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A broader look at today’s business n Monday, June 4, 2018 Vol. 13 No. 233

NPC seeks okay to hike power rates, cites TRAIN

By Lenie Lectura @llectura & Jovee Marie N. dela Cruz @joveemarie

HE National Power Corp. (NPC) is seeking approval to increase its power rates by P0.8293 per kilowatt-hour this year, mainly on account of higher taxes brought about by the Tax Reform for Acceleration and Inclusion (TRAIN) law. “Due to the TRAIN law, the fuel cost will increase by P0.8293 per kilowatt-hour [kWh] in 2018, P1.4815 per kWh in 2019, P1.9919 per kWh in 2020. The impact of the increase in fuel cost will greatly affect NPC’s power-plant operations if the corresponding cost will not be immediately recovered by NPC as incurred,” the state firm said in its 19-page application

filed with the Energy Regulatory Commission (ERC). The NPC application was submitted even as the clamor among lawmakers for a suspension of the TRAIN-mandated higher fuel excise rates gained momentum at the weekend. Following an increase in revenue collection for the first four months of 2018, Party-list Rep. Gary C.

Alejano of Magdalo said last Sunday the government can now afford to suspend excise taxes on fuel products under the TRAIN law. Alejano said the government can afford to suspend excise taxes on fuel products as the tax revenue has reached P927.4 billion, or P58.2 billion more than the target of P869.2 billion. Earlier, the Bureau of Internal

Due to the TRAIN law, the fuel cost will increase by P0.8293 per kilowatt-hour [kWh] in 2018, P1.4815 per kWh in 2019, P1.9919 per kWh in 2020. The impact of the increase will greatly affect NPC’s power-plant operations if NPC does not immediately recover the corresponding cost.” —NPC filing with ERC

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Anti-Crime Council of the Philippines: Living life with a purpose Dr. Jesus Lim Arranza

Make Sense

t 76 years old, I am not surprised if some of my new acquaintances would ask where I get the energy to pursue my advocacies as chairman of the Federation of Philippine Industries (FPI) and as convenor of the Fight Illicit Trade (Fight IT) Movement. And on Tuesday, May 29, the same thought came into my mind when, during the first FPI organized anti-illicit trade summit at the Fairmont Hotel in Makati, a new and stronger anti-illicit trade group that is backed by the Philippine National Police (PNP), National Bureau of Investigation (NBI), Bureau of Customs (BOC), the industry sector, academe and professional groups, the youth and student sector, including the religious groups, was formally launched. Continued on A11

Revenue reported that the net gain from the implementation of the TRAIN reached P12.5 billion in the first quarter of the year.

PHL-SoKor trade, defense relations in focus in Duterte visit

D.O.F. May inflation forecast: 4.9% on supply issues, rising prices of ‘sin’ products

By Bernadette D. Nicolas

Continued on A4

By Rea Cu

@BNicolasBM

RESIDENT Duterte is in South Korea for a three-day official visit until June 5, aiming to strengthen the countries’ partnerships in trade and investments, defense and security, and political cooperation, among others. In a media interview prior to his departure, Duterte said South Korea could also assist in Marawi rehabilitation through its investments, especially in agriculture. South Korea earlier donated $100,000 to the Philippine Red Cross. Following the invitation of South Korean President Moon Jae- in, the President left on a commercial flight to Incheon airport last Sunday midnight and arrived at 4:57 a.m. (South Korea time), hoping to return with “greater gains” for the country. “The Philippines stands ready to write a new chapter of closer ties, deeper amity and more comprehensive collaboration with South Korea,” Duterte said in his departure statement. Continued on A2

PESO exchange rates n US 52.5540

Philippine President Rodrigo Duterte (center left) arrives at Incheon International Airport in South Korea, last Sunday. Duterte, on his three-day visit, will meet South Korean President Moon Jae-in. AP

@ReaCuBM

HE Department of Finance (DOF) sees inflation for the month of May to settle at 4.9 percent, on the back of supply problems affecting food prices and still rising prices for “sin” products. Based on the latest economic bulletin on inflation from the DOF, the country’s inflation level for May could hit 4.9 percent, driven by supply problems affecting food prices, as well as higher prices for tobacco and alcoholic products. The 4.9-percent forecast is higher than the actual inflation rate registered by the Philippine economy in April of 4.5 percent, as well as the 2.8 percent recorded in the same month for 2017. “Inflation in May likely inched to 4.9 percent year-on-year, up from

the previous month’s 4.5 percent. Supply problems continue to affect food prices, with vegetables accelerating to 1.4 percent month-onmonth from negative levels since February, while the levels of rice and fish are slowing down to 0.52 percent and 0.72 percent, respectively,” the DOF said. In terms of food commodities, the price of fish is seen to settle at 13.6 percent for the month, from 12.4 percent the previous month, and 7.5 percent in May 2017. Vegetable prices may increase to 9.3 percent, from the 6.8 percent the previous month, and 2 percent in May 2017. And the price of nonalcoholic beverages may also inch up to 11.5 percent, higher compared to the 9.3 percent recorded in April, and the 0.9 percent registered for May the previous year. Continued on A4

n japan 0.4830 n UK 69.9126 n HK 6.7007 n CHINA 8.2026 n singapore 39.2956 n australia 39.7676 n EU 61.4566 n SAUDI arabia 14.0136

Source: BSP (1 June 2018 )

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A2 Monday, June 4, 2018

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DepEd sees smooth school Despite MDT, America’s stand on sea row unclear opening, but solon flags issues W

By Jovee Marie N. dela Cruz @joveemarie & Claudeth Mocon-Ciriaco | Correspondent

HE Department of Education (DepEd) expects a smooth opening of classes on Monday (June 4), saying it has made all the necessary preparations to ensure that the estimated 28 million pupils returning to schools nationwide would not face major problems.

This was disputed by a teachers’ party-list representative, citing data showing problems of lack of teachers and classrooms will keep plaguing the publicschool system. Education Secretary Leonor M. Briones said various agency partners have worked together to ensure that all learners will have a safe environment that is conducive to learning. “This is not just the undertaking of the department, this is the undertaking of the entire community of Filipinos interested in, and advocating, quality education,” Briones said in a statement. For his part, Undersecretary Jesus Mateo recognized the DepEd’s continuing partnership with the Oplan Balik Eskwela (OBE) Inter-Agency

Task Force (IATF) members: “We are now united with the agencies and organizations who have partnered with us in ensuring our children are safe and our schools are ready for the class reopening.”

Addressing traffic congestion

With millions expected to troop back to schools, the Metropolitan Manila Development Authority (MMDA) will deploy over 2,000 traffic constables in critical, traffic-prone areas leading to schools. The MMDA will also deploy support personnel from its Traffic Engineering Center (TEC), Sidewalk Clearing Operations Group (SCOG), Anti-Jaywalking Unit, Anti-Smoking Enforcement Group and Metro Parkway Clearing Group Personnel.

28 million The number of students expected to return to school on June 4

The Department of Trade and Industry (DTI) has committed to monitor prices of school supplies after distributing the suggested retail prices (SRPs) guide to the local government units. The Department of the Interior and Local Government (DILG) is putting up a National Barangay Operations Office hot line the public may call for school-related concerns in their locality. The Philippine National Police (PNP) committed to ensure the safety of learners through, among others: the deployment of intelligence teams near the vicinities of schools and other crime-prone areas. It also distributed crime prevention leaflets to students, parents and school authorities; and intensified intelligence operations against drug pushers/dealers and other criminal elements victimizing students. The Office of Civil Defense (OCD), in cooperation with the DepEd Disaster Risk Reduction and Manage-

ment Service (DRRMS), will update safety information, education and communication (IEC) materials to be disseminated to students, parents and school authorities.

ACT still sees shortages

Meanwhile, a representative of the ACT Teachers party-list said on Sunday that a lack of teachers and classrooms would still hound the opening of classes. In an interview, Party-list Rep. Antonio L. Tinio of ACT Teachers, pointing to DepEd records, said the National Capital Region alone needs at least 18,000 classrooms while there is still a shortage of 5,858 teachers natiowide. “With this room shortage, [they are putting] at least 50 to 60 students per class,” Tinio added. According to Tinio, having oversized classes in public-school classrooms is against the constitutionally guaranteed right of Filipino school children to quality education. The lack of space on which to erect school buildings is one of the reasons for the classroom shortage, he said. In the lower chamber, the House Committee on Basic Education and Culture has already created a technical working group to fine-tune House Bill 473 regulating the class size in all public schools. Continued on A4

BBL bicam panel to fast-track Competition, demand woes work despite House-Senate gaps dampen hiring in Q2: BSP

BICAMERAL panel has been tasked to fast-track work on conflicting provisions in the Bangsamoro basic law separately passed by the Senate and House of Representatives, with marching orders to submit a reconciled version for final ratification by lawmakers soon after the two chambers of Congress reconvene regular sessions on July 23. “We need to come up with one version acceptable to both chambers,” Senate President Aquilino L. Pimentel III said over the weekend, indicating the Senate and House leaderships expect to submit the awaited measure to Malacañang for signing into law soon after President Duterte delivers his annual State of the Nation Address before Congress. The Senate leader confirmed that a Senate and House conference committee on the BBL will convene early next month to quickly finish the task. “We intend to come up with the reconciled version earlier so that by July 23, a bicameral report is ready for ratification,” Pimentel said, voicing hopes that a final version can be crafted “10 days before” Duterte’s appearance in the joint session of Congress. But more than the self-imposed deadline, Pimentel clarified that “the main goal

is to have peace” in the Autonomous Region in Muslim Mindanao (ARMM), noting the presence of “big armed groups.” Pimentel pointed out this was why the BBL included a provision that “they will lay down their arms under the decommissioning provision in the law. “That [fast-tracked timetable for passing the BBL] is the plan on the part of the Senate; I don’t know about the House,” Pimentel said, pointing out this was not usually done “but this is an important law. So if we can fix the reconciled version by July 23, we will do it.” The Senate leader asserted the urgency of passing the law to for the sake of peace, citing the presence of big armed groups operating in Mindanao, including the Moro Islamic Liberation Front (MILF) who, he said, “are not happy with the ARMM, so we expect they will be happy with the BBL and pave the way for peace, including an agreement to surrender their firearms.” Pimentel indicated they are also relying on the peace pact with MILF to encourage other armed groups to join them in the “decommissioning or surrender of firearms.” Butch Fernandez

OCAL businesses are looking to hire less people in the second quarter of the year, as companies cite heightened worries on competition and demand during the period. In the Bangko Sentral ng Pilipinas’s (BSP) quarterly gauge of local corporate sentiment, firms across the country reported decreased business confidence for April to June this year. More than half of the 1,466 top companies surveyed by the Central Bank cited competition as their main business complaint during the period. Low and “insufficient” demand was also one of the top concerns of businessmen in the country with at least a quarter of the surveyed firms citing this as a major concern for operations. The BSP said firms are worried that combination of high competition and insufficient demand will translate to low sales volume for firms in the second quarter of the year. These rising jitters among local companies are about to spill over to the real economy, as businesses expressed decreased interest in expanding their businesses and hiring more people. In particular, the percentage of businesses with expansion plans in for the next quarter edged lower to 34.2 percent, from 35.1 percent in the previous quarter. The BSP also said that although the employment outlook index for the next quarter remained positive across sectors, it was lower at 24.9 percent compared to a quarter ago’s 29.9 percent. This indicates that while firms will continue to hire new employees, the number of new hires could be lower compared to the overall volume of new hires in the first three months of the year. Data from the Philippine Statistics Authority showed the unemployment rate hitting 5.3 percent in January this year, improving from the 6.6 percent seen in the same month last year. Among the other concerns of businesses for the quarter include higher interest rates, unclear economic laws, access to credit and labor problems. Bianca Cuaresma

ASHINGTON continues to remain vague on whether it will come to the assistance of Manila if push comes to shove in the West Philippine Sea. Last Saturday United States Defense Secretary Jim Mattis gave a very muted response to questions from the media during the Shangri-La Dialogue he is attending in Singapore. Journalists asked Mattis if Washington will honor its commitment under the Mutual Defense Treaty (MDT) if Philippinecontrolled features and vessels in the South China Sea are attacked. Mattis was evasive and said Washington “maintains confidentiality at times in these efforts.” “We stand by our treaty allies but this is a discussion between the current administrations in the Manila and in Washington, D.C., and it’s not one that can be answered as simply as your question would indicate,” Mattis said. His statement comes on the heels of a pronouncement by United States Ambassador Sung Kim before an Asia Society forum in April that Washington will defend the Philippines should a foreign force attack any of the country’s territories, excluding the disputed West Philippine Sea. Diplomats said Washington’s position is exactly what they have been trying to point out in explaining the controversial – often characterized as too “soft” or cozy, despite the bullying— approach that President Duterte has been taking in handling Manila’s dispute with Beijing in the West Philippine Sea. Critics of that approach have pointed to a disturbing series of developments in Philippineclaimed islands in the South China Sea. And, in the latest incident, Chinese forces harassed a resupply mission for the BRP Sierra Madre, the decrepit hospital ship that Manila posted as its sentinel in the Ayungin Shoal. “The West Philippines Sea is a very complex issue that we would want the public to understand,” a senior diplomat who requested anonymity told some reporters last Sunday. “It’s not as easy as what critics want to make it appear.” “There are those who want us to push hard against Beijing, thinking that Washington will automatically come to our aid if something untoward happens in the West Philippine Sea,” the same diplomat said. “It’s more complicated than that.” The diplomat said Foreign

Affairs Secretary Alan Peter S. Cayetano, Defense Secretary Delfin N. Lorenzana, National Security Adviser Hermogenes C. Esperon and other national security officials explained this during a briefing for the Special Committee on the West Philippine Sea of the House of Representatives on Wednesday. “There’s a justice in the Supreme Court who said, “Padala na lang kayo ng ship sa Scarborough. ’Pag pinutukan kayo [Just send a ship to Scarborough. If the Chinese shoot at you], the Mutual Defense Treaty comes in.” As if it’s that simple,” Cayetano told lawmakers. “Alam naman niya [He knows], because he has records of the 2012 standoff. That’s why in the 2012 standoff [at Scarborough Shoal] hiniwalay nga [the issues were treated separately] because we want to prevent war. And there were third parties who told us, [the] Mutual Defense Treaty [will not necessarily come in],” Cayetano pointed out. Speaking partly in Filipino, the DFA chief stressed, “It’s easy to say that if this happens, the Americans will automatically help us. But please recall that President Duterte himself was speaking before to then-Ambassador [Philip] Goldberg. He asked him, ‘If we’re attacked, will the Mutual Defense [Treaty apply?’ To which Ambassador Goldberg replied] In theory, sir, we will have to get congressional approval for that.” In contrast, Cayetano noted that the US assured Japan of help if conflict breaks out with China in the disputed Senkaku Islands. In a news briefing before leaving for Seoul last Friday, Cayetano stressed that the Philippines is looking at its relationship with China in a comprehensive manner. “The Duterte approach is prudent, patient and pragmatic and has produced major results. This prudent approach produced the environment of peace and stability that has given us significant gains in protecting our national territory and enjoying our sovereign rights,” Cayetano told reporters. “Our fishermen are back exercising their livelihood in Scarborough Shoal. Although there were a few reports of problems encountered by some fishermen, the overall situation in the greater South China Sea has become more stable than in past years,” he added.

