Businessmirror june 05, 2018

Land reform in Boracay won’t spare golf courses

By Jonathan L. Mayuga

@jonlmayuga

A

GRICULTURAL lands previously covered by an exemption or a land conversion on Boracay Island will not be spared, as the Department of Agrarian Reform (DAR) is pushing to place more than 600 hectares of agricultural lands on the island under the Comprehensive Agrarian Reform Program (CARP). At a press briefing at the DAR central office in Quezon City on Monday, Undersecretary for Policy, Planning and Research David D. Erro said the agency is stepping up the distribution following President Duterte’s policy pronouncement. Boracay, the country’s top tourist destination, was

Tourists enjoy Boracay's white sand and water in this June 2017 file photo. BRIX VILLARUEL

media partner of the year

United nations

2015 environmental Media Award leadership award 2008

ordered closed for six months starting April 26 to fast-track the rehabilitation and allow the pollution-challenged island to recover from decades of abuse and degradation. According to Erro, newly confirmed Agrarian Reform Secretary John Castriciones is determined to carry out Duterte’s marching order to distribute all agricultural land on the island to qualified farmer-beneficiaries, particularly the Atis of Boracay. The latter were displaced allegedly by the unbridled development on the island. Also targeted as beneficiaries are qualified farmer-beneficiaries, including those from mainland Malay, who are willing and able to cultivate the land for food production. See “Boracay,” A2

BusinessMirror A broader look at today’s business

www.businessmirror.com.ph

n Tuesday, June 5, 2018 Vol. 13 No. 234

Price woes cloud growth outlook in manufacturing T By Bianca Cuaresma

@BcuaresmaBM

HE Philippine manufacturing sector recorded a solid growth print anew in May to perform as the region’s second fastest-growing industry sector, but experts are worried that high prices may dampen its trajectory down the line.

In the most recent ranking of Purchasing Managers Index (PMI) in the Southeast Asia region, the Philippines was the second fast-

est-growing manufacturing sector among seven jurisdictions with a PMI of 53.7 during the month. The PMI is a composite index

aimed to gauge the health of the country’s manufacturing sector. It is calculated as a weighted average of five individual subcomponents. Readings above the 50 threshold signal a growth in the manufacturing sector, while readings below 50 show deterioration in the industry. Leading the region was Vietnam’s manufacturing sector with a PMI of 53.9 during the month. Singapore follows the Philippines with a 52.8 PMI, trailed by Myanmar’s 52.6, Indonesia’s 51.7 and Thailand’s 51.5.

2016 ejap journalism awards

business news source of the year

P25.00 nationwide | 4 sections 20 pages | 7 days a week

Monitoring inflation Manny B. Villar

THE ENTREPRENEUR

T

he inflation rate has become one of the most anticipated economic data these days, amid surging prices of crude oil in the world market and the prohibitive cost of rice in the Philippines. It is one economic indicator that government policy-makers and company executives take seriously in planning ahead. The Philippine Statistics Authority (PSA) is expected to announce today (June 5) the May 2018 inflation rate, which would likely influence future decisions by the Bangko Sentral ng Pilipinas and the government. The latest BSP assessment puts the inflation rate in May within a range of 4.6 percent to 5.4 percent, faster than April’s 4.5 percent, on the back of higher petroleum and rice prices. Continued on A6

See “Manufacturing,” A8

DTI chief backs candy, biscuit makers’ bid to buy imported sugar By Elijah Felice E. Rosales @alyasjah

& Jasper Emmanuel Y. Arcalas

T

@jearcalas

R ADE Secretary Ramon M. Lopez said he is in favor of a l low ing confectionery producers to import sugar to ensure that the price of local candies and biscuits would remain competitive. Lopez issued the statement after candy and biscuit makers belonging to the Philippine Confectionery Biscuits and Snacks Association (PCBSA) sought the government’s approval for their request to purchase imported sugar. The group of confectionery producers pushed for the importation of the sweetener after its average domestic price shot up to as high as P2,790 per 50-kilogram bag (Lkg), more than double the landed price of imports at P1,300 per Lkg. “They should be allowed to import. Before, we talked to industrial users to commit to buy local sugar to help local farmers,” Lopez told the BusinessMirror via SMS. “Now that [industrial buyers] are buying local sugar, [farmers] should ensure competitive pricing and supply. World market prices are much lower and it is fair to allow importation to serve the supply requirements of sugar users,” he added. In a letter to the Department of Trade and Industry (DTI), the

₧2,790

read Henry J. Schumacher’s ‘integrity initiative’ column in economy section, a4.

The current price of a 50-kilogram bag of sugar, according to confectionery producers

PCBSA—a group of 18 producers of confectionery producers— claimed domestic sugar is now priced twofold compared to imports. Sugar is critical for candy and biscuits manufacturers as it constitutes about 60 percent of each confectionery item. “The prevailing price of domestic sugar is roughly 200 percent of the world market price and is clearly prohibitive,” the PCBSA said. “At this price, a buyer is not even assured of being supplied upon demand. This price distortion is very significant to PCBSA members, as sugar is the main ingredient of a confectionary item,” its letter read. Apart from this, the group also accused the government of protecting the local sugar industry “too much” to the point that the free trade aspiration of the Asean Trade in Goods Agreement has been “sidelined”. Because of this, confectionery items produced locally are not and will not be competitive with those brought into the country, the PCBSA argued. See “DTI,” A2

PESO exchange rates n US 52.5940

CLEARANCE FOR STEEL Steel cones are seen on a major infrastructure project in Manila in this photograph taken on Monday, June 4. The Department of Trade and Industry has debunked allegations that locally made steel used in dozens of public infrastructure projects is of low quality standard. The DTI said it found “no factual or technical basis to support the allegation that quenched and tempered (QT) steel is unsafe for high-rise construction, following a series of consultations” conducted with stakeholders. Story on page A4. NONIE REYES

S

@butchfBM

ENATORS are firming up an accord to mitigate the effects of higher levies imposed under the Tax Reform for Acceleration and Inclusion (TRAIN) law. This, even as they need to await House action before pushing the remedial legislation suspending additional oil tax impositions that have been blamed for the higherthan-projected inflation and steep price increases in basic commodities and services. “About seven or eight senators

have spoken publicly with concerns on the TRAIN law, but no consensus yet,” Sen. Bam Aquino told the BusinessMirror on Monday. Aquino admitted he was “hoping that with the growing clamor from our citizens, the Senate can show our independence and responsiveness to the needs of our countrymen,” amid mounting pleas for relief from burdensome tax impositions under the Duterte administration. Aquino suggested fellow lawmakers can do this “by supporting the bill I filed to suspend the excise taxes on petroleum products based on rising inflation.” He added the

By Rea Cu

@ReaCuBM

T

amending bill was already referred to the Senate Ways and Means Committee, “but [there’s been] no scheduled hearing yet.” Asked how soon the Ways and Means panel can endorse Aquino’s remedial legislation for plenary vote, Senator Juan Edgardo Angara, the committee chairman, explained they are required to wait for the House of Representatives to first pass the tax relief counterpart bill. “That is a revenue measure so it must originate from the House under the Constitution, so maybe best to await House action, if

HE Philippine government will hold its economic briefing for Japanese investors by mid-June as preparation for its samurai bond issuance eyed for the third quarter of this year, the Bureau of the Treasury (BTr) said on Monday. “We are preparing for a Philippine economic briefing in midJune in Tokyo, the briefing is in terms of the economic updates and also to bring the Philippine credit brand to the Samurai market. We might be holding one-onone meetings with investors also,” National Treasurer Rosalia V. de Leon told financial reporters. She explained that the Treasury is still in the process of securing approvals from both internal and external regulators for

See “Senators,” A8

See “Investors,” A8

Senators weighing calls to suspend TRAIN By Butch Fernandez

Investors’ briefing set ahead of samurai bonds

n japan 0.4806 n UK 70.1709 n HK 6.7039 n CHINA 8.1928 n singapore 39.2991 n australia 39.7611 n EU 61.3299 n SAUDI arabia 14.0243

Source: BSP (4 June 2018 )

News

BusinessMirror

A2 Tuesday, June 5, 2018

Aquino at Dengvaxia hearing: We did what we did to save lives

F

By Joel R. San Juan

@jrsanjuan1573

ORMER President Benigno S. Aquino III on Monday showed up at the Department of Justice (DOJ) to seek the dismissal of the criminal complaints filed against him and 44 others for their alleged role in the P3.5-billion Dengvaxia vaccine mess.

At the continuation of the preliminary investigation being conducted by a DOJ panel of prosecutors, Aquino along with his corespondents—former Budget Secretary Florencio A. Abad, former Health Secretary Janette L. Garin andseveralothers—submittedtheir counter-affidavits on the complaint filed by the Volunteers Against Crime and Corruption (VACC) and the Vanguard of the Philippine Constitution Inc. (VPCI). The VACC and VPCI had accused Aquino and the others of violating Section 3(e) of Republic Act 3019, which prohibits a public officer from giving a private party unwarranted benefits in the discharge of his administrative or judicial functions; Section 65(3) of Republic Act. 9184, or the Government Procurement Reform Act (GPRA); and Article 220 (technical malversation) of the Revised Penal Code (RPC); and Article 365 (criminal negligence) of the RPC. Besides Aquino, Abad and Garin, several health officials and executives and agents of pharmaceutical companies Zuellig and Sanofi Pasteur, the distributor and manufacturer of the anti-dengue

Boracay. . .

Continued from A1

Proclamation 1064 signed in 2006 by then President and now Pampanga Rep. Gloria Macapagal-Arroyo declared 628.96 hectares of Boracay Island’s total 1,006.64-hectare land area as agricultural land, hence alienable and disposable, and the remaining 377.68 hectares forest lands for protection purposes. The legality of Proclamation 1064 was affirmed by a Supreme Court decision, invalidating all existing land-ownership claims prior to the proclamation, in effect declaring the entire island as state-owned. On top of the 15 hectares that can be immediately placed under CARP, the DAR has identified another 10 hectares. These patches of lands had no structures and can be placed immediately under CARP coverage. He said it will take the DAR only 90 days to distribute the 25 hectares to qualified beneficiaries, but, he added, beneficiaries will have to be identified. The priority CARP beneficiaries are the 80 identified Ati tribe members who are willing and able to till the land

“Complainants’ abject failure to provide sufficient [information] based in fact and law to sustain the offenses charged and a finding of probable cause must and should lead to the outright dismissal of the complainant fled before this Honorable Panel,” he added. Likewise, Aquino said the complainants may be violating the rule on forum shopping, considering they filed similar cases before the Commission on Elections and the Office of the Ombudsman.

