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Lower chamber propels Duterte ‘change’ agenda By Jovee Marie N. dela Cruz

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Continued on A2

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Wednesday, June 7, 2017 Vol. 12 No. 237

BSP seen keeping rates steady on slower inflation By Bianca Cuaresma

@BcuaresmaBM

he rather uncharacteristic easing of price pressures in May should help soften the view that the Bangko Sentral ng Pilipinas (BSP) would prove trigger happy and be the first in the region to thwart pent-up prices by an interest-rate adjustment within weeks. This became more certain on Tuesday, when the Philippine Statistics Authority (PSA) reported inflation averaging lower at 3.1 percent during the month and put a stop to the ramping up of inflation in the country. The May inflation rate of 3.1 percent was lower than the 3.4 percent reported the previous April. The declaration in the rate of change in prices was traced to slower changes in the price of food, beverages and tobacco items.

SENATE MULLS OVER STATE INSURANCE FOR FARMERS IN AGRI-AGRA CREDIT LAW By Butch Fernandez

Conclusion

HE bicameral committee reports ratified by the House before it went on adjournment sine die last week include House Bill (HB) 5513 and Senate Bill (SB) 14, or “An Act Adjusting the Amounts or the Value of Property on which a Penalty is Based, and the Fines Imposed Under the Revised Penal Code”.

Filipino activists hold slogans as they oppose the recent declaration of martial law in Mindanao by President Duterte during a rally outside Malacañang on May 26. One of the 67 resolutions adopted by the Lower House include a report on inquiries related to the imposition of martial law in Mindanao. The House said it found no reason to revoke Proclamation 216, entitled “Declaring a State of Martial Law and Suspending the Privilege of the Writ of Habeas Corpus in the Whole of Mindanao”. AP

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he Senate Committee on Agriculture and Food is pursuing further review to update the 2009 Agri-Agra Reform Credit Act, mulling over the enactment of remedial legislation extending state insurance to cover farmers’ loan liabilities. “We are passing a law on agricultural insurance,” Sen. Cynthia A. Villar, committee chairman, disclosed at a public hearing on Tuesday, even as implementing details of the plan are still being finalized. Villar said access to cheap credit is the key to improving the agriculture sector’s productivity, as she vowed to further scrutinize the existing law embodied in Republic Act (R A) 10000, passed eight years ago to grant farmers and fishermen cheap credit. “When the law was amended, the intention was to provide a financing system to improve the

productivity of the agriculture and fisheries sector,” the senator recalled, noting that “years after its enactment, we want to know why we are still failing”. She added the ongoing committee scrutiny is intended to find out “if the law delivered on its promise to improve competitiveness or further amendment needs to be done.” The senator pointed out that, under the existing law, it retains 25-percent requirement of the loanable funds of banks to be dedicated for agriculture and fisheries, of which 10 percent shall be for agrarian-reform beneficiaries. Moreover, RA 10000 also provides for loans to support activities and purposes specified under the Agriculture and fisheries Modernization Act (Afma) and the Agrarian Reform Code. In a hearing last month, the committee reviewed remedial bills proposing to either condone See “Senate,” A2

PESO exchange rates n US 49.4040

BSP Governor Amando M. Tetangco Jr. said the slower inflation print in May further lends credence to the likelihood of more manageable and within-target inflation print for this year. “The BSP will continue to monitor developments here and overseas that can potentially influence future inflation and consider these in our next policy meeting,” Tetangco told financial reporters. I NG B a n k e conom i s t Jo e y Cuyegkeng in Manila said easing

3.1% The inflation rate in May

i nf l at ion i n May shou ld on ly strengthen downtrending inf lation the rest of the year, compared to price numbers reported earlier. “A high base effect has kicked in in the food component; we expect it to be a source of disinflation for the rest of the year. We also think the oil price-driven increases in the utilities and transport components have peaked,” Cuyegkeng said. “With inflation well-behaved, we think the prospect of the conflict in the south weighing on growth will lead the BSP to soften its stance,” Cuyegkeng added. Continued on A2

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The case for kinder, therefore smarter, wars Teddy Locsin Jr.

free fire

he following is my response to the presentation of the Report of the Secretary-General on children and armed conflict in the Philippines to the Security Council Working Group on Children and Armed Conflict at 12 p.m., Friday, June 2, 2017, Conference Room 7, UNHQ. The report summarized abuses against children in armed conflicts in the Philippines. In content, it damned by faint praise our Armed Forces on the basis of a few, but nonetheless egregious, instances of barbarity by our troops but it showered praises on the Molor Islamic Liberation Front (MILF) for undertaking measures, and promising even more measures, to moderate its regular barbarity in the abuse and employment of children in war. There seemed to be an assumption that the more we give up our sovereignty, the better chance we shall have to be praised, in turn, with equal exuberance by the United Nations. The UN gets its information from civil-society groups and from interactions with the MILF arranged by our government. Continued on A11

Mida sees 20% hike in sales for 2017 By Ma. Stella F. Arnaldo

@akosistellaBM Special to the BusinessMirror

IONEERING seafood importer and distributor Mida Food D i st r ibutors sees higher sales this year on the back of increased demand for frozen seafood products and consumer trends toward healthier eating. M i d a P r e s i d e nt a n d C E O Enrique Valles told the BusinessMirror that “our topline growth [for 2017] is 20 percent year-on-year”. He added the Asean Free Trade Area (Afta) agreements that lower the tariffs on a multitude of products have enabled the company to bring in more seafood to the country. “Afta has helped ease the process of importing and delivering [products] to our customers at better prices,” he said. He added Mida “supplies all five-star hotels and white-linen restaurants in the Metro, as well as grilleries, fast-food chains and stand-alones. Our client list is varied because we offer products that accommodate differing client needs. We have the capabil-

Afta has helped ease the process of importing and delivering [products] to our customers at better prices.”—Valles ity to produce bespoke products to match client requirements. We believe in personalized service and have dedicated account managers and business development managers to handle our clients needs.” Among the fast-food establishments the company supplies are Shakey’s (scallops for its scallops pizza), Tokyo Tokyo (shrimps for ebi tempura) and Wendy’s (fish for fish fillet burger), to name a few. Valles said most of their products are imported, “although we buy local shrimp and tuna as much as possible, depending on the season and price”. Mida celebrated its 20th anniversary as a leader in the Philippines seafood business by hosting a special lunch for media at Gallery Vask in Taguig City, showcasing the company’s various product lines

and its growth through the years. The company started off as a distributor of tuna products, but the business soon expanded, offering premium seafood items including Chilean seabass and salmon, as well as soft-shell crab, lobster, shrimp, squid, octopus, bacalao, halibut, dory, scallops, mussels and more. It now retails these in major supermarkets under the Pacific Bay brand. Valles admits, though, that the company’s biggest challenge is meeting the expectations of its clients for high-quality seafood at value price points. “Our biggest challenge moving forward is, as our customer base grows as well as the food industry in general, diners look for greater value on the menu and, in exchange, our customers demand for better pricing. The balance of being able to provide

these additional discounts, managing cashflow and being able to supply greater volumes to offset gross margin decline is the key to our success,” he stressed. Mida has also been instrumenta l in rev iv ing t he loca l aquaculture industr y, considering the prawns industry had already declined from its highgrowth years in the 1980s and 1990s. The Philippines used to be among the top exporters of prawns to the world, however, negligent and unsanitary culture activities led to the near-death of the industry. “As volumes [of demand for shrimp] grew, we started legislating for the ban on vannamei shrimp [white shrimp] to be lifted,” Valles noted. The Department of Agriculture, through the Bureau of Fisheries and Aquatic Resources had suspended the importation of live species of the vannamei in 2013 to protect the local shrimp industry from being infected with a virus that had affected the shrimp industries of Thailand, Vietnam, Malaysia, China and Indonesia. See “Mida,” A2

n japan 0.4473 n UK 63.7559 n HK 6.3403 n CHINA 7.2604 n singapore 35.7637 n australia 36.9690 n EU 55.6141 n SAUDI arabia 13.1744

Source: BSP (6 June 2017 )

BMReports BusinessMirror

A2 Wednesday, June 7, 2017

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Lower chamber propels Duterte BSP seen keeping rates steady on ‘change’ agenda Continued from a1

Speaker Pantaleon D. Alvarez said Congress also reviewed and updated the Revised Penal Code, giving new life to its pursuit for justice. “The imposed fines and valuations from which penalties are based were crafted in 1930. That was 87 years ago. The amounts are grossly disproportionate to the existing realities of our time,” Alvarez said. “For example, the act of treason, under the old Revised Penal Code, imposes a fine not exceeding P100,000. We have raised this to a more proportionate fine not exceeding P4 million”. Another bicameral committee report ratified by the House was HB 5648 and SB 1449, or “An Act Rationalizing and Strengthening the Policy Regarding Driver’s License, Providing for a Five-Year Validity and Penalizing Acts in Violation of its Issuance and Application”. PDP-L aba n R ep. Cesa r V. Sarmiento of Samar claims the approval of this bill is a big help to drivers. Also pending at the bicameral committee is HB 64 and SB 1317, or “An Act Strengthening Compliance with Occupational Safety and Health Standards and Providing Penalties for Violations Thereof”.

Money matters

THE House of Representatives has adopted the Senate version of a bill expanding the coverage of AntiMoney Laundering Act of 2001 to include casino operators. Under the bill, covered transaction includes a transaction in cash or other equivalent monetary instrument involving a total amount in excess of P500,000 within one banking day. For covered persons under this act, a single casino financial transaction involves an amount in excess of P5 million or its equivalent in any other currency. The said

threshold, however, may be adjusted by the council based upon the recommendation of the congressional oversight committee. For his part, PDP-Laban Rep. Ben Evardone of Eastern Samar, chairman of the House Committee on Banks and Financial Intermediaries, said the amendments were intended, not only to further strengthen the law, but also to make it fully compliant with the United Nations convention against Transnational Organized Crime (2000 Palermo Convention) and related UN Conventions. Some of these conventions include the UN Convention Against the Illicit Traffic in Narcotic Drugs and Psychotropic Substances (1988 Vienna Convention) and the UN convention Against Corruption (2003 Merida Convention). Likewise, Evardone said the amendments seek to make the country fully compliant with the international standards on combating money laundering and terrorist financing set by the Financial Action Task Force through its Revised 40 Recommendations. “The laundering of the proceeds of crime is very dynamic. As criminals continue to exploit identified weaknesses of the legal and regulatory structures and mechanisms of jurisdictions in order to surreptitiously launder the proceeds of their crime and make them beyond reach of the legal and judicial powers, the law enforcement and judicial system should, likewise, evolve to counter them,” he said. “Our responsibility as legislators is to ensure that our government is equipped with the necessary legal tools”.

House support

MEANWHILE, among the mea-

sures approved on third reading was HB 187. The bill provides for the restructuring and condonation of unpaid interests, penalties and surcharges on loans secured by farmers, fisherfolk and agrarian-reform beneficiaries from the Department of Agrarian Reform, Department of Agriculture, People’s Credit and Finance Corp., Cooperative Development Authority, National Food Authority and Quedan and Rural Credit Guarantee Corp. Party-list Reps. Anthony Bravo and Sabiniano Canama of CoopNatcco said HB 187 aims to promote comprehensive rural development and agrarian reform through measures that will free farmers, fisherfolks and agrarian-reform beneficiaries from the bondage of debt and poverty. Also, the lower chamber came out with 294 committee reports and adopted 67 resolutions that were based on the hearings and inquiries conducted by the different committees on varying issues. The 67 adopted resolutions are broken down as follows: 58 regular resolutions; five concurrent resolutions; two reports on resolution on inquiries related to the impeachment move against Duterte and the imposition of martial law in Mindanao; and reports on inquiries related to the illegal-drugs trade and cooperatives. According to Alvarez, these reflect the full support of the House of Representatives to Duterte. The House found no reason to revoke Proclamation 216, entitled “Declaring a State of Martial Law and Suspending the Privilege of the Writ of Habeas Corpus in the Whole of Mindanao” and dismissed the impeachment complaint filed by Party-list Rep. Gary C. Alejano of

Magdalo against the President. The two reports on inquiries adopted by the House are a resolution calling for an investigation, in aid of legislation, on the proliferation of drug syndicates at the National Bilibid Prison; and a resolution directing the Committee on Cooperatives Development to conduct an inquiry for noncompliance of the Bureau of Internal Revenue with Section 13 of the joint rules and regulations implementing Articles 60, 61 And 144 of Republic Act 9520, or the Philippine Cooperative Code of 2008.

