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Monday, June 25, 2018 Vol. 13 No. 254

Lopez backs bizmen’s bid to curb LGU taxes T

By Elijah Felice E. Rosales @alyasjah & Bernadette D. Nicolas @BNicolasBM

HE country’s trade chief is rallying behind domestic business groups in their demand to restrict the financial power of local governments under a federal system.

Trade Secretary Ramon M. Lopez said regional states should not be allowed to adjust their fiscal

policies on their own without the approval of the national government. He argued that the national

government must still be in charge of taxation to avoid “unnecessary leakages” should the country shift

to a federal system.

The Department of Trade and Industry chief was responding to a position paper issued by top Philippine business groups at a forum on federalism organized last week by the consultative committee (Con-com) reviewing the 1987 Constitution.

Reacting to the same paper, the Con-com at the weekend allayed fears of business groups that the “proposed states” under a federal system might have the power to increase taxes at will and spend their funds in risky ways.

Sought for comment by the BusinessMirror, the Con-com said See “Lopez,” A2

2 rate hikes not enough vs inflation– BMI Research

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WO rate hikes are not enough to put a sudden brake on inflationary pressures for the country this year, according to international think tank BMI Research.

In its latest commentary on the Philippine rate hike, BMI Research—a Fitch Group subsidiary—said the Bangko Sentral ng Pilipinas (BSP) will be inclined to move its monetary-policy rates further upward before the year ends, to put a cap not only on inflation but also to safeguard the stability of the peso.

Economists have since shared mixed views on the upcoming moves of the BSP, after the Central Bank pulled the trigger anew on Wednesday for a backto-back rate hike of 25 basis points. This puts the main policy rate of the BSP at 4 percent.

See “Rate hikes,” A12

Take the PPP challenge: True or false Alberto C. Agra

ead

L AlbertoPPP C. Agra

A

re we on the same page about the policies and laws on public-private partnerships in the Philippines? Is there a consensus on how we view PPPs? Hopefully, after you take this quizzer—just answer True or False—we will be.

1. The Philippines has only one governing law on PPP. 2. Only national government agencies can pursue this development strategy.

Continued on A11

NG’s April gross borrowings at P36.7B; debt payments, P226B

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@BcuaresmaBM

TAKING STOCK AT CHARTER-CHANGE FORUM Roel Refran (left), the chief operating officer of the Philippine Stock Exchange (PSE), chats with Ed Gallinero, managing director of the PCM Group of Cos., at the Revisiting the 1987 Constitution of the Philippines: 1st National Forum and Public Consultation in Manila before the weekend. The PSE’s initiative to introduce short selling in the stock market has, meanwhile, been approved by the Securities and Exchange Commission. Read full story on B1. NONIE REYES

PESO exchange rates n US 53.4190

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By Rea Cu

By Bianca Cuaresma

2016 ejap journalism awards

@ReaCuBM

HE national government (NG) has reported gross borrowings for April amounting to P36.692 billion, pushing total gross borrowings for the first four months of the year to P244.609 billion, data from the Bureau of the Treasury (BTr) showed.

Based on BTr data, the government’s four-month gross borrowings of P244.609 billion marked a 41.7- percent contraction compared to the P419.595 billion recorded in the same period for 2017.

For April 2018 the recorded gross borrowings of P36.692 billion is lower by 82.2 percent, from the April 2017 recorded gross borrowings of P206.474 billion.

Broken down, external gross borrowings for the month reached P3.455 billion, while domestic gross borrowings totaled P33.237 billion. This showed a decrease of 32.2 percent, from the P5.101 billion for offshore borrowings, and 83.4 percent, from the P201.373 billion in local borrowings for the

41.7% The contraction of the government’s four-month gross borrowings to P244.609 billion, from P419.595 billion in JanApril 2017

same month, respectively.

From the January-to-April period this year, external gross borrowings reached P149.595 billion, higher by 15 percent, from the P130.04 billion recorded in 2017.

The government’s global bonds exchange formed the bulk of the total for external borrowings, amounting to P102.682 billion; program loans came in second w ith P21.444 billion; project loans had P13.455 billion; and Panda bonds or Chinese Yuan bonds accounted for 12.014 billion of the total for the period.

Domestic gross borrowings for the same period reached P95.014 See “Borrowings,” A2

n japan 0.4857 n UK 70.8015 n HK 6.8086 n CHINA 8.2259 n singapore 39.3365 n australia 39.4179 n EU 61.9927 n SAUDI arabia 14.2447

Source: BSP (22 June 2018 )

News

BusinessMirror

A2 Monday, June 25, 2018

Con-com transforms competition body into independent constitutional commish

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By Bernadette D. Nicolas

@BNicolasBM

HE consultative committee (Concom) tasked to review the 1987 Constitution has decided to elevate the country’s antitrust agency to a full-fledged independent constitutional commission under the federal government.

The committee’s proposal on Philippine Competition Commission (PCC) followed its earlier decision to also elevate the Commission on Human Rights (CHR) as an independent constitutional commission.

Con-com Chairman and retired Chief Justice Reynato S. Puno announced in a speech in a forum on Thursday that they have also elevated the status of PCC, which he deemed as the “most important commission” given the need, he said, for an independent body to ensure that the ban on monopolies and oligopolies in the business sector is enforced, especially “against those whose god is named gold.”

Puno noted that as early as the 1935 Constitution, the country has already prohibited monopolies, but it was only a few years ago that Congress enacted the law creating PCC. “Be that as it may, the competition commission was placed under the Office of the President. It was therefore vulnerable to the virus of politics and can be used as a tool to favor or harass business for political partisan purposes,” he said. “Just as we leveled the political playing field by prohibiting political dynasties, we also have to level the business field by banning monopolies and oligopolies.”

If the Con-com’s proposal under its draft federal constitution is formally adopted, PCC and CHR will be added to the list of independent and fiscally autonomous constitutional commissions, which currently includes the Civil Service Commission, Commission on Elec-

Lopez. . .

Continued from A1

that it is “unlikely” for federated regions to impose higher taxes at will, as this will make them “uncompetitive.”

For his part, Lopez told the BusinessMirror: “Each LGU [local government unit] will compete for investments and may offer various fiscal and no-fiscal incentives.

Thus, [there is] the need to have closer alignment with national government agencies [on] what can be doable.”

He said federal states could be permitted to provide incentives and tax breaks, but the national government should still have the final say in the overall tax policy under a federal system. Lopez agreed with business groups that there could be “unnecessary leakages” if absolute financial power—fiscal policy, budget spending, among others—is

tions and the Commission on Audit.

Being f isca l ly autonomous means their appropriations shall not be reduced by the legislature below the amount appropriated in the previous years, and after approval shall be automatically and regularly released.

To recall, the House of Representatives initially approved on second reading a P1,000 budget for the CHR, among other agencies in September last year. In the same month, the House also restored the budgets of three agencies, including the Energy Regulatory Commission and the National Commission on Indigenous Peoples, after drawing flak.

Puno said the commissioners may only be removed by impeachment and shall have a fixed term of seven years without reappointment. Their salary and retirement benefits cannot also be reduced.

Single competition authority

The committee also decided on Saturday that there should only be one competition policy and one competition authority at the federal level.

Arthur N. Aguilar, chairman of Subcommittee on Economic Reforms, said in an earlier interview that this will enable the federal government to check and prevent economic domination in any of the proposed federated regions and that the federated region cannot formulate their own competition policy or create their competition authority.

Among the “enormous” powers of the federal competition authority transferred to local governments.

In a position paper on Thursday, business groups war ned investments might be at risk if regional states are permitted to reform their fiscal regime on their own. They said draft proposals from the House of Representatives and the consultative committee tasked to review the 1987 Constitution leave many provisions of the division of financial power open to dispute for future leaders.

The position paper was signed by the Financial Executives Institute of the Philippines, Makati Business Club, Management Association of the Philippines and the Philippine Chamber of Commerce and Industry. The Semiconductor and Electronics Industries of the Philippines Foundation Inc. and Cebu Business Club were also signatories.

The Con-com spokesman, Conrado Generoso, issued a statement at the weekend allaying the businessmen’s fears. “The design of the

include the conduct of motu proprio investigations involving violation of competition laws; review of mergers and acquisitions that prevent or restrict competition in the market or allow players to abuse their dominant market position; issue subpoena duces tecum; the power to cite for contempt; the power to inspect business premises; impose sanctions like the divestiture order or disbursement of excess profits and to impose fines and penalties.

PCC Chairman Arsenio M. Balisacan told the BusinesssMirror in a message that they welcomed the Con-com proposal.

“With this move the PCC’s existence and mandate will be guaranteed by no less than the fundamental law. If we are to be fully effective in leveling the economic playing field, the PCC has to be insulated from political pressure, owing accountability only to the Constitution and the public,” Balisacan said.

CHR mandate

Meanwhile, the Con-com has also redefined the coverage of rights that the CHR is mandated to protect and expanded its powers.

Aside from watching out for violations of rights guaranteed by the Constitution, the CHR’s mandate will now also include guarding against violations of rights covered by international human rights covenant and treatises to which the Philippines is signatory.

“We also empowered the Commission on Human Rights to go after all violators of human rights which shall include not only state actors but also nonstate actors.

Heretofore, the seeming mandate of the commission is only to go after state actors like the police and the military that violate human rights and this has earned some vitriolic criticisms,” Puno said. “We shall end that limitation of power. After all, the reality is a great number of violator of human rights come also from non-state actors.”

The Con-com has also given CHR the power to grant immunity federal system is such that the regional government will have to make sure that the capacity of their provinces and other LGUs improve because that will make the entire region competitive with the other regions,” Generoso said in a statement.

“And while each region can formulate an economic and investment plan/program of their own, the federal government reserves the power to formulate an integrated national economic and investment plan. Still, the regions would have the power to provide measures that will attract investors within their jurisdiction and develop ‘specialized’ economies or industries as they see fit for their region.”

Noting that the Con-com design does not create states but federated regions—which means that the provinces and the highly urbanized cities or chartered cities are federated into a region with regional government—Generoso said that the national government, through the Bureau of Internal Revenue, remains the rate-setter and collector of the major taxes, such as income taxes, while the collection of some taxes and fees will be transferred to the regional governments and some collecting agencies of the national government.

“Only taxes such as capital gains tax, donor’s tax, documentary stamp tax, land transportation franchise fees, vehicle registration, driver’s license fees and others are to be collected by the regional governments to give them a steady stream of revenues,” he said.

But, Generoso pointed out, this does not happen in an instant, adding that the review of the Internal Revenue Code and the plant for the grant of taxing powers to the federated regions is part of the entire

and to establish a witness protection program for persons whose testimony is necessary to determine the truth in any investigation conducted by it.

Puno noted that the witness protection program of the Department of Justice is “ineffective” since the perceived violator of human rights is the government itself.

“Hence, to take care of this abnormal situation, it is necessary that a different witness protection program be established and we give it to the Commission on Human Rights to create its own witness protection program,” he said.

Puno said they also gave the CHR visitorial powers over jails, prisons and analogous detention facilities, noting that massive violations of human rights are found in the country’s jails.

Aside from violations of civil and political rights of the people, the CHR is also now empowered to investigate violations of socioeconomic rights and environmental rights.

“This means that the commission can now investigate those who trample on our people’s right to health, our people’s right to clean air, right to clean water, right to healthy environment,” he said.

Last year President Duterte “joked” about the abolition of the CHR as he defended the police and soldiers amid allegations of humanrights violations in the country.

Human-rights groups have also criticized the Duterte administration’s war on drugs, which allegedly led to thousands of extrajudicial killings. The administration has since denied that the summary killings were state-sponsored.

T he comm ittee is a l ready 100-percent done with its proposed draft federal constitution, which is now subjected to final review for each provision. The final en banc vote for the entire draft was moved from June 28 to June 30.

The Con-com is targeting to submit its draft to the President on or before July 9, weeks before the Chief Executive’s State of the Nation Address on July 23. transition plan to be formulated by the Federal Transition Commission, which the committee decided to have 10 members to be headed by the President in a bid to shift the country from unitary to federal form of government by 2022.

Bizmen’s doubts

In their position paper, the business groups also doubted if federal regions will efficiently deliver infrastructure and social services should the national government pass on to them the power of the purse.

T he bu si ness g roups a l so warned against radically redistributing the national treasury to regions should the country shift to a federal system. “Third, investors are also concerned about a planned equalization, which is meant to transfer undefined amounts during a transition period from more economically strong states to weaker ones,” they said.

It is, therefore, the recommendation of the business groups that local governments undergo a program intended to improve the capabilities of their officials before they are given additional duties under a federal system. They also said some reforms on LGUs can be achieved immediately by amending the Local Government Code and enacting new laws and administrative measures, instead of waiting for the new constitution to be completed.

“An eventual shift to federalism implies the significant expansion of the breadth and depth of power and authority that will be transferred from the national government to the proposed federal states and regions. From the current baseline, it is imperative that such a move be preceded by and complemented with a comprehensive buildup of

www.businessmirror.com.ph

DepEd. . .

Continued from A12

with respect to students, and Section 36 (d) with respect to officers and employees of public offices.

“With respect to students, the authority is to test for secondary and tertiary students. Based on the implementing regulation of the DDB [Dangerous Drugs Board], the objectives of the drug testing are: [a] to determine the prevalence of drug users among the students; [b] to assess the effectivity of school-based and communit y-based prevention programs; [c] to deter the use of illegal drugs; [d] to facilitate the rehabilitation of drug users and dependents; and [e] to strengthen the collaboration efforts of identified agencies against the use of illegal drugs and in the rehabilitation of drug users and dependents.

The DDB regulation also provides that the number of samples should yield a statistical 95-percent confidence level for the whole student population,” the statement added.

The program is being done in close partnership with the Department of Health. The preparation and continuing capacitybuilding to be able to responsibly undertake the full cycle of the drug testing is an involved process: from training of per-

Borrowings. . .

Continued from A1

billion for 2018, contracting by 67.1 percent from the P289.555 billion in the same period for 2017.

Fixed-rate Treasury bonds comprised bulk of domestic borrowings at P75.965 billion, while Treasury bills accounted for P19.049 billion for the same period.

Debt payments

Meanwhile, debt payments made by the government for the period of January to April 2018 reached P226.046 billion, with interest payments outpacing that of amortization.

BTr data showed that the P226.046 billion in debt payments made by the government posted a contraction of 17.7 percent comlocal government capabilities,” the business groups added.

Con-com’s side

Con-com allayed the business groups’ fear of forced shutdowns of big and small businesses from lack of preparation by federated regions to handle increased responsibilities and production and trading capacity to support their population. The Con-com spokesman said there “doesn’t seem to be a sound basis” to it.

“The gradual transition is to assure that no major disruption takes place and the regional governments and LGUs will be prepared to take on the greater responsibilities entrusted to them,” Generoso said.

“To ensure that the transition is effective, efficient and smooth, the Transition Commission, which shall oversee the transition, is going to be composed of experts in such fields as economics, public finance/ fiscal administration, law, economics, governance and development.

A comprehensive transition plan will be formulated and whatever problems may be projected to arise will be addressed in the transition plan. The business sector will have a key role to play in the formulation of the transition plan,” he added.

The position paper also raised the business groups’ concern that political dynasties’ competition will “escalate and intensify” in a shift to federal system.

Con-com said they share this concern and that is why they instituted political reforms in their proposed draft federal constitution, specifically the anti-dynasty provisions that prohibit any relative of an incumbent official up to second degree of consanguinity or affinity to maintain political con-

sonnel in the collection of urine samples; the orientation and notice of all officers, personnel, and secondary students on the objectives and guidelines of the program; and the training of personnel in the proper handling of positive results.

The DepEd noted that drug test ing is a component of a much-broader preventive drug education program. The primary mandate of the DepEd is still the integration of preventive drug education in curriculum and instruction, which includes: (a) the adverse effects of the abuse of dangerous drugs on the person, the family, the school and the community; preventive measures against drug abuse; (b) health, sociocultural, psychological, legal and economic dimensions and implications of the drug problem; (c) steps to take when intervention on behalf of a drug dependent is needed, as well as the services available for the treatment and rehabilitation of drug dependents; and, (d) misconceptions about the use of dangerous drugs such as, but not limited to, the importance and safety of dangerous drugs for medical and therapeutic use, as well as the differentiation between medical patients and drug dependents in order to avoid confusion and accidental stigmatization in the consciousness of the students. pared to the P274.939 billion recorded in 2017.

For April alone, the government paid P27.846 billion for its debt, increasing by 5.9 percent from the debt payment of P26.289 billion made for the same month in 2017.

Broken down, interest payments for the four-month period reached P120.334 billion, an expansion of 8 percent coming from P111.338 billion; while amortization payments amounted to P105.712 billion for this year, a contraction of 35.3 percent from the P163.601 billion in 2017. The BTr earlier pointed out that the government’s financing mix for 2018 has a ratio of 65:35, with 65 percent coming from the domestic side and the remaining 35 percent to be borrowed from offshore entities. trol by succession or by simultaneously holding or running for elective positions.

“This means that no political dynasties or ‘bosses’ [to borrow the MBC’s term] would be able to capture a federated region or a province as one member of the family can run for a regional or a local position,” Generoso said.

