Businessmirror june 14, 2017

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Wednesday, June 14, 2017 Vol. 12 No. 244

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he government on Tuesday said it has approved a number of changes in its rice-importation programs, in an attempt to prevent farmers from incurring losses if imports would arrive during harvest. The National Food Authority Council (NFAC), headed by Cabinet Secretary Leoncio B. Evasco Jr., said the government has decided to implement a tranche-based delivery of rice

San Miguel to build $20-B oil refinery, petrochem complex By VG Cabuag

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an Miguel Corp. said it is building an integrated oil refinery and petrochemical plant worth between $15 billion and $20 billion in the southern part of the country. San Miguel President and COO Ramon S. Ang told reporters after the company’s stockholders’ meeting on Tuesday the refinery and petrochemicals complex will have a capacity of 250,000 barrels of oil per day (bopd). Ang said they have two foreign partners for the project, but he signed nondisclosure agreements that prevented him from disclosing the identities of these firms, as well as the corporate structure. The project will be undertaken b y a ne w compa ny a nd not through subsidiary Petron Corp., the countr y’s largest refiner. The project will be built in the southern part of the country, on a property that is at least 1,000 hectares, he added. Ang said they decided to build the refinery and petrochemicals plant in the south, as Petron already operates a refinery in Luzon. “You don’t want to put all your eggs in one basket,” he added. “We will break ground in six months. The only reason for the delay is that we are still buying more land because the complex will be big,” he said, adding that the complex should be operational

ANG: “There is big domestic consumption of petrochemicals, as well as strong export potential.”

in three-and-a-half years. The petrochemicals business is more stable and profitable, he said. “We realized that the condensation from the refinery can be used to produce petrochemicals. There is big domestic consumption of petrochemicals, as well as strong export potential,” he noted. Petron is already exporting propylene, helping it generate P2 billion in profits every month, he said. Aside from the new refinery and petrochemicals plant, Ang added they are also investing $800 million for the expansion of Petron’s existing refinery in Limay, Bataan, to 270,000 bopd, from the current 180,000 bopd, with the additional capacity mainly for the production of petrochemicals. Ang said they are also considering expanding Petron’s refinery and petrochemicals plant in Malaysia, where the consumption is double that of the Philippines. The company still has no estimate on the cost of the expansion as he is going to Malaysia on June 15 to look at their options there.

PESO exchange rates n US 49.4900

imported via the minimum access volume (MAV) and the governmentto-private (G2P) schemes. “The delivery of private sector-led importation shall arrive in tranches.

805,200 MT

The total volume of rice the private sector will be allowed to import under the MAV scheme At least 30 percent of the volume import quotas should arrive between August and September, and the balance to arrive between December and February 2018,” Evasco said. Harvest for the wet season rice crop usually begins in October. A supply glut during harvest would depress the farm-gate price of unmilled rice and reduce the income of farmers.

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Govt acts to ensure imports won’t harm rice farmers By Elijah Felice E. Rosales

2016 ejap journalism awards

What cannot change Teddy Locsin Jr.

free fire

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F there was ever any doubt that we will never give up an inch of our national territory or an iota of our territorial rights, including what is now part of our national patrimony—our victory at The Hague, Defense Secretary Delfin N. Lorenzana, an internationally respected soldier, laid that doubt to rest. Continued on A11

See “Imports,” A2

BMReports

Sharia courts: Then and now By Manuel T. Cayon

Mindanao Bureau Chief @awimailbox

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Conclusion

N reality, very few Sharia courts are in operation. However, there is a clear standout in Tawi-Tawi. In Tawi-Tawi, the southwesternmost island province of the country, the sole Sharia court is in Bongao. “But even its look is appalling,” said Radzma J. Jamiri, one of five Sharia lawyers in the area and one of only two women lawyers. “The building is unkempt, unpainted and looks more of an ordinary office than a court. It does not elicit dignity and respect a courtroom should imbue,” she told the BusinessMirror in a mobilephone interview from Davao City. It is an injustice for the Bangsamoro in the Philippines “that we have the presidential decree [PD] that already mandated the creation of the Sharia courts and, yet, it has not been implemented”. The expanded autonomy law, in fact, she added, has taken the PD further by empowering also the Sharia courts to litigate criminal cases, contained in Islam’s Hudod Law, or criminal law. Yet, nothing has brought further inroads into the jurisdiction of the Sharia, she said. “ T he Reg iona l L eg isl at ive Assembly should have made the implementing rules and guidelines immediately after the laws

This file photo shows Filipino Muslims praying inside the Golden Mosque in Quiapo, Manila. The creation of Sharia courts through a presidential decree was a significant recognition that Muslim Personal Laws, as the legal system of Muslims in the country, is part of the law of the land that seeks to make Islamic institutions more effective. ALYSA SALEN

were enacted.” The Bongao court is one of the supposed eight courts allotted to Tawi-Tawi. For many reasons, only that court was established. Jamiri has stopped lawyering after 2007. She said this was after being disappointed over a Sharia judge who recalled an earlier decision for the husband-respondent to pay compensation to his wife in a divorce case. Jamiri was one of the more than 100 Sharia lawyers who took their

oath before then-Chief Justice Hilario G. Davide Jr. in 2001.

Islam’s tenets

THE Shar ia and Hudod laws are practically contained in the Koran, Islam’s holy book. “The Sharia court only lifted them from the Koran to be enforced among men,” Jamiri said. The Koran has made it easier for the Sharia courts and Muslim scholars, including the imams, to enforce the law equally among

men, whatever the stature one has in the community, said Hadji Basit Baraguir in Davao City. Baraguir is the program officer of the Madrasah Comprehensive Development and Promotion Program of the Davao City government, the only one program by any local government in the Philippines. The program covers the operation of the 45 madaris [plural of madrasah] and the 180 Arabic language teachers. Continued on A2

n japan 0.4503 n UK 62.6444 n HK 6.3457 n CHINA 7.2792 n singapore 35.7613 n australia 37.3105 n EU 55.4585 n SAUDI arabia 13.1977

Source: BSP (13 June 2017 )

BMReports BusinessMirror

A2 Wednesday, June 14, 2017

Sharia courts: Then and now Continued from A1

“Many nations who implement the Sharia court system are progressive, mainly because the dispensation of justice is fair and just, whether you are rich or poor, has position in society or an ordinary resident,” Baraguir said. “People will know, or eventually will know, if something unusual is not being done right. The judge would have to answer to Allah,” he said. “But nothing has ever happened that was not right.” “When I say that most nations adapting the Sharia law has become progressive, it is because the law is swift and just, and there is a corresponding information dissemination for every act punished,” he added. For stealing, for example, “a finger is cut, and for higher amounts, the bigger part of the limb would be cut also,” Baraguir explained. In the Middle East “either the finger cut or the person itself is being brought around the community to announce the act that was punished,” he said. “It’s the message that

Govt. . .

Continued from A12

“We are not going to name the persons. We are able to track about more than one last night.” However, Salalima said he could not say yet if those involved in cybersedition are among those listed in the arrest orders issued by Defense Secretary Delfin N. Lorenzana. “To the extent that they effect or they commit cybercrimes, then the DICT takes over, because rebellion and sedition are crimes under the Old Penal Code,” the DICT chief said. Salalima said anyone who incites people through the Internet can be charged with cybersedition, as this crime is covered by Republic Act (RA) 10175, or the Cybercrime Prevention Act of 2012.

is important: That no one should commit the act again or meet the same fate.”

Petty crimes

NOTHING of that sort of ordering the dismembering of a limb has happened in the Philippines, so far. According to Samer Allong, administrative officer at the same Madrasah program in Davao City, a semblance of the Sharia court is being practiced in communities populated by Moro Muslims. As far as I remember, Allong said, in the Muslim Village at the southern edge of Barangay Bangkal in Davao City, petty crimes have been litigated and decided by the imam. But mostly, the public punishment of lashing, or whipping, “is one punishment that has left a mark in the community consciousness”. “It is commonly enforced on cases of premarital sex, and the two persons involved are given 100 whips in full view of the community,” Allong said. “It’s also the imam to do it.” All crimes defined and penalized by the Revised Penal Code, committed through and with the use of information and communications technologies, are covered by RA 10175. Penalty for such offense is increased one degree higher than that provided by the Revised Penal Code. The military on June 9 called on Facebook Philippines, including Filipino online citizens, to “undertake necessary measures” on 63 Facebook accounts allegedly managed by Islamist militants. “These 63 [Facebook] accounts have been utilized by the Maute Group terrorists and their sympathizers as it was spreading malicious operations that affect the information landscape and the mindset of every Filipino,” the Philippine Army’s 1st Infantry Division Spokesman Jo-ar A. Herrera said. Elijah Felice E. Rosales

Unlike in the Middle East, though, the whipping material is taken from the softer end of the coconut palm, or the outer edge of a palm frond, “which are common in our community”. While this mellowed version of the hard stick or metal-ended whip belt may still inf lict pain, it was intended to send a more grim message that crime does not pay. “It’s a psychological and religious message that drills deep into the consciousness of a Muslim.”

Worse than a whip

ALLONG could still remember one Muslim resident in the same village. He said in 2005 resident “volunteered confessing that he had sex with another Muslim while they were migrant workers in Saudi Arabia”. “The girl got pregnant and had to go back to her hometown in General Santos City,” he said. That voluntary confession and accepting the hundred lashes “freed him of his bad conscience, and opened the avenue for them to get married and

Imports. . .

Continued from A12

The NFAC has earlier approved the importation of 250,000 metric tons (MT) of rice via G2P, and as much as 805,200 MT of rice via MAV. The government will import rice to beef up the rice stockpile of the NFA during the lean months which will begin in July. Evasco said the NFAC has directed the NFA administrator to release import permits within a day, emphasizing that the NFA chief ’s duty is “purely ministerial or mandatory”. He said the NFAC has also instructed the NFA to issue certificates of eligibility to rice traders within two days, from the usual 15 days. As for imports under the G2P scheme, Evasco said the NFAC has decided to divide the 250,000 MT into tranches and will be putting

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DOT. . .

Continued from A12

to receive the blessings of Allah”. But it was worse in a Muslim community in Sulu, “when I was a kid then,” Jamiri said. She said an uncle committed the same offense, but opted to take all the 200 lashes, half of them supposed to be inflicted on the girl. “An ‘uway’, or rattan, was used, and I could still recall the whipper doing it in full blast,” she said. It would be worse for adultery and rape, where death is meted out, but which has not been applied in the Philippines, too. “Muslims would usually rest the case to the regular courts,” Baraguir said. As in the case in the Muslim village in Davao City, the imam only went as far as warning the parents of one of the rapists to surrender their child to the police “because it is already out of his jurisdiction as an imam, and which would have been handled by a Sharia lawyer.” “But the imam told the parents that had a Sharia court handled the case, their child could have me te d t he de at h s e nte nce,” Allong said.

Gender equality

a cap on each lot to “ensure competition and fair trade”. “The council is looking at dividing the importation to eight to 10 lots with a minimum of 25,000 MT and maximum of 50,000 MT per lot. This year’s G2P importation seeks to do away with the old government-togovernment [G2G] that lacks transparency and competition,” Evasco added. To get a better deal, the NFAC chief said the payment term for rice imports has been cut to 15 days. Previously, Evasco said it took the government as long as one year to pay for the imports. The NFAC has also agreed to remove the Subic Freeport Zone as port of entry for G2P and identified Zamboanga City as replacement. “With these changes being in place, the council is confident that it is being faithful to its foremost duty, that amid the lean season, it is able to secure fair pricing and affordable yet quality rice for every Filipino household,”

Evasco said. However, he did not mention when the NFAC will begin the bidding for the 250,000 MT of rice import under the G2P. The NFAC on May favored the G2P over the G2G, after President Duterte, in a policy shift, adhered to the recommendation of the council. An official of the NFA said bidding for the 250,000 MT of rice would start 28 days after the publication of the terms of reference (TOR). The food agency is still awaiting the NFAC resolution to publish the TOR. Evasco said rice imports under the G2P should arrive on the last week of July until the last week of September. In addition, Evasco said only the total cost is required for the traders to publicize, as other expenses, such as cost of freight, logistics and insurance will no longer be revealed, owing to the principle of “trade secret”. With a report from Jasper

WHILE the Sharia law promises a strong deterrent to crime and offers better economic development as a consequence, Jamiri said women issues, like the rest of the Philippine society, has a far and winding road ahead. She has used women-rights issues among Muslims as her dissertation for a doctorate degree in 2005. That time, she asserted that Muslim women “should be given equal rights to file for a divorce” that she said, was commonly a privilege for Muslim men. “Musl im societ y is st i l l highly patriarchal, but a number of our Islamic elders and scholars are beginning to agree to giving Muslim women wider latitude and equality before the Sharia law,” she said. She said her sources came from the imams, the ulama, the asatidz, [plural of ustadz] and other learned men in the Muslim communities in Tawi-Tawi. “All agree that women should be respected to exercise their gender rights,” she added.

Emmanuel Y. Arcalas

of a real retiree.” For his part, DOT Spokesman and Assistant Secretary Frederick M. Alegre said “we stand by McCann,” and that the DOT would still run the ad “in key retiree markets, like Japan and South Korea... for about a quarter [three months]”. He cited government data that show about 27,000 foreigners have secured retirement visas in the Philippines. Having been in media and advertising prior to his appointment to the DOT, Alegre explained there are some ads that have “similar creative executions but with unique propositions. It’s something that’s accepted in the advertising industry.” A published report (not in the BusinessMirror) showed the similarities in the DOT’s new television commercial (TVC). and an ad for South Africa, which showed tourists enjoying the destinations in each country. Both end in the revelation that the featured tourist is blind. A DOT source, meanwhile, told the BusinessMirror, the province of Quebec in Canada last year also came out with a similar ad featuring a blind tourist. “Canadians also criticized Quebec for copying the South Africa ad,” the source added. In the Quebec ad, however, the tourist's blindness was introduced in the beginning of the ad. This is not the first time the DOT has been accused of copying or plagiarizing tourism ads of other countries. In November 2010 the DOT, under then-Secretary Albert Lim, came up with the “Pilipinas Kay Ganda” slogan, with the help of Campaigns & Grey. Netizens discovered the font and color scheme used for the logo appeared to have been lifted from Poland’s own tourism logo. In January 2012 the DOT led by Secretary Ramon R. Jimenez Jr., unveiled the “It’s More Fun in the Philippines” country slogan, created by BBDO Guerrerro. It was later found to have been similar to a tourism ad in the 1950s for Switzerland (“It’s More Fun in Switzerland). The new TVC of the DOT, likewise, reaped criticism for what netizens described as a “ lame” or “unimaginative” slogan, preferring the more catchy “It’s More Fun...” Some have also pointed out that tag itself is similar to the Bengali ad that enjoins tourists to “Experience Bengal”. The DOT earlier stressed it would still be keeping the “It’s More Fun..” country slogan but is using the “Experience” tag for the new TVC due to the safety concerns of foreign tourists. (See, “New DOT ad enjoins foreigners to ‘Experience the PHL’,” in the BusinessMirror, June 8, 2017.) It also said the ad was based on a true story of a Japanese retiree in the Philippines, and highlights the destinations in northern Philippines. The new “Sights” ad is the second in a series for the DOT’s yearlong advertising campaign, pegged on the theme “When with Filipinos”. The first, which premiered in January during the Miss Universe campaign, showed a travel writer Jack Ellis, enjoying snacks offered by a motherly local at the Enchanted River in Hinatuan, Surigao del Sur. She proceeds to call him Anak (child), which hypes on the Filipinos’ unique brand of hospitalty that treats every visitor like family. A third ad is already under development, Alegre said. The rest of the McCann statement is as follows: “In working with the [DOT], we have been inspired by the many stories we have seen and heard, about why foreigners choose to v isit the Philippines. Many of them have spoken about our innate warmth, the genuine friendships they have developed here, our hospitality that extends to a sense of family, and the many reasons it is the Filipino people that truly make it more fun in the Philippines.” “Our research has also shown that, of the millions of visitors who visit the Philippines, thousands of foreigners from over 100 countries have chosen to live and retire here.”

news@businessmirror.com.ph

The Nation BusinessMirror

Editor: Dionisio L. Pelayo • Wednesday, June 14, 2017 A3

NBI to seek Interpol help Marawi Peace Corridor volunteers in locating Lascañas rescue 4 more trapped residents By Joel R. San Juan @jrsanjuan1573

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USTICE Secretary Vitaliano N. Aguirre II has directed National Bureau of Investigation (NBI) Director Dante A. Gierran to coordinate with the International Police Organization (Interpol) to determine the whereabouts and immediately arrest Arturo Lascañas, the confessed member of the Davao Death Squad (DDS). Aguirre issued the order after the Regional Trial Court (RTC) in Davao City ordered Lascañas’s arrest for the murder and two counts of frustrated murder charges filed against him in connection with the ambush killing of radio broadcaster Juan “Jun” Pajadora Pala on September 6, 2003. “In the interest of the service and pursuant to the provisions of existing laws, you are hereby directed to coordinate with the International Police Organization to gather information on the location and whereabouts of Arturo Lascañas and to coordinate with the proper authorities for his apprehension,” the memorandum stated. Upon the recommendation of the prosecutor, the trial court in Davao set no bail for Lascañas. Lascañas, who implicated President Duterte in summary execu-

tions committed by DDS, left for Singapore on April 8 to avoid possible lawsuits that may be filed against him. The case stemmed from the complaint filed by Louise Aguirre Pala, wife of the victim, based on Lascañas’s admission at the Senate hearing on March 6 that he was responsible for the killing of the broadcaster. The Davao City Prosecutor’s Office issued on May 25 a resolution which found probable cause to charge Lascañas before the trial court. It held that Lascañas’ s admission through his affidavit and testimony during the Senate hearing constitutes extrajudicial confession. An official of the Bureau of Immigration (BI), meanwhile, said Lascañas is still out of the country. BI Spokesman Ma. Antonette B. Mangrobang said that based on the agency’s records, Lascañas has not returned to the Philippines. “He is still out of the country based on our travel records,” Mangrobang said. Lascañas has left countr y through the Clark International Airport in Pampanga on April 8 for Singapore. He was supposed to return on April 22 as indicated in his return ticket, but has never returned.

