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Wednesday, June 27, 2018 Vol. 13 No. 256
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‘Economy can hurdle short-term peso woes’
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By Bianca Cuaresma @BcuaresmaBM & Cai U. Ordinario @cuo_bm
HE peso will continue to weaken in the coming months on the back of the country’s widening trade deficit, according to local economists.
This, as a local investment firm said on Tuesday the country should not be worried about the volatility in its local currency, even if the peso has been hitting its lowest value in 12 years. In a commentary about the peso
movement, First Metro Investment Corp. (FMIC)—the investment banking arm of the Metrobank Group—said while the weakness of the peso may seem negative, its impact in both the short and medium term is positive.
The local currency continued to slide further on Tuesday, closing at a 53.47 level, from the previous day’s 53.44 to a dollar. The total traded volume for the day was at $429.82 million, slightly down from Monday’s $449.2 million,
Fake Bt corn seeds to cut production, ISAAA warns
The level at which the peso closed against the dollar on Tuesday
data from the Bankers Association of the Philippines (BAP) show. FMIC’s commentary is a seeming response to the rising concerns of local and international analysts after the peso crossed the 53 territory in mid-June. “If we take a longer view, the peso has actually appreciated by only 4.6 percent from 2004 to June 13, 2018, while our neighbors Indonesia and Vietnam had large See “Economy,” A2
Toast at UN Mission Independence Day Teddy Locsin Jr.
free fire
‘P
agbabagong Ipinaglaban, Alay sa Masaganang Kinabukasan [Our struggle for change, our gift to the future]. I dislike government slogans except for Tourism Secretary Mon Jimenez’s “It’s More Fun in the Philippines” because it happens to be true. Even for Filipinos who left home to find better paying and more intellectually challenging work abroad, it is true: it is more fun in the Philippines when you’ve made enough to go home to replenish your energy before taking up again your work abroad—work beneficial to you, your family and community back home—as it is useful for your host country. We are known for this and we are grateful for our hosts abroad. Continued on A6
‘Resolve issues, conclude R.C.E.P. before trade war’ @alyasjah
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A cornfield in General Santos is seen in this file photo. NONIE REYES
PESO exchange rates n US 53.4050
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By Elijah Felice E. Rosales
HE International Service for the Acquisition of Agri-biotech Applications (ISAAA) has warned that the proliferation of counterfeit Bacillus thuringiensis (Bt) corn seeds in the local market could cut the country’s yellow corn production. Worse, the ISAAA said, the uncontrolled and unregulated spread of fake genetically modified (GM) corn seeds would “jeopardize the longevity and efficiency” of the technology, resulting in lower income for Filipino farmers. “The large decline of biotech maize area in the Philippines due to counterfeit seeds needs immediate attention because, if not attended to, this will jeopardize the longevity and See “Bt corn,” A2
53.47
2016 ejap journalism awards
HE Philippines has urged the so-called big boys, or six major non-Asean economies, in the proposed Regional Comprehensive Economic Partnership to resolve issues that stand in the way of a quick conclusion of the RCEP, saying it’s crucial to settle the trade deal before an actual trade war erupts. Trade Secretary Ramon M. Lopez aired his demand to the big boys of the RCEP, as their ministerial meeting on Sunday in Tokyo comes to a near. Trade ministers of the 16 RCEP negotiating countries will review new submissions and reports from the trade negotiating committee and give instructions on what to do with the proposed agreement for the latter half of the year.
30%
The share in the global GDP accounted for by the 16 RCEP economies, which also account for over a quarter of the world’s exports Members of the Association of Southeast Asian Nations (Asean), Australia, China, India, Japan, New Zealand and South Korea have agreed to conclude the RCEP this year. However, differences between the big boys, or the six non-Asean economies, continue to delay the trade deal from being finalized.
n japan 0.4866 n UK 70.9218 n HK 6.8059 n CHINA 8.1673 n singapore 39.2136 n australia 39.5891 n EU 62.5159 n SAUDI arabia 14.2402
See “RCEP,” A8
Source: BSP (26 June 2018 )
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A2 Wednesday, June 27, 2018
Govt may step in if private funds not enough for LNG
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By Lenie Lectura
@llectura
EPARTMENT of Energy (DOE) officials on Tuesday raised the possibility of government taking the lead in constructing a liquefied natural gas (LNG) facility should efforts to attract private-sector investment not be enough. “That idea came out,” Energy Assistant Secretary Leonido J. Pulido III said. “It was discussed when we had the recent hearing with the Committee on Energy chaired by Senator [Sherwin T.] Gatchalian.” Pulido cited “mature natural gas industries” in which the government had to step in and make the investments critical to the development of their industry because the private sector was unwilling to take on the necessary risk. The committee earlier held a public hearing on the proposed Dow nstream Natural Gas Industr y Development Act (Senate Bill 765) filed by Senator Francis G. Escudero. In covering the downstream part of the industry, the bill focuses on the transmission, distribution and
Economy. . . Continued from A1
cumulative depreciations in excess of 40 percent during the same period. Malaysia also shows net depreciation during the period,” FMIC, in partnership with the University of Asia and the Pacific (UA&P) said in the commentary.
Economists unfazed
Economists gave assurances on Tuesday that while the peso may continue to weaken, it should still not be a cause for “too much worry” since the peso is expected to appreciate toward the end of the year. Ateneo Center for Economic Research and Development (ACERD) Director Alvin P. Ang said their forecast places the peso at an average of 52 to the greenback but this may likely be revised upward after August. “There are always winners and losers in the depreciation of the peso. Exporters, OFWs [overseas Filipino workers], and BPOs [business-process outsourcing] will be the winners while importers are the losers,” Ang said. “The trade deficit will weaken the peso further.” Ang said they will revise their forecast after the release of the second quarter economic data, mainly the National Accounts of the Philippines (NAP), which is set for August 9. Data from the Philippine Statistics Authority (PSA) showed that the country’s trade deficit in the first four months of the year reached $12.2 billion.
commercial supply of natural gas. Gatchalian said the committee would work to broaden the coverage of the bill to cover the midstream part of the industry, touching on topics such as LNG hubs, floating storage and regasification units, among others. This would strengthen the country’s capacity to make use of LNG sourced from other countries that enjoy a bountiful supply of the fuel. “The best way to develop the potential of natural gas is to craft a strong legal framework that will touch on all important points of the industry as a whole,” he said. The DOE official acknowledged the fact that financing a capitalintensive project such as LNG would be “critical.” “We leave that to the wisdom of the Legislative. In April the country’s trade deficit reached $3.62 billion, higher than the $1.55-billion deficit in April 2017. “For the first four months, this amounted to $12.2 billion, which if multiplied by three [simple annualization] yields $36.6 billion—over 20 percent higher than a year ago,” FMIC and the UA&P said. “However, this should not be viewed too badly as imports of capital goods [additions to productive capacity] have shown robust growth,” they added.
54 to the dollar
Meanwhile, Emilio S. Neri Jr., lead economist of the Bank of the Philippine Islands (BPI), said he expects the peso to weaken to around 54 to the dollar by the third quarter. However, Neri said this will appreciate to 53 or lower to the dollar by year-end, depending on global oil prices and how markets react to trade war concerns. “It’s a concern but should not be a cause for much worry. Yearto-date 6-percent appreciation is still considered normal under an environment of rising global interest rates,” Neri said. “It’s really higher global oil prices, problems with domestic food supply, and the transitory impact of TRAIN which have been the major drivers of higher inflation recently,” he added. UnionBank Chief Economist Ruben Carlo Asuncion said the depreciation of the peso will continue, mainly because of worries surrounding the possible trade war between the US and China.
Of course, we have some ideas but that position paper will have to be submitted to the Senate.” Energy Undersecretary Felix William B. Fuentebella said that two units of the Philippine National Oil Co. (PNOC) could be tapped to actually construct and operate an LNG facility. The law does not allow the government to be involved in the power generation sector. “ T here are t wo schools of thought with regards to that. There are those of the opinion that government cannot totally come in under the Epira [Electric Power Industry Reform Act] but there’s also that school of thought that...the Epira...only talks about Napocor [National Power Corp.] not going into power generation,” Fuentebella said. “ There is a Department of Justice opinion, however, that PNOC-RC (Renewables Corp.) can come in because it is a renewable corporation and corporate arm of the DOE and also that PNOC-EC (Exploration Corp.) can have that capability for power generation. On any eventuality, we can pursue any of these options so that we can fulfill our mandate to provide quality, affordable and secure supply of energy,” he added.
The DOE earlier issued rules governing the Philippines Downstream Natural Gas Industry. Interested LNG investors have long waited for this policy meant to guide them in pursuing this capitalintensive project. Department Circular 2017-110012 also outlines the issuance of permit for the construction, expansion, rehabilitation, modification, operation and maintenance of downstream natural gas facilities. About 10 firms have signified interest to the DOE to pursue the construction of LNG facilities. The DOE is bent on completing the planned LNG project before the expected depletion of the Malampaya offshore gas find near Palawan Island in 2024. The Malampaya project currently supplies fuel to five natural gas plants with a total installed capacity of 3,211 MW. This amounts to 21.33 percent of the installed capacity of the Luzon grid and almost 15 percent of the country’s total installed capacity. LNG is natural gas that has been converted into a liquid state for easier storage and transportation. Upon reaching its destination, LNG is regasified so it can be distributed through pipelines as natural gas.
Nonetheless, Asuncion said the country’s strong macroeconomic fundamentals will allow the Philippines to be resilient to these kinds of volatilities in the global market.
FMIC continued to argue that the peso depreciation has positive effects for the local economy, including a weaker currency’s ability to discourage imports and produce more exports, thus, reducing the trade deficits over the medium term. “And because of the increase in production locally, it will boost employ ment generation,” the firm said. FMIC also said the peso weakness will boost the peso income of Filipinos living off migrant workers’ remittances. “There are about 10 million OFWs [overseas Filipino workers], and with an average family size of 4.6, the peso slide benefits some 46 million Filipinos,” FMIC said. “Add to that the number of families dependent on exports, which account for 30 percent of GDP [gross domestic product], plus those that supply raw materials to exporters, we can easily conclude that a vast majority of Filipino families benefit from the higher peso-dollar exchange rate,” it added.
The negative view
Local economist Calixto V. Chikiamco has a different view. He said the peso decline will translate to higher costs of water, oil and electricity, which will experience forex adjustments due to a weaker peso. Chikiamco said while the weak peso was expected to benefit exporters, this has not been able to prevent the country’s balance of trade (BOT) deficit from widening. He added that the Central Bank ’s targets for the balance of payments deficit have been breached and the current accounts (CA) and balance of payments (BOP) deficits are also widening. “The peso will continue to fall if the US Fed keeps raising interest rates as expected,” Chikiamco said. “We should increase FDI in large numbers to finance the growing CA, BOT and BOP deficits.” Chikiamco said, however, this is difficult to do because foreign investors are concerned about the uncertainties over TRAIN 2, as well as federalism and political noise. By political noise, he means the President’s declaration of Boracay as a land reform area; the ouster of former Chief Justice Maria Lourdes A. Sereno; and “alleged abuses of human rights.”
