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Monday, June 5, 2017 Vol. 12 No. 235

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@c_pillas29

he Department of Trade and Industry (DTI), realizing the full menacing impact of an excise tax on sugar on per-liter basis, has instead backed a proposed shift in the tax base by recognizing the levy as a fraction of overall product content.

This surfaced in an interview with DTI chief Ramon M. Lopez, who saw merit in the sugar producers’ call to change the tax base of

the excise tax proposed for sugarsweetened beverages.

Lopez said the government supports the industry proposal to impose

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DTI: Soft-drink levy must be based on sugar content

By Catherine N. Pillas

2016 ejap journalism awards

PPP Conversations #6 with Rep. Arlene Arcillas

₧10 per liter

PPP Lead

The excise tax to be imposed on sugar-sweetened beverages under House Bill 5636 a tax based on sugar content instead of on a per-liter basis.

“There will still be an excise tax on it, of course, but instead of the P10 per liter, which they say will have the substantial impact on prices, the industry proposed to index it on the sugar content, in effect taxing the usage. We support that,” Lopez said.

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Alberto C. Agra

o date, some 80 provinces, cities and municipalities have adopted their own framework on public-private partnerships (PPPs) through the passage of local ordinances. This columnist hopes that, in the near future, the City of Santa Rosa will adopt its own to further accelerate development started

by First District Rep. Arlene B. Arcillas when she was the city chief executive.

Continued on A16

Continued on A15

D.O.F.TOLD TO FINALIZE BMReports PACKAGE 2 OF TAX Lower chamber propels Duterte ‘change’ agenda REFORM PROPOSAL A T

By Jovee Marie N. dela Cruz @joveemarie

leader of t he Hou se of Representatives has urged the Department of Finance (DOF) to start finalizing Package 2 of the Comprehensive Tax Reform Package (CTRP) focusing on lowering corporate income taxes.

Deputy Speaker Romero S. Quimbo of Marikina City, former chairman of the House Committee on Ways and Means, said lowering corporate income taxes is needed to attract more foreign direct investments. “[Following the passage at the lower chamber of the Package 1, or the Tax Reform for Accelera-

tion and Inclusion], I also urge the DOF to begin finalizing Package 2 of the tax-reform program so that we can now lower the tax on corporations, which today stands as the highest in our region,” he said.

Last week the lower house approved House Bill (HB) 5636, which seeks to lower personal income-tax rates, expand the va lue -added t a x ( VAT ) base, adjust excise taxes on petroleum and automobiles, impose excise tax on sugar-sweetened beverages and ease the rates of estate and donor’s taxes.

See “D.O.F.,” A16

Public float rule to hit 37% of total listed firms

By VG Cabuag

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@villygc

T least 37 percent of the total listed firms w ill be a f fec ted when t he proposed increase in minimum public ownership is implemented by the Securities and Exchange Commission (SEC).

According to Philippine Stock E xc h a nge (PSE) d at a , a s of end-March, about 121 of the 322 total listed firms will be affected by the SEC’s move to double the minimum public float of listed firms

to 20 percent, from the current 10 percent, by end of 2020. The regulator cited market uncertainty for delaying for more than a year the application of the new rule.

As of March, about 41 listed companies had float levels of 15 percent and below, while 68 listed companies had float levels below 20 percent. Notably, there are 12 listed companies whose float level is at 10 percent.

The average public float of listed companies as of end-March 2017 is Continued on A16

PESO exchange rates n US 49.7810

Part One

HE House of Representatives has shown seriousness in pushing its ambitious legislative agenda, which will be used as tools “to effect meaningful and genuine change”.

With the help of the supermajority, Speaker Pantaleon D. Alvarez said the two Houses’ priority measures would be passed into law before the 17th Congress ends in 2019.

“Here in this chamber, we were tasked to legislate and address what may be called the ‘pain points of ordinary life’,” he said. “We can proudly say to the Filipino people that the laws we passed will address these problems they face every day.”

For their part, lawmakers said Alvarez’s leadership style is a big contribution to the passage of the legislative agenda.

The first regular session of the 17th Congress ended last week with the passage of several important measures. Priority bills of the lower chamber include both economic and sociopolitical measures.

Data from the House Committee on Rules showed that, since the 17th Congress convened on July 25, 2016, the House processed a total of 1,247 measures in just 97 session days, or an average of 13 measures processed per session day.

The House also managed to approve a total of 289 measures broken down as follows: enacted into law, four; approved on third read-

This May 17 photo shows farmers planting for the second cropping of a rice field in Palawan. On May 19 the House Committee on Agrarian Reform approved House Bill 187, or the “Agrarian and Agricultural Loan Restructuring and Condonation Act”, which is one of the legislative priorities of the 17th Congress. The bill seeks to condone the unpaid loan interests secured by farmers, fishermen and agrarian-reform beneficiaries. NONIE REYES

ing, 194; approved on second reading, 13; adopted resolutions, 67; ratified bicameral reports, six; adopted Senate versions/provisions, one; and concurred with Senate amendments, four.

Of 194 bills approved on third and final reading, 53 are national bills, 140 are local bills and one House Joint Resolution, HJR 10.

The latter is also known as the “Increasing the Monthly Pension of Social Security System Pensioners under the Social Security Act of 1997.”

A total of 6,908 House bills (HB) and House resolutions have been

filed since the opening of the first regular session in July last year.

The Train

ONE controversial economic measure that was recently approved is the Duterte administration’s taxreform package, which is dubbed as the Tax Reform for Acceleration and Inclusion (TRAIN).

HB 5636 was passed after four months since it was introduced by the Department of Finance.

House Committee on Ways and Means Chairman and PDPLaban Rep. Dakila Carlo E. Cua of Quirino said the tax measure

is needed to allow the government to provide better infrastructure, health, education and social protection for all Filipinos.

Cua said under the bill, for four years, the apportioning of 40 percent of the yearly incremental revenues generated from the proposed petroleum excise tax shall be allocated to fund social benefits programs. Fuel vouchers to qualified transport franchise holders would also be granted.

Dur ing t he same per iod, the remaining yearly incremental revenues shall be allocated Continued on A2

n japan 0.4471 n UK 64.1329 n HK 6.3894 n CHINA 7.3141 n singapore 35.92220 n australia 36.6986 n EU 55.8294 n SAUDI arabia 13.2760

Source: BSP (2 June 2017 )

A2 Monday, June 5, 2017

BMReports BusinessMirror

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Lower chamber propels Duterte ‘change’ agenda Continued from A1

for infrastructure, health, education and social protection expenditures, Cua said.

Also, the lawmaker added, the measure provided that 85 percent of the tax collection from sweetened beverage excise tax shall be allocated for government priority programs.

The remaining 15 percent, the bill provided, shall fund the welfare and benefit of sugar farmers.

However, despite this assurance, several lawmakers still expressed opposition to the bill, which was certified as urgent by the Palace.

Opposition

PARTY-list Rep. Carlos Isagani T. Zarate of Bayan Muna said the tax measure will definitely hit the poor hard, because it would mean higher prices of basic goods and services.

While it exempted those earning P250,000 yearly from income tax, Zarate said the bill removed the previous personal-tax deduction, as well as the deduction to the medical and health insurance. It will also impose taxes on the fringe benefits of workers.

“The government stands to lose up to P152 billion in revenues by 2019 because of the adjusted income-tax structure, but the government is seen to earn at least P320 billion through complementary tax reforms, such as excise taxes and removal of VAT [value-added tax] exemptions that would be shouldered primarily by ordinary citizens, especially the poor,” he added.

SOUTHWEST MONSOON AFFECTING WESTERN SECTION OF LUZON (As of 5:00 AM - June 4, 2017)

Here in this chamber, we were tasked to legislate and address what may be called the ‘pain points of ordinary life.’ We can proudly say to the Filipino people that the laws we passed will address these problems they face every day.”—Alvarez

Zarate said taxes, expenses and basic commodities will significantly increase for most Filipinos by imposing higher excise taxes on petroleum products, particularly on liquefied petroleum gas, diesel and gas, as well as sugar-sweetened beverages (SSBs).

Under the bill, workers earning P250,000 will be exempted from paying personal income taxes.

But to recover the forgone revenue for the said adjustment, it also includes a P6 tax on petroleum products, which could cause prices of basic goods to rise.

The P6-per-liter excise-tax increase will come in three tranches of P3, P2 and P1, respectively, in three years starting 2018.

The measure also said the SSBs shall be levied an excise tax of P10 per liter of volume capacity, subject to a yearly 4-percent rate increase after effectivity date of January 1, 2018.

The tax-reform bills are both pending before the Senate.

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The Nation BusinessMirror

Metro Manila police commander identifies Resorts World gunman

Stunting robs millions of Pinoy kids their childhood–group

By Claudeth Mocon-Ciriaco | Correspondent

agbayalde

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HE National Police last Sunday revealed the identity of the lone gunman of the attack at the Resorts World Manila in Pasay City that killed 38 individuals, including himself, early last Friday.

Director Oscar D. Albayalde, Metro Manila police chief, identified the gunman as Jessie Carlos, Filipino, 43 and a former employee of the Department of Finance (DOF).

He is married to Jen Carlos. They have three children—one son and two daughters.

The assailant’s last known address is at 1663 Felix Huertas Street corner San Lazaro Street, Santa Cruz, Manila.

Carlos was dismissed from the service for issues on misdeclaration and nondisclosure of his statement of assets, liabilities and net worth (SALN).

Albayalde said: “At 5:30 this morning [Sunday], members of his Carlos’s] family arrived and sat down with our SITG [Special Investigation

Task Group] personnel. After a thorough review of details, photographs, CCTV [closed-circuit television] footages…the family confirmed the identity of the perpetrator.”

According to the assailant’s immediate family, his being hooked in casino gambling made him heavily indebted.

This became the cause of a misunderstanding between him, his wife and parents. His outstanding debt in bank of P4 million and several other nonbank related debts prompted him to sell his vehicle.

During a news conference, the gunman’s parents, Fernando and Teodora Carlos, expressed their deepest sympathy to the families and friends of the victims and to the public, in general.

“Today, we hope to have brought closure and peace to the bereaved families,” Albayalde said.

“We also reiterate our prior statements that this is not an act of terrorism but this incident is confined to the

Editor: Dionisio L. Pelayo • Monday, June 5, 2017 A3

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HE Philippines ranks 96th among 172 countries on the list of best and worst places to grow up.

The country barely made it into the top 100 in a global ranking of the best and worst countries for children to grow up, putting it behind regional neighbors Vietnam, Thailand and China, a new report from Save the Children reveals.

Launched to coincide with International Children’s Day, “Stolen Childhoods” report comes with an index that examined countries against eight indicators that affect children’s ability to have a safe, happy childhood, including rates of child mortality, undernutrition, school drop outs and early marriage.

The Philippines performed poorest on child stunting or chronic malnutrition, which affects more than 30 percent of children across the country.

The report’s index of 172 countries ranked the Philippines as the 96th best country for children to ex-

perience childhood, putting it narrowly ahead of Indonesia (101) and Cambodia (117) but behind China (41), Thailand (84) and Vietnam (92). Norway and Slovenia topped the index, followed by Finland, with Niger ranking last.

“The ranking is not so surprising when you look at the levels of stunting and undernutrition across the country. Undernutrition accounts for over half of the 95 daily child deaths among children under 5 in the Philippines,” Save the Children Philippines Country Director Ned Olney said.

Olney added, “The Philippines has made tremendous economic and development progress in recent years, but poverty rates have remained the same over the last few years. Economic growth has been poorly distributed.

“Disappointing statistics from

the Philippines underscore the importance the first 1,000 days of a child’s life, when they are most susceptible to stunting and most in need of good nutrition. This is an area that must be dramatically improved if the Philippines is to move up the rankings and, most important, ensure every child across the country can benefit from a safe and happy childhood,” Olney added.

Children suffering from undernutrition or stunting have increased risks of contracting diseases like acute diarrheal syndrome, acute respiratory infection and anemia, while children, especially those with severe undernutrition, are more likely to die from illnesses caused by complications.

Children who are stunted in the first two years of life are also more likely to repeat grades, drop out of school and delay school entry.

Save the Children’s “Cost of Hunger: Philippines” study in 2016 put the cost of undernutrition or stunting to the economy of the Philippines at over P320 billion a year—almost 3 percent of the country’s GDP. Save the Children called for greater investment in activities that prevent undernutrition and stunting.

These include more targeted nutrition support for the poorest and most marginalised groups and greater in-

vestment in nutrition interventions for pregnant and lactating mothers and babies in their first 1,000 days.

“Our report clearly shows that poor nutrition levels, which cause stunting, is holding children back in the Philippines, and preventing them from having the childhoods they deserve and are entitled to,” Olney said.

Globally, the report found that at least 700 million children—and possibly hundreds of millions more— have had the promise of a full childhood brought to an early end.

The report also found that: Every day, more than 16,000 children die before reaching their fifth birthday; About one quarter of all children under 5 (156 million) have their growth stunted as a result of malnutrition; One in six school-aged children worldwide is currently out of school; Conflict has forced nearly one child in 80 from their homes; Some 168 million children in the world are involved in child labor —85 million of them in hazardous work—which is more than all children living in Europe (138 million) and

One girl under 15 is forced to marry every seven seconds.Every two seconds, a girl gives birth.

Economy

A4 Monday, June 5, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

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FDA told to fast-track certification of implants

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By Catherine N. Pillas

@c_pillas29

Neda Secretary Ernesto M. Pernia noted the full implementation of the RH law to manage population growth is part of the Duterte administration’s socioeconomic agenda.

“Apart from slow economic growth, we have not been able to manage our population growth.

That’s why the last, but not the least, point in 0+10 socioeconomic agenda is the full implementation of the RH law,” Pernia told reporters in a news briefing during the recent launch of the Philippine Development Plan.

“The problem is that the poor couples who want to plan their families and have fewer children cannot do so because of lack of access to [family planning] services. If you have so many kids but can’t provide proper education and health care, you’re not going to have an educated working force,” he added.

To recall, in 2015, the Supreme Court (SC) acting on a complaint by the Alliance for the Family Foundation Philippines, issued a temporary restraining order (TRO) that pre-

vented the FDA from granting and renewing certifications for contraceptives for women.

Last year, with the TRO still in effect, the Supreme Court (SC) modified the original ruling and directed the FDA to recertify specific drugs as nonabortifacients.

If the FDA certifies them as nonabortifacients, then the TRO would be “deemed lifted”.

Pernia said they have given a deadline for the FDA to complete its evaluation process, as a hearing will still have to be held, after the certification, for the petitioners or “pro-lifers” to air their side.

“We told them that this recertification shouldn’t take time. This has been done before. So we said by the middle of June, you should already have a hearing for the petitioners,” he said.

Pernia added that the implementation of the RH law plays a key role in reducing poverty.

“Bringing down the 21.6-percent [poverty rate] in 2015 to 12 percent

FILE PHOTO

he National Economic and Development Authority (Neda) has asked the Food and Drug Administration (FDA) to speed up its certification of contraceptives to help the government fully implement the reproductive-health (RH) law.

to 14 percent by 2022 includes the implementation of the law,” he said.

President Duterte’s 0+10 socioeconomic agenda guides the Philippines’s medium-term development

No debt trap in China loans—Diokno

By Elijah Felice E. Rosales @alyasjah

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ontrary to the analysis of a United States-based think tank, the Philippines is not falling into a debt trap at the hands of China, according to Budget Secretary Benjamin E. Diokno.

In a recent news briefing, Diokno refuted allegations by economist Anders Corr, founder of Corr Analytics Inc., saying the Philippines is sinking into debt, given the proposed borrowings from China.

“The total amount of loans and grants from China is around $9 billion, and the loans shall be at a preferential rate,” Diokno said at the Kapihan sa Manila Bay forum held last week.

“We have not yet discussed the preferential interest rate but the Chinese

told us not to tell the rates to other countries, because the other countries might get jealous because the preferential rates will be much lower than that granted to other countries,” he added.

Diokno was debunking Corr’s analysis that the Philippines’s borrowings are too high, and this might cost the country its resilient GDP growth.

Corr’s remark that the country is falling into a debt trap is often quoted in local media.

According to Diokno, Corr “misleadingly claimed” that soft loans from China carry high interest rates. However, this is false, the chief of the Department of Budget and Management (DBM) said, given that the Philippines maintained excellent investmentgrade level for several years now.

He added the Philippines will continue to accept official develop-

ment assistance from other countries, but should they come with strings attached, the government will reject them without thinking twice.