The Con-com also disputed accounts of a lack of participation from the Department of Finance and Department of Budget and Management (DBM) and the National Economic and Development Authority (Neda). These departments submitted their studies and even attended a meeting of Concom wherein their views, assessments and analyses were heard, Generoso said.

“In addition, the Con-com submitted to the PIDS [Philippine Institute for Development Studies] and Neda its own study, assessment of the regions and criteria and formula for the creation of the regions—which the PIDS critiqued. The Neda and DBM made subsequent submissions after the meeting with the Con-com. These were widely reported in the media,” Generoso said.

Under the Con-com’s design, a regional government will be distinct from the provincial governments.

A Regional Legislative Assembly is constituted by one set of representatives elected per province and highly urbanized or independent chartered city while an equal set of representatives shall be elected region-wide by proportional party representation.

They then elect a regional governor and regional deputy governor, who will preside over the Regional Legislative Assembly.

The Nation BusinessMirror

www.businessmirror.com.ph

Editor: Vittorio V. Vitug • Monday, June 25, 2018 A3

Govt subsidies to hospitals, social-sector firms nearly doubled in 2016–PSA survey

EAST Avenue Medical Center façade

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Total expense

Nonoy Lacza

By Cai U. Ordinario

@cuo_bm

AX perks and other subsidies received by hospital and other human health and social-sector firms nearly doubled in 2016, according to the Philippine Statistics Authority (PSA).

Based on the preliminary results of the 2016 Annual Survey of Philippine Business and Industry (ASPBI)-Human Health and Social Work Activities Sector For Establishments with Total Employment of 20 and over, the government extended P102.6 million worth of subsidies to these firms.

PSA data showed that this is 90 percent higher than the P54-million subsidies extended by the government to these firms in 2015.

“Subsidies are all special grants in the form of financial assistance or tax exemption or tax privilege given by the government to aid and develop an industry,” the PSA explained.

In 2016, the bulk, or 71.1 percent or P72.9 million—of subsidies the government extended went to hospital activities of the sector.

The other industries that received subsidies were other social work activities without accommodation, n.e.c. with P27.49 million; residential care activities for mental retardation, mental health and substance abuse,

as well as residential care activities for the elderly and disabled, P1.56 million; and other residential care activities, n.e.c., P607,000.

In terms of region, Calabarzon led other regions in terms of subsidy received from the government, amounting to P89.4 million, or 87.2 percent of the total.

Other regions that received subsidies were Soccsksargen with P7.99 million; Central Visayas, P2.96 million; Northern Mindanao, P1.56 million; Metro Manila or the National Capital Region, P607,000; and Mimaropa, P28,000.

Generated income

Meanwhile, income generated by the sector for establishments with total employment of 20 and over reached P150.7 billion in 2016.

Hospital activities contributed the highest income amounting to P125.3 billion, or 83.2 percent of the total income, followed by medical and dental practice activities with P12.3 billion, or 8.2 percent.

ON the other hand, total expense generated by the sector amounted to P129.7 billion. Hospital activities incurred the highest expense of P107 billion, or 82.5 percent of total expense.

This was followed by medical and dental practice activities and other social work activities without accommodation, with total expense of P10.8 billion, or 8.4 percent, and P9.9 billion, or 7.6 percent, respectively.

Among industry groups, hospital activities registered the highest number of establishments, with 696 establishments, or 65.2 percent of the total; followed by medical and dental practice activities with 262 establishments, or 24.5 percent.

Other social work activities without accommodation ranked third with 49 establishments or 4.6 percent.

At the regional level, NCR accounted for the most number of establishments for the sector with 317, or 29.7 percent of the total.

Calabarzon and Central Luzon placed a far second and third with 170 establishments, or 16 percent, and 98 establishments, or 9.2 percent, respectively.

The 2016 ASPBI is one of the designated statistical activities of the PSA. Data collected from the survey provide information on the levels, structure, performance and trends of economic activities of the formal sector in the entire country for the year 2016.

The survey was conducted nationwide in 2017 with the year 2016 as the reference period of data, except for employment, which is as of November 15, 2016.

JBC opens nomination, application for vacant post of Chief Justice

By Joel R. San Juan @jrsanjuan1573

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HE Judicial and Bar Council (JBC) is scheduled to convene on Monday to officially open the nomination a n d a p p l i c at i o n f o r t h e p o s i t i o n of Chief Justice which is now vacant following the ouster of Maria Lourdes A. Sereno through a quo warranto petition filed by the Office of the Solicitor General.

Justice Secretary Menardo I. Guevarra, ex-officio member of JBC, said they will begin the selection for Sereno’s replacement in line with the directive of the Supreme Court (SC), which recently affirmed its May 11 decision that nullified Sereno’s appointment in 2012 as chief magistrate.

“The JBC will meet on Monday to take up the Chief Justice vacancy. It will direct the publication of a notice stating that it will now accept applications or nominations for the vacant Chief Justice position,” he revealed over the weekend.

The JBC is tasked to screen nominees and applicants for a Judiciary post and come up with a shortlist to be submitted to the President.

Under the 1987 Constitution, the President has 90 days to fill up vacancies in the Judiciary from the finality of the ruling.

Sereno’s ouster became final after the Court threw out her motion for reconsideration in a resolution issued on June 19, where it maintained its voting of 8-6. One of the six dissenters, Senior Associate Justice Antonio T. Carpio, said earlier he will decline a nomination despite his seniority, out of delicadeza. He noted that he had considered it unconstitutional to oust a Chief Justice outside of an impeachment proceeding, such as by quo warranto; hence,

wikimedia commons

Completing the top highest income generating industries of the sector in 2016 was other social work activities without accommodation, with P10.4 billion, or 6.9 percent of the total.

The top 3 regions in terms of income generation comprised 66.3 percent of the total income. NCR earned the highest income amounting to P67.1 billion, or 44.5 percent of total income.

This was followed by Calabarzon andCentralVisayaswithP20.3billion, or 13.5 percent, and P12.5 billion, or 8.3 percent of the total, respectively.

he should not benefit from the majority ruling that he disagreed with.

Given the mandatory timeline for choosing replacements in the Judiciary, President Duterte needs to appoint Sereno’s replacement by September 16.

In its May 11 ruling, the Court held that Sereno should have been disqualified for the Chief Justice post for:

Engaging in private practice of her profession while in government service;

For representing that after her resignation from the University of the Philippines in 2006, she was engaged, full time, in private practice although documents would show that she was engaged as counsel by the government in the arbitration proceedings against the Philippine International Air Terminals Co. Inc. (Piatco), builder of the Ninoy Aquino International Airport (Naia) Terminal 3;

For stating in her personal data sheet (PDS) that she was deputy commission of the Commission on Human Rights, only to be later claimed that it was only a functional title; and

For committing tax fraud when she failed to truthfully declare her income.

Under the Constitution, the Chief Justice and an associate justice in the SC is required to be a natural-born citizen, to be at least 40 years old, to have experience as judge or in private law practice for at least 15 days, and to be a person with proven competence, integrity, probity and independence.

Carpio will sit as ex-officio chairman of the JBC, withGuevarraandOrientalMindoroRep.andHouse Justice Committee Chairman Reynaldo Umali as ex-officio members.

The regular members of the council are retired SC Justice Jose Catral-Mendoza, retired judge Toribio Ilao, and lawyers Jose Mejia and Milagros Fernan-Cayosa.

POEA warns caregivers: Recruitment As PHL’s friends ‘weaponize’ human rights, DFA chides developed-country critics on migrant abuse for Japan internship scheme premature

By Samuel P. Medenilla

By Recto L. Mercene @rectomercene

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OREIGN Secretary Alan Peter S. Cayetano lamented at the weekend that some of the Philippines’s friends in the diplomatic community have “politicized and weaponized” the human-rights issues in the country.

“Unfortunately, it seems our friends are really not interested in arriving at the truth and would rather rely on the misinformation being fed to them by parties that have politicized and weaponized human rights,” Cayetano said from New York.

The country’s top envoy part ic u l a rly scored Ice l a nd a nd several other mostly European countries for insisting on what he called their biased and unfounded criticism of Manila’s human-rights record.

“We regret that Iceland and several other countries maintained their position despite our offer for them to visit the Philippines and objectively asses the humanrights situation, especially at the

community level,” Cayetano said.

The secretary, who is presiding over a command conference for Filipino diplomats from the Americas, said he even personally extended an invitation to Iceland Foreign Minister Gudlaugur Thor Thordarson to visit Manila to see for himself the human-rights situation in the country.

“Politics is politics but politicizing human rights endangers lives,” Cayetano said in the statement he issued after Iceland and several other countries, including the United Kingdom, Australia, and Finland, again criticized the Philippines at the general debate of the 38th Session of the Human Rights Council.

According to the Philippine Mission to the United Nations in Geneva, Iceland led 10 other members of the Council in signing the joint statement against the Philippines. “ T his is a minority in the 47-member Human Rights Council,” according to Philippine Permanent Representat ive Evan Garcia who responded to the criticism by pointing to the ris-

ing xenophobia and anti-migrant sentiments in parts of Europe and elsewhere, including some of the countries that spoke against the Philippines.

“We are shocked by the persistent abusive and inhumane treatment of asylum seekers, refugees and migrants, whether legal or otherwise, their lack of inclusion in society and their oftentimes woefully limited access to all kinds of services,” Garcia said in response to the joint statement.

In exercising Manila’s right of reply during the general debate, Ga rc i a c ited nu merous reports of exploitation of migrants under conditions of great vulnerability.

“We remind countries that have such severe shortcomings, including the United Kingdom and Australia, that the Philippines has preferred to engage with them in a positive manner, whether bilaterally or multilaterally,” Ambassador Garcia said, citing as examples the Global Forum for Migration and Development and in the ongoing nego-

tiations for the Global Compact on Migration.

“This is in stark contrast with the needlessly confrontational attitude they have taken in [the Human Rights] Council,” Garcia added.

The Filipino envoy also noted that developing countries are hosting 80 percent of the world’s refugees today. “It is a shame for developed countries to keep their eyes shut to this growing concern,” he said.

“The Philippines, a developing country even with its more than 100 million population, has been doing its small part in sharing the global burden of the protection of refugees, asylum-seekers, stateless persons and other persons of concern,” Garcia pointed out. “ The Philippines remains a responsible member of this august body. We are respectful of our international human rights obligations. We remain a free, dynamic and democratic society.

There is no basis, therefore, for the Council to be concerned with the situation in the Philippines,” Garcia added.

@sam_medenilla

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HE Philippine Overseas Employ ment Administration (POEA) has warned caregivers wishing to work in Japan against the ongoing unauthorized recruitment for the Japanese government’s Technical Internship Training Program (TITP).

POEA Administrator Bernard B. Olalia said they recently got reports that some unscrupulous licensed and unlicensed recruitment agencies are already offering placements for caregivers under the 2016 TITP Act of Japan.

The recruitment is illegal, he stressed, since they have yet to release the necessary guidelines for the said category of the TITP. On February the POEA released the general rules for the implementation for the TITP, but Olalia said they will issue separate guidelines for the health-care sector.

“The finalization of the Guidelines on the ‘Care Worker’ Job category under the TITP is ongoing. It is targeted to be completed before the end of June,” Olalia told the BusinessMirror in an interview.

“A stakeholder consultation on the careworker guidelines will be conducted prior to its finalization,” he added.

The POEA said it will file the corresponding administrative and criminal action against recruitment agencies that continue to prematurely use the TITP to hire caregivers.

“Until the appropriate guidelines are issued by this office, all recruitment agencies are being directed to desist from the unauthorized recruitment,” POEA said in a onepage advisory.

“The administration will be constrained to initiate the appropriate administrative action for the violation of the 2016 Revised POEA Rules and Regulations Governing the Recruitment and Employment of Landbased Overseas Filipino Workers of 2016,” it added.

Olalia explained the special guidelines is necessary since the deployment of caregivers and nurses is also covered under the Philippine-Japan Economic Partnership Agreement (PJepa).

He said the PJepa will now serve as their government-to-government track for the recruitment of Filipino nurses and caregivers in Japan, while that from the TITP will be through the private sector.

A4 Monday, June 25, 2018 • Editor: Vittorio V. Vitug

Economy BusinessMirror

Not business as usual for miners that hurdled MICC review–DENR

File photo shows the Pujada Nickel Project in Mati, Davao Oriental. It was one of the mining projects that was suspended by the former chief of the Department of Environment and Natural Resources.

By Jonathan L. Mayuga

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@jonlmayuga

ining companies that passed the review of the Mining Industry Coordinating Council (MICC) should not expect that it would be business as usual, an official of the Department of Environment and Natural Resources (DENR) said.

DENR Undersecretary for Climate Change and Mining Concerns Analiza R. Teh told the BusinessMirror that a report which indicated that the majority of mining firms hurdled the MICC audit is “premature.”

“It’s not yet final. The MICC

resolution will still be reviewed by the DENR before Environment Secretary [Roy A.] Cimatu submits his recommendation to the President,” Teh said.

She said the MICC’s third-party experts are from the National Economic and Development Authority

(Neda) and the Development Academy of the Philippines.

“After the experts finished their review, it was presented to the DENR internally for further comment. After that, we came up with comments and it was integrated.

The MICC’s comments were also integrated,” she said.

Five aspects, or criteria, were reviewed: economic, social, environmental, legal and technical.

To recall, the MICC was convened to review the mine closure and suspension orders issued by former DENR chief Regina Paz L. Lopez during a 10-month crackdown on large-scale mining operations. Most of those recommended for closure or suspension are nickelmining companies.

The closure or suspension order was based on environmental, social and biodiversity criteria set by

Lopez, triggering howls of protest from miners who appealed their case. Some filed their appeal before the Office of the President while some appealed to the MICC. Some companies filed a motion for reconsideration with the DENR. The results for four of the five criteria, with the exclusion of the technical aspect, were completed. Teh said the technical aspect is still being finalized. She said the report of the audit or review of the mine closure orders will be revealed by August.

Teh added that the environmental aspect of the audit is still up for final review by the DENR, to make sure that the third-party experts’ findings and recommendation are “airtight.”

According to Teh, the Neda designed the review and came up with the standard questions used by the audit teams.

“There were surveys and the households were asked about all the aspects of mining,” she said.

“There were, in fact, fears raised by communities about the possible pullout of mining operations, of losing their dole-outs.”

On the technical side, Teh said environmental experts were also involved. “There are marine biologists, forest experts.”

Teh said she does not know whether any of the technical experts are from environmental advocacy groups who oppose mining. Environmental groups are urging the Duterte administration to implement Lopez’s recommendation to sanction the mining companies. Her term was cut short in May last year, when the Commission on Appointments (CA) rejected her appointment.

She said the DENR is “very cautious” about letting mining companies off the hook, considering that President Duterte himself has warned mining companies to shape up.

“Actually, we are very cautious about coming up with the resolution because it was the President himself who had warned mining companies to shape up. So if ever mining companies will indeed be allowed to continue operation, it will no longer be business as usual,” Teh said.

On June 22 Finance Undersecretary Bayani H. Agabin said 23 of 27 were cleared by third-party experts commissioned by the MICC. Agabin also said only three nickel and one chromite mining operations did not pass the review.

Senators to review foreign investment laws

By Butch Fernandez @butchfBM

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wo Senate panels are poised to review government’s foreign investment rules to beef up the current investment regime and make it “more adaptable to global business demands and trends,” Sen. Sherwin T. Gatchalian said over the weekend.

Gatchalian earlier announced the Senate Committees on Trade and on Economic Affairs were set to convene their initial joint hearing on Tuesday but said on Sunday this had to be reset “to a later date due to conflicting schedules.”

In pushing for the Senate review, Gatchalian asserted the need for a “conscious and aggressive effort

from the government to address the deficiencies deterring the smooth inflow” of foreign direct investments in the country.

The joint committee inquiry was triggered by Sen. Grace Poe’s Resolution 73, paving the way for the lawmakers’ initiative to update Republic Act 7042, also known as the Foreign Investments Act, in order to “make the Philippines a competitive haven for investments and a preferred place of business for top multinational corporations.”

In a statement, Gatchalian prodded fellow lawmakers to “take advantage of the good economic performance of the country by further harnessing the country’s potential for foreign investment.”

The senator suggested “this starts by reviewing and updating our laws to encourage the influx of foreign capital through the development of a more friendly investment climate.”

Gatchalian confirmed that among the resource persons from relevant agencies expected to testify at the upcoming Senate review are top officials of the Bangko Sentral ng Pilipinas, the Department of Trade and Industry, Department of Finance, National Economic and Development Authority, the Bureau of Customs, the Professional Regulation Commission, the Securities and Exchange Commission, the Philippine Economic Zone Authority, the Board of Investments,

the Insurance Commission, the Department of Labor and Employment, the Philippine Competition Commission, the Bases Conversion and Development Authority, the Clark Development Corp. and the Subic Bay Metropolitan Authority.

He added that other stakeholders and organizations being invited to give inputs at the Senate hearing are the Joint Foreign Chambers, the European Union, the Department for International Trade of the British Embassy, the Philippine Institute for Development Studies, the Foundation for Economic Freedom, and academic institutions like the Ateneo de Manila University and the University of Asia and the Pacific.