CA to House: Explain detention of ‘Ilocos 6’

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he Court of Appeals (CA) has issued a show cause order requiring the leadership of the House of Representatives and the chamber’s sergeant at arms to explain why they should not be held in contempt for their refusal to comply with its earlier directive to present before it the detained six employees of the Ilocos Norte provincial government. In an order, the CA’s Special Fourth Division directed Speaker Pantaleon D. Alvarez to submit an explanation why he should not be cited in contempt for defying the directive to present the six employees of the provincial government before the appellate court last week. The show cause order, which also addressed to the House sergeant at arms, retired Army Lt. Gen. Roland M. Detabali, was issued after the House leadership defied its order to present detained petitioners—Genedine D. Jambaro, Encarnacion A. Gaor, Josephine P. Calajate, Eden C. Battulayan, Evangeline C. Tabuluog and Pedro S. Agcaoili Jr.—before the Court, and its subsequent order for their immediate release. Butch Catubay, legal counsel of the “Ilocos 6” said the CA ruled that it has jurisdiction over the case since

it is a “matter of a habeas corpus case”, thus, the jurisprudence and the decisions of the court is “concurrent with the Supreme Court and the Regional Trial Court when it comes to habeas corpus cases”. In an interview, Sangguniang Panlalawigan member and lawyer Vicentito Lazo reiterated Catubay’s statement saying: “It is not a question of ‘powers and jurisdiction’ between CA and and the House of Representatives for it is a habeas corpus case, and under an existing law the CA has jurisdiction to the said cases.” “We must follow the rule of law,” he added. CA Special Fourth Division Acting Chairman Stephen C. Cruz and Associate Justices Edwin D. Sorongon and Nina G. AntonioValenzuela granted the petitioners an Order of Release on June 9, directing the release of the Ilocos 6 who filed a petition for the writ of habeas corpus. Led by the CA Sherriff accompanied by the legal counsels of the Ilocos 6, the CA process server attempted to serve the order of release twice, on June 9 and 10, but it was not accepted by the House. Joel R. San Juan

By Claudeth Mocon-Ciriaco | Correspondent

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HE Peace Corridor volunteers from the government and the Moro Islamic Liberation Front (MILF) rescued four more trapped Marawi City residents early this week. One of the rescued civilians thanked the government-MILF Peace Corridor for helping them get of the conflict area in Barangay Bangolo, Marawi. So far, the Peace Corridor has retrieved a total of 221 stranded individuals. The rescued noncombatants include three Maranaos and a Christian. They were rescued in the Bangolo area in coordination with the Armed Forces units under Lt. Gen. Carlito G. Galvez Jr., Western Mindanao Command chief. The civilians have been trapped at Moncado Colony since the start of the conflict. The rescued person recounted that everybody helped each other

to survive after the attack. On the last week of May, MILF Chairman Al Haj Murad Ebrahim, with the help of Presidential Peace Adviser Jesus G. Dureza, met personally with President Duterte to discuss the concept of Peace Corridor. The Peace Corridor was established in the 3-kilometer Banggulo Bridge to Quezon Avenue.

‘Let’s heal wounds of conflict’

DUREZA, meanwhile, urged stakeholders to work on relationship building and healing the wounds and divisions brought about by armed conflict. “I always say this before, and even now, I can build easily the [physical] structures destroyed

by the [armed] conflict. I can also build the school buildings that were burned down. But building of the relationships, bringing back social cohesion and mending the torn social fabric brought about the conf lict takes time. The healing takes time,” Dureza said in a speech in Zamboanga City, during the celebration of the country’s 119th Independence Day. Dureza was in Zamboanga City on Monday to represent Duterte. He, along with Mayor Isabelle “Beng” Climaco-Salazar, hoisted the Philippine flag and laid wreaths at the Plaza Rizal, fronting the City Hall. Dureza emphasized the process of healing, amid the crisis in Marawi and the continuing recovery of Zamboanga City following the 2013’s siege. “I see here in Zamboanga, the healing process has already started. And we can see the results. This is principally due to the leadership of Mayor Beng and the city officials, in cooperation with the military, the police and members of the different sector, and most especially the civilians,” he said.

He noted that indications show that Zamboanga “is now moving forward. The city is already building torn relationships”.

Benefits for kin of fatalities

FAMILIES and loved ones of marines who were killed while trying to clear Marawi City of the remaining Maute Group bandits are set to receive P700,000 worth of benefits each. This was disclosed by the Navy Spokesman Capt. Lued Lincuna, in a message to the Philippines News Agency on Tuesday when asked what benefits the survivors of the 13 fallen marines will be getting from the military organization. These include benefits from the Navy Assistance System, free burial services from the Saint Peter Life Plan, Marines Assistance and Special Financial Assistance. These will total P700,000 per family, Lincuna added. “Total of around P700,000 will be immediately received,” he added. As of Tuesday, 58 government troops have been killed and about 120 injured in the fighting which is now entering its fourth week.

With PNA

CBCP official opposes free Wi-fi in churches

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N official of the Catholic Bishops’ Conference of the Philippines-Public Affairs Committee (CBCP-PAC) said it is not advisable to provide free Wi-fi inside churches. Fr. Jerome Secillano, CBCPPAC executive secretary, noted that while it can help the faithful in praying, the parish will not be able to monitor if the people will use it for other purposes. “The intention to install Wi-f i in churches to aid people in praying is good, but the irresponsible use of it is certainly beyond the church’s control,” he said. Secillano added the free Internet access in parishes might be used to browse the Internet instead of using it for spiritual purposes. “The danger with installing Wi-fi in churches is it might be used for purposes other than the spiritual,” Secillano said. He added people can download applications (prayer and other spiritual-related content) somewhere else, either in their homes or other places where there is free Wi-fi prior to their visit to church.

HONORARY MEMBER

National Intelligence Coordinating Agency (Nica) Director General Alex Paul I. Monteagudo (right) displays the Philippine Drug Enforcement Agency (PDEA) badge given to him by PDEA Director General Isidro S. Lapeña as a token of appreciation after the signing of the PDEA-Nica Memorandum of Agreement on Intelligence Sharing Cooperation on Tuesday. PNA

“Even without Wi-fi, there are apps that they can download before going to churches and use them for praying,” he said. “While we want to take advantage of what communications technology can offer, we would rather be

prudent in their use than let people utilize them possibly for Facebook, Instagram, andInternet browsing,” he added. Some malls, restaurants, coffee shops in the country are offering free Internet access as part of their marketing strategies to entice customers.

On Monday the government launched the free Wi-fi access along Epifanio de los Santos Avenue and also at Light Rail and Metro Rail Transit stations. With this, the public will have access to information, such as weather, education and online jobs. PNA

Bureau of Corrections not capable of running plantation, director says

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HE Bureau of Corrections (BuCor) had admitted that it is not capable of managing the 5,308.36-hectare banana plantation inside the Davao Penal Colony (DPC) reservation, which is currently being managed by the Tagum Agricultural Development Co. Inc. (Tadeco) BuCor Director Benjamin C. delos Santos made the admission even as they are still waiting for the final recommendations of the Department of Justice (DOJ), as well as the House of Representatives, which conducted the inquiry into the 25-year jointventure agreement (JVA) between the BuCor and Tadeco. The DOJ exercises administrative supervision over the agency. It can be recalled that House

Speaker Pantaleon D. Alvarez earlier called a legislative investigation into the BuCor-Tadeco JVA over the DPC’s property allegedly for being grossly disadvantageous to the government. A lvarez questioned, among others, the company’s annual payments for both lease and profit sharing as only a fraction of the prevailing market rate. While waiting for the final recommendations of the DOJ and the House Committees on Justice and on Good Governance and Public Accountability, de los Santos admitted that, as far as the agency is concerned, “We do no have the capability and expertise to manage the plantation”. De los Santos made the state-

ment after the DOJ’s fact-finding committee earlier made an observation that the BuCor-Tadeco JVA is “fraught...with infirmities”. There is still 12 years remaining under the JVA, which provides that the government should receive a guaranteed payment of P26.542 million per year for the lease of the land, or P5,000 per hectare. Tadeco President and CEO Alex Valoria earlier told lawmakers the government, without spending a single centavo, earned a total of P142.72 million in 2016 alone, representing a 45 percent share under the JVA. Tadeco is owned by the family of PDP-Laban Rep. Antonio R. Floirendo Jr. of Davao del Norte.

“All of our contingency planning will be subject to the final outcome of the congressional investigation and recommendations of the DOJ,” de los Santos said, when asked if the BuCor already has a plan should the lease contract with Tadeco over the DPC property is cancelled. Justice Secretar y Vitaliano N. Aguirre III vowed to come up with final recommendations after reviewing the contract, which he said aimed to maximize the government’s resources to generate funds for the social and infrastructure programs of President Duterte. Aguirre, who noted the JVA was renewable for another 25 years, admitted it would be difficult to

renegotiate the terms of the agreement at this point. He, however, was caught unaware that the primary goal of the JVA was to rehabilitate the inmates of Dapecol. “I was not informed that this contract constitute some parts of rehabilitation of the inmates,” Aguirre told lawmakers during a congressional hearing on the contract. Under the deal, Tadeco committed to use inmates from the Davao Prison and Penal Farm (DPPF) and pay them “minimum daily wages” and provide them with “necessary emergency medical measures”. “I can say, however, that the relationship between Tadeco and the Bureau of Corrections is a joint venture with the purpose of

reeducation and rehabilitation of inmates to ready them for eventual release to society together, and in conjunction with the development of the lands covered in the joint-venture agreement, one must look at the entire JVA and not pick and choose specific provisions,” Valoria said, adding that of the 12,000 workers, 1,000 of them are DPPF inmates. The contract dates back to the Marcos administration when the first JVA was signed in July 1969, and consolidated into a fresh 25-year contract in September 1979. A year before its expiry, the contract was renewed in May 1, 2003, between Floirendo’s father, Antonio Floirendo Sr. and then-BuCor Director Ramon Liwag. Joel R. San Juan

Economy

A4 Wednesday, June 14, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

DICT’s Salalima seeks Palace order for NGP implementation

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By Elijah Felice E. Rosales

@alyasjah

he chief of the Department of Information and Communications Technology (DICT) on Tuesday said he has submitted to President Duterte a draft executive order (EO) pressing government agencies to relocate their data to the National Government Portal (NGP).

“We have now asked the President to sign the executive order urging government agencies to transfer and migrate all of their data, all of their systems and processes, to the DICT so their online services will be available to the people,” Information Secretary Rodolfo A. Salalima said in a news briefing. The NGP is a single online window containing all online information, operational infrastructure and public services of the government. According to Salalima, the NGP will benefit the people as they will

no longer have to travel from one place to another just to acquire government-issued documents. Salalima said the concept of the NGP could be compared to a onestop shop. Asked about the draft EO, Salalima said he is confident the President will sign it, as the streamlining of the NGP is part of Duterte’s marching order to the DICT in his first State of the Nation Address, aside from the development of a national broadband plan and the implementation of a public Wi-fi.

“I have no doubt he will approve the executive order [because] this is only our means to execute the portal plan,” the DICT chief said. Salalima added the DICT has no specific timeline as to when the NGP will be fully functional, as it will still depend on how fast government agencies relocate their data to the single online window. On top of public convenience, Salalima said the public need not worry about cyber security because the NGP maintains a server secured enough to protect information. “The [Commission on Elections leak in 2015] is one of the reasons

the DICT is asking government agencies to migrate all their data and processes with us because our department, as part of its mandate, will take care of all your data encoded in databases of the government,” Salalima said. The DICT, he added, is scheduled to meet at the end of June to discuss how to fast track the transfer of government data and processes to the NGP. Under the NGP, the public can perform transactions with the government online, such as applying for a driver’s license, filing of taxes and renewing of passport, through a single sign-on credential.

The [Comelec leak in 2015] is one of the reasons the DICT is asking government agencies to migrate all their data and processes with us because our department, as part of its mandate, will take care of all your data encoded in databases of the government.”—Salalima

Senator’s proposal strips most of powers vested on ERC head By Lenie Lectura

@llectura

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enate Energ y Committee Chair man Sen. Sherwin T. Gatchalian has proposed key refor ms w ithin the Energy Regulatory Commission (ERC) in a bid to strengthen the gover nance aspect of the commission. “If you look at some provisions, ERC was created under Epira [Energ y Power Industr y Refor m Act], but meron ding problema [we have encountered some problems with the ERC]. That’s why we proposed to reform ERC, as well. I presented some salient points in our proposal,” Gatchalian said. In his proposal presented before a forum last week, the lawmaker proposed to remove the executive functions from the ERC chairman and transfer it to all the commissioners. The ERC is led by a chairman and four commissioners. “Last December the Securities and Exchange Commission came out with international guidelines on good governance for corporations…we’re compelling them to follow international guidelines, why not the regulators? And regulators are institutions in terms of protecting the public,” Gatchalian said. One of the important features is the balance of power between the commissioners and the chairman, he added. Today, the chairman is the CEO. We will now balance the power of the chairman with the commissioners,” Gatchalian added. T he senator sa id t he ERC chairman, among others, must consult with commissioners regarding meeting scheduled and agenda; secure that the commission avoids acts which unduly inf luence, impede or hamper the

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DENR ready to sign 5.7K new contracts for ‘enhanced’ tree-planting program 1.2M hectares By Jonathan L. Mayuga @jonlmayuga

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he government will be signing a total of 5,700 contracts for the implementation of the Enhanced or Expanded National Greening Program (E-NGP) this year, an official of the Department of Environment and Natural Resources (DENR) said. Under Executive Order 193, which takes off from the implementation of the massive reforestation program of the previous administration, the Duterte administration targets to reforest 1.2 million hectares from 2017 to 2022, the duration of President Duterte’s term. This year the target is to cover 147,000 hectares, which will require partnership with 5,700 people’s organizations, non-governmental organizations and community-based groups. The NGP and E-NGP are the government’s response to the threats of climate change. It is a massive reforestation program that will boost the country’s food security and generate millions of green jobs while strengthening the country’s defense against intense typhoons, flashfloods, landslides and storm surges. The program covers the massive reforestation of mangroves and beach forests, as well. Like the NGP, the E-NGP will be a marriage between the massive reforestation program and the Community-Based Forest Management Program being implemented by the DENR. Director Nonito Tamayo of the DENR’s Forest Management Bureau (FMB) also said the plan is to extend the duration of new contracts, previously extending up to three years under the NGP to five years under the E-NGP. Each E-NGP partner-organization will get at least P30,000 per hectare from the government. The contract will include production of planting materials and planting in the first year and nurturing of ENGP areas in the next four years.

