Issuu

media partner of the year

United nations

2015 environmental Media Award leadership award 2008

BusinessMirror A broader look at today’s business

www.businessmirror.com.ph

Thursday, June 29, 2017 Vol. 12 No. 259

Solon seeks reimposition of telcos’ franchise tax

By Jovee Marie N. dela Cruz

@joveemarie

or an industry whose two players are raking in combined gross annual receipts of close to P300 billion, foregoing the franchise tax on telcos is like giving up revenues big enough to fund the operations of the Office of the President, or about twice the yearly budget of Congress. Continued on A2

8% The proposed percentage of the telcos’ gross revenues that will be remitted to the government as franchise tax under HB 5444

2016 ejap journalism awards

business news source of the year

P25.00 nationwide | 4 sections 24 pages | 7 days a week

Is the Philippines winning in the ‘war for talents’? Rene E. Ofreneo

LABOREM EXERCENS

he “war for talents” refers to the fiercely competitive environment in the recruitment and retention of talented and highly skilled employees. The term entered the vocabulary of human resource managers at the turn of the millennium. It was ignited by the rise of information and communications technology ( ICT) and knowledge-intensive industries. In America and Europe, the war was deepened by the changing demographics—the declining supply of skilled workers to replace the retiring baby boomers. The ICT success of Silicon Valley in California was partly due to the influx of highly educated and talented migrants from India, Taiwan and other countries. Continued on A11

PHL’s 2020 vision: Top 20 of ‘doing business’ ranking By Catherine N. Pillas

executive ride Fernando Zobel de Ayala, president and COO of Ayala Corp., presents for the first time the KTM 390 Duke motorbike now manufactured in the Philippines. Ayala Corp. debuted on Wednesday its motorbike-manufacturing business in collaboration with Austria-based KTM AG. The partners aim to make Manila Southeast Asia’s motorcycle-manufacturing hub. The venture is the exclusive distributor of KTM products and sole motorcycle manufacturer in the Philippines for export to China and around Southeast Asia. Stephanie Tumampos

BPOs thumb down tax-reform bill

he b u s i n e s s - p r o c e s s outsourcing (BPO) sector is opposing the taxreform package of the Department of Finance, dubbed as the Ta x Refor m for Accelerat ion a nd I nc lu sion ( T R AI N ) A c t , say i ng t h is cou ld dera i l t he industry’s competitiveness. The IT and Business Process Association of the Philippines (IBPAP) urged the government on Wednesday to look into the impact of the TRAIN bill on the country’s second-largest dollarearning sector, next to overseas Filipino workers. “We are petitioning the government to consider the negative

impact on job creation that may happen if the incentives of the [sector] are removed,” IBPAP said in its position paper. The group noted that the Philippine BPO sector remains competitive because it could afford to offer high-quality service. “With the current model there is flexible demand for our services, allowing us to be competitive in the global market,” the position paper read. “This is because the margin of difference is counterbalanced by the high-quality service and talent the industry offers. However, should the tax-reform bill remove the current incentives of

PESO exchange rates n US 50.2620

the industry, this will increase the price differential,” the position paper read. The TRAIN bill is attempting to remove the value-added tax exemption on the sales of input materials for goods, and possibly services, meant for export. The IBPAP said the move will impact the competitiveness and the growth strategies outlined in its Industry Road map 2022. The road map targets 1.8 million direct jobs by 2022, and 7.6 million direct and indirect employment, $40 billion in revenues, and a 15-percent share in the global IT-BPM market. Catherine N. Pillas

@c_pillas29

he government and the private sector have taken on the gargantuan task of pulling the Philippines from its current ranking of 99th in the International Monetary Fund’s (IMF) Ease of Doing Business Report all the way to the top 20 by 2020. To achieve this, the publicprivate National Competitiveness Council (NCC) has even enlisted the services of a foreign adviser who will help benchmark the Philippines’s progress with that of New Zealand, which topped the latest round of the IFC survey. Dr. Stefan Korn, the NCC adviser, said one way to achieve this ambitious leap is through the socalled design sprint. A design sprint is a five-phase operations concept that helps answer critical business questions through rapid prototyping and

99th

The current ranking of the Philippines in IFC’s Ease of Doing Business Report

user testing. Korn said the design sprints can be implemented in three projects: in setting up a Wikipedia for local government permitting processes, establishing a concierged registration initially for Quezon City, and in accelerating the existing online registration with the Securities and Exchange Commission. Under this concept, the NCC can set up a five-month work plan to implement each of the five phases for these three areas, and can be done by December if the plan starts in August.

2020 vision

“Our vision for 2020 is to be w ithin the top 20. T he next step after streamlining is automating. It’s automating that will bring us where we want to be, which is in the top 20,” said NCC Public Sector Cochairman and Trade Secretary Ramon M. Lopez during the Fifth Annual Ease of Doing Business Summit held at the Philippine International Convention Center. The automation should be at a level that businesses can set up their operations with submissions of requirements done through a mobile phone, he added. “This is challenging but doable,” commented NCC Private Sector Cochairman Guillermo Luz, noting that the Philippines’s current competitiveness ranking below the midpoint in Asean is worrying. “We’ve improved but we are rated below the midpoint in Asean and See “2020 vision,” A2

Alibaba to invest $1 billion more in Lazada to speed up Asean drive

l i b a b a G rou p Hol d ing Ltd. will invest another $1 billion to raise its stake in online mall Lazada Group SA to 83 percent, securing control of a fast-growing start-up at the vanguard of its Southeast Asian expansion. T he C h i ne s e e - c om me rc e leader is buying out most other

backers in a deal that values the Singapore-based start-up at $3.15 billion, Lazada CEO Maximilian Bittner said, with management and Temasek Holdings Pte. remaining as the only other investors. Lazada’s previously disclosed backers include British supermarket chain Tesco Plc. and Investment AB Kinnevik.

Alibaba took control of Lazada last year from Rocket Internet in a $1-billion deal— its largest overseas move to date. The company Bittner started in 2012 is now pivotal to quickening the Chinese online retailer’s forays abroad, f u lf i l l ing bi l l iona ire cofounder Jack Ma’s ambitions of Continued on A2

n japan 0.4474 n UK 64.4258 n HK 6.4434 n CHINA 7.3757 n singapore 36.2406 n australia 38.1086 n EU 57.0021 n SAUDI arabia 13.4018

Source: BSP (28 June 2017 )

A2 Thursday, June 29, 2017

BMReports BusinessMirror

www.businessmirror.com.ph

Solon seeks reimposition of telcos’ franchise tax Continued from A1

This is why Deputy Speaker Sharon S. Garin of AAMBIS-Owa Party-list is seeking to amend the National Internal Revenue Code (NIRC) to reimpose the franchise tax on telecommunications entities. If enacted, Garin’s House Bill (HB) 5444 will reimpose the franchise tax at the rate of 8 percent on the gross receipts of telcos in lieu of the value-added tax (VAT) to which these entities’ earnings are presently subjected to but is being passed on to consumers. “Telcos were granted franchise

tax exemptions when the industry was still starting out in the country in order for the telcos to fully capacitate themselves and strengthen the industr y. Now the industry has immensely grown in the recent years,” Garin said. The lawmaker, citing the Standard and Poor’s, said revenues in the Philippine telecommunications industry are seen to grow by about 2 percent to 4 percent per year in the coming years, as smartphones become more accessible and data usage increases. Globe repor ted 2016 f u l l-

year revenues rising 6 percent to P119.99 billion, while PLDT Inc.’s gross receipts for the year amounted to P165 billion. For this year, the budget of the Office of the President is P20.17 billion. The House of Representatives, on the other hand, will get P9.68 billion, and the Senate P4.19 billion. “ With the advancement of technology and the ever-growing demand for telecommunications service, this industry undoubtedly has become a significant sector for the country’s economic growth,” she said.

Remove loopholes

HB 5444 is currently pending before the House Committee on Ways and Means. “With this proposal, simplified and uniform taxation will be achieved and the problems related to tax administration, such as tax evasion and undue tax crediting, among others, that result in poor tax collection will be adequately addressed,” Garin said. Under the bill, the secretary of finance shall, upon the recommendation of the commissioner of Bureau of Internal Revenue, promulgate the necessary rules and regulations for

its effective implementation.

‘Most profitable’

According to Gar in, some of these telecommunications businesses have become the country’s most profitable corporations, and yet the tax incentives provided were never revoked. “The country’s telecommunications industry has been particularly energetic for some years, there has been the development of SMS as an effective communications service, significant expansion in broadband, and also progress in the rollout of optical fiber infrastructure,” she said.

Alibaba to invest $1 billion more in Lazada to speed up Asean drive Continued from a1

becoming a truly global business. Lazada’s home turf is shaping up to be the next battleground for Alibaba and main Chinese rival JD.com Inc. and Amazon. com Inc. down the road. While still lacking the transport and payments infrastructure crucial to the widespread adoption of ecommerce, the region has become the world’s fastest-growing Internet arena, with a populace of more than 600 million getting more comfortable with online shopping and payments. “Obviously this allows Alibaba to expand its global footprint, giving them unrivalled access to users,” Bittner said in an interview.

“E - com merce penet rat ion i n Southeast Asia is only roughly 3 percent, so the partnership is a great step change.” Amazon hasn’t yet voiced its intentions for Southeast Asia, but the industry expectation is that its constant quest for growth will lead it there as early as this year. Now that Alibaba’s established its dominance of China and Amazon has taken the lead in the US, both are looking to make their mark overseas. JD, whose preference for building its own distribution more closely mirrors Amazon’s, is also said to be in talks to invest hundreds of millions of dollars in Indonesian online marketplace To-

kopedia. Alibaba—which despite its sheer scale still derives most of its revenue from China—has been the most aggressive thus far. It’s amassing a regional presence in anticipation of Amazon’s eventual entry, starting with 51 percent owned Lazada. Ma traveled to Kuala Lumpur in March to declare Malaysia its first logistics hub outside of China, a centralized warehousing and distribution launchpad for the region. Indonesia, the world’s fourthmost populous nation, is considered among the most promising markets in the region. The country draws comparisons with China a decade ago, with its lack of

retail infrastructure, an exploding mobile-user base, and a growing middle-class craving leisure and quality goods, which underpinned the rise of both. L a z a d a it s e l f c o v e r s s i x countries—Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam—and runs about a dozen warehouses and scores of distribution centers from which it conveys goods directly to buyers. The company is competing with well-funded rivals from MatahariMall to Sea Ltd., but Bittner said Lazada can count on Alibaba’s expertise. This year the two introduced Alibaba’s Taobao online bazaar to Singapore via a dedicated web site.

It also helped Lazada create an online loyalty and services program that offers UberEats and Netflix along with free deliveries from Alibaba’s Taobao and online grocer Redmart. It was the first time the US companies have jointly created an online rewards program, Bittner said at the time. “ T he e-commerce markets in the region are still relatively untapped, and we see a very positive upward trajectory ahead of us,” Alibaba CEO Daniel Zhang said in a statement. “We will continue to put our resources to work in Southeast Asia through Lazada to capture these growth opportunities.” Bloomberg News

Just share

“It is important that the government gets hold of its just share in the form of taxes in the profits coming from the telecommunications industry to secure the continuous development of the country’s economy,” Garin added. Garin said these telcos should not pass on the burden of the franchise tax to their consumers, as it is them who are benefiting from the franchise given by Congress, and not the consumers. “The passage of this bill will not add burden to our people,” Garin said.

2020 vision. . . Continued from A1

that is simply not good enough. We can’t accept being seventh out of 10 in Asean. “We want to be able to improve this so we have to push government online,” Luz added. One step forward is the creation of online portals for industry, trade and national-quality infrastructure, to name a few. To fast-track the placement of digital infrastructure, Luz suggested going outside the traditional procurement process, as well as the hiring of independent tech entrepreneurs to build it. Businesses or individuals can avail themselves of this is on a subscription basis. Lopez said the vision is to have all government agencies involved in running a business in a single automated system. “It’s just linking all these agencies up.”

The Nation BusinessMirror

news@businessmirror.com.ph

Editor: Dionisio L. Pelayo • Thursday, June 29, 2017 A3

House eyes filing of charges vs Bongbong By Jovee Marie N. dela Cruz

@joveemarie

HE House of Representatives is studying the filing of charges against former Sen. Ferdinand “Bongbong” R. Marcos Jr. for advising his sister, Ilocos Norte Gov. Imee R. Marcos, not to attend a House inquiry on the alleged fraudulent use of a P66.45-million tobacco fund.

PDP-Laban Rep. Johnny T. Pimentel of Surigao del Sur, chairman of the House Committee on Good Government and Public Accountability, however, said he would consult first the members of his committee on the matter. After repeatedly snubbing the

panel’s prior invitations for her to testify on the matter, Imee was subpoenaed to the fourth hearing on July 25. However, Pimentel, citing the governor’s news briefing on June 23, said upon the recommendation of her younger brother Bongbong,

she would stay away from the July 25 hearing. “I want to explain myself in Congress but others said I should not. Bongbong told me I could also be detained,” Pimentel’s news release quoted Imee as saying. Pimentel said Bongbong may suffer the same fate as Sen. Leila M. de Lima. The leadership of the lower chamber filed a complaint against de Lima when she advised her former driver-bodyguard, Ronnie Dayan, not to appear in a committee hearing on the alleged drug trade inside the New Bilibid Prison despite the issuance of a subpoena. Last year the House Committee on Justice held Dayan in contempt and issued a warrant of arrest against him after he failed to show up to testify on the materiality of all allegations against him. “On that day [July 25], we will be issuing a subpoena already to Gov.

Imee Marcos and if she [still] does not appear, we will be constrained to issue a warrant of arrest for her just like what happened to Ronnie Dayan,” Pimentel said. Pimentel added Imee’s detention space at the House of Representatives is now being prepared, “If she does not show up, her arrest and detention is as sure as the sun rising tomorrow.” The committee has been investigating the provincial government’s alleged misappropriation of P66.4 million in public funds representing Ilocos Norte’s share of excise tax collections from locally manufactured Virginia-type cigarettes following the filing of resolution by House Majority Leader Rodolfo C. Fariñas, an erstwhile Marcos ally. Under Republic Act 7171, the 15-percent share of Virginia tobacco producing provinces shall be allotted for livelihood projects and infrastructure projects as a special support for tobacco farmers.

