn to Medicare, which doesn’t pay for long-term care. Respondents with incomes below $50,000 were more likely to expect to rely on government programs.

Jeanie Powell, 58, of Albuquerque, New Mexico, said she was confident she could afford long-term care until about a year ago when she learned that her insurance policy would cover only $1,000 per month in an institution.

“It won’t even put a dent in the cost,” Powell said.

Powell said she bought her policy in the 1990s, before she was diagnosed with multiple sclerosis. Now she is worried and unsure about what she’ll do. She stopped working in 2002 and her health continues to deteriorate.

“I have good days and bad days and days I can’t tolerate the pain,” Powell said.

Health, education

AT the other end of the spectrum, 36 percent of older Americans expressed confidence in their ability to pay for long-term care, up from 27 percent in 2013, the first year of the survey.

Those figures are consistent with other measures of consumer confidence following the Great Recession of a few years ago, according to a report by the Conference Board cited by the survey.

In the latest survey, another 36 percent said they feel just somewhat confident and 24 percent said they are not too confident or not confident at all.

Men were more likely than women to be confident, and so were older Americans with higher incomes, bet-

ter health and more education.

Robert Nadel, of San Diego, California, said he has always feared not being able to care for himself later in life.

“In our family, we didn’t send someone to the nursing home,” Nadel said, adding that he grew up with his grandparents. “Nowadays, it isn’t that way.”

Great Recession

NADEL, 44, doesn’t have children, and though he has nieces and nephews, he knows he will be on his own.

This awareness has made planning for the future a priority, even in difficult times, he said. When he lost his job during the Great Recession, he borrowed money to continue making the monthly payments on his long-term care insurance policy.

“Even if I get sick,” he said, “I’ll be OK.” The more in control people feel about the world and their life, the greater the sense of confidence in their ability to plan for the future, said Kit Yarrow, a professor emerita at Golden Gate University in San Francisco who specializes in consumer psychology.

The AP-Norc Center for Public Affairs Research survey was conducted from February 18 through April 9, with funding from the Scan Foundation. The nationally representative poll involved landline and cell-phone interviews with 1,698 Americans age 40 or older. It has a margin of sampling error of plus or minus 3.4 percentage points. AP

India tops world slavery list, but activists see improvement N EW DELHI—Activists against forced labor said on Wednesday that while India tops a recent global slavery index, the situation is improving in the South Asian nation, thanks to public awareness, legal reforms and police-backed raids on factories employing workers illegally.

The Walk Free Foundation counted some 18.35 million modern slaves in India in its index of modern slavery released on Tuesday, or 40 percent of a global total of 45.8 million, an estimate 10 million higher than the group last reported in 2014.

The figures include children and adults forced into labor, often unpaid or to pay off a debt, as well

as child brides, child soldiers and migrant workers.

Officials with the Indian Labor Ministry did not immediately respond to calls for comment.

Experts and activists said, however, that while the problem has persisted for years in India, there are signs that the situation is improving.

“We get 20 complaints per day from family members and public in general” reporting labor abuse—a sign that awareness of the problem was growing, said Ramesh Senger from Nobel laureate Kailash Satyarthi’s charity Bachpan Bachao Andolan, or Save the Childhood Movement.

He noted that India’s carpet

industry used to employ 300,000 trafficked children just a decade ago, but that the number has come down to an estimated 5,000 to 10,000. Meanwhile, the number of children forced to work making plastic bangles in parts of the northern state of Uttar Pradesh is now negligible, whereas thousands worked in the industry 10 years ago.

India’s garment-industry hub in the Indian capital has also eliminated child labor, Sanger noted as an example of how police-backed raids can make a difference. “We rescued nearly 400 children in the area between 2012 to 2014,” he said. “The garments industry in the area no

longer employs child labor.”

The global index showed China with the second highest number of modern slaves, 3.39 million, out of 167 countries surveyed for the report. China’s foreign ministry did not immediately respond to a faxed request for comment.

North Korea was found to have the highest per capita rate of modern slavery, with 4.37 percent of its population affected.

In India the problem of slavery—including child marriage and bonded labor—has long been a challenge and cause for shame.

Many saw the 2014 Nobel Peace Prize for children’s rights activist Satyarthi, who was awarded along with Malala Yousafzai of

Pakistan, as a sign that India would be forced to improve.

But child labor is widespread despite India’s rapid economic growth over the past decade. Millions of children are forced to work, some as young as 5 or 6. Many end up in difficult and sometimes toxic jobs including rolling cigarettes, mining in stone quarries, dying leather in tanneries. Laws meant to keep kids in school and out of the workplace are routinely flouted.

On Monday the Indian government published draft legislation to curb human trafficking without punishing its victims.

“At present the law says the trafficked and the trafficker are both criminals and they both go to jail.

Now, we are saying the victim will not go to jail,” said Maneka Gandhi, the government’s minister for women and child development, according to Press Trust of India.

But some blamed the government for maintaining an economy where bonded labor can still flourish thanks to high unemployment of around 10 percent and abject poverty in the countryside.

“The laws are there, but there is no political will on the part of the government to implement them,” peace activist Swami Agnivesh said. “The government can’t afford to annoy rural rich, as well as the urban rich who are exploiting the situation.” AP

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New austerity measures in Greece tap café culture

A

THENS, Greece—Greeks have woken up to a new wave of price hikes that have been demanded in return for more international bailout loans, with the highest increases targeting the main ingredients of the country’s café culture: Coffee and beer. Starting on Wednesday, Greece’s main sales-tax rate, or value-added tax (VAT), went up from 23 percent to 24 percent.

Taxes were also raised on services used heavily by Greeks forced to cut back on leisure activities due to the financial crisis. Charges increased on Internet, fixed telephone and pay TV subscriptions.

