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BMReports

PHL’s ‘Smart Cities’ dream: Too slow? Conclusion

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NTERCONNECTION is important in building smart cities. This means that each component of a city should “communicate” with one another in order to make life easier for its population. University of Bremen Prof. Hans Dietrich Haasis said in a forum a smart economy may base its data from mobile usage, which links all other components through the Internet. A smart city is a place wherein almost everything is automatic: from home to health care, to work. “Smartphones are changing the landscape to digital,” he said. “Through innovation, we can use data from the smartphone to develop smart services, such as assisted living or electronic health, build smart homes that are connected to smart grids, and even smart factories.” Continued on A2

Jakarta’s Smart City monitoring room is seen in this May 10, 2016, file photo. Jakarta’s Smart City program is a technology-based service aimed at increasing government efficiency, effectiveness and accountability. It integrates a web site, smartcity.jakarta.go.id, Google Maps and traffic application Waze. The web site is also integrated with the crowd-sourcing smartphone application Qlue, which allows residents to report in real time various incidents, such as crimes, floods or fires. Civil servants nearest to the reported incidents are monitored by another application, CROP Jakarta (Cepat Respon Opini Publik, or rapid response to public opinion), which assesses their ability to quickly and effectively respond to complaints. Gregorius Bhisma Adinaya | dreamstime.com

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Wednesday, March 1, 2017 Vol. 12 No. 140

Ash Wednesday Teddy Locsin Jr.

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ome 5,215 projects have been identified for public funding under the P7.89-trillion Threeyear Rolling Infrastructure Program (TRIP) from 2018 to 2020, data obtained by the BusinessMirror from the National Economic and Development Authority (Neda) showed.

free fire

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The number of projects to be pursued under the 20182020 Three-year Rolling Infrastructure Program

The bulk, or 4,889 projects, will cost the government less than P1 billion each, for a total outlay of P311.02 billion, or 3.94 percent of the See “Infra,” A2

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Govt allocating ₧7.89T for 3-year infra buildup 5,215 S By Cai U. Ordinario

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his is all over the Internet. I will give it to you verbatim. Jim Martin, Jesuit, culture editor of America magazine, says, “It is Lent again. The time when we ask again what am I gonna give up for Lent.” Instead of something to give up, Father Martin suggests doing something positive. Be kind. Kindness sums up the Christian message. Come to think of it, kindness also sums up the Buddhist, Hindu and Muslim messages. Karma is gonna get you if you are not kind in this life. You are coming back as a cockroach. Although that will not stop you from getting elected. In the case of Muslims, kindness is only polite. So Muslims once famously welcomed strangers into their tents in the desert. Continued on A10

HOUSE PANEL OKs BILL Facebook-style social network a shift in how science is shared 12 million ON IN-CITY RELOCATION C By Jovee Marie N. dela Cruz

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@joveemarie

he House Committee on Housing and Urban Development has endorsed for plenary approval a measure establishing a local government resettlement program that will implement an on-site, in-city or near-city strategy

for informal-settler families (ISFs). In the proposed Local Government Unit-led On Site, In Site or Near City Resettlement Act, PDPLaban Rep. Alfredo B. Benitez of Negros Occidental, the panel chairman and principal author of the measure, said the proposal seeks to help the 1.5 million ISFs in the See “House panel,” A12

PESO exchange rates n US 50.2670

alvin Coffey, a professor of surgery at the University of Limerick in Ireland, has a world of gadgetry, scientific equipment and medical tests at his disposal. Recently, he added another tool: social media. During a months-long project to prove that the mesentery—folded tissue that connects the intestines to the wall of the abdomen—was, in fact, a human organ, Coffey regularly turned to his follow-

ers on ResearchGate, a free Facebook-style social network aimed solely at scientists worldwide, for tips and suggestions on where his four-person team should focus their research. “It’s real-time feedback from people who are experts in this field,” said Coffey, who published his findings last month in the The Lancet Gastroenterology & Hepatology, a prestigious British medical journal. “It’s not like your typical social media.”

The number of scientists the social network ResearchGate has signed up

That paper was, in part, shaped by his interactions on the social network, indicative of a shift in how scientific research is conducted. As Coffey noted, researchers once

faced difficulty in getting feedback from peers before publication, and their projects were often closed to outsiders. This change was initially gradual. But it has increased at pace in recent years, as the cost of cloud computing has plummeted and researchers have become comfortable in uploading their work onto social media. That is what Ijad Madisch, who founded the social-network See “Facebook-style,” A12

n japan 0.4460 n UK 62.5573 n HK 6.4769 n CHINA 7.3169 n singapore 35.8052 n australia 38.5900 n EU 53.2378 n SAUDI arabia 13.4063

Source: BSP (28 February 2017 )


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A2 Wednesday, March 1, 2017

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PHL’s ‘Smart Cities’ dream: Too slow? Continued from A1

Thus, connection, Haasis said, is indispensable, as this will help computers process data to solve problems, such as traffic congestion.

ICT role

ATENEO de Manila University School of Science and Engineering Prof. Kardi Teknomo added that the information and communications technology (ICT) industry can help as early as now by providing mobile usage data from common people that can be used as a basis for formulae in solving gridlocks. “Our problem is how to build a network of tools to analyze traffic congestion,” Teknomo said. “We have abundant mobile data from common people, from these, we can actually collect some kind of trajectory data, which we can use to create an ideal—not delusional—condition.” Haasis noted that, to do this,

Infra. . .

Continued from A1

required spending for TRIP. About 149 projects will cost between P1 billion and P2.5 billion each, for a total expenditure of P226.8 billion, or 2.87 percent. There are 177 projects worth more than P2.5 billion each and will use up P7.35 trillion, or 93.18 percent of the entire TRIP budget.  “The TRIP is the government’s

Boosting connectivity

FROM digital connectivity to sanitation and child mortality, Narendra Modi’s tenure has im-

pacted day-to-day life for over 1.2 billion people. In May 2014 Modi’s Bharatiya Janata Party (BJP) secured the largest election victory in three decades amid a backlash over a bevy of corruption scandals and policy missteps that pushed growth to near decade lows. With this historic mandate, India’s prime minister has pushed through a slew of big-bang reforms, including the introduction of a goods-and-service tax, a reduction in fuel subsidies and the implementation of an inflation target. Modi also embarked this month on the biggest gamble of his political career through a controversial ban on high-value currency notes. India’s biggest crackdown against corruption in almost four decades risks an economic slowdown and a popular backlash. At the halfway point of his fiveyear tenure, there are milestones that show how the prime minister has “Modi-fied” one of the world’s fastest-growing large economies.

tool to strengthen the link between programming and budgeting. This shall ensure that the right types or the needed projects are included in the pipeline and accordingly funded,” the Neda earlier said in describing the program. In 2018 alone Neda data showed some 2,822 projects will be financed under the TRIP. These will amount to P1.097 trillion, hitting the government’s target of over P1 trillion worth of infrastructurerelated spending annually.  The Duterte administration

targets to spend a total of P8.2 trillion between 2017 and 2022 to usher in what Budget Secretary Benjamin E. Diokno terms as the “golden age of infrastructure” in the country. The projects for 2018 are divided according to Tier 1 and Tier 2 projects. Tier 1 projects are those that need to have continuous funding in the next three years, while Tier 2 are “new” projects. The Neda said there are 348 Tier 1 projects worth P805.64 billion and there are 2,474 Tier 2 projects

worth P291.08 billion. Initially, the TRIP includes transportation facilities, such as roads and railways; water projects, such as irrigation and water supply; energy projects; and social infrastructure, such as classrooms and health facilities. Under transport, the TRIP aims to finance 10,699.53 kilometers of new national roads to help ease congestion and address connectivity and mobility issues. It will also finance the rehabilitation and improvement of

several components must communicate with one another to produce a precise solution. “In a smart city, we have to connect the traffic, information and even energy-supply networks with each other. The connection is not only meaningful in a technology point of view, but also meaningful to new businesses,” he said. Haasis added: “When I think about new business models, I take into account a special category of needs, such as logistics, mobility, tourism, working environment, living environment, shopping and entertainment. We have these special ‘transpirational’ logistics needs; we have a portfolio needs.” As such, the ICT industry will play a key role in developing tech to provide these in a smart city. India shows the way how.

India Modi-fied

EASTERLIES AFFECTING THE EASTERN SECTION OF SOUTHERN LUZON, VISAYAS AND MINDANAO NORTHEAST MONSOON AFFECTING NORTHERN LUZON (As of 5:00 PM - Feb. 28, 2017)

ONE of Modi’s signature programs is the Smart Cities Mission, which aims to convert 100 cities by 2020 to ‘smart cities’ to boost the quality of life through urbanization. According to the Telecom Regulatory Authority of India’s annual report, the number of phones per 100 people in India has increased from 75.23 in 2014 to 79.38 in 2015, the latest available data. Modi has been keen on his “Digital India” initiative, which aims to achieve goals, such as providing high-speed Internet in rural villages and offering government services online. Overall wireless subscribers, which includes cellphone services and the like, grew from 904.51 million people in 2014, to 969.9 in 2015. In the rural part of the country, growth was significantly stronger with the number of wireless subscribers jumping from 371.78 million in 2014 to 414.8 million in 2015, according to the Telecom Regulatory Authority.

That growth is expected to accelerate this year with Reliance Jio Infocomm Ltd., the wireless telecom service of Reliance Industries Ltd., launching free service from September 5 to December 31. The company aims to add 100 million subscribers by the end of 2016.

Dangerous for pedestrians

city by population, was 11th-most dangerous among the nation’s 104 biggest metros. It doesn’t help that the state’s population growth took off in the post-World War II boom, when planners high on the fumes of unleaded gasoline dreamed up urban places that prioritized cars over people. But cities in all parts of the country have wide roads without enough safe places to cross. Part of the answer is demographics, according to Emiko Atherton, director of the National Complete Streets Coalition. “In a city-like Seattle, high-income people are out on the streets, and walking is almost looked at as a luxury activity,” she said, adding that wealthier pedestrians have been more successful at advocating for safer streets. In states such as Florida, “the people who are walking are doing it because they have to, not because they want to.” Patrick Clark and Narae

IN the United States, Florida’s metropolitan areas are the most dangerous, a study from Smart Growth America (SGA), a Washingtonbased organization that promotes walkable cities, revealed. Eight of the 10 cities where pedestrians are at the greatest peril are in Florida, according to SGA’s Pedestrian Danger Index, which compares the number of traffic fatalities with census data on the number of people in each metropolitan area who walk to work. They include Tampa, Orlando and Jacksonville, the second-, third-, and fourth-biggest cities in the state. Miami, Florida’s largest

Kim, Bloomberg News

15,130.19 km of national and local roads. According to the Asian Development Bank, the Philippines and other Southeast Asian countries must invest over 5 percent of their GDP for infrastructure annually until 2030 to maintain high growth and meet climatechange needs. In its latest report titled Meeting Asia’s Infrastructure Needs, the ADB said Southeast Asian economies need to invest 5.7 percent of GDP until 2030.

This means investing a total of $3.147 trillion between 2016 to 2030 using 2015 prices. This translates to an annual investment of $210 billion until 2030. “The demand for infrastructure across Asia and the Pacific far outstrips current supply,” ADB President Takehiko Nakao said. “Asia needs new and upgraded infrastructure that will set the standard for quality, encourage economic growth and respond to the pressing global challenge that is climate change.”


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Yasay’s C.A. confirmation hangs By Butch Fernandez @butchfBM

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OREIGN Secretary-designate Perfecto R. Yasay Jr.’s awaited confirmation by the bicameral Commission on Appointments (CA) hangs amid still-unresolved dual-citizenship issues hounding him. Senators sitting in the commission say it is unlikely Yasay would be confirmed in the CA’s plenary session on Wednesday, given hardline positions taken by members of the House contingent that Yasay first clear the lingering controversy over his 1986 oath acquiring American citizenship. Sen. Gregorio B. Honasan, a CA member, noted the commission’s screening panel had suspended hearings on Yasay’s Cabinet nomination, because “we still need to validate the citizenship issue with additional information...it is procedural.” Senate Majority Leader Vicente C. Sotto III acknowledged the slim chance that Yasay would be confirmed this week with the House members unresolved questions on his DFA appointment. “Palagay ko malabo,” Sotto told the BusinessMirror. “There are more questions being raised by CA members about the citizenship is-

sue. Mabigat iyon. It can be a cause for rejection.” Sen. Joseph Victor Ejercito, another CA member, suggested Yasay directly address the issue with House members seeking clarification on his citizenship status. “The burden of proof lies with him [Yasay],” Ejercito said. “While he claims that he was never an American citizenship, the House members say otherwise.” Ejercito added, “As of now, it is doubtful [that Yasay] would be confirmed by the CA. We are still waiting for proof to back up his claim.” In separate interviews, senators confirmed there are still a lot of questions from CA members Yasay must address, indicating there are “lingering doubts” that must first be resolved, otherwise his Cabinet nomination would likely be rejected if submitted to a plenary vote this week. Newly designated Senate President Pro Tempore Ralph G. Recto said Yasay needs to make a convicing clarification in order to win confirmation by the commission. “He [Yasay] will have to explain why his testimony is different from what he said in the report,” Recto said, referring to reports reaching the CA about Yasay’s dual citizenship.

Military confirms beheading of German Sayyaf captive By Priam F. Nepomuceno Philippines News Agency

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HE Armed Forces on Tuesday said it has received information from official sources confirming Juergen Kantner, the German hostage of the Abu Sayyaf, was beheaded on February 26, after his government refused to pay the bandits’ P30-million ransom demand. “We have finally received information from reliable sources confirming that Mr. Juergen Gustav Kantner was mercilessly and inhumanly murdered by the evil KFR [kidnap-for-ransom] Abu Sayyaf Group [ASG],” the Armed Forces Public Affairs Office chief, Col. Edgard Arevalo, said in a message to the Philippines News Agency. The bandits earlier threatened to behead Kantner if their P30-million demand was not paid before 3 p.m. of February 26. “Our operations in the past several days and nights using all our resources were unrelenting. We lost some of our best men in the process, because we value the life of Mr. Kantner and that of the others who have fallen prey to this terrorist group,” Arevalo added. With Kantner’s execution, Arevalo vowed to further intensify efforts to hunt down the perpetrators. “We express our heartfelt sympathies and condole sincerely with his family for their loss. The Armed Forces condemns in the strongest terms this abominable act of ruthlessness, loathe and greed of this evil terrorist group,” he added. He said the military is committed to pursue the ongoing all-out offensive to neutralize the ASG. “There will be no let-up in our operations until we have rescued all the remaining kidnap victims. Military units will continue to search for the remains of Mr. Kantner to be handed to his bereaved family, and to afford him decent burial he deserves,” he added. Kantner was kidnapped by the bandits while his yacht Rockall was cruising off Sulu waters last November. His companion, 56-year-old Sabine Mertz, was shot and killed by the bandits and allegedly raped.