PHL-SoKor trade, defense relations in focus in Duterte visit Continued from A1

A highlight of his official visit is a bilateral meeting with Moon on June 4, in which he said he will “explore ways to bring cooperation to a whole new level.” “I will, likewise, stress the need to work together to help achieve greater security by addressing conventional and emerging threats to stability in our [region],” he said. After the bilateral meeting, he will also witness the signing of agreements, which will be followed by a joint press statement of the two leaders at the Cheong Wa Dae or the Blue House. The South Korean leader will also host a dinner for the President at the State Guest House. Prior to his meeting at the Blue House, he is also expected to lay a wreath at the Seoul National Cemetery to honor the fallen soldiers, leaders and heroes of South Korea.

Another highlight of his visit is his meeting with Korean business leaders on June 5, in which he said he will encourage them to be the country’s responsible partners in pursuing economic growth. “This way, they can actively contribute to our objective of providing a comfortable life of our people.” His first order of business was meeting the Filipino community on June 3 at the Convention Hall of the Grand Hilton Hotel and Convention Center. He meant to thank them for their sacrifice for the sake of their families and their contributions to the nation’s socioeconomic development. The President will cap his official visit by gracing the Philippine Food Festival at the E-Mart headquarters, where Philippine agriculture products will be showcased in one of the biggest supermarket chains in South Korea. Ph i l ippi ne A mba ssador to South Korea Raul S. Hernandez

welcomed the delegation last Sunday morning. The President was accompanied by Presidential Spokesman Harry L. Roque Jr., Agriculture Secretary Emmanuel F. Piñol, Presidential Communications Secretary Martin M. Andanar, Science Secretary Fortunato T. de la Peña, Trade Secretary Ramon M. Lopez and Special Assistant to the President Christopher Lawrence Go. In a statement, Hernandez said South Korea is the sevethlargest trading partner of the Phi lippines, w it h trade relations totaling around $10.6 billion. It is the fifth-largest official development assistance partner of the Philippines, with about $570 million in loans and grants last year. South Korea is one of the top defense and security partners of the Philippines, and is also the country’s top tourist source, with about 1.6 million of its nationals visiting in 2017.

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Aquino, other accused in Dengvaxia criminal raps to attend investigation By Joel R. San Juan @jrsanjuan1573

ORMER President Benigno S. Aquino III, along with two former Cabinet secretaries and several former and incumbent Department of Health (DOH) officials, are expected to attend today’s (Monday) preliminary investigation on the criminal complaint filed by two anti-crime advocacy groups over the controversial anti-dengue vaccine Dengvaxia. The Department of Justice panel conducting the preliminary hearing, headed by Senior Assistant State Prosecutor Rossane Balauag, compelled the respondents to appear for the submission of their counter-affidavits. Other members of the panel are Senior Assistant State Prosecutor Hazel Decena Valdez, Assistant State Prosecutors Consuelo Corazon Pazziuagan and Gino Paolo Santiago. The probe stemmed from the complaint filed by newly appointed Philippine Anti-Corruption Commission Commissioner and Volunteers Against Crime and Corruption (VACC) lawyer Manuelito Luna and Eligio Mallari of the Vanguard of the Philippine Constitution Inc. (VPCI). The two groups accused Aquino and 44 others of violation of Section 3 of Republic Act (RA) 3019 (AntiGraft and Corrupt Practices Act); Section 65 of RA 9184 (Government Procurement Reform Act); Article 220 (Technical Malversation) of the Revised Penal Code; Article 365 (Criminal Negligence) of the Revised

Penal Code. Aquino failed to show up during the panel’s first preliminary hearing on May 15 but sent his lawyer Mildred Umali to receive a copy of the complaint. Aside from Aquino, other respondents in the complaint are former Budget Secretary Florencio B. Abad, former Health Secretary Janette L. Garin, DOH undersecretaries Dr. Carol Tanio, Gerardo Bayugo, Lilibeth David and Mario Villaverde; and assistant secretaries Lyndon Lee Suy and Nestor Santiago. Also named as respondents were DOH Financial Management Service Director Laureano Cruz; DOH Directors Dr. Joyce Ducusin, Dr. May Wynn Belo, Dr. Leonila Gorgolon, Dr. Rio Magpantay, Dr. Ariel Valencia and Dr. Julius Lecciones; retired health undersecretaries Dr. Nemesio Gako, Dr. Vicente Belizario Jr., Dr. Kenneth Hartigan-Go; and Dr. Yolanda Oliveros, who served as Garin’s head executive assistant. Executives and agents of pharmaceut ica l companies Zuel l ig , which supplied the controversial Dengvaxia vaccine and its manufacturer Sanofi Pasteur were also named as respondents. In their complaint, the VACC and VPCI alleged that Aquino and the other respondents are criminally liable after they “anomalously and illegally funded and procured the Dengvaxia vaccine and ill-advisedly, thoughtlessly and imprudently implemented the dengue immunization” project of the DOH.

Editor: Vittorio V. Vitug • Monday, June 4, 2018 A3

asked to handle Government to build lighthouses, DOJ Okada estafa cases upgrade runway in Pag-asa Island T By Rene Acosta

@reneacostaBM

he government’s initiative to build lighthouses in the country’s territory in the West Philippine Sea is in line with the Declaration of Conduct signed with other claimant states, according to the country’s security adviser.

Nationa l Secur it y Adv iser Her mogenes C . Esperon Jr. sa id t he const r uc t ion of lighthouses in Pag-asa Island w il l be complemented by the planned development of the r unway in the ter r itor y, which is being disputed by China. “Well, as a matter of safety of life at sea…we are also putting up lighthouses,” Esperon said, adding the project should help fishermen and other mariners in the area in their navigation. Esperon said the lighthouses were among the projects the government has lined up to undertake in Pag-asa Island, including the

upgrading of the Rancudo Airfield to stimulate the territory’s commercial development. The improvement projects were covered by the P1.6-billion budget earmarked by the government for the development of the island, which was announced by Defense Secretary Delfin N. Lorenzana during his visit to Pag-asa Island last year. As envisioned, the funds should help turn the island into a tourist destination and a marine research facility by creating beaching facilities, a radio station, a power plant and even an ice plant. Esperon said the lighthouses, the likes of which China has already put up in the territories that it disputes but already occupied and developed, should make Pag-asa Island easier to navigate for fishermen and other seafarers. The national security adviser said the project would go along with the rehabilitation of the airfield after the government has completed the development of a beaching ramp in the island. A recent report by the Asian Maritime Transparency Initiative of the US-based Center for Strategic and International Studies, however, claimed the repair of the runway has already began, citing satellite photos of the island. It also said the photos showed seven new buildings in Pag-asa Island, but which the government, and even Esperon, did not confirm. However, part of the P1.6-billion budget will be used for the improvement of shelters of soldiers deployed in Pag-asa Island, a muchdelayed project since all of the other claimant states have not only improved, but even constructed concrete buildings as shelters for their troops deployed in territories that they have occupied.

HE Department of Justice (DOJ) has been formally asked to take over the investigation of the leakage of the resolution in the $10-million estafa cases against gaming tycoon Kazuo Okada. In a complaint filed before the DOJ, Japanese gaming firm Tiger Resorts Leisure & Entertainment Inc. (TRLEI) also asked Justice Secretary Menardo I. Guevarra to sanction Parañaque City Prosecutor Amerhassan Paudac for the leakage. The firm accused Paudac of violating the rules and procedures, and the Code of Conduct for Prosecutors in handling cases before his office for allegedly leaking copies of his resolution dismissing the estafa cases against Okada. The leakage was learned after the dispositive portions of the decision was posted in the social-media accounts of Korean national Chloe Kim believed to be Okada’s girlfriend. TRLEI is the owner and operator of the posh Okada Manila at the sprawling Entertainment City in Parañaque City where Okada was its chief executive officer before he was kicked out last year for allegedly embezzling more than $10 million in company funds. Earlier, the TRLEI sought the investigation of Paudac for the leaks, and demanded that the prosecutor recuse himself from the cases pending in his office. Paudac has inhibited himself from the case but proceeded to officially release the accused, stressing that the resolutions are maintained. Paudac also formed a panel to look into the leakage and even requested the National Bureau of Investigation to make a forensic examination of Kim’s social-media accounts to determine if said posts “are fake or not, and how and from whom said account holder was able to obtain said photographs.” But, the TRLEI said Paudac’s order for investigation will be self-serving and may be a prelude to a whitewash. Joel R. San Juan

A4 Monday, June 4, 2018 • Editor: Vittorio V. Vitug

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Rise in power demand takes toll on Luzon grid

By Lenie Lectura

@llectura

he increasing demand for electricity has caused the Luzon grid to be placed on yellow alert for three consecutive days, despite additional supply injected into the grid from new power plants, an official of the Department of Energy (DOE) said. “We hit our forecast on peak demand and even exceeded it by 300 megawatts [MW]. It happened the other day. Thus, we need capacity. I am not saying we lack the capacity now but we need it because demand is rising,” Energy Assistant Secretary Redentor Delola said when asked if additional capacity from Pagbilao Energy Corp.’s (PEC) unit 3 420-MW plant in Quezon is still not enough to prevent the issuance of a yellow alert notice. A yellow alert is issued when reserves are not enough to cover the largest running generating unit at the time but does not necessarily lead to power outages. Luzon was placed on yellow alert by the National Grid Corp. of the Philippines (NGCP) on May 30, 31 and June 1 due to thin reserves because of high power demand, unexpected shutdown and limited generation of some power plants.

Based on an earlier DOE forecast, peak demand in Luzon was expected to hit 10,500 MW between the second and third weeks of May, with reserve expected at 1,500 MW during the period. On May 17 peak demand hit 10,688 MW. The load growth for the past five years indicates the growing trend of peak power demands occurring in the month of May: 8,304 MW on May 8, 2013; 8,717 MW on May 21, 2014; 8,928 MW on May 21, 2015; 9,726 MW on May 3, 2016; and 10,054 MW on May 9, 2017. Delola noted that the hike in demand came from outside the franchise area of the Manila Electric Co. (Meralco). “Most probably, it was not within Meralco franchise area. Our growth is now outside the economic center. We are still looking for possible reasons. We will also look at individual submissions of

Meralco linemen repair a power cable in this August 17, 2015, file photo. The Department of Energy placed the Luzon grid on yellow alert from May 30 to June 1 due to the increase in demand for electricity. NONIE REYES

distribution utilities,” he added. Meralco serves over 6 million customers in Metro Manila, the provinces of Rizal, Cavite, Bulacan and parts of the provinces of Pampanga, Batangas, Laguna and Quezon. The franchise covers the core of the country’s industrial, commercial and population centers. Energy Secretary Alfonso G.

Cusi acknowledged that the country needs more capacity. “With the growing economy spurring more and more commercial activities, the demand for power is also growing, so we would need power plants like the Pagbilao Unit 3 to sustain national development,” Cusi said. Cusi lauded PEC for beefing up

its two power plants in Pagbilao with a third facility that can produce additional 420 MW of electricity. “The plant will also go a long way in supplying the energy needs of the country beyond the Duterte administration, thereby supporting future businesses.” He ack nowledged that the Pagbilao Unit 3 power plant is

coal fired, but he said it complies with environmental standards through the use of flue-gas desulfurizer technology. FGD removes sulfur dioxide from exhaust flue gases of fossil-fuel power plants. The PEC built the Pagbilao Unit 3 power plant at a cost of P976 million. The plant is beside the Unit 1 and Unit 2 facility of the Pagbilao Power Station. Units 1, 2 and 3, which are all of the same technology, could generate a total of 735 MW. Delola said another power plant is providing Luzon additional capacity. This is the second unit of SMC Consolidated Power Corp.’s power plant in Limay, Bataan. “We have the supply. It’s just that demand keeps growing and there were plant outages, as well,” he added. The same official said on March that there was nothing to worry about because Luzon has enough reserves for the summer months even as some plants are scheduled to go offline for that period. “During the summer months, as projected, we will not have any problem as long as the new power plants will come in and run,” Delola had said. In addition to the 570 MW of new capacity from Pagbilao 3 and Limay unit 2, Delola added the government could still tap the stateowned 650-MW Malaya thermal plant, which is considered a “mustrun” unit. However, Malaya is one of the power plants that went on forced outage last week.

Job seekers exceed vacancies in PHL offices–report DOF’s May inflation forecast: By Cai U. Ordinario

@cuo_bm

he number of Filipinos looking for jobs is more than six times the available vacancies for professional positions in January 2015 to June 2016, according to the latest data from the Philippine Statistics Authority (PSA). PSA figures showed that there were a total of 91,175 of professional job vacancies from January 2015 to June 2016. A total of 559,636 applicants vied for these positions during the period. Data from the PSA also indicated that there were a total of 698,683 vacancies and 3.82 million job seekers during the period. “[The data] presents statistics on job openings or vacancies that were made available for placements by establishments during the 18-month period covering January 2015 to June 2016, specifically for professional positions,” the PSA said.

There were more than 10 job seekers per vacancy in mining and quarrying, professional, scientific, and technical activities. The PSA also said 71 applicants vied for every vacant position as mining engineers, metallurgist and related professionals. Other occupations with a surplus of applicants were: paramedical practitioners, policy administration professionals, financial and investment advisers and financial analysts. More than 20 applicants vied for these positions. “Occupational surplus occurs when there is an abundance of applicants in a vacant position, assumed if there are excess or more than 10 applicants per vacancy,” the PSA said. While there were more job seekers than available positions, there was a shortage of applicants in human health and social work activities. There were also a lack of applicants in water supply, sewerage, wage management and remediation activities.

