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Tuesday, June 6, 2017 Vol. 12 No. 236
Moody’s: Tax reforms credit positive for PHL By Butch Fernandez @butchfBM & Bianca Cuaresma @BcuaresmaBM
S
overeign ratings firm Moody’s Investors Service hinted broadly of another credit upgrade for the Philippines should the houses of Congress finally enact a plate full of reforms significantly ramping up the country’s ability to generate revenues. Moody’s Vice President and Senior Credit Officer Christian de Guzman said the passage of the Comprehensive Tax Reform Pro-
gram (CTRP) last Wednesday at the House of Representatives was seen as credit positive for the Philippines, since this directly addresses
₧162.5B
The estimated amount of additional revenues that will be generated from the Comprehensive Tax Reform Program
the country’s weak revenue output at the moment. But Moody’s buoyant mood was apparently not shared by senators, some of whose members on See “Moody’s,” A2
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Coexistence
the entrepreneur Manny Villar
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he appointment of environment advocate Regina Paz L. Lopez as head of the Department of Environment and Natural Resources (DENR) may be considered the most controversial among President Duterte’s Cabinet appointments. She took the post in June 2016 and served for almost a year, but she was rejected by the Commission on Appointments in early May this year. Her appointment came at a time when the mining industry was under a ban: then-President Benigno S. Aquino III signed in 2012 Executive Order 79, which suspended the granting of mining permits until a new revenue-sharing scheme between the government and the industry was passed into law. Continued on A10
What drives BMReports bad behavior? Lower chamber propels Duterte ‘change’ agenda By Greg Navarro Conclusion
In my previous article, I wrote about the conditions, policies and business practices that may contribute to the rise of bad behavior within organizations. Deloitte’s Center for Regulatory Strategy identified these drivers of misconduct based on the findings of various conduct-related enforcement actions, regulatory reviews and firm remediation programs in the financial services sector. But as I mentioned in the first article in this series, organizations from other industries can pick up insights from these findings that will help them fortify their operations against poor conduct. Now, let’s look at some of the ways organizations and regulators can restore trust and regain reputational capital in relation to the eight drivers of misconduct I’ve identified.
Ensure that customer needs and suitability steer product lifecycle decisions In the financial services sector, some firms are developing new Continued on A2
World Bank maintains global growth forecast
T
he World Bank kept its out look for t he globa l economy unchanged, forecasting a modest pickup in growth despite uncertainty about monetary policy and the risk of a surge in protectionism. The development lender projects the world economy will grow by 2.7 percent this year and 2.9 percent the next, the same as its
January forecast. “Global activ it y is firming broadly as expected,” the World Bank said in a report released last Sunday. “Manufacturing and trade are picking up, confidence is improving and international financing conditions remain benign.” Still, the lender warned that risks to its global outlook remain See “World Bank,” A2
PESO exchange rates n US 49.6310
This May 30, 2016, photo shows lawmakers inside the plenary hall of the House of Representatives. Despite controversies over priority bills—like the one seeking to revive the death penalty—the Lower House was able to unite on key legislative agenda of the Duterte administration, like the Comprehensive Tax Reform Program. NONOY LACZA By Jovee Marie N. dela Cruz @joveemarie
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Part Two
HE passage of the tax bill at the Lower House is set against several political controversies that have almost created a severe divide among lawmakers. Such threat of fissure casts a
grim pallor over the legislative agenda of President Duterte, who is grappling with a deadly antidrug campaign and terror attacks. Nonetheless, despite strong oppositions, another controversial measure the lower chamber was able to rally on was the revival of the death penalty. Voting 216-54-1 in March,
the House of Representatives passed House Bill (HB) 4727. The bill, also called “An Act Imposing Death Penalty on Certain Heinous Crimes”, repeals for the purpose Republic Act (R A) 9346, or “An Act Prohibiting the Imposition of Death Penalty in the Philippines”, and further amends the Revised Penal Code and Com-
prehensive Dangerous Drugs Act of 2002. The passage of HB 4727, which was included in the list of priority bills, was controversial, as Pantaleon D. Alvarez removed a deputy speaker and several committee chairmen who voted against the passage of his pet bill. Continued on A2
n japan 0.4499 n UK 63.8652 n HK 6.3712 n CHINA 7.2896 n singapore 35.9593 n australia 36.8361 n EU 55.9639 n SAUDI arabia 13.2346
Source: BSP (5 June 2017 )
BMReports BusinessMirror
A2 Tuesday, June 6, 2017
Lower chamber propels Duterte ‘change’ agenda Continued from A1
However, Senior Deputy Minority Leader and Party-list Rep. Lito Atienza of Buhay believed that the Duterte administration has already lost interest in reviving the death penalty in the country. “ T he ad m i n ist rat ion m ay h ave already come to terms with the reality that it is now impossible for anybody to be executed via a court order throughout President Duterte’s tenure, simply because, at best, it takes around five years for any potential [death-penalty] case to go through due process of law,” he said. “And his term also ends in five years.” Duterte has publicly said he intends to send hundreds of convicts to the gallows once Congress reintroduces the death penalty. The death penalty was abolished in 2006. “Owing to lack of time, the President won’t get to have his show after all,” Atienza added. “So it seems that the administration is no longer keen on producing the show.” The bill reviving the death sentence was passed by the House in March. But Senate Minority Leader Franklin M. Drilon said the measure is already “dead” in the Senate, where at least 13 members are committed to vote against it. Atienza said there is now no chance at all that the return of death verdicts
Moody’s. . .
Continued from A1
Monday cited potentially far less revenue intake for the Malacañang-endorsed Ta x Reform for Acceleration and Inclusion (TRAIN) bill of only some P130 billion versus the P162.5 billion crafted by their House colleagues. That puts a damper on the sovereign’s ability to convince the New York-based ratings firm to move at least a notch higher the country’s “Baa2” credit classification at the moment. Moody’s had said the Philippines still collects significantly less revenue than similarly rated peers, such revenues equal only 15.2 percent of local output, or the GDP, in 2016, or only slightly higher than Indonesia’s 12.5 percent of GDP and Colombia’s 14.9 percent of GDP. Revenue collection among “Baa”-rated developing countries as the Philippines equal 22.9 percent of GDP. De Guzman said the TRAIN bill should boost collection and improve such metrics as interest payments as a share of revenue. The government earlier estimated the TRAIN bill will generate an addi-
World Bank. . .
would be enacted this year. According to the lawmaker, both Congress and the Senate would be preoccupied with the proposed General Appropriations Act for 2018 from August to December.
Bicameral committees
THE bicameral committee reports ratified by the House before it went on adjournment sine die last week are HB 4767 and Senate Bill (SB) 1365. The latter, “An Act Extending the Validity of the Philippine Passport”, seeks to amend for the purpose Section 10 of RA 8239, otherwise known as the “Philippine Passport Act of 1996”. The bill seeks to prolong the validity of passports to five years for minors aged zero to 17 years old; and to 10 years for passports of adults aged 18 years old and above. Other bicameral committee reports ratified by the House of Representatives are HB 5225 and SB 1277, or “An Act Mandating the Provision of Free Wi-fi Internet Access in Public Areas”. HB 5225 mandates the government, including local government units (LGUs) and government-owned and -controlled corporations (GOCCs), to install broadband hot spots in public areas that will provide a stable and reliable wireless Internet connection. Party-list Rep. Sarah Elago of Kabatational P162.5 billion, or 1 percent of GDP, over 12 months as the lower tax for fixed-income earners will be more than offset by incremental excise tax on items as automobiles, fuel and sugarsweetened beverages. But Moody’s also said the lower house may have diluted the potential incremental receipts by some P82 billion, or 0.5 percent of GDP. Earlier, analysts at Credit Suisse said any further dilution in the Senate would have negative implications to the economy. “Official estimates of the tax reform’s revenue effect are still forthcoming, but we expect that the debt affordability ratio will fall to less than 13 percent by 2018 from 24.4 percent in 2010 should the bill pass into law later this year,” de Guzman said. Aside from economic gains, de Guzman also said the TRAIN bill should help boost the government’s ability to pursue economic reforms and away from the aggressive war on crime and drugs. “Since last year, Duterte’s administration has been mired in various controversies related to his focus on security and the war on drugs. As a result, strained relations with some
Continued from A1
tilted to the downside. “Policy uncertainty is likely to remain high in 2017, and there is a risk that financial-market
volatility could increase from current low levels,” the bank said. Risks include unexpected changes in
an, one of the principal authors of the bill, said “this is a step toward the realization of a #BetterInternet”. “We expect to take further steps toward democratizing access to the Internet, to propel the economy and consequently increase access to information, once this is signed into law,” Elago added. “This will help in fighting misinformation and public manipulation. In addition, free public Wi-fi access involves improving and transforming the physical infrastructure of our network systems.” For his part, Alvarez said the free Wi-fi bill has been ratified and is only awaiting Duterte’s signature. “When it becomes law, it will further empower the Filipino people in using information and communications technology as they go about with their daily lives,” Alvarez added. “This ensures the success of Filipinos in a data-driven world”.
Mothers, students
OTHER bicameral committee reports ratified by the House of Representatives are HB 5159 and SB 1353, or “An Act Strengthening the Provision of Emergency Health Care Ser vice to Patients, Further Amending for the Purpose Batas Pambansa Bilang 702”, As Amended, entitled “An Act Prohibiting the Demand of Deposits factions in both houses of Congress threatened to detract attention away from the reform agenda, particularly those related to economic and fiscal matters,” de Guzman said. “Nevertheless, Duterte has maintained high approval ratings among the electorate, as well as a coalition comprising a strong majority in the House of Representatives and has leveraged his political capital to push the TRAIN bill through the legislature,” he added.
‘In-depth scrutiny’
Sen. Juan Edgardo M. Angara, chairman of the Ways and Means Committee, indicated on Monday the money measure earlier passed by the House of Representatives will still have to undergo further review before its submission for plenary deliberations. “We will be having hearings during the recess and going in-depth on each aspect—oil, sugar, automobile, value-added tax and income, among others,” Angara told the BusinessMirror. Angara added the senators need to conduct a series of public hearings on the complex tax proposal before writing a committee report endorsing the Senate monetary, trade or other policies in major economies, as well as financial-sector uncertainty and geopolitical turmoil, according to the bank. The lender is projecting that growth in the volume of world trade will
or Advanced Payments for the Confinement or Treatment of Patients in Hospitals and Medical Clinics in Certain Cases”. Alvarez said the weak points of the law have been remedied to protect “the weakest of our society at a time when they are most vulnerable”. “Mothers who are about to give birth and patients who are rushed to the emergency room will be administered the required medical care and attention,” Alvarez added. “The PhilHealth [Philippine Health Insurance Corp.] shall shoulder all the expenses advanced by hospitals for emergency care given to poor and indigent patients”. Other bicameral committee reports ratified by the Lower House are HB 5633 and SB 28, or “An Act Promoting Universal Access to Quality Tertiary Education by Providing for Free Tuition and Other School Fees in State Universities and Colleges and State-Run TechnicalVocational Institutions, Strengthening the Unified Student Financial Assistance System for Tertiary Education”. According to Alvarez, “taking heed of the timeless lesson that education is key for a nation to prosper and progress, higher education provided by our state universities and colleges will now be more affordable for all. This bill has been ratified. All that it requires is the signature of the President”. To be concluded version of the bill, indicating the panel is not likely submit one when Congress reconvenes on July 24. “We are targeting September to come out with a committee report,” the senator said on the Malacañang-certified tax measure for plenary consideration. This developed as Sen. Sher win T. Gatchalian, who chairs the Senate Committee on Economic Affairs, voiced concerns over the potential backlash of upward tax adjustments under the Executive’s tax proposal endorsed for congressional approval. “The excise tax on fuel could trigger spike in basic commodities,” Gatchalian said in a separate interview with the BusinessMirror. Even as the oil tax adjustment is seen to drive up prices of basic goods, the senator suggested the government must make sure it takes other steps to mitigate its impact. Gatchalian said finance officials should also review proposed adjustments in personal income-tax rates affecting 9 million individual taxpayers. “ The Comprehensive Tax-Reform Program needs to be studied carefully,” he added. accelerate this year to 4 percent, up 0.4 percentage point from its January forecast. But it cautioned that “additional erosion of the multilateral rules-based system that has been built since the mid-1940s could put downward pressure on economic integration, and ultimately, on growth and job creation.” T he World Bank d idn’t inc lude proposals by the administration of President Donald J. Trump to cut taxes and boost infrastructure spending, noting the administration hasn’t provided enough details and the time frame is unclear.
Tax overhaul
Plans to slash corporate- and personal income-tax rates could boost shortterm growth, but may also substantially increase the nation’s fiscal deficit, the lender said. While the unemployment rate is close to its long-run equilibrium, the Federal Reserve is expected to raise interest rates more gradually than in past tightening cycles, it said. The development lender raised its forecast for growth in the Euro area to 1.7 percent this year, up 0.2 percentage point from previously, as loose monetary policy supports domestic demand and strengthening global trade and investment lifts manufacturing. The bank also boosted its outlook for Japan to 1.5 percent, up 0.6 percentage point from its forecast six months ago, as stronger external demand boosts exports and the economy benefits from accommodative monetary and fiscal policy. The bank left its forecast for growth this year in China unchanged at 6.5 percent. Bloomberg News
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What drives bad behavior? Continued from A1
training modules on needs and suitability so that their employees are better able to offer products based on what the client actually wants and even on the client’s level of financial sophistication. Other firms are working on improving their post-sale customer surveys/analytics, and complaints and escalation procedures, and tightening their rules on how to treat customers to ensure that consumers are protected and that employees always act in the customer’s best interest.
Build ‘balanced scorecards’ for human resource decisions
During the hiring process, consider an individual’s ethical, compliance and regulatory history in addition to the other factors that play into a candidate’s suitability. Some firms are building structures to encourage positive conduct, such as linking performance objectives to ethical codes and incorporating nonfinancial objectives—e.g., customer satisfaction— into performance assessments. On the regulatory side, the Monetary Authority of Singapore is adding an ethics and skills component to the professional examination for financial advisors to underscore the importance of understanding ethical principles even in the absence of explicit rules.
Ensure that individuals and leadership are responsible and accountable for conduct
Make sure that the individual business units in your organization—your first line of defense— own the risks in their respective business lines and are capable of assessing and managing those risks before they can affect the rest of the organization. Creating a robust incident management program and a strong antiretaliation policy, or in other words, a “speak up” culture, will empower employees to report concerns about unethical conduct and will demonstrate your commitment to the highest ethical standards.
Be proactive in identifying and managing conflicts of interest
In 2018 a revised version of the Markets in Financial Instruments Directive (MiFID II) — the European Union legislation that regulates firms providing services linked to financial instruments—will be released with this additional requirement: that “all appropriate steps be taken to identify and to prevent or manage conflicts of interest”. The MiFID II was crafted specifically to strengthen investor protection. For firms, leaders may want to consider conducting an enterprise-wide review of where conflicts may occur and designing controls to manage those conflicts, such as physically segregating teams or ensuring supervisory oversight of conflicts.
Create a cohesive organization with a conduct-aligned business model
The isolation or remoteness of business units or branches must no longer be accepted as an excuse for instances of misconduct. When developing a governance, conduct and risk management framework, business leaders should ensure that this is applied throughout the entire organization and that there are direct lines to the executive. In Japan the Financial Services Agency (FSA), the government body that regulates banks, has adopted a more holistic approach to its mandate: Instead of addressing individual instances of misconduct, it now looks at the total picture of the organization in an effort to find—and address— underlying root causes of the unethical behavior.
Automate and streamline processes and procedures
In an effort to address the tediousness of compliance processes, some firms are simplifying, rationalizing and optimizing them to come up with fewer, but better, rules. Other firms are using technology to automate manual routine tasks and ease the burden on employees.
Strengthen and modernize monitoring and surveillance capabilities
This is another area where technology is playing an increasingly important role: Some firms are using sophisticated technology and analytics to create systems that can predict and prevent misconduct. In many key jurisdictions, regulatory bodies have ramped up the requirement for firms to record, monitor and report transactions.