Beheading condemned

PRESIDENTIAL Adviser on the Peace Process Jesus G. Dureza

AREVALO: “We have finally received information from reliable sources confirming that Mr. Juergen Gustav Kantner was mercilessly and inhumanly murdered by the evil KFR [kidnapfor-ransom] Abu Sayyaf Group.”

condemned the beheading of Kantner, and said efforts to save his life failed. Dureza said many sectors, including the Armed Forces, exhausted all efforts to save Kanter’s life, but to no avail. “Another precious life had been needlessly lost. There must be a stop to this killing of the innocent and the helpless,” he said. Dureza said up to the last moment, he was in contact with Kantner’s family. Dureza’s statement confirmed the fate of the victim, after the bandits committed to keep him alive until February 26. “We grieve as we strongly condemn the barbaric beheading of yet another kidnap victim, German Juergen Gustav Kantner in Sulu,” Dureza added. Kantner, 70, was abducted from his yacht off Malaysia’s Sabah state last November while the body of his companion was later found on the boat. Dureza has been facilitating release of kidnap victims. Last year it was him who facilitated the release of Filipina Marites Flor, who was kidnapped by the Abu Sayyaf from a high-end resort of the Island Garden City of Samal. It was followed by Norwegian Kjartan Sekkingstad. Early this year two ship crew members, a South Korean and a Filipino, were also fetched by Dureza in Sulu. Dureza said, “Terrorism has no place in a country like ours, and we as a people must confront violent extremism every time it rears its ugly head. We condole with his family, friends and loved ones.” The German government condemned the killing of its citizen. German Chancellor A ngela Merkel condemned the act as “barbaric” and “abhorrent”, while calling for a world united front against terrorism. With Xinhua

Editor: Dionisio L. Pelayo • Wednesday, March 1, 2017 A3

Angeles group tells Tugade, Cauguiran: Resign right away

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By Ashley Manabat | Correspondent

NGELES CITY—The Pinoy Gumising Ka Movement (PGKM) on Tuesday demanded the resignation of Clark International Airport Corp. (Ciac) Officer in Charge Alex Cauguiran and his boss, Transportation Secretary Arthur P. Tugade.

PGKM Chairman Ruperto Cruz said Cauguiran should resign from Ciac for his failure to initiate moves to “obligate” the funds intended for the expansion of the Clark International Airport (CIA). “What is he waiting for?” asked Cruz. “Cauguiran should resign now if he cannot advance the most urgent task to develop the Clark airport —that is to utilize the P2.9-billion fund before it is reverted back to the general fund and waste several more years for the full and immediate development of the airport,” Cruz said. “Cauguiran was the executive vice president of Ciac for a long time, and should know exactly what is needed for the development of the airport,” Cruz pointed out. Cauguiran was also convener of the Move Clark Now in 2005 and the Advocacy for a Dual Airport Priority early last year, which both called for the immediate and full development of the Clark airport, he added. “Why is he [Cauguiran] silent now?” he asked. Cruz also said, “Tugade has no business meddling with the Clark airport, and should

also resign now because of his failure to address the lingering problems of the Land Transportation Office on drivers’ licenses, as well as motor-vehicle license plates.” Under Executive Order 64 signed by then-President Benigno S. Aquino III on December 21, 2011, the Ciac was transferred from the Office of the President to the Department of Transportation and Communications (DOTC), which made it an attached agency of the DOTC.

‘Why waste P2.9 billion?’

THE PGKM is also against the plan for a private-public partnership (PPP) scheme to implement the master plan of the Clark airport. Cruz said PPP projects are “too complicated”, when, in fact, “we can already start the bidding right now”. Former Liberal Party Rep. Joseller Guiao of Angeles City said last week that “it seems that nobody is championing Clark”, and warned of the impending possibility that the P2.9-billion funds for the expansion of the Clark airport terminal will just be reverted back to the general funds by year-end. Guiao recalled that in 2015 Con-

gress appropriated P800 million for the expansion of the Clark airport terminal for the detailed engineering studies and the groundworks. He said in the 2016 budget, another P2.1 billion was appropriated for the start of the structure itself. “So there is a total available fund now of almost P3 billion, but the problem now is that the budget was appropriated in the 2015 GAA [General Appropriations Act], and it has a lifetime of only two years. So if you do not spend that by the end of this year, it will revert back to the general funds,” Guiao explained, even if the fund for Clark is “multiyear”, which meant that it has a budget every year for five years for a total budget accumulation of P12 million to P15 billion, Guiao said. “But if you fail to obligate the initial P800 million, the rest of the budget will be gone,” he said. The problem now is nothing was allocated for Clark in 2017, he lamented. “But if we can allocate funds for Clark in 2018, work could start only in the following year or by 2020 and by that time, we have lost five years, when we can already start now,” he said. Guiao met with Cruz over the weekend to discuss the urgency of prodding key government officials to obligate the Clark airport funds before it’s too late. Guiao said 10 months is very short. “The processes in government are very slow, so parang nag hahabol na tayo ngayon […it’s like we are already catching up because we’re pressed for time],” he said. However, a source from the Department of Budget and Management (DBM) said there was a release of P800 million for Clark Airport in 2015, and it was transferred to CIAC per memorandum of agree-

ment (MOA) with the Department of Transportation (DOTr), which meant that the fund is already obligated. The DBM source said in 2016, the release of another P2.09 billion was again obligated with a MOA between Ciac and the DOTr in addition to the 2015 funds. Guiao said upon learning of the new development, he immediately called up Cauguiran, who denied the information from the DBM source. “Ali tutu [It’s not true],” Guiao said. Guiao said Cauguiran told him the funds are not yet obligated, and that he is just an employee and he will follow whatever instructions will be relayed to him. “I cannot tell my boss what I want to do, because it will look that I know better than him,” Guiao quoted Cauguiran as saying. Meanwhile, Ciac, through its newly designated communications department manager, said they are now working for the release of the P2.9-billion fund, for the expansion of the Clark airport terminal building. In a statement, Ciac Communications Manager Ojie Sanchez said: “The management of the Clark International Airport Corp. is actually pushing for the download of the first tranche of the P2.9-billion fund, so that plans for the airport development will materialized as soon as possible.” Sanchez said, “Ciac shall immediately conduct procurement of detailed engineering-design consultants and the bid out and award contract of project implementation for horizontal civil works of the new terminal building upon receipt of funds to be downloaded by the DOTr.”

Congressmen, Cabinet member call for resumption of govt-NDF talks By Marvyn N. Benaning Correspondent

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ARTY-LIST Reps. Antonio L. Tinio and France L. Castro of ACT Teachers and Social Welfare Secretary Judy M. Taguiwalo joined hundreds of government employees, teachers and students in calling for the resumption of peace talks between the government and the National Democratic Front (NDF). Tinio, Castro and Taguiwalo, along with hundreds of employees of the Department of Social Welfare and Development (DSWD) and 300 teachers and students, formed a human chain at the main gate of the DSWD office precisely to call for the revival of the peace talks. “We urge the President to hear the cry of the Filipino people to resume the peace talks between the government and the NDF,” Tinio said. “Teachers, students and government officials unite in calling for the resumption of the peace talks, especially now that both panels have already started talking about the Comprehensive Agreement on Social and Economic Reforms [Caser].” “We form this human chain for peace to symbolize the call for both panels to immediately resume the talks and tackle the roots of the armed struggle in the country. It also symbolizes the unity of the Filipino people from different sectors in the call for just peace,” Castro said. “The human chain for peace is in line with the efforts in Congress with House Resolution 769. We urge the House to approve the resolution, and push further the growing call for the immediate resumption of the peace talks to finally address the roots of the armed conflict.” “The agreements on social and

UNIFY THE KOREAS In Tek-seo, copresident of One K Global Campaign Organizing Committee, briefs newsmen on the move to unify the

two Koreas and end the post-World War II schism that persisted in the Korean peninsula for more than 70 years. One K Global Campaign is the civic movement that is taking its advocacy to a global level as a means of rallying international support for Korean unification. NONIE REYES

economic reforms, which will be tackled at the resumption of the peace talks, include our people’s demands that will bind government to uplift their lives by working toward a genuine agrarian reform and national industrialization by ensuring job creation and decent salaries, and by providing social services that the people need for a decent life. It will bind government to abandon its decades-long implementation of neoliberal economic

TINIO: “We urge the President to hear the cry of the Filipino people to resume the peace talks between the government and the NDF.”

policies, which have been proven to only cater to the interests of the elites and not the majority of the Filipino people,” Castro added. “We strongly urge the President to respect and honor previous government-NDF peace agreements, such as the Joint Agreement on Security and Immunity Guarantees and the Comprehensive Agreement on Respect for Human Rights and International Human Rights,” Tinio said.


Economy

A4 Wednesday, March 1, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

EU, IMF reports boost PHL’s investment profile

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alacañang on Tuesday welcomed a European Union report citing the Philippines as among the top favorite of European investors in the Asean region. In a Palace news briefing, Presidential Spokesman Ernesto C. Abella said that, according to EUAsean Business Council Executive Director Chris Humphrey, the Philippines is one of the favorites among the Asean countries preferred by European companies as investment destination. “The EU-Asean Business Council said the Philippines is foreseen to further enhance the European interest due to the country’s young population, increasingly liberal trade and investment policies and largely untapped market,” Abella said.

The Palace official said the EU report is a big boost to President Duterte’s promise to create a million jobs each year. “To deliver its promise to create 1.2 million jobs annually, the Duterte administration will attract more foreign investments, increase infrastructure spending, ease the cost of doing business in the Philippines and continuously develop its human resource,” Abella said. Jobs to be created include those in construction, information and technology, business-process management, tourism, manufacturing,

transport and logistics, agri-processing industry and retail trade. Malacañang, likewise, welcomed an International Monetary Fund (IMF) report commending Philippine monetary policy. “We welcome the commendation from the IMF mission team regarding the Philippine monetary policies, which are supportive of domestic expansion,” Abella said in the same briefing.

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the third quarter of 2016, according to the Philippine Statistics Authority (PSA). Based on data from the Labor

To deliver its promise to create 1.2 million jobs annually, the Duterte administration will attract more foreign investments, increase infrastructure spending, ease the cost of doing business in the Philippines and continuously develop its human resource.”—Abella

Turnover Survey (LTS), employees who resigned from their jobs from large enterprises in Metro Manila increased to 7.94 percent.

RE firm launches ‘best’ solar rooftop panel in local market

“It [IMF] took note of the Comprehensive Tax Reform Program [CTRP] as among those that contributed to the strengthening of the country’s monetary transmission and reduction of concentration risks in the banking sector, among others,” he said. “Also, continuing and maintaining the current macroeconomic policies is part of the 10-point socioeconomic agenda,” Abella said. PNA

PSA notes hike in employee resignations in Q3 2016

spike in the number of workers who resigned from their jobs caused employment losses to grow nearly 8 percent in

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This was significantly higher than the 2.49-percent growth in the number of workers who were laid off or terminated by their employers during the period. “Separations refer to terminations of employment due to quits or terminations initiated by the employees and layoffs or terminations initiated by the employers due to economic reasons,” the PSA said. The PSA added administrative and support service activities posted the highest separation rate, at 16.59 percent. Around 14.05 percent of these were employee-initiated. This was followed by accommodation and food-service activities, at 11.49 percent, of which 9.47 percent were also employee-initiated. “Generally, employer-initiated separations were higher in the industry sector. However, most of the industries in the services sector recorded higher separations initiated by the workers themselves, except for three industries—trade, education and health,” the PSA said. Even with these separations, employment in the third quarter of 2016 was at 3.67 percent. This is the highest labor turnover rate (LTR) since 2010, when the LTR was at 4.22 percent in the third quarter and 4.05 percent in the fourth quarter. The PSA also said the accession rate, which refers to new hires, increased 14.1 percent, higher than the separation rate, at 10.43 percent, resulting to the 3.67 percent difference. This translates to hiring 37 workers for every 1,000 employed. “Specifically, for every 1,000 employed, 141 workers were added due to either expansion or replacement, while 104 workers were laid off or quit their jobs,” the PSA said. The SA said most industries reported positive labor turnover rates ranging from 0.05 percent in water supply; sewerage waste-management and remediation activities to 20.79 percent in transportation and storage. The LTS is a quarterly sample survey of enterprises conducted by the PSA since the third quarter of 2002. There were a total of 1,232 enterprises served as respondents to the Third Quarter 2016 Labor Turnover survey. The sample enterprises were drawn from the 2015 List of Enterprises. The retrieval rate for this quarter was placed at 98.4 percent. Cai U. Ordinario

GreenHeat Corp. officials present The Curve, reputed to be the lightest, safest, most durable, flexible, easy-to-install and transport solar technology photovoltaic panel. Bending the panel to show its flexibility are GreeHeat China Operations Manager Zhu Tianwen, Director Glenn Tong, CEO Helen Tong, General Manager Obeth Martin and Finance Director Edward Antonio. NONOY LACZA

By Lenie Lectura

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@llectura

reenHeat Corp., a leading solar-power provider in the country, unveiled on Tuesday the Curve, taunted as the most flexible and lightweight solar rooftop panel in the market to date. The Curve, company officials said, is the latest technological breakthrough in the industry, and is the first to be introduced in the world. “We are the first in the industry of solar to introduce this. Curve is ultra-light, easy to install, safe, easy to transport and, most of all, it’s flexible. We are launching this, together with partners, in Japan and Hong Kong,” said GreenHeat General Manager Roberto Martin said. The Curve can be easily integrated into surfaces where regular panels are not compatible. “Because it is lightweight, the Curve can be applied to surfaces that cannot handle conventional panels,” he added. The Curve weighs only 7.5 kilograms, as against conventional panels that weigh 27 kg. It can physically adjust to structures, like arches and domes, which is possible through its Flexicell technology. Installation is also easier because the Curve requires no drilling of holes on rooftops.