The measures were approved by parliament before Greece’s partners in the 19-country euro zone agreed to unfreeze ($11.5 billion) in bailout funds and begin discussions on easing Athens’ debt repayments.

Greece’s lef t-w ing gover nment also overhauled pensions a nd sig ned up to a mbit iou s budget targets. Business owners have criticized the latest tax hike, saying it will hit consumption in a country already reeling from six years of a financial crisis that has seen the economy shrink by a quarter and unemployment levels swell—currently, the jobless rate is hovering around 24 percent.

“The sixth VAT increase in six years and the second in the last 10 months means that our lives from June 1 gets more expensive by €437 million per year, while each increase acts as a cut to consumption, turnover and state income,” said Vasilis Korkidis, head of the Hellenic Confederation of Commerce and Entrepreneurship.

Coffee-shop owner Katerina Vagena noted that this was the second hike in consumer tax on coffee in the space of a year. Last year it was raised a whopping 10 percentage points to 23 percent as part of the country’s third international bailout deal. AP

Testy Trump takes his war with the press to a new level

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ASHINGTON—Donald Trump’s heated war with the media reached new heights, as he turned the brag-worthy feat of raising $5.6 million for veterans’ charities into a sparring match with reporters pressing him on the issue.

“The press should be ashamed of themselves,” a defensive Trump railed during a Tuesday news conference at Trump Tower, called to announce a list of 41 charities that received a cut of the money he raised during a highly publicized January fundraiser.

The presumptive Republican presidential nominee had previously declined to disclose which charities had received the $6 million he’d claimed to have raised, and his campaign had gone back and forth about how much pledged money had come through. The Washington Post had pressed for an accounting of the donations, and several charities said they received checks just last week.

Throughout Tuesday’s 40-minute question-and-answer session, Trump accused the media of being “unbelievably dishonest” in their treatment of him.

“I sent people checks of a lot of money.... And instead of being like, ‘Thank you very much, Mr. Trump,’ or ‘Trump did a good job,’ everyone’s saying: ‘Who got [the money]? Who got it? Who got it?’

And you make me look very bad,” he complained. “I have never received such bad publicity for doing such a good job.”

Sleaze

WHILE Trump has frequently made the media a punching bag,

41 The number of charities that Donald Trump said received a cut of the money he raised during a highly publicized January fundraiser.

calling out reporters during his signature rallies, the taunts on Tuesday were intense, even for him. The billionaire mogul interrupted his recitation of the list of groups receiving portions of the money to complain about the way reporters had called up charities to try to verify his contributions.

He called the political press “disgusting” and dismissed one ABC News reporter as “a sleaze.”

While Trump’s fundraiser, held opposite a Fox News debate he chose to boycott, should have been a positive story for Trump, his campaign’s refusal to disclose details about the money raised became a sticking point. Trump insisted on

Tuesday that “most of the money went out quite a while ago,” but that didn’t seem to be the case.

The Associated Press spoke or left messages with each of the organizations Trump named. Of the 26 groups that responded by Tuesday, half said they had received checks from Trump just last week.

Several said the checks were dated on or about March 24 and shipped out by overnight express—the same date as a Trump interview with The Washington Post, which for weeks had been pressing his campaign to disclose the recipients of the millions raised during the splashy telethonstyle fundraiser in Iowa.

Ritzy

INDEED, more than a dozen big checks were rushed out of New York early last week, bound for veterans charities around the country. The largest, a $1-million check dated May 24 and drawn from Trump’s personal account, was addressed to the Marine CorpsLaw Enforcement Foundation, a small Tuckahoe, New York, group that provides scholarships to the children of fallen Marines. The foundation had presented Trump with an award at its 2015 gala held at a ritzy New York hotel.

Trump’s campaign manager, Corey Lewandowski, had originally told the Post that the Iowa event had raised about $4.5 million— less than the $6 million originally announced by Trump—because some who’d pledged contributions had backed out. Appearing Tuesday on CNN, Democratic presidential front-runner Hillary Clinton said she was glad Trump had finally given out the promised money.

“The problem here is the difference between what Donald Trump says and what Donald Trump does,” Clinton said. “He’s bragged for months about raising $6 million

for vets and donating $1 million himself, but it took a reporter to shame him into actually making the contribution.”

Trump repeatedly insisted during the news conference that he didn’t want “credit” for the contributions. However, he hadn’t appeared shy about giving away poster-size checks at campaign events in the weeks after the fundraiser.

Timing

ON January 30, just before the Iowa caucuses, he gave a $100,000 check to the Puppy Jake Foundation, which provides service dogs to wounded veterans. Representatives from the foundation, accompanied by several service dogs, accepted the check at the Adler Theater in Davenport, Iowa, where Trump was being interviewed on stage.

The next day, in Council Bluffs, Trump presented another check, also for $100,000, to Partners for Patriots, which also provides service dogs to disabled veterans.

The public check presentations trickled off within days, though some of the groups contacted by The Associated Press did report receiving checks in Februar y, March and April. Trump spokesman Hope Hicks denied Tuesday that timing had anything to do with questions from the media.

“Mr. Trump’s team worked very hard to complete this lengthy process prior to Memorial Day Weekend,” she said. The campaign also said it had taken months to carefully vet each of the groups receiving money.

Trump, who has refused calls to moderate his tone and temperament, also said he has no plans to change his tone with the press if he’s elected to the White House.

“Yeah, it is going to be like this,” he said of potential future news conferences led by a President Trump. AP

Young activist shows anger at Egypt’s courts C

A IRO —Eg y ptian activist Sanaa Seif decided she had had enough of Egypt’s justice system.

When the 22-year-old was summoned for questioning on accusations of inciting protests, she refused to answer the investigating judge’s questions. She told him she would not participate in the “charade,” and said the courts and prosecutors all follow the will of the government.