Define and embed a clear unified culture
Perhaps the most important action leaders can take in the effort to curb misconduct is to improve the firm’s culture. Management should be consistent in upholding the highest ethical standards and should craft a purpose statement that includes support for customers and the broader society. Ultimately, the most robust and wellmeaning structures, policies and processes will fail if, at its core, an organization is not driven to do what is right.
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The Nation BusinessMirror
Congress’s ‘Magnificent 7’ asks SC to junk martial law in Mindanao By Joel R. San Juan @jrsanjuan1573
and Jovee Marie N. dela Cruz @joveemarie
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HE “Magnificent 7” at the House of Representatives on Monday challenged before the Supreme Court the constitutionality of President Duterte’s Proclamation 216 imposing martial law and suspending the privilege of the writ of habeas corpus in the whole of Mindanao. In the petition, which was docketed as GR 231658, Liberal Party Reps. Edcel C. Lagman of Albay, Teddy Baguilat Jr. of Ifugao, Edgar R. Erice of Caloocan City and Emmanuel A. Billiones of Capiz and Party-list Reps. Tom S. Villarin of Akbayan and Gary C. Alejano of Magdalo assailed Proclamation 216 as “bereft of sufficient factual basis” and prayed that it be nullified. The seventh member of the Magnificent 7, Liberal Party Rep. Raul A. Daza of Northern Samar, said he has not read the petition but is willing to sign it once he has read it. Section 18 of Article VII of the Constitution empowers the President to declare martial law and suspend the writ of habeas corpus only “in case of invasion or rebellion, when public safety requires it”. It, however, grants special jurisdiction to the Supreme Court to review the “sufficiency of the factual basis” of such declaration or suspension. Earlier, the House of Representatives adopted the House Resolution (HR) 1050 supporting President Duterte’s declaration of martial law in Mindanao. Under HR 1050, there is no compelling reason to revoke martial law in Mindanao. The petitioners said the imposition of martial law and the suspension of the writ of habeas corpus is flawed because admittedly Duterte acted alone, without any recommendation from or consultation with the ranking defense and military authorities, some of whom formed part of his official entourage in Russia. The lawmakers said the absence of recommendation and consultation was admitted and confirmed by Defense Secretary Delfin N. Lorenzana when he briefed members of the Senate and the House of Representatives. Meanwhile, the petitioners contended that there is no sufficient factual anchorage for Proclamation 216 because there is no revolution or invasion where the public safety requires the declaration of martial law and the suspension of the privilege of the writ of habeas corpus in Marawi City or elsewhere in Mindanao. Also, they said there were conclusions of fact and law on the “pretended existence of rebellion and/ or invasion will not serve as sufficient basis since errant conclusions
have no legal pedigree”. “No less than the military establishment has admitted that the current armed conflict in Marawi City was government initiated and the armed confrontation was precipitated by the military operation to neutralize or capture Isnilon Hapilon, a highprofile terrorist commander, which was resisted by the Maute Group of terrorists,” the group added. They said the alleged “siege” of Marawi City was actually an armed resistance by the Maute Group to shield Hapilon from capture, not to overrun Marawi and remove its allegiance from the Republic. “The proffered rebellion and/or invasion is at most a threat akin to ‘imminent danger’, which has been obliterated from the 1987 Constitution as an alternative ground for the declaration of martial law and the suspension of the privilege of the writ of habeas corpus,” it said. According to the lower chamber’s minority group, the alleged facts contained in Proclamation 216 and the President’s Report justifying the imposition of martial law and the suspension of the privilege of the writ of habeas corpus turned out to be mostly inaccurate, simulated, false and/or hyperbolic, and the list of terrorist acts or incidents of violence are either distant or have been earlier solved with the apprehension and prosecution of the suspected culprits. Moreover, the petitioners said the fatal inaccuracies and falsities in the proclamation and the President’s Report to Congress included the following: Contrary to the President’s Report, the Amai Pakpak Medical Center (APMC) was not overrun by the Maute Group according to Amer Saber, APMC medical director, and the medical facility remains operational; The Land Bank of the Philippines said its branch in Marawi City was not ransacked by the bandits, contradicting the President’s Report; The Senator Ninoy Aquino College Foundation was intact as of May 24, 2017, and Marawi City Schools Division Assistant Superintendent Ana Alonto said the Marawi Central Elementary Pilot School was not burned by the bandits, thus belying the President’s Report; The police chief of Malabang in Lanao del Sur, Senior Insp. Romeo Enriquez, is alive and was not beheaded by the bandits, contrary to the claim of Duterte upon his arrival from Russia on May 24, 2017; and Contradicting Lorenzana’s news briefing in Moscow on May 23, 2017, the Armed Forces denied that the Marawi City Hall was occupied and Mindanao State University (MSU) Vice President for Academic Affairs Alma Berowa assured that MSU has not been occupied.
High-school students, youth groups hold DepEd campout vs tuition hikes By Marvyn N. Benaning Correspondent
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IGH-school students and youth organizations, led by Anakbayan, Kabataan Party-list group and League of Filipino Students, have mounted a campout at the Department of Education (DepEd) office in Pasig City to protest tuition increases. The protesters said the approval of increases of tuition and other school fees in 1,013 elementary and high schools nationwide is unconscionable and adds more burdens to parents already reeling from additional expenses for children enrolled in the K to 12 senior high-school (SHS) scheme. “Continuing the burdensome K to 12 and approving tuition hikes in 1,013 schools is antipoor economics that further commercializes education. This means more hardships for students and their families amid perennially low wages and rising cost
of basic goods and services,” Anakbayan National Chairman Vencer Crisostomo said. Anakbayan hit the way K to 12 Program has facilitated the entry of big businessmen in the private sector who profit from state subsidies through the voucher system from the implementation of the SHS program. Anakbayan said the K to 12 Program has only benefited foreign companies and big businessmen “that now exploit young high-school graduates as immediately exportable cheap laborers”, explaining the increase in the supply of young workers brought about by measures like the K to 12 further pushes wage levels down. Crisostomo added the continuation of the policy of deregulation of education by President Duterte allows the continued collection of fees, which has already soared to a range of P60,000 to P80,000, from P30,000 to P60,000 a year in 2010, thus jacking up profits of school.
Editor: Dionisio L. Pelayo • Tuesday, June 6, 2017 A3
House panels to probe RWM carnage By Jovee Marie N. dela Cruz
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@joveemarie
WO committees of the House of Representatives will jointly investigate on Wednesday the recent Resorts World Manila (RWM) incident, which killed 38 people, including alleged gunman Jessie Javier Carlos and injured scores of other casino and hotel guests. PDP-Laban Rep. Winston Castelo of Quezon City, chairman of the House Committee on Metro Manila Development, said the House Committees on Games and Amusement and on Public Order and Safety will conduct a joint investigation on the incident at the Conference Hall of the Ninoy Aquino International A ir port Terminal 3. “We will determine the lapses in security of the officers manning the hotel and alleged failure of hotel smoke detectors and sprinkler systems to function and locked fire exits that contributed to the fatality count,” Castelo said. PDP-Laban Rep. Gus S. Tambunting of Parañaque, chairman of the House Committee on Games and Amusement, said, “We will investigate. It’s mindboggling how a man can bring in a long firearm and gasoline just like that. The public deserves to
End near for Maute bandits –military
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HE remaining Maute Group bandits, holed out in Marawi City, are now on the end on the rope and are on the verge of being defeated by the military. This was stressed by Armed Forces Spokesman Brig. Gen. Restituto Padilla, who noted that the surviving lawless elements are now fragmented and seeking refuge in four areas in the city. In those sanctuaries, the bandits are hard pressed to find food, water and ammunition as their movements are closely monitored by military units. Padilla said the government forces are deployed to ensure that the bandits will not be able to make up any desperate moves, like the taking of hostages and other atrocities. With this development, Padilla is urging the surviving Maute Group members to surrender “so that they can live and be reunited with their families”. As of press time, the Maute Group’s dead are placed at 120, government security forces at 38 and 20 civilians executed in the more than two weeks of fighting, which started on May 23. Recovered enemy firearms are placed at 98 and rescued civilians at 1,271. President Duterte, meanwhile, assured the military could eliminate the bandits. In a speech during his visit to the Mactan-Benito Ebuen Air Base in Cebu last Sunday, Duterte reiterated that he would not negotiate with the Maute Group, as he ordered the troops to further intensify their offensive. “I will not negotiate. Wala akong pakialam kung anong gawain ninyo ngayon diyan. You do it because pag-abot ng panahon kung nakakaintindi kayo ng Bisaya, I will not spare your life,” he added. PNA
know what really happened.” Among the fatalities in the said incident are the wife of PDPLaban Rep. Aurelio D. Gonzales Jr. of Pampanga, Elizabeth Panlilio Mendoza; and Cliff Reynera, a consultant to PDP-Laban Rep. Federico Sandoval II of Malabon City.
Suspend
AT the same time, Part y-list Rep. Jose L. Atienza Jr. of Buhay, a senior deputy minority leader, u rged t he Ph i l ippi ne Amusement and Gaming Cor p. (Pagcor) to immediately suspend the permit to operate of Resorts World Manila. Atienza said the gaming company has failed to ensure the saftety of its customers, as well as its employees. “Pagcor should immediately suspend Resorts World Manila’s permit to operate,” Atienza said.
According to Atienza, the local government of Pasay should also suspend the operation of the entire facility until authorities have complete the results of the investigation. “[We need to know] whether the emergency fire sprinklers worked and activated when the fire broke out. Hindi puwedeng walang managot sa nangyaring ito,” Atienza said. He said if it is true that this was indeed the act of a lone gunman and not a terrorist attack, then there was failure on the part of management to secure the lives of its guests entering the premises. “[They need to answer] first is how come not all the emergency water sprinklers were working when the fires broke out? These should automatically switch on in the event of a fire. Secondly, how could a heavily armed man have entered the premises, pointing his gun at everyone? How could he have entered the gate that had seemingly very strict security measures employed for civilians entering the casino?” Atienza asked. For his part, Speaker Pantaleon D. Alvarez insisted that the incident was “an act of terrorism”. “Anybody [who] with premeditation harms and kills people indiscriminately is a terrorist. Whether or not the perpetrator is a member of a known terrorist organization or a lone wolf acting independently, he is a terrorist. This is happening all over the world,” he said.
“Our authorities should not lull our people into complacency by dismissing the incident as a common criminal act. Neither should they relax just because they refuse to label the incident as such,” he added.
Anybody, [who] with premeditation harms and kills people indiscriminately is a terrorist. Whether or not the perpetrator is a member of a known terrorist organization or a lone wolf acting independently, he is a terrorist. This is happening all over the world.” —Alvarez
Economy
A4 Tuesday, June 6, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon
BusinessMirror
Lawmakers renew call to scrap CCT
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By Marvyn N. Benaning | Correspondent
CT Teachers lawmakers have found no reason to pursue the Conditional Cash Transfer (CCT) Program since it did not cut the poverty rate and did not reduce the dropout rate among children who benefited from the multibillionpeso scheme.
Party-list Reps. Antonio L. Tinio and France L. Castro of ACT Teachers said that the CCT Program has failed to deliver on its promise to improve enrollment and completion rates among children of beneficiaryfamilies in elementary and secondary schools. “We have observed little improvement, even decreases in the enrollment and completion rates from 2011 to 2015. This, despite the hefty increases in the budget for CCT,” Castro said. Citing data from the Department of Education (DepEd), the ACT Teachers lawmakers said that participation or net-enrollment rate (NER) for public and private schools went down by 6.05 percentage points, from 97.10 percent (14.44 million out of 14.87
₧62.7B The total budget allotted for CCT, also known as 4Ps, last year, from P21.2 billion in 2011 and P62.3 billion in 2015
million elementary school-age children) in 2011 to 91.05 percent (14.35 million out of 15.76 million) in 2015. Elementary school-age children not enrolled in Grades 1 to 6 more than tripled from around 431,000 in 2011 to 1.41 million in 2015. Though high-school NER increased from 64.2 percent (7.05
million out of 10.98 million high school-age youth) to 68.15 percent (7.35 million out of 10.79 million), the number of high-school-age youth not enrolled in first to fourth year remain high at 3.44 million in 2015. Moreover, CCT, also known as Pantawid Pamilyang Pilipino Program (4Ps), did little to improve the high-school completion rate (CR). While elementary school CR rose from 71.01 percent (10.25 million) to 84.02 percent (12.05 million), fewer youths finished high school, with the CR declining from 74.4 percent (5.25 million, or 1.8 million dropouts) in 2011 to 74.03 percent (5.44 million, or 1.9 million dropouts) in 2015. The wide gaps between the enrollment figures for elementary and those for high school also indicate that a significant number of those in elementary school do not go on to enroll and finish high school, the two legislators argued. Under 4Ps, a grant of P300 per child every month is given for 10 months, or a total of P3,000 every year, with a maximum of three children per household. Children-beneficiaries aged 3 to 18 must enroll in school, and attend classes at least 85 percent of class days every month. The Aquino administration expanded the 4Ps, increasing nearly three times its budget from P21.2 billion in 2011, P62.3 billion in 2015
to P62.7 billion last year. For this year, 4Ps has an appropriation of P78.19 billion. “ The government has been throwing more and more of the people’s money into the 4Ps, on the promise that it will, among others, afford children from poor families the chance to go to school and finish education. But, from government’s own data, we do not see this promise being fulfilled,” Castro said. “Instead of continuing the implementation of a failed program, the government should directly fund basic social services, like education, health and housing, that would directly help the poor and marginalized. Direct investments in public education, for instance, will enable more Filipino youth to avail themselves of complete free education,” Tinio argued. “Stop wasting the people’s money in safety nets that have been proven to be ineffective.” “The little to no improvement in enrollment and completion rates in elementary and secondary schools reflects on the capacity of the government to provide universal access to basic education. There are still a lot of shortages in public-school education that have to be addressed, like the lack of public high schools, especially in rural areas, the low salaries that teachers and school-staff receive, and lack in facilities, especially in the proper implementation of the K to 12,” Tinio said.
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DOE creates interagency group to rehab Marawi power facilities
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HE Department of Energy (DOE) on Monday announced the creation of an interagency group to come up with options on rehabilitating Marawi City’s energy facilities. Aside from the DOE, other members of the group include the National Power Corp., Power Sector Assets and Liabilities Management Cor p., Nationa l Electrification Administration and the Lanao del Sur Electric Cooperative (Lasureco). The Interagency Task Force on Securing Energy Facilities (IATSEF), meanwhile, reported that the power situation in Lanao del Sur province has yet to fully normalize, as 15 municipalities are still without power and only 20 percent of Marawi City is energized. The second district with 16 municipalities is fully energized according to the task force based on the report by Lasureco on the current power supply in its franchise area as of 9 a.m. on June 5. Power supply in the three towns of Lanao del Norte remains normal. With regard to power generation, the National Power Corp. Mi nd a nao Generat ion (NPCMinGen) reported that the AgusPulangi power plants are operating normally, with Marawi Lake elevation at 701.292 meters above sea level and Lake Lanao discharge at 160 cubic centimeters per second (cms).