Dengvaxia vaccine, respectively. were also named as respondents. In his counter-affidavit, Aquino noted the voluminous documents that VACC and VPCI gave to the DOJ panel of prosecutors to support their complaint. Out of these documents, only three documents were relied upon and referenced by the complainants to substantiate their allegation, Aquino noted. He said the complainants failed to explain the relevance of the documents attached to the complaint, leaving the panel, headed by Senior Assistant State Prosecutor Rossane Balauag, to speculate on their supposed relevance. Aquino said most documents submitted were full transcripts of testimonies given by witnesses at the Senate investigation on the Dengvaxia mess. “To be sure, my co-respondents and I cannot be reasonably expected to intelligently and adequately address or even tackle these unidentified documents that were not even referred to or cited in the complaint—when we have not been informed as to how these documents support the charges against us,” Aquino said.

Meanwhile, respondents from Zuellig and Sanofi have yet to submit their counter-affidavits as of Monday. The DOJ gave the VACC and VPCI until June 22 to reply to the counter-affidavits. In their complaint, the VACC and VPCI insisted that Aquino and the other respondents should be held responsible for “ill-advisedly, thoughtlessly and imprudently” implementing the vaccination program. The purchase of Dengvaxia was approved by Aquino and Abad even if the program had no allocation in the 2016 national budget, complainants said. Aquino and his fellow respondents “anomalously and illegally funded and procured the Dengvaxia vaccine and used 830,000 schoolchildren as ‘guinea pigs’ just to bolster the candidacy of Liberal Party presidential bet “Mar Roxas [II] and of other candidates of the party,” they alleged. At a press briefing after the preliminary investigation, Aquino, Garin and Abad denied any irregularities in the anti-vaccine program during their term.

and make it productive. All 80 Atis, he added, will have a share of Boracay’s land and may collectively own all 25 hectares that can be immediately placed under CARP. Asked if the DAR expects resistance from residents with residential or business establishments sitting atop agricultural lands that will be placed under CARP, Erro said that since it is land owned by the state, there is no need to issue a notice of coverage to place the land under CARP. He added unlike private agricultural land, government lands can be immediately distributed by the DAR. To place Boracay’s agricultural land under CARP coverage, Erro said a draft executive order will be submitted by Secretary Castriciones. “The executive order will direct the Department of Environment and Natural Resources to transfer the authority over the land to the DAR for immediate distribution,” said Erro. The proposed EO calls for the help of other agencies, particularly the DENR and Department of Agriculture, in the conduct of a land survey, and in ensuring that the areas to be covered for distribution will be made productive. CARP’s implementation on Boracay based on

the proposed EO will be divided into three phases. The first phase is for the 25 hectares with no structure. The second covers about 200 hectares of agricultural land with “illegal structures,” and the third, all other agricultural lands that can be placed under CARP based on the determination of an interagency body to include the Department of Justice, to handle legal problems that may arise. With the EO, he said DAR intends to bring in the DENR and DA to ensure there will be no negative environmental impact and the lands can be made productive. The DENR will be asked to determine which agricultural lands are exempted based on the 18-degree slope rule for CARP—meaning, those with a slope of at least 18 degrees are not CARPable, if they are not previously developed or planted with crops. Once distributed, those areas with structures will have to be cleared. He said the plan is to put top soil cover on the land once the illegal structures are removed, to make the plan arable or productive once again. “These areas were once productive agricultural land and we intend to put back topsoil cover to these lands to make them productive,” he said.

Zuellig, Sanofi

Aquino insisted that the government’s apparent haste in implementing the Dengvaxia program in April 2016 was to address the rapidly rising number of dengue cases in the country —from 121,580 dengue cases in 2014, the number rose sharply to 200,415 cases. Aquino also cited Sanofi’s claim that Dengvaxia would be largely beneficial for both those who had dengue before and those who have not been exposed to the illness. He said they based their judgment on Sanofi’s assurance that only .2 percent are in danger of experiencing severe dengue out of the 830,000 who were given the shots. Aquino also hinted at political motives behind those pushing the Dengvaxia issue against him. Also during the briefing, Aquino admitted that he could not think of the possibility that he would suffer the same fate of two staunch critics of President Duterte —Sen. Leila M. de Lima and Chief Justice Maria Lourdes A. Sereno. De Lima has been detained for what she called trumped-up drug charges, while Sereno was ousted by her colleagues in the Supreme Court based on the quo warranto petition filed by the government’s chief counsel, Solicitor General Jose C. Calida. “I cannot help but think that it is a possibility,” Aquino said. Still, he expressed optimism the complaints would not prosper for lack of basis. “At the end of the day the only weapon we have is the truth. And with the truth , with the help of God we will overcome these challenges,” Aquino said.

The official said about 1 feet to 3 feet of soil is needed as topsoil cover to make the land productive again, for purpose of rice or vegetable production. However, since Boracay is an island, agrarian-reform beneficiaries will be advised to plant coconut which naturally grows on the island. He declined to say where the DAR intends to source materials for top soil cover, but added that the DAR, together with the DENR and DA, will ensure that there will be no change in the natural landscape that may worsen the environmental degradation on the island. Experts to conduct extensive research on what else needs to be done to ensure sustainability may be brought in. Asked whether the CARP implementation will cover lands previously covered by the land exemption and land conversion, Erro said “yes.” “If we need to initiate cancellation proceedings to cover the land under CARP, then we will,” he said in mixed English and Filipino. Prior to CARP, agrarian reform had been implemented on Boracay. Sometime in March 1992, a leasehold contract was provided for under PD 27, the land reform version of then-President Ferdinand E. Marcos covering a 0.5 hectare of land in Barangay Manoc-Manoc. There are also approved land conversion applications that exempted a total of 80.61 hectares of agricultural land from CARP. These are the 80.11-hectare land in Barangay Yapak, filed by the heirs of Federico Sarabia and Salvacion Sarabia, the owners of Sarabia Optical which is now part of the Fairways & Blue Water, a famous resort on the island; and a 0.5-hectare lot assigned to Ignacio Colesio of Boracay Island Water Inc., a subsidiary of the Ayala-led Manila Water in Barangay Manoc-Manoc. On top of these approved land conversions is a 139.83-hectare agricultural land in Barangay Yapak, filed by Fil-Estate Properties Inc., which DAR approved on June 2, 1998. All these lands, should the President so order, will be covered for distribution to potential CARP beneficiaries, Erro said. Under the proposed EO, Erro said the DAR is not recommending an extension of Boracay’s closure although they intend not to touch the coastal areas which will be reserved for tourism purposes, or the forested areas, including the wetlands which the interagency Task Force Boracay is now moving to recover from informal settlers. Erro said the DAR may consider those who will be displaced by the ongoing eviction of informal settlers on Boracay’s wetlands as beneficiaries of CARP once the President decides to push through with the distribution.

www.businessmirror.com.ph

Classroom, teacher shortages hound schools, but DepEd says they’re but ‘challenges’ By Claudeth Mocon-Ciriaco Correspondent

S

TUDENTS of both public and private elementary and high schools faced problems of classroom and teacher lack as they trooped back to school on Monday. Education Secretary Leonor M. Briones, however, said the Department of Education (DepED) is already addressing the shortage in classrooms, and some 85,000 classrooms are expected to be added this year. Briones, who visited Quezon City High School on Monday, said most of the classroom shortages are in Metro Manila. Some schools, like Parañaque National High School, is forced to host two shifts, one in the morning and another in the afternoon. Parañaque National High School has the largest student population in Metro Manila at 13,000. Briones also cited the lack of spaces where school buildings can be constructed. Addressing the claim of Party-list Rep. Antonio Tinio of ACT Teachers that the government had not completed construction of nearly 82,000 classrooms, Education Undersecretary for Planning and Field Operations Jesus Lorenzo R. Mateo said that there is no shortage but “challenges. ” Currently, there is a classroom for every 45 students, Mateo said. There is 1 teacher for every 33 students in the elementary, and 1 teacher for every 26 students in the secondary level. DepEd data show 22 million students are enrolled in public schools, and 4 million in private schools. In public schools, 2.2 million are kindergarten pupils, 12.2 million are elementary students, 6.4 million are junior high school (Grades 7 to 10) students and 1.3 million are senior high school (Grades 11 and 12) students. In private schools, 243,818 are in kindergarten, 1.2 million in elementary, 1.3 million in junior high school and 1.2 million in senior high school. The DepEd said 149,614 junior and senior high school students in the technical and vocational (tech-voc) track will go to state universities and colleges and to local universities and colleges; while 641,584 are enrolled in the Alternative Learning System or ALS.

‘No major problems’ Meanwhile, Briones noted there were no reports of major problems encountered by schools nationwide.

DTI. . .

Continued from A1

The group also cited the expanding market share of imported candies and biscuits that had gone up to 30 percent last year, from 5 percent in 2010. The PCBSA said the share is “significant” given that the total sales of confectionery goods in the previous year, excluding chocolates, was at P30 billion. With this, candy and biscuit makers are asking the government to allow it to import sugar to meet its manufacturing requirements. “This can be based on total purchases of a PCBSA member in 2017 through and validated by sales invoices issued by local suppliers,” the letter read. “PCBSA members will not be allowed to sell imported sugar and act as traders. PCBSA will not compete with sugar millers in selling sugar to the domestic market,” it added. The group said the importation will be done on a “one-time basis” only for this calender year. The PCBSA is even in favor of permitting the government to set an aggregate limit for the volume of imports. “[The] government has to protect the local confectionery industry, which we again point out is a P30-billion industry. [The] PCBSA is not seeking the same magnitude of support that the government is giving to the sugar industry, but given the local confectionary industry’s contribution to the economy, this industry likewise deserves the support of the government,” the letter read. The trade chief said he supports the confectionery’s bid to import sugar, “as long as local producers cannot supply the right quantity at competitive prices.”