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Unido’s $202.61-million grant to help govt build ‘resilient’ communities

By Cai U. Ordinario @cuo_bm

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he United Nations Industrial Development Organization (Unido) will extend $202.61 million worth of grants to the Philippines for the implementation of various projects and programs in the next five years, according to the National Economic and Development Authority (Neda).

The grants, which will be extended between 2018 and 2023, will be for projects and programs in sustainable development, including the establishment of green and resilient communities and innovation-led industrialization.

Neda Undersecretary for Investment Programming Rolando G. Tungpalan told the BusinessMirror over the weekend that this is the first time that Unido created a multiyear program with the Philippines. “[These are] all grants and this is going to be the first Unido Country Program Framework,” Tungpalan said. “There have been specific TAs [Technical Assistance] with the DTI [Department of Trade and Industry] and DENR [Department of Environment and Natural Resources] but having a country framework ensures good match with our priorities, predictability and country ownership.”

The Neda said the Country Programme for the Philippines focuses on supporting inclusive, sustainable, and innovation-led industrialization; fostering green and resilient industrial communities; and cultivating effective partnerships for inclusive and sustainable development.

Ultimately, the Country Programme for the Philippines will also seek to support the government’s efforts to revitalize manufacturing in selected sectors, and to develop the biotech industry.

Tung pa l a n sa id t he Unido Country Programme Framework 2018-2023 has three major components. The component that will receive the most grants is foster ing green and resilient industr ia l communit ies w it h $196.11 million.

The other two components— supporting inclusive, sustainable, and innovation-led industrialization and cultivating effective partnerships for inclusive and sustainable industrial development—will receive $6 million and

$500,000, respectively.

Unido’s present portfolio in the Philippines covers the indust r y, energ y, env ironment and post-disaster economic recover y sectors.

It ’s i nnovat ions i n g reening industries and sustainable cities, circular economies, and sustainable consumption and production will also be continued under this program.

Socioeconomic Planning Secretary of the Philippines Ernesto M. Pernia said he recognizes the importance of Unido’s work in the country, especially in advancing industrial development.

Per nia added that Unido’s role in developing the industrial sector supports the strategies of the Philippine Development Plan 2017-2022 and recognizes the country’s long-term vision, AmBisyon Natin 2040.

“Unido’s presence in the Philippines has been instrumental in fostering an inclusive and sustainable industrial sector.

We thank Unido for their tireless efforts, most especially in strengthening the value chain linkages in the domestic and g loba l m a rket s t h at benef it small and medium enterprises of Filipinos,” Pernia said.

Unido and high-level Philippine government representatives recently reaffirmed their commitment to the country’s industrialization goals.

Unido Director Genera l Li Yong’s official visit, which coincides with the 25th anniversary of the Basic Cooperation Agreement (BCA) signed between Unido and the Philippine Government in 1993, seeks to support the country’s renewed outlook on the industry sector, and on infrastructure as a key priority.

“Today, we celebrate a sterling partnership, with 25 years of collaboration and cooperation,” said Li Yong. “The Country Programme is proof of Unido’s continuing support for the Philippines and our common desire to achieve inclusive and environmentally sustainable growth that will benefit all parts of society, with all people being given equal opportunities for prosperity.”

Unido is the specialized agency of the United Nations that promotes industrial development for poverty reduction, inclusive globalization and environmental sustainability.

Japan to help PHL improve energy efficiency

By Lenie Lectura

@llectura

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anila and Tokyo have agreed to work together to further improve electric infrastructure and power-generation efficiency in the Philippines.

Officials from Japan and the Philippines signed last week a letter of intent for the technical cooperation deal at the Japanese Prime Minister’s Office in Tokyo, the Department of Energy (DOE) said over the weekend.

The technical cooperation involves the identification of issues and remedial measures based on Japanese experience and knowledge; proposal of institutional arrangements to propel the installation of facilities with reliable performance; provision of training for the Philippine government and independent power producers to enhance operations and maintenance quality of existing thermal power plants; and sharing of the rehabilitation diagnosis

results carried out in line with the action plan.

Energy Secretary Alfonso G. Cusi and Kazuhisa Kobayashi, deputy director general of the Japanese Ministry of Economy, Trade and Industry (Meti), signed the letter.

The plan resulted from a series of coordination meetings between the DOE and Meti officials to resolve power sector issues. The plan is also based on Meti’s study on the Philippine supply-demand outlook, current electricity tariff, electrification rate, and disaster resiliency that complement the DOE’s performance assessment and audit of power generation, transmission, and distribution systems and facilities.

The technical cooperation deal is in accordance with the DOE’s function to disseminate information resulting from energyresearch programs for the optimal development of various forms of energy production and utilization, as indicated in the Electric Power Industry Reform Act of 2001.

PHL to benefit from liquefied natural gas development, says ADB energy expert

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ANILA­—The Philippines stands to benefit from introducing liquefied natural gas (LNG) to support power generation and making it part of its energy mix, according to an energy sector expert for the Asian Development Bank (ADB).

“Right now and the foreseeable

future, natural gas and LNG is much cheaper today compared to two to three years ago, so there is a chance for the Philippines and for the countries in Asia to benefit from LNG and this is window of opportunity I think,” ADB Chief of Energy Sector Group Dr. Yongping Zhai said in an interview on Thursday.

Zhai believes that LNG, a cleaner gas compared to coal, could be “very much part” of the Philippines’s energy mix depending on its viability. He said the Philippines already operates a facility running on natural gas, and has been using it significantly.

The ADB has signed an agreement

with state-run Philippine National Oil Co. (PNOC) to act as transaction advisor for the Philippines’s first LNG hub project in Batangas.

The PNOC is developing a robust and sustainable gas supply strategy through the establishment of an LNG hub in Batangas given the imminent depletion

of the Malampaya gas field’s reserves.

Zhaisaidthebankisprovidingadvisory services to the Philippine government on the viability of importing LNG, how can this be utilized for power generation and whether this is commercially viable.

“We are in the stage of assessing the [LNG project] offers from companies

and we gather information from the country, what is the demand. We also assess the international market, what will be the price of LNG whether you buy long-term contract, short-term contract, (and buying in) spot market so what will be cost implication,” he said. PNA

The Regions BusinessMirror

www.businessmirror.com.ph

Editor: Dennis D. Estopace • Monday, June 25, 2018 A5

DOF to DOTr: Make up your mind on BRT

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By Rea Cu

@ReaCuBM

he Department of Finance (DOF) has given the Department of Transportation (DOTr) until the end of the month to decide on the fate of Cebu’s bus rapid transit (BRT) system.

Finance Secretary Carlos G. Dominguez III said the DOTr was told to settle technical issues that could delay the roll out of the proposed BRT system in Cebu.

The DOTr has earlier recommended the cancellation of the project.

“I said you have until the end of June to settle it because I don’t want this argument to go on forever. I told [the DOTr] to settle it by the end of June. Settle it, make up your mind, I don’t want these

long arguments,” Dominguez said.

The DOF chief said narrow roads and right-of-way issues are some of the technical issues that are being cited by the DOTr for withdrawing the BRT proposal. He added that financial issues are not expected to hamper the BRT’s implementation since the previous administration has a lready eva luated the project.

“But I understand that one of the is-

5 RTWPBs in Luzon, Mindanao hold wage-hike consultations

By Samuel P. Medenilla @sam_medenilla

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ive more regional wage boards are now mulling over the possibility of increasing the minimum wage in their respective jurisdictions, according to the National Wages and Productivity Commission (NWPC).

In an interview, NWPC Executive Director Maria Criselda R. Sy disclosed that the Regional Tripartite Wages and Productivity Boards (RTWPB) in the Cordillera Administrative Region (CAR), Central Luzon, Bicol region, Zamboanga Peninsula, and Davao region are now conducting public consultations for their new wage orders.

Sy said these RTWPBs have previous wage orders that have reached their anniversary dates as of June. The wage order in CAR became effective on June 5, 2017, while those in Regions 3 and 5 took effect on May 1, 2017 and June 2, 2017, respectively.

In the case of Regions 9 and 11, Sy said the RTWPBs have not implemented a new wage order since 2016.

During the consultations, she said the five RTWPBs will decide if there is a need to raise the minimum-wage rates in their respective areas.

“They are now at the different phases of their consultations. We expect these boards to come out with their decisions in the next two months,” Sy said.

Under the Wage Rationalization Act, RTWPBs could only release a new wage

order a year after the date of effectivity of their previous wage order unless they would declare a supervening event.

A supervening event is any extraordinary increase in basic goods, such as petroleum, and services for a given period, which is usually for three straight months.

Sy made the statement after the NWPC declared that five RTWPBs have already implemented their new wage orders for 2018.

RTWPBs that have implemented new minimum-wage rates are Ilocos region (P256 to P310); Calabarzon (P317 to P400), Eastern Visayas (P305), Soccsksargen (P311), and the Autonomous Region in Muslim Mindanao (P280).

Sy confirmed that the RTWPB in Central Visayas has already completed its wage deliberations.

“We are just waiting for them to transmit their new wage order to the Commission for affirmation before it takes effect,” she said.

In a related development, the RTWPBNational Capital Region said it is scheduled to convene its members this week to decide on the P320 across-the-board wage-hike petition filed by the Trade Union Congress of the Philippines on June 14.

In March the RTWPB-NCR junked the P175 wage-hike petition of the Association of Minimum Wage Earners and Advocate since it was filed ahead of the anniversary of the previous wage order in NCR, which will fall in October.

CamSur unveils ‘massive’ infrastructure program

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lawmaker on Sunday said the province of Camarines Sur has unveiled its plan to build five infrastructure projects in support of the government’s “Build, Build, Build” program.

Rep. Luis Raymund F. Villafuerte Jr. of the Second District of Camarines Sur said these five projects are an “iconic” ecofriendly Capitol building, expansion of the Naga Airport in the town of Pili; the modernization of the Philippine National Railways (PNR) line; the CamSur West Coast Tourism Highway that will connect the towns of Balatan, Pasacao and Ragay; and the Bicol River bridge that will connect the town of Libmanan to Naga City.

He said the construction of the Capitol building in the town of Pili will kick off the “massive” infrastructure program that CamSur would roll out. Villafuerte added the construction of these projects will begin next year.

“I always say that don’t expect extraordinary things to happen if you keep doing ordinary things every day. We want CamSur to be extraordinary. We want CamSur to be different. We want CamSur to set new standards,” Villafuerte said in a statement following the Capitol building’s recent formal launch in Makati City.

According to Villafuerte, the world-class Capitol, which was designed by architect and urban design consultant Carlos Arnaiz,

would be a “groundbreaking and unique” structure that would instantly become a recognizable symbol of the province.

Gov. Miguel Luis R. Villafuerte of Camarines Sur said the CamSur Capitol building featuring several Pili-shaped roofs is designed as an eco-friendly structure, reflecting its commitment to sustainable development and the preservation of Bicol’s culture.

Arnaiz of the design firm Caza conceptualized the building as a spiraling assembly of pili-shaped husks that appears like a mountain from the horizon and like a flower from the sky.

Each pili-shaped volume is a metal sunscreen protecting the building’s interior from the intense tropical sun and creating a series of shaped roof terraces.

The Capitol’s spiral organization of pilishaped volumes produces a covered openair atrium in the center of the building with a dramatic interior helicoid ramp terminating at the Mount Isarog viewing deck.

“Our CamSur Capitol is a visionary project that builds on what is endemic to CamSur in order to propel the province into a future of technological advancement, environmental sustainability and civic engagement,” the governor said.

Caza, a Brooklyn-based design studio and think tank, has offices in the Philippines and Colombia. Jovee Marie N. dela Cruz

Photo shows a transfer station of a bus rapid transit (BRT) corridor in Curitiba, Brazil. The government is aiming to implement the same BRT system in Metro Manila and Cebu City to modernize the transport system and ease traffic in major Philippine cities. WIKIMEDIA COMMONS

sues that has to be addressed is the fact that there are no wide roads in Cebu.

The suggestion is to widen the roads [but] that’s easier said than done. I don’t know how much it will cost to acquire the right-of-way, to move the buildings

further apart. That’s the technical issue,” Dominguez said.

For as long as the project is financially and technically feasible, he said the DOF will support its implementation. Dominguez added that the same issues may bog

down the implementation of the BRT system in Metro Manila.

“It hasn’t come up but I guess the same issues will hound the proposed BRT in Metro Manila. In my own opinion, the best time to implement the BRT is when you are building the road, which we are going to do in Clark,” he said.

Earlier, DOTr officials said the narrow road s a nd r i g ht - of -w ay i s s ues forced the department to recommend the cancellation of the BRT project in Metro Manila and Cebu City. The DOTr also told lawmakers that it is withdrawing its request for funds for the three BRT lines.

The estimated P11-billion Cebu BRT project proposed by the DOTr will ply the 23-kilometer Bulacao-Ayala-Talamban route. The three proposed BRT systems— two in Metro Manila and one in Cebu City— are part of the Duterte administration’s “Build, Build, Build” program and will cost a total of P53 billion.

Transportation Secretary Arthur P. Tugade earlier said the DOTr has not ruled out BRTs entirely, adding that the system is more effective in areas that are not yet congested.

The World BusinessMirror

A6 Monday, June 25, 2018

Saudis pledge oil-supply boost to comfort global consumers

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audi Arabia promised to act decisively to keep oil prices under control, signaling a real supply boost approaching 1 million barrels a day is on the way to global markets.

“We will do whatever is necessary to keep the market in balance,” Saudi Energy Minister Khalid AlFalih told reporters on Saturday, while sitting alongside his Russian counterpart Alexander Novak at the Organization of Petroleum Exporting Countries (Opec) headquarters in Vienna. Consumers can rest assured that “their energy supplies are available, are being stewarded by a responsible group of producers.”

Al-Falih went out of his way to give a detailed explanation of how the so-called Opec+ deal will work, clarifying a vaguely worded agreement and contradictory statements from other ministers that spurred a rally in crude futures on Friday.

It would be troubling if that jump in prices became a trend, the minister said, adding that producers with spare capacity, such as Saudi Arabia, can fill any gap left by falling production elsewhere.

“The only country that can increase production is Saudi Arabia, so its interpretation of the deal is the one that matters,” said Ann-Louise Hittle, a veteran Opec watcher at

consultant Wood Mackenzie Ltd. Al-Falih’s assurances—backed up by Novak—follow pressure from US President Donald J. Trump’s anti-Opec tweeting, as well as more conventional lobbying by major oil buyers. They give Saudi Arabia and Russia more room to ease consumer anxiety about prices, but risk a backlash from Iran and Venezuela, founding members of the Opec that insist members can’t snatch one another’s market share.

An Iranian Opec delegate immediately criticized the Saudi position, saying the agreement didn’t allow any member to replace someone else’s market share. Countries that do so will be cheating on the deal, the delegate said, asking not to be named because of the sensitivity of the matter. Venezuela’s Energy Minister Manuel Quevedo made the same argument on Twitter.

The Iranian delegate added, however, that Venezuela and other countries producing below their quota have few ways of enforcing their views, beyond statements of disapproval.

Friday’s deal between Opec members pledged a “nominal” supply increase of 1 million barrels a day.

In reality, ministers said several countries are unable to pump more, so the real output boost would have been smaller—ranging from Iran’s 500,000 barrel-a-day estimate up to Iraq’s prediction for as much as 800,000. The vague wording of that agreement left it open to such a broad range of interpretations and, helping to secure a last-minute compromise that overcame Iranian opposition to any increase.

Nominal vs real

Saturday’s accord, in which nonOpec countries ratified the previous day’s deal, dropped the pledge that the 1 million barrel-a-day increase should be shared proportionally among members, opening the way for the full volume to flow, Al-Falih said.

“If we allocated the number prorata basis among the 24 countries, given the capacity of those countries that can increase, it had been estimated that about 60 percent will be achieved,” Al-Falih said. “But because we went away from allocation on a pro-rata basis, we will be closer to 1 million than to 600,000 barrels a day.”

The group’s communique still pledged a return to 100-percent compliance with the original 2016 agreement—ending a period of deeper-than-intended cuts—but Al-Falih insisted that no individual country will be subject to a strict output cap.

Novak was fully aligned with Al-Falih, saying Russia would contribute as much as 200,000 barrels a day to the supply boost.

Tankers sail

“The real increase of production would be a figure exactly close to 1 million,” Novak said in an interview with Bloomberg television. “The decision is very straightforward.”

United Arab Emirates Energy Minister Suhail Al Mazrouei gave similar assurances.

Al-Falih also said the Opec+ Joint Ministerial Monitoring Committee, which has overseen the group’s supply cuts, will play a key role in managing how production is increased.

Both Russia and Saudi Arabia are members, and the committee’s increasing importance will help ce-

ment their dominance over a coalition that pumps more than half the world’s crude.

State oil company Saudi Aramco had anticipated this week’s decision and was already ramping up output, Al-Falih said. He declined to say how much the kingdom would pump in July, but promised a month-on-month hike in the order of “hundreds of thousands of barrels” rather than “ten of thousands.”

He later floated a range of 250,000 to 400,000 barrels a day.

Tanker-tracking data for early June compiled by Bloomberg showed a significant jump in shipments from the kingdom.