20% The portion of Marawi City that has been energized amid the Maute Groupinstigated violence, even as a total of 15 municipalities in the entire Lanao del Sur province remain without power supply, according to the IATSEF
The National Grid Corp. of the Philippines also reported normal operations in its transmission facilities. Mindanao State University, which is directly connected to the transmission lines, has been energized as of 12:34 p.m. last Saturday. Meanwhile, the IATSEF has expanded its membership to include the Department of Finance, Philippine Information Agency and the Philippine Electricity Market Corp. The task of the group is to secure all energy facilities in the entire country. The expanded membership of the IATSEF and the policies on resiliency are embodied in a draft department circular that will be scheduled for public consultation. Lenie Lectura
Akamai reports 20% growth in mobile Internet-connection speed in Q1 2017
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he Philippines has consistently improved its average mobile Internet-connection speeds and steadily gained on the adoption of broadband Internet in the country, according to Akamai, a leading content delivery network services provider for media and software delivery and cloud security solution. Akamai also said the Philippines posted a 20-percent growth in average connection speeds for the first quarter of 2017, together with Thailand and China. The country’s average connection speed for first quarter of the year, Akamai report said, was at 5.5 megabits per second (Mbps)—a 20-percent increase quarter-on-quarter-QOQ) and 57 percent yearon-year (YOY), a consistent improvement in the average mobileconnection speed. For the past three quarters of 2016, the Akamai State of the Internet Report showed a consistent improvement in the Philippines’s average mobile-connection speed. In the second quarter of 2016, the country’s average mobileconnection speed was pegged at 8.5 Mbps. In the third quarter of the same year, Akamai reported that the country’s average mobileconnection speed increased to 13.9 Mbps. Akamai then reported that the Philippines mobile-Internet speed clocked at 14.3 Mbps in the fourth quarter of 2016. The National Telecommunications Commission (NTC) has earlier stated that the improvement in mobile-Internet speed was due to the ongoing deployment of Long-Term Evolution (LTE) cell sites throughout the country by Globe and Smart through the 700 megahertz (MHz) frequency spectrum, which were acquired from the telco assets of San Miguel Corp. last year. Akamai has also cited improvements on the broadband adoption in the country. On the Above 4 Mbps Broadband Adoption category, the Philippines’s adoption rate is now at 39 percent, representing a growth rate for the country of 26 percent QOQ and 111 percent YOY. On the Above 10 Mbps Broadband Adoption category, the Philippines’s adoption rate is now at 11 percent, representing a growth rate for the country of 53 percent QOQ and 330 percent YOY. On the Above 15 Mbps Broadband Adoption category, the Philippines’s adoption is now at 6.2 percent adoption, representing a growth rate for the country 72 percent QOQ and 509 percent YOY. Akamai believes the implementation of the national broadband program would help further improve the delivery of Internet services in the country. “Although the Philippines has the lowest ranking among AsiaPacific countries/regions for this metric, as well as some of the broadband adoption metrics, first-quarter announcements suggest it may see improvements to its infrastructure in coming years, as Philippine President Duterte approved a plan to deploy a national broadband network at an estimated cost of $1.5 billion to $4.0 billion. The network will be used to host a national portal and other online government services, as well as to connect remote areas of the country that are underserved by existing broadband providers. Deployment could begin as early as June, with a three- to five-year timeline for completion.” PNA
Sky Dancers A group of workers perform maintenance work on a billboard steel-frame structure along Edsa in Quezon City in preparation for the rainy season ahead. The outdoor advertising industry remains vibrant, especially in key cities across the country. Nonoy Lacza
DFCAMC-Las Piñas grad places No. 3 in CPA board exam
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as Piñas City Mayor Imelda T. Aguilar feted the graduate of Dr. Filemon C. Aguilar Memorial College of Las Pinas (DFCAMC-LP)—the city-funded college—who placed No. 3 among the topnotchers in the May 2017 Certified Public Accountant (CPA) board passers. Aguilar said Jason Granado Bugatan, a BS Accountancy graduate of DFCAMC-LP is another pride of Las Piñas, obtaining 92.17-percent rating. “We are honored by the performance of Jason Bugatan, who, like the rest of our scholars, are assured of our
commitment to provide free and quality public-college education through our Tuluy-Tuloy na Serbisyo program,” Aguilar said. Bugatan is among the 13 new CPAs from DFCAMC-LP who took the board exams on May 14. He is thankful to DFCAMC-LP for his college education and for subsidizing part of his review school expenses. Bugatan originally wanted to study engineering, but his parents could not send him to an engineering school due to financial difficulties. He is second to the youngest among seven siblings. His father work as a construction worker,
while his mother is a security guard. Their family’s financial difficulties did not deter him to pursue a college degree. DFCAMC-LP became his passport to fulfill his dream of obtaining a college education. Edgardo Parungao, acting president of DFCAMC-LP, said the performance of their accountancy graduates in the board examinations is the result of the local government’s full support to education of Las Piñas youths. He added that Bugatan is an inspiration to the rest of the city scholars who endeavor to be among the topnotchers.
The DFCAMC-LP is one of the top performing schools among city-funded colleges, and Bugatan has the highest rating among the board passers in Metro Manila and Luzon-based schools of accountancy. In the previous CPA board exams, DFCAMC-LP produced graduates that placed No.7 and No. 10, among the board passers. The DFCAMC-LP offers free quality college education for those who would like to pursue accountancy and business courses. It also provides assistance to its graduates who wish to enrol in review schools before taking the board exams.
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Cambodia opposition claims strong showing in Sunday’s local polls
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HNOM PENH, Cambodia— C a m b o d i a ’s o p p o s i t i o n claimed a strong showing in local elections last Sunday that could shake Prime Minister Hun Sen’s longtime grip on power. Hun Sen has repeatedly warned of civil war if his Cambodian People’s Party loses the majority in city and village councils to the main opposition party, which had made major gains in the general election four years ago, when it claimed it was cheated out of outright victory. Sunday’s polls could have a major impact on Cambodia’s political landscape ahead of the 2018 general election. Opposition party Spokesman Yim Sovann said his Cambodia National Rescue Party won about 500 communes out of the country’s 1,646. He said his party received 46 percent of the vote, up from 30 percent in the last local elections in 2012, while the ruling party got 51 percent, down from 62 percent in 2012. “This is a huge victory for the Cambodia National Rescue Party,” Yim Sovann said at a news conference. Official results will be announced on June 25. The spokesman for the ruling party could not be reached for comment. Hun Sen’s government has been accused of using violence against opponents, but in recent years has stalked its foes mostly in courts. Last Friday Hun Sen appealed to political parties to accept the
election outcome rather than make accusations of irregularities, saying courts can dissolve any party if it challenges the result of the vote. Hun Sen and some of his top ministers have frequently used strong rhetoric leading up to the vote, warning of dire consequences should the opposition win, in what has been seen as an attempt to intimidate voters into supporting him. Cambodia’s ruling party could take some credit for bringing modest economic growth and stability to a country devastated by the communist Khmer Rouge’s regime in the 1970s. Hun Sen left the Khmer Rouge, which was responsible for the deaths of some 1.7 million people from starvation, disease and executions, before it was toppled in 1979. This past week Amnesty International accused Cambodia’s government of using its grip on the judiciary system to intimidate human-rights defenders and political activists. It said in a report that since the 2013 general election, Hun Sen’s government has used the courts as a tool to imprison at least 27 prominent opposition officials, human rights defenders and land activists, as well as hundreds of others facing legal cases. Earlier this month, the State Department said the US was urging Cambodia’s government to “guarantee a political space free from threats or intimidation” and respect freedom of expression for all its citizens. AP
Human FX traders are becoming a rare breed–except in Asia
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sia is set to become one of the last places on Earth where you can encounter an increasingly endangered species—human currency traders. By 2025, foreign-exchange dealing in G-10 currencies— which account for the overwhelming majority of the $5.1-trilliona-day market—will become fully electronic, predicts David Mercer, CEO of LMAX Exchange, an electronic trading platform. Already in 2015, about 76 percent of global currency trading was done electronically by the biggest and most active investors, according to consulting firm Greenwich Associates. Demand for greater transparency in pricing and fees has helped accelerate the shift, along with banks’ efforts to cut staff and lower costs more broadly since the global financial crisis. In Asia, however, thinner volumes mean there’s less scale to be gained. Idiosyncratic markets also have an impact: when it comes to relatively illiquid currencies like the Vietnamese dong and Indonesian rupiah, for example, investors may prefer checking in with a human trader. “Speed is not so important in Asia,” Mercer said. “Price discovery is not so easy because most of the dealing still happens in London, Chicago and New York.” Humans have been on the retreat in financial markets for some time—the open-outcry commodity pits showcased in the Eddie Murphy film “Trading Places” have almost disappeared, for example—and equity markets too are now predominantly electronic. But people have kept their role in the foreign-exchange market longer because most trading has taken place away from exchanges.
Managing relationships
IN Asia a penchant by policy makers to influence, if not control, their exchange rates makes it tougher to see a switch-over to electronic trading. Thailand’s
central bank will hold a briefing on Monday to announce foreignexchange regulation reforms. Local restrictions mean investors often use offshore markets for nondeliverable forwards (NDF) to hedge against losses or speculate on declines in currencies. Due to their complexity, NDFs are typically handled by phone between human traders. That didn’t stop NEX Markets from setting up an electronic market, but its platform took a blow when it came to the ringgit. Since Malaysian regulators in November took steps to deter foreign banks from trading offshore ringgit NDFs, trading on the platform for that instrument tumbled 70 percent, said Jeff Ward, head of Asia and emerging markets. “Political headwinds will mean that it has a natural slower rate of uptake than maybe it would do otherwise,” Andrew Bresler, director for global sales trading at Saxo Capital Markets in Singapore, said of electronic trading. “Liquidity providers don’t want to go and upset the central banks.” Asia’s not alone in lagging behind US and European markets in electronic trading—Latin America continues to be dominated by the telephone, according to Ward at NEX Markets. That region is “like Asia eight years ago for us”, he said. “Relationship trading will remain important” in many areas, said Javier Paz, a senior analyst in Boston at the consulting firm Aite Group. But the inevitable march of the machines is being propelled by banks continuing to cut costs as regulatory changes compress their margins—the 12 largest global banks slashed front-office staff, including sales and trading, by about 25 percent in G-10 currency markets from 2012 to 2016, according to Coalition Development Ltd. Ultimately, “increases in trading volume and electronification will have a positive effect on liquidity,” Paz said. Bloomberg News
Editor: Max V. de Leon • Tuesday, June 6, 2017 A5
Asian leaders push aside Trump doubts to combat terror threat
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THE police stand outside Kampung Melayu bus terminal in Jakarta, Indonesia, on May 24. AFP via Getty Images/Bloomberg
S global defense chiefs debated what “America First” and China’s rise meant for Asia’s future, regional officials focused on a more immediate concern: terrorism.
Southeast Asian defense officials who attended Asia’s most high-profile security conference in Singapore this weekend repeatedly urged cooperation to counter what they said was the growing threat of Islamic extremism in the region. They said the risk was growing that Islamic State (IS) fighters might gravitate toward predominantly Muslim countries, such as Indonesia and Malaysia, and Muslim areas in the southern Philippines, as they lose ground in the Middle East. “To me, the most immediate challenge in my mind is meeting headon the threat of Daesh,” Malaysian Defense Minister Hishammuddin Hussein said, using an alternative name for the IS. “Real military gains have been made against Daesh in the last couple of months. This, however, gives rise to the disturbing prospect that the Asia Pacific is
now in Daesh’s crosshairs.” Hishammuddin ranked the threat above North Korea’s nuclear weapons program and territorial disputes in the South China Sea— great-power debates that dominated speeches by Australian Prime Minister Malcolm Turnbull and US Defense Secretary James Mattis at the Shangri-La Dialogue. The annual gathering has often been preoccupied with questions about strategic competition between a rising China and the US, where the election of President Donald J. Trump has fueled doubts about its post-World War II commitment to the region. The final day of the conference was overshadowed by the latest terror attack in London, which killed seven people. Concerns about Islamic extremism have long simmered in Southeast Asia, which is home to about 15 percent of the world’s 1.57
billion Muslims. In the last month the Indonesia capital Jakarta was struck by twin suicide bombings that killed three police officers, and Philippine President Rodrigo Duterte declared martial law to fight IS-linked militants in the country’s restive south.
Regional cooperation
Hishammuddin and Indonesia’s Defense Minister Ryamizard Ryacudu were expected to travel to Manila this week to discuss ways to improve regional cooperation against violent extremism. The three countries are expected to begin their first joint antipiracy patrols in the Sulu Sea on June 19, a water body that sits between them and has become a popular access point for terror groups. Ryamizard described the patrols as a platform for greater security collaboration in the region, inviting Singapore, Thailand and other Southeast Asian nations to join. “No single country can deal with and resolve security threats independently,” he said. The nascent framework fit with Turnbull’s advice during his keynote address last Friday that smaller nations couldn’t rely on great powers
and needed to band together against common threats. The 10 states of the Asean have been divided over how much sway to give the two big powers jockeying for influence, China and the US. “Coordinating to fight terrorism is an easy thing, where everyone can agree on who the bad guy is,” said Euan Graham, director of the international security program at the Lowy Institute for International Policy in Sydney. “By the same token, it doesn’t negate sources of strategic tension or suspicion.” Asean has been vexed over how to handle China’s claims to more than 80 percent of the South China Sea, which overlap those of five other nations. China has used patrols by its growing naval and coastguard fleets to establish sovereignty over the region’s disputed territory. Such questions surfaced during one public to-and-fro last Sunday when Colonel Lin Liu, an associate research fellow with China’s Academy of Military Science, asked defense officials from Indonesia and the Philippines what her country could do to help. Philippine Undersecretary for Defense Ricardo David said any additional participation would have to be discussed by the trilateral patrol group. Mattis, during his own remarks, highlighted US efforts to provide assistance to Malaysia and Indonesia to improve information sharing and maritime domain awareness and to train Philippine counter terrorism forces fighting in the south. Several Southeast Asian defense officials warned of active groups of extremists within their borders. David said 250 to 400 foreign fighters were believed to be operating in the Philippines, while Hishammuddin said at least six people suspected of ties to Islamic State had been arrested in Malaysia in the past week. Singaporean Defense Minister Ng Eng Hen said at least 31 regional groups have pledged allegiance to the IS and there was evidence of growing transnational cooperation between them. “Porous borders and dense jungles provide easy access and safe havens for terrorism training camps,” Ng told the conference. “If these groups further entrench themselves in our region, more attacks will occur.” Bloomberg News
Bond buyers now say adieu to Indonesia upgrade
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ndonesia’s ascension to investment grade at the big three ratings companies has spurred optimism for more inflows to the nation’s bonds. But beyond the hoopla, the risk-reward equation is worsening. BlackRock Inc., the world’s largest money manager, has moved to an underweight position on Indonesian US-currency debt, although it remains bullish on the country as a whole. Deutsche Bank Wealth Management recommended it’s time to take profits on the dollar bonds. To some extent, the notes have become a victim of their own popularity. In the local-currency market, some $6.7 billion of inflows this year combined with accelerating inflation have pushed real yields to the lowest since late 2015. Meanwhile, the yield premium that Indonesian dollar debt offers over Treasuries is near the smallest since before 2013’s taper tantrum. “The sovereign credit is trading tight as market consensus moved closer to the rating upgrade,” said Neeraj Seth, the head of Asian credit at BlackRock in Singapore. There’s “limited scope for further outperformance” of dollar sovereign and quasi-sovereign notes, he said. On the political front, President Joko Widodo is facing a reenergized opposition after his ally was defeated
Cars and motorcycles sit in congested traffic while driving past commercial buildings in the business district in Jakarta. Dimas Ardian/Bloomberg in the Jakarta governor’s election. The government also said tax revenue is under pressure even after an amnesty that was supposed to broaden the base. Markets got too optimistic about the longevity of the tax reforms and the president’s political capital has been diminished a bit of late, according to Mizuho Bank Ltd. “A lot of front-running was done in terms of those expectations, the upgrade expectations, the reform expectations, and so valuations are beginning to look rather rich,” said Vishnu Varathan, head of economics and strategy at the
Japanese lender in Singapore, referring to the local-currency debt.“We’re beginning to sense the risk-reward has turned and become far less compelling than it was, say, two years ago.” S&P Global Ratings upgraded Indonesia’s credit rating to investment grade on May 19, more than five years after Moody’s Investors Service and Fitch Ratings raised it from junk. The country’s domestic bonds now have an identical rating to India, the other Asian high-yielder, where the real yield on the 10-year notes is around a percentage point higher.