Stunned and offended, the investigator didn’t charge her with incitement; he charged her, instead, with insulting a government employee while performing his duties. Within days, Seif was tried, convicted and sentenced to six months in prison.

She refused to attend the trial and then refused to appeal the verdict.

On May 14 she gave herself up to authorities and is now serving her sentence in a prison outside Cairo.

“It’s not an act of bravado. Being jailed is not easy, and I know it,” Seif wrote on her Facebook page before turning herself in.

Entirely stacked

HER unusual protest reflects the deep frustration among Egypt’s prodemocracy activists who led the 2011 uprising that ousted longtime autocrat Hosni Mubarak. Five years later, they say, the system has become entirely stacked against them under the government of President Abdel-Fattah el-Sissi.

In the media, memories of the 2011 “revolution” have been silenced, replaced by what authorities call the 2013 “revolution,”

in which the military—led by elSissi—removed the first freely elected president, Islamist Mohammed Morsi, after massive protests against him and his Muslim Brotherhood. El-Sissi was elected president almost a year later, claiming a mandate to do whatever was needed to bring stability after years of turmoil.

A law issued in late-2013 virtually banned street protests and largely succeeded in suppressing demonstrations. Along with thousands of Islamists, many of the top secular activists have been jailed. Progovernment media have fanned public bitterness against the 2011 activists and critics of el-Sissi, depicting them, at best, as naïve youth who cause chaos—or, at worst, as traitors intentionally trying to wreck the country.

El-Sissi insists the judiciary is independent and that its verdicts must not be criticized outside the courts. But whether following government pressure or its own devices, the judicial system has largely followed the lead of the security forces in the fierce crackdown on dissent.

Fear-filled

COURTS have issued heavy prison sentences against Islamists, secular activists and protesters, often with little evidence or due process, rights groups say. Prosecutors have vigorously applied vague charges like endangering security or stability, while turning a blind eye to police abuses ranging from torture and forced disappearances to long detentions

when she took part in a sit-in protest against the appointment of a leading Mubarak-era politician as prime minister. She was detained for a day and beaten in the military’s custody, said Soueif, her mother.

Seif raised a case against the army officer who beat her, backed by a medical report on her injuries.

“But like always in these cases, it came to nothing,” Soueif said.

Lengthy periods In this September 22, 2014, photo, Egypt’s most prominent activist Alaa Abdel-Fattah (left) holds his mother, Laila Soueif, a university professor who is an also an activist, prior to a conference held at the American University in Cairo, near Tahrir Square. Egyptian activist Sanaa Seif, who on May 14 gave herself up to authorities, is now serving her sentence in a prison just outside Cairo. AP

without charge. Seif’s confrontation with her investigators “was the most honest thing anyone can ever say about Egypt’s justice system,” Wael Iskandar, a prominent political blogger and a Seif acquaintance, told The Associated Press.

Many activists are convinced the judiciary is beholden to el-Sissi’s government. But rights lawyer Negad Borai noted that judges and prosecutors have their own interest in ensuring that Morsi’s Muslim Brotherhood, now outlawed and branded a terrorist group, does not return to power and they believe the activists threaten stability.

“The judiciary, just like the middle class that supports el-Sissi, is filled with fear. Fear of the Brotherhood, fear of lack of security and fear of a repeat here of what’s happened in Iraq and Syria,” he said.

“It feels that el-Sissi saved them from the Brotherhood,” which judges feared intended to purge

the judiciary and stack it with its supporters while in power.

Direct run-in

SEIF, a film editor who worked on The Square, a 2013 Oscar-nominated documentary on the 2011 uprising, hails from Egypt’s best known family of activists. Her father, Ahmed Seif al-Islam, who died in 2014, was a renowned human rights lawyer.

Her mother, Leila Soueif, a mathematician, is a prominent advocate of academic independence.

Seif ’s older brother, Alaa Abdel-Fattah, is an iconic figure in Egypt’s prodemocracy movement. He is serving a five-year prison sentence for taking part in a 2013 demonstration. Mona, her sister, is an outspoken critic of el-Sissi’s government. Her aunt, Ahdaf Soueif, is a novelist and rights advocate.

Seif had her first direct run-in with authorities in December 2011,

IN 2014 Seif was sentenced to three years in prison for joining a demonstration against the protest law.

After serving 15 months, she was among a number of activists freed in a pardon by el-Sissi last September.

Months later, on January 25, when the police had fanned out in the streets to prevent any demonstrations marking the anniversary of the 2011 uprising, Seif made a bold, solo protest, risking arrest: She walked alone to Tahrir Square retracing the steps of one of the biggest anti-Mubarak marches with a sign on her back reading, “It’s still the January Revolution.” Seif described her confrontation with the investigator on her Facebook page.

“In the past, I took the ‘ justice system’ seriously,” she wrote, but she said she became disillusioned.

She said one prosecutor in her 2014 case told her he didn’t want to jail her but was under pressure to do so. A judge, she wrote, ignored her when she told him she was being held in so-called protective custody, used by the police to detain suspects without charge for lengthy periods. AP

Thursday, June 2, 2016

A9

briefs

Canadian charged with torture, mutilation in killing a girlfriend

LOS ANGELES—A Canadian man pleaded not guilty to charges of torturing, mutilating and killing a girlfriend whose bloodless body was found in their Southern California apartment. Blake Leibel, 35, could face the death penalty if convicted of first-degree murder in the slaying of Iana Kasian, prosecutors said. He entered his plea on Tuesday. Kasian’s mother had reported her missing. Deputies discovered her dead body on Thursday after forcing their way through a door that Leibel had barricaded with furniture. AP

Rain pummels France; Paris embankments overflows

PARIS—The Seine River has overflowed embankments in Paris, as floods hit or threaten cities and towns around France. Paris City Hall closed roads along the shore of the Seine from the southwest edge of the city to the neighborhood around the Eiffel Tower, as the water level has risen 4.3 meters higher than usual. City authorities are warning residents and visitors to be vigilant on Wednesday around the river banks, and said high river levels are expected to last through Friday. AP

French rail network hit hard by protest over labor reform

PARIS—Much of France’s rail network has ground to a halt, as rail workers strike in protest against changes to French labor rules.