“If other countries want to help, then they are welcome, but if there are strings attached, then we’ll just say, ‘No, thank you’,” he said.

The Philippines has recently rejected grant from the European Union, saying it entails policy intrusion on the part of the EU. Meanwhile, the Philippine-BRICS Strategic Studies (PH-Bricss) cited the administration for participating in China’s One Belt, One Road initiative, which will involve billions of dollars of Chinese investments to countries enlisted in the revival of the maritime Silk Road.

In a statement, PH-Briccs said the Philippines should hold on to its economic policy under the “Build, Build, Build” scheme to bridge the infrastructure gap in the country estimated by the Asian Development Bank to require some $127.12 billion in investments from 2010 to 2020, or some P552.50 billion on infrastructure spending per year.

“The Philippines must not miss the opportunity today offered by the One Belt, One Road, as it did in the 1980s when Asian and Asean countries transitioned to tiger economies, while the Philippines wallowed in the mire of political turmoil and misinformed economic theories. Today we read and hear a chaos of opinions from the usual suspects questioning Dutertenomics and the One Belt, One Road opportunities, but the nation has already learned from its past—the Philippines is already on board,” the statement read.

plan, dubbed as the Philippine Development Plan (PDP) 2017-2022, which is anchored on Neda’s longterm growth plan, Ambisyon 2040.

The PDP 2017-2022 was approved

for implementation by the President just last week. Duterte directed all government agencies to align their programs and budgets according to the plan.

The PDP 2017-2022 targets a 7-percent to 8-percent growth in GDP in the medium term and to reduce the poverty incidence to 14 percent by 2022, from 21.6 percent in 2015.

Stricter foreign aid vetting pushed, remedial legislation seen crafted

By Butch Fernandez @butchfBM

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he chairman of the Senate Committee on Economic Affairs prodded the Duterte administration over the weekend to adopt a stricter vetting system for accepting foreign aid and foreignfunded investments.

Sen. Sherwin T. Gatchalian made the suggestion after presiding over a Senate hearing last week on reported investment deals signed between Manila and Beijing officials during President Duterte’s China visit last October.

“The Philippine government has been using a loose vetting system for foreign-funded investments, which has allowed scheming foreign firms to pull off one-sided trade contracts to the detriment of the nation and the Filipino people,” Gatchalian said in a statement over the weekend.

The senator stressed the need to further improve the system for assessing foreign financing agreements and overseas development assistance to “make sure that these investment agreements are beneficial to Filipinos”.

“We will tighten the rules in terms of acquiring overseas development assistance and foreign financing.

We will come up with mechanisms to protect all of us, the Filipino people,” Gatchalian said.

“We have to remember that once we sign a loan agreement, this is a loan that all of us will pay in the end. Thus, it is important to make sure these loans are beneficial to our country...that those contractors are capable and unquestionable. That will be built-in in the law that we are going to propose,” he added.

Gatchalian recalled that during the hearing on the present set up, the committee was told that the procedure goes like this: “We look for financing agencies, and when we find one, these financiers are given the free hand to name their chosen contractors and suppliers as part of their trade packages.”

“This is a revelation to me,” Gatchalian said, as he noted the admission of finance department officials that the 2016 Chinese investment deals were actually “tied” loan agreements allowing Export-Import Bank of China, as the Chinese funding agency, to pick the prequalified suppliers or contractors for the Philippine government projects.

The Senate hearing into the Philippine-Sino trade agreements, Gatchalian said, also revealed some of these prepicked contractors have “bad records”.

According to the senator, the insertion of these suppliers and contractors in foreign-funded contracts tied the hands of the Philip-

pine government from doing an indepth “due diligence” check on the corporate history of the handpicked foreign firms.

He added, “A number of these contractors have been discovered to have bad history, bad records in doing business in our country.

Some of them are facing corruption cases or are in trouble with other agencies, some have been barred by other multilateral loan agencies, like the Asian Development Bank and the World Bank. We would have known all these issues earlier if our vetting system had been strict.”

Gatchalian was prompted to start crafting remedial legislation to correct the lax vetting system after learning there were no clear guidelines on “who should vet these suppliers or contractors, whether it’s the National Economic and Development Authority or the DOF [Department of Finance]?”

The senator said the Economic Affairs Committee is set to review the process and draft legislation to “protect us from unfair loans and unscrupulous contractors”.

“We will tighten the rules in terms of acquiring overseas development assistance and foreign financing. We will come up with mechanisms to protect all of us, the Filipino people,” Gatchalian said.

Small entrepreneurs only need a purchaser’s license to buy controlled chemicals

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icro and small enterprises certified by the Department of Trade and Industry (DTI) are advised to apply for a purchaser’s license from the explosives unit of the Philippine National Police (PNP) as the fastest and simplest way to acquire regulated chemicals used in production.

Emmarita Mijares, deputy executive director of the Export Devel-

opment Council (EDC), issued the advice after consulting on May 26 with Col. Conrado Gongon, chief of the Explosives Management Division (EMD) of the PNP-Firearms and Explosives Office (PNP-FEO).

In an e-mail to the Philippine Ex porters Confederation Inc. (Philexport), Mijares said that by applying as a DTI-accredited purchaser, micro and small enterprises wishing to buy controlled

chemicals will only need to meet “minimal documentary requirements” from the PNP-FEO. To file for this license, an enterprise just has to submit a duly accomplished application form, a DTI certification that the company is a micro or a small enterprise, and proof of payment for the license from the Land Bank of the Philippines.

Under PNP-FEO provisions, the scope of the purchaser’s license

for DTI-certified micro and small enterprises includes the authority to purchase certain controlled chemicals “within the maximum allowable quantity without the necessary permit”.

The license also authorizes the “use and process of controlled chemicals to produce [the] desired product; except the manufacture of another controlled chemical”.

Philexport News & Features

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The Regions BusinessMirror

ARMM crafts three-phased recovery plan for Marawi City

By Manuel T. Cayon Mindanao Bureau Chief

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AVAO CITY—The Autonomous Region in Muslim Mindanao (ARMM) would be crafting a three-phase recovery and rehabilitation plan for Marawi City, whose extent of devastation was beginning to surface as government soldiers continued to dislodge the extremist fighters from the city.

Gov. Mujiv Hataman said the recovery and rehabilitation plan, called “Unified Plan for Marawi City”, would be coordinated with the Marawi City government and the provincial government of Lanao del Sur. The recovery and rehabilitation initiative would also be linked to the existing plans of neighboring municipalities within Lanao del Sur. Hatamans said there would be appropriate planning tools and mechanisms in developing the plan, “which will run in three phases: Early recovery and reconstruction (three months to 12 months), medium-term reconstruction (one year to six years); and long-term rehabilitation and development (six years and beyond).

The overall plan would be administered by the ARMM’s Regional Planning and Development Office and the Marawi City government.

Hataman said the plan would adapt the “Build-Better-Now approach for better planning and urban design”.

“The plan would build on previous efforts on disaster preparedness, prevention and mitigation, and response,” the initial draft of the proposal said. It added the final output would be culture-sensitive, “given the

context of Marawi as an Islamic city, and would consider issues on land tenure and land use.”

“Conflict resolution processes would also be embedded in the said plan,” it said.

“As we continue to deliver relief to those affected by this crisis, we also need to plan and to prepare to build the future that the people of Marawi are holding on to,” Hataman said. “Marawi is home to our brothers and sisters in the Bangsamoro, and it is our responsibility to make sure it continues to be home for our people. We cannot let terror drive us away from the places we have built for ourselves and our family,” he added.

The plan would be implemented as soon as the conflict in the city is over, he said.

Development experts from the World Bank would assist in the formulation of the plan.

He said a series of area assessments would be undertaken “to determine the extent of damage the crisis has caused on lives and properties”.

“The next step is an inventory of existing resources that can be mobilized to hasten rehabilitation and recovery. This involves the availability of local manpower, experts, as well as institutions that can assist government efforts,” he added.

The existing area development plans of Marawi City and those of communities adversely affected by the crisis would also be reviewed. “While the process would welcome inputs from external experts and partners, a significant part of the output would be generated through participatory planning, using tools such as focused group discussions and workshops with local communities and resource persons,” he said.

Editor: Efleda P. Campos • Monday, June 5, 2017 A5

AFP gives relief workers 4 hours to rescue trapped Marawi civilians

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By Rene Acosta @reneacostaBM and Elijah Felice E. Rosales @alyasjah

HE military provided on Sunday four hours of “peace corridor” for humanitarian workers to move trapped residents away from the conflict in Marawi City, Lanao del Sur, as casualties from both sides and civilians continued to rise in the raging conflict.

As of Saturday night, the Armed Forces of the Philippines (AFP) reported that at least 120 terrorists, 38 soldiers and 20 civilians were killed in the continuing fighting. More than 70 soldiers were wounded. The soldiers have also recovered at least 90 firearms.

The AFP also said 1,271 civilians have been rescued.

Military Public Affairs Office Chief Col. Edgard Arevalo said the “humanitarian pause” implemented and observed by security forces from 8 a.m. to 12 noon last Sunday, allowed rescue workers to secure and move civilians away from the conflict zones.

AFP Spokesman Restituto F. Padilla Jr. and Presidential Spokesman Ernesto C. Abella also said in a news briefing over a local radio program the white flag was meant to “allow the entry of humanitarians from local government units, non-governmental organizations and civil-society organizations, in order to

reach trapped residents and those needing assistance in the area of conflict.”

“It’s a humanitarian pause,” Padilla said, adding it is a lull period coordinated with the State’s armed forces as approved by the chief of staff.

The initiative was reached upon by the government, led by Bangsamoro Peace Panel Chairman Irene M. Santiago, with the Moro Islamic Liberation Front, considered the country’s most dominant Islamic rebel group, with Central Mindanao, where Marawi City is located, known as its bailiwick.

Abella, however, clarified the military did not approve entry into high-risk areas to avoid putting humanitarian workers in danger and any possibility that might complicate the situation.

“To enable rescue workers a window of four hours, Lt. Gen. Carlito Galvez Jr., commander of the Western Mindanao Command,

provided for a peace corridor,” Arevalo said, adding the initiative was approved by AFP Chief of Staff Gen. Eduardo Año.

“This shall serve as an avenue where Marawi residents trapped in this conflict caused by the terrorist Maute-ISIS [Islamic State of Iraq and Syria] can be moved to safer grounds with the benevolence of our wellmeaning and concerned citizens and peaceinclined organizations,” Arevalo added.

While thousands of residents have been moved away from the conflict areas in Marawi City, the government and even private rescue and relief groups have reported that thousands of civilians were still caught in the middle of the firefight between security forces and the Maute Group.

Arevalo admitted the peace corridor may also benefit the terrorists by giving them a reprieve.

“This might entail some operational risks to the security forces, as the MauteISIS Group is also being accorded some sort of a reprieve during the lull,” he said. “But these initiatives are necessary and called for to allow safe passage to the residents adversely affected by the terrorist affront to our security and sovereignty.”

Arevalo added the military implemented the reprieve, as it gave importance to the lives of civilians trapped in the clashes.

“The AFP places premium to the lives and limbs of noncombatant civilians victimized by this terrorist group that has threatened and openly, directly and notoriously challenged [the] government and its security forces,” he said.

Agriculture/Commodities BusinessMirror

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Editor: Jennifer A. Ng • Monday, June 5, 2017

NDA: Dairy output up 11% in Jan-March

By Jasper Emmanuel Y. Arcalas

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@jearcalas

More industrial crops produced in Q1–report

he country’s dairy production in the first quarter of 2017 expanded by 11 percent to 5,730 metric tons (MT), from 5,160 MT recorded a year ago, according to the National Dairy Administration (NDA).

In its report, titled “The Performance of the Philippine Dairy Sector”, the NDA, an attached agency of the Department of Agriculture (DA), attributed the output growth to the increase in the number of dairy-producing herd in the country.

“According to the PSA [Philippine Statistics Authority], there were more cattle, carabao and goats for milk production during the period, thus dairy posted a doubledigit expansion in dairy production at 11 percent,” the NDA said in its report published recently.

“Total dairy production...grossed more than P199 million at current prices. On the weighted average,

the farm-gate price of dairy reached P34.75 per liter,” the report read.

At current prices, the dairy sector’s value of production grew 22 percent to P199.09 million, from P162.74 million posted in the first quarter of 2016.

“The NDA-assisted/monitored dairy projects contributed threefourths [or equivalent to 4,290 MT] to the total national milk output,” it said.

Citing data from the PSA, the NDA said that among all the livestock subsectors, the dairy subsector registered the highest increase, both in terms of volume and value of production in the first quarter.

The NDA noted that during the

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File photo

period, the livestock sector’s production value rose by 9.37 percent year-on-year to P65.43 billion. Its output reached 663,240 MT, 3.19 percent higher than the 642,720 MT posted a year ago.

“Due to sustained demand and higher prices of all the livestock subsectors, hog, the major contributor

to the subsector’s performance, registered a 3.5-percent growth in production and realized a 9.68-percent gain in earnings. Dairy registered the highest increase in volume and value of production at 11 percent and 22 percent, respectively,” the report read.

“Gross production and earnings

from carabao sustained an upward trend by 1.63 percent and 14.11 percent, respectively. Both cattle and goat increased in value [6.08 percent and 5.22 percent, respectively] but cattle recorded a growth in gross volume of output of 1.38 percent, while goat was up by only 0.81 percent,” it added.

Dollar-earning banana industry grapples with numerous challenges

By Antonio V. Figueroa

R

ecognized as the secondranked Philippine agriculture exports sector, the banana industry has largely been an underrated segment. Contributing $1.14 billion to the world banana trade in 2014, the local industry, particularly the fresh banana sector, is also the world’s fifth-largest exporter of bananas.

By classification, the industry is divided into three, namely: Cavendish, lacatan, and saba (cardaba). Davao region attained the highest production with 3.85 million metric tons (MMT). Highest production of saba was attained by Davao in 2010 with 582,529 metric tons (MT).

Top major export destinations for fresh bananas include Japan, China and Korea. For chips and crackers, top export markets include Vietnam, China and the United States. The top destinations of local dried bananas are Vietnam, Japan and Saudi Arabia.

In general the banana industry, both fresh and processed, occupies 443,370 hectares, with saba cornering 182,001 hectares. The rest is planted with lacatan, with 56,473 hectares, and the fresh Cavendish variety with 85,809 hectares.

Mindanao, in particular, is home to Cavendish plantations with 85,809 hectares dispersed in 15 provinces, five of them in Davao region alone.

This is the equivalent of 19.35 percent of the total banana hectarage used for the entire industry in southern Philippines.

Around 44,670.29 hectares, or roughly 50 percent, of the banana industry hectarage is cultivated by firms registered with the Pilipino Banana Growers and Exporters Association (PBGEA), while the remaining 30,000 hectares are tilled by agrarian-reform beneficiaries and small landowners, mostly under growership programs.

These plantations are found in the provinces of Bukidnon, Davao del

Norte, Davao del Sur, Davao Oriental, Davao Occidental, Compostela Valley, North Cotabato, South Cotabato, Sarangani, Sultan Kudarat, Agusan del Norte, Agusan del Sur, Surigao del Sur, Maguindanao and Lanao del Sur.

Monetary terms

Volume of production from the fresh banana sector in 2015 reached 4.65 MMT, providing over 515,000 jobs and paying taxes estimated at P6.5 billion. These figures do not include the P100 million spent annually for corporate social responsibility undertakings.

Industry estimates put the annual wages paid by the industry at P46.4 billion, and a yearly tax contribution to the public coffers of P6 billion.

In terms of development technology, buildings, logistics and marketing, PBGEA estimates that investment value per hectare of fresh banana farm costs P1.75 million, or approximately P150.4 billion for the 85,809 hectares covered.

According to the Philippine Statistics Authority (PSA), the country has an agricultural land area of 9.671 million hectares, divided as follows: arable land, 4.936 million hectares; permanent cropland, 4.225 million hectares; permanent meadows/pastures, 129,000 hectares; forestland, 74,000 hectares; other lands, 307,000 hectares. Of the total arable land, only 450,125 hectares have been planted to bananas, 85,000 hectares of these are in Region 11.

The banana industry, moreover, is not only the largest employer in the country; it is also the second-biggest dollar earner. It has also been a huge factor in the development of idle lands and has given employment and ancillary opportunities to thousands of families.

Legislative indifference

Despite the huge input the industry has made in terms of taxes and revenues, government fees, jobs, livelihood

and export earnings, it is the only thriving agricultural sector that hasΩnot been legislated.

