Businessmirror june 06, 2018

UNDEREMPLOYMEMT PERSISTS BECAUSE OF FARM SECTOR neglect–neda

By Samuel P. Medenilla

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@sam_medenilla

HE double-digit underemployment rate persists because the country’s agriculture sector remains backward, the National Economic and Development Authority (Neda) said on Tuesday.

Neda Undersecretary for Planning and Policy Rosemarie G. Edillon told reporters in a news briefing that the country’s high underemployment rate “warrants attention.”

“When you talk about underemployment,

Farmworkers carry their produce somewhere in Central Luzon in this 2017 file photo. Latest government data showed underemployment persists because the agriculture sector remains underdeveloped. NONIE REYES

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it’s largely the problem of the agriculture sector,” Edillon said. “What we should be doing really is to create other job options.

That is what the government is doing.”

Earlier, the Sugar Regulatory Administration attributed the delay in planting to the lack of sugarcane cutters who have decided to shift to construction jobs created by the government’s “Build, Build, Build” program.

The Associated Labor Union-Trade Union Congress of the Philippines (ALUTUCP) has also expressed concern over the high underemployment rate.

“It means there are jobs and there are work opportunities but there are still jobs-skills mismatch, poor wages and poor security of tenure, poor social protec-

See “Underemployment,” A2

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A broader look at today’s business n

Wednesday, June 6, 2018 Vol. 13 No. 235

Panic a worse enemy than inflation, says BSP ‘D

By Bianca Cuaresma

@BcuaresmaBM

O not panic.”

Bangko Sentral ng Pilipinas (BSP) Governor Nestor A. Espenilla Jr. said this following the Philippine Statistics Authority’s (PSA) announcement of a 4.6-percent price growth number for the country in May.

5 traders get NFA okay for rice imports

The governor made the remark at the BusinessMirror’s Coffee Club Forum on Tuesday, where Espenilla was invited as guest speaker, the same morning the PSA announcement of the May inflation data was released.

The May inflation rate of 4.6 percent is an acceleration from

both its level last year and from the previous month, with the inflation rate for May 2017 hitting 2.9 percent and in April 2018 at 4.5 percent. It is, however, significantly on the lower end of market expectations for the month.

“If we don’t panic, we will be able to manage this. But if we hit the

ECONOMIC CHIEFS TRACK OIL PRICES

They saw the TRAIN coming, but didn’t reckon with its speed. Read how economic managers deliberately tweaked policy to tax ‘sin’ and sweet items more, but underestimated volatility of oil prices.

Banking and Finance, B3

panic button and rave about inflation going out of control and start demanding all kinds of things, then that may be a self-actualizing, selfrealizing aspect,” Espenilla told the

Bangko Sentral ng Pilipinas Governor Nestor A. Espenilla Jr. gestures as he discusses the latest inflation data and proposals to blunt the impact of inflation and the tax-reform package, among other key economic issues, at Tuesday’s BusinessMirror Coffee Club in Makati City. ROY DOMINGO

PESO exchange rates n US 52.5780

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No atheists in migrations Teddy Locsin Jr.

free fire Philippine statement delivered by Ambassador Teddy Locsin Jr. on June 4, 2018 at the Fifth Round of Negotiations: Side Event on “The Protection and Integration of Migrants in Vulnerable Situations: The Case of FaithBased Organizations” at UN Headquarters, New York.

B

efore I begin, allow me to extend my country’s deepest condolences to Guatemala for the lives lost to the Fuego Volcano’s eruption on Sunday. The death toll is still rising.

Continued on A6

Weak peso spurs factories to produce more in April

By Cai U. Ordinario

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Continued on A2

HE National Food Authority (NFA) on Tuesday said it has awarded the contracts for the importation of 250,000 metric tons (MT) of rice to five traders from Southeast Asia.

The NFA said a total of 19 suppliers participated in the open tender last month, but only 13 passed the eligibility and technical requirements. Of the 13 who offered bids, only five eventually passed the postqualification evaluation of the NFA’s special bids and awards committee for the supply of the 250,000 MT of rice.

“These are Thai Hua [2511] Co. Ltd. for the supply of 75,000 MT; Capital Cereals Co. Ltd. for 43,000 MT; Asia Golden Rice Co. Ltd. for 58,500 MT; Ponglarp Co. Ltd. for 36,000 MT; and Olam International Limited for 37,500 MT,” it said See “5 traders,” A2

tion benefits and insurance,” ALU-TUCP Spokesman Alan Tanjusay said.

Julius Cainglet of the Federation of Free Workers said the increase in underemployment rate reflects the “prevalence” of contractual workers, who receive low wages and insufficient benefits. “The increase in the underemployed underscores the government’s failure to stop labor contractualization.”

The Philippine Statistics Authority (PSA) reported that the country’s underemployment rate rose to 17 percent in April, from last year’s 16.1 percent.

This represented 6.93 million Filipinos in April, an increase of nearly 500,000 from 6.47 million recorded a year ago.

@cuo_bm

ACTORY output rose to an eight-year high in April as the weakening of the peso and the increase in consumer demand encouraged manufacturers to produce more, the National Economic and Development Authority (Neda) said on Tuesday.

Data released by the Philippine Statistics Authority (PSA) indicated that the manufacturing sector’s Volume of Production Index (VoPI) grew 31.1 percent in April, 0.1 percent higher than the rate recorded a year ago. The last time the sector’s expansion breached 31 percent was in April 2010, which was an election year.

Analysts said the weakening of the peso will boost consumption spending as it would improve the purchasing power of the families of overseas Filipino workers. It also bodes well for exporters as it would allow them to earn more.

The peso has been weakening against the US dollar in the past few months. First Metro Investment Corp.-University of Asia and the Pacific Corporate Market Research

31.1 percent The rate of expansion of the manufacturing sector’s Volume of Production Index in April

expect the trend to continue in June and July to P52.67 and P53.05 to the dollar, respectively.

Neda Officer in Charge (OIC) and Undersecretary Jose Miguel R. de la Rosa said this can also be attributed to the passage of the Ease of Doing Business Act of 2018.

“A bullish business outlook is expected for the entire second quarter on the back of robust economic growth. An expansion of businesses will also be facilitated, thanks to the new law on ease of doing business,” de la Rosa said.

The Neda said the growth in production of food and exportoriented products, such as processed food, chemicals, fabricated metals, leather, petroleum, nonmetallic minerals, electrical and nonelectrical machiner y, among others, contributed to the higher VoPI. See “Weak peso,” A2

n japan 0.4788 n UK 70.0023 n HK 6.7019 n CHINA 8.2118 n singapore 39.3401 n australia 40.1854 n EU 61.5110 n SAUDI arabia 14.0200

Source: BSP (5 June 2018 )

News

BusinessMirror

A2 Wednesday, June 6, 2018

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PHL asks SoKor to slash tariffs on imported fruits to 5%

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By Jasper Emmanuel Y. Arcalas @jearcalas & Bernadette D. Nicolas @BNicolasBM

ANILA has urged Seoul to slash tariffs on agricultural imports to least 5 percent so Filipino planters could expand their fruit shipments to South Korea.

Trade Secretar y R amon M. Lopez said in a news briefing on Tuesday in South Korea that Manila and Seoul are hammering out a preferential trade agreement that would improve market access

for Philippine products.

“We have the Asean-Korea Free Trade Agreement but there are still products that we wish to improve market access on. In particular, we are referring to banana,

30 percent The tariff rate slapped by South Korea on tropical fruits from the Philippines

pineapple, mangoes and coconut products,” Lopez said.

The trade chief said the reduction in tariff rates for agricultural imports would enable Philippine bananas to become competitive. The Philippines’s status as leading supplier of bananas to South Korea is cur-

rently being challenged by Latin American countries.

Lopez said the Philippine government is just basically asking for reciprocity since Manila has already lowered tariff rates for South Korean exports.

Agriculture Secretary Emmanuel F. Piñol noted that while Seoul slaps a 30-percent tariff on Philippine fruits, especially bananas, Manila imposes “very low duties” on Korean fruits, trucks, cars and farm equipment.

Piñol also said President Duterte has already asked South Korean President Moon Jae-in to lower the tariffs imposed by Seoul on Philippine tropical fruit exports.

Panic a worse enemy than inflation, says BSP Continued from A1

Coffee Club, a joint presentation by the Aliw Media Group.

The 4.6-percent inflation rate fell on the lower end of the BSP’s inflation projection for the month —which was at 4.6 percent to 5.4 percent for May. The PSA attributed the rise in inflation to higher prices of alcoholic beverages and tobacco; furnishing, household equipment; and transportation.

“The risk is people assume that inflation will continue to spiral down the road and, as a result, that contributes to the process itself by elevating increasing wage demands and prices, and let’s say transport price adjustments, and that keeps feeding on each other,” Espenilla said.

“So this is the challenge that we need to manage. We want to keep inflation moderate over the medium term,” he added.

Proposed measures need further study

Among the more pressing proposals, in an effort to address the public outcry against rising consumer pr ices, include the various wage hike calls across d if ferent reg ions a nd across different sectors.