She said the commitments of other agencies, such as the Philippine National Police (PNP), contributed to the smooth opening of classes. As part of its efforts to ensure a smooth school opening, the DepEd set in motion its flagship programs and projects to ensure that learners are hosted by schools with a child-friendly, gender-sensitive, safe, and motivating environment. Brigada Eskwela or the National Schools Maintenance Week, which ran from May 28 to June 2, with the theme, “Pagkakaisa para sa Handa, Ligtas, at Matatag na Paaralan Tungo sa Magandang Kinabukasan,” mobilized the communities and various sectors to prepare the schools’ physical facilities, and ensure the safety and preparedness of learners and personnel during emergencies. As of 8 a.m. of May 31, partial data reflected that a total of P1,121,408,164.27 worth of resources were already generated, and 1,205,388 volunteers rendered man-hours from 12 regions of the country. “The outpouring of love and support from our partners and stakeholders – parents, teachers, community members, local government units, national government agencies, civil society groups, non-government organizations, private individuals and corporations, and everyone who believes in the power of education—has been overwhelming,” Briones said.

Oplan Balik-Eskwela Meanwhile, the DepEd’s Oplan Balik Eskwela attended to the concerns of enrollees, their parents, and other stakeholders. An interagency task force was also convened to attend to the learners’ and other stakeholders’ needs, including electrical and road safety, adequate power and water supply, access to health care, justified pricing of commodities, protection and security from criminal elements, and assistance in crisis situations.

School readiness assessment THE DepEd also conducted a nationwide inventory and assessment of the readiness of public schools in terms of six basic variables: teachers, classrooms, seats, toilets, and availability of water and electricity. The assessment allowed the DepEd to prioritize interventions for schools that need support in achieving the ideal ratios of 1:40 for teachers and classrooms; 1:50 for toilets, and 1:1 for seats.

Roehlano M. Briones, senior research fellow at the Philippine Institute for Development Studies, agreed with Lopez. He said the rising domestic prices of sugar is “the result of our restrictive policy on sugar importation.” “Of course, they [confectionery producers] should be allowed to import. I believe in liberalized importation of sugar,” Briones told the BusinessMirror.

‘No need to import’

The Sugar Regulatory Administration (SRA) told the B usiness M irror that the request of the PCSBA has not reached its desk. SRA Administrator Hermenigildo R. Serafica, however, dismissed the need to import sugar as local supply is enough to meet the requirements of manufacturers. “[The PSCBA] should formally inform the SRA of their requirements then the sugar board will study if the domestic production can cover it or not,” Serafica said via SMS. “As of production week ending May 27, we have sufficient supply of sugar.” The PCSBA joined the Philippine Sugar Refiners Institute in pushing for the importation of sugar. The PSRI recommended the importation of 100,000 metric tons of refined sugar to ease the tightness in supply. Earlier, Agriculture Secretary Emmanuel F. Piñol told the BusinessMirror that the Philippines will not import sugar any time soon, as local supply remains ample to meet the demand of industrial users. Piñol met with members of the Sugar Regulatory Administration board and sugar industry stakeholders on May 28 to discuss the current sugar supply situation. “I was assured by industry stakeholders that there will be enough sugar.”

A4 Tuesday, June 5, 2018 • Editor: Vittorio V. Vitug

Economy BusinessMirror

www.businessmirror.com.ph

ERC urged to freeze FiT-All rate hike

T

By Lenie Lectura

@llectura

he Laban Konsyumer Inc. (LKI) is urging the Energy Regulatory Commission (ERC) to halt the collection of additional feed-in-tariff allowance (FiT-All) of P0.0733 per kilowatt-hour (kWh).

In its-six page motion for reconsideration filed on Monday, the group wants the ERC “to issue a resolution setting aside” its decision on FiT-All rates “for being null and void on the ground of lack of jurisdiction,” and “to suspend and/or stop immediately the collection of the FiT-All.” The ERC raised the FiT-All rates to 25.63 cents per kWh, higher than the current FiT-All rate of 18.30 cents per kWh. It is also higher than the 22.91 cents per kWh rate applied by the National Transmission Corp. (Transco), administrator of the FiT-All fund. The decision was dated February 27, 2018, but docketed on May 11, 2018. It is supposed to take effect this June billing. FiT-All is billed to all on-grid electricity consumers, which appears as a separate line item in power distributors’ bills. The amount is meant to cover payments to renewable-en-

ergy (RE) developers who are assured of a fixed rate per kWh for electricity generated by their projects over a period of 20 years. “Aside from being void ab initio and without legal effect, the assailed decision must be reconsidered because it granted a higher FiT-All rate of P0.2563 per kWh despite TransCo’s prayer for the approval of a FiTAll rate of P0.2291 per kWh, which is an act of grave abuse of discretion tantamount to lack or excess of jurisdiction on the part of this honorable commission,” LKI President Victorio Mario Dimagiba said. LKI said it is not arguing that the FiT-All rate should be disregarded, “only that it be determined in a certain manner—a manner that upholds and respects the constitutional right to due process of every electricityconsuming public in this country.” “What LKI finds erroneous is the manner by which this honorable

commission disregarded its own pronouncements of protecting the consumers from rate applications that fail to comply with due process requirements, and then, itself violating the said due process requirements that it espoused when it issued the assailed decision,” LKI’s motion stated. Dimagiba expressed concern over the decision and reiterated his group’s prior petitions to revert the FiT-All, and reminded the ERC of its mandate to protect consumer welfare, while also demanding that the “ERC should not be ruling on any further rate increases in FiT-All, and the commission should render null and void its decision in the application for an increase in

The ERC should not be ruling on any further rate increases in FiTAll, and the commission should render null and void its decision in the application for an increase in FiT-All. Because of this increase, consumers will have to brace for an increase in their electricity bills starting June, and this will only add to their already ongoing suffering from TRAIN.”—Dimagiba

Do you really care about digital privacy?

F

By Henry J. Schumacher

ollowing the Facebook data security issue with Cambridge Analytics and others, we are all receiving e-mails from Twitter, Facebook, Google and many others, advising us of their new privacy rules and requesting us to read them carefully and accept them. Many of us, I am sure (me included) receive the e-mail, have a brief look at the long privacy rules and promptly delete it. Either we don’t care whether someone has our private information or the cost—measured in time and hassle—of changing the passwords, etc., was greater than the expectation of the harm from not doing so.

Of course, our behavior is at odds with the important assumptions in the public debate. The Philippines, the United States and Europe have been abuzz with discussions about privacy, driven in large part by the revelations that the information from as many as 87 million Facebook users was sold to a private company, and by the information that two fast-food chains in the Philippines had data breaches involving very personal information of tens of thousands of their customers. The topical question is: How can we protect information about ourselves that is on social media? This question comes with a second question: Do we really care about privacy, given the fact that only a few Facebook users decided to cancel their membership in Facebook? Consider whether you would trade the privacy of your friends for a free slice of pizza. Researchers asked undergraduate students in the US to provide the e-mail addresses of their friends; to entice them to do so, some were offered free pizza. It turns out that if you offer free pizza (or an amount of money), the

FiT-All. Because of this increase, consumers will have to brace for an increase in their electricity bills starting June, and this will only add to their already ongoing suffering from TRAIN [Tax Reform for Acceleration and Inclusion law].” LKI voiced out its concern for Filipino consumers, saying that “consumers are already overburdened with rising fuel costs, as well as the rise of prices of rice, noodles and other basic commodities.” “Though sometimes we are welcomed by news, such as lower electricity rates this month of May as announced by Meralco, looking at the bigger picture, prices of most products, goods and services have been skyrocketing, especially with

likelihood that they will protect the privacy of their friends is cut in half. I don’t consider anything on my Facebook page as sensitive, private content. That stands, however, in contrast with the e-mails stored on my Gmail account, which have lots of private information that I would not want anyone to read. I doubt I am alone in wanting my e-mail to stay private. Which is why I was surprised to learn that less than 10 percent of active Gmail accounts use a new “two-factor authentication” protocol to access a Gmail account. It seems that for the overwhelming majority of Gmail users, the benefit of extra security isn’t worth the small cost of providing a bit extra information at the login stage. All this highlights the importance of personal responsibility—a key part of the discussion about data privacy that has been conspicuously absent. If you care about what’s in your e-mail, take simple steps to protect it. Social-media platforms are in the public square. It’s the responsibility of users to make sure there is nothing on their social-media accounts that should not be made public. Moving from the personal data protection to business, allow me to add: With perhaps a few exceptions, every business that collects personal data from customers, clients and vendors is exposed to a security breach where that data is exposed, comprised and/or stolen. This inevitable fact is just one of the costs of doing business in an interconnected world. The EU’s GDPR and the Data Privacy Act of the Philippines (DPA) do not, and cannot, expect businesses to patch unknown security vulnerabilities or avoid security incidents altogether. However, they do require businesses to make every effort to mitigate the damage security breaches have on people. To that end, it is vital that all enterprises take measured and documented steps to close security vulnerabilities, prevent security breaches, and mitigate the risks when prevention fails. The mere fact that an enterprise made a substantial and documented effort in this regard could be enough to establish data-privacy compliance and avoid substantial fines and penalties after a security breach. Let’s be aware that digital transformation opens the door wider to information-security breaches, affecting data-privacy security and cybersecurity. However, as we all know, confidential information must be kept secure to protect the business and its staff. System or network breaches and data loss can result in severe consequences for organizations. There are numerous real-life examples of publicized intrusions (we are just witnessing that two fast-food chains are investigated for severe dataprivacy breaches) that produced damaging results, and they have proven that technological safeguards and a strong employee commitment to policy are essential tools in preventing and responding to information-security incidents. If companies need assistance in establishing and implementing security processes, there are teams available that can reduce risks and provide systems management tools. Comments are welcome—contact me at Schumacher@eitsc.com.

the implementation of the TRAIN law,” the group added. Dimagiba reiterated that the government should consider shouldering the FiT-All cost instead of passing it on to the public. T he comm ission h ad sa id there is a need to raise the FiT-All rate to address the inability of the FiT-All fund to pay in full the claims of FiT-eligible generators. “ W h i le t he comm ission is granting a rate of P0.2563 per kWh, considering that there is an existing rate of P0.1830 per kWh, what is being added is only an increment of P0.0733, which represents the increase from the current FiT-All rate. The approved FiT-All rate is sufficient to cover the obligations,” it said. As of February 5 this year, the total RE claim stood at P40.120 billion, of which only 82 percent has been paid, and 18 percent of P7.378 billion remains unpaid. Accrued interest has ballooned to P527 million. This is 195 percent higher than the January 2016 interest level, when the commission approved the 18.30 cents kWh FiT-All 2016 rate. “The condition has exacerbated to the detriment of the consumers since interest is also charged in the FiT-All fund, thus, based on that and the fact that there is again an alternative prayer in this application, the commission believes that the grant of the adjustment is justified,” it said.