The Central Bank’s view
Earlier this month, Bangko Sentral ng Pilipinas (BSP) Governor Nestor A. Espenilla Jr. said the country’s central monetary authority is “very comfortable” with the local currency’s level, as things are “just normalizing” with the peso. In his most recent statement on monetary policy, however, Espenilla took a stronger tone, saying the Monetary Board “emphasized the BSP’s continued vigilance against developments, including excessive peso volatility, that could affect the outlook for inflation,” adding that they are prepared to take further policy action as needed to achieve price and financial stability objectives. This is the first time this year that Espenilla mentioned something about the local currency in his post-monetary policy meeting statement.
Alarm bells
In a statement, FMIC and UA&P said in June 11 the peso breached the 53 level and two days after, the peso further slid by 5.8 percent. With this, FMIC and UA&P said foreign analysts have already raised alarm bells. But overall, the weak peso’s impact will be net positive for the country. FMIC and UA&P estimated that a 10-percent peso depreciation could lead to a 0.5 percent, while a 6-percent depreciation could lead to 0.3- percent increase in inflation. “Consumers of imported goods are mostly those that belong to higher-income classes,” FMIC and UA&P said. “While the current weakness of the peso might seem negative, its impact in both the short and medium term is net positive.”
US economy factor
Meanwhile, FMIC and UA&P said that apart from the selling off of peso-denominated stock and bond investments by foreigners, the weak peso was being caused by the strengthening of the US economy. FMIC and UA&P said the International Monetary Fund (IMF) projects that the US economy will grow 2.9 percent this year from 2.3 percent last year.
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SRP on farm produce only covers wet markets–DA
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HE Department of Agriculture (DA) explained on Tuesday that the implementation of a suggested retail price (SRP) scheme on certain farm commodities only applies to wet markets in Metro Manila. In a Facebook post, Agriculture Secretary Emmanuel F. Piñol issued a “clarificatory” announcement that the SRP, which the DA started to impose on June 25, only covers wet and public markets in Metro Manila. “Posh supermarkets like SM, Rustan’s or S&R and similar establishments are not covered by SRP,” Piñol said in his official Facebook page on June 26. “It is assumed that if a consumer opts to buy these basic items in an airconditioned supermarket, he or she is willing to pay a higher price for the comforts of a classy market,” Piñol added. The DA implemented an SRP on bangus, tilapia, galunggong, rice, onion and garlic “to protect ordinary consumers from very high and unreasonable prices,” according to Piñol. “Let this be an official clarificatory announcement that the SRP only applies to the eight items sold in wet and public markets because the intention of government is to protect the poor,”he said. Piñol signed on Monday an administrative circular that implemented the SRP on certain farm commodities being sold in Metro Manila. The farm products covered by the circular are regular-milled rice at P39 per kilogram; milkfish (medium to big size, two to five pieces) at P150 per kg; tilapia (medium size, six pieces) at P100 per kg; galunggong (medium size; 11 to 20 pieces) at P140 per kg; red onion at P95 per kg; white onion at P75 per kg; garlic (imported) at P70 per kg; and garlic (local) at P120 per kilo. The agriculture chief said the DA, in coordination with the Departments of Trade and Industry and the Interior and Local Government, will constantly monitor the implementation of the SRP on farm products. The implementation was based on the provisions of Republic Act 7581, also known as the Price Act, according to
Bt corn. . .
Continued from A1
efficiency of the technology that will weigh heavily on farmer profitability and economic benefits,” the ISAAA said in its annual report on the Global Status of Commercialized Biotech released on June 26. In its report, titled “Biotech Crop Adoption Surges as Economic Benefits Accumulate in 22 Years,” the ISAAA said the total hectarage planted with biotech maize in the Philippines declined by 21 percent to 642,000 hectares, from 812,000 hectares last year. This is despite a 10.42-percent expansion in the country’s total corn area in 2017, driven by favorable weather conditions. Total area planted with corn last year reached 1.378 million hectares, from the 1.248 million hectares recorded in 2016. The reduction in the area planted with authorized Bt corn seeds resulted in an 18.6-percentage point decline in the adoption rate of the technology to 46.5 percent in 2017, from 65.1 percent in 2016. “Biotech maize area and adoption rate decreased because according to industry analysts, there was a proliferation of counterfeit biotech maize seeds,” ISAAA said. Seed industry stakeholders estimate that about 10 percent of the Bt corn seeds sold in the domestic market are counterfeit. Counterfeit Bt corn seeds are seeds that contain traits belonging to registered and regulated multinational firms but are produced and sold by unauthorized people. ISAAA explained that they only took into account in their study the regulated and authorized Bt maize seeds sold in the Philippine market. Due to the reduction of area planted with Bt maize, the Philippines fell to 13th place—from 12th place in 2016—among countries with the largest hectarage for commercialized biotech crop. ISAAA Global Knowledge Center on Crop Biotechnology Director Rhodora R. Aldemita told the BusinessMirror that the area planted with Bt maize could shrink further if the issue on
the administrative circular. “Pursuant to RA 7581, Section 10, Powers and Responsibilities of Implementing Agencies, Item no. 5, states that the head of the implementing agency may from time to time issue suggested reasonable retail prices for any or all basic necessities and prime commodities under his jurisdiction,” the document read. The farm commodities covered by the administrative circular should not be sold by 10 percent higher than the SRPs as this would be investigated for profiteering, according to the Price Act. Profiteering is considered an illegal act of price manipulation under the law. Under the Price Act, profiteering is defined as “the sale or offering for sale of any basic necessity or prime commodity at a price grossly in excess of its true worth.” “There shall be prima facie evidence of profiteering whenever a basic necessity or prime commodity being sold: (a) has no price tag; (b) is misrepresented as to its weight or measurement; (c) is adulterated or diluted; or (d) whenever a person raises the price of any basic necessity or prime commodity he sells or offers for sale to the general public by more than ten percent (10 percent) of its price in the immediately preceding month: Provided, That, in the case of agricultural crops, fresh fish, fresh marine products, and other seasonal products covered by this Act and as determined by the implementing agency, the prima facie provisions shall not apply,” the law read. Under the Price Act, the agriculture chief is vested with the power to conduct investigations of any violations of the law concerning the commodities under his jurisdiction. More so, the agriculture chief could impose administrative fines “in such amount as he may deem reasonable, which shall in no case be less than P1,000 nor more than P1 million.” Furthermore, the law stipulates that violations involving basic necessities, which include farm commodities, “shall be deemed more serious” than those committed for prime commodities.
Jasper Emmanuel Y. Arcalas
counterfeit seeds it not addressed immediately. This could lead to farmers earning less than what can they achieve with branded and authorized Bt maize seeds, Aldemita explained. “The farmers will also suffer because in the long run they will see that they are losing money,” she said. Aldemita said the country’s yellow corn output last year could have grown even beyond if there were no counterfeit seeds sold in the market and planted by the farmers. “[The counterfeit seeds] have reduced the area but the productivity has increased. That means if we increased the area much more—if the 10 percent was not counterfeit—then we could have achieved higher production,” she said. At least 80 percent of the country’s yellow corn production are GM. Coalition for Agriculture Modernization of the Philippines Inc. Benigno D. Peczon echoed Aldemita’s statement, adding that the proliferation of fake Bt corn seeds puts the technology beyond the crop at risk. Pecson explained that using fake Bt corn seeds will give corn borers a chance to grow immune to standard Bt corn, likening the effect to antibiotic immunity. “What happens is the bacteria becomes immune to it, the same thing with the borers because of the halfway measures of the seeds,” he told the BusinessMirror. “Those who use the authorized corn seeds would still earn profit. But those who will gamble and will use the fake corn [seeds], they may or may not get the good results but the danger is for everybody,” he added. The ISAAA study showed that the farm-level economic benefit of planting Bt corn from 2003 to 2006 was estimated to have reached $724 million. In 2016 alone, the net national impact of Bt corn on farm income was estimated at $82 million. More than 470,500 Bt corn farmers and their families in the past 14 years have benefited from the economic gains provided by the commercialization of Bt maize in the country, according to ISAAA. Jenn Kiana Louise N.
Cardeno and Monique Danielle A. Fernando with additional reporting from Jasper Emmanuel Y. Arcalas
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Duterte calls God ‘stupid,’ faces uproar in Catholic Philippines
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residen t Duter te has sparked an uproar in Asia’s biggest Catholic nation after he called God “stupid,” prompting a rebuke from church officials who have been instrumental in toppling past leaders. In an expletive-laden speech last Friday before government officials, Duterte expressed disbelief in the Catholic story of creation and described the teaching that humans have already sinned at birth as a “very stupid proposition.” “Who is this stupid God? He’s really stupid. You created something perfect, and then you think of an event that would tempt and destroy the quality of your work,” Duterte said. The comment risks undermining Duterte’s popularity in a country where Catholics make up 80 percent of the population, and 10 percent belong to other Christian denominations. So far, his support has stayed strong despite regular vulgar insults against women, gays and other groups. It’s not the first time he’s criticized the church—when he was a presidential candidate, Duterte cursed the Pope for supposedly causing traffic jams during his 2015 visit to the Philippines. The Philippine leader justified this remark in a separate speech on Monday, saying it was borne out of
his frustration at religious workers criticizing his government, particularly an Australian missionary who he wants deported. His spokesman, Harry L. Roque Jr., said Duterte was expressing his anger as a victim of sexual abuse by a priest when he was young.
Church dialog
The Duterte administration has formed a three-man committee to engage with the Catholic Church and other religious groups to help reduce tension, Roque said in a televised briefing in Manila. “I know there’s a separation of church and state, but the president wants to open the dialog with the Catholic Church,” Roque said. The Catholic Bishops Conference of the Philippines, which was instrumental in organizing the protests that toppled late dictator Ferdinand E. Marcos Sr., issued a statement on Monday defending church teachings and calling out Duterte for “attacking Christian beliefs.” Sen. Antonio F. Trillanes IV, a senator and one of Duterte’s most vocal critics, called the Philippine leader “one evil man.” “My God is real, and He is alive,” said Emmanuel Joel J. Villanueva, a senator and son of a Christian evangelist. “We pray for the president’s enlightenment.” Bloomberg News
Editor: Vittorio V. Vitug • Wednesday, June 27, 2018 A3
Village chiefs told: Enforce the law or face dismissal By Manuel T. Cayon
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@awimailbox Mindanao Bureau Chief
AVAO CITY—President Duterte on Monday urged barangay chairmen across the country to secure their own villages from street prowlers, or face sanction, or even dismissal, if street crimes continue to soar in their respective jurisdictions. Duterte administered the oath of officeofthenewlyelectedbarangayofficials in Northern Mindanao at the Limketkai AtriuminCagayandeOroCity,andwhere he admonished that “as mayor, governor or presidentofyourrespectivebarangays, do what is your duty.” “You have to protect the people, you’re barangay captains, and you must see to it that the nation is preserved,” he said, even as the President asked the audience to join his administration’s drive to eliminate street crimes and maintain peace and order.