Second session

MEANWHILE, House members are set to act on several pending measures during its second regular session, which is set to open on July 24. Included in the calendar of unfinished business are: ■ HB 4113, or “An Act Increasing the Maternity Leave Period to 100 Days for Female Workers in the Government Service and in the Private Sector, and Granting an Option to Extend for an Additional 30 Days Without Pay”, which is in the period of interpellation; ■ HB 4982, or “An Act Prohibiting Discrimination on the Basis of Sexual Orientation or Gender Identity or Expression and Providing Penalties Therefor”, which is in the period of sponsorship; ■ HB 3177, or “An Act Penalizing Influence Peddling and for Other Purposes”, which is in the period of interpellation; and ■ HB 3988, or “An Act Providing for the Conjugal Partnership of Gains as the Governing Regime in the Absence of a Marriage Settlement or When the Regime Agreed Upon is Void, Amending for the Purpose the Family Code of the Philippines”.

slower inflation Continued from A1

There would likely be two 25basis-point hikes in the policy rates of the BSP this year, including one forecast happening in the fourth quarter. ANZ Bank Researchers, likewise, said inf lation across the $292-bil lion economy shou ld remain slightly elevated, given the implementation of the taxreform package. “Compared with the original version, the modified version of the tax-reform package recently approved by the Lower House will have a milder effect on inflation,” ANZ Research said. “Underlying price pressures remain in the Philippines on the back of strong economic growth. Thus, we still expect the central bank to commence its tightening cycle in the third quarter and raise its policy rate by a cumulative 50 basis points in 2017 and 75 basis points in 2018,” it added.

Lower food prices

Slower price adjustments in both food and nonfood commodities contributed to slower inflation in May 2017, according to the National Economic and Development Authority. Inflation for the food and nonalcoholic beverages subgroup eased to 3.8 percent, from the previous month’s 4.2 percent. This is due to slower price adjustments in vegetables, fish, oils and fats, as well as sugar, jam, honey, chocolate and confectionery. The slowdown in the prices of vegetables, in particular, was attributed to the resilience of crops in northern Philippines, which withstood unfavorable weather and frost earlier this year.

However, other food commodities, like fruits, meat and rice, recorded faster price increases in May 2017. Rice inflation accelerated further to 2.4 percent. “ T hese trends bear watching, given the significant impact of food prices on the poor. T he amendment of domestic laws to ref lect the expiry of the World Trade Organization waiver’s on rice quotas should also b e pu r s ue d ,” S o c io e conom ic Planning Secretary Ernesto M. Pernia said. Nonfood inflation also slowed to 2.5 percent in May 2017, from 2.7 percent in April. This was driven by slower price adjustments for clothing and footwear, furnishing, household equipment, health, transport, communication, and recreation and culture. This follows the slower year-on-year increase in domestic petrol prices during the period. Slower inf l at ion was a lso recorded for unleaded gasoline, diesel, kerosene and LPG in May 2017 relative to the previous month. Pernia said the country’s overall economic outlook remains “optimistic”, considering recent international and domestic developments. “On the external front, growth prospects for the global economy have improved, and the expected recovery of international trade should provide ample supply of commodities to support domestic production,” Pernia said. He added that, on the domestic front, neutral weather conditions are likely to prevail over potential recurrences of El Niño or La Niña, based on the latest outlook of Pagasa and the International Research Institute for Climate and Society.

Senate. . .

Continued from A1

or restructure unsettled interests, penalties and surcharges on loans taken out by farmers under the program but Department of Agriculture officials failed to provide information on delinquent accounts sought to be condoned. But more than condoning delinquent loans, Villar indicated she was also keen to find out “the reasons and conditions why there was inability to pay back the loans and what interventions are needed by the farmers.” She cited findings by the Philippine Institute for Development Studies, which noted the inability to access cheap credit as a barrier to competitiveness of Filipino farmers, apart from “lack of mechanization, lack of technical expertise and lack of financial literacy”, which, she added, are already “being addressed” by concerned government agencies.

Mida. . .

Continued from A1

“Lifting the ban on importation of the vannamei shrimp, and its subsequent culture would help grow the aquaculture industry. We won this case in the end,” he said. In fact, the local culture of vannamei shrimp has been successful that the Philippines now exports over 60 50foot container vans of vannamei shrimp every month. The Mida official also said the growth of the company could also be attributed to its close collaboration with its clients. Its services include menu development, customization of products, as well as training on food safety, among others. “Through research and development, as well as client intimacy, we’ve gained a reputation in the market as a seafood expert,” he said.

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Troops chasing Maute bandits recover ₧80M

HE recovery of P52.2 million in cash and P27 million in checks shows that Filipino soldiers, battling Maute Group terrorists in Marawi City, are not engaged in looting. This was stressed by the Armed Forces spokesman, Brig. Gen. Restituto Padilla in a message to the PNA on Tuesday in response to claims that soldiers are responsible for looting incidents in the war-torn city. Marines sent to track down the remnants of the bandits recovered the money and checks in a house near the Mapandi Bridge on Monday afternoon. Allegedly, the house was also used as a machine-gun position by the bandits. “[The money and checks were] duly secured and turned over to the headquarters of Task Force Marawi for safekeeping. This debunks claims that troops have been involved in looting as claimed by some quarters,” Padilla said. He added that, “Recovery of the money and checks and subsequent turnover to the authorities by the military shows that the Armed Forces is doing its job with honor, integrity and on high moral ground.” Meanwhile, slackening of fire is now being noted in the remaining Maute Group positions in Marawi City, Padilla said on Monday. He added resistance among the remaining bandits is now considerably less compared to the first few days of fighting.

The conflict in Marawi City started when government security troops tried to arrest Abu Sayyaf leader Isnilon Hapilon, an ally of the Maute bandits, on May 23. “That [lessening of resistance and lower of volume of fire] means that they are low on supply, low on everything,” Padilla said. Despite this observation, he declined to give an estimate on the number of the remaining Maute bandits and the timeline on when the lawless group will be totally neutralized, and Marawi City cleared and ready again for civilian living. “[It] depends on the ground commander, its not on us, we will wait for the ground commander’s assessment of the situation,” he added. Earlier, the government offered P20 million to anyone who can give vital information that could lead to the arrest and neutralization of Hapilon and Abdullah and Omar Maute, the heads of the bandits now being cornered by security forces in Marawi. The money will come from President Duterte, said the Armed Forces Chief Of Staff, Gen. Eduardo Año. The P10 million is allotted for Hapilon and P5 million for each of the Maute brothers. The government’s reward for Hapilon’s head is aside the $5-million bounty offered by the US government for his neutralization. PNA

Release of detained activists hangs–human-rights group By Marvyn N. Benaning Correspondent

HE human-rights watchdog Karapatan has belied the claim of President Duterte that he had conceded so much to the demands of the National Democratic Front (NDF), including the release of almost all detained activists. Karapatan said on Tuesday morning that Duterte’s revelation on May 31 at the Sasa Wharf in Davao City was correct only insofar as the release of sickly and elderly political prisoners, or those 70-years-old and older. “The President’s statements are either misguided or malicious. Whether this is another plot to twist the story in favor of the government and frame the NDF as irrational and unreasonable, or a situation where the President is merely kept in the dark about the real score on his promised releases, the fact remains that only 23 political prisoners—17 NDF con-

sultants and two others—were freed for humanitarian reasons in August 2016, all on bail. Four others were pardoned on December 2016 and were released in line with the peace talks,” Karapatan Deputy Secretary- General Jigs Clamor said. As of May 15 Clamor said Karapatan has documented 402 detained activists, 39 of whom were arrested under Duterte. The number includes three more NDF peace consultants—Ferdinand Castillo, Promencio Cortez and Rommel Salinas. Clamor said from the list Karapatan submitted last May, only 67 detainees have been released on the merit of their cases. “Most charges were dismissed by the courts, while many of them have served their sentences, and a few others are out on bail. If only for a small fraction, justice has won, but nothing can compensate for the government neglect they suffered whilst in jail,” he added.

Largest Japanese helicopter carrier on port call at Subic

HE Japan Maritime Self Defense Force’s (JMSDF) largest ship, the helicopter carrier JS Izumo (DDH183); and her escort, the guided-missile destroyer JS Sazanami (DDG-113), are now at Subic Bay, Zambales, for a fourday goodwill visit that started on Sunday. The Navy spokesman, Capt. Lued Lincuna, on Monday said the ships belong to JMSDF’s Flotilla One, which is commanded by Rear Adm. Yoshihiro Goka. Aboard the JS Izumo are eight SH60K patrol helicopters, 800 officers and ratings. After their Subic Bay visit, the ships will participate in the Malabar Naval

Exercise in India. Lincuna said the Japanese ships were rendered meeting-point procedures by BRP Rajah Humabon (FF-11) at the vicinity of Subic Bay. Navy representatives then accorded the visiting navy a welcome ceremony upon arrival, followed by a port briefing related to security and health aboard JS Izumo. The four-day visit will include series of confidence-building engagements between Navy and JMSDF personnel, including a courtesy call to the Philippine Fleet commander, Rear Adm. Gaudencio Collado. PNA

Editor: Dionisio L. Pelayo • Wednesday, June 7, 2017 A3

Marcos seeks faster proceedings in election protest vs Robredo

N order to speed up the proceedings, former Sen. Ferdinand R. Marcos Jr. has asked the Supreme Court, sitting as the Presidential Electoral Tribunal (PET), to order the decryption and printing of ballot images from the clustered precincts of the thirty contested provinces that are subject of his election protest against Vice President Maria Leonor G. Robredo.

In a seven-page motion, Marcos’s counsel, George Erwin Garcia, moved to decrypt and print the ballot images from the Secure Digital cards or data storage devices or both from each of the 36,465 protested clustered precincts in the contested areas ahead of the scheduled preliminary conference on June 21 to hasten the process. Garcia explained that the decryption and printing may be ordered by the tribunal before the scheduled preliminary conference, since the 2010 Rules of the PET allows any course of action that will expedite the proceedings.