The land-reforestation target under Executive Order 193 from 2017 to 2022 under the Duterte administration Under the E-NGP, Tamayo said the plan is to plant 1,000 trees for every hectare of targeted areas. During previous NGP implementation, only 500 trees were planted for every hectare, for which the DENR-NGP partners receive less than P20,000 per hectare. “This proved to be insufficient,” Tamayo said. The 1,000-trees-per-hectare target, he said, will ensure that the reforested area will expand the country’s green canopy or closed forest cover and will allow communities to benefit from the program longer. Fuel wood trees will be a priority in the massive reforestation program this year, he added, noting of the everincreasing demand for fuel wood. This year’s E-NGP has a budget of P7 billion, including the maintenance of the NGP sites. The last remaining contracts signed in 2015 and 2016 under the NGP will expire in 2018. The DENR’s Forest Management Bureau (FMB) is currently preparing the blue print of the ENGP’s implementation under the Duterte administration. Signed by former President Benigno S. Aquino III on November 12, 2015, EO 193, “Expanding the Coverage of the National Greening Program”, aims to expand the coverage of the NGP implemented from 2010 to 2016 to cover all the remaining, unproductive, denuded and degraded forestlands and its period of implementation extended from 2016 to 2028. According to the DENR-FMB, around 7 million of the 15 million hectares of land classified as forestland in thenPhilippines needs rehabilitation.

Seipi aims to bring back $30-B revenue in 2017

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Dream house A boy takes a break in a cluster of miniature houses, which could be used as coin savings box being sold, in Kawit, Cavite, for P50 a piece. Filipino middle-class children are being encouraged and taught at a young age by both parents and teachers to save a portion of their money for future spending. Nonie Reyes

executive director or any ERC employee; and establish good corporate-governance practices and procedures. The members of the commission, meanwhile, must be tasked to appoint the agency’s executive director, review and approve the appointment of key ERC personnel and the ERC budget. The responsibilities of agency’s executive director, meanwhile, must execute operationalization of strategies and policies, and assume full responsibility for the overall supervision and control of all divisions, units and bureaus. “[In the Senate], we are allowed to ex plain our votes…

[and] our vote[s] are shown to the public. [W hy not the] vote[s of] ERC commissioners and their arguments?...We have to understand their arguments for approving or not. [We call this] open-meeting process. Like at the Senate we are witnesses in their deliberations. This is to improve transparency w ithin the commission and within the regulator; and to attract public participation in the rate making and critical decisions of the regulator,” Gathahalian said in a mix of Tagalog and English. The ERC, he said, has been provided with a copy of his proposal. M o r e o v e r, G a t c h a l i a n i s requ i r i ng t he ERC to put up a

suppor t desk t hat w i l l prov ide lega l a nd tec h n ic a l a ssist a nce to consumers. He a lso stressed t h at consu mers h ave t he r ight to acce s s i n for m at ion up on request. “We have no strong consumer group. What is happening now is whenever there are public hearings paisa-isa pupunta ang consumer or isang consumer group na very loose. Dapat gobyerno ang nage-educate sa consumers about rate making, on the rules and regulation. We have to be proactive. Hopefully, it will attract consumer groups to be more participative and educate themselves, and not just join a rally,” he said.

he country’s electronics industry aims to return to the $30-billion revenue this year, Semiconductors and Electronics Industries in the Philippine Inc. (Seipi) President Dan Lachica said. Lachica said that, if the industry can maintain a growth of at least 5.0 percent throughout the year, the sector’s exports can again hit the $30-billion mark. “It was in 2010 when we last hit $31 billion,” he said. Data from the Philippine Statistics Authority (PSA) showed that the industry’s total exports receipt in 2016 amounted to $28.44 billion, a slight slip of 0.1 percent from 2015’s figure of $28.90 billion. For the first four months of the year, electronic goods’ revenues rose 11.6 percent to $10.1 billion from $9.0-billion in the same period last year. Average growth of the sector is at 13 percent during the first four months of 2017. “We’re hoping to go back to that [$30 billion] level,” the Seipi president said.

Revenue growth in April, however, slowed down to 6.8 percent after three consecutive months of double-digit expansion. R e venues i n Ja nu a r y w a s at 10.4 percent, followed by a 15.9-percent increment in February, and hitting its highest growth of 19 percent in March. Meanwhile, Lachica said Seipi has yet to adjust its target growth for this year, despite the better performance of the industry in the first few months of 2017. Seipi is eyeing a 5-percent to 7-percent increase in revenues at the end of the year. The industry may finish 2017 with exports amounting to $30.31 billion to $30.89 billion. The electronics industry accounts for about half of the country’s export revenues. Data from the industry showed that the top export destinations for Philippine-made electronic goods in March were Hong Kong, China, the United States, Singapore, Japan, Germany, Taiwan, the Netherlands, South Korea and Thailand. PNA

As higher excise tax looms, BOC told to gear up against car smuggling

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he Bureau of Customs (BOC) should be prepared to combat higher incidence of car smuggling when additional excise taxes are imposed on the sale of luxury vehicles, Sen. Sherwin T. Gatchalian said. Gatchalian made this statement noting that stakeholders in the auto-

mobile industry are likely to engage in the underground trading of highend vehicles to avoid paying higher excise taxes. “In my view, the incidence of smuggling will also go up when higher excise taxes are imposed on luxury cars. If this happens, it should not be ‘business as usual’ for the Bu-

reau of Customs. The BOC should be ready to deal with these smugglers,” Gatchalian said during the recent hearing on proposed new excise tax on automobiles. An estimated 20 percent of cars sold in the market are smuggled by unscrupulous traders through the country’s various ports, according

to importers and distributors of luxury vehicles. The neophyte senator said this estimate could grow bigger when car dealers and traders trade underground. To prevent this, Gatchalian said there should be a “strong strategy” to make sure that the increase in the

tax on luxury vehicles will not result in unabated smuggling. “…Only smugglers will earn money if the new excise tax on high-end cars turns out to be too expensive,” Gatchalian said. Under the proposed new excisetax scheme for vehicles, cars costing more than P2.1 million would

be taxed P1.22 million (up from P512,000), plus 200 percent (up from 60 percent) of the amount in excess of P2.1 million. Luxury cars in the country include automotive brands, like Jaguar, Land Rover, Ferrari, Lamborghini, Bentley, Rolls-Royce and Aston Martin. PNA

Agriculture/Commodities BusinessMirror

news@businessmirror.com.ph

Editor: Jennifer A. Ng • Wednesday, June 14, 2017

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PHL won’t suffer from rice shortage–DA By Jasper Emmanuel Y. Arcalas

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@jearcalas

he Department of Agriculture (DA) on Tuesday made an assurance that the Philippines will not experience rice shortage in the coming months, despite the depletion of the National Food Authority’s (NFA) rice stockpile. Agriculture Secretary Emmanuel F. Piñol noted that the Philippines produced 4.42 million metric tons (MMT) of unmilled rice in the first quarter, 12.38 percent higher than last year’s 3.93 MMT. “Actually, what is being depleted is the NFA’s buffer stock and the NFA buffer stock does not mean it’s the national buffer stock,” Piñol told reporters in an interview. “We harvested more than 4 million tons in the first quarter. That’s why if we are going to talk about rice supply, there will be no shortage. What the NFA is saying is that their buffer stock is insufficient,” he added. The DA chief made the statement, amid government efforts to beef up the rice stockpile of the

country’s food agency before the start of the lean season in July. As of May 31, the NFA said its buffer stock is enough to fill the country’s rice requirement for seven days. In end-May the NFA Council (NFAC), the highest policy-making body of the NFA, approved the recommendation of the National Food Security Committee (NFSC) to allow the food agency to import 250,000 metric tons (MT) of rice. The NFAC approved the NFSC’s recommendation to import rice via the government-to-private (G2P) sector scheme. Based on an assessment by the NFSC of the lcoal harvest and supply situation, the government imports only the shortfall in local harvest for buffer stocking purposes. T he NFA’s i mpor t at ion of

IN file photo: A worker passes a sack of rice to other workers inside a National Food Authority warehouse in Taguig City.

250,000 MT of rice through the G2P scheme is covered by Republic Act 9184, or the Government Procurement Reform Act, which provides that the lowest bidder

should be named as supplier. Based on the BusinessMirror’s computation, the NFA needs to import at least 785,280 MT of rice to meet its Legislative-Executive De-

LandBank expands lending programs to small farmers, fishermen

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ominador Ercilla has been a farmer almost all his life. Being born into a family of farmers in San Jose, Nueva Ecija, he took the same road when he was forced to quit school after his second year in college due to poverty. He was hoping to get a degree in Agriculture at the then-Central Luzon Agricultural College (now Central Luzon State University). For almost 50 years now, Ercilla has provided for his family with what he earns from rice farming in his 5-hectare land in Barangay A. Pascual in his hometown. By working on his plow from sunrise to sundown, he was able to send two of his three children through college who are now a nurse and a radiologic technologist. However, it has not always been easy for Ercilla. Just like other farmers, he had to go to private money lenders to augment his production budget every crop cycle. “Noong mga unang panahon, eh, sa Masagana 99 kami nangungutang. Hanggang sa bumalik kami sa private na nagpapautang na mas mataas ang interes. Umaabot sa 25 percent ang interes sa loob ng lima hanggang anim na buwan,” he said. The interest rates imposed by private money lenders were high, but Ercilla had to take it with his eyes closed because it was the only way he could finance his rice production. This changed when he was invited by their association president to a seminar at the Philippine Rice Research Institute—where he learned about Sikat Saka.

Sikat Saka Program

Launched in 2012, Sikat Saka is a credit program implemented by the Land Bank of the Philippines (LandBank) with the Department of Agriculture (DA), which provides direct access to credit for small palay farmers who are members of irrigators associations. The program is designed for palay farmers in the country, most of whom don’t have access to formal credit facilities and, thus, depend on informal lenders who charge exorbitant interest rates. The program is implemented in 45 major rice-producing provinces in the country like Nueva Ecija. “Maganda ang benepisyo ng programa dahil napanatili kong mataas ang ani ko kaya napainut-inot kong napaayos ang aking bahay, napatapos ko ang adopted son ko sa pagaaral at nakabili ng motor at hand tractor,” Ercilla shared. In 2016, with additional funding for the program, LandBank expanded Sikat Saka to also cover small corn farmers in 11 major corn-producing provinces in the country. As of the first quarter of 2017, P4.7 billion in loans were released under the Sikat Saka Program, benefiting a total of 13,465 farmer-borrowers in covered areas nationwide. “Napakaganda nya para sa akin. Una, dahil sa mababang interes at makukuha nang minsanan ang pera sa bangko para mabili mo na kaagad ang kailangan sa bukid. At may kasama nang libreng insurance na hindi mo na iiintindi ang premium,” Ercilla said, who has been a Sikat Saka availer since 2012. Sikat Saka has an interest rate

of 15 percent annually for the first two crop cycles. This is further reduced by 1 percent for every succeeding cycle on loans fully paid on time, up to the eighth cycle. The program also offers integrated support, such as irrigation, training, market, extension and administrative services. The farmers are, likewise, trained on credit discipline and financial management to teach them how to save, pay loans on time and better manage their finances. “Ipinaabot namin ang pasasalamat sa pagtitiwala nila sa aming mga magsasaka na pahiramin ng puhunan,” said the now 71-year-old farmer who just availed himself of another loan under the program for the start of the new crop cycle.

Agri-fisheries financing program

Meanwhile, for non-palay and corn farmers who are not covered by Sikat Saka, LandBank has another program especially designed for non-agrarian-reform beneficiary (ARB) small farmers and fishermen in select provinces in the country. Implemented in partnership with the DA and the Agricultural Credit Policy Council, the Agriculture and Fisheries Financing Program (A FFP) is a f lexible credit facility that provides agricultural loans to marginalized small farmers and fishers who are registered in the Registry System for Basic Sectors in Agriculture (RSBSA). Total loan releases under AFFP in the first quarter of this year amounted to P363 million, which benefited 2,340 small farmers and fishers across the country.

The program is designed to further increase the productive capacity of small farmers and fishers in the priority provinces, raise their income and contribute to the attainment of food selfsufficiency. Among the priority provinces for AFFP implementation are Abra, Apayao, Benguet, Batanes, Cagayan, Kalinga, Ifugao, Nueva Vizcaya, Masbate, Romblon, Ilocos Norte, Isabela, Aurora, Zambales, Mountain Province and Palawan. LandBank, likewise, has a lending program for ARBs through its organization called the Agrarian Production Credit Program (APCP). Implemented with the DA, Department of Agrarian Reform and Department of Environment and Natural Resources, APCP provides credit assistance to ARBs through their respective organizations and support for their on-farm and off-farm activities, whether individual or communal projects. APCP helps prepare ARBOs to become credit conduits of the bank under the regular lending window. As of March 2017, LandBank has so far released P4 billion in loans benefiting 43,583 farmers nationwide. Eligible projects under APCP include agricultural production (crop, livestock, poultry and fishery), agri-enterprises and agri-related livelihood projects. These retail lending programs are only among the wide array of services offered by LandBank in keeping with its thrust to promote inclusive growth and sustainable development, especially in the countryside.

Flying cows to Qatar is one man’s way to beat the Saudis

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all it the biggest bovine airlift in history. The showdown between Qatar and its neighbors has disrupted trade, split families and threatened to alter long-standing geopolitical alliances. It’s also prompted one Qatari businessman to fly 4,000 cows to the Gulf desert in an act of resistance and opportunity to fill the void left by a collapse in the supply of fresh milk. It will take as many as 60 flights for Qatar Airways to deliver the 590-kilogram beasts that Moutaz Al Khayyat, chairman of Power International Holding, bought in Australia and the US. “This is the time to work for Qatar,”

he said. Led by Saudi Arabia, Qatar stands accused of supporting Islamic militants, charges the sheikhdom has repeatedly denied. The isolation that started on June 5 has forced the world’s richest country by capita to open new trade routes to import food, building materials and equipment for its natural gas industry. The central bank said domestic and international transactions were running normally. Turkish dairy goods have been flown in, and Iranian fruit and vegetables are on the way. There’s also a campaign to buy homegrown produce. Signs with colors of the Qatari flag have been placed next to dairy products in

stores. One sign dangling from the ceiling said: “Together for the support of local products.” “It’s a message of defiance, that we don’t need others,” said Umm Issa, 40, a government employee perusing the shelves of a supermarket before taking a carton of Turkish milk to try. “Our government has made sure we have no shortages and we are grateful for that. We have no fear. No one will die of hunger.”

What crisis?

Most of the fresh milk and dairy products for Doha’s more than 1 million population came from Saudi Ara-

bia up until a week ago. That milk is getting scarce after the kingdom, the United Arab Emirates and two allies cut transport links with a country that spends $500 million a week to prepare stadiums and a metro before the soccer World Cup in 2022. Al Khayyat, whose main business is a construction firm that built Qatar’s biggest mall, had been expanding the company’s agricultural business at a farm 50 kilometers (31 miles) north of Doha. Food security is part of Qatar’s government strategy to steer the economy away from petrodollars, known, like in Saudi Arabia, as “Vision 2030.” Bloomberg News

velopment Advisory Council-mandated stock requirement of 30 days at the onset of the lean months. The national daily rice requirement is pegged at 32,720 MT.