Among professionals, there was a shortage of applicants among physiotherapists; nursing professionals; economists; dentists; pharmacists; social work and counseling professionals; education; agriculture, forestry and fishing; and art entertainment and recreation. “Occupational shortages occur when there are insufficient applicants to fill up job vacancies,” the PSA said. There was also a shortage of applicants in vacant positions like special medical practitioners, generalist medical practitioners, landscape architects, archivists and curators, vocational education teachers and midwifery professionals. Applicants were also wanting for positions such as teachers; announcers on radio, television and other media; veterinarians; journalists; and civil, electronic, electrical and mechanical engineers. “These occupation titles reportedly had less than five applicants per

vacant position,” the PSA said. The indicator for employment by occupation comprises statistics on job vacancies classified according to major groups as defined in the 2012 Philippine Standard Occupational Classification (PSOC). This version of the PSOC distinguishes 10 major groups: (1) managers; (2) professionals; (3) technicians and associate professionals; (4) clerical support workers; (5) service and sales workers; (6) skilled agricultural, forestry and fishery workers; (7) craft and related trade workers; (8) plant and machine operators and assemblers; (9) elementary occupations; and (10) armed forces occupations. Conducted every two years, the Integrated Survey on Labor and Employment (ISLE) is a nationwide sample survey covering agricultural and nonagricultural establishments with 20 or more workers. The latest survey, 2015/2016 ISLE, covered 12,926 establishments.

NPC seeks okay to hike power rates, cites TRAIN. . . continued from a1

“As crude oil prices [rose] dangerously in the world market, so did our revenues. Since we collected more than the projected values, we can afford to slash excise taxes to mitigate the damaging effects TRAIN has on the people,” Alejano said.

NPC’s mandate affected

Meanwhile, the NPC said in its application for an increase in its power rates that the Electric Power Industry Reform Act of 2001, mandates it to provide power generation and associated power-delivery systems in missionary areas or those islands and communities not connected to the main transmission grid. In 2017 NPC said it operates 275 small power utilities group (Spug) plants in 189 municipalities across 34 provinces in the country. It said electricity prices will be affected since the NPC-Spug uses diesel and bunker fuels in its power plants. “There shall be an increase in fuel cost due to excise tax that must be imposed pursuant to the said law which, in turn, translates to an increase in the operating cost in the Spug areas,” NPC said. The TRAIN law affects all the electricity end users in both main grids and off-grids. NPC added that the higher fuel cost translates to an increase in the operating cost in the Spug or missionary areas, effectively contributing to the increase in the universal charge for missionary electrification (UCME), which the main grid customers also pay along with off-grid customers. “Hence, it is imperative to adjust the SAGR [Subsidized Approved Generation Rate] to

address the impact of fuel cost due to excise tax on NPC’s operating expense in order to mitigate the impact of the TRAIN law to main grid customers,” its application said. NPC said the existing subsidized approved generation rate is based on 2003 cost levels, which was approved in 2011. “The fuel cost has increased to about 114 percent since the last level of SAGR approval in CY 2003 even without the TRAIN law,” it said. The TRAIN law is a key plank of the government’s CTRP, with the goal of creating a more effective system of tax collection. Package 1, which became effective on January 1, cut individual income-tax rates but imposed higher fuel excise rates and taxed sugar-sweetened beverages. The higher fuel cost has been blamed in many sectors for jacking up inflation to five-year highs in April, but government economists said TRAIN was not solely to blame for rising prices because supply issues in rice and certain food products, as well as international developments that impacted global oil prices, were also factors to consider. The Departments of Agriculture (DA) and of Trade and Industry (DTI) are also moving to ensure profiteers do not hide behind the TRAIN law. The Department of Energy (DOE), for its part, announced last week the release of draft rules for the unbundled energy pricing system, meant to ensure transparency in the way oil players price their products. Two more final hearings are scheduled this month on the draft rules, which the DOE expects to finalize by end-June. The unbundled pricing reports required of

petroleum stakeholders are mandated by the oil deregulation law passed two decades ago.

House initiative

The Department of Finance (DOF) as well as House Committee on Ways and Means Chairman Dakila Carlo E. Cua of the Lone District of Quirino had earlier expressed willingness to suspend the excise tax on fuel as well as to cut the valueadded tax (VAT) rate, under certain conditions. According to Alejano, suspending the excise taxes would be a genuine alternative to cushion the blow from TRAIN—something that, he said, the Duterte administration has yet to provide. “The government chooses to be passive and insensitive to the Filipino people when it should be actively seeking ways to ease the burden of the increasing cost of living. The money from the unconditional-cash transfers is not enough to cover all the increases brought by TRAIN law. Hoping for the best is an admirable Filipino trait, but, it is never an effective government policy,” he lamented. Alejano said providing the poor with financial breathing room amid price hikes takes priority, but, maintained that this was only the first step. Last Saturday President Duterte said he will leave it to Congress to decide whether or not to amend or suspend the TRAIN law. Currently, three measures in the House seek to suspend or review the implementation of the new tax-reform law to ease inflation pressures and slow down the decline in the purchasing power of the peso.

World crude prices easing

Meanwhile, Party-list Rep. Ciriaco S. Calalang of Kabayan said excise tax on fuel can stay as latest Dubai crude oil futures point to a gradual easing. “At this time, I believe we can breathe some sigh of relief about world crude oil prices. Latest Dubai crude oil futures point to a gradual easing and continuing downward trend line of the price of Dubai crude oil, although there are some upward pressures,” he said. “The earlier-feared $80 per barrel level would likely be avoided because the futures prices show peaking at close to $75 in June 2018, then sliding toward $69 for June 2019, and further slipping to about $65 for December 2019,” he said. Considering these latest figures, the lawmaker said the DOF would not have reason to suspend the excise tax on imported oil and fuel on the basis of the authority it is given by the TRAIN law. “It looks like Dubai crude oil will stay above $70 until May or June next year. Our country started feeling the pain as crude prices approached $70. Considering this, safety nets must still be activated and deployed. For June 2022, when the term of President Duterte ends, the Dubai crude futures price is at about $54,” he said. “Unless some new events and factors emerge over the next months to upset the Dubai crude oil forecasts, we now see a gradual easing of inflation pressures on the Philippine economy,” Calalang added.

4.9% on supply issues, rising prices of ‘sin’ products continued from a1

Rice prices are seen to settle at a higher 4.7 percent from the 4.3 percent the previous month, as well as the 1.1 percent recorded in the same month for 2017. “Inf lation may appear to be rising year-on-year but it is actually decelerating as the monthon-month inf lation continues to drop,” the DOF added. Meanwhile, alcoholic beverages and tobacco prices may have hit 20.4 percent for the month, higher than the 19.9 percent recorded in April, and the 7.3 percent in May 2017. For nonfood times, the inflation level may settle at 3.2 percent, increasing compared to the 3 percent recorded in April, and the 2.7 percent in May 2017. “A meaningful drop in prices is attainable if the food-supply problem is solved because food accounts for 35.5 percent of the consumer basket. Rice tariffication will help temper rice inflation, while productivity programs for the food sector would enhance longer-term price stability,” it said. The price of electricity, gas and other fuels may have declined to 4.4 percent from the previous month’s 4.6 percent, as well as from the 7.2

percent recorded in May 2017. Transport prices may go up to 6.1 percent, from the 4.8 percent the previous month, and the 4.2 percent in the same month the previous year. “Electricity, gas and fuels are likely to have reversed to a 1.1-percent price decline month-onmonth while transport continues to accelerate reflecting domestic petroleum prices,” it added. Last week the Bangko Sentral ng Pilipinas (BSP) said that growth of consumer prices in May could have skyrocketed to above 5 percent, breaching anew its annual average target range. The BSP had set a target range of 2 percent to 4 percent for the countr y’s inf l at ion rate, but pointed out that the inflation level for May is seen to hit between 4.6 percent and 5.4 percent. The Central Bank’s Department of Economic Research explained that both local and international developments contributed to the potentially sharp rise in inflation for the month. The Philippine Statistics Authority is expected to release the country’s May inflation numbers within June’s first week.

DepEd sees smooth school opening, but solon flags issues continued from a2

The “Public School Class Size Law of 2016” also seeks to prescribe additional compensation for teachers handling large-size classes. He said classrooms in the country are among the most crowded in Asia, per data of the United Nations Educational, Scientific and Culture Organization (Unesco) Institute for Statistics. “The country’s public elementary schools’ average class size of 43.9 is far bigger than Malaysia’s 31.7, Thailand’s 22.9, Japan’s 23.6 and India’s 40,” Tinio said. The same data show public high schools in the country have even larger average size of class

of 56.1 students, he added. He said it is no longer uncommon to see teachers handling classes with 60 to 80 students. An oversized class is one of the main causes of the marked decline in the quality of education in public schools, he added. To remedy the situation, the bill limits the size of each class to 35 students, to be handled by a single teacher. Any class with not more than 35 students shall be considered a standard class. Any class with more than 35 students up to a maximum of 50 students shall be considered a large class. In no case shall a class size in excess of 50 students be permitted.

Agriculture/Commodities BusinessMirror

www.businessmirror.com.ph

Editor: Jennifer A. Ng • Monday, June 4, 2018

Congress keen on weather-based crop insurance By Jasper Emmanuel Y. Arcalas

@jearcalas

ongress is targeting to enact into law a measure that would provide farmers with free index-based crop insurance before the end of the year, according to the chairman of the Senate Committee on Agriculture and Food. Sen. Cynthia A. Villar, the committee chairman, said weatherbased crop insurance would afford farmers a “more convenient way”

of receiving indemnity in times of disaster. “We like this [measure] because the money will come from our

fund for calamity. Instead of giving funds for calamity, we will just give farmers climate-based crop insurance,” Villar told reporters in a recent interview. “So if they are affected by a calamity, they will just claim [their indemnity] from the insurance company. The government will shoulder the premium. We are hoping to cover all crops,” she added. On March 20 Villar filed Senate Bill (SB) 1759, or the “Free IndexBased Crop Insurance Act of 2017,” which seeks to establish a free index-based crop insurance (Fibci) framework in the Philippines. Under the bill, a Fibci framework would allow private insurance companies to implement a weather

index-based insurance product. The parameters for an agreed weather reference index would include but not limited to: rainfall, wind speed and temperature. A trigger or threshold reference point shall be set for each parameter. Once the trigger is breached, the insurance provider obligates itself to indemnify the insured farmers, according to the bill. A Fibci Program Management Office under the Office of the President would be created “that would focus on establishing the needed coordination mechanisms to implement the program, and popularizing farmers’ regular use of weather index-based crop insurance.” The bill is proposing to allocate

at least P5.8 billion for the Fibci, which would be initially sourced from the government’s risk management fund. The initial amount would cover at least 2.8 million hectares of rice lands, according to SB 1759. Villar said the program would be opened to the private sector to “promote competition.” “Six companies have already expressed their interests to participate [in the program]. We are looking for insurance companies that can do agricultural insurance,” she said. A similar bill has been filed by Rep. Arthur C. Yap of the Third District of Bohol in the House of Representatives, which has al-

ready hurdled the third reading in February. House Bill 6923 calls for an overhaul of the crop-insurance system of the Philippines by allowing index-based direct insurance and reinsurance. Yap noted that the Philippines needs a law strengthening the Philippine Crop Insurance Corp. (PCIC) because the country’s farm sector is vulnerable to climate change. The PCIC’s coverage, he added, should be expanded to allow the agency to be engaged in indexbased insurance and reinsurance. “We will go to a bicameral conference should there be conflict [in provisions]. We will see,” Villar said.

PLDT unit creates platform to help farmers access financing, markets

INTQnologies Corp. (Fintq) said over the weekend it is keen on rolling out within the year an online platform that seeks to allow farmers to tap “affordable” financing and sell directly to consumers. Fintq, the financial-technology arm of PLDT-owned Voyager Innovations Inc., said it has created the Accelerated Growth and Rural Inclusion (Agri platform as an expansion of its KasamaKA program, “a grassroots-based, bottomup and multisectoral social advocacy program for inclusive growth in support of the government’s National Strategy for Financial Inclusion.” “Agri is an end-to-end farm-to-

marketplace digital agricultural value chain platform connecting producers to consumers for optimized productivity and greater efficiencies,” Fintq said in a statement. “It includes digital financial services through the award-winning Lendr platform, digital commerce through a marketplace, and cost-effective logistics infrastructure management in partnership with Metropac Movers,” it added. Fintq said the Agri platform will be introduced nationwide by the company, in partnership with the Bangko Sentral ng Pilipinas (BSP), Department of Agriculture, League of Provinces of the Philippines, Liga ng mga Barangay sa

Pilipinas, and Rural Bankers Association of the Philippines. “The agricultural sector is vital to our nation’s development as it sustains the requirements of our growing population. It, likewise, needs to be well-funded to make it globally competitive and resilient against climate-related risks, especially in the Philippines, which is highly exposed to various weather-related hazards,” Lito Villanueva, Fintq managing director and KasamaKA founder and lead convenor, was quoted as saying. Villanueva added: “the Agri platform will be an intervention to help reduce poverty in the countryside and boost shared prosperity at the bottom of the

pyramid.” Fintq is planning to initially implement Agri in eight pilot areas, mostly in Mindanao. The company, however, did not specify the pilot areas. “Farmers and fishermen are still deemed as high-risk borrowers of banks, but with the intervention of the Agri platform, which covers end-to-end of the agri-value chain, this will level the playing field. Agri will serve as an alternative channel for agriculture workers to source funds from Lendr partner banks and financial institutions,” Villanueva said. Fintq said the Agri platform would also allow farmers to earn more while cutting the retail prices of their farm products “as it would cut down the unnec-

essary middlemen” with its “direct farm to business and consumer approach.” “It will stimulate optimized productivity as it boosts rural economy and harness trade,” the company said. “The platform will also include enhanced capacity-building program with sustained training, education and values formation, which would include marketing and sales modules. A partnership with a global standards certifying agency will also be part of the initiative to make Philippine produce globally competitive, as well,” it added. BSP Governor Nestor A. Espenilla Jr. supported the rollout of Agri platform, saying: “Innovations enabled by digital

technology and value-chain approach can not only make agri-financing more viable but also unlock new opportunities for rural banks and cooperatives to deliver a whole range of financial services catering to the unique needs of farmers and their communities.” Agriculture Secretary Emmanuel F. Piñol welcomed the creation of the Agri platform, saying it would help improve the farm sector’s productivity. “We always look for ways to further capacitate our small farmers and fishers by providing more access to affordable financing and leveraging on technology,” Piñol was quoted as saying in the statement. Jasper Emmanuel Y. Arcalas

The World BusinessMirror

A6 Monday, June 4, 2018 • Editor: Lyn Resurreccion

G-7 finance chiefs condemn Trump tariffs as allies rebel

around possible exemptions to the metal tariffs. Shortly before the G-7 meeting ended, Trump tweeted that “the United States must, at long last, be treated fairly on trade.” “If we charge a country ZERO to sell their goods, and they charge us 25, 50 or even 100 percent to sell ours, it is UNFAIR and can no longer be tolerated. That is not Free or Fair Trade, it is Stupid Trade!” the president said, without specifying what tariff rates he was referring to.