“The oil is already on the water,” said Daniel Gerber, the head of tanker tracker company Petro-Logistics SA in Geneva. Bloomberg News

Trump broadens global trade war with tariff threat for EU cars

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resident Donald J. Trump threatened a 20-percent tariff on cars imported from the European Union unless the bloc removes import duties and other barriers to US goods, escalating a global trade war the EU warned could endanger $300 billion in commerce.

“Based on the Tariffs and Trade Barriers long placed on the US and its great companies and workers by the European Union, if these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20 percent Tariff on all of their cars coming into the US. Build them here!”

Trump said in a tweet on Friday.

The EU planned to retaliate, according to a European Commission memo obtained by Bloomberg. “An introduction of US tariffs would be met with equivalent penalties imposed by affected trading partners,” it said.

Shares of Volkswagen AG, Daimler AG and BMW AG fell in Frankfurt, and US auto companies erased earlier gains in New York trading.

Trump’s tweet came hours after the EU imposed tariffs on about $3.3 billion of American products in response to his barriers to imported aluminum and steel.

The European tariffs target politically resonant products, including 25

percent duties on Harley-Davidson Inc. motorcycles, Levi Strauss & Co. jeans and bourbon. The EU measures cover a total of around 200 categories, also including various types of corn, rice, orange juice, cigarettes, cigars, t-shirts, cosmetics, boats and steel.

Trade war

Trump’s latest salvo against the European auto industry threatens to broaden a trade war that he’s already sparked with China. The US has pledged to impose 25-percent tariffs on $34 billion in Chinese goods on July 6, and China vowed to retaliate in the same amount of US imports.

The US may justify the auto tariffs on the grounds of national defense, just as it did in March when imposing duties on global imports of steel and aluminum. Trump initially exempted the EU from the metal tariffs, but let the temporary reprieve expire after negotiations with the Europeans fell apart.

America’s Ambassador to Germany Ric Grenell is in Washington this week seeking a deal on auto levies.

He spoke to White House trade adviser Peter Navarro, Commerce Secretary Wilbur Ross, US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin

BLOOMBERG

about reducing existing tariffs on cars shipped between the US and Europe to zero. There’s support in the administration and from German carmakers for such an idea, but no agreement has been reached yet.

Rarely used

The Commerce Department in May started investigating whether imports of cars and light trucks hurt America’s ability to defend itself by eroding the country’s auto industry.

If the findings show a threat to the US, a 1960s-era trade law gives the president authority to impose import restrictions without congressional approval.

Many lawmakers have been critical of Trump’s use of the trade law, which was rarely applied before he took office. Ross during a Senate hearing on Wednesday faced heated questions from GOP lawmakers who argued there was no merit to claiming auto imports threaten the country’s defense capabilities. Bill Reinsch, senior adviser at the Center for Strategic and International Studies in Washington and former Commerce official, said the president’s tweet may undermine his government’s argument for auto tariffs.

“Having ordered an investigation into whether auto imports are a national security threat, he has

now undercut that by reaching his conclusion before the investigation has barely begun,” Reinsch said. “It’s a classic case of ‘ready, fire, aim,’ and it will only lead to litigation in the US and a loss at the WTO when we are inevitably taken there.”

The Washington trade association for BMW, Daimler and Volkswagen’s operations in the US warned consumers will be harmed by higher tariffs. “Consumers fare best when tariffs are low,” Gloria Bergquist, a spokeswoman for the Alliance of Automobile Manufacturers, said in a statement. The group also represents General Motors Co. And Fiat Chrysler Automobiles NV. Trump’s tariff rhetoric further undermines a US auto market already in its second year of decline after record sales in 2016, said Cody Lusk, president of the American International Automobile Dealers Association. He pointed to Daimler’s decision on Thursday to pare its profit outlook as an early example.

“You’re already going to see prices going up incrementally as a result of the steel and aluminum tariffs in the auto sector,” said Lusk, whose group represents foreign-branded auto dealers in the US. “All of that combined with increasing interest rates is a recipe for disaster.” Bloomberg News

Debate over migrants divides EU; Mini-summit seeks solutions

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RUSSELS—With another migrant rescue ship stranded in the Mediterranean and both Italy and Malta again refusing to let it dock, European Union leaders will try to find common ground for tackling a growing political crisis that is threatening to undermine the entire EU. The leaders of about 16 countries— more than half the 28-nation bloc—will take part in what is being billed as “informal talks” in Brussels on Sunday ahead of a full EU summit next Thursday and Friday, where migration will top the agenda.

German Chancellor Angela Merkel said the meeting involves “talking with particularly affected nations about all problems connected with migration.” She said the hope is to see if “we can reach bi-, tri- or even multinational agreements to better solve certain problems.”

The arrival of more than 1 million people in 2015, most fleeing wars in Syria and Iraq, exposed glaring deficiencies in EU migrant reception capacities and asylum laws. It has fueled tensions among EU nations, and anti-migrant parties have won votes in Europe by fomenting public

fears of foreigners. “These rescue ships can forget about reaching Italy,” Italy’s new firebrand interior minister, Matteo Salvini, said on Saturday as he assured his anti-migrant base that he would “crush” the human-trafficking business.

At the heart of the problem lie deep divisions over who should take responsibility for arriving migrants—often Mediterranean countries like Italy, Greece and increasingly Spain—how long they should be required to accommodate them and what should be done to help those EU countries hardest hit.

The problem was crystalized last week in a row between Italy’s new populist government, Malta and France over who should take responsibility for 630 people rescued from the Mediterranean Sea off the coast of Libya, the main departure point for people trying to reach Europe.

Amid the mud-slinging, Spain’s new Socialist government agreed to take charge of the migrants and the ship eventually made a weeklong voyage to Valencia.

On Saturday Spain also announced it had rescued 569 more migrants at sea, many from boats in the Strait of Gibraltar,

a busy shipping lane with treacherous currents.

But another rescue ship, the Lifeline of the German NGO Mission Lifeline, was stranded in the Mediterranean off Malta after both Italy and Malta refused to let it dock with its 234 migrants. Lifeline said a merchant vessel, the Alexander Maersk, had another 113 migrants and was also waiting for a port to receive them.

Salvini has demanded that Malta, the EU’s smallest country, allow the Lifeline to dock because it was in the island’s waters. AP

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Mattis to visit China as Taiwan, South China Sea tensions rise

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EIJING—US Defense Secretary Jim Mattis, who has accused China of “intimidation and coercion” in the South China Sea, is visiting Beijing this week as the countries increasingly spar over United States arms sales to Taiwan and Beijing’s expanding military presence overseas.

Mattis will be the first defense secretary in President Donald J. Trump’s administration to visit China. His trip highlights the need for the US and its chief rival in East Asia to engage each other despite increasingly stark differences and mutual suspicion. Mattis’s mission comes at a difficult time as the Trump administration is set to start taxing $34 billion in Chinese goods in two weeks, while Beijing has vowed to retaliate with its own tariffs on US products.

The US appears likely to rely on China for help getting North Korea to deliver on denuclearization promises made at a summit in Singapore between Trump and North Korean leader Kim Jong Un. Below are some of the thorny issues:

South China Sea sparring

The South China Sea will likely be near the top of the agenda in discussions between Mattis and Chinese officials, with the US issuing threats against Beijing for its continued militarization of the waters. “There are consequences that will continue to come home to roost, so to speak, with China, if they don’t find a way to work more collaboratively with all of the nations who have interests,” Mattis said earlier this month. He said China’s weapons were placed in the region for “intimidation and coercion.” The Pentagon last month withdrew its invitation for China to participate in a large-scale multinational naval exercise in what it called “an initial response” to the militarization of the South China Sea.

Korean peninsula

China was seen as taking home a major win when Trump announced at the summit with Kim that the US would suspend joint US-South Korea war games that North Korea and China have long opposed. Both Mattis and South Korea were seen as caught off-guard by the decision. US and South Korean officials now see the pledge as helping advance nuclear negotiations with North Korea.

China welcomed the move, and Kim met with Chinese President Xi Jinping in Beijing last week, but no new measures toward denuclearization have been announced. Trump said last week that “total denuclearization” has “already started taking place.” Mattis, however, was asked on Wednesday whether he had seen any sign that North Korea had begun steps toward denuclearization and replied: “I’m not aware of any. Obviously, we’re at the very front end of the process.”

Tangling over Taiwan

China’s complaints about US contacts with Taiwan have grown louder as the United States has sought to increase exchanges with the self-ruled island Beijing claims as its territory, and sells more weapons to it. Mattis will likely hear those arguments made even more forcibly after Trump this year signed the Taiwan Travel Act encouraging high-level visits between the two sides, and the Department of Defense agreed to give American contractors marketing licenses for diesel-electric submarine technology sought by Taiwan’s armed forces. The US government also approved a $1.4-billion arms sale to Taiwan last year, although in an effort to mollify Beijing, has been reluctant to supply everything the island’s leadership wants.

Trump’s ‘space force’ call

Trump’s announcement last week that he was directing the Pentagon to create a new “Space Force” drew attention in China and may be among the items for discussion in Beijing. Trump framed space as a national security issue, saying he does not want “China and Russia and other countries leading us.” While the US has dominated in space since its 1969 moon landing, China is making strong headway, while Russia is in decline. China says it opposes the militarization of outer space, but demonstrated its growing prowess in the field in 2007 when it fired a missile that destroyed a defunct Chinese satellite, creating an enormous debris field and drawing concerns from the United States and others. AP

www.businessmirror.com.ph

Banking&Finance BusinessMirror

Monday, June 25, 2018 A7

PHL, Japan tweak plans to rid yen-funded projects of bottlenecks

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By Rea Cu

@ReaCuBM

HILIPPINE and Japanese officials continued to discuss in Tokyo last week the timeline and plans of action to get rid of bottlenecks and swiftly address concerns in the preparation and implementation of flagship infrastructure projects that Manila is undertaking in cooperation with Tokyo.

ability of the first phase of the Metro Manila Subway Project by May 2022, subject to the progress of the measures that need to be carried out to deal with various concerns, such as land acquisition and relocation of utilities.

Dominguez and Socioeconomic Planning Secretary Ernesto M. Pernia headed the Philippine delegation during the meeting held at the Office of the Prime Minister, while the Japanese side was led by Chief Cabinet Secretary Yoshihide Suga and Shigeru Kiyama, the special advisor to the Cabinet.

“This joint committee has been convening for the important plan in developing multilayer bilateral cooperation since we discussed cooperation in various areas, such as traffic and transport infrastructure problems, the Metro Manila Subway project, peace and development in Mindanao, safety and counter terrorism measures, and information and technology,” Suga said.

The finance chief expressed the Philippine government’s appreciation for the efforts of the Japan International Cooperation Agency (Jica) to streamline its approval process, and hoped that “the same efficient approach would be applied to the processing of other projects in the pipeline.”

For the railway projects to be implemented with Japanese funding support, both sides agreed to continue the trilateral consultations regarding the cofinancing arrangement between Jica and the Asian Development Bank for the PNR North 2 project and the PNR South Commuter Line.

“We are targeting to sign the Exchange of Notes for both projects in November 2018.

We will also exert efforts to achieve the challenging goal of making the North rail section partially operational by 2022,” he added.

The South rail section, meanwhile, would require more time to commence operations because of the existing railway and complexity of the project design, according to Dominguez.

“Both sides will continue to have consultations at the technical working level to accelerate implementation and address challenges for the railway projects,” he said.

During the meeting, Philippine officials also provided an update on the Mindanao peace process and informed their counterparts of the approval of the proposed Bangsamoro basic law by both the Senate and the House of Representatives. After this, Japan affirmed its commitment to support the establishment of a new Bangsamoro government by enhancing its development assistance in Mindanao.

The Philippine side also requested Japan to provide a concessional financing package for the Road Network Development Project in Conflict Areas in Mindanao, including Marawi City, as well as for other infrastructure projects in the pipeline to which Japan responded by expressing its intent to immediately start consultations on these concerns.

Both sides also confirmed plans to further explore possible urban development projects in the cities of Cebu and Davao, and

discussed developments in the following areas of sectoral cooperation: regional development, information and communications technology, energy, agriculture, environment, public safety and disaster prevention.

After the meeting, two official documents were also signed by the Philippines and Japan: the Record of Discussions of the fifth meeting, and the Letter of Intent for the Technical Cooperation between the Department of Energy (DOE) and the Japan Ministry of Economy, Trade and Industry on the Action Plan on Electric Power, which aims to help resolve issues plaguing the Philippine power sector, such as the need to improve generation efficiency and electrification rates.

An Amended Joint Venture Agreement between the Bases Conversion and Development Authority and the Surbana Jurong Group, which restates their commitment to develop the New Clark City in Pampanga, was also signed after the meeting.

As a result of the regular meetings convened by the high-level committee, loan agreements for three flagship infrastructure projects of the Duterte administration have already been signed. These are: the ¥9.39-billion loan for the third phase of Arterial Road Bypass Project in Bulacan, the ¥104.53-billion loan for the first phase of the Metro Manila Subway Project and the ¥2-billion grant for the Programme for the Support for Rehabilitation and Reconstruction of Marawi City and Its Surrounding Areas.

Finance Secretary Carlos G. Dominguez III said during the Fifth meeting of the Philippines-Japan Joint Committee on Infrastructure Development and Economic Cooperation that Japanese officials expressed their government’s intention to provide indicative official development assistance (ODA) loan financing of about ¥38.1 billion for the Metro Rail Transit System (MRT) Line 3 Rehabilitation Project and an indicative supplemental loan of some ¥4.37 billion for the second phase of the New Bohol Airport Construction and Sustainable Environmental Protection Project, subject to the Philippine and Japanese government approval processes.

“This is now our fifth meeting since March 2017 and it is evident that our frequent meetings are beginning to bear positive results.

Indeed, our commitment and efforts to fasttrack loan processing and project implementation are gaining headway,” Dominguez said.

Aside from the two projects, the committee also confirmed the updated candidate list of projects to which Japan will provide assistance.

These include: the Philippine National Railways North 2 Project, which will run from Malolos in Bulacan to Clark in Pampanga; the PNR South Commuter Line, which will extend from Tutuban in Manila to Calamba in Laguna; the Pasig-Marikina River Channel Improvement Project, which aims to mitigate flooding in Metro Manila; and the Road Network Development Project in Conflict-Affected Areas in Mindanao.

Officials of both countries also affirmed their commitment toward the partial oper-

BPI pitches better financial management among overseas Filipinos

AUB intensifies IT innovations, partnerships with fintechs

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ANK of the Philippine Islands (BPI) is reaching out to more overseas Filipinos to provide badly needed financial management education.

According to Ritchie Fariñas, Overseas Customer Segment division head of BPI, recent studies have shown that overseas Filipinos’ money habits are rather grim. In the Q2 2018 Consumer Expectations Survey of Bangko Sentral ng Pilipinas, only 33.9 percent of the households that received OFW remittances allot money for savings, and only 5.2 percent of the households have investments. Meanwhile, Filipino Times, a UAE-based news outlet, reported that 8 out of 10 OFWs are not saving up for retirement.

Fariñas said overseas Filipinos, who find saving and investing to be a challenge, should look for bank services that will help them not only to send money back home, but also make it easier for them to save and invest.

“OFs should really learn how to manage their finances well because no matter how much they earn, money can be easily spent. There are also different ways to send money back home, and some can be more expensive than others,” said Fariñas.

According to him, BPI has been taking some steps to help overseas Filipinos become more financially stable and secure.

Through a needs-based approach to financial education and planning, BPI aims to bridge the gap between remitters and beneficiaries.

By Leony R. Garcia

A

SIA United Bank (AUB), among the country’s fastest-growing publicly listed banks, is determined to grow in the digital space and build collaboration with various financial-technology (fintech) providers for the influx of 1.5 million tourists expected in the country this year from China, as projected by the Department of Tourism.

This is to further leverage on its enhanced IT platform to improve the banking experience for its customers, according to AUB President Manuel A. Gomez. He said the 20-year-old bank has been making use of technology since it opened at the height of the Asian financial crisis in 1997 to differentiate its services and operations in the highly competitive market.

“We’re a young organization but we’re at the forefront of innovation—powered by a tech-savvy senior management and an entrepreneurial mind-set, and not bogged down by legacy systems,” Gomez said during the press briefing immediately after the company’s AUB Annual Stockholders’ Meeting held on June 22 in Pasig City.

Gomez added that with the management’s focus on people development and holistic change, the bank is able to scale up and sustain its robust financial performance.

The bank said it will continue to embark on automation to improve its product offerings and bank services. It has already started to integrate the National Retail Payment System into AUB’s online platform, and is now looking to create the bank’s own e-wallet that can be accessed by the whole AUB ecosystem.

Perspectives The strategic imperative Beyond technology

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CCELERATED change raises questions that go to the heart of strategic planning for businesses. They may need to rethink which markets they operate in, what problems they are solving for their customers, and what roles they play in the value chain.

They need to consider the new opportunities created by emerging technologies and evaluate the capabilities they need to realize those opportunities.

Important, this does not necessarily mean immediately building or acquiring expertise and resources in emerging technologies. Anthony Stevens, chief digital officer at KPMG Australia, commented: “In all the industries that I have experience with, the most successful digital innovators have focused on key business areas in the first instance. Technology is not one of those.”