Meanwhile, Fariñas is eyeing to file graft charges against the members of the Ilocos Norte Sangguniang Panlalawigan for declaring him persona non grata in his own province. “I will file cases against them for damages for the violation of my constitutional rights, as well as for a violation of the Antigraft and Corrupt Practices Act for causing me undue injury through evident bad faith,” Fariñas told reporters. Fariñas said the provincial board cannot declare him, a Filipino citizen, a persona non grata, saying such declaration only applies to foreigners. “I am a citizen of this country and no one, especially Sangguniang Panlalawigan members, can declare me, or any other citizen of this country, a persona non grata. Not even convicted criminals are declared as such,” he added. “Such a person is for all intents and purposes culturally shunned,

so as to be figuratively nonexistent. That is what those eight have done to me,” he added. Six provincial executives have been detained at the House since May 29 “for their contemptuous act of giving evasive answers, tantamount to refusal to answer” questions about the money meant for the benefit of tobacco farmers, but supposedly misused as cash advances for the purchase of motor vehicles sans the benefit of competitive public bidding. Still being held at the House are Provincial Treasurer Josephine Calajate; Encarnacion Gaor and Genedine Jambaro of the Office of the Provincial Treasurer; Budget Officer Evangeline Tabulog; Bids and Awards Committee Chairman and Provincial Planning and Development Office Head Padro Agcaoili; and Eden Batulayan, officer in charge of the Provincial Accounting Office.

Postponement of barangay, SK polls up to Congress–Comelec By Joel R. San Juan @jrsanjuan1573

HE Commission on Elections (Comelec) on Wednesday said it would not endorse the postponement of the barangay and Sangguniang Kabataan (SK) elections as the matter should be left to discretion of our lawmakers.

In a statement, Comelec Spokesman James Jimenez clarified that the poll body “is neither in favor nor opposed” to the postponement of the said elections, which is scheduled on October 23. “The Comelec has consistently adopted a neutral stance in the debate on whether the BSKE should be postponed.… The Comelec is not urging

postponement of the 2017 barangay and SK elections,” Jimenez said. He added this is consistent with their role as enforcer of prevailing election laws. The Comelec issued the statement following comments made by Party-list Rep. Antonio L. Tinio of ACT Teachers that it is inappropriate for the Comelec to urge the

Help from China President Duterte poses for a photograph with (from left) Chinese Ambassador to the Philippines Zhao

Jianhua, Social Welfare Secretary Judy M. Taguiwalo and Health Undersecretary Herminigildo Valle during the turnover of the P15-million donated by the Chinese government at the Music Room in Malacañang. The check is intended for the rehabilitation of Marawi City. PNA

Mothers of missing UP coeds renew call for justice By Marvyn N. Benaning Correspondent

ONCEPCION EMPEÑO and Erlinda Cadapan, mothers of missing University of the Philippines (UP) students Karen and Sherlyn, early this week commemorated the 11th year of their disappearance by renewing their call for justice. “Today, June 26, 2017, marks the 11th year of Karen’s and Sherlyn’s abduction…still no significant change on the case, despite the changes of leadership in our country. For Karen’s family, it is 11 years of torment— emotional, mental, social and financial. We do hope that in this present administration under President Duterte, our case will be solved and closed with faultless decision. To our dear President, our plea: Justice for Karen and Sherlyn!” said Nanay Connie, as Empeño is fondly called, in her Facebook account. Nanay Connie was with her grandchildren in their hometown in Zambales the whole day.

When asked what she did the whole day, she said, “Nag-usap kami ni Tatay sa sitwasyon ng kaso na sobrang bagal. Sana matapos na at mabigyan na ng tamang desisyon [Karen’s father and I talked about the very slow status of the case. We really hope it will be resolved soon and be given the correct decision].” She also thanked humanrights lawyers from the National Union of People’s Lawyers, public prosecutors from the Department of Justice and human-rights alliance Karapatan for their tireless support. Pinning their hope on Duterte’s sense of social justice, Nanay Connie said, “Sana talaga matulungan tayo ni Pangulong Duterte na matapos na ang kaso [We really hope President Duterte will help so that the case will be resolved soon].” Meanwhile, Sherlyn’s mother Linda, thanked all those who have supported them in their search for their missing daughters, and those who shared their struggle for justice. However, she lamented the

pains of a mother in search for her child. In a Facebook post, she asked: “Kailan...? Ubos na ang luha at lakas, paghahanap, mayakap muli ang mapagmahal sa mga dukha; ayaw ko ang tagpo sa kabilang mundo…[Until when (shall we search)? Tears and strength have dried up, we continue to search, to whom I long to embrace, she who empathized with the poor; I fear that only in the afterlife shall we meet again].” Since 2007, friends and relatives of Karen and Sherlyn have gathered on the day of their enforced abduction to call on government agencies to produce them alive, along with Manuel Merino, the Bulacan farmer snatched along with them, and hundreds of other people taken into custody by suspected state agents. A tribute for them will be held on June 29 by the Tanggulan Youth Network for Human Rights and Civil Liberties and the University of the Philippines— College of Mass Communication Student Council.

postponement of elections. “If an election is scheduled, it will be held; if Congress decides, as several bills currently pending in the House would have it do, to change the schedule, then the Comelec will comply,” Jimenez said. Jimenez clarified that Comelec Chairman Andres D. Bautista was only urging lawmakers “to already

decide on the fate of the barangay and youth polls”. “The Comelec is seeking the earliest possible resolution to the question of whether the elections will be allowed, by Congress, to proceed as scheduled or not,” Jimenez added. He said the commission issuing such an appeal is only natural considering the proximity of election day.

“The inescapable fact is that the Comelec is already on a trajectory that will lead to significant expenditures. It behooves the institution, therefore, to seek clarification from Congress,” Jimenez noted. A bill filed in the Senate is seeking the postponement of the barangay and SK elections to October 2018.

Economy

A4 Thursday, June 29, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon

PEMC launches trial operations of Mindanao power spot market

total of 41 firms participated in the trial operations for a spot market in Mindanao, the Philippine Electricity Market Corp. (PEMC) said on Wednesday. The trial operations of the Wholesale Electricity Spot (WESM) in Mindanao is expected to last for three months. The success of the trial operations is key to pursuing a commercial launch of the program. “PEMC, as the designated market operator, is committed in ensuring the readiness of the personnel and interfaces of our Mindanao participants to ensure a functional electricity market working in raising the competition and transparency in the power industry,” PEMC President Melinda L. Ocampo said. The WESM participants include the National Grid Corp. of the Philippines as the system operator and metering services provider, generation companies, distribution utilities and grid-connected customers. They are involved in the conduct of end-to-end testing of all interfaces and systems that include simulations of all processes, such as registration, bid submission, pricing and scheduling, and settlement. PEMC said the trial operations program signals the start of implementing test cases of a marketbased mechanism for the efficient scheduling, dispatch and settlement of energy withdrawal and injections in the Mindanao grid brought about by excess generation supply starting in 2016 with the entry of 748 megawatts (MW) of new generation capacity, which is expected to increase further by 1,260 MW until 2018. The integration of Mindanao to the WESM would cover, among others, the following: application of the Energy Regulatory Corp.-approved price determination methodology (PDM) for pricing and settlement of electricity transactions in the

Mindanao grid; utilization of the market management system (MMS) for the determination of dispatch schedules in the Mindanao grid; provision of access to Mindanao generators and customers to the MMS for the submission of bids, offers and self-schedules, and other trading functions; real-time publication of wholesale prices for electricity in the Mindanao grid in the public web site; and eligibility of Mindanao stakeholders for membership in the Philippine Electricity Market Board and its various committees. Coinciding with the onset of the Mindanao trial operations program is the initiation of the live parallel operations of the new market management system (NMMS), in the Luzon and Visayas grids. The live parallel operations is a milestone in the implementation of the enhanced WESM design via the NMMS enabling the market operator, the system operator, trading participants and other service providers to operate under a live market environment of the NMMS in parallel with the existing market management system until the transition to commercial operations, or “Go Live”, of the NMMS. The results of the NMMS will not be used in the billing and settlements processes of actual transactions, hence, will not be financially binding. Ocampo said the live parallel operation is a transition phase that comes after the trial operations stage, which commenced on March 26 and prior to the Go Live. During this period, the NMMS is subjected to actual inputs with the goal of evaluating the resulting prices and schedules, and assessing the NMMS’ performance in a real-time environment. It shall also gauge the readiness of the interfaces of the trading participants and the system operator in this real-time environment. Lenie Lectura

BusinessMirror

news@businessmirror.com.ph

Groups urge ERC to thrash Meralco’s ‘shady’ PSA deals

By Lenie Lectura

@llectura

embers of civil society and representatives of communities and consumers affected by the operations of coalfired power plants filed on Wednesday before the Energy Regulatory Commission (ERC) separate petitions for intervention regarding Manila Electric Co.’s (Meralco) applications for power-supply agreements (PSAs).

Meralco’s PSA applications filed in April last year are pending before the ERC. These PSAs with seven power generation companies cover a total of 3,551 megawatts (MW). Sought for comment, Meralco said, “The PSAs they [the petitioners] are questioning have been filed more than a year ago. Meralco and these suppliers have complied with all requirements of the regulator. Negotiations prior to the submission of said PSA applications had been rigorous with the end in mind of securing supply for our customers at the most reasonable cost possible. We remain committed in providing efficient, reliable and steady supply without harming the environment. It is also very important to note the importance of energy security to ensure the continued growth and progress of the country.” The seven PSAs are the following:

3,551 MW The power generation coverage of Meralco’s seven pending applications for PSAs before the ERC filed in April last year Meralco with Redondo Peninsula Energy Inc., which covers the supply of 225 MW; Meralco with St. Raphael Power Generation Corp. (SRPGC), which involves 400 MW; Meralco with Atimonan One Energy Inc. for the full output of the latter’s 2x600-MW supercritical coal-fired power plant; Meralco with Panay Energy Development Corp. (PEDC), which involves 70 MW; Meralco with Global Luzon Energy Development Corp., which covers 600 MW; Meralco with two San Miguel power plants, Central Luzon Pre-

miere Power Corp. and Mariveles Power Generation Corp. (MPGC), for the purchase of up to 528 MW of capacity; and The Center for Energy, Ecology, and Development (CEED), along with Sanlakas, Philippine Movement for Climate Justice, Freedom from Debt Coalition (FDC), Koalisying Pabahay ng Pilipinas and other member organizations of the Power for People organization filed their respective petitions questioning various irregularities concerning the process of applications, as well as negative consequences, which would arise if Meralco’s applications are granted. Lawyer Aaron Pedrosa of Sanlakas lambasted Meralco for its alleged “shady” dealings, saying its purchase of power from the generation companies are “incestuous”, given that it has vast shares from all seven of the companies. “With its investments ranging from owning 14 percent in PEDC, to 49 percent of MPGC, and even 50 percent of SRPGC, Meralco would have even greater influence in setting the price of electricity and ensuring maximum profit for its investors,” Pedrosa said. “This is not only reflective of the failure of the Epira [Electric Power Industry Reform Act] to prevent market influence by big electricity oligarchs, but also contradicts the promise of decreasing the price of electricity for citizens,” Pedrosa added. “We now challenge the ERC to consider…[our] interests…who would shoulder the burden of these shady dealings and throw out Mera lco’s m id night contracts,” Pedrosa stressed. Further, the approval of Meralco’s PSAs would lead to 3,551 MW of coal entering the pipeline, which would pose great harm to the people’s health and livelihood, as well

as the environment and the climate, CEED Convener Gerry Arances said. “But on top of this, Filipinos will end up paying more for electricity if Meralco would have their way.” Arances explained that if the ERC approves Meralco’s applications the country would still be dependent on coal for the next 20 years, which means that regardless of the trend of decreasing costs for renewable-energy (RE) technology, the Philippines will be stuck with operating and paying for costlier energy from coal. “Despite the passage of the Renewable Energy Act of 2008, RE share in the power mix has not increased from 34 percent in that year. In fact, it has even decreased to 29 percent as of 2016,” Arances added. “About 70 percent of power projects to go online in 2019 will be from coal. This means that by 2021, coal will supply at least 50 percemt of our energy needs,” Arances said. Butch Junia of the FDC, who personally filed an earlier petition of intervention regarding the PSAs on June 13, said Meralco’s midnight contracts should be subjected to the competitive selection process (CSP) in order to ascertain if “it is the best and least cost supply for consumers”. “Conveniently for Meralco, the ERC had previously reset the CSP’s effectivity date last year from November 6, 2015, to April 30, 2016. This would exempt the PSAs from undergoing the transparent and public bidding ordained in the CSP,” Junia said. “Even with this, Meralco’s PSAs were still late, as it was filed after office hours of April 29, 2016, which was a Friday and last business day of April. Thus, the ERC must follow its own rules and throw out the midnight contracts so that such a transparent and public bidding may take place,” he added.

Judgment day for ‘erring’ mining Transport group firms likely in July–DENR official rejects OFG for By Jonathan L. Mayuga

@jonlmayuga

he Department of Environment and Natural Resources (DENR) is now drafting resolutions of mine closure orders and will be ready for release by July, Environment Undersecretary for Legal Affairs Maria Paz Luna said on Wednesday. The DENR Legal Affairs Department, headed by Luna, has been tasked to review appeals made by “erring” mining companies whose operations were either closed or suspended by former Environment Secretary Regina Paz L. Lopez during her brief stint with the DENR. In a text message, Luna said the DENR is working on the motion for reconsiderations filed by affected mining companies. She, however, declined to reveal as to how many or which companies have filed the motion for reconsideration before the department. The Legal Affairs Department was earlier tasked to conduct a review on Lopez’s order to crackdown on mining companies. The feisty former secretary, however, was forced to step down from the top DENR post in May. “We worked on the recommendations one by one based on the motion for reconsideration of each, and we are not at liberty to share draft decisions. The secretary would still have to make the decision [based] on the drafts. But the MICC [Mining Industry Coordinating Council] review is parallel,” she said. “We are just preparing draft decisions of the secretary and we are doing them as a matter of course. If the secretary announced that he will decide [on] them all by July, then we are ready,” Luna said. Some of the appeals, she added, were referred back to the Mines and Geosciences Bureau (MGB) or the Environmental Management Bureau (EMB). “They [appeals] are legal motions so the DENR Legal Services does have the mandate to address them for the secretary’s final say. We do refer back to the MGB and EMB when we have questions on the mine audit and the Technical Review Committee recommendations,” Luna said. Early this week, Lopez’s predecessor, Roy A. Cimatu, was quoted in news reports as saying that the final decision on the mine closure orders will be out next month. More than two dozens large-scale operating mines have been issued closure and suspension orders as a result of a mine audit review for alleged violation of mining and environmental laws triggering howls of protest among miners. Eventually, miners fought back and won a battle in the powerful Commission on Appointments that decided to reject early in May Lopez’s appointment. An environmentalist, Lopez’s cracked down was anchored on an audit criteria based on environmental, social and biodiversity considerations.