Feel-good summit

Group of Seven finance ministers and central bank governors attend a meeting in Whistler, British Columbia, Canada, on June 1. (From left, first row) Mark Carney, governor of the Bank of England; Stephen Poloz, governor of the Bank of Canada; Bill Morneau, Canada’s minister of finance; Kristalina Georgieva, chief executive officer of the World Bank Group; Olaf Scholz, Germany’s finance minister; and Mario Draghi, president of the European Central Bank. Darryl Dyck/Bloomberg

roup of Seven (G-7) finance chiefs issued a rare rebuke of a member-nation, claiming US trade actions could undermine global economic confidence and threaten the effectiveness of the Western alliance. The statement singled out the Americans, the largest and most important member of the G-7, saying “decisive action” is needed at a leaders summit next week in Quebec. The ministers requested that Treasury Secretary Steven Mnuchin “communicate their unanimous concern and disappointment.” “The international community is faced with significant economic and security issues, which are best addressed through a united front from G-7 countries,” Canadian Finance Minister Bill Morneau said in a “chair’s summary” of the meeting in Whistler, British Columbia. “Members continue to make progress on behalf of our citizens, but recognize that this collaboration and cooperation has been put at risk by trade actions against other members.” Morneau’s comments came after an acrimonious three days of talks— with Mnuchin on the receiving end of much of the frustration—in which

America’s allies protested against President Donald J. Trump’s decision to impose tariffs on steel and aluminum from the European Union (EU), Canada and Mexico. With the trade dispute triggering one of the biggest crises in the G-7 since the group’s formation in the 1970s, frictions are poised to spill over into next week’s meetings in Charlevoix, Quebec, that Trump will attend. The group includes Canada, France, Italy, Germany, the United Kingdom, Japan and the United States.

G-6+1

“IT has been a tense and tough G-7. I would say it has been far more a G-6 plus one than a G-7,” French Finance Minister Bruno Le Maire said. The EU has threatened to retaliate with duties on everything from American motorcycles to bourbon. Before these week’s trade actions, the European Union and Canada had previously been granted temporary

exemptions. Japan had already been subject to the tariffs, which the US said were necessary to protect its national security. At his closing press conference, Mnuchin said he’s already conveyed the G-7 message to Trump, who he said “has been very clear in wanting to address trade issues.” “Our objective is to make sure we have fair and balanced trade,” Mnuchin said in the Canadian ski resort town. “I don’t think in any way the US is abandoning its leadership in the global economy. Quite the contrary, we’ve had a massive effort in tax reform in the United States which has had an incredible impact on the US economy.”

US court

Le Maire opened the door to negotiations over the tariffs, but said the ball is in the US court. We still have a few days to avoid an escalation. We still have a few days to take the necessary steps to avoid a trade war between the EU and the US,” Le Maire said, adding the European Union doesn’t want a trade war. Mnuchin reiterated that the US would continue to have discussions

The trade disputes hijacked what was supposed to be a feel-good summit that global finance chiefs initially saw as an opportunity to tout the successes of the global economic upswing. The International Monetary Fund projects the world economy will grow this year and next at its fastest pace since 2011 and Morneau’s statement did give a nod to the expansion. Ministers “agreed that the global economy has strengthened since they met last year in Bari and that the expansion is set to persist,” said Morneau, while cautioning the trade dispute is introducing unnecessary risks. “Concerns were expressed that the tariffs imposed by the United States on its friends and allies, on the grounds of national security, undermine open trade and confidence in the global economy,” it said. Mnuchin faced so much criticism from his counterparts over the new trade levies that Japanese Finance Minister Taro Aso said he almost “felt sorry” for the US finance chief. “He’s not directly in charge of the metal tariffs, so in that sense it was very tough for him,” Aso told reporters. “I felt sorry for him, but I guess it’s not the sort of issue I should sympathize with.” Despite the divisions at the meeting, the US remains a backer of the alliance of wealthy nations, Mnuchin said. “We believe in the G-7,” he said. “These are our most important allies. We’ve had long-standing relationships will all these countries.” Bloomberg News

It has been a tense and tough Group of Seven [G-7 meeting]. I would say it has been far more a G-6 plus one than a G-7.”—Le Maire

Mattis warns of bumpy road India threads path between to US, N. Korea nuke summit rising China, uncertain US

INGAPORE—It will be a “bumpy road” to the nuclear negotiations with North Korea later this month, Defense Secretary Jim Mattis warned last Sunday, telling his South Korean and Japanese counterparts they must maintain a strong defensive stance so the diplomats can negotiate from a position of strength. Mattis was speaking at the start of a meeting with South Korean Defense Minister Song Young-moo and Japanese Defense Minister Itsunori Onodera on the final day of the Shangri-La Dialogue security conference. He said allies must remain vigilant. “We can anticipate, at best, a bumpy road to the negotiations,” Mattis said. “In this moment we are steadfastly committed to strengthening even further our defense cooperation as the best means for preserving the peace.”

Plans are moving forward for a nuclear weapons summit between President Donald J. Trump and North Korean leader Kim Jong Un on June 12 in Singapore. And Mattis repeated the US position that North Korea will only receive relief from UN national security sanctions when it demonstrates “verifiable and irreversible steps” to denuclearization. Through an interpreter, Song said that this is a great turning point as North Korea takes its first steps toward denuclearization. “Of course, given North Korea’s past, we must be cautious in approaching this.” He added that some of North Korea’s recent measures “give us reasons to be positive and one can be cautiously optimistic as we move forward.” AP

NITED States Defense Secretary James Mattis described India as the “fulcrum” of security in the IndoPacific region as he traveled this week to an annual security conference in Singapore, attended for the first time by an Indian leader. But if Mattis was hoping that Prime Minister Narendra Modi would use the platform to join the US, Japan and Australia—a grouping known as the Quad—in a more muscular challenge to China’s regional expansion, he was disappointed. Instead, India’s strongest leader in decades navigated carefully between the two regional military powers. Modi studiously avoided any mention of the Quad in his speech, and he hammered the kind of protectionism currently practiced by the United States, both of which were sure to satisfy Chinese delegates. “Asia and the world will have a better future when India and China work together in trust and confidence, sensitive to each other’s interests,” Modi told defense ministers and military officials assembled for the Shangri-La Dialogue, an event organized by the London-based International Institute for

Strategic Studies. He did echo US appeals for “freedom of navigation, unimpeded commerce and peaceful settlement of disputes in accordance with international law.” And he attacked governments that put other nations under “impossible burdens of debt.” Both were likely references to China for its behavior in the disputed South China Sea and its “Belt and Road” initiative infrastructure projects—which can come courtesy of large loans—in other countries. Yet Modi has done something of a turnaround on China in recent weeks, a far cry from his ground-breaking shift to deepen engagement with the US when he came to power in 2014, which was accompanied by a show at home of standing up to China’s rise with a more robust “act east’’ policy. Tensions came to a head last summer when Indian and Chinese troops engaged in a standoff over a long-running border dispute. To embrace a more proactive India, the US rebranded its Asia-Pacific policy as “Indo-Pacific,” a change that fuels Chinese concerns about containment. Bloomberg News

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US hints at China trade talks progress

NITED States Commerce Secretary Wilbur Ross continued two days of talks on trade in Beijing with a signal that the two sides may be making some progress toward increasing Chinese imports of US goods. Ross told reporters following a meeting last Sunday with Vice Premier Liu He that the encounter had been “friendly and frank, and covered some useful topics about specific export items.” The United States delegation included energy and agriculture experts, reflecting the US desire to increase exports of natural gas and food in an effort to reduce the $375- billion annual deficit in goods trade with China. While the team may be inching toward technical agreement in that direction, the talks are overshadowed by the unpredictability of US policy in the wake of recent reversals that have seen tariffs placed on metals imports by allies. On the Chinese side, officials including Commerce Minister Zhong Shan, Central Bank Governor Yi Gang, Vice Agricultural Minister Han Jun, and Li Fanrong, vice minister of national energy administration, accompanied Liu in the talks, according to a media pool report. During his stay, Ross has been looking to build on a vague joint statement released on May 19, after the last negotiations in Washington. China pledged to take steps to “substantially” reduce the US trade deficit, including by buying more American farm goods and energy, though it didn’t commit to a dollar amount.

Shifting stance

The Trump administration’s shifting stance on China may complicate Ross’s ability to extract concessions from Beijing. President Donald J. Trump announced that the US would forge

ahead with a plan to slap tariffs on $50 billion of Chinese imports just 10 days after the two reached the truce agreement in Washington. China slammed the “flip-flop,” vowing to hit back should the US tariff threat materialize. In addition to tariffs, Ross is also under pressure from US lawmakers to stay tough on Chinese telecomequipment maker ZTE Corp. China pressed the US to give ZTE a break after the Commerce Department cut off the company from US suppliers to punish it for allegedly lying to American officials in a sanctions case.

Trump leniency

Last month Trump said he would allow ZTE to stay in business once it pays a $1.3-billion fine, shakes up its management and provides “high-level security guarantees.” Republican Sen. Marco Rubio and other lawmakers from both parties have questioned Trump’s leniency toward ZTE, arguing the company represents a security risk. The stakes are high for the global economy, which is cruising at its fastest pace of growth in seven years. But the International Monetary Fund has warned that a trade war could threaten the recovery, and policy makers are contending with a growing list of geopolitical risks, from a political crisis in Italy to the rocky progress of peace talks with North Korea. Treasur y Secretar y Steven Mnuchin said last Saturday the US wants to see “structural changes” in the Chinese economy. “This isn’t just about buying more goods. This is about structural changes,” Mnuchin told reporters in Whistler, Canada, at the close of a summit of G-7 finance chiefs. “If there are structural changes that allow our companies to compete fairly, by definition that will deal with the trade deficit alone.” Bloomberg News

briefs

➜ New Italian govt to create jobs and deport migrants ROME—Italy’s new populist leaders commemorated the founding of the Italian republic by attending a pomp-filled military parade last Saturday—and then promised to get to work creating jobs and expelling migrants. “The free ride is over,” league leader Matteo Salvini, Italy’s new interior minister, warned migrants at a rally in northern Italy. “It’s time to pack your bags.” The pledge of mass deportations to come was a reminder that Italy has a staunchly anti-immigrant, right-wing party in its governing coalition—and that the European Union will face a whole new partner governing its fourth-largest economy. AP

➜ Pope digs deeper into roots of Chile sex-abuse scandal VATICAN CITY—Pope Francis dug deeper into the roots of Chile’s sex-abuse scandal by meeting last Saturday with a group of priests who were trained in a cult-like Catholic community and suffered psychological and sexual abuse there. Francis celebrated Mass with priests trained by the Rev. Fernando Karadima, a powerful preacher in Chile who was sentenced by the Vatican in 2011 to a lifetime of penance and prayer for having sexually and spiritually abused young parishioners through an abuse of power. The Vatican said the Mass and subsequent weekend meetings would help Francis better understand life inside Karadima’s El Bosque community, which catered to the rich and powerful of Santiago society during and after the Pinochet dictatorship. AP

➜ Protests resume after paramedic’s Gaza funeral KHUZAA, Gaza Strip—Thousands of Palestinians, including hundreds of medical workers in white uniforms, took part last Saturday in the funeral procession of a colleague who was shot dead by Israeli troops the previous day along the Israel-Gaza border. Razan Najjar, a 21-year-old volunteer paramedic, was shot as she tried to help evacuate wounded near Israel’s perimeter fence with Gaza. She was the second woman among more than 115 Palestinians who have been killed by Israeli army fire since Gaza border protests began in late-March. UN officials condemned the killing of Najjar, saying that witness reports indicated she wore clothing that clearly identified her as a health worker. AP

➜ Syria FM: Iran has no combat forces, bases in the country DAMASCUS, Syria—Syria’s foreign minister said last Saturday that Iranian military advisers are embedded with Syrian troops but Tehran has no combat forces or fixed bases in the country. Walid al-Moallem’s comments came amid rising tension in the region as Israel has repeatedly warned against any permanent Iranian military presence in Syria. Al-Moallem said Israel is making false claims to try to pressure Iran, its archrival. In May Israel carried out a wave of air strikes in response to what it said was an Iranian rocket attack on its positions in the occupied Golan Heights. It was the most serious confrontation between Israel and Iran to date. AP

➜ Nato chief: Alliance won’t aid Israel if Iran attacks BERLIN—The North Atlantic Treaty Organization’s (Nato) secretary-general says the alliance wouldn’t come to Israel’s defense in case of attack by arch-enemy Iran. Jens Stoltenberg told the magazine Der Spiegel in comments published last Saturday that Israel is a partner, but not a member and that Nato’s “security guarantee” doesn’t apply to Israel. Stoltenberg says Nato isn’t involved in Mideast peace efforts or in conflicts in the region. AP

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Banking&Finance BusinessMirror

With RRR cut, more Filipinos have funds to invest in RTBs–finance chief

By Rea Cu

@ReaCuBM

ITH the move of the Bangko Sentral ng Pilipinas (BSP) to cut the reserve requirement ratio (RRR), Filipinos can invest in government bonds specifically the retail Treasury bonds (RTBs), as there is liquidity in the banking system, the Department of Finance said. Finance Secretary Carlos G. Dominguez III told financial reporters that the RRR cut made by the BSP last month increases liquidity within the financial system, and the funds can in turn be invested in bonds or other financial products.