In fact, major industries, such as sugar and rubber, have their own regulatory agencies that address issues and concerns affecting them. There is no Philippine law that exclusively protects and promotes the banana industry, and investors in this sector use their own funds with almost no technical, financial and subsidiary support from the government.

To name a few, there is the Sugar Regulatory Authority (SRA), which manages sugar; Philippine Coconut Authority (PCA), for coconut; Philippine Fiber Industry Development Authority (PhilFida) for abaca; Philippine Rubber Research Institute (PRRI) for rubber; National Tobacco Authority (NTA) for tobacco; and Philippine Rice Research Institute (PhilRice) for rice.

During the National Banana Congress 2016 held in Davao City, the industry stakeholders pushed for the creation of a Banana Industry Development Council (BIDC). In support of the move, President Duterte declared: “The proposed measure is the creation of a Banana Industry Development Council. Now it should be a law, I cannot give an executive order.

So, because if you need something, money or otherwise; if you need the government to intervene—the legal standing has to be something like there is a law, the force of law in the creation of the banana research institute.”

During the same congress, the industry sector, through the interim board of the National Banana Industry Council (NBIC) and the Philippine Exporters Confederation (Philexport) 11, also pushed for the passage of the Comprehensive Development Act for Banana.

A draft bill of the proposed measure was submitted in 2016 to the House of Representatives, now head-

ed by Speaker Pantaleon D. Alvarez (First District, Davao del Norte) but no member of Congress sponsored it.

Challenges

Notwithstanding its billionpeso contribution to the national economy, the banana industry, particularly the fresh banana sector, survives on its own amid the various challenges it faces.

It is the only industry that has no banking supporter, and it gets its funding from outside financial institutions and investors. It is self-financed and survives without state support.

While the President has encouraged the strengthening of exports in order to create more jobs, the industry is in dire straits, given the wobbly socio-political climate that is endangering it. Worse, it is deemed as the most harassed industry given the threats it has received as a result of rising insurgency, misguided agrarian-reform claimants, informal settlers and other risks.

Between February and May 2017, over a dozen rebel atrocities were recorded, inflicting huge losses in the industry while displacing hundreds of laborers.

In Davao City alone, the most devastating attacks happened on April 29, when three banana establishments were torched, resulting in P1.2 billion in losses.

On that day, New People’s Army (NPA) rebels stormed the banana plantation of Lapanday Foods Corp. in Mandug, Davao City. They attacked and torched the Macondray Plastic Plant in Bunawan, followed by the confiscation of high-powered fireams in a banana plantation in Calinan, both in Davao City.

The threats to the banana industry also include pests and diseases, natural clamities, climate change after effects, high production costs, inconsistent government policies, anti-banana industry legislation, statues that cripple sustained com-

petitiveness and the moratorium on expansion of plantations.

During the National Banana Congress 2016, the President underscored the conundrum the industry is in, saying: “The greatest challenge of the banana growers in the Philippines is really the law and order because of revolutionary tax, extortion and everything. If it’s not taxation of the communists, it’s extortion of the roving bandits in Mindanao.”

Urgent concerns

Already the vortex of so many threats, the banana industry was recently drawn into controversy when the joint-venture agreement signed by the Bureau of Corrections and the Tagum Agricultural Development Co. Inc. was subjected to a legislative inquiry.

The probe created uncertainty and placed under duress the live contracts Filipino planters had negotiated with foreign traders. Worse, investments already in the pipeline had to be suspended pending the completion of the inquiry and the return to normalcy of the industry.

An even more pressing matter is the NPA extortion activities, which became more evident as the peace talks went on high gear. Aside from the billions of pesos in equipment and structures lost or damaged by insurgent attacks, thousands of displaced workers had to be permanently removed from the payrolls.

But the overriding factor now is the passage of a law that creates an institution that directly attends to the needs, demands and problems of the industry. The proposed statute must carry mechanisms that encourage government lending institutions to open loan windows exclusively to fund the expansion of the industry.

In order to bring back stability and confidence, a presidential intervention is a top consideration; it is also the stepping-stone toward achieving a more lucrative and stable banana sector.

avor able planting conditions allowed farmers to increase their production of major industrial crops, such as sugarcane and rubber, in the first quarter of the year, according to the latest report of the Philippine Statistics Authority (PSA).

In its report, titled “Major Non-Food and Industrial Crops Quarterly Bulletin”, the PSA said sugarcane output in the January-to-March period grew 3 percent to 12.57 million metric tons (MMT), from 12.2 MMT recorded a year ago.

The PSA noted sugarcane used for centrifugal sugar production, which accounted for 98.7 percent of the total output, reached 12.408 MMT, 3.6 percent higher than the 11.977 MMT produced in the same period last year. “ T his was associated w ith the enhanced growth of canes stimu lated by suf f icient and proper application of fertilizer and enough rainfall in Negros Island Region [NIR] and better growth of canes in Central Luzon,” the report read.

The PSA noted NIR accounted for more than half of the total sugarcane production in the first three months of the year.

Sugarcane output in the region reached 6.739 MMT, 16.7 percent higher than the 5.774 MMT posted last year.

T he PSA also said production of r ubber in the threemonth period expanded by 17.9 percent to 45, 36 4 MT, f rom 38,487 MT in the first quarter of 2016.

“The growth in production was due to more tapping activities prompted by good buying price of cuplump in Soccsksargen [North Cotabato] and Caraga [Agusan del Sur],” the report read. “ T he top-producing region during the period is Soccsksargen, with its production of 20.27 thousand metric tons accounting for 44.7 percent of the total rubber production of the country,” it added.

Tobacco output also rose by 3.8 percent year-on-year to 13,029 MT, from 12,550 MT last year. The PSA attributed this to the expansion of area harvested and early harvesting by farmers.

“Ilocos region produced the majority of the national tobacco production for the quarter at 84.5 percent,” the PSA said. “ Virginia was the highestproduced variety, constituting 95 percent of the total tobacco production.

Native variety and other variety [Burley] comprised 3.5 percent and 1.5 percent of the total production, respectively,” the PSA added. Jasper Emmanuel Y. Arcalas

Antibiotic use in farming poses threat

I

have been discussing the above subject in a few columns in the last few months. I am glad I am not alone in this endeavor.

Look at headlines that have appeared in recent weeks: n US chicken industry deploys wet wipes, oregano sans antibiotics; n Antibiotic-free meat gains US foothold amid environmentalist pressure; n Excessive antibiotic use in farming poses threat; n 15 wet markets and 15 supermarkets in Metro Manila were contaminated with drug-resistant Campylobacter bacteria; and

n G20 health ministers to tackle antibiotics resistance.

It was interesting to note that the G20 health ministers—for the first time—agreed on May 27 to work together to tackle issues such as a growing resistance to antibiotics and to start implementing national action plans by the end of 2018. It was an important breakthrough that all nations agreed to address the problem. The G20 focused on the obligatory prescription of antibiotics initially; antibiotic use in farming will follow.

While the discovery of antibiotics has provided cures for many bacterial infections that

Henry J. Schumacher

europe Beat previously have been lethal, oversubscription and the high use of antibiotics in raising poultry have led to the evolution of resistance strains of many bacteria. An European Union report last year found that newly resistant strains of bacteria were responsible for more than 25,000 deaths a year

in the 28-member bloc alone. This hot topic will again be discussed at the G20 leaders’ summit in Hamburg in July this year.

Is this relevant for the Philippines? Given the fact that 80 percent of Filipinos are antibioticresistant, this problem needs to be addressed, by supervising the raising of chicken and hogs. As I said before, Pamora Farms in the Philippines should be taken as an example and the chicken vendors, from groceries to fast-food chains, should follow the example of KFC in the US and cooperate with Pamora and other progressive and healthoriented chicken and hog raisers. It

is essential that Pamora Farms are supported by government and that licenses are not withheld.

It would be good for all agri-food stakeholders if this topic would be discussed in more detail between the private sector (the complete supply chain) and government. It is understood that these drastic changes cannot be effected within a short period of time, as the Tyson/KFC US example shows (Tyson, one of KFC’s suppliers, set a goal in April 2015 to eliminate the use of human antibiotics from its broiler flocks, or those raised for meat, by the end of September 2017), and the G20 changes to come

into play only at the end of 2018.

But every revolution starts with the first step.

And, as mentioned above, these important changes need government intervention. The government (especially the departments of Agriculture, Trade and Industry, Health and Social Welfare and Development, and the Food and Drug Administration) must certainly do its part, but it is certainly wrong to only wait for the government to act. We must become agents for our own well-being.

Who wants to partner with us?

Contact Schumacher@mca.ph

news@businessmirror.com.ph

The World BusinessMirror

Editor: Lyn Resurreccion • Monday, June 5, 2017 A7

Trump’s climate move has broad econ fallout

P

resident Donald J. Trump’s decision to abandon the Paris climate accord— and his broader unwillingness to fight climate change—will have broad economic consequences.

Exactly what those consequences will be, though, depends on many things. It’s not just the political decisions that will matter, but also the pace of scientific advances around renewable energy, the vicissitudes of commodity markets, and the investment decisions of businesses, governments and individuals worldwide.

The very discussion rapidly turns to questions that are as much philosophical as economic. How much do you value existing jobs versus different jobs that might be created? And how much do you value the future versus the present?

Consider a relatively narrow question involving the economics of climate-change mitigation: How much will the Obama administration’s Clean Power Plan, a key element of its efforts, increase the electricity prices that Americans pay?

Industry-funded research from Nera Economic Consulting estimated that it would increase retail electricity bills by 0.3 percent in the 2020s; the Environmental Protection Agency (EPA) estimated a 2- percent to 3-percent increase in 2020 and a decrease by 2030; and Synapse Energy Economics and M.J. Bradley and Associates both projected a significant decrease in electricity costs, as much as 17 percent by 2030.

In this case, not only is the extent to which the plan will affect power bills uncertain, but also the direction.

In these forecasts, it matters a great deal how quickly prices fall for generating solar and wind power; how much energyefficiency programs reduce demand for electricity; the future price of natural gas; and how aggressively states cooperate to

2.7M

The number of jobs that will be lost by 2025 as one of the economic impacts of regulating greenhouse gases achieve emissions targets.

This challenge of projecting the consequences of climate action gets all the harder when you go from a narrow question like the cost of electricity a few years down the road to broader questions about jobs, incomes and GDP. Any credible effort to combat climate change endangers millions of jobs involved in the extraction and processing of fossil fuels. But the reality of the modern economy is that industries are constantly in flux, and the workers who lose jobs may well find better ones.

The Nera study, for example, with its pessimistic take on the economic impacts of regulating greenhouse gases, projects that the efforts will cost the US economy 2.7 million jobs by 2025 and 31.6 million by 2040.

But that’s the way the labor market works in general, with some sectors expanding at any point in time and others contracting. Right now, the retail sector is bleeding jobs as physical stores give way to more online shopping.

The information-services sector shed more than a million jobs from 2001 to 2012. The share of jobs in manufacturing

Paris exit isolates Trump from C-Suites to capitals

T

he response to President Donald J. Trump’s announcement he was exiting the Paris climate accord and wanted to renegotiate on his terms was immediate: The leaders of France, Germany and Italy said no.

On Wall Street, corporate executives pilloried the businessman president. Goldman Sachs’s CEO tweeted for the first time, calling the move a setback for the world. Tesla Inc.’s Elon Musk and Bob Iger of Walt Disney Co. quit a White House advisory council in protest.

Even the mayor of Pittsburgh—a city Trump highlighted as a beneficiary of his decision to turn his back on the global pact—vowed to abide by the Paris Agreement.

Trump’s decision leaves him more alienated than ever, isolated on the world stage and increasingly embattled at home. Trump retweeted a flurry of praise about his move last Friday morning, all delivered by political allies, from Vice President Mike Pence to Republican House Majority Leader Kevin McCarthy.

Scott Pruitt, Trump’s environmental chief, said exiting doesn’t mean the US is disengaging—just that Trump had put America’s interests first.

“Paris represents a bad deal for this country; it doesn’t mean we’re not going to continue the discussion,” Pruitt said at a White House briefing last Friday.

Coming against the backdrop of sprawling probes into ties between Russia and Trump’s campaign, the backlash threatens to sap the president’s power when he needs it most to advance domestic priorities, such as tax reform and a health-care overhaul, while confronting an increasingly bellicose North Korea.

It’s a dramatic change in fortunes for the president after just 133 days in office. Business leaders no longer seem to fear Trump’s tweets; foreign leaders have moved from attempts to find rapport to direct confrontation.

Consider that in earlier days, a tweet about Ford Motor Co. shipping US jobs to Mexico prompted the automaker to announce it was abandoning plans to build a $1.6-billion plant there.

Days after his election, Trump called the top executive of United Technologies Corp. and told him not to move jobs from a Carrier factory in Indianapolis to Mexico. Carrier partially

relented, agreeing to keep 1,100 jobs in the US in exchange for $7 million in tax breaks and incentives from the state. (Even so, 1,300 jobs are still going to Mexico.)

And in her first visit with Trump in Washington, German Chancellor Angela Merkel gamely tried to shake Trump’s hand during a photo opportunity, offering an optimistic assessment of the meeting despite the president’s persistent criticisms of her country.

“I’ve always said it’s much, much better to talk to one another and not about one another, and I think our conversation proved this,” she said afterward.

There is none of that fear and trembling now.

After Trump’s announcement on Paris, Ford issued a statement asserting that “we believe climate change is real and remain deeply committed to reducing greenhouse-gas emissions”.

Company Chairman Bill Ford, the man Trump once described as “my friend”, broke with the president over his executive order on immigration. Even the initial deal came with a caveat: The company is still moving some auto production to an existing factory in Mexico, in addition to plowing $700 million into a plant south of Detroit.

Although Carrier hasn’t announced a change to its plans, other companies are moving production south.

Trump’s moves have alienated allies who game out how to one-up the president.

In his first meeting with Trump, French President Emmanuel Macron squeezed Trump’s hand so hard that the American’s knuckles turned white. And when the two chatted before cameras, Macron spoke only French. He switched to English for his remarks with UK Prime Minister Theresa May. After Trump’s announcement on Paris, Macron tweeted, “Make our planet great again,” and assured American scientists, engineers and entrepreneurs they could find a second homeland in France.

And last Friday, the French Foreign Ministry tweeted its edit of a White House video on the Paris accord, complete with on-screen rewrites of the Trump administration’s claims, including one transforming “this deal was badly negotiated” to “this deal was comprehensively negotiated”. Bloomberg News

Protesters demonstrate against President Donald J. Trump’s withdrawal from the Paris climate accord, at the San Francisco Federal Building on June 2. Jim Wilson/The New York Times

has been falling pretty much continuously since World War II. So the real question is not whether some jobs involving fossil fuels will go away if greenhouse gases are regulated more stringently; what matters is whether the jobs that emerge to replace them will pay better or worse.

If no jobs emerge at all and unemployment rises, then that’s a failure of macroeconomic stabilization—which is to say, it’s the Federal Reserve’s fault for keeping interest rates too high.

There’s a parallel with trade policy.

Major trade deals have minimal effects on the overall number of jobs, and increase incomes on average, but may have a particularly large job-reducing effects in particular locations and among particular workers.

In other words, it’s one thing to say that jobs drilling for oil and mining coal will go away even as jobs installing solar panels will be created. That sounds comforting—but if different people in different locations are doing those jobs, there can still be disruption.

And beyond the complexity of modeling how climate policies will affect the economy, and the judgment call of how much value to assign to preserving existing jobs, there is an even bigger question.

In pessimistic forecasts of the impact of climate change, the cost to adapt to a warming planet will eventually be huge, potentially including vast expenditures to try to protect cities from rising seas, adjusting agriculture to new climate patterns, and countless other changes to business and the economy.

We don’t know exactly when those costs will arrive, how big they will be and how much the kinds of climate action contemplated as part of the Paris Agreement would shift the risk patterns. To use a business concept, we have to apply some kind of “discount rate” when thinking about future climate economic impacts.

A dollar today is worth more than a dollar tomorrow and a lot more than a dollar in 100 years. But what discount rate you set determines how much more.

So the question for the economy is not just how much more an aggressive climate policy would cost today; it’s how it would change those costs in the decades ahead, and how, as a society, we count the value of time.

New York Times News Service

A8

Monday, June 5, 2017

The World BusinessMirror

www.businessmirror.com.ph

Terrorist attacks in London hit a nation still reeling

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ONDON—Another night of terrorism unfolded in Britain last Saturday with two attacks that killed six civilians in the center of the capital, London police said.

At least one of the dead was killed when a van careered onto the sidewalk along London Bridge, mowing down pedestrians.