One proposal is to hike the minimum wage to P750 per day to be implemented on a national scale “regardless of location, size or in-

dustry classification;” another is to hike rates by P320; and one proposal specifically targetted significantly raising the wages of teachers.

While the BSP chief expressed support for wage hike calls among minimum-wage earners, he said other wage hike calls will need more careful thought as well as further calm and educated dialogue.

“I think the concerns of our workers are very real and need to be responded to, especially the lower wage workers. And this is precisely the reason why in the planning of the government they have budgeted for targeted subsidies,” Espenilla said at the BusinessMirror forum.

Asked about other specific wage hikes, however, the governor said it is a crucial for the government to “not give in to every demand.” “ That’s exactly what I was concerned about...We can always blame a lot of things but we have to look at this holistically because in the end if we are in a situation where we give in to all kinds of wage demands, that will in itself fuel inflation further down the road,” Espenilla said.

“And instead of looking at inflation moderating by next year we may be in danger of seeing inf lation accelerate further in the coming years and we were already in that kind of situation in the 1980s. We don’t want to be back in that kind of scenario,” he added.

Not as bad as thought

Although Espenilla admitted that inf lation will still likely breach the ceiling of the government’s 2 percent-to-4 percent target range for 2018, the Central Bank governor reiterated his confidence that inf lation will normalize back to within 2 percent to 4 percent levels by 2019.

He also expressed satisfaction with the lower-than-expected May price growth.

Espenilla particularly said at the sidelines of the BusinessMirror Coffee Club Forum that inf lation has yet to peak toward the third to fourth quarter of the year, but the acceleration of pr ice g row th seems to be “ f latter” than earlier expected, and that the May inf lation seems to indicate that inf lation is actually losing momentum and speed.

In a statement issued separately on Tuesday morning, the governor also told the press that while the five-month average inflation is still a nudge off of their target range ceiling at 4.1 percent, inflation looks like it is “not going to be as bad as some might think.”

“Inflation slowed down in the NCR [National Capital Region].

Month-on-month seasonally adjusted inflation has also continued to decelerate. It helps that oil prices seem to have peaked and food price inflation is also slowing down,” Espenilla told reporters.

BSP not letting its guard down

The BSP, however, is apparently not sitting on its laurels even after the recent inflation assessment, saying it will keep a close watch on inflation developments down the line.

“On the other hand, inflation is still accelerating outside NCR. Core inflation is slightly higher at 3.6 percent,” Espenilla said. “ The MB [Monetary Board] will consider what further adjustments are necessary to firmly anchor inflationary expectations and ensure that the inf lation target will be achieved in 2019,” he added.

In their latest monetary-policy setting meeting in May, Espenilla let out his first policy rate hike as BSP governor by raising the BSP’s main interest rates by 25 basis points.

The BSP earlier said the rationale behind the rate hike is to curb excessive inflationary pressures down the line. “...the BSP is taking certain measures and the most recent measure is the increase in the policy rate by 25 basis points and that is always something that is on the table for the BSP because we are very mindful of coming back to the inf lation target,” Espenilla said in the BusinessMirror Forum.

The BSP MB is scheduled to meet anew to set monetary policy on June 21.

Duterte, who is currently in South Korea for a state visit, raised the matter during an hour-long bilateral meeting on June 4.

“Responding to the Philippine President’s request, South Korean President Moon Jae-in said his government will look into mechanisms to allow lower tariffs for Philippine agriculture products,” Piñol said in his official Facebook page on June 5.

“President Moon said the Regional Comprehensive Economic Partnership [RCEP] could be a possible instrument for the lowering of duties,” Piñol added.

He said the prospect of increased engagement in agricul-

ture between the Philippines and South Korea is “bright” with the recent signing of the memorandum of understanding on agricultural cooperation.

Aside from lowering the tariffs imposed on its tropical fruits, Manila also requested Seoul to allow the entry of other farm products, such as okra and avocado, into South Korea.

“Easily grown in tropical countries and given the proximity to the Philippines of health-conscious markets such as Japan, South Korea, Hong Kong and Singapore, okra shines as the next hot item for Filipino farmers,” Piñol said.

Underemployment . . .

The PSA said underemployed Filipinos are employed persons who express the desire to have additional hours of work in their present job, or to have additional job, or to have a new job with longer working hours.

Data showed that 32.4 percent of the underemployed are engaged in agriculture; 47.1 percent in services; and 20.5 percent in industry. Further, more than half of these underemployed workers are considered visibly underemployed or those working for less than 40 hours a week.

The PSA said around 52.5 percent are visibly underemployed and 46.1 percent worked 40 hours or more. Those who worked for over 40 hours a week increased significantly from 37.7 percent in April 2017.

Edillon said this is why it is important for the government to create jobs, even those outside of the farm sector to improve the lives of those engaged in agriculture.

“Sometimes the jobs created outside of agriculture did not match with workers in agriculture and so an important intervention is to improve their employability,” Edillon said.

Lower jobless rate Data from the PSA showed that the unemployment rate slowed to 5.5 percent, the lowest in 10 years. The Neda attributed this to the infrastructure build-up of the government and the private sector.

The industry sector recorded a strong employment growth rate of 8.1 percent or 605,000 workers, increasing its total employment share to 19.7 percent, the

5 traders. . .

Continued from A1

in a statement on June 5.

Except for Olam International, which is based in Singapore, all the other suppliers are from Thailand, according to the NFA. “The five companies issued with Notice of Award will be required to post a Performance Bond within seven days,” it said.

“Preparation of contracts will also be done during this period for those who will be able to comply with the requirements. Issuance of Notice to Proceed will be given only after the posting of performance bond and signing of contracts,” it added.

The NFA said bulk of the volume or 200,000 MT are scheduled to arrive in the country not later than July 31, while the remaining

Weak peso. . .

Continued from A1

Higher government spending on infrastructure in the months leading to April helped sustain growth in construction-related manufactures, according to the Neda.

It added that construction-related manufactures continued its upward trend given higher demand for nonmetallic mineral products, particularly cement.

De la Rosa said the Ease of Doing Business and Efficient Government Service Delivery Law will boost factory output moving forward since it will help streamline procedures.

The law can also shorten processing time for government transactions, and create a central business portal to receive and obtain data involving business-related transactions. “ The full implementation of the Ease of Doing Business Act of 2018, and

Continued from A1

largest in the past decade.

The Neda said the construction subsector is the biggest contributor to employment, generating 468,000 jobs, among the industry subsectors during the period.

“Employment grew partly due to increased infrastructure spending as the Department of Public Works and Highways’s road projects and rehabilitation of public school facilities are already underway nationwide,” Neda Officer in Charge and Undersecretary Jose Miguel R. de la Rosa said.

“We are now seeing the contribution of the ‘Build, Build, Build’ campaign in terms of job generation. We can expect the demand for workers in the sector to grow further as more projects break ground,” he added.

Former Labor Undersecretary Rene E. Ofreneo agreed with the government’s assessment that the BBB boosted employment rate in April.

“Since ‘Build, Build, Build’ started it was able to generate additional jobs.

Other contributors to employment include the boom in the real estate and services,” Ofreneo told the B usiness M irror in a phone interview.

Ofreneo said the recently concluded Barangay and Sanggunigang Kabataan elections last month may have also contributed to jobs generation. “But its effect is probably not that much compared to the national elections.”

Cainglet said, however, that the number of displaced workers due to the closure of Boracay Island in April will “significantly raise” the jobless rate later this year. With Cai U. Ordinario

50,000 MT should be delivered not later than August 31.

The total volume was divided into seven lots with corresponding discharge ports in Luzon, the Visayas and Mindanao to facilitate distribution to the markets and intended beneficiaries, according to the NFA. “Designated discharge ports are: Poro Pt. in La Union, Batangas, Subic, Tabaco, Iloilo, Bacolod, Cebu, Tacloban, Zamboanga, Cagayan de Oro, Surigao, General Santos City, Davao City and Manila,” it said.

Meanwhile, the NFA said that it has no plans yet for further rice imports at this time.

“NFA Administrator Jason Aquino said the agency will first focus on the immediate presence of NFA rice in the markets, as imports arrive, to possibly pull down and stabilize rice prices,” the grains agency said. Jasper Emmanuel Y. Arcalas engagement in massive and coordinated capacity-building initiatives will help the manufacturing sector grow further,” de la Rosa added.

Based on the preliminary results of the Monthly Integrated Survey of Selected Industries, the PSA said the country’s average capacity utilization rate increased to 84.3 percent in April.

Data showed that 60 percent, or 12 out of the 20 major industries, operated at 80 percent and above capacity utilization rates.

The PSA said the propor tion of establishments that operated at full capacity (90 percent to 100 percent) was recorded at more than one-fourth of the total number of establishments (28.3 percent) in April 2018.

More than half, or 53.3 percent of the total establishments, operated at 70 percent to 89 percent capacity while almost one-fifth of the total establishments (18.4 percent) operated below 70-percent capacity.