The NFA imports rice to augment its buffer stock during the lean months of July to September, when palay harvest declines significantly due to bad weather.

House endorses bill providing free irrigation for Senate OK By Jovee Marie N. Dela Cruz @joveemarie

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he House of Representatives has endorsed for Senate approva l a measure providing free irrigation services that aim to help Filipino farmers improve production and increase their income. House Committee on Agriculture and Food Chairman and party-list Rep. Jose T. Panganiban Jr. of Anac-IP said House Bill (HB) 5670, or the “Free Irrigation Services Act”, seeks to strengthen assistance to all farmers by providing them with free irrigation services. Panganiban said the bill seeks to promote irrigation systems that are free, suitable and efficient as a key strategy to agricultural development. HB 5670, principally authored by House Committee on Economic Affairs Chairman and Nationalist People’s Coalition Rep. Arthur Yap of Bohol, was approved on final reading last May before Congress’s adjournment sine die. The bill grants free irrigation to all farmers, farmers’ organizations, irrigators associations and local government units drawing from all irrigation systems built, operated and maintained by the National Irrigation Administration (NIA), the Department of Agriculture, or any other government agencies. However, the bill said owners or operators of corporate farms, plantations, fishponds and other nonagricultural crop users drawing water or using the drainage facilities of the NIA irrigation systems are not qualified beneficiaries of the program. The measure also authorizes the condonation of all unpaid irrigation fees, back accounts and the corresponding penalties. It also directs the NIA to provide technical and financial assistance to local government units, farmer-beneficiaries, irrigators’ associations and farmer cooperatives with respect to irrigation systems located, utilized and managed in their respective jurisdictions. The measure also said the government, together with the farmers’ and irrigators’ associations and farmers’ cooperatives, will build

and operationalize an “effective grassroots-based management of irrigation systems”. For purposes of ensuring construction, the bill provided that the repair and maintenance of irrigation systems administered by the NIA will be included in the annual General Appropriations Act (GAA).

‘Makeover’ Nacionalista Party Rep. Luis Raymund F. Villafuerte Jr. of Camarines Sur, vice chairman of the House Committee on Appropriations, has called anew for instituting reforms in the NIA, particularly at this time when the agency is getting a lion’s share of government subsidies. According to Villafuerte, the NIA has been requesting for higher and higher allocations under the national budget each year and continues to receive “humungous” subsidies from the national government to maintain irrigation systems nationwide and fund its free irrigation program. “The NIA, despite being a stateowned firm, has been bleeding the government dry. It has even requested a higher budgetary allocation for next year as it has been doing so in the previous years, although its accomplishment rate is far from impressive,” he said in a statement. Villafuerte added the NIA has proposed a P42-billion budget next year, which is 11 percent higher than this year’s allocation of P38 billion. The lawmaker, citing Bureau of the Treasury reports, said the NIA got P11.08 billion in subsidies in the first quarter, more than fivefold the P2.06 billion acquired by the agency in the same quarter in 2016. Subsidies given to the NIA accounted for over half of the P19.7 billion in subsidies to government-owned and -controlled corporations in January to March. Currently, Villafuerte said 2.4 million hectares, or 43 percent, of farmlands in the country still lack irrigation, even though the NIA was given the “flexibility of a corporate vehicle and the administrative autonomy” to achieve its objectives under Republic Act 3601, which created the agency 53 years ago.

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The World BusinessMirror

Wednesday, June 14, 2017

Qatar Air defies Gulf sanctions, Trump stance with new routes G

www.businessmirror.com.ph

G7 talks leave Pruitt, US as climate-change ‘footnote’

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atar Airways struck a defiant tone and vowed to continue expanding, even as its state owner gets punished by neighboring countries in an escalating political standoff that’s threatening to choke the tiny nation’s economy.

The Persian Gulf ’s secondlargest carrier will introduce a record number of 24 destinations in the next year, including routes to San Francisco, Rio de Janeiro and Dublin, and will add 66 Airbus SE A350 planes over the coming five years. But the airline’s ambitious growth plan could be stunted, amid the unfolding diplomatic crisis over Qatar’s alleged support of extremism. Saudi Arabia, Bahrain, Egypt and the United Arab Emirates (UAE) last week suspended ties w ith Qatar, severing air, sea and land links. W hile Kuwaiti officials are mediating in the conf lict, those efforts are in question, amid conf licting signals from US President Donald J. Trump’s administration. “I am extremely disappointed,” Qatar Airways CEO Akbar Al Baker said in an interview published on Monday by CNN. The US “should be the leader trying to break this blockade, and not sitting and watching what’s going on and putting fuel” on the fire. A l Baker’s criticism repre-

24

The number of destinations that Qatar Airways will introduce next year

sents a marked change of tone after the executive praised Trump as “a very wise individual and a very good businessman”, even as the US administration targeted the Gulf region with an attempt to block travel from six predominantly Muslim nations and a ban on carrying on laptop and tablet computers on f lights from Middle East airports.

‘Legal channels’

The latest issue at its a regional

Opening day of the 51st International Paris Air Show Bloomberg

element to Qatar Airways’s headwinds as Saudi Arabia and the UAE also restricted airspace to flights linking the Qatari capital of Doha with destinations outside the region. That’s diverted planes that normally cross the Arabian Peninsula, forcing them to make wide detours to reach destinations in Africa, South America and Europe. The overflight blockade violates International Civil Aviation Organization rules, and Qatar Airways will use “legal channels to object to this”, Al Baker told CNN, adding that he has no intention to “shrink ” the airline in the face of growing headwinds. Qatar A ir ways has been seek ing to tur n Doha into a globa l superhub to r iva l t he Dubai base of loca l r iva l Emirates. Both carr iers are competing for high-pay ing intercontinenta l transfer passengers. Qatar Air’s strategy has included

adding destinations served by wide-body planes that use Doha as a transfer point, as well as buying stakes in key airlines, such as British Airways parent IAG SA and South America’s biggest carrier Latam Airlines Group SA. The issues have yet to show signs of hampering the company. Net income for the year ended March 31 jumped 22 percent to 1.97 billion riyals ($538.7 million), Qatar Air said last Sunday. Revenue rose 10 percent to 38.9 billion riyals as the airline added 10 destinations and carried 32 million passengers, up from 26.6 million a year earlier. Despite the trade and travel blockade, “Qatar Airways continues to operate to the rest of its network as per its published schedules with day-to-day adjustments for operational and commercial efficiencies, which is standard airline practice,” the company said. Bloomberg News

roup- of-Sev en (G7) climate talks confirmed a crack between six member-states and the US after the country’s representative left the summit in Italy just hours after arriving. Environment ministers were unable to find common ground on climate measures, according to a joint press release from the seven delegations on Monday in Bologna, Italy. The US was represented by acting Environmental Protection Agency (EPA) Assistant Administrator Jane Nishida following the departure on Sunday by EPA chief Scott Pruitt. The US doesn’t join “those sections of the communiqué on climate and MDBs, reflecting our recent announcement to withdraw and immediately cease implementation of the Paris Agreement and associated financial commitments,” it said in the communiqué footnote. It “will continue to engage with key international partners in a manner that is consistent with our domestic priorities, preserving both a strong economy and a healthy environment”. The world’s largest economies are divided over how to tackle global warming following the withdrawal of the US from the Paris climate accord this month. Expectations for the G7 talks were already low following President Donald J. Trump’s June 1 move to exit the agreement that was signed in 2015 by his predecessor. Alongside Syria and Nicaragua, the US is now the only nation not participating in the accord. Trump’s plans to renegotiate a more favorable deal for the US have been rebuffed by the leaders of Germany, France and Italy.

Canadian Environment Minister Catherine McKenna echoed that on Monday and pledged to move ahead with US governors, mayors and executives who still support the accord. “It was very sad to see that the United States was relegated to a footnote on climate action,” McKenna told reporters on Monday, saying she told Pruitt the pact is not up for renegotiation and that he left the meeting after a couple of hours. “Let’s be clear—the US is bigger than one administration and we’re going to be moving forward, as is the rest of the world, with the states, cities and businesses in the US that are committed to serious climate action and committed to the Paris Agreement.” “We are resetting the dialogue to say Paris is not the only way forward to making progress,” Pruitt said in statement issued by the EPA after the talks. “Respective of the importance to engage with long-standing allies and key international partners, we approached the climate discussions head on from a position of strength and clarity.” “Separate lengthy chapters on climate change and the role of multilateral development banks” were not endorsed by the US, Alden Meyer, who has followed international climate talks for more than two decades for advocacy group the Union of Concerned Scientists, said in a note. The US’s withdrawal will take years to unfold as the earliest it can formally exit is November 4, 2020, the day after the next presidential election. But Trump’s decision has already left it isolated. Bloomberg News

Cabinet convenes with flattery first, then Trump praises himself

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A SHINGTON— One by one, they praised President Donald J. Trump, taking turns complimenting his integrity, his message, his strength, his policies. Their leader sat smiling, nodding his approval. “The greatest privilege of my life is to serve as vice president to the president who’s keeping his word to the American people,” Mike Pence said, starting things off. “I am privileged to be here— deeply honored—and I want to thank you for your commitment to the American workers,” said Alexander Acosta, the secretary of labor. Sonny Perdue, the agriculture secretary, had just returned from Mississippi and had a message to deliver. “They love you there,” he offered, grinning across the antique table at Trump. Reince Priebus, the chief of staff whose job insecurity has been the subject of endless speculation, outdid them all, telling the president—and the assembled news cameras—“We thank you for the opportunity and the blessing to serve your agenda.” So it went on Monday in the Cabinet Room of the White House, as Trump transformed a routine meeting of senior members of his government into a mood-boosting, ego-stroking display of support for himself and his agenda. W hile the president never explicitly asked to be praised, Pence set the worshipful tone, and Trump made it clear he liked what he heard. “Thank you, Mick,” he told Mick Mulvaney, his budget director. “Good job,” he told Scott Pruitt, his Environmental Protection Agency (EPA) chief. “Very good, Daniel,” he said to Dan Coats, the director of national intelligence. The commander in chief, who has been k now n for decades as a fan of f latter y and who

President Donald J. Trump meets with members of his Cabinetin the Cabinet Room of the White House, in Washington, on June 12. At left is Secretary of State Rex Tillerson. Doug Mills/The New York Times

spea ks of himself in superlatives, even indu lged in a bit of self-congratu lation. He declared himself one of the most productive presidents in United States history—perhaps Franklin D. Roosevelt could come close, he conceded—and proclaimed that he had led a “recordsetting pace” of accomplishment. Never mind that Trump has yet to sign any major legislation, or that his White House has been buffeted by legal and ethical questions surrounding the investigation into his campaign’s possible links to Russia and his firing of the FBI director who had been leading that inquiry. The highly unusual spectacle before the Cabinet meeting got down to business and the T V cameras were banished seemed

designed to def lect attention from the president’s faltering agenda and the accusations leveled against him last week by the fired Federal Bureau of Investigation (FBI) director, James Comey, which are threatening to further overshadow his agenda and haunt his presidency. Days before, Comey had charged that Trump had lied about his firing and inappropriately sought to influence the Russia investigation. On Monday the president said the country was “seeing amazing results” from his leadership. “I will say that never has there been a president, with few exceptions—in the case of FDR [Roosevelt] he had a major Depression to handle—who’s passed more legislation, who’s done more things than what we’ve done,” Trump

said. “We’ve been about as active as you can possibly be, and at a just about record-setting pace.” The tableau in the Cabinet Room drew instant derision from critics. And within hours, Democrats had pounced. “GREAT meeting today with the best staff in the history of the world!!” Sen. Chuck Schumer, Democrat-New York, the minority leader, said in a post on Twitter. In a video posted with the tweet, Schumer sat at a table with young staff members who, at his prompting, praised his performance on Sunday talk shows and the appearance of his hair. One repeated Priebus’s quotation word for word, prompting the senator and his aides to erupt into laughter. Trump has been struggling

with his legislative agenda. His effort to repeal and replace the Affordable Care Act passed the House on a second try, but senators are toiling to put together their own version. And his administration is months away from unveiling either a major tax-cut package or the sweeping infrastructure plan he has promised. The endorsements from the administration’s highest officials may have served as a comforting counterpoint to Trump’s sinking poll numbers. Fifty-nine percent disapprove of the job he is doing as president, according to a June 11 Gallup tracking survey, with only 36 percent approving. After his upbeat introductory remarks on Monday, the president went around the table asking for a statement from each

Cabinet member. One by one, they said their names and—as if working to outdo one another—paid homage to Trump, describing how honored they were to serve in his administration. “Thank you for the opportunity to serve at SBA,” said Linda McMahon, the administrator of the Small Business Administration, trumpeting “a new optimism” for small businesses. Ben Carson, the housing secretary, called it “a great honor” to work for Trump, while Perdue offered congratulations for “the men and women you have gathered around this table”. Steven Mnuchin, the Treasur y secretar y, told Trump: “It was a great honor traveling with you around the countr y for the last year, and an even greater honor to be here ser v ing on your Cabinet.” A few Cabinet members diverged from the apparent script. Jim Mattis, the secretary of defense whose reputation for independence has been a comfort to Trump’s critics, refrained from personally praising the president, instead aiming his comments at US troops fighting and dying for their country. “Mr. President, it’s an honor to represent the men and women of the Department of Defense, and we are grateful for the sacrifices our people are making in order to strengthen our military so our diplomats always negotiate from a position of strength,” Mattis said as Trump sat, stern-faced. But the meeting still struck White House officials of past administrations as odd. “I ran 16 Cabinet meetings during Obama’s 1st term,” Chris Lu, former President Barack Obama’s Cabinet secretary, wrote on Twitter. “Our Cabinet was never told to sing Obama’s praises. He wanted candid advice not adulation.” New York Times News Service

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Trump administration says financial watchdog agency should be defanged

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ASHINGTON—The Trump administration called for the neutering of many of the central provisions of the DoddFrank Act as it offered its most detailed plans to date for the unraveling of the financial regulations put in place after the 2008 financial crisis.

In a report released late on Monday, the Treasury Department said the Consumer Financial Protection Bureau (CFPB) should be substantially stripped of its powers, accusing the agency of regulatory overreach and saying the president should be able to remove its director. It also recommended greater exemptions from the so-called Volcker Rule, which bans banks from trading for their own gain, and it called for rules to be revised to give small community banks relief from regulatory scrutiny, such as stress tests. “Properly structuring regulation of the US financial system is critical to achieve the administration’s goal of sustained economic growth and to create opportunities for all Americans to benefit from a stronger economy,” said Steven Mnuchin, the Treasury secretary. The recommendations were written with an eye toward easing regulations imposed on community banks and all but the largest credit unions after the financial crisis. President Donald J. Trump asked for the report in February, giving the Treasury Department the authority to restructure major provisions of the Dodd-Frank law, which was passed in 2010. His order directed Mnuchin to take steps to ensure that the law aligns with the administration’s goals. While the Trump administration cannot roll back the law on its own, the law does give the presi-

dent broad authority to determine how its rules are executed. Mnuchin said at a congressional hearing on Monday the administration could implement many of the changes in the report on its own. T he Trump administration is hopeful that Congress will act to further loosen financial regulations. The Treasur y report came less than a week after the House passed the Financial Choice Act with the support of only Republicans. If passed, it would exempt some financial institutions that meet capital and liquidity requirements from many of Dodd-Frank’s restrictions on risk-taking. It would also replace DoddFrank’s method of dealing with large and failing financial institutions, known as the orderly liquidation authority—which critics say reinforces the idea that some banks are too big to fail—with a new bankruptcy code provision. The Senate is working on its own legislation on financial regulations, but analysts think that passage of a bill is unlikely because Republicans do not have enough votes without help from Democrats, who supported Dodd-Frank. The Trump administration has been supportive of the House bill, although the Treasury report did not go as far as the House plan in some regards. For instance, it wou ld e xempt sma l ler inst itutions from the Volcker Rule rather than revoking it entirely.