The London Ambulance Service said it had taken 48 injured to five hospitals.

The police said they had killed three attackers, which they believed to be the total number of assailants.

Witnesses reported that at least one man jumped out of the van wielding a large knife and ran into the nearby Borough Market, a popular spot for pubs and restaurants on the southern side of the Thames.

Heavily armed police responded to the bridge attack, which took place just after 10 p.m., and more officers rushed to investigate reports of stabbings at the market.

The police shot and killed three attackers there, within eight minutes of receiving the first emergency call, they said.

Although no one claimed responsibility for the attacks, they hit a nation still reeling from the shock of the bombing in Manchester almost two weeks ago when a suicide bomber blew himself up outside the

doors of an Ariana Grande concert.

Twenty-two people were killed, including many children.

Saturday’s attack was reminiscent of another on Westminster Bridge on March 22, when Khalid Masood, 52, drove a car into pedestrians, killing four people.

He then stabbed a police officer to death before being shot and killed near Parliament. The police treated that attack, in which 50 were injured, as “Islamist-related terrorism”.

And now, as Britain prepares for national elections in less than a week, it must cope with more attacks in the most ordinary of places, London Bridge on a Saturday night, as people walked about enjoying the spring weather.

The mood in London was shock and anger, with the center of the city saturated with the sound of sirens.

People were told to run, hide and silence their cell phones as the police searched for assailants.

There was panic that a third stabbing in the Vauxhall area at about the same time as the assaults near the bridge might have been part of a coordinated attack, but the

police later declared that incident unrelated.

The attacks came a few days before a snap election that has major implications for the country’s future outside the European Union.

Across London and Britain, there was a sense of fear that a way of life was under attack but also a determination to carry on.

The mayor of London, Sadiq Khan, called it a “deliberate and cowardly attack on innocent Londoners”, and it was also condemned by the leader of the main opposition party, Jeremy Corbyn.

The office of Theresa May, the prime minister, announced she would chair a meeting of the government emergency response committee, known as Cobra, last Sunday.

A White House spokesman said President Donald J. Trump had been briefed by his national security aides on the events in London.

He spoke with May, offering his condolences for the attacks and praising the response of the police, White House officials said.

He offered the full support of the US government in investigating the attacks.

No motive has been ascribed to the attackers, but on the messaging app Telegram, members and supporters of the Islamic State (IS) shared a poster that called for supporters to attack people with guns, knives and trucks during the month of Ramadan, which began last weekend.

Last Saturday night ambulances

People place their hands on their heads about 10 minutes after midnight as they leave from a police cordon after an attack in London on June 4. Armed British police rushed to London Bridge late Saturday after reports of a vehicle running down pedestrians and people being stabbed nearby. AP/Matt Dunham

rushed to the scene, people fled in panic, restaurants and hotels were evacuated, and helicopters flew overhead.

Witnesses described horrible scenes.

Holly Jones, a BBC reporter who was on the bridge when the van crashed, said it was driven by a man and was “probably traveling at about 50 miles an hour”.

“He swerved right round me and then hit about five or six people,” Jones said. “He hit about two people in front of me and then three behind.”

A witness, who identified himself as Andrew, said he was in the area at a bar, heard “a massive bang” and saw a van hitting the rail of the road.

“Next 10 seconds later, there was a guy with a big knife, I mean, a big knife,” he told LBC Radio.

Andrew said he jumped over a

fence, got to a footpath and saw “a dead guy lying on the floor.” He hid for a few seconds in bushes nearby, then, he said, “I ran for my life.”

At the market, Ben, who did not give his last name, told the BBC that he and his wife Natalie had seen someone being stabbed.

“I saw a man in red with quite a large blade. I don’t know the measurement—I guess maybe 10 inches,” Ben said. “He was stabbing a man. He stabbed him about three times fairly calmly.”

Ben added: “He was being stabbed quite coldly, and he slumped to the ground.”

He then said someone threw a table and a bottle at the man with the knife, but “then we heard three gunshots and we ran”.

A man named Gerard told the BBC that he had seen men stabbing everyone they could and shouting “this is for Allah”.

He saw three men with knives, “and they stabbed a girl”, he said.

“So I follow them, toward Borough Market. They were running into the pubs and bars and stabbing everyone. They were running up, saying this is for Allah, and they run up and stabbed this girl, 10, maybe 15 times.”

Lorna Murray, 44, said she was about to drive over London Bridge when traffic stopped and people ran toward her car.

“We ducked down in our car, assuming there was a stabbing,” she said. “Then this young couple started banging on the doors trying to get into our car for safety. We took them in, but couldn’t let anyone else in because we had a baby in the back.”

The police told everyone to leave their cars and get away.

“When I got out the car everything was a blur, but I saw a woman with blood all over her face,” she said.

Tim Hodge, 37, a security officer at an office building on the south side of the bridge, described “huge crowds” running and screaming.

“There was so much panic, and so many of the people were drunk, which made them more hysterical.”

Alex Shellum was in the Mudlark pub, underneath London Bridge, with his girlfriend and two friends.

He told the BBC about an injured woman who came into the pub: “She was bleeding heavily from the neck.

It appeared that her throat had been cut.” New York Times News Service

The World BusinessMirror

www.businessmirror.com.ph

Monday, June 5, 2017

A9

As China eyes trade growth, EU calms wary industries

A

S the European Union (EU) forges closer ties with China, the bloc is also moving to calm concern that Chinese exporters will destroy EU-based industries, ranging from steel to solar.

The EU will retain the scope to impose hefty levies against Chinese businesses that sell goods below cost in Europe under a planned tariff overhaul, according to Salvatore Cicu, an Italian member of the European Parliament.

Europe is revamping the way it calculates duties on these “dumped” imports in response to long-standing Chinese demands for more favorable trade treatment.

“We want to give a political message—especially to China—that we are open for trade, but EU industries must not be penalized,” Cicu, who is steering a draft law on the controversial issue through the 28-nation Parliament, said in an interview at the assembly’s headquarters in Strasbourg, France. “We can find an effective compromise.”

At a June 1 and 2 meeting in Brussels, Chinese and European leaders continued to chart a path to closer trade and investment ties.

The EU is seeking to create stronger international bonds without reigniting a populist wave in Europe that rallied against global-

2

The rank of China as European Union’s trade partner, after the United States ism’s negative effects on domestic industries and workers.

Meanwhile, the bloc is telling China that more open trade with Europe first requires fewer barriers to foreign investment in the Chinese market.

After Chinese President Xi Jinping used the Davos forum of global business and political elites in January to portray his country as a champion of free markets, EU Trade Commissioner Cecilia Malmstrom said she’s still looking for results.

“We are all waiting now for the remarks by the president to translate into action and make trade and investment more open,” Malmstrom told an EU-China business conference in Brussels on June 2.

Disagreements over trade prevented both sides from drawing up as planned their first-ever statement on climate change and clean energy at the summit, according to an EU official, who said the discord over commercial matters had no impact on the unity over global warming.

Ambassador Yang Yanyi, head of the Chinese mission to the EU, told China’s official Xinhua News Agency before the summit that some differences between the two regions may arise while others fall away but “the key is to understand how to manage and handle these differences properly.”

Cicu, a native of Sicily serving his first term as an EU lawmaker, said European industries have little to fear from the planned overhaul of the bloc’s system for determining antidumping duties. At stake is the level of European import levies on billions of euros of goods.

While it is the EU’s No. 2 trade partner after the US, China is grouped with the likes of Belarus and North Korea in lacking marketeconomy designation by Europe and faces more European antidumping duties than any other country.

After years of stalling, the EU moved to upgrade China’s status in November when Malmstrom proposed to elevate the country’s clas-

sification in dumping cases. A final EU agreement is likely to be reached by year-end, according to Cicu. The next step is a June 20 vote in the EU Parliament’s trade committee on amendments he’s proposing.

“We are confident of finding a convergence of views,” Cicu said. “If we manage this properly, it won’t be so bad for the European industry.”

To limit a flood of cheap imports from China, the EU has included in the draft law a formula for calculating antidumping duties against countries whose markets are deemed to have “significant distortions” from state intervention. A related provision would allow the European Commission, the EU’s Brussels-based trade authority, to report on regional distortions, aiding European industries when filing dumping complaints.

After the June 20 vote in the EU Parliament’s trade committee, Cicu plans to start negotiations on a final deal with representatives of the bloc’s national governments, which have already reached a deal among themselves.

Asked how one of the most politically toxic EU policy questions in years could suddenly seem ripe for settlement, Cicu cited cool heads, widespread consultations and the value of two decades he spent in the Italian parliament and government before joining the European legislature in 2014.

“Twenty years of political experience is a way to manage hot potatoes,” he said with a smile. Bloomberg News

50 years on, Israel keeps tight grip on Palestinian economy S

ALFIT, West Bank—Fuad Maraita wakes up at 3:30 a.m. His hometown of Salfit in the Israeli-occupied West Bank lies in darkness.

He drinks coffee, slings a bag with his lunch over his shoulder, gets on a minibus and starts the grueling journey to his job laying tiles at a construction site near Tel Aviv.

Maraita, 62, is among tens of thousands of Palestinians who make the trek to Israel every day.

Fifty years after Israel captured the West Bank, the Gaza Strip and east Jerusalem, this army of laborers is one of the most visible signs of the occupation.

Israeli control has held back the Palestinian economy, making decentpaying jobs in the territories scarce.

Stripped of choices, Palestinians work in Israel, where their average pay is the minimum wage—still more than double what they would earn at home. They build homes, fix cars and serve food.

Laying tiles in Israel has become a Maraita family tradition, passed down from Maraita’s late father to him, his four brothers and one of his sons. Salfit is just 30 miles from Tel Aviv, but Israeli travel restrictions keep him on the road for almost as much time each day as he spends working.

Maraita believes the occupation won’t end anytime soon.

“They [the Israelis] are not going anywhere,” he said.

Some 125,000 Palestinians now work in Israel and in Jewish settlements in the West Bank. At peak times, a third of the West Bank’s work force was employed in Israel, whose high-tech-driven economy is about 15 times larger than the Palestinian one.

This lopsided relationship will loom large if President Donald J. Trump restarts Israeli-Palestinian peace talks. The US administration believes strengthening the Palestinian economy would support future talks, but Israelis and Palestinians have different views of what that means.

Palestinians say Israel must cut shackles now, rather than linking economic change to an elusive peace deal. They say it’s the only way to grow a sluggish economy held back

by Israeli restrictions, including on Palestinian development in large parts of the West Bank where Jewish settlements are allowed to flourish.

“Our economic problems can’t wait,” said senior Palestinian economist Mohammed Mustafa, who discussed such demands with the Trump administration. AP

A4 A10 Monday, June 5, 2017

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May avoids guarantees on UK tax rates as election looms

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.K. Prime Minister Theresa May declined to guarantee a Conservative government won’t raise income tax or national insurance payments, saying only that her party “believes in low taxes”.

“Our plans on tax have been set out in the manifesto: We are a party that believes in low taxes,” May said last Saturday at an election rally in Dewsbury, northern England, when asked if she plans to raise national insurance rates, a form of tax that is mainly used to pay for state benefits. “Our position on tax hasn’t changed.”

With five days until Britain votes in a snap election May called in April, her lead in opinion polls has narrowed, leaving her scrambling to shore up her vote.

While Defense Secretary Michael Fallon and Foreign Secretary Boris Johnson suggested in the past 24 hours that tax increases aren’t envisioned, the premier’s answer suggests she’s leaving herself wriggle room.

The opposition Labour Party, which in polls has closed to within as few as three percentage points behind the Conservatives from a gap of 24 points last month, seized on the Tories’ mixed messages, with Leader Jeremy Corbyn saying “there’s complete chaos going on at the top of the government”.

“One minister says they’re going to give no more tax rises, indeed possibly tax reductions for the very wealthiest, then they can’t answer the question about tax rises for the rest of the population, then they can’t answer the questions about funding social care,” he said in comments broadcast

by Sky News.

The Tories’ tax policies are being questioned because their program for government dropped a commitment, made in 2015, not to raise income tax, national insurance contributions or value-added tax, a sales tax.

The 2015 pledge had hamstrung Chancellor of the Exchequer Philip Hammond. In the face of opposition from Tory lawmakers, he was forced to drop a planned increase in national insurance rates for self-employed workers a week after announcing it in his budget in March.

Johnson told the BBC’s “Newsnight” program last Friday that the party has “absolutely no plans to raise income tax”, a comment that fell short of an outright pledge.

And Fallon gave an interview in the Telegraph ruling out tax rises for higher earners, a promise also left out of the election manifesto.

“We’re not in the business of punishing people for getting on, on the contrary we want people to keep more of their earnings,” Fallon told the newspaper. “The only way they can be sure their taxes won’t rise is to vote Conservative.”

“The mask has finally slipped: the only guarantee the Tories are prepared to give at this election is to big business and high earners,” the party’s finance spokesman, John McDonnell, said in a statement. “Low- and middle-income earners have seen no guarantee from Theresa May that their taxes won’t be raised.”

The Liberal Democrats, the former coalition partner of the Conservatives, said the Tory stance on taxation “raises suspicions”.

“Michael Fallon’s comments raise the obvious question as to where the Conser vatives will raise the money that their chancellor knows will be needed if promised funding for schools, the NHS [National Health Ser vice], the police and defense is to materialize,” Lib-Dem Finance Spokesman, Vince Cable said in a statement.

“We must assume that there will be an increase in National Insurance and in various ‘stealth ta xes’ yet to be specified.”

When asked last Saturday if she would say “categorically” she would not raise income tax, May said “it’s our firm intention to reduce taxes on ordinary working families.”

She repeated that line when asked if she planned to raise national insurance contributions.

May pointed to commitments to raise the thresholds at which people start paying income tax and at which the 40-percent rate of tax kicks in. That still leaves wriggle room to raise the actual tax rates and national insurance payments.

“The choice is very simple,” she said. “A Conservative Party that’s always believed in lower taxes, or a Labour Party with a manifesto that we know will mean higher taxes for all and ordinary working people paying the price.” Bloomberg News

Trump seizes on London attack as leverage in travel-ban case

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resident Donald J. Trump wasted no time using another terrorist attack in London to argue for US courts to reinstate his travel ban focused on people from predominantly Muslim countries.

“We need to be smart, vigilant and tough. We need the courts to give us back our rights. We need the Travel Ban as an extra level of safety,” Trump said on Twitter, before UK Prime Minister Theresa May said the incidents were being treated as a potential act of terror.

He later phoned May and offered condolences for the “brutal terror attacks”. according to a White House statement.

Six people were killed in Saturday night’s attack in London. A van swerved into crowds on London Bridge, before three men got out of the vehicle and went on a stabbing rampage through nearby bars in a popular nightlife spot of central London. The men, who wore hoax suicide vests, were shot dead by the police, taking the total death toll to nine.

British authorities provided no immediate information on the likely source of the attack, but May said in a statement: “I can confirm that the terrible incident in London is being treated as a potential act of terrorism.” No one has claimed responsibility for the attack.

It wasn’t immediately clear whether Trump—who was briefed by his national security team, according to Spokesman Sean Spicer—had additional, nonpublic information about the attacks at the time he sent his message on Twitter.

The White House last Thursday asked the US Supreme Court to immediately reinstate Trump’s stalled travel ban, aiming to reverse a string of courtroom losses since the measure was first introduced in January and then amended in March.

At issue is Trump’s executive order temporarily barring entry into the US by people from six predominantly Muslim countries in what the White House has described as an effort to protect the country from terrorists.

The administration asked the court to let the ban take effect while the justices decide whether to review a lowercourt ruling that said the policy was “steeped in animus and directed at a single religious group”.

About eight minutes after his original tweet, Trump followed up with an expression of concern: “Whatever the United States can do to help out in London and the UK, we will be there—WE ARE WITH YOU. GOD BLESS!”

Bloomberg News

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Editor: Max V. de Leon • Monday, June 5, 2017 A11

Cambodian vote tests strongman’s power

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HNOM PENH, Cambodia— Cambodians voted in local elections last Sunday that could shake longtime ruler Hun Sen’s grip on power.

Prime Minister Hun Sen has repeatedly warned of civil war if his Cambodian People’s Party loses the majority in city and village councils to the main opposition party that made major gains in the last general elections four years ago and claimed it was cheated out of outright victory.

The polls could have a major impact on Cambodia’s political landscape ahead of 2018 national elections.