“Digital transformation is really not about technology,” says Rogers. “It’s much more about strategy, leadership and new ways of thinking. The hardest part for any organization is to step back and recognize how the strategy book they’re playing by—with rules they might not even realize they’re following—is

now woefully out of date.”

Digital is about strategy, leadership and new ways of thinking. Organizations need to cut technology out of their strategic change imperative—at least for now—and focus instead on strategy: 1. What is the corporate vision and objective? How do the financial, business and operating models need to evolve?

2. What will the digital enablers be? What new digital capabilities can be used to redefine financial, business and operating models?

3. How does the business exploit its strengths as a large incumbent—its customers, cash flows, experience and networks?

Incumbents have advantages over start-ups with their market access, existing technologies and strong balance sheets, for example.

4. How does the business become a “connected enterprise”—across front, middle and back office? How can it align its fundamental capabilities across people, operations, systems and processes to capture business value?

Importance of a holistic approach

Companies have been quick to react and several are taking action. In our recent paper,

AUB President Manuel Gomez reports on the bank’s performance in 2017 and its position as the fastest growing among listed local banks.

“We have so far incorporated InstaPay in both our mobile app and Internet banking to allow our customers to do real-time fund transfer to other banks on a 24/7 basis. We also just launched our Credit Card Mobile App to allow cardholders to access their credit card accounts anytime, anywhere,” said Wilfredo Rodriguez Jr., AUB head of Operations and Information Technology.

AUB is also partnering with fintech providers on credit evaluation to improve its loan approval process. “Fintechs cater to specific products and services that traditional banks failed to serve. By harnessing this synergy with fintechs, we expect to develop bank products and services that are more responsive to the growing demands of

“Decoding Disruption3,” we studied a variety of responses—ranging from internal innovation teams and skunk works programs, to sponsoring accelerators and incubators for start-ups, to corporate venture capital. However, we find that digital initiatives are largely confined to piecemeal improvements at many organizations. These constitute stop-gap measures and small projects that have little influence on the core business. Achieving successful digital transformation requires a significantly more holistic approach.

The process of bringing piecemeal digital initiatives together within a strategic framework is what will underpin successful digital transformations.

“It’s the all-pervasiveness that many senior executives struggle with. The tendency of businesses is to go for projects here and there, with no focus on the whole—the orchestration becomes critical.”

—Peter Evans, principal, KPMG in the US To succeed, organizations must first answer the most basic questions about how digital initiatives can further their corporate vision and objectives. Only when an end-state strategic vision is in place does it make sense

today’s customers, including the millennials, and embrace the unbanked sectors of the country,” Rodriguez stressed.

AUB recently partnered with Tencent, developer of mobile payments giant WeChat Pay. AUB developed the mobile app AUB PayMate to allow local merchants to accept WeChat Pay transactions for shopping, dining, hotel, as well as other tourism-related payment activities.

“Since we launched WeChat Pay in the country in November 2017, AUB has so far accredited 2,000 merchants,” said Mags Surtida, head of AUB Credit Cards Business.

She revealed that WeChat Pay is in preparation of the influx of the Chinese tourists expected to arrive in the last two quarters

to drill down into the tools that will deliver it in practice.

Recognizing potential–transforming business models

Over the past 10 years, digital initiatives have typically focused on the customer experience, with the emergence of new sales and engagement channels. Increasingly, organizations are exploring ways of digitizing the operating model and harnessing emerging technologies to improve the way they run their business.

But few organizations recognize that the true potential of digital lies in transforming business models of the future.

“Operating model improvements are interesting and useful, but it’s just doing what you’ve been doing better. Developing new business models and tools will be the game changer.”

—Andrew Sohn, senior vice president of Global Digital and Analytics, Crawford & Co. A KPMG proprietary survey of more than 100 senior executives in large organizations highlights this finding— there is greater recognition of the need for change in the operating model than there is in redesigning business model elements. Executives have lower expec-

of the year. “We are in the planting season right now. We are building relationships but we recognize it to be a very big business in the future,” Surtida added.

AUB also plans to open 15 new branches to bring its network size to 264 by the end of the year, including the branches of its subsidiaries, Cavite United Rural Bank and the Rural Bank of Angeles in Pampanga.

“We want most of them outside of Metro Manila, as we are looking to expand our reach nationwide. Subsequently, we are looking at opening 10 to 12 branches per year, as well as ensuring the profitability of all our branches,” said Jacob Ng, AUB chief transformation officer and branch banking head.

AUB said it projects a net income of P3.2 billion by the end of the year. Robust growth in loans and deposits nudged up the net income of AUB and its subsidiaries to P2.8 billion in end-2017, 23 percent higher than a year ago.

The Rebisco-owned universal bank ranked No. 1 in deposits and loans, with year-on-year increases of 22.40 percent and 31.87 percent, respectively, in 2017, based on the published statements of conditions of 10 publicly listed universal banks. Its deposit level stood at P158 billion in 2017, from P129 billion in 2016, while total loans amounted to P130 billion in 2017 and P99 billion, previously.

To further improve the banking experience for its customers, AUB is simplifying its branch processes so depositors can just fill out electronic forms and take a selfie on an iPad to open new accounts, among others.

tations on emerging technologies, forcing a change in the way they go to market, price their products or define their value propositions.

This may be a dangerous underestimation.

Many organizations have not yet fully grasped the scale of the challenge they now face. “The problem you have is that people will often try and automate what they’ve got today, rather than focusing on where the model is going to go,” says Shamus Rae, partner, KPMG UK. “Actually, it’s your business model that needs to flip.”

And time may be running out for large organizations to “flip” their business modelss— their most disruptive competitors are already using technology to rethink the very essence of what they do.

The article “The strategic imperative” was taken from the publication entitled Becoming truly digital: Rethinking business models for a digital world. © 2018 R.G. Manabat & Co., a Philippine partnership and a member-firm of the KPMG network of independent member-firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in the Philippines. For more information on KPMG in the Philippines, you may visit www.kpmg.com.ph.

Green Monday BusinessMirror

A8 Monday, June 25, 2018

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

The first defense against biodiversity loss

Establishing local conservation areas

By Jonathan L. Mayuga

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First of two parts

@jonlmayuga

ith limited financial and human resources, the protection and conservation of the rich biological diversity remain a major challenge in the Philippines.

Although not an entirely new concept, many Filipinos, including policy-makers remain oblivious to the word “biodiversity” and its economic importance to ensure sustainable growth and development.

The Convention on Biological Diversity (CBD) defines biodiversity as “the variability among living organisms from all sources, including terrestrial, marine and other aquatic ecosystems and the ecological complexes of which they are part.”

Biodiversity includes diversity within species, between species and of ecosystems.

The Philippines’s system of accounting, however, negates to consider the biodiversity values in the computation of the annual goods produced and ser vices provided by various sectors.

Strong national policy

The Philippines, being a signatory to the CBD, is committed to protecting and conserving the country’s rich biodiversity.

The country has a number of policies, including national laws, aimed at preventing environmental destruction and degradation, particularly key biodiversity areas, to protect its unique and endangered plant and animal species, against various threats.

The 1987 Philippine Constitution, for one, recognizes the right of every Filipino to a balanced and healthful ecology.

Among the national laws are Republic Act 7586, or the National Integrated Protected Areas System (Nipas) Act; RA 9147, or the Wildlife Resources Protection and Conservation Act; RA 9072, or the National Cave and Cave Resources Mangement and Protection Act; Presidential Decree 705, or the Revised Forestry Code of the Philippines; and RA 8550 and RA 10654, also known as the Philippine Fisheries Code and Amended Fisheries Code, respectively.

Financing, action gaps

Despite the many environmentrelated laws, the budget for the protection and conservation of biodiversity remains wanting.

The huge financing gap, estimated to be around 80 percent, was identified by a study of the United Nations Development Pro-

gramme (UNDP)-Biodiversity Finance Initiative (BioFin) Project.

In 2016 the UNDP-backed project revealed that P334 billion is needed for the next 13 years.

The amount will cover projected expenses for actions on forest, coastal and marine areas, inland wetlands, caves and cave systems, protected areas, invasive alien species, agrobiodiversity, access and benefit-sharing and urban biodiversity, which are investments identified as a must to ensure funding for the implementation of the Philippine Biosafety Strategy Action Plan (PBSAP).

Under the PBSAP, the annual funding requirement is pegged at P24 billion until 2028. However, the current annual budget allocation by the government is only P5 billion, or a yearly budget gap of P19 billion.

LGUs to the rescue

Local government units (LGUs) play an important role in filling the gaps in national biodiversitypolicy financing and action.

In a telephone interview on June 12, Environment Undersecretary Jonas R. Leones said outside the protected areas and national parks, there are a huge number of key biodiversity areas (KBAs) that need protection against various threats, especially against drivers of biodiversity loss.

There are a total of 228 KBAs in the country, according to the Department of Environment and Natural Resources’s (DENR) Biodiversity Management Bureau (BMB).

P r o t e c t i n g t h e c o u nt r y ’s KBAs, he said, calls for the help and support of all stakeholders, particularly LGUs. “The DENR alone cannot protect all these KBAs,” said Leones, the spokesman of Environment Secretary Roy A. Cimatu.

What is an LCA?

Josefina de Leon, chief of the DENR-BMB’s Wildlife Resou rces D iv i s ion , s a id lo c a l conser vation areas (LC As) are locations outside Nipas sites but within K BAs, including those with ecotourism potential.

“They are managed by local government units which are responsible for the protection of areas and the conservation of resources,

Clad in loincloth and smoking tobacco in pipes, steely eyed Taw’buid Mangyan tribesmen protect Mindoro’s Iglit-Baco mountain range from poachers. The park and its people are part of the New Conservation Areas in the Philippines Project, which synthesizes locally managed zones to expand the country’s protected areas by some 400,000 hectares. Gregg Yan/National Geographic Channel

while promoting biodiversityfriendly enterprises like ecotourism,” she told the BusinessMirror in response to a query through Messenger on June 17.

She said LCAs can boost the protection and conservation not only of the ecosystem or habitat but can also help endangered species of plant and animals to eventually recover and thrive.

“Such approach will ensure the sustainable use of resources, the perpetuation of species and improvement of the economic status of the local communities concerned,” she said.

From this definition, LCAs can be considered as the first line of defense against biodiversity loss, she said.

Reducing biodiversity loss

Best A lter natives Campa ig n Director Gregg Yan said that whether spearheaded by LGUs or indigenous groups, the gradual expansion and enhancement of the country’s protected area systems could dramatically reduce biodiversity loss while bolstering

local pride and stewardship.

“Site-centric management has numerous advantages because community members are frontliners. Trickle-down effects are also direct. We’re not just talking about ecotourism here. We’re talking about direct benefits in the form of resources like food, water and medicine,” Yan said.

Yan cited Conserving Nature as Lifeways, a 2012 book authored by anthropologist Dr. Raoul Cola.

“Some cultures have mastered the sustainable use of their environment. In his book on the Tagbanua tribe of Malampaya Sound, my good friend Dr. Raoul Cola revealed how the tribesfolk combined hunting, fishing, foraging, gleaning and farming to optimize productivity, while protecting the regenerative capacity of their local environment, year-on-year. So ,too, can we bolster local conser vation governance while learning from local practices,” Yan explained.

New conservation areas

From 2010 to 2015 the DENR

Such approach [local conservation areas] will ensure the sustainable use of resources, the perpetuation of species and improvement of the economic status of the local communities concerned.”

—de Leon

implemented a project that recognizes new conser vation areas, such as those managed by indigenous peoples (IPs), local communities and LGUs. Dubbed as New Conservation Areas in the Philippines Project (NewCAPP), it was viewed as an opportunity to establish solid foundations for accelerated expansion of the terrestrial system in the Philippines.

The project is an opportunity to establish solid foundations for accelerated expansion of the terrestrial system in the Philippines, supported by strong m a n a ge me nt c ap a c it ie s a nd sustainable financing.

It seeks to identif y conservation areas managed by IPs, local communities and LGUs in selected prov inces in the Cordillera Administrative Region, Ilocos Reg ion, Centra l Luzon, Ca l abarzon, Mimaropa, Centra l Visayas, Easter n Visayas, Nor t her n M i nd a n ao, C a raga a nd t he Autonomous Reg ion in Muslim Mindanao.

Local initiative

Leones said the DENR supports the establishment of LCAs in recognition of the important role played by LGUs and in recognition of their local mandates and authority over territories within their political jurisdiction.

Sect ion 3 of Republ ic Act 7160, or the Local Government Code of 1991, states the shared responsibility of the LGUs and the national government in the management and maintenance of ecological balance within their territorial jurisdiction, subject

to the provision of the law and other national policies.

LCAs can be established through local legislation—by ordinance.

An LCA may be established, he said, when the LGU came to realize the importance of conserving the area, also because of their religious, cultural, historical, economic or tourism potentials, besides the ecosystem services they provide or the biodiversity values they possess.

Many LCAs have started as a locally managed seascape, landscape, marine or fish sanctuary, game reserve or natural park but “leveled up” over time to become initial components of the Nipas, thus, becoming a protected area or national park that is managed by the DENR through the Protected Area Management Boards.

Nipas ‘initial components’

According to Leones, protected areas and national parks that are not yet covered by laws are considered as initial components of the Nipas Act. There are 240 protected areas and national parks but only 13 are currently covered by laws enacted by Congress. The rest were established by virtue of presidential proclamations or executive orders. Most of these so-called protected areas were once locally managed conservation areas funded by the LGUs, he said.

“That is why Sen. Loren B. Legarda is pushing for the enactment of the Expanded-Nipas Act to increase the number of protected areas and national parks that are covered by law,” he said.

To be concluded

More issuers urged to offer green bonds in time for the July AGBS

By Roderick L. Abad Contributor

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IVEN the sharp uptake in the amount of green bonds issued worldwide, a ranking official of the Philippine securities regulator encouraged more of its issuers in the country to take advantage of the situation, especially with the upcoming local implementation of the standards set by the ten member-states of the Association of Southeast Asian Nations (Asean) next month.

“We are not a stranger to the issuance of [green bonds]. We are already doing it. We just need to introduce ourselves or reintroduce ourselves to the international financial community once again under a

set of guidelines that are internationally accepted in order to tap that $36-trillion market,” said Securities and Exchange Commission Commissioner Ephyro Luis Amatong in his speech during the Green Financing Forum held at a hotel in Makati City on Wednesday.

According to Amatong, investors not only in Europe and North America, but also in Asia, mainly in Japan and China, are mandating investment in green bonds.

He cited Amundi and International Finance Corp.’s initiative to put up a fund of $2 billion to invest in green and emerging markets, including the Philippines.

“So the point I’m trying to make is that investors are putting their money behind

green,” he emphasized. “The money is very, very real. And the demand coming from the Asean is also very real.”

Economic prospects in the region is upbeat. Based on the estimates of the World Bank, the Asian Development Bank and the International Renewable Energy Agency, economies in Southeast Asia are expected to grow at 5.2 percent between 2016 and 2020.

Infrastructure investment needs for the whole Asean, on the other hand, are approximated at $470 billion.

On the energy segment, there is a requirement of an additional $290 billion between 2016 and 2025. In the Philippines alone, around $30-billion fundings are needed over that time frame.

“Because we have a ‘Build, Build, Build’ program, infrastructure is something that we want to promote and something that we need to drive the economy going forward. And that infrastructure could easily be green [and] should be green.

Mass transport, green housing, green buildings, renewable energy and a host of other investments could be green,” Amatong said.

Regionally, it is fortunate that there is a concerted effort to match the demand and supply of investment opportunities through the Asean Green Bond Standards (AGBS). It came into being so as to provide guidance to issuers, fund the projects and give assurance to investors that the projects are green.

The newest economic block had partnered with the International Capital Market Association to come up with t h i s o n e s e t o f co m m o n s t a n d a rd s and assurance of consistency for both investors and issuers. The AGBS d e m o n s t rate s A s e a n’s co m m i t m e nt to globally recognized G reen B ond Principles created by ICMA. “The Asean Green Bond Standards are intended to enhance transparency, consistency and uniformity throughout the 10 countries, and highlight the potential of the Asean region. We want to attract that capital into the region, and for my purpose, specifically to the Philippine,” the SEC commissioner said.

“We want it to make sure that the

guidance we are putting out in the Asean is closely aligned with international expectations of what constitutes a green bond,” he added.

In this regional strategy, Amatong said the standards are also aimed at making investors think of the “Asean Green” as a specific investment asset class.

To qualify in the AGBS, there needs to be an Asean connection. The issuers from the region or the use of proceeds are for a project in the Asean, he explained.

What makes the AGBS different is that instead of coming up with a very definitive list, or what Europe is embarking on now which is a taxonomy of acceptable green projects, they have a negative list in order to keep things open and flexible.

Biodiversity Monday BusinessMirror

Asean Champions of Biodiversity Media Category 2014

Monday, June 25, 2018

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

A9

Will PHL become the next land of the dodo?

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By Michael A. Bengwayan | Special to the BusinessMirror

ooner rather than later many of the Philippines’s plants and animals will face the same fate as the proverbial dodo bird.

Its biodiversity is being destroyed at a fast clip, perhaps reaching an irreversible trend.