PUV upgrade

iththereleaseoftheOmnibusFranchisingGuidelines(OFG),atransport group will hit the roads again carrying calls of disapproval against the public-utility vehicle (PUV) modernization program. The Angat Tsuper Samahan ng mga Tsuper at Operator ng Pilipinas Genuine Organizations Transport Coalition Inc. (Stop & Go) said, after their consultation with members and other progressive groups, they have decided to protest against the OFG. “The reason we haven’t made a move since the second dialogue on May 25 was because we have yet to see the OFG, which should be our basis to protest. Now, we already have a basis to go out again and condemn it,” said Pascual Magno Jr., who sits as president of Stop & Go. Transportation Secretary Arthur P. Tugade, along with other government officials, on June 19, signed the OFG, which includes requiring local government units (LGUs) to develop their own Local Public Transport Route Plan. The local transport plan will be based on the current and projected travel patterns in their respective areas, and shall be used by the Land Transportation Franchising and Regulatory Board as basis for franchise issuance. Magno pointed out parts of the guidelines which they deem “unacceptable” in their sector. Among these are the installation of Global Navigation Satellite System, Wi-fi, automatic fare collection, fixed salary for public-utility jeepney drivers, required off-street terminal and the three-year transition period. “We’re going to come up with what we call a Public Transport Information and Management System. We’re living to the day when all PUVs will have those features to monitor where they are. We’ll be able to monitor in terms of addressing supply and demand issues,” LTFRB Chairman Martin Delgra said on during the launch of the PUV modernization program. Charlotte Furigay

The Regions BusinessMirror

news@businessmirror.com.ph

₧4.9-B Panguil bridge to spur Mindanao’s economic devt By Beatriz Zamora

Special to the BusinessMirror

ORTHERN Mindanao is seen to persist on an accelerated growth path after three years as the government gears up to finish the P4.9-billion Panguil Bridge by 2020, a facility expected to increase economic activities in the area.

By connecting the provinces of Misamis Occidental and Lanao del Norte through a two-lane bridge, the Department of Public

Works and Highways (DPWH) said it expects economic growth in the region to be at full speed by 2020, thanks to increased

mobility of goods and services. “The P4.9-billion mega infrastructure project is expected to accelerate and sustain the economic growth in Mindanao by providing the efficient and seamless transport of goods and services,” the DPWH statement read. In 2016 the region registered a 7.6-percent increase in gross regional domestic product. Northern Mindanao owes majority of its local output to the service sector, comprising 43 percent of its P305billion value in the past year. The Panguil Bridge will be funded through a mix of official development assistance from South Korea and taxpayers’ money. Broken down, P4.272 billion will come from the Korea Economic

Development Corp. Fund, and the balance of P587,000 will be from the national budget. Korean consultants from winning bidder Yooshin Engineering Corp. will help the DPWH with design reviews and construction supervision. Public Works Undersecretary Emil K. Sadain and Korean company’s President Kuan Jung Joo signed the memorandum of agreement for consultancy services on Wednesday. Flagship projects, such as the Panguil Bridge, are part of the plan to mark the current administration as the “golden age of infrastructure”, with spending-to-GDP ratio targeted to reach 7.2 percent at the end of President Duterte’s term.

Ayta tribesmen eye mall sales of native craft By Henry Empeño Correspondent

ALAUIG, Zambales — About 30 families belonging to the indigenous Ayta tribe in this province are now setting their sights on selling handcrafted native products in high-end retail stores after completing a governmentsponsored livelihood-training program. The Ayta folks, who live at the Dampay Resettlement Area in this town, had mainly lived off the land by tilling upland farms and by foraging ever since they relocated here in 1992 after the Mount Pinatubo eruption. Now, armed with a new skill set, as well as modern tools from the Department of Trade and Industry (DTI), they are starting to make furniture and novelty items from the bamboo trees that abound in the upland community. Pa stor Joseph Bad a r, t he 57-year-old chieftain of the Ayta Tribes in Palauig (Atip), said his people previously made barbeque sticks and skewers from bamboo in order to earn a living, but this gave them very little income. And aside from the root crops and banana they harvest from their farms, the tribesmen did not have any other local raw material they can put to commercial production. “That is why we really need to increase our knowledge in bamboocraft making. We need this to improve the lives of the Ayta people,” Bandar added in Filipino. “This suits us perfectly because the raw materials are abundant here and we don’t have to buy them.” It took five days for the DTI trainers from the Manila office to teach the Aytas bamboo-craft

A TRAINING participant assembles components of a bamboo furniture. HENRY EMPEÑO

making, three days for bamboo furniture and two days for bamboo novelty items. “This was because we have to orient them first on the basics, like the varieties of bamboo, maturity and harvesting, treatment and preservation, as well as machine operation, assembly and maintenance,” said John Neil Fabay, DTI project officer for the Atip community. “What is also important is that after the training, they should be able to demonstrate proper working attitude, which will be very important, as well as discipline and interest for the workshop.” After the lectures, the participants were grouped together ac-

cording to their best possible roles in the production line, and then given hands-on training. Most of the menfolk were assigned to cutting the bamboo poles and putting holes and designs on them with the use of electric tools, while most of the women did sanding and polishing, as well as decorating. At this point, the participants were expected to be able to demonstrate competence in safe machine operation and maintenance, perform proper material selection, perform appropriate preservation and perform assembly. Fabay said the participants would eventually settle into spe-

cialized tasks down the production line, while others would shift to related projects like coconut-shell products. Aside from teaching them bamboo-craft production, the DTI would also help the Ayta tribesmen market and distribute their products. Fabay added the DTI is eyeing a tie-up with major retail establishments, like Kultura Filipino at SM malls, to carry the line of bamboo furniture and novelty items to be produced by the Atip members. Ku lt u ra Fi l ipi no c a r r ies a wide range of furniture, houseware, home decors and souvenir items made mostly of indigenous products.

China donates P15M for relief operations, rehab of Marawi City

HE Chinese government donated P15 million to the Philippine government for the relief operations and rehabilitation of Marawi City in Lanao del Sur. Chinese Ambassador to the Philippines Zhao Jinhua on Tuesday presented to Duterte a P15million check donation for allocation to the Department of Health (DOH) and the Department of Social Welfare and Development (DSWD). The DOH and the DSWD are in command of the immediate operations, such as medical response, evacuation and logistical support, to the victims of the conflict in Marawi City. In a statement, Malacañang described the Chinese donation to the Philippines “as an example of the flourishing partnership between two countries and their

shared commitment toward sustainable peace in the region”. As of Monday, the DOH has spent P52 million for the medical checkups, immunizations, medicine and mental and psychological services to the displaced persons. Meanwhile, the DSWD has shelled out P85.53 million worth of assistance to the affected families, mostly for food packs, hygiene and dignity kits, kitchen utensils and tents. In a speech on Tuesday, Duterte vowed to ma ke Maraw i Cit y great again. “One thing I will promise you, my brother Moros, I will see to it that Marawi City will rise again as a prosperous city,” he told an audience largely composed of representatives of the Muslim community. The Chief Executive said he

would seek funding for the rehabilitation of the besieged municipality to ensure its swift and efficient recovery from the atrocities of the conflict. “I will tell Sonny [Finance Secretary Carlos G. Dominguez III] that I will be needing a big amount because I will rebuild Marawi City,” Duterte added. Duterte said the government is doing everything to hasten the flushing out of the Maute Group terrorists from Marawi City. He said he instructed relevant government agencies to begin drawing up the rehabilitation plan. “We have laid concrete plans on the rehabilitation and reconstruction of your lives and communities. Task Force Bangon Marawi, composed of various agencies of the government, is being created to

hasten recovery efforts in Marawi City,” Duterte said. The government has allocated P20 billion for the rehabilitation program and more funds will be added if deemed necessary, he added. “Meaningful and long-term support will also be made available, with the help of our partners in the private sector and the international community,” Duterte said. Fighting in Marawi City has been ongoing for more than a month now, and the conflict has left 397 people dead. The military has failed to fulfill its previous deadlines on putting an end to the war, citing several factors affecting its operations, such as the terrorists taking refuge in places of worship, which government forces cannot bomb. Elijah Felice E. Rosales

Editor: Efleda P. Campos • Thursday, June 29, 2017

LGUs want disaster plans required to okay biz permits By Manuel T. Cayon

@awimailbox Mindanao Bureau Chief

AVAO CITY—Disaster and rescue officials said they want contingency measures, such as the evacuation of clients, included in the checklist of requirements for approving a business permit. Vicente Tomazar, former director of the Office of Civil Defense’s (OCD) operations service, said the contingency or emergency plan is supposed to be the responsibility of the owner or manager of a hotel, shopping mall, a business establishment and even a business office. “But right now, we still have to educate and inculcate in them this responsibility during emergency drills, such as a fire drill and, this time, earthquake drill,” he told the BusinessMirror. “I hope it would come to that because management should be responsible for the safety and wellbeing of their buying customers when they are inside their establishments,” he said. Tomazar was tapped as consultant in the national earthquake drill being piloted here. It would be conducted on Thursday afternoon. Retired Brig. Gen. Leoncio Cirunay, the OCD regonal director here, said he also wished it would be initiated here by the city government. “It would be a great progress in promoting awareness on safety and disaster preparation,” he also told the BusinessMirror. The armed attack and arson at Resorts World Manila was the wake-up call for government to require business operators to present a contingency plan. “But we hope it would be done as a required item in the checklist, not just during inspections.” Tagaytay City has started to require events organizers to have a security personnel and a security plan before approving an event, he said. This was prompted by the disastrous stampede during a popular noontime show of a national television network, and the drowning of Catholic faithful in the river parade in Naga City. Tomazar and a former colleague in the national OCD office, Susana

Juangco, the director of the capacity building and training service, were in the city to witness the piloting of the earthquake drill. Cirunay said 280 earthquakedrill evaluators would be posted in various government offices, shopping malls and hotels in the city to assess “the readiness and capability of the people here to meet the contingency in the event of an earthquake”. For three weeks OCD personnel were sent to the field to talk and brief government officers and their personnel on what to prepare for the drill. They also went to various business stores here. “What is important is to inculcate preparedness among responsible people,” Tomazar added. The city response would be evaluated “on how it evacuated people, how individual offices and management of buildings have identified open the space for evacuation and how the rest of the agencies involved in the disaster preparation were able to perform their designated functions during an earthquake or other calamities”. Specific responses to be evaluated include handling traffic, evacuating people, crowd control and medical response. “A developing trend to be tested here is how certain areas are able to establish the incident command system immediately to contain chaos and enforce a single communication flow,” he said. The National Disaster Risk Reduction Management Center has already directed their regional and city offices to identify the chief of the incident command center “so that when a disaster strikes, the center functions quickly”. Tomazar added there had been disaster drills done for fire and typhoons, but none so far for an earthquake. This city would be the pilot for this semester. The strongest quake to hit the city was magnitude 7.1 in 1974. “We would expect a lot of chaos in an actual event of a strong tremblor,” Juangco said. “We would like to know how this city performs.” She said the piloting was done here “to represent the situations that major cities would find themselves in an actual event”.

Duterte’s aide questions DOTr project in Cebu By Charles R. Pepito Correspondent

RESIDENTIAL Assistant for the Visayas Michael Lloyd Dino is questioning the Department of Transportation (DOTr) project in Cebu, particularly the proposed Bus Rapid Transit (BRT). Dino said the BRT project as originally proposed by Cebu City Mayor Tomas Osmeña was “antipoor” and “anti-Cebuano” and will not even ease the worsening traffic condition in the city. Instead, Dino wants the city to have a Light Rail Transit (LRT), saying the feasibility study for the LRT is finished and will be submitted to the DOTr and the National Economic Development Authority for evaluation and approval. Dino earlier tagged the mayor as a “bully, antibusiness and antipoor”, citing a string of moves by Osmeña, including threatening to close all branches of well-known bank, which Dino said resulted to a gloomy business climate in the city. But Osmeña countered this by saying he is anticorruption and anti-tax evaders, not antibusiness. Osmeña stood firm that a BRT is more feasible and cost-effective than an LRT, stating the BRT will cost less to ride and still be selfsustaining. “I am the elected mayor of this

city. I am the one held responsible. I applied for this job by sharing my vision, and I was hired by the people of Cebu to make it happen. Despite a hostile city council and a presidential ‘assistant’ who plays politics every step of the way, I am moving as fast as I can,” Osmeña said. Osmeña challenged Dino to run for mayor of Cebu City in 2019 if he thinks he can do a better job. “We will integrate if it comes, but I have my doubts on how sustainable any rail system will be, given its track record in Manila,” Osmeña said, referring to the LRT project being pushed by Dino. A total of 64 big-ticket projects ranging from major road networks, railway systems and a BRT system to airport and seaport modernization are either for implementation or in the pipeline as part of the Duterte administration’s envisioned “golden age of infrastructure”. The 64 projects for implementation or in the pipeline are broken down as follows: 20 involving road construction and improvements; two involving bridge construction and reinforcements; four floodcontrol projects; two dams; one road transport information technology-infrastructure project; 23 involving rail systems; seven airport development projects; two transport terminals; and three BRT systems.

TheBroa

Business

Thursday, June 29, 2017

PHL ICT projects seen I By Rizal Raoul Reyes Contributor

Maria Eden T. Dino & Mary Noll Christine P. Caadyang Interns

Marcelomayo | Dreamstime.com

NFORMATION and communications technology (ICT) has been hailed by many governments around the world as the great enabler to achieve a higher degree of efficiency, better productivity, stronger transparency and improved government service to the people.

Politicians in a developing country such as the Philippines got the point. The government has realized the importance of ICT in upgrading governance and public service, but not without advocacy from the private sector. Since the 1990s, local ICT advocates have been pushing for the development of ICT-related initiatives not only to make the Philippines more competitive in the digital economy but also to improve government services to the citizens. In response, the administration of President Duterte under the newly established Department of ICT (DICT) has launched on June 23 three projects the government expects would give birth to digital Filipinos.

Free Internet

ONE of the three projects formally launched on Friday was the socalled Pipol Konek. Documents from the DICT described the project as providing free wireless-fidelity (Wi-Fi) Internet access in public places. The first of its kind in South East Asia, Pipol Konek aims to raise digital literacy and citizen productivity through easy access to government online services, information and other online opportunities. According to ICT Undersecretary for Special Concerns Eliseo Rio, there are 381 “live” project sites, and 904,588 devices had access to the free public Wi-Fi as of June 19. The project will cover 1,634 total localities, including 13,024 public places, 1,489 municipalities and 145 cities with 18 points of presence across the Philippines. Among the public places to be covered are 4,568 schools, 3,173 parks and plazas, 2,277 government hospitals, 677 libraries, 1,557 national government offices, 682 state universities and colleges and 90 seaports, airports and train depots. Once the project has been

fully implemented, the free Wi-Fi in public places will serve 105,000 concurrent users with 256 kilobytes per second (kbps) each, the minimum speed requirement of a broadband service.

User levels

TO ensure Filipinos and tourists will equally benefit from the project, users will be subjected to a three-level log-in scheme. In the first level, the user will instantly enjoy a 50-Megabyte (Mb) daily data or 1 Gigabyte (Gb) monthly data without registration. Users at this level, however, would be required to have a machine ID or a media access control (MAC) address. A MAC address of a computer is a unique identifier used as a network address for network technologies like Ethernet and Wi-Fi. Users of second-level registration would have a 100-Mb daily data or 2-Gb monthly data after presenting a Philippine government ID or registering an e-mail account with the system. In the case of a foreigner, a web-based registration system that would accept an image of an acceptable ID can be considered. A username and password will be provided so the user can access the Internet on multiple devices. Both level-1 and level-2 registered users would have their data limit reset at 12 noon the following day.