A news statement issued by the Presidential Communications Office after the event said Duterte instructed the barangay officials how
to engage and treat the tambay or street loiterers. “We call them istambay. That’s the word. That is my order. And you continue to frisk people who are there in streets and that is legal. Until such time, that is my order,” the President said. Duterte said he was ordering them and the other authorities to frisk loiterers and not to arrest them, and for minors caught loitering to be taken only to the custody of the social welfare department “for their protection and not for arrest.” He said the act of frisking loiterers and taking into custody of minors “are legal unless the Supreme Court declares otherwise.” Duterte said the barangay officials could always invoke police power of the state to establish order and safety, which, he said, would not be subject
You, the barangay captain, do what is your duty. You are more than just a policeman because you are mayors. You are the governors and the president of your barangay.”—Duterte
anymore to legislation. He cited a recent Social Weather Stations (SWS) survey which shows Filipino families “have become victims of street crimes, including theft and robbery, carnapping, sexual harassment, and physical violence.” “Fear of burglary, fear of unsafe streets and presence of drug addicts. That’s what residents are afraid of here,” Duterte said. He added that as village chiefs, “it is your duty to protect the welfare of the public and that the local government is mandated to enforce existing national laws.” “You, the barangay captain, do what is your duty. You are more than just a policeman because you are mayors. You are the governors and the president of your barangay,” the President said. He warned, though, that if records still show high crime rates and drugrelated incidents in their respective barangays, the chieftains would be charged with neglect of duty. “And the next time is gross neglect and I will simply, upon the recommendation, upon investigation, recommendation of General [Eduardo M.] Año, if he says that you should go, I will dismiss you,” Duterte said.
DILG, DND set probe of PNP, Army ‘misencounter’ in Samar
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he Departments of the Interior and Local Government (DILG) and National Defense (DND) will conduct a joint inquiry regarding the reported “misencounter” between Army troopers and police operatives in Samar province on Monday morning. “This is a very unfortunate event that nobody wanted to happen. Together with the DND, we will form a board of inquiry to investigate the incident in order to determine the cause of this unfortunate event and draw up measures to prevent the same from happening again,” DILG Officer in Charge Secretary Eduardo M. Año said in a news statement issued on Tuesday. Año said the board will also seek answers and summon concerned officials on why prior communication and coordination were not made between local military and police forces in the conduct of combat operations in the area. “There are existing protocols between the Philippine National Police [PNP] and the Armed Forces of the
Philippines in field operations. We will try to determine why these were not followed, and if these need review and modifications,” he said. In the morning of June 25, elements of the Philippine Army’s 87th Infantry Battalion reportedly had a misencounter with members of the 805th Mobile Company of the Regional Mobile Force Battalion 8, as both groups were conducting simultaneous combat operations in Santa Rita and Villareal towns. Six police officers were killed, while nine others were wounded in the incident. “We are really very saddened by this incident, as both troops were just doing their jobs of going against lawless elements and protecting the community,” Año said. The DILG chief also expressed his condolences to the bereaved families of the slain cops as he assured them of the immediate release of financial assistance due them under the Comprehensive Social Benefits Program.
Red-tide warning
Based on the latest laboratory findings of the Bureau of Fisheries and Aquatic Resources and local government units, shellfishes collected in the coastal waters of Biliran province; coastal waters of Leyte in Leyte; Lianga Bay in Surigao del Sur; coastal waters of Dauis and Tagbilaran City in Bohol; and Honda Bay, Puerto Princesa City, in Palawan, are still positive for paralytic shellfish poison that is beyond the regulatory limit. Moreover, Puerto Princesa Bay in Puerto Princesa City, Palawan, is now also positive for red-tide toxin. All types of shellfish and acetes or alamang gathered from the area shown above are not safe for human consumption. Fish, squids, shrimps and crabs are safe for human consumption provided that they are fresh and washed thoroughly, and internal organs, such as gills and intestines, are removed before cooking.
CA upholds dismissal of 2 DSWD officials LLDA vows renewed trash, squatter for 2009 release of Crisologo’s PDAF funds cleanup on Laguna de Bay shore By Joel R. San Juan @jrsanjuan1573
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HE Court of Appeals (CA) has recommended the dismissal from the service of two officials of the Department of Social Welfare and Development (DSWD) for their involvement in the release and utilization of the P10 million Priority Development Assistance Fund (PDAF), also known as pork barrel funds, of Quezon City First District Rep. Vincent P. Crisologo in 2009. In a 20-page decision penned by Associate Justice Ma. Luisa Quijano-Padilla, the CA’s Special Fifth Division modified the decision issued by the Office of the Ombudsman on June 19, 2017, which found appellants Mateo Montano and Pacita Sarino guilty of grave misconduct, serious dishonesty and conduct prejudicial to the best interest of the service. Instead, the appellate court found Montano and Sarino guilty of gross neglect of duty and conduct prejudicial to the best interest of the service, since there was no showing that they benefitted from their “irresponsible” acts. “Accordingly, they are dismissed from
government service with all the accessory penalties of cancellation of eligibility, forfeiture of leave credits and retirement benefits, and disqualification for reemployment in the government service,” the CA ruled. Montano was DSWD Undersecretary for General Administration and Support Services Group, while Sarino served as the assistant bureau director of the Protective Services Bureau of the DSWD. The CA did not give weight to claim of the petitioners that the release of Crisologo’s PDAF to Kalookan Assistance Council Inc. was compliant with the internal rules of the DSWD and that the project submitted by Kaci received favorable reviews from the DSWD offices concerned. Contrary to the claim of Montano and Sarino, the CA noted that three officials of the DSWD actually did not give a favorable recommendation for the proposed projects of Kaci, such as medical/ hospitalization assistance, transportation, calamity, death, burial, educational expenses, small-scale livelihood, sociocultural expenses, small-scale infrastructure assistance and values training.
“Contrary to petitioners’ argument that the procedure they followed was the prevailing practice at that time, the approval of the disbursement of funds in favor of Kaci violated Section 75 of the General Appropriations Act…,” the CA ruled. The said provision declared that it is the government’s policy not to allow nongovernment organizations to participate in the implementation of any program or project of the national and local government units funds earlier released to them have been fully liquidated. In the case of Kaci, the CA noted that the group had existing unliquidated cash advances at the time it proposed the projects. “Thus, it was not qualified for fund transfer. Despite this fact, petitioners, approved the disbursement of funds in favor of Kaci. Furthermore, the CA said the petitioners failed to show proof that Kaci underwent the procedure for availment, release and utilization of funds under Commission on Audit Circular 2007-001. Concurring with the ruling were Associate Justices Ramon Cruz and Amy Lazaro-Javier.
By Jonathan L. Mayuga
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@jonlmayuga
nything unpleasant to the eye will be removed from the shoreline of Laguna de Bay, particularly garbage heaps and illegal structures, including shanties that serve as homes to thousands of squatters, an official of the Laguna Lake Development Authority (LLDA) said. Generoso M. Dungo, acting assistant general manager and head of the Shoreland Management Office of the LLDA, said the clearing of the shores of Laguna de Bay started last year with LLDA teams conducting surveys and investigations around the lake as part of the Duterte administration’s development and rehabilitation effort of the lake. The rehabilitation of Laguna de Bay, also the country’s largest aquaculture hub, was ordered by President Duterte upon assuming the presidency in 2016. The marching order was to clear Laguna de Bay of illegal structures, including fish cages and fish pens that choke the 90,000-hectare lake, in effect, reducing the traditional fishing grounds of small fishermen. About 13,000 hectares of the water body is occupied by large fish cages and fish pens operated mostly by agri-fishery companies and indi-
viduals. The lake’s shores are also home to tens of thousands of fishermen and informal settlers. On Tuesday the LLDA highlighted anew its ongoing effort to develop and rehabilitate the Laguna de Bay, ordering the closure and subsequent takeover of reclaimed areas from two companies in Taguig City. A cease-and-desist order was earlier issued against the companies for illegal land reclamation and garbage-dumping activities in Taguig area. In a news statement, the LLDA said the cease-and-desist order was issued by LLDA General Manager Joey Medina against IPM Construction and Development Corp. and Level up Construction on June 14 to stop the dumpand-fill activities of the two firms. Charges were also filed against the two companies for violation of Republic Act 4850, the law that created the LLDA, in connection with the illegal land-reclamation activities. Separate charges were also filed for violation of Republic Act 9003 and Republic Act 9275 or the Clean Water Act. IPM is accused of illegal land-reclamation activities over a 37-hectare portion of the lake, while Level Up is charged with the same offense covering a 10-hectare in the same area.
A4 Wednesday, June 27, 2018 • Editor: Vittorio V. Vitug
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Lawmaker seeks rent-hike Palace brushes off senator’s freeze amid inflation rise call to probe ‘BBB’ program
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By Jovee Marie N. dela Cruz
@joveemarie
mid the increasing prices of basic commodities and services allegedly due to the implementation of the Tax Reform for Acceleration and Inclusion law, a lawmaker on Tuesday called on the government to freeze residential rent rates for poor and middle-income Filipino families. Assistant Majority Leader Bernadette Herrera-Dy of Bagong Henerasyon party-list said the Housing and Urban Development Coordinating Council (HUDCC) should also now consider freezing rental rates following the impact of the rising inflation, high fuel prices and peso depreciation against the US dollar. “Consistent with the Rent Control Act of 2009 [RA 9653] which delegated to the HUDCC the setting and coverage of increases in residential rent rates, I now appeal to the HUDCC to consider the hardships of the Filipino at this time of rising inflation, high fuel prices and peso depreciation against the US dollar,” the lawmaker said. “Most ideal is that the residential rent rates of all kinds of units of the poor and middle class are frozen at current levels because any rent hikes at this time will just inflict more suffering,” Herrera-Dy said. However, the lawmaker said if the HUDCC determine that rent rate hikes are necessary, the rent increase should not be
more than the 2018 annual inflation rate and should within allowable rent rate hikes. “If statistical analysis, field reports and management decision of the HUDCC determine that rent rate hikes are necessary, the rate hike should not be more than the 2018 annual inflation rate based on 2012 prices as determined by the Philippine Statistics Authority [PSA],” Herrera-Dy said. The lawmaker, citing the latest information from the government economic experts and officials, said inflation this year could be 4 percent to 5 percent. In the past, she added, the HUDDCC stratified the allowable rent rate hikes, but the coverage back then was limited to these monthly rent brackets: up to P3,999 (4-percent allowable rent hike) and P4,000 to P10,000 (7-percent allowable rent hike). Herrera-Dy, likewise, proposed to HUDCC three tiers of rent bracketing and corresponding allowable rent increase applicable nationwide: Up to P4,000 per month rent (3-percent maximum allowable rent increase); P4,001 to
P10,000 per month rent (4-percent maximum allowablerentincrease);andP10,000toP20,000 per month rent (5-percent maximum allowable rent increase). “This I believe is fair to most Filipino families who rent apartments and other residential units, but still allows landlords to recover from the cost of inflation,” she said. “Here in Quezon City, the usual one-room or studio apartments with bathroom go for P10,000 and below, but for two or more bedrooms fit for the usual Filipino family of five to six members, monthly rentals are P11,000 to P20,000. An Internet scan of apartments available on a popular web site confirms this,” she added. The HUDCC has extended the rent control regulation for residential units occupied by lowincomebracketsforonlytwoyearsuntilDecember 2017 to protect poor and middle-income families from unreasonable rent increases. The rent control regulation was extended pursuant to the authority given to the HUDCC under Republic Act 9653, or the Rent Control Act of 2009, to determine whether to continue or discontinue the regulation based on a study of its implementation and to adjust the yearly rate increase accordingly. Herrera-Dy said a study undertaken by the Philippine Statistical Research and Training Institute of the PSA found that 82 percent of the renters in the country are renting at less than P4,000 per month. Based on the requirement of the rent control law to consider inflation rate in determining any adjustment of the rental rates, she said that the average inflation rate in 2014 is at 4.1 percent, which was used as basis for the annual increase in rent for families renting at below P4,000 per month.