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PDEA ‘narco list’ bares drug links of mayors, lawmakers, vice govs

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he Philippine Drug Enforcement Agency (PDEA) confirmed the alleged involvement of least 60 mayors, a number of congressmen and vice governors, as the agency bared on Tuesday the contents of its second narco list.

The mayors, at least six congressmen and the vice governors were among the list of 93 government officials involved in the illegal-drugs trade, according to PDEA Director General Aaron Aquino, who gave a preview of the contents of the new list.

Aquino, however, did not disclose the names of the government officials pending the approval of President Duterte.

“In the 93 listed, more than half of them are mayors, which are about 60plus of them. There’s a few vice mayors, congressmen and few vice governors,” Aquino said during a news briefing.

The PDEA director general said some of the officials are from Calabarzon, northern Mindanao and the Autonomous Region in Muslim Mindanao.

The new list followed the release more than a month ago of the names of at least 200 barangay officials who were reportedly involved in the illegal-drugs trade.

Meanwhile, PDEA operatives seized P74 million worth of methamphetamine hydrochloride, or shabu, during a controlled delivery operation in Parañaque and Bacoor cities.

Aquino said separate operations also resulted in the arrest of Dolores Lintag, 51; Melchor Corocoto, 29; Daniel de la Cruz, 21, and William de la Pizza.

The operations were made following information received by the PDEARegional Office 3 from the Bureau of Customs regarding the suspicious packages from Clark Freeport Zone.

“The report was immediately acted upon and the packages were subjected for inspection. The team took samples for laboratory examination, which gave positive result for methamphetamine hydrochloride,” Aquino said.

Prior to the interception, PDEA personnel conducted a two-day surveillance against the shipments, with agents going to Paraňaque City and Cavite.

Confiscated during the operation in Parañaque City was one box declared to be containing grill pans and stool bars, but was found containing suspected shabu, weighing more or less 6.5 kilograms, with an estimated street value of P44,200,000. Rene Acosta

Editor: Vittorio V. Vitug • Wednesday, June 6, 2018 A3

House opposition bloc slams call to postpone 2019 polls

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pposition lawmakers belonging to the “Magnificent 7” bloc on Tuesday slammed the call for the postponement of the 2019 elections to pave the way for a plebiscite for Charter change.

The so-called Magnificent 7 in the House of Representatives issued the statement in reaction to a recent statement issued by consultative committee (Con-com) member retired Associate Justice Antonio Nachura, who said in a television interview that some lawmakers are “inclined to call for poll delay next year.”

Rep. Edgar Erice of the Second District of Caloocan said any proposal to postpone the 2019 elections and extend the term of office of lawmakers is “self-serving and immoral.”

“Disturbance of the election process will only lead to the degradation of our democracy and will affect our economy since it will increase

the political risk factor in business and investments,” Erice said.

He added the Con-com must come up first with a draft of the proposed federal charter and defend it in Congress.

For his part, Party-list Rep. Tom Villarin of Akbayan said Nachura’s statement on lawmakers seeking poll postponement is “nothing new,” and “only shows desperation” for Charter-change advocates.

“Term extension and no-election are always used as caveats in any move for Charter change.

These are the twin evils of seeking power beyond what is allowed under the Constitution,” Villarin said.

He cited surveys that have shown that twothirds of Filipinos soundly reject Charter change.

Villarin said the Con-com should send to the archive its proposal for future reference and academic studies.

“Justice Nachura should not put up some solons as straw men in a futile exercise. Our people want to go on with the scheduled 2019 elections that will start October 2018, when certificates of candidacies will be filed,” Villarin said.

Party-list Rep. Gary Alejano of Magdalo, for his part, said changing the Constitution is no ordinary measure and must be discussed and debated thoroughly instead of immediately opting for a poll postponement.

“Threat, intimidation, rewards employed by proponents to gather support to the shift are clear manifestations that there [is a] hidden agenda behind it,” Alejano said. PNA

briefs sc to osg: comment on sereno’s appeal THE Supreme Court (SC) has directed the Office of the Solicitor General (OSG) to comment on the motion filed by ousted former Chief Justice Maria Lourdes A. Sereno seeking the reversal of the Court’s May 11 decision nullifying her appointment to the Judiciary’s top post in 2012.

SC Spokesman Theodore Te said the order was issued during the regular en banc session of the magistrates.

“In the matter of GR 237428 (Republic of the Philippines represented by Solicitor General Jose Calida v. Maria Lourdes P.A. Sereno) the Court directed the Solicitor General to comment on respondent’s ad cautelam motion for reconsideration within a nonextendible period of five days from notice,” the Court said in its resolution.

After the submission of the OSG’s comment, the Court is expected to rule on Sereno’s motion for reconsideration also within this month, upon the return of its ponente, Associate Justice Noel Tijam from his sabbatical leave or service incentive leave. Joel R. San Juan

Child rights BILL passed on 3rd reading The House of Representatives has passed on third and final reading a bill that provides protection to children during armed conflict.

House Bill 7442, or the “Special Protection of Children in Situations of Armed Conflict Act,” principally authored by Rep. Feliciano Belmonte Jr. of Quezon City, seeks to implement the protection guaranteed under the Convention on the Rights of the Child, its Optional Protocol on the Involvement of Children in Armed Conflict and all other core human-rights treaties.

Jose Oscar Magpusao

A4 Wednesday, June 6, 2018 • Editor: Vittorio V. Vitug

Economy BusinessMirror

‘Fake’ seeds threaten govt’s corn self-sufficiency program

By Jasper Emmanuel Y. Arcalas

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@jearcalas

he reported proliferation of counterfeit genetically modified (GM) seeds in the country’s agriculture sector could cut the country’s self-sufficiency in corn, a multinational seed company warns.

But not only that, according to Dr. Gabriel Romero of Monsanto Philippines Inc. (Monsanto): Bt corn counterfeits will hit at Philippine dreams to export the said commodity.

Romero, Monsanto’s Regulatory Policy and Scientific Affairs lead, said these “counterfeit” Bt corn seeds are offered at almost 50 percent lower than the price of its branded counterpart that results in lower yield.

He said the yield produced by these adulterated seeds is about 30 percent to 50 percent lower than the registered kernels authorized by the government.

“Definitely our self-sufficiency will decline if the technology behind Bt corn would decline [due to counterfeit seeds],” he told the BusinessMirror in an interview.

“Because, eventually the technology of Bt corn may just become conventional. That means the chemical control of the technology would not be that effective and farmers would have to use more pesticides again,” he added.

“They [corn crop] will now be susceptible to pests and would eventually result in lower yield. And if that happens, we may not even be able to meet our local demand for corn and much less, the chance of exporting it will not happen,” Romero added.

The Monsanto official explained that the counterfeit Bt corn seeds sold in the market do not come with a “refuge” system.

A refuge system seeks to maintain the efficacy of the technology behind Bt corn seeds by mixing conventional

seeds in every bag of the product.

These conventional seeds would keep pests unresistant to Bt corn as they would serve as food for insects such as corn borer.

Without the refuge, Romero argued, pests may develop sooner or later a resistance to Bt corn and would eventually eat them, as well.

“The early failure of the technology would result in faster development of resistance by pests to Bt corn,” he said. “If that happens, then we are going back to conventional seeds. Then farmers would have to do a lot of chemical spraying again.

It’s like going back to zero.”

At least 80 percent of the country’s yellow corn production are GM. In March the Department of Agriculture announced that the country has achieved a 103-percent self-sufficiency in yellow corn production last year, the first in more than two decades.

Quoting a report from the Philippine Statistics Authority (PSA), Agriculture Secretary Emmanuel F. Piñol said gross yellow corn output in 2017 reached 5.811 million metric tons, which translated to a net local production of 5.749 MMT at a 1.07-percent postharvest loss.

This, Piñol noted, was 3.3 percent higher, or 189,000 metric tons more, than the 5.560 MT total yellow corn

demand last year.

The PSA defines self-sufficiency as the extent at which a country’s local production of commodities is adequate enough to meet the demand of the whole population.

Monsanto has urged the government to help the seed industry to address the proliferation of counterfeit Bt corn seeds in the market to avert its detrimental effects to the local corn industry.

At present, Monsanto estimates that more than 10 percent of the Philippines’s Bt corn seeds are produced illegally by unauthorized companies.

“According to a survey in 2015, farmers who used counterfeit seeds observed a significant decrease in their yield and negative net income brought about by issues like smaller grain, unfilled ear and higher susceptibility to pests,” the company said.

If this problem is left unchecked, then the number of farmers using these adulterated Bt corn seeds would continue to rise, according to Romero.

“The number will continue to increase as long [as these illegal companies] see that the government is looking the other way,” he said.

“If the government will not strengthen its regulation, then these companies will just be encouraged to continue to produce more.”

www.businessmirror.com.ph

PHL gets 21 investment pledges worth $4.86B from SoKor firms

By Elijah Felice E. Rosales @alyasjah

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anila was able to secure 21 investment pledges from South Korean firms amounting to almost $5 billion that is expected to generate more than 50,000 job opportunities.