All of these qualities make the Curve a perfect fit, as well, for rural off-grid applications, where transportation and logistics are a challenge. The Curve is also ideal for military, emergency aid, or rescue operations, because it is easy to transport and install. GreenHeat has so far installed eight solar rooftop panels with a capacity of 2.4 megawatts (MW) last year. This include the solar panels installed in five branches of Wilcon Builders for a total capacity of 1.2 MW. For this year, it aims to put up 20 to 30 solar rooftop panels with a total capacity of 6.5 MW. “We are targeting mostly commercial and industrial,” Martin said. The Curve is also being offered to residential houses with an initial fee of P170,000. GreenHeat Director Glenn Tong said the company is in talks with Banco de Oro to offer flexible payments to interested individuals who may want to purchase the Curve. “Our goal is to push this technology and even make this technology, better in the future. There will be definitely savings to be realized here. Wilcon told us that it was able to save up to 50 percent in electricity bills when they started using our solar panels.”

briefs b.o.i. oKs satrap’s p1.16-b biomass project The Board of Investments (BOI) has recently approved the application of Satrap Power Corp. to be a renewable-energy (RE) developer of biomass-energy resources, the agency announced on Tuesday. The energy firm was approved and is entitled to fiscal incentives through the Special Laws List (Renewable Energy Act of 2008) of the current Investment Priorities Plan (IPP). The P1.16-billion project involves the development, construction and operation of a 10-Megawatt (MW) power plant in Barangay Nagpanaoan, Santa, Ilocos Sur. Satrap will utilize municipal solid wastes and agricultural wastes to generate electricity at a rated capacity of 3 MW and 7 MW, respectively. It has already executed a feedstock-supply agreement with the various local government units (LGUs) in the province, and commercial operations are expected to commence by April 2019. All of the generated electricity are expected to be sold to the National Grid Corp. of the Philippines in accordance with the feed-in tariff (FiT) system of the RE Act. The Ilocos Sur Electric Cooperative, Inc. is also being considered as a market. “This project boosts the Ilocos region as a hub for renewable power and complements the wind power plants already in the region. The addition of biomass projects will spur further development of renewable-energy sources in the area as we continue our march toward reducing our dependence on fossil fuels over time,” Trade Undersecretary and BOI Managing Head Ceferino S. Rodolfo Jr. said in a news statement. Catherine N. Pillas

house approves bill to simplify donor’s tax rate The House of Representatives has approved on third and final reading a measure simplifying the donor’s tax rates. Voting 221-0 on Monday, the lower chamber passed the House Bill 4903, or an act simplifying the donor’s tax brackets, by imposing a unitary tax rate of 6 percent on all gifts with a net value of more than P100,000. The bill, principally authored by House Committee on Ways and Means Chairman and PDP-Laban Rep. Rep. Dakila Carlo E. Cua of Quirino, Party-list Reps. Jesulito Manalo Angkla and Victoria Isabel Noel of An Waray, will be submitted to the Senate for own its deliberation. Currently, Section 99 of the National Internal Revenue Code of 1997 exempts from tax a net gift value of P100,000 and levies 2 percent, 4 percent, 6 percent, 8 percent, 10 percent, 12 percent and 15 percent, depending on which bracket the gift value belongs. Under the bill, the tax to be paid by the donor shall reduce to 6 percent, from the current 30 percent, if the beneficiary is a “stranger”. The bill refers the “stranger” as someone who is not a brother, sister (whether by whole or half-blood), spouse, ancestor and lineal descendant; or relative by consanguinity in the collateral line within the fourth degree of relationship. Jovee Marie N. dela Cruz


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Dino appeals to LGUs not to harass investors

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RESIDENTIAL Assistant for the Visayas Michael Lloyd Dino is appealing to local government units (LGUs) to be businessfriendly and not to harass investors. Dino made the appeal during the Visayas leg of the Economic Zone Summit conducted by the Philippine Economic Zone Authority (Peza). In his speech, Dino said in presenting to the business community the Duterte administration’s 10-point socioeconomic agenda, the third point is to “increase competitiveness and the ease of doing business”. He said this effort will draw upon successful models used to attract business to local cities and attract foreign direct investments. “I urge you to inculcate this third point and emphasize the term ‘competitiveness’ of doing business. This can only be realized if we have a friendly local government, a local government unit that will veer away long queue of taxpayers transacting business, a local government unit that has no devils-lieutenant who collect 10-percent kickback in business transactions, an LGU that releases business permits in three days, without hassle of red tapes,” Dino said. Dino has invited all LGUs to help this administration establish business-friendly environment, avoid arm-twisting and harassment to the businesses, locators and economic players, for they are the partners for growth and development. “I assure you of my office’s full support. Please do not hesitate to come to my office whenever you encounter harassment from any government office or LGU, and I will show you how this administration deals with the grafters,” Dino said. Peza is conducting summits across the country to prepare a nationwide economic zone map. The Economic Zone Summit was held in Mindanao last week, which was attended by 300 participants, mostly land owners, developers, investors and officials from the LGUs. The next and the last leg of the Economic Zone Summit will be in Luzon. Charles R. Pepito

Bohol, Palawan ink ecotourism, development exchange program

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By Charles R. Pepito | Correspondent

HE provinces of Bohol and Palawan are sharing best practices through a partnership to advance ecotourism and development in the two prime Philippine destinations.

ALWAYS READY

To heed the call during emergency situation, the Emergency Response Team of OceanaGold (Philippines) Inc. in the Didipio Mine seems always on alert status. March is Fire Prevention Month, which starts on March 1. LEONARDO PERANTE II

DTI to showcase 200 MSMEs at national food fair 2017 By Catherine Joy L. Maglalang Correspondent

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ITY OF MANDALUYONG— The Department of Trade and Industry (DTI), through its Bureau of Domestic Trade Promotion (BDTP), is set to showcase various food and delicacies of the Philippines with 200 participating micro, small and medium enterprises (MSMEs) during the SikatPinoy National Food Fair, dubbed as “Piling-piling Pagkaing Pilipino”, from March 15 to 19, 2017 at the Megatrade Halls 1 to 3, fifth floor, SM Megamall, Mandaluyong City. “The National Food Fair is one of the many avenues provided by the DTI to our local businesses in the regions to introduce their products to a broader domestic market. We hope to invite Filipinos to look for best Phil-

ippine food products at the fair and help promote our local produce,” DTI Industry Promotion Group Undersecretary Nora K. Terrado said. Supported by the DTI Regional and Provincial Offices, the fiveday National Food Fair will feature a wide array of food products and produce carefully selected from various regions and provinces of the Philippines. Products that are up for sale include fresh produce, processed-food products and regional-food delicacies. “Every year we aim to showcase upgraded products that the Philippines can boast of not just in the domestic market, but also in the global market. This year, through our thorough screening process, we would like to introduce more outstanding products from our trade exhibitors,” BDTP Director Rhodora

Leaño said. Aside from the buying public, members of various trade associations and retail and wholesale institutional buyers seeking subcontractors and suppliers of intermediate and finished products are expected to attend and visit the said tradefair. Sikat Pinoy National Food Fair is conducted annually by the DTI-BDTP as a means of promoting Philippine products at the domestic level. It also recently held the Sikat Pinoy National Arts and Crafts Fair, which promoted the indigenous products of the Philippines and world-class talents of Filipino artisans. Jedidiah’s Turmeric Tea, RAMC’s shrimp paste and delicacies and Sta. Maria yogurt and dairy products, among others, will be the pride of Bulacan in the upcoming fair.

900 Tuburan farmers benefit from coffee farming

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EBU CITY—About 1,000 farmers in Tuburan, Cebu, a re no w e nj o y i n g t he fruits of the government-assisted coffee plantation. Tuburan Mayor Democrito Diamante Jr. said their coffee plantation now covers 2,850 hectares in 16 barangays in his town. Diamante was happy to announce that “Kape sa Tuburan” will soon be the coffee used by one of Cebu’s famous coffee shops, Coffee Dream, owned by Glenn Soco, the president of the Mandaue Chamber of Commerce and Industry. “This program aims to alleviate poverty of my town. Our coffee seedlings are regarded as one of the best. So, I hope daghan mo-patronized sa among kape aron pud makatabang ta sa mga pobre,” Diamante said. “It excites me to be part of something we can truly claim our own, and I’m happy that our first batch using coffee from our beloved province has arrived,” Soco said. In his coffee shop, Soco named it “Kape Arcadio” after the town's patriarch and revolutionary leader, Arcadio Maxilom. “We thank the town officials for collaborating with us on this project. Surely, its coffee that you can drink without any sugar and creamer in it,” Soco said. Bo’s Coffee was reportedly interested to support and look into the coffee farms in Tuburan and possibly

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buy their produce. Sometime in 2012, Diamante said the Department of Environment and Natural Resources (DENR) was searching for around 700 hectares for its National Greening Program in western Cebu. He offered the 500 hectares, covering 10 barangays, to be planted with coffee. In 2013 Diamante said the coffee plantation almost died until his friend advised him to seek technical assistance from Nestlé Philippines and he did it. Diamante said he was told by Nestlé they will give assistance, provided he would buy their seedlings. He bought 30,000 seedlings and

Nestlé technicians went to his town to teach farmers how to propagate coffee. In the same year, Tuburan was chosen beneficiary of the government’s Accelerated and Sustainable Anti-Poverty Program (Asapp) giving a boost to the town’s local coffee industry, as government agencies, local government units and private enterprises collaborate to expand production and markets of coffee growers in the area. Launched in 2015, Asapp aims to ensure poverty-reduction programs are focused, well targeted and coordinated. In Cebu, stakeholders identified the coffee industry as a potential

driver of inclusive growth that will increase the incomes of the poor in the areas. Convened by the Regional Office of the National Economic and Development Authority (Neda) in Region 7, the Asapp Cebu Action Team led discussions among LGUs, line agencies, private enterprises and community members to come up with a poverty-reduction program in Tuburan through developing local Tuburan coffee. Based on coffee site visits and an assessment of the 2,850 hectares currently planted to coffee in Tuburan, the Asapp Cebu team developed various technical assistance projects to enable the town’s local coffee growers sector to increase production and sell to wider markets. These include technical assistance on coffee production, coffee handling practices and postharvest facilities as first steps. The team also found the need to provide coffee seedlings and funds for fertilizers, as well as for postharvest facilities and facilities for coffee bean grinding/processing. Being part of commercial value chains is, likewise, considered crucial. The Asapp-Cebu Action Team is composed of members of the Tuburan LGU and its coffee people’s organizations. From the private sector, Bo’s Coffee and the Philippine Retailers Association were involved in the Tuburan coffee Asapp project. Charles R. Pepito

Bohol Gov. Edgar M. Chatto and Palawan Gov. Jose C. Alvarez formalized the partnership dubbed the Bohol-Palawan/Puerto Princesa Tourism and Environmental Programs and Development Policy Exchange, with the linkage slogan “We grow together”. Tagbilaran City Mayor John Geesnell Yap II and Puerto Princesa City Mayor Luisito Bayron, at the same time, forged a city sisterhood. The United States Agency for International Development-Strengthening Urban Resilience for Growth with Equity (USAID-SURGE) facilitated the exchange program. The program strengthens sustainable tourism and policies on environmental preservation amid the growth and development of the partner-provinces and -cities. Nature conservation in Palawan is considered a Philippine benchmark that can enrich and enhance Bohol’s own innovations and practices for sustainable, enduring ecotourism. The League of Municipalities of the Philippines (LMP) -Bohol Chapter is also a party to the partnership. Chatto said policy-development exchange is essential because the partnership engages local government units (LGUs). Bohol and Palawan also have these in common: Both have island towns, three congressional districts and one city, which is also the provincial capital. “We share and develop policies during the exchange and policy-development exchange has positive long-term implications that will make the program more substantial,” Chatto said. Host officials themselves took turns in sharing best practices not just on tourism and environment, but also on agriculture, culture and arts. The continuing pursuit of sustainable development and excellent governance, through the exchange program, has tied Bohol and Palawan. A guided tour, coordinated by the

provincial and city tourism officers, brought the Bohol group to the different known Palawan program sites and environs. A fitting “prelude” to the formalizing of the partnership with Palawan, the Bohol tagline “Behold Bohol” was officially launched in Metro Manila. The catchphrase is Bohol’s newest branding as a premier tourist destination in the country with the support of provincial government’s partners AirAsia Philippines, Department of Tourism (DOT) and USAID. Through its Compete Project, USAID assisted in Bohol’s rehabilitation from the great earthquake, particularly in the formulation of the tourism recovery master plan. The governor himself led the Bohol stakeholders in attending the launch, which gathered the officials of AirAsia, the DOT and USAID. Also gracing the event, National Economic and Development Authority (Neda) Director General Ernesto M. Pernia said an earlier Panglao airport completion, which he believed is doable, is much better for Bohol. DOT Undersecretary Alma Rita Jimenez said she was “amazed by the progressive increase” in the number of Bohol tourists despite the merciless earthquake’s impact. She said Bohol, as one of the Philippine destination icons, has simply been validated, again. The launch was also attended by Rep. Rene L. Relampagos of the First District of Bohol, former House tourism committee chairman; Rep. Arthur C. Yap of the Third District of Bohol, House economic enterprise committee chairman; and Ebb Hinchliffe, executive director of the American Chamber of Commerce of the Philippines. Organized Boholanos in Metro Manila joined in the affair, which further had Provincial Tourism Council Chairman lawyer Lucas Nunag Jr. and Bohol Tourism Office people, plus travel agents and the national media.