Full access

AT the third and highest level of registration for the free Wi-Fi connection, users would have full access to benefits of e-Government services by presenting their Citizen’s Digital ID. Level-3 registered users can enjoy 300 Mb per day or 3-Gb monthly data. This, however, is not available to foreigners. “We make sure that in all our free Wi-Fi access points, the citizens will more or less not pay for the speed,” Rio told the BusinessMirror. Other limitations on the us-

age of free Internet were proposed, including restricting the services made through blacklisted websites and a multilevel registration for an equal Internet access. “This service should not violate the privacy but, at the same time, we are still giving the access that is useful for the citizens. It is a balance of what content that our citizens get from our free Wifi,” Rio told the BusinessMirror. “There must be some limits of access, because if you get all the bandwidth, then the other people around you will not get the same service as you get.”

Connected MRT

TO make the Pinoy Konek more relevant, the government will launch the free Wi-Fi access along the Metro Rail Transit Line 3 (MRT-3) on July 12. According to ICT Secretary Rodolfo A. Salalima, the Internet connection will cover the North Avenue to Taft Avenue stretch on or before the President’s State of the Nation Address on July 24. The stretch of Balintawak to the SMTriNoma Mall would be covered on August. The Internet connection is being provided by the government’s Juan Connect Network, which has a daily capacity of 100 megabytes per user (Mbpu). Salalima said during the launch the 200-Mb to 300-Mb connection speed users experienced on July 12 would most likely fall as the number of commuters will rise mid-June. Two private network providers would be giving 30-minute free Internet access for every commuter each day. Users would be charged for exceeding consumption. Furthermore, the access of each connected devices will reset at 12 noon.

Sustainability issue

IN line with the sustainability of service and consistent nationwide coverage, ICT Undersecretary for Developmental and Innovations Denis F. Villorente said the project

needs the support of other government agencies. “We are hopeful with the passage of the free Internet bill [since] it [would] provide the specific mandate to provide free Internet in public places and it also sets certain performed centrics,” Villorente told the BusinessMirror. Senate Bill 1277, or the Free Internet Access in Public Places Act, has been approved by the bicameral committee on May 19 and is now awaiting Duterte’s signature. Still, as the budget for the project increased from P339 million to P1.408 billion, the scope of the program has expanded, according to ICT Undersecretary Monchito Ibrahim. Ibrahim said cities that were underdeveloped would be also included in the project by bringing investors in the area. “It is all about bringing the jobs to where the talents are, and we are talking here of the countryside. We all know that 75 percent or

even more of the annual graduates that we have are partly from places outside of Metro Manila.” “However, 80 percent of the jobs are actually in Metro Manila. What we are trying to do to help develop the countryside cities is to make them more attractive to investors so that investments in those cities will bring jobs,” Ibrahim said.

National Government Portal

ANOTHER project rolled out expected to raise more digital Filipinos is the gov.ph, or the National Government Portal (NGP). Documents from the DICT said the NGP will function “as a single website for all web-based government content to maximize efficiency and high-quality service for the citizens.” According to Salalima, the NGP seeks to have happier and more satisfied citizens and other users of online services. Other objectives of the NGP are continued

improvement in the Philippines’s international and e-government ranking and easier and more economical aggregation of resources and information. Salalima added the NGP also aims for faster government transactions, processes and services through the use of online forms. The fourth objective of the NGP is increased efficiency of communications between and among the government, citizens and business users. Salalima said he expects government operational expenses will decrease as there will be centralized management of the website. He explained that through the NGP, state employees can work on a collaborative environment, allowing them to engage in data sharing. Salalima said this interaction is expected to streamline government processes and boost transparency in the bureaucracy. Equally important, the portal will give the Philippine govern-

aderLook to breed digital Pinoys

sMirror

www.businessmirror.com.ph | Thursday, June 29, 2017

plaints section to handle request for government assistance and complaints.

Broadband capability

Leonovsilver | Dreamstime.com

AT the end of the day, the government still needs to tackle the challenge of broadband access in the country. Nevertheless, Villorente said the government is seeking ways to develop the country’s broadband capability. He adds the government will undertake a feasibility study on how to reduce the cost of the development of the broadband infrastructure. Meanwhile, the W3C Interest Group stated in one of its papers that pursuing the mobile route is a viable option for developing countries like the Philippines. “For many constituents in developing countries, mobile delivery and retrieval are the only opportunity and method for access given the lack of needed telecommunications and networking infrastructures,” the W3C said. “The cost of access is also an issue since computers and connection points are still economically out of range for a majority of people around the world.”

National Broadband Plan

A year after its creation, the DICT formally launched the National Broadband Plan (NBP), allowing the enhancement of Internet access and the establishment of “infostructures” (information infrastructures) throughout the Philippines. The NBP, which serves as “the blueprint in building infostructures for a digital nation”, is the platform enabler of the state’s egovernment plan to have one digitized network for its online services to citizens, documents from the ICT said. “[We need a] primary network from Luzon to Mindanao so that this can serve [the] government and singularly [the] people in the countryside,” Salalima said in his keynote speech during the launch of the department’s flagship projects on June 23. “[It is] because people in the countryside at times, most of them do not have access to telecommunications services.” The NBP was developed to improve the overall Internet speed and its affordability, as well as to accelerate the deployment of fiber-optic cables and wireless technologies across the country, the DICT said.

Tai111 | Dreamstime.com

Important components

ment a strong branding through a singular identity, he said. For entrepreneurs, the former Ayala Corp. executive said the NGP would enable state employees to access information, online forms, applications and other government requirements for various forms of transactions. To reduce red tape, the NGP is hosting the integrated government service center, enabling businesses to seek government assistance on several matters, Salalima said.

Portal empowerment

HAILED as the A-Z of government services, the NGP can also be harnessed to empower the citizens, according to Ibrahim. He points out that the NGP can boost the development of smart cities in the country by providing educational material and content. Through the NGP, educational materials such as early childhood care, K to 12 basic education, vocational technical training and schol-

arships will now be available to the people for their advancement, Ibrahim added. “With an educated work force, investors will come to the provinces to establish their businesses and people will not go to the urban areas for economic opportunities.” The NGP can also be the venue for issuance of certificates, government identification cards and individual licenses. This would surely provide a great relief to millions of Filipinos who have to brave the scorching heat of the sun, horrendous traffic and fixers, Ibrahim said. For people seeking job opportunities, a government portal can help Filipinos access the proper employment agencies, particularly for people seeking overseas employment, he added. If the NGP becomes operational, many Filipinos are hoping that the days of the illegal recruiters would be numbered, Ibrahim said.

Of citizens, taxes

THE NGP seeks to provide tax and revenue information to enlighten the citizenry on tax matters, documents provided by the DICT said. The NGP is also expected to be a platform to deliver information on health benefits, hospital finder, health centers finder, social programs and pension fund. It is also expected as a vehicle to promote tourism. Being a disaster-prone country, the DICT envisions the NGP will be a source of data and information toward a proactive stance on disaster risk-reduction management. It will contain hotline numbers, maps and other valuable information, Ibrahim said. The NGP will also be a source for the housing and shelter requirements of Filipinos. It will have a database on housing programs, property developers, buyers and other important data on housing. Last but not the least, the NGP will have an assistance and com-

WITH the help of the private sector, the government would invest in the NBP by establishing connectivity in various areas in the country, the DICT said. This broadband project enables the NGP (gov.ph) to harness connectivity for better and effective use. Pipol Konek is also an important component of the broadband plan. As an enabler for an affordable and faster Internet access, the NBP addresses three major broad strategies: (1) policy and regulatory reforms; (2) investment on broadband infrastructure; and (3) support on the stimulation of broadband demand. The first strategy focuses on the establishment of policy and regulatory reforms, wherein the government shall include efforts in the reviews and amendments of relevant laws, policies and regulatory issuances. Moreover, the government shall collaborate with the legislative body concerning the passage of any law or policy. Through the investment on broadband infrastructure, the government shall develop a primary operating network that will create connectivity in governmentowned facilities and areas in the countryside.

This network is the established Philippine Integrated Infostructure (PhII), wherein the government shall address the shortage in market capacity within the required time and shall avoid infostructure surplus during the implementation.

Access cost

BY 2020, the PhII is expected to provide an average of 10 Mbps of Internet connection speed for households at an “affordable” broadband access cost. “Our target is the threshold of less than 5 percent of household income for broadband services,” Villorente said. “By the end of the plan, we expect that 100 percent of government units will be connected to high-speed government broadband plan.” The last strategy of the department sustains the government support to encourage broadband demand in the country. Necessary measures to increase broadband take-up rates shall also be established. According to DICT documents, these actions focus on several involvements. One of these is local content development and promotion that will provide incentives to resident application developers and support to citizen-made engagement platforms. A second involvement is the conduct of capacity building and information outreach programs that shall inform citizens of the benefits of broadband in education, business, telecommuting, research, development and innovation activities. The third involvement is the introduction of incentives to broadband users that will establish an “access device” subsidy scheme for the said users. “To implement the plan, the details of this plan [specifically] on the network need to be fleshed out through feasibility study so we can start to implement government investments on infostructures,” Villorente said.

Guide for advancement

THE NBP shall also work as a guide for the advancement of facilities for the ICT or infostructures. At this extent, competition in the telecommunications and ICT sector would be intensified and the project’s cost would be lowered for the citizens. With the country’s GDP growth rate running from about

6 percent to 7 percent this year, Salalima said this rate is rising and would “digitize the country because digitization increases the GDP of the country.” “Studies have shown that every 10-percent increase in broadband penetration boosts GDP by an average of 1.3 percent, and every 10-percent increase in mobile telephone density results in 0.7 percent [of] GDP,” Salalima said. The final blueprint of the NBP defines broadband as high-speed access to the Internet. Under the broadband plan, “entry-level broadband connection to the Internet should have a minimum speed of 2 Mbps.” However, the National Telecommunications Commission defines entry-level broadband as a data-connection speed of at least 256 Kbps.

Transmission capacity

GLOBAL broadband transmission capacity is at least 1.5 Mbps or 2 Mbps, according to the International Telecommunication UnionTelecommunications Standardized Sector (ITU-T). The DICT said the National Grid Corp. of the Philippines (NGCP) has allowed the department to utilize the latter’s fiberoptic network facilities for the national broadband project. “When we estimated it [the budget] earlier, it’s about P70 billion to P240 billion, but because we are now working with the NGCP, and we have existing fibers, that [the project’s cost] will be drastically reduced,” Villorente said. With the broadband vision set by the NBP within the telecommunications and ICT industry in the coming years, the government shall have laid strategies to the realization of the outcomes on accelerated investment; mobilized and engaged public and private sectors; more places connected; and increased take-up rates. “Advances in ICT, particularly in broadband technologies, have unlocked numerous socioeconomic opportunities for the Philippines,” Salalima said in the NBP’s final blueprint. “Given the socioeconomic benefits that broadband brings, I believe that it is imperative that investments in open, pervasive, inclusive, affordable and trusted information infrastructures or infostructures should be prioritized.” n

Thursday, June 29, 2017

The World BusinessMirror

www.businessmirror.com.ph

Costly retraction for CNN, an opening for Trump

Colombia President Juan Manuel Santos (second from left) and the Revolutionary Armed Forces of Colombia (FARC in Spanish) top commander Rodrigo Londoño, also known as Timoleón Jiménez or Timochenko (third from left) greet the baby of a rebel couple during an act to commemorate the completion of the FARC disarmament process in Buenavista, Colombia, on June 27. The United Nations says it has concluded the disarmament process for individual arms as part of a peace deal between the leftist rebels and the government. AP/Fernando Vergara

FARC disarmament signals new era in Colombia

ESETAS, Colombia—As United Nations inspectors slammed shut a shipping container filled with rifles, fighters from Colombia’s largest rebel group cheered on Tuesday morning when their leader declared that they had laid down their arms after 52 years of guerrilla war. It may yet be some time before every weapon the rebels fired in Colombia is accounted for. But the ceremony signaled to the country that the Revolutionary Armed Forces of Colombia, known by its Spanish initials as the FARC, would no longer threaten Colombians as it had for generations. “Good-bye, weapons! Good-bye, war!” Rodrigo Londoño, the FARC leader known as Timochenko, shouted to the fighters. The rebels have abandoned their battle camps for demobilization camps like the one in a lush stretch of countryside near Mesetas—temporary settlements of tents and drywall buildings where the rebels have been slowly handing over their weapons, 7,132 at last count. Some rif les will remain at the camps for security purposes until August 1, the UN inspectors said, and rebel weapons caches were still being examined. But for the most part, the inspectors said, the disarmament is essentially complete. The weapons have been packed for shipment out of the country, to be melted down and used to build monuments.

The number of years of guerrilla war in Colombia

Rank-and-file rebels will soon be free to trade their fatigues for civilian clothes and begin new lives. And the FARC is laying plans to become a political party, much like the parties that emerged from guerrilla groups in post-conflict El Salvador and Guatemala. The Colombian government must now tackle a host of challenges under the complicated peace agreement with the FARC, which took years to negotiate. Special tribunals are to be established to settle war-crimes cases, and farmers are to be given incentives to stop growing coca leaf. (The rebels largely controlled

the cocaine trade in Colombia.) “The goal of ending the war has essentially been met,” said Cynthia J. Arnson, the director of the Latin America program at the Woodrow Wilson International Center for Scholars. “It’s implementing the 300-plus-page document, with 100 different programs and strategies, that’s going to be difficult.” Colombia’s president, Juan Manuel Santos, was awarded the Nobel Peace Prize last year for the peace accords with the FARC, but the deal remains highly controversial in Colombia. Voters rejected the accords by a narrow margin in a referendum last year, with many Colombians arguing that the fighters, who were promised amnesty, had gotten off too easily. After the referendum, Santos got the Colombian Congress to approve a revised deal with FARC without submitting it to another referendum. But with his term scheduled to end next year, he has been under constant attack from conservatives, including critics who say that the FARC will not reveal all the weapons and cash it has hidden in the jungle, something analysts say is possible. The ceremony on Tuesday offered Santos a chance to remind his country that peace with the FARC had been awaited by generations of Colombians. “This is the best news for Colombia in 50 years—this is great news of peace,” he said, adding that the country could now finally unify as a democracy. “Today we see the end of this absurd war.” At the FARC camp, in the Putumayo department of southern Colombia, about 460 fighters now spend their days contemplating the unarmed life ahead of them. They were glued to mobile phones this weekend, talking to families on Facebook and WhatsApp, which