By Bernadette D. Nicolas
P
resident Duterte wants to fast-track the implementation of infrastructure projects under his administration’s “Build, Build, Build” (BBB) program, particularly in the Autonomous Region in Muslim Mindanao (ARMM), the poorest region in the Philippines. Presidential Spokesman Harry L. Roque Jr. said in a briefing on Tuesday in Davao that the Chief Executive is “never contented” with the pace of implementation of BBB projects, especially in the provinces. “He wants it faster, and he wants the projects, the BBB projects in the provinces implemented faster,” Roque said. The Palace official also said Socioeconomic Planning Secretary Ernesto M. Pernia mentioned that there are three regions where the implementation should be fast-tracked. One of these is the ARMM. “I guess what the President is saying is ‘I am growing impatient. I want to see actual implementation,’” Roque said in a mix of English and Filipino. “So far, there are many projects in the drawing board. He wants to see more groundbreaking and he wants to see these projects implemented, particularly outside of Metropolitan Manila.” But Roque assured that the President will remind Cabinet members to speed up the implementation of BBB projects. “There is nothing wrong with the attitude of the President. He [just] wants to make sure that everyone will do their job under the BBB,” he said. Asked about the Palace’s reaction to the Senate’s plan to conduct an inquiry into the funding sources for BBB projects, Roque said he is wondering why there is a need for the lawmakers to look into the program. Last week Sen. Sherwin T. Gatchalian, Senate economic affairs committee chairman, filed a resolution to conduct hearings on BBB program funding
DOLE pitches ₧10,800 aid for minimum wage earners
@BNicolasBM
By Samuel P. Medenilla
@sam_medenilla
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HE Department of Labor and Employment (DOLE) is proposing a P10,800 cash subsidy for 4.1 million minimum-wage earners spread out over three years. Labor Secretary Silvestre H. Bello III said they will be submitting to President Duterte the proposed subsidy program, after coordinating with the Department of Social Welfare and Development and the Department of Finance to determine its feasibility. For this year, Bello said they are recommending a P200 monthly cash subsidy for minimumwage earners. “But this will be given one time so it could make an impact on workers—so it will be P2,400 this year,” Bello told reporters on Tuesday. “This will be nationwide and shouldered by the government,” he added. Bello said the monthly subsidy will be raised to P300 on 2019 and P400 on 2020. “This will of course be subject to the approval of Malacañang,” Bello said. He said they hope Duterte will act on their proposal before his third State of the Nation Address (Sona). “But maybe the President could also announce it during the Sona,” Bello said. Bello explained the subsidy scheme was based on the appeal of the Trade Union Congress of the Philippines to Duterte to provide minimum-wage earners with a monthly subsidy of P500 to help them cope with the rising cost of living. While the DOLE supported the initiative, the National Economic and Development Authority rejected the proposal since it will cost the government billions of pesos.
sources, saying there a review is needed to closely monitor the debt obligations and modes of financing incurred and adopted by the Duterte administration for the program and to ensure transparency and accountability in the use of loans and other financing methods utilized by the government. The resolution is expected to be referred to his committee soon as Congress reconvenes on July 23. “Well, first of all, the [BBB program] is already included in the 2018 national budget, so I was wondering why there are members of Congress asking how will the BBB projects will be funded,” Roque said. “That is why the 2018 budget is an all-time high, since it includes the majority of BBB projects. Although we have those foreign-assisted or foreignfunded projects, I think an overwhelming number will still be paid for using taxpayers’ money, that is why the Tax Reform for Acceleration and Inclusion law is important,” the lawmaker said. According to Gatchalian, 40 out of 75 approved infrastructure projects as of July 2017 will be funded through official development assistance, which comprises the bulk of expenditures amounting to P1.006 trillion. This was noted by the senator as the national government’s total outstanding debt as of December 2017 already added up to P6.65 trillion, while around P329.05 billion was allocated for debt servicing in the 2018 General Appropriations Act. This month, the Bangko Sentral ng Pilipinas also reported that the country’s external debt-to-gross domestic product ratio was 23.3 percent in 2017—a five-year low and a 5.6-percent decrease, from the 28.9-percent ratio recorded in 2013. Under the BBB program, 75 infrastructure projects are expected to be rolled out with a total budget of around P8 trillion to P9 trillion to usher in what the Duterte administratin calls the “golden age of infrastructure.”
Air Force gets two new NC212i light lift planes By Rene Acosta
@reneacostaBM
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efense and military officials accepted on Tuesday two brand-new NC212i planes that were ordered from Indonesia. The two light lift fixed-wing aircraft, acquired through the Armed Forces of the Philippines modernization program, were formally received and blessed on Tuesday in Clark Air Base, Pampanga. “The turnover of these two light lift fixed-wing aircraft signify the modernization of the Armed Forces of the Philippines to a level where it can more effectively and fully perform its constitutional mandate to uphold the sovereignty and preserve the patrimony of our country,” Defense Secretary Delfin N. Lorenzana said during the ceremony. “These aircraft in front of us will offer our military, the Air Force in particular, a long list of contributions in the areas of internal security operations, territorial defense and national development,” he added. The two brand-new NC212i were delivered by Indonesia’s state-owned aircraft manufacturer PT Dirgantara Indonesia (PT DI), which won the bidding for the project in 2014. The planes were supposed to have been delivered as early as 2015 or even last year, but the crafts encountered hitches, one of which was the manufacturer’s issue with its previous autopilot supplier. The arrival of the two NC212i boosted the Air Force’s inventory of medium and light-lift aircraft, as it already has three C-295M planes that were manufactured by Spain’s Airbus Defense and Space. The NC212i aircraft can be used for maritime patrol, passenger and troop transport, cargo/logistic transport, search and rescue, paratroop dropping and medical evacuation. Compared to the previous NC212, also built by PT DI, the aircraft can carry 28 passengers and it has a digital avionic and next generation autopilot. The aircraft is also capable of taking off and landing on unpaved runway.
Group slams unregulated tuna fishing in General Santos City
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group of tuna fishermen in General Santos City has decried the local government’s alleged failure to step up efforts to curb illegal, unreported and unregulated (IUU) fishing that threaten the local tuna-fishing industry. Jake Fajurano, owner of the Melvi Fishing Industry and an officer of the Alliance of Tuna Handliners, said here that the local government of General Santos City had allegedly failed to implement the fishing regulation policy.
According to Fajurano, the local government failed to implement Executive Order 154 signed by former President Benigno S. Aquino III in December 2013 that calls for the implementation of a national plan of action to prevent, deter and eliminate IUU, fishing in the country. General Santos City Mayor Ronnel C. Rivera was criticized by the group of handline tuna fishers for ignoring the EO, which, they said embolden tuna industry players not to declare
the exact number of tonnage of fish catch. “The Maritime Industry Authority and Bureau of Fisheries and Aquatic Resources [BFAR] are [also] not doing their job because they cannot even regulate the tuna fishing owners to report and scale their tuna fish catch at the GenSan Fishing Port Development Authority for recording and that is why both government offices have no idea of how much fish catch of these handline tuna fishing owners they have,”Fajurano said. Gerry N. Adlaw
The World BusinessMirror
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US oil premium rises on shortage as Opec uncertainty persists
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nited States oil for near-term delivery rose to the highest level since 2014 versus cargoes for later on speculation that America faces a supply crunch while uncertainty lingered over the Organization of Petroleum Exporting Countries’ (Opec) planned output boost. August futures in New York were about a $1 higher than the September contract, in a market structure known as backwardation that signals a shortage. Inventories at the key US storage hub in Cushing, Oklahoma, are seen sliding for a sixth week, and the nationwide hoard is forecast to have fallen for a third week. A Canadian oil-sands outage could lead to a North American crunch for all of July and drain stockpiles, according to Goldman Sachs Group Inc. Investor focus is shifting to the inventories as Goldman predicts the decline in Cushing will have a stronger impact on the oil market than the ambiguous deal between Opec and its allies to raise output. The group’s plan to lift production “ may be a little short” of what’s required to prevent a price spike, US Energy Secretary Rick Perry said. Canada’s oil-sands outage is “ likely to drive some tightness in the North American market,” sa id Da n ie l Hy nes, a sen ior commodities strategist at Australia & New Zealand Banking Group Ltd. “I would ex pect the back wardation to persist indefinitely. Certainly while the market remains tight.”
Backwardation deepens
West Texas Intermediate (WTI) crude for August delivery rose as much as 45 cents to $68.53 a barrel on the New York Mercantile Exchange and was at $68.44 at 7:48 a.m. in London. The September contract was at $67.38. Total volume traded was about 26 percent below the 100-day average. Brent futures for August settlement was up 19 cents to $74.92 a barrel on the London-based ICE Futures Europe exchange. That’s a premium of only 16 cents to the September contract, a much smaller backwardation than in the US market. W T I and Brent bot h slipped on Mond ay af ter Saud i A rabia a nd Ru ssi a pled ged to kee p
pr ice s u nd e r cont rol b y re stor ing production. Oi l chiefs f rom t he world ’s top 2 cr ude e x por ters ind icated t hat last week ’s 24 -nation accord w i l l add 1 mi l lion bar rels to d a ily suppl ies, more t han t he 70 0,0 0 0 - b a r re l f i g u re c it e d by severa l ot her members of t he Opec. Goldman sa id even an ag g ressive out put increase w ill lead to only a slim sur plus.