According to the SNCF national rail authority, about 40 percent of France’s high-speed trains and more than half of regional trains are canceled. Eurostar trains to London are expected to run normally, however, though more than half of trains to Spain and Italy are affected. Commuter trains serving Paris’s Charles de Gaulle airport are also being impacted by the strike. Three of the four unions representing workers at SNCF called for a strike on Wednesday. AP

Jury deliberations expected soon in Islamic State case

MINNEAPOLIS—Jury deliberations are expected to begin soon in the federal trial of three Minnesota men accused of plotting to travel to Syria to join the Islamic State group. The attorney for 21-year-old Guled Ali Omar gives his closing argument on Wednesday. Defense attorneys for 22-year-old Abdirahman Yasin Daud and 22-year-old Mohamed Abdihamid Farah told jurors on Tuesday that their clients were not part of a conspiracy. AP

Swiss inaugurate $12-B rail tunnel

GENEVA—It’s taken 17 years and cost 12.2 billion Swiss francs but Switzerland is finally ready to inaugurate the world’s largest railway tunnel. The ceremony on Wednesday to celebrate the completion of the 57-kilometer tunnel through the Alps will be greeted with great fanfare with the leaders of France, Germany and Italy on hand. The thoroughfare aims to cut travel times, ease roadway traffic and draw cargo from pollution-spewing lorries trucking between Europe’s north and south. AP

Afghan official: Taliban hit court in east, kill policeman

KABUL, Afghanistan—An Afghan official says Taliban gunmen have attacked a court building in eastern Ghazni province, killing at least one policeman. Jawed Salangi, spokesman for the provincial governor, says a suicide bomber launched the coordinated attack by blowing himself up at the court’s entrance, after which three other attackers stormed the building on Wednesday. He says two of the attackers were killed by security forces, while the third is believed to remain inside the building. AP

A10 Thursday, June 2, 2016 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Duterte’s promise of change awaited

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RESIDENT-ELECT Rodrigo R. Duterte will take his oath in a few days as the 16th Philippine president. He will take over the vast powers of the presidency with an overwhelming mandate and the goodwill of millions of Filipinos who see him as their savior. Luck favors the incoming president to preside over a nation that has recorded strong economic growth this past eight years. He has a chance to become the greatest president this country ever had by showing the people “the great difference” he could achieve. He can do this if he can differentiate his leadership by making sure the benefits of our economic growth will trickle down to the majority of the population in an equitable and sustainable way.

This is the biggest challenge that confronted all past Philippine presidents.

It is the same challenge that will test Duterte’s mettle as a national leader, given the general consent that everything rises and falls on leadership. He has to uplift the downtrodden and improve the plight of people living in desperate poverty.

It is imperative for him to deliver on his promise that “change is coming.” People are tired of broken promises. The outgoing administration also touted “inclusive growth” as its goal, but it failed to deliver on its promise. Thus, the groundswell of dissatisfaction the Aquino administration created among ordinary Filipinos sealed the fate of his party’s bet in the last presidential election.

The incoming president is a seasoned political leader with a track record of delivering progress to his constituents. Presently he will be tested and judged on a wider national platform. However, everything is going well for him. Industry leaders were upbeat to hear his announcement of an eight-point economic program that promises continuity of policies that worked for the economy. Another favorable factor for the incoming president and his team is the fact that they will inherit a government that’s in a very good financial position and an economy that is without doubt the envy of other economies in the region.

If Duterte’s economic managers are expected to hit the ground running by virtue of the country’s sound economic fundamentals, the challenge to pursue balanced and sustainable economic growth remains a daunting task. The magic word, as far as the country’s economic growth and stability is concerned, is “continuity.” The next administration must continue adopting policies that worked well for the growth of the economy, even as it deploys much-needed change to strengthen the mechanisms of inclusive growth.

To succeed in this endeavor, Duterte needs to convince Congress to dance with his music. Fortunately for him, conventional wisdom has long held that newly elected presidents have a so-called “honeymoon” period with Congress. The traditional hypothesis is that the immediate post-inaugural 100-day period is often characterized by rhetoric of cooperation, a coming-together after a divisive national elections. At the end of the day, politics in this country is still a team sport.

With his promise of change, Duterte and his Cabinet must always remember that 101 million Filipinos—and the world—are watching closely how they roll out the economic plans that will deliver the equitable growth the new President spoke of so frequently and passionately during his campaign.

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in the Philippines earns from 1.8 to 3.5 times as much as the average Vietnamese. Further, the cost in living in Vietnam is 10 percent higher than in the Philippines.

While you may think you are properly paid, the Vietnamese think you are way overvalued.

But that is all based on “local” conditions. For the stock market, we have a formula to determine “overvalued” and the experts like to use the Price Earnings Ratio (PER). Here we can measure the relationship of stock price to corporate earnings and that should be comparable across all borders.

The PSE has a PER of more than 20, while Japan is only 15. Singapore is at 14 and South Korea comes in at 12. Too expensive? But the London Stock Exchange trading is at 35 PER

Benjamin Franklin wrote, “We are all born ignorant, but one must work hard to remain stupid.”

Franklin was wrong. It is easy to remain stupid in the 21st century. You have to work hard to fight through the propaganda of the sound bite era. We take our analysis from the headlines.