Philippine trade officials, along with a business delegation, netted $4.86 billion of fresh projects from South Korean investors. According to the Department of Trade and Industry (DTI), the investments will create 50,800 jobs once the projects are in full swing.

The business-to-business deals were composed of a memorandum of agreement, six memorandums of understanding (MOUs) and 14 letters of intent (LOIs). The MOA came with a deed of donation that transferred a chemical fire truck, a fire pump truck and two ambulances to the Authority of the Freeport Area of Bataan from the Korean Federation of Fire Association.

The country’s small and medium enterprises (SMEs) are also expected to get a boost from the MOUs signed by the Asean Business Advisory Council with the Asean-Korea Centre and the Korea Federation of Small and Medium Businesses; and the Philippine Chamber of Commerce and Industry with the KBIZ. The first is aimed at the “establishment of a partnership to jointly develop and undertake programs, projects and advocacy initiatives” that will boost the re-

gional bloc’s mentorship network for SMEs. The other SME MOU is targeted at sharing information about commerce, industry market updates and identification of business and trade opportunities focusing on small businesses.

The Philippine Utility Vehicle Inc. (PhUV) also inked an MOU with DaeKyung Engineering Co. Ltd. to create a cooperative relationship for a joint development and promotion of green enterprises in the Philippines, such as smart grid, electric vehicle and advanced energy. The partnership will require DaeKyung to provide parts and components, while PhUV will supply the chassis and body for the assembly of an electric jeepney prototype.

The Cagayan Economic Zone Authority also scored four LOIs for the dredging, reclamation and reinforcement of the breakwater pier and harbor at Port Irene, Cagayan; construction of a pelletization plant for the prospective production of steel through the build-and-transfer arrangement at no cost to the government; creation of a partnership for the creation of a hub inclusive of blockchain technology; and initiatives related to financial technology.

Trade Secretary Ramon M. Lopez also signed a number of LOIs related to infrastructure development, engineering and construction, solar power, wind power, dredging and port rehabilitation, among others.

There was also desire from Taeseong Kimchi Co. to expand its kimchi food operations in the Philippines.

Manila expected to push for mutual recognition of professionals in forthcoming PJepa review

By Samuel P. Medenilla @sam_medenilla

M

anila and Tokyo are expected to tackle the mutual recognition of professionals in the next review of the PhilippineJapan Economic Partnership Agreement (PJepa).

The Professional Regulation Commission (PRC) has confirmed that it has been tapped by the Department of Trade and Industry (DTI) to activate for the first time the special subcommittee for mutual recognition agreement (MRA) since it was included in the PJepa in 2013. “[The] PRC was called to lead the discussion, and we emphasized that we cannot do otherwise since it is part of the agreement that the special subcommittee on MRA should be activated. Recently, they [Japan] finally agreed,” PRC International Committee Negotiations Division Chief L. Louis P. Valera told the BusinessMirror in an interview.

“This is a big development...it would provide us a very conducive platform to negotiate a mutual recognition,” he said.

Bureau of Local Employment (BLE) Director Dominique R. Tutay, who is also part of the subcommittee for mutual recognition, said the MRA will allow specific professionals in the Philippines and Japan to practice their professions in both countries.

Valera, however, said the subcommittee has yet to negotiate which professions maybe subjected to an MRA.

“That is what is good about it. It is still open [for discussion]. Because if on the onset we [have] already identified the professions, then our talks will be restricted to those,” Valera said.

The PRC added the special subcommittee under the Movement of Natural Person Committee of PJepa has already convened in the past to discuss the MRA for engineering, but no conclusive result was achieved.

“Japan was initially lukewarm about it...[even as the] Philippines continued to articulate about it in its every meeting…. It never left the ground,” Valera said.

Japan is currently undergoing significant migration policy reforms to allow more foreigners to enter its work force, amid its worsening labor shortage due to its dwindling and aging population.

Tutay said the review of the PJepa is expected to be completed before the end of the year.

“In September there is a scheduled joint committee meeting in Japan.

Before that, representatives from the Philippines and Japan will be meeting to discuss each other’s requests and exchange notes,” Tutay said.

Unsure protection

IN a related development, Migrante International (MI) Spokesman Arman Hernando urged the Duterte administration to ensure the protection of Filipinos who will be deployed in Japan under the TechnicalInternshipTrainingProgram(TITP).

The Philippines and Japanese governments signed last year a new

agreement for the TITP, wherein Filipinos will be allowed to enter Japan as trainees to get work experience with an entitlement for allowances.

Hernando, however, expressed concern over this TITP arrangement since Filipinos will be deployed in Japan as trainees rather than as workers, and thus unprotected by labor laws and policies there.

“This is another form of labor ‘flexibilization.’ They are called as trainees to reduce their guarantees as workers,” Hernando said in an ambush interview.

“Trainees will have no job security, even if they have a contract. Upon being reviewed [by a company] that they were not able to pass the necessary standards, they could be retrenched,” he added.

The MI said since trainees have fewer protection, they will be more vulnerable to labor abuses.

Hernando aded the government should put up the necessary protective measures for Filipino trainees in Japan.

“The government should be able to guarantee the protection of the Filipinos, even if they are trainees or ‘irregular’ workers, through a clear labor migration policy,” Hernando said.

“This could be contained in a bilateral agreement containing provisions in international standards on the protection of migrants,” he added.

In a previous interview, Philippine Overseas Employment Administration Administrator Bernard P. Olalia said that the necessary protective measures for TITP will be put into place.

DTI launches first Aeromart summit in Clark

By Ashley Manabat Correspondent

C

LARK FREEPORT­—The first “Aeromart Summit Clark” hosted by the Board of Investments (BOI) of the Department of Trade and Industry was launched here on Monday.

In her welcome remarks, DTI Assistant Secretary Rafaelita M. Aldaba said the Aeromart summit features the growing capabilities and potential of the Philippines in aerospace manufacturing, aircraft

maintenance, repair and overhaul and aviation training.

“We are pursuing the development of an integrated aerospace supply chain by further enhancing our capabilities in various segments of the industry and promoting the participation of our automotive, electronics and IT-BMP [information technology-business process management] industries in aerospace,” Aldaba said.

“We wish to replicate the successes of our companies that have diversified from other industries

to aerospace and now they are our key partners in and stalwarts of the Philippine aerospace industry,” she added.

According to the DTI, the Philippines is projected to grow more than five times its current economic size to become the 24th biggest economy in the world by 2030.

“We are confident that the Philippine aerospace industry will play an important role in achieving this, especially with aerospace exports posting 42-percent growth from 2010 to 2016,” Aldaba said.

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Wednesday, June 6, 2018

A5

Opec holds production steady while ministers discuss next move

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h e O rg a n i z at i o n o f Pe t ro l e u m Exporting Countries (Opec) is holding oil production steady even as it debates an increase. Opec pumped 31.9 million barrels a day last month, unchanged from revised levels for April, according to a Bloomberg News survey of analysts, oil companies and ship-tracking data. April’s output was the lowest in a year.

Opec and its allies are discussing whether to revive output after supply curbs they agreed to in late-2016 succeeded in clearing a global oil glut and prices rose to a threeyear high. Saudi Arabia and Russia, the biggest two producers in the accord, have signaled that more oil will flow later this year to make up for potential declines in Iran and Venezuela. Still, they will have to convince others in a 24-nation alliance, some of whom prefer the higher prices.

The steady production levels last

month owed as much to luck as design, with seasonal increases in Saudi Arabia countering unplanned losses in Nigeria.

Saudi output, which typically soars in the summer to meet power demand for air conditioning, increased by about 110,000 barrels a day to just over 10 million barrels a day. The kingdom’s production held just above 10 million for most of last summer.

Production in Nigeria slumped to the lowest in more than a year following disruptions at key pipelines. Supplies fell 190,000 barrels a day to 1.62 million.

Venezuela crisis

A slump also continued in Venezuela as an escalating economic crisis takes its toll on the country’s oil industry. It produced 1.44 million barrels a day, which barring a temporary collapse in 2002 and 2003, is the lowest in decades.

Facebook’s latest data lapse draws critique from lawmakers

F

acebook Inc. is disputing a New York Times report about how it shares data with device makers from Apple and Amazon to Samsung. But United States lawmakers were skeptical and demanded more accountabilit y for Facebook ’s frequent privacy lapses.

“Sure looks like Zuckerberg lied to Congress about whether users have ‘complete control’ over who sees our data on Facebook,” Rep. David Cicilline of Rhode Island, the top Democrat on a House subcommittee overseeing antitrust issues, wrote on Twitter, referring to the Facebook CEO. “This needs to be investigated and the people responsible need to be held accountable.”

T h e N e w Yo r k Ti m e s r e p o r t e d Facebook had struck deals with device manufacturers that allowed them full access to information on users and their friends. But the company contends those pacts were intended to help device makers create their own versions of Facebook apps, and the data mostly remained on phones that accessed it. That kind of arrangement was necessary before phone operating systems relied on app stores, it added.