were unknown to most of the fighters before this year. Shipping containers holding the decommissioned weapons sat on the camp’s perimeter, watched and sealed by UN observers in baseball caps. Though Colombian army Black Hawk helicopters occasionally flew overhead, the peace agreement forbids soldiers to enter the camp. Many rebels complained about months of delay in getting building materials to the camp, leaving it looking like a construction site, and many fighters still slept outdoors in hammocks, as they had in the jungle during the war. If the camp-building process was so halting, they asked, how could they expect the rest of the peace deal to be carried out smoothly? Disarming has proved difficult, too. Naida López, 32, spent nearly two decades with the rebels, after the military killed her parents and she ran away. She said it was hard for her, as an orphan, to give up the protection of her weapon and her comrades. “For every guerrilla fighter, their weapon has always been their most loyal friend, which has always accompanied them,” she said. “Some people have names for their rifle.” Like many of the rebels, López is afraid of what might happen now that the former guerrillas must depend on the state for protection. She mentioned the last time the FARC experimented with political participation, running candidates for office under the Patriotic Union party banner, only to face massacres by right-wing paramilitary groups that the government failed to stop. Those groups still exist. “They could kill us one by one,” López said. New York Times News Service

n CNN’s newsroom, it is called the Triad: a three-pronged internal system designed to ensure that sensitive reporting by the network’s journalists is unimpeachable before it runs. Last week the Triad fell short— and by Tuesday, the consequences were being felt across the news industry and in the hallways of the White House. CNN was forced to apologize after retracting a story on its web site that a Russian bank linked to a close ally of President Donald J. Trump was under Senate investigation. Three high-ranking journalists at the network resigned. But the mea culpa did not stop Trump and his supporters from seizing on the mistake, condemning CNN and claiming it as evidence that other major news organizations were conspiring against the administration. On Twitter, Trump wrote that “they caught Fake News CNN cold” and asked, “What about all the other phony stories they do?” By the afternoon, Trump’s deputy press secretary, Sarah Huckabee Sanders, was on live television scolding the White House press corps over the retraction, even urging Americans to watch a video filmed by a controversial rightwing activist, James O’Keefe, that showed a low-level CNN producer criticizing his network. “Whether it’s accurate or not, I don’t know, but I would encourage everybody in this room and, frankly, everybody across the country to take a look at it,” Sanders said of the video. News organizations regularly issue corrections and, in rarer instances, retract a story. Other journalists on Tuesday praised CNN for taking responsibility after a painful black eye. But the ferocious response on Tuesday was a reminder of CNN’s unique role as a nemesis for Trump, who says the network has unfairly tried to tie him to Russian interference in last year’s election— and underlined the heightened tensions between the news media and an administration that has curtailed access and labeled the news media an “opposition party”. “People are trying to attack us, trying to take us down,” CNN President Jeffrey A. Zucker said in a newsroom conference call on Tuesday morning, according to a network employee who listened to the call and was granted anonymity to describe private remarks. “Our reputation is everything; that is our currency, and that’s why we have processes in place,” Zucker said, according to the employee. He added, “If you don’t follow those procedures, you don’t work here, period.” Those procedures broke down last week, according to several people at CNN, who, in speaking on condition of anonymity to discuss internal matters, recounted

According to the Iraqi officer, who spoke on condition of anonymity in line with regulations, the latest counter-attacks began last Sunday by scores of IS fighters dressed as Iraqi Shiite paramilitaries. The following day, he said, a dozen coalition air strikes on Mosul’s western-most edge killed about 40 militants. The territory that the IS group still holds in Mosul has been reduced to an area that now amounts to about 2 square kilometers in the ancient Old City district. Front lines were quiet in the Old City on Tuesday as Iraqi special forces scouted the terrain. Troops ducked into narrow alleyways, through bright courtyards and up balconies

to reach positions with a view of the now destroyed al-Nuri Mosque. IS fighters blew up the 12th-century mosque in the heart of the Old City last week, along with its landmark minaret, according to the US-led coalition and the Iraqi Ministry of Defense—an act of destruction that the authorities in Baghdad interpreted as the militants’ message of defeat in the face of the relentless Iraqi offensive. IS released a statement blaming a US air strike for the destruction. The mosque was also hugely symbolic—it was from a pulpit there that the IS group’s top leader Abu Bakr al-Baghdadi in July 2014 declared a self-styled “caliphate”,

encompassing territories held by IS in Syria and Iraq. Iraqi Special F orces Lt. Gen. Abdul-Wahab al-Saadi said IS holds “very little” territory inside Mosul at the present moment, adding that he hoped the operation would be concluded within days. But despite staggering territorial losses, IS has managed to launch a number of counterattacks and insurgent assaults inside some Mosul neighborhoods that were retaken from IS earlier this month. The attacks also underscore the security threat that IS will likely pose, long after the militant group is routed from all of Mosul and other territory it holds in Iraq. AP

New York Times News Service

Pentagon: ‘Active preparations’ by Syria for chemical attack

IS counterattacks in parts of Mosul stall Iraq push W OSUL, Iraq—Counterattacks by Islamic State (IS) militants on the western edge of Mosul have stalled Iraqi forces’ push in the Old City, the last IS stronghold in the battle, an Iraqi officer said on Tuesday. The attacks forced Iraqi forces and the USled coalition to pull some assets away from the Old City to again clear the Yarmouk and Tanak neighborhoods, which were declared liberated of IS in May. The assaults underscore the Sunni extremist group’s resilience in the city, Iraq’s second-largest, despite months of heavy fighting with Iraqi forces backed by US air power.

a scramble inside the network after the story was published last Thursday. The article, written by veteran reporter Thomas Frank, linked Anthony Scaramucci, a hedge-fund manager and Trump confidant, to a Russian investment fund supposedly being investigated by the Senate Intelligence Committee. The reporting was attributed to an anonymous source. The Triad system should have kicked into gear, with reviews by lawyers, a standards-and-practices division, and an editorial team known collectively as the Row, which checks facts and approves anonymous sources. (The system is so ingrained that CNN journalists often use the term as a verb: as in, has the story been “rowed”?) But several network officials were caught off-guard when the story appeared online, the people said, signaling that it had not received the proper approvals. CNN has not specified what, if anything, in the story was untrue, only saying that the piece did not meet its editorial standards. On Tuesday the network declined to explain the exact nature of how its procedures went awry. The mistake came at a sensitive time. Like other news channels, CNN’s ratings are up compared with last year, but on weeknights, the network has fallen behind its rivals Fox News and MSNBC in prime time. In the past month, CNN cut ties with broadcast personalities Kathy Griffin and Reza Aslan after they publicly assailed Trump in vulgar ways. Among newsroom executives, however, the big concern was a bungled story earlier in June, which incorrectly predicted the congressional testimony of James B. Comey, former Federal Bureau of Investigation (FBI) director. Zucker was deeply upset about the error and the ensuing correction, and made clear to his staff that the network would not tolerate mistakes amid such intense public scrutiny. The zero-tolerance atmosphere made last week’s mistake all the more glaring. Zucker began an investigation as right-wing outlets like Breitbart News began to note problems in CNN’s reporting. Scaramucci contacted CNN executives to dispute the story and said he was considering legal action, according to a person familiar with his conversations who spoke on condition of anonymity. By Monday morning, Frank and two editors who worked on the piece, Lex Haris and Eric Lichtblau, had submitted their resignations. The men were key players in CNN’s beefed-up investigative unit, part of a highly acclaimed push by Zucker to expand the network ’s original reporting on politics and national security in the Trump era.

ASHINGTON—The Pentagon on Tuesday said it detected “active preparations” by Syria for a chemical weapons attack, giving weight to a White House statement hours earlier that the Syrian government would “pay a heavy price” if it carried out such an attack. A Pentagon spokesman, Navy Capt. Jeff Davis, said the US had seen “activity” at Shayrat airfield that “indicated active preparations for chemical weapons use.” That is the same base from which the Syria air force launched an attack in April that the US and others said used lethal chemicals to kill civilians. Syria denied the charge. President Bashar al-Assad’s government and Russia dismissed the White House allegation that Damascus was preparing a new chemical weapons attack. Russian President Vladimir Putin’s

Spokesman Dmitry Peskov said, “Such threats to Syria’s legitimate leaders are unacceptable.” Russia is Assad’s key backer and sided with him when he denied responsibility for a chemical weapons attack that killed dozens of people in Idlib province on April 4. The US responded to that attack by hitting the airfield with dozens of cruise missiles. A Monday evening statement by White House Press Secretary Sean Spicer said the US had “identified potential preparations for another chemical weapons attack by the Assad regime that would likely result in the mass murder of civilians, including innocent children.” Spicer said the activities were similar to preparations taken before the attack in April, but provided no evidence or further explanation. AP

The World BusinessMirror

www.businessmirror.com.ph

Thursday, June 29, 2017

Petya ransomware attack spreads worldwide

new cyber attack similar to WannaCry has reached Asia after spreading from Europe to the US overnight, hitting businesses, port operators and government systems.

A terminal operated by AP Moller-Maersk at the Jawaharlal Nehru Port Trust, a facility near Mumbai, which is India’s biggest container port, was unable to load or unload because of the attack, according to the nation’s shipping ministry. The facility, called Gateway Terminal India, could not identify which shipment belongs to whom, the ministry said. The attack is being carried out by the Petya virus, with users being told to pay $300 in cryptocurrency per infected computer to unlock their systems. The spread of the attack into Asia underscores how ransomware is becoming a routine risk of doing business around the world. W hi le bank s and retai lers h ave st re ng t he ne d de fe n ses against certain types of attacks, such as those targeting creditcard data, many others are still catching up in guarding against ransomware. About 2,000 users had been attacked as of midday on Tuesday in North America, according to Kaspersky Lab analysts, with organizations in Russia and Ukraine the most affected. “With there being no global kill switch for this one, we’ll continue to see the numbers rise in different parts of the world as more vulnerable systems become more exposed,” said Beau Woods, deputy director of the Cyber Statecraft Initiative at the Atlantic Council in Washington.

WannaCry warnings

$300 The amount of ransom demanded per infected computer in India’s port to unlock their systems

There are signs the virus is starting to spread in China but no large-scale outbreak has been detected, according to Zheng Wenbin, chief security engineer at Qihoo 360 Technology Co. The attack popped up in government systems in Kiev, then disabled operations at companies, including Rosneft PJSC, advertiser WPP Plc. and the Chernobyl nuclear facility. More than 80 companies in Russia and Ukraine were initially affected, Moscow-based cybersecurity company Group-IB said.

DLA piper

Rob Wainwright, executive director at Europol, said the agency is “urgently responding” to reports of the new cyber attack. In a separate statement, Europol said it’s in talks with “member-states and key industry partners to establish the full nature of this attack at this time”. Kremlin-controlled Rosneft, Russia’s largest crude producer,

A computer screen cyber-attack warning notice is reportedly holding computer files to ransom as part of a massive international cyber attack, at an office in Kiev, Ukraine, on Tuesday. A new and highly virulent outbreak of malicious data-scrambling software appears to be causing mass disruption across the world, hitting Ukraine especially hard, with company and government officials reporting serious intrusions at the Ukrainian power grid, banks and government offices. Oleg Reshetnyak via AP

said it avoided “serious consequences” from the “hacker attack” by switching to a backup system for managing production processes. UK media company WPP’s web site is down, and employees have been told to turn off their computers and not use Wi-fi, according to a person familiar with the matter. Sea Containers, the London building that houses WPP and agencies, including Ogilvy and Mather, has been shut down, another person said. Law firm DLA Piper took down its systems as a “precautionary measure”, meaning clients couldn’t contact its team by email or land-line, according to a notice on its web site. The most vulnerable places are “where the operators are a lot of the times at the mercy of

manufacturers and providers of those technologies and there’s a long time between existence of a fix and implementation of a fix,” Woods said.

Global attack

The hack quickly spread from Russia and Ukraine, through Europe and into the US. Maersk said its customers can’t use online booking tools, and its inter na l systems are down. The attack is affecting multiple sites and units, which include a major port operator and an oil and gas producer, s p ok e s m a n C o nc e p c io n B o o Arias said by phone. A PM Ter mina ls, ow ned by Maersk, is ex per iencing system issues at multiple terminals, including the Port of New

GOP pushes back health-care vote as support wanes

ASHINGTON—Facing intransigent Republican opposition, the Senate majority leader Mitch McConnell on Tuesday delayed a vote on legislation to repeal the Affordable Care Act (ACA), dealing another setback to Republicans’ seven-year effort to dismantle the health law and setting up a long, heated summer of health-care battles. McConnell faced resistance from across his conference, not only from the most moderate and conservative senators but from others, as well. Had he pressed forward this week, he almost surely would have lacked the votes even to begin debate on the bill. “We will not be on the bill this week, but we’re still working toward getting at least 50 people in a comfortable place,” said McConnell, who is known as a canny strategist but was forced to acknowledge on Tuesday that he had more work to do. The delay pushes Senate consideration of the bill until after a planned recess for the Fourth of July, but it does not guarantee that Republican senators will come together. Opponents of the bill—including patient-advocacy groups and medical organizations—plan to lobby senators in their home states next week. Senators are likely to be dogged by demonstrators. Democrats vowed to keep up the pressure, and some Republican senators have suggested that their votes will be difficult to win. After meeting with President Donald J. Trump at the White House, McConnell told reporters that if Republicans could not come to an agreement, they would be forced to negotiate a deal with Sen. Chuck Schumer of New York, the Democratic leader. “The status quo is simply unsustainable,” McConnell said. “It’ll be dealt with in one of two ways: Either Republicans will agree and change the status quo, or the markets will continue to collapse, and we’ll have to sit down with Senator Schumer. And my suspicion is that any negotiation with the Democrats would include none of the reforms that we would like to make.” Republicans have promised for seven years to repeal the health law, former

President Barack Obama’s signature domestic achievement. But McConnell’s announcement on Tuesday was yet another major stumble in the unsteady quest by Republican congressional leaders to deliver a repeal bill to the desk of Trump, who has yet to sign his first piece of marquee legislation. McConnell, the chief author of the Senate repeal bill, can afford to lose only two of the 52 Republican senators, but more than a halfdozen have, for widely divergent reasons, expressed deep reservations about the bill. Trump, meeting with Republican senators at the White House, declared, “We’re getting very close.” “This will be great if we get it done,” he said. “And if we don’t get it done, it’s just going to be something that we’re not going to like, and that’s OK, and I understand that very well.” McConnell wrote his bill behind closed doors, betting he could fashion a product that would show significant improvement over the bill that was narrowly approved by the House last month. And he laid out an aggressive timeline for its passage, hoping to secure Senate approval roughly a week after unveiling the legislation. Yet, on Tuesday, just five days after releasing the bill, McConnell had to bow to reality: Republican senators were not ready to move ahead with the bill. At least a small number might never be— raising questions about whether McConnell will be able to win over the votes for passage. “It’s difficult for me to see how any tinkering is going to satisfy my fundamental and deep concerns about the impact of the bill,” said Sen. Susan Collins, RepublicanMaine, who was among the lawmakers prepared to vote against taking up the bill this week. McConnell and his leadership team are hoping to replicate the feat of Speaker Paul D. Ryan, who revived the House’s repeal bill and pushed it to passage six weeks after it appeared to be dead. “I would hope, by the end of the week, that we have reached basically conclusion with regard to the substance and the policy of this,” said Sen. John Thune of South Dakota, a

member of the Senate Republican leadership. Then, he said, it is just a question of timing. Democrats are unified against the repeal bill, but they were not celebrating on Tuesday. “The mantra on our side is never to underestimate Mitch McConnell,” said Sen. Richard Blumenthal, Democrat-Connecticut. Schumer said, “We know the fight is not over. That is for sure.” Over the next few weeks, he added, McConnell “will try to use a slush fund to buy off Republicans, cut backroom deals, to try and get this thing done”. At least four Republican senators— Collins, Dean Heller of Nevada, Ron Johnson of Wisconsin and Rand Paul of Kentucky—had said they would vote against the motion to begin debate, enough to ensure it would fail. Other Republicans also appeared reluctant about moving forward with the bill. “I’m just grateful leadership decided, let’s take our time, give this more thought and try and get this right,” said Johnson, who had been critical of the desire by Republican leaders to hold a vote this week. After McConnell’s announcement, three other Republicans announced their opposition to the bill in its current form: Jerry Moran of Kansas, Shelley Moore Capito of West Virginia and Rob Portman of Ohio. Capito and Portman, who announced their opposition together, expressed concern about how the bill would affect Medicaid and the opioid crisis, which has had devastating effects in their states. The release of a Congressional Budget Office evaluation last Monday made it much more difficult for party leaders to win over hesitant Republican members. The budget office said the Senate bill would leave 22 million more people uninsured after 10 years, and many people buying insurance on the individual market would have skimpier coverage and higher out-of-pocket costs. The Senate Democratic whip, Richard J. Durbin of Illinois, said the report by the Congressional Budget Office “did more to strike a dagger to the heart of this