The Philippine Stock Exchange (PSE) is a subject that apparently everyone can easily be an expert about.

There is a stock-market news headline available to read in every newspaper every day and all the “experts” agree; the PSE is too expensive.

Is your personal employment compensation “too expensive”? Most everyone would answer with a loud “No.” Except, the average employee

Life’s ironies

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Stock-market realities

Siegfred Bueno Mison, Esq.

THE PATRIOT

(This column, which will come out every Thursday starting today, will be a compilation of articles narrating real life stories of persons and events—as the author experienced them or those narrated to him— to inspire all Filipinos [whether in government or in the private sector; whether here or abroad] to help the Philippines in their own small way and to believe that there is still hope in the Filipino.)

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OOTS: For my first article, let me share a feel-good story about one man who made a name for himself despite the odds. His classmates in a public school in Camarines Sur never imagined he would go far in life. Born and raised in the vicinity of the Naga public market, this boy was, at the time of conception, even mistaken for a tumor by the attending nurse!

Growing together with his two older brothers and three younger sisters, he helped his parents earn money by selling rice cakes. During the Japanese occupation, he received “tips” from Japanese pilots as he delivered drinking water to them in a nearby airfield. He wanted to become an engineer. But after a year in Mapuá, he left school as his parents could no longer afford his tuition. He became a government scholar when he passed the

Philippine Military Academy (PMA) entrance exams despite not knowing what PMA was all about until a friend told him.

After graduating from the PMA, he joined the Army and fought the Huks, the New People’s Army and Moro National Liberation Front.

He earned three stars in 36 years of military service. But that’s not the end of his story. The boy, who traced his roots from an African-American soldier (Massey) and a Chinese mer-

The Philippine stock market is a subject that apparently everyone can easily be an expert about. There is a stock-market news headline available to read in every newspaper every day and all the “experts” agree; the PSE is too expensive. and Norway is at 64?

So why is the PSE up about 10 percent for the year and Japan is down 7 percent? Further, the way “overvalued” Norwegian market is up 9 percent in 2016. The “cheap” South Korean market has gained only 3.5 percent since the beginning of the year. And I seem to be the only one in the Philippines that has been saying since the beginning of May, “Buy the PSE.” We are told the PSE is really meaningless in the big picture of the economy. Look how small our stock market is. But is that true?

The New York Stock Exchange total market capitalization is 120

chant from Xiamen (Dy Tai Co), still works for a private company at the ripe age of 83!

What is his secret to a long and productive life? He is a devout Catholic and a Lady of Penafrancia devotee. Before he turned 50 years old, he started to control his diet, especially his meat and rice intake. He reduced his alcohol intake and stopped smoking and replaced these vices with crossword puzzles and Sudoku.

Ironically, when he left government service, his first job in the private sector was president of a major tobacco company! Still, he carefully watches what he eats and takes a lot of vitamin supplements supplied by her daughters in the United States. There was even a time that his breakfast was just a clove of raw garlic and coffee.

Today, he is still bull-strong, except for his hearing problem supposedly developed during the bombing of Jolo, when he was with the 14th Infantry Battalion. He follows a routine of Monday to Friday workdays in Makati, Saturday farm days in Cavite and Sunday golf days, either at the Veterans Golf Course or Camp Aguinaldo Golf Course. From humble beginnings, this poor boy became a vice chief of staff of the Armed Forces of the Philppines, a Customs commissioner and a president of

percent of the total GDP. The PSE is about 65 percent. But the average on the PSE has been 48 percent for the past 20 years. Japan is 97 percent and Indonesia comes in at 45 percent.

The reason our market is up and going higher is because of the money flow. Not only is more money coming into the market, but the market has the capacity to absorb much more money than in Japan or the US. Combine that fact with an economy that is creating more wealth, it is not a surprise that the PSE holding company index—including all the major conglomerates—has been at historic highs for the past month.

The South Korean stock market is supposedly “cheap”; that economy grew 0.4 percent in the first quarter. The PSE is “expensive” and the economy is 6.9 percent larger than last year.

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

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

Fortune Tobacco. Many know him as Lt. Gen. Salvador Mison. To me, he is known as Papa.

When I left the Bureau of Immigration early this year, some of Papa’s friend told me that history is simply repeating itself. Papa served the Bureau of Customs for more than four years; I served the Bureau of Immigration for more than four years. President Aquino replaced a Mison a few months before a presidential election; then-President Cory Aquino removed Salvador in late 1991 and President Aquino removed Siegfred in early 2016. Both Misons were replaced with politicians from Batangas; Tomas Apacible and Ronaldo Geron, respectively. Soon after their replacement, both Misons were taken in by Dr. Lucio Tan (Papa in Fortune Tobacco, myself in Philippine Airlines). Papa has been with the LT group for the past 24 years. So if I were to believe that history, indeed, is simply repeating itself, then I am in good shape. As Mark Twain puts it, “History doesn’t repeat itself, but it does rhyme.”

And just to share my personal mantra, I think Papa and I left our respective bureaus a little better than we found them.

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

Opinion BusinessMirror

opinion@businessmirror.com.ph

Sale of SMC’s telecom business: Boon or bane?

Val A. Villanueva

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Businesswise hen two companies have cornered all or nearly all of the market for a product or service, they are considered a duopoly, the most basic form of oligopoly.

With this undue advantage, they can command higher prices, using their respective production costs as justification. The prices they charge their customers could be much lower, of course, if only the market was more competitive. Higher prices mean that consumers may be forced to demand lower quantity to save on cost. Thus, the quantity produced and expended will be lesser than it would be under a competitive market with more players.

The bottom line is that prices become prohibitive, and production too low. Herein lies an incompetent distribution of resources.