Ilocos-based SMEs develop market niche in Quezon City

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AOAG CITY—More and more small and medium entrepreneurs in Ilocos Norte are gaining more customers in Metro Manila through a direct producer to a consumer-trade show in Quezon City. For at least two days every month, small and medium-sized enterprises (SMEs), assisted by the provincial government, bring their products to the Quezon City Hall to showcase Ilocos Norte’s “Pinakbest” booth products, ranging from fresh fruits and vegetables and authentic Ilocano best-selling products, such as bagnet, longganisa, miki noodles and empanada. Also presented are Ilocos tour packages, inabel hand-made products, among many more. Aimed to boost Ilocos Norte’s tourism and SMEs, the Quezon City government, led by Mayor Herbert Bautista and Ilocos Norte Gov. Ma. Imelda Josefa Marcos, earlier signed a memorandum of agreement for the conduct of a regular trade show to benefit both producers and consumers. Running for two months now, SMEs in the province were again in Quezon

City on February 28 and March 1 to display their products. Edison Natividad, head of the SME Office under the provincial government, said the number of SME participants has increased as the product launched in January were all sold out fast. To assist local producers, the SME office coordinates with other local government units (LGUs) in the province to provide transportation services to SMEs, which will take turns in bringing local produce or merchandise at the Quezon City Hall every pay day. As a continuing support to SMEs, the governor initiated a joint venture with the Quezon City government to expand their market, citing the success of local producers would transform sustainable development and build stronger relations with other LGUs. “We must commit as a province to long-term, integrated master planning. Annual investment plans only result in short-term Band-aid solutions that, in the long run, may cause ever more problems,” she underscored in her 2016 State of the Province Address. PNA


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Fly me to the moon, SpaceX founder says CAPE CANAVER AL, Florida— SpaceX said on Monday it will fly two people to the moon next year, a feat not attempted since NASA’s Apollo heyday close to half a century ago. Tech billionaire Elon Musk—the company’s founder and chief executive officer—announced the surprising news barely a week after launching his first rocket from NASA’s legendary moon pad. Two people who know one another approached the company about sending them on a weeklong flight just beyond the moon, according to Musk. He won’t identify the pair or the price tag. They’ve already paid a “significant” deposit and are “very serious” about it, he noted. “Fly me to the moon...Ok,” Musk said in a light-hearted tweet following the news conference. AP

S. Korean prosecutors to indict Samsung’s de facto chief SEOUL, South Korea—South Korean special prosecutors said they would indict Samsung’s de facto chief on Tuesday on bribery, embezzlement and other charges linked to a political scandal that has toppled President Park Geun-hye. The planned indictment of Samsung Electronics Vice Chairman Lee Jae-yong is a huge hit for the country’s most important company. It also signals the still roiling state of South Korea’s political and economic circles after weeks of massive demonstrations that led to Park’s impeachment and a threemonth investigation by the special prosecution team. Prosecutors say the Samsung heir gave bribes worth $36 million to Park and her confidante to help win government support for a smooth company leadership transition. Lee also allegedly hid assets overseas, concealed proceeds from criminal activities and committed perjury. The 48-year-old billionaire was arrested on February 17. Samsung has denied wrongdoing. AP

Malaysia to charge 2 women with murder in N. Korean’s death KUALA LUMPUR, Malaysia— Malaysia’s attorney general says the two women accused of killing the half brother of North Korea’s leader with a nerve agent in a Kuala Lumpur airport terminal will be charged with murder on Wednesday. Mohamed Apandi Ali said Tuesday the charges against Indonesian Siti Aisyah and Vietnamese Doan Thi Huong would bring a mandatory death sentence if they are convicted. The attorney general confirmed the women will be charged in a text message to The Associated Press. Two other suspects in the February 13 killing of Kim Jong Nam have been arrested—a Malaysian who is out on bail and a North Korean who remains in custody. Asked if the North Korean will be charged, Apandi said it depends on the outcome of the investigations. AP

Australian accused of planning to help I.S. develop missiles SYDNEY—Australian counterterrorism police arrested a man on Tuesday who officials say was planning to advise the Islamic State group on how to develop missiles. Australian Federal Police arrested the 42-year-old electrician during a raid at his home in the rural New South Wales town of Young following an 18-month investigation, Police Commissioner Andrew Colvin told reporters in the nation’s capital, Canberra. Haisem Zahab, an Australian-born citizen, is accused of researching and designing a laser warning device that could alert the IS group to incoming guided weapons used by coalition forces in Syria and Iraq, Colvin said. He is also accused of researching, designing and modeling systems to assist the extremist group’s efforts to develop their own long-range guided missiles, Colvin said. AP

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

China considering financial rewards for 2nd children C hina is weighing subsidies for couples who have a second child to help increase the birthrate after authorities scrapped a decades-old one-child policy in 2015, official media reported.

The government is considering measures, such as “birth rewards and subsidies,” to help encourage more people to have another child, Wang Peian, vice minister of the National Health and Family Planning Commission, said at a conference on Saturday, according to a report last Tuesday by the state-run China Daily. Such incentives, if adopted, would represent a fundamental shift in the Communist Party’s approach to family planning, from limiting births to encouraging them. After decades of penalizing many couples who had more than one child, now the world’s second-largest economy, which has gained for decades from having an abundant young work force, is facing a hangover of its one-child policy implemented in late 1970s. Allowing all couples to have two children still falls short of reversing a trend that threatens to impose a drag on economic growth. And a limited baby boom could still be dampened by the rising costs of child-rearing.

17.86M The number of births in 2016

Wang said affordability has become a constraint on Chinese families’ decisions to have a second child, according to China Daily. Wang’s comments are in line with the advice from one of the nation’s top demographers. Policy-makers should use public services—including kindergartens, schools and child care—to lower costs and encourage cashsqueezed parents to have more children, Cai Fang, vice president of the Chinese Academy of Social Sciences in Beijing and a member of the Standing Committee of the National People’s Congress, recently told Bloomberg News in an interview. Wang said that such a “baby bonus” policy would not be easy because it should be applied evenly

nationwide, China Daily reported. The population authority alone can’t handle such a plan, as it requires consensus and cooperation among all authorities, Wang said. Government subsidies may not be a panacea. They had limited success in countries, such as Singapore, because people tend to have fewer children when they’re wealthier and more educated, according to Chen Xingdong, chief China economist at BNP Paribas SA in Beijing.

“The mind-set of the entire nation is switching from controlling births to worrying about low births,” Chen said. “But many parents would still be reluctant to have kids even if the government encourages them to.” Births reached 17.86 million last year, a 1.3-million increase from 2015, official statistics show. The policy would lead to about 17 million additional births by 2020, and add 30 million young workers by 2050, the family planning

UN defends refugee vetting as Trump ponders revised ban

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MMAN, Jordan—In an office cubicle at the United Nations refugee agency, a Syrian woman and her three daughters took turns staring into a camera for iris scans. Their biometric registration, a first step toward possible resettlement in the West, is to be followed by interviews and background checks that can take months or even years. T he 31-yea r- old pa r t-t ime hairdresser, who fled to Jordan in 2014 after her husband went missing in Syria’s civil war, feels fortunate. But the long road ahead for many Syrian refugees could grow even more arduous if United States President Donald J. Trump fulfills campaign vows to impose “extreme vetting”. Many of the 5 million Syrian refugees who scratch out a living in overwhelmed neighboring states, such as Jordan, aren’t necessarily candidates for a rare slot in the resettlement program. Priority is given to the most v u lnerable, including women head ing households, med ica l patients and victims of torture. Still, the vetting process has come under intense scrutiny since Trump took office. A week after his inauguration, Trump suspended refugee admissions, arguing that the displaced pose a potential terrorism threat and that his administration needs time to impose more stringent vetting procedures. A federal judge blocked the order, but Trump has said a new version will be announced soon. US involvement in refugee resettlement is bound to shrink this year, even if a new executive order softens earlier provisions, such as the open-ended ban on the entry of displaced Syrians. Trump has announced that he is reducing the US limit for taking in refugees from all over the world from 110,000 to 50,000 a

year, leaving even fewer spots for refugees from the conflictscarred Middle East. The US has been a leading resettlement destination, taking in about half of the 20,000 refugees, most of them Syrians, who left to the West from Jordan in 2016, said Daniela Cicchella, a senior refugee agency official in Jordan. Cicchella described the vetting as stringent, but said all involved are open to ways of improving it. The program is “one of the most scrutinized” ways of entering the US, Cicchella said during a tour of the vetting area at the agency headquarters in Jordan’s capital. “We have been working very closely with different countries, including with the US authorities, in the last years,” she said. Trump’s initial order asked officials to review the refugeeapproval process in search of possible security loopholes, but did not say what additional vetting he wants to see. For now, the process includes i n- person i nter v ie ws du r i ng which refugees provide information about families, friendships, social or political activities, employment, phone numbers and e-mail accounts. They also provide biometric information, including fingerprints, and federal law-enforcement and intelligence agencies are consulted for background checks. Syrians are subject to add it iona l c l a ssif ied c hec k s. T heir vetting t y pically takes two years or more. Last year the US Homeland Sec u r it y Depa r t ment sa id it planned to look more closely at social-media postings of people seeking to come to the US. The Syrian hairdresser said she hoped to move with her daughters, ranging in age from 7 to 13, to Britain, where she has family. In a small office, a UN staffer logged their details into a computer, includ-

ing the names and ages of the woman’s siblings. After registration, they were led to another cubicle for an indepth interview with another UN staffer. After the first hurdle, there’ll be more refugee agency interviews and checks by the prospective new host country. Jordan’s security agencies also get involved in clearing refugees for departure. “I want to leave Jordan, and it is a chance to improve my daughter’s education levels,” said the woman, whose name was withheld at the request of the refugee agency, which cited protection concerns. She said she understood Western concerns about weeding out potential terrorists. “But I don’t think I will pose any threat,” she said, adding that she and her daughters “want to live in peace.” Analysts at the Homeland Security Department’s intelligence arm have found insufficient evidence that citizens of seven Muslim-majority countries covered by Trump’s travel ban, including Syria, pose a terror threat to the US. A draft document that surfaced last week concluded that citizenship is an “unlikely indicator” of terrorism threats and that few people from the seven Muslim-majority countries listed in the travel ban carried out attacks or were involved in terrorismrelated activities since the 2011 start of Syria’s civil war. A Homeland Security official said at the time that the document is not a final comprehensive review of the government’s intelligence. The initial travel ban created confusion among refugees awaiting resettlement. At the time, about 300 Syrian refugees had tickets to fly from Jordan to the United States, Cicchella said. “They were shocked, they were sad,” she said. Many

had sold their belongings and were left stranded. Flights were rebooked a few days later, after the court suspension of the ban, and most have since reached the US, she said. Overall, 673 Syrian refugees arrived in the US in the past month, according to a US refugee aid agency, citing government statistics. Several thousand others are in the pipeline, having been submitted to the US as candidates for resettlement after initial screenings by the refugee agency. With shrinking US refugee quotas, their prospects are uncertain. In 2017 the UN refugee agency hopes to resettle 76,800 refugees from the Middle East and North Africa and 169,000 globally, but the scope depends on the quotas being offered by host countries. Jordan, a key US military ally in the fight against the Islamic State group and a major recipient of US aid, has refrained from criticizing Trump’s immigration policies. However, the kingdom views resettlement as one of the ways, along with international financial aid, to ease the disproportionately heavy refugee burden on regional host countries. More than 650,000 Syrian refugees live in Jordan, close to 3 million in Turkey and more than 1 million in Lebanon. Schools, hospitals and state budgets, especially in Jordan and Lebanon, have been strained by the mass inf lux. Government Spokesman Moha mmed Moma ni sa id on Sunday the international community must do more to help Syrian refugees. “If we don’t do this, then we will have generations of lost refugees, uneducated refugees, abandoned refugees that will continue to create further problems to the host communities [in the region],” he said. AP

commission said in late 2015. The larger labor supply would boost the economy’s potential growth rate by 0.5 percentage point, it said. The working-age population has been shrinking as a result of aging and low birth rates, draining the labor supply. About one in three Chinese will be older than 60 by 2050, compared with about one in seven now, posing challenges to the social welfare system. Bloomberg News

UK economic momentum at risk as consumer confidence wanes

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nited Kingdom consumer confidence weakened this month as the pound’s slide, rising prices and weak pay growth began to weigh on the powerhouse of Britain’s economy. GfK’s household-sentiment index fell in February, remaining below zero for a 10th month, and the appetite for making major purchases decreased, indicating that Britons may be starting to rein in spending. A separate gauge by YouGov and the Centre for Economics and Business Research also declined, with an index of job security slumping to the lowest since 2014. Consumer spending and the dominant services industry have driven economic growth since Britain’s vote to leave the European Union last June, but that’s showing signs of strain. Inflation is accelerating due to rising energy prices and the pound’s 16-percent drop since the referendum. Credit growth slowed sharply last December and retail sales grew at their slowest annual pace in more than three years in January. “Any momentum behind the post-Brexit, debt-fueled, consumer-spending boom now appears to be softening,” said Joe Staton, head of market dynamics at GfK. “Mounting pressures on disposable income are starting to bite. Consumer spending continues to drive economic growth in the UK so any further fall in confidence could support forecasts for a slowdown of the overall economy this year.” Chancellor of the Exchequer Philip Hammond should prioritize weaning the UK economy off its reliance on consumption in his March 6 budget, according to the Resolution Foundation, which ranks it alongside a shrinking tax base and inequality as one of Britain’s biggest structural problems. “With last year’s growth driven entirely by consumption, the prospect of a significant slowdown in household income growth in the coming years raises serious questions over sustainability,” said Matt Whittaker, chief economist at Resolution. “For households across Britain, the living standards story of this parliament risks being one of anemic growth and rising inequality.” Bloomberg News


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

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Wednesday, March 1, 2017

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Japan’s industrial output falls for first time in 6 mos

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apan’s industrial production fell for the first time in six months in January, raising questions about the sustainability of Japan’s export-driven growth in the second half of 2016. Retail sales rose. Industrial production fell 0.8 percent in January from a month earlier (forecast +0.4 percent). Output is forecast to rise 3.5 percent in February and drop 5 percent in March. Retail sales rose 0.5 percent from a month ago (forecast +0.3 percent). The unexpected weakness in industrial output points to the risk of depending on external demand for recent economic growth. W hile domestic consumption has been weak in Japan, net exports added to growth in the second half of 2016, and shipments rose in January for a second straight month. Data on household spending are due on Friday, along with labor market and inflation data. “ This is a reminder to be cautious for those who have been upbeat on Japan’s economy,” s a id Ta ro Sa ito, d i re c tor of economic research at the NLI Research Institute. “There has

been optimism globally that production and exports will pick up,” Saito said. “We saw strong car sales around the world at the end of last year and that led Japan’s exports and production, but the sales are not gathering speed.” “I wor r y about the negative forecast for March, which calls for a 5 -percent drop,” said Masa k i Kuwahara, senior economist at Nomura Secur ities Co., refer r ing to industr ia l out put. “ T hat just ma kes you wor r y about the sustainabilit y of the economic recover y.” Sluggish exports, including autos, weighed on production in January, Kuwahara said. T he big gest contr ibutor to the decline from December was the drop in production of cars, eng ines and ot her transpor t equipment, dow n 4.7 percent. T hat was fol lowed by declines in out put of c hemica ls suc h as soap and detergent, and industr ia l machiner y. Measured year-on-year, industr ia l pro duction rose 3.2 percent (forecast +4.3 percent). Retail sales rose 1 percent in January from a year ago (forecast +1.0 percent). Bloomberg News

Commerce Secretary Wilbur Ross arrives for the 60th annual Red Cross Gala at Trump’s Mar-a-Lago resort in Palm Beach, Florida, on February 4. AP/Susan Walsh

Billionaire Ross confirmed as US commerce secretary

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A S H I N G T O N —T h e Senate confirmed Wilbur L. Ross, the billionaire investor, as commerce secretary on Monday, installing a key leader for the Trump administration’s plans to overhaul trade deals, such as North America Free Trade Agreement (Nafta). By a vote of 72-27, the Senate confirmed Ross, who has already been advising President Donald J. Trump on economic policy and helping him to craft ways to rewrite the tax code. A renegotiation of Nafta is expected to be Ross’s top priority when he takes over the job. During his confirmation hearing in January, he warned that “all aspects” of the agreement between the United States and its northern and southern neighbors are on the table. With the confirmation of Ross, the most important members of Trump’s economic team are in place just in time for looming fights over the budget, health care and tax legislation. Compa red w it h some of Trump’s other Cabinet picks, Ross had his confirmation process move ahead with relative ease. He faced less resistance from Democrats than Steven Mnuchin, the Treasury secretary, and Andrew F. Puzder, whose nomination to lead the Labor Department was derailed. A former Democrat, Ross, 79, divested a significant portion of his holdings to avoid conflicts of interest before taking the helm of the Commerce Department. He also tried to temper some of Trump’s views on trade, attempting to ease concerns that the US is going to be engaging in trade wars. “I am pro-trade, but I am prosensible trade,” Ross declared at his confirmation hearing. But he takes the job with lin-

gering questions about how his business experience will mesh with Trump’s “America First” trade agenda. As a private-equity investor, Ross amassed a fortune by taking advantage of trade deals with countries such as China and Mexico. He sent jobs to Mexico when he was the head of a car-parts company, benefiting from some of the Nafta provisions that he will most likely be looking to unwind. And he is maintaining a minority stake in a company backed by the Chinese government. Ross has said that he wants to use his knowledge of the global economy to help improve the fortunes of lower- and middle-class Americans. He said last summer that he was attracted to Trump as a candidate because he believed that the country needed a “more radical, new approach to government”. The appointment of Ross fulfills Trump’s promise to stock his Cabinet with proven dealmakers. But it also opens the president up to criticism that he has veered away from his vows of popu l ism by su r rou nd i ng himself with plutocrats. Democrats have assa i led Trump for assembling the wealthiest Cabinet in US history, and on Monday they did not let up. “Wilbur Ross is practically a cartoon stereotype of a Wall Street fat cat with no interest in anyone but himself,” Sen. Elizabeth Warren, Democrat-Massachusetts, wrote on Twitter. On the Senate f loor before the vote, Sen. Chuck Schumer, Democrat-New York, and the minority leader, accused Ross of having questionable business ties to Russia. He said Ross and the Trump administration had failed to be forthcoming about the matter and described it as a troubling pattern.

