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Monday, March 5, 2018 Vol. 13 No. 145
Decision day: To close or not to close Boracay By Ma. Stella F. Arnaldo
@akosistellaBM Special to the BusinessMirror
B
ORACAY Island, Malay, Aklan— President Duterte is expected to decide during the Cabinet meeting today (Monday) whether to keep Boracay Island open to tourists. But if it will be closed off, he will also decide when the closure will start, and for how long.
Duterte’s grand infra plan has missing ingredients By Cai U. Ordinario @cuo_bm
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he will to implement the projects is there, and there’s no hindrance on the funding side. However, almost two years into the Duterte administration, the government has not begun civil works on any of its 75 flagship projects. For former Socioeconomic Planning Secretary Cielito F. Habito, one key ingredient is probably missing—the “flagship champion.” Having served in the Ramos administration, Habito knows the importance of having a flagship czar. In 1994 then-President Fidel V. Ramos created the Presidential Committee on Flagship Programs and Projects, which was then chaired by Emilio M.R. Osmeña. The Estrada administration continued the committee, under the chairmanship of Roberto Aventajado, and identified a total of 128 “flagship” projects for funding. Habito said having a flagship champion is important because the government does not have a “sterling record” when it comes to project implementation.
0
The number of flagship projects now in civilworks stage
AÑo: “If it can be shown that everyone is willing to contribute to save Boracay, then the President will reconsider it.”
Government sources told the BusinessMirror that all Cabinet secretaries are one in thinking that the island should be closed, and “it’s just a matter of when that will happen.... [Interior Continued on A4
BMReports
One Charter under siege: Would amending Constitution enhance PHL economic devt?
See “Infra plan,” A2
PESO exchange rates n US 52.0150
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What can be negotiated in a competitive challenge process Alberto C. Agra
ead
L AlbertoPPP C. Agra Part One
A
nother aspect of unsolicited proposals (UPs) for public-private partnership (PPP) arrangements, which is the subject of interpretation and conjecture, is the boundaries of negotiation. Negotiation, which is Stage 2 of a three-step process, takes place after a government implementing agency (IA) accepts a complete UP from a private-sector proponent (PSP) for a particular PPP project, and before that IA opens the negotiated terms to competitive challenge. Continued on A15
‘Habit’ of impeaching SC chiefs to weaken Judiciary By Joel R. San Juan
JOYAS: “As I have said before, this will be a cycle. There is a possibility and probability that the next Chief Justice will be impeached. To my mind, this will weaken the Judiciary.”
@jrsanjuan1573
Technical personnel lacking
Apart from the czar, government agencies also lack the technical personnel—like engineers—that will ensure proper implementation of the projects on the ground, former Philippine Institute for Development Studies (PIDS) President Gilberto M. Llanto told the B usiness M irror. With this, Llanto said it is also important for the government to revisit its hiring policy, as it needs to have a sufficient number of engineers and other technical personnel to undertake the projects. Llanto noted that this can be easily addressed because the government enjoys sufficient fiscal space to hire additional personnel. This is something that cannot be done before because
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W Skyscrapers continue to rise from the Bonifacio Global City, a military camp privatized under then-President Fidel V. Ramos. Economic provisions in the 1987 Constitution of the Republic of the Philippines emphasize protection of the country’s resources, especially the public domain, such as agricultural, forest or timber, mineral lands and national parks. NONIE REYES By Jovee Marie N. dela Cruz @joveemarie
H
Part One
E who doesn’t look back where he came from would either not reach his destination or wouldn’t trip and fall down.