Brent vs WTI
Still, the Saudi-led drive to pump more has weighed on London’s Brent crude, narrowing its premium to US oil. The spread between the European and US markers shrunk as much as 31 percent on Monday and has almost halved this month, with global benchmark Brent trading at a $6.48 premium to WTI, compared with over $10 a barrel last week. Shrinking US stockpiles and the shutdown of a key oil-sands facility in Canada have also been causing a ruckus in American oil prices. US crude stockpiles are estimated to have declined by 2.5 million barrels last week, while inventories at Cushing fell by 1.3 million barrels, according to a Bloomberg survey before the Energy Information Administration’s data Wednesday. A key piece of equipment at Sy nc r ude C a nad a’s oi l-sa nd s complex in A lberta halted operations last week after a transfor mer blast shut the entire 350,000 barrel-a-day facility. The expected shortfall in supplies follows five consecutive weeks of shrinking inventories at Cushing, the delivery point for WTI contracts, and Goldman said a shortage at the oil-storage hub could worsen. Syncrude is conducting an assessment of the disruption, after which it will look to provide a recovery path, the plant controller Suncor Energy Inc., said. “The facility produces light, sweet Syncrude, which is primarily processed by US Midcontinent refiners,” said Victor Shum, a Singapore-based vice president at industry consultant IHS Energy. “These refiners will have to quickly find replacements for the lost light, sweet Syncrude volumes. The market is pricing this in.” Bloomberg News
Wednesday, June 27, 2018
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China, EU set to form group to modernize global trade rules
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EIJING—China and the European Union (EU) agreed Monday to launch a group that will work to update global trade rules to address technology policy, subsidies and other emerging irritants and preserve support for international trade amid US threats of import controls.
Actions such as US President Donald J. Trump’s unilateral tariff hikes in a technology dispute with Beijing show World Trade Organization (WTO) rules need to keep pace with changes in business, said an EU vice president, Jyrki Katainen. Katainen said Europe was not siding with Beijing in its dispute with Trump but was taking action to protect the global system of regulating free trade. He said the EU wants other governments to join the WTO group. Companies worry the US-Chinese dispute could chill global trade and economic growth if other governments respond by raising their own import barriers. Even before Trump took office, economists were warning countries were tightening import restrictions and taking steps to favor their companies over foreign rivals. US of f ic i a l s compl a i n t he WTO, the Geneva-based arbiter of trade rules, requires an overhaul because it is bureaucratic, rigid and slow to adapt to changing business conditions. Katainen said Europe wants to focus on issues, including subsidies to industry, government pressure on foreign companies to hand over technology and the status of state-owned industry— all areas in which Beijing faces complaints by Trump, as well as other trading partners. “I don’t expect these negotiations to be easy,” Katainen said
at a news conference. But if nothing is done, “the environment for multilateral trade will vanish.” Scott Kennedy, who studies the Chinese economy at the Center for Strategic and International Studies in Washington, said the EU-China arrangement is “a huge deal” and risks leaving the United States isolated. “It is not in the interests of the United States to just be playing defense and creating a fortress America while the EU, China and others play offense and attempt to set the rules of the game for the next century,” he said. Trump has threatened to impose tariffs of 10 percent to 25 percent on up to $450 billion of Chinese goods. Beijing responded to Washington’s first round of hikes on $34 billion of imports by raising duties on US soybeans, whiskey and other products. Other governments have similar complaints but Trump has been more direct about challenging Beijing and threatening to disrupt exports. Beijing might agree to talks to deflect further sanctions but is unlikely to agree to changes that hamper its technology plans, said Mark Williams of Capital Economics. “I very much doubt they would agree to anything that would have teeth and punish them,” said Williams. Policies companies object to are “integral to the growth model China is pursuing,” he said.
European Commission Vice President Jyrki Katainen speaks during a press conference in Beijing, China, on Monday, June 25. The vice president of the European Union’s governing body says Europe and China will form a group aimed at updating global trade rules to address technology policy, subsidies and other emerging complaints in a bid to preserve support for international commerce. AP/Ng Han Guan
Beijing agreed to narrow its multibillion-dollar trade surplus with the US by purchasing more American goods but scrapped that after Trump went ahead two weeks ago with a tariff hike on $34 billion of imports. Beijing also has cut import duties on autos and some consumer goods and promised to remove limits on foreign ownership in its auto, insurance and finance industries. But the Communist government has resisted any change to its plans that call for challenging US and European technology dominance by creating Chinese companies capable of competing in fields including clean energy, biotech and aerospace. Chinese officials deny foreign companies are required to give up technology. But in many industries, they are compelled to work through state-owned partners, which require them to share knowhow with potential competitors. One in five companies that responded to a survey by the European Union Chamber of
Commerce in China released last week said they felt compelled to hand over technology in exchange for market access. Tr u m p i n f u r i a t e d U S a l lies—from the EU to Canada and Mexico—last month by imposing tariffs of 25 percent on imported steel and 10 percent on aluminum. He said imports threatened A merica’s national security—a justification countries use rarely because it can be easily abused. Beijing has tried to recruit European allies in its dispute with Washington, promising v isiting leaders including Germany’s Chancellor Angela Merkel in May to open industries wider to their companies. On Monday Premier Li Keqiang, China’s No. 2 leader, told visiting French Premier Edouard Philippe that Beijing would allow more imports of beef and other food from France. Li said French companies were welcome to invest. “China takes a positive attitude to cooperation with the French side,” Li said. AP
Rouhani: Iran in ‘economic fight’ with US
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A group of protesters chant slogans at the old grand bazaar in Tehran, Iran, on Monday, June 25. Protesters in the Iranian capital swarmed its historic Grand Bazaar, news agencies reported, and forced shopkeepers to close their stalls in apparent anger over the Islamic Republic’s troubled economy, months after similar demonstrations rocked the country. Iranian Labor News Agency via AP
EHRAN, Iran—Iranian President Hassan Rouhani said Tuesday his country is in a “fight” with the United States, a day after protesters angered by Iran’s tanking economy confronted police in front of parliament. In a televised speech, Rouhani blamed the US for Iran’s woes and said the US is trying to damage the country by creating “an economic war.” “The US cannot defeat our nation, our enemies are not able to get us to their knees,” he said. R o u h a n i ’s co m m e nt s c a m e a f te r protesters angered by Iran’s tanking economy confronted police in front o f p a r l i a m e nt M o n d ay. I t wa s t h e first such confrontation, since similar demonstrations rocked the country at the start of the year. The demonstration signaled w i d e s p re a d u n e a s e i n t h e wa ke o f President Donald J. Trump’s decision to withdraw the US from Tehran’s nuclear deal with world powers and restore sanctions on the country.
It wasn’t immediately clear who led Monday’s protests. Iran’s semiofficial news agencies, Fars, ISNA and Tasnim, described the protests at the Grand Bazaar as erupting after the Iranian rial dropped to 90,000 to the dollar on the country’s b l a c k m a r ke t, d e s p i te g ove r n m e nt attempts to control the currency rate. Videos posted to social media showed p ro t e s t e r s a t t h e b a z a a r h e c k l i n g shopkeepers who refused to close. A short time later, about 2 kilometers (1.25 miles) from the Grand Bazaar, videos shared by Iranians on social media appeared to show a crowd confronting police at parliament. Iran’s semiofficial ISNA news agency re p o r t e d Tu e s d a y t h a t a u t h o r i t i e s detained many of the rioters. Prosecutor Abbas Jafari Dolatabadi said the “main provocateurs” who planned the protest and threatened shopkeepers to close their stores were arrested. He did not elaborate on the number of people detained. Still, semiofficial ISNA news agency
re p o r te d t h e c o u n t r y ’s p a r l i a m e n t speaker, Ali Larijani, said Tuesday that t h e R o u h a n i a d m i n i s t rat i o n h a s n’t done enough to confront the economic problems. At the end of last year, similar economic protests roiled Iran and spread to some 75 cities and towns, becoming the largest demonstrations in the country since its 2009 disputed presidential election. The protests in late-December and early-January saw at least 25 people killed and nearly 5,000 arrested. Iran has announced a list of 15 demands for improving relations with the United States, including a US return to the 2015 nuclear accord, in response to a similar list of demands made by Washington last month. In May US Secretary of State Mike Pompeo called for a wholesale change in Iran’s military and regional policies, threatening the “strongest sanctions in history” if it refused. The US withdrew from the landmark nuclear agreement with world powers earlier that month. AP
A6 Wednesday, June 27, 2018 • Editor: Angel R. Calso
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editorial
President Trump’s ‘zero sum’ game
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he suggestion of US President Donald J. Trump to remove “artificial” trade barriers and tariffs on American products is an interesting proposition for countries like the Philippines. Undoubtedly, his hard-line stance on reciprocity has ignited fears of a trade war among major economies, which may cause global recession. The United States and the European Union are among the top buyers of Philippine goods, and any uncertainty in these markets could harm Filipino exporters. But Trump’s posturing is worth a second look. The Philippines imports food and beverage (F&B) products from the US. Data from the US Department of Agriculture showed that the Philippines bought $2.59 billion worth of American agricultural products last year. The Global Agricultural Information Network report of the USDA noted that the majority of US farm exports to the Philippines consist of wheat, dairy, meat, poultry, nuts, fruits and vegetables. This year the value of US food exports to the Philippines is expected to rise by 4.24 percent to $2.7 billion. Washington considers the Philippines a valuable market for US food products given the Filipinos’ strong preference for American brands and the expansion of the upper and middle class. Removing tariffs on American F&B products would certainly make these items cheaper and expectedly hike demand for US food items. This would benefit American farmers who are seen incurring losses due to the retaliatory measures imposed by the trading partners of the United States. Washington earlier slapped tariffs on steel and aluminum produced by key US allies, and these countries have fired back by imposing tariffs on American goods. Going by Trump’s insistence on reciprocity, Washington should do the same and scrap tariffs and nontariff barriers on Philippine food exports. This would help expand shipments to the US and also help Filipino farmers hike their income. NTBs such as unreasonable sanitary and phytosanitary measures, increase the transaction cost of Philippine exporters. Dismantling nontariff measures would be a welcome relief for Filipino businessmen who have hopes of getting or expanding their access to the US market. While governments earn from tariffs and other fees imposed on exporters, the free flow of goods would be beneficial to trading partners, as this would spur the growth of their manufacturing sector and create more jobs. Revenues lost from scrapping tariffs could be recovered from the taxes of entrepreneurs who were encouraged by the removal of trade barriers. Scrapping tariffs on all other goods would be beneficial to consumers around the world, particularly to the poor. Higher demand for consumer goods would further boost the manufacturing sector of developing countries and bolster global trade. Ultimately, this might just be the shot in the arm needed by the multilateral trading system. The Doha Round—the latest round of trade negotiations among the World Trade Organization (WTO) membership that aims to reform the international trading system through the introduction of lower trade barriers and revised trade rules—broke down mainly because of the disagreement between rich and poor countries concerning farm subsidies and tariff cuts. Among the key issues that remain unresolved to this day is the call of developing nations like the Philippines for the implementation of a special safeguard mechanism, which would protect their farm sectors from harmful import surges. Countries like India have also been pushing for public stock holding for food security. These issues have bogged down talks at the WTO for a new global trade deal. If Trump were to be taken seriously, and if he himself is serious in pushing for the removal of tariffs and other trade barriers, then these issues would no longer have to present difficulties to global negotiators.