PHL, SoKor ink pact on farm development By Jasper Emmanuel Y. Arcalas @jearcalas

M

anila on Tuesday forged a five-year memorandum of understanding (MOU) with Seoul that seeks to put forward the development of the two Asian countries’ farm sectors through bilateral cooperation. Agriculture Secretary Emmanuel F. Piñol said this is the first MOU between the Philippines and South Korea in their 70 years of diplomatic cooperation. “The MOU, the first Comprehensive Agreement on Agricultural Cooperation, will now serve as the ‘mother document’ of all succeeding cooperation agreements,” Piñol said in a post in his official Facebook page. The MOU was signed by Piñol on behalf of the Philippines, while Ministry of Agriculture, Food and Rural Affairs Acting Minister Kim Hyeon-soo signed on behalf of South Korea. The MOU was one of the major agreements inked before the bilateral meeting between President Duterte and South Korean President Moon Jae-In, according to Piñol. The agriculture chief is part of the delegation of the President’s official three-day state visit to South Korea. “In spite of existing cooperation projects implemented by the Korean International Cooperation Agency, both sides overlooked the fact that there was no mother document that set the parameters of the cooperation,” Piñol said. “ With the MOU on agr icu lt ura l cooperat ion sig ned to day [Monday], var ious activ ities are now being lined up, including technolog y transfer on mechanization and ir r igation,” he added. Under the MOU, the two countries will promote cooperation in the following areas: exchange of information on agricultural and rural development policies; technical partnership and exchange of exports to promote the agricultural sector and foster rural developments and coop-

“The MOU, the first Comprehensive Agreement on Agricultural Cooperation, will now serve as the ‘mother document’ of all succeeding cooperation agreements.” —Piñol

eration in agriculture development with the aim of ensuring food security. Furthermore, the Philippines and South Korea will promote “cooperation in technology and skills development on irrigation and drainage systems, mechanization of agriculture, agricultural research, and enchancement of postharvest management and the distribution system,” according to the MOU. The two countries would also strengthen the linkage of their respective farmer organizations with community production and processing technology. Under the MOU, the Philippines and South Korea would also promote engagement between their public and private sectors while facilitating private investments in agriculture. A joint committee on agriculture, which would be known as the Republic of Philippines-the Republic of Korea Joint Committee on Agriculture, will be established to coordinate bilateral cooperation in line with the provisions of the MOU. “The committee will detailed cooperation programs and monitor the implementation of the present memorandum of understanding,” the MOU read, a copy of which was posted by Piñol on his Facebook page. The joint committee will be cochaired by representatives from the two countries with at least a director level. The present MOU between Manila and Seoul will be valid for five years and could be extended for an additional five years “ by mutual consent” of both countries.

DTI assures quality of local QT steel for infra projects By Elijah Felice E. Rosales @alyasjah

T

he Department of Trade and Industry (DTI) debunked the allegation of a former senator that locally made steel used in dozens of public infrastructure projects is of low quality standard. In a news statement issued on Monday, the DTI belied the claims made by former Sen. Anna Dominique Coseteng of substandard quenched and tempered steel. The former lawmaker last week warned the use of QT steel in the construction of high-rise and sensitive buildings is risky and might lead to accidents. “The DTI finds no factual or technical basis to support the allegation that quenched and tempered steel is unsafe for high-rise construction, following a series of consultations conducted with the Philippine Constructors Association, Philippine Iron and Steel Institute, Association of Structural Engineers of the Philippines and other relevant stakeholders. It was learned in the studies and researches made by the DTI that the process of quenching and tempering steel is being used by more than 190 countries across the globe for the last 30 years,” the DTI said. According to the trade department, Coseteng’s allegation holds no water that the processes of buttwielding, treading, hot-bending, galvanizing and heating of QT steel can result to damage of property. It cited a study by the Department of Science and Technology-Metal Industry Research and Development Center (DOST-MIRDC) that claimed rebar process through quenc h-temper ing treat ment passed all the chemical, physical and mechanical requirements. “The said study also indicates that a QT steel bar, when heated up to a temperature of 500 degrees Celsius, does not impose any change in its microstructure. Although this exceeds the restriction set at 275 degrees Celsius in the National Structural Code of the Philippines 2015 edition, the DOST-MIRDC explained that this may be a very conservative cap on welding temperature to ensure safety,” the DTI added. Steel groups also said buttwielding is not even used for construction, and that galvanizing is never performed on rebars, as claimed by Coseteng. “In terms of treading, or the process of creating a screw tread to mechanically connect two rebars, some local steel manufacturers said that they perform roll treading to do this. “They explained that this process only diminishes about 0.1 percent of the steel bar, which does not at all affect the strength of the rebar. This practice is also commonly used in the construction industry across the globe, including high-rise construction,” the DTI said. The trade department vowed it will strongly uphold the use of QT steel bars, but will be watchful in maintaining the quality of materials being used by the government for its infrastructure projects. Unless steel groups and research proved otherwise, the DTI said the use of QT steel in high-rise buildings is allowed. “In addition, massive information and education campaign on steel bars will be conducted for the benefit of consumers, constructors and all other concerned industry practitioners. The DTI continues to ensure quality and safety of products, particularly construction materials used in the golden age of infrastructure with the national government’s ‘Build, Build, Build’ program,” the DTI said.

www.businessmirror.com.ph

The World BusinessMirror

Guatemala volcanic eruption sends lava into homes, kills 25

E

L R O D E O, G u a t e m a l a — A f i e r y volcanic eruption in Guatemala sent lava flowing into rural communities, killing at least 25 as rescuers struggled to reach people where homes and roads were charred and blanketed with ash. The death toll rose late Sunday with 18 bodies found in the community of San Miguel Los Lotes, disaster agency spokesman David de Leon said, adding to the seven victims previously confirmed elsewhere earlier in the day. At least 20 people were injured, and authorities have said they feared the death toll could rise with an undetermined number of people unaccounted for. The Volcan de Fuego, or “Volcano of Fire,” exploded in a hail of ash and molten rock shortly before noon, blanketing nearby villages in heavy ash. Lava began flowing down the mountain’s flank and across homes and roads around 4 p.m. Eddy Sanchez, director of the country’s seismology and volcanology institute, said the flows reached temperatures of about 1,300 degrees Fahrenheit (700 Celsius). Dramatic video showed a fast-moving lahar, or flow of pyroclastic material and slurry, slamming into and partly destroying a bridge on a highway between Sacatepequez and Escuintla. Sacatepezuez television published images of a charred landscape where the lava came into contact with homes. Three bodies lay partially buried in ashcolored debris from the volcano, which lies about 27 miles (44 kilometers) from Guatemala City. Other videos from local media showed residents walking barefoot and covered in muddy residue. “Not everyone was able to get out.

I think they ended up buried,” Consuelo Hernandez, a resident of the village of El Rodeo, told the newspaper Diario de Centroamerica. “Where we saw the lava fall, we ran to a hillside” to escape, she added. Homes were still burning in El Rodeo late Sunday, and a charred stench hung over the town. Hundreds of rescue workers, including firefighters, police and soldiers, worked to help any survivors and recover any more bodies amid the still-smoking lava. Firefighters said they had seen some people who were trapped, but roads were cut by pyroclastic flows and they had been unable to reach them. Amid darkness and rain, the rescue effor t was suspended until early Monday morning, municipal firefighters’ spokesman Cecilio Chacaj said. Among the fatalities were four people, including a disaster-agency official, killed when lava set a house on fire in El Rodeo village, National Disaster Coordinator Sergio Cabanas said. Two children were burned to death as they watched the volcano’s second eruption this year from a bridge, he added. Another victim was found in the streets of El Rodeo by volunteer firefighters, but the person died in an ambulance. At an ad-hoc morgue in the town of Alotenango, at least three bodies lay covered with blue sheets. Guatemala’s disaster agenc y said 3,100 people had evacuated nearby communities, and ashfall from the eruption was affecting an area with about 1.7 million of country’s 15 million or so people. Shelters were opened for those forced to flee. AP

Tuesday, June 5, 2018

A5

China says trade deals are off if US raises tariffs By Joe Mcdonald & Paul Wiseman The Associated Press

B

EIJING — China has balked at stepping up its purchases of American products, raising the odds of a trade war, if President Donald J. Trump follows through on his threat to tax billions of dollars’ worth of Chinese imports.

The warning from Beijing came after delegations led by US Commerce Secretary Wilbur Ross and China’s top economic official, Vice Premier Liu He, wrapped up talks on Beijing’s pledge to narrow its trade surplus. White House advisers were insisting on fundamental changes in ties between the world’s two biggest economic powers. At the outset of the event Ross said the two sides had discussed specific American exports China might purchase, but the talks ended with no joint statement, and neither side released details. “Both sides appear to have hardened their negotiating stances and are waiting for the other side to blink,” said Eswar Prasad, professor of trade policy at Cornell University. “Despite the potential negative repercussions for both economies, the risk of a full-blown China-US

trade war, with tariffs and other trade sanctions being imposed by both sides, has risen significantly.” Asked specifically on Fox’s Sunday Morning Futures if the United States is willing to throw away its relationship with China by proceeding with threatened tariff hikes, Peter Navarro, director of the White House National Trade Council, pointed in part to an unfair relationship involving a multibillion-dollar trade deficit, Defense Secretary Jim Mattis’ warning of China’s activities in the South China Sea and the threat of China stealing US intellectual property. “That’s a relationship with China that structurally has to change,” he said. “We would love to have a peaceful, friendly relationship with China. But we’re also standing firm that the president is the leader on this.” The US has threatened to impose tariffs on up to $50 billion of Chinese products in a dispute over Beijing’s aggressive tactics to challenge United States technological dominance; Trump has asked US Trade Rep. Robert Lighthizer to look for another $100 billion in Chinese products to tax. China has targeted $50 billion in United States products for possible retaliation. Tensions temporarily eased on May 19 after China promised to “significantly increase” its purchases of