“Rule 29(a) of the 2010 PET Rules enumerated the items to be considered during the preliminary conference, which includes, among others, such other matters as may aid in the prompt disposition of the election protest,” Garcia said. He added such procedure will also “assist in the preparation for the recount proceedings and the presentation of evidence for the protest”. The contested areas subject to the proposed decryption and printing of ballot images included the provinces of Cebu, Leyte, Negros Occidental, Negros Oriental, Mas-

bate, Zamboanga del Sur, Zamboanga del Norte, Bukidnon, Iloilo Province, Bohol, Quezon, Batangas, Western Samar, Misamis Oriental, Camarines Sur, Palawan, Albay, Zamboanga Sibugay, Misamis Occidental, Pangasinan and Isabela; as well as Iloilo City, Bacolod City, Cebu City, Lapu-Lapu City and Zamboanga City and the Second District of Northern Samar. Garcia said the decryption and printing of the ballot images will be conducted and supervised by the Election Records and Statistics Departments of the Commission on Elections. He was, however, quick to note the motion is without prejudice to the conduct of the judicial recount-revision, technical examination and forensic investigation of the paper ballots or the ballot images or both, voter’s receipts, election returns, audit logs, transmission logs, the lists of voters, particularly the Election Day Computerized Voter’s List and voters registration records and other paraphernalia used in the May 2016 elections. Marcos earlier asked the PET to assign three hearing officers who will hear the three main issues in his election protest in order to fasttrack the much-delayed proceedings. Joel R. San Juan

Economy

A4 Wednesday, June 7, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon

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PEMC sets June launch of WESM Mindanao trial operation

By Lenie Lectura

@llectura

he Philippine Electricity Market Corp. (PEMC) made public on Tuesday the trial operation guidelines for the wholesale electricity spot market (WESM) in Mindanao are ready to be launched this month. PEMC, operator of WESM, also released the test plan for Mindanao participants comprised of generation companies, distribution utilities (electric cooperatives and private distribution utilities) bulkusers that are directly connected to

the transmission grid, and the National Grid Corp. of the Philippines (NGCP) as the system operator and metering-services provider. The trial-operations program, which shall commence on June 26, contains a set of preparatory

29 The number of participants who have signified their intent to take part in the WESM Mindanao trial operations that will commence on June 26

activities that aim to familiarize all Mindanao participants in the

implementation of the WESM via the market systems and procedures to be deployed. Mindanao participants are expected to be involved in the conduct of end-to-end testing of all interfaces and systems that will involve simulations of all processes, such as registration, bid submission, pricing and scheduling, and settlement. “PEMC is committed in its mandate of operating an electricity market for the whole country that will usher in transparency and competition in the generation sector,” PEMC President Melinda Ocampo said. At present, 29 participants signified their intention to take part in the trial operations. Several capacity-building activities are also in the offing parallel

to the trial-operations program to ensure the readiness of participants prior to the commercial operations of the integration of Mindanao in the WESM. The integration of Mindanao to the WESM would cover, among others, the following: application of the Energy Regulatory Commssion—approved Price Determination Methodology for pricing and settlement of electricity transactions in the Mindanao grid; utilization of the Market Management System for the determination of dispatch schedules in the Mindanao grid; provision of access to Mindanao generators and customers to the MMS for the submission of bids, offers, self-schedules and other trading functions; real-time

publication of wholesale prices for electricity in the Mindanao grid in the public web site; and eligibility of Mindanao stakeholders for membership in the Philippine Electricity Market Board and its various committees. “We are looking forward to our presence in Mindanao as we fully realize the vision of Epira in the creation of a one WESM, where benefits of efficiencies in electricity trading shall redound to the benefit of Mindanao end-users through a transparent and reasonably-priced electricity,” Ocampo added. The said guidelines were released following the promulgation of circular by the Department of Energy declaring the launch of WESM Mindanao.

Govt urged to prepare contingency plan for Qatar OFWs amid Gulf row DENR allots ₧34M for water

senator on Tuesday urged concerned government agencies to provide assistance to overseas Filipino workers (OFWs) in Qatar and neighboring countries amid an ongoing diplomatic crisis in the Middle East. “With the ongoing tension in the Middle East, I urge the DFA, DOLE, OWWA, (Departments of Foreign Affairs, Labor and Employment, Overseas Workers Welfare Administration and Philippine Overseas Labor Office) to prepare for any eventuality,” Sen. Nancy Binay said in a news statement. “The government is ready to ex-

tend help. Kailangan po nating tiyakin na laging ligtas at kalmado ang ating mga kababayan sa Qatar (We have to assure that our countrymen in Qatar are safe and calm),” she said. Binay expressed concern that the ongoing row between Middle Eastern countries is a cause for concern for the thousands of OFWs there. Data from the Philippine Overseas Employment Administration (POEA) in 2016 showed that there are around 900,000 OFWs working in the Middle East. Meanwhile, around 130,000 OFWs work in Qatar.

The senator said the government should coordinate with the Filipino community and organizations in Qatar on immediate action and possible evacuation in case the situation worsens. She also called on non-governmental organizations (NGOs) helping OFWs to coordinate with the Philippine embassy in Doha, Qatar, as well as the labor attaché, in helping Filipinos living in the Middle Eastern state. Meanwhile, Binay said she trusts Labor Secretary Silvestre H. Bello III in dealing with the situation, and assured that the Senate is also

ready to extend help and support. “I’m confident that Sec. Bello can handle the situation in Qatar. He is assured that we in the Senate will extend all the support he would need to make sure that our kababayan in Qatar are safe, especially those who are near the borders,” Binay said. The DFA, for its part, said it is closely monitoring the development in Doha. “The DFA and the Philippine Foreign Service Posts in the Gulf states are closely monitoring the situation,” Spokesman Robespierre Bolivar said in a text message. PNA with Recto Mercene

Ecop seeks small biz exemption from bill increasing paid leaves

he Employers Confederation of the Philippines (ECOP) wants small enterprises to be exempted from House Bill (HB) 5067, which aims to increase the service incentive leave to 10 days. In its position paper submitted to the House Committee on Labor and Employment, Ecop said the group does not begrudge the granting of additional paid leaves to employees, but the group noted that the exemption to the bill should be extended to small businesses. The HB 5067 aims to grant yearly service-incentive leave of 10 days from the current 5 days. Employees who rendered at least one year of service are entitled for the additional paid leaves. But the bill exempts micro enter pr ises, wh ic h reg u l a rly employs less than 10 employees, or establishments exempted from granting the benefit by the secretary of Department of Labor and Employment (DOLE) after considering the viability or financial conditions of the establishment. Cu r rent ly, pa id leaves for wage and salary workers ranges from 19 leaves for male employees, and up to 160 leaves for female employees. Male workers are entitled for fiveday service-incentive leave, sevenday paternity leave and seven-day solo parent leave. Female workers, on the other hand, have 142 to 160-day paid leaves which include five serviceincentive leaves, 60 or 78 maternity leaves, seven-day solo parent leaves, 10 battered-women leaves, and 60 gynecological leaves. Apart from these paid leaves, employers paid their workers for 15 regular and special holidays. “While Ecop does not begrudge increasing the grant of serviceincentive leave, it is concerned that any further reduction in the number of working days, particularly through additional paid leaves, impacts not only on productivity and on cost of doing business, but also on the viability of micro and small enterprises,” Ecop’s position paper read. PNA

resource inventory project By Jonathan L. Mayuga @jonlmayuga

he Department of Environment and Natural Resources (DENR) is allocating P34 million to identify and protect more ground water sources against destructive development projects, particularly mining. Environment Undersecretary and concurrent Mines and Geosciences Bureau (MGB) Director Mario Luis J. Jacinto told the BusinessMir ror that a P34 million fund has been allocated for a two-year water resourceinventory project. The two-year water resource inventory is part of the regular projects and mandate of the MGB. The Philippines is richly endowed with freshwater sources. It has 18 major river basins, 412 major rivers and 113 proclaimed watersheds. Water in rivers near urban areas, however, are already polluted and unsafe even for bathing because of indiscriminate dumping of garbage, mostly from households, and chemical pollutants from agriculture, small-scale mining and other toxic chemicals from factories and other commercial and industrial establishments. Speaking mostly in Filipino, Jacinto said many of the country’s watersheds are threatened by destructive development projects, particularly mining, underscoring the need to move to identify and protect water sources to boost the country’s water security. Early this year, former DENR Secretary Regina Paz L. Lopez had declared watersheds as “off limits” to destructive development projects and cancelled 75 mineral production sharing agreements (MPSAs) within or near “functional watersheds” to protect the country’s water source and boost the country’s water security, for the present and future generation. The cancellation order came after Lopez issued an order canceling or suspending at least 28 large-scale mining operations that failed a mining criteria anchored on social, environmental and biodiversity considerations. The orders and policy declaration by the former DENR chief defines “a watershed is a watershed.” Jacinto said nevertheless, the DENR-MGB, which regulates mining, including quarrying, is determined to secure watersheds, but will employ more science in determination of what needs to be protected by the government. “We are more on water resource inventory as part of our mandate related to water resources. Our hydrologists just had their training and we are going to deploy them,” he said. Scouting for water, he added, will be conducted nationwide by DENR with the 16 MGB regional offices taking the lead. The water resource inventory, he

We need to identify and protect our water sources… We are more on water resource inventory as part of our mandate related to water resources... [and] we have the manpower, we have the geologists, we have hydrologists to do this [job].” —Jacinto said, involves scouting watersheds, including underground aquifers in various parts of the country. “We need to identify and protect our water sources,” Jacinto said, adding that the MGB will move to declare any area identified by the MGB’s hydrologists as possible source of clean, drinking water, will be declared “off limits” to destructive development projects. “Water is important. If these areas were found to have substantial water, we will protect it,” he said. A major output of the project, he said, is the development of a map identifying the water. The map, initially with a scale of 1:10,000 will be detailed to include an estimate of the volume of water. The map, according to MGB chief, will be produced and distributed to local government units (LGUs) and private-sector users. It will be useful in developing facilities for water utilities, including water districts. “We have the manpower, we have the geologists, we have hydrologists to do this,” Jacinto said. He said the map will be produced as soon as the DENR-MGB’s field personnel completed the water resource inventory per region. The map, he said, will be “very useful” to LGUs in crafting their own policies. “LGUs can use this [the map] whether or not a project should be allowed in an area. It can also be used to support...[and] local water sources which can be developed by water-utility companies or water districts,” he said. Meanwhile, he said the MGB is strictly against cutting of trees in old growth forests even if they are within the mining tenement or covered by MPSA’s. “We have a law against cutting of trees in old growth forests. We will not allow cutting of trees there,” he said.

news@businessmirror.com.ph

AseanWednesday BusinessMirror

Editor: Max V. de Leon • Wednesday, June 7, 2017 A5

Brain drain: SE Asia’s obstacle to growth

yl Patangan, a nursing graduate from the Philippines, left his native land in search of a better life. Now working in a Chicago hospital after a stint in Dubai, he’s supporting his parents back home and is buying his mother a Toyota Vios.

Shoppers and pedestrians walk past market stalls in the Binondo district of Manila. Veejay Villafranca/Bloomberg

A recent study by the Asian Development Bank shows that the number of immigrants with university degrees who left to work in richer nations in the Organisation for Economic Co-operation and Development (OECD) surged 66 percent in the decade through 2010-2011 to 2.8 million. More than half of them came from the Philippines, with hundreds of thousands more working in regions outside the OECD like the Middle East. The trend has persisted, with the number of Filipinos leaving for work overseas rising 27 percent between 2011 and 2015. Brain drain, a term which originated in the 1960s, when British scientists and intellectuals immigrated to the US, refers to the loss of human capital. Emerging nations, where salaries are but a fraction of those in the OECD,

are vulnerable to losing their brightest talent, even if it offers a silver lining in the form of remittances that support families back home. The World Bank estimates that remittances to developing countries amounted to $429 billion in 2016, with those to the Philippines rising to $30 billion, a 10th of its economy. “This loss of human capital in the fields of medicine, science, engineering, management and education can be a major obstacle to economic and social development,’” ADB researchers Jeanne Batalova, Andriy Shymonyak and Guntur Sugiyarto wrote in a February report. Close to 10 percent of the highly educated citizens from the Philippines, Singapore and Vietnam live in OECD countries. For Lao PDR and Cambodia, the ratio is about 15 percent. T he emigration comes

Thailand’s central bank relaxes currency rules to help businesses

he Bank of Thailand said it’s easing some foreignexchange rules to reduce compliance costs for the private sector. The baht strengthened as speculation the monetary authority might unveil major steps to curb the currency’s appreciation proved unfounded. The central bank, in a statement on Monday, laid out a timeline for regulatory changes that seek to improve clarity and eliminate redundancy. The steps will save businesses more than 1 billion baht annually ($29 million), and some changes will come into effect as early as this month, Governor Veerathai Santiprabhob said in a briefing in Bangkok. The measures are unrelated to reducing foreign-exchange risks, he later told reporters. Key points: n Stock brokerages will be allowed to buy and sell foreign exchange for locals and nonresidents; n Commercial banks can give baht loans to non-resident companies investing in Thailand without needing central bank approval; n Commercial banks can give baht loans to companies registered in the Greater Mekong subregion for infrastructure and industrial investment projects that also benefit Thailand; n Money changers will be allowed to sell foreign-currency banknotes to offshore banks and money changers; n Easier rules and documentation requirements for outward remittances of $50,000 or above for eligible purposes; n Retail investors with assets

of over 50 million baht but below 100 million baht will be able to invest directly in overseas securities up to a gross flow of $1 million annually; n Greater flexibilit y is planned for foreign-exchange risk management. The central bank has signaled concern about the strength of the baht, and Veerathai on Monday reiterated the stance that the monetary authority is monitoring the situation and ready to act when necessary. He has previously rebuffed claims that export-reliant Thailand manipulates the exchange rate to gain an advantage in trade. The baht appreciated 0.1 percent to 34.008 per dollar as of 4:08 p.m. in Bangkok, after rising as much as 0.3 percent following the start of the central bank’s briefing on easing rules. “Given recent concerns by the Bank of Thailand about the strong baht, people in the market were expecting it to do something to control inflows,” said Anchali Singh, an analyst at Kasikornbank Pcl. in Bangkok.“But the measures we were seeing do nothing of that sort, and they are mainly aiming to improve business and help people to invest abroad.” The baht has climbed about 4.8 percent against the dollar in the past year, the third-best performer in a basket of Asian currencies tracked by Bloomberg. Overseas investors bought a net $8.3 billion of Thai bonds and $1.9 billion of stocks in the period. The central bank has reduced issuance of short-term bonds in recent weeks to deter inflows.