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Toast at UN Mission Independence Day Teddy Locsin Jr.
Free fire Continued from A1
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he previous slogan, Matatag na Republika or Strong Republic, did nothing, because that is not something you say but something you show; until the strength is so selfevident there is no need to say it. Strength speaks for itself. And it is not wrong to interpret bragging about one’s strength as a sign of one’s real weakness. Hence the unnecessary and self-defeating chest-beating done by parvenu powers today. “But ‘fighting for change as this generation’s gift to the future’ sounds about right. President Duterte became president because of a desire for change; a desire so strong and widespread that no amount of money and machinery could make any of his rivals catch up. That desire was known to almost everyone except the minority that voted for the losing candidates; among them my own very talented
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Though there have been tragic…truly tragic mistakes. “The President has not invented new priorities; but set the old triedbut-rarely-tested ones aright. He has made us face reality instead of make-believe—not least the weakness of the Republic in the face of armed threats—from insurgencies and terrorism at home; and from the provocations of new friends and being taken for granted by old friends abroad. “Tonight is the 120th anniversary of the Independence of the First Republic in Asia, and a charter member of the United Nations even before it regained independence from the United States. Distinguished guests, ladies and gentlemen, friends of the Philippines, it is not an easy world to understand out there, let alone to cope with; but we can fight for change and—win or lose—give at least the sincerity of our endeavors if not their success as our gifts to our respective countries’ futures. Please raise your glasses and join me in a toast: to the Republic of the Philippines; and to the nations of the world united here on this happy occasion. Cheers.”
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niece— Assumption Convent bred and Boston College polished—for whom I of course voted because I am Filipino; and for Filipinos it is always family first and the devil take the hindmost. We are Latin that way. “But the people, the poor—and in great numbers the middle class and rich—wanted change. And strangely enough they all wanted the same change and nothing more: from lawlessness to order, from
insecurity to safety, from confusion to clarity about a few essential things—like getting home without getting mugged and having children without ending up with addicts who will never move out of your house until the ambulance comes to take them away. And from helplessness to a sense of take-charge, each of his or her own life, and of a country on the verge of disintegration into drugs but clueless about it. “He did not propose, let alone impose, his idea of the future. He barely outlined a particular vision of the future. Instead, he promised to clear the stage of what stands in the way of the country’s progress: by bringing order to things in disorder, stopping the criminality and anarchy feeding off a culture resigned to corruption, impunity and incompetence. He has specifically addressed the threat drugs pose to the very ability of a people to exist as a nation, or even possess a national vision instead of a chemically induced delusion. It is this I have tried to convey: that the first principle of political institutions is justice, and the first purpose of government is to protect the good from the bad and not the bad from justice.
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n 2015 the Insurance Commission recognized derivatives as an investment vehicle to promote investment diversification. This recognition is consistent with Section 202 (k) of the Amended Insurance Code as “other assets” “deemed by the Commissioner to be readily realizable and available for the payment of losses and claims.” But under Circular Letter 2015-56, the derivatives were limited only to forwards and swaps. As a form of precaution, the aggregate placements in derivatives shall not exceed 10 percent of the total admitted assets of life companies or 20 percent of the net worth of a nonlife company. A derivative is a “financial instrument that derives its value from the movement in commodity price, foreign exchange rate and interest rate of an underlying asset or financial instrument.” In this regard, it is important to know the role of the International Swaps and Derivatives Association. The ISDA is an over-the-counter (as opposed to those traded in exchanges) derivatives industry trade association. Its primary objective is to make privately negotiated derivatives safer, transparent and more efficient. Thus, its slogan—“Safer, Efficient Markets.” It does this principally by providing templates for counterparties in derivatives contracts. It seeks to reduce credit and legal risks in transactions—to which OTC derivatives are exposed to. It has
identified three key focus areas: a) reducing counterparty credit risk; b) increase transparency; and c) improving the industry’s operational infrastructure. It was founded in 1985 by a group of dealers and initially called the International Swap Dealers Association. Currently, it has 875 member institutions in over 68 countries. The main office of ISDA is in New York. Its membership includes derivatives market participants, such as commodity companies, investment managers, international banks, derivatives exchanges, clearing
The International Swaps and Derivatives Association is an overthe-counter (as opposed to those traded in exchanges) derivatives industry trade association. Its primary objective is to make privately negotiated derivatives safer, transparent and more efficient. Thus, its slogan—“Safer, Efficient Markets.” It does this principally by providing templates for counterparties in derivatives contracts.
houses and insurance companies. Membership types are Primary (dealer firms), Associate (service providers) and Subscriber (end-users). ISDA Primary Membership is designed for international and regional banks, insurance companies, diversified financial firms, and energy and commodities firms. It currently includes over 200 large global institutions that deal in derivatives. ISDA Associate Membership is designed for service providers, key components of the derivatives market infrastructure, such as technology solution providers, exchanges, intermediaries, clearing organizations and repositories, as well as law firms, accounting firms and other service providers. Associate Membership provides a forum for industry participants to stay up to date with and influence important developments and initiatives. ISDA Subscriber Membership is designed for corporations, financial institutions,
supranationals, government entities and others that use derivatives to better manage financial risks. Subscriber Membership provides a forum for industry participants to stay up to date with and influence important developments and initiatives. With the expansion of global finance, the growth of the derivatives market was met with challenges. Trading in derivatives can be complex. The negotiation of the precise terms and conditions can be complex, as well. In response, ISDA produced the ISDA Master Agreement, which is a standardized template to be used between a dealer and the counterparty entering into a derivatives transaction. The Master Agreement was first published in 1992 and updated in 2002. The Master Agreement consists of 14 clauses, which are called Sections. The ISDA Master Agreement is a preprinted template where any changes, additions or alterations will have to be done through a document called Schedule to ISDA Master Agreement. ISDA also creates industry standards and provides industry definition of terms such as the 1999 ISDA Credit Derivatives Definitions. Among the terms defined were credit default swaps, credit linked notes and total return swaps.
Dennis B. Funa is the current insurance commissioner. Funa was appointed by President Duterte as the new insurance commissioner in December 2016. E-mail: dennisfuna@yahoo.com.
Opinion BusinessMirror
www.businessmirror.com.ph
(King) crab mentality
Wednesday, June 27, 2018 A7
Why not transform anti-loitering campaign to anti-littering
Competition Matters
on the contrary
first learned about “crab mentality” back in elementary while studying history. It is a bad trait unfairly ascribed to Filipinos and considered a formidable obstacle to their success.
he recent ruckus over the mishandling of the “anti-loitering” drive that has forced President Duterte to backpedal and declare that “loitering” is not a crime presents an alternative opportunity for the government to shift tack by going aggressive instead on anti-littering by employing jobless people.
Knowing the law as a lawyer, Duterte declared that loitering itself is not a crime. However, numerous local ordinances ban loitering (i.e., “anti-vagrancy law”). Perhaps, these laws need to be reviewed and repealed for going against constitutional provisions. Anti-loitering laws were adopted after the US civil war ended in 1865.
The policy mix-up. A policy mix-up or confusion is bound to happen when an authority, this time no less than the President, speaks with ambiguity. When eager-beaver subordinates perceive an ambiguous pronouncement as policy, expect the Duterte faux pas on loitering to happen. The President’s penchant for ambiguity, at times adopting Orwellian 1984’s Big Brother “Double Speak” may be deliberate or simply tactless. One reason is that Duterte is inherently mischievous and keeps people guessing, while getting them entertained, oftentimes uncomfortably, owing to his uncouth and unorthodox snide remarks. Moreover, he admits that two to three of every five statements he makes are either distorted or false, which makes him somewhat smart, at a risk, if he does it consciously to test people and their behavior based on the varying stimuli he injects. But, on the contrary, this nature of being impulsive and spontaneous makes him also somewhat stupid, as he shoots from the hip without thinking and aiming well, thus resulting in many unintended consequences. Realizing his blunders, resulting from what critics call his chronic ailments of “foot and mouth” disease and “oral diarrhea,” Duterte has
continued for another century, and loitering laws were effectively used to make selective arrests without making distinctions between hanging around and loitering, which mean the same. In 1965 civil-rights activist Fred Shuttlesworth was jailed for six months for talking to friends on a sidewalk, while Martin Luther King Jr. was arrested trying to attend a friend’s court hearing. Apparently, people with color then were unfairly punished even if they did not commit a crime. Anyway, anti-loitering was finally scrapped after it was deemed unconstitutional. n Why the poor loiter. The poor loiter mainly because many of them are jobless and underemployed, and to keep themselves busy looking for any opportunity to make money. Another reason is the fact that the urban poor’s only breathing space in their crowded, blighted neighborhoods are the streets. In contrast, the rich and middle class have subdivision spaces for their social clubs and have the resources to kill time at the malls. n Literacy drive vs. littering? Learning from an ancient Chinese symbol and proverb describing solutions found in the midst of problems themselves, it is worth exploring a paradigm shift of transforming anti-loitering into
Michael Makabenta Alunan
Atty. Amabelle C. Asuncion
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Crab mentality involves pulling down anyone who achieves or is about to achieve success greater than yours. This behavior takes its name from how crabs scramble to get out of a boiling pot by clambering on top of the others. This has the effect of crabs pulling each other down so that no one escapes, and everyone ends up on the dinner table. I remember how laughable the concept was and did not believe it to be real. Fast-forward to this day, and I realize that crab mentality partly explains the state of market competition in the Philippines. The boiling pot represents the market, while the crabs are the players competing to get to the top. Crab mentality creeps in and destroys competition, to the detriment of the market. In this situation, the players are of similar size and might, with those who are behind engaging in unfair conduct to pull down the others who are ahead. There is another version of crab mentality, which I dub “king crab mentality.” In this second situation, a king crab that has reached the top flicks the smaller crabs back to the bottom of the pot to prevent them from getting to the top. This exemplifies what the Philippine Competition Act (PCA) considers abuse of dominant market power. Abuse of dominance involves a firm holding a dominant position in the market and behaving in a way that substantially lessens competition. It is not wrong to be a dominant player; in the same way that it’s not a sin to be a king crab. However, flicking smaller crabs back to the bottom of the pot is another matter—this is abusive conduct. Such king crab mentality may come in the form of unfair pricing and exclusionary behavior against competitors. An example of unfair pricing is selling below cost or at artificially low prices to drive a competitor into bankruptcy. Exclusionary conduct includes imposing barriers to entry or preventing competitors from growing. Offering special discounts to a customer who buys all or most of their supplies from you can be abusive conduct. Some businesses engage in these practices, probably without realizing that they are potentially anticompetitive. The PCA recognizes that some of these practices can be legitimate business strategies beneficial to consumers. For instance, tying and bundling products may prove to be a good deal for customers. Likewise, offering discounts would not be anticompetitive per se. The law doesn’t prohibit legitimate business strategies in acquiring, maintaining or increasing market share; nor does it penalize
There is another version of crab mentality, which I dub “king crab mentality.” In this second situation, a king crab that has reached the top flicks the smaller crabs back to the bottom of the pot to prevent them from getting to the top. This exemplifies what the Philippine Competition Act considers abuse of dominant market power. success. What the law forbids is a dominant player behaving in a way that lessens competition. The law presumes a “special responsibility” on the part of dominant firms to act in accordance with the basic tenets of competition. A firm with a market share of at least 50 percent is presumed to be dominant. Other factors that determine dominance are the number and strength of competitors, barriers to entry, customers’ ability to switch to other goods or services, and competitors’ access to inputs. These factors are relevant because a dominant firm is likely to exercise a multipronged power: over its competitors, over customers and on the relevant market. Considering these factors, it is easy to understand why and when the various behaviors mentioned above may be abusive. To be sure, the king crab is not expected to pull up the smaller ones to the mouth of the pot but instead is presumed to maintain its position. Again, there is nothing wrong with this. What the law guards against is the king crab pushing the smaller crabs back to the bottom of the pot, putting up barriers or preying on their lesser brethren. Allowing these could lead to the demise of the entire market, to the prejudice of consumers. Many find it difficult to understand competition law, much less abuse of dominance. It would be instructive to read Robert Fulghum’s book, All I Really Need to Know I Learned in Kindergarten. If my elementary years taught the vice of crab mentality, Fulghum’s book taught the virtue of fair play in kindergarten. Take these lessons and apply them to your harried business lives. I am sure these will hold true, clear and firm. Amabelle Asuncion is a commissioner of the Philippine Competition Commission. Before this, she was engaged in corporate and commercial practice and served as chief legal counsel of a top company and a corporate partner of a law firm. She was also previously involved in legislative, law and policy reform, advocacy and adjudication work. Asuncion has a Master of Laws degree (with distinction) in International Legal Studies from Georgetown University Law Center in Washington, D.C. and is admitted to the New York bar.