Republican repeal than anything else”. In 2026, the budget office said, 15 million fewer people would have Medicaid coverage under the Senate bill than under the ACA, and 7 million fewer people would have coverage they purchased on their own. Faced with deep cuts in Medicaid, the report said, state officials would face unpalatable choices: restrict eligibility, eliminate services, reduce payments to health-care providers and health plans or spend more of their own money. Appearing in Washington, Gov. John R. Kasich of Ohio cited the 22 million projection and expressed bewilderment that fellow Republicans would be on board with the bill. “And they think that’s great?” he asked. “That’s good public policy? What, are you kidding me?” Doctors, hospitals and other health-care provider groups have come out strongly against the Senate bill, as have patientadvocacy groups like the American Heart Association. But business groups were ramping up their support. In a letter on Tuesday, the US Chamber of Commerce urged senators to vote for the bill. The Senate bill “will repeal the most egregious taxes and mandates” of the ACA, allowing employers to create more jobs, said Jack Howard, a senior vice president of the group. The bill, he noted, would repeal a tax on medical devices and eliminate penalties on large employers that do not offer coverage to employees. A separate letter expressing general support for the Senate’s efforts was sent by a coalition of business and employer groups including the National Association of Home Builders, the National Restaurant Association and the National Retail Federation. But Senate conser vatives found themselves squeezed between business sentiment and their conservative base. The Club for Growth, a conservative group, came out against the Senate measure on Tuesday. The organization’s president, David McIntosh, noted that congressional Republicans had “promised to repeal every word” of the ACA. New York Times News Service

York and New Jersey, the largest port on the US East Coast, and Rotterdam in The Netherlands, Europe’s largest harbor. APM Terminals at the Port of New York and New Jersey will be closed for the rest of the day “due to the extent of the system impact”, the Port said. Cie de Sa int- Goba in, a French manufacturer, said its systems had also been infected, though a spokesman declined to elaborate. Mondelez International Inc. said it was also experiencing a global information-technolog y (IT) outage and was looking into the cause. Merck and Co. Inc., based in Kenilworth, New Jersey, reported that its computer network was compromised due to the hack.

The strikes follow the global ransomware assault involving the WannaCry virus that affected hundreds of thousands of computers in more than 150 countries, as extortionists demanded bitcoin from victims. R a nsomw a re at t ac k s h ave been soaring, and the number of such incidents increased by 50 percent in 2016, according to Verizon Communications Inc. “W hile this attack directly impacts IT systems, we must consider how the ransomware threat will evolve in the near future to also impact IoT [Internet of Things] devices and connected cars,” said Mark Hearn, who is director of Internet of Things security at Irdeto. “If something as simple as system patches are being missed to let ransomware in, the prospect for robust protection of IoT devices does not look good.” Analysts at Symantec Corp., have said the new virus, called Pet ya, uses an ex ploit called EternalBlue to spread, much like WannaCry. EternalBlue works on vulnerabilities in Microsoft Corp.’s Windows operating system. T he new v ir us has a fa ke Microsoft digital signature appended to it and the attack is spreading to many countries, Costin Raiu, director of the global research and analysis team at Moscow-based Kaspersky Lab, said on Twitter. T he attack has hit U kraine particularly hard and the intrusion is “the biggest in Ukraine’s histor y”, Anton Gerashchenko, an aide to the Interior Ministr y, wrote on Facebook. Kyivenergo, a U krainian utilit y, sw itched of f a l l comput e r s a f t e r t he hac k, whi le anot her power company, U krenergo, was a lso a f fe c te d , t he I nte r f a x ne w s ser v ice reported. Bloomberg News

Higher pay could mean ‘Made in China’ equals ‘Made by Robots’

he heartland of Chinese manufacturing is currently facing surging wages and labor shortages, two things that threaten its role as workshop to the world. Rather than succumbing to cheaper competitors, though, factory owners in the Pearl River Delta (PRD) are rising to the challenge. That’s what Standard Chartered Plc. found by surveying more than 200 manufacturers in the region, which spans the eponymous river mouth in southern China, just across the border from Hong Kong. Automation is the way out for factories facing wage pressure, according to the 68 percent of respondents who plan to increase capital expenditure this year. Investing in automation and robotics can give the economy a “much-needed productiv it y boost,” analysts wrote in the report of the survey published this month. “We believe that what doesn’t kill the PRD and, i nstead , pu shes t he reg ion’s manufacturers to upgrade and reinvent themselves, will make China stronger.” The poll has been run in each of the past eight years, during which factories have been complaining about rapidly increasing wages and the difficulty in hiring enough workers. The delta is located in the nation’s biggest regional economy, Guangdong , whic h generates more than $1 trillion a year in output and boasts the new innovation hub of Shenzhen, commercial center Guangzhou and many smaller, prosperous cities around them. Higher-end manufacturers in sectors, such as semiconductors,

prefer to stay in the increasingly expensive region with more automation and investment, while lower-end ones, such as textile and garment makers, are more willing to move to cheaper nations, according to the report. “On the one hand, you see the competitive ones are investing more to stay competitive but, at the same time, there is also the emerging trend of moving overseas because it may not be ideal for some to stay within the Pearl River Delta”, said Kelvin Lau, the Hong Kong-based senior economist who led the survey. The region would fare better by having “a better mix or a focus on higher-end manufacturing rather than trying to save everybody and trying to incubate all sorts of industries,” Lau added. “Now they have moved away from the old way of manufacturing.” Factory owners are more optimistic about business this year as demand in overseas markets improve, the survey finds. Still, a possible trade war between the US and China is clouding the outlook. Ow ners expect to increase wages for workers more than last year, according to the report. The government is no longer as adamant as before on mandating minimum-wage increases, but collective wage bargaining from workers still poses stubborn pressure, the survey shows. For employees, the trend is clear. The double-digit pay raises of the past are over for now. Among those who chose to relocate, inland provinces are not as attractive as Southeast Asian nations, such as Cambodia or Vietnam, whose market potential helps lure investors. Bloomberg News

A10 Thursday, June 29, 2017 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Why not a workers’ bank, Mr. President?

resident Duterte is about to fulfill one of his campaign pledges to our more than 10 million overseas Filipino workers (OFWs) on his first anniversary in Malacañang. Wooing them during the 2016 presidential campaign, Duterte told OFWs that if he wins he will put up a bank dedicated to service the needs of Filipino migrant workers. Duterte’s promise will be fulfilled in October, according to the Department of Finance (DOF).

Finance Secretary Carlos G. Dominguez III announced on Wednesday that by October our OFWs will have their own bank, designed specifically to service their needs. He said this will be done by converting the Postal Bank into an OFW Bank. Currently, the Land Bank of the Philippines (LandBank) is doing the valuation process to convert the Postal Bank into a LandBank subsidiary. While the requirements and procedures to establish the OFW Bank are still being completed, concerned regulators need to speed up the approval process to meet the October deadline. The LandBank needs clearances from the Governance Commission for Government-owned and -Controlled Corporations and the Philippine Competition Commission, as well as approvals from the Monetary Board, Securities and Exchange Commission and the Bangko Sentral ng Pilipinas. Government sources said the OFW Bank will be a listed company with an authorized capital of P3 billion and a subscribed capital of P2 billion, of which P1 billion is paid up by the LandBank. Another P1 billion will be open for subscription to OFWs who can acquire them by buying shares in the bank. There are concerns raised regarding the Postal Bank valuation, which showed a negative value of P580 million. Industry observers, however, said this bank has been struggling for many years. As a LandBank subsidiary, there’s no question that its operations as OFW Bank will be viable. Based on 2016 data, the LandBank was ranked as the country’s fourth-largest commercial bank with a total capital of P90.9 billion and assets amounting to P1.3 trillion. Given this, the OFW Bank will certainly be standing on solid ground. The DOF said the LandBank will initially set up a representative office in Saudi Arabia to offer financial education and investment counseling services to some 800,000 Filipino workers based in that country. As officials are still trying to determine what other services are needed by our migrant workers not only in the Middle East but all over the world, may we suggest that the soon-to-operate OFW Bank will allow OFWs to send remittances without a fee and to borrow money with no interest rates. This is one way for us to show our gratitude to our so-called modern heroes who have been helping boost our economic growth with close to $30 billion in remittances. As millions of Filipino migrant workers cheered the DOF announcement about the impending operation of the OFW Bank, the entrepreneurs among them are hoping to access funds that can help them establish a business enterprise of their own once they’ve decided to stay home for good. It’s a welcome gesture for President Duterte to fulfill his campaign promise of establishing a bank owned by OFWs. But we are certain the President can outdo himself as far as serving the people is concerned. And we know the Duterte administration is capable of putting up a bank servicing the specific needs of all Filipino workers, not just our OFWs. The real game changer is to see the President establishing a Workers’ Bank owned by Filipino workers before he leaves Malacañang.

Rich people are smarter John Mangun

OUTSIDE THE BOX

ince the close at the end of February 2009, the Philippine stock market has been in a continuous “bull market”. That is over eight uninterrupted years, the longest in history. Before you head for your e-mail to tell me how wrong I am, these are the facts. While day-to-day and week-toweek fluctuations are exciting and what keeps many experts still being paid for their advice, at no time during this period has the month-tomonth closing of the PSE Composite Index (PSEi) ever met the definition going into a “bear market”. A bear market is one where prices have fallen 20 percent from a 52-week high. In 2013 the PSEi was down 16 percent before it turned higher. From March 2015 to February 2016, the PSEi also fell 16 percent. Most recently from the middle of 2016 to December of that year, the PSEi was off 14 percent. While not follow-

ing the same highs and reversals as the PSEi, the Dow Jones Industrial Average (DJIA) also has been in an unending bull market since 2009. There is little, if any, comparison between the reasons for the higher price movement of the PSEi and the DJIA, and it is not important if there are no similarities. In fact, were we to look at traditional factors that are supposed to drive stock prices higher like corporate earnings and economic growth, the PSEi should be up and the DJIA should not. But that is not important either. However, the price movements of the PSEi and the DJIA both to his-

BusinessMirror A broader look at today’s business

Cecilio T. Arillo

database

✝ Ambassador Antonio L. Cabangon Chua Founder

Editor in Chief Managing Editor Associate Editor News Editor City & Assignments Editor Senior Editors

T. Anthony C. Cabangon Jun B. Vallecera Max V. de Leon Jennifer A. Ng Dionisio L. Pelayo Vittorio V. Vitug Lorenzo M. Lomibao Jr., Gerard S. Ramos Lyn B. Resurreccion, Efleda P. Campos

Online Editor Social Media Editor

Ruben M. Cruz Jr. Angel R. Calso

Creative Director Chief Photographer

Eduardo A. Davad Nonilon G. Reyes

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

Judge Pedro T. Santiago (Ret.) Benjamin V. Ramos Adebelo D. Gasmin Marvin Nisperos Estigoy Aldwin Maralit Tolosa Dante S. Castro

BusinessMirror is published daily by the Philippine Business Daily Mirror Publishing, Inc., with offices on the 3rd floor of Dominga Building III 2113 Chino Roces Avenue corner De La Rosa Street, Makati City, Philippines. Tel. Nos. (Editorial) 817-9467; 813-0725. Fax line: 813-7025. (Advertising Sales) 893-2019; 817-1351, 817-2807. (Circulation) 893-1662; 814-0134 to 36. E-mail: news@businessmirror.com.ph.

www.businessmirror.com.ph

Printed by brown madonna Press, Inc.–San Valley Drive KM-15, South Superhighway, Parañaque, Metro Manila MEMBER OF

know the company will just borrow at near-historic low interest rates and buy their own shares back to support or raise the stock price. Repaying that debt might be a problem, but “cans” like that are made to be “kicked down the road”—hopefully forever. If the US economy is growing at the lowest long-term rate in the nation’s 200-year history, the future is always going to be brighter. Just ask any central bank official or prominent political leader. Just like “Daddy” said, “There are no monsters under the bed. Trust me”. Besides, stock prices are fueled by money and we can always create more. But the biggest difference between the PSEi and DJIA is that investment from individuals has never been higher in the Philippines and investment from individuals has never been any lower in the United States. Other people’s money can create stock-market miracles. Just ask the rich and smart institutional traders.

E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stockmarket information and technical analysis tools provided by the COL Financial Group Inc.