Indonesian inflation accelerated to 4.33 percent in May, data showed on Friday, compared with 3.02 percent at the end of 2016. By contrast, India’s consumer price index fell to 2.99 percent in April, the least in figures going back to the start of 2012. The yield on Indonesia’s one-year rupiah notes rose three basis points to 6.26 percent last Friday and that on the five- and 10-year tenors climbed one basis point each. In the dollar debt market, the yield premium for Indonesian bonds has dropped to 193 from 290 a year ago, according to a JPMorgan Chase & Co. index. Kyle DeDionisio, investment director for fixed income at Fidelity International in Singapore, is also wary of the dollar bonds. Valuations are “particularly stretched”, he said, adding that local-currency notes look more attractive, but the firm is neutral on them at the moment. “Inflation is fairly stable but has a higher risk of running higher from here than lower.” Indonesia is still a “good carry” market from a fixed-income perspective and there will be an additional $3 billion to $5 billion of inflows over the next six to 12 months, Goldman Sachs Group Inc. said in a May 30 note. Around $1 billion has flowed into the rupiah sovereign notes since May 19. Bloomberg News
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Tuesday, June 6, 2017
The World BusinessMirror
Wasted green power tests China’s energy leadership B
EIJING—China’s scramble to curb pollution has made it the world leader in renewable-energy (RE) development, yet increasing amounts of that green electricity have gone unused as the country struggles to integrate wind and solar power into an outdated and balkanized electricity network dominated by coal. The problem threatens to slow China’s progress in clearing its air and controlling the greenhousegas emissions that make it the top contributor to climate change. It also runs counter to a desire by Chinese leaders to fill the leadership gap left by President Donald J. Trump’s move to withdraw the US from the Paris climate accord. As international energy ministers gather in Beijing this week to promote renewables, China’s difficulty maximizing its green resources underscores uncertainty over how best to transition to cleaner electricity. “They installed too much too fast,” said Qiao Liming, China director for the Global Wind Energy Council. “A real market should allow electricity to flow between two provinces. That is currently lacking” in China, she said. Thousands of new wind turbines and solar panels were installed in China’s remote provinces over the past several years as the country’s leaders sought to alleviate choking urban smog without slowing economic expansion. China now has more renewable-power capacity than any other nation. Two nagging problems have dampened that success, however,
48%
The percentage of energy from wind that went unused in western China’s Gansu province in 2016
according to industry representatives and outside observers: China’s sprawling power grid has been unable to handle the influx of new electricity from wind and solar, while some provincial officials have retained a preference for coal. In western China’s Gansu province, 43 percent of energy from wind went unused in 2016, a phenomenon known in the energy industry as “curtailment”. In the neighboring Xinjiang region, the curtailment figure was 38 percent and in northeast China’s Jilin province it was 30 percent. The nationwide figure, 17 percent, was described by Qiao’s organization as “shockingly high” after increasing for several years
Solar panels are seen near the power grid in northwestern China’s Ningxia Hui autonomous region. AP/Ng Han Guan
in a row. The problem has shown some signs of improvement this year, according to the China Electricity Council. Power demand in general increased in the first quarter, giving a boost to renewables after the economy regained momentum from 2016’s slowdown. However, experts say wasted energy will continue to be a drag on Chinese renewable-power potential until the country’s electrical grid is modernized and provincial officials end their preference for coal, which provides almost two-thirds of the country’s energy. The problem is worst in winter, when many coal plants provide electricity for the power grid and send out excess heat to keep homes and businesses warm. That’s led provincial officials to keep coal plants running—and to reject available wind-generated electricity—despite pressure from the central government to use more renewables, said Lu Xi, a professor at Tsinghua University’s School of Environment in Beijing. “On paper they express quite clear attitudes to promote renewables, but in reality they promote coal interests,” said Frank Yu, a
renewables specialist with the consulting firm Wood Mackenzie. To help address the issue, China’s National Energy Administration has pushed for more wind turbines to be installed closer to Beijing and coastal cities, where demand is highest. That should allow RE to bypass part of the dated transmission system that’s been blamed for impeding its use. It also would give more populated provinces a greater stake in making sure renewables get used. In a separate effort, at this week’s energy ministers meeting in Beijing, Chinese officials are expected to launch a campaign to make its power-supply system more flexible. The goal is to create a power grid that can more easily absorb the highs and lows associated with weather-dependent wind and solar electricity, said Christian Zinglersen, the head of the Clean Energy Ministerial, which is hosting the meeting. Still, the problem of electricity going unused could get worse before it gets better, said Liutong Zhang, a senior manager with the Lantau Group, a Hong Kongbased energy consulting firm.
More solar and wind is planned in Chinese provinces that already have more power-generating capacity than they use. Additional coal plants also are slated to come online, Zhang said. China’s difficulties, while more pronounced than in other countries, are not unique. Western countries have experienced their own renewable struggles as utilities tried to integrate weatherdependent wind and solar power into electricity grids built around coal plants, which are more polluting but also more reliable. But over the next two decades, events in developing nations, including China and India, are expected to play a magnified role in addressing climate change. The United States, meanwhile, appears headed for a diminished presence as Trump and fellow Republicans back away from the climate policies of former President Barack Obama. Almost all of the increased electricity demand during that period is expected to come from developing nations, according to projections from the International Energy Administration. China alone will account for about half the total. China’s struggles to maximize its use of renewables won’t necessarily prevent it from meeting international emissions targets that aim to keep global warming below 2 degrees Celsius compared to pre-industrial levels. But it will make it much more expensive unless China is able to adapt its power-supply system while it’s still in development, Zinglersen said. “This is a case of political leadership catching up with the reality on the ground,” he said. “The more flexible a system you can have, the more renewables you can allow for.” AP
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US energy chief reassures Japan of commitment to environment
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OK YO —T he US energ y secretar y reassured Japan on Monday that his country is committed to tackling environmental issues and to promoting clean energy even though the country is leaving the Paris climate accord. Energy Secretary Rick Perry told his Japanese counterpart, Hiroshige Seko, during their talks in Tokyo that the US commitment to environment is unchanged, according to Kazushige Tanaka, a Japanese industry ministry official who was at the talks. Perry’s comment comes days after President Donald J. Trump announced the US would withdraw from the Paris accord, a decision that has triggered international disappointment and criticism. Perry said America, as it has led the effort in tackling carbon reduction and clean-coal technology, will continue to be a leader in developing clean energy and its technology. He agreed with Seko on JapanUS cooperation in clean energy and environment, as well as other areas including nuclear energy, cleanup of the Fukushima nuclear power plant damaged by the 2011 earthquake and tsunami. Japan had little previous experience of decommissioning a nuclear plant, even one that operated normally, so the country has been learning from the 1979 accident at Three Mile Island nuclear plant in Pennsylvania. Its damaged reactor was mothballed but the other reactor is still operating. Perry last Sunday had inspected the Fukushima nuclear plant and offered continuing US support for decommissioning the plant, which is expected to take decades. “We offer continued support, expertise, companies that have history of dealing with cleanups and technology available as well as the department of energy,” he said. “I want to bring the strong support of the current administration to Japan and any assistance that we can, as we go forward in the cleanup and the decommissioning of those facilities.” AP
Trump’s off-the-cuff tweets strain foreign ties W
A S H I N G TO N — O n o n e l e ve l, President Donald J. Trump reacted to Saturday night’s terrorist attack in London much as his predecessors might have. He expressed solidarity and telephoned Britain’s prime minister to offer condolences. “WE ARE WITH YOU,” he wrote to Britons. But even as the investigation into the attack was getting under way, Trump wasted little time in using the episode to defend his hotly disputed travel ban on visitors from certain predominantly Muslim countries and to criticize the judges who have blocked it. And by Sunday morning, he decided to go after the mayor of London as not being tough enough on terrorism. Along the way, he mischaracterized the mayor’s position, renewed a transAtlantic feud stretching back a year and widened his rift with the United States’s traditional European allies a bit further. And he set off a chain reaction in the news media world, triggering partisan reactions that illustrated just how polarized both the United States and the world have become about the uninhibited, Twitter-obsessed president. Trump’s penchant for picking fights is well established by now, but it continues to confound and exasperate foreign leaders who are not accustomed to such roughand-tumble interactions with American presidents. The niceties of international diplomacy have never had such a reality-show flavor to them in the modern era, but Trump has thrilled his nationalist base with his “America First” approach, and all the complaints from overseas only seem to
embolden him. The latest contretemps came when Trump heaped scorn on Mayor Sadiq Khan of London. “At least 7 dead and 48 wounded in terror attack and Mayor of London says there is ‘no reason to be alarmed!’” Trump wrote on Twitter. Trump either misunderstood what Khan had said or distorted it. During an interview shown on the BBC, the mayor said he was “appalled and furious that these cowardly terrorists would target” innocent civilians and vowed that “we will never let them win, nor will we allow them to cower our city.” He went on to say that residents should not worry as they encounter more police officers patrolling the streets. “Londoners will see an increased police presence today and over the course of the next few days,” Khan said. “No reason to be alarmed. One of the things the police, all of us, need to do is make sure we’re as safe as we possibly can be. I’m reassured that we are one of the safest global cities in the world, if not the safest global city in the world, but we always evolve and review ways to make sure that we remain as safe as we possibly can.” Khan’s office later dismissed Trump’s post, saying the mayor was too busy to reply. “He has more important things to do than respond to Donald Trump’s illinformed tweet that deliberately takes out of context his remarks urging Londoners not to be alarmed when they saw more police—including armed officers—on the streets,” his office said in a statement. The exchange reflected the tensions between Trump and the United States’s close allies in Europe. The president returned a little more than a week ago
after meetings in Belgium and Italy, where he questioned the role of North Atlantic Treaty Organization. Then, once home, he followed up by criticizing Germany on trade and pulling the United States out of the Paris climatechange accord. The friction has been especially acute for more than a year between Trump and Khan, the first Muslim to serve as mayor of a major Western European capital. During last year’s presidential race, Khan criticized Trump’s proposal to t e m p o r a r i l y b a n a l l M u s l i m s f ro m entering the United States and endorsed Hillary Clinton, prompting an exchange with Trump’s campaign. Critics of Trump in Britain and the United States faulted him for his acrimonious response to the Saturday assault. “I don’t think that a major terrorist attack like this is the time to be divisive and to criticize a mayor who’s trying to organize his city’s response to this attack,” former Vice President Al Gore said on CNN’s State of the Union. Damon Wilson, who was President George W. Bush’s top Europe adviser and is now the executive vice president of the Atlantic Council, lamented that the spat only undercut a relationship that mattered to the United States. “America is safer when we rally our friends and allies against the bad guys rather than pick fights with the good guys,” he said. But the White House showed no signs of backing down, and a top aide to Trump amplified the attack shortly afterward. Dan Scavino Jr., the president’s director of social media, posted a message referring
to Khan’s criticism of Trump a year ago for his “ignorant view of Muslims.” Addressing Khan, Scavino referred to his “tweet 13 months ago, after you criticized... now President @realDonaldTrump—and WAKE UP!!!!” Other US officials sought to smooth over the dispute. “I commend the strong leadership of the @MayorofLondon as he leads the city forward after this heinous attack,” Lewis Lukens, a career diplomat serving as acting American ambassador to London, wrote on Twitter hours later. This is just the latest time the US Embassy in London has had to manage turbulence in the relationship since Trump took office. The London government complained vociferously after the White House aired a conspiracy theory that British intelligence helped President Barack Obama secretly spy on Trump during last year’s campaign, which Britain denied. London complained again when US officials leaked details of the investigation into last month’s terrorist bombing in Manchester. Trump’s initial arguments about the meaning of Saturday night’s terrorist attack stirred debate both at home and abroad. “We need the courts to give us back our rights. We need the Travel Ban as an extra level of safety!” he wrote in one message last Saturday night. “We must stop being politically correct and get down to the business of security for our people,” he wrote in another last Sunday morning. “If we don’t get smart it will only get worse.” “Do you notice we are not having a gun debate right now?” he added. “That’s because they used knives and a truck!”
President Donald J. Trump at the White House in Washington on June 1. The president suggested that Sadiq Khan, London’s first Muslim mayor, was soft on terrorism a day after seven people were killed and dozens more wounded in the latest attack in the British capital. The mayor’s office fired back, calling Trump “ill informed”. Al Drago/ The New York Times
Trump first tussled with Khan publicly last year shortly after Khan was elected. At the time, Trump’s proposed Muslim ban applied to all Muslims from all countries who were not US citizens, but Trump said he welcomed Khan’s election and would make an exception for him. Khan replied that he wanted no exception and accused Trump of harboring “ignorant views about Islam”. Khan said Trump would only encourage Muslim alienation from the West. “He’s playing into the hands of extremists,” he said. Scavino, at the time, fired back on
Trump’s behalf, writing on Twitter that it was not ignorance: “It’s called not being ‘politically correct.’ @realDonaldTrump will MAKE AMERICA SAFE & GREAT AGAIN!” The feud continued after Trump’s election. In March, after a terrorist attack in London, Donald Trump Jr. posted a link suggesting that Khan had said terrorist attacks were just “part of living in big city”. In fact, what Khan had said was that “part and parcel of living in a great global city” was being vigilant against terrorism and supporting police. New York Times News Service
www.businessmirror.com.ph • Editor: Lyn Resurreccion
The World BusinessMirror
Tuesday, June 6, 2017
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Bank at center of US inquiry projects Russian ‘soft power’ D
Economists expect slower US growth, survey says
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t has offices in a sleek Manhattan skyscraper. Its bonds are accessible to millions of American investors. And it holds ties to some of New York’s biggest banks.
Despite this presence on Wall Street, detailed in previously unreported financial records, Vnesheconombank (VEB) is no normal bank. It is wholly owned by the Russian state. It is intertwined with Russian intelligence. And the Russian prime minister is, by law, the chairman of its supervisory board. Now VEB is at the center of an international firestorm that threatens to consume the Trump presidency, because the bank’s chief—a prominent graduate of Russia’s spy school—met with Jared Kushner, President Donald J. Trump’s son-in-law, during the presidential transition. That meeting is the focus of a federal counterintelligence investigation about possible collusion between the Trump campaign and the Russian government. Three years ago, in response to Moscow’s military intervention in Ukraine, the Obama administration imposed sanctions on VEB that have effectively kept it from taking on most new business in the US. Since then, however, VEB has quietly kept up appearances on Wall Street in the event that sanctions would be lifted, according to interviews with American bankers and former government officials. T hat moment appeared to be nearing with Trump’s victor y. And so the bank ’s chief, Sergey N. Gorkov, traveled to New York in December for what he described as a “roadshow” promoting the bank that was largely hinged on the prospect of i mproved d iplom at ic a nd business relationships between the US and Russia. During that trip, The New York Times has found, Gorkov met with bankers at JPMorgan Chase, Citigroup and another, unidentified US financial institution. Goldman Sachs bankers also tried to arrange a meeting but u lt i m ate ly h ad a sc hedu l i ng conf lict. The meetings, which are not prohibited by sanctions, were confirmed by three people briefed on the discussions but unauthorized to speak publicly about them. None of the US banks were new to VEB. Citi and JPMorgan had long, established relationships clearing financial transactions for VEB in the US, activities not affected by the sanctions. And before the sanctions, securities filings show, Goldman and others had helped the Russian bank issue bonds, activity that was blocked by the sanctions and that VEB was eager to resume. After a few painful years, continuing Western borrowing had become a pressing priority for Moscow. The Russian Finance Ministry has spent about $10 billion to prop up the bank over the past three years, according to banking analysts. On that same trip, Gorkov met with Kushner. The nature of the meeting, which remains in dispute, followed a session between Kushner and the Russian ambassador, Sergey I. Kislyak, about opening a communications channel with Russian officials
$20B
The amount of Vnesheconombank’s total debt at the time sanctions were imposed
during the presidential transition, according to current and former US officials. The Federal Bureau of Investigation and congressional investigators are now scrutinizing whether Kushner may have met with Gorkov to help establish a direct line to Russia’s president, Vladimir Putin, or for other reasons not cited by the White House. The W hite House and VEB have issued contradictory statements about the purpose of the Gorkov meeting. The White House has said that Kislyak requested the meeting and that “Mr. Kushner was acting in his capacity as a transition official”. But VEB said Gorkov had met with Kushner, who was still running his family’s real-estate company, to discuss business. The statement said VEB’s management had met with “a number of representatives of the largest banks and business circles of the US”, a claim supported by the Times’s reporting about Gorkov’s meetings with banks in New York. V EB has not disclosed specifics of the conversation w ith Kushner, which is of keen interest to investigators. Kushner’s hunt for overseas investors for his company’s financially troubled Manhattan office tower on Fifth Avenue has been documented by The Times. W hile such an investment would not f it the prof i le of V EB’s past lending, it would have been possible for Gorkov to relay such information to other Russian banks. It is not known, however, whether the subject was raised in the meeting. The subject of sanctions was also freshly topical in December. The rolling back of sanctions was an essential part of Gorkov’s strategy in visiting New York, and was central to the health of his bank. T he ne x t mo nt h , du r i n g Trump’s first week in office, administration officials signaled they were considering lifting the sanctions that stemmed from the conflict in Ukraine. Separately, Michael T. Flynn, the former national security adviser, had several phone conversations late last year with Kislyak, the Russian ambassador. In one, the two men discussed additional sanctions imposed by the Obama administration in response to the Russian government’s efforts to disrupt the 2016 presidential election. The meeting with Kushner was not VEB’s only connection to Trump’s campaign or associates. A banker who pleaded guilty last year to spying for Russia out of VEB’s office in New York was part of an unsuccessful Russian
The building that houses the Russian Vnesheconombank in New York at the center of an international firestorm that threatens to consume the Trump presidency, because its chief—a prominent graduate of Russia’s spy school—met with Jared Kushner, President Donald J. Trump’s son-in-law, during the presidential transition. Sam Hodgson/The New York Times
scheme to recruit Carter Page, an American businessman who later became a Trump campaign adviser, as a spy. VEB also obtained shares in a Ukrainian steel smelter when it was sold by a business partner of Trump’s who built a Trump hotel in Toronto, according to previously undisclosed documents from the vast leak known as the Panama Papers. The VEB involvement in the smelter deal was first reported by The Wall Street Journal. T hese i nterac t ions h ave stirred concerns over whether the bank, which few Americans have heard of despite its ties to Wall Street and big companies like Boeing, has been spreading Russian influence along with its financial footprint. A representative for the bank would not comment.