It seemed like one more damning revelation as Facebook and other Internet companies are grappling with a global backlash over the extent to which they hoover up and handle user data. The New York Times said the vast amounts of information shared with Apple Inc. and other phone-makers included data on users’ friends that had supposedly barred access. The report raised questions about whether Chief Executive Officer Mark Zuckerberg misled Congress in testimony earlier this year, and whether the company was in violation of its decree with the Federal Trade Commission to obtain consent from users about how their information is shared.

The revelations are “a troubling reminder that the expectations tech companies set for consumer protection sometimes differ from what is actually delivered,” a spokesman for the House E n e rg y a n d Co m m e rce Co m m i t te e, which oversees several tech issues and questioned Zuckerberg in April, said.

Th e c o m m i t t e e’s t o p D e m o c r at, Representative Frank Pallone of New Jersey, said “the Federal Trade Commission must conduct a full review to determine if the consent decree was violated,” and that “Facebook and other data collectors, including these device manufacturers, should be prepared to come before Congress.”

The FTC, which is the lead US agency for enforcing companies’ adherence to their own privacy policies, declined to comment, but the agency is already examining Facebook’s compliance with a 2011 consent decree in the Cambridge Analytica case. The FTC could fine the company into the millions of dollars if it finds a violation.

Facebook said it had begun dismantling pacts with device makers dating back as far as a decade—when the social network was rarely directly installed on phones.

Hardware manufacturers used Facebook’s software tools to allow their own users to access contacts or post photos to their profiles, among other things, the company said in a blog post.

“There were no app stores at the time and this was the only way to make our product work on their devices. We tightly controlled these APIs from the get-go,” Ime

Archibong, Facebook’s vice president of product partnerships, said in an interview.

“These partners signed agreements that prevented people’s Facebook information from being used for any other purpose than to recreate Facebook-like experiences.”

Archibong said Facebook approved each of the experiences that were built, and that they worked differently to its public, platform APIs. The company has since terminated 22 partnerships with device makers, he added.

European lawmakers also voiced their concerns. Andrea Jelinek, who’s in charge of policing the European Union’s data-privacy law, said in an interview that regulators on the continent intend to examine the reports.

Separately, Hamburg privacy regulator Johannes Caspar described the reports as “absolutely alarming.”

“It’s high time to stop any illegal p r a c t i c e s o f Fa c e b o o k e s p e c i a l l y transferring user data to third parties,” he said by e -mail. “ The sharing of highly sensitive data of nonconsenting users with device manufacturers is an unprecedented violation of privacy laws and user trust. This is exactly one of the scenarios why GDPR was brought into force.”

GDPR is the European Union’s stringent regime governing how data collectors gather and use its citizens’ information.

It took effect last month.

Facebook’s share price plunged 10 percent in March after the Cambridge Analytica scandal erupted. Since then, it’s not only recovered, but on Friday closed at a record $193.99. Shares of Facebook were down less than 1 percent to $193.

42 at 3 p.m. in New York.

Facebook is retooling its approach amid a global consumer and regulatory backlash. Critics accuse its news feed algorithm of spreading misinformation and terrorism content among 2 billionplus users. Lax policies around sharing data with third parties led to the leak of information to consultancy Cambridge Analytica, which worked on successful Republican campaigns, including that of President Donald J. Trump. An app developer gave information on up to 87 million Facebook users to Cambridge Analytica mostly without their permission, setting off an uproar over data privacy. That developer was able to make the deal with the firm because the data was stored on his servers. Facebook said that in the device partnerships described by the New York Times, personal data was mostly processed on users’ phones.

Fa ce b o o k h owe ve r d o e s n’t v i e w device makers as outsiders—allowing them deeper access, the New York Times reported. It said it discovered some device partners could retrieve users’ relationship status, religion, political leanings and upcoming events, among other things.

“We’re not aware of any people’s information being misused by these companies,” Archibong said.

R o g e r M c N a m e e , t h e Fa c e b o o k investor who is now one of the company’s top critics, said that while the program may have restricted device makers’ access to Facebook users’ data, Facebook may not be fully aware of what was done with the data and some people may still have misused it.

“We have to allow for the possibility that abuse has occurred,” he said.

Bloomberg News

The Latin American nation’s unraveling has played a large part in eliminating the oil surplus Opec set out to clear, and it’s part of the reason the group is now deliberating whether to relax its supply curbs.

Prices of Brent crude, the global benchmark, hit $80 a barrel last month, a level that threatens to hurt global fuel demand and has drawn criticism of Opec policy from US President Donald J. Trump. It’s also sparked protests from Brazil to Siberia. Saudi Arabia has said Opec is focused on allaying consumers’ anxieties.

Ministers from some key Opec countries involved in the supply-curb accord met in Kuwait on June 2, where they “emphasized the need for healthy market conditions” and stable oil supplies, according to a statement issued Sunday.

All the 24 nations in the alliance will gather in Vienna later this month.

Bloomberg News

Trump, facing pushback, vows US will be stronger on trade

W

ASHINGTON—President Donald J. Trump faced pushback Monday from Republican lawmakers, an influential GOP group and foreign leaders over his tough negotiations that are hitting China, Canada and Mexico with tariffs amid fears of a trade war.

But the president defended his actions saying the US would soon be in a stronger position with its top trading partners.

Trump wrote in a series of tweets that his trade negotiations with China and a slew of US allies would break down large trade barriers faced by American farmers.

He said that China “already charges a tax of 16 percent on soybeans.

Canada has all sorts of trade barriers on our Agricultural products.

Not acceptable!”

In a conference call later Monday with grassroots supporters, he said: “We will be in a very strong position very soon. We don’t want to be taken advantage of anymore.”

T he president l a st week imposed tar iffs on steel and a lu m inu m impor ts f rom top United States trading partners, including Canada, Mexico and the European Union. A nd he has threatened tariffs on up to $200 billion in Chinese imports, raising the potential for retaliation in a dispute involving the globe’s two largest economies.

S e n at e R e p u bl i c a n s h av e warned that the tariffs could dampen the economic gains from the GOP tax cuts and sour the mood among voters as lawmakers campaign to protect the Republican majority in Congress in November midterm elections.

Sen. Bob Corker, R-Tenn., said he met with senators Monday as they consider a legislative response, drawing interest from “both sides of the aisle” who are concerned about the tariffs.

The lawmakers were trying to draft a narrowly focused bill that would require a vote in Congress to approve tariffs when the administration claims they’re needed for national security, as it did for those on steel and aluminum from the top US allies.

It’s a long shot leg islative strategy, but the group was working quickly to try to produce an amendment that could win support in time for debate on a separate, must pass defense bill.

White House legislative affairs director Marc Short dismissed the chatter. “To suggest that it’s news that Congress would want to reclaim powers that belong to the executive branch, I don’t think is exactly newsworthy,” he said on CNN. Many Farm Belt lawmakers worry that the trade disputes could make American farmers the target of retaliation. Mexico, for example, has said it will penalize US imports including pork, apples, grapes and cheeses.

At least one Republican, Sen. David Perdue of Georgia, said he was not ready for Congress to intervene because, having just returned from Asia, he’s confident Trump has gained China’s attention and he wants to see the strategy “play out.”

Groups backed by the influential Koch brothers’ network announced Monday they were launching a new multimilliondollar campaign to oppose tariffs and highlight the benefits of free trade. The groups—Freedom

In this June 1, 2018, photo, President Donald J. Trump attends a Change of Command ceremony at the US Coast Guard Headquarters in Washington. Trump is defending his tough trade negotiations with China, Canada and Mexico, saying that US farmers have been treated “unfairly.” The president says on Twitter that by the time he finishes his trade negotiations, “that will change” and big trade barriers “will finally be broken.” AP/Jacquelyn Martin

Partners Chamber of Commerce, Americans for Prosperity and The LIBRE Initiative—called on Congress to exert oversight by requiring House and Senate votes on any new tariffs and urged the lifting of the recent steel and aluminum tariffs as well as those being proposed on goods from China.

Tim Phillips, the president of Americans for Prosperity, said the tariffs amounted to “self-imposed barriers” to the $1.5-trillion tax overhaul that Trump signed into law last December. “The Trump administration has taken some incredibly positive steps for the American economy, but tariffs will undercut that progress and needlessly hamstring our full economic potential,” he said in a statement.

Sen. John Cornyn of Texas, the No. 2 Senate Republican, said senators would continue to try to talk the administration out of the plan and compared the tariffs to an “unguided missile” because “retaliation could occur” in vulnerable sectors.

Trump has also received blowback from world leaders. British Prime Minister Theresa May told Trump in a phone call that his decision to impose tariffs on steel and aluminum imports from the

European Union was “unjustified and deeply disappointing.”

May’s office said the two leaders would discuss “free and fair global trade” at the upcoming G7 summit in Canada.

Tr u mp’s h a rd l i ne rhetor ic comes as Commerce Secretary Wilbur Ross returns from China as part of the ongoing trade discussions. The White House said the meeting focused on reducing the US trade deficit by having China buy more agricultural and energy products.