Why President Marcos declared martial law

Since 2005

Publisher

toric highs during this period—even if not coinciding in time—definitely shows that rich people are smarter. Ordinary individual retail investors that transfer their hard-earned wealth into their stockbrokerage account follow this rule of stockmarket investing: “Sell until you can sleep”. Institutional investors follow another rule: “[Other people’s] money never sleeps”. Both of these ideas are completely rational and sensible depending on which investor class you are a part of. However, the first rule that individuals pursue makes stock price movement more in line with both internal and external conditions and developing situations. If you think your personal financial future looks dim, you do not go and buy that new 110-inch Ultra HDTV. Likewise, you do not buy shares if the company is losing vast amounts of money with little chance of a positive turnaround. Also, if the economy looks gloomy, your money goes out of stocks and back into the bank account. Institutional investors in the US during the past eight years have little regard for such minor inconveniences, like earnings and economy. If corporate earnings are down, they

Part Three

HE level of violence and criminality in the country, especially in Mindanao, grew critically. Enrile had to deal with the socalled private armies: the T’boli rebellion in South Cotabato; the Higaonon uprising in Agusan; the Iranon outbreak in Buldon; the Tiruray, Ilaga and Muslim conflict in Cotabato; the political feuds of the Quibranzas and the Dimaporos and the Matalam-Pendatun group against the Sinsuat-Ampatuan-Sangki group; the Mindanao independence movement, the Blackshirts and the Barracudas; the Moro National Liberation Front of Nur Misuari; and the militant Christian for National Liberation with its theology of liberation and its basic Christian communities. On August 21, 1971, a political rally of the Liberal Party at Plaza Miranda in Quiapo, Manila, was attacked with military grenades. Many leaders of the Liberal Party were injured and severely wounded. One of them was Sen. Jovito Salonga. Expectedly, the Liberal Party, the Communist Party of the Philippines (CPP), their supporters, including a segment of the general public, blamed the Marcos regime for the bloody incident. And because of that so-called Plaza Miranda bombing, nearly all the Nacionalista Party candidates for the Senate lost in the 1971 national elections. Enrile was among the Nacionalista senatorial candidates who lost. It turned out the Plaza Miranda bombing was a project of the CPP-New People’s Army (NPA). This was what

Col. Victor Corpuz and Salonga said in their respective books. The explosive that severely wounded the leaders of the Liberal Party was thrown by Danilo Cordero of Caloocan City, a trusted commander of the NPA. Cordero was killed later on by his own military organization, the NPA. Enrile said the most significant event that made President Marcos decide to declare martial law was the MV Karagatan incident. It was the turning point. The MV Karagatan involved the infiltration of high-powered rifles, ammunitions, 40-millimeter rocket launchers, rocket projectiles, communications equipment and other assorted war materials by the CPP-NPA-National Democratic Front (NDF) at the Pacific side of Isabela province in Cagayan Valley. The CPP-NPANDF attempted a second effort—their

MV Andrea project—but they failed. The MV Andrea sunk in the West Philippine Sea on its way to the country. In the afternoon of July 4, 1972, a logger, while flying his small aircraft, spotted a ship anchored not too far away from a beach in Palanan, Isabela. The logger noticed men unloading cargoes from the ship on small boats and piles of boxes on the shoreline. The logger reported his discovery to the Philippine Constabulary (PC) in Isabela. The PC command in Isabela formed an eightman team under Lt. Edgar Aglipay to verify the report of the logger. Next day, July 5, early in the morning, Aglipay and his team flew to Palanan on Huey helicopters. They borrowed a tugboat there to locate the mysterious ship. Late in the afternoon, they found the ship moored in Digoyo Bay without anyone onboard. Aglipay and his team boarded the deserted ship, and they found large quantities of military supplies, foodstuffs, powerful radio sets, maps, books written in Chinese characters, poems of Ka Amado Hernandez and many empty wooden crates. When the tugboat of the Aglipay team started to pull the ship away from its mooring place, heavy firing from the shoreline began toward the tugboat and the MV Karagatan. The chief mate of the tugboat was severely wounded, and some men onboard the MV Karagatan were also wounded. The tugboat cut loose its towing line and left the MV Karagatan behind with Aglipay and his team onboard. The Aglipay team pleaded for help, but none came. A strong typhoon smashed the area, and it prevented any rescue operation for them either by sea or by air. Even the fighter planes that were ordered to provide them with air cover could not fly their mission. The

Aglipay team was left onboard the ship harassed by gigantic waves and by intense firing from the shoreline. The Aglipay team was rescued three days later when the raging typhoon passed Digoyo Bay. When the typhoon weakened, Arsenio “Bobby” Santos of the Philippine Army and his 32 men onboard helicopters landed on a logging camp near Digoyo Bay. From their landing area, they traveled on foot to the coast. When they reached the coast, Santos and his men engaged the rebels in battle. Santos and his men were greatly outnumbered. Arrayed against them was an enemy force estimated to be more or less 300 men. The enemy force was reported to be under the command of the Danilo Cordero who was involved in the Plaza Miranda bombing. They fought the rebels for days. Enrile ordered the chief of staff to support them with fighter planes. Army rangers and soldiers from the presidential security command joined the battle against the rebels. Eventually, the rebels gave up, abandoned their position, and the government forces captured their camp in Digoyo. They found initially a cache of 100 M-14 rifles, 15,000 rounds of ammunition and 40 sacks of rice. In a follow-up operation, government forces captured another pile of 491 M-14 rifles, 150,900 rounds of M-14 ammunition, 900 magazines for M-14, six sacks of magazine pouches, 40-millimeter rockets and 564 rounds of 40-millimeter rocket projectiles. At the end of the Palanan campaign, more than 1,000 M-14 rifles were recovered. To be continued

To reach the writer, e-mail cecilio.arillo@ gmail.com.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Is the Philippines winning Total commitment in the ‘war for talents’? Msgr. Sabino A. Vengco Jr.

Alálaong Bagá

Dr. Rene E. Ofreneo

LABOREM EXERCENS Continued from A1

he war for talents is not really new. Well-capitalized companies that enter existing industries usually start doing business by pirating the tested talents and skills from other competitor companies. It takes time and lots of training investment to nurture talented new graduates from the university. This situation has given rise to the executive search business of the head-hunting companies, such as John Clements, Manpower of Milwaukee, Monster Inc. and so on. In the Philippines, the piracy or poaching of skilled managers, supervisors and skilled workers was common in the electronics industry during the boom years of the 1990s. When the garments industry collapsed in the 2000s, the footloose-garments investors who transferred manufacturing business to Bangladesh, Cambodia, Sri Lanka and other cheaper production sites brought with them their Filipino supervisors and line leaders. Today, employee poaching is a major headache for human-resource managers in the call center-businessprocess outsourcing (BPO) industry despite so many past efforts of the industry players to institute an antipoaching Code of Conduct. However, the war for talents is a global one. The Philippines happens to be one of the largest exporters of skills and talents. Filipino middle-level managers, professionals and skilled workers are everywhere in the war-torn Middle East. Schools at home are complaining that they have been losing their English teachers to the non-English-speaking countries of the Asean. For a while, in the mid-2000s, registered nurses were on top of the American “hot job” list; this prompted a number of Filipino doctors to switch to the nursing profession. With the Asean countries further liberalizing trade in services and visa requirements for the highly educated, the exodus of Filipino professionals, talents and other skilled workers is likely to continue and grow despite the failure of the Asean Mutual Recognition Arrangement (MRA) program on professional equivalency to take off (See “Labor mobility in Asean: Free or unfree?”, June 22, 2017).

Is the Philippines then a winner in the war for talents in the Asean and across the globe? For the individual talents who are able to land well-paying and secure jobs overseas, the answer is yes. But the bigger question is: what happens to the industry and the country that nurtured their talents? The truth is that the Philippines has been suffering from a brain and brawn drain since the 1970s, when the program of “manpower export” was launched by the martial-law government in response to the demand for workers by the petro-dollar states of the Middle East. A number of manufacturing industries then loudly complained about the drain, citing the problem of maintaining business when companies lose expert electricians, plumbers and construction workers. In the 1980s the industry complaint on the exodus was somehow stilled by the decadelong economic crisis at home. Then, lately, a bigger problem has cropped up: the loss by industry of “mission-critical personnel”. These are the most talented workers occupying sensitive or strategic positions whose absence can paralyze the operations of the entire business or factory, for example, manufacturing will grind to a halt if there are no production engineers. Some of the most affected industries by the migration of mission-critical personnel are aviation, power, mining, steel, telecoms and manufacturing. The exodus decades of the 1970s to the present happen to be the decades too of industrial stagnation. Hence, an argument can be raised that the brain drain contributed to the failure of Philippine industry to move up the ladder from the 1980s onward. On the other hand, it can also be argued that

the failure of industry to take off is precisely the reason for the exodus of the skilled workers. So what is the right policy approach to the exodus? Can one really prevent the war for talents and the ensuing piracy of talents by the head hunters? If the war is confined within the national borders like in the case of the call center-BPO sector, the government probably can maintain its usual let-themarket-take-care attitude. The competition to get the better and more experienced workers even helps increase wages and improve working conditions in the call center-BPO sector across the board. But if the outflow of talents goes cross-border and the number is huge, the exodus will obviously impact on the ambition of the government to revive Philippine manufacturing and modernize agriculture. There is, therefore, a clear need for the government, industry, education sector and the associations of professionals to sit down and draw up a program on how to develop a balanced approach to the migration of talents. The preoccupation of the Professional Regulatory Commission and the education bodies to meet the various MRA requirements of the Asean, alongside with the so-called Asean Qualifications Referencing Framework, should give way to the bigger challenge of how to craft a talent-development program in support of accelerated industrial development and agricultural modernization at home. In this regard, the case of Singapore is worth citing here. At least 40 percent of the workforce of Singapore are migrants. Most of these migrants are subject to strict visa requirements and reportorial monitoring. However, Singapore has a relatively lenient policy, if not an open one, when it comes to the entry of high-skill workers, even for those who come to Singapore as tourists and yet apply for jobs upon arrival. Also, as early as the 1980s, Singapore had adopted a policy of recruiting the best and the brightest outside Singapore in order to sustain its program of continuous upward development. In the early 2000s, it also launched a program to recruit leading scientists from around the world to take up positions in research institutions and/or serve as university professors. The whole idea is to enhance Singapore’s capacity for innovation and transform Singapore as the region’s center for research and development. In contrast to the low-skill workers who are given ordinary but strict “Work Permits”, highly skilled workers are given “personalized employment permits” (EPs). The EPs are given a variety of benefits, such as monthly income of at least $3,000, housing privilege and permit to bring in their families. Singapore also set up “Contact Singapore”, jointly managed by the Ministry of Manpower and Economic Development Board, for the purpose of attracting the best talents outside the country. Contact Singapore advertises vacancies in Singapore firms and the benefits that await qualified talents outside Singapore. Clearly, for Singapore and other countries with similar skills-oriented migration policy, e.g., Australia and Canada, the issue is how to get the best and the brightest in order to enhance further their own development. Posting the “hot jobs” list for those seeking jobs overseas is the least of their priority. Their must-do task is to find out what are the talents needed to spur higher growth at home and how to secure those talents wherever in the world they are.

esus’ discourse on the cost of discipleship, or on the mission His disciples share with Him, fundamentally details the detachment they must have from everything else and their total commitment to Him (Matthew 10:37-42). The love of Jesus Christ must come before all else and must be the basis of all else.

More than father or mother The total commitment of Jesus to the will of His heavenly Father sets the tone for those who would follow after Him. One has to make a decision: elect his way and become His disciple, or reject it and deny Him. To believe in Jesus is to go the full extent of the way of His gospel: God alone is absolute and ultimate. This radical claim underlines the fact that God demands of us an absolute and unique commitment. Ultimate reality demands ultimate commitment. “I am the Lord your God...you shall have no other gods before me” (Exodus 20:2-3). Love of God with

one’s entire being is the first commandment; it is second to none. Disciples must have proper priorities. Not worthy to be his disciple is anyone who loves father or mother, son or daughter more than Him. The revelation of God in Jesus Christ demands that we measure up to Him. The ties of kinship marked by natural love and affection must take second place to commitment to Him, even if that may cause suffering, alienation and a sense of loss.

Carrying the cross

Matthew rounded up the necessary attitude of the followers of Jesus

Thursday, June 29, 2017 A11

by referring to the postresurrection understanding that the cross is the root of their identity. Christ’s cross represents both his total commitment to God’s purposes and the human, religious-political rejection of those purposes. And as the cross was the measure of Jesus’ love for us, it is now the measure of our love for him. We cannot be worthy of Jesus if we do not take up our cross, symbolizing our total commitment to God and to Jesus and His gospel, and duly our readiness to suffer any pain, and even death. Anybody following Jesus whose total commitment is to God will necessarily have to face the rejection and opposition of those from one’s own family or from society, who would want our ultimate loyalty, the allegiance we owe only to God. The cross, to loss one’s life on account of Jesus, is the way to life. Playing with the idea of finding and losing, to “find” one’s life means to live on one’s own terms and to go about everything in one’s own selfcentered framework. Such a “selfie” life that one has, by oneself, arranged and invented can give only temporary satisfaction, never a life of ultimate fulfillment. The life that one willingly “loses” in self-sacri-

fice and in communion with Jesus will be rewarded with ultimate life. We Filipinos are proud of our first kababayan to be canonized to have measured up to Jesus Christ’s total commitment to God, Saint Lorenzo Ruiz, who faced martyrdom with extraordinary flair, proclaiming that he would offer a thousand lives if he had them for his God whom he would never deny or exchange for anything. Alálaong bagá, discipleship also has its rewards. The dynamic relationship between Jesus and his followers reflects the intimacy between Him and his heavenly Father. Just as to receive Jesus is to receive the Father who sent Him, to receive his disciples is to receive Him. “Whoever receives you receives me”, demonstrates the esteem Jesus has for his followers. He identifies Himself with His disciples, as they are asked to identify themselves with Him. Jesus identifies Himself with every just person, be they the least of the little ones, and He promises a sure reward to anyone who receives Him in their persons. Join me in meditating on the Word of God every Sunday, from 5 to 6 a.m. on dwIZ 882, or by audio streaming on www.dwiz882.com.

BIR’s violation of the Rehabilitation Court’s Commencement Order Atty. Fermo B. Avila

Tax Law for Business

here are instances where a corporation, during its lifetime, experiences financial difficulties. In the occasion that it is unable to meet its obligations when they become due, specifically, when its liabilities are more than its assets, it has the option of undergoing corporate rehabilitation instead of completely shutting down its operations.

Rehabilitation, as defined in Republic Act (RA) 10142, pertains to the restoration of the debtor corporation to a condition of successful operation and solvency. The law requires, however, that its continuance of operation is economically feasible, and its creditors can recover by way of the present value of the payments projected in the rehabilitation plan. During the rehabilitation, the corporation will be allowed to recuperate by putting “on hold” all collections of its liabilities and, as an incident

thereof, the Rehabilitation Court may issue a Commencement Order, which includes a Stay or Suspension Order. A Stay or Suspension Order suspends all actions or proceedings, in court or otherwise, for the enforcement of claims against the distressed company. The question now arises as to whether or not the Commencement Order includes the collections by the government for taxes. RA 10142 provides that a claim against the distressed company, which shall be suspended by the

issuance of a Commencement Order, includes all claims of the government, whether national or local, including taxes, tariffs and Customs duties. However, the Bureau of Internal Revenue (BIR) is not without remedy for any taxes due, as it may still submit its claims to the Rehabilitation Court for proper consideration so that they may participate in the proceedings. But what if the Bureau, instead of submitting its claims to the Rehabilitation Court, issues a Notice of Informal Conference and, subsequently, a Formal Letter of Demand? How should the distressed corporation treat the assessment? The case of Bureau of Internal Revenue, et. al. v. Lepanto Ceramics Inc. (GR 224764) provides illumination. In the above mentioned case, the Supreme Court held that RA 10142 is very clear in stating that “attempts to seek legal or other resource against the distressed corporation shall be sufficient to support a finding of indirect contempt of court”. Thus, when the Bureau issued the Notice of Informal Conference and the Formal Letter of Demand despite the

written reminder coming from the Corporation’s Receiver of the pendency of rehabilitation proceedings and the issuance of the Commencement Order, its acts were held to be in clear defiance of the Commencement Order and constitute indirect contempt of court. Therefore, while it is said that the power of taxation is plenary in nature, as it is regarded as the lifeblood of the government, the Supreme Court, on several occasions, opined that, despite its inevitability and indispensability, it is a requirement in all democratic regimes that it should be exercised reasonably and in accordance with the prescribed procedure. The author is a junior associate of Du-Baladad and Associates Law Offices, a member-firm of WTS Global. The article is for general information only and is not intended, nor should be construed, as a substitute for tax, legal or financial advice on any specific matter. Applicability of this article to any actual or particular tax or legal issue should be supported therefore by a professional study or advice. If you have any comments or questions concerning the article, you may e-mail the author at fermo.avila@ bdblaw.com.ph or call 403-2001 local 150.