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Bloomberg Opinion
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inancial markets have long been able to ignore the spillover from political and geopolitical developments. Now, they seem a lot more sensitive to possible disruptions these events could cause to growth and corporate earnings, and with good reason: The threats seem to be spreading, and the fortifications are weaker. Unless the possibility of a full-blown trade war turns into to an opportunity to fix longstanding defects in the global system, the defenses that have proved effective in recent years risk being overwhelmed
in both the financial and, more damaging, economic realms. Stock markets around the world sold off on Monday, including losses of just under 1.5 percent for both the S&P 500 and the Dow Jones Industrial Average and of 2.1 percent for the Nasdaq. The downturn was a reaction to indications over the weekend that the Trump administration would consider curbs on Chinese corporate investments in US technology companies and, more broadly, could increase the scrutiny of tech exports. The harsher stance follows a period of increasing tensions that prompted China and Europe to take retaliatory steps aimed at containing
E-mail: mikealunan@yahoo.com
Sto. Tomas, first Batangas city under Duterte administration Florante S. Solmerin
FACT IS MIGHT!
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he expected solid yes vote of the citizens to make Santo Tomas, Batangas, a city in October 2018 will certainly bring added vigor to the entire economy of the Calabarzon (Region 4-A), comprising of the provinces of Cavite, Laguna, Batangas, Rizal and Quezon, particularly the constituents of Mayor Edna Sanchez. The momentous event will coincide with the upcoming filing of the Certificates of Candidacy of political wannabees for the midterm elections in 2019. I admire the hard work of the mayor with the support of Atty. Art Marasigan, her administrator, because they were able to unite the 30 barangay captains, despite the reality that these barangay leaders belong to different political parties. Supporting the move is a philanthropist who was not even a native of Santo Tomas, but his kind-
Why protectionist rhetoric roils markets By Mohamed A. El-Erian
backpedaled often, justifying his statements with excuses, claiming some of his statements are deliberate distortions. This spontaneous volatility similar to a powder keg that explodes has put his spokesmen helter-skelter as they proverbially tried dousing water on fire, lest they turn into PR conflagrations. Unfortunately, their tasks in situations where Duterte paints himself into a corner is like putting toothpaste back in the tube. In military parlance, a general cannot be too general, ironically, but has to be specific, with his orders. In contrast, soldiers follow orders to the letter without question, and will even overdo things, thinking it will please their generals. This was what happened to the anti-loitering campaign that resulted in the death of a bystander in jail after getting arrested. n “Loitering is not a crime.” Knowing the law as a lawyer, Duterte declared that loitering itself is not a crime. However, numerous local ordinances ban loitering (i.e., “antivagrancy law”). Perhaps, these laws need to be reviewed and repealed for going against constitutional provisions. Anti-loitering laws were adopted after the US civil war ended in 1865. Although Abraham Lincoln abolished slavery, racial prejudice
an anti-littering drive, while at the same time generating jobs. We already have numerous antilittering laws, from Marcos presidential decrees, to Metro Manila Development Authority circulars, to local government ordinances, but they all seem to be ignored and implemented in the breach. What is necessary is a combination of measures, including a carrotand-stick approach, apart from mobilizing an army of street sweepers, which may just be a sweeping measure, as this has long been implemented by many administrations. What is also needed is a massive information and a “literacy drive” on the ABCs of hygiene and cleanliness, which include requiring every citizen to bring along with them little bags to place their litter for disposal later at home. Instructive toilet posters can teach people on proper waste disposal, hygienic habits like doing Pontius Pilate acts (washing hands) to avoid the spread of diseases. n When penalties are not fine enough. We’ve had laws and penalties, but penalties are not fine enough, as violators only match fines with counterincentives that cripple implementation. In fact, the culture of corruption is so pervasive that it has resulted in the corruption of our culture. Why not mobilize instead the jobless as Environmental Police to catch litterbugs by providing incentives, say 50 percent of penalties? This way, the operation becomes “self-financed.” I believe, when the incentive to do good is higher than the incentive to be corrupt, then corruption stops. In short, incentives (carrots) may be better measures than penalties (stick) to implement laws that also help generate jobs, encourage public participation, boost tourism and improve public health.
and reversing tariffs imposed by the United States. Instead, the tit-for-tat measures have raised the probability of another round of protectionist measures by the US. Three main factors explain the higher sensitivity of stocks and other risk assets after a prolonged period when financial markets confidently shrugged off political and geopolitical factors. First, many still believe that an outright global trade war is avoidable and that current tensions will prove to be part of a negotiating process resulting in fairer trade (including safeguards against intellectual- property theft, the modernization of trade
The 30 barangay captains set aside their political affiliations to help the cityhood campaign by making sure that their respective constituencies would support the move. They pledged to lead their constituents to support a solid yes vote in the plebiscite. If yes wins, Santo Tomas will be the first municipality to become a city under President Duterte’s administration.
heartedness has been instrumental to unite the people and get the yes for cityhood campaign succeed. In fact, the 30 barangay captains set aside their political affiliations and helped the cityhood campaign by making sure that their respective constituencies would support the move. All of them pledged to lead their constituents to support a solid yes vote during the upcoming plebiscite. If this happens, Santo Tomas will be the first municipality to become city under the administration of
President Rodrigo Duterte. This is going to be historic! Santo Tomas has already reached, and even surpassed, the requirements set by law for the municipality to become a city. The moment it becomes a city, its Internal Revenue Allotment is seen hitting P800 million annually. Aside from that, the city will be spared from paying taxes to the provincial government, and the money would go to the city government and to the barangays. This is welcome news, certainly one that will benefit the residents of the future Santo Tomas City.
arrangements and a reduction in nontrade tariffs). Yet, undoubtedly, uncertainty and the risk of accidents have risen. Those concerns are accentuated by the recent spread of protectionist rhetoric, which now targets cross-border investment flows, as well as trade. Second, the narrative of a synchronized pickup in global growth no longer comforts markets. There’s good reason to be more cautious and discerning: With the notable exception of the US, growth momentum has started to weaken, and not just in Europe, where both hard and soft indicators are already under pressure. In China over the weekend, the central bank announced a relaxation
of reserve requirements for banks aimed at bolstering domestic economic activity. Third, due to policy-tightening measures by the Federal Reserve and the recent absence of reassuring volatility-repressing language from any of the systemically important central banks, investors have realized that financial asset prices can no longer count on the same liquidity backstops and circuit breakers, including during bouts of higher volatility. This weakens what had been a strong and stabilizing “buy-the-dip” mentality, opening up a greater possibility for technical overshoots, particularly in segments that face structural
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Philippine Charity Sweepstakes Office (PCSO) General Manager Alexander Balutan reminded all Lotto millionaires to be practical and smart in spending their Lotto winnings. They should pay first whatever debts they have so no one will be going after them. If they are not capable to run a business, they should seek expert opinion or advice. However, they need to be careful in their business dealings to avoid investment scams. Last, Balutan told them: Don’t be a “one-day millionaire” because of vices. Data from the PCSO show that 26 new Lotto millionaires have been produced from January to May 2018, sharing among them a total of P1.2 billion in prizes. PCSO lottery games like Lotto, digit games, Keno, Sweepstakes and Small Town Lottery are beneficial games for Filipinos. The PCSO charter mandates that 55 percent of revenues is allocated for prizes, 15 percent for operational expenses and 30 percent for the PCSO’s charity work. E-mail: fetad@yahoo.com.
imbalances, such as emerging markets. So far, most of the discomfort caused by protectionism has been limited to financial variables and not economic ones. And the disruption has been less acute than it would be if the market decided to fully embrace a high likelihood of a global trade and investment war. Turbulence has been contained by a belief that wellinformed and rational policy-making around the world will ultimately avert an alternative that could benefit a handful of segments within countries but result in worse welfare and prosperity outcomes for all. Let’s hope this will not prove to be more than just wishful thinking.