‘This is not a bank’
VEB and Putin are inextricably linked. The bank stepped up lending after 2008 when Putin, then prime minister, became chairman of the board. And during the oil boom, VEB was seen as embodying Russia’s new financial might. Under a 2007 law, VEB’s mandate was to lend to important but underfinanced sectors of the Russian economy, including infrastructure and businesses that help diversify the economy beyond oil dependence. There are other governmentcontrolled banks in Russia, Sberbank and VTB, but they are primarily retail banks. VEB serves a very different role, lending mostly to large borrowers, many of them politically connected. To that end, VEB over the past decade has lent freely in ways that dovetail with government priorities and make it a tool of Russian soft power. The purse strings opened for two inf luential groups in particular: oligarchs building Olympic sites in Sochi and companies in Russianspeaking eastern Ukraine. “This is not a bank,” said Karen Vartapetov, a public finance ana-
lyst at Standard and Poor’s. “We should rather treat this bank as a government agency. It is used by the government as a tool to invest in politically and socially important, but not always financially viable, projects.” VEB’s role as a projector of state influence was on display in 2010 with a deal that potentially affected a Trump hotel in Toronto. At the time, Alex Shnaider, a Russian-Canadian businessman developing the hotel, was looking to sell a steel plant in Ukraine. His Midland Resources Holding Ltd., which owned the Zaporizhstal steel factory, sold at least half its stake to a collection of five offshore companies that received funding from VEB, according to documents in the trove of files from the law firm Mossack Fonseca that were obtained by the International Consortium of Investigative Journalists. The documents show that one year after acquiring the Zaporizhstal stake, the five companies— based in Cyprus and the British Virgin Islands—transferred it to Russian control. In each case, the companies’ shares were “charged in favor of ” VEB, meaning the bank effectively took ownership of them in exchange for financing the steelplant acquisition. Court papers in Canada show that Shnaider’s deal to sell the steel plant coincided with his need to cover cost overruns in the Trump deal. His lawyer initially told The Wall Street Journal last month that about $15 million from the Ukraine sale went into the $500 million Toronto project, but he later backtracked. Nothing in the Panama Papers linked VEB’s financing to the Trump project, which Trump did not own. Rather, the deal underscored VEB’s strategy to venture into Ukraine at the behest of the Russian government. More broadly, the bank’s plan had been to tap capital markets in New York to help finance the Ukraine lending, but the plan
collapsed with the imposition of sanctions in 2014. The bank today, not unlike Putin’s government, expanded its sway abroad in a way that appears unsustainable. Weighed down by sanctions and the oil price collapse, the Russian economy has slipped to 12th in the world, below South Korea’s, according to a World Bank ranking. At the time sanctions were imposed, the bank ’s total debt ran about $20 billion. It has since been reduced to $17 billion, according to financial disclosures at the end of last year. But the Ukraine lending in particular is affecting the balance sheet, with outstanding Ukraine debt tota ling $14.2 bi l lion at the current exchange rate, banking analysts say. Last week the Russian business newspaper Vedomosti reported that about 40 percent of VEB’s loans were at risk of default. Gorkov, who previously worked at the Yukos oil company and was a senior executive at Sberbank, became director of VEB in February 2016, partly with a mandate to find market solutions to the bank’s financial woes. For Gorkov, fixing VEB would require a new focus, and that, according to the bank’s statement, became the reason for a meeting with Kushner. The two met as Gorkov traveled to gather ideas for a new strategy for the bank, published a month after the meeting with Kushner in a document called “Strateg y 2021”. It called for shifting some risks directly to the Russian budget, selling assets not considered central to the bank and trying to resume borrowing in places like the US. The document suggested that the bank was expecting some relief from sanctions. “The forecasts for the term of the strategy predict certain decrease of geopolitical risks and gradual weakening of the restricted access to global capital markets,” it said. New York Times News Service
ETROIT—Forecasts for US economic growth are coming in slightly lower after a weak first quarter, according to a survey of business economists released on Monday. T he Nat ion a l A s so c i at ion for Business Economists said it’s expecting GDP of 2.2 percent this year and 2.4 percent in 2018. Those forecasts are down 0.1 percentage points from a survey in March. The survey is based on responses from 52 professional forecasters. The gross domestic product— the broadest gauge of the economy—expanded in the Januaryto-March quarter at a 1.2-percent annual rate. That was better than initially forecast, but still weak. Unseasonably warm weather was one reason for the slow growth, since it limited spending on utilities. E conom i s t s fore c a s t GDP growth will rise 3.1 percent in the April-to-June period and 2.5 percent in the second half of the year. They’re forecasting solid hiring and a low, 4.5-percent unemployment rate, which should help boost consumer spending. Inflation also is expected to remain in check Most of the economists surveyed believe President Donald J. Trump will enact an infrastructure plan and cut corporate and individual taxes before the end of 2018. That will have a positive impact on economic growth, but likely not until 2018, the survey said. There are downside risks. Just over one-third of the panelists said trade protectionism, a strong US dollar and higher interest rates could pose a risk to the economy in 2018. But 60 percent say there’s more chance of an upside risk thanks to expected corporate-tax reform, individual-tax cuts and infrastructure spending. AP
S. Korea draws up $10-billion extra budget to create jobs
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EOUL, South Korea—South Korea’s government said on Monday it has drawn up an 11.2-trillion-won ($10-billion) extra budget to create jobs, as the new administration took its first steps to deliver campaign pledges. T he Finance Ministr y said about half of the stimulus package will be allocated to add 71,000 jobs in the public sector, including teachers, police, firefighters and social workers. The ministry added the budget would also support the unemployed, women and the elderly. Pay during parental leave, elderly jobs and pays for the elderly will go up. The government also plans to give subsidies to small- and medium-sized firms that create stable full-time jobs, rather than contract jobs, to boost quality jobs in the private sector. In total, the ministr y said the budget plan will create more than 110,000 jobs in the public and private sectors. President Moon Jae-in promised to put jobs at the center of his economic policy during his election campaign. Asia’s fourth-largest economy may appear to be on track to recovery with recent improvements in exports and economic growth. But those upbeat economic reports mask other problems, such as inequality in income distributions, youth unemployment that hovers near all-time highs and sluggish growth in household income. Recovery in consumer spending has been slow as a result. AP
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Tuesday, June 6, 2017
The World BusinessMirror
On Mosul’s front line: A battle on civilian streets
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OSUL, Iraq—The Islamic State’s (IS) grip on Mosul has shrunk to a tighter circle of neighborhoods in the western par t of the city. But many civilians are still trapped in those areas, and the militants are giving no ground easily. As we traveled with Iraqi forces through the Rifai neighborhood last month, evidence of a brutal street fight was all around. The destruction was immense, and it seemed not a single house was free of bullet holes—or worse. While clashes still raged in the last remaining pockets of IS control in Rifai, displaced people began to trickle out at dusk. The number of people managing to f l e e a p p e a re d m u c h l owe r t h a n in earlier par ts of the battle for the west. Other than the occasional group of hushed and worn-out people who would suddenly file out from the front line, the streets were almost devoid of a human presence. Another exception was the Iraqi forces stationed there. But yet, there are many civilians in the area, most sticking to their houses out of fear of crossfire, or of being seized by IS fighters. On one street corner, opposite an Iraqi special operations forces base near the front line, five dead IS fighters lay rotting in the summer heat—a rare concentration of militants, who have increasingly fought in smaller teams of two or three men. Some Iraqi soldiers said the fighters had probably been caught by cannon fire from a helicopter or plane. The bodies were bloated and covered in the flies that seem to flourish in the debris-strewn streets of Mosul. Special o p e rat i o n s f o rce s s o l d i e r s to o k u p defensive positions on the edge of Rifai after it was recaptured, and they waited for their next orders.
Then came the IS’s counterattack. Under the cover of a sudden sandstorm, the jihadis fought the troops for hours before being driven off. The militants seldom seem to pass up the chance to use storms or other heavy weather, when coalition aircraft cannot target them, to press the fight. On the front line the next morning, soldiers told how the intense gunfire during the storm battle had set their sandbag walls on fire. They appeared amazed that the IS remained well equipped and capable, and described how the militants were disciplined about using vehicles and medics to retrieve their wounded. On May 29, a Monday morning, four battalions of Iraqi special operations forces soldiers moved into what seemed to be a very small part of the western district of Al Saha to try to clear it of any remaining IS fighters. Setting out early, the men split into teams and moved into the area in stages. The second team had time to rest and eat breakfast before being called to join the operation. The work for Iraqi troops has already been grueling as they have tried to clear neighborhoods north of the Old City, often within gunshot of militants holed up there. Al Saha is one of the close-in areas, and the Iraqi special operations forces there took care to use the rat holes that the militants had cut through the walls of homes in order to move more securely. At one junction on the edge of Rifai, an IS sniper had taken up position and was shooting at vehicles as they crossed the road. He fired at a large group of fleeing civilians, narrowly missing. His shot flew over their heads and hit an upturned car behind them. The gunfire split the crowd, with half running back to where they had come from. New York Times News Service
Editor: Lyn Resurreccion • www.businessmirror.com.ph
Trump to embrace privatization of air-traffic control system
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ASHINGTON—President Donald J. Trump plans to lay out his vision for overhauling the nation’s air-traffic control system on Monday, outlining his goals to privatize the system in a White House speech.
Trump will push for the separation of air-traffic control operations from the Federal Aviation Administration (FAA), embracing an approach long championed by US airlines, according to White House officials. Joined by airline industry executives, Trump is expected to point to the changes as a way of accelerating a more modern airtraffic control system. “We’re really moving into the modern decade of technology in air-traffic control. It’s a system where everyone benefits from this,” White House economic adviser Gary Cohn said in a conference call with reporters. Trump’s budget plan released earlier this year called for the changes, placing air-traffic operations under an “independent, non-governmental organization”.
50K
The number of airline and other aircraft flights a day in the United States There are about 50,000 airline and other aircraft flights a day in the United States. Both sides of the privatization debate say the system is one of the most complex and safest in the world. US airlines have been campaigning for more than two decades to separate air-traffic control operations from the FA A. That effort picked up steam last year when the union that represents air-traffic controllers agreed to support a proposal by House Transportation and Infrastructure Committee Chairman Bill Shuster, Republican-Pennsylvania, to spin off air-traffic operations into a private, nonprofit corporation in exchange for guarantees that controllers would retain their benefits, salaries and union representation. Airlines have been lobbying vigorously for the change, saying the FAA’s NextGen program to modernize the air-traffic system is taking too long and has
President Donald J. Trump talks to House Speaker Paul Ryan of Wisconsin in the Rose Garden of the White House in Washington, after the House pushed through a health-care bill in May. AP/Evan Vucci
produced too few benefits. The changes would involve moving from the current system based on radar and voice communications to one based on satellite navigation and digital communications. Airlines and the controllers union say the FAA’s effort to modernize the air-traffic system has been slowed down by the agency’s dependence on inconsistent funding from Congress and occasional government shutdowns and controller furloughs. As a result, the FA A has had difficulty making long-term commitments with contractors. Union of f icia ls have complained that the FA A has been unable to resolve chronic controller understaffing at some of the nation’s busiest facilities and pointed to the modernization effort’s slow progress. But FA A Administrator Michael Huerta has said the agenc y has made progress dur ing t he past decade in upd at ing its computers and other equip ment in order to move from a radar-based to a satellite-based control system.