Bloomberg News

even as Southeast Asia has made tremendous progress in boosting education in recent decades. More than 50 percent of Filipinos, Malaysians and Singaporeans in OECD countries are highly educated, compared to the average of 30 percent. Immigrants from Southeast Asia are also often more educated or more experienced than what is needed for

the jobs they hold. About 52 percent of workers from Thailand are overqualified and the ratio is more than 40 percent for immigrants from the Philippines, Laos, Cambodia, Myanmar and Vietnam. Despite the region’s economic boom, with countries, including the Philippines, Vietnam, Laos, Myanmar and Cambodia, posting growth rates

of more than 6 percent, the educated citizens are still likely to look for opportunities abroad. “Migrants respond to other countries’ higher wages and better working conditions, prospects for professional development and continuous education, and opportunities to work with other skilled persons in talent clusters,” the report said.

In the hospital where Patangan works as a dialysis nurse, his colleagues include migrants from Cambodia, Laos and Thailand. Holding down two jobs, Patangan is now a permanent resident in the US. He’s traveling to Europe this month before paying his parents a visit in September in southern Philippines. “You work so hard, but at least here, you’re earning,” he said. Bloomberg News

Wednesday, June 7, 2017

The World BusinessMirror

Gulf spat to put brakes on Qatar’s $335B empire T

he windfall from being the world’s largest exporter of liquefied natural gas has allowed Qatar to amass about $335 billion of investments around the world through its sovereign wealth fund. Now, a diplomatic spat with neighboring countries threatens to hamper the Qatar Investment Authority’s (QIA) ability to continue making headlinegrabbing global deals.

Saudi Arabia and three other Arab countries cut off most diplomatic and economic ties to Qatar on Monday in an unprecedented move designed to punish one of the region’s financial superpowers for its ties with Iran and Islamist groups. “ The potential risks that Qatari investors face, including the

QIA, are going to increase and new deals are probably going to become more difficult to complete and face greater scrutiny,” said Sven Behrendt, managing director of political risk consultant GeoEconomica GmbH. “Qatar has walked a fine line suppor ting e x tremist g roups elsewhere in the Arab world,

which has provoked this reaction from its neighbors.” Here’s a look at some of Qatar’s biggest international investments:

Volkswagen

The QI A is the big gest shareholder i n G er m a n c a r m a ker Volkswagen AG, w ith a sta ke wor t h a l most $11.6 bi l l ion , i n c lu d i n g p r e f e r r e d s h a r e s , according to data compiled by Bloomberg. T hat ma kes it the QI A’s second-big gest listed equity investment after its nearly 52- percent hold ing in Qat a r Nationa l Bank QPSC.

$11.6B

The value of shares of Qatar Investment Authority, the biggest shareholder, in German carmaker Volkswagen AG

Rosneft

In December, commodity trader Glencore Plc and Qatar teamed up to buy an $11-billion, 19.5-percent joint stake in Russia’s largest oil producer from the state. The deal gave the QIA a holding of 9.75 percent in Rosneft Oil Co. and was one of the biggest investments in the global-energy industry last year, despite attempts by the US and Europe to economically isolate Russia with sanctions following Russian President Vladimir Putin’s incursion into Ukraine.

Glencore

The QIA also played a pivotal role in Glencore’s $29-billion takeover of Xstrata Plc in 2012 after demanding the Swiss commodities trader boost its offer for the diversified mining group, in which it had built a stake of more than 10 percent. That merger left the QIA with an 8.49-percent stake in Glencore, worth $4.51 billion, according to data compiled by Bloomberg.

Deutsche Bank

Qatar’s royal family asked Germany’s financial regulator for approval to boost its stake in Deutsche Bank to more than 10 percent, people familiar with the matter said last month. Former Prime Minister Sheikh Hamad Bin Jassim Bin Jabr Al Thani and the former emir of the country, Sheikh Hamad bin Khalifa Al Thani, hold a joint stake in Deutsche Bank AG of just under 9 percent, according

to people familiar with the matter. Their latest regulatory filing shows a combined stake of about 6.1 percent.

Barclays

T he sovere i g n we a lt h f u nd joined a two-stage £12-billion ($15.5-billion) fundraising to help Barclays Plc. avoid a state bailout during the financial crisis of 2008, with the 6-percent stake in the British lender now worth $2.76 billion, the Bloomberg data show. The UK Financial Conduct Authority reopened an investigation into the Barclays deal in March, despite issuing a fine in the case four years ago.

Brookfield Property Partners

Brookfield Proper t y Par tners LP and QIA formed a joint venture on Manhattan West, an $8.6-billion mixed-use project under construction on New York ’s far west side, the companies announced in 2015. The QIA will acquire a 44-percent stake in the project and opened an office in New York as part of plans to invest $35 billion in the US by 2020 to diversify its oil holdings. Plans to boost US investments may now suffer as a result of the diplomatic row with other Arab countries, Behrendt said. “If this incident intensifies the debate about Qatar’s links to extremist forces, and the role that such forces play in global terrorism, companies should look into this, at least from a risk perspective,” he added. Bloomberg News

London mayor: Terror harder to stop if May wins election

ondon Mayor Sadiq Khan said it will be harder to stop future terrorist attacks if Prime Minister Theresa May wins Thursday’s general election and carries out planned changes to the Metropolitan Police’s (Met) funding. In a statement that praised the “tremendous bravery” of police during the attack last Saturday night that left seven dead, Khan warned the UK capital would lose between 3,400 and 12,800 officers if the premier pushes through budget cuts proposed by her Conservative Party. “The Conservative plans mean another £400 million ($516 million) of cuts to the Met, as well as between £184 million and £700 million a year because of their changes to the police-funding formula,” Khan, a member of the opposition Labour Party, said in an e-mail. “Cuts on this scale would make it harder to foil future terrorist attacks on our city, and as Mayor

of London, I’m simply not willing to stand by and let that happen.” Security has become a central issue in the June 8 vote after attacks on Manchester and London during the campaign. Khan warned that the proposed cuts would lead to the loss of thousands of community police officers who “act as the eyes and ears of the security services, providing the intelligence and information that allows us to disrupt attempted terrorist attacks”. The prime minister refused to say if she would reverse cuts made to budgets while she was home secretary between 2010 and 2016 that led to 20,000 fewer police on Britain’s streets. “It’s not just about resource, it’s about the powers people have,” May said at a campaign event in central London on Monday. “I have been responsible for giving the police extra powers to deal with terrorism.” Bloomberg News

Intel contractor charged in 1st criminal leak case of Trump era

ASHINGTON—An intelligence contractor was charged with sending a classified report about Russia’s interference in the 2016 election to the news media, the Justice Department announced on Monday, the first criminal leak case under President Donald J. Trump. The case showed the department’s willingness to crack down on leaks, as Trump has called for in complaining that they are undermining his administration. His grievances have contributed to a sometimes tense relationship with the intelligence agencies he oversees. The Justice Department announced the case against the contractor, Reality Leigh Winner, 25, about an hour after the national-security news outlet The Intercept published the apparent document,

a May 5 intelligence report from the National Security Agency (NSA). The report described two cyber attacks by Russia’s military intelligence unit, the GRU—one in August against a company that sells voter registration-related software and another, a few days before the election, against 122 local election officials. The Intercept said the NSA report had been submitted anonymously. But shortly after its article was published, the Justice Department said the Federal Bureau of Investigation had arrested Winner at her house in Augusta, Georgia, last Saturday. It also said she had confessed to an agent that she had printed out a May 5 intelligence file and mailed it to an online news outlet. New York Times News Service

www.businessmirror.com.ph

For Opec, SaudiQatar crisis is just latest family squabble

he diplomatic clash between Qatar and three Arab allies flared regional tensions and caused oil prices to jump. For Organization of Petroleum Exporting Countries (Opec), it’s likely to remain business as usual. Saudi Arabia and three other Arab countries severed most diplomatic and economic ties to Qatar to punish the nation for its links with Iran and Islamist groups. Although most of the countries involved are members of Opec, the standoff is seen posing little threat to the group’s initiative to rebalance world oil markets by cutting production. “It is not the first time for Opec to see a political rift between its member-countries, and it’s not going to be the last,” said Abdulsamad Al-Awadhi, a Londonbased analyst who was one of Kuwait’s representatives to the group between 1980 and 2001. “Opec has gone through many political and military conflicts among its members, and this has never had an impact on the flow of work of the organization or its binding agreements.” W hile Opec members have fought political disputes, and even wars through the organization’s 57-year history, their shared economic interests have meant policies on oil production have still been implemented. The group withstood a bitter conf lict between Iran and Iraq in the 1980s and Saddam Hussein’s 1990 invasion of Kuwait. Renewed hostility between Saudi Arabia and Iran didn’t prevent last year’s historic agreement to curb production. After initially jumping as much as 1.6 percent on the diplomatic spat, Brent crude erased its gains to close 1 percent lower in London on Monday. Prices extended declines on Tuesday, down 0.4 percent at $49.27 a barrel as of 5:51 a.m. in London.

Shared interests

Russia, which is cooperating with Opec on supply cuts, doesn’t see tensions in the Gulf having any impact on the deal, the nation’s Vienna-based envoy to international organizations, Vladimir Voronkov, told RIA Novosti. “ There are no signs of any disruption to the Opec and nonOpec deal,” said John Sfakianakis, a Riyadh-based director of research at Gulf Research Center. “It is not only in the GCC’s [Gulf Cooperation Council] national energy interest but also it is in Russia’s national interest to see the Opec deal sustained as everyone needs higher oil prices and a stable market.” Here are some examples of Opec’s ability to keep working despite conflict: 1980s—Iran and Iraq waged an eight-year war that disrupted production in both members, yet Opec still managed to set its firstever output quotas in 1983. 199 0 — A f ter I raq i nv aded Kuwait on August 2, the combined production of both countries—4.3 million barrels a day— was halted, according to the Energy Information Administration. Opec continued to meet through the conflict. 2011—Syria’s civil war intensified tensions between Saudi Arabia and Iran, with Iran supporting the regime of Bashar al-Assad while Saudi and other Sunni-led members backed rebels seeking to topple him. Opec agreed a new collective production ceiling in December of that year. 2015—Yemen’s civil war deepens the divide, with Saudi Arabia accusing Iran of backing rebel factions. Despite the friction, the group settled on its first production cut in eight years in November 2016. Bloomberg News

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

The World BusinessMirror

Wednesday, June 7, 2017

Under Trump, worker protections are viewed with new skepticism

he victory was so sweet that the head of the Occupational Safety and Health Administration (Osha) sent thank-you notes to his employees.