Cars that were traded in because of the Takata airbag recall at a lot in West Palm Beach, Florida, on January 25. Plaintiffs in a class action say internal documents from at least four automakers show they continued to use the flawed airbags to save on costs. Scott McIntyre/The New York Times

Automakers knew of Takata airbag hazard for years–suit

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t least four automakers knew for years that Takata’s airbags were dangerous and could rupture violently but continued to use those airbags in their vehicles to save on costs, lawyers representing victims of the defect asserted in a court document filed on Monday.

T he Ju st ice De pa r t ment ’s criminal investigation into Takata’s rupture-prone airbags has so far painted automakers as unwitting victims duped by a rogue supplier that manipulated safety data to hide a deadly defect, linked to at least 11 deaths and more than 100 injuries in the United States. But the fresh allegations against Ford, Honda, Nissan and Toyota, made as part of a class action in Florida and based on company documents, point to a far deeper involvement by automakers that used Takata’s defective airbags for years. Hond a vehement ly den ied the new allegations on Monday. T he t hree ot her autom a kers declined to comment or said a response would come through legal channels. Last summer The New York Times reported indications that automakers, rather than being the victims of Takata’s missteps, had pressed their suppliers to put cost before all else. That report focused on General Motors, which is not named in the Florida case, though plaintiff lawyers said they were preparing to take action against the company. The defect has prompted the nation’s largest automotive recall ever, affecting nearly 70 million airbags in 42 million vehicles. T he plaintiffs’ filing came hours before Ta k ata pleaded guilty, under a deal announced last month, to charges of wire fraud for providing the false data,

70M The estimated number of recalled rupture-prone Takata airbags in 42 million vehicles in the US

a rare outcome for businesses accused of wrongdoing. Federal prosecutors also said last month they had charged three Takata executives with fabricating test data and fined the Tokyo company $1 billion. “I deeply reg ret t he c irc u mst a nces t hat resu lted in t he a g r e e m e nt t o d a y,” Yo i c h i r o Nomu ra, Ta k at a c h ief e xec ut ive, sa id at t he federa l cou r t hear ing in Detroit. T he company ’s act ions were “completely u naccept able,” he sa id. “Takata is fully committed to ensuring such conduct never happens again,” he added. The allegations in the Florida case came in response to a court document filed by the automakers last week that pointed to Takata’s plea deal to argue that the supplier alone was culpable. But the plaintiffs, who could gain f rom suing the deep pocketed automakers alongside Takata, argue the automakers were more deeply involved in

the handling of the defect. The fines and costs associated with the scandal have also taken a heavy financial toll on Takata, and it has been searching for a financial lifeline—possibly in the form of a white knight that would effectively take it over. One of the plaintiffs’ lawyers, Kevin R. Dean, filed an objection to Takata’s plea deal on Monday in Detroit, arguing the automakers were accomplices in the cover-up. He urged the judge to reject the agreement and for the Justice Department to further investigate the automakers’ role. The plaintiffs have taken particular issue with the amount set aside for victims in Takata’s plea—a total of $125 million. In contrast, the automakers will have recourse to draw on an $850-million fund to offset continuing recall costs. Judge George Caram Steeh dismissed Dean’s objections, saying that Takata’s plea deal was in the best interest of the victims. He said any further action against the automakers should be pursued in civil court, and approved the plea deal. R and i Johnston, 26, of Fa r ming ton, Uta h—who was injured in September 2015 when the airbag in her 2003 Honda Civ ic ruptured and meta l shards str uck her throat— attended the hear ing and said after ward that she was shocked by t he judge’s dec ision. T he shards severed most of her voca l cords, leav ing her able to spea k only in a whisper. “I really don’t have any words r ight now,” said Johnston, a plaintiff in the Florida classaction case. The filing by the plaintiffs says emails and internal documents turned over by Honda show that in 1999 and 2000, the automaker was intimately involved in developing a problematic propellant, or explosive, used in Takata’s air bags. The propellant is housed in a container called the inf later, which in the Takata case can

rupture, shooting metal fragments toward the car’s driver or passengers. That propellant, based on a volatile compound, raised concerns internally at Takata at the time, and long plagued the company’s engineers. During testing of Takata’s inflaters in 1999 and 2000 at Honda’s own facilities, at least two inflaters ruptured, according to the filing. Still, Honda pushed a particularly problematic configuration of the propellant over Takata’s objections, the filing said. Honda chose Takata’s air bags because of their relative “inexpensiveness”, the filing quoted Honda documents as saying. The first recalls of Takata’s airbags did not take place until almost a decade later, when Honda recalled 4,000 vehicles in 2008. The Times has reported that Honda and Takata became aware in 2004 of an air-bag explosion in a Honda Accord in Alabama that shot out metal fragments and injured the car’s driver. But the two companies deemed it “an anomaly” and did not issue a recall or seek the involvement of federal safety regulators. O n Mond ay Hond a ve he mently denied the allegations in the plaintiffs’ filing. When it installed Takata’s airbags, it said in a statement, “Honda reasonably believed, based on extensive test results provided by Takata, that they were safe.” Honda said it believed it reacted “promptly and appropriately” in handling known airbag defects. It also said Takata’s air bags had not necessarily been cheaper than those of its competitors. “Sometimes they were more expensive, sometimes less,” the carmaker said. The filing also cites internal documents from Ford, Nissan and Toyota indicating that cost considerations inf luenced the automakers’ decision to adopt Takata’s air bags in the early 2000s, despite safety concerns. New York Times News Service


Agriculture/Commodities

A8 Wednesday, March 1, 2017 • Editor: Jennifer A. Ng

BusinessMirror

news@businessmirror.com.ph

Farm output seen expanding by 2% in Q1 By Jasper Emmanuel Y. Arcalas

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OceanaGold backs veggie production in Didipio

@jearcalas

griculture production in the first three months of the year could grow by 2 percent, as favorable weather encouraged farmers to plant more crops, according to Agriculture Secretary Emmanuel F. Piñol. “The first quarter was slightly affected by Typhoon Nina [international code name Nock-ten] but I think output will post positive growth in the first quarter,” Piñol told reporters in an interview |on Monday. “I wouldn’t be very optimistic but I’ll be happy if production will grow by 2 percent,” he added. Piñol said the crops subsector would still be the main driver of the farm sector’s growth during the January-to-March period, particularly rice and corn. “Let’s just hope the country will not be hit by a typhoon [in the first quarter]. But we’re expecting there will be greater productivity, especially starting March,” he said. In the first quarter of 2016, farm output declined by 4.53 percent, according to data from the Philippine Statistics Authority (PSA). The PSA attributed the drop in produc-

tion to the prolonged dry spell and damages caused by typhoons. Piñol said the Department of Agriculture (DA) would be releasing “soon” its financial aid for farmers affected by Nina last December to help them recoup their losses. “We will already be releasing our survival and recovery loans to typhoon victims. A maximum of P25,000 could be loaned by each family, which could be used as production capital,” he said. Earlier, Agriculture Assistant Secretary for Operations Federico Laciste Jr. told the BusinessMirror favorable weather would boost the country’s corn production from January to March. Laciste, who is also the national deputy director of the DA’s Rice and Corn Program, said corn output could rise by around 20 percent. “Production in the first quarter of 2015 and 2016 declined due to El

By Leonardo Perante II Correspondent

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Malacañang photo

Niño. This year we expect output to really increase,” he said. In the January 2017 survey of the PSA, the agency projected first-quarter corn output to ex-

pand by a quarter to 2.4 million metric tons (MMT), from 1.92MMT harvested during the same period last year. Based on standing crops, the

PSA said probable palay production in the first quarter of the year could reach 4.53 MMT, 15.2 percent higher than the 3.93 MMT recorded in 2016.

Govt extends arrival date for rice imported under MAV T

he interagency National Food Authority (NFA) Council has extended the deadline for the arrival of rice imported under the minimum access (MAV) scheme of the World Trade Organization to March 31. Office of the Cabinet Secretary Undersecretary Maia Chiara Halmen Reina A. Valdez said the NFA Council agreed in a meeting on February 27 to move the deadline for the 2016 MAV arrivals by a month. “The deadline for private sector-led importation [MAV arrivals] has now been extended to March 31 as approved by the NFA Council,” Valdez said in a text message to reporters. Valdez said the NFA Council has authorized Cabinet Secretary Leoncio Evasco, who sits as the NFA Council chairman, to approve rice-import permits. “Previously, the administrator has given the sole authority to sign import permits. This time, the chairman of the NFA Council has also been authorized by the council,” she added. The NFA Council is comprised of the Cabinet secretary as the chairman, while the NFA administrator sits as vice chairman. The other members of the NFA Council are the Bangko Sentral ng Pilipinas governor, Development Bank of the Philippines chairman, the president of the Land Bank of the Philippines, finance secretary, trade secretary, the National Economic and Development Authority, and a representative from a farmers’ group.

Earlier, NFA Spokesman Marietta J. Ablaza told the BusinessMirror far mers’ cooperatives and private companies asked the NFA for a one-month extension of the deadline. “The import permits were distributed only last December and with the holidays, farmers’ cooperatives and firms had very limited time to prepare the necessar y paper work,” Ablaza said. Under the NFA guidelines, rice imports under the 2016 MAV must arrive in the Philippines not later than February 28. Last December the NFA allowed 210 farmers’ organizations and private firms to import 692,340 metric tons (MT) of rice, 110,160 MT less than the country’s annual MAV of 802,500 MT. The NFA list available on its web site also showed that 194 qualified rice traders, including AgriNurture Inc. and Pilmico Foods Corp., will import 642,340 MT of rice under the country specific quota (CSQ). Of the total rice to be imported under the CSQ, 293,100 MT of rice will be bought from Thailand and Vietnam. Meanwhile, 16 qualified applicants will import a total of 50,000 MT of rice under the “omnibus origin” category, according to the NFA list. A separate list posted on the NFA web site showed 345,435.90 MT of imported rice have already arrived in the country, nearly half of the 692,340 MT approved under the 2016 MAV. Jasper Emmanuel Y. Arcalas

IDIPIO MINE, Nueva Vizcaya—Wit h t housands of mining employees fed from breakfast to dinner, Australian mining firm OceanaGold (Philippines) Inc. (OGPI) has reaffirmed its support to the production of high-value crops in Barangay Didipio, home to its Didipio operation. As part of its continuing efforts to ensure a productive and healthy community, the firm is revitalizing the program to encourage more villagers, including teachers and students, to plant nutritious vegetables and fruits right in their own backyard. This will not only ensure residents of a continuous supply of homegrown crops, but also meet the vegetable and fruit requirements of Ogpi employees. “Mining and agriculture can coexist, and Nueva Vizcaya is a citrus capital. It is precisely of this reason that we conduct a series of citrus seminars among our local farmers to educate them further on proper production and postharvest techniques,”OGPI SVP for Communications and External Affairs Chito Gozar said. Aside from the farm-to-market roads constructed by the mining firm in surrounding villages, Gozar said farmers in Barangay Didipio now find it more convenient to transport their products because of the all-weather access road developed by the mining firm. Last year OceanaGold Philippines was again awarded by no less than President Duterte the Presidential Mineral Industry Environmental Award (PMIEA) for exhibiting outstanding level of dedication, initiative and innovation in pursuit of excellence i n m i n i ng operat ions, environmental, safety, health management and communit y development. “One of the most significant contributions to its host communities over and above the mandated requirements under the Philippine Mining Act is the Didipio Community Development Corp. [DiCorp], which was established on August 11, 2011, to assist the local community in creating sustainable business partnership among enterprising locals,” Gozar said. DiCorp Chairman Henry Guay informed his community-based business enterprise, composed of 391 genuine Didipio residents, employs some 372 local workers who offer services, like food catering, for the OGPI Operations and take charge in maintaining the 22-kilometer service road developed by the mining firm from Dibibi, Cabarroguis and Quirino to the Didipio mine site. DiCorp is one of the two top taxpayers in Nueva Vizcaya, next to OceanaGold. “DiCorp is the best corporate partnership that binds original Didipio local that provides services of world-class standards,” Guay said. The Didipio Operations employs more than 1,800 mining employees and feed them daily for free. “The ongoing pavement of the road to the mine site is a favorable project not only for our workers but for everyone who regularly commutes to the community center because of the friendly road design,” Gozar said.


ExportUnlimited BusinessMirror

US-Asean Business Council upbeat on Philippine economic prospects

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OR the first time in three years, the Philippines made it to the worldwide list of top 20 investment destinations of multinational enterprises,” Trade Undersecretary for Industry Promotion Group Nora K. Terrado told participants in a roundtable organized by the US-Asean Business Council (US-ABC) on February 22 in Washington, D.C. Terrado said with the country’s 6.8-percent GDP growth in 2016, the Philippines continues to be one of Asia’s fastest-growing economies, exhibiting resilience amid external shocks. This message highlighted Terrado’s presentation about the country’s improving global competitiveness ranking. Terrado discussed the current administration’s 10-point socioeconomic agenda, which aims to sustain improvements in the Philippine investment climate, support

rural development, and further enhance the country’s infrastructure, human capital and socialprotection programs. “ T he whole gover nment is tasked to continue to improve the ease of doing business in the Philippines,” Terrado said. As chair for Asean 2017 Summit, the Philippines is poised to highlight the region’s strengths by engaging the international business community, foreign governments and investors through the Asean Business and Investment Program (Abip).