Treasury Secretary Steve Mnuchin speaks in a meeting with President Donald J. Trump and his Cabinet, in the Cabinet Room of the White House in Washington on June 12. The Trump administration called for substantially stripping the power of the Consumer Financial Protection Bureau as part of an overhaul to the banking regulations that were imposed after the 2008 financial crisis, the Treasury Department said in a report released on Monday. Doug Mills/The New York Times

The Volcker Rule, a Dodd-Frank provision, bans banks from trading for their own gain and limits ownership in hedge funds and private equity deals. The Trump deregulation plan sets up a clash between Trump and one of his most vocal Democratic critics: Sen. Elizabeth Warren of Massachusetts. T he C FPB w a s her br a i n child. Among other approaches to scaling back its power, the Treasur y report called for its funding structure to be changed so it is beholden to the annual appropriations process. “ T he CFPB was created to

pursue an important mission, but its unaccountable structure and undu ly broad reg u lator y powers have led to predictable regulator y abuses and excesses,” the report said. “ The CFPB’s approach to r u lema k ing and enforcement has hindered consumer access to credit, limited innovation and imposed unduly high compliance burdens, particularly on small institutions.” The report did not take up many other important financialregulation issues, but several more reports from the Treasury are due this year. The report did not address reform of the gov-

Financial reform has made the system safer, and the CFPB is returning billions of dollars to consumers facing industry tricks and traps.”—Donner

Trump’s friend: President considering firing Mueller

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ASHINGTON—A longtime friend of President Donald J. Trump said on Monday that Trump was considering whether to fire Robert S. Mueller III, the special counsel investigating possible ties between the president’s campaign and Russian officials. The startling assertion comes as some of Trump’s conservative allies, who initially praised Mueller’s selection as special counsel, have begun trying to attack his credibility. The friend, Christopher Ruddy, chief executive of Newsmax Media, who was at the White House on Monday, said on PBS’s NewsHour that Trump was “considering, perhaps, terminating the special counsel”. “I think he’s weighing that option,” Ruddy said. His comments appeared to take the White House by surprise. “Mr. Ruddy never spoke to the president regarding this issue,” Sean Spicer, the White House press secretary, said in a statement hours later. “With respect to this subject, only the president or his attorneys are authorized to comment.” Allies of the president cast doubt on the idea that Trump would take such a drastic step, and White House officials said Ruddy had not met directly with the president while he was there. Firing Mueller would be a politically explosive move that would raise new questions about Trump, whose abrupt dismissal of James Comey as FBI director generated accusations of obstruction of justice and led to Mueller’s appointment. Trump has been known, in moments of frustration and stress, to vent threats of action

to members of his inner circle. In the past, some of those private expressions of anger have been made public by friends and associates, only to generate speculation about moves that never take place—including a senior staff shake-up that has yet to happen. Such moments sometimes reflect the deep division among Trump’s White House advisers about the best course for the president to take in the face of political or legal adversity. Under Justice Department rules, Trump would seemingly have to order Deputy Attorney General Rod J. Rosenstein to rescind department regulations protecting a special counsel from being fired for no good reason, and then to fire Mueller. If Rosenstein refused, Trump could fire him, too—a series of events that would recall the “Saturday Night Massacre” during Watergate, when President Richard M. Nixon sought to dismiss a special prosecutor, Archibald Cox. White House officials referred questions to Trump’s personal lawyer, Marc E. Kasowitz, as they have recently on all matters relating to the Russia investigation. A spokesman for Kasowitz declined to comment. The former House speaker Newt Gingrich, a longtime supporter of Trump’s, said in a tweet on Monday that it was time to “rethink” Mueller’s ability to be fair. “Republicans are delusional if they think the special counsel is going to be fair,” Gingrich tweeted after praising Mueller’s integrity in recent weeks. Apparently referring to Federal Election Commission reports, he added: “Look who he

is hiring. check fec reports. Time to rethink.” The idea that the investigation is illegitimate and politically motivated has been gaining currency on the political right for months. Conservative writers, radio hosts and cable personalities—emboldened by the president himself, who has called it a witch hunt—have repeatedly sought to discredit the inquiry, its investigators, the mainstream news accounts of it, and the lawmakers on Capitol Hill who are demanding more answers. Initially, Comey was the subject of much of their derision. Now they have moved on to Mueller, whom they are attacking as too compromised and conflicted to lead an independent inquiry. In the PBS interview, Ruddy said Trump had considered replacing Comey with Mueller, who served as FBI director during the George W. Bush and Obama administrations. A senior White House official confirmed that the president had interviewed Mueller for the FBI post in the Oval Office the day before Rosenstein tapped him to be the special counsel in the Russia investigation. Ruddy said the president was weighing whether to dismiss Mueller because of concerns about conflicts of interest. He said those concerns included the interview for the FBI post and connections between Mueller’s law firm and White House officials. “There are some real conflicts. He comes from a law firm that represents members of the Trump family,” Ruddy said. “I know for a fact that he was under consideration and that the president did talk with him in the days

before he was named special counsel. I think there’s a conflict there.” He also said that he believed it would be “a very significant mistake” for Trump to fire Mueller, but emphasized that he was concerned about what he described as conflicts. The criticism of Mueller has intensified in recent days, spreading from Trump surrogates like Gingrich to powerful media personalities like Rush Limbaugh. On his radio program last week, Limbaugh endorsed the suggestion that Trump fire Mueller. Mark Levin, another prominent radio host, has also called for Mueller’s firing. “Mueller must step aside,” he wrote on Facebook over the weekend. Much of the criticism has focused on whether Mueller is too close to Comey. The two became friends after working closely together during the Bush administration. Democrats accused Republicans on Monday of beginning a campaign to smear Mueller’s reputation as he engages in a broad investigation that could include whether Trump obstructed justice by pressuring Comey to end parts of the inquiry and then by firing him. Rep. Adam B. Schiff of California, the senior Democrat on the House Intelligence Committee, scoffed at the idea that the president might fire Mueller. “If President fired Bob Mueller, Congress would immediately reestablish independent counsel and appoint Bob Mueller,” Schiff said in a tweet. “Don’t waste our time.” New York Times News Service

er nment-controlled mortgage finance giants Fannie Mae and Freddie Mac, which have been in a government conservatorship for nearly nine years. But the report did focus a good deal on the effect of post-crisis regulations on the mortgage market, saying that some of the rules had added costs to the business of servicing mortgages. The report said “ increased oversight and regulation has led to an increase in compliance costs”, which limits the ability of mortgage firms to spend more money “on developing more effective mortgage servicing platforms and technology”. The Treasury recommended a slowdown in new regulations for mortgage servicers. Many of the reg u lations imposed on mor tgage ser v icers came about because of foreclosure abuses dur ing the financia l cr isis that led big banks to pay tens of bil lions in fines and restitution. However, the report recommended a number

of regulatory changes to spur greater mortgage origination. In particular, the report said, there needs to be “careful study of regulations and the extent to which they may be holding back the supply of mortgage credit”. One recommendation was to rev ise t he def init ion of what const it utes a “qu a l if ied mor tgage”, which can be guaranteed b y Fa n n ie M ae a nd Fre dd ie Mac, to encourage more ex pansive lend ing. T he repor t sa id a loa n shou ld be able to meet t he cr iter i a “even if one pa r t ic u l a r cr iter ion is deemed to fa l l outside t he bou nd s of t he e x ist ing f ra mework ”. The financial industry cheered the Treasury report as a step in the right direction. “Today’s report is an important step toward modernizing America’s financial regulatory system so both economic growth and consumer protection are advanced,” said Tim Pawlenty, chief executive of the Financial Services Roundtable. Some of the changes, such as revising the Volcker rule, would largely be a moot point, as banks sold off their proprietary trading desks years ago. W hile Republicans have generally been in favor of rolling back Dodd-Frank, the plan would open the door to loosening capital requirements they tend to support. Progressive groups condemned the recommendations as proposals that would put the economy at risk and allow the same practices that led to the recession. “ T he f i n a nc i a l c r i s i s h ad devastating costs for families and communities, and everyday abuses in financial markets cost people tens of billions of dollars a year,” said Lisa Donner, executive director of Americans for Financial Reform. “Financial reform has made the system safer, and the CFPB is returning billions of dollars to consumers facing industry tricks and traps.” New York Times News Service

China data showing consumers steady, factories downshifting

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hina’s next batch of economic data is expected to signal that consumption remained steady, while industrial momentum softened a bit in the world’s second-largest economy. Data on Wednesday will show retail sales growth was unchanged last month, while growth in factory output and investment both edged down for a second month, economists say. That would reinforce expectations that economic growth will slow in coming months from the first quarter’s 6.9-percent expansion. Here’s what key indicators are expected to show, according to Bloomberg surveys: Retail sales rose 10.7 percent from a year earlier for a second month in May. Factory output rose 6.4 percent on year, compared with 6.5 percent in April. Fixedasset investment growth in urban areas edged down to 8.8 percent in the first five months of the year, from 8.9 percent in the first four months. While forecasters see full-year growth exceeding the government’s 6.5 percent objective as trade and the global economy pick up, some gauges show activity faltering. Authorities tightening regulations to reduce risk in the financial system have also boosted interbank borrowing costs, weighing on the outlook for the credit that supports the economy. “There are signs of the current mini-cycle peaking, although the slowdown has been very gradual and will likely remain so,” Wang

Tao, head of China economic research at UBS Group AG in Hong Kong, wrote in a recent note, referring to the economy. Private surveys confirmed the softening. Standard Chartered Plc.’s Small and Medium Enterprise Confidence Index slipped to 56.9 in May from 58 in April, and a sales managers index from London-based research firm World Economics slid to a six-month low. Global financial market experts also were much less confident, according to a survey of the China Economic Panel, a joint project of The Centre for European Economic Research in Mannheim, Germany, and Fudan University in Shanghai. Factory engines are slowing. Despite the official manufacturing gauge holding at 51.2 for a second straight month in May, a manufacturing index based on satellite imagery slipped below 50 this month, signaling contraction for the first time since August. A private factory gauge also fell below 50 in May, adding to evidence that the year’s robust start has leveled off. The consumption picture remains robust. Travelers checked in more at luxury hotels and spent more at restaurants in May, according to data from China UnionPay Co., operator of the nation’s largest bank card network. That’s partially due to a seasonal peak in summer. Spending rose across multiple categories last month, including home appliances, according to JD Finance, a unit of JD.com Inc., the nation’s second-largest e-commerce company. Bloomberg News

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

Taiwan down to 20 diplomatic ties as Panama switches relations

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EIJING—Panama’s switching of diplomatic relations from Taiwan to China on Tuesday deprives Taipei of one of its most important and influential allies.

Taiwan now is left with just 20 countries that extend it diplomatic recognition, providing symbolic support for its claim to sovereignty, as well as a conduit into international society that China has increasingly sought to choke off. Below is a look at recent developments in Taiwan’s diplomatic relations:

Recent losses

China lessened the diplomatic pressure on Taiwan during the 2008-2016 term of China-friendly President Ma Ying-Jeou, but its overall strategy of narrowing the island’s global breathing space has continued unabated. In 2007 Costa Rica became the first of Taiwan’s Central American partners to switch allegiances. That was followed by the southern African nation of Malawi in 2008, with Gambia in West Africa following suit in 2013, although

formal relations with Beijing weren’t formed until 2016. Also in 2016 tiny African state Sao Tome and Principe switched ties, marking a warning shot across the bow of Taiwanese President Tsai Ing-wen’s ship of state.

Scattered friends

The steady attrition has left Taiwan with just two allies in Africa: Burkina Faso in the west and the Kingdom of Swaziland in the south. Ta iwa n’s rel at ions w ith its remaining Centra l and S out h A me r ic a n a l l ie s — B e l i ze, El Sa lvador, Gu atema l a, Honduras, Nica rag u a a nd Pa rag u ay—a re pa r t ly a legac y of their former shared right-w ing pol it ics a nd pa r t ly of Ta ipei ’s generous a id prog ra ms. In the Car ibbean, Taiwan’s allies are Haiti, the Dominican Republic, Saint Kitts and Nevis, Saint Lucia, and Saint Vincent

Panama’s Foreign Minister Isabel de Saint Malo and her Chinese counterpart Wang Yi drink a toast after signing a joint communiqué on establishing diplomatic relations in Beijing on June 13. Greg Baker/Pool Photo via AP

and the Grenadines. Taiwan is a lso a l lies w ith a number of fel low Pacif ic island nations and A mer ican a l lies, namely, K ir ibati, Naur u, the Marsha l l Isl a nd s, Pa l au, t he Solomon Islands and Tuva lu.

Sole European ally

T a i wa n ’ s o n l y d i p l o m a t i c

partner in Europe is the Holy See, a relationship that endures against a steady stream of conjecture about the Vatican’s plans to switch relations to Beijing. Successive popes have reached out to China hoping to find an accommodation over management of the Catholic Church in the country, but agreement has proven elusive:

Beijing insists on the right to appoint bishops, as well as to tightly manage the church’s activities and its role in public life. Although few Taiwanese are Catholics, the church has a lengthy history on the island, and Taiwan’s democracy and open society allow it a far greater degree of activity than found in China. AP

Puerto Rico upholds statehood demand

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AN JUAN, Puerto Rico— Puerto Rico’s governor is vowing to make the US territory the 51st state after statehood won in a nonbinding referendum hit by a boycott and low turnout that raised questions about the vote’s legitimacy. Gov. Ricardo Rossello told a couple hundred supporters waving US flags late on Sunday that he will soon create a commission to appoint two senators and five representatives to demand statehood from the US Congress, which has to approve any changes to the island’s political status. “ The United States of America will have to obey the will of our people!” Rossello yelled to a crowd clutching US f lags and dancing to a tropical jingle that promoted statehood. But experts say it is highly unlikely a Republican-controlled Congress would acknowledge Sunday’s results, let alone accept them because Puerto Rico tends to favor Democrats. US Presidential Spokesman Sean Spicer said on Monday that the process will have to work its way through Congress. “Now that the people have spoken in Puerto Rico, this is something that Congress has to address,” he said. Puerto Rico’s referendum has sparked dozens of memes that tur ned v ira l, including some showing the tropical island covered in snow. More than half-a-million people voted for statehood during Sunday’s referendum, followed by nearly 7,800 votes for free association/independence and more than 6,800 votes for the current territorial status. Voter turnout was just 23 percent. It was the lowest level of participation in any election in Puerto Rico since 1967, noted Carlos Vargas Ramos, an associate with the Center for Puerto Rican Studies at Hunter College in New York. He told The Associated Press that even among voters who supported statehood, turnout was lower this year compared with

the previous referendum in 2012. “Supporters of statehood did not seem enthusiastic about this plebiscite as they were five years ago,” he said. Rossello brushed aside those concerns, noting that the referendum was a democratic process in which the majority prevailed as he questioned why more people did not come out to defend alternatives to statehood. He also said participation rates varied from 7 percent to 35 percent for states, including Wisconsin and Hawaii when they were ratified as states. Three of Puerto Rico’s political parties, including the main opposition party, had called on their supporters to boycott the referendum, which they labeled a failure. Former Gov. Alejandro Garcia Padilla, who did not seek reelection last year and whose party supports the status quo, rejected Sunday’s results. “Whoever claims that statehood triumphed is being intellectually dishonest,” he said. “The boycott defeated statehood.” T he referendu m coinc ided with the 100th anniversar y of the United States granting US citizenship to Puerto R icans, though they are barred from voting in presidential elections and have only one congressional representative with limited voting powers. Many believe the island’s territorial status has contributed to its economic crisis, largely caused by decades of heavy borrowing and the elimination of federal tax incentives. Puerto Rico is exempt from the US federal income tax, but it still pays Social Security and Medicare and local taxes and receives less federal funding than US states. “We have been a colony for 500 years, and we have had US citizenship for 100 years, but it’s been a second class one,” Rossello said. Nearly half-a-million Puerto Ricans have fled to the US mainland to escape the island’s 10-year economic recession and 12-percent unemployment rate. AP

briefs Suspected North Korea drone took photo of U.S. missile-defense site SEOUL, South Korea—A suspected North Korean drone had photographed a US missile-defense shield in South Korea before it crashed near the border where it was found last week, the Defense Ministry said on Tuesday. The finding came four days after North Korea tested new antiship missiles in a continuation of its weapons launches that have complicated new South Korean President Moon Jae-in’s push to improve ties frayed over the North’s nuclear ambitions. The drone was found at a South Korean border town last Friday and South Korean investigators have since discovered hundreds of photos from its Sony-made in-built camera, a Defense Ministry official said, requesting anonymity because of department rules. Ten of the photos were of US missile launchers and a radar system installed in the southeastern town of Seongju earlier this year, while the rest show mostly residential areas, farming fields and other less-sensitive areas in the South, the official said. AP