This is mainly how the duopoly of the Philippine Long Distance Telephone Co. (PLDT) and Globe Telecom Inc. have a stranglehold on the local telecommunications market. In fact, the Philippines has one of the slowest, but most expensive, Internet service in Asia, with high-speed service costing about $57 per month more than in the United States. Customer complaints are often handled by inept consumer representatives and are not acted upon swiftly. Obviously, the market is not getting its money’s worth, but is left with no choice but to swallow the bitter pill.

President-elect Rodrigo R. Duterte earlier threatened to bring in new players if the two telecom giants would not improve their service.

Many speculated that he would favor a third party to achieve a more competitive telecom market, thus raising the quantity and quality of the services being offered in the sector.

San Miguel Corp.’s (SMC) telecom arm was the most logical entity to challenge the duopoly’s tight hold on the market. For a while, it was bruited about that Duterte would prod the food-and-beverage giant to expedite its foray into the telecoms business, earlier hobbled by its failure to bring in Australianbased Telstra as its partner.

But, lo and behold, the market was jolted by the news that SMC has decided to sell its lucrative telecom business to both PLDT and Globe.

The move was unexpected and baffling, coming at a time when the newly minted Philippine Competition Commission (PCC) has yet to get its feet wet.

It’s as if everyone who’s in it is in such a hurry to ink the deal before Duterte’s proclamation as the country’s 16th president. There were even loose talks that SMC was forced to sell out, because its owners supported Grace Poe, one of Duterte’s rivals in the recently concluded presidential election.

One of the reasons cited for the acquisition is to fast-track the country’s high-speed Internet service, a feat that can easily be achieved even without SMC selling out, if only it was able to pursue its intent to be the third player in the country’s telecom business.

In effect, SMC agreed to sell its telecommunications assets at cost in a 50-50 ownership between PLDT and Globe.

The $1.2-billion deal includes SMC’s stake in Bell Telecommunication Philippines Inc., Liberty Telecoms Holdings Inc. and Eastern Telecommunications Philippines Inc., along with the assumption of SMC’s contractual obligations related to the broadband project’s rollout.

At the end of the day, it was a business decision for SMC, in the hope that the sale of its telecom assets will bring about drastic and muchawaited improvements in the telecom industry, a promise that both PLDT and Globe had to make under

The Philippines has one of the slowest, but most expensive, Internet service in Asia, with high-speed service costing about $57 per month more than in the United States. Customer complaints are often handled by inept consumer representatives and are not acted upon swiftly. Obviously, the market is not getting its money’s worth, but is left with no choice but to swallow the bitter pill. the sale agreement.

Beset by financial and operational challenges, the company also has to fend off existing and impending legal actions to its ownership of key frequencies, specifically its 700 MHz, from various sectors, which would only delay the rollout of its mobile broadband project to the detriment of the consumers.

SMC President Ramon S. Ang says the company has to sacrifice for a cause greater than itself: “The country needs better telecommunications services to grow further and fast. Both PLDT and Globe promised to work on that goal.”

It now appears that what made Ang to finally sell out is his desire to accelerate the delivery of better broadband service to consumers and significantly improve the quality of Internet connectivity in the country.

PLDT says that it entered into the transaction as a solution to harmonize the “spectrum assets in the country and immediately unlock the underutilized frequencies.”

I believe, however, that allowing more companies to compete in the country’s telecom industry is what would ultimately tilt the balance in favor of the consuming public. The sale only fortifies the two carriers’ tight grip on the oligopolistic market. In the end, we are still face-toface with a draconian duopoly. Acquiring larger broadband frequency will not alleviate the suffering of the consumers. The problem is not technological in nature; rather, it is in market control, specifically on who wields the power over production and cost.

What we know as the duopoly in the country’s telecommunication industry could become a potential cartel. With a tight grip on the market, the two carriers can restrict free trade, preventing the market from setting prices. Because consumers are left with no other choice, PLDT and Globe can set any price they choose to sell their products and services, regardless of demand. With a weak government watchdog, there is little enticement for both carriers to bring down costs and improve Internet speed.

The duopoly is also inflationary.

Because they can set any price they want, they can keep raising costs to the customers’ detriment. This is known as cost-push inflation. A good analogy of this is how the Organization of the Petroleum Exporting Countries has a chokehold on the entire world oil market.

Acting on numerous inquiries from the media, the PCC vows to assert its mandate, saying that it is within the powers of the commission to evaluate all business agreements and transactions that may have an impact on market competition. All we can do now is to wait and see how the PCC handles the issue as it unfolds.

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

The Lord giver of life Msgr. Sabino A. Vengco Jr.

Alálaong Bagá

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ive praise to the Lord, for He turns mourning into dancing and His goodwill lasts a lifetime (Psalm 30:2, 4, 5-6, 11, 12, 13). In and through Jesus, God is, indeed, the giver of life and in His reign the gift of life reveals His compassion (Luke 7:11-17).

You changed my sorrow into rejoicing The psalmist promises to praise and thank the Lord before the assembly for delivering him from the peril of death, from the pit (sheol).

The Lord has snatched him clear as though out of a grave. The enemies referred to, who have threatened his life and rejoiced at his descent to the netherworld, could have been a mortal illness or a misfortune or death itself. But God intervened and spared him. The psalmist invites the faithful ones to join him and extoll God, as well, and give thanks to His holy name. For His anger lasts but for a moment, His favor, however, throughout life.

With the Lord “weeping may tarry for the night, but joy comes with the morning.”

With insistent, threefold plea, the psalmist turns to God and prays and begs for the divine mercy to continue for him. Hear me! Be gracious to me! Help me! The psalmist reminds or argues with God that He has already in His graciousness changed his mourning into dancing, his sorrow into rejoicing. He hopes then that God’s loving kindness will continue in his regard. The Lord can be counted on to come to the aid of those who cry for assistance. And so the psalmist intends for his part to give thanks to the Lord without ceasing.