Winning congressional approval would still be an uphill battle for Trump. Democrats have largely opposed the changes, warning that the proposed board overseeing the estimated 300 air-traffic facilities and around 30,000 employees would be dominated by airline interests. They have also pointed to the unprecedented safety under the current system and noted repeated computer system failures in recent years by US airlines, questioning whether they are ready to handle complex technology modernizations. Trump’s plan would also eliminate taxes on airline passengers in favor of a system of user fees. Key members of tax-writing committees have questioned whether corporations can legally impose fees, which can be viewed as taxes, on air-traffic system users. Business aircraft operators, private pilots and nonhub airports have also expressed concerns they may need to pay more and get less service under a private corporation even though airlines have promised that won’t happen. AP
4 Arab nations cut ties to Qatar as rift deepens
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UBAI, United Arab Emirates—Four Arab nations cut diplomatic ties to Qatar early on Monday morning, further deepening a rift among Gulf Arab nations over that country’s support for Islamist groups and its relations with Iran. Bahrain, Egypt, Saudi Arabia and the United Arab Emirates all announced they would withdraw their diplomatic staff from Qatar, a gas-rich nation that will host the 2022 Fifa World Cup and is home to a major US military base. Saudi Arabia also said Qatari troops would be pulled from the ongoing war in Yemen. The countries also said they would eject Qatar’s diplomats from their territories. Qatar’s Foreign Affairs Ministry said there was “no legitimate justification” for the countries’ decision, though it vowed its citizens wouldn’t be affected by the “violation of its sovereignty”. All the nations also said they planned to cut air and sea traffic. Saudi Arabia said it also would shut its land border with Qatar, effectively cutting off the country from the rest of the Arabian Peninsula. It wasn’t immediately clear how Monday’s announcement would affect Qatar Airways, one of the region’s major long-haul carriers that routinely flies through Saudi airspace. The airline did not immediately respond to a request for comment. Etihad, the Abu Dhabi-based carrier, said it would suspend flights to Qatar “until further notice”. Emirates, the Dubai-based carrier, announced it, too, would suspend Qatar flights starting on Tuesday, as did budget carrier FlyDubai. Even before Monday, Qatar had appeared unperturbed by the growing tensions. On May 27 Qatar’s ruling emir, Tamim bin Hamad Al Thani, called Iranian President Hasan Rouhani to congratulate him on his reelection. The call was a clear, public rebuttal of Saudi Arabia’s efforts to force Qatar to fall in line against the Shiite-ruled nation, which the Sunni kingdom sees as its No. 1
enemy and a threat to regional stability. Qatar shares a massive offshore gas field with the Islamic Republic. Qatar is also home to the sprawling al-Udeid Air Base, which is home to the US military’s Central Command and some 10,000 American troops. It wasn’t clear if the decision would affect American military operations. Central Command officials and the Pentagon did not immediately respond to a request for comment. Saudi Arabia said it took the decision to cut diplomatic ties due to Qatar’s “embrace of various terrorist and sectarian groups aimed at destabilizing the region”, including the Muslim Brotherhood, alQaeda, the Islamic State (IS) group and groups supported by Iran in the kingdom’s restive Eastern Province. Egypt’s Foreign Ministr y accused Qatar of taking an “antagonist approach” toward Egypt and said “all attempts to stop it from supporting terrorist groups failed.” The tiny island nation of Bahrain blamed Qatar’s “media incitement, support for armed terrorist activities and funding linked to Iranian groups to carry out sabotage and spreading chaos in Bahrain” for its decision. The US Navy’s 5th Fleet, based in Bahrain, did not immediately respond to a request for comment about whether the decision would affect its operations. In Sydney US Secretary of State Rex Tillerson said he didn’t believe the diplomatic crisis would affect the war against the IS in Iraq and Syria. “I think what we’re witnessing is a growing list of disbelief in the countries for some time, and they’ve bubbled up to take action in order to have those differences addressed,” Tillerson said. “We certainly would encourage the parties to sit down together and address these differences.” The decision comes after Qatar alleged in late May that hackers took over the site of its state-run news agency and published what it called fake comments from its
ruling emir about Iran and Israel. Its Gulf Arab neighbors responded with anger, blocking Qatari-based media, including the Doha-based satellite news network Al-Jazeera. Qatar long has faced criticism from its Arab neighbors over its support of Islamists. The chief worry among them is the Muslim Brotherhood, a Sunni Islamist political group outlawed by both Saudi Arabia and the UAE as it challenges the nations’ hereditary rule. Gulf countries, led by Saudi Arabia, fell out with Qatar over its backing of thenEgyptian President Mohammed Morsi, a Brotherhood member. In March 2014 Saudi Arabia, the UAE a nd Bahrain recalled their ambassadors from Qatar over the rift. Eight months later, they returned their ambassadors as Qatar forced some Brotherhood members to leave the country and quieted others. However, the 2014 crisis did not see a land and sea blockade as threatened now. In the time since, Qatar repeatedly and strongly denied it funds extremist groups. However, it remains a key financial patron of the Hamas-controlled Gaza Strip and has been the home of exiled Hamas official Khaled Mashaal since 2012. Western officials also have accused Qatar of allowing or even encouraging funding of Sunni extremists, like al-Qaeda’s branch in Syria, once known as the Nusra Front. Global oil prices rose 1.24 percent to $50.57 a barrel in early trading on Monday in Asia amid the Gulf diplomatic crisis. The Qatar Stock Exchange fell 7.65 percent. Kuwait, which earlier had tried to mediate the crisis, had no immediate comment. The crisis comes after US President Donald J. Trump’s recent visit to Saudi Arabia for a summit with Arab leaders. Since the meeting, unrest in the region has grown. At that Saudi conference, Trump met with Qatar’s ruling emir Sheikh Tamim bin Hamad Al Thani. AP
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Editor: Efleda P. Campos • Tuesday, June 6, 2017
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DTI warns Mindanao retailers to maintain price freeze
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By Catherine Pillas
@c_pillas29
RADE Secretary and National Price Coordinating Council (NPCC) Chairman Ramon M. Lopez is warning retailers and vendors in Iligan City not to take advantage of the crisis in neighboring Marawi City, and observe the prevailing price freeze in the Mindanao region following the declaration of martial law in Marawi City.
In a message to reporters on Monday, Lopez said he and Trade Undersecretar y for Consumer Protection Teodoro Pascua conducted a price inspection in Iligan City and found the prices of
prime commodities, specifically rice, remain stable. Even so, Lopez reiterated that as the region remains under martial law, any upsurge in prices is “considered illegal and, therefore,
violators and profiteers will face appropriate sanctions.” Officials of the Department of Trade and Industry (DTI) were initially informed that rice was being sold at P100 per kilo—double the standard retail price—in Marawi City and adjacent areas amid an ongoing firefight between government forces and the Maute Group. Lopez said there will be consistent price monitoring for both basic and prime goods under the DTI and rice under the Department of Agriculture, as well as the sustained flow of supply to prevent price increases in Iligan City. In a text message to the BusinessMirror, Pascua said NFA rice remains at P27 per kilo and the prices of other commercial rice varieties continue to range between P36 and P50 per kilo. “Prices are still within range, and supply is from two weeks to three weeks to a month,” he added.
Tourists flock to natural marine attraction in Coron, Palawan By Jonathan L. Mayuga @jonlmayuga
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HE Department of Environment and Natural Resources (DENR) in the Mindoro, Marinduque, Romblon at Palawan (Mimaropa) region is planning to hold a consultation with stakeholders to ensure all views are taken into consideration on the planned construction of an underwater-themed park in Coron, Palawan. Environmental groups stiffly oppose the proposed construction, whether on land or in the coastal and marine area in Coron, because of its potential impact on the environment. In its official twitter account quoting DENR Mimaropa Regional Director Natividad Y. Bernardino, the agency said it still has to see pertinent papers of the resort. Bernardino was reacting to recent reports the Coral World Park Undersea Resorts Inc. will push through with its proposed project in Palawan. Bernardino said permits must be secured by the project proponents before any construction begins. The tweet further said “Bernardino believes tourists flock Coron because of its natural attractions”. DENR Mimaropa plans to hold consultations with stakeholders “to ensure all views are taken into consideration”. Last Sunday the Pambansang Lakas ng Kilusang Mamamalakaya ng Pilipinas (Pamalakaya), joining environmentalists’ call, asked Environment Secretary Roy A. Cimatu
to reject the proposed underwater themed-park project. In a statement, Pamalakaya Chairman Fernando Hicap said aside from threatening to destroy the coastal and marine environment, the project threatens the livelihood of small fishermen in the province. The project is being pushed by the Coral World Park Undersea Resorts and the Viacom International Media Networks. The Department of Tourism (DOT) on Thursday said the project will push through to promote ecotourism in Palawan. It was not immediately known where the proponents plan to put up the underwater theme park. Palawan, the country’s “last ecological frontier”, boasts of a rich coastal and marine ecosystem and is home to unique, but threatened, species of flora and fauna, including marine wildlife. Palawan is also known for having rich municipalfishing grounds. “Environment Secretary Cimatu should prove his worth. We all know the proposed Palawan project is no protection, but will pose environmental degradation to our last ecological frontier and to its marine resources. Thus, we challenge the newly appointed DENR chief to release a public statement deploring the Palawan project and that he stands in the side of the fishermen who will be affected if the destructive project pushes through,” Hicap said. Any project that poses potential environmental impact is required to acquire an environmental compliance certificate (ECC) from the DENR by submitting the
project’s Environmental Impact Statement (EIS). “The last thing the DENR could do to preserve our last ecological frontier is to abstain from securing this project with an ECC,” Hicap said. Former Environment Secretary Regina Paz L. Lopez had earlier declared Palawan as off-limits to destructive development projects. “Cimatu should follow the path of Lopez: A road toward genuine protection of the environment without putting the lives of the ordinary people at stake. If this project pushes forward, we have nothing to blame, but the new DENR Chief Cimatu, who until now shows no ethos in genuine environment-protection and even continuing Lopez’s actions against giant destructive mines,” Hicap said. The Kalikasan-People’s Network for the Environment (KalikasanPne) said small fishermen in Coron stand to lose their fishing gounds to the proposed ecotourism project. Tourism Secretary Wanda Corazon T. Teo confirmed Viacomm International Media Networks will push through in privatizing 400 hectares of onshore and foreshore areas in Coron, Palawan. “The Krusty Krab-style of largescale tourism development will not benefit the majority of the people and will definitely disrupt Coron’s immensely rich marine ecosystems,” Kalikasan-Pne National Coordinator Clemente Bautista said. Krusty Krab is the burger restaurant in the cartoon series Spongebob Squarepants, a flagship series of the media giant Nickelodeon, which is pushing for the theme park.
‘BAYANIHAN’ BY THE SHORE Fishermen in Oslob, Cebu, together with younger members of their families, carry their boat to
shore to catch fish. MAU VICTA
HARVEST TIME A family is busy harvesting the cauliflower and cabbage planted in their backyard to sell in the public market of Santa Catalina, Ilocos Norte, and nearby towns. LAILA AUSTRIA
Diño order reignites turf war in SBMA By Henry Empeño Correspondent
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UBIC BAY FREEPORT—An administrative order issued by Subic Bay Metropolitan Authority (SBMA) Chairman Martin Diño has rekindled conflict between two of the highest positions in the agency, a simmering instability that briefly sparked late last year, when Diño questioned Malacañang’s duly-appointed OICadministrator. Administrative Order 01-2017, dated May 2, 2017, but released to SBMA offices only on May 31, sought to create a task force under Diño’s office ostensibly to “inspect, monitor and faithfully implement the laws in the conduct of business and financial operations and collections” of the agency. The creation of such task force, however, “interferes and encroaches upon [the] power, function and duty of the administrator and CEO,” Administrator Wilma Eisma contended. As it is, the task force would just be “counterproductive, super f luous a nd u nnecessa r y”, Eisma added. Diño said the task force is necessary because the agency “is hardpressed in continuing to generate and earn a very substantial and respectable income as a special economic zone.” “Due to these very bothering and alarming financial predicaments being encountered by the agency, there is an urgent need to respond and provide the necessary solutions to forestall, if not avoid, the unwarranted and untimely financial collapse of the SBMA,” he said. Diño, who appointed six personnel to the task force, most of whom came from his own staff, also said the Task Force on Business Operations and Financial Safety and Security will be necessary “to prevent graft and corruption”. He said the body, among other duties, will “recommend to the SBMA chairman the issuance of appropriate measures to promote transparency and efficiency in business operations and financial practices.” The intention, notwithstanding, Eisma said in her May 31 rebuttal Diño “has no power or
authority to issue said administrative order, much less create a task force that will directly involve itself in the operations and day-today activities of the SBMA.” Diño’s order, said Eisma, a lawyer by profession, “has no force or effect whatsoever”. Eisma also called out Diño’s allegation of financial collapse as “totally false and misleading”, pointing out that SBMA’s revenues this year are 9.5 percent higher than those recorded in 2016, which has been recorded as the agency’s banner year. Still, Diño retorted with a June 1 memorandum that reiterated his “unflinching legal conviction” that he has the power and authority to issue an administrative order. “I firmly believe that what you have stated [in your May 31 memorandum] is your honest opinion and, as such, will remain as it is, a mere opinion,” the chairman said. This was not the first time Diño clashed with the SBMA administrator, the second in command in the organizational hierarchy, but the de facto manager of the agency. From October to December 2016, the flamboyant chairman was also at loggerheads with then SBMA Deputy Administrator for Legal Affairs Randy Escolango, who was appointed OIC-administrator by the Malacañang. Escolango, upon assumption as OIC, had voided Diño’s administrative orders for lack of authority. Diño fired back by filing criminal and administrative cases against Escolango, and later said he would assume the position of administrator by virtue of his being the chairman of the agency. The impasse was only broken when Eisma was appointed SBMA administrator in January. Eisma admitted in a news briefing on Monday that the current leadership struggle “may result in instability” at the Subic agency. “But I believe that I am not the cause of this instability, and I am confident of my mandate,” Eisma said. “I don’t want to lose respect for my chairman—because he is the chairman of the agency, but the law is very, very clear: The dayto-day operations of the agency falls under the authority of the administrator,” she said.
Despite CA, SC rulings, Albay mayor refuses to vacate office
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EGAZPI CITY—Despite affirmation from the Court of Appeals and the Supreme Court involving an Ombudsman order dismissing a municipal mayor from service in 2013, Mayor Billy Ceriola of Malinao, Albay, refuses to leave his post. Ceriola was ordered dismissed by the Ombudsman on the wake of the graft complaint filed by municipal councilor Irene Fajut concerning the operation of the Malinao Cockpit Arena in 2012 owned by the mayor without any permit to operate. The Ombudsman resolution clearly ordered Ceriola’s perpetual disqualification to hold office as mayor that also barred him from holding position in any government office or agency, including forfeiture of all benefits due him as public official. During the 2013 election, Ceriola lost to his vice mayor Alice Morales, sister of then-Makati City engineer Nelson Morales, who was murdered in Barangay Estancia after attending a morning church wedding where he was a sponsor. Morales had aspired to contest the reelection bid of Ceriola. Department of Interior and Local Government Regional Director Elena Pastor said she had installed Malinao Vice Mayor Shirley Bilo as Ceriola’s replacement. The regional director said the dismissal order in 2013 from the Ombudsman against Ceriola had not been served in 2014, after he lost in his reelection bid in 2013. Court records showed the Ombudsman’s dismissal order against Ceriola was affirmed by both the CA and the SC. Both bodies also denied the motions for reconsiderations from Ceriola declaring the order final and executory, Assistant DILG Regional Director Arnaldo Escober said. In the 2016 election, however, Ceriola won in the election against reelectionist Alice Morales. He continued performing the duty of the mayor discarding the Ombudsman 2013 dismissal order for his perpetual disqualification to hold office as mayor and any position in the government. This prompted the complainant to follow up the case, resulting to the issuance of denials of the motions for reconsideration filed by Ceriola before the CA and the High Court. Ceriola said he will not vacate his office until after his filed motion for reconsideration with the SC to suspend his dismissal order is resolved, saying the charges against him were clearly politically motivated perpetrated by his political nemesis. Pastor urged Ceriola to respect the court decision, saying transactions at the Malinao municipal office no longer passes Ceriola who remains holed up in his office. Manly M. Ugalde
A10 Tuesday, June 6, 2017 • Editor: Angel R. Calso
Opinion BusinessMirror
editorial
Here comes the rain again
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he state weather bureau Philippine Atmospheric, Geophysical and Astronomical Services Administration (Pagasa) announced the start of the rainy season last Tuesday and, as if on cue, a sudden downpour arrived early evening as working folks were on their way home, flooding several areas in Metro Manila.
If that is what a short deluge could do—causing flooding, crippling traffic and stranding commuters—we hate to think what could happen when an actual storm with very strong and continuous rains comes and hits Metro Manila. Some areas, in no time at all, became submerged in floodwaters, making streets impassable to both pedestrians and motorists. If last week was a sneak preview of what’s in store for us during the rainy season, then God help the kids who are returning to school. Most schools start classes this week and traffic everywhere in the metropolis is expected to get even heavier. Pagasa said last week’s downpour was due to a southwest monsoon. “Intermittent to continuous rains and thunderstorms, associated with the southwest monsoon, will continue to affect Metro Manila and the western section of the country,” its statement read. “Most parts of the country are likely to experience near to above-normal rainfall conditions in the next two months [June to July].” Pagasa advised the public to take precautionary measures during the rainy season. The government would do well to heed this same advice. The Aquino administration had a P350-billion Metro Manila Flood Control Plan, which had a 2035 completion date, but surely some part of that budget, or perhaps even a huge chunk of it, should have already been spent to ease the perennial and deadly problem of flooding in the metropolis. And yet, the Duterte administration has proposed for cofinancing by Chinabased Asian Infrastructure Investment Bank another flood-control project in Metro Manila, this time worth $500 million, or about P25 billion. The Metropolitan Manila Development Authority also does quarterly cleanups of creeks and other waterways and drainages in flood-prone areas in Metro Manila, which is why we were surprised when these same problem areas got flooded just because of the sudden downpour last week. What happened to all the cleanup activities? Of course, it’s not all the government’s fault. People should also stop their indiscriminate and irresponsible dumping of garbage on estero and other waterways. We should learn our lessons from past flooding and behave as responsible citizens. Also, it could not have helped at all that there are so many road-repair projects and diggings under way all over Metro Manila, some by water concessionaire Maynilad, others by the Department of Public Works and Highways, and still others by local governments. A lot of these projects were started before the resumption of classes, but the fact that they are still “ongoing” speaks, perhaps, of the poor quality of the contractors hired for them or of mismanaged budgets and timetables. These road projects and diggings certainly contributed to last week’s flooding and should be finished promptly. The Duterte administration should make sure its public-works projects cause the least inconvenience to commuters, pedestrians and even residents, whose normally quiet neighborhoods have been turned into busy roads because traffic has been diverted to them in order to ease the choke points caused by various excavations. And to public contractors, including those of water concessionaires, please, if you’re going to cause such an inconvenience, you could at least instill a sense of urgency in your people to finish the job as soon as possible. Because when the rains come, as they have now, your excavations and diggings only worsen traffic and flooding in the cities. More rain is coming still, Pagasa warns. Please hurry up and get the job done. We should all learn our lessons from past flooding and put up better flood defenses and instill better practices.