Hun Sen and his wife were among the early voters last Sunday. His government has been accused of using violence against opponents, but in recent years has stalked its foes mostly in courts. After casting his vote, Kem Sokha, leader of the opposition Cambodia National Rescue Party (CNRP), said he expects to win more than 60 percent of the vote. In the last communal elections in 2012 Hun Sen’s party received 60 percent compared to the CNRP’s 30.6 percent. Last Friday, Hun Sen appealed to political parties to accept the outcome rather than make accusations of irregularities, saying courts can dissolve any party if it challenges the result of the vote.

Hun Sen and some of his top ministers have frequently used strong

rhetoric leading up to the vote, warning of dire consequences should the opposition win, in what has been seen as an attempt to intimidate voters into supporting him.

The ruling party could take some credit for bringing modest economic growth and stability in a country devastated by the communist Khmer Rouge’s regime in the 1970s. Hun Sen left the movement that was responsible for the deaths of some 1.7 million people from starvation, disease and executions before it was toppled in 1979. This week Amnesty International accused Cambodia’s government of using its grip on the judiciary system to intimidate human rights defenders and political activists. It said in a report that since the 2013 general election, Hun Sen’s government has used the courts as a tool to imprison at least 27 prominent opposition officials, human rights defenders and land activists, as well as hundreds of others facing legal cases.

Also early this month the State Department said the US was urging Cambodia’s government to “guarantee a political space free from threats or intimidation” and respect freedom of expression for all its citizens. AP

Opposition Cambodia National Rescue Party President Kem Sokha shows off his ballot paper before voting in local elections in Chak Angre Leu on the outskirts of Phnom Penh, Cambodia, on June 4.

Cambodians voted in local elections last Sunday that could shake longtime ruler Hun Sen’s grip on power. AP

Vietnamese long hair lining female traders’ pockets one snip at a time

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ANOI, Vietnam—”Anyone want to sell their long hair?” came a sweet feminine voice creeping through a summer noon in the outskirts of Vietnam’s Hanoi capital city.

The voice was not coming from the mouth of any woman or man, however, but from a small loud speaker attached to an old motorbike ridden by a middle-aged woman in the rural district of Thanh Tri. “Buying human hair is my bread and butter,” the woman, who identified herself as Nguyen Thi Thuy, 50, from the northern Bac Ninh province, told Xinhua in late May while pointing her sunburnt hand to a small set of blue scales, and a pair of black scissors. The scissors are used to cut the hair of customers, and the scales are to weigh the hair, she explained.

“I can buy a bundle of long hair at prices of hundreds of thousands of Vietnamese dong [tens of US dollars] depending on its length and quality,” Thuy said in a husky voice, noting that medium-length hair measuring 20 to 50 centimeters is most common, and“rivers of hair”, measuring around one meter, is extremely rare. A decade ago Thuy cycled along alleyways and through villages to seek customers, shouting with all her might: “Anyone want to sell their long hair?”

“Thanks to this odd occupation, my husband and I have managed to turn our brick house into a three-story building, and can afford two motorbikes,” she said with a hint of pride twinkling in her eyes. The motorbike helps Thuy go faster, and the loud speaker, using a prerecorded voice from one of her villagers, saves her from wearily saying the same sentence all day. “This year traders offer higher prices for the longer hair we collect, and they buy bigger volumes,” Thuy said. “But long hair is becoming scarcer and scarcer, so I have to go further into remote villages in Hanoi and its neighboring provinces. My husband even has to go to northern mountainous areas.”

Like hotcakes LONG hair is selling like hotcakes because of thinner supply and bigger demand, Thuy said, noting that she often sells the hair to a millionaire, director of a trading company, in Bac Ninh, who

supplies hair to beauty salons all over Vietnam and exports the product to several countries.

In olden times, like in other Asian countries, all Vietnamese females had very long hair that they lovingly cared for. Some women had hair that cascaded all the way to their heels. Today, few grow their hair that long, but there is something of a fetish for long hair, and it is still highly prized among Vietnamese men, as it denotes a soft, feminine beauty.

While traditional long tresses may be a thing of the past, women today are keenly experimenting with new, more modern hairstyles and rather than waiting a couple of years, sometimes opt for extensions. However, for every woman, actress, model, office clerk or student, that proudly flicks her long tresses, a story of poverty or domestic violence often lies behind the scenes.

Selling their hair is not an easy decision for some to come to. According to Thuy, there are women who agree to sell their hair at first, but snatch it back at the last minute, crying out when her scissors close in for the first snip. Other people who do not want to sell their hair, but see the money they could get for it, agree to go through with it despite trauma of losing their locks.

“Every woman loves her hair so only those in the most difficult circumstances do it. I know that some sell hair to repay a small loan, to prepare Tet [lunar new year festival] for her kids, to pay a tuition fee or to timely buy a bottle of alcohol for her husband who drinks like a fish and beats her frequently,” Thuy said, fetching a deep sigh.

Synthetic hair HOWEVER, such unlucky women bring about joy to many other people, from hair buyers who sell on the product to bigger dealers, to women that need wigs, such as fashionitas and cancer patients, and of course, beauty salon owners.

“We buy bundles of long hair at lengths of 30 to 60 centimeters weighing a total of 0.6 to 0.7 kilograms at prices of some 3 million Vietnamese dong [$133],” Nguyen Thi Hong Thai, owner of a big beauty salon named Thai in Be Van Dan Street, Hanoi, told Xinhua last Sunday. Such an amount of hair is

enough for lengthening the hair of one customer who will have to pay total fees of around 10 million Vietnamese dong (some $440), Thai said.

“More and more women are becoming well-off and increasingly aware of fashion trends, so they prefer hair and eyelash extensions made from natural human hair, which can be permed, dyed or flat ironed, whereas synthetic hair cannot,” Thai explained.

According to the beauty salon’s owner, synthetic fiber also looks unnatural and rough, but demand for wigs made from synthetic hair is still high in Vietnam because of their reasonable prices.

“A wig made from synthetic hair costs only hundreds of thousands of Vietnamese dong. Many cancer patients who have undergone radiotherapy or chemotherapy, use them,” Thai noted.

Large volumes ACCORDING to statistics from Vietnam’s Health Ministry, the country detects some 150,000 cancer cases each year, while facing over 75,000 deaths caused by cancer.

Besides hair buyers and salons, largescale dealers benefit, maybe the most, from the hair trade.

“We sell large volumes of hair to salons, 3 million to 4 million Vietnamese dong [$133 to $177] for one kilogram of hair with lengths of around 30 centimeters, and 7-8 million Vietnamese dong [$310 to $354] for longer hair,” Nguyen Thi Hoa from a local business named Real Hair in Nguyen Ngoc Nai Street, Hanoi, told Xinhua in late May. Long Vietnamese hair is not just found domestically, Vietnamese tresses can be found in hair salons in China, Thailand, South Korea and even as far afield as the US. According to Hoa, there has been an increasingly bigger demand for long hair in the Chinese and American markets. “We have received orders for hundreds of kilograms of long hair to be exported to China each month, but we have refused often due to shortages,” the businesswoman said.

While Vietnamese hair is exported in greater mass to Thailand than to the US, the two markets added together still do not equal China’s demand for human hair. Xinhua/PNA

Green Monday BusinessMirror

A12 Monday, June 5, 2017

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

Protecting environment, securing water supply

By Jonathan L. Mayuga

W

@jonlmayuga

ith a population of more than 100 million, the Philippines is faced with the challenge of ensuring water security.

Me t ro p ol it a n Wate r work s and Sewerage System (MWSS) A d m i n i s t r a t o r R e y n a l d o V. Velasco, underscoring the need to protect the country’s freshwater source, recently unveiled the plan to address this challenge at forum led by Finex Research and Development Foundation Inc. at a hotel in Makati City recently.

Primarily mandated by Republic Act 6234, the MWSS is tasked to ensure the proper operation and maintenance of waterworks system to ensure an uninterrupted and adequate supply and distribution of potable water for domestic and other purposes, and the proper operation and maintenance of sewerage systems in its service area, which includes the whole of Metro Manila and parts of Cavite and Rizal.

Environmental protection

According to Vel asco, t he MWSS shall vigorously partner with the Department of Environment and Natural Resources (DENR), local government units (LGUs), business and civic organizations to conserve and use water, as well as protect the environment.

He said the MWSS is eyeing six major watersheds that need protection—the Umiray, Angat, Ipo, La Mesa, Marikina and Laguna de Bay—which are currently managed by different government agencies. Velasco added that in the long term, an integrated watershed management plan should be implemented to sustain the care and protection of these watersheds, including the rivers and arterial channels.

“The protection of these watersheds is important as their environmental conditions directly impinge on the quality and amount of potable water supply to our constituents,” he said.

Lucrative business

Appearing for the first time before members of the Financial Executives Institute of the Philippines (Finex) since he assumed his MWSS post in February, Velasco shared the agency’s programs for water sustainability.

Velasco said, water, being an

20M

The number of consumers of Metropolitan Waterworks and Sewerage System in Metro Manila and nearby provinces of Rizal, Cavite and Bulacan

essential human need and service, is also a lucrative business venture given the successful legal framework for public-private partnership (PPP) put in place in August 1997 during the administration of then-President Fidel V. Ramos.

This can be gleaned through the income figures in the last 20 years since the MWSS started implementing PPP, he said, citing the gains of MWSS’s private water contractors—May ni lad Water Services Inc. and Manila Water Co. Inc. “The income figures would not lie and you can just ask Mr. Ferdz de la Cruz and Mr. Mon Fernandez on their secrets of success in managing Manila Water and Maynilad in the last 20 years since the MWSS was put into a PPP,” he added.

The multibillion-peso bottledwater industry, where top corporations and malls all over the Philippines have joined the lucrative business, are also proof of the water sector’s huge business potential. Another mushrooming water business, he said, is the water-refilling stations all over the country.

Water sustainability

For Velasco, water sustainability means there should be enough and available water not only for the present generation but also for future generations.

He underscored the fact that one of the 17 Sustainable Development Goals of the United Nations is to “ensure availability and sustainability in the management of water and sanitation for all”.

He cited the 2016 Asian Water Development Outlook of the Asian

Laguna de Bay is the country’s largest freshwater lake. It is being eyed by the Metropolitan Waterworks and Sewerage System as possible source of tap water for around 20 million households in Metro Manila and nearby provinces. Laguna Lake Development Authority

Development Bank, which states that by 2050, more than 60 percent of the Asia and Pacific region’s population will be living in cities.

“The overall urban water-security score takes into consideration the fundamental requirements of a livable city—water supply, wastewater collection, f lood management [drainage] and river health,” he said.

The Philippines has a National Water Security score of 40.4 out of 100, which means that much needs to be done for the country to become water secure, he added.

Privatization

In 1997 Velasco noted that the MWSS privatization highlights t he R a mos ad m i n i st r at ion’s strategy to address the looming water crisis.

In the Ramos Peace and Development Foundation 15th year commemorative book launched on April 21, an event hosted by the MWSS, he noted the book ’s chapter on env ironment and sustainable development, which are the salient features of water privatization.

During the early years of the Ramos administration, Velasco noted the generally poor waterservice coverage all over Metro Manila, with around 53 percent only of the service area.

The unaccounted water, meanwhile, is around 63 percent. There was also inefficient service with low water pressure and limited water availability. Water situation was also characterized by high nonwater revenue and minimal sewerage coverage.

To address the problem, Ramos signed two laws—Republic Act (RA) 8041, or the National Water Crisis Act and Executive Order (EO) 311 on March 20, 1996.

RA 8041 aimed to address the nationwide water crisis, which adversely affects the health and well-being of the population, food production and industrialization.

On the other hand, EO 311 encouraged private sector participation in the operations and facilities of the MWSS. T he reorgani zat ion of t he MWSS, which followed the signing of the two laws, meanwhile, addressed issues relevant to supply distribution, anti-water pilferage and finance privatization of the water sector.

In August 1997 the Ramos administration entered into a 25year concession agreement with two private consortia comprised of international and local partners, shifting the operational responsibilities of MWSS to Maynilad Water Services Inc., for the West Zone, and Manila Water Co. Inc. for the East Zone of Metropolitan Manila and nearby provinces.

‘Master stroke’

The MWSS privatization, Velasco said, is the former President’s “master stroke of a genius”.

A mong its positive results was the expansion of ser viced area, which now stands at 96 percent, as well as reduced unaccounted for water at 13 percent

by Manila Water and 32 percent

by Maynilad.

“One important aspect and enduring effect of the successful legal framework of the PPP between MWSS and the concessionaires, is that these two water partners have shared their best practices to other parts of the country and also our Asean neighbors, like Vietnam, Myanmar, Indonesia and Cambodia,” Velasco said.

He added that it is for such reasons that he is pushing to redraft the agreements with the provisions that MWSS must have at least a royalty on the PPP legal framework, much like a franchise.

Safe water for all

In the next five years, Velasco is bent on ensuring affordable and safe water for 20 million consumers in Metro Manila and

The Finex Research and Development Foundation Inc. forum on water security at a hotel in Makati City recently is graced by (from left) Antonilo Mauricio, master of ceremonies; Ramoncito Fernandez, president and CEO, Maynilad Water Services; Dr. Sevillo David Jr., executive director, National Water Resources Board; and Ferdinand de la Cruz, president and CEO, Manila Water Co. Manila Water

nearby provinces of Rizal, Cavite and Bulacan.

“Our mission at MWSS is to work for the well-being of our consumers notably on water supply for each person that must always be sufficient, safe and continuous for personal and domestic uses,” he added.

While pursuing fairness for water consumers, Velasco said the MWSS would respect its concessionaire agreements with Manila Water and Maynilad, and its latest partner, the Bulacan Bulk Water.

Velasco said the Annual MWSS Million Tree Challenge, aimed at planting 1 million trees a year over the next five years in the watershed areas, would be launched.

He urged Finex Foundation to participate in the project to protect the country’s watersheds.

Sustainability

With the MWSS under his helm during the Duterte administration, Velasco said the agency would pursue water sustainability.

He said MWSS sources 95.6 percent of its total water supply from the Angat and Umiray Rivers, and 4 percent from Laguna Lake. The remaining supply, 0.4 percent, comes from groundwater sources.

The Bulacan Bulk Water Supply Project of the MWSS, in partnership with the San Miguel Corp.’s Luzon Clean Water Development Corp. and K-Water, for the supply of treated bulk water to the entire Bulacan province through its water districts, aims to ensure sustainable water supply for the province.

Bulacan hosts the Angat Dam, which supplies Metro Manila and other nearby provinces with clean drinking water.

While the Angat Reservoir has a sufficient capacity to cover the

water requirement of the current population, the water supply for Metro Manila must be secured through additional water sources.

“MWSS needs to reduce its dependency on the Angat Dam, especially when the Big One, or a 7.2 [-magnitude]earthquake, strikes or when major disasters occur, including potential threats from terrorists,” he said.

Future projects

“ T ogether w i t h t h e n e w MWSS board of trustees under the administration of President Duter te, we w i l l del iver t he needed dam projects that were long-started and stalled during the Ramos presidency to ensure adequate, safe, potable, affordable and sustainable water supply for Metro Manila and the adjoining provinces serviced by MWSS,” he added.

Velasco said he is pursuing the approval and implementation of new water-source projects, like the Kaliwa and Laiban dams, with the National Economic and Development Authority, through Secretary Ernesto M. Pernia, and the Department of Finance, through Secretary Carlos G. Dominguez III. “We have the opportune time under this administration to push for the Laiban and Kaliwa flagship dam projects that will include the possible rehabilitation of the Wawa Dam. Putting these all together in place will result in additional combined 2,400 MLD [millions of liters per day] to complement the 4,000 MLD from Angat Dam,” he said.

With such projects, Velasco said the MWSS would ensure adequate, steady and sustainable water supply for water consumers in Metro Manila and adjoining provinces in the next 25 to 50 years.

Ocean conference: Integrated vision that must be delivered U N I T E D N AT ION S — I n March 2015 at the Sendai World Conference for Disaster Risk Reduction, thenPresident of Kirbati, Anote Tong, made it very clear how vulnerable his country was to climate and disaster risk, when he informed the room (which was sadly less than half full) that his country had purchased land in Fiji.

The reason was simple: the threat of climate change to every aspect of life and living in his country, and the belief that one day, should the world not change its path on emissions, it might simply disappear under the waves.

At the Ocean Conference (from June 5 to 9) in New York, nations will gather to discuss how best to deliver on Sustainable Development Goal (SDG) 14, Life Below Water. This event is critical because it will, for perhaps the first time, focus the international

community on how critical our oceans to our life and livelihoods.