The latter phrase was taken by wise cracks from Jose Rizal’s original admonition to always review history. It could also describe the mind-set of those who framed the 1987 Constitution of the Republic of the Philippines: always look forward. Continued on A2
ITH the “impending” impeachment trial of Chief Justice Maria Lourdes A. Sereno and considering the impeachment of her predecessor, the late Chief Justice Renato C. Corona, legal experts believe that “the sword of Damocles” is now hanging over the heads of the Supreme Court (SC) magistrates. Former Integrated Bar of the Philippines (IBP) President Vicente Joyas recalled saying at the height of the impeachment proceedings against Corona that this will become a cycle. “As I have said before, this will be a cycle. There is a possibility and probability that the next Chief Justice will be impeached. To my
mind, this will weaken the Judiciary,” Joyas said. “The sword of Damocles is hanging over the head of the chief magistrate. If she, or he, will commit something that cannot be appreciated by the party administration, then she will be impeached,” he added. The sword of Damocles is an expression referring to the imminent and ever-present threat faced by those in positions of power. See “Impeaching,” A2
n japan 0.4899 n UK 71.6559 n HK 6.6453 n CHINA 8.1817 n singapore 39.3071 n australia 40.3532 n EU 63.7964 n SAUDI arabia 13.8699
Source: BSP (2 March 2018 )
A2 Monday, March 5, 2018
BMReports BusinessMirror
One Charter under siege: Would amending Constitution enhance PHL economic devt? Continued from A1
Framed after the deposing of the dictatorship of President Ferdinand E. Marcos, the 1987 Constitution was hinged on the goal of ensuring greater opportunities for more employment, better income and improved standard of living of Filipinos. This goal was explicitly expressed in the economic provisions stated in Article XII, XIV and XVI. Under the 30-year-old Charter, the goals of the national economy are to assure a more equitable distribution of opportunities, income and wealth and a sustained increase in the amount of goods and services produced by the nation for the benefit of the people. This provision is created to expand productivity, as the key to raising the quality of life for all, especially the underprivileged. It also mandated the State to promote industrialization and full employment based on sound agricultural development and agrarian reform, through industries that make full and efficient use of human and natural resources and which are competitive in both domestic and foreign markets. The economic provision also seeks to protect Filipino enterprises against unfair foreign competition and trade practices.
Optimum opportunity
IN pursuit of these goals, the Constitution said all sectors of the economy and all regions of the country shall be given optimum opportunity to develop. Private enterprises, including corporations, cooperatives and similar collective organizations shall be encouraged to broaden the base of their ownership. One of the strongest economic provisions in the Charter is that which emphasizes ownership of all lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna and other natural resources. With the exception of
Impeaching. . . Continued from A1
However, Joyas still believes that the impeachment process and the filing of several cases, the ultimate objective of which is to oust the Chief Justice, were a valid exercise of the functions and duties of the legislative and legal branches of the government. He also believes that there is no concerted effort to remove Sereno from her post. To say that there is a concerted effort, according to Joyas, would be too sweeping to be accurate. “There is no concerted effort from what we are reading and seeing now, we always assume that these people are exercising their duties and functions regularly,” he said. Former University of the East Law Dean Amado Valdez, a known constitutionalist, also expressed belief that that ongoing impeachment proceedings against Sereno is a valid exercise of check and balance by the Legislative branch. “The result of Corona’s impeachment should have been a lesson on the part of the appointing power, as well as to those to be appointed, to be aware that there is a sword of Damocles over their heads so that they
agricultural lands, all other natural resources shall not be alienated. This means all exploration, development and utilization of natural resources shall be under the full control and supervision of the Philippine government. However, the Charter allows the State to enter into agreements with Filipino citizens in developing these resources for the benefit of the people. Nonetheless, the Charter demands that the government protect the country’s marine wealth “and reserve its use and enjoyment exclusively to Filipino citizens.” Other economic provisions of the Constitution also emphasize this ownership and development of the country’s resources. The Charter allows for cooperative fish farming, with priority to subsistence fishermen. It gives leeway to the country’s chief executive in terms of entering into agreements with foreign firms for large-scale exploration, development and utilization of minerals, petroleum and other mineral oils.