Iraq: Mass food poisoning, 2 die at Mosul camp for displaced BAGHDAD—Iraq’s health minister says a mass food poisoning at a camp for displaced people near the northern city of Mosul has killed at least two and sickened hundreds. Adila Hamoud, told The Associated Press on Tuesday 752 people took ill after a meal the previous evening at the Khazir camp. The food, provided by a nongovernmental organization, was for an iftar, a meal with which Muslims break their dawn-to-dusk fasting during the holy month of Ramadan. Hamoud says a woman and a girl died while at least 300 people remain in critical condition. The camp houses thousands who have fled their homes in Mosul after a US-backed Iraqi offensive to dislodge the Islamic State group from the city. AP

Tests find that most midsize S.U.Vs have unsafe headlights NEW YORK—More than half of the midsize sport-utility vehicles (SUVs) tested by an insurance industry group were found to have unsafe headlights that did not light up the road far enough or caused glare for oncoming drivers. The Insurance Institute for Highway Safety (IIHS) said on Tuesday it tested 37 midsize SUVs and only two received a “good” rating: the 2017 Volvo XC60 and 2017 Hyundai Santa Fe. Twelve were rated “acceptable”, 12 others were rated “marginal” and 11 were rated “poor”. IIHS recommends buying vehicles with headlights rated “good” or “acceptable”. “We continue to see headlights that compromise safety because they only provide a short view down the road at night,” said Matt Brumbelow, a senior research engineer at IIHS. The 2017 Kia Sorento, which received a “poor” rating, had the worst visibility. IIHS says the Sorento lit up 148 feet down the road, compared with 315 feet for the top-rated Volvo XC60. AP

Police officer, others wounded in Munich subway shooting BERLIN—Several people were wounded, including a police officer, in a shooting early Tuesday at a Munich subway station, the police said. Munich police said in a tweet that the policewoman’s wounds were serious, and that the suspect was in custody. The shooting occurred during a morning police check at the Unterfoehring subway station, Munich Police Spokesman Michael Riehlein said. He had no further details, but Munich’s Merkur newspaper reported that witnesses said the suspect took a police officer’s pistol and shot her, and also wounded others at the scene. Riehlein said the area has been secured and that there was no danger to the wider public. AP

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DTI moves to strengthen Marikina shoe industry

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OLLOWING President Duterte’s instruction to revive and to strengthen the country’s footwear industry, Trade Secretary Ramon M. Lopez and members of the Philippine Footwear Federation Inc. (PFFI) identified possible solutions to existing obstacles that hamper the shoe industry’s growth.

“Technological improvement remains an industry concern. While there are patrons who prefer manually produced shoes because of their durability, still, innovation is crucial for the shoe industry to flourish and expand,” Lopez said.

In a series of site visits on June 8, Lopez and officials of the Department of Trade and Industry (DTI) explored ways to level up current industry practices with the PFFI. For one, DTI already has a sustainable Shared Service Facilities (SSF) Proj-

ect with PFFI that houses machines and equipment serving as commonservice facilities for efficient, quality and innovative production. Among the SSF projects is the High Value Custom-Made Footwear, which intends to capture a market that prefers custom-made shoes, featuring new methodologies in shoe engineering, footwear design and manufacturing. It also uses state-of-the-art scanner that automatically produces a 3D model of the foot in seconds for measuring and size estimation. “Small shoemakers take turns in using the equipment. They need to expand the capacity and add more and newer machines,” Lopez said. Within the compound where the SSF is located is DTI’s Negosyo Center-Marikina and the Philippine Footwear Academy that aims to produce job-ready workers for the

Marikina footwear industry. The Academy is considered the first and only footwear school in Asean. Meanwhile, the trade chief guaranteed PFFI that DTI remains committed in supporting the Marikina shoe industry from the policy and program level that will improve access to raw materials and supply chain, as well as enjoin the government and private sectors to give preference to buying locally made shoes. Assistance on design creation through the Design Center of the Philippines up to provision of market access and promotion through the Go Lokal! stores in malls, national and international trade fairs and exhibitions and the internationally recognized Manila FAME will also be provided. Headed by its President Roger Py, PFFI is composed of footwear

manufacturers, retailers, cooperatives and allied industries from Marikina, Laguna, Bulacan, San Mateo and Cebu, whose members belong to the sector of micro, small and medium enterprises (MSMEs). On the same day, Lopez visited production facilities of Gibi Shoes Manufacturing, Bristol Shoes and microenterprises, like Ruperta Enterprises, all of which are based in Marikina. He called on industry leaders to initiate the kind of entrepreneurship that is idea-based, demand-driven and innovation-led. Lopez also visited Marikina’s pride Rolando “Tatay Oly” Santos, the shoemaker, who gave President Duterte a pair of shoes as a gift, which the president wore during his international meetings with heads of state. Lopez learned the common sentiments of small Marikina shoe-

makers in terms of machines, shoe molds and working capital. Tatay Oly, who is currently borrowing from five to six loan sharks, got emotional when he was assured of working capital assistance from Duterte’s Pondo para sa Pagbabago at Pag-asenso, or the P3 microfinancing program. The trade chief also talked to some of Marikina’s talented and hardworking designers and artisans, who also serve as trainers in the DTI’s SSF project for MSMEs aspiring to take part in reviving Marikina’s shoe industry. “The Filipino artisanship and craftsmanship in designs, plus the highly skilled, highly trainable workforce that showcase ingenuity despite stiffer market competition will help bring back the glory of Marikina as the country’s shoe capital,” he said.

MARKET DEVELOPMENT UPDATE ‘Slow Food’ presents opportunities for PHL food exporters

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ENHANCING TRADE PROSPECTS FOR PHILIPPINES, SWITZERLAND Swiss businessmen and officials led by Swiss

Ambassador Andrea Reichlin (seated, center) remain upbeat in advancing trade relations with the Philippines as the Department of Trade and Industry’s Undersecretary for Trade and Investments Promotion Group Undersecretary Nora K. Terrado (seated, right) met with the Philippine-Swiss Business Council at their General Membership Meeting on June 7 in Taguig City. Speaking before over 30 Swiss and Filipino businessmen, Terrado assured Swiss investors about the robust-growth momentum of the Philippines that has not been affected by recent events. Terrado emphasized deeper economic relations between the Philippines and Switzerland in various sectors, including electronics, aerospace, processed and specialty food, information technology, energy and infrastructure, among others. Switzerland stands as the country’s 23rd trading partner, 19th export market and with over $8.68-million IPA-approved investments in 2016. Among the top Swiss companies in the Philippines with over 100 years’ presence in the country is Nestlé Philippines. In 2016 Switzerland played a vital role as it served as cochairman of the negotiations for the free-trade agreement between the Philippines and the European Free Trade Association. Also in photo are PCCI Chairman Ambassador Benedicto V. Yujuico (seated, left); representatives from the PCCI Secretariat and PSBC Big Brother Programs, namely, Melanie Zoref Luis Mendez (standing, from left), Reiner W. Gloor, Pat Cortez, Ernesto Mascenon and Benjie Los Baños.

HE “Slow Food” movement in Switzerland has progressed into high gear recently with books and films raising awareness of the dangers of a fast-food diet for humans and the planet. Two leading retailers, Migros and Coop, played a key role in the Slow Food movement since the early 1990s when they first placed organic products on their shelves. It was a decision that proved to be a breakthrough for chemicalfree foods, putting them for the first time on the plates of the average Swiss family. Slow Food began in Italy in 1986 with the foundation of its forerunner organization, Arcigola, to resist the opening of a McDonald ’s near the Spanish steps in Rome. The Slow Food organization spawned by the movement has expanded and now has over 100,000 members with chapters in over 132 countries. According to the international Slow Food organization, everyone has “the responsibility to protect the heritage of food, tradition and culture. We believe the food we eat should taste good; that it should be produced in a clean way that does not harm the environment, animal welfare or our health; and that food producers should receive fair compensation for their work”. The Philippines can take advan-

By Magnolia Uy and Ella Burgos Philippine Trade and Investment Center-Geneva

tage of the Slow Food Trend in the following aspects: 1. Non-GMO Foods/Organic food and fair trade certifications—About 80 percent of the world’s chocolate is organic by default. Most farmers can’t afford chemical applications, and it’s not efficient for the crop. 2. Dehydrated Foods—Dehydrated foods make for convenient, healthier, less sugary snacking and help preserve foods and concentrate their flavors. Philippine products: dried fruits and nuts, seaweed; 3. Gluten-Free Flours—Grainfree cooking and baking is trending and very popular in Paleo circles, so the demand for these flours is on the rise. Philippine products: mango flour, coconut flour; 4. Single origin food—Singleorigin food is food products grown within a single-known geographic origin. Sometimes, this is a single

farm, or a specific collection of crops from a single country, such as cacao, coffee and tea; and 5. Flavors from Asia—The old days of bland meat and potatoes are gone, as Swiss demographics and palates are shifting, and taste buds are exploring these two exotic continents: Asia and Africa. The Swiss are becoming more open to hotter spices, new textures and taste, and a greater variety of ethnic food. For more infor mat ion, you can get in touch with the Philippine Trade and Investment Center in Geneva, Switzerland, at +41.22.9097900 / 7906/7915/7917 and Geneva@dti. gov.ph. PTIC Geneva is led by our commercial attaches, TSO Maggie Uy and TSO Ella Burgos, and is located at the Philippine Permanent Mission to the World Trade Organization at Rue de Lausanne 80, 1902 Geneva.

PHL EXPLORES NEW WAYS TO DIVERSIFY INDUSTRIES: TO CREATE IS TO DRIVE ECONOMIC GROWTH By Celynne Layug and Brian Jay Ambulo

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USINESS columns tend to feature opportunities for our exporters and industry stakeholders. Creative economy, creative thinking and creative cities are topics not usually associated with trade and investment. However, it is a wellknown saying that the first industrial revolution was driven by engineering; the second was driven by electricity and production lines; the third was technology and innovation; and the modern economies that undergo a fourth revolution are those that embrace and support human creativity. As the Philippines explores new ways of diversifying its industries, how does creativity—the engine for ideas, heritage, culture and the arts—make way for job creation, social inclusion and economic growth and development? Creative economy is not a recent concept. Professor Howkins, who coined this term and was also the keynote speaker of the Asean Creative Cities Forum and Exhibition held from April 24 to 27 at the BGC Arts Center in Taguig City advocates for creativity, as it engages and it reaches more participation from people. He believes that in these times, more than ever, people

are more creative and inventive. He established the “Three Propositions”, the basic foundations to consider in order to be successful in the industry: Everyone is creative; Creativity needs freedom; and Freedom needs markets. Creativity was also at the forefront of Inclusive Innovation Summit at the Manila Peninsula held from June 1. Dado Banatao, a Filipino entrepreneur who invented two of the foundation technologies in every PC today and founded three technology start-ups that became the third-most profitable company in the world in 1993, emphasized the value of creativity in creating disruptive technologies and technology solutions. Creativity has been deeply associated with performing and visual arts in general. Although truly embedded in the arts, creativity stretched far way broader than the said sector. Creativity is a mentality, a mindset on how to make something out of nothing, or something out of something, of executing different ideas, from the mundane to the extraordinary. Coining the term creative economy is a way to acknowledge and to recognize the significance of creativity in driving economic growth and being a part of development. Creativity is not a trend that dies and gets reborn. It is through creativ-

ity that our ancestors came up with the tools used for food gathering, the boats we used for maritime journeys for ease of trade. It is the same creativity that led the people to express themselves through literature, movement and visuals, and the same creativity that made us more connected now more than ever. Above all else, creativity is a celebration of ideas, on how people approach problems and how we come up with breakthrough solutions.

Creative economy, an important link to inclusive growth CREATIVE economy is now a mass movement globally, but the Philippines has yet to catch-up due to the perception that engaging in the creative economy is a hobby, a costly endeavor and an unpredictable incomegenerator. Similar to the Philippines’s micro, small and medium enterprise and entrepreneurship movement, there has to be a change of mind-set, not only for the youth who have a lot of potential to be successful in this economy, but also to the mature target participants, such as the parents and the indigenous elders. We can drive profit out of ideas and creative inputs. If there is anything the Philippines is known for, it is our rich pool of talent, heritage

and creativity—from singing, acting, directing, fashion, natural, cultural, tangible and intangible heritage, among others. It determines who and, what we are; it is nonrenewable and, sadly, we are not capitalizing on such invaluable resource. Filipinos need the right environment to unleash their potential. We have to evolve into something more innate that would impact how we see a problem, and then translate it into a solution via an innovative or out-ofthe box service or product. The Philippine government has started laying the foundation by dedicating a chapter on culture, creativity and innovation under Chapter 7 of Philippine Development Plan 2017 to 2022. Under the Malasakit pillar, the government prioritizes sustaining and enhancing cultural assets to foster creativity and innovation for national development. Furthermore, the Department of Trade and Industry champions the establishment and recognition of the creative economy and its potential to be the next ITBPM industry of the country.

Developing and sustaining creative cities

WHILE the creative-economy movement should be a national initia-

tive, local government units (LGUs) have a critical role in the movement through the development of creative cities. As an international platform, the Unesco Creative Cities Network (UCCN), brings cities and communities around the world together in sharing best practices and ideas in the field of creative industries and urban development. Four cities in the Asean have already been inscribed in the list of the UCCN: Singapore for design; Phuket in Thailand for gastronomy; Bandung in Indonesia for design; and Pekalongan in Indonesia for crafts and folk art. As the Philippines envisions to have at least one of our cities inscribed by next year, it is assuring to hear reports of a number of LGUs applying to be part of the UCCN. There is an increasing appreciation that a creative city has a vast potential of increasing tourism, increasing investments, increased employment and income for the city. Ultimately, these translate to new and innovative products and services, and serve as a gateway to look at creativity and culture on a different light. In sum, what can be the ingredients for a creative city and a creative economy? 1. Love of culture and heritage— Distinctiveness that shall translate

to niche products, unique services, and innovative solutions to everyday problems; 2. Accessibility and participation —New ideas emanate from recycled ideas. People need to have interaction to inspire development of new ideas and creative thinking. This is possible when people convene, brainstorm and collaborate; 3. Livability—A conducive physical infrastructure for the people to convene and expound on ideas; 4. Talent development and support; 5. Political will to enshrine creative thinking into development policies in local level; and 6. Entrepreneurship.

Celynne Layug is the program director for the Department of Trade and Industry (DTI) Asean 2017 Committee on Business and Investment Promotion (CBIP) and a Foreign Trade Service Officer of the FTSC. Brian Ambulo is a Program Manager for the DTI Asean CBIP and worked closely with the Design Center of the Philippines during the Asean Creative Cities Forum and Exhibition. To get to know more about the Asean 2017 Business and Investment Program and how you can participate, kindly e-mail BrianJayAmbulo@dti.gov.ph.