US farm, energy and other products. Treasury Secretary Steven Mnuchin said then that the United States tariffs were suspended and the trade war was “on hold.” The purchases are meant to reduce America’s massive trade deficit in goods and services with China, which last year came to $337 billion, according to the US Commerce Department. After the apparent cease-fire, global financial markets rallied in relief. But Trump upended the truce last Tuesday by renewing his threat to impose 25-percent tariffs on $50 billion in Chinese high-tech goods. The tariffs are meant to pressure Beijing for allegedly stealing trade secrets and forcing foreign companies to hand over technology in exchange for access to the Chinese market. Navarro later called Mnuchin’s conciliatory comments “an unfortunate soundbite.” Ross nonetheless journeyed to Beijing Friday to work out details of the vague agreement Mnuchin had earlier cobbled together with the Chinese vice premier. China balked at making concessions unless the US lifted the tariff threat. “If the United States introduces trade sanctions, including a tariff increase, all the economic and trade achievements negotiated by the two parties will not take ef-

fect,” said a Chinese government statement, carried by the official Xinhua News Agency. T he negotiating process shou ld be “ based on the premise” of not fighting a “trade war,” the statement said. The dispute with China comes at the same time Trump has riled some of America’s closest allies with the imposition of tariffs on steel and aluminum imports. After a three-day meeting of finance ministers from the G7 industrial nations that ended Saturday in Canada, Canadian Finance Minister Bill Morneau issued a summary saying the other six members want Trump to hear their message of “concern and disappointment” over the US trade actions. Allies including Canada and the European Union are threatening retaliatory tariffs. Canadian Prime Minister Justin Trudeau told NBC’s Meet the Press last Sunday that the reciprocal tariffs would hurt both US and Canadian workers and consumers. He also pushed back against the argument that Canadian steel poses a United States security threat. “The idea that we are somehow a national security threat to the United States is quite frankly insulting and unacceptable,” he said.

A6 Tuesday, June 5, 2018 • Editor: Angel R. Calso

Opinion BusinessMirror

www.businessmirror.com.ph

editorial

Deaf, not dumb

I

n the movie A Quiet Place, shown in local cinemas in April, we saw humanity being hunted by alien monsters who are blind but have incredibly sensitive hearing.

The family in the movie has a daughter who is deaf (as the actress who played the role actually is), hence, all the family members know sign language. That gave them an edge over the monsters hunting them, a unique ability to communicate effectively with each other without words or sound, which contributed greatly to their survival. The daughter’s disability somewhat became her family’s unique ability, their saving grace, their superpower, so to speak. The movie was enlightening in many ways without being preachy about the plight of deaf people, especially for those of us who have come to consider hearing and sound as essential and normal to our lives. The real, everyday world we live in has not been kind to the vibrant and incredibly warm deaf community in our country. Despite existing laws that are supposed to guarantee that PWDs, or persons with disabilities, do not suffer any kind of discrimination, that they have equal opportunities and rights like any citizen, deaf people have been incredibly marginalized by mainstream hearing society. They bear the scars of daily discrimination and oppression. A news item in the Philippine Daily Inquirer last week told the story of a deaf couple, Robelyn Arcangel and Emmanuel Bernardino, both graduates of De La Salle-College of Saint Benilde’s School of Deaf Education, who were mocked and driven away by a security guard in Farmers Plaza, a mall in Cubao, Quezon City. Despite saying through gestures that they were deaf and could not hear what the guard was saying, they were still shooed away and disrespected. Eventually, they were able to enter through another gate and report the incident to the management of the mall. The guard was told to apologize. The management later on also publicly apologized. However, such lack of respect and discrimination against deaf people and other PWDs happens every day and are often overlooked by both government and society. In 2016, for instance, the Land Transportation Franchising and Regulatory Board (LTFRB) had to urge public-utility vehicle drivers and conductors to treat PWDs better, after getting a complaint against a bus conductor who abused two deaf-mute passengers. The deaf passengers approached the conductor holding out a sheet of paper with “Where is Taft?” written on it, their PWD IDs and their payment. The conductor, according to the well-meaning passenger who later wrote to the LTFRB, disregarded their IDs, took the money and asked the deaf passengers to alight in Pasong Tamo, when they were clearly supposed to get off in Taft Avenue. If there was no good Samaritan who posted about the incident on social media and shared photos of the bus plate number online and written a complaint to the LTFRB, would any action have been taken against the bus operator, driver and conductor? If the video of the incident with the rude Farmers Plaza security guard had not been posted on social media (and gone viral) and if the story had not been picked up by a national newspaper, would the mall even apologize or do something about the outrageous discrimination suffered by the deaf couple? In Arcangel’s Facebook post on May 28, she wrote that they didn’t post the video to sow divisions among netizens, “but to make us all realize and to be aware about the special needs of People with Disabilities.” “We both [me and my boyfriend] think that the main issue here is not only the attitude of the security guard but the lack of awareness of some people regarding PWDs. Lack of awareness and sensitivity leads toward discrimination and improper treatment of PWDs,” she said. Another issue, this paper believes, also has to do with our laws that grant equal opportunities for PWDs but are not fully enforced, nor are they widely practiced and accepted. The government must ensure that the needs and rights of PWDs are met and respected. There must be stricter enforcement of the PWDs Magna Carta provisions (Republic Act 7277 with further amendments in RAs 9442 and 10524). Government agencies must investigate all cases of discrimination against PWDs in employment, education, transport and public services. But Arcangel is right. Ultimately, deaf people face discrimination because of people’s continued lack of understanding and acceptance of the Deaf community and its values, causing them to be ignored, bullied, excluded and discriminated against, treated as “others” in schools, workplaces and society. We need to change this. We need to stop their marginalization and the marginalization of all PWDs. Because it’s not just in the movies but in real life where they can contribute greatly to making us and our society so much better, if we give them a chance.

Since 2005

BusinessMirror A broader look at today’s business ✝ Ambassador Antonio L. Cabangon Chua Founder Publisher Editor in Chief Associate Editor News Editor Senior Editors

T. Anthony C. Cabangon

THE Entrepreneur Continued from A1

T

he inflation rate, or the movement of prices of goods and services in a given period, impacts on household income and spending. An inflation that falls within expectation is normally a result of stable economy and proper monetary policy. Businesses want inflation to be steady, so that they can appropriately chart their expansion strategies. An inflation rate above the target range, meanwhile, could lead the BSP to tighten its monetary policy in the form of higher benchmark interest rates. At the same time, a higherthan-expected inflation could force the government to raise the minimum wage, approve higher transport fares or adjust the suggested retail prices of basic commodities. Over the past five years, inflation rate fell within the Bangko Sentral’s target range of 2 percent to 4 percent. The annual inflation averaged 2.6 percent in 2013, 3.6 percent in 2014, 0.7 percent in 2015, 1.3 percent in

2016 and 2.9 percent in 2017 using the 2012-based consumer price index series, data from the PSA show. The low-inflation regime has allowed the central bank to reduce interest rates to record-low levels in recent years, which enabled businesses and households to get cheaper loans from banks, boosting investments and spending in the process. Two factors behind the low inflation rates in recent years were abundant food supply and low petroleum prices in the world market. When crude prices began to surge this year and rice prices also climbed

Lorenzo M. Lomibao Jr., Gerard S. Ramos Lyn B. Resurreccion, Efleda P. Campos Dennis D. Estopace

Creative Director Chief Photographer

Eduardo A. Davad Nonilon G. Reyes Judge Pedro T. Santiago (Ret.) Benjamin V. Ramos Adebelo D. Gasmin Marvin Nisperos Estigoy Aldwin Maralit Tolosa Rolando M. Manangan

BusinessMirror is published daily by the Philippine Business Daily Mirror Publishing, Inc., with offices on the 3rd floor of Dominga Building III 2113 Chino Roces Avenue corner De La Rosa Street, Makati City, Philippines. Tel. Nos. (Editorial) 817-9467; 813-0725. Fax line: 813-7025. (Advertising Sales) 893-2019; 817-1351, 817-2807. (Circulation) 893-1662; 814-0134 to 36. E-mail: news@businessmirror.com.ph.

www.businessmirror.com.ph

Printed by brown madonna Press, Inc.–San Valley Drive KM-15, South Superhighway, Parañaque, Metro Manila

amid perception of tight domestic supply, inflation began to trend up. This was complicated by the weakening of the peso against the US dollar, which pushed the domestic value of imported commodities higher. Driven by these factors, inflation rate hit a five-year high of 4.5 percent in April 2018, faster than 4.3 percent in March, which were both slightly higher than the target range. Inflation averaged 4 percent in the first four months of 2018. The BSP expects inflation to remain high in 2018 and decelerate toward the midpoint of the target range in 2019. To help ease the price increase, the central bank raised the overnight borrowing rate by 25 basis points to 3.25 percent on May 10. Amid rising consumer prices, there were talks about suspending the fuel excise tax provision in the Tax Reform for Acceleration and Inclusion law, once the three-month average Dubai crude price breached the $80-per-barrel level. This could well provide a temporary relief to consumers, although this may also affect the government’s revenue collection. Another significant driver of inflation is the price of rice, because it is the biggest item in the so-called CPI market basket. Unfortunately, there were too much speculations

over supply shortage in the market, which eventually led to higher prices. This situation can be easily resolved by flooding the market with rice from local farms and foreign suppliers. Informed of the situation, President Duterte abolished the quota system in rice importation, allowing everybody to buy the staple from abroad. Hopefully, more rice would be available in the market this month. Despite the upward trend in inflation, I think the situation remains manageable. The government’s economic managers and Bangko Sentral’s monetary experts would not allow the situation to go beyond their control. I still remember when the inflation rate was in double digits (50.3 percent in 1984 and 23.1 percent in 1985), which affected the growth trajectory of the Philippine economy. But inflation has eased to single-digit level over the past decade, which speaks of our current level of macroeconomic stability. We should continue to watch inflation rate, along with all the factors driving consumer prices higher, in order to sustain the economic gains we have achieved as a nation. For comments, e-mail mbv.secretariat@gmail. com or visit www.mannyvillar.com.ph.