Even a glance at the targets and indicators of this goal make that clear: the Ocean SDG is about poverty reduction, economic development, adapting to climate change and protecting the environment, not just the health of the oceans and those who depend on it. Delivering on SDG 13 will help deliver on the other 16 and they, in turn, will be essential to its delivery.

For Small Island Developing States (SIDS), such as Kiribati, this integrated approach is not just important, it is critical. On the one hand, their ocean environment provides them with critical needs, with communications, transportation, livelihoods, trade and more.

But it also makes them vulnerable in many interconnected ways.

Logistics, transportation and communications are complex and expensive given these island nations’ distance to other nations

and distance between their own islands. Their income is vulnerable, with often middle-income status masking very narrow-productive sectors, such as tourism.

Often lacking in fossil fuels themselves, they import heavily and, in some cases, access to energy remains poor. And these vulnerabilities are exacerbated by the increasing disaster and climate risk, the growing threat of cyclones and the seemingly every-rising sea levels.

We can look across a diverse set of small islands to see this in practice. The Federated States of Micronesia has a population of just over a 100,000 and consist of 607 separate islands of just over 700 square kilometers within waters of more than 2,600,000 kilometers.

Tourism accounts for a very high percentage of GDP for small islands, making these nations very susceptible to climate and disaster risk. In the Maldives, for example,

it accounts for 28 percent of GDP and more than 60 percent of its foreign-exchange receipts.

The Solomon Islands and Tuvalu, meanwhile, have at times drawn close to half of their entire national income from international development assistance.

Pa lau has been increasing the percentage of its population that has access to energy and has reached nearly 70 percent, but despite significant potential for renewable energy, it still relies on almost all of its power generation on the import of fossil fuels.

Meanwhile, climate change is an existential threat, and not only to Kiribati; the Maldives, the Marshall Islands, as well as Kiribati, all have more than 90 percent of their population living below 5-meters above sea level.

In these and many other small island nations, sea levels are already eroding land, significantly threatening tour ism, mak ing

agricultural land untenable, increasingly infiltrating fresh water wells, while storm surges and extremely hide tides are, in some cases, increasing in both number and severity.

Given the multiplicity of interconnected vulnerabilities and risks that face SIDS in particular, the ocean conference has the task of delivering a thoroughly integrated vision for not only ac hiev ing on t he sig nif icant ambition of SDG 13; it can and it must ensure a message of integration is at the heart of its deliberations, and especially its solutions to the complex interrelated issues of SIDS. Tackling economic development, poverty reduction, coastal erosion, agricultural adaptation and more, can only be successful if it is thought of as a single interconnected problem, to which must be applied integrated solutions.

The Samoa pathway developed

by SIDS in 2014 makes such an integrated approach clear when it states that “promoting the integrated and sustainable management of natural resources and ecosystems that supports, inter alia, economic, social and human development, while facilitating ecosystem conservation, regeneration, restoration and resilience in the face of new and emerging challenges” is key to sustainable development.

With Fiji, both the cochairman of the Oceans conference and current president of the climate negotiations, there is no better opportunity to deliver on this challenging ambition, an ambition that binds actors together in a vision to deliver on all their global commitments—Sendai, Paris, the SDGs— at the country level. It is here where United Nations Development Programme works, and here that the commitments to act, integrated, need to be delivered. IPS

Biodiversity Monday BusinessMirror

Asean Champions of Biodiversity Media Category 2014

Monday, June 5, 2017 A13

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

Vietnam’s Bai Tu Long is 38th Asean Heritage Park

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ndowed with unique ecosystems of marine and terrestrial mountain lands, limestone mountains, islets and diverse fauna and flora, the Bai Tu Long National Park (BTLNP) joined the network of Asean Heritage Parks (AHPs)—the best of the best protected areas that preserve a complete spectrum of representative ecosystems in the Southeast Asian region.

The ceremonial AHP launch, held recently in City Convention Center, Ha Long, Quang Ninh province, was attended by around 500 guests, was graced by the presence of Roberto V. Oliva, executive director of the Asean Centre for Biodiversity (ACB); Corina Warfield, deputy director of Environment and So-

cial Development Office, United States Agency for International Development; Hiroki Miyazono, chief technical adviser, Japan International Cooperation Agency; Nguyen Song Ha, Food and Agriculture Organization Vietnam; Dr. Hoang Thi Than, deput y director, Biodiversit y Conser vat ion A genc y (BC A);

Harald Leummens, deputy director, United Nations Development Programme Vietnam; Le Than Binh, Vietnam Association for Conservation of Nature and Environment; and heads of BCA. Bai Tu Long is the sixth AHP in Vietnam, which include Ba Be National Park, Chu Mom Ray National Park, Hoang Lien Sa Pa National Park, Kon Ka Kinh National Park and U Min Thuong National Park.

Considered as a natural gem, BTLNP is a treasure trove of wonders from ridge to reef. It consists of numerous flora and fauna dotted with karst limestone mountains and islets comparative to its neighboring Ha Long Bay. The park has a total area of 15,783 hectares, total marine area of 9,658 hectares and the remaining 6,125 hectares is composed of islands.

Tropica l everg reen forests on the limestone island include bro a d le a f e v e r g re e n fore s t s on soil islands, mangrove forests, seagrass cover, coral reefs and valleys between limestone mountains of which the presence of “ Tung ang” ecosystem mark its unique features.

The whole park area was designated to be in-situ conservation.

T he director of Biodiversit y Conser vation Agency, Dr. Pham A nh Cuong, said the biodiversit y of Quang Ninh, in particular, is at r isk because of some economic activ ities.

Cha l lenges in conser vation of env ironment exist, as pollution is stil l preva lent because of consumptive use of biolog ica l resources. With this, Pham commended the People’s Committee of Quang Ninh in taking

action, such as the establishment, of policies and strategies for env ironment protection.

Bai Tu Long National Park Director Nguyen Than Phuong said biodiversity and sustainable tourism is the main battle cry of the Peoples’ Committee of Quang Ninh in making resources sustainable by infusing biodiversity conservation in plans and programs.

ACB Executive Director Roberto V. Oliva acknowledged the passionate effort of Vietnam in biodiversity conservation. He said Vietnam has proven its leadership in developing concrete platforms to implore its call for environmental protection and conservation.

He emphasized that Bai Tu Long National Park is now a part of the AHP family, where the doors for many opportunities along institutional and capacity development are ready for access.

The ACB serves as the secretariat of the AHP Programme.

Protected areas benefit from being declared as an AHP through capacity-building activities for park managers and stakeholders in the form of various learning events, such as trainings and workshops.

AHPs also receive technical assistance from the AHP secretariat, through ACB in-house experts and network of partners. Being an AHP also increases its visibility as a prime ecotourism destination and model for effective protected area management through the Communication, Education and Public Awareness program of ACB. Participation of and collaboration among AHP stakeholders in the implementation of research and development programs and projects are also maximized and strengthened when a protected area is declared as an AHP. The AHP Programme also provides a regional platform for information sharing among AHPs by way of AHP Committee Meetings and AHP Conferences. Parks declared as AHPs are first in line for available funding through ACB programs and projects.

Photos on sea turtle and forest win in ‘Selfie for Biodiversity’ contest

‘F

ollow me, humans.” No, this is not the title of a new movie or a Koreanovela.

This is the winning photo for the Selfie category in the fourth annual photo competition “Selfie for Biodiversity and Sustainable Tourism 2017”.

The photo by Cebu-based student Marrise Tumampos topped the 600 entries in the contest held by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, together with the Biodiversity Management Bureau of the Department of Environment and Natural Resources (DENRBMB). It was in commemoration of the recent International Day for Biological Diversity.

In the photo, Tumampos featured a swimming sea turtle, one of the country’s critically endangered marine species—as if guiding the direction underwater.

Asked about what she thinks her role is in protecting Philippine biod iversit y, Tumampos said, “Ever ybody has responsibilities in being a steward for the environment. We all need to take care of our rich biodiversity because it doesn’t only help

boost our tourism; biodiversity supports the variety of life.”

M e a nw h i l e , M a r k Jo s e p h Fr a nc i sco ba g ge d t he g r a nd prize for the Nonselfie category with his entry “Biodiversity and historical treasures”.

Francisco shared the picturesque view of the forest from the cave in Biak na Bato. For him, saving the country’s biodiversity is in the hands of the Filipinos.

“We can still protect our biodiversity through research, individual action, public policy and education. There’s a lot we can personally do in the preservation of species and the ecosystem as a whole. We can do it our own way, we can start at home.”

Tumampos and Francisco received an all-expenses paid trip to any of the protected areas or biodiversity areas under the jurisdiction of the DENR-BMB, or a project site of GIZ-Protected Area Management Enhancement Project, except for the islands of Batanes.

In the past years, the competition has also already been able to jet off aspiring photographers to their dream destinations. Allan

Marrise Tumampos swims with a sea turtle in her photo “Follow me, humans”, which won the grand prize in the 2017 Selfie for Biodiversity Selfie category in the contest held by Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH with the Biodiversity Management Bureau of the Department of Environment and Natural Resources.

Jay Quesada, last year’s winner, went on a five-day, all-expense paid trip to Gunung Leuser National Park in Medan, Indonesia.

Thanks to his entry called “The livelihood stairway”, taken at the Banaue Rice Terraces, he was able to see this national park, a grasslands area-turned-forest that also boasts of an elephant sanctuary.

That same year, Danny Ocampo won first runner-up with his entry “Ancient sea turtle”. The photo was taken on Apo Island and featured one of the island’s

sea turtles, which has given the island a boost in tourism as one of the most popular dive spots in the country.

For his winning entry, Ocampo was able to travel to Busuanga where he searched for dugongs, as well as Coron, where he was able to explore different dive spots.

Erickson Tabayag, meanwhile, bagged the competition in 2015 with his entry “Saving little birdie”, which was taken at a mangrove forest-restoration area near his home in Palawan.

Sunlight beams through the forest canopy, down to the cave in Bulacan’s Biak na Bato in Mark Joseph Francisco’s photo “Biodiversity and Historical Treasures” in the Non-Selfie category.

In 2014 Rei Gallardo Jr. won the grand prize for his entry “Mount Pulag”. In the photo, he is shown taking a photo of himself with the majestic pine trees of Mount Pulag in Benguet in the background. That same year, Andrea Gaurana won the Phone and Mobile Device category with her

entry “Dulang-dulang”, taken at Mount Kitanglad in Bukidnon.

With this year’s theme, “Biodiversity and Sustainable Tourism”, the contest challenged everyone to capture scenes showing efforts to sustain biodiversity and how biodiversity is connected to sustainable tourism.

A14 Monday, June 5, 2017 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Bending over for China again

O

ur prayers and hearts go out to the victims of the unspeakable tragedy at the Resorts World complex last week. There are no words to adequately console and give comfort to those who lost loved ones.

However, we will refrain from speculating on what happened and why until a proper and complete investigation have been made by government authorities and the private sector. We will leave it to others to offer their theories and conclusions based on current information.

Almost simultaneously, President Donald J. Trump in Washington, D.C., was announcing that the United States was withdrawing from the Paris Climate Agreement. The stated aim of this global agreement is to hold “the increase in the global average temperature to well below 2°C above preindustrial levels…recognizing that this would significantly reduce the risks and impacts of climate change”.

Let’s assume for the sake of argument that all the environmental concerns for the Paris Accord are valid. This agreement is based on the groundwork of the 1997 Kyoto Protocol Treaty, which the US also rejected raising the same global anger as now.

In his speech, Trump said: “For example, under the agreement, China will be able to increase these emissions by a staggering number of years, 13 [until 2030]. They can do whatever they want for 13 years. China will be allowed to build hundreds of additional coal plants. So, we can’t build the plants, but they can, according to this agreement. India will be allowed to double its coal production by 2020. We’re supposed to get rid of ours. Even Europe is allowed to continue construction of coal plants”.

The US opted out of the Kyoto Protocol because both China and India were excluded from the protocol requirements as they were “developing” economies. The per-capita economic output for China and India in 1997 was $1,800 and $650, respectively. Today, those numbers are $6,500—a 260-percent increase—and $1,750, a 170-percent gain. Interestingly, to get the US onboard, it too was “excluded” from the requirements as long as the financial commitments were met.

Further, the Paris Agreement assumes that the countries that do most of the polluting—China, the US, India, Brazil, Canada, Russia, Indonesia and Australia—will eventually and voluntarily reduce carbon pollution without any binding enforcement mechanism or specific penalty or fiscal pressure to discourage bad behavior.

In 1928 the Kellogg-Briand Pact—also known as the “Paris Pact”— was signed by members who promised not to use war to resolve “disputes or conflicts of whatever nature or of whatever origin they may be, which may arise among them.” That agreement is still in force with the nation of Barbados finally signing in 1971. In some ways, it was effective. Cuba was one of the original signatories and they never went to war against a neighbor since then.

Actually, it would probably be in the best interest of the Philippines for the Paris Agreement to push through as the Green Climate Fund could provide billions of dollars to “poor developing countries” like the Philippines.

But what if the Paris Agreement signatories got serious and decided that all nations “cut domestic greenhouse-gas emissions 26 percent to 28 percent below 2005 levels by 2025” as former President Obama pledged the US would do? The demand for Filipino workers who could build nipa huts would increase significantly. To misquote US President Gerald Ford, “A global government big enough to give you everything you want is a government big enough to take from you everything you have”.

The counterpart of financial assistance Atty. Jose Ferdinand M. Rojas II

RISING SUN

M

ost classes are starting on Monday, June 5. I hope students have taken the opportunity to relax and recharge, and get ready for another school year. For many college students, it’s still enrollment time—a challenging period for many parents.

There is the issue of tuition increases in some private schools, and one of the most talked about topic: the free tuition program of the government for state colleges and universities.

It would seem as if there are few reasons (or excuses) why a student wouldn’t be able to go to college these days. Aside from the free tuition program, there are other Student Financial Assistance Programs (StuFAPs) being offered not only by the Commission on Higher Education (Ched), but also by other government agencies. Plus, there are the institutional scholarships and private

scholarship programs from various organizations, foundations, corporations and other private individuals.

According to data, tuition makes up around 30 percent to 40 percent of a student’s total cost of education. The other expenses include miscellaneous fees, books, uniforms, board and lodging, transportation expense, etc. If a student could, for example, secure two

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students: Ched; Technical Education and Skills Development Authority; the departments of Science and Technology, Social Welfare and Development, Agriculture and Health; National Commission on Indigenous Peoples; Armed Forces of the Philippines Education; and Benefit System Office.

Students can take note of this for next year since it is already too late to apply for financial assistance at this time. What students and parents can do at this point would be to look at the requirements and qualifications, and then to complete these in time for the next round of screening.

Now that we are beginning another school year, let us prepare to work hard and develop the values necessary to reach success. Let us not depend totally on other people doing things for us. Students, be ready to work hard this school year.

Parents, be willing to support your children’s education so they can reach their dreams. Put effort into your studies and you’ll reap the rewards in the end.

Tax reform for acceleration and inclusion

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StuFAP benefits to cover for tuition and part of the remaining 60 percent to 70 percent of total expense, then there is a bigger chance for the student to finish college and be able to secure a decent job after college.

The fact is that there is help being offered—help from the government and private institutions.

Some students and/or their parents may not be aware of these or they may not have the patience to go through the application and screening process, or maybe in some cases, they may simply be uninterested.

We have to remember that offering help is only half of the story; the beneficiary or recipient should also be willing and able to help himself or herself. All the effort and hard work will have to come from the student and his or her family, including the willingness to do what needs to be done to reach the goal.

So where can college students apply for StuFAPs? As far as government agencies are concerned, the following are just some of those that offer benefits for college

“All appropriations, revenue or tariff bills, bills authorizing increase of the public debt, bills of local application and private bills shall originate exclusively in the House of Representatives but the Senate may propose or concur with amendments” —Article VI, Section 24, Constitution

T

hus, at least 55 House bills were filed proposing amendments to the National Internal Revenue Code. These were all consolidated into substitute House Bill 5636. On May 15 the Committee on Ways and Means released its Committee Report 229 endorsing the approval of House Bill 5636 sponsored by Rep. Dakila Carlo E. Cua (committee chairman) and Rep. Joey S. Salceda.

Many observations, comments, positive and negative reactions have been ventilated on the merits of the proposed Tax Reform for Acceleration and Inclusion (TRAIN) Act. Some admit to not even having read the actual House bill itself, which is a difficult, if not boring, read.

In the interest of transparency and a more informed discussion/ debates, I have quoted in this column the salient portions of the fact sheet prepared by the Committee on Ways and Means, which was appended to the Committee’s Report to the House endorsing approval of House Bill 5636.