A10 Wednesday, June 14, 2017 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Making Mindanao a land of peace and prosperity

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indanao is generally regarded as the food basket of the Philippines, where many cash and high-value crops are grown. That’s because of its innate geographic advantages. For one, the region is not in the path of typhoons, unlike Luzon. Hilly areas in Mindanao are ideal for growing temperate vegetables, and contiguous farmlands in the region are suitable for palm-oil plantations. As a testament to the potential of Mindanao to boost the country’s food production, the region hosts the plantations of multinational enterprises such as Dole. Farmers in Mindanao have shown through the years that they are capable of producing enough food for the region. Northern Mindanao and Soccsksargen are regarded as major producers of rice and corn. The Autonomous Region in Muslim Mindanao, the country’s poorest region, is also one of the top corn-producing areas. Bananas and pineapples are extensively grown in the region, allowing farmers to enjoy higher income from exports. Skirmishes between government security forces and terrorists in Marawi City, Lanao del Sur, however, have once again highlighted a major risk to betting on the region’s agribusiness sector. Farming communities in Marawi City and nearby areas were affected by the conflict, and experts have warned that food production in these areas would inevitably decline. The conflict had also forced thousands of Marawi residents to leave their city and flee to Iligan, which now bears the burden of feeding thousands of fleeing families. Apart from the fights that break out between government security forces and extremists, banana plantations also have to contend with the extortion activities being carried out by the New People’s Army (NPA). In recent months, leaders in the banana sector have complained about NPA members who have attacked their plantations and burned expensive farm equipment following their refusal to give in to the demands of the communists. While the government is hammering out a peace agreement with the communists and setting up the Bangsamoro Autonomous Region to improve the peace-and-order situation in Mindanao, it should consider identifying food-production zones in the region. These zones should be insulated from security threats by having soldiers or policemen patrol the areas 24/7. Banana plantations that are under constant threat from NPAs should be covered in these zones to discourage extortion activities. Minimizing disruptions in Mindanao’s food-production areas would not only ensure that residents would be fed, but would also allow farmers to increase the country’s food stockpile. Experts have long ago harped about the need to expand crops production in southern Philippines given its ideal climatic condition. But the peace-and-order situation in the region has been one of its drawbacks. The Duterte administration must come up with innovative approaches to secure food production in the region and protect farmers and exporters. Agriculture is one of the region’s strengths and it must be exploited to the fullest to cut poverty, which helps fuel insurgency in Mindanao. That’s the only way to make the land of promise a land of peace and prosperity. Since 2005

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Insurance pools as taxable entities Dennis B. Funa

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INSURANCE FORUM

re insurance pools taxable under the National Internal Revenue Code (NIRC)? This issue was tackled in the case of Afisco Insurance Corp. et al. v. Court of Appeals et al. (GR 112675, January 25, 1999). Justice Artemio V. Panganiban summed up the issue of the case as follows: “A number of local insurance firms formed themselves into a pool in order to facilitate the handling of business contracted with a non-resident foreign reinsurance company. May the clearing house or insurance pool so formed be deemed a partnership or an association that is taxable as a corporation under the NIRC? Should the pool’s remittances to the member companies and to the said foreign firm be taxable as dividends?”

A group of 41 non-life insurance companies, as ceding companies (assessed as “pool of machinery insurers”), entered into a Pool Agreement or an association that would handle all the insurance business covered under their quota-share reinsurance treaty and surplus reinsurance treaty with Munich. Specifically, “upon issuance by them of Erection, Machinery Breakdown, Boiler Explosion and Contractors All Risk insurance policies, the petitioners on August 1, 1965 entered into a Quota Share Reinsurance Treaty and a Surplus Reinsurance Treaty with the Munchener Ruckversicherungs-Gesselschaft ( herea f ter ca l led Munic h), a non-resident foreign insurance cor poration. T he reinsurance treaties required petitioners to form a [p]ool. Accordingly, a pool

composed of the petitioners was formed on the same day.”

Supreme Court ruling

The Supreme Court ruled that the insurance pool was a partnership taxable as a corporation, and that the latter’s collection of premiums on behalf of its members, the ceding companies, was taxable income. An insurance pool is an informal partnership taxable as a corporation under the NIRC. The pool is a taxable entity distinct from the individual corporate entities of the ceding companies. The tax on its income is different from the tax on the dividends received by the said companies. The Court ruled that a taxable partnership or association covered by Section 24 of the NIRC was formed in view of the

The Supreme Court ruled that the insurance pool was a partnership taxable as a corporation, and that the latter’s collection of premiums on behalf of its members, the ceding companies, was taxable income. An insurance pool is an informal partnership taxable as a corporation under the National Internal Revenue Code. The pool is a taxable entity distinct from the individual corporate entities of the ceding companies. following indicators: (1) The pool has a common fund, consisting of money and other valuables that are deposited in the name and credit of the pool. This common fund pays for the administration and operation expenses of the pool; (2) The pool functions through an executive board, which resembles the board of directors of a corporation, composed of one representative for each of the ceding companies; and (3) True, the pool itself is not a reinsurer and does not issue any insurance policy; however, its work is indispensable, beneficial and economically useful to the business of the ceding companies and Munich, because without it they would not have received their premiums. The ceding companies share in the business ceded to the pool and in the expenses according to a rules of distribution annexed to the pool agreement. Profit motive or business is, therefore, the primordial reason for the pools formation. The Supreme Court ruled that “(i)neludibly, the Philippine legislature included in the concept of

corporations those entities that resembled them, such as unregistered partnerships and associations. Parenthetically, the NIRC’s inclusion of such entities in the tax on corporations was made even clearer by the Tax Reform Act of 1997, which amended the Tax Code.” Citing the CTA (CTA Case No. 5039, October 19, 1992), “the fact that the pool does not retain any profit or income does not obliterate an antecedent fact, that of the pool being used in the transaction of business for profit. It is apparent, and petitioners admit, that their association or coaction was indispensable [to] the transaction of the business. If together they have conducted business, profit must have been the object as, indeed, profit was earned. Though the profit was apportioned among the members, this is only a matter of consequence, as it implies that profit actually resulted.” The Court ruled that the remittances of the pool to the ceding companies and Munich are taxable dividends. The Court ruled that “Section 255 provides that no tax shall be paid upon reinsurance by any company that has already paid the tax. This cannot be applied to the present case because, as previously discussed, the pool is a taxable entity distinct from the ceding companies; therefore, the latter cannot individually claim the income tax paid by the former as their own.” 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.

My lawyers got Trump to admit 30 lies under oath

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By Timothy L. O’Brien | Bloomberg View

onald J. Trump closed out last week by rumbling back into his battle against James Comey, who was FBI director until Potus fired him. In the morning, he celebrated Comey’s Senate testimony as a “complete vindication” on Twitter. In the afternoon, Trump flat out called him a liar—in the Rose Garden no less.

When a reporter asked Trump if he would testify about his version of events “under oath” with the Justice Department’s special counsel in the Russia probe, Robert Mueller, the President said, “100 percent”. And Trump elaborated: “I would be glad to tell him exactly what I just told you.” Well, that’s interesting. A decade ago, my lawyers questioned Trump under oath during a deposition in a libel case he filed against me for a biography I wrote, TrumpNation. (Trump lost the case in 2011.) Trump had to acknowledge 30

times during that deposition that he had lied over the years about a wide range of issues: his ownership stake in a large Manhattan real-estate development; the cost of a membership to one of his golf clubs; the size of the Trump Organization; his wealth; the rate for his speaking appearances; how many condos he had sold; the debt he owed, and whether he borrowed money from his family to stave off personal bankruptcy. Trump also lied during the deposition about his business relationships with organized crime figures.

Trump’s propensity for lying was also on display throughout the 2016 presidential campaign. He said that he had opposed the Iraq War when he hadn’t; he lied about his stances on climate change and the national debt; he lied about various insults he had hurled at women; he lied about who had endorsed him; he lied about how much money his father had given him over the years, and on, and on.

W he n my l aw ye r s a s k e d him whether he planned to sever his partnership with a developer named Felix Sater because of Sater’s mob ties, Trump said he hadn’t decided. “Have you previously associated with people you knew were members of organized crime?” one of my

lawyers asked. “No, I haven’t,” Trump responded. That wasn’t true, however. Trump, despite what he said in the deposition, had knowingly associated with mob figures before. When Trump entered the Atlantic City casino market in the late 1970s, two of his partners were men he knew to have organized crime ties: Kenneth Shapiro, who was a bag man for the Philadelphia mob, and Daniel Sullivan, who was a Mafia associate and a labor negotiator. Trump originally told casino regulators in Atlantic City in 1982 that his partners were reputable people. But when Trump later chatted with me aboard his jet about his troubled gambling career—almost 25 years after he entered Atlantic City—his memories of Shapiro and Sullivan had changed again. “They were tough guys,” Trump See “O’Brien,” A11

Opinion BusinessMirror

opinion@businessmirror.com.ph

₧2.5-B ‘nonappearance’ testings make Clean Air Act inutile Michael Makabenta Alunan

on the contrary

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s we celebrate the 17th anniversary of the Clean Air Act on June 23, air pollution from vehicle emissions has worsened with 400,000 new four-wheeled vehicles sold every year, amid no massive technological intervention, while the rampant P2.5-billion “nonappearance” emission-testing practices remain unchecked by the Department of Transportation (DOTr). n Nonappearance mag ic clears emissions? Upon registration, a motor vehicle is required to undergo emission testing, but to avoid all the trouble of actual testing at Private Emission Testing Centers (PETCs), one can pay a fee without appearing and get an official “Emission Clearance Certificate”, popularly called a nonappearance, indicating your vehicle passed emission standards. Worst, it has a validity of a few months, which may be likened to a doctor giving you a medical certificate, assuring you of no colds for say, three months. In fact, you can catch a cold the next day, depending on immunity levels and exposure to pollutive elements. For a motorist, why seek solutions to emissions, if a nonappearance piece of paper makes one pass emission standards and, thus, avoid getting caught for smoke-belching. So which must be respected, the “official” nonappearance paper or the visible reality? This appears like magic as emissions vanish on paper on record, while some law enforcers vanish too as they turn around and see nothing. n Accredits suppliers, but ignores standards? It is unusually strange that while the Department of Energy implements fuel standards and the Department of Environment and Natural Rasources implements emission standards, the DOTr allegedly accredits suppliers. And yet, Section 21-D of the Clean Air Act mandates the DOTr to implement an “Inspection” and “Maintenance” program to reduce emissions. There is nothing in the law requiring accreditation of suppliers. Land Transportation runs a Motor Vehicle Inspection Service, but there is “Vehicle Maintenance” program, which is more important because when you maintain, it follows that you inspect, plus remedy problems. An example is the Metro Rail Transit, which was not maintained for two years, and now conks our every week. Similarly, a person without maintenance of balanced diet, exercise, sunshine and sleep will later experience multiple ailments and periodic hospital visits. n Education more vital than penalties. Instead of accrediting suppliers, DOTr must focus on implementing emission standards. And implementation must not be limited to road apprehension and slapping of penalties, which is only what government is doing for transport. Unfortunately, no amount of penalties or frequency of arrests will reduce emissions, but education will help. In fact, Section 46 of the Clean Air Act on Penalties on Vehicle Violators requires that apart from penalties, violators, including operators and drivers, must undergo seminars on emissions control. Likewise, Section 11 on “Air Quality Control Techniques” mandates the government to make available all information on maintenance techniques, best practices and technologies on pollution control. n Team building, not turf building. As no entity or individual

has a monopoly of ideas, Section 35 on Linkage Mechanisms institutionalizes the coordination among agencies, and mandates to “consult, participate, cooperate and enter into agreement with other government agencies, or with affected nongovernmental organizations or people’s organizations or private enterprises”. It is lamentable that a recent technical seminar, a product of initiatives of concerned multistakeholders in the Metro Manila Airshed Governing Board and supported by Environmental Management Bureau-National Capital Region under Director Minda Osorio, was boycotted by Arnel Manresa of the DOTr, claiming it was the DOTr that had the authority to speak on some topics, and not other people. In a democracy, every one is entitled to an opinion, more so from people behind this seminar initiative. In the interest of the common good, the DOTr must cooperate and reach out to other agencies and groups, which is the essence of public consultation, and not bother about turf issues. n Flawed policies show lack of consultations. On June 19 the DOTr is scheduled to formally sign its “Omnibus Franchising Guidelines”, which earlier met strong resistance from the transport sector. Apparently, the DOTr has consulted the academe from the ivory tower, who may be sophisticated in language and methodologies, but lack the common sense of ordinary drivers. Imagine, this DOTr document initially pushed for the installation of Global Positioning System (GPS), Wi-fi and other gadgetry, which are unnecessary and ridiculous. Why do you need a GPS when jeepneys have defined short routes? Ramil Padrigo, president of the Cubao Rosario Operators and Drivers Association, also asks “why change an entire vehicle like the P1.6- million electric jeepney, when there are cheaper alternatives to wipe out emissions by over 99 percent”? Engr. Dave Garcia of Atin ’to Development Services, said the P1billion credit facility of LandBank to fund electric jeepneys can only fund the conversion 650 units, but something must also be done urgently to reduce emissions for all the other 220,000 jeepneys. After all, the law calls for emission reduction, and does not say vehicle replacement. Ronald Baroidan, president of the National Jeepney Federation for Environmental Sustainable Transport, said “why is the phaseout based on 15 years of age, when what should only be replaced are moving parts, like pistons, that undergo wear and tear? Sturdy parts like the chassis and engine block can last maybe 100 years, so why change all”? Just like any consumer, jeepneys must be respected of their right to choices, provided they all reduce emissions, and not be forced to purchase new vehicles that will bring them deeper in debt. On the DOTr’s program on fleet management, the alternative to the highlycapitalized big business organization are cooperatives, but the government must simplify the procedures of Coop registration.

What cannot change Teddy Locsin Jr.

Free fire Continued from A1

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n a briefing, he said Chinese survey ships entering waters recognized by the UN as Philippine territory, is “very concerning”. He said this even as the President got a promise from China to buy a billion dollars worth of bananas.

In response to the Chinese presence, Lorenzana said, “I have ordered the navy that if they see these service ships this year, to start to accost them and drive them away.” If this triggers an aggressive

response, the Philippine-US Mutual Defense Treaty kicks in, the US 7th Fleet sails in World War III begins and the US wins. Nice. He explained that “the very concerning thing is that the Chinese

Wednesday, June 14, 2017 A11

He explained that “the very concerning thing is that the Chinese have several service ships plying this area, staying in one area sometimes for a month as if doing nothing. But we believe they are actually surveying the seabed”. Not, as cheap opinion has it, merely to look for minerals but “for a place in which to put submarines”, said the retired general. A military mind does not see mere economic possibilities, but capabilities that translate to threat—to the Philippines and its military alliance, which are one and the same.

have several service ships plying this area, staying in one area sometimes for a month as if doing nothing. But we believe they are actually surveying the seabed”. Not, as cheap opinion has it, merely to look for minerals but “for a place in which to put submarines”, said the retired general. A military mind does not see mere economic possibilities, but capabilities that translate to threat—to the Philippines and its military alliance, which are one and the same. Nothing can diminish that first priority. Some things will never change. And those are the fullest extent of our territory. And the defense by any and all means of our sovereignty and democracy. “The Army,” says our wise Constitution, “is the protector of the people and the state.”