Google is fighting a losing battle with the EU By Leonid Bershidsky Bloomberg View

he unexpectedly large fine the European Commission has slapped on Google—€2.4 billion ($2.7 billion)—is evidence that the search giant’s relationship with European regulators is now a vicious circle of escalation. Google’s reluctance to give up any revenue from its fastest-growing ad format may lead to significant, unpredictable losses in its biggest market outside the US. The case in which Competition Commissioner Margrethe Vestager announced the fine on Tuesday is seven years old. It began when the UK shopping-comparison engine Foundem complained to the commission that Google was promoting its own rival service, then called Google Product Search and later renamed Google Shopping, to the detriment of competitors. The case grew as other European and US companies jumped on the bandwagon. Google thought its troubles were over in 2014 when it almost agreed on a settlement with Vestager’s predecessor Joaquin Almunia—but the complainants were acutely unhappy with the proposed document. They didn’t want to buy ads that Google promised to place at the top of the search-results page, insisting instead that Google display “organic” results. One could argue whether such a thing as organic search is even possible with a proprietary algorithm, but that was moot—the complainants were on the warpath, so Google decided to fight

it out. Vestager apparently responded to the challenge by spending countless hours of her staff’s time studying terabytes of evidence to make a solid case. In the process, the commission’s investigation expanded with one case dealing with AdSense ads and another with the Android mobile operating system. Google is nothing if not rational. It would have agreed to a compromise had the stakes been lower. But so-called product-listing ads—the kind displayed in the Google Shopping modules that appear to the right of search results if your query looks like you’re trying to buy something —have been growing faster in recent years than Google’s traditional text ads. In the first quarter of this year, they accounted for more than half of retail-search ad clicks, and advertiser spending on them rose 32 percent yearon-year. Making these ads less prominent or removing them from search results altogether would have resulted in a sharp revenue drop. Vestager is aware of that, and the size of the fine reflects her intention to drive home to Google that noncompliance won’t be worth it. If the commission deems that Google hasn’t changed its behavior within 90 days, it will start charging an additional daily fine of up to 5 percent of Google’s global daily revenue, currently about $12.5 million. Besides, Vestager said on Tuesday that Google’s competitors were now liable to sue it in national courts using the commission’s decision as justification for further rewards. The economics of continuing the fight aren’t really in Google’s favor now. Its parent company, Alphabet, made $8.1 billion of revenue in Europe, the Middle East and Africa in the first quarter of the year. That’s a third of its revenue and

probably a higher share of net income, given that it barely pays any taxes in Europe (according to Google’s 2016 annual report, the “foreign tax differential” reduced its effective tax rate by 11 percentage points). If Europe accounts for 40 percent of the company’s net income, it delivered $2.2 billion to Alphabet in the first quarter. Vestager’s fine alone eats up more than that. The maximum daily noncompliance fine would destroy almost two quarters’ profit in a year. And then there are almost certain further penalties from national courts. It’s worth losing some—not all—of the product-listing ad revenue to avoid such an outcome. Google has announced that it “respectfully disagrees” with the commission’s decision and intends to look into appealing it. That’s a difficult path to take—just ask Microsoft, which fought the commission with all it could and lost all of its appeals in eight years of litigation. In fact, the commission has a strong record in abuse of monopoly-position cases. From 2000 to 2011, the European Union’s (EU) General Court did not fully annul a single one of the 14 commission decisions that were appealed to it, though it canceled parts of four decisions. It has revised only two out of 11 fines. In subsequent years, not a single large fine has been overturned. It’s possible that Intel, hit with a €1.06-billion fine last year for offering rebates to computer makers for buying most of their chips from it, and not from competitor AMD, will shoot a hole in that record in 2018. After losing in the General Court, Intel appealed the commission’s decision in the EU’s highest court, the Court of Justice. Last fall one of

that august body’s Advocates General— advisers whose briefs are mostly followed by the judges—delivered an opinion in Intel’s favor. This preliminary success is encouraging to Google. But then, the case against Intel appears weaker: It’s harder to prove that its rebates hurt the competition or consumers than to demonstrate that Google’s preferential display of its own product listings took traffic away from competitors. Google’s case isn’t easy to argue. Its market position in Europe in unquestionably dominant. It has, and uses, the power to promote offerings from retailers who pay it. It hasn’t seen fit to promote other comparison services. As a consumer, I’m actually on Google’s side: I’ve found that Google shopping works better than the competition. No one is really limited to using the service that is displayed the most prominently on the first search result page; I’ve gone to check out some others and was underwhelmed. But from a risk-reward perspective, Google should probably stand down and agree a remedy with Vestager’s office, in this and the other two cases. By playing nice for a change, Google can, among other things, reduce the likelihood of new investigations. Its tax arrangements in Europe are highly suspect. It promotes its own restaurant and travel listings over those of rivals. It’s a big fat target, and the commission is unlikely to leave it alone if it plays the insolent American cowboy. Yes, there’s always this element of anti-Americanism to punitive European rulings against big US companies —but then, it’s usually worth it to go local in large markets, such as Europe, and try to play by the rules, even if they don’t always seem fair.

2nd Front Page BusinessMirror

A12 Thursday, June 29, 2017

www.businessmirror.com.ph

‘ITs should work with evolving technology to hasten company’s digital transformation’ By Inna Christine Cabel

Special to the BusinessMirror

ITH global spending on digital transformation predicted to reach $2 trillion by 2020, enterprises should consider outsourcing their information and technology requirements to lessen the strain on their resources.

Nerisse Ramos, who sits as COO at ePLDT Inc., said undergoing digital transformtation requires a company’s in-house informationtechnology (IT) department to work with emerging and constantly evolving technologies. “This can put a strain on their resources. Outsourcing IT takes their hands off the more mechanical tasks enabling them to focus on the strategic part of their responsibilities,” she said. This makes outsourcing IT infrastructure and operations a sound and strategic decision, she said. “Outsourcing can significantly help manage the risks, as well as resources since the implementation is handled by IT experts, while the in-house IT department

$2T

The projected global spending on digital transformation by 2020 can devote their undivided attention to achieving business goals,” Ramos said. By outsourcing IT, the benefits translate not only to cost savings, but also to overall business pro-ductivity. A recent Deloitte survey said four out of 10 business owners believe outsourcing

is useful in finding unique ways to address capacity issues, and 29 percent thought it boosts their companies’ chances to scale globally.” Companies can ensure their IT infrastructure and strategies align with the latest technologies while still maintaining a customer-centric approach. Through this, companies can be more resilient and, ultimately, more profitable,” PLDT Inc. Senior Vice President Juan Victor I. Hernandez noted. ePLDT is a managed service provider (MSP), a company that gives access to enterprises to new technologies and technical know-how, including tried-and-true policies. It operates through a subscriptionbased model, which minimizes capital expenditures and mitigates

the risk of obsolescence. The company offers managed IT services to small, medium and large businesses to deliver worldclass IT support at a reasonable and more affordable cost. Its service roster includes tech operations and maintenance for network, systems, devices, security, storage and contact-center support designed on a monthly subscription payment model. PLDT is no stranger to outsourcing its tech requirements. During the 2017 annual stockholders’ meeting, PLDT Chairman Manny V. Pangilinan said it will soon start outsourcing its IT requirements from IBM Corp., saying this will allow the company to save P7 billion over a five-year period.

I.M.F. trims economic forecast for U.S. amid growth uncertainty

STRINGENT MEASURES An immigration officer at the Ninoy Aquino International Airport Terminal 1 takes a photo of a stewardess in compliance with the stricter profiling of travelers. The Bureau of Immigration has installed cameras at every counter to automatically photograph every departing and arriving passengers, including pilots and crew members, as part of the intensified campaign to stop potential terrorists who will attempt to gain entry into the country or try to flee. NONIE REYES

Duterte reaffirms all-out support for troops

r e sident D ute r te on Wednesday led the 120th founding anniversary of the Presidential Security Group (PSG), reassuring the troops of his commitment to modernize the Armed Forces of the Philippines (AFP). In his speech, Duterte vowed to provide soldiers with proper ser v ices through the modernization of their medical and defense equipment. “I assure you of my loyalty to you and the best of the service that I can give you,” he said before the officials and members of his security group. Prior to delivering his speech, Duterte led the groundbreaking ceremony for new PSG

Global stocks fall on jitters over central bank policy

Station Hospital Compound at the Malacañang Park. He directed Health Secretary Paulyn Jean B. Rosell-Ubial, who accompanied him during the event, to fast track the construction of the hospital and other pending acquisition of medical equipment for the military. He likewise promised the soldiers that they will get the needed equipment for their hospital, including magnetic resonance imaging (MRI), CT scan and hyperbaric or decompression chamber. “I want it 60 days, pati ’yung ospital ninyo by December. You will get all these equipment, lahat,” he said.

Also in his speech, the President reiterated his commitment to defend Filipinos against all forms of threat, be it drug menace or terrorism. “My order is, ‘If you destroy my country, I will destroy you. Be it drugs or terrorism’,” he said. Amid the ongoing conflict between government troops and Maute rebels in Marawi City, the Chief Executive expressed assurance that he would continue to fulfill his constitutional mandate of preserving the welfare of every Filipino. “On terrorism. Well, they are not members of the Geneva Convention. They are just plain bandits, gangsters, and what they really

ONG KONG—Global stocks edged lower on Wednesday as investors fretted over the prospect of tighter monetary policy from major central banks. Keeping score: Germany’s DAX fell 0.4 percent to 12,618, while the CAC 40 of France lost 0.2 percent to 5,246. Britain’s FTSE 100 edged almost 0.1 percent lower to 7,433. Dow and S&P futures were both up 0.1 percent, suggesting a tepid start to trading on Wall Street. Central banking: Upbeat comments by European Central Bank (ECB) President Mario Draghi about prospects for the 19-country euro zone were taken

want is just to kill. And if you want to destroy us, we will also destroy you,” he said. The President stood by his order for the military to keep conducting counterattacks against Maute militants, who continue to wreak havoc in the Marawi City. He, meanwhile, took the opportunity to apologize for the atrocities in Marawi, saying that he has to declare martial law to quell terrorism in Mindanao. “Let’s share your grief this afternoon. I’m very sorry that this has to happen. I do not like it, but I had to because that is my Constitutional duty. I would be violating the law if I allow this country to go to the dogs,” he said. PNA

as a hint that policy change may be in the pipeline, even though he did not mention plans to dial back stimulus measures. Meanwhile, US Federal Reserve (the Fed) Chairman Janet Yellen, in a speech in London, said she didn’t foresee another financial crisis “in our lifetimes”. Market watchers noted that she didn’t say anything to contradict earlier statements about plans to gradually remove stimulus and raise rates if economic conditions continue to improve, indicating those plans are still on track. Market insight: “The net effect of last night’s speeches by Yellen and Draghi has been to reinforce a view that markets are now embarking on a phase

ASHINGTON— The International Monetar y Fund (IMF) has trimmed its outlook for t he US economy, citing the number of uncertainties that surround President Donald J. Trump’s plans to boost economic growth. The IMF forecast that the US economy will grow this year at an annual rate of 2.1 percent. That would be an improvement over last year’s lackluster 1.6percent growth rate but down from the IMF’s April forecast for growth this year of 2.3 percent. T he IMF a lso tr immed growth for next year and said the economy would have a hard time achieving the 3-percent growth goal set in the president’s first budget. The new growth figures were included in the IMF’s annual review of the US economy issued on Tuesday. The report said it lowered its forecast because it was evident that many parts of the administration’s tax and spending plans remained undecided. Given these uncertainties, the IMF said the decision was made to make no assumptions about which parts of Trump’s program would win approval in Congress and, instead, use a projection that current policies remain unchanged. The IMF’s forecast is that annual GDP growth of 2.1 percent this year and 2.1 percent next year would slow to 1.9 percent in 2019 and 1.8 percent in 2020. By contrast, the administration’s budget released in May projects rising GDP rates in coming year hitting 2.9 percent in 2020

of global policy tightening with the ECB potentially moving faster relative to the Fed than many had expected,” Ric Spooner, chief analyst at CMC Markets, said in a commentary. Us politics: A decision by Republican leaders in the Senate to put off until after their July 4 recess a vote on a health-care overhaul bill spurred a selloff. The delay added to investor worries about political gridlock and what it could mean for President Donald J. Trump’s plans for health-care reforms and other economy-boosting measures. Asia’s day: Hong Kong’s Hang Seng led declines, falling as much as 0.7 percent. By late afternoon it was

and then turning in growth of 3 percent for each year after that through 2027. The current economic expansion, now the third longest in US history, has averaged weak growth around 2 percent since the recovery began eight years ago in June 2009. The IMF said the administration’s forecast that its policies can lift that growth rate by a full percentage point to 3 percent was “unlikely”. In a statement, the Treasury Department said it appreciated the IMF’s support for the administration’s broad policy efforts in such areas as boosting infrastructure investment and simplifying the tax system. “The administration is committed to generating sustainable economic growth that will benefit both the American and global economy,” the Treasury statement said. “ We are focused on making significant refor ms to our ta x and reg ulator y policies, as well as renegotiating trade agreements to be more balanced for American workers, which w ill lead to stronger economic grow th and job creation.” On trade, the IMF said the US dollar was “moderately overvalued” by around 10 percent to 20 percent. A stronger dollar hurts US exports by making American products more expensive on overseas markets while making imports cheaper in the US market. The IMF said the US economy would benefit by keeping its markets open as it pursues new and renegotiated trade agreements. AP

down 0.6 percent at 25,683.50, while Japan’s benchmark Nikkei 225 index lost 0.5 percent to 20,130.41. South Korea’s Kospi shed 0.4 percent to 2,382.56. The Shanghai Composite index in mainland China lost 0.6 percent to 3,173.20, while Australia’s S&P/ ASX 200 gained 0.7 percent to 5,755.70. Shares fell in Taiwan and most of Southeast Asia. Energy: Oil futures fell, with benchmark US crude slipping 15 cents to $44.09 a barrel in electronic trading on the New York Mercantile Exchange. The contract gained 86 cents on Tuesday. Brent crude, the international standard, lost 5 cent to $46.60 per barrel in London.AP