Nearly four decades in the making, a new rule under the Obama administration was set to lower workplace exposure to beryllium, an industrial mineral linked to a lung disease that is to estimated to kill 100 people annually. And the nation’s largest beryllium producer had agreed to back the new restrictions. “Once we finish, these workers will be protected and we will end the epidemic of beryllium exposure in the United States,” David Michaels, the Osha chief, said at the time in 2015. But several weeks ago, just as the rule was going into effect, the safety agency suddenly proposed changes that experts expect may exempt major industries from the tougher standard. It was one of several instances in which workplace safety decisions have been revisited in the early months of the Trump administration. Osha has also put off enforcement of an Obama-era standard for another respiratory hazard—silica, a mineral linked to a disabling lung disease, as well as cancer— and it has delayed action on a rule that would require employers to electronically report workplace injuries so that they can be posted for the public. The moves come as the Trump ad m i n i st r at ion of fe r s ot he r

hints of a significant relaxation in the government’s approach to occupational safety. A successor to Michaels at Osha has yet to be named. Trump’s proposed budget eliminates at least two other strategies designed to promote worker safety, including the Chemical Safety Board, which investigates chemical-plant accidents, and an Osha grant program that provides training in industries with high injury or fatality rates and workers who do not speak English well. During the early months of the Trump administration, a former lobbyist for an industry group that has opposed the beryllium, silica and record-keeping rules served on the transition team at the Department of Labor, which oversees Osha. T hat official, Geoffrey Burr, who has since moved to the Depar tment of Transpor tation as chief of staff, had been a lobbyist for the A ssociated Builders and Contractors, which represents nonunion constr uction companies. A spokesman for the Transportation Department declined to make Burr available for an interview but said the former lobbyist had been in regular contact with officials while at the Department of Labor “to ensure he was in com-

Vishwanauth Jailall, who suffers from severe respiratory trouble after six years of working with molten metals, including beryllium, at his home in Richfield, Minnesota, on June 1. A new rule set to lower workplace exposure to beryllium was revisited in the early months of the Trump administration, one of several instances that offers hints of a relaxation in the government’s approach to occupational safety. “I don’t want anyone else to get sick,” Jailall said. Nate Ryan/The New York Times

pliance with all ethics rules.” The Associated Builders and Contractors did not respond to questions about Burr. Asked about the Trump administration’s approach to occupational safety, a spokesman for the White House said, “The President and his administration care very much about worker safety, but believe the Obama administration’s approach was counterproductive, and we think we can do better.” He added that decisions to repeal and reduce specific Osha regulations had not been made. Osha did not respond to questions about specific regulations. Business groups that have fought Osha actions have welcomed the apparent new direction and others believe it heralds a different approach by the Trump administration. “The agency, under Obama, changed into something that was more explicitly allied with unions

Trump promotes original ‘travel ban’, eroding his legal case

ASHINGTON—President Donald J. Trump has excellent lawyers. They have a challenging client. In a series of Twitter posts on Monday morning that continued into the evening, Trump may have irretrievably undermined his lawyers’ efforts to persuade the Supreme Court to reinstate his executive order limiting travel from six predominantly Muslim countries, according to legal experts. Saying he preferred “the original travel ban, not the watered-down, politically correct version” he had issued in March, Trump attacked both the Justice Department and the federal courts. He also contradicted his own aides, who have suggested he was causing a pause in travel, by calling the order “what we need and what it is, a TRAVEL BAN!” He said it would be imposed on “certain DANGEROUS countries” and suggested that anything short of a ban “won’t help us protect our people!” There is a reason lawyers generally insist that their clients remain quiet while their cases move forward, said Josh Blackman, a professor at South Texas College of Law in Houston. “Talkative clients pose distinct difficulties for attorneys, as statements outside the court can frustrate strategies inside the court,” Blackman said. “These difficulties are amplified exponentially when the client is the president of the United States, and he continuously sabotages his lawyers, who are struggling to defend his policies in an already hostile arena. I do not envy the solicitor general’s office.” Even a lawyer with strong ties to the administration said Trump was hurting his own chances in the Supreme Court and undercutting the work of the Justice Department’s elite appellate unit. George T. Conway III, who withdrew last week as Trump’s nominee for assistant attorney general for the civil division and whose wife, Kellyanne Conway, is the

president’s counselor, commented on one of Trump’s posts. “These tweets may make some ppl feel better, but they certainly won’t help OSG get 5 votes in SCOTUS, which is what actually matters,” he wrote in his own Twitter post, using acronyms for the Office of the Solicitor General (OSG) and the Supreme Court of the United States (SCOTUS). “Sad.” Still, some administration supporters said the court should not consider the tweets. While looking beyond the letter of the order might be appropriate in domestic policy, the president has a freer hand in foreign policy, said David B. Rivkin Jr., a lawyer in the administrations of Ronald Reagan and George Bush. “As a constitutional matter, as a legal matter, it should make absolutely no difference,” he said of the president’s extracurricular messaging. Last week lawyers in the solicitor general’s office filed polished briefs in the Supreme Court. They urged the justices to ignore incendiary statements from Trump during the presidential campaign, including a call for a “Muslim ban”. The court should focus instead on the text of the revised executive order and statements from Trump after he had taken the inaugural oath to “preserve, protect and defend the Constitution”, the briefs said. Trump, his lawyers said, was now a changed man, alert to the burdens and responsibilities of his office. “Taking that oath marks a profound transition from private life to the nation’s highest public office, and manifests the singular responsibility and independent authority to protect the welfare of the nation that the Constitution reposes in the president,” they wrote. On Twitter early Monday, though, Trump appeared to say the latest executive order was of a piece with the earlier one, issued in January, and with his longstanding positions. In calling the revised order “politically

correct”, Trump suggested that his goal throughout had been to exclude travelers based on religion. And in calling the revised order “watered down”, he made it harder for his lawyers to argue that it was a clean break from the earlier one, which had mentioned religion. The Supreme Court has asked people and groups challenging the executive order to file their responses to the government’s briefs next Monday. Those responses will almost certainly rely on Trump’s tweets in arguing that the justices should not revive the order. The court will probably act on the government’s requests in the coming weeks. In his posts, Trump seemed to betray a misunderstanding of how two branches of the federal government work. His criticism of the Justice Department was misplaced, because it works for him. He could have insisted that it defend his original order. It was Trump’s decision, too, to issue the revised order. Trump also suggested that the Justice Department could ask the Supreme Court could impose a “much tougher version” of his executive order. But the court’s role is limited to evaluating the lawfulness of the current order. Insulting judges is also generally a poor litigation strategy. But Trump also posted that “the courts are slow and political!” Trump’s adversaries certainly welcomed his tweets. “It just adds to the mountain of already existing evidence that the government has had to ask the court over and over to ignore,” said Omar Jadwat, a lawyer with the American Civil Liberties Union, which represents people and groups challenging the law. “Blinding the courts to a reality that everyone else is aware of is never an attractive position, but is especially problematic when you have to ignore in real time what’s being said by the president of the United States.” New York Times News Service

and critics of business,” said Walter Olson, a senior fellow at the Cato Institute, a libertarian think tank. “That’s likely to change.” Some workplace experts and advocates say the Obama administration’s decision to wait until the 11th hour to finalize some major rules made them vulnerable. “Because they did it so late in the game, they left the rules open

to change,” said Dr. Lee S. Newman, a pulmonary expert at the University of Colorado in Denver, who helped uncover worker deaths caused by beryllium. Experts like Newman also fear that a widespread regulatory rollback is beginning, and possible changes to the beryllium rule are particularly frustrating to them because it had taken so long to get the new standards in place. It has been known for decades that exposure at even very low doses to beryllium—a strong, lightweight metal used to make computers, aircraft parts and nuclear bombs—can cause chronic beryllium disease, a disabling and potentially fatal lung ailment, in a small percentage of workers with a genetic susceptibility to it. The Obama-era standard resulted from negotiations between the biggest US producer of beryllium, Materion Corp. and the United Steelworkers union. At one time, Materion, which was once known as Brush Wellman, played down beryllium’s risks and fought efforts to lower federal exposure standards because of fears that doing so

would undercut its defense of lawsuits brought by sick or dying workers, court filings showed. When Osha proposed its final rule in August 2015, Materion applauded it, calling it a demonstration of how “industry and labor can collaborate to better protect workers” and saying it could be a guide for how the agency could develop future standards. But in April, less than three months into the Trump administration, Osha sent proposed changes to the White House for review. Agency officials declined to d iscuss the proposa l. But safety advocates and an industry lawyer involved in meetings with Osha about the new rule said it was made clear to them Osha intended to lessen the rule’s effect on maritime and construction companies—or perhaps even exempt them. “I had the feeling that the administration has already decided what it wants to do,” said Peg Seminario, director for safety and health for the American Federation of Labor and Congress of Industrial Organizations. New York Times News Service

ExportUnlimited

A8 Wednesday, June 7, 2017 • Editor: Efleda P. Campos

BusinessMirror

PHL food exporters meet Korean traders in Ifex

rom May 17 to May 20 a South Korean delegation of large food companies visited the Philippines to source products from the International Food Exhibit (Ifex) and to conduct a trade facilitation workshop for Philippine food exporters and small and medium enterprises (SMEs). The workshop was held in the World Trade Center in Metro Manila, which was also the Ifex venue. The workshop featured three expert speakers from the Korean food industry. These speakers held the workshop to help Philippine food exporters build better capabilities for penetrating the Korean food market. The first expert speaker came from CJ Freshway, and he

spoke about how a large Korean seafood company sources seafood from overseas. T he second s pea ker c a me from Daesang Corp., the secondlargest food company in Korea. Daesang spoke about how a large Korean agr icultural company sources agricultural and food products from overseas. The third speaker came from CJ Cheiljedang, which is the largest food

Emmanuel Ang (Philippine Commercial counselor to Korea), His Excellency Raul Hernandez (Philippine ambassador to Korea), H.E. Kim Young-sun (Asean Korea Center secretary-general), Senen M. Perlada (director of the Export Marketing Bureau of the Department of Trade and Industry), H.E. Kim Jae-shin (Korean ambassador to the Philippines) and Lee Dong-go (AKC Trade and Investment Unit head)

company in Korea. CJ spoke about packaging trends, technology and Korean packaging requirements for food products.

DTI-EDC studies international shipping costs By Maria Jobellieza Alzate Policy Advocacy Officer Export Development Council

R. ENRICO Basilio, chairman of the Export Development Council Networking Committee on Transport and Logistics (EDCNCTL) and private-sector cochairman of the National Competitiveness Council Trade Infrastructure Transport Logistics (NCC-TITL) Working Group, discussed the initial study regarding

the freight cost and other fees charged by international shipping lines. The study was presented in a forum organized by the Export Development Council-Networking Committee on Transport and Logistics (EDC-NCTL), together with the Philippine Exporters Confederation Inc. (PhilExport), the Department of Trade and Industry, Supply Chain Management Association of the Philippines and the Philippine Chamber of Commerce and Industry.

Dr. Basilio emphasized the need to validate the cost and understand the cost components charged to exporters and importers. Other issues raised in the forum were the nonrefund of container deposits, exorbitant imposition of demurrage and detention charges and illegal imposition of lien, exorbitant charges for container imbalance or equipment cost return surcharge imposed by shipping lines to Philippine consignees of cargoes.