Trump’s economic agenda is almost dead

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By Barry Ritholtz | Bloomberg View

the next several decades. Such was the legacy of Ronald Reagan, who oversaw a similar once-in-a-generation economic boost that resonated for the next 30 years. Trump is no Reagan. The current president started with a generational opportunity, in the form of a Grand Old Party sweep of the White House and Congress. On November 9 I placed the odds of passing a robust economic legislative agenda at 96 percent. The day Trump took office, cracks in my optimism appeared. By March I had lowered the odds to a still-healthy 75 percent. Now I’m thinking 25 percent, and even that might be optimistic. Let the weight of that missed opportunity sink in for a minute. What’s astonishing is that every misstep has been an unforced error. The president has served every ball into the net, blown every opportunity and never encountered a situation that he couldn’t make worse. It is incredibly frustrating to witness this sort of gross incompetency. If only Trump was merely repeating Obama’s rookie mistakes. What

we have seen since then is much, much worse. Inviting an Federal Bureau of Investigation (FBI) investigation—via Twitter!—that has brought damning testimony from one former FBI chief and a special investigation headed by another. Alienating allies on Capitol Hill for petty reasons. His staffers never know who will be thrown under the bus next. Antagonizing the intelligence community and the entire press corps save Fox News (and even that shows signs of cracking). Demonstrating zero comprehension of the gravitas of the office. The president is becoming radioactive. He is having problems hiring outside counsel: Four top law firms have reportedly turned him down. Resignations are mounting. Diplomats are revolting. Hundreds of key positions have gone unfilled as people increasingly perceive working for Trump as a career killer. Less than six months into Trump’s White House stay, there is no evidence of any sort of discipline, planning, thoughtfulness or maturity. When you have the fate of 325 million people in your hands, not to mention much of the rest of the world, you best take that obligation seriously. Investors concerned about the president’s impact on their portfolios should be furious. I have no crystal ball, but I can imagine a few scenarios, presented here in order of likelihood: Drawn out misery: The worstcase scenario from a sentiment perspective is years of investigation. A never-ending drama of testimony, depositions and public hearings means the economic agenda never gets out of the starting gate. Malaise spreads among consumer and

investors. Odds: 50 percent President Pence: Trump, who I suspect never really wanted to be president anyway, decides he has had enough. He blames the media and the Democrats and the deep government or whatever he heard on Fox News that day and resigns before the 2018 election season begins. Pence takes over and reaches across the aisle to do a repatriation and infrastructure plan. Following that easy success, he does a full-on corporate tax reform, even a tax cut. Odds: 30 percent. Mid-Term 2018 Elections: The economist and PIMCO advisor Richard Clarida observed that presidents typically get about a 14-month window to implement their agenda before Congress begins to focus on mid-term elections, where the party that controls the White House typically loses seats. Perhaps the rancor settles down, the investigations amount to nothing and a wounded president finishes out his one and only term. Odds: 20 percent. Total Vindication: The president and his long-standing personal attorney are proven correct. He is completely vindicated. Investigations find no collusion with the Russians, no obstruction of justice. Riding high on the political victory, a magnanimous Trump pivots toward becoming presidential. (The dumbest among us publish articles including the sentence “He became president today” and are immediately set upon by black crows, an ominous but confusing omen). GOP leaders and even #NeverTrumpers embrace the newly invigorated president. The full legislative agenda passes, and a century of peace and prosperity begins. Odds: How many decimal places am I allowed to use?

in 2006.) In a press release littered with errors and a misspelled title for Trump (“Predisent”), Kasowitz accused Comey last week of trying to undermine the White House by leaking information about his conversations with the president. Kasowitz also said that Comey lied when testifying that he shared information about his conversations with the president only after Trump tweeted that he might have made tapes of the same conversations. Yet, Kasowitz claimed, the New York Times had published an article about the Comey-Trump conversations prior to Trump’s tweet. Kasowitz was wrong, however. The Times’s first article about the conversations appeared on May 16, four days after Trump tweeted. And what about those tapes? Trump revived speculation about hidden White House tapes again last Friday, suggesting in the Rose Garden that he will advise the world about whether they exist in the “very near future”. As I noted last month, I don’t think any tapes exist. Trump told me and other reporters over the years that he had a taping system in his Trump Tower office that he used to record journalists meeting with him. But

when he testified under oath in the deposition for his suit against me, Trump acknowledged that he was “not equipped to tape-record”. There’s another odd aspect to all of the back-and-forth about Trump’s multiple conversations with Comey: The president apparently never inquired about the substance of the FBI’s Russia investigation. That has prompted a former law-enforcement professional and others to say that it reveals a troubling disregard for national security on the president’s part (which it does). Others noted that it also suggests that Trump may have already known quite a bit about the Russian affair— and therefore didn’t have many questions for Comey. “The innocent ask a multitude of questions about what the detectives know, or why the cops might think X or Y or whether Z happened to the victim,” noted the former police reporter and creator of The Wire, David Simon, in a pair of Twitter posts. “The guilty forget to inquire. They know.” House Speaker Paul Ryan said Trump deserves a pass for strongarming Comey, because “the president is new at this” in Washington, and he’s “learning as he goes”. But positioning the nation’s capital as a complicated place for unwary

newcomers doesn’t hold much water for the president, who turns 71 in two days. In fact, Trump is not new at this at all—he’s been directly lobbying and strong-arming regulators and law-enforcement officials for decades. Trump is the man, after all, who coined the term “truthful hyperbole” as a euphemism for lying in his 1987 nonfiction work of fiction, The Art of the Deal. Thirty years later, he’s still up to his old tricks. The difference now, of course, is that Trump is president. And in James Comey, he’s collided with a seasoned, wily law-enforcement official who opened the investigative door for Robert Mueller and cleared a path for him to bring the full force of the law to bear on the White House. “I can definitively say the president is not a liar”, Sarah Huckabee Sanders, a White House spokesman, said last Friday in response to a question about whether it is Trump or Comey who is lying. But now that the president himself has invited the broader Russia probe and the Justice Department into the Oval Office, we won’t have to take Sanders’ word for it—Mueller is going to help answer the question.

oday’s column veers dangerously into “I told you so” territory. I take neither pleasure nor credit for recognizing that a once-in-a-generation opportunity is slipping away.

In February I warned that President Donald J. Trump was repeating his predecessor’s rookie mistakes. In March I noted that the odds of passing important economic legislation had fallen meaningfully. This missive offers the most dire warning of all, with significant ramifications for equity markets. Let’s begin with the observation that the long-awaited “pivot toward being presidential” hasn’t arrived and, by all indications, never will. Those of us who harbored hopes for a comprehensive corporate-tax reform, for repatriation of trillions of overseas dollars, for an infrastructure plan and perhaps even for a lowered personal income-tax rate, are coming to recognize the folly of our wishful thinking. That window of opportunity now looks like casements in South Florida during hurricane season. The good news is that the global economy keeps expanding as corporate profits rise, and the postcreditcrisis recovery continues apace. Left to its own devices, even as the Federal Reserve normalizes rates, the economy has the potential to grow for several more years before its next cyclical stumble. The bad news is that the self-inflicted wounds of the most undisciplined presidency in history are increasingly likely to blow its chances of passing any of the aforementioned economic stimulus measures. The trifecta of tax reform, repatriation and infrastructure investment could put the US on very strong footing for

O’Brien. . .

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told me. “In fact, they say that Dan Sullivan was the guy that killed Jimmy Hoffa.” Sullivan “probably wasn’t an honest guy”, Trump added, and Shapiro “was like a third-rate, local real-estate Mafia”. Trump’s propensity for lying was also on display throughout the 2016 presidential campaign. He said that he had opposed the Iraq War when he hadn’t; he lied about his stances on climate change and the national debt; he lied about various insults he had hurled at women; he lied about who had endorsed him; he lied about how much money his father had given him over the years, and on, and on. A loose relationship with the facts has also plagued Team Trump in the White House. Kellyanne Conway, Sean Spicer, Stephen Miller, Mick Mulvaney, Reince Preibus and, of course, Michael Flynn, have all been caught peddling blather or lies in the course of carrying out their civic duties. Trump’s own lawyer, Marc Kasowitz, has had problems getting his facts straight, too. (Kasowitz represented Trump when the president sued me

What’s astonishing is that every misstep has been an unforced error. The president has served every ball into the net, blown every opportunity and never encountered a situation that he couldn’t make worse. It is incredibly frustrating to witness this sort of gross incompetency.

2nd Front Page BusinessMirror

A12 Wednesday, June 14, 2017

PLDT to downsize IT unit as part of fresh cost-cutting measures By Lorenz S. Marasigan

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@lorenzmarasigan

ith its income still seeing a huge drop, PLDT Inc. announced that it is instituting more cost-cutting measures, including downsizing its information-technology (IT) unit. Manuel V. Pangilinan, chairman of PLDT Inc., said the manpower reduction will help the largest telco operator in the Philippines save at least P7 billion in at least five years. It will result in less spending for manpower, processes and applications, and enable the company to improve its margins. “We estimate over P7 billion in

savings over at least five years. The cost reduction is substantial to our profit-and-loss statement,” he said. The company’s consolidated core income stood at P5.3 billion in the first quarter of 2017, 26 percent less than the year prior. Its consolidated revenues were down by 7 percent to P35.6 billion, even as it cut down its expenses by 9 percent to P30.47

₧7 billion PLDT’s estimated cost savings from the downsizing of its information-technology unit over five years

billion during the first quarter. Shares of PLDT shed P31, or 1.65 percent, to close at P1,850 apiece on Tuesday. Pangilinan did not disclose how many of its tech employees will be sacked, but said those who would be part of the retrenchment would be absorbed by IBM. Depending on its need, the telco giant may then outsource its IT personnel requirements from the tech company. Currently, there are about a

thousand staff under its IT office. “It’s progressing reasonably well, and we aim to sign the relevant agreements with them by the end of June,” Pangilinan said. “Not all of the IT people will be moved to IBM. We have to retain the so-called brains of the operations.” The digital-services provider has been cutting costs over the last few quarters to help normalize its dwindling bottom line. “O t he r co s t - c ut t i n g me a sures include travel, attendance to sem i n a rs, fora a nd ot her nonessential entertainment. We even had a freeze on salary increase for the past year or two,” Pangilinan added. He described cost-reduction measures as “very painful, as this involved expenses that people are used to spending”.

Govt takes war against terror online

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s Islamist militants expand their platform to recr u it neophy tes and inflict fear upon the public, the government stepped up its game by including the Department of Information and Communications Technology (DICT) in efforts to neutralize terrorists, particularly those nesting online. In a news briefing on Tuesday, Information Secretary Rodolfo A. Salalima said his agency is now tracking down more than one person for crime of cyber sedition, or spreading terror propaganda online, in aid of the Maute Group in Marawi City, Lanao del Sur. “[The details are] confidential, but some persons will be arrested soon,” Salalima said.

housing executives Affordable abode builders at Empire East met with shareholders on Tuesday, including (from left) Kevin Andrew L. Tan, director; Gerardo C. Garcia, director; and Anthony Charlemagne C. Yu, director and president, ata hotel in Eastwood City. NONOY LACZA

www.businessmirror.com.ph

INDONESIA, MALAYSIA, PHILIPPINEs SET TO JOIN FORCES VS MILITANTS

Government troops head to the frontline as fighting between government forces and Muslim militants who laid siege in Marawi City enters its third week on Tuesday. AP

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ndonesia said it’s looking to set up joint patrols with the Philippines and Malaysia to prevent Islamic militants who have laid siege to a city in the southern Philippines from entering its territorial waters. Indonesia’s military chief, Gen. Gatot Nurmantyo, said late on Monday that he and Defense Minister Ryamizard Ryacudu would meet next week with their counterparts from Malaysia and the Philippines on Indonesia’s Tarakan island in northern Borneo, just across the border from Sabah, Malaysia. He said they’ll discuss increasing security and signing an agreement to step up joint patrols. The conflict in the city of Marawi has raised fears that the Islamic State (IS) group’s violent ideology is gaining a foothold in the Philippines’s restive south, where Muslim separatists have fought for greater autonomy for decades. Nurmantyo, speaking with reporters and military officials in the capital, Jakarta, said Indonesia needs to be aware of the movement of ISaligned militants in the Philippines who assaulted Marawi three weeks ago because Indonesia already has sleeping cells that most likely have

been long embedded in the country. He said IS-affiliated cells exist in all of Indonesia’s provinces, except Papua. Authorities in Indonesia, the world’s most populous Mu sl i m-m ajor it y n at ion, have carried out a sustained crackdown on militants since the 2002 bombings by alQaida-affiliated radicals that killed 202 people in Bali. In recent years, it has faced a new threat as the rise of the IS group in the Middle East has breathed new life into local militant networks and raised concerns about the risk of Indonesian fighters returning home. Marawi is located about 500 kilometers (310 miles) north of Sangihe island in Indonesia’s North Sulawesi province. Maj. Gen. Ganip Warsito, the regional military chief overseeing the closest areas to neighboring Philippines, said Indonesia army, navy and air force have deployed extra troops to boost security in the region. “So far, we have not found any indication of Islamic militants infiltrating from the Philippines to our territory,” Warsito added. “We have conducted intelligence, territorial and combat operations to anticipate it.” AP

See “Govt,” A2

Industry players focus efforts DOT still running ‘copied’ on ‘future-proofing’ retail ad despite netizens’ outcry

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ith t he r apid de velopment in online commerce and retail liberalization, the country’s top retailers are now seeking initiatives that will stabilize the industry amid fresh challenges. This is why the Philippine Retailers Association (PRA), in staging the 24th National Retail Conference and Stores Asia Expo (NRCE) on August 10 and 11 at the SM Mall of Asia in Manila, has decided to carry the theme “Future-Proofing Retail” for the annual gathering of the best minds in the retail sector. The annual NRCE, the biggest and most important retail event in the country, is PRA’s flagship project aimed at providing retailers with tips and solutions on how to prepare for the fast-changing digital age. The NRCE 2017 will feature talks and panel discussions from industry experts and personalities led by Leyte Rep. and TV personality Lucy Torres-Gomez, Sen. Juan Edgardo M. Angara and Rustan Supercenters CEO Irwin Lee as keynote speakers for the two-day conference.

Topics of the conference will cover new trends in retailing, branding design, future of shopping malls, creating a niche in a diverse market, online retailing fashion retailing, impact of music in the marketplace, food retailing and engaging the millennial consumers. Confirmed speakers and presenters include Filscap Vice President and noted TV personality and musician Jim Paredes, Zalora CEO Paolo Campos, Google Philippines Marketing Manager Gabby Roxas, Springtime Design Limited Creative and Managing Director Chris Dingcong and Organization Development Advisor Susan Grace Rivera. Two panels composed of young and upcoming retailers, such as Apartment 8 President Sheira Lim, Sunnies Café Finance Director Eric Dee Jr. and Genki Sushi owner Eric Teng will discuss the new generation of retailers and food retail as mall anchors.New for this year’s NRCE is the launch of the Supermarket Track dedicated to supermarkets and food retailers, which will discuss modern retailing with a responsive

Department of Trade and Industry, spatial planning and supermarket trends in Asia Pacific. NRCE 2017 Overall Chairman Lorenzo Formoso said: “This year’s event aims to create a deeper understanding of modern retail, as well as open more opportunities for partnerships and networking.” Back to back with the conference is the only focused and dedicated retail suppliers’ expo showcasing the “tools for global retailing” from over 100 exhibitors offering products and solutions for the retail industry, such as retail solutions, e-commerce and m-commerce, shop fittings and store designs, digital marketing, commercial and realestate developers, web developers, nontraditional advertising, financial services, storage and distribution, human-resource solutions and billboard locations, among others. The Stores Asia Expo, which is the biggest in the Philippines and is one of the longest-running retail suppliers’ expo in Asia, expects to draw more than 3,000 visitors and decision makers from retail and related industries.

By Ma. Stella F. Arnaldo

@akosistellaBM Special to the BusinessMirror

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HE Department of Tourism (DOT) is standing pat on its new “Sights” ad, despite criticisms from netizens that it was copied from a tourism ad for South Africa. This developed as the McCann Worldgroup Philippines said in a statement that it “takes full responsibility [for the ad], as all ideas and storyboards were conceptualized by [the company]”. The statement was read by Niña Terol, director for corporate affairs for McCann, in a hastily called news conference by the DOT on Tuesday. “However, we underscore that there has never been any intention to copy others’ creative work. McCann Worldgroup Philippines has always strived to adhere to our guiding principle, ‘Truth Well Told’, in everything we do. We stand by the integrity with which this campaign was developed,” she stressed.

Niña Terol, director for Corporate Affairs of McCann WorldGroup Philippines, reads a prepared statement from the advertising firm in a news conference on Tuesday at the Department of Tourism (DOT) building in Makati City. She said McCann “takes full responsibility” for the DOT’s new ad, which netizens have criticized as having been copied from a tourism ad for South Africa. Beside her is DOT Spokesman and Assistant Secretary Frederick M. Alegre. Stella Arnaldo

The advertising firm added: “We acknowledge the feedback that the way this story was told may have similarities with the South African tourism campaign.

It is unfortunate that the DOT has been called out and accused of plagiarism for work we have done to highlight the testimonial See “DOT,” A2