But China said any agreements with Washington in their talks on settling a sprawling trade dispute “will not take effect” if threatened US sanctions including tariff increases go ahead.

Trump pointed to progress under his watch during a Monday conference call with grassroots activists surrounding the 500th day of his administration.

“I have your back. You remember Hillary Clinton calling everybody deplorables?” Trump said, noting his 2016 opponent’s description of his supporters. “We were the deplorables. Well, the deplorables, we’re the hot ones right now. They’re all trying to figure out: How do we get the deplorables on our side?” AP

Jordan protests resume despite resignation of embattled PM

A

Protesters gather for a demonstration outside the Prime Minister’s office in Amman, early Tuesday, June 5. Jordan’s King Abdullah II on Monday accepted the resignation of his embattled Prime Minister Hani Mulki and reportedly tapped a leading reformer as a successor, hoping to quell the largest anti-government protests in recent years, which are also seen as a potential challenge to his two-decade-old rule. AP/Raad al-Adayleh

MMAN, Jordan—Anti-government protests have resumed in Jordan despite the resignation of the country’s prime minister who had led the push for austerity measures.

Several thousand Jordanians marched toward the office of outgoing Prime Minister Hani Mulki overnight and into early Tuesday, demanding the government scrap proposed tax increases which critics say mostly target the poor and the middle class.

Riot police scuffled with some of the marchers, trying to keep them away from the building, but the fifth street protest in as many days was largely peaceful.

Mulki resigned on Monday, as Jordan’s King Abdullah II tried to get a handle on the biggest protests in the kingdom in several years.

The monarch, who has the ultimate say on policy decisions, promised change, but gave no specifics on possible reforms. AP

A6 Wednesday, June 6, 2018 • Editor: Angel R. Calso

Opinion BusinessMirror

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editorial

Bitter truth about Philippine sugar

S

ugar is a major food item ingredient, particularly for confectionery products. Makers of these products belonging to the Philippine Confectionery Biscuits and Snack Association (PCBSA) revealed that sugar constitutes about 60 percent of each confectionery item. This means that sugar accounts for a huge chunk of their production cost.

That’s why it did not come as a surprise when PCBSA members urged the government to allow the importation of sugar after the price of the sweetener rose to P2,790 per 50-kilogram bag. Based on Sugar Regulatory Administration (SRA) data, the average wholesale price of refined sugar was only at P2,041.67 per Lkg as of March 2. The current price of refined sugar is also more than double the landed price of imported sugar pegged at P1,300 per Lkg, according to the group.

The SRA, a government-owned and -controlled corporation under the Department of Agriculture, said domestic sugar prices rose due to a drop in estimated production for the current crop year ending August 31. Production of raw sugar for the current crop year, according to the Philippine Sugar Millers Association, could decline by 8 percent to 2.3 million metric tons, from the previous year’s 2.5 MMT. The SRA blamed the projected drop in sugar output to “unfavorable weather conditions.”

The weather is not the only culprit to the slowdown in the performance of the sugar sector. Data from the SRA showed that the majority of sugarcane farmers are considered small farmers, or those tilling up to 5 hectares of land. In crop year 2015-2016, the SRA noted that nearly 79 percent are small farmers, 17 percent cultivate 5.01 to 50 hectares and only 4 percent have landholdings that exceeded 50 hectares.

In a study published by the Philippine Institute for Development Studies in October 1999, the government think-tank pointed to the Comprehensive Agrarian Reform Program as a major factor that affected the competitiveness of the sugar sector. The Pids study noted that the implementation of land reform has contributed largely to the reduction in the size of land planted to sugar and the decline in yields per hectare. In Thailand and Indonesia, the study titled “Refined Cane Sugar Industry” revealed that sugar plantations averaged about 70 hectares.

This is because sugar is a plantation crop where economies of scale are important.

Because Republic Act 6657, or the Comprehensive Agrarian Reform Act of 1988, prohibited large landholdings, the reduction in sugar farms made mechanization more expensive. The Pids study noted that small farmers could not afford a tractor, which is needed for deep plowing. Also, some farmers who were granted land under the Comprehensive Agrarian Reform Program (CARP) either sold it to developers who turned it into subdivisions or leased it to small business entrepreneurs. Some decided to leave their land idle because they did not have the production capital.

To help farmers increase their productivity, the SRA under its former chief, Ma. Regina Bautista-Martin, rolled out the block farming program in 2012. Under the Sugar Industry Roadmap, the block farming program espouses the operational consolidation of small farms to take advantage of plantation-scale production to improve productivity and sugar yields. Small farms will be consolidated into minimum “block farms” of 30 to 50 hectares through various innovative schemes such as lease, joint venture, partnership and sharing.

Six years after it was launched, however, the block farming program has yet to make a dent on hiking productivity. Sugarcane planters remain hostage to erratic weather patterns, such as El Niño and La Niña. It also does not help that farm workers are leaving the sector in droves and are taking on construction jobs that pay higher.

The SRA should understand that manufacturers cannot be faulted for looking at markets abroad for sugar if they’re having difficulties sourcing their requirements from farmers. Also, higher prices due to supply tightness could encourage smuggling and consequently harm local produce. The production of more sugar should be the priority of the SRA at this time, especially now that it has tightened rules for importing alternatives such as high fructose corn syrup. It should revisit its initiatives, such as the block farming program, and craft measures that would encourage farm workers to remain in the sector.

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Free fire Continued from A1

I

am honored to be here to support the Permanent Missions of Guatemala and the Holy See, and the Scalabrini International Migration Network, in this side event, which highlights the primary relevance of a sustaining faith in the migrant condition—a condition that universally characterizes every life’s journey when you think of it. It highlights the critical importance of faith-based organizations in the protection and integration of migrants in their vulnerable situations.

It is no secret that faith-based organizations play a very significant role in my country—not just when it comes to protecting migrants in vulnerable situations, but in championing the rights of all of those in situations of vulnerability. They are the indispensable if rarely acknowledged partners of the government, especially in far-flung areas where they have more influence of the kind that counts, and a bigger presence in the manner that touches people most deeply. This is significant because many of our migrant workers—most of them women—

come from these areas.

In this light, we welcome the recognition by the REV2 of the Global Compact on Migration of faith-based organizations as partners in the implementation of the GCM.1 Faith-based organizations have the unique feature of being present in both sending and destination countries. For the migrant, this provides a comforting sense of familiarity, of emotional security and of community in a new environment, among strangers who view migrants as the quintessential strangers. As high-

Truth prevails

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No atheists in migrations

FACT IS MIGHT!

T

he Philippine Charity Sweepstakes Office leadership is silently working hard without fanfare to make the agency a potent revenue-collection machine of the Duterte administration. As they continue improving the agency’s services, PCSO General Manager Alexander Balutan and Chairman Anselmo Simeon Pinili welcomed the International Chamber of CommerceInternational Arbitration Court (ICC-ICA) decision to dismiss the case filed by the Philippine Gaming and Management Corp.

(PGMC) in connection with the PCSO’s P10.9-billion Nationwide Online Lottery System (NOLS).

The judgment unshackles the PCSO to finally modernize the system of its online lottery games like Lotto, digit games, Keno and Small Town Lottery (STL).

Does this mean the arbitral award to the PCSO has rendered moot and academic the writ of injunction against PCSO’s NOLS earlier issued by a Regional Trial Court (RTC) in Makati City. Let’s see what happens next.

Because of this good news, the

PCSO is grateful to the Office of the Government Corporate Counsel (OGCC), which helped the PCSO’s Legal Department in defending the case against PGMC at the ICC-ICA. Recently, the OGCC faced a controversy when President Duterte fired the agency’s chief for alleged corruption.

Based on OGCC’s records, the PCSO’s victory at the ICC-ICA is one of the largest cases it won in the past decade.

lighted by our panelists, they provide frontline care and assistance, a range of health-related, social, economic and cultural support, and, most important, a sense of safety for one’s basic faith-based identity. There are no atheists in migrations anymore than in foxholes.

In addition, faith-based organizations are critical in promoting evidence-based public discourse rather than evidently baseless and biased views in shaping perceptions of migration and of migrants. This is Objective 17 of the GCM. Countering xenophobia and related intolerance against all migrants goes beyond the enactment of legislation, for it touches on the strongest feeling of fear, which is the motor of cruelty.

And, as Ms. Portillo and Ms. Giron detailed, shocking brutality, unimaginable inhumanity and, most painfully, complete indifference to, at times, even glee at the sufferings of others.

In the current atmosphere of a negative societal narrative on migrants, faith-based organizations become more necessary, as they conduct focused awareness-raising campaigns and education to foster a culture of tolerance and acceptance.

From the first round of negotiations, the main principle of the Philippine engagement with the GCM is that the Global Compact should be

firmly anchored in human rights.

Our message has been simple: all migrants must be treated with decency and with the commensurate dignity of all human beings, regardless of their migration status. For we are all migrants in life. We are profoundly grateful to faith-based organizations for partnering with us in this vital advocacy.