The three speakers were part of a larger 11-member delegation of Korean food companies, organized by the Asean Korea

Center, the Department of Trade and Industry (DTI), Philippine Embassy in Korea, and supported by the Korean Embassy in the Philippines. These 11 companies included the top 2 largest food companies in Korea, and the whole delegation combined had annual corporate revenues in excess of $12 billion. More t han 150 Phi l ippine SME e x por ters attended t he workshop in the morning of May 20. After lunch, the workshop cont i nued w it h bu si ness -to business (B2B) sessions between Korean food buyers and Philippine food exporters. Koreans are ver y receptive to Philippine food products as these are considered clean (pollution and food-safety issues-free), and familiar (with the increasing numbers of Korean tourists coming to the Philippines every year and being familiar with local food products. Local exporters need to develop a better sup-

ply process on what Korea wants and requires. Hence, the reason for the workshop, which brings Korean food industry experts to directly inform Philippine food exporters regarding what exactly the Korean food market needs and requires, be it in terms of trade processes and documentation requirements, food additives and processing standards, packaging requirements, all the way to Korean consumer taste preferences and trends. The workshop was also attended by Asean Korea Center Secretary-General and Ambassador Kim Young-sun and Korean Ambassador to the Philippines Kim Jae-shin. The delegation schedule in Manila, including the workshop and B2B sessions, was organized by the Philippine DTI, represented by Commercial Counsellor Emmanuel Ang and Export Marketing Bureau Director Senen Perlada. Manuel Ang

MARKET DEVELOPMENT UPDATE Consider Singapore market for PHL biz

INGAPORE remains a strong economic ally for the Philippines. The country is its third source of investment in the world, with a contribution of $156.2 million in the $7.933-billion net foreign direct investments of the Philippines in 2016. Singapore is also the No. 1 source of investment in the Asean for the Philippines in the same period. Investment pledges from Singapore have been channeled into agriculture, forestry and fishing, manufacturing and construction sectors. Singapore is also the fourthlargest export market of the Philippines with exports amounting to $3.7 billion in 2016. In addition to electronic components, the country imports a variety of Philippine raw ingredients, fresh and processed seafood, and fresh produce, particularly fresh crab, lobster, prawn, banana, pineapple, mango and durian. Other household processed brands from the Philippines are now found in Singapore hotels, ship chandlers and retail stores, such as FairPrice, Giant, Lucky Plaza Mall and Chinatown. W it h a p e r - c a p it a G DP o f $51,162, Singapore is an aff luent market in search of premium products. For its more than 5 million residents, 15.5 million annual tourists and the 180,000 Filipinos living in the country, the food service market is strong. According to Euromonitor, wellpriced and quick-serve options from street stalls and kiosks and home delivery or takeaway services are in high demand because of busy lifestyles. A government initiative for healthy dining has also affected the market, with consumers preferring natural and fresh products. Aside from this, Singapore also has ship-handling operations and is a trading hub for third markets for investors. Naturally, one of the best prospects for Philippine business in Singapore lies in the food industry. Apart from the fresh produce, there is a demand for the wide spectrum of halal-certified foods, from cereals to baked goods, ice cream to noodles, oils to condiments and more. Other priority export opportunities include engineering and architecture services, where Philippine talent and resources, including the 62,000 information-technologyenabled and English-proficient graduates that join the work force each year, are tapped for core research and product development purposes, procurement procedures

By Glenn G. Peñaranda Commercial Counsellor, PTIC Singapore

and even critical construction projects. Aircraft maintenance, repair and overhaul (MRO) services are also in demand. Seventy-five Filipino MRO companies, which specialize in airframe heavy maintenance, engine and APU maintenance, component or systems maintenance, repair services and aircraft interiors MRO, already provide support to Singapore’s growing aerospace industry. Franchising is notably robust, especially for Filipinos, who have been identified as the secondlargest pool of professionally certified franchising executives in the world, next to the US. In Singapore local brands, such as Jollibee, Yellow Cab, Tapa King, Gerry’s Grill, Bench and LBC Express, have opened branches, while companies, such as Ayala Corp., Megaworld, BDO Unibank, Philippine Airlines, PLDT and Manila Electric Co., also have presence. T h e Ph i l i p p i n e D e p a r t ment of Trade and Industry, through the Philippine Trade and Investment Centre (PTIC) in Singapore, promotes the entrepreneurial alliance between Singapore and the Philippines. With the goal of tuning more Fi l ipi nos tow a rd ent re pre ne u r sh ip i n orde r to s pu r wealth and economic growth, the agency creates the best environment for Filipino businesses to become competitive, sustainable and profitable. Its activities include organizing missions in trade fairs to establish partnerships between local businesses and Singapore-based companies. The PTIC also engages in promotional activities, such as connecting Filipino businesses with Singaporean buyers and importers in major trade fairs, such as the Manila FAME and International Food Exhibition (Ifex) Philippines. The agency has also organized trips to the Philippines for Singapore com-

panies seeking to diversify their fruit and vegetable offerings and conducted Filipino food-tasting events for the Singapore press. The PTIC also helps Filipino start-up companies find partners in Singapore and in the country. The agency, through the DTI-Export Marketing Bureau, has, for example, introduced the Singapore-based Cebuano founders of GeoPik (a new app that shortens long addresses into code for easy delivery of goods) to potential venture-capital firms and users in the Philippines. Local entrepreneurs can also seek assistance from the QBO Innovation Hub, a coworkspace in the DTI International Building in Makati. The hub offers start-ups and innovators opportunities for market access and capital and mentorship. In Manila Filipino businessmen who would like to explore opportunities in Singapore can contact the coordinating office of the DTI-Foreign Trade Service Corps (FTSC) in the DTI headquarters, as well as the Negosyo Centers across the country. These offices offer information, training, credit facilities, networks and other forms of assistance. The Negosyo Centers, in particular, provide support services, such as business registration assistance, advisory services, monitoring and evaluation, which are needed to encourage the development of micro, small and medium enterprises. Outside t he Ph i l ippines, Fi l ipi nos c a n a l so con nec t with PTIC agencies of the DTIFTSC for trade preferences, commercial intelligence and i nt ro du c t ion to i mp or t e r s a nd buyers. T he DT I-F TSC has a network of 26 Philippine Trade and Investment Centers in major international markets, including Singapore. For more information, visit www. dti.gov.ph/overseas/singapore.

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news@businessmirror.com.ph

Editor: Efleda P. Campos •Wednesday, June 7, 2017

House questions legality of EO’s splitting SBMA positions Clark intl airport implements enhanced safety, security measures

LARK INTERNATIONAL AIRPPORT—Stringent and enhanced safety and security measures are being implemented at this airport in view of last week’s flight diversions from the Ninoy Aquino International Airport (Naia) in Manila. This was the assurance made by the state-run Clark International Airport Corp. (CIAC) on Monday. “Clark airport is able and ready to accommodate at least 30 aircraft should there be flight diversions, especially at the onset of the rainy season, as we have ample facilities and aircraft parking slots, hotel accommodations, transportation services and emergency and technical services,” CIAC OIC Alexander Cauguiran said. Last week 11 flights were delayed or diverted to this airport after the runway at the Naia was

temporarily shut down for several hours to give way to emergency repairs of a large pothole at runway 06-24. The airport’s engineering and security personnel are directed to work overtime in preparation for the Asean Summit in November since some of its related meetings will be held in Clark, Cauguiran said. In a related development, security measures are also currently being undertaken to discourage the proliferation of informal settlers who raise farm-produced crops inside this Civil Aviation Complex (CAC). Cauguiran said the present CIAC board members approved the replacement last November of Cerberus Security, the past management’s securit y force at the Clark Civil Aviation

Complex, due to “lapses in security”, referring to the unregulated access of unauthorized persons to the CAC area. “Under this administration, we have established tougher security measures to control informal settlers and heighten security efforts,” Cauguiran said. The informal settlers, most of them farmers, have been occupying the area even before the establishment of the Clark Freeport Zone. Aside from the ongoing census and other social preparation activities to compensate the settlers, Cauguiran said he has directed the CIAC security to prohibit settlers from bringing in agriculture inputs, such as rice and corn seeds, which lure in birds to prevent any incidence of bird strikes. Ashley Manabat

NBI: Probe vs 3 Pampanga town hosts firms in illegal peace camp amid fighting in Marawi City dredging to push through

HE National Bureau of Investigation’s (NBI) Environment Crime Division (ECD) on Tuesday said they will investigate the three companies allegedly involved in the dredging operation in Macolcol River in San Felipe, Zambales. NBI ECD Chief Eric Nuque said they will investigate Globe Bulk Services Philippines Corp., which allegedly secured a Special Permit with number DSS-0027-2017 from Maritime Industry Authority (Marina) on April 12, 2017, to allow the Chinese dredger vessel MV SL-D1 to operate. However, the permit to operate expired on May 12, 2017. He warned they will file a case against STL Panay Resources Co. Ltd., if it is found violating certain laws. The company is a shipping agent directly involved in the operation of foreign vessels in Zambales, which were allegedly responsible for smuggling out of the country sands dredged from Macolcol River. Some of its workers, at least nine Chinese nationals and an Indonesian, were caught working without the necessary working permits from the Department of Labor and Employment and working visa from the Bureau of Immigration (BI). The NBI will also ask the Great River Valley to explain why they are operating without necessary documents from government agencies, like the Department of Public and Highways. The company must submit a dredging operation plan before they could proceed with their dredging operations. They also need to secure permits from the Department of Environment and Natural Resources’s Mines and Geoscience Bureau, if they plan to get minerals from the river in Zambales, and from the Bureau of Customs, if they plan to export the same. Nuque said they will gather enough evidence and documents to pin down the companies from the violations. Meanwhile, lawyer Anthonette Mangrobang, spokeman of the BI, said the arrested Chinese and Indonesian nationals could not be deported yet because they were facing necessary criminal charges filed by the NBI before the Department of Justice.

By Joey Pavia Correspondent

AGALANG, Pampanga—At least 63 young people, including Muslims, joined a peace summit here, even as fighting continues in Marawi City. The National Commission for Culture and the Arts (NCCA) and this municipality, headed by Mayor Malu Paras Lacson, hosted the recent Angat Kabataan Peace Camp 2017. “We want to remove the perception that Muslims are bad people and they want violence. That is not true,” said Ednis Ryan Macaludos, one of the six young Muslims interviewed during the mayor’s night last Thursday. The participants were between the ages of 18 to 25. Buddhist Krizel Balasabas of the Fo Guang Dhan Mabuhay Temple said, “We want to attain peace with all other religions.” T he peace camp a lso in-

cluded members of the Roman Catholic Church. “It’s an inter-faith event,” said NCCA Commissioner Fr. Harold Rentoria, OSA. He said they first agreed to hold a peace camp in 2014 during a meeting in Russia. “We want to foster peace through the youth,” he said. Rentoria lauded Lacson for hosting the peace summit in their town. In his speech, NCCA Executive Director Rico Pableo Jr. described Magalang and its officials as “terrific”. “Mayor Lacson is a very cultured person and energetic,” he said. Pableo said Lacson, the first woman mayor of this town, gave all-out support to the peace camp. Among those who attended the event were Pampanga First District Rep. Jonjon Lazatin, Board Member Cherry Manalo and Vice Mayor Norman Lacson.

By Henry Empeño Correspondent

UBIC BAY FREEPORT—The leadership of the House of Representatives has questioned the legality of Executive Order (EO) 340 signed by then-President Gloria Macapagal-Arroyo, which separated the power and functions of the administrator and chairman of the Subic Bay Metropolitan Authority (SBMA). In a hearing here on Tuesday of the Oversight Committee on Bases Conversion, House Speaker Pantaleon D. Alvarez and Majority Floor Leader Rodolfo Fariñas led an inquiry into the separation of the top SBMA positions, which has resulted to conflicts in the agency. Rep. Ricky Sandoval of Malabon, vice chairman of the House Committee on Transportation, called for the committee hearing in view of the issuance of an administrative order by SBMA Chairman Martin Diño. Sandoval said the order “may sow confusion within the SBMA”. Present during the hearing were Diño, SBMA Administrator Wilma Eisma and other senior officials of the agency. Asked on what authority Diño

issued Administrative Order 012017, the SBMA official said he was empowered to do so under Section 2 of EO 340. With this, Fariñas expressed dismay over the split in the administrator-chairman position and noted it has apparently become the source of intra-agency conflict. “There is confusion now because there are already two positions. The law is not being followed,” Fariñas said. In giving a historical background of the appointments to the top SBMA posts, Eisma and Diño were both appointed by President Duterte under EO 340. Before them, two other sets of officials were appointed in the same fashion—Chairman Antonio Licu-

anan and Administrator Alfredo Antonio, and Chairman Feliciano Salonga and Administrator Armand Arreza. All received appointments under Arroyo. Eisma said the previous Chairman and Administrator Roberto Garcia was, likewise, appointed under EO 340, only that he was given separate appointments for the separate positions. Still, Fariñas clarified that Republic Act (RA) 7227 is clear: There will be only one position for the SBMA administrator and chairman, contrary to EO 340, which was signed by Arroyo in 2004. Reading pertinent parts of RA 7227, Fariñas noted, “The President shall appoint a professional manager as administrator of the Subic Authority…who shall be the ex-officio chairman of the board and who shall serve as chief executive officer of the Subic Authority.” “EO 340 is a transgression of the law,” the lawmaker said. “How did the law [RA 7227] become amended without legislation?” The committee then agreed to set another hearing on the matter on Thursday and to invite now Representative Arroyo, Executive Secretary Salvador C. Medialdea, Justice Secretary Vitaliano N. Aguirre II and former Executive Secretary Alberto Romulo to shed light on how EO 340 came about. The committee also asked the two officials to respect the status quo pending the resolution by the committee of this concern.