“Our assessment is, remember that the Central Bank has lowered the reserve requirement by another 1 percentage point, that’s P80 billion at least, that money is going to look for a home. So they [the Filipinos] can use that money

to buy bonds,” Dominguez said. Last Wednesday the Bureau of the Treasury (BTr) awarded P66 billion in its initial auction for RTBs from the P30 billion on offer, at a coupon rate of 4.875 percent, on the back of a very liquid system. National Treasurer Rosalia V. de Leon earlier said that the auction committee is pleased with the turnout of the first-day auction for the 21st RTB, as tenders rose to P92.788 billion, prompting the Treasury to award P66 billion, from the P30 billion on offer at a coupon rate of 4.875 percent. The RTB has a tenor of three years. She added the BTr is confident the investing public will participate in the fund-raising exercise of the government. The offer period for the RTB is from May 30 to June 8. De Leon said the lead bank for the RTB issuance is the Land

Bank of the Philippines, while issue managers include the Development Bank of the Philippines (DBP), BDO Capital & Investment Corp., the Bank of the Philippine Islands Capital Corp., Security Bank Capital, and the Metropolitan Bank and Trust Co. RTBs are medium- to long-term investments issued by the Philippine government offered to small investors. The finance chief said the government will not overborrow in terms of its financing plan. The borrowing mix set by the Duterte administration for 2018 is a ratio of 65:35, with the bulk raised from domestic lenders and the remaining 35 percent from the offshore entities. “We will follow what our borrowing plan is, it’s not demanddriven, it’s what we need. We are not going to overborrow,” he added.

For OFWs, dreams could be shattered by one medical emergency. New health plan aims to end that.

EADING global nonlife-insurance provider Madanes Group, market leader in insurance and reinsurance brokering Jardine Lloyd Thompson (JLT), and homegrown health-care industry pioneer PhilCare have combined efforts to come up with a breakthrough health plan tailored to the needs of overseas Filipino workers (OFWs). “We have a lot of our countrymen outside of the Philippines who are working hard, sending money to educate their children and put food on their tables,” JLT Philippines President and CEO Raul Tan shared. “We hear all these horror stories of how their sibling, their husband or wives are hospitalized and all of a sudden their earnings are gone. This is where we step in.” Called Bayani Family Care (BFC), the innovative insurance product is meant to ease the emergency hospitalization concerns of the OFW families. Philip Samson, deputy CEO and head of Benefit Solutions of JLT, stressed the need to empower OFWs, who are considered heroes but find themselves in dire straits

Bayani Family Care is the result of a partnership rooted in a shared vision—to empower overseas Filipino workers by giving them the opportunity to secure the health of their loved ones back home. In photo are: Madanes Group President and CEO Ohad Madanes (from left), PhilCare President and CEO Jaeger Tanco and JLT Philippines President and CEO Raul Tan.

because of family needs, especially arising from medical emergencies. “Right now in the Philippines, there is only about 4 percent of the population covered by health maintenance organization [HMO]. The need arises—a lot of people are getting hospitalized,” PhilCare President and CEO Jaeger L.

Tanco shared. “58 percent of the money remittance coming here is actually for hospitalization— and it is sad because their dreams could all go down because of one simple illness.” BFC covers scheduled and emergency room care and confinement, and scheduled hospitalization

benefits for viral and bacterial illnesses and injury treatments in more than 500 PhilCare-accredited hospitals nationwide. Valid for one year, BFC offers basic life coverage for P4,350 per person. This assures scheduled and emergency hospitalization and treatments for up to P60,000. Part of its benefits include an optional unlimited outpatient medical consultations with pediatricians, cardiologists, endocrinologists and more. Interested parties may apply for the HMO online and pay overthe-counter or via credit card. BFC requires no medical examinations, no hospital deposits, and no agents to meet and discuss. What’s more dependents only need to present the BFC e-voucher or code to a PhilCare-accredited hospital when claiming benefits. “We want to create a product that will give OFWs peace of mind and ensure no worries over the cost of hospitalization,” Madanes Group President and CEO Ohad Madanes said. “We want to give them the kind of protection that whenever emergencies happen they have a solution.”

Monday, June 4, 2018

SSC affirms dismissal of cases vs 4 SSS execs

HE case filed by former Social Security Commissioner Jose Gabriel M. La Viña against four officials of the Social Security System (SSS), for alleged links to stock trading, has been dismissed, the Social Security Commission (SSC) has reported. In a document obtained by financial reporters, SSC Resolution 181, series 2018 said the commission has approved the recommendation for the dismissal of the administrative complaint filed by La Viña last year against the officials. “Resolved, that the commission approve, as it hereby approves, the attached resolution recommending that the administrative complaint filed by former commissioner La Viña against respondents Rizaldy T. Capulong, Reginald G. Candelaria, Ernesto D. Francisco Jr., and George S. Ongkeko Jr. ‘be dismissed for insufficiency of evidence,’” the resolution said. In November last year the SSC welcomed the investigations by Congress and third-party institutions in support of the SSC’s house cleaning efforts, particularly on the conduct of its officials handling investments of the pension fund. Former SSC Chairman Amado D. Valdez said that a committee will evaluate the responses submitted by Capulong, Candelaria, Francisco and Ongkeko, to the complaints

filed by La Viña. The SSC is the policy-making body of the SSS. Under Republic Act (RA) 8282, or the social-security law, the SSC shall be composed of the secretary of labor and employment or his duly designated undersecretary, the SSS president and seven appointive members, among others. Earlier, the SSC assured the public an investigation was to under way to look into the charges against the four SSS officials. The SSS assured the public that its investment reserve fund is well protected, amid reports that some officials of the state-run pension fund were illegally profiting from the contributions and investments made by its members. Candelaria is the former SSS Equities Investment Division vice president while Ongkeko is the pension fund’s former chief actuary. Capulong is the SSS EVP for investments, while Francisco is the SSS Equities product development head. SSS President and CEO Emmanuel F. Dooc earlier said that Ongkeko is now a consultant for the Bureau of the Treasury. “George is now a consultant for the Treasury, and he is reviewing, I think, the military pension because he’s in actuary. Capulong and Francisco are still with the SSS as the SSC also found them not guilty,” Dooc said. Rea Cu

BPI-Philam remains the country’s number one bancassurance firm

ancassurance firm BPIPhilam Life Assurance Corp. continued to outpace its financial performance from previous years, according to recent data released by the Insurance Commission. Across the board, the company grew more than a billion pesos in both premium income and net worth posting an increase of 6 percent and 22 percent in each category, respectively. With a net worth of P 7,149,854,289, the company remains the top fastestgrowing bancassurance firm in the list. Further, as part of the Philam group, BPI-Philam’s growth contributed to the strong industry standing of parent company Philam Life, boasting a combined premium income of P40.2 billion. A strategic alliance between life insurer Philippine American Life and General Insurance Co. (Philam Life) and the Bank of the Philippine Islands (BPI), the country’s No. 1

bancassurance company, relied on world-class customer offerings and nationwide reach of its parent companies to further establish its industry foothold. “This growth is a testament to the company’s strong business model, customer-centric client servicing and industry innovative products,” BPI-Philam CEO Surendra Menon said. Early this year, the company was awarded the Philippines’s Best Life Insurance Company for 2017 by international finance magazine World Finance following its exhaustive efforts in pushing its advocacy of educating Filipinos on financial literacy. “BPI-Philam plans to use this momentum to further develop products and services this year that not only meet the client’s needs but also stand as innovations in the insurance industry,” Menon added. “We are looking forward to our third annual celebration of Bancassurance month this October to culminate this year’s momentous wins.”

Perspectives

Digital gets personal

EOs are optimistic about the sweeping changes that digital brings. The vast majority—95 percent—see technological disruption as more of an opportunity than a threat. Many are determined to seize the competitive edge it offers and get on the front foot. Over half of CEOs (54 percent) are actively disrupting the sector in which they operate, rather than waiting to be disrupted by competitors. To win the digital race, CEOs are taking close personal ownership of driving digital transformation. They recognize the power of data to personalize the customer experience, though only 23 percent claim to be exceeding customer expectations today. They are embracing the likes of AI and the Internet of Things to reshape their businesses. They are taking on—as a personal responsibility—the obligation to protect data and earn the public’s trust. And, as automation and AI reconfigure the work force, CEOs are planning how to prepare their people for the age of the smart machine. KPMG’s Goodburn welcomes these developments: “more and

more of the CEOs I speak with are telling me, ‘I am personally leading our digital charge.’ That says to me, ‘I’m creative, adaptive and agile, and prepared to transform my business to be successful in a digital world.’” Samuel Tsien, group CEO of Singapore-headquartered OCBC Bank, has a similar view of how CEOs should approach transformation. “The word ‘disruption,’ often used in association with digital technologies, has an antagonistic feel that I’ve never liked,” he says. “Instead, we need to look at it as a transformation that is brought about by the change in our market environment.”

actively disrupting the sector in which they operate. For Susan Story, president and CEO at American Water, the largest publicly traded water and wastewater utility company based in the US, CEOs’ focus on transformation ref lects the fact that business and technology are now intertwined. “In the old days, you had business and then you laid technology on top of it,” she explains. “Today business is technology and everything we do has technology threaded through it. How you most effectively and efficiently do that is what distinguishes companies that are digitally transformed from those companies that aren’t.”

Owning transformation

Keeping up with expectations

In the digital age, CEOs are prepared to lead their organizations through a radical transformation of their operating model. In fact, 71 percent of CEOs say this. American CEOs are most prepared to drive this transformative change, with 91 percent saying that they are prepared to step up to the plate. They are keen to be first-movers, too: 86 percent of CEOs in the United States feel their organization is

As well as acting as champions of change, CEOs are under the spotlight in terms of delivering results on technology investments—and expectations can be challenging. Over half of CEOs (51 percent) say that their board of directors has an unreasonable expectation of returns on digital transformation investments. Vinod Kumar, managing director and group CEO of Tata Communications, believes that “the

largest challenge with getting a return on technology investment is the adoption of it.” He explains, “once you have the technology, your people and processes have to evolve to leverage it. There’s usually a lag effect, so adoption tends to be slower than planned.” Setting clear expectations will be critical, as CEOs recognize that a degree of patience is required. We found that 65 percent of CEOs say that the lead times to achieve significant progress on transformation can seem overwhelming. Steven Hill, KPMG’s Global Head of Innovation, believes that leaders need to challenge ROI conventions by fundamentally rethinking how they view digital investments and how returns are measured. “Business leaders need to rethink their innovation equation,” he says. “You can’t look at investments and returns in the way you did in the past. First, you will only get marginal benefits if you just digitize an existing process—leading organizations rethink analogue system workflow at a minimum and the entire business model in many cases.” Jim Kavanaugh, CEO of World

Wide Technology, advises taking a long-term view on technology investing. “You can no longer evaluate technology investments through only a traditional lens. When the goal is market disruption or to create a new business model or level of engagement, understand that the return is more complex and may materialize over time.” Paul Massara, CEO of United Kingdom-based Electron, a company that provides blockchain solutions to the energy sector, agrees that digital innovation is top of mind for today’s business leaders. “Nearly every industry is being disrupted by technology of some sort and the energy industry is no exception—battery storage, AI, electric vehicles and blockchain are just some,” he says. “The challenge for both incumbents and new entrants is how you transition to new models in a highly regulated and political environment. My money would still be on the new entrants but any new models need to be grounded in the reality of the market rules.” Traci Gusher of KPMG’s Data & Analytics Center of Excellence says a combination of quantitative and qualitative measures are needed to

measure the benefits of AI. “It’s a bit short-sighted to focus solely on quantitative metrics. Some of the qualitative measures we’ve looked at are things like general competitive advantage. So, while you may not see a direct benefit of putting investment dollars into AI for your supply chain, you’re going to lose competitive advantage over time if you’re not using it,” she explains. “Another measure is around attracting high-performing talent. The most attractive talent wants to be part of an innovative culture where cutting-edge approaches and technologies are being implemented.” The article “Digital gets personal” was taken from the publication entitled Growing Pains: 2018 Global CEO Outlook. © 2018 R.G. Manabat & Co., a Philippine partnership and a member-firm of the KPMG network of independent member-firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in the Philippines For more information on KPMG in the Philippines, you may visit www. kpmg.com.ph.

Green Monday BusinessMirror

A8 Monday, June 4, 2018

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

Will climate change cause more migrants than wars?

limate change is one of the main drivers of migration and will be increasingly so. It will even have a more significant role in the displacement of people than armed conflicts, which today cause major refugee crises. This was the warning sounded by Ovais Sarmad, the deputy executive secretary of the United Nations Framework Convention on Climate Change (UNFCCC), who was in Buenos Aires to participate in a meeting of international representatives and senior Argentine government officials in mid-May to analyze the impacts of this phenomenon. “One example I use is that recently, there was migration of refugees and migrants in Europe because of the Syrian conflict and other conflicts in Sub-Saharan Africa. That is a big political issue,” Sarmad told Inter Press Service (IPS). “But the climate-change impact will make 1 million look like a small number. Because a hundred [million] or 400 million people live in developing countries in low-lying areas, in cities which are very close to the sea. If sea level rises, then people will have to move.” Sarmad, from India, is a specialist in commerce and financial management, with postgraduate studies in London, who, for 27 years, worked at the International Organisation for Migration (IOM). He was chief of staff to the IOM director general until last year, when UN Secretary-General António Guterres appointed him as No. 2 at the UNFCCC. “This movement won’t be just national; people will be moving to other countries. One of the examples is Kiribati, a small island in the Pacific with 100,000 people that will disappear in a few years’ time. What will happen with this population?” Sarmad asked in a meeting with four journalists, including IPS. Can one speak in a strict sense of climate refugees? The international community has not yet validated that definition, but Sarmad believes that the issue must be considered due to realities, such as the sea-level rise, increasingly destr uctive hurricanes or persistent droughts. “In many countries around the world, farmers are the most affected by droughts and they will move. With their cattle, with their children or whatever.… And then… they won’t have many places to go. We have only one planet and they can’t go to space,” the expert said. In that sense, he considered that the world should be “supportive” and “not close the doors” to those who are displaced due to extreme weather events. The Indian diplomat was the keynote speaker at the meeting “T20 and Climate Change: Planning, Risk and Response Facing the Emergency,” organized within the framework of the so-called Think 20 (T20), which brings together academic organizations and researchers of the Group of 20 (G-20). The T20 is organized in 10 working groups, one of which deals with climate change and infrastructure for development. Its mission is to submit publicpolicy recommendations to the G-20, the group of industrialized and emerging countries that

encompasses 66 percent of the world’s population and makes up 85 percent of global GDP. Last December Argentina assumed the one-year presidency of the G-20, which will conclude at the end of the year with the summit that will bring together the world’s main government leaders in Buenos Aires. The issue of climate change is particularly controversial in the G-20, because last year, under the German presidency, the United States did not adhere to the Action Plan on Climate and Energy Growth, which was endorsed by the rest of the member-countries, leading many to conclude that the G-20 had become the Group of 19+1. Argentina wants to be seen as taking an active stance in the battle against climate change, although it did not make the issue one of the G-20 priorities for this year, to avoid conflicts. The main themes chosen by the government of Mauricio Macri are:

the future of work, infrastructure for development and a sustainable food future. Sergio Bergman, the Argentine minister of environment and sustainable development, acknowledged in the T20 meeting that Argentina needs to fulfill its commitments undertaken within the Paris Agreement on climate change. That binding agreement that establishes global measures to combat climate change was adopted during the 21st Conference of the Parties to the UNFCCC in December 2015, and was considered a landmark achievement, until the US administration of Donald J. Trump withdrew from it in 2017. Argentina needs to maintain those commitments, among other things, because it is applying for membership in the Organisation for Economic Co-operation and Development (OECD). “We want to join the OECD and for that we have to take on our obligations and sit for an exam,” said Bergman, who added: “After what happened in Germany last year, the challenge is how we get the 20 members of the G-20 into the final document.” Also participating in the T20 meeting was Argentine Defence Minister Oscar Aguad, who to some extent played host since it was held at the National Defence University. This state institution is responsible for the training of military and civilians and climate change is one of its