His Holiness Pope Francis said in his message to the 2018 World Day of Migrants and Refugees, “Every stranger who knocks at our door is an opportunity for an encounter with Jesus Christ,” and in that regard, “our shared response may be articulated by four verbs: to welcome, to protect, /to promote and to integrate.” I prefer to say “to embrace,” because all humankind are kin, and the Earth is all our home. The shortfall of the United Nations is best filled by the world religion united—on migration. Thank you.

As far as I know, the PCSO started the public bidding of its NOLS early in 2017. Had the PGMC not interfered by securing a temporary restraining order, followed later by an injunction, the project would have been working by now.

On August 3, 2017, RTC Branch 143 Presiding Judge Maximo de Leon granted the injunction case filed by PGMC. Meaning, no public bidding on the project until the case is resolved in court. PGMC then filed an arbitration case before the ICC-ICA. PGMC is connected with Berjaya Philippines, which is 88.26-percent owned by Berjaya Sports Toto Bhd. According to PGMC, the PCSO allegedly violated its legal rights to open NOLS. The company claimed exclusive rights as service provider of the PCSO’s online lottery system for Luzon.

However, a document I received showed that the ICC-ICA dismissed in February PGMC’s case against the PCSO. ICC-ICA had advised the RTC in Makati City, Branch 143, regarding the dismissal of PGMC’s case. The Makati court announced through an order it released on May 25.

ICC-ICA declared that PGMC has no “exclusive contractual right” to

supply PCSO’s online lottery system in Luzon.

Worse, ICC-ICA dismissed PGMC’s P7.6-billion claims for damages against the PCSO and awarded the latter reasonable costs and expenses in the amount of P53.5 million.

PGMC is also ordered to reimburse PCSO $200,000 for the share of the advanced costs.

As this developed, Balutan and Pinili and all the men and women of the PCSO are gearing up to upgrade the agency’s online lottery system to increase revenue collection, which will fund its charity programs, especially for medical assistance to the poorest of the poor.

After more than 20 years, PGMC’s contract with PCSO will expire on August 21. It got the contract in 1996 during the term of President Fidel Ramos.

This is the only time NOLS, which has been serving more than 10,000 lotto outlets nationwide, will be open for public bidding.

For everyone’s information, Pacific Online System Corp., whose contract will expire on July 31 this year, holds the contract for the Visayas-Mindanao.

143. We will implement the Global Compact in cooperation and partnership with migrants, civil society, migrant and diaspora organizations, faith-based organizations, cities and local communities, the private sector, trade unions, parliamentarians, National Human Rights Institutions, the Red Cross and Red Crescent Movement, academia, the media and other relevant stakeholders.

E-mail: fetad@yahoo.com.

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Surety requirements in government procurement laws Dennis B. Funa

INSURANCE FORUM

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he Government Procurement Reform Act governs the procurement activities of the government. Under the law, various securities are required for the different stages of the procurement process. From the point of view of surety companies, these are: 1) the Bidder’s Bond; 2) the Performance Bond; 3) Warranty Bond for the procurement of infrastructure projects; 4) Advance Payment or Down Payment Bond under Section 4 of Annex “E” of the implementing rules and regulations (IRR); and 5) Retention Money Bond under Section 6 of Annex “E”.

The Insurance Commission has issued Circular Letter 2016-32, dated May 30, 2016 providing the guidelines for the issuance of certifications as required under Section 1.1 of Appendix 28 (Guidelines for the Establishment of Negative List of Surety and/or Insurance Companies) of the IRR.

Bidder’s Bond

The Bidder’s Bond “shall serve as a guarantee that, after receipt of the Notice of Award, the winning bidder shall enter into contract with the Procuring Entity within the stipulated time and furnish the required performance security.” Under the IRR, all bids shall be accompanied by a bid security payable to the Procuring Entity. Bid securities may also be in other forms such as cash or manager’s checks, bank draft or irrevocable letter of credit, or a Surety Bond callable upon demand issued by a surety company duly certified by the Insurance Commission. The amount of the bid security shall not be less than 5 percent of the Approved Budget for the Contract.

In Padilla v. Zaldivar it was ruled that “the bidder’s proposal bond in a public bidding is deemed to be an indispensable requirement for the validation of a bid proposal. This is no idle requirement. Indeed, its purpose is to insure the good faith of the bidders and bind them to enter into a contract with the government should their proposal be accepted.

The bond is the only hold which the government has on a bidder.”

Performance Bond

The Performance Bond shall be required prior to the signing of the contract “as a measure of guarantee for the faithful performance of and compliance with his obligation under the contract.” Likewise, the performance security may also be in other forms. The amount of the security shall not be less than 30 percent of the Total Contract Price.

Warranty Bond

IN Warranty Bonds, the contractor assumes “full responsibility for the contract work from the time project construction commenced up to a reasonable period.” The contractor assumes full responsibility for the safety, protection, security and convenience of his personnel, third parties, and the public at large, as well as the works, equipment, installation and the like to be affected by his

construction work and shall be required to put up a warranty security in the form of a callable surety bond.

The amount of the Warranty Bond shall not be less than 30 percent of the Total Contract Price.

Advance Payment Bond

The Advance Payment Bond is provided for under Section 4 of Annex “E” of the IRR. Under Section 4, “the procuring entity shall, upon a written request of the contractor which shall be submitted as a contract document, make an advance payment to the contractor in an amount not exceeding 15 percent of the total contract price, to be made in lump sum or, at the most, two installments according to a schedule specified in the Instructions to Bidders and other relevant Tender Documents.” The “advance payment shall be made only upon the submission to and acceptance by the procuring entity of an irrevocable standby letter of credit of equivalent value from a commercial bank, a bank guarantee or a surety bond callable upon demand, issued by a surety or insurance company duly licensed by the Insurance Commission and confirmed by the procuring entity.” The purpose of allowing advance payment is “to provide financial help to contractors to expedite the completion of a particular government infrastructure project.” On the other hand, the purpose of the bond is to guarantee the reimbursement of the advance payment made by the Procuring Entity in the event that the contractor fails to comply with the obligations.

Retention Money Bond

Retention Money Bond is provided under Section 6 of Annex “E” of the IRR. Progress payments are subject to retention of 10 percent referred to as the retention money.

The total “retention money” shall be due for release upon final acceptance of the works. The contractor may, however, request the substitution of the retention money for each progress billing with irrevocable standby letters of credit from a commercial bank, bank guarantees or surety bonds callable on demand, of amounts equivalent to the retention money substituted.

Dennis B. Funa is the current insurance commissioner. Funa was appointed by President Duterte as the new insurance commissioner in December 2016.

E-mail: dennisfuna@yahoo.com.

Untying the ‘Gordian knot’ of jeepney modernization Michael Makabenta Alunan

on the contrary

T

he government’s Jeepney Transport Modernization program remains tied down with several proverbial “Gordian knots” that need to be untied to achieve a smooth, effective and affordable implementation.

The proverbial Gordian knot was difficult to untie because it had no beginning or end, which today is likened to a dilemma or problem. n Reverse drive before accelerating? One such dilemma is the handling of rising fuel prices. It may seem unfair for the public transport sector not getting any relief, but allowing fare hikes may trigger a price spiral that can even worsen our poverty situation.

So, before jeepney groups intensify their demands for fare hikes and fuel discounts, or their criticisms against perceived defects of the Jeepney Modernization program, it is worth noting that many jeepney groups do not have the moral engine power to complain as they themselves are not serious in correcting their own inefficiencies, but prefer to pass on the problems to government or to commuters through fare hikes, disregarding their impact on inflation.

Inefficiencies of jeepneys and their lopsided one-way solutions of passing on problems through fare hikes have emerged recently, amid surging fuel prices. Piston earlier demanded for a P6-per-liter fuel discount; Pasang Masda, an increase in minimum fares from P8 to P12; while Atty. Vigor Mendoza, an increase in fares to P10.

For operators, they just see a mirage, which is a false vision of opportunities, when they should be driving back to their garage to improve their engine efficiency to help absorb costs as it is also unfair for commuters to absorb their inefficiencies. n I m p ro v i n g e f f i c i e nc y absorbs spike in fuel prices.

Improving efficiency is indeed one way to untie the Gordian knot. Engr.

Dave Garcia of ATIN’TO Development Services and a transport cooperative organizer, argues it is even possible to increase jeepney mileage from 5 kilometers per liter to 8 kms per liter, but even a minimal improvement to 6 kms per liter is already a 20-percent increase that can cover increases in diesel prices.

If diesel prices are at P45 per liter, a low mileage rating of 5 kms per liter costs P9 per km, but at only 6 kms per liter, this means an improvement of 16.66 percent. Assuming diesel prices rose by a total of P6 from P39 per liter, this 15.38-percent increase is still lower than the 16.6-percent improvement in fuel efficiency.