A10 Wednesday, June 7, 2017 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Looking beyond rice

N a few weeks the House of Representatives will start scrutinizing the proposed budget of various departments for 2018. One of the agencies expected to see a huge jump in its allocation is the Department of Agriculture (DA). According to Agriculture Secretary Emmanuel F. Piñol, President Duterte himself has promised that the agriculture department would be given a budget of at least P200 billion for next year. This amount is significantly higher than the P45 billion the DA received this year. The national government usually allots huge resources just to grow rice, given the crop’s importance to the diet of Filipinos. Rice, a water-loving crop, is the staple food of Filipinos. Because of this, the budget for irrigation in recent years has averaged P20 billion. Also, Philippine Institute for Development Studies research fellow Roehlano Briones noted the government’s resources were largely focused on rice. Briones said government spending for rice reached P37.44 billion, more than half of the P62.64 billion spent for agriculture-related programs and projects in 2012. In contrast, spending for other crops, like corn, amounted to only P951 million in 2012; high-value crops, P1.63 billion; coconut, P2.08 billion; livestock, P2.72 billion; and P3.3 billion for fisheries. Government support for the production of high-value crops was less than P2 billion. This is lamentable considering the potential of high-value crops, such as cacao, to increase the country’s export receipts. This is not to say that the rice sector does not deserve the attention being heaped upon it by the government. The DA made the right call in seeking a fivefold increase in its budget this year, given the impending expiration on June 30 of Manila’s waiver for the special treatment on rice. The World Trade Organization (WTO) had allowed the Philippines to enjoy this privilege for two years, or until this year, and Manila has indicated it will no longer shoot for another extension. The impending removal of this protection requires the government to prepare rice farmers for increased competition, and the DA would need huge resources to do this. But the DA should also not lose sight of the need to make other subsectors competitive. Experts have been pushing for the propagation of other crops and boosting the production of other agriculture subsectors so farmers could earn more. While the focus on rice is warranted, given the impending expiration of the WTO waiver, the national government should make sure that other subsectors are not neglected. Congress could help the government, particularly the DA, set its spending priorities once it reviews the proposed budgets of various agencies. A huge budget would allow the DA not just to prepare the rice sector, but also jump-start other agri-based industries. After all, the Philippine agriculture sector is so much more than rice, and farmers could grow other dollar-earning crops if only they are given the proper support. Since 2005

BusinessMirror A broader look at today’s business

Life-insurance proceeds are exempt from execution Dennis B. Funa

INSURANCE FORUM

he proceeds of life insurance are exempt from the claims of creditors. In other words, they are “exempt assets”. Occasionally, statutes would provide for limitations as to the amount of or as to the beneficiaries entitled to the exemption. For example, in the United States, certain states do not protect the policy’s entire proceeds as it may allow creditors to take amounts beyond a certain threshold. Certain states protect the proceeds only if the policy beneficiaries are the policyholder’s spouse, children or other dependents. The rationale of this statute is “to enable a husband, when death deprived wife and children of his support, to secure them from want and to prevent them from becoming a charge upon the public”. This principle is enshrined in Rule 39 (Executions, Satisfaction and Effects of Judgments), Section 13 (k) of the Rules of Civil Procedure, which provides that “(e)xcept as otherwise expressly provided by law, the following property, and no other shall

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be exempt from execution: (k) Monies, benefits, privileges, or annuities accruing or in any manner growing out of any life insurance.” The exemption is allowed regardless of the amount of premiums paid. This exemption does not apply to nonlife-insurance policies. However, in Gallardo v. Morales, it was ruled that while a life insurance is distinct and different from an accident insurance, a personal-accident insurance that “insures for injuries

and/or death as a result of murder or assault or attempt thereat” is also a life insurance within the purview of Rule 39. Hence, the Court ruled, keeping in mind the intent of the rule, that the proceeds from the personal-accident insurance shall, likewise, be exempt from execution. The Court also mentioned that in its broader sense, “life insurance” includes accident insurance, since life is insured under either contract. The Court ruled that exemption under the Rules of Court “applies to ordinary lifeinsurance contracts, as well as to those which, although intended primarily to indemnify for risks arising from accident, likewise, insure against loss of life due, either to accidental causes, or to the willful and criminal act of another, which, as such, is not strictly accidental in nature.” In case of further doubt, the Court reminded that such “statutes should be construed liberally and in the light of, and to give effect to, their purpose of enabling an individual to provide a fund after his death for his family which will be free from the claims of creditors”.

onald J. Trump just took us out of the Paris climate accord for no good reason. I don’t mean that his decision was wrong. I mean, literally, that he didn’t offer any substantive justification for that decision. Oh, he threw around a few numbers about supposed job losses, but nobody believes that he knows or cares where those numbers came from. It was just what he felt like doing. And here’s the thing: What just happened on climate isn’t an unusual case — and Trump isn’t especially unusual for a modern Republican. For today’s GOP doesn’t do substance; it doesn’t assemble evidence, or do analysis to formulate or even to justify its policy positions. Facts and hard thinking aren’t wanted, and anyone who tries to bring such things into the discussion is the enemy. Consider another huge policy area, health care. How was Trumpcare put together? Did the administration and its allies consult with experts, study previous experience with health reform, and try to devise a plan that made sense? Of course, not. In fact, House leaders made a point of ramming a bill through before the Congressional Budget Office (CBO), or for that matter anyone else, could assess its likely impact.

When the budget office did weigh in, its conclusions were what you might expect: If you make huge cuts in Medicaid and reduce subsidies for private insurance—all so you can cut taxes on the wealthy—a lot of people are going to lose coverage. Is 23 million a good estimate of those losses? Yes—it might be 18 million, or it might be 28 million, but surely it would be in that range. So how did the administration respond? By trying to shoot the messenger. Mick Mulvaney, the White House budget director, attacked the CBO, declaring that it did a “miserable” job of forecasting the effects of Obamacare. (It got some things wrong, but overall did pretty well.) He also accused the office—headed by a former Bush administration economist chosen by Republicans — of political bias, and smeared its top

health expert in particular. So, Mulvaney, where’s your assessment of Trumpcare? You had plenty of resources to do your own study before trying to pass a bill. What did you find? (Actually, the White House did do an internal analysis of an earlier version of Trumpcare, which was leaked to Politico. Its predictions were even more dire than those from the CBO.) But Mulvaney and his party don’t study issues, they just decide, and attack the motives of anyone who questions their decisions. Which brings us back to climate policy. On climate change, influential conservatives have for years clung to what is basically a crazy conspiracy theory—that the overwhelming scientific consensus that the earth is warming due to greenhouse-gas emissions is a hoax, somehow coordinated by thousands of researchers around the world. And at this point this is effectively the mainstream Republican position. Do GOP leaders really think this conspiracy theory is true? The answer, surely, is that they don’t care. Truth, as something that exists apart from and in possible opposition to political convenience, is no longer part of their philosophical universe. The same goes for claims that trying to rein in emissions will do terrible economic damage and destroy millions of jobs. Such claims are, if you think about it, completely inconsistent with everything Republicans supposedly believe about economics. After all, they insist that the pri-

An interesting question is whether or not variable life-insurance policy proceeds are also covered by the exemption. The Insurance Commission believes that such proceeds should also be exempt from garnishment or execution in keeping with the liberal interpretation accorded to exemption from executions of “monies, benefits, privileges, or annuities accruing or in any manner growing out of any life insurance”. Under Section 238 (b) of Republic Act 10607, or the Amended Insurance Code, a variable contract is “any policy or contract on either a group or on an individual basis issued by an insurance company providing for benefits or other contractual payments or values thereunder to vary so as to reflect investment results of any segregated portfolio of investment x x x.” A variable life insurance is a life-insurance policy. And such “monies, benefits, privileges, or annuities” have grown out of such life insurance.

Atty. Dennis B. Funa is the current insurance commissioner. Atty. Funa was appointed by President Duterte as the new insurance commissioner in December 2016. E-mail: dennisfuna@yahoo.com.

vate sector is infinitely flexible and innovative; the magic of the marketplace can solve all problems. But then they claim that these magical markets would roll over and die if we put a modest price on carbon emissions, which is basically what climate policy would do. This doesn’t make any sense—but it’s not supposed to. Republicans want to keep burning coal, and they’ll say whatever helps produce that outcome. And as health care and climate go, so goes everything else. Can you think of any major policy area where the GOP hasn’t gone post-truth? Take budgeting, where leaders like Paul Ryan have always justified tax cuts for the rich by claiming the ability to conjure up trillions in extra revenue and savings in some unspecified way. The Trump-Mulvaney budget, which not only pulls $2 trillion out of thin air but counts it twice, takes the game to a new level, but it’s not that much of a departure. But does any of it matter? The president, backed by his party, is talking nonsense, destroying American credibility day by day. But hey, stocks are up, so what’s the problem? Well, bear in mind that so far Trump hasn’t faced a single crisis not of his own making. As George Orwell noted many years ago in his essay “In Front of Your Nose”, people can indeed talk nonsense for a very long time, without paying an obvious price. But “sooner or later a false belief bumps up against solid reality, usually on a battlefield”. Now there’s a happy thought.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Is Trump crying ‘emperor’s new clothes’ over climate change? Michael Makabenta Alunan

on the contrary

.S. President Donald J. Trump’s recent move to bolt out from the 2015 Paris Agreement on Climate Change, which was signed by 154 countries on Earth Day, April 22, 2016, appears increasingly like the classic fable about the “Emperor’s New Clothes”. The story goes that a gullible vain emperor hired the best tailors to design the best expensive clothes, which con-artist tailors said were invisible. Spellbound to believe his words as the law, all his subjects allowed him to parade his “new clothes”, only to realize the truth when a boy shouted “the emperor has no clothes”. Trump says truth or “alternative fact?” Is Trump saying another alternative fact or is he saying the truth against Al Gore’s documentary, Inconvenient TRUTH, on the anthropogenic or man-made causes of global warming? We may not like Trump’s obnoxious behavior and Islamophobic, racial and misogynist remarks in the past, but he may have discovered the proverbial “emperor’s clothes” on climate change that he is willing to risk the fear of getting the US isolated, or incurring the ire of global environmentalists over the climate agreement championed by former President Obama. Mounting evidence shows that climate change is real and has been changing daily constantly for billions of years, contrary to the propaganda it is caused by man-made industrial and transport emissions. Is it man-made or Mann-made? The main argument of the UN’s Intergovernmental Panel on Climate Change (IPCC) and by Al Gore’s climate-change documentary is the Hockey Stick theory by climatologist Michael Mann. Mann’s study of global temperature in the past 1,000 years recorded temperature spikes starting in the 19th century showing a hockey stick-shaped graph, which politically motivated environmentalists link to man-made industrial and vehicle emissions. They took earth samples from the polar region and made correlations between carbon dioxide (CO2) residues capturing temperature levels. Logically, the further back CO2 levels dissolve with time and more recent years show increasing concentrations, but Mann’s correlation is a nonsequitor or highly flawed as it does not establish causality or cause and effect. Many scientists have debunked this with their voluminous literature on the Internet. Some 31,000 scientists even signed a petition opposing climate lies peddled a la Hitler’s Joseph Goebbels. Many scientists resigned from IPCC, which is composed more of government and political advocacy groups. Facts don’t follow theory. The Global Warming Swindle documentary aired on British TV revealed the opposite to the propaganda that an increase in CO2 leads to global warming, followed by climate change. Prof. Philip Stott of the University of London, noted when humans were not yet producing CO2, we had ice ages and warm periods. In the 14th century Europe had a little ice age, as shown by illustrations of people skating on the Thames River. But medieval England had a warm climate, as manifested in the writings of English poet Chaucer and the remnants of sites all over, like vineyards, Vine Hill, Vine Street, Vinery, etc. At the turn of the 19th century temperatures rose by half-percent Celsius, but during the post-World War economic boom up to 1975, they dropped even when CO2 rose to their peaks with industrialization, thus