The Belgians are coming! By Jose Antonio Buencamino

Commercial Counselor, Philippine Trade and Investment Center-(PTIC)-Brussels &

Jeoffrey Houvenaeghel Trade Assistant, PTIC-Brussels

MARKET DEVELOPMENT UPDATE Part Three

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MEMBERS of the US-Asean Business Council (US-ABC) hosted a roundtable for Trade Undersecretary Nora K. Terrado on February 22 in Washington, D.C.

As chairman for the Asean Committee on Business and Investment Promotion, Terrado urged the US-ABC and its members to participate in the business activities to be held in the Philippines, focusing on themes, such as regulatory coherence, micro, small and medium enterprises (MSMEs), women and youth entrepreneurship, and innovation. Marc Mealy, vice president for policy of the US-ABC, expressed positive feedback after the dialogue with Terrado. “With the Philippines serving as the current Asean chairman

and having one of the highest GDP growth rates in Asia, the representatives from the 13 American multinational companies who participated were keen to receive the undersecretary’s update on current business trends in the Philippines and the economic priorities of the Duterte administration,” Mealy said. “The Council looks forward to conducting our 2017 senior executives business mission to the Philippines later this year.” The US-ABC members that participated in the dialogue were CocaCola, Fluor, Citi and Philip Morris, among others.

PHL targets $28-million export sales in Foodex Japan

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EVENTEEN local companies take advantage of the Philippines’s developing trade relations with Japan, as it showcases the country’s finest tropical flavors in the largest food fair in the AsiaPacific region. The local companies will feature the country’s premium tropical products, including banana, coconut, mango and pineapple, in the 42nd International Food and Beverage Exhibition, popularly known as Foodex Japan, from March 7 to 10 in Chiba, Japan. As a major gateway to the Japanese market, Foodex welcomes over 3,000 local and international exhibitors, as well as 75,000 buyers from the food manufacturing, service, distribution and trading sectors this March. “With the existing Japan-Philippines Economic Partnership Agreement [Jpepa], Japan provides an attractive and vast market for Philippine food suppliers to serve the retail, food service and manufacturing industries,” said Rosvi Gaetos, executive director of the Center for International Trade Exhibitions and Missions. “Through this participation, Philippine companies can benchmark and update themselves on the demands and current regulations of the Japanese market.” For 2017, the Philippine delegation generated at least $28 million in export sales in the four-day event, surpassing last year’s $27-million sales record. Participating companies in this edition includes AgriNurture Inc., AslaxPhils Corp., Benevelle Corp., CJ Uniworld Corp., DLA Naturals Inc., Bleeding Heart Rum Co., Fruits of Life Inc., GSL Premium Food Export Corp., Maharlika Agro-Marine Venture Corp., Pasciolco Agri Ventures, Prime Fruits International Inc., Profood International Corp., Prosource International Inc., Raw Brown Sugar Milling Co. Inc., Republic Biscuit Corp., See’s International Food Mfg. Corp. and Year Luck Food and Industrial Corp.

Editor: Efleda P. Campos • Wednesday, March 1, 2017 A9

he eight product groups that declined and fell out of the top 20 by 2015 were sterilesuture materials, preparations of animal feed, air or vacuum pump parts, self-adhesive plates (sheets, film, foil, tape, strip and other flat shapes), fungicide products, products of esters of inorganic acids, wire and cable connections, and nucleic acids or salts. There were eight new product groups in the top 20 in 2015. These are plastic products coated (unvulcanized or synthetic rubber), frozen boneless-chicken products, preparations of animal feed, mineral or chemical fertilizers, grinding or crushing machines, electrical- insulating fittings, machinery or apparatus parts, and medicaments containing hormones or steroids. These eight product groups had very low, nonexistent or declining growth rates prior to 2013. In 2014 we see high growth rates throughout the following product groups: Plastic products coated (unvulcanized or synthetic rubber), 336 percent; frozen boneless-chicken products, 129 percent; preparations of animal feed, 34 percent; mineral or chemical fertilizers, 82 percent; grinding or crushing machines, grew from nothing to €4,600,033 in 2014; electrical-insulating fittings, 52 percent; machinery or apparatus parts, 100 percent; and medicaments containing hormones or steroids, 10 percent. Mobile cranes and work trucks had practically no trade from 2011 to 2014 and performed exceptionally well in 2015 with €3,15 million. This corroborates the trend that Belgian exports to the Philippines grew exponentially in the period 2013-2015.

Belgian imports from the Philippines

AN analysis of the top 20 product groups imported from the Philippines in 2010 and their performance from 2010 to 2015 revealed 10 out of the 20 remained in the top 20 in 2015. These product groups are desiccated coconuts, electronic-

CHINESE DELEGATION EXPLORES INVESTMENT OPPORTUNITIES IN PHL

Chinese businessmen remains upbeat in Philippine investment prospects as a 10-man delegation from China was in the country recently to explore investment opportunities. Led by Ministry of Commerce of People’s Republic of China (Mofcom) Deputy Director General Li Shao Tong (left), the business delegation composed of representatives from Mofcom, Chinese Embassy in the Philippines and the China International Engineering Consulting Corp. (CIECC) met with members of the Philippine Investments Promotion Plan (PIPP), led by Trade Undersecretary and BOI Managing Head Ceferino Rodolfo, held at the Board of Investments in Makati City. Joining Rodolfo in the PIPP Panel were representatives from the Bases Conversion and Development Authority, First Philippine Industrial Park and Pacific Coast Cities. BOI INFOCOMMS

Japan is the Philippines’s largest export destination for fresh foods and the second-largest market for processed food, next to the United States. In November 2016 the Philippines’s export to Japan reached $898.83 million, comprising nearly 20 percent of the country’s global export. FoodPhilippines products include various coconut derivatives, banana chips and other organic fruit purees and fillings. It will also feature soft-serve ice cream and cones, rum, seafood, Peking duck, chicken yakitori and other meat products. The Philippines is currently the world’s second-largest producer of coconut and banana, according to the 2015 data of the Philippine Coconut Authority and the Department of Agriculture. It is also a top global producer of pineapple (third), canned tuna (fourth) and mango (10th), based on a 2013 data of the United Nations Food and Agriculture Organization. Meanwhile, Philippine bananas are one of the most highly soughtafter tropical fruits in Japan—ac-

counting for nearly 90 percent of the total bananas circulating in the Japanese market. Ninety percent of bananas in Asia are grown in the Philippines, where the industry rakes $1.2 billion annually. Bananas are the second highestearning agricultural export of the Philippines, next to coconut. In President Duterte’s state visit last year, Japan pledged a $1- billion investment in the Philippines agricultural sector, as well as agreements to import Philippine bananas, pineapples and avocados. In particular, Japanese company Farmind Corp. signed an agreement with the Philippine government to import 20 million boxes of Cavendish bananas to Japan every year, generating an estimate of P5 billion annual revenue for local farmers in conflicted areas. “The Japanese have an intergenerational love affair with Philippine bananas,” Gaetos said. “We plan to introduce a new twist to our readyto-eat banana chips, of which they show avid fondness.” Banana chips are slices of bananas that are deep fried, baked,

or dehydrated to become crispy. It is then coated with sugar, honey, salt, or spices. Banana chips are increasingly becoming sensational snacks as healthier alternatives to potato chips. Japan’s financial magazine, Toyo Keizai, said households of at least two people buy an average of 18 kilograms of bananas a year, well ahead of the No. 2 fruit, mandarins, at 13 kilograms per annum. However, in 2014 the Japan Business Press reported fruit consumption, in general, was dropping in Japan because young people do not have the tendency to eat fruit—or, at least, not in their raw form. Consequently, there is an increasing demand on processed fruits sold as confections and beverages, which appeal to younger people. FoodPhilippines is a branding initiative of Citem, the export promotion arm of the Philippines’s Department of Trade and Industry. It unifies the efforts of the government in promoting the Philippines as a source of quality food products in the global market.

integrated circuits, regulating or controlling instruments, mucilage and thickeners, medical syringes, semiconductor devices, packaging good, carbonate products, crude coconut oil and prepared or preserved tunas/skipjack. Electronic-integrated circuits and medical syringes are the only two product groups that had strong, consistent and steady growth over the years, while the other eight product groups performed rather inconsistently, e.g., declines in imports in one year and a rise in the next year. The 10 product groups that declined and fell out of the top 20 are digital cameras, photosensitive semiconductor devices, mobile telephones, data-processing machines, bicycles, new pneumatic tires, products made of silicon, radio navigational equipment, men’s or boy’s clothing products and static converters with telecommunication use. (Some observers would describe these product groups as the established, traditional exports of the Philippines.) There were 10 new product groups in the top 10 in 2015. These are sea-going tankers, air-cured tobacco products, electronicintegrated circuits with storage capacity, baked products, medical, tubular metal needles, printers and copying machines parts, polyethylene products, electronic integrated circuits, excluding multichip integrated circuits and storage capacity; flue-cured tobacco products and static converters without telecommunication use. All of these new product groups had an unprecedented increase of imports in the period 2014-2015 whereas before 2014, they performed relatively poorly or were nonexistent. The year 2015 was also the first year of implementation of GSP-Plus, a nonreciprocal, but conditional, trade scheme where the Philippines could export duty-free more than 6,700 products to the European Union. (Our previous editions in this newspaper featured the GSP-Plus.) To be continued

Auto-manufacturing industry expects 1,000 additional jobs

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OL L OW I NG t he pres i dential visit of President Duterte and the signing of a memorandum of understanding between Mistubishi Motors Corp. (MMC) President Osamu Masuko and Trade Secretary Ramon M. Lopez last October in Tokyo, Japan, Duterte and Lopez, together with Executive Secretary Salvador C. Medialdea and Finance Secretary Carlos G. Dominguez III, led the launching ceremony of the Philippine-manufactured Mirage G4 under the Comprehensive Automotive Resurgence Strategy (CARS) on February 27 in Malacañang. The production of the Mirage G4 in the Philippines is in line with the initiative of the government to revive and develop the auto-manufacturing industry in the country, making it as a regional manufacturing hub for auto parts. “The CARS Program will bring in more investments, better paying and high productivity jobs that will lead to spill-over effects by stimulating economic activities in related manufacturing and services. It will create employment and require local sourcing of auto parts up to 70-percent local content, which will develop more small and medium enterprises and generate more jobs,” Lopez said.

Over 200,000 units are to be produced under the program for six years, which will require additional manpower of 1,000 workers, including direct and indirect sales and general administration employees from Mitsubishi and auto parts suppliers. The program will serve as an opportunity for technology transfer to local micro, small and medium enterprises through joint ventures and technical licensing agreements. “This is important to enable us to maximize the trade and investment opportunities arising from the Asean Economic Community and take advantage of our growing domestic market” Lopez said, highlighting the significance of building the domestic auto market base to attain the necessary scale economies that would bring down costs of auto manufacturing in the country. “The implementation of the CARS Program signals government’s vigorous support and focus on industries with auto as platform for manufacturing takeoff,” Lopez said. “This will maximize the trade and investment opportunities arising from the Asean Economic Community and take advantage of our growing domestic market,” he said.


A10 Wednesday, March 1, 2017 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Rice sector awaits government help

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HE government announced last week it has decided to extend an executive order (EO) that reduces the tariffs on raw materials used for making processed-meat products, such as offal and mechanically deboned meat (MDM).

This announcement came barely a few months after meat processors have sounded the alarm bells over the adverse impact of reverting the tariff of MDM to 40 percent once the quantitative restriction (QR) on rice expires on June 30. The government made the decision to extend EO 190 just a week after the Tariff Commission held its first consultation on the matter. Meat processors had warned that if the tariff on MDM is raised again to 40 percent, the poor would be most affected. For one, canned goods remain as one of the cheapest sources of protein for the poor who cannot afford to shell out P200 for a kilogram of pork or P140 for a kilo of chicken. This warning may have prompted the government to immediately act on the petition of meat processors to extend EO 190 so the 5-percent tariff on MDM would be retained even after the rice QR lapses on June 30. However, the same cannot be said for the rice sector, which continues to await the government’s pronouncement for measures to mitigate the impact of the removal of the rice QR. The reduction of the MDM tariff was one of the concessions given by the government so the World Trade Organization will allow the Philippines to retain rice-import caps until this year. The Duterte administration, however, had already decided not to extend the rice QR. Under EO 190, the tariff on MDM would revert to 40 percent once the QR on rice expires, prompting meat processors and other affected sectors to intensify their lobby to extend the EO.   Unfortunately, the rice sector does not have the same recourse. That is why during the Tariff Commission hearing on EO 190 held on February 16, the Rice Watch Action Network appealed to the government to immediately put in place measures to help Filipino rice farmers become competitive after the import caps are removed. Agriculture Secretary Emmanuel F. Piñol himself had admitted the government failed to prepare rice farmers for this, despite the existence of the rice QR for more than two decades. The QR on rice had effectively served as the Philippines’s protection from the deluge of cheap imports from neighboring Southeast Asian countries, which are efficient rice producers. The Philippines is practically racing against time to find ways to cushion the impact of the removal of the rice QR on local farmers. State-owned think tank Philippine Institute for Development Studies (PIDS) urged the government to set aside P18 billion a year from tariffs, that will be collected from rice imports once the government replaces the QR with a specific duty. At a tariff rate of 35 percent, PIDS said the government could collect as much as P28 billion in duties from 2.26 million metric tons of rice imports. Before this happens, the Duterte administration should first craft a solid plan that would ensure the smooth transition of the Philippines from having a protected rice industry to one that will become virtually open to cheap rice imports.

Ash Wednesday Teddy Locsin Jr.

Free fire Continued from A1

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nly the Aztecs believed in eating the hearts of your enemies. And anyone they didn’t know was an enemy. On top of which, Aztecs hated each other. At the rate they were doing, there would be no Aztecs, let alone the Mayans they conquered, to work Spanish farms. No wonder the Spaniards exterminated them. It was an unsustainable message. The Spanish were there for the long term. They did not need Aztecs killing each other and others. Now, there are three ways of being kind, Martin says. One, “don’t be a jerk”. Sure it was a bad day at the office. And maybe a worse evening back home. “But don’t

pass along your misery to everybody else.” Once Martin complained to a friend that his life was a cross. His friend said, “Really? For you or for others?”

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Two, “honor the absent. Stop talking about people behind their backs. Nothing is so damaging to spiritual life than denigrating others behind their backs”. Or, I would add, and this is far, far worse, denigrating others to their faces because they are weak and cannot strike back. Like

Confucius blocks change in Korea

Since 2005

Founder

Kindness sums up the Christian message. Come to think of it, kindness also sums up the Buddhist, Hindu and Muslim messages. Karma is gonna get you if you are not kind in this life. You are coming back as a cockroach, although that will not stop you from getting elected. In the case of Muslims, kindness is only polite. So Muslims once famously welcomed strangers into their tents in the desert.