Based on the experience of progressive transport groups that have experimented on a combination of interventions and best maintenance practices, fuel savings can even reach as much as 30 percent, which means at P45 per liter diesel price, fuel savings could reach P13.50 per liter or more than the total fuel price hike. n DOTr offer good, but reform needed. Instead of rejecting outright Department of Transportation’s (DOTr) modernization, jeepney drivers must not consider it a threat, but an opportunity to empower themselves by modifying the program’s “Clean Fleet Management” system, anchored on 1) Clean for emissions-free and 2) Industrial Consolidation through Cooperative-building.

On emissions-prevention alone, which is achieved through better

Bloomberg

I

t’s the end of an era at Starbucks Corp.

The coffee giant announced on Monday that its longtime leader Howard Schultz is resigning as executive chairman, a coda to his decision last year to step down as CEO and turn that job over to Kevin Johnson.

It’s hard to overstate the role Schultz played in this chain’s

extraordinary ride from tiny, boutique coffeehouse to global dining juggernaut.

Schultz, 64, was a key architect of the Starbucks brand identity and, more broadly, basically created the market in the US for lattes and other once-exotic coffee drinks. He also steered the company through some dark times, such as when he reassumed the CEO role in 2008 after having vacated it several years earlier. Starbucks was in a rut fueled by overexpansion and

Inefficiencies of jeepneys and their lopsided one-way solutions of passing on problems through fare hikes have emerged recently, amid surging fuel prices. Piston earlier demanded for a P6-per-liter fuel discount; Pasang Masda, an increase in minimum fares from P8 to P12.

maintenance and technological interventions, fuel savings can reach as much as 10 percent to 30 percent, or P4.50 to P13.50 per liter, or more than the P6 per liter that Piston demanded.

On consolidation, jeepneys can go the way of consortiums or corporations, but the logical and viable option is cooperativism owing to its numerous privileges and benefits with value-added tax exemptions alone, which would translate to P5.40 per liter in earnings.

As cooperatives, oil firms can set up gas stations for clusters of transport cooperatives and offer additional P3 per liter in fuel discounts. Oil firms prefer cooperatives as experience of financing on transport shows that cooperatives have higher (97 percent) repayment rates compared to associations (32 percent).

More benefits can be derived from cooperatives, but more reforms are needed to cut down tedious red tapes in the registration of cooperatives. Registration can drag up to 10 months, while SEC registers companies in just two to three days. n Segmentizing solutions.

The DOTr’s one formula for all may not work as there are lucrative major routes, where drivers can earn P1,000 to P2,000 a day and can thus afford the P800 plus daily amortizations for the P1.6 million diesel vehicle replacements. There are highend routes like Global City, which are appropriate for electric vehicles that can charge premium rates.

However, there are small jeepneys with boundaries of only P600 to P700 a day, and could not afford the daily P800 amortizations. Perhaps, LPG engine vehicles costing only P1 million could bring down

amortizations to only P500 a day.

And if you add the 10 percent to 30 percent efficiency improvements derived from technological and maintenance best practices, it is possible to “effectively” reduce daily amortizations to as low as P350 per day, which is reasonable for both drivers and operators, Garcia added.

In short, the DOTr must allow all options as the industry is highly segmented, therefore the approaches and solutions must also be segmentized. After all, electric vehicles may not work in flooded and sloping areas, neither could diesel vehicle builders supply all the 250,000 jeepney units. Meanwhile, all vehicles have to be modernized. n Maintenance is missing key. Either option, which is the consumer’s choice by law, needs regular maintenance. If humans need maintenance like good diet, sleep, exercise, vitamins, vehicles also need periodic maintenance.

Jeepneys, which run 14 hours a day under passenger overloads, are therefore likely to break down. This could affect the daily amortizations.

Maintenance, therefore, allays the fears and prevents the nightmare of the modernization program turning into a multibillion peso failure simply because drivers and operators en masse failed to pay their amortizations.

Under Section 21 of the Clean Air Act, the DOTr is mandated to implement emission standards through 1) Motor Vehicle Inspection Service and 2) A Maintenance Policy and program, which is still nonexistent. The government will not do the maintenance, but sets maintenance policies, like integrating it in the modernization financing.

Simply put, maintenance must be a periodic daily habit or activity of jeepneys, whether the government operates an inspection or anti-smoke belching drive. This is easy and sustainable if maintenance becomes the transport cooperative’s business and a source of additional livelihood for the jeepney sector, which is its own market.

E-mail: mikealunan@yahoo.com.

Chinese burn will only make solar stronger

By David Fickling Bloomberg

R

emember how there was a glut of computer chips in 2008, and then the world stopped using computer chips? Yeah, me neither.

That’s a good reason to discount your worries about the effects on solar power from recent policy blows on panel manufacturers by the United States and Chinese governments.

The falls in the share prices of some major producers have certainly been dramatic—43 percent so far this year for JinkoSolar Holding Co., 20 percent for Canadian Solar Inc., and 4.4 percent for Hanwha Q Cells Co. But to date, what hasn’t killed the solar industry has only made it stronger.

To see why, reflect upon some history. Solar module prices slumped 80 percent between 2010 and 2017 as rising efficiencies and burgeoning supply pushed down expenses.

That process put many manufacturers out of business—but the plummeting costs caused global installed

capacity to increase almost ninefold, and the victors of that market battle have since done well on the spoils.

Those who bought shares in JinkoSolar and Canadian Solar at the end of 2011 when the market was in crisis had received total returns of 33 percent a year and 22 percent a year, respectively by the end of last week. That compares to 22 percent and 17 percent for investors in Taiwan Semiconductor Manufacturing Co. and Intel Corp. over the same period.

What will be the impact of the recent policy moves from Washington and Beijing? The Trump administration in January slapped a 30-percent tariff on imported solar panels, one reason that JinkoSolar and Canadian Solar shares are down so much this year, while the Chinese government last week said it would reduce the permits for new utility-scale projects this year and cut the feed-in-tariffs that solar generators are paid for their kilowatt-hours.

That’s clearly bad news for incumbent panel manufacturers, but

Howard Schultz leaves Starbucks in good hands

By Sarah Halzack

Wednesday, June 6, 2018 A7

exacerbated by the recession, and he managed to get it on steadier footing. All the while, Schultz has been an innovator when it came to how a public corporation should try to affect social change.

But Starbucks investors shouldn’t be too troubled by his departure from the board. After all, the more decisive moment for the future of Starbucks was when Schultz handed over the CEO reins to Kevin Johnson. And as I noted earlier this year, Johnson is proving himself to be a

capable steward of the company. He displayed that clearly in his proactive response to the controversy that sprang up earlier this year after two black men were arrested in one of its Philadelphia restaurants, including closing more than 8,000 of its stores for part of a day last month so employees could attend racial-bias training.

Johnson also seems clear-eyed about the challenges Starbucks faces in its home market and is moving quickly, but also prudently, to expand

In China module prices—still about a third of the cost of a solar system—should fall 35 percent this year and another 10 percent to 15 percent in 2019, Yvonne Liu, Yali Jiang and Xiaoting Wang of Bloomberg New Energy Finance wrote in a note on Monday.

it’s worth considering why. The near-term fall in demand in China —and the increase in supply from manufacturers that have announced 4.55 annual gigawatt-hours of new US production capacity this year in response to Trump’s tariffs—will lead to a glut in the global market that will drive prices lower.

That will hurt the margins of manufacturers, but help the uptake of photovoltaic technology, especially in Asia, where electricity demand is rising fast and utility-scale solar is already at or past the tipping point where its generation costs start to undercut fossil fuels.

In China module prices—still

about a third of the cost of a solar system—should fall 35 percent this year and another 10 percent to 15 percent in 2019, Yvonne Liu, Yali Jiang and Xiaoting Wang of Bloomberg New Energy Finance wrote in a note on Monday. That’s an acceleration of the expected pace before Beijing’s intervention, when a drop of 20 percent to 27 percent was forecast for 2018.

While aggregate global demand will fall this year because of the decline in Chinese build, those lower prices may stimulate the market in 2019 and 2020, they wrote.

We’ve become so used to large companies extracting a profit from their market power that an industry in which it’s hard to pick the winners three years hence feels like one that’s in a state of crisis. In truth, this is precisely the situation in which capitalism is supposed to excel, for the benefit of all.

Policy changes in 2018 have been bad news for incumbent producers of solar panels. For the industry as a whole—and for the global climate—they’re likely to prove a salutary tonic.

in China to help offset some of that weakness. He has extensive experience in the tech world, essential for a company that’s been blazing the trail on mobile ordering and payments.

A nd besides, we probably should’ve seen this coming. When Schultz relinquished the CEO job, the company had announced his focus as executive chairman would be on new innovations such as its upscale roasteries and reserve stores and on its social agenda. It’s not terribly surprising someone as ambi-

tious as Schultz wouldn’t be content to simply tinker on a small portion of the Starbucks empire.

Schultz said in a Monday interview with the New York Times that he is exploring a number of options for his next act, including public service, so cue up the feverish speculation that he’ll challenge President Donald J. Trump in the 2020 election.

But whatever Schultz does next, he can feel content that he left Starbucks in good hands. Johnson no longer needs a copilot.