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Manny B. Villar
THE Entrepreneur Continued from A1
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he industry faced another challenged with the appointment of Lopez. She carried out environmental audits of all mines in the country and banned open-pit mining. Early this year she ordered the closure of 23 mining operations, the suspension of five others in 10 provinces and later ordered the cancellation of 75 mineral production sharing agreements between the government and mining companies. I will not discuss the issues involved in the former secretary’s actions, particularly because the inter-agency Mining Industry Coordinating Council, which is cochaired by the finance and environment secretaries, is currently undertaking a three-month review of Lopez’s orders and is reviewing all other mining contracts as mandated under the law. What I want to point out is that there are lessons to be learned from what happened at the DENR and in the mining industry as a result of Lopez’s short tenure. One, we can expect the normalization of the industry, which will
be good for the economy, and will save a lot of jobs while creating additional employment and attracting more investments. Two, this is not to say that there will be no improvements. The former DENR chief’s actions brought to light the failure, perhaps both by the government and the industry, to abide by the provisions of law mandating responsible mining, so as to protect the environment. So the third lesson is that, as a result of the Lopez directives, miners will now be fully aware that they should be more fully responsible. President Duterte’s directive to new Environment Secretary Roy A.
Asian-style investing John Mangun
Lorenzo M. Lomibao Jr., Gerard S. Ramos Lyn B. Resurreccion, Efleda P. Campos
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Chairman of the Board & Ombudsman President VP-Finance VP Advertising Sales Advertising Sales Manager Group Circulation Manager
Coexistence
OUTSIDE THE BOX
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ne lesson I learned when I first came to “The Orient”—about the time that Genghis Khan was building mounds of skulls under his version of martial law—Asians have a completely different view of return on investment. We tend to think that the Asian mentality is to look at decades rather than years, years rather than weeks. However, when it comes to money, time frames and percentages are shorter and larger. Presenting an investment idea that offers 15 percent annually for five years is usually met with “What’s your idea to double my money in 24 months?” My take on this is that business investment is the slow and steady turtle winning the race, while cashon-the-table passive investment should be the fast rabbit. Maybe that is why Asians are characterized as
big casino gamblers. I can remember Taiwanese stockmarket traders sitting around and betting thousands with each other if the next price change on a particular stock would be up or down. Asian money often wants action in the short term, as well as potential profits. How long does the average cockfight lasts when tens of millions change hands? No wonder the financial-literacy advocates have such a difficult time in Asia. One of those top 10 trading rules—written by Westerners, of course—is always like “Invest
Cimatu, which the latter revealed to the media, was clear and firm: “All that I ask of you is just to be true to yourself, to be true to your country and protect the environment. But remember there is a mining law... it has to be regulated and allowed.” In line with the President’s directive, Cimatu said he was open to allowing new mining projects—because the law allows them—as long as these comply with the requirements of responsible mining. In other words, mining and environment protection can coexist. As Finance Secretary Carlos G. Dominguez III aptly put it, “One could be environment-friendly and business-friendly at the same time.” The Philippines is recognized as one of the world’s richly endowed countries in terms of mineral resources. Data from the Mines and Geosciences Bureau (MGB) show that, as of 2015, the country’s gold resource and reserves stood at 4.46 million tons, chromite at 79,005 million tons, copper at 7.38 billion tons, bauxite at 117.8 million tons and iron at 959.13 million tons. I saw an online report saying that only 1.4 percent of an estimated 9 million hectares in the country are potential sites for metallic minerals, such as copper, gold and others. It’s obvious that mining offers a big opportunity to grow the economy, but the industry currently
conservatively and grow your money over time with the least amount of risk possible.” Yeah, good luck selling that idea in Asia. Actually, the only time you hear something like that is when the stock market has been in a downside trend for several years from someone who did not cut losses and who, therefore, also missed the condo boom. From what I understand, the latest investment strategy is to put the stocks you own in a warehouse and forget about them until they generate a profit. The interesting thing is, apparently, this only applies to issues that are down 10 percent, 20 percent, 50 percent from the original purchase price. And they never stop talking about those issues that are supposed to have been put away in a quiet place for “safe-keeping”. Buying and holding for the long term is a valid stock-market investment strategy. However, every passive investment must be viewed in the context of the real world. That is why Warren Buffet’s “I buy on the assumption that they could close the market the next day and not re-
contributes less than 1 percent to GDP. At constant 2000 prices, the gross value added of the mining industry even declined by 2.8 percent, or from P23.54 billion in the first quarter of 2016 to P18.84 billion in the first quarter of 2017. Mining is a capital-intensive industry, and foreign investors provide such capital. In 2014 investments in the mining industry totalled $1.19 billion; in 2015, the amount declined to $924.92 billion, according to the MGB. Figures for 2016 were not available. No wonder that, according to BMI Research, a unit of the Fitch Group, the Philippines is a laggard in Asia in terms of investments in the mining industry. Based on the BMI’s index on mining risk and rewards, the Philippines scored 45.1 out of 100, lower than the average for Asian countries of 55.6. I hope, with Secretary Cimatu at the helm, the Philippines will not only remain as one of the most mineral-rich countries in the world, but also one of the biggest producers—with the mining industry playing a bigger role in generating employment and growing the economy while preserving the environment for future generations of Filipinos.
For comments, e-mail mbv.secretariat@gmail. com or visit www.mannyvillar.com.ph.
open it for five years” is great if you are a billionaire and won’t need the money in those five years. Buffet was 56 years old and a billionaire when he said that. One of his first major stock purchases was American Express Co. (AXP) in 1964. But if you happened to buy AXP at $65.07 on June 1, 2007, and saw it go to $10.26 on March 6, 2009, you might disagree. By the way, AXP went back up to $65 in late March 2013. Albert Einstein—or maybe Abraham Lincoln—said: “Compound interest is man’s greatest invention”. But Al Capone—I think—said: “Compound inflation is man’s worst invention”. The two factors of “cost of money” and “opportunity cost” must be included in every investment decision. If real inflation is 6 percent and it is, then over five years that stock better be up 30 percent just to break even. 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
opinion@businessmirror.com.ph
Resorts World attack: Terrorism or robbery?
The fatal Resorts World incident was a preventable crime Cecilio T. Arillo
database Edgardo J. Angara
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he way the Resorts World assault unfolded over the weekend has caused deep anxiety and grief not just for the loved ones of the victims, but for the general public, as well.
A few hours after shots were heard at the casino, the Agence FrancePresse reported that according to SITE Intelligence Group, an organization that monitors the online activity of terrorists, a Filipino operative of Islamic States in Iraq and Syria (ISIS) was claiming responsibility for the attack. Foreign news agencies, including CNN and Al Jazeera, quickly picked up the story, enabling it to reach the social-media feeds of Filipinos across the world. Immediately, authorities downplayed the claim, saying that they were pursuing the angle of a robbery perpetrated by a deranged lone gunman. Over the weekend, closed-circuit television footage was released showing indeed that a single gunman walked past security and into the casino floor, fired shots into the air to cause panic, set ablaze tables, stole chips worth millions of pesos and engaged in a shootout with security. Later, the gunman on the video was revealed to be a former employee of the Department of Finance, who had racked up millions of pesos in debt due to a gambling problem. Not only did the gunman frequent casinos, he was also found to be an impulsive sabungero, who in one instance lost up to P1 million in a single evening. So severe was his addiction that Resorts World banned him from entering in April. Despite these details, several questions remain unanswered, leaving the victims’ families and the general public all the more
anxious. At first, the police said they neutralized the threat in a shootout. However, the media later reported that the murderer killed himself in a hotel guest room by immolation. Why the seemingly ritualistic suicide? He could have simply shot himself. While the police’s claim of a lone gunman perpetrating the incident has been bolstered by the release of his identity and background, eyewitness reports however claimed that several masked men were responsible for the attack. What explains the difference in reporting? By virtually saying the case has already been solved, the police appear to be closing the door into further inquiries into the gunman’s identity, his associate and contacts, even network. Contrast this with how the UK Police handled the Manchester concert bombing, as they painstakingly unearthed personal details of the lone suicide bomber and exposed the terror network the bomber was affiliated with. That patient and dogged work of the UK Police, who did not give media interviews while doing their task, is an example our own should emulate. Otherwise, the Resorts World incident will suffer the same fates as the murky account of the killing of the Leyte drug lord inside prison and of the Korean businessman inside the Philippine National Police’s headquarters in Camp Crame. E-mail: angara.ed@gmail.com, Facebook and Twitter: @edangara
Susie G. Bugante: sss was her life
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hardly know Susie even after I joined Social Security System (SSS). I got a glimpse of her from her column pieces, from her work and from the descriptions of colleagues who spoke highly of her. She had been on and off the sickbed already when I started working in SSS, but wondered of the mystic glow and enthusiasm for work that negated her dismal state of health. There’s no question she valued and loved her job at SSS. When she left academe as a mass communication professor at the University of the Philippines, she put to good use her skills and talent in the practice her craft and enjoyed every minute of her work. She seemed guided by the words of Fyodor Dostoyevsky: “Human existence lies not just in staying alive but in finding a reason to live for.” Championing social security, particularly for the average working man, has given her the reason BUGANTE to wake up each morning and joyfully confront the daily challenges of life. You don’t really have to be acquainted for a long time to really know a person. All you need is to hear the conviction in her voice, the sincerity of her looks, the integrity of her words and the decisiveness of her action. Yes, those are Susie’s unmistakable trademarks. The first time you meet her, you may find a fault, but once you get to know her better, you find only virtues. A true voice of calm and reason that helped position the SSS as a bastion of social justice and protection for the Filipino workingman. As spokesman and chief information officer, she was a true voice of calm and reason, a role that fitted her to a T—true, tried and tested. She accepted praise with pride and humility and handled criticisms with poise and dignity. She deftly navigated the minefield of media and public affairs where you meet, as one writer has aptly put it, “the wits, the half-wits and the nitwits”. She proved that one does not have to use vile and loud language
and a devious or forked tongue to command media and public attention. Her soft voice and straight talk never failed to deliver the strong and compelling message that forced everyone to listen. She discharged her duties with passion and energy unmatched by many. She never engaged in double-talk, since her singular devotion is to SSS and its members. She was a unifier, not a polarizer, and that was the reason she was able to bring us to work together—SSS and its members, employees and employers and SSC and the media. Even as I speak now, Susie’s words reverberate inside this hall, whose walls have heard her memorable speeches that still resonate in our hearts and minds. Death will not still your voice, Susie.... Susie was a devoted sister, a loving aunt, a loyal friend, a caring colleague and a true Christian. She was a public servant who subordinated her self-interest to that of her people, the country and God. Let me quote African-American writer, Maya Angelou, who once said, “Life is not measured by the number of breaths we take but by the number of moments that take that breath away.” Susie, I would like to tell you that you have taken our breaths many, many times with your extraordinary work. Your death signaled the end of summer this year. On the first evening of your wake, heaven mourned with a heavy downpour that flooded many areas. Thunder cracked and lightning burned the dark sky. Even Nature shared our grief. When summer was done, you were gone, but you leave us with happy memories of many summers that will stay forever in our hearts. Susie stayed single and remained singularly devoted to her job. So maybe I’m wrong. In fact, she was married to SSS. For the past 29 years SSS was her family...SSS was her love...SSS was her life... Good-bye, dear Susie.
Tuesday, June 6, 2017 A11
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HE identification of the lone gunman last Friday finally settled the contending issue that indeed, he was not a terrorist, but the police should not be too fast in closing the case.
Why? Because a new crime may have emerged: criminal and civil negligence on the part of the hotel management, particularly security and receptionists assigned at the lobby and other entrances to the hotel. Had they followed procedure, the gunman, Jessie Javier Carlos, a heavy gambler, could have been prevented from entering the casino and, thus, stop the carnage that killed 37 people, especially since he was barred from doing so since April 3. Carlos carried an assault rifle (M-4 Carbine) and a bottle or bottles of highly inflammable fuel. How he easily got past the security people and receptionists, as well as the closedcircuit television (CCTV) cameras at the entrance, defies logic. Assuming he was wearing a mask
or a bonnet to cover his face, the more reason that the security people should have stopped him from entering the hotel-casino complex. CCTV clips presented by the police last Saturday to the media revealed incriminating pieces of evidence showing the gunman’s movements that provided every opportunity for the security people to stop him from committing the crime. One clip showed that the gunman calmly walked around the casino, fired his Armalite into the air, apparently to scare people, and freely moved to the second floor. Before that, Carlos set on fire many gambling tables in an attempt to create a diversion so he could easily escape. The video also showed him breaking into a secure room
where money and chips were stored, and stayed much longer, apparently intent on stealing as many as he could. In civil negligence, when someone is killed or injured in an accident caused by the negligence of another party, the negligent party can be sued for damages. Compensation for victims in a civil lawsuit could include: lost wages, medical expenses, cost of rehabilitation, pain and suffering. Criminal negligence is punishable by imprisonment, fines, probation supervision and mandatory community service. Those convicted of criminal negligence would probably have a criminal record that could make it difficult to obtain employment once the sentence imposed by a court has been served. In Article 365 of the Revised Penal Code, (Imprudence and negligence)—“Any person who, by reckless imprudence, shall commit any act which, had it been intentional, would constitute a grave felony, shall suffer the penalty of arresto mayor in its maximum period to prision correccional in its medium period; if it would have constituted a less grave felony, the penalty of arresto mayor in its minimum and medium periods shall be imposed; if it would
Can the MWSS deliver enough water? Ernesto M. Hilario
ABOUT TOWN
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ith climate change now an urgent global concern, one question residents of Metro Manila may well be asking is: Can the government assure us of adequate water supply in the future? At present, the city’s main supply source is Angat Dam, which supplies 4,000 million liters per day (MLD) of water. Water from the Angat Dam is treated at the La Mesa and Balara Plants. The La Mesa Treatment Plant processes 2,400 MLD of raw water and serves the western portion of Metro Manila. The Balara Treatment Plant has a full production capacity of 1,600 MLD and supplies the eastern zone. One problem is that Angat Dam is vulnerable to El Niño, an extreme weather phenomenon that causes severe droughts. Apart from this, the 49-yearold Angat Dam sits on the West Valley Fault in Bulacan. Hence, a 7.2-magnitude earthquake could affect the supply of water from Angat Dam, which provides 97 percent of the National Capital Region’s (NCR) water requirements. The Asian Development Bank is well aware of the structural instability of the dam and has warned that a breakdown of the structure “would lead to losses to the economy of Metro Manila and the Philippines, as well as potential health hazards”. Maynilad Water Services (Maynilad), the water concessionaire for Metro Manila’s western portion, has
likewise warned of the risk of relying solely on Angat Dam for NCR’s water supply. This, it said, could lead to a water shortage by 2020. The Duterte administration is now taking steps to address the problem. For one thing, the Manila Waterworks and Sewerage System (MWSS) wants to build a stronger partnership with its concessionaires Maynilad and Manila Water Co. (MWC) and assure NCR’s 12 million water consumers of ample water supply. The national government wants official development assistance from countries, such as China and Japan, to finance the multibillion-peso New Centennial Water Source-Kaliwa Dam Project in Quezon province. The project will tap the Kaliwa-Kanan-Agos River Basin as an alternative water source for Metro Manila by generating some 600 MLD. This will require the construction of a dam at the Kaliwa River (the Laiban Dam), and a smaller one (the Kaliwa Dam) downstream to ensure adequate water supply for Metro Manila. Construction of this new dam will go handin-hand with the rehabilitation of the Wawa Dam in Montalban, Rizal.