The climate-change impact will make 1 million look like a small number. Because a hundred [million] or 400 million people live in developing countries in low-lying areas, in cities which are very close to the sea. If sea level rises, then people will have to move.”—Sarmad

areas of research. Sarmad ’s proposals in Buenos A ires made it clear that the goal of the UNFCCC is for Argentina, as chairman of the G-20, to promote commitments in the field of climate change. “G-20 must have political leadership and include in this year’s recommendations that the Paris Agreement must be implemented. Otherwise, it will be a nice agreement, but it will stay on a shelf,” he said in the keynote address during the event before about a hundred attendees, many of them public officials. Sarmad said that, despite the international community’s efforts to combat climate change, there was an increase in greenhouse-gas emissions in 2017, after a decrease in the previous three years. The reason, he added, has been an increase in the consumption of fossil fuels. This was confirmed by another participant in the T20 meeting, Youba Sokona from Mali, an environmental expert and the vice chairman of the Intergovernmental Panel on Climate Change (IPCC). Sokona said that although the cost of renewable energies has gone down in recent years, fossils fuels are still cheaper. “ T he cost of renewable energ ies is not on ly e x pensive for developing countr ies. Even Ger many, when it decided to put a bra ke on nuclear energ y, had to tur n to coa l,” said Sokona, who pointed out that the IPCC faces f unding problems because of the w ithdrawa l of US economic suppor t. “ It ’s i nt e r e s t i n g t h a t w e have these conferences to talk about climate change, but there a re ma ny t hings we ca n do. We must take action because there’s much suffering around the world because of climate change that affects especially women and children, the most vulnerable populations.” There’s no other issue at an international level, besides security and nuclear proliferation, more important than climate change,” he said. IPS

Boracay water firm says it remains compliant with DENR standards

he water service provider with the only centralized sewerage system in the world-famous island of Boracay said it continues to remain compliant with the stringent pollution-control standards of the Department of Environment and Natural Resources (DENR). With a network spanning over 22 kilometers of sewer lines serving more than 1,000 commercial and residential establishments and a fleet of seven desludging trucks to haul wastewater coming from those in unsewered areas, Boracay Island Water Co. Inc. (Boracay Water), said it ensures that wastewater discharges or effluents are treated in its two sewage-treatment plants and are consistently compliant with the DENRmandated Class SB water quality or water that is fit for recreational activities and contact uses that would not pollute the island’s pristine beach waters. Boracay Water operates and manages the Balabag Sewage Treatment Plant (STP) with an expanded wastewatertreatment capacity of 6.5 million liters per day (MLD), more than double the original capacity of only 2.5 MLD when it was still under the operation of then B o ra c ay Wate r wo r k s a n d S e we ra g e System back in 2008. It was completed in March 2011, four years ahead of the regulatory completion target and fully environmentally compliant. A second STP in Barangay ManocManoc was also constructed by Boracay Water to cater to the increasing demand for wastewater treatment, with a capacity

of 5 MLD, the water-service firm said in a news release. The combined treatment capacity of both STPs at 11.5 MLD ensures that wastewater from its connected customers always conforms with DENR standards. The recent completion of a diversion system from the Balabag STP to the Manoc-Manoc STP will fur ther allow t h e s y s t e m t o h a n d l e m o re s e we r connec tions even from non-Boracay Water customers, making certain that they will always meet the requirements and regulations set by the DENR. With the operation of the sewage-treatment facilities and the expansion of the sewer network—61 percent of the sewer lines laid and completed—sewer coverage on the island has doubled from only 22 percent in 2010 to almost 45 percent to date, with wastewater from more establishments fully compliant with the DENR effluent standards. A third STP to be built in Barangay Yapak with a treatment capacity of 5 MLD is set to be completed in 2020 to cater to the wastewater-treatment requirements of commercial and residential establishments in the island’s third barangay. This will make Boracay Island as the only beach destination with a sewage treatment in each of its barangays. Since the start of its operations in 2010, Boracay Water has been consistently implementing its master plan for the island’s sewer system aligned with the approved plan of its regulator, the Tourism Infrastructure and Enterprise Zone Authority, the news release said.

Greening of Boracay pushed

n the heels of President Duterte’s plan to place Boracay under land reform to give land back to farmers, the Philippine governmenthosted Asean research center is looking to assist in the development of the island’s agriculture sector. D i re c to r G i l C . S a g u i g u i t J r. o f the Southeast Asian Regional Center for Graduate Study and Research in Agriculture (Searca) said the center is conceptualizing a project that will help Boracay farmers and indigenous people make the best use of the land they will receive from the government. He added the idea is to help farmers in three ways: teach farmers best agricultural practices, involve them in the value chain and teach them agri-tourism. “ Wi t h t h e wo r l d watc h i n g t h e rehabilitation of Boracay, Searca sees this time as an excellent window for demonstrating sustainable agriculture practices to show that the invigorated farms would not only be economically viable but also environmentally sound.” Saguigit said. “The importance of forest rehabilitation, replanting and protection will also be stressed with possibly significant involvement of indigenous people.” Moreover, Saguiguit said an important component in strengthening the rejuvenated farming communities would be to get the farmers on track in the value chain.

“ Th i s m e a n s t h at w h ate ve r t h e farmers produce they can sell right on the island. They don’t have to bring out their produce. They can sell raw products to hotels and other tourist locations and, at the same time, explore possibilities for postharvest processing into alternative products that tourists would buy. These are essentials in an island economy,” Saguiguit explained. “The most important component,” he added, “would be to teach the farmers of Boracay agri-tourism as an alternative source of income in the mold of Ubud in Bali, Indonesia, where there are paddy areas which attract tourists as much as the island’s world-famous beaches.” Given the push for agri-tourism, he said Boracay is a prime location to demonstrate that farmers can actually earn from the tourism boom by providing opportunities for tourists to experience a rural farm setting in the Philippines without having to get away from Boracay. Saguiguit said the plan is to involve the local government unit and private sector to ensure that the proposed agricultural and rural development initiative will be inclusive and sustainable. Searca is actively seeking expressions of interest and possible support from government agencies and other entities to develop and implement this concept approach to help Boracay.

Water concessionaire builds new central lab

Supertyphoon Yolanda (international code Haiyan) survivor Jessica Bibera and her baby Nino Cedric partake of free meals distributed by a charitable organization at the “tent city” for typhoon survivors on November 7, 2014, in Tacloban City, Leyte province. It was one year after the supertyphoon ravaged Leyte, Eastern Samar and other provinces in the region, killing thousands of people in Leyte alone and left a wide swath of destruction. AP/Bullit Marquez/File

water concessionaire is constructing a new building inside La Mesa Compound in Quezon City to house its expanded Central Laboratory, which monitors and tests the quality of water supply within its concession area. The Maynilad Water Services Inc.’s (Maynilad)Central Lab is equipped with stateof-the-art analytical instruments that allow the water concessionaire’s chemists to study compounds in the water samples drawn from over 1,000 sampling points throughout the West Zone, it said in a news release. Its new P70.4-million facility has the added capability to monitor more compounds that are now part of the new quality parameters set by the Department of Health’s (DOH) updated Philippine National Standards for Drinking Water. “Ensuring good water quality is of paramount importance to Maynilad. Hence, we continuously invest in our infrastructure to ensure that the water we deliver to our over 9 million customers is potable,” Maynilad President and CEO Ramoncito S. Fernandez said in a news release.

With the expanded facility, Maynilad’s Central Lab can sustain its multiple accreditations. It obtained environmental laboratory accreditation from the Department of Environment and Natural Resources in 2015, and was conferred with the ISO 17025:2005 by the Department of Trade and IndustryPhilippine Accreditation Bureau. It is also accredited by the DOH as a laboratory for drinking water analysis. Maynilad is the largest private water concessionaire in the Philippines in terms of customer base. It is the agent and contrac tor of the Metropolitan Waterworks and Sewerage System for the West Zone of the Greater Manila Area, which is composed of the cities of Manila (certain portions), Quezon City (certain portions), Makati (west of South Super Highway), Caloocan, Pasay, Parañaque, Las Piñas, Muntinlupa, Valenzuela, Navotas and Malabon all in Metro Manila; the cities of Cavite, Bacoor and Imus, and the towns of Kawit, Noveleta and Rosario, all in Cavite province.

Biodiversity Monday BusinessMirror

Asean Champions of Biodiversity Media Category 2014

Monday, June 4, 2018

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

Philippine eagle soaring high: A sign of balanced ecology

By Jonathan L. Mayuga

@jonlmayuga

he iconic Philippine eagle (Pithecophaga jefferyi) is the most revered bird of prey in the Philippines. Also known as the monkeyeating eagle, this endemic eagle is the largest extant eagles in the world in terms of length and wing surface. It’s sheer size and ability to fly and soar high in the sky in search of prey within its territory or range makes it the most fearsome among all birds of prey in the Philippines. Several laws provide the legal basis to protect the Philippine eagle against all threats—particularly illegal wildlife trade, hunting or the destruction of their habitats. The laws include the Republic Act 7586, or the National Integrated Protected Areas System (Nipas) Act, which established protected areas set aside for conservation; and R A 9147, the Wildlife Resources Protection and Conservation Act, which prohibits acts that threaten wildlife resources and their natural habitats.

Apex predator

Josefina de Leon, Wildlife Resources Division chief at the Biodiversity Management Bureau (BMB) of the Department of Environment and Natural Resources (DENR), said the Philippine eagle, being the top predator in the wild, helps maintain the ecological balance within its territor y. Interviewed by the BusinessMirror on May 8 at the DENRBMB office inside the Ninoy Aquino Park and Wildlife Rescue Center in Quezon City, de Leon said being a national symbol, the existence of the Philippine eagle is important. “Its very existence in the forest means its preys still exist,” she added. De Leon said the Philippine eagle is known to prey on monkeys, snakes, monitor lizards, lemurs, all of which have different but important functions in an ecosystem to maintain the ecological balance. “It means the food chain is complete. The more pairs [of Philippine eagle] we have in the wild means the more healthy ecosystems we still have,” she added.

‘Not just a big bird’

The Philippine eagle is the national bird of the Philippines by virtue of Proclamation 615 series of 1995 signed on July 4, 1995, by then-President Fidel V. Ramos. Dennis I. Sa lvador, executive director of the Philippine Eagle Foundation (PEF), said in a statement sent to the BusinessMirror, in time for the celebration of the Philippine Eagle Week from June 4 to 10, that the Philippine eagle is more than just a big bird. The PEF is one of the leading conservation and advocacy non-governmental organizations (NGOs) dedicated to the protection and conservation of the Philippine eagle and their habitats. It is also one of the DENR’s leading nature conservation partners that continue to conduct research, on-the-ground community work and to help educate the people about the importance of the Philippine eagle and their natural habitats. “As an equal wonder of creation that is found only in the country,

how we treat our national bird greatly reflects the kind of connection we have with the natural world. Our character as individuals and as a people are tied to how we treat our national symbol,” he said.

Eagle Watch

Through a program called Eagle Watch, the DENR and its partners continue to monitor known habitats of the Philippine eagle to protect and conserve the critically endangered species. The DENR-BMB serves as the repository of all reports of Philippine eagle sightings, nesting or incidence, such as rescue or killing of the revered bird of prey. De Leon said new sightings of Philippine eagle, especially of juveniles outside known habitats, is something to be happy about as far the DENR-BMB and its partners are concerned. “Because it only proves there are still areas where they can survive. They can only survive if the area has a healthy ecosystem,” she added. A pair of Philippine eagle needs a territory with a radius of at least 7 kilometers to 13 kilometers to be able to survive, she said.

A 2016 photo of 2-year-old Philippine eagle “Sinabadan” while perching on a tree. Sinabadan was raised by a single parent, a female, whose partner was shot and killed in 2014. John McKean/Philippine Eagle Foundation

It means the food chain is complete. The more pairs [of Philippine eagle] we have in the wild means the more healthy ecosystems we still have.”—de Leon

Declining population

While it is the apex predator in the wild, the population of the Philippine eagle is on the decline. The DENR-BMB believes there are around 500 pairs of breeding Philippine eagles left in the wild. The PEF places the eagle’s population at around 400 breeding pairs. Whichever is the case, the International Union for the Conservation for Nature (IUCN) lists the rare, endemic species as “critically endangered,” which means the species, which can only be found in the Philippines, is in the brink of extinction. The Philippine eagle is known to exist in eastern Luzon, Samar, Leyte and in Mindanao, particularly Northern Mindanao, where the bulk or highest number of breeding pairs have been recorded, including several pairs discovered outside protected areas. Hunting for food, sports or trophy, and habitat loss because of the massive deforestation have been identified by scientists as the two leading causes of the continuing decline in their population.

Philippine Eagle Week

The protection and conservation of the Philippine eagle were institutionalized with the declaration of the Philippine Eagle Week from June 4 to 10 of each year by thenPresident Joseph Ejercito Estrada through Proclamation 79 signed on February 24, 1999. Since then, the DENR has been launching various activities to highlight the importance of the Philippine eagle, and to increase the awareness and appreciation to the country’s national bird. This year the 20th Philippine Eagle Week celebration will culminate at the Manila Ocean Park at Luneta Park, Manila, on June 9. The event will be highlighted by the introduction of “Hero,” a white-bellied sea eagle on loan

from the DENR-BMB. There will also be a signing of a memorandum of agreement on the Renewal of Wildlife Loan Agreement between the DENR and the Manila Ocean Park to be led by DENR-BMB Director Crisanta Marlene Rodriguez and Francis Low, Manila Ocean Park executive vice president and COO. The DENR-BMB and the Wild Birds Photographers of the Philippines will also showcase a photo exhibit in the area.