No country has its plant and animal life being destroyed faster than in the Philippines, to go by the recently released Red List of Threatened and Extinct Species by the International Union for the Conservation of Nature (IUCN) based in Switzerland.

Another group, Conservation International (CI), recently described the Philippines as the “ hottest” of the 25 so-called bio-diversity hot spots in the world—a record that does not speak well of the government’s env i ron ment a l con ser v at ion program and the public’s apathy to environmental concerns.

Hot spots are areas w ith the least number of species existing, the least number of species found in an exclusive ecosystem and have an alarmingly high deg ree of threat against the existing species.

The other hot spots—include the Tropical Andes, Mediterranean Basin, Madagascar Islands in the Indian Ocean, Mesoamerica, Caribbean Islands, Indo-Burma, Atlantic Forest of Brazil, Cape Floristic Region of South Africa, Mountains of Central China, Sundaland, Brazilian Cerrado, Southwest Australia, Polynesia and Micronesia, New Caledonia, Choco/ Darien/Western Ecuador, Western Ghats and Sri Lanka, California Floristic Province, Succulent Karoo, New Zealand, Central Chile, Guinean Forests of West Africa, Caucasus, Eastern Arc Mountains and Coastal Forests of Kenya and Tanzania, and Wallacea.

World’s hottest hot spot

The IUCN Red List, released on September 28, 2017, indicated the precarious future of Philippine flora and fauna.

Of the 11,046 endangered and extinct plant and animal species documented by IUCN in 112 countries, 932 species—amounting to 9 percent of the world’s total endangered and extinct species—are in the Philippines.

The list is the most comprehensive analysis of global conservation ever undertaken. It involved 120 national governments and 735 environmental nongovernment organizations (NGOs).

IUCN has been in the forefront of environment documentation globally for the past 20 years.

On record, the Philippines has 387 threatened species, making it No. 4 on the list after Malaysia with 805 species, Indonesia with 763 and India with 459.

Of its threatened species 50 are mammals, 67 birds, eight re pt i les, 2 2 a mph ibi a n s, 28 fishes, three mollusks and 16 are other invertebrates.

However, with regard to extinct and threatened plants and animals, the Philippines heads the list in Southeast and South Asia, and is second after Africa worldwide.

The country has 318 extinct and threatened animals classified as follows: two extinct, 47 critically endangered, 44 endangered, 103 vulnerable, seven conservation-dependent, 84 nearthreatened and 31 species with deficient data.

Some of the threatened animals are the Philippine eagle—the rarest and the second-largest eagle in the world, which is now down to about 350 to 600 birds compared to 6,000 eagles 40 years ago.

Another, the Mindoro crocodile (Crocodylus mindorensis), is near extinction. It is only recovering due to help from captive-breeding programs and conservation measures. The three-striped box turtle, which abound in the Sulu Sea, was also included on the Red List because it is under threat due to its value as a traditional medicine.

Among plants, the country has 227 extinct and threatened plants—the fourth-most in the world. Of the total, 37 are critically endangered, 28 endangered, 128 are vulnerable, three conservationdependent, 24 near-threatened and seven with deficient data.

Endangered marine ecosystems

The country’s marine and aquatic life are equally endangered.

The waters of the Philippines are some of the most productive in the Coral Triangle. Shown is a large school of trevally in Cagayancillo, which also covers the famed atolls of Tubbataha in Palawan. Toppx2/WWF/BusinessMirror file

The Philippine coral reefs—one of the most diverse and largest in the world—may not be around for long.

The World Bank in March released in its Environment Monitor monthly report that only 4.3 percent or 1,161 square kilometers of the country’s once-sprawling 27,000 sq km of coral reefs are in good state.

This used to cover 10 percent of the country’s land area. But even then, the remaining parcel will eventually die, as there is very little effort to stem the deat h of t hese nat ura l f ishbreeding grounds, the World Bank report said.

With the impending loss of the coral reefs, 10 percent to 15 percent of the total marine fisheries’ production for human consumption will be lost and adversely affect the livelihood of an estimated 65,000 fishing families, the report added.

Some 500 to 700 coral reef species are being lost as the reefs die.

In 1998 the highly influential environmental think tank, Earthwatch Institute, warned that 30 percent of the Philippine coral reefs were already dead and that aggressive conservation efforts needed to be undertaken.

But political events overcame genuinely committed conservation efforts, rendering the coral

Swimming with ‘mermaids’ M

y too-tight wetsuit’s turning into a sauna, but I did not mind. We’re aboard a double-decked dive boat in Calauit Island in oh-too-sunny Northern Palawan, and that day might finally be the day.

Over the years, I’ve met some of the sea’s most amazing residents—from macho tiger sharks to play ful dolphins—but one creature has been more elusive than others.

With underwater photographer Danny Ocampo and expert guides from the Tagbanua tribe, we’re finally hoping for some downtime with a dugong.

Dugongs are legendary sea creatures, having inspired lonely seamen’s “sightings” of mermaids.

(Being out at sea for months or years, who can blame them.)

Dugongs’ last relatives were Stellar’s sea cows (Hydrodamalis gigas), which were wiped out by hunters just 36 years after being discovered by scientists.

“It’s still early, so we have a fairly good chance of sightings.

Look for splashes or shadows near

the surface,” explained our guide Dodong Valera.

We gaze at our swim-spotter swimming a hundred feet away, homemade plastic fins slapping the sea’s surface.

“There are around 30 dugongs in this area. If we’re lucky, we’ll see the largest and friendliest of them all, Aban,” Valera said as he named his marine friend.

My brain’s baking from the heat, so I nod absentmindedly and slop seawater inside my wetsuit, trying to cool down.

Twenty minutes and a liter of sweat later, the spotter finally gave the signal: target sighted!

Excitedly, we became one with fin and rig and slide gleefully into a vast expanse of seagrass.

Sirenians

Dugongs (Dugong dugon) are distant cousins of elephants, growing up to 3 meters and weighing about 400 kilograms (kg).

Also called sea cows, they inhabit shallow waters of the Coral Triangle, wherever seagrass is most abundant. They are the

fourth member of the order Sirenia, alongside the three manatee species. A fifth, the gigantic 8-meter long Steller’s sea cow, was completely wiped out by 1768.

The name dugong comes from the Malay word duyung, meaning “lady of the sea.”

Sizeable herds of dugongs once plied the Philippine archipelago until hunting and habitat destruction reduced their number.

Populations still hold out in Isabela, Mindanao, Guimaras and Palawan, but encounters are extremely rare.

Dugongs are thought to live as long as humans (about 70 years), but give birth to just a single calf every three to five years.

They are globally classified as vulnerable and are considered critically endangered in the Philippines because of their sparse number. Prior to our Coron trip, I’ve spent 20 years looking for one—they’re just that rare.

Said dugong conser vationist Dr. Teri Aquino: “We can learn a lot about sustainable use and responsible stewardship from

reefs to die due to destructive fishing methods, aquaculture development and pollution.

Mangroves, equally important breeding and spawning grounds for fish and shellfish, have not been spared.

Mario Carreon, of the Fisheries Resources Management of the Bureau of Fisheries and Aquatic Resource, said that the Philippines has already lost some 11,543 sq km of mangrove forests. These were indiscriminately cut for firewood, construction, charcoal and lost to fishpond conversion. “ T he cora l reefs, seag rass beds and mangroves support 80 percent of all commercial species of fish and shellfish. In the last 20 years, these have declined as much as 57 percent in the Philippines,” he said.

The Philippines, with more than 7,000 islands, 2.2 million sq km of territorial waters and 300,782 sq km of land, once had the most expansive mangrove and coral reefs in Southeast Asia. But this is no longer true, as Carreon said 4,000 hectares of mangroves are destroyed yearly.

Who is to blame?

The World Bank and CI recently released $150 million to support the protection efforts of these biodiversity hot spots. CI is working in the protected 359,000 Palanan

Wilderness Area of Palanan, Isabela, of the Sierra Madre Ranges, where 10 percent of the country’s remaining rainforest exists.

Among the factors blamed for the destruction of biodiversity are deforestation, booming population, poaching, over hunting, logging, pollution and urban sprawl.

In the Philippines various sectors—farmers, fishermen, the government and NGOs, globalization advocates and environmental policy-makers—have been tossing the blame at one another.

The answer can only be any or all of them. But governmental policies take a big share of the blame, as well as government agencies that lack the political will to protect the national patrimony and foster a sense of natural stewardship among the people.

All these, plus the fact that conservation programs are hardly a priority or carried out in earnest.

Deploring the country’s sad state of corals, the World Bank said: “The Philippines, which has perhaps the best coral reefs, does not give importance to its water resources. The people should find ways to rehabilitate the coral reefs because almost 55 percent of the fish consumed in the country depend on the coral reefs.”

The World Bank itself is not free of any blame for global environmental decay. It is often be-

Author Gregg Yan (center) with Aban, a 3-meter-long bull dugong in Northern Palawan.

Aban stayed with Yan and with this underwater photographer for half an hour.

Danny Ocampo

the dugong. It consumes a lot of seagrass, yet leaves the seagrass bed even healthier than before.

When feeding, they help release micronutrients from the seabed, making nutrients more accessible for small fish—and this is why we always see fish swimming with dugongs. This gentle marine mammal living the simplest of lives is one of the best caretakers of our seagrass habitats and the animals that live in them.”

A famous dugong

A fter 20 years of waiting, I’m finally face-to-face w ith a dugong. It’s not like a whale that steals your breath because of sheer size, nor a shark that inspires more than just a hint of fear, no matter how small it is.

Dugongs are huge but friendly,

just like a mermaid Hodor.

Valera signaled us to keep at least five meters away from the obliviously grazing bull, crunching on clumps of Halophila ovalis, which, unlike most types of seagrass, has small, round leaves instead of flowing grass blades.

Dugongs wolf down up to 40 kg a day, keeping hectares of seagrass pruned and productive.

Photographer Ocampo started shooting.

As the animal ambles closer, I noticed fighting scars on his hide. This is Aban, confirmed Valera with a nod.

Owing to his good nature and natural curiosity, generations of divers have swam and photographed the scarred, 3-meter-long dugong, who seemed perennially surrounded by colorful golden,

ing held largely responsible for the poverty of developing countries—one reason deforestation is widespread worldwide.

The World Bank continued: “Dynamite and cyanide fishing is still rampant in the Philippines and Indonesia, and the governments have done little to curb these destructive fishing methods, which are illegal under Philippine laws, as well as under the 1975 Convention on International Trade of Endangered Species [CITES].”

The Coral Reef Alliance, which monitors coral-reef developments worldwide, said the country has not done well in protecting its coral reefs, and instead, is a major illegal exporter of coral reefs for aquariums, especially in the United States .

In the Philippines the coral reefs are protected under Presidential Decree 1219, which, however, is not rigidly enforced. The CITES law, to which the Philippines is a signatory, prohibits the sale of coral reefs.

With regards to deforestation, Sen. Loren B. Legarda, who once headed the Senate’s environment committee, blamed flawed government policies for the loss of forests and plants.

“Government negligence has prompted the devastation of not only forests but all that live with it,” she said.

Flawed government policies have been worsened by corruption in environmental conservation programs. For instance, Dr. Frances Korten, former head of the Ford Foundation in the Philippines, said that the $325-million loan from the Asian Development Bank in 1990 for national reforestation was a failure. “ The program was ill-advised and managed and relied on insufficient data. T he program a l l t he more accelerated t he damage it intended to reverse,” she charged.

The continuing loss of biodiversity in the country may, thus, be said to be the collective result of administrative, mismanagement, corruption and social inequity.

Bengwayan has a masters degree and PhD in Development Studies and Environmental Resource Management from University College Dublin, Ireland, as a European Union Fellow.

He writes for the British Gemini News Service, New York’s Earth Times and the Environmental News Service. He is currently a Fellow of Echoing Green Foundation in New York.

large trevally fish.

I noticed his skin is brown and not grey (dugongs only look grey in pictures because they’re usually photographed below 3 meters), his beady eyes and his serene, Siddhartha Gautama-level expression.

Magical minutes pass, then we fin up to leave the medit at i v e m a m m a l b e . I n c r e d ibly, Aban said good-bye, circling around us on the surface.

I waved adios as he dived and disappeared into the teal waters.

T hough dugongs are pro tected by law nationwide, they still get accidentally entangled in fishing gear and drown. The once -va st seag ra ss meadows they depend on for food are being destroyed by coastal reclamation and pollution.

By protecting not just dugongs—but the seagrass meadows that support them—tomorrow’s Filipinos might too get a chance to come face to face with the real mermaids of the sea.

We climb back on our boat, exchanging high fives and fresh tales to share with other environment-lovers. The boat revs its engines, and we’re off with big smiles etched on our faces.

Gregg Yan/Best Alternatives Campaign

A10 Monday, June 25, 2018 • Editor: Angel R. Calso

Opinion BusinessMirror

www.businessmirror.com.ph

editorial

The people speak on PHL democracy

T

he concept of a democratic government has changed since Ancient Greece. Virtually no country has a system where the people have a direct voice in government decisionmaking. Representatives make decisions. However, in many instances, the people do change laws as in the recent case of a referendum in Ireland, which legalizes some abortions.

The worry that political freedoms around the world are under attack and that democracy is losing strength is a valid concern. However, it is interesting that where we hear that phrase “democracy is dying,” it often comes from the out-of-power political opposition.

If the classic definition of democracy is no longer valid, how do we measure democracy? Abraham Lincoln gave us the “government of the people, by the people, for the people” definition. Perhaps there is a clear way to measure if a nation is a democracy: Ask the people.

The Democracy Perception Index is a research project conducted by Dalia Research, in collaboration with the Alliance of Democracies and Rasmussen Global consultancy. Its 2018 report is based on a global survey of 125,000 respondents in 50 countries, conducted from June 6 to 18.

Four questions were asked, starting with “Do you feel that the voice of people like you matters in politics?” Fifty-four percent of citizens in “free” countries said their voices “rarely” or “never” mattered, compared with 46 percent in “non-free” states. In other words, the people were less inclined to believe in their “voice” in those countries considered to be “democracies.”

In Japan 74 percent of the people felt that their voice did not matter, followed by Poland (63 percent) and France (62 percent). The United States came in with 49 percent.

Perhaps contrary to the opinion of certain local groups, Filipinos were at the top, saying their voices mattered, with only 41 percent answering rarely or never. Mexico, ranking 73 in freedom, and Egypt, ranking 155 in freedom, also were at the top of the list.

Having a voice is one thing, but “Do you feel that your government is acting in your interest?” Eighty percent of the people in Kenya said “rarely” or worse. But, showing why the global populist movement is strong, more than 60 percent felt the same way in the following developed democracies: The US (66 percent), Germany, Australia, Canada, Japan, Sweden, Singapore and France.

In the Philippines, 55 percent felt that the government rarely or never acted in their interests, about the same as in Mexico and Taiwan.

About half of the world—including in the Philippines (52 percent)—do not feel free to share political opinions in public if other people disagree with them. Peer pressure creates a form of censorship. This is particularly true in Singapore (66 percent) and even Indonesia (61 percent). Yet, in Vladimir Putin’s supposed “dictatorship,” only 26 percent might hesitate speaking out.

Finally, “Do you feel like the news you read or watch gives you balanced and neutral information?” Only 44 percent of Filipinos answered rarely or never, believing there is enough unbiased news reporting in the nation. India also believes it has a neutral press. Sixty percent of Americans said they rarely or never get neutral and balanced information.

The basic conclusion is that the global public does not think that their governments are delivering core democratic benefits. The political changes of the past few years are probably not finished. In the Philippines people feel more power and control with the process of democracy and are generally more pleased with the results from their government than the rest of the world. According to the people, “democracy is healthy” in the Philippines.

Beginning a zero-waste lifestyle Atty. Jose Ferdinand M. Rojas II

RISING SUN

Conclusion

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The idea is to reduce the amount of waste in our daily lives by reusing, reducing and refusing. Recycling or repurposing comes next—for those things that we can’t reduce/refuse/ reuse. But it is recommended to first reuse various items as much as possible—plastic packaging, bottles, paper, containers, etc.

✝ Ambassador Antonio L. Cabangon Chua Founder Publisher Editor in Chief Associate Editor News Editor Senior Editors

T. Anthony C. Cabangon

Atty. Lorna Patajo-Kapunan

legally speaking

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T

he Red Cross emblem is not just any other symbol but an emblem that is to be respected and given proper acknowledgment as a symbol of humanitarian work all over the world. More important, the Red Cross emblem is a protection for those working in areas of conflict to be able to provide humanitarian and medical services to the most vulnerable and affected population.

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

As mentioned last week, the first line of action would be to refuse all unnecessary items like plastic straws, single-use items, plastic bags, etc. To make sure that this step would succeed, you need to be always ready —bring your own mug, metal straw, ecobag, handkerchief and food containers wherever and

The Red Cross emblem

Since 2005

BusinessMirror A broader look at today’s business

his is the conclusion of a piece written on living a zerowaste lifestyle, which all of us need to adopt if we would like to help protect our environment.