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ack in 2006, after Chung Mong-koo, chairman of Hyundai Motor Co. Ltd. and son of its founder, was arrested amid one of South Korea’s recurring corruption scandals, I called a friend in the company’s public-relations office. He answered in a breathless panic. Without Chung in the driver’s seat, he assured me, the management of Korea’s largest automaker would be adrift. At the time, I saw his warning as spin, an attempt to sway the Korean government to back off Chung. (If so, it worked: Chung was pardoned two years later.) But in my 20 years watching Korea’s family-run business groups, known as “chaebol,” I’ve come to realize my friend was telling the truth. The much-maligned conglomerates that dominate Korea’s economy may be facing investigations, pressure from foreign shareholders and unprecedented public anger. But unless the culture that binds management, investors and other stakeholders to Korea’s corporate system changes dramatically, the chaebol will almost certainly survive. Even the most recent blow to the chaebol—the planned indictment of Samsung family scion Jay Y. Lee for alleged bribery—probably won’t usher in the changes it should. Lee had sought to modernize Samsung Group’s archaic corporate culture, but instead became embroiled in the massive corruption scandal that led

to the impeachment of the country’s president, Park Geun-hye. Critics of the chaebol are hoping a conviction will end Lee’s career, force a management overhaul at Samsung, Korea’s most important business house, and teach other chaebol bosses a lesson. In fact, it’s just as likely to prove a fleeting embarrassment. The chaebol have outlasted pressures that would easily have upended companies in other countries. Though they often trade at valuations lower than their rivals—shares of Samsung Electronics Co. Ltd. trade at a lower priceearnings ratio than Apple Inc.’s, while Hyundai Motor’s are cheaper than those of Ford Motor Co. and Toyota Motor Corp.—Korean shareholders rarely challenge management. Public  fury  over the boorish behavior of chaebol heirs hasn’t led to any effective efforts to rein them in or reduce the influence of founderfamilies over management. Presidents routinely pardon chaebol bosses found guilty of

assorted crimes and allow them to return to their old jobs as if nothing had ever happened. Lee’s powerful father, Lee Kun-hee, himself resigned from Samsung after being indicted for tax evasion in 2008, only to be pardoned and restored to a chairmanship post. Partly this has to do with the companies’ outsized influence within the Korean economy; the combined revenues of the five largest chaebol were equivalent to 58 percent of South Korea’s GDP in 2015. Government officials, who regularly pay lip service to the need for reform, worry that destabilizing the chaebol will undermine an already struggling economy. Yet, a lack of political will doesn’t entirely explain the chaebol’s endurance. For that, we need to wander into the somewhat dangerous territory of culture. I’ve long resisted cultural explanations for economic outcomes. But in the case of the chaebol, the link seems unavoidable. Confucianism still exerts strong influence in Korea, and that philosophy, especially the form that took hold there in the 15th century, stresses loyalty to authority. At the chaebol, reverence for the “emperor” translates into obedience to company founders and their families, who are treated like royalty. In certain chaebol, employees are actively indoctrinated in the wonders of the company’s founding clan. I’ve known Samsung employees who would praise the brilliance of Lee Kun-hee the way the North Korean media lauds dictator Kim

calling drug addicts not human and therefore not entitled to human rights. That is cowardice. You wouldn’t say it to an addicted commandant of Marines. Last time someone hurt their feelings, the Marines blew up a Muslim congressman and everyone else unlucky enough to be near him. And, three, “always give people the benefit of the doubt”. When there is a doubt about what a person means when he says or does something, give him the benefit of the doubt. He might mean well. But hit him in the face if he moves to strike you or curses you to your face. I added that. So don’t give up chocolates for Lent, Martin says. Be kind in all three ways instead. “It will be better for your spiritual life.” And after six heart by-passes, I can also vouch it will be better for your cholesterol and sugar levels.

Jong Un. What seems to happen is that the top family-executive at a chaebol, much like an imperial ruler, becomes a point of focus and loyalty for managers who may, otherwise, have competing interests. Only he (and it’s almost always “he”) can arbitrate between those demands and bring a sense of larger mission to an unwieldy conglomerate. Relationships in business are also critically important in Korea (as they are throughout Asia). So shareholders, bankers and bureaucrats, who often have long-standing connections to chaebol management, are naturally reluctant to rock the boat. Such ties help explain why, for instance, US hedge fund Elliott Associates LP failed to rally shareholder support against a Samsung merger that solidified Jay Y. Lee’s control over the group. (Prosecutors allege that Lee also bribed the government to win support from the national pension fund for the merger.) On paper, more can and is being done to bust up the chaebol. Regulators can force a true unwinding of the complex cross-shareholdings that permit families to dominate chaebol management. Legislators can even the playing field for startups and smaller companies, who are typically squeezed out by the conglomerates and their traditional suppliers. Certainly the public seems fed up with the tangle of collusion between politics and big business in Korea. But the chaebol won’t vanish until those who manage, own and finance them accept that Korea is better off without them.


Opinion BusinessMirror

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Wednesday, March 1, 2017 A11

Climate change is real, A new philanthropy in the digital age but don’t blame humans Edgardo J. Angara

Michael Makabenta Alunan

on the contrary

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limate change is real, and has constantly been changing ever since, but contrary to the massive propaganda it is allegedly anthropogenic or caused by man-made global warming, true science says human activities, like industrialization and transport emissions, do not cause global warming. n Is it man-made or Mannmade? The biggest argument used by the United Nations’s Intergovernmental Panel on Climate Change (IPCC) and carried by Al Gore’s Climate Change documentary, An Inconvenient Truth, is the “Hockey Stick” theory by climatologist Michael Mann. Mann’s study of global temperature the past 1,000 years or so recorded the spike in temperature starting in the 19th century with a graph like the shape of a hockey stick, which many politically motivated environmentalists associate directly to man-made industrialization and the massive influx of motor vehicles. This was done by getting deep earth samples from the polar region, where he made correlations between carbon dioxide (CO2) content and residues capturing temperature levels, although correlation does not establish causality. This was debunked by many scientists and there are voluminous literature on this over the Internet. Some 31,000 scientists even signed a petition opposing this. Many scientists resigned from IPCC, which is composed more of people from government and non-governmental organizations. Facts don’t follow theory. In the Global Warming Swindle documentary, earth’s history shows climate changed, contrary to the unscientific propaganda that an increase in CO2 leads to global warming, followed by climate change. Prof. Philip Stott of University of London noted that when humans were not yet producing CO2, we had little ice ages and warm periods. In the 14th century, Europe was in a Little Ice Age, as shown by illustrations of ice fairs and people skating on the Thames River. In the medieval period, England had a warm climate, as manifested in the writings of English poet Chaucer and the memories to this day of historic sites in England like vineyards, Vine Hill, Vine Street, Vinery, etc. At the turn of the 19th century, temperatures rose by almost halfpercent Celsius, but during the postWorld War II economic boom up to 1975, they dropped even when CO2 rose to their peaks with industrialization, thus negating the globalwarming scare theory. More proof from Moore. Green Peace’s cofounder, scientist Patrick Moore, left Green Peace when it abandoned science and turned too political, starting with its Global Chlorine Ban, when chlorine is the only technology that can purify water on a mass scale. Chlorine evaporates in 30 minutes, making water already safe. Moreover, 75 percent of medicines are chlorine-based. Carbon dioxide may have increased from 260 parts per million (ppm) to 400 ppm the past two centuries, this is still a negligible 0.0004 of 100 percent or a million parts. Over the last 600 million years, average CO2 levels were even at 2,000 ppm, which is ideal for plant growth, Moore said. One can only get dizzy at 30,000 ppm of CO2. We even need more CO2 to develop agriculture and more greenery. Carbon dioxide is also used as a refrigerant, There is even a web site, I Love CO2.com, but why is CO2 restricted, if the bigger greenhouse gas is water vapor, which is 850-percent stronger than CO2, and 2.1 percent more in volume than CO2. In fact, without water vapor, the Earth will

be 14-percent colder. Apparently, there are interest groups that do not want less-developed countries to industrialize. So their strategy is to put a cap on CO2, which means to go slow on industrialization. Moore, a Canadian, could not also understand why Green Peace is against hydropower dams, which is the cheapest renewable energy and account for 60 percent of Canada’s power. It also opposed China’s Three Gorges Hydro Dams, which produce 22,500 megawatts, equivalent to 40 coal plants, and even got the World Bank to pull out funding support. Green Peace and groups like the Worldwild Life Fund also push for costly and age-old renewable energy (RE). Windmills made of steel may be more efficient, but are no different than Holland’s 12thcentury wooden mills, as there is no energy when there is no wind. Solar is another costly RE with very low energy flux density, but may still be appropriate in remote areas. n We need smart-agri vs. climate change. Regardless of the arguments, climate change is here to stay and we need to prepare agriculture as the first line of defense. This was stressed at a Philippine Agricultural Journalists (PAJ) forum sponsored by the Climate Change, Agriculture and Food Security (CCAFS) program based at the International Rice Research Institute (IRRI). Among the speakers were Dr. Julian Gonsalvez of the International Institute for Rural Reconstruction; Dr. Reiner Wassmann of IRRI, Victor Cruz of the UP Los Baños College of Forestry; and Dr. Rex Navarro, a PAJ director and member of the Climate Change CCAFS team. Navarro summed up the measures to be climate-resilient as follows: 1)Farmers need to be knowledge-smart; 2) Seed-smart by using quality-resilient hybrid seeds; 3) Water-smart or irrigation that can manage drought or floods; 4) Nutrient-smart, balancing organic and inorganic fertilization; 5) Energy-smart by adopting appropriate and efficient technologies not dependent on fossil fuel; and 6) Market-smart. On water resources, Gonsalvez says unlike African countries, which lack rain, we are blessed with rainfall that we can harness to make it possible to have three crops a year. He adds that in Capiz, 40 reservoirs were built, allowing farmers to grow three crops. It only took a backhoe two days to build one reservoir, so why can’t we do this nationwide on a mass scale? On competitiveness, as we could not match Vietnam’s and Thailand’s production costs of P6 per kilo with our P11 to P12 per kilo, Cruz said we should plant crops other than rice, corn and coconut. He stressed the need to also correct so many institutional and policy weaknesses. Wassmann added it is not only “a question of productivity. It is also a question of adaptation, that diversity is always good”. In summary, climate change is a fact, but is not caused by humans, thus we need to bring back science and technology to explore all the other maybe seven to 10 natural causes, which are a whole discourse altogether. We also need to change the climate of governance to be more relevant to the imminent threats of climate change.   E-mail: mikealunan@yahoo.com.

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hilanthropy in the digital age has taken a dramatic shift and has become large scale. Gift-giving seems to have grown in magnitude in step with the gigantic challenges we confront today. In the United States philanthropists have become “patrons of social progress through science research”.  The Bill and Melinda Gates Foundation since 1997 has given up to $28.3 billion in grants to various global initiatives, including research and development in HIV/AIDS, malaria and other tropical diseases.  It also funds efforts to develope more nutritious rice and cassava varieties. In 2000 David H. Koch, New York City’s wealthiest resident, contributed more than $750 million to cancer research and public policy studies. In 2009 Eric E. Schmidt, executive chairman of Google, and his wife donated $100

million to establishing the Schmidt Ocean Institute, aimed at advancing oceanographic research, discovery and knowledge. More recently, Facebook founder Mark Zuckerberg and his wife, Priscilla Chan, announced in December 2015 they would donate throughout their lives up to 99 percent of their Facebook shares—amounting to more than $45 billion. What is the state of Philippine philanthropy? Are Filipino philanthropists responding to our society’s ills?  The charities the Filipino rich pursue and spend for are largely duplicative and scatter-shot—

overconcentrating their money on a handful of scholarships and school houses or a high-brow museum. Few pay attention, for instance, to the more frightening public-health hazard of child malnutrition. The stunting of our children results to the loss of over P328 billion a year to the economy in terms of work productivity and education. It’s not for lack of resources.  The total net worth of the recent Forbes 10 richest Filipinos is $53 billion, or P2.63 trillion, equal to nearly 20 percent of the country’s total national income. The Filipino rich have not scaled up their giving in order to provide solutions to systemic problems or age-old afflictions, like tuberculosis and malaria. In our country, our democracy suffers from its chronic inability to bridge the yawning gap between the few who are very rich and the millions of Filipinos who struggle daily to survive.  Our democracy remains unable to deliver on the promise that hard work, ability and ambition will assure one of upward social and economic progress. In 2010 only 0.1 percent, or

India’s slow-motion bank crisis

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By Mihir Sharma | Bloomberg View

ndia’s slow-moving banking crisis continues to drag on, as ponderous and unstoppable as the state-controlled banking sector itself. A recent study found the gross “nonperforming assets” of state banks rose 56 percent in 2016, and 135 percent in the last two years. They now account for 11 percent of all state bank loans.