Objectives: n To enhance the progressivity of the tax structure through rationalization of the internal revenue system;

n To provide equitable relief to taxpayers in order to improve their levels of disposable income and increase their economic activity; and n To ensure that the government is able to provide better infrastructure, health, education and social protection by raising sufficient revenues through the expansion of the value-added tax (VAT) base, increase of the excise taxes on petroleum and automobiles, introduction of excise tax on sugar-sweetened beverages and adoption of measures to improve tax administration Key provisions: 1. Amends Section 24 as follows: Tax schedule (for compensation income earners only). n Not over P250,000—0 percent n Over P250,000 but not over P400,000 —20 percent of the

excess over P250,000 n Over P400,000 but not over P800,000—P30,000 + 25 percent of the excess over P400,000 n Over P800,000 but not over P2,000,000—P130,000 + 30 percent of the excess over P800,000 n Over P2,000,000 but not over P5,000,000—P490,000 + 32 percent of the excess over P2,000,000 n Over P5,000,000—P1,450,000 + 35 percent of the excess over P5,000,000 Effective 2020 onward, six tax brackets; but second to fourth tax bracket with reduced tax rates of 15 percent, 20 percent, 25 percent and 30 percent, respectively Tax schedule (for compensation income earners only). n Not over P250,00—0 percent n Over P250,000 but not over P400,000—15 percent of the excess over P250,000 n Over P400,000 but not over P800,000—P22,500 + 20 percent of the excess over P400,000 n Over P800,000 but not over P2,000,000—P102,500 + 25 percent of the excess over P800,000 n Over P2,000,000 but not over P5,000,000—P402,500 + 30 percent of the excess over P2,000,000 n Over P5,000,000—P1,302,500 + 35 percent of the excess over P5,000,000 (*provides for automatic adjustment of taxable income levels and their corresponding base every three years beginning 2021 based on a fiveyear cumulative CPI inflation rate) 2. Removes the exemption for minimum-wage earners (Section 24), personal and additional exemptions (Section 31) and deduction

for premium payments on health insurance of an individual taxpayer (Section 34); 3. Further amends Section 24 to levy on self-employed individuals/ professionals whose gross sales or gross receipts falls below the proposed VAT threshold of P3 million an income-tax rate of 8 percent on gross sales or gross receipts in lieu of percentage tax; while those above the VAT threshold shall be taxed the tax rate, minimum income tax and allowable deduction imposed on corporations; 4. Amends Section 25 by subjecting alien individuals employed by multinational companies, offshore banking units and petroleum service contractors and subcontractors to the regular income tax imposed on compensation income earners; 5. Amends Section 34 such that the optional standard deduction (OSD) of 40 percent of gross income effectively applies now not only to corporations, but also to self-employed and professionals; likewise provides that beginning 2020, the actual monetary value of the fringe benefit and not the grossed-up monetary value shall be allowed as deduction from gross income; 6. Amends Section 33 such that the fringe benefit tax for July 1, 2017, up to 2019 is reduced to 30 percent from 32 percent and beginning 2020 fringe benefit shall form part of the gross income of the individual’s recipient of the fringe benefit and will be subjected to regular incometax rates for individuals; 7. Amends Section 24 to now subject to 20-percent final income See “Kapunan,” A15

Opinion BusinessMirror

opinion@businessmirror.com.ph

Crumbs, sand, and the small stuff

PPP Conversations #6 with Rep. Arlene Arcillas

By Alberto Agra

PPP Lead

Siegfred Bueno Mison, Esq.

THE PATRIOT

A

single bread crumb seems meaningless. However, when brought together, bread crumbs always create something bigger than itself. These small crumbs are not ones to be underestimated; seemingly insignificant individual efforts in work, life and love can produce significant results when combined—perfectly seen in how the Yellow Boat of Hope Foundation began.

Six-and-a-half years ago, my friend Jay Jaboneta posted a Facebook status on the story of grade-school students in Zamboanga. These children were swimming 2 kilometers just to go to school every day. Upon seeing this, Josiah Go, a well-known marketing guru, launched a mini-fund-raising campaign that generated P70,000 within one week. Having raised funds, Jay contacted Anton Lim of Tzu Chi Foundation, a local nongovernmental organization in Zamboanga, to help find a long-term solution to the problem. In December 2010 Anton visited the community, who, in turn, decided to build a boat using the funds and a few logs donated by the local Community Environment and Natural Resources Office (Cenro).

Six months since Jay scattered his crumbs through his Facebook post, the boat was turned over to the community.

From 2011 onward, not a single student in that area of Zamboanga has had to swim just to go to school. These small crumbs—Jay posting on Facebook, Josiah asking others to contribute and the Zamboanga Cenro donating logs—can lead to transformative results. From one yellow boat in 2011, the yellow boats now number 2,446. They are used in 41 communities throughout Zamboanga, Masbate, Pampanga, Cotabato and Palawan, among others.

In law school, I remember how UE College of Law Dean Antonio Tupaz (deceased) happily interacted with his students as if he was one of them. Amiable as he was, Dean Tupaz would have fun with his students off-campus, engaging them in casual conversations about school and life. As a result, the students loved and admired him very much. Since Dean Tupaz served as dean for only a year, I’m not sure if this admiration translated to a better performance among the law students. But the little gestures of Dean Tupaz deepened and strengthened the professional relationship between the faculty and the students.

In any relationship, crumbs can lead to a more meaningful and healthy connection with loved ones. But it can also work against you, as depicted in a story about a jar, rocks, pebbles and sand. In that story, a professor filled an empty jar with rocks. When asked if the jar was full, the students said yes. The professor

Kapunan. . .

continued from A14

tax PCSO and lotto winnings; 8. Amends Sections 84 (computation of net estate) and 86 (estate tax; increases the amount of deduction for the family home from P1 million to P3 million and provides for automatic adjustment of this exemption ceiling every three years beginning 2018 according to current value using a three-year cumulative CPI inflation rate), and 99 (donor’s tax) to apply a transfer tax rate of 6 percent on net estate and annual net gift, as the case may be.

9. As to VAT, amends Sections 106, 107, 108 and 109 on sales that shall remain subject to zero percent; Sales that shall no longer be subjected to VAT zero rate upon the establishment and implementation of an efficient VAT refund system; VAT exempt transaction subjected to qualifications; VAT exemptions proposed to be removed; n Cooperatives a) Sales by agricultural cooperatives duly registered with the CDA to their members, sale of their produce and importation of direct farm inputs, machineries and equipment (including spare parts);

then poured pebbles into the jar, which naturally rolled into the open areas between the rocks. When asked if the jar was full, the students said yes. The professor then poured sand into the jar, which filled every space between the rocks and the pebbles. Rocks represent the important things, such as family; the pebbles are other things that matter, like a house; and the sand is everything else—the crumbs!

Sand, like crumbs, are spaces in our lives that tend to overwhelm more important things. Grains of sand seem irrelevant, but when combined, they can overpower the pebbles or rocks in our lives. It has been said that we should not sweat the small stuff. But when small things add up over time, according to Pastor Jim Kane, “they can become burdens that drain us of faith, hope and love”. In the words of Mother Teresa, “Be faithful in small things because it is in them that your strength lies.”

I remember a sweet couple (affluent TJ and middle class FM) who seemed smitten with each other. Despite the supposed chemistry between them, the relationship is in a rocky stage because of the lack of crumbs. She anticipated a committed relationship months back, but he took her for granted and forgot that the small stuff does matter. As TJ is about to give up, my friend FM, nonetheless, is doing double time to show TJ small gestures of love and affection, hopefully, enough to save the relationship. FM hopes that the lyrics of the song “Lost” will not be applicable to him: “I’d never lost it all till I lost you. But I was much too reckless and I broke your heart in two. A million bits of hope, now you’ll never know the truth. You’re part of every single thing I do. Now you’re gone ’cause I forgot about loving you.”

In all relationships—whether at work, in life or in love—never underestimate the value of crumbs, sand and the small stuff. These seemingly insignificant things can either strengthen or ruin relationships more than the bigger things we deem important. To the giver, these crumbs might mean nothing, but it might be everything to the recipient.

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

b) Gross receipts from lending activities by credit or multipurpose cooperatives registered with CDA; c) Sales by nonagriculture, nonelectric and noncredit cooperatives; n Housing a) Real property utilized by lowcost and socialized housing as defined by Republic Act 7279. b) Lease of residential unit with monthly rental not exceeding P10,000; 10. As to excise tax on petroleum, the measure provides for the amendment of Section 148, such that the tax on said products shall be increased gradually covering a three-year period; diesel, kerosene, LPG and bunker fuel per liter from P0 to P3, P5 and P6; gasoline per liter from P4.35 to P7, P9 and P10; lubricating oils and grease per liter and kilogram., respectively, from P4.50 to P7, P9 and P10; processed gas per liter from P.05 to P3, P5 and P6; waxes and petroleum per kg; from P3.50 to P7, P9 and P10; denatured for motive power alcohol per liter from P0.05 to P3, P5 and P6; asphalts per kg from P0.56 to P3, P5 and P6.

11. On the other hand, sugarsweetened beverages shall be levied an excise tax of P10 per liter of volume capacity subject to yearly

Monday, June 5, 2017 A15

Continued from A1

I

n a briefing last week on PPP, organized by Rep. Arlene B. Arcillas and attended by incumbent Mayor Dan Fernandez and Vice Mayor Arnold Arcillas, the city leaders disclosed their plans for integrated land development, market redevelopment, solid-waste management, mass transit, reclamation, sports development and knowledge creation. Representative Arlene shares with us her vision of the city, propelled by PPP. n What is your concept of PPP? Broadly, PPP is a partnership between a public entity and a private entity. Going deeper on the essence and objective of PPPs, it can address the limited financial resources for local infrastructure projects of the public sector, thereby, allowing the allocation of public funds for other

government initiatives. PPP is also a program structured for both sectors to gain improved efficiency and project implementation process in delivering quality services to the public. n What makes PPP a viable development strategy for the city of Santa Rosa?

Widely recognized for its financial

Auditing the auditors Joel L. Tan-Torres

DEBIT CREDIT Conclusion

W

hat is the “soft” and “transitory” approach of the Board of Accountancy (BOA) in implementing the Quality Assurance Review (QAR) of the work of the more than 6,500 auditors and auditing firms in the Philippines.

As the BOA gears up to implement the long delayed QAR, it took into account several factors in pursuing this particular approach.

These include, among others, the existing organizational structure of the QAR group, the objective of jump-starting the QAR, the prevailing environment in the public accountancy practice, and the tumultuous history of the events leading to the implementation of QAR today.

stability and efficient local governance, the city of Santa Rosa continues to thrive as one of the most advanced and sustainable cities within the region and the country, as well. As the city attempts to further improve its delivery of quality social services, the demand for more infrastructure and development projects increases.

This is a situation wherein the need to engage the private sector arises.

Through PPPs, the city of Santa Rosa would be able to implement projects minimizing financial costs, while realizing development goals and allocate more for other social-welfare projects and programs, highlighting the value for money. For me, that means lesser exposure for the city but more gains.

n What could be your legislative agenda for PPP? As per report of the Asian Development Bank in 2016, the Philippines still lacks an official guideline for local government units (LGUs) forming joint ventures (JVs) with the private sector. This gap, I think, is causing serious uncertainty for

As the BOA gears up to implement the long-delayed QAR, it took into account several factors in pursuing this particular approach. These include, among others, the existing organizational structure of the QAR group, the objective of jump-starting the QAR, the prevailing environment in the public accountancy practice, and the tumultuous history of the events leading to the implementation of QAR today.

These considerations make it imperative for BOA to proceed with the implementation similar to that of a soft opening of a new enterprise. Akin to the situation of a start-up restaurant, the BOA intends to move forward the QAR to make its presence known in the community, even with only the bare essentials in place.

The QAR will be implemented by the Quality Assurance Review Office (Qaro) as prescribed in the implementing rules and regulations of BOA Resolution 244-2015.

There shall be an Executive Committee composed of the incumbent

chairman and vice chairman of the BOA and a member to be selected by the chairman from any of the incumbent members of the BOA. The Executive Committee has the full power and authority to set policies and to supervise the operation of Qaro. The Qaro’s personnel shall be composed of the chief inspector, the chief of administration and such other employees that may be necessary to carry out effectively the functions of the Qaro.

Per the strategy of the BOA, it is sufficient that once the key officers, namely, the chief inspector or the chief administration are hired,

the Qaro can begin functioning.

Thereafter, the Executive Committee and the two officers can proceed to formulate and complete the bare essentials for the QAR. These will include, among others, (1) formulating the governance and operational policies and procedures, to include the QAR inspection program; the training of inspectors program; the audit methodology and documentation requirements; (2) updating of information of CPAs in public practice; and (3) developing a cloud-based, riskbased, red flagging informationtechnology system using the information gathered from the engagement reporting prescribed in BOA Resolution 2-2016.

The Qaro can, thereafter, gradually conduct QAR inspections on

4 percent rate increase after effectivity date of January 1, 2018.

12. With regard to excise tax on automobiles, Section 149 is amended to provide for increase of the excise tax rates from 2 percent, 20 percent, 40 percent and 60 percent; and the current four brackets to 3 percent, 30 percent, 50 percent, 80 percent and 90 percent; and five brackets (P600,000 and less, over P600,000 to P1.1 million, over P1.1 million to P2.1 million, over P2.1 million to P3.1 million and over P3.1 million, respectively, for 2018. For 2019 the rates shall be 4 percent, 40 percent, 60 percent, 100 percent and 120 percent; 13. Hybrid vehicles, which can run at least 30 kilometers under one charge, and pick-ups shall be exempt from excise tax; 14. In connection with tax administrative reforms, provisions of ereceipts issuance and transmission, fuel marking, point-of-sales (POS) machines linkage to the Bureau of Internal Revenue (BIR) and linkage between the BIR government agencies/bureaus/offices are introduced in the bill to address perennial tax administration problems, such as sales under declaration, among others; penalties are also prescribed and/or made more effective for infractions related to fuel making,

nonissuance of receipts, and under declaration of sales through sales suppression devices; 15. For three years, not more than 40 percent of the yearly incremental revenues generated from the proposed petroleum excise tax shall be allocated to fund a social benefits program and granting of fuel vouchers to qualified transport franchise holders, for the same period, the remaining yearly incremental revenues shall be allocated for infrastructure, health, education and social-protection expenditures.

16. There shall, likewise, be allocation from sugar-sweetened beverages excise-tax revenue broken down as follows: a) 85 percent of tax collection shall be allocated for government priority programs; b) 15 percent shall fund programs for the welfare and benefit of sugar planters/farmers.

The House of Representatives passed on third and final reading the TRAIN before the 17th Congress adjourned its first regular session on May 31, voting 246 in favor, nine against (the majority from the militant Makabayan bloc who claim that it is “antipoor”) and a lone abstention by opposition lawmaker Rep. Edcel C. Lagman of Albay.

On VAT exemptions, the House retained the 12-percent VAT exemption for cooperatives, following strong opposition to its repeal. senior citizens and persons with disabilities (PWDs) remain exempted from VAT. However, the bill removed the VAT exemption on the lease of residential units with a monthly rental not exceeding P10,000. VATexempt are power or fuel generated through renewable sources of energy, such as, but not limited to, biomass, solar, wind, hydropower, geothermal, ocean energy and other emerging energy sources using technologies, such as fuel cells and hydrogen fuels. Automobiles shall be levied incremental taxes effective January 1 next year. The controversial excise tax on petroleum products was retained despite strong opposition from various quarters.

In my view, it is an achievement that TRAIN left the House in record time. But a tax-reform package is not enough to meet the P366 billion needed by the government for infrastructure, education and health care per year from 2016 to 2022 under the “AmBisyon Natin 2040” socio-economic program of the government. Reforms in tax administration, efficiency in collection by the concerned bureaus,

some LGUs that are interested in coming up with PPP projects that are not covered by build-operateand-transfer law.

n What do you think are the challenges and risks of PPP projects?

First and foremost, I think the risk of a project being “discontinued” when a new administration comes in should be addressed. Mechanisms to protect contracts and projects should be in place. n What is your message to the public?

Considering everything else, the pros and cons, I still believe that PPP would be a very effective mechanism to implement more programs and projects for the city of Santa Rosa and for other government agencies, as well. The city of Santa Rosa would be able to go beyond what it has already been achieved and provided in the last decade through my administration. I believe a great leap toward more developments will be achieved through PPP.

a risk-based approach using the methodology prescribed in 2009 and 2010 QAR manuals and Picpa Voluntary QAR methodology. For this purpose, the Qaro shall enter into contracts of service with Quality Assurance Reviewers, who will be hired and trained on a need basis.