Misuse of the emblem, even unintentionally, and even in times of peace, weakens the effectiveness should war break out. Unfortunately, the Red Cross emblem is misused everywhere, on pharmacy signs, doctors’ calling cards, children’s dressups, toy sets, Halloween costumes, ads for mobile phone repairs, first aid kits, security guard uniforms and many others. The Red Cross has become a generic sign of medical aid and a universal logo for health and help.

More recent, the Red Cross emblem has been used in fun runs, in religious processions, such as the Traslación in Quiapo, in cosmetic surgery clinics and even in military tanks and jeeps used by active combatants, not by authorized medical personnel. Most people do not know that the Red Cross emblem has 150 years of history. I am proud to be a Red Cross volunteer and a governor of the Philippine Red Cross and, therefore, familiar with the origin of the Red Cross emblem.

The Red Cross came into being as a result of the advocacy work of a Swiss businessman, Henri Dunant.

Dunant was on a business trip to northern Italy in June 1859, when he came across the aftermath of the Battle of Solferino—one of the bloodiest battles fought during the Italian Wars of Independence. Nearly 40,000 men were dead or wounded, left behind as their respective armies retreated. For three days the villagers of nearby Castiglione, Dunant among them, brought the injured food, water and shelter, and buried the dead. Dunant’s experience so moved him that, upon his return to his home in Geneva, he called on nations to establish some kind of organization that could assist the wounded and sick in the armed forces in times of armed conflict.

In the decades following the adoption of the Red Cross, the emblem was widely used by armed forces as a sign of medical aid and care. So successful was the emblem that commercial enterprises began to capitalize on the goodwill of the symbol, with makers of medical supplies, household goods and even ladies’ shoes, branding themselves as “red cross.” Concerned that such commercialization would

whenever you can.

Advocates of the zero-waste lifestyle recommend that everyone take stock of their current lifestyle and really look into how we all end up with the trash that we have, where it comes from, what we throw out.

When we have studied this, then it would be easier to refuse, to reduce and to reuse. We can make intelligent decisions on what to buy next time.

Those who have gone on this path tell us that the transition is not going to be easy, and the results are not immediate. We need to be patient with our efforts and to learn how not to be too harsh on ourselves, and others who will definitely criticize us.

Take small steps, do one good act per day. When you fail, acknowledge the mistake and begin again. Pretty soon, with time and a great deal of dedication, we would be significantly reducing our carbon footprint on the planet.

Another good thing that may

come out of this is the possibility of becoming an influence and encouragement to others. We will also notice a general improvement in the quality of our lives, which means we would be making better decisions about our transport choices, the food that we eat, where we buy our food and supplies, how we dispose of our trash.

It all translates to feeling better, becoming healthier and saving more money in the long run.

Some people would argue that the efforts of one person will not make a big difference in the whole scheme of things. I say it is infinitely better than not making any effort at all.

Let’s make that daily decision to help protect Mother Earth. We have the choice every single day whether we would like our children to live in a better planet, or not. Because if you think about it, everything we do is really for our children and the next generations.

The misuse of the emblems by drug stores, on first-aid kits, in clothing designs, etc., will be penalized a minimum fine of P50,000 and/or imprisonment, at the discretion of the court for each and every violation. The misuse of the emblems in armed-conflict situations, with an intent to deceive an adversary and make him or her believe that the other person is protected under international humanitarian law, is considered a war crime and is punishable by up to 40 years imprisonment and a fine of up to P1 million.

use of the emblems and penalizing offenders. The law enhances respect for the three emblems of humanity—the Red Cross, Red Crescent and Red Crystal—and penalizes its misuse, increasing the protection of specially designated persons, installations and vehicles providing life-saving assistance for victims of armed conflict.

These emblems, which are neutral and free from any religious, ideological, cultural or political value, are internationally recognized symbols of the protection that international law confers on the wounded and sick, and those caring for them in times of armed conflict. The implementing rules and regulations was adopted in 2017 and was published in the Official Gazette on April 9. Thus, the IRR is now in full effect.

The Departments National Defense, Health and Trade and Industry, in consultation with the Philippine Red Cross, are mandated to ensure strict compliance with RA 10530 and its IRR. Under the supervision of the DND, the Armed Forces of the Philippines shall, both in peacetime and during armed conflict, use the Red Cross to identify its medical service personnel, medical units and transports on the ground, sea and air, particularly within combat zones or during combat operations, medical missions and similar activities where threat of attack may occur. Religious personnel, organic or attached to the Chaplain Service, AFP, shall be afforded the same protection as medical service personnel and shall be identified in the same way.

The staff and volunteers of the International Red Cross and Red Crescent Movement may use these

devalue the Red Cross emblem, and perhaps even cause confusion in times of armed conflict, the 1949 Geneva Convention included an international law protecting the Red Cross. It can only be used in specially designated circumstances, and the use of the emblem in any unauthorized situations was prohibited.

Dunant’s idea eventually gave birth to the “International Committee for Relief to Wounded Soldiers”— which eventually became the International Committee of the Red Cross. In order to maintain its status as neutral, nonpartisan, humanitarian caregivers, the Committee realized it would need some kind of distinctive symbol, worn on one’s person.

A white cloth with a red cross was suggested, likely a tribute to the Swiss flag, which is a white cross on a red background. The Red Cross was born in 1864. It was followed in later years by the Red Crescent (1929) and the Red Crystal (2005).

In the Philippines Republic Act (RA) 10530, also known as the Emblem law, was signed into law in May 2013. The enactment of this law by Philippine Congress fulfills the obligation of the State to adopt national legislation regulating the

See “Kapunan,” A11

Opinion BusinessMirror

www.businessmirror.com.ph

Get on board the diamond bandwagon

Take the PPP challenge: True or false

By Alberto Agra

PPP Lead

Joel L. Tan-Torres

DEBIT CREDIT

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he 95th anniversary year celebration and commemoration of the accountancy profession is on full steam. The Board of Accountancy (BOA) has already organized four learning events, implemented the Asean Mutual Recognition Arrangements (MRA) and launched the Search for Ms. CPA Diamond Ambassadress of Goodwill (Ambassadress of Goodwill) since the anniversary year started this 2018. For your information, the diamond is the gem stone for 95 years celebratory events and the results of the search for the Ambassadress of Goodwill shall be announced during the oath taking of the new CPAs at the Philippine International Convention Center (PICC) on July 10, 2018.

These are just some of the many activities that have taken place in line with Proclamation 464 issued

by President Duterte declaring the period of March 17, 2018, to March 16, 2019, as the Year for the Celebration of the 95th year anniversary of the BOA. The theme for this celebration is “95 years of invaluable service to the Philippines and the global accounting community.”

The year 2018 started with a bang, with the BOA organizing on January 3 an “Integrated Reporting for SMEs” speak up by Paul Thompson at the PICC. Paul is a director of the European Federation of Accountants and Auditors for SMEs. This was followed by my talk on “Expanding Horizons updates and forward directions.”

On January 11 the memorandum of agreement (MOA) between the Professional Regulation Commission, BOA and the Philippine Institute of Certified Public Accountants (PICPA) was signed to establish the Monitoring Committee (MC) to implement the Asean MRA. With the MC in place, the processing for the applications to become an Asean Chartered Professional Accountant (ACPA) commences. For details, go to this link: https://boa. com.ph/prc-and-boa-ready-for-mraimplementation/. All CPAs should take this opportunity to qualify for this prestigious title of ACPA and garner the many advantages and benefits from such.

Also on the same day of the MOA signing, I led the discussion with various PICPA members on the Monitoring Group Consultation Paper on “Strengthening the Governance and Oversight of the International Audit-Related Standard Setting Boards in the Public Interest.” The MG is a grouping of global securities and accounting regulators which provides oversight in the operations of standard setting bodies, such as the International Auditing and Assurance Standards Board. We were able to submit our comments to this paper in January.

A forum on “Future is Now” was held at the PICC on March 22, with various speakers and panelists featured. Some of the speakers included March Chau, regional manager of CPA Australia, who was part of the panel

Kapunan. . .

continued from A10

emblems while undertaking their humanitarian tasks. The Movement includes the PRC and other national Red Cross and Red Crescent societies, International Committee of the Red Cross and the International Federation of Red Cross and Red Crescent Societies.

Trade names, business names, trademarks, service marks, collective marks, other marks of ownership, utility models and industrial designs making use of the emblem of the Red Cross, the Red Crescent or the Red Crystal or their translations in any official language and dialect cannot be used or registered without the consent of the Philippine Red Cross. For this purpose, the DTI, Securities and Exchange Com-

that discussed “Digital disruptions impact on the accountancy profession” and Chun-wee Chiew, regional head of Policy-Asia Pacific, ACCA, who talked on “ Trust and Ethics in the Digital Age.” I also talked and dwelled on the topic, “Philippine Accountancy in the Age of Future is Now.” A symposium, entitled “The Accounting Profession—Then, Now and the Future,” was conducted at the National University on May 21, with Institute of Management Accountant President Jeffrey Thomson speaking on “Becoming future ready—it starts with you.” In that forum, I talked on “Accountancy Now and the future…Time of Joy...

Time of Disruption.”

The rest of the BOA members and I have been busy speaking in and attending events here and abroad. It is evident that the important themes that we should be discussing in the accountancy area are those pertaining to globalization and digital technology developments. We should be conscious of what are happening in the global accountancy community, including issues involving governance and ethical behavior, professional skepticism, integrated thinking and reporting, empowering the small and medium practice, and others. On the digital technology phase, we should be aware of current and emerging developments affecting our profession and business, including artificial intelligence, cloudbased solutions, blockchain technology, data analytics, cybersecurity and risks, and several others. These are important and exciting topics that will be discussed in various events for our 95th anniversary year.

To my fellow CPAs and accountants, get on board now on our diamond anniversary bandwagon and be involved in our many activities and festivities.

Joel L. Tan-Torres is the chairman of the Professional Regulatory Board of Accountancy. He is a Certified Public Accountant who placed No. 1 in the May 1979 CPA Board Examinations. He served as Commissioner of the Bureau of Internal Revenue from 2009 to 2010.

This column accepts contributions from accountants, especially articles that are of interest to the accountancy profession, in particular, and to the business community, in general. These can be e-mailed to boa.secretariat.@gmail.com.

mission and Intellectual Property Office shall include in their respective rules and regulations provisions for the effective implementation of the provision of the IRR regarding this matter.

The misuse of the emblems by drug stores, on first-aid kits, in clothing designs, etc., will be penalized a minimum fine of P50,000 and/or imprisonment, at the discretion of the court for each and every violation.

The misuse of the emblems in armedconflict situations, with an intent to deceive an adversary and make him or her believe that the other person is protected under international humanitarian law (“perfidy”), is considered a war crime and is punishable by up to 40 years imprisonment and a fine of up to P1 million.

Respect for the Red Cross/Red Crescent emblem will save lives. That life could be yours!

Monday, June 25, 2018 A11

Continued from A1

3

. There are only nine PPP modalities to choose from.

4. Lack of financial resources is the only reason government agencies partner with private-sector proponents (PSPs).

5. Local governments cannot award concession contracts.

6. All PPP awards must be approved by the National Economic and Development Authority (Neda).

7. All PPP projects can only have a single purpose.

8. Government agencies must contribute cash in a PPP joint venture (JV) in order to have a share or equity.

9. The charters of governmentowned and -controlled corpora-

tions (GOCCs), government instrumentalities with corporate powers (GICPs), and state universities and colleges are not PPP laws.

10. The winner, in any PPP selection process, is always the proponent or bidder with the highest bid.

11. All GOCCs and GICPs must follow the 2013 Neda Joint Venture Guidelines.

12. After the PPP contract has been signed, the PSP can immediately construct the facility.

Role players matter Siegfred Bueno Mison, Esq.

THE PATRIOT

A

fter winning their third National Basketball Association (NBA) championship in four years, the Golden State Warriors (GSW) has been labeled a “super team”. It took some time to get all the right ingredients, but I admire how they drafted and traded for the right role players, not necessarily for their skills, but for their mind-set of approaching the game of basketball as a team effort.

Let me share one inspiring story of a particular role player in this successful basketball program. In the four games in the 2018 NBA Finals, Javale McGee contributed 22 points in 54 minutes with a whopping field-goal percentage of 70 percent. Far from being an elite player of the game, Javale has been playing for several years in the NBA for five teams already. But the more important part of his basketball journey is how Javale performed his role for the GSW—dedicated, unselfish and with a lot of heart.

In the Army, force multipliers are factors in the service that help amplify the main effort in combat.

These include technology, intelligence, weather and, of course, a few role players. For instance, the unheralded mess cook can easily boost the morale of the unit by simply serving a satisfying meal. The anonymous radioman of any unit, who stays

in touch with the rest of the entire combat force, plays a small, yet important, role for better coordination.

Some people would dream of doing great deeds to be famous. Others would aspire to make a big difference in the lives of others by trying to do extraordinary things. What most people fail to appreciate is the fact that role players can also make a big impact.

In most households, the contributions of helpers, drivers and nannies are as valuable as McGee to the GSW. Since most working parents are constrained to spend less time doing household chores, these “force multipliers” allow the little yet necessary things to get done. In my case, I relied and continue to rely on my helper Divina to help me do the laundry, buy groceries, cook, wash the dishes and clean the house, among so many other mundane chores in the house. Most important, when

13. The PPP Center approves PPP projects.

14. A long-term lease arrangement where the government is the lessor is not a PPP. 15. Under a build-operate-transfer arrangement, the government agency participates in the day-to-day operations of the PPP project.

16. For JVs, the public sector and PSP should jointly incorporate a separate entity.

17. A governor can enter into a PPP contract without the authorization of the provincial legislative council.

18. T he successor head of agency can unilaterally rescind a PPP contract entered into by the predecessor.

19. Nonparties to a PPP contract, like the general public, are not stakeholders in a PPP arrangement.

20. A city government cannot undertake a PPP for a monorail project.

Unsolicited Proposals: 21. Do not comply with requirements of competition, accountability and transparency.

my children were growing up, Divina was there to do anything and everything for them. And the small deeds she has done, especially for my children, have produced much fruit. Her performance of seemingly insignificant tasks has led to the fact that her minor wards/my children are now done with college.

My daughter Regina Victoria Mison graduated with a double degree at the Ateneo University a few years back. My son J. Siegfred Salvador Mison and daughter Regina Elena Mison both managed to graduate with Latin honors at the University of the Philippines this 2018.

Referring to the parable of a mustard seed, the Bible in Matthew 13:32 tells us, “Though it is the smallest of all seeds, yet when it grows, it is the largest of garden plants and becomes a tree, so that the birds come and perch in its branches.” The smallest faith within us can also yield much fruit as we continue to aspire to be like Jesus. When taken together, activities like reading the Bible and praying as a group can lead us to genuinely help others for the sake of helping ourselves grow in faith.

Legendary basketball coach John Wooden said little things make big things happen. Retired US Navy SEALS Adm. William McRaven also said that little things, like making our bed, set us up for success.

Just because a contribution is little doesn’t mean that the contribution is unimportant or noncritical. Role players and the little things they do contribute much to any major

22. Only provide for right to match.

23. Can proceed to Stage 2, which is the negotiations stage, even if incomplete.

24. Must always be accepted by the government agency.

25. Must always include a fullblown feasibility study.

26. Are never allowed for priority projects.

27. In Stage 3, or the competitive challenge phase, covers both the technical and financial aspects.

28. In all cases, confer original proponent (OP) status upon acceptance thereof.

29. Stage 3 may be unilaterally canceled after the Certificate of Successful Negotiations in Stage 2 is issued.

30. Cannot allow for reimbursement of OP if it fails to secure the award.

And the (my) answers are…all false. Share your insights, or if you want to learn more about PPPs, email me at alberto.c.agr@gmail.com, or visit my web site www.albertocagra.com.

accomplishment, whether in business, in sports, or in life.

In life, we cannot do everything alone—we need to value and recognize the importance of role players in our lives, and to appreciate what they do for us. Similarly, we must acknowledge every chance we can become role players in the journey of others. We may not realize that our contributions, while small, can have a lasting influence in the lives of those around us. And there are things worth doing and accomplishing, not for us, but for others. In the case of my helper, Divina, while she was paid to do many things, I think she served my children out of genuine love for them, treating them as if they were her own children. She dedicated more than 15 years of her life serving my family in Manila, while separated from her own family in Cebu.

In the words of Mother Teresa, “Not all of us can do great things. But we can do small things with great love.”

In the Bible, 1 Corinthians 16:14 tells us to do everything in love. Whenever we do things out of love, with a sincere heart and a pure spirit, we expect nothing in return. Otherwise, it would not be love at all.

Whenever role players, like Javale for the Golden State Warriors and Divina for the Mison household, do things unselfishly and for the sake of love, they accomplish meaningful things with the greatest impact not for themselves, but for others around them.

For questions and comments, please e-mail me at sbmison@gmail.com.

10 reasons finance is going to keep changing

By Barry Ritholtz Bloomberg Opinion

O

ne of the great variables of appearing at investment conferences is the questionand-answer session after your presentation. No matter how well-prepared you may be, it’s hard to anticipate every query.

Such was the case earlier this week, when I was speaking to employees at a scrappy start-up in Pennsylvania (OK, it was Vanguard Group). It was the last question, and it was a gem: “What do you think the financial-services industry will look like in five or 10 years?”