Abolishing the BIR? Atty. Benedicta Du-Baladad

Tax law for business

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hould the Bureau of Internal Revenue (BIR) be abolished?

The declaration of President-elect Rodrigo R. Duterte to abolish the BIR was laughed at and not taken seriously by many.

Can the government exist without the BIR? Will this put an end to corruption on tax collection?

But seriously, should the BIR be abolished? I say Yes. It is about time to abolish the BIR, but replace it with a new tax agency with a structure that will address the cause of inefficiency and corruption.

The BIR is trapped in a situation where the root cause of all inefficiency and corruption lies in the very core of its structure as being part of the bureaucracy and the whole government machinery. Let me explain this.

The BIR, being part of the bureaucracy, is governed by civil-service rules, and is subject to the budgetary constraints of the Department of Budget and Management. The compensation of its personnel is tied to the salary-standardization law, which makes it unable to offer competitive compensation packages to attract and retain highly trained and professionally competent personnel.

The BIR performs a very critical role in collecting and safeguarding the erosion of government revenues.

Thus, its work force, in terms of pay, skills and training should be on a par with, if not even better than, their counterparts in the private sector, who they interact with every day.

Likewise, it is bound by inflexible rules on hiring and firing, because government workers are protected by a security of tenure that makes it difficult to fire erring and underperforming personnel. Low pay and security of tenure, in an environment where there is frequent exposure to temptation, will breed corruption.

Then there is a problem of funding. Over the years, the revenue performance of the BIR had increased significantly, but funding, as a percentage of revenue collection, had remained almost constant. There are

Thursday, June 2, 2016 A11

The face of the god of life

AS Jesus and his party were entering the city of Naim, they encountered a funeral procession. The only son of a widow was being buried.

Moved spontaneously at the sight of the grieving mother and without being asked by anyone, Jesus touched the bier carrying the dead to stop the procession. He ordered the dead to rise up, and He gave the son back to his mother alive. And the widowed mother received back from Jesus her only son and her own life. For a widow in ancient society was most vulnerable without a legal advocate like a son.

The miracle elicited fear from the people, the human response to a manifestation of God. The people glorified God; they recognized the act of Jesus to be a demonstration of God’s power as the giver of life. In Jesus they saw God; God had visited them. And they acclaimed Jesus as a great prophet through whom God mightily worked in giving back the son alive to his mother. The scene was reminiscent of the prophets Elijah (1 Kings 17:17-24) and Elisha (2 Kings 4:32-37) bringing dead sons back to life, of hopes restored and lives reconstructed.

reports that the BIR’s budget (cost to collect as a percent of revenue) is not even near its counterparts in the region.

We put all the blame on the BIR as a graft-ridden, inefficient and inutile tax agency. But, on the other hand, has somebody made an effort to help the BIR solve these problems, which are beyond its own doing?

With the growing complexities of business transactions and increasing workload and public demand, the BIR must be equipped with modern facilities to be able to move in parallel with business.

There is an increasingly significant growth in taxpayer population; industries are becoming more diverse; business transactions more complex; underground economy growing; way of doing business changing. All of these pose a big challenge to the BIR. One must realize the crucial role of the BIR, not only as the fundraiser of the government; but in nationbuilding. Its inefficiency and inability to collect the needed revenues will paralyze the whole government machinery.

Again, should the BIR be abolished? Yes, it is high time that a drastic, radical administrative tax reform be undertaken—one that is structural, one that requires abolishing the current tax agency and creating a new one—a new tax agency with full legal, financial and administrative

Alalaong baga, one stronger than death is now among the people, according to the psalmist, one who can turn mourning into dancing of joy. In the liturgical season of the Ordinary Time, we go into a deeper appreciation of what the presence of Jesus in our lives means; He is the giver of life, our guarantee against emptiness and our guide from destruction.

He is the face of divine mercy, making no prerequisites before raising the young man back to life and returning him to his mother.

The compassion of Jesus moved Him to help the widowed mother from being further marginalized, from further threats and griefs.

He extended His ongoing care and concern for her by giving her back the son who would look after her. God’s saving love knows no boundaries and is ever inventive; He can transform us into His i nst r u ments of love beyond human limitations so that others may be enfolded into His merciful embrace.

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

autonomy. One whose funding is tied to performance; one who exercises independence in the allocation and management of its financial and human resources; one that is flexible to make its own decisions with as limited restriction as possible.

In short, I envision a tax agency similar to the Inland Revenue Authority of Singapore, which is structured like a corporate body with a board of directors exercising policymaking powers, and a CEO commissioner responsible in managing the day-to-day affairs of the tax agency.

The board can be chaired by the secretary of finance to align tax policies and administration. The CEO should be with a tenure to insulate him from political pressures.

The conversion of the old Central Bank to the Bangko Sentral ng Pilipinas (BSP) is a good example of this conversion. The BSP has proven itself to be a center of excellence in performing a vital governmental function.

The author is the managing partner and CEO of Du-Baladad and Associates Law Offices (BDB Law), a member-firm of World Tax Services.

The article is for general information only and is not intended, nor should be construed as a substitute for tax, legal or financial advice on any specific matter. Applicability of this article to any actual or particular tax or legal issue should be supported, therefore, by a professional study or advice. If you have any comments or questions concerning the article, you may e-mail the author at dick.du-baladad@bdblaw.com.ph or call 403-2001, local 300.

Abe’s next step in Japan’s economic recovery

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apanese Prime Minister Shinzo Abe’s reported postponement of a planned salestax hike will surely be popular and is perfectly defensible. For it to be truly effective, however, Abe will have to make some harder decisions.