2nd Front Page BusinessMirror
A8 Wednesday, June 27, 2018
Govt urged to seek 1-year reprieve for PHL seafarers
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By Jovee Marie N. dela Cruz
@joveemarie
HE Philippine government should request the European Maritime Safety Agency (EMSA) for a one-year extension for 80,000 Filipino sailors to comply with the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers (STCW), a party-list lawmaker said. ACTS-OFW Rep. Aniceto “John” D. Bertiz III, who will file a resolution urging the government to seek the extension, warned of a “potential downside” due to the review being conducted by the EMSA on the Philippines’s compliance with the International Convention on STCW. According to Bertiz, failure to pass the EMSA review may adversely affect the deployment of some 80,000 Filipino sailors on European merchant ships. He said the EMSA has been questioning the capability of the Philippines’s Maritime Industry Authority (Marina) to ensure enforcement of the STCW, which sets minimum qualification standards for ship masters, officers and watch personnel. “On the part of Congress, we
can file [when session resumes next month] a resolution or call for House investigation regarding this matter and if it’s possible for us to request for extensions to EMSA through IMO [International Maritime Organization] for another year or so to comply with their requirements and standard,” Bertiz told the BusinessMirror. According to Bertiz, Marina has no contingency plan yet in case the EMSA, as authorized by the IMO, imposed sanctions on the Philippines by October 2018 for noncompliance with the STCW Convention and Code. “So if worst comes to worst, what will happen to 80,000 seafarers who might lost their jobs because the training they got from our country is not compliant?”
80,000
The number of Filipino sailors on European merchant ships who will be affected if EMSA refuses to issue certification of compliance by October he pointed out. “This is a big challenge to the leadership of Marina, if EMSA/ IMO will grant our request. One more thing: what DOLE/POEA will do about this matter, are they coordinating also with Marina? As you know, it is POEA who’s responsible for the processing of...necessary documents of our seafarers; why did they not anticipate it?” the lawmaker added. Bertiz, however, said he expects Marina Administrator Rey Leonardo Guerrero, a retired Armed Forces chief of staff, to manage the risks associated with EMSA’s audit and to build up compliance. “Actually that issue was way long ago already, but MARINA took a blind eye on the issues, and it’s really very alarming if we will be blacklisted by EMSA,” he said.
PHL sailors everywhere
The biggest employers of Filipino sailors are international shipping operators based in the United States, Germany, Singapore, Japan, the United Kingdom, Hong Kong, Greece, the Netherlands, New Zealand, Panama, Norway, Cyprus, Switzerland, South Korea and Liberia. Filipino sailors serve on bulk
carriers, container ships, oil, gas, chemical and other product tankers, general cargo ships, pure car carriers and tugboats around the world. A growing number of Filipinos also provide housekeeping, guest relations, culinary, front office and other maintenance services on cruise ships and floating casinos.
Probe on compliance
Bertiz said he will ask the House of Representatives to look into the compliance of courses being offered to Filipino seafarers with STCW and EMSA requirements. “A good friend told me that the Philippines imposes many mandatory training and certification for seafarers, but it is not known whether these courses are compliant with STCW and EMSA requirements,” he said. “[Some of the] additional courses offered by maritime schools and trainings to seafarers are moneymaking schemes, as these are not needed or are not compliant with international seafaring certification standards,” Bertiz added. The lawmaker said Filipino sailors would no longer have to grapple with the anxiety caused by EMSA audits if only training and review centers would ensure that its courses adhere to the STCW. Bertiz also noted that the Philippines has agreed to comply with the provisions and requirements when it signed the STCW International Convention. He said schools that impose additional courses and trainings other than those required by the international convention could be subjected to penalties as provided for by Article 31 the Vienna Convention on the Law of Treaties.
Laguna Lake Highway now 6.7 kms long
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HE Department of Public Works and Highways opened an additional 700-meter, two-lane segment of the Laguna Lake Highway on Tuesday, bringing the total serviceable area of the road to 6.7 kilometers. Public Works Secretary Mark A. Villar said the road section that was opened is the Napindan to M.L. Quezon segment in Taguig City. This is part of the Laguna Lake Highway project, which also consists of a two-lane concrete road with a two-meter-wide planting strip and drainage. It also includes the construction and widening of three bridges: the Napindan Bridge, Barkadahan Bridge and Tapayan Bridge. “Aside from increasing mobility, this project acts as an armored elevated dike protecting Taguig City against possible flooding,” Villar said. The government also integrated pedestrian-friendly infrastructure through a 1.5-meter-wide sidewalk and a 3-meter-wide protected bike lane. “The Laguna Lake Highway can also be a temporary evacuation area during the occurrence of floods,” Villar added. The highway is expected to give motorists traversing Rizal Province and the eastern corridor of Metro Manila an alternative to Edsa and C-5. It is expected to cut travel time from Taytay to Bicutan from one hour to only 30 minutes.
www.businessmirror.com.ph
AFTER INSULT ON ‘GOD,’ PALACE OFFERS DIALOGue WITH CHURCH GROUPS By Bernadette D. Nicolas
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@BNicolasBM
OLLOWING his controversial tirades against the Catholic Church and calling the Catholics’ God “stupid”—President Duterte has agreed to engage in a dialogue with Church and other religious groups, Malacañan Palace said on Tuesday. The President formed a three-man committee to talk on his behalf with the Church leaders in a bid to lessen the tension between the Church and the government—tension that began with criticism of his war on drugs by some churchmen, then grew as Duterte exposed alleged “sins” of some priests who had been gunned down, and recently capped by his rant about the god of Catholics being “stupid.” Palace officials on Monday defended Duterte by saying that, like any Filipino citizen protected by the Constitution, he enjoyed freedom of belief and of expression. The explanation was dismissed by critics who said a President has no business deliberately offending the sensibilities of certain constituencies, especia l ly since 90 percent of Filipinos are Catholics. The newly formed dialogue committee tasked to reach out to church groups included Presidential Spokesman Harry L. Roque Jr., Edsa People Power Commissioner Pastor “Boy” Saycon and Foreign Affairs Undersecretary Ernesto C. Abella. “This was just decided by the President yesterday, and today I have coordinated with Mr. Boy Saycon to start the process of dialogue. Of course, we w ill talk first with the Catholic Church, although we are also open to having a dialogue to Born Again churches,” Roque said in a br ief ing on Tuesday in Davao. Roque said he is also not
ruling out the possibility of a meeting between the Church leaders and the President, but he assured everyone that he will relay to Duterte whatever he will be getting from the churches. This development comes after the Catholic Church and the Philippine Council of Evangelical Churches urged the President to hold dialogues with the leaders of different Christian traditions. Catholic Bishops’ Conference of the Philippines’s President Davao Archbishop Romulo G. Valles welcomed the move, saying that “to dialogue; to listen to one another, is always good.” Roque also noted that they are hoping that this would be a fruitful dialogue, as Valles and the President are on very good terms. In a speech in Davao last Friday, the President drew the ire of religious groups and even the public, including senators for his statements about ca l l ing God “stupid” and his remarks on the Catholic faith. The President, however, clarified in a speech on Monday that he said that in connection with his statement on Sister Patricia Fox, the Australian missionary who has lived in the country for 30 years and was arrested and ordered deported after being seen in rallies by tribal protesters. Fox was also criticized by the President for allegedly being involved in political activities and for making critical remarks against the government. “Your God is not my God because your God is stupid,” he said during the speech. “Mine has a lot of common sense.” In numerous speeches, the President also attacked the Catholic faith and on two separate occasions called the Pope and CBCP as “son of a whore.” In the Philippines, the majority of Filipinos are Catholic, making the nation of more than 100 million people, Asia’s bastion of Christianity.
Bad weather forces Gulf Air plane to abort landing twice By Recto Mercene A portion of the additional 700-meter, two-lane segment of the Laguna Lake Highway that Department of Public Works and Highways and Taguig officials opened on Tuesday. PHOTO FROM DPWH TWITTER ACCOUNT
RCEP. . .
Continued from A1
Australia and Japan are pushing for drastic tariff reductions and modest intellectual-property rights protection under the RCEP. This does not sit well with China and India. Lopez said the big boys have yet to resolve their concerns, and he hopes this will be ironed out at the ministerial meeting to allow the RCEP to move forward. He also said the larger economies have to make some adjustments to close the discussion on various chapters of the RCEP. “We hope to see adjustments from them to get closer to the prescribed parameters and key
elements in the agreement,” Lopez told the BusinessMirror. He asserted that concluding the RCEP is, more than ever, critical, as global trade floats in uncertainty arising from the trade conflict between the United States and China. The situation calls for “more resolve to conclude” the trade deal, Lopez said. In a joint statement in March, the trade ministers admitted there is a difference in the levels of ambition between the RCEP negotiating countries. Negotiators were tasked to work this out, and they were also instructed to address specific sensitivities faced by each economy. The RCEP is an ambitious freetrade agreement aimed at consolidating the Asean’s bilateral FTAs
with its partners. The 16 RCEP economies account for almost half of the world’s population, about 30 percent of global GDP and over 25 percent of the world’s exports. T he RCEP is branded as a strong counterpart of the TransPacific Partnership, as it will cover trade in goods, trade in services, investment, economic and technical cooperation, intellectual property, competition, e-commerce, dispute settlement and other issues. It is intended to lower barriers to trade and provide market access for exporters. Apart from this, it is also banked on, particularly by Asean memberstates, to deepen regional value chains, enhance economic growth, generate jobs and improve the livelihood of people.
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@rectomercene
AD weather twice prevented a Gulf Air A330 from Bahrain from landing at the Ninoy Aquino International Airport (Naia) on Tuesday. The first attempt was made at 11:42 a.m., but the pilot aborted his landing while about 2 miles away from touchdown on runway 24. The control tower gave the pilot another clearance to go around the airport and land again on runway 24. The airplane climbed to 1,500 feet, joining the traffic pattern, but on the second try, the runway remained unseen to the pilot, who decided to abort at 11:56 a.m. Senior ramp controller Alger Ramo said the Civil Aviation Authority of the Philippines has established a “decision height” on runway 24—meaning, the pilot would decide either to land or execute a mis-approach at 1,900 feet high and 2 miles distant from the end of the runway.
Runway 06 has a different decision height, Ramo added. A the time Tuesday’s incident happened, there were dark rain clouds on the eastern side of the Naia, going all the way to Pasig and Antipolo, obscuring visibility on half of the 3-kilometer runway 24. However, the western side of the airport on the Parañaque side was clear, Ramo noted. As the weather cleared on runway 06, the pilot was given instructions to land on runway 06. He made it successfully and touched down at 12:12 p.m. Nothing untoward happened, and the passengers debarked after the pilot parked on Bay 3 of the Naia. The A300 can accommodate 335 passengers. Ramo, who used to be a private pilot, said if GF154 had failed on its third attempt, the pilot would have had to proceed to his alternative, the Clark International Airport, to refuel and wait for the weather in Manila to clear before coming back to land at the Naia.