Further protection
BUT the Charter emphasizes protection of these resources, especially the public domain, such as agricultural, forest or timber, mineral lands and national parks. The Constitution said all alienable lands of the public domain shall be limited to agricultural lands. Also, the Charter emphasizes these resources are reserved for Filipinos and to be used by Filipinos alone. The Constitution provides that private corporations or associations may not hold such alienable lands of the public domain except by lease, for a period not exceeding 25 years, renewable for not more than 25 years. The Charter also demands that the State protect indigenous cultural communities and their ancestral lands to ensure their economic, social and cultural well-being. Another economic provision of the Constitution, particularly Article XIV, also provides that the control and administration of should exercise their duty in accordance to what is right, legal and fair,” Valdez said. When asked what is really at stake in ongoing efforts to oust Sereno, Valdez said: “It’s not about the legality. It is whether justice is done in a fair and equitable manner, in the language that the people will understand. That is what is at stake.” Valdez also expressed belief that the people will not allow any effort to circumvent the laws in order to remove Sereno. “I don’t think the people in their collective sense will allow that…what will prevail is check balance in action and sense of fairness. Any abuse should not be tolerated,” the former law dean said. Law yer Josa Deinla, one of Sereno’s spokesmen in her impeachment case, believes that the integrity and the independence of the Judiciary are at stake considering the “concerted extra-constitutional effort” to oust her. “We do not want to speculate on the motivation of the proponents behind the impeachment. [But] definitely, it is not motivated by a genuine desire to exact accountability as the allegations are bereft of any truth. It could be many things, but none of them would serve to preserve the integrity, as well as the independence of the Judiciary,”
educational institutions shall only be vested, again, in citizens of the Philippines. It said educational institutions, other than those established by religious groups and mission boards, shall be owned solely by citizens of the Philippines or corporations or associations at least 60 percent of capital of which is owned by such citizens. Meanwhile, Article XVI emphasizes that the ownership and management of mass media shall be limited to citizens of the Philippines, or to corporations, cooperatives or associations, wholly-owned and managed by Filipino citizens.
Charter change
DESPITE the good intentions behind these economic provisions, members of the House of Representatives are focusing on amending the Charter. These lawmakers, who will be members of the constituent assembly that will amend the 1987 Constitution, have said “now is the right time” to review and liberalize what they deem as “restrictive” provisions of the charter to attract more foreign direct investments. Last December President Duterte ordered the creation of a consultative committee to review the 1987 Constitution, including economic policies enshrined in the Charter. Last January Rep. Roger G. Mercado, the chairman of the House Committee on Constitutional Amendments, said they would closely coordinate with the consultative committee created by Duterte. “The creation of the committee is a welcome development toward the plan to revisit or amend the Constitution,” Mercado said. “The creation of the committee would be a great help for us in drafting this historic Constitution.” The move to amend the 1987 Constitution comes 31 years after it was ratified by a nationwide plebiscite on February 2 that year. To be continued
Deinla said. But, Deinla explained that as long as the House of Representatives and the Senate would adhere to the factual and due process standards in dealing with the case of Sereno, the impeachment process should not have any inimical effect on the independence of the Judiciary. “If these standards, however, are disregarded for the sake of political expediency, we are afraid that the process would only undermine such independence,” Sereno’s lawyer said. Although Sereno’s camp is seeing these concerted extra-constitutional effort to oust the chief magistrate, Deinla said they are now taking such actions seriously. “We see them more as sophomoric attempts at legal acrobatics that no serious practitioner of the law should pay attention to,” she said. Deinla reiterated their stance that these efforts are intended to muddle the issues and should be taken as “a sign of the impeachment proponents’ low regard for the merits of their own complaint.” But, Valdez, Joyas and Deinla all agreed that there should be a cordial relationship between the Judiciary and the Executive branch but not to the extent that the independence of the judiciary would suffer. Valdez said cordiality by being respectful toward each other is required. “If cordiality would be taken advantage of for personal gains, then it’s better to have enmities among them,” Valdez said. Joyas said a cordial relationship between the Judiciary and the Executitve branch is necessary but maintained that independence should not be sacrificed. “There must be a cordial relationship but not to the extent of sacrificing clear exercise of remedies and recourses, which are provided for under the Constitution by way of check and balance,” he said. Deinla assured that Sereno has been cordial and respectful to the President, despite the latter’s tirades against her. “Cordiality and respect among public officials, from the rank and file to the heads of the three branches, are expected at all times. The Chief Justice has nothing but cordial and respectful to the President and wishes to continue the same relationship while maintaining the constitutionally mandated independence of the Judiciary,” she added.