New MWSS Administrator Reynaldo Velasco wants these projects to ensure clean, affordable and sustainable water for Metro Manila and nearby provinces for the next 25 to 50 years. Velasco has given assurances that the new MWSS Board of Trustees will deliver the needed dam projects. With Velasco’s excellent track record at the Philippine National Police and as former mayor of Santa Barbara town in Pangasinan, both Maynilad and Manila Water recognize that the MWSS is in good hands and can implement doable solutions to Metro Manila’s water woes. Under Velasco’s watch, the MWSS will focus on three areas. One, interim and long-term water source projects to approximate at least 4,000 MLD in the next 10, 25 to 50 years. Two, disaster management, especially with the possible occurrence of a 7.2-magnitude earthquake and antiterrorist measures on major water installations and facilities. And three, sustainable watershed management projects. The MWSS will also draw up a new 10-year development blueprint on new water sources. The 10-year plan will focus on the Laguna Lake to supply 50 MLD; Putatan (150 MLD); Umiray and Sumag (350 MLD); Kaliwa (600 MLD); Laiban (1,800 MLD); and the possible reinstatement of Wawa Dam (350 MLD) into an active state after 24 years of lying dormant. The plan, which will be implemented in the next five years and completed within 10 years, will benefit not only Metro Manila consumers, but also those in outlying provinces. With Velasco at the helm of the government agency MWSS, the two water concessionaires expect the MWSS to honor key provisions of the privatization deals signed in 1997.
On climate, China should think small By Adam Minter Bloomberg View
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t’s a common sight in rural China: rows and rows of low-rise apartment buildings, often topped by solar water heaters the size of kitchen tables. By one estimate, 30 million Chinese households rely upon the devices for hot water. They’re served by 3,000 companies that sell around one million of the devices annually. Neither subsidies nor environmental guilt account for the sales, or for China’s place as the renewable hot-water capital of the world. Folks in rural areas have been buying them for two decades because they’re cheap to own and operate. Ever since US President Donald J. Trump announced the US would withdraw from the Paris climate treaty, there’s been lots of overheated talk about how China will now seize leadership of
the global fight against climate change. It’s easy to see why: Chinese leaders face pressure to address rampant pollution and have the resources to implement massive clean-energy projects, such as the world’s largest floating solar array, launched on a Chinese lake last week. But if China truly is to lead the world in promoting renewables, it’s going to have to think small as well as big. The real opportunity is in pushing innovative greentech—especially the type that fits on a rooftop. In fact, while China’s now the world’s biggest producer of renewable energy, its giant, utility-scale wind and solar installations have started to run up against serious problems. Thanks to the remote locations needed for such massive projects and the lack of sufficient transmission infrastructure to get the power back to major cities, as much as 17 percent of all wind power and 20 percent of all solar
power generated in China goes to waste —enough to power Beijing for a year. The problem has become so acute that in February, China banned the construction of new wind-power projects in six provinces for the rest of the year, lest more wasted capacity be added to the system. Worse, some utility-scale generators are being forced to curb power production.Moving major wind and solar projects closer to China’s biggest cities is virtually impossible. Given the rapid growth in the size of urban populations and ensuing sprawl, the vast acreages necessary simply don’t exist anymore. What land is available is far too expensive to justify devoting to windmills. Developers would rather invest in glossy condos. Yet, other opportunities abound. At the end of 2014, for instance, rooftop solar accounted for just 17 percent of China’s installed solar capacity. In Germany, by contrast, rooftop solar accounts for at
have constituted a light felony, the penalty of arresto menor in its maximum period shall be imposed. “Any person who, by simple imprudence or negligence, shall commit an act which would otherwise constitute a grave felony, shall suffer the penalty of arresto mayor in its medium and maximum periods; if it would have constituted a less serious felony, the penalty of arresto mayor in its minimum period shall be imposed. “When the execution of the act covered by this article shall have only resulted in damage to the property of another, the offender shall be punished by a fine ranging from an amount equal to the value of said damages to three times such value, but which shall in no case be less than P25. “A fine not exceeding P200 and censure shall be imposed upon any person who, by simple imprudence or negligence, shall cause some wrong which, if done maliciously, would have constituted a light felony. “In the imposition of these penalties, the court shall exercise their sound discretion, without regard to the rules prescribed in Article 64.”
To reach the writer, e-mail cecilio.arillo@gmail. com.
The provisions in question involve the rate-rebasing mechanism in the MWC and Maynilad contracts that allowed them to adjust their water rates once every three years, so they could recover their multibillion-peso investments and generate sufficient revenue to cover their maintenance, expansion and modernization operations. Maynilad had submitted a petition for an adjustment several years ago, but the MWSS arbitrarily cut the existing tariffs. This prompted Maynilad to file an arbitration case before the ICC in October that year in the hope of recovering P3.44 billion in foregone revenues. The ICC arbitral tribunal already ruled in favor of Maynilad, but rather than comply, the MWSS put the rate adjustment on hold. Maynilad filed a second arbitration case before the ICC in Singapore, telling the arbitral tribunal that on top of its P3.44 billion losses since 2013, it has been losing P208 million a month from the time the ICC approved the rate adjustment in December 2014. MWC has also filed an arbitration case against the MWSS before the ICC in Singapore, saying that it stands to lose a projected P79 billion until its concession runs out in 2037 because of the MWSS refusal to honor the raterebasing process. With new leadership at the MWSS, the two concessionaires are hoping that the water agency would now be more accountable and decisive in honoring its contracts so that Metro Manila will have a clean, affordable and sustainable water supply for itself and outlying provinces in the years ahead.
E-mail: ernhil@yahoo.com.
least 70 percent. That gap should soon start to close: Bloomberg New Energy Finance forecasts that China will install 7 to 8 gigawatts of rooftop solar in 2017 —an amount equal to the cumulative installed rooftop solar base up to 2016. Anywhere but China, that would seem an overambitious target. But the same resources China has brought to bear on megaprojects will help with smaller ones as well. For example, China’s National Energy Administration is piloting a program in rural areas to boost the incomes of two million poor Chinese, using rooftop solar. Villagers will become shareholders in cooperatives that manage local power substations and sell any excess power to the grid. Making the scheme work will require overcoming some steep technical challenges, including developing the infrastructure to transmit energy from often remote villages to the grid.
2nd Front Page BusinessMirror
A12 Tuesday, June 6, 2017
S. Korea tourism execs assure DOT of continued Philippine patronage By Ma. Stella F. Arnaldo
@akosistellaBM Special to the BusinessMirror
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HE Department of Tourism (DOT) received affirmations of support from tourism executives in South Korea after its officials assuaged the latter’s fears on traveling to the Philippines, amid recent safety and security concerns. DOT officials, led by Undersecretary for Tourism Development Planning Benito C. Bengzon Jr. and Assistant Secretary for Public Affairs, Communications and Special Projects Frederick M. Alegre, attended the Korea World Travel Fair (Kotfa) in Seoul, from June 1 to 4, along with Philippine tourism stakeholders. The two officials also held “fact-finding” meetings w ith major Korean travel agents and airline executives, as well as Seoul-based media, to answer the latter’s travelsafety concerns. Koreans were among those tourists who canceled their bookings in various destinations in the Philippines when the Abu Sayyaf attacked a village in Inabangan, Bohol, during the Catholic Holy Week break; and when martial law was declared in Mindanao on May 23, following the clashes between the government forces and a local rebel group, the Maute Group, in Marawi City. In a news statement, Bengzon described the meetings with Korean tourism executives as a “ breakthrough in the meeting of minds”. He expressed confidence that South Korea would still remain as the Philippines’s top source of tourists. “We look at Korea as a mutual partner in growth [and] in tourism,
and our Korean partners are convinced that the Philippines remains in fact, a safe haven for foreigners,” he stressed. Visitor arrivals from South Korea hit 1.48 million in 2016, up 10 percent from its arrivals in 2015. The market also accounted for 24.72 percent of the total 5.9 arrivals last year. Korean tourists have also consistently been among the top spenders in the Philippines, with visitor receipts amounting to some P70 billion in 2016. The Korean travel executives, who met with Bengzon and Alegre, were Kim Seong-hoon, sales manager, and Kang Hyuk-shin, country manager, Philippine Airlines (PA L); K ang Yoon-ho, senior manager, Cebu Pacific; Yong SunOk, senior manager and Jeong C ha n-woo, a ssist a nt m a nager, Hana Tour; Kim Jeong-tae, manager, Mode Tour; Um Jonghyun, CEO, Yoo Han Travel. Kim Young-sun, secretary-general of the Asean-Korea Center, shared the DOT officials’ optimism about continued travel of Koreans to the Philippines. “The Philippines is close to Koreans, and we will continue to explore cooperation and tourism exchange,” he said. Young-sun has been in Manila at least four times, he said. In interviews with Seoul-based
media, Alegre pointed out that the disturbance in the “remote area of Marawi City was immediately placed under control”, and should not in any way deter foreigners’ trips to the Philippines. He explained that martial law was imposed temporarily in the southern island of Mindanao to beef up the government’s security measures versus any potential terror threat. He also emphasized that terrorism threats and attacks have now become commonplace in many parts of the globe. The United Kingdom, for instance, has been a continuing target of terrorists, with the latest ones occurring at London Bridge and the Borough Market, just a few weeks after attacks were carried out against attendees of the concert of Ariana Grande in Manchester. Alegre underscored the importance of disseminating factual information on the differing situations in the thousands of travel destinations, in the Philippines and elsewhere. “We are indeed elated by the strong interest in our tourist destinations, amid the challenges faced recently by our tourism industry, a major contributor to the country’s gross domestic product,” Alegre said. Among those who met with Alegre were Ji Won-kim, Arirang T V; Boeun K im, Korea Times; Choe Hyun-yi, Korea Travel Times; Jepil So, Kotfa Daily; and Chung Sun-hwa, Ewha Communications.
Ph i l ippi ne A mba ssador to South Korea R aul Hernandez joined Bengzon, who also addressed the International Tourism Forum in conjunction with Kotfa. Bengzon assured the dignitaries and entrepreneurs from across the globe that the Duterte administration has embarked on a massive tourism-infrastructure program to boost tourism in small and med ium-sized loca lities, which is the theme of the international tourism forum. “We are promoting rural tourism, including ecological and farm tourism, to achieve self-sustaining and inclusive development,” he added. He said the world-famous resort island of Boracay in Aklan and Panglao, Bohol, are among the small towns that have successfully developed and protected their natural tourism resources. Boracay and Panglao are among the favorite destinations of South Koreans in the Philippines. About 90 countries participated in the four-day tourism fair and was also attended by the DOTKorea Office, headed by Officer in Charge Liliosa Libosada and marketing officer Jake Velasco, and representatives of PAL, Bayview Park Hotel Manila, Golden Phoenix Hotel Manila, Oakwood Premier Joy-Nostalg Center Manila, Okada Manila, Azalea Hotels and Residences, World Citi Leisures, El Pinoy Dive & Leisure Resort, Bai Hotel Cebu and Plantation Bay Resort & Spa.
We are indeed elated by the strong interest in our tourist destinations, amid the challenges faced recently by our tourism industry, a major contributor to the country’s gross domestic product.”—Alegre
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NAPC, LABOR GROUP TELL BUSINESSMEN: DON’T BE A GROUCH By Elijah Felice E. Rosales
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@alyasjah
he Associated Labor Unions-Trade Union Congress of the Philippines (ALU-TUCP) and the National Anti-Poverty Commission (NAPC) took a swipe at the Employers’ Confederation of the Philippines (Ecop) for its statement that security of tenure of workers is not an absolute right. A LU-T UCP Spokesma n Alan A. Tanjusay told the BusinessMirror in a phone interview that Ecop is being the “habitual oppositor again of rights long fought for by the labor sector”. “Ecop does not consider the concerns of the workers as it is, as usual, lobbying for the interests of employers and owners of companies only,” Tanjusay said. “The labor sector will not be hindered by groups and individuals lobbying against its welfare and rights,” he added. In a statement, the labor council of the NAPC disputed Ecop’s remark that security of tenure is linked to the “right of enterprises to reasonable returns on investments and to expansion and growth”; thereby, it is the employer’s call whether or not to regularize a worker. “This argument is so arrogant that businesses cannot flourish without the workers’ significant contribution in producing commodities and providing services,” NAPC labor representative Edwin A. Bustillos said. “For several decades now, employers and owners of companies gained much from the proliferation of contractual employment, while workers remain poor and unprotected,” he added. Bustillos said he is also “appalled” by Ecop’s move last week to file a position paper before Congress seeking to block 25 measures aimed at
strengthening the security of tenure of workers. He said blocking the measures without going through the process of deliberation is tantamount to the continuation of contractualization, which Bustillos dubbed as a form of modern-day slavery. Bustillos said it is high t i me P re s i d e nt D ut e r t e signed an executive order (EO) scrapping the practice of contractualization as a mode of employment. “It’s about time for the President to issue an executive order prohibiting all forms of contractualization that NAPC-FLMW [Formal Labor and Migrant Workers] has been lobbying through the NAPC en banc in order to change the status quo and improve the condition of the working class, if change has really come,” he said. Presently, a draft EO , submitted by ALU-TUCP on May 9, is awaiting Duterte’s signature. In a position paper last week, Ecop expressed its opposition against 25 bills pending at the House of Representatives, which favor the security of tenure of workers. “Jurisprudence has reiterated time and again that the exercise of management prerogative is not subject to interference so long as it is done in good faith based on the exigencies of business and not intended to circumvent the legal rights of labor,” the position paper read. “Security of tenure is not an absolute right. It cannot be pleaded to avoid the exercise of management prerogative. Such exercise becomes objectionable only when it is not for ‘reasonable returns on investments’ and for ‘expansion and growth’, which are constitutionally recognized employer’s rights, but is sought merely as a convenient cover for oppression,” it added.
Hotel deaths fail to jar market: PSEi closes high By VG Cabuag
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@villygc
HARE prices closed at its highest for the year as investors ignored last week’s attack at a popular gambling site in Pasay City. The benchmark Philippine Stock Exchange index (PSEi) closed at 8,001.38, up by 93.72 points or 1.2 percent from Friday’s closing level of 7,907.66. Since last week, the main index already touched the 8,000-point level, but investors decided to lock in on their gains, as they became nervous on the developments in the attack at Resorts World Manila last Friday. The attack inside the casino is linked to the deaths of 38 people. The PSEi closed at an all-time high of 8,127.48 on April 10, 2015, but fell sharply in the following months on global market jitters. All sectoral indices also ended higher for the day. The Financials sector gained the most, up by 1.6 percent to 1,976.31 points; the broader All Shares index gained 44.14 to 4,760.27; the Mining
and Oil index surged 149.27 to 12,568.54; and the property index was up by 34.08 to 3,740.42. “The market’s breach of the 8,000 level can be attributed to the optimism over the developments in the Department of Finance’s Comprehensive Tax Reform Program [CTRP],” PSE President and CEO Ramon Monzon said. President Duterte has certified to Congress the urgency of the CTRP, and the House of Representatives passed it before approving an adjournment sine die. The tax-reform package is estimated to generate additional revenues of P130 billion for the government on the first year of its implementation. Year-to-date, the PSEi has gained 17 percent. Cirtek Holdings Philippines Inc. was the day’s most active, gaining P0.20 to P23.50; Ayala Land Inc. lost P0.40 to close at P40.90; SM Investments Corp. rose P22.50 to P790, its property unit SM Prime Holdings Inc. increased P0.85 to P34.60; and Universal Robina Corp. was up P0.80 to P160.40.
BACK TO SCHOOL Students from Parañaque National High School line up for the flag ceremony during the first day of school year 2017-2018. Around 25 million students are expected to return to school this June, including Grade 12 students who will be the first batch of graduates of the Senior High School Program. NONIE REYES