These are hardly reassuring numbers. Yet, the government— which, after all, owns these banks and, thus, dominates the Indian financial sector—appears relatively unconcerned. In the most recent budget, the government set aside barely $1.5 billion to recapitalize the banks.  Who has time for a slow-moving crisis in India, a country where life comes at you fast? Instead of being allowed to focus on bad loans, the state-controlled banking sector has been buffeted by one task after another dealt out by its principal owner. Banks have spent months dealing with the fallout of Prime Minister Narendra Modi’s decision to withdraw 86 percent of India’s currency. There still aren’t enough currency notes in automated teller machines, as a senior finance ministry official admitted recently. And though forced deposits mean banks’ cash resources have increased, nobody knows for sure how much of that money will remain in bank accounts once withdrawal limits are lifted. Meanwhile, the state bank sector has become the government’s primary tool for many of its other

plans. Banks are supposed to be the primary conduit for drawing tens of millions of poor Indians into the financial system, for example. They’re being told to solve India’s jobs crisis, as well: Officials insist a government scheme to provide easy loans to small entrepreneurs will help employment recover. So who has time to fix bad loans? The Reserve Bank of India (RBI) asked banks to conduct an “asset-quality review” a few years ago, which ended last Monday. There are voices suggesting the deadline should be extended, given the pressures of demonetization. This lack of attention is puzzling. The bad-loan crisis, together with demonetization, has pretty much wrecked the credit pipeline—and, consequently, India’s growth prospects. Recently, credit growth hit 5.1 percent, and the chief economist of India’s largest state bank, the State Bank of India, said that represented its lowest point since 1960. Most analysts expect credit growth to range between 5 percent and 6 percent in the coming months, nowhere near the double-digit numbers needed

to get an investment recovery going. Two things need to happen: Statecontrolled banks need to get these loans resolved; then the system that allowed them to build up needs to be demolished. Each of these has an obvious solution. The problem is that the government is simply unwilling to implement either one. Resolving loans isn’t a simple process. Somebody ultimately has to take a haircut. That requires a system in which people are able to make decisions based on discernible facts on the ground. Which project will be viable once it’s restructured? Which will require more money? Which should be shut down? India doesn’t have a system like that yet. At the moment, decisionmakers face political pressure to protect sensitive projects. And bank officials worry any choice they make could come back to haunt them later if some anticorruption crusader accuses them of taking bribes. True, India passed a bankruptcy law recently. And that’s a useful achievement. But it’s simply words on paper without institutional backing—and the institutions aren’t there yet. Unlike in the US, you can’t expect courts to supervise resolution; India has a case-backlog crisis as deadly as (and even slower-moving than) its bad-loan crisis. And although the original draft of the bill called for the government to set up an entire cadre of resolution professionals, that crucial requirement

19,738, Filipino families belonged to the high-income group with an average monthly income of P194,965. In contrast, there were 80.8 percent, or 14.07 million, low-income families with an average monthly income of P7,513. This gap has remained unchanged. The 2015 Family Income and Expenditure Survey shows the income of the richest 10 percent of the population is nine times more than the income of the poorest 10 percent.  But our situation is far from hopeless. We are happily seeing young entrepreneurs rising in the wealth ladder—Megaworld’s Andrew Tan, Jollibee’s Tony Tan Caktiong, DoubleDragon’s Injap Sia and others. They are youngsters compared with the elder taipans, yet they possess the same grit and determination to succeed.  Not unlike the US tech billionaires, their capital was their own brains and diligence.  They made their fortune and didn’t inherit their wealth. Our hope lies in this young group of entrepreneurs blazing the trail in more significant and targeted and relevant philanthropy.                                   E-mail: angara.ed@gmail.com| Facebook & Twitter: @edangara.

had mysteriously disappeared by the time the bill became law. So, again, who’s going to evaluate these projects and price these bad loans? Recently, RBI Deputy Governor Viral Acharya backed the creation of a “bad bank” to take nonperforming assets off bank balance sheets. That would certainly help coordination between creditors. But it wouldn’t address the basic problem: figuring out at what price the bad bank should buy these assets. If it’s too high, then you won’t get privatesector participants; if the haircut is too much, careerist bank officials will be unwilling to sell. And, finally, what will keep state banks from making the same mistakes again? Well, the answer is: if they’re subject to market discipline and not burdened with multiple objectives imposed by their harassed owners in New Delhi. Bad loans are the result of the government ordering banks to support big, growth-promoting, but risky infrastructure projects during India’s boom years—and then politically connected companies procuring bridge loans when those projects turned sour. Private-sector banks managed to extricate themselves from such mistakes handily. If state-owned banks didn’t, it’s pretty obvious why. And it’s equally obvious what has to be done: Privatize them. If this government is as bold and courageous as it likes to claim, that should be its first priority.

What a Fed rate hike in March would imply By Mohamed A. El-Erian  Bloomberg View

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n Monday a combination of domestic and international factors contributed to a significant reassessment by market participants of the probability of a Federal Reserve (the Fed) interest-rate hike in March. Now the markets are pricing in a more realistic probability of 52 percent, up from less than 40 percent last week. Where this probability assessment  goes next increasingly depends on a single data point, which could also fuel a gradual reorientation of the Fed’s approach to monetary policy and how the US central bank interacts with markets. Market expectations of a March rate hike were boosted by a clarification by Robert Kaplan, the president of the Federal Reserve of Dallas and a voting member of the policy-making Open Market Committee. In referring to previous signals from Fed officials that the central bank would likely raise rates “sooner rather than later”, Kaplan said this would imply a hike in the “near future”—this on the

basis of stronger economic growth in 2017 and the need to lower the risk of monetary policy falling behind the curve on inflation. Rate sentiment was further influenced by signals from the White House that President Donald J. Trump’s first budget would include a substantial and “historic” increase in defense spending of $54 billion. Global conditions also played a role in the market reevaluation. After a string of record negative interest rates in Germany last week, two-year German government bonds found their footing, at least for now. This alleviated the considerable downward pressures on US yields. Nonetheless, the higher probability of a Fed hike still doesn’t make it a done deal, and rightly so; and this is not primarily due to heightened political risk in Europe. Judging from the insights of Fed Chairman Janet Yellen and some of her colleagues, the Federal Reserve  Open Market Committee (FOMC) would need stronger wagegrowth data to feel comfortable raising rates for what would be only the

Market expectations of a March rate hike were boosted by a clarification by Robert Kaplan, the president of the Federal Reserve of Dallas and a voting member of the policy-making Open Market Committee.

third time in 10 years. As a result, the jobs report for February, which will be released  on March 10, will have an important, if not deterministic, influence on what the Fed does when its top policy-making committee next meets on March 14 and 15. A green light from the wage data would do more than significantly increase the probability of a March rate hike. It also would allow the Fed to slowly evolve away from its tactical posture and toward one that involves more strategic consideration. Since the eruption of the global financial crisis in 2008, the Fed has adopted a highly “data dependent” approach to policy making. The fact that the crisis took Fed officials by surprise, together with a recovery

process that has been far from usual and coupled with repeated growth/inflation forecasting errors, have undermined the Fed’s understanding of the economy’s behavior and the effectiveness of its analytical models, especially the historically calibrated ones. The Fed became a hostage not just to high-frequency economic data (and the unavoidable “noise” that accompanies them, including some large subsequent revisions), but also to markets. Rather than lead markets, the central bank fell into the habit of following their shortterm orientation. Should the next jobs report open the way, the Fed could return to a more proactive strategic stance. In addition to countering excessive short-termism, this new orientation could provide a new policy anchor, especially when other elements of policies go from agonizing paralysis (due to congressional gridlock) to potentially significant change as will likely be illustrated by Trump’s speech to a joint session of Congress on Tuesday evening.


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Teo admits exorbitant rates of tour packages making her job difficult

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O marketing and advertising campaign can impress foreign visitors to come to the Philippines if the country doesn’t offer competitive travel packages.

This was stressed by Tourism Secretary Wanda Corazon T. Teo, when she raised the issue on the pricing of travel packages at the recent Tourism Coordinating Council (TCC) meeting that she said has been a stumbling block in the Philippines’s global tourism competitiveness. “Throughout my long career in the travel and tour business, travel agents and tourists complained about the expensive tour packages to the Philippines. I found it difficult to market our country with these exorbitant rates,” she told members of the interagency council who met on February 23 at the Edsa Shangri-La Hotel. She pointed out that other countries in Southeast Asia, even Japan, “sell reasonably priced packages, especially after a natural calamity or political upheaval, so foreign travelers would still be enticed to visit after a crisis”. The tourism chief convened the TCC to spur active participation in the Duterte administration’s tourism program, as embodied in the Department of Tourism’s (DOT) National Tourism Development Plan (NTDP) for 2017 to 2022. The TCC was created under Republic Act 9353, dubbed the Tourism Act of 2009. “It is imperative that we collaborate as a team of stakeholders in

TEO: “Throughout my long career in the travel and tour business, travel agents and tourists complained about the expensive tour packages to the Philippines. I found it difficult to market our country with these exorbitant rates.”

the implementation of the NTDP, and realize the government’s vision of Ambisyon Natin 2040 for the benefit of all sectors and, at the same time, deliver the best tourism packages to the world market,” Teo said in a news statement. She said the TCC, which had not convened in the last two years, is mandated to help set the direction for the country’s tourism program and address urgent issues confronting the country’s tourism industry. Inputs and insights of representatives from other government agencies, the travel sector and tourism stakeholders are now being gathered and consolidated for incorporation to the NTDP, which will then be presented to President Duterte for final approval. During the meeting, most of the members of TCC lauded the tourism road map for the next five years, but raised concerns on “high

hotel rates, insufficient infrastructure, poor access roads, lack of direct flights to tourist destinations, and adverse travel advisories over security threats.” The DOT added that some members also took issue with the Metro’s “traffic congestion, destruction of historical sites, massive number of street dwellers and ‘colorum’ tour guides and taxi services”. Teo conceded, “We cannot sweep these issues under the rug. It is the mandate of the Tourism Coordinating Council to address such concerns.” However, private-sector members of the TCC blamed the airlines and energy prices as some of the reasons the travel packages to the Philippines are expensive. Cesar Cruz, president of the Philippine Tour Operators Association, said: “The prices of international airfares cause the increase of our tour package rates, even if prices of ground arrangements are decreased.” The Philippines’s location in the middle of the ocean makes inbound airfares more expensive, unlike other Southeast Asian countries, where land travel is possible to get from one country to another. Speaking on behalf of the Philippine Hotel Owners Association, Executive Director Leny Fabul explained that “due to the supplydemand factor, we have to keep our room rates high and allow us to keep up with high cost of energy here”. She also said there is also the need to encourage more hotel investors to correct the room gap of about 75,000 more rooms for the next five years. For her part, Tourism Congress of the Philippines (TCP) President Rosanna Tuason-Fores raised the need for more jetty ports or small sea ports to be built

on islands like Mindoro, “which has 10,000 rooms, but remain inaccessible to travelers”. She also underscored the need for more government incentives to encourage small- and mediumscale enterprises to craft more tourism products and services. Under the NTDP, the Duterte administration is targeting to entice 12 million foreign visitors and 89.2 million domestic tourists by 2022, its last year in office. The targets for 2022 also include tourism revenue of some P4 trillion; employment of 6.5 million (14.4-percent share to total employment); and 702,000 poor beneficiaries. M e a n w h i l e , D r. C a t a l i n a

Cabral, Department of Public Works and Highways (DPWH) undersecretary for planning and public-private partnership service, cited the importance of the direct involvement of local tourism stakeholders in pinpointing exact places to be developed in a locality as new or less-known tourist destinations. She said the agency has received some 1,700 project requests, but they find it challenging to decide “which of these requests should be given top priority in order to maximize efforts in designing and executing infrastructure development”. She added the DPWH is planning to fund potable-water systems,

energy sources and informationtechnology facilities, in keeping with its continuing convergence program with the DOT. Trade and Industry Undersecretary for Management Service Rowel Barba assured the members of the TCC his agency is currently working on plans in cooperation with the DOT to implement the NTDP’s goal of increasing livelihood and employment opportunities for the poor. Similarly, Agriculture Assistant Secretary for Agribusiness, Marketing and Fisheries Leandro Gazmin expounded on the economic importance of agritourism or farm tourism, as well as rural tourism and ecotourism, as a way to encourage more visitors to the country.

NEW MODELS FOR PEACE Former Guatemalan President Vinicio Cerezo (third from left) gave his insight and views during the Global Peace Convention 2017, with the theme “Moral and Innovative Leadership: New Models for Peace and Development”, which kicked off at the Marriott Convention Center in Pasay City on February 28 and will run until March 3. Cerezo was joined by the other speakers (from left) Pampanga Rep. Gloria Macapagal-Arroyo; Dr. Hyun Jin-moon, founder and chairman of the Global Peace Foundation; Jin Pyo-kim, former deputy minister of strategy and finance from Korea; Prof. Madhav Das Nalapat, director of geopolitics and international relations; and Dr. Edwin Feulner, founder and chairman of the Asian Studies Center. NONIE REYES

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country, of which almost 600,000 are found in Metro Manila. This measure is included in the package of bills aimed at addressing the country’s 5.5 million housing backlog. The package also includes a bill transferring government offices to the provinces and a resolution standardizing the definitions of housing terminologies. “Government programs before were focused on the relocation of informal settlers to areas outside Metro Manila where they have no access to livelihood and other basic services. The scenario is that the ISFs are pushed to go back to informal settlements in the urban centers again because of their need to find a source of income for their family’s daily needs,” Benitez said. Under the bill, to the extent feasible,

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ResearchGate with three partners in 2008, had in mind when he ditched his budding scientific research career in Massachusetts to return home to Germany to build his star-up in Berlin’s fast-growing cluster of technology companies. According to Madisch, the social network has signed up 12 million scientists, or roughly 60 percent of all such potential users worldwide. Researchers now upload roughly 2.5 million papers to ResearchGate every month. In comparison, scientists added the same amount of research over the first four years of the network’s operation. On Tuesday the social network said it had raised $52.6 million from a range of investors, including Goldman Sachs, Bill Gates and Benchmark Capital, a venture-

socialized housing and resettlement projects should be located near areas where employment opportunities are accessible. It also said the government agencies dealing with the provision of skills and livelihood training, development of livelihoods programs and grant of livelihood loads—the departments of Labor and Employment, Social Welfare and Development and Science and Technology, the Technical Education and Skills Development Authority and Philippine Trade and Training Center—shall give priority to the beneficiaries of the program. It said the local government units (LGUs), in coordination with the Presidential Commission for the Urban Poor and concerned government agencies, will afford program beneficiaries or their duly designated representatives an opportunity to participate in the decision-making process over matters “involving the protection and promotion of their legitimate collective interests”.

The bill said beneficiaries would also be encourage to organize themselves into an association for accreditation as beneficiaries or awardees of ownership rights under the resettlement program, communitymortgage program land-tenure assistance program and other similar programs in relation to a socialized-housing project actually being implemented by the national government or by the LGUs. The association, in consultation with the Presidential Commission for the Urban Poor, will formulate a “people’s plan”. The people’s plan is a tool that recognizes the need for adequate consultation and participation of the beneficiaries themselves in planning their resettlement. Benitez said the relocation action plan should ensure safe, affordable, decent and humane condition of relocation, incorporating therein appropriate disaster risk-reduction management and climatechange adaptation standards.

capital fund. The money, which more than doubles the amount it has raised previously, was secured in late-2015, but was only made public on Tuesday in accordance with German corporate accounting rules. The fledgling company has taken advantage of the growing trend across the scientific world to open up to the wider public and take advantage of technology, like machine learning to conduct projects across borders and faster. It is not alone in making science more transparent and open. Cancer researchers, for instance, recently created a video game inspired by Space Invaders that allowed people to participate in the crunching of complex data on their smartphones by guiding a craft through space along paths based on genetic sequencing from breast-cancer patients. And as the likes of the Massachusetts Institute of Technology and Harvard in-

creasingly offer online courses to anyone worldwide, even the concept of what it means to go to college—let alone conduct scientific research—is undergoing an upheaval. Upal Mahbub, a computer scientist at the University of Maryland, for instance, has routinely turned to his followers on ResearchGate as part of his efforts to find a more secure way of protecting people’s mobile devices. Recently, he said, another scientist contacted him through the network, asking to borrow his computer code for an unrelated project, something that wound not have been possible if Mahbub had not posted regular updates about his research. “I had no problem about sharing my code with him,” he said. Putting everything online “makes it a lot easier for people to keep track of my research.” New York Times News Service

Profile for BusinessMirror

Businessmirror march 01, 2017  

Businessmirror march 01, 2017  

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