The prime minister originally vowed not to backtrack on the tax hike—already delayed once —unless Japan faced a Lehmanstyle crisis. Although no such crisis appears imminent, the Japanese economy remains weak. Prices are falling again, and growth remains sluggish despite the Bank of Japan’s (BOJ) huge and increasingly unconventional monetary-easing program. Rather than driving Japanese consumers to spend, the prospect of higher taxes seems to be encouraging them to save up.

The last two sales-tax increases, separated by 17 years, both tipped an economy that looked to be recovering back into recession.

There’s little reason to think a third wouldn’t do the same. It’s unlikely that a fragile global economy will have recovered enough by next spring, when the hike was to have

ABE

taken effect, to offset a major drop in demand at home.

Abe’s reported plan for as much as ¥10 trillion (nearly $91 billion) in new spending is smart, as well.

After driving rates into negative territory, with mixed results, the

BOJ doesn’t have much room to maneuver. If the stimulus money is directed at day-care programs and ot her measures t hat benef it younger workers, rather than simply more roads and bridges, it could help boost productivity and the

number of women in the work force.

Japan’s debt levels, while dizzyingly high, should be manageable for now given extraordinarily low rates. The government could ease some worries by looking harder for other ways to start bringing down the deficit.

Still, delaying the tax hike only postpones some pain. It won’t do much to alter Japan’s low-growth, low-inflation future. In recent months, a lack of urgency appears to have sapped whatever momentum existed for Abe’s structural reforms.

The Trans-Pacific Partnership, meant, in part, as a wedge to crack open some of Japan’s most ossified sectors, has been stalled by politics in Washington.

Abe needs to regain the narrative. If his Liberal Democratic Party does well as expected in July’s upperhouse elections, he should revive serious efforts at privatization and deregulating labor and product markets. He should look again at ways to increase desperately needed immigration and to put more pressure on companies to raise wages.

Bloomberg View

2nd Front Page BusinessMirror

A12 Thursday, June 2, 2016

President-elect offers bounties for drug lords

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resident-elect Rodrigo R. Duterte said on Tuesday he will pay bounties to police or military officials who capture suspected drug lords “dead or alive,” adding that there is enough reward money to leave “100 persons dead.”

Duterte said he will pay up to P3 m i l l ion ($6 4,0 0 0) for every drug lord that officials turn in, adding that the bounties would be financed by leftover campaign contributions.

The targets, he said, will include antinarcotic agents who are secretly involved in the drug trade and jailed crime suspects who manage to continue their drug dealing. He said only crime suspects who put up a resistance would be killed.

“I’m not saying that you kill them, but the order is dead or alive,”

₧3M The bounty offered by Duterte for every drug lord

Duterte said in a televised news conference in Davao, the southern city where he has been mayor for many years.

Duterte, 71, whose six-year term starts on June 30, won an overwhelming election victory on

a promise to eradicate crime and corruption in the country within six months, a feat police officials say will be difficult to achieve. He told the news conference that the antidrug crackdown is starting “now.”

A former prosecutor, Duterte said he stressed his seriousness in his antidrug campaign to an official who will be appointed to a lawenforcement agency.

“I said, ‘I’ll put you there on one condition, that if you have an agent who is messing around with drugs and it comes to a fight, I want you to kill him personally,’” Duterte said, adding that he promised the official he would get the largest bounty if he does that.

He said military forces will be harnessed in the war against drugs.

Army and police units will check on each other to punish personnel involved in drugs, and special forces could be deployed in jails to make sure inmates, who continue to deal in drugs, will “no longer be standing,” he said.

Duterte, who has stayed in Davao City since the May 9 election, in-

troduced a number of his Cabinet appointees at the news conference, including officials who have served under previous presidents, former college classmates, close political allies and a handful of left-wing activists.

Duterte’s bold approach to crime and public threats to kill criminals have resonated among Filipinos long exasperated with crime, but have sparked alarm among humanrights groups and pro-democracy advocates, who fear Duterte may resort to strongman tactics.

Addressing criminals, Duterte warned: “Do not destroy my country because I will kill you; do not destroy the youth of the land, our children, because I will kill you.”

Duter te a lso sa id many journalists have been killed in the country because they were involved in corrupt deals and turned against people who had paid them off. He did not cite any evidence or provide details, but said he knew one radio commentator who was killed in Davao City because he was “rotten.”

www.businessmirror.com.ph

ALVAREZ WANTS AN ACTIVE LEDAC IN DUTERTE ADMIN

By Jovee Marie N. dela Cruz @joveemarie

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ncoming PDP-Laban Rep. Pantaleon D. Alvarez of Davao del Norte, who is almost sure of clinching the House speakership under the administration of incoming President Rodrigo R. Duterte, vowed to push for regular Legislative-Executive Advisory Council (Ledac) meetings in the 17th Congress.

Alvarez said the Ledac is needed for a smooth and early passage of priority measures of the incoming Duterte administration and the 17th Congress.

“We need a regular Ledac because [those] meeting[s] [are] needed for the successful passage of bills,” he told the BusinessMirror. Lawmakers and members of the Executive branch draw up a list of priority measures in Congress during Ledac meetings. The council is chaired and presided over by the President himself.

“I experienced…[taking part in Ledac meetings] during [former President Fidel V.] Ramos’s administration, where Ledac was [then] at its most active [state]. I was the one among

We need a regular Ledac because [those] meeting[s] [are] needed for the successful passage of bills.”

—Alvarez those attending the meeting [and] that’s why I know that [such meetings are] important,” Alvarez said.

He added: “We also need that [Ledac meetings] for a smooth relationship between the Legislative and Executive [branches of the government],” he added.

During the Aquino administration’s entire six-year term, only two Ledac meetings were ever convened. Republic Act 7640, or the Ledac law, states the council should meeet, at the least, on a quarterly basis.

See “Alvarez,” A2