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Infra plan. . . Continued from A1
the country had a very high deficit. “Now that you have a fiscal space, the government has to look back and check whether its own policies are constraining the implementation because, if you don’t have the right technical people in place, then necessarily, project implementation will slow down,” Llanto said. He said he agrees with the thrust of the Department of Budget and Management (DBM) to “right size” the bureaucracy. This will ensure that agencies will have enough personnel to ensure that projects and programs are efficiently undertaken. This, Llanto said, is the right approach in terms of ensuring sufficient allocation of resources. People are resources and, without them, projects will take time to complete or just fail altogether. “I think the DBM is on the right path this time; it’s trying to assess the distribution of personnel across government agencies, meaning, to use the word, rightsizing approach. Rightsizing would mean providing government agencies an optimal allocation of skilled personnel and resources,” Llanto said. Habito said the duterte administration should also reconsider its preference for official development assistance (ODA). He noted that, more than the funds, the government can rely on the efficiency of the private sector when it comes to undertaking big-ticket projects through public- private partnerships (PPPs). “I was saddened by the shift from PPP [to ODA]. But its good that the economic managers are still open to PPPs,”Habito said.
BBB perpetuates ‘Imperial Manila’
There is also a need to distribute the projects equally among regions nationwide. He said this will prevent the impression that “Imperial Manila” still holds in this administration. Of the 75 flagship projects, around 25 are in Metro Manila and 19 were in Luzon. This means 44 of the 75 flagship projects—more than half—are in Metro Manila and Luzon. This, Habito said, could perpetuate the notion of an “Imperial Manila,” since only 18 flagship projects are in Mindanao and 17 are in the Visayas. Habito earlier said this will only worsen the GDP-growth distribution, which saw that Luzon’s share in GDP is at 73 percent in 2016. This share was at 66 percent in 2006 and 73 percent in 1996. The combined share of Metro Manila, Calabarzon and Central Luzon in the GDP was 63 percent in 2016. Metro Manila alone had a share of 37 percent. In 2006 the share of the industrialized areas in Luzon was at 56 percent, while Metro Manila’s share was 33 percent. In 1996 Habito said the share in GDP of Metro Manila, Calabarzon and Central Luzon was 53 percent, while Metro Manila’s share was 30 percent. “Metro Manila has become even more imperial, and the “Build, Build, Build” doesn’t do anything to change that,” Habito said. Around 20 of the 75 flagship projects have been approved by the Neda board. These include the Clark International Airport New Terminal Building Project, Mindanao Rail Project (Phase 1)—Tagum Davao Digos Segment, MRT-LRT Common Station Project, New Bohol Airport, Chico River Pump Irrigation Project, Laguindingan Airport, Cavite Industrial Area Flood Management Project, New Bohol Airport, PNR North 2 (Malolos-Clark Airport-Clark Green City Rail) and the New Centennial Water Source—Kaliwa Dam Project. Only the Clark International Airport New Terminal Building Project is up for implementation, but no civil works have yet begun.
‘Momentum is there’
But change and development always take time. Public Works Secretary Mark A. Villar assured the public that there is a plan, there is a vision and the builders are coming. “Well, to be fair, we’ve been here less than two years. You know we’re under construction, so I mean these major infrastructure projects don’t get finished [immediately,” Villar said.“The momentum is there, the planning is there, and as time passes, we’ll see more projects.” National Economic and Development Authority (Neda) Undersecretary for Investment Programming Rolando G. Tungpalan added that project approval is not the end, but only marks the start of project implementation.
Tungpalan said among the most important activities after project approval by the Neda Board is the detailed engineering design. This is a more refined project assessment to ensure that the project is not only within budget but also will be of the right quality. “They have to do a good detailed engineering design so that they know what foundation, the strength, so you never see that on the ground. So do not be misled by no activity [even if a project is] approved, because most of them are in the detailed engineering stage,” Tungpalan explained.