Integrated conservation program

To boost its limited resources, the DENR-BMB has partnered w it h var ious conser vation groups to boost its limited fina nc i a l a nd hu m a n-resou rce capacity dedicated for the Philippine eagle’s protection and conser vation in the wild. There is no specific program dedicated to the Philippine eagle or any other iconic animals like the Tamaraw or the Philippine crocodile that are also threatened with extinction. Interviewed on May 8 at the DENR-BMB office, Anson Tagtag, the chief of the wildlife management section, said starting in 2015, all the activities related to threatened species conservation were integrated into the programs and activities of every DENR regional office. Nevertheless, he added the strategy appears to have been helpful as the DENR regional offices are now making the budget proposals, ensuring the proper allocation for wildlife conservation on conservation on the ground. He said the only way to ensure the survival of the Philippine eagle is to continuously expand the country’s forest cover through massive reforestation programs and enforcement of various environmental laws that will protect

not only the Philippine eagle but all threatened species, against man-made threats. “This is where we come in. From the reports we gather and actual site visits, we are able to make a policy recommendation to enhance our wildlife conservation programs,” Tagtag added.

Eagle center

Protection and conservation efforts for the Philippine eagle, nevertheless, are getting the much-needed boost from NGOs. The 31-year-old PEF, which is dedicated to saving the Philippine eagle and their habitats, for one, has been helping keep track of the population of the species. Its dedicated work force, mostly experts in their respective fields, has been conducting various activities to learn about the rare species and impart knowledge to increase awareness and appreciation of the bird, particularly in areas where they are known to exist, which incidentally, are also the areas where the threats are strong and real. The PEF also has been implementing a captive-breeding program at its facility, the Philippine Eagle Center in Davao City, which also serves as a rescue and rehabilitation center, where injured rescued eagles are kept for treatment before their possible release back into the wild. In 1992 the PEF successfully bread and hatched its first two Philippine eagles named “Pagasa,” which means hope, and “Pagkakaisa,” which means unity.

Sad, happy stories

Maria L. Almeda, a DENR-BMB staff in charge of documenting reports about the Philippine eagle, said information from all over tells of sad and happy stories about the plight of the bird species.

The DENR-BMB keeps historical data that keeps track of sightings of the Philippine eagle. The record dates back to 1993, from the time the office started monitoring the bird’s sightings. “Sometimes, we receive reports of rescue and then the eagle is released back into the wild, only to be shot and rescued again,” she said. Success stories of eagles having been rehabilitated and released back into the wild, she said, are inspiring stories that need to be shared to enlighten the public about the plight of threatened wildlife and the hope of being able to go back into the wild, their natural habitat. Just last March, Almeda said another Philippine eagle in Apayao province in the Cordillera has died. The eagle was only a juvenile, about 5 months old, when discovered by the DENR monitoring teams. Another Philippine eagle remains missing in the province for three years now. The eagle has a tracking device attached to its leg but the device suddenly went dead or stopped sending back signals. Philippine eagles, Almeda said, are sometimes shot, captured or injured. But there are also reports of rescue, successful rehabilitation and eventual release back into the wild. In the last three years, she added there is no new distribution record but there were reports of sightings of juvenile eagles in known nesting sites, indicating successful hatching and an ongoing nurturing by parent-eagles. In 2017 a total of 32 sightings were reported, while in the previous years the number of sightings reached up to 47.

Incentives ‘a must’

Despite various efforts to protect and conserve the Philippine eagle, including wildlife law enforcement and massive information, education and communication campaign, hunting or killing of the king of Philippine birds persists. According to Jayson Ibañez, the director for Research and Conservation of PEF, all the effort by both the government and private-sector partners seem wanting to address the problem.

In response to a BusinessMirror interview via social media on May 30, Ibañez said Filipinos must have an incentive to conserve the Philippine eagle. “ For u s conser v at ion d ie hards, contributing to a common good is enough [nonmaterial] incentive. But for the rest of the Filipinos who might not yet share such values, some other incentives might be necessary, such as forms of financial and other material incentives,” he added. For instance, Ibañez said for poor upland villages close to eagle habitats, meeting basic needs is their primary life motivation. “But if conservation helps them achieve first order needs [need for food, job and security], then that would incentivize adoption of a conservation lifestyle,” he said. Ibañez noted that once the people in upland villages are out of the poverty trap, then they would have the luxury of enjoying the nonmaterial values for eagles and wildlife, such for aesthetics and spiritual health.

Stiffer penalty

According to Ibañez, imposing stiffer penalties would be an adequate disincentive to cruel acts against wildlife. “Wildlife-crime theory indicates that for wildlife laws to be an effective deterrent against wildlife crimes, three factors must be in place: a] that the chances of getting caught is high, b] that conviction of the guilty should be quick, and that c] penalty should be adequately heavy,” he said. The government and private sector, he added, should invest more in a combination of incentives and disincentives. “Such incentives can be subsidizing forest guards and other forms of green jobs, strong law enforcement and education,” he said, adding that he is hopeful that a national law would give incentives to green jobs and services by the upland poor and as a poverty-alleviation strategy would be enacted. Despite the threats, the sad plight of the country’s forests, the natural habitats of threatened wildlife, all hopes are not lost while the Philippine eagle continues to soar.

A10 Monday, June 4, 2018 • Editor: Angel R. Calso

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editorial

PHL opportunity in North Korea

n the minds of at least some Westerners, Korea is an ethnic and geopolitical “missing link:” Not Chinese and not Japanese and maybe somewhere in the middle of the two. That might be as inaccurate as it sounds.

Since the unification of the Three Kingdoms of Korea in the seventh century, Korea has often been in the wrong place at the wrong time, meaning between China and Japan when those two countries went to war with each other. The Mongols invaded Korea so many times in the 13th century that finally Korea gave up and became a Mongolian vassal state. In the 1880s a German advisor to the Japanese military said Korea was “a dagger pointed at the heart of Japan,” primarily because China wanted to effectively take over the Korean peninsula. This ignited the First and Second Sino-Japanese Wars, which then led to the Japanese occupation of Chinese Manchuria. After the post-World War II division of the peninsula, China was supportive of the North’s invasion of the South, which would have created a permanent buffer between Japan and China. And, of course, China vividly remembers how the United Nations forces reached the Yalu River border between the North and China with the threat that the United States would use nuclear weapons if China directly entered the war. The reunification of the North and South is not going to happen any time soon. The US and Japan are not going to allow the country to be dominated by China and vice versa. North Korea is definitely paranoid. However, with China’s strong encouragement, Kim Jong Un is not going to allow a replay of the Korean War perhaps this time with a different outcome. The Philippines holds a unique position on the Asian stage. The country is too small and “insignificant” to be a threat. Yet, it is too important strategically to the region to be ignored. Further, with the recent changes in our foreign policy thrust, the Philippines has the ear and the attention of both China and the US, and to a lesser extent Japan. By interesting coincidence, President Duterte is in South Korea a week before the historic meeting between Kim Jong Un and US President Donald J. Trump is set to take place in Singapore. South Korea is home to at least 60,000 Filipinos. With the potential of North Korea opening its economy in the future, the Philippines might be in a unique position to take advantage of the situation. While an insignificant exporter to North Korea ($34.8 million) compared to China ($2.8 billion) the Philippines is not far behind Russia at $68 million and India selling $54 million to North Korea. In the near future, Philippine exports to North Korea would still not be impressive although they have a desperate need for agricultural products some of which, like fruits, that the Philippines might be able to supply. On the other side, North Korea is extremely mineral rich and joint ventures between local companies and the North Korean government could be productive. The Philippines would have a currency exchange rate advantage over Japan, the US, and even China, both for exports and imports. This would also be a plus for Filipino companies wanting to invest in North Korean projects. Geopolitically as well as economically, the Philippines could be an interesting “middleman” between all the players involved. Both China and the US will be looking carefully to ensure that the other party is not gaining too much of a foothold in the future “New North Korea.” The Philippines could play an important role in the balance of power. Since 2005

BusinessMirror A broader look at today’s business

Tit for tat Atty. Jose Ferdinand M. Rojas II

RISING SUN

irst, Washington imposed stiff tariffs on imports of aluminum and steel coming from the European Union, Canada and Mexico. Its partners, of course, were not happy with the 25-percent (steel) and 10-percent (aluminum) duties that were implemented starting the 1st of June. Now to retaliate, Washington’s trade partners and allies are implementing “counter-balancing measures” in response to the “illegal” decision (according to France). Mexico, for example, said it would impose duties on some United States goods like steel and other agricultural items, including pork, apples and cheeses. Brussels had previously threatened to impose tariffs on US products like bourbon, motorcycles and blue jeans. Canada is imposing retaliatory duties on US imports (potentially including beef, coffee, candies, plywood, maple syrup, aluminum and steel)

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legally speaking

T. Anthony C. Cabangon Lourdes M. Fernandez

Economists have of course weighed in on the issue, and two experts have said that the impact would not be that overwhelming. Holger Schmieding of Berenberg Bank believes that its effects on GDP would be small, while the World Trade Organization’s former chief, Pascal Lamy, said there will likely be limited damage, in concrete terms. Despite these conservative forecasts, both believe that what happened has, of course, negative economic repercussions. Specifically pertaining to the US justification that the action was carried out in the name of national security, Lamy called it a “very worrying development.” Schmieding, on the other hand, believes that the recent events would certainly deal a “significant blow to business confidence” in trade-oriented nations because of uncertain trade relations and Trump’s disregard for international rules. We can only hope that succeeding negotiations will repair the damage, and convince Washington to take a more flexible stance to find a solution that is acceptable to all, or at least the majority, of the involved economies.

‘Rights of internationally displaced persons’

✝ Ambassador Antonio L. Cabangon Chua Publisher

worth up to $12.8 billion. The EU has yet to announce the specific measures they are taking. It doesn’t take an expert to see that businesses and consumers are going to be the casualties of this economic conflict. Shares in the global stock markets in London, Paris, Frankfurt and even Wall Street, are falling. Economic reports say the Dow Jones Industrial Average dropped 1.0 percent. Judging by the recent events and biting comments being released by the different camps, it looks like the world’s biggest economies are indeed on the brink of a trade

war. President Donald J. Trump’s decision elicited angry responses from Canadian President Justin Trudeau, German Chancellor Angela Merkel, and French President Emmanuel Macron. The latter believes Trump’s move was a mistake because it creates “economic nationalism.” “[This] nationalism is war,” he said, “...exactly what happened in the 1930s.” He apparently made a phone call to Trump to say that these tariffs were illegal and that Europe would respond in a “firm and proportionate manner.” Merkel, on the other hand, said Washington’s recent economic measure would just hurt everyone in the end. Trudeau, speaking about the long-standing trade relations between the US and Canada, said the move was an affront to their partnership. The chief of International Monetary Fund, Christine Lagarde, addressed the Group of Seven (G-7) officials from the world’s top economies to say that the friction could lead to an “erosion of trust...[and] distort, damage and disrupt supply chains which have been established for decades.”

report issued on April 16, 2018, by the United Nations High Commissioner for refugees states that 59,495 of the 77,170 families, or 353,921 people, remained displaced as of March 16, 2018—a year after the Marawi siege. The Philippine government has appealed to the Marawi people for patience as it is doing its best to fast-track the restoration of normality to their lives, which they had been spending in shelters or temporary homes and joblessness fleeing the terrorist attack last year. Part of the government’s effort in devising a comprehensive plan for the rehabilitation of Marawi should be a certification of the President to prioritize the passage of the “Rights of Internally Displaced Persons Act,” long pending in both the Senate and the House of Representatives. Under the pending bills, an “Internally Displaced Person or Group of Persons” (IDP) refers to any person or group of persons who has or have been forced or obliged to flee or to leave their homes or places of habitual residence within the national borders, as a result of or in order to avoid or minimize the effects of armed conflict, situations of generalized and/or organized violence, violations of human rights,

implementation of development projects, natural, human-induced and human-made hazards. Under the proposed IDP bill, the following rights shall be afforded to IDPs during and after their displacement, without discrimination of any kind, such as those based on race, color, sex, language, religion or belief, political or other opinion, national ethnic or social origin, legal or social status, age, disability, property, birth, lack of tenurial claim, or any other similar criteria: 1. Provision and access to basic necessities. At the minimum, regardless of the circumstances, and without discrimination, and with special attention to gender sensitivity and varying vulnerabilities, competent authorities shall provide

IDPs with and ensure safe access to: a. Essential and adequate food and nutrition, and potable water; b. Adequate shelter with proper sanitation facilities; c. Adequate and appropriate clothing and essential nonfood items; and d. Essential medical, dental and psychological services, including provision for essential drugs and medicines, as well as social services; 2. Protection against criminal offenses and other unlawful acts. It shall be prohibited to commit any acts against IDP’s penalized under the Revised Penal Code and other special laws applicable in situations of armed conflict, generalized and/or organized violence, clan wars, violations of human rights, implementation of development projects, natural, human-induced and human-made hazards, including but not limited to Republic Act 9851, RA 10121 and RA 10821; 3. Freedom of movement. Every IDP has the right to liberty of movement and the right to move freely in and out of any evacuation center, encampment or other settlements, subject to existing rules and regulations; 4. Recognition, issuance and replacement of documents. The authorities concerned shall issue to the IDPs all documents necessary for the enjoyment and exercise of their legal rights. In particular, these

authorities shall facilitate the issuance of new documents or the replacement of documents lost in the course of displacement, without imposing unreasonable conditions and without discrimination against men and women, who shall have equal rights to obtain and to be issued the same in their own names; 5. Family unity and missing persons. a. Members of internally displace families who wish to remain together shall be allowed to do so. Families that are separated by displacement and whose personal liberty have been restricted by internment or confinement in any evacuation center, facility, encampment or other settlements should be reunited immediately, with appropriate measures taken to expedite the reunion, particularly when children are involved; b. The state shall encourage cooperation among international and local humanitarian organizations engaged in the task of family reunification; c. The authorities concerned shall endeavor to establish the fate and whereabouts of IDPs reported missing and cooperate with relevant international organizations engaged in this task. They shall inform the next-of-kin on the progress of the investigation and notify them of any result; d. The authorities concerned See “Kapunan,” A11