This shall be the approach that shall be adopted for the “transitory” QAR. There are institutional and regulatory revisions that must be put in place for the QAR to be firmly in place. These include the upward rationalization of the audit threshold, the establishment of a fully staffed and funded audit inspection office and revision of the Republic Act 9892 (Accountancy Law of 2004).

This soft and transitory approach in the QAR implementation may take several years. But the accountancy profession, in particular, and the business community, in general, have something to look forward to that the long-envisioned QAR may soon be a fixture in our country.

Chairman Joel L. Tan-Torres is the chairman of the Professional Regulatory Board of Accountancy.

He is a Certified Public Accountant who placed No. 1 in the May 1979 CPA Board Examinations. He is concurrently a tax partner of Reyes Tacandong & Co. CPAs. He was the former commissioner of the Bureau of Internal Revenue from 2009 to 2010.

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

prosecution of tax evaders, must also be put in place. Tax authorities can achieve and sustain the needed rapid increases in tax collections only by directly confronting the existing large tax gap (the difference between actual and potential collections) or conversely, the narrow tax base. If jobs are created by increased government spending on projects, which will provide employment to the unemployed, or if the climate for private-sector investment is conducive to job-creating industries and manufacturing in the country, then widening the tax base (or the number of employed) can be achieved. And last but not the least, it is necessary that the tax collected is spent correctly to fund infrastructure, health, education and social-protection expenditures, and not plundered for private gain.

Only then can we eradicate extreme poverty suffered by the majority among our countrymen.

The Senate is expected to raise certain objections to provisions on the House version, which are allegedly antipoor and antiminimum- wage earners. It promises to have a better tax-reform package when it tackles as high priority the Senate version at the opening of its sessions in July.

Don’t hold your breath!

2nd Front Page BusinessMirror

A16 Monday, June 5, 2017

UNWTO confirms Manila meet amid RWM incident

T

By Ma. Stella F. Arnaldo

@akosistellaBM Special to the BusinessMirror

HE United Nations World Tourism Organization (UNWTO) reaffirmed its support for the Philippines by confirming its scheduled conference in Manila this month.

In a news statement, UNWTO Secretar y-General Taleb R ifai said: “The Philippines is one of the most consolidated tourism destinations in the world. We are fully confident that this will continue to be the case and we look forward to meet in Manila on June 21 for the sixth International Conference on Tourism Statistics: Measuring Sustainable Tourism, one of UNWTO’s major events.”

He added: “This will be the best expression of support and union against these hideous acts.”

Rifai’s statement appears to have been made in reaction to initial reports that suggested the incident at Resorts World Manila (RWM) was a terrorist attack. Succeeding reports indicated, though, that the shooting and fire at the casino-hotel was perpetrated by a lone gunman, and that the 38 fatalities in the incident died from smoke inhalation.

Last Sunday the police said the lone gunman who perpetrated the attack on the integrated hotel and resort casino in Pasay City was a former tax specialist of the Department of Finance, Jessie J. Carlos, fired in 2014 for discrepancies in his statements on assets and

38

The number of people who died from smoke inhalation at the Resorts World Manila fire that was perpetrated by a lone gunman liabilities. His family confirmed that he was an inveterate gambler who had massive debts.

About 200 foreign delegates from 65 countries are expected to participate in the UNWTO conference, said the Department of Tourism (DOT) in a separate news statement. Many of them will be representing tourism and statistical agencies, tourism associations and enterprises and international organizations. Also, 182 local delegates from national and local governments and academe will be

attending the UNWTO conference.

Rifai has confirmed his participation at the conference to be held at the Marriott Hotel, Manila, from June 21 to 23.

Tou r ism Sec ret a r y Wa nd a Corazon T. Teo told the BusinessMirror over the weekend that Rifaiindeed issued his news based on initial indications that the Resorts World incident was a terrorist attack. “But I explained to him [that] the police investigators were already turning up evidence that indicated it was a lone gunman who may have had some mental- health issues,” she said.

“This convinced Rifai even more to make sure to get other tourism ministers to attend the UNWTO conference in Manila,” she added.

Teo said Rifai even wants to “hold a [news] conference” in Palawan, to convince tourists that it was safe to come to the Philippines.

Rifai has been particularly supportive of developing countries, like the Philippines, which have yet to fully achieve their potential as tourism destinations. During the World Tourism and Travel Council’s Global Summit in Bangkok, Thailand, in April, the UNWTO chief backed Teo’s call for foreign governments to keep their travel advisories regularly updated and clearly limited in time and geographic scope, so as not to unduly impact on a destination’s inbound tourism flows and revenues.

He was also instrumental in convincing Teo to keep the “It’s More Fun in the Philippines” brand slogan, which he said many tourists actually appreciated, but suggested the DOT just go a step further in explaining “why it’s fun”.

In a separate news statement, the DOT last Saturday said tourism ministers from five countries

have confirmed their attendance at the conference. They include Thailand’s Kobkarn Wattanavrangkul, Fiji’s Shaleen Ali, Sri Lanka’s John Amaratunga, Sudan’s Mohammed Abuzaid Mustafa and Seychelles’s Didier Dogley. More are expected to attend, as the deadline for the registration closes by the second week of June.

Also, chief statisticians from Belarus, Fiji, Kenya, Malaysia, Oman, South Africa and Indonesia have confirmed their participation in the discussion of the Manila call to measure sustainable tourism.

The conference, which is in line with this year’s celebration of the International Year of Sustainable Tourism for Development, will discuss policy initiatives on the importance of developing a statistical framework to measure sustainable tourism on the global level.

“We aim to discuss and implement policies and programs that will raise awareness of the importance of sustainable tourism both to economic growth and environmental conservation,” Teo said.

During the launch of the International Year of Sustainable Tourism for Development in Madrid in January, Rifai said: “The year 2017 is a unique opportunity for us to promote the contribution of tourism to achieving the future we want —and also to determine, together, the exact role we will have tourism play in the sustainable development agenda, to and beyond 2030.”

On the Resorts World incident, the UNWTO said: “On behalf of the international tourism community, [we convey our] heartfelt condolences and sympathy to the families and friends of the victims and to the Filipino people.”

Public float rule to hit 37% of total listed firms Continued from A1

at 35.6 percent. The firm with the most free-float level is Swift Foods Inc., followed by ATN Holdings Inc. with 90.88. Basic Energy Corp. has 87.65 percent, Omico Corp. has 85.87 percent and Geograce Resources Philippines Inc. is at 85.37 percent. In the proposed SEC memorandum circular, the regulator said come July, all firms filing for their initial public offering should have to float at least 20 percent of its issued and outstanding shares by 2020.

According to the proposed rules, which is still subject for public comments through June 15, companies with existing registration statements filed with the SEC and whose shares are currently listed and traded in the PSE

must increase their public float to at least 15 percent on or before the end of 2018, and then to at least 20 percent on or before the end of 2020. Public float of a company refers to the portion of the issued and outstanding shares that are freely available and tradable in the market and are nonstrategic in nature.

Significant shareholdings of 10 percent or more of the total issued and outstanding shares of the company are considered strategic and, thus, excluded in the public float of the company.

Earlier, the SEC mulled over imposing a 2.5-percent increase in the current 10-percent minimum public float. Another 2.5 percent will be imposed months later to increase the float to 15 percent.

Noncompliance of the minimum

public ownership requirements may result to publicly listed companies being subjected to administrative sanctions, the SEC said, citing Section 54 of the Securities Regulation Code. Noncompliant firms may also be subjected to a higher tax rate.

Under Bu reau of I nter n a l Revenue Regulations 16-2012, all publicly listed companies are required to maintain a minimum public ownership as prescribed by the SEC so as to enjoy preferential tax treatment. The sale, barter, exchange or other disposition of shares of stock of publicly listed companies that meet the minimum public float is subject to a stock transaction tax of onehalf of one percent of the gross selling price.

If the firm fails to meet the set

minimum public float, it will be subject to a final tax of 5 percent or 10 percent on the net capital gains and documentary stamp tax.

SEC Chairman Teresita Herbosa earlier said the agency aims to make the Philippine capital market on equal footing with its Asean counterparts that have a minimum public participation requirement of 20 percent to as much as 25 percent.

To note, when the PSE implemented the increase of the minimum public float rule to 10 percent in 2011, a number of listed companies decided to voluntary delist themselves from the market. The PSE also forced-delisted one firm after giving most companies a year and a half to prepare before the minimum public float rule was enforced.

DTI: Soft-drink levy must be based on sugar content Continued from A1

House Bill 5636, also known as the Tax Reform for Acceleration and Inclusion (TRAIN), the first of four reform packages eyed by the Department of Finance (DOF), passed muster at the House of Representatives earlier this week.

Salient features include a scaledback personal income-tax rate for fixed-income earners. To offset the foregone revenues, so-called compensating revenue-generating measures were crafted to include an excise tax of P10 per liter volume capacity on sugar-sweetened

beverages (SSB).

SSBs, according to HB 5636, encompass all nonalcoholic beverages that contain caloric sweeteners, added sugar, or artificial/noncaloric sweetener (whether in liquid, syrup, concentrate, or solid form) that is added to water or other liquids to make a drink.

T he inf luentia l Phi lippine Chamber of Food Manufacturers, in an earlier statement, said the per-liter excise rate was “disproportionately high” compared to other tax jurisdictions with similar tax schedules. The group emphasized that the lower income segment,

considered the largest consumer of coffee mixes, powdered concentrates and soft drinks, would be hit hardest by the proposal.

The DF earlier projected gaining more or less P47 billion in revenues from an specific imposition, a good portion of which reportedly earmarked for a “health promotion fund”.

Such other industries as the automotive sector and the business- process outsourcing (BPO) industry prospectively levied higher tax rates and stripped of their exemption from the value-added tax (VAT) should be able to cope

on their own, according to Lopez.

“As for the BPOs, they’ll be refunded anyway. The DOF committed to a particular time for the VAT refund,” the government official said. As currently crafted, HB 5636 was seen pushing the price of SSBs higher by as little as 2 percent to as high as 140 percent were these goods imposed an excise of P10 per liter.

It has also been calculated the popular brand of soft drinks were to cost as much as 36 percent more if the per-liter proposal excise tax were to muster the houses of Congress.

www.businessmirror.com.ph

MARTIAL LAW IN MANILA NOT NEEDED–PALACE

By Catherine N. Pillas @c_pillas29

& Elijah Felice E. Rosales @alyasjah

M

alacañang said last Saturday President Duterte finds no compelling reason to place Metro Manila under martial law in the wake of a gunman attack in a casinohotel in Pasay City.

In a text message to reporters, Presidential Spokesman Ernesto C. Abella said what transpired in Resorts World Manila last Friday is nothing more but a criminal act. “All indications in the Resorts World Manila point to a criminal act by an apparently emotionally disturbed individual.”

Abella’s statement echoed police findings dismissing terror agenda in the attack, as the gunman, later identified to be Jessie J. Carlos, does not possess the making of a terrorist.

“The incident in the Resorts World Manila is, thus, an isolated case, which does not constitute rebellion or invasion, which are the grounds for the declaration of martial law, as prescribed by the Constitution and which the President is sworn to abide by and protect when he took his oath of office,” Abella said.

Security footages showed Carlos, armed with an assault rifle, stormed into the building, fired shots at televisions, torched gambling tables and slot machines and stole gambling chips worth P113 million, before he forcibly entered a hotel room, where he committed selfimmolation and shot himself.

The Islamic State of Israel and Syria claimed responsibility for the attack, but the police concluded it was a failed robbery attempt. Metro Manila Police Chief Oscar D. Albayalde last Sunday said Carlos had a bank account with an outstanding debt of P4 million, along with other nonbank-related debts, which might have led him into committing the crime. “On this note, we also reiterate our prior statements that this is not an act of terrorism, but an incident confined to the act of one man alone, as we have always said,” Albayalde said.

Terror attack or not, Carlos was able to set ablaze enough gambling tables and slot machines to spread fire across the building, killing 38 people in the process due to suffocation.

DOF. . .

Continued from A1

“Foreign direct investments in the Philippines miserably lag behind our Asean neighbors principally because of our high taxes,” Quimbo added. According to the finance department, the second of four packages of the tax-reform program calls for the reduction of corporate income taxes to 25 percent, from the current 30 percent. Besides decreasing the corporate income taxes, the agency said the measure will also include the rationalization of fiscal incentives of businesses.

In the lower chamber, there are several pending bills seeking to lower corporate income tax and rationalize fiscal incentives.

Quimbo said his HB 2379 will adjust the corporate income-tax rate from 30 percent to 25 percent. The lawmaker said that, with the Asean economic integration, reevaluating the country’s corporate income tax is “critical”.

“Years before the integration, our Asean neighbors—Vietnam, Thailand, Indonesia and Brunei Darussalam— already adjusted their corporate income-tax rates to help achieve a solid footing in the competition,” he said in an earlier statement.

“The average corporate incometax rate in the Asean region is now 23 percent. Considering our low level of infrastructure, we need to provide favorable tax treatments to attract the investors. And while there may be an immediate reduction in tax revenues, we will have a net revenue gain after about four years due to increased foreign direct investments,” Quimbo added. The tax rate is one of the factors considered by businessmen prior to making investment decisions, said Quimbo, citing a UP School of Economics study.

Carlos was a former tax specialist for the Department of Finance and was sacked from service for failing to declare all his assets in his statement of assets, liabilities and net worth (SALN).

In 2014 the Office of the Ombudsman ruled Carlos guilty of grave misconduct and neglect of duty for not disclosing his house and lot in Manila in his SALNs from 2003 to 2006, his Toyota Innova sports-utility vehicle (SUV) in his SALN in 2007 and his business interest in his SALN in 2010.

Due to this, Carlos’s civil-service eligibility was canceled, his retirement benefits forfeited and was perpetually disqualified from rejoining the government, pursuant to the Revised Rules on Administrative Cases in the Civil Service.

His attack at Resorts World Manila took place a week after Duterte declared martial law and suspended the privilege of the writ of habeas corpus in Mindanao, as soldiers and Maute Group terrorists clash in Marawi City, Lanao del Sur. The Philippine Chamber of Commerce and Industry (PCCI) and the Management Association of the Philippines (MAP) agreed with the President saying, the incident in Resorts World Manila does not present “just cause” for imposing martial law in Metro Manila.

PCCI Presaident George T. Barcelon said that, while he supports the increased visibility of the police following the incident, it does not warrant the extension of martial law to Luzon or Metro Manila.

“I don’t think [the move] will be justified. It was one man, and an isolated incident. I trust the intelligence being gathered by the government and the police should be enough to deter or prevent more incidents,” Barcelon said.

Perry Pe, chairman of the MAP’s national issues committee, said the incident does not meet the requirements of the 1987 Constitution, unlike the terrorist attack in Marawi City.

The 1987 Constitution provided that the writ of habeas corpus can be suspended in times of rebellion or invasion.

Peter Perfecto, executive director of the Makati Business Club, said the government and the private sector should be more prepared.“The government, private sector and media must be more prepared so that we can save more lives and assure visitors and investors that these things will never happen again,” Perfecto added.

“It is also the high tax rates that are cited by firms as among the top reasons for the high cost of doing business, according to the Global Competitiveness Report, as observed in the same study,” he said.

Party-list Rep. Bernadette Herrera-Dy ofAng Bagong Henerasyon also filed a separate HB 1537 to reduce corporate income taxes.

“This bill is part of a twin measure to reduce the country’s income tax rates for individuals and corporations, in preparations for the Asean Integration,” she said.

PDP Laban Rep. Bellaflor AngaraCastillo also filed a separate proposal related to the reduction of corporate tax rates.

Meanwhile, Deputy Speaker and AAMBIS-Owa Rep. Sharon Garin filed HB 3359, or the Rationalization of Fiscal Incentives Act, which seeks to help the government attract more foreign direct investments. Garin said the 17th Congress should pass the proposed Rationalization of Fiscal Incentives Act. The bill is currently pending before the House Committee on Ways and Means.

“It is important to reevaluate these incentives given to business, and identify those that will remain and those that need to be done away with. Not only will it avoid redundancy, it will also be able to provide more support to exporting industries, micro, small and medium enterprises, and research and development,” she said.

Under Executive Order 226, also known as the Omnibus Investment Code of 1987, investors are given corporate income-tax holidays for up to eight years.

If enacted, Garin said the measure will balance the “tension” between creating attractive fiscal incentives for domestic and foreign investors and achieving social and economic goals.

Jovee Marie N. dela Cruz