The number one rule for the stock market

Jennifer A. Ng Vittorio V. Vitug

Ruben M. Cruz Jr. Angel R. Calso

MEMBER OF

Manny B. Villar

Lourdes M. Fernandez

Online Editor Social Media Editor

Chairman of the Board & Ombudsman President VP-Finance VP Advertising Sales Advertising Sales Manager Group Circulation Manager

Monitoring inflation

John Mangun

OUTSIDE THE BOX

T

here are two subjects that the average person has little understanding about—health and wealth. Did you know that the most deadly cancer with a five-year survival rate of only 7.2 percent and the second-highest frequency of 1 in 65 persons is pancreatic cancer? Better yet, do you even know what your pancreas does? Me neither.

As a result of our ignorance, we rely on people who do understand the human body and health. As a historical reference, I thought at one time of becoming a physician. Then I realized that I do not like being around sick people. But, I also realized that I do like being around rich people and money. And with people being ignorant about money, I became a “wealth doctor.” Not only are people mostly uninformed about what it takes be super healthy, we humans are also lazy about our bodies. After years of experimentation, I have proven

that it is absolutely easier to cook a pork roast in the turbo oven than it is to steam a bunch of fresh carrots. When it comes to wealth, the wisdom is to get educated, get a job, get a raise, get retired and die. There are about 2,880,000 Google results for “how to ask for a raise.” There are also about 152,000,000 results from “how to get rich.” You would think that there would be more rich people than there are based on the amount of information available. The problem is that getting rich—like getting healthy—requires work and discipline. One

of the “rules to get rich” is, “don’t spend money on stupid stuff.” Most people would respond with a “lazy” answer like “I work so hard, so I am entitled to spend some money on stupid stuff.” Why do you think my pork-roast budget is way larger than my carrot spending? Of course this getting rich thing usually includes, “put money in the stock market”. Here again, if that was the simple answer, even in the Philippines we would be creating tons of new multimillionaires every year. The reasons we are not are the same reasons we are not creating tons of super healthy people. Not everyone should invest in the stock market, and while some take that as the moral equivalent of saying that males and females are biologically different, both statements are true. The women’s world record of 10.49 seconds in the 100-meter dash was set by Florence Griffith-Joyner in 1988. The USA record, set in 2014, for the high-school boy’s 100-meter dash is 10.16 seconds. For the 20 years ending 2015, the S&P 500 Index averaged 9.85 percent a year. The average equity investor earned a return of only 5.19 percent. That includes how every

retail investor traded, whether active speculators, “buy and hold” experts and those that inherited shares from long-dead ancestors who bought at the low in 1932. But if you absolutely must invest in the stock market, here is the one rule you must know and follow. And it is on the same level as “don’t smoke three packs of cigarettes a day and expect to stay healthy.” The rule is that, as a stock market investor, you cannot “buy low” if you do not “sell high.” In fact, most investors do fairly well at “buying” but are absolutely terrible at “selling.” They do not know when to take profits, and they do not know when to cut losses. The primary reason is psychological. They forget that the purpose of the game is to make money, not to be right. Further, experienced, profitable investors never buy into the nonsense that losing money is alright as long as you learn something. Making money is the best learning experience. E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stockmarket information and technical analysis tools provided by the COL Financial Group Inc.

Opinion BusinessMirror

www.businessmirror.com.ph

Tuesday, June 5, 2018 A7

Imperiled airport project Wrong policies that keep oil prices and power rates rising

E

Recognizing the power industry as the backbone of economic progress, President Marcos issued Presidential Decree 40 that paved the way for the setting up of island grids with generating facilities and cooperatives for the distribution of power, mainly in the country’s rural areas. As early as 1972, Marcos authorized the NPC “to own and operate as a single integrated system all generating facilities supplying electric power to the entire area embraced by any grid set up by NPC.”

I have detailed the explanation in this series of articles: Start by looking at the country’s energy situation from 1972 to 1985, a specific period of 13 years covered by former President Ferdinand E. Marcos’s total energy plan for the country that was made successful by the right combination of regulated policies that saw the steady, low-cost supply of oil and cheap electricity to consumers. In that period, the Marcos regime, based on official records, had succeeded in reducing the country’s dependence on Middle East oil, from 92 percent in 1972 to 71 percent in 1980, and further to 57 percent in 1984. By 1985 the Philippines stood as the world’s second-largest user of geothermal power, next to California, resulting further to 44-percent reduction of the country’s dependence on imported oil worth billions of dollars. To attain its ultimate objective of total electrification of the country, the Marcos administration had the National Power Corp. (NPC) as its arm to do the job. Established in 1936 by President Manuel L. Quezon under Commonwealth Act 120, NPC reached a significant landmark in its corporate existence with the enactment of Republic Act 6395 in 1971, giving birth to a revised charter for NPC.

oil crisis, the Marcos regime built a nuclear power plant that was supposed to supply the country’s energ y demands and further decrease our dependence on imported oil. Thus, the construction of the Bataan Nuclear Power Plant (BNPP) began in 1976. When the BNPP was finished in 1984, with a cost of $2.3 billion, it became one of the world’s state-ofthe-art nuclear power stations. The BNPP was designed to withstand an intensity-8 earthquake in the Richter scale, making it sturdier and safer than the Fukushima power plant in Japan, which in 2011 survived an intensity-7 earthquake before the subsequent tsunami incident. If the plant had operated, it would have produced 621 megawatts of electricity, enough to power at least 10 percent of the power requirements for the Luzon grid. It would have addressed our looming energy crisis. It could have ushered the country into nuclear power and brought our economy at greater heights. T his faci l it y, sitting on a 369-hectare property in Morong, Bataan, remains idle from the time of its completion in 1984 until today. It is a “sleeping giant,” a national asset reduced into an artifact for tourists to see, buried in years of misguided priorities and baseless fear. Patterned after the Krisko

Ernesto M. Hilario

Cecilio T. Arillo

database

ABOUT TOWN

T

he modernization of Naga Airport in the town of Pili, Camarines Sur, is among the infrastructure projects of the Duterte administration’s centerpiece “Build, Build, Build” (BBB) program. But the unexpected strong opposition of Rep. Rolando G. Andaya Jr. of the First District of Camarines Sur to the project dashed the hopes of CamSur folk and the business sector in the Bicol region, who expected their airport to get a muchneeded upgrade. Andaya is a stalwart of the administration party, PDP-Laban, in Bicolandia and former budget secretary under the Arroyo administration. The modernization of Naga Airport took an unexpected turn when, even before the clearing operations for the airport improvement could start in Barangay San Agustin in Pili, Andaya and his bodyguards, accompanied by the town mayor, reportedly stormed the site and tried to drive away members of CamSur’s Sagip Kalikasan Task Force (SKTF), who were manning the area. According to testimonies obtained by the police from the SKTF members, Andaya started shouting and asking them what they were doing in the area. He and his bodyguards were said to have pushed and shoved people, and some SKTF members had their cell phones, handheld radios and other belongings confiscated by Andaya and his men. Eleven of the SKTF members trooped to the nearby Pili Municipal Police Station to report Andaya’s unruly behavior and to seek police protection. Andaya rushed to the Pili Municipal Police Station after learning that several SKTF members were there to report to the police their encounter with the lawmaker. Andaya became even more enraged upon learning that Rep. Luis Raymund F. Villafuerte Jr. of the Second District of Camarines Sur was also at the police station. TV cameras were present when Andaya rushed to the police station, and a video of his tirade that has since gone viral on social media showed Andaya hurling insults at somebody outside camera range and challenging him to a fight. The object of Andaya’s outburst off camera was Villafuerte. Bicolanos did not expect such behavior from one who is supposed to be an honorable member of Congress, a lawyer by profession and a former Cabinet official. One question begging for an answer is why Andaya barged into the airport project site to stop workers from proceeding with the clearing operations when Pili is in the third district of CamSur, which is out of his jurisdiction because he represents the first district. And since Andaya is now a member of PDP-Laban, he is expected to support the administration’s investment-friendly and job-generation initiatives, of which the Naga airport-modernization project is a good example. The provincial government of CamSur has been overseeing the implementation of the Naga Airport Development Project on the strength of its Memorandum of Agreement (MOA) signed with the Department of Transportation (DOTr) in November 2016. Under the MOA, the DOTr has committed to set aside P402 million for the airport project, to be taken from the DOTr’s budget in the General Appropriations Act of 2015. The allocation included funds for the acquisition of the lots of the affected residents and their resettlement. The provincial government, in turn, has been tasked under the MOA to identify the affected residents and to supervise the purchase of their lots based on the principle of just compensation and their resettlement. “The development of airports has been included among the priority projects of the national government, and this includes the development and reorientation of Naga Airport to serve the Metro Naga and the Province of Camarines Sur, including its

influence area,” the MOA stated. “The funding requirement for the Naga Airport Development Project, including cost for land acquisition and resettlement, will be sourced from allotments under the General Appropriations Act of CY 2015 budget of the DOTr,” the MOA said. Moreover, Branch 32 of the Regional Trial Court (RTC) in Pili already issued on July 5, 2017, a Writ of Possession ordering the affected residents not to exercise their rights over their lots and to vacate these in favor of the DOTr project. Even before the court’s issuance of this writ, the province started negotiating three years ago with the concerned farmers and their tenants and even with informal settlers on the expropriation of their lands. In fact, a majority of the affected ones had already formally decided to turn over their lots to the provincial government, while several others agreed in principle to do so and were just awaiting the court’s decision on the “just compensation” for their lots. It was learned that the provincial government has even opted to pay both the landowners and the tenants who have been tilling the affected lots to speed up the expropriation process and settle the issue amicably. In a resolution dated May 2, 2018, the presiding judge of Branch 32 of the RTC in Pili dismissed the motion of some lot owners who wanted to stop the execution of the writ of possession. Judge Vivencio Gregorio Atutubo III made it clear in this resolution that: “Wherefore, premises considered, the Defendants’ motions to dismiss and to recall the writ of possession are denied for lack of merit.” The court’s ruling is a major victory for the vast numbers of supporters of the Naga airportimprovement project, as it affirms the legality of the writ. In the resolution, Atutubo ordered the plaintiff, CamSur Gov. Miguel Luis Villafuerte, to “desist” or stop from implementing the writ in the meantime for the sole reason that the solicitor general should be the proper “party-in-interest” to represent the DOTr in the case because it involves a national government project. In short, the Court merely wanted the complaint amended to reflect the proper plaintiff in the case, which is the DOTr through the Office of the Solicitor General. Rep. Villafuerte pointed out that the judge’s ruling “is a big victory for ​ the people of C​amS​ur because it affirms that the Naga airport project will continue and, ​more important be put on the fast track.” “The court order just affirmed that the Naga airport project will proceed,” said Villafuerte, pointing out that the MOA between the DOTr and the provincial government is “still in effect and in force.” Undersecretary Marvel Clavecilla, Presidential Adviser on Bicol Affairs, has also defended the project and criticized local politicians who are using farmers whose lands were expropriated for the Naga Airport Expansion Project to advance their own political agenda. He emphasized the urgency for the government to fast-track this facility upgrade in pursuit of President Duterte’s BBB program.