The climate agreement limits the increase in global temperature to 1.5 °Celsius, which means ridiculously zero greenhouse-gas emissions between 2030 and 2050. But what’s the fuzz, and why so fast? If climate change is not caused by humans, but by seven to eight other natural reasons, the insidious hidden agenda must be slow genocide on a mass scale. negating the global warming theory. More proof from Moore. Greenpeace’s cofounder scientist Patrick Moore left Greenpeace when it turned political and unscientific on many issues, starting with its “Global Chlorine Ban”, when it is only chlorine that can purify water on a mass scale. Chlorine evaporates in 30 minutes, making water safe. Moreover, 75 percent of medicines are chlorine-based. CO2 may have increased from 295 parts per million (ppm) to 400 ppm the past two centuries, this is still a negligible 0.0004 of 100 percent. Over the last 600 million years, CO2 levels even hit 2,000 ppm, which is ideal for plants, Moore said. One gets dizzy only at 30,000 ppm. We even need more CO2 to develop agriculture. CO2 is also used as a refrigerant and dry ice, which are good for preserving food. There is even a web site, I Love CO2.com, but why restrict CO2, if the bigger greenhouse gas is water vapor, which is 850 percent stronger than CO2, and 2.1 million percent more in volume than CO2. In fact, without water vapor, the Earth will be 14 percent colder. Apparently, there are interests that do not want poor countries to industrialize by putting a cap on CO2, which means to go slow on industrialization. Greenpeace and groups, like the World Wildlife Fund, also push for costly age-old renewable energy. Windmills made of steel are efficient, but are no different than Holland’s 12th-century wooden mills, both dependent on unreliable wind velocity. Solar energy is another with very lowenergy flux density, but may still be appropriate in remote areas. Why so fast about the fuzz? Records show that with its massive industrialization, China now shares 23.43 percent of global CO2, even higher than the US’s 14.69 percent. India shares 5.7 percent; Russia, 4.87 percent; Japan, 3.61 percent; Germany, 2.23 percent; South Korea, 1.75 percent; and the Philippines, a miniscule 0.24 percent. And yet remnants of Obama’s influence at the local US AID office are still pushing for greenhouse-gas accounting, and ignoring air pollution that causes scores of thousands of deaths with carbon monoxide levels alone even over twice that of CO2. The climate agreement limits the increase in global temperature to 1.5 °Celsius, which means ridiculously zero greenhouse-gas emissions between 2030 and 2050. But what’s the fuzz, and why so fast? If climate change is not caused by humans, but by seven to eight other natural reasons, the insidious hidden agenda must be slow genocide on a mass scale. Perhaps, we need to change the climate of governance and relearn the issues on climate change.

E-mail: mikealunan@yahoo.com

Wednesday, June 7, 2017 A11

The case for kinder, therefore smarter, wars Teddy Locsin Jr.

Free fire Continued from A1

r. Chair, thank you for this opportunity to address this working group to discuss the Report of the Secretary-General on children and armed conflict in the Philippines for the period December 2012 to December 2015. I wish to thank the Honorable Special Representative of the Secretary-General (SRSG) for Children and Armed Conflict, Ms. Virginia Gamba, whom I had the pleasure of meeting earlier this week. I wish to further thank the office of the SRSG for the transparent and collegial manner with which the report was prepared, which gave the Philippine government the opportunity to comment on the draft. We appreciate the effort to achieve a fair and balanced reporting process.

Mr. Chair, We share, to an even greater degree if that was possible, the UN’s profound concern for the safety of children in armed conflict. There is absolutely no excuse, no justification, no conceivable rationale for enlisting, let alone hurting, children in armed conflicts as armed groups tend to do. Children’s very evident size and vulnerability make it impossible to believe that they are hurt inadvertently in a fight, or that they can be used deliberately to fight. Armed groups that have so used them are beneath contempt. That they have, of late, moderated their use and abuse of children merely underscores that the deplorable practice has finally touched if not their conscience then their self-interest to appear better in the eyes of the world. The Philippines has suffered human, social and economic costs from decades-long armed conflicts waged by different armed groups. Finding a resolution to these conflicts and attaining peace remain at the core of my country’s national security and development agenda. President Rodrigo Roa Duterte has advanced a Six-Point Peace and Development Agenda, which aims to bring about, one, new peace agreements consistent with human rights and our

democratic constitution, along with the meaningful implementation of existing agreements and commitments with the various armed groups; two, a peace that promotes catch-up socioeconomic development in conflict areas; and, three, a culture of peace and conflict sensitivity. Once realized, this agenda will positively impact the lives of children in armed conflicts. Mr. Chair, The Philippines is a State Party to the UN Convention on the Rights of the Child (CRC). As such, it is committed to undertake the appropriate measures to enforce the rights recognized in the CRC, and accompanying optional protocols for the protection of children from recruitment and use in armed conflict and from all forms of sexual abuse and exploitation, including rape by soldiers whose sworn duty is to protect them. That the incident in question is isolated does not diminish its repulsiveness. Armies are raised to win conflicts without inflicting abuses that create new ones. Toward this end, the second National Action Plan for Children was crafted to sustain existing, and to identify new programs and activities for the protection of children. Since the last reporting period,

We share, to an even greater degree if that was possible, the UN’s profound concern for the safety of children in armed conflict. There is absolutely no excuse, no justification, no conceivable rationale for enlisting, let alone hurting, children in armed conflicts as armed groups tend to do.

the Philippines has gone further in institutionalizing mechanisms to prevent violations against children in armed conflicts. One, there is the monitoring, response and reporting system for grave child-rights violations under the auspices of the Philippine Council for the Welfare of Children. Two, there is the Inter-Agency Committee on Children in Armed Conflict, which coordinates with United Nations Children’s Fund (Unicef) and its technical working group on the UN Country Task Force on monitoring and reporting of grave child- rights violations in armed conflicts. The committee reviews cases of alleged violations. These mechanisms are up and running as we speak, particularly in the ongoing resolution of the crisis in Marawi, of which I have the most recent report from the field. Three, the Philippine government continues to strengthen its capacity to address and prevent the incidence of grave violations by training and empowering frontline service providers in the local government and community levels, with the participation of civil society in identifying, reporting and responding to incidents. Four, the Armed Forces of the Philippines has started implementing a strategic plan drafted with the Unicef, to better protect children in the course of military operations. The AFP has since reached some of the benchmarks. Policy and mechanisms in the plan to respond better to child-victims are being improved. Mr. Chair, In my meeting with Ms. Gamba earlier this week, she expressed her desire to maintain a continuous engagement between her office

and member-states on issues affecting children in armed conflicts. I welcome this initiative because it addresses two concerns that, in my experience, pose a challenge to achieving fair and balanced reporting on the part of the SRSG, namely: the brevity of time within which a member-state must provide comments to a draft report (although I am aware that the more time, the more excuses can be invented). And second, the lack of clarity and details of some cases cited in reports, which make it difficult for the concerned governments to validate. We have no need nor desire to hide abuses. We want an Army that fights to win conflicts; not to create new conflicts by abuses, especially of children. It is my hope that establishing and nurturing a relationship with the office of the SRSG will facilitate the issuance of timely, accurate and balanced reports—and pave the way to stamping out violence against children in the wars that member-states still sadly wage to protect their people from enemies. Thank you. The Swedish ambassador who chaired the working group asked if any of the ambassadors wished to ask me questions. There were none. He and Ms. Gamba escorted me to the door. I assured both of them, if they were listening, that I look forward to cooperating with them, and that I would investigate the particular incident involving soldiers shooting a family of five for alleged NPA connections and another one involving the detention and rape of a 14-yearold girl over a two-month period. The soldiers and officer involved have been censured, which I think is inadequate. If anyone should be shot, it should not be pushers but soldiers who disgrace the Army by the filthiness of their conduct in war. Rape. Contemptible. I hope my message was clear for a lean and clean Philippine Army able to win wars without creating reasons for other wars to arise, which was my way of emphasizing that we will fight to protect and preserve our country even from enemies who win the praises of the UN for their protestations of moderation, if nothing else.

Crafting a national intellectual-property strategy Josephine Rima-Santiago

Intellectual Property Matters

nextricably linked to the concept of intellectual property is the concept of innovation. Where there is intellectual property, there necessarily is innovation.

Yet, the converse may not be always true. Innovation, to be felt and appreciated, must be translated in terms of products and services. While both are abstract concepts, they have tangible and lasting effects. But if intellectual property can be measured in terms of filings (i.e., patent, trademark, utility model, industrial design), of grants, of registrations, how can we measure innovation, considering that it is just as abstract as the concept of intellectual property? Fortunately, to help us answer that question, the Global Innovation Index (GII) was developed. The index computes an economy’s performance innovation-wise using the following principle: innovative and creative outputs result from a combination of factors which enable innovation. Stated in GII terms, the level of knowledge and technology outputs, as well as creative outputs—as indicated by intellectual property filings, among others—are influenced by how much the government and the market allow them to thrive. Imagine a machine churning out products: what you put in determines what goes out. Here, both input and output sub-indices are measured to determine the innovation index of an economy. (A more extensive discussion

of the GII will be had in a future column.) How did we fare as a country? In the 2016 GII ranking, the Philippines placed 74th of 128 economies— translated in percentile ranking, the 42nd. While this is a nine-notch leap over the 2015 performance, this translated to only a one percentile ascent from our placement last year at 43rd. Pitted against our Asean neighbors, excluding Brunei, Myanmar and Lao PDR (they had incomplete data), we are ranked 5th out of seven. I repeat—5th out of seven Asean countries. Why should the Philippines be alarmed? Wen Jiabao, the former Chinese Premier, sums why succinctly: The future world competition is for intellectual property. With the GII as a guide, the felt need for a national Intellectual Property strategy (NIPS) can no longer be ignored. A whole-of-government and private sectors approach is a must, in terms of strengthening institutional policies to attract businesses and fostering growth, improving the capacity for innovation by investing more in human capital and research, creating more infrastructures to allow easy access to information and products, and enabling an environment supporting investment locally

How did we fare as a country? In the 2016 GII ranking, the Philippines placed 74th of 128 economies—translated in percentile ranking, the 42nd. While this is a nine-notch leap over the 2015 performance, this translated to only a one percentile ascent from our placement last year at 43rd. Pitted against our Asean neighbors, excluding Brunei, Myanmar and Lao PDR (they had incomplete data), we are ranked 5th out of seven. I repeat—5th out of seven Asean countries. Why should the Philippines be alarmed?

and access to local and international markets. Our end goal is very clear: to create a stronger environment conducive and not deterrent to innovative endeavors.

Motivation for undertaking the NIPS

Three reasons motivate the creation of a NIPS. One, the 4th industrial revolution is in our midst and there is no stopping it. Artificial intelligence, autonomous vehicles, big data, Internet of things and Internet of everything interfacing humans and things, are some of the increasing disruptive technological developments in this industrial revolution that government and society face. Two, in an essentially seamless global economy and in the face of climate change phenomenon, where extraordinary natural disasters are experienced, the strength of the Philippines as an agriculture country is significantly challenged. The onslaught of agricultural products from rice to fruits imported from

neighboring countries places the livelihood of our own traditional farmers to an irreversible disadvantage. We urge the government to envision a strategically industrialized Philippines and for whole of society to start paving the way. Three, we have Filipinos who made it big in Silicon Valley, with the likes of Dado Banatao. We have scientists and researchers all over the world. Some of them have expressed their desire to come back very soon and help the country. Thus, we must tap them, get them back, and ask them to train our young population not only towards science, engineering and research, but also towards the arts. We bank on these young people from both science and the arts; they should be able to steer the Philippines toward technological transformation as a country. We will make the period for crafting the NIPS the springboard to thresh out all challenges. Going back to the fundamental question of WHY the need for a national intellectual property strategy: The simple answer is, we want to ensure we add more value to the various development plans and roadmaps, including creativity and innovation, of the Philippines through the effective use of the intellectual property system. More importantly, we want the Philippines to actively participate in the global competition; but we need a national policy purposively to transform knowledge creation, and utilize those that have been independently innovated, or those that have foreign contributions.

Josephine Rima-Santiago, Ll. M., is currently the Director General of the Intellectual Property Office of the Philippines. E-mail: jrsantiago@ columnist.com.