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TRAIN stories

Anti-Crime Council of the Philippines: Living life with a purpose

Anthony Alden S. Aguilar

DEBIT CREDIT

Dr. Jesus Lim Arranza

Conclusion

he impact of the Tax Reform for Acceleration and Inclusion (TRAIN) law can already be felt just by going to the supermarket. My sister and I compared our experiences and we both noticed that the prices for things like canned goods, powdered juices, and yes, even rice, have been steadily heading north. My sister told me—with no small amount of bewilderment—that her two daughters were taken aback when they did their groceries several weekends ago and discovered that the price of one sachet of their favorite iced tea mix went up by 100 percent. That, in a microcosm, is the impact of the increase in value-added tax rates for sugar-sweetened beverages, one of the integral elements of the TRAIN law. It’s a price hike that my sister can absorb—though she still mutters under her breath about it—but what about the people whose income will surely feel the strain of successive price increases? While it’s true that the TRAIN law will give the salaried and the self-employed more cash to “take home,” the same can’t be said for the minimum-wage earners, who don’t pay income taxes and therefore, won’t benefit from the TRAIN law’s amended income-tax rates. And because there’s no increase in minimum-wage rates in the near future, minimum-wage earners won’t have more money in their pockets to offset the price increases set into motion by the same TRAIN law. Last year the Department of Finance estimated that minimum-wage earners —who number approximately 2 million—account for almost 30 percent, or roughly 27.78 percent, of the tax base for individual taxpayers. Every one of them, and their families, will surely feel the pinch of the impact of the TRAIN law —because they don’t pay income taxes, and they don’t have a wage increase to look forward to, they won’t have more money in their pockets come payday. And if they don’t have more money in their pockets on payday, then they may be faced with only one choice: buy less of what they used to purchase—including what they put on their dining tables. From where I sit, that is a huge problem waiting to happen. The salaried employees and selfemployed may have a slightly easier time of it, but this isn’t to say that they’ll be spared the impact of the TRAIN Law. Ironically, while payday may give them more money to spend, the fact that prices are starting to go up for so many goods and commodities means that these salaried employees will have to pay more for the items they usually place in their supermarket shopping carts. Consumption, therefore, may not increase significantly enough to generate the additional tax revenues that the government hopes the TRAIN law will produce. When all is said and done, the TRAIN law may yet prove to be an object lesson in what not to do when a government tries to offset reductions in the rates for one type of tax by increasing the rates for other tax types. No one’s going to argue

with the need to raise tax revenues, just as no one’s going to argue with the benefits of giving people more purchasing power. But in trying to give the people more purchasing power, the government should be careful that it doesn’t effectively thwart its own efforts by raising certain tax rates to a point where people ultimately end up spending more money to buy the same volume of goods they usually purchase. Because when that happens, then the TRAIN law that was envisioned as the country’s vehicle to a more prosperous future just might need to be reexamined to see if it’s truly on the right track. More than 10 years ago, I saw an animated film called The Polar Express, about this fantastical steam locomotive that took children on a train ride to the North Pole. At one point during the film, the conductor declared, “One thing about trains: It doesn’t matter where they’re going. What matters is deciding to get on.” Now, that may sound like words of wisdom, but I think I’ll have to disagree. Because where the TRAIN is concerned, I think it matters very much where its headed, because we may all not end up at the North Pole with a benevolent old man in a red suit with gifts for everyone. And with Phase 1 now in the opening stages of its implementation, and Phase 2 waiting to get off the ground, I guess you could say that the TRAIN is pretty much pulling away from the station that was its promulgation. Perhaps, before it goes any farther, we should take a good, hard look at where the TRAIN may take us…because getting off will be impossible once it’s too late to turn back.

The author is on study leave from The Tax Offices of Romero, Aguilar & Associates and currently on a Research Fellowship at Harvard University. This column accepts contributions from accountants, especially articles that are of interest to the accountancy profession, in particular, and to the business community, in general. These can be e-mailed to boa.secretariat.@gmail.com.

Why buy a car when you can subscribe to one? By Nathaniel Bullard Bloomberg Opinion

enture capital investor and longtime technology observer Mary Meeker has published her annual Internet Trends presentation—294 slides this year, including a section on transportation. There’s a useful finding on slide 128: What Americans spend on purchasing vehicles has dropped since the 1970s, while spending on “other transportation,” including public transport and ride hailing, has nearly doubled. Bloomberg New Energy Finance research published this week suggests that other transportation will continue to grow as a share of US transportation spending. Today in the United States, the average monthly costs of owning, leasing, sharing or subscribing to an automobile service are similar. In a sense, any form of using a car is a service—the service of moving someone around without

expending one’s own energy—but subscriptions, which allow drivers to pay a monthly fee to access a selection of vehicles, go furthest in removing the usual encumbrances of buying or leasing by providing insurance, maintenance and roadside assistance. There’s quite a bit of range in price for subscription services. Ford’s Canvas service starts at $329 a month; the Porsche Passport service starts at $2,000 a month for access to many different models. Both services meet the same need but in different style. Owning a car can be a small or large part of one’s identity; so can the way one subscribes and what they subscribe to. And it’s not just about personal cars. As Meeker notes, people took more than 7 billion on-demand trips in hailed cars and on bicycles in the first quarter of 2018. China’s on-demand transport, which makes up more than two-thirds of the global market, grew 96 percent year-on-year.

Monday, June 4, 2018 A11

Continued from A1

alled the Anti-Crime Council of the Philippines (ACCP), the new anti-crime group, where this writer was endorsed by the FPI Board to sit as its chairman, has a broad partnership and membership base from the government’s law-enforcement agencies and various cause-oriented groups from the private sector. This would help in the campaign against all forms of illicit trade and criminality in the country.

ACCP’s complement of technically trained members from the industry and business sector, academe and students, including those from religious groups would assist the government’s law-enforcement agencies like the Police, NBI and the Bureau of Customs (BOC), among others, in addressing smuggling and all forms of illicit trade, a scourge that does not only cause hundreds of billions of pesos in lost

revenues for the government, but expose consumers to various risks associated with illicit trade, as well. The nonviolent white crimes Such as money laundering, pyramiding scams and fake and damaging news among others will also be tackled by ACCP. Indeed, May 29 was a day of reckoning for me. With my age, I thought I was doing the right thing. But if I am inspired of the successes

Mister C-A-B

systems of airlines globally resort to dynamic pricing and the pros and cons of liberalization and deregulation during that hearing. I have attended quite a few congressional hearings. One thing I learned is that participants should use respectful language. In the Bible, Colossians 4:6 says, “Let your speech always be with grace, as though seasoned with salt, so that you will know how you should respond to each person.” Within those legislative session halls, representatives of the people are addressed as “Your Honor” similar to how lawyers address judges in the courtroom. Respect is earned for the most part; but there are certain instances where respect is demanded. It takes a great deal of courage to speak out, especially in public service. Some leaders, like Wyrlou, may be subject to ridicule and persecution every time they display tenacity to battle conformity, complacency and corruption in the government. In his book, A Good Laywer, Bobby Quitain narrated an incident where he as well as those with disabilities, shall receive to the fullest extent practicable and with the least possible delay, the medical care and attention they require, without distinction on any ground other than the medical ones. When necessary, IDPs shall have access to psychological and social services and such other forms of assistance necessary for them; c. Special attention shall be given to the health needs of women and girls, including access to comprehensive female and reproductive health care services, to be provided, whenever feasible, by female health care providers, as well as appropriate counseling and other services for victims of sexual and other abuses; and d. Special attention shall also be given to prevent the contraction and spread of contagious and infectious diseases, including AIDS, among IDPs; 7. Education. The authorities

concerned shall ensure that IDPs, in particular displaced children, receive education that shall be free, quality and safe and shall be compulsory up to the primary education level. Special efforts shall be made to ensure the full and equal participation of women and girls in educational programs. Cultural identity, language and religion shall be considered in the institution of these educational programs. Educational and training facilities shall be made available to the IDPs as soon as circumstances permit and in accordance with Republic Act 10821. 8. Property and possessions. The property and possessions of IDPs shall, in all circumstances, be protected against the following acts: a. pillage or looting; b. direct and indiscriminate attacks or other acts of violence; c. being used to shield military operations or objectives; d. being made the object of reprisal;

e. being destroyed or appropriated as a form of collective punishment; and f. destruction, arbitrary and illegal appropriation, occupation or use. The city or municipality exercising territorial jurisdiction over the affected area/s, with the assistance of the national government, shall endeavor, as far as practicable, to assist the IDPs to bring with them basic necessities during evacuation subject to logistical considerations. Any violation of the foregoing rights of IDPs is penalized by 6 years to 12 years imprisonment and civil damages. As we remember the one-year anniversary of the Marawi siege (on May 23) and celebrate its liberation by government forces last October, let us honor our lost brothers and their families not only by restoring their homes and normal lives but by giving back dignity, and respecting their rights as human being.

feisty and articulate member of Congress labeled him as Mr. C-A-B presumably because his name is not easy to remember. During a congressional hearing where issues of overbooking, fare pricing and fuel surcharge in the aviation industry were discussed, Chief Legal Officer of the Civil Aeronautics Board (CAB) Wyrlou Samodio somehow earned the ire of one particular member of the House Committee on Transportation when he passionately shared his technical expertise on the issues.

continued from A10

shall endeavor to collect and identify the mortal remains of the deceased, prevent their despoliation or mutilation and facilitate the return of those remains to the next of kin or dispose of them respectfully; and e. Grave sites of IDPs shall be protected and respected in all circumstance and shall have the right of access to the grave sites of their deceased relatives; 6. Health. a. Certain IDPs, such as children, especially unaccompanied minors, expectant mothers, mothers with young children, female heads of households, persons with disabilities and elderly persons, shall be entitled to protection and assistance required by their condition and to treatment which takes into account their special needs; b. All wounded and sick IDPs,

It takes a great deal of courage to speak out, especially in public service. Some leaders, like Wyrlou, may be subject to ridicule and persecution every time they display tenacity to battle conformity, complacency and corruption in the government. In his book, A Good Laywer, Bobby Quitain narrated an incident where he publicly shared his ideas in a forum but felt alone when nobody supported his views. publicly shared his ideas in a forum but felt alone when nobody supported his views. Quitain suggested that courageously standing alone is necessary for servant leaders to have maximum impact. When Wyrlou was my student in law school, he tenaciously stood out from the rest, as he is never afraid to be different. He would sometimes share his out-of-the-box analysis of certain cases. At work, even his choice of wardrobe during casual Fridays does not conform to conservative government standards. During that congressional hearing, he fearlessly did not conform to the norms as he used the Filipino language for the most part of the interpellation. Wyrlou’s mind-set would always remind me of the lesson in the story of David and Goliath, that is, nothing is impossible. It is that kind of courage that comes from God. In the Bible, Deuteronomy 31:6 tells us, “Be strong and courageous. Do not be afraid or terrified because of them, for the LORD your God goes with you; He will never leave you nor forsake you.” All of us are designed to have fear of whatever sort. At the same time, all of us are designed to have the tools to prevent fear from impeding our ability to fulfill our purpose in life. First, understanding our

THE PATRIOT

Kapunan. . .

of our various anti-smuggling and anti-illicit trade initiatives, I am even more inspired to do more for the country and the Filipino people with the deeds of Manong Johnny, the former Senate President Juan Ponce Enrile, PNP chief General Oscar D. Albayalde, the former PNP chief and now the current Bureau of Jail Management and Penology head Ret. General Ronald M. “Bato” dela Rosa and Customs Commissioner Isidro S. Lapeña through his representative BOC-ESS Chief Yogi Filemon Ruiz. At 94 years old, Manong Johnny’s

acceptance of our request for him to be the ACCP’s legal mind was not only touching, but an affirmation of his lifetime engagement to serve the Filipino people, as well. For his part, General Albayalde’s commitment to work closely with the ACCP is a crucial assurance for the council of help from the police. The BOC’s support for ACCP, meanwhile, could be a big dent to smuggling syndicates. And, most important, General Ronald “Bato” dela Rosa’s acceptance of our request for him to lead the ACCP as its president, would be the council’s driving force to success. Thus, as the first ACCP chairman, I would like to thank Manong Johnny, General Albayalde, General “Bato” dela Rosa, Commissioner Lapeña, the FPI officers and board members, the industry, business and youth sectors, academe and religious groups, for sharing their heart with the ideals of ACCP. After all, as the famous inspirational writer Rick Warren says, “Knowing your purpose gives meaning to your life.” And, indeed, we all share a common purpose to help eliminate or, at least, reduce criminality and all forms of illicit trade in the country.

strengths is one way of conquering fear. Acting fearlessly often means heading into uncharted territory and challenging conventional paths. Wyrlou found the courage in his purpose in his calling when he entered public service. Indian philosopher Patanjali once said, “When you are inspired by some great purpose, all your thoughts break their bonds…. Dormant forces, faculties and talents become alive, and you discover yourself to be a greater person by far than you ever dreamed yourself to be.” Resiliency is another way of conquering fear. Acting fearlessly means we have to act like a bamboo; it bends but it never breaks. When things do not go our way, we have to adapt and let go. Near the end of that congressional hearing, Wyrlou managed to speak no further realizing that he, alone, cannot fully explain the global economics in the commercial aviation industry to all stakeholders. Finally, turning obstacles into opportunities is one way of conquering fear. Fearless people are at ease with frustrations. Instead of taking that berating incident as a setback, Wyrlou saw it as an opportunity to learn a valuable lesson, that is, it is not what we say, but how we say it. Effective communications will depend on the tone, gestures, facial expressions, body posture, volume, inflection, timing and, most important, the choice of words. I do not know the spiritual inclinations of Atty. Wyrlou Samodio. But I do know that every time we end our spirited conversations, he would always tell me, “God bless.” Yes, Wyrlou is truly Mister C-A-B for he exemplified “Controlled Audacity as a Blessing.”

Siegfred Bueno Mison, Esq.

In an International Air Transport Association (Iata)-sponsored event wherein experts in the field taught the basics of airline economics, one Iata lawyer said that overbooking is an industry practice to minimize empty seats during flights. Since seats as an airline product are perishable and that passenger no-show is always a possibility, the industry recognizes the value of overbooking. Interestingly, only 0.09 percent of passengers in the US are denied boarding due to overbooking. And since airlines are mandated to compensate those passengers who are denied boarding, airlines exercise prudence in resorting to such practice. In the country, there is a current proposal to have a percentage cap on overbooked seats. Despite these developments, there is an urgent need for all stakeholders to understand airline economics. In his eagerness to share what he has learned in the past 10 years with the CAB, Wyrlou audaciously explained different points of view as to why revenue management

Called the Anti-Crime Council of the Philippines, the new anti-crime group, where this writer was endorsed by the FPI Board to sit as its chairman, has a broad partnership and membership base from the government’s law-enforcement agencies and various cause-oriented groups from the private sector. This would help in the campaign against all forms of illicit trade and criminality in the country.