E-mail: ernhil@yahoo.com.

Part One

Blame the post-Marcos presidents

XCEPT for President Rodrigo Duterte, who is just two years into his six-year term, blame the post-Marcos successors, from Mrs. Corazon C. Aquino, her son Benigno S. Aquino III and the three presidents between them, Fidel V. Ramos, Joseph E. Estrada and Gloria Macapagal-Arroyo, for the continuing rise of oil prices and power rates. Recognizing the power industry as the backbone of economic progress, President Marcos issued Presidential Decree (PD) 40, which paved the way for the setting up of island grids with generating facilities and cooperatives for the distribution of power, mainly in the country’s rural areas. As early as 1972 Marcos authorized the NPC “to own and operate as a single integrated system all generating facilities supplying electric power to the entire area embraced by any grid set up by NPC.” Targeted to be integrated in this “system” were all Manila Electric Co. (Meralco) generating units. After a long series of negotiations, Meralco sold its power-generating units at P1.1 billion. The acquisition of Meralco’s thermal plants was in line with NPC’s plan to centralize all generating capacities in Luzon as part of the so-called Luzon grid. In another breakthrough move, Marcos increased the capitalization of NPC to P50 billion in 1978 through PD 1360. This significant increase in capitalization catapulted NPC’s financial strength and capacity to tap other possible sources of power, including nuclear and hydropower developments.

A sleeping giant

In response to the 1973 global

GSIS upholds good governance MAIL

This refers to the issues raised by Atty. Jesus I. Santos, former trustee of the Government Service Insurance System (GSIS) and counsel for the Confederation of Government Employees Organizations Inc. (Cogeo). These were discussed in Cecilio T. Arillo’s Database columns  in the BusinessMirror—“Keeping a tight rein on security funds” (April 19) and “Are they not victims of hatred and vindictiveness? “ (April 26)—as well as in a news story on May 7 (“Santos demands yet again for GSIS funds transparency”). Allow us to shed light on the issues brought forth in the articles.

On the sale of Philcomcen property

AS previously explained to Atty. Santos, the sale and disposition of any GSIS asset and property, including the 18-story Philcomcen building, strictly follows the requirements for an open and competitive procurement process and the pertinent rules and regulations in selling state-owned assets and properties. Assets for disposal are sold through bidding to ensure that all interested parties have access to a fair and transparent bidding process. The disposition of the Philcomcen property yielded a maximum

return of investment that further strengthened the GSIS’s financial viability. The sale, in fact, generated P771.5 million, which is much higher than the property’s book value of only P234 million. Prior to the sale, the Philcomcen property was described as “a dangerous ruinous structure” that had to be demolished. Subsequently, the sale proceeds were initially invested in a shortterm deposit with government banks and other financial assets, such as government or corporate bonds and equities.

On the status of the $1-billion investment pulled out from foreign investment and invested in the local market

IN March 2011 the former GSIS Board of Trustees approved the redemption of GSIS investments under the Global Investment Program. The decision to redeem the investments allowed the GSIS to avoid significant turbulence in international markets in 2011. The funds were then reinvested in the local capital market. Investments in both equity and bonds occurred at an opportune time, as the Philippine equity market was still recovering from the global financial crisis of 2008 to 2009 and bond yields were considerably higher than the current low levels. It must be emphasized that, since 2010, the Philippine equity market has been among the top performing stock markets globally. Thus, GSIS investments in the local market have continued to earn through coupons, dividends and capital appreciation.

On the status of the GSIS investments in local and overseas markets

Under Republic Act 8291 (GSIS Act

of 1997), GSIS investments should satisfy the requirements of liquidity, safety and yield to ensure the actuarial solvency of GSIS funds. The outward investment of $800 million in overseas market is in line with the global best practice in investment management strategy that ensures proper diversification in the investment portfolio. Global diversification minimizes concentration risks. Managing risks that threaten the fund is a key to long-term performance. At present, GSIS invests heavily in local f ixed income and equities markets. With its high yield, local markets will continue to contribute to the financial performance and growth of the pension fund.

On Atty. Jesus I. Santos’s Provident Fund benefits

IN a number of letter-responses to Atty. Santos, the GSIS informed him that his Provident Fund benefits are subject of a Notice of Disallowance issued by the Commission on Audit (COA) on December 1, 2011, which held that members of the GSIS Board are not salaried officials to be entitled to such benefits. His former colleagues in the GSIS Board had received their PF benefits, as Atty. Santos claimed, but that was because their term ended before Executive Order 7, series of 2010, took effect. The EO suspended the grant of allowances, bonuses, incentives and other perks to GSIS trustees.

On transparency about GSIS investment practices and decisions

The GSIS Board of Trustees and Management, as pointed out in previous communications to Atty. Santos, are committed to transparency and good governance. In fact, the GSIS is now on board the electronic Freedom of Information portal, which serves as an online platform from which

nuclear power plant in Yugoslavia, the BNPP had the same design as the nuclear power plants 1 and 2 of South Korea. The Yugoslavian and the South Korean plants have had no operational problems ever. The Bataan nuclear plant was scheduled to go into commercial operation in November 1983. This was deferred to 1986 so that additional work could be done to ensure the maximum safety of the plant. This deferment was an offshoot of the accidents in the Three Mile Island nuclear power plant in the United States and in the Chernobyl nuclear power plant in Russia. In the end, the commercial operation of the Bataan nuclear plant never happened. As if by design, nature itself disproved the possibility of radiation leak. A very strong earthquake occurred in Central and Northern Luzon in 1990. Mountain slopes crumbled; buildings, roads and bridges collapsed; and parts of the coastal cities of Dagupan in Pangasinan and San Fernando in La Union sunk. Even Mount Pinatubo, standing a few miles from the nuclear plant, violently erupted. And yet the nuclear plant stood untouched. It suffered no damage, not even a scratch. C lea rly, Cor y Aqu i no wa s unaware that the nuclear reactor of the Bataan nuclear plant was designed and constructed to withstand the crashing impact of a 747 jumbo jet at full speed. Surely the decision to abandon the nuclear plant has contributed greatly to the current high cost of electricity in the country. Instead of producing cheap electricity for the people, the nuclear plant has become a white elephant, not far from another white elephant: the multibillion-peso Centennial complex built on order of President Ramos in Pampanga. To be continued To reach the writer, e-mail cecilio.arillo@ gmail.com.

interested parties may easily request information that are not electronically available. This platform enables our members, pensioners and other clients to access information about GSIS. It should be stressed, however, that the release of highly classified information, such as copies of board resolutions and investment activities, is subject to the Guidelines on Disclosure of Board Actions, Issuances and Resolutions. Under the guidelines, investment decisions and other commercially sensitive transactions are treated as highly classified, as they may pose risks to the organization’s competitive position. Given such legal restrictions, Atty. Santos’s request has not been given due course, which the GSIS had already explained to him to a large extent. One of these occasions was on April 17, when he and other concerned officers of Cogeo were invited to sit down with us so we could further clarify our position on his concerns and put the issues to rest. Further, contrary to Atty. Santos’s allegations that his issues were not responded to, we have on file our records of communications, which answered each of his queries. We continue to assure Atty. Santos and the rest of our stakeholders that the GSIS upholds good governance in all its policies, programs and decisions. We carry out our fiduciary duty within our legal and ethical obligation to safeguard the contributions of the government work force and ensure that their future obligations are fulfilled. We hope that our explanation sees print in your paper in the interest of fairness. Jesus Clint O. Aranas President and General Manager Government Service Insurance System

2nd Front Page BusinessMirror

A8 Tuesday, June 5, 2018

BCDA transfers ownership of improved facilities to PAF

T

By Rene Acosta

@reneacostaBM

HE Bases Conversion and Development Authority (BCDA) has formally transferred ownership of military facilities it has developed to the Philippine Air Force (PAF).

The transfer was made following the signing of a memorandum of agreement (MOA) between BCDA President and CEO Vivencio Dizon and Defense Secretary Delfin N. Lorenzana on May 29. “Today, the BCDA has finally turned over to us the Certificate

of Titles of the PAF Golf Course and Operational Areas. This undertaking signifies that the BCDA remains to be our dynamic partner in modernizing military facilities and infrastructure development,” Lorenzana said. Lauding BCDA for the renewed

₧716.44 million

The value of the PAF Golf Course and PAF Operational Areas that were improved by the BCDA partnership with the DND, which focuses on moder nization of military facilities and infrastructure development, Lorenzana explained that the collaboration with the BCDA gives life to the provisions of a MOA signed by the DND and the PAF with the BCDA back in July 1997. The MOA covers the swapping of a portion of the Villamor Air Base Golf Course area with the Ninoy Aquino International Airport International Passenger Terminal 3 site. The agreement was further

amended by a 2005 MOA obliging the BCDA to be responsible for the funding and replication or reconstruction of PAF facilities and utilities that were affected by the final delineation of areas in VAB. According to the BCDA, the PAF Golf Course measures 56.13 hectares, while the PAF Operational Areas cover 47.33-hectares, both amounting to a total of P716,440,855.42. “It is good to know that our department is not alone in pursuing the goal of having a modernized military. We have stakeholders, like BCDA, who are committed to assist us in sharpening our military edge so we can better perform our mandate of securing our peace and sovereignty,” Lorenzana said.