After acknowledging the advantages of being free of the burden of having made any forecasts, I offered up a short and woefully incomplete answer. Today, I want to fill in some holes.

The old expression “The days are long but the decades are short” barely hints at just how fast the world is changing. Facebook Inc. was moving beyond its dorm-room start-up phase back in 2008, and was about to go cash-flow positive. Apple Inc.’s iPhone was almost a year old, having been introduced to mostly lukewarm reviews, and Uber Technologies Inc. was a full year away from being founded. Indeed, the list of items that didn’t exist 10 years ago would also have to include Bitcoin, the iPad, Slack, Instagram, Venmo, Snapchat, Candy

Crush, Square and so much more.

Rather than simply make unfounded guesses, we can borrow from the approach advanced by Philip Tetlock, professor at the University of Pennsylvania and author of Superforecasting: The Art and Science of Prediction” In a nutshell, the method outlined in this invaluable book is: What do we already know, and what can we extrapolate from that knowledge?

My top 10 list would have to include the following: Declining fees: The Vanguard effect is well- known, and the reduction of costs has become a central feature of the money-management industry. This applies to mutual funds, exchange-traded funds, brokerage firms and hedge funds. I have yet to see any signs that this is approaching a bottom anytime soon.

Indexing: The flows don’t lie: Money has continued to move from actively managed funds to passive, and from costly to cheap, especially since the financial crisis.

ETFs: These have been growing steadily, and their gains in many ways parallel those of index funds. Inflows are robust, as is new product development. Don’t expect the rise of the ETFs to slow anytime soon.

The death of alpha: Perhaps nothing has driven so much money to both indexing and ETFs as the inability of the active asset-man-

agement community to consistently deliver on the promise of market outperformance. There have been the slightest signs of improvement lately, and demands to wait until the next crash to see the merits of active. However, these claims are up against an accumulating body of academic research showing most investors should be using low-cost index funds.

Fintech: The advent of new technology specifically geared to make owning, trading and managing money more effective and efficient has led to substantial shifts in the industry. This has affected not only how business is conducted, it has raised the required skills needed for back-office operations.

Behavioral finance: The work begun by the many academics in the world of behavioral economics shows no sign of slowing down: It is being adopted by more practitioners as we learn the impact of our own human foibles on our decision-making, especially when money is involved.

Communications, storytelling: How the industry informs investors and other stakeholders, such as employees, continues to rapidly change. The rise of blogs and social media, the broad adoption of podcasts, the increased use of screen-sharing technology with conference calls all suggest that the ways the industry communicates internally and externally is in the midst of a metamorphosis. Narrative

storytelling is an increasingly large part of that.

Fiduciary rule: The Trump administration may have formally killed the Department of Labor’s fiduciary rule, requiring retirementplan investment advisers to put the interests of clients first, but it might be too late. The rule has been adopted by the advisory side of the business, and the big brokers have also warmed up to it. As I have discussed before, it is probably too late to put this toothpaste back in the tube.

Consolidation: This seems like a sure thing, and I see nothing to stop the so-called roll-up strategies that have led to consolidation among registered investment advisers.

As long as the return on investment remains attractive, it will continue.

Head count: It was no surprise during the financial crisis that employment in the industry fell. Perhaps what is surprising is that, despite the robust market recovery, job reductions continued in 2015, 2016, 2017 and this year.

I am certain there are other factors that will affect how finance looks like in a decade, but this is a good start. The only constant in the industry seems to be change: As long as the potential for doing things faster, cheaper and better is out there, modern finance will be in a constant state of flux. We’re just going to have to live with it.

2nd Front Page BusinessMirror

A12 Monday, June 25, 2018

Key Cabinet officials outline priorities to boost PHL tourism

By Ma. Stella F. Arnaldo

D

@akosistellaBM Special to the BusinessMirror

ECONGESTING the Ninoy Aquino International Airport (Naia) is one of the priorities of the Duterte administration to improve the “customer experience” and support growth in the tourism sector.

12 million

The number of foreign tourists the Philippines is targeting to visit the country by 2022 Bengzon said the DOJ has also committed to shortening the process for visas upon arrival (VUA) for major tourism markets, such as China and India. He explained that at present, the processing for VUAs for the Chinese market is 10 days; the DOJ hopes to shorten this to five days.

The DOJ is also studying the same for the Indian market, he added, although currently, Indian nationals who already hold visas for Australia, Japan the UK, the Schengen countries and the US are allowed to enter the Philippines visa-free for 14 days for tourism purposes.

The DOT is pushing for fewer visa restrictions for these particular markets, because they are fast growing and their citizens usually visit in groups.

“They are the low-hanging fruit for Philippine tourism,” the DOT official noted. For instance, the country receives about 3,000 to 4,000 arrivals from China via cruise ships.

Data from the DOT showed visitor arrivals from China grew a substantial 52.65 percent to 481,218 from January to April 2018. Arrivals from India increased by 20.36 percent to 43,020 in the same period. (See, “Chinese tourists power visitor arrivals,” in the BusinessMirror, June 21, 2018.)

Romulo Puyat said the meeting was successful because all the Cabinet secretaries “thought like

tourists,” thus raising issues that hamper one’s travel experiences and coming up with the solutions that could address those issues.

She explained the meeting was actually the idea of Tugade, when they saw each other at the inauguration of the Mactan International Airport’s new passenger terminal on June 7. “He offered to come to the office, then it snowballed from there, with other Cabinet secretaries expressing their willingness to participate in the meeting.”

Other key priorities raised during the interagency meeting include: ■ “Night rating” 42 domestic airports, 15 of which are already being upgraded with night-landing/ departure facilities (DOTr); ■ Adding 30 more toilet facilities at the passenger terminals in Naia (Miaa); ■ Sending “clarificatory” information Korean and Japanese tourists “at source” about the Philippine Customs’s prohibitions regarding duty-free items being taken out of the airport costing more than P10,000 (DOT); ■ Reiteration by the Miaa of its “noninvasive” approach in checking luggage of passengers by using x-ray machines, and marking only of questionable packages/ luggage; and; ■ Expected arrival of some 1,600 high-definition CCTV cameras, a P5-million project, for deployment throughout the passenger terminals, and expanding the storage capability to 30 days (Miaa).

At present, the DOT already has an ongoing convergence program with the DPWH, where the latter has set aside some P31 billion to construct 1,688 kilometers of roads to connect tourism destinations in the country this year.

This was one of the programs agreed upon during a four-hour meeting of key government agencies on Friday, June 22, at the Department of Tourism (DOT) in Makati City.

In an interview with the BusinessMirror, DOT Spokesman and Undersecretary for Tourism Development Planning Benito C. Bengzon Jr. said: “Among the many things discussed is the need to improve the arrivals and departure experience, so we are now exploring the possibility of improving the facilities at the airport to improve customer experience.”

He said this would involve “putting up additional immigration booths, in which the Department of Transportation [DOTr] has committed, and deploying additional personnel, to which the Department of Justice [DOJ] and Bureau of Immigration [BI] have committed. This is a breakthrough.”

The increase in immigration booths would “almost double” the number of existing immigration counters in the international passenger terminals, and is expected to be completed “in six months,” he added.

The meeting was hosted by Tourism Secretary Bernadette Fatima Romulo Puyat, and was attended by Transportation Secretary Arthur P. Tugade, Justice Secretary Menardo I. Guevarra, Public Works and Highways Secretary Mark A. Villar, Customs Commissioner Isidro S. Lapeña, Manila International Airport Authority (Miaa) head Ed V. Monreal and their supporting officials.

Romulo Puyat said Friday’s meeting “showed how much support the other government agencies are willing to extend to ensure the tourism sector gets the focus it deserves as a genuine engine of economic growth.

“Though this convergence of ideas, priorities and projects, we believe the Duterte administration will be able to build the infrastructure needed to connect key destinations and improve its services that will enhance the foreign and local tourists’ experience, and make it more fun to travel in our country.”

The DOT is targeting to attract 12 million foreign visitors, and increasing domestic tourists to 89.2 million by 2022, or by the last year of President Duterte’s term.

Rate hikes. . .

Eternal Chapels breaks ground in Naga City

Continued from A1

Most recently, international banking giant HSBC said they do not expect the BSP to pull out another rate hike within the year, citing easing inflationary pressures down the line.

However, BMI Research argued that the BSP needs one more rate hike before the year ends.

“We believe that the BSP will likely be compelled to hike interest rates further in the coming months to support the peso, as the US Federal Reserve is likely to continue its interest rate normalization path, which will likely entail one more 25 basis point hike this year and three more in 2019,” BMI Research said.

BMI Research also said the two rate hikes are not enough to dampen inflationary pressures for this year.

“Indeed, core inflation has also been rising steadily to 3.6 percent year-on-year in May, from 3.5 percent year-on-year in April and 3.4 percent year-on-year in March, and we are not convinced that the BSP’s 50-basis point rate hike so far would do enough to dampen aggregate demand,” BMI Research said.

“We have revised up our forecast for headline inflation to average 4.5 percent in 2018, from 4 percent previously, but note that this is contingent upon the BSP continuing its rate hiking cycle,” it added.

BSP officials on Wednesday said inflation expectations were slightly lowered to cover for the slower-than-expected inflation in May—bringing forecasts to 4.5 percent from 4.6 percent for 2018, and 3.3 percent from 3.4 percent for 2019.

The BSP took a firm forward guidance to the table in its last monetary-policy meeting, saying it is prepared to take further action even after having pulled the trigger for two consecutive meetings this year.

In particular, BSP Governor Nestor A. Espenilla Jr. ended his post-policy meeting statement saying: “The BSP is prepared to take further policy action as needed to achieve its price and financial stability objectives.”

The BSP is scheduled to meet again on August 9 for the next monetary-policy setting meeting, the fifth for the year.

www.businessmirror.com.ph

DICT sees P57-billion savings from natl broadband network

By Lorenz S. Marasigan

T

@lorenzmarasigan

HE cost of building a national broadband backbone is expected to go down by as much as three quarters to P20 billion from P77 billion, thanks to a tripartite agreement for the use of existing, but unused infrastructure, a Cabinet official said.

While it is not yet the final cost of the National Broadband Network, Department of Information and Communications Technology (DICT) Acting Secretary Eliseo M. Rio noted his group expects to see savings of as much as P57 billion from building the said Internet backbone.

Rio said this savings will come from the fact that his group now has access to the dark-fiber facilities of National Grid Corp. of the Philippines (NGCP) and National Transmission Corp. (Transco).

“Now that we have secured access to the facilities of NGCP and Transco, a big chunk of the budget will have to be cut. Our estimate is that only P20 billion will be needed for the National Broadband Network,” he said in a chance interview.

The tripartite agreement was signed about two weeks ago.

Under the deal, the government secured the right to use and/or access in certain spare fiber-optic cores (FOCs), vacant lots, tower spaces and related facilities of the NGCP as backbone for the National Broadband Plan (NBP).

Dark fiber refers to spare fiber-optic cables, from which data flows in an out. Combined, two energy companies’ dark-fiber facilities span 6,154 kilometers across Luzon, the Visayas and Mindanao.

Rio noted the government is

still working on the feasibility study of the NBP and will continue to do so until 2018.

“For 2018, we will be finishing the feasibility study for the plan. We can secure budget for the NBP by 2019,” he said.

The NBP will analyze existing and planned government and private-sector deployment, and address supply-and-demand gaps by recommending policy and nonpolicy related actions.

The plan will also provide detailed physical targets and strategies to effect nationwide broadband deployment and widespread use.

After crafting the plan, the government will pursue the construction of a National Broadband Network, which will include a mixture of several Internet connectivity, technologies, such as fixed line and mobile data, among others.

The creation of such a network started during the time of then-President Gloria Macapagal-Arroyo, but was shelved due to corruption issues.

The Philippines is one of the few countries in the region where the government has yet to fully engage in investing in telco infrastructure.

Neighboring countries in the Asean have already started to implement national broadband plans, earmarking billions of dollars to develop a government-owned backbone for the information superhighway.

In Thailand, for example, the government has invested $114 million to improve the Internet service or availability. The fund is part of Bangkok’s economic policy.

Malaysia has now spent a total of $4.5 billion over a 10-year period to lay fiber-optic lines to every home in the country’s urban area. With Sharmaine O. Paden

DepEd to PDEA: Drug test for younger students needs amending law, to cost ₧2.8B

By Claudeth Mocon-Ciriaco Correspondent

T LOCAL government officials of Naga City and executives of the ALC Group of Companies and Eternal Chapels and Mortuary-Naga Inc. spearhead a groundbreaking ceremony on Friday, June 22, at Eternal Gardens in Barangay Balatas, Naga City, marking the company’s first expansion. Present during the groundbreaking are (from left): ALC Group of Companies Project and Development Head Engineer Mariano Hilario, Eternal Chapels Vice President for Finance Marvin C. Timbol, Engr. Don Emmanuel Santy, Naga City Councilor Salvador del Castillo, Eternal Plans Inc. Chairman T. Anthony C. Cabangon, Councilor Ray-An Cydrick Rentoy, Eternal Chapels Vice Chairman Benjamin V. Ramos, Eternal Plans Inc. Vice Chairman and CEO D. Antoinette C. Cabangon-Jacinto, Arch. Lerma Balolong, Naga City Vice Mayor Nelson Legacion, Eternal Chapels Chairman and CEO D. Edgard A. Cabangon, PNP Naga City Director Police Senior Supt. Jonathan O. Panganiban, Eternal Gardens President and Chief Operating Officer Numeriano B. Rodrin, Vice President for Chapel and Mortuary Operations Jaime B. Bangalan, Vice President for Sales and Marketing Jose Antonio V. Rivera, Fr. Rhoeden V. Regalario, Balatas Barangay Chairman Pedro San Juan Jr., Eternal Plans Inc. President and COO Elmer M. Lorica and Eternal Gardens Naga Branch Manager Richard B. Bringas.

T

HE Eternal Chapels and Mortuary-Naga Inc., a provider of complete mortuary and chapel products and services, held its groundbreaking ceremony on Friday, June 22, at Eternal Gardens in Barangay Balatas, Naga City, marking the company’s first expansion.

Naga City Vice Mayor Nelson Legacion led the local government officials who graced the event. They were welcomed by Eternal Chapels executives, headed by Chairman and CEO D. Edgard A. Cabangon.

The event started with a Thanksgiving Mass celebrated by Fr. Rhoeden V. Regalario, assistant parish priest of

the Immaculate Conception Parish, who also officiated the blessing of the groundbreaking site that followed.

In his special message, Legacion thanked the Cabangon family for once again investing in Naga City through the establishment of the Eternal Chapels. He also praised Eternal Gardens, citing it as a “tourist destination” and memorial park in one.

“We in Naga look at Eternal Gardens and see a tourist destination for two reasons. First, this is where Jesse Robredo, our former mayor and also former interior secretary whom we idolized, rests in peace. Second, Eternal Gardens in really beautiful.”

D. Edgard A. Cabangon thanked the city government of Naga for its warm welcome and unwavering support to the company. “I thank the city of Naga for welcoming our company in this city.

Rest assured we will provide the city good service in return for welcoming our company into your city,” he said.

Eternal Chapels opened its first branch at Eternal Gardens Greenhills Park in Cagayan de Oro City in 2017. It is a member of the ALC Group of Companies, founded by the late Ambassador Antonio L. Cabangon Chua, under the Eternal Group that includes Eternal Gardens, Eternal Crematory Corp. and Eternal Plans Inc.

HE Department of Education (DepEd) cautioned the Philippine Drug Enforcement Agency (PDEA) on the cost of its plan to test all students aged 10 and older throughout the country.

More important, Education Secretary Leonor M. Briones said the plan requires amending the Comprehensive Dangerous Drugs Act of 2002, which authorizes drug testing for secondary and tertiarylevel students only.

Briones said students from Grade 4 (the grade level of 10-yearold students) to Grade 12 number at least 14 million.

At P200 per student for the testing fee alone, the budget stands at P2.8 billion.

There are considerable related costs for capacity-building and mobilization for the conduct of the drug testing. Briones has sought a meeting with PDEA Director General Aaron Aquino to share the DepEd’s program.

Briones said it will be good to compare the objectives of the two institutions; the DepEd’s objective is mainly to know the prevalence of drug use among public-school students so it can provide interventions compliant to its mandate, and for health reasons, so proper treat-

ment can be provided In a statement, the DepEd clarified it has an ongoing drug-testing program, which started in School Year 2017-2018 and will be completed in SY 2018-2019.

The program covers all 1,300 officers and personnel at the central office; 3,800 in the regional offices; and 26,000 in school division offices. It also covers a sample population of all teachers, numbering 10,000, and a sample population of all secondary students, numbering 21,000.

The sample population of secondary students and teachers is based on a sampling, designed to yield a 95-percent statistical confidence level of the result.

Before the DepEd drug testing program—for higher year levels only—was implemented, Briones made a presentation of the program before the Cabinet. The President expressed his full support of the program.

Briones noted that when it comes to the younger age range, the President’s directive is to enhance the curriculum on preventive drug education, to which the DepEd is responding.

The drug-testing program is being done pursuant to the authorized drug testing under the Comprehensive Dangerous Drugs Act of 2002, specifically Section 36 (c) See “DepEd,” A2