The promise
The Duterte administration aims to spend P8.4 trillion for various infrastructure projects until 2022. This includes 75 flagship projects—which will bear the imprint of the President in Philippine society—and over 5,000 projects in the Public Investment Program. In July 2017 the Neda estimated that the Three Year Rolling Infrastructure Program (TRIP) 2018 to 2020 will cost P3.55 trillion. But the numbers are expected to increase. As of January 2018, Neda documents obtained by the BusinessMirror stated that the TRIP for 2019 to 2021, in terms of cash-based appropriations, will reach P3.66 trillion. In 2019 the amount will reach P1.05 trillion, or 5.4 percent of GDP; in 2020, P1.22 trillion, or 5.8 percent of GDP; and in 2021, P1.39 trillion, or 5.9 percent of GDP. Not all these projects, however, will be evaluated by the interagency Investment Coordination Committee (ICC) of the Neda Board, which requires a minimum cost of P2.5 billion for each project. For 2019 only 11 projects will go through the ICC; for 2020, five projects; and 2021, two projects. Of all the projects in the next three years, around 77 will require right of way acquisition (Rowa) and two will require resettlement. The government will invest some P4.86 billion for Rowa and resettlement in 2019; around P4.52 billion for 2020; and P932.77 million for 2021. However, the Neda said the investment estimates for 2019, particularly, may further increase because some project proposals have not yet been completed and received by the Neda. These agency proposals are estimated to increase the cash-based appropriations needed for infrastructure projects to P1.3 trillion in 2019.
The way forward
To see to the implementation of the “zeroto 10-point agenda,” the President issued Executive Order 24 creating, among others, the Infrastructure Cluster (IC). The IC is chaired by the DPWH and cochaired by the Neda. Tungpalan said the IC, as opposed to the Infrastructure Committee (Infracom), is focused on the implementation side of projects. The Infracom is focused on policy, strategy and programming, such as the creation of master plans. The IC will be in charge of addressing immediate project concerns, such as Row, and other operational issues to ensure that projects remain on track. “It’s a quick way to get things discussed quickly and hopefully solutions agreed to. It’s not a policy-making body unlike the Neda Board Committees, [which] have policy-making [functions] that’s confirmed with the Neda Board. The IC doesn’t formulate policies,” Tungpalan said. This is just one of the key changes that the government instituted to speed up, not only project evaluation, but also implementation. In 2017 Tungpalan identified major changes in the Investment Coordination Committee to speed up project approval. These include the creation of the Project Facilitation and Monitoring and Innovation Task Force, which aims to ensure that flagship projects are implemented and completed on time. Another initiative that sought to hasten project appraisal and approval process is the $100-million Infrastructure Preparation and Innovation Facility (Ipif ). The Ipif now covers 21 projects from the indicative list of 19 projects. The list now includes eight road and bridge projects; six water projects; and six rail, public transport, port and airport projects. “To be fair, infrastructure projects do not mean that in six months these will be completed. The major ones take a year or two. So that’s why I’m saying two years into the administration, we’ll start feeling the effects of some of the projects. As we go further, we’ll feel even more,” Villar assured.
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crackdowns on passport fixers lead to arrest of 23
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he Department of Foreign Affairs (DFA) last Sunday announced that at least 23 individuals, who sold passport appointment slots, were arrested in separate entrapment operations in DFA-Aseana, Parañaque, Pasay and Taguig. Chief Supt. Tomas Apolinario, Southern Police District (SPD) director, said policemen acted out as passport applicants as a result of its surveillance work done on different DFA offices in the National Capital Region since February 15. The suspects were nabbed last Thursday and will face charges for violation of Republic Act 9485, or the AntiRed Tape Act, and estafa, among others. Ricarte Abejuela III, acting director of the DFA Passport Division of the Office of Consular Affairs, extended gratitude to the SPD for its swift action, further warning fixers of a similar fate if they continue with their illegal activities. The DFA official also reminded passport applicants to shun individuals who claim they can get passport appointments for a fee. “Scheduling an appointment online is completely free,” Abejuela said, adding that all Facebook postings offering passport appointments are scams. He noted that the DFA opens slots daily for the March-to-June passport appointments. “Applicants should just be prompt and alert because the demand is so high we run out of slots very fast,” Abejuela said. A police report identified the 23 fixers as Nenita Ugalde, 63; Noelito Ven-
tura, 46; Marlon Narvaez, 35; Amalia Tagarilo, 44; Marilyn Tabay