Parojinog’s partner nabbed

I

NTELLIGENCE agents arrested on Sunday in Paranaque City the live-in partner of Ozamiz City councilor Ricardo “Ardot” Parojinog, who is wanted for a string of criminal charges. Mena Luansing, 34, resident of 35 Belisario Compound, San Isidro, Paranaque, was nabbed during a joint operation by the PNP Directorate for Intelligence and the National Intelligence Coordinating Agency (NICA). Luansing was presented on Monday by PNP chief Director General Oscar Albayalde at a news briefing. He said the arrest was backed by warrants of arrest issued by a court in Ozamis City. Luansing, who resigned as provincial board member of Misamis Occidental in January this year, was facing nonbailable charges of illegal possession of firearms and explosives and violation of the dangerous drugs law. A man identified as Jonas Galamitan Cablitas was also arrested by the agents for allegedly coddling Luansing while she was in hiding. Luansing went into hiding after a government raid into the compounds and residences of the Parojinog family in Ozamis City in July last year wherein Reynaldo Parojinog Sr., the mayor of Ozamis City was killed. Reynaldo was the older brother of Ricardo. Ricardo escaped during the raid, but was subsequently charged with the same charges filed against Luansing. Ricardo was arrested in Taiwan two weeks ago after he entered the country using illegal documents.

Rene Acosta

Senators. . .

Continued from A1

forthcoming,” Angara said in a separate text message to the BusinessMirror. Senate Minority Leader Frank Drilon, who heads the six-member minority bloc, confirmed he has yet to get word of an emerging consensus among senators to move for the suspension or amendment of the TRAIN Law, particularly the provision for higher fuel excise taxes. “I do not see any consensus,” said Drilon, even as he confirmed that members of the minority bloc will help Sen. Aquino push approval of the bill suspending excise tax on petroleum products based on inflation. Sen. Francis Escudero also confirmed that senators have yet to formalize a consensus in TRAIN Law reforms when Congress reconvenes regular sessions on July 23. “Wala pa [None yet]...[but] I hope so.” Escudero said.

SOUR POINT FOR SWEET MAKERS Sugar products are on display at a Metro Manila supermarket. Trade Secretary Ramon M. Lopez on Monday favored allowing confectionery producers to import sugar to ensure that the price of local candies and biscuits remain competitive. This, after candy and biscuit makers from the Philippine Confectionery Biscuits and Snacks Association sought the government’s approval for such importation. Story on page A1. NONIE REYES

Manufacturing. . . The Malaysian manufacturing sector was the only jurisdiction during the month to record a contraction at 47.6. Despite the positive projection, economists at IHS Markit said the Philippines, along with Indonesia, has the highest import inflation during the month due to weaker currencies. “The upturn in the Filipino manufactur ing sector gained further momentum in the middle of the second quarter, lifted by strengthening demand conditions. The adverse impact caused by the new tax reforms has clearly subsided,” IHS Markit

Investors. . . Continued from A1

the Samurai bond issuance. The Treasury is eyeing a float of $1 billion for the Samurai issuance, and is looking at the three, five, seven, and 10-year tenor buckets for the issuance. “We still have to go through the approvals, we still have to go through that, both internal and external for the Samurai issuance. We also have to continue to be watchful of the market. We want to get good pricing, so it’s not right after [that] we will immediately plunge into the issue, we also have to have a strategy,” she added. Last month, the Department of Finance (DOF) said that the government is seen to issue yen-denominated debt or Samurai bonds in

Pr incipa l economist Ber nard Aw said. “However, input cost inflation intensified in May, but some of the upward pressures are driven by a weaker exchange rate, global commodity shortages and higher oil prices, not just from new excise taxes,” the economist added. The rising inflation pressure raises worry among local manufacturers, particularly on their profit margins. “PMI data showed firms raising selling prices at a slower rate in May amid rising costs, suggesting that companies may have a threshold of the extent to which their custom-

ers can bear higher prices without affecting demand,” Aw said. Overall inflation in the first four months of the year averaged at 4.1 percent. Its annual target range is at 2 to 4 percent. The Bangko Sentral ng Pilipinas (BSP) expects this to have risen further in May, particularly forecasting the growth of consumer prices to have hit somewhere between 4.6 and 5.4 percent in May. The BSP hiked its main interest rate by 25 basis points earlier this year to curb excessive inflationary pressures and keep the print within their target range. The Philippine Statistics Authority (PSA) will be releasing the country’s inflation numbers this week.

the second half of the year in line with plans to diversify the country’s bond portfolio. Finance Secretary Carlos G. Dominguez III said the issuance of Samurai bonds will likely happen in September or October. The Philippines last sold Samurai bonds in 2010. Worth $2.5 billion, this allowed the government to complete its commercial funding exercise that year. The IOUs had partial backing from the Japan Bank for International Cooperation, which helped explain the excess in demand from Japanese investors who submitted far more subscriptions than what was available. The Samurai exercise was done by private placement in which insurance companies, cooperatives and others partook of the offer. “We are looking at three, vari-

ous tenors, because the pricing differs. So right now we haven’t really pinned down on the exact tenor. It depends because the spread increases if the tenor is longer, so we have to see what would be the optimal tenor buckets for us. We might be looking at several tenors,” she said. Earlier, Deputy Treasurer Sharon P. Almanza told reporters that the BTr plans to sell $2 billion from the launch of a samurai bond in the third quarter as well as the second issuance of global bonds soon after. She did not say how the $2 billion will be split between the samurai bond sale and the dollar-denominated bond offering. Samurai bonds provide the issuer access to Japanese capital, which can be used for domestic investments or for financing operations outside Japan.

Continued from A1

www.businessmirror.com.ph

NEW PHILHEALTH CHIEF NAMED AS FUND MESS PROBE CONTINUES By Elijah Felice E. Rosales @alyasjah

P

RESIDENT Duterte has appointed a new chief for the Philippine Health Insurance Corp. (PhilHealth), as Malacañang continues with its probe of the agency’s former head over allegations of workers’ rights violations and inefficiency. In an appointment paper circulated on Monday, the President handpicked Roy B. Ferrer to lead the agency as acting president and CEO. Ferrer was a board member of the health-insurance agency before being placed as its interim chief. Ferrer finished his Biology degree from the Ateneo de Davao University, before taking up medicine at the Davao Medical School Foundation to become a medical doctor. He also holds a master’s degree in internal medicine from the University of the East Ramon Magsaysay Memorial Medical Center. He used to be the national president of the Ambassador Club Philippines and the president of the Ambassador Club Davao. In his course of practicing medicine, he served at a total of nine hospitals, including the Ricardo Limso Medical Center, DMSF Hospital, Medical Mission Group Hospital, and San Pedro Hospital, among others. The appointment was made as PhilHealth officials and employees held a black candle vigil on Monday to protest the alleged abuses against the agency’s workers, as well as the reported gross mismanagement of finances and operations of the corporation. They pointed to the agency’s former head, Maria Jude de la Serna, as the culprit for alleged violations of workers’ rights and Philhealth’s underwhelming performance the past year.

“After losing P250 million in 2016, Philhealth initially announced an P8.9-billion loss for 2017. However, shortly after being questioned on the huge loss, Philhealth corrected its earlier announcement and stated that it only has a P4 billion deficit—still an almost 200 percent increase from the previous year’s,” they said. “Philhealth likewise failed to achieve its performance commitments, gaining a dismal 53 percent corporate performance rating for 2017, after having a performance rating of more than 90 percent in 2016. These twin indicators—financial loss and poor corporate performance rating—are the concrete consequences of the incompetent management and lack of direction which has plagued the corporation of late,” they added. Apart from this, they accused de la Serna of abusing her power by sacking employees who allegedly expressed objections to her policies. “Six of the 17 casual employees who had been working with PhilHealth from seven to 19 years remain jobless.” The complaining workers found it “highly suspicious that she removed three antifraud personnel who had reported significant findings on fraud on claims and other areas of operation.” They took issue with her alleged order to terminate certain allowances for workers, including the P2,700 monthly rice subsidy for rank-andfile employees.“Ironically, too, while De La Serna kept on imposing oppressive compensation policies on employees, it is a fact that for almost a year, she incurred illegal expenses running close to P1 million for staying in hotels in Manila, claiming she was on official travel while she was actually in her official station as interim president and CEO,” the workers said.

25% pay hike in HK-based OFWs’ floor wage backed By Jovee Marie N. dela Cruz @joveemarie

A

LAWMAKER on Monday backed the proposed 25-percent pay hike for Filipino domestic workers in Hong Kong following the demand for household helpers in mainland China. ACTS-OFW Rep. Aniceto Betrtiz III made a statement as Hong Kong families are under pressure to hold on to their Filipino domestic workers, amid the lure of greener pasture in Beijing. Bertiz said a 25-percent increase in the statutory minimum wage will benefit the 190,000 Filipino domestic workers in Hong Kong. “If Hong Kong wants to stay competitive and keep on attracting dependable and educated Filipino household staff, it has to bump up at a faster rate their minimum pay,” Bertiz said. “There is pent-up demand for Filipino household staff in mainland China, primarily from the growing number of wealthy Chinese families with a second child and from the expatriates there,” Bertiz added. The lawmaker said Hong Kong’s Labor Department periodically reviews the minimum wage and other benefits for foreign domestic workers, and is expected to announce improvements in September. He said advocates for domestic workers’ rights in Hong Kong are pushing for a HK$5,500 monthly minimum wage, which is 25 percent higher than the current floor pay. At present, foreign domestic workers in Hong Kong are entitled to a “minimum allowable wage” of HK$4,410 per month, plus a food allowance of at least HK$1,053

per month if they are not provided free meals by the employer. According to Bertiz, affluent families in China want their children to learn English at an early age to prepare them for future higher education in America, Britain, Australia and elsewhere. “This is why they are willing to offer higher pay for English-speaking Filipino staff to help around the house,” Bertiz said. He said Filipinos account for 53 percent of the 360,000 foreign domestic workers in Hong Kong. The party-list lawmaker said Hong Kong has already acknowledged it could lose up to 50 percent of its Filipino domestic workers due to superior pay in the mainland ranging from the Chinese yuan equivalent of HK$8,600 to HK$15,500. Even without the mainland demand factor, he said Hong Kong would still need an additional 240,000 foreign domestic workers in the years ahead, partly to help look after its growing number of seniors, according to the autonomous Chinese territory’s Labor and Welfare Bureau. Earlier, the Department of Labor and Employment said there are 300,000 available jobs for Filipinos in China. It said China needs household service workers, caregivers, musicians, nurses and English teachers. Bertiz, citing 2017 data from the Bangko Sentral ng Pilipinas (BSP), said Filipino workers in Hong Kong, including professionals, sent home US$735.2 million last year. “They sent home another US$188.7 million from January to March this year. The amounts do not include money transferred via non-bank channels, such as through other Filipino workers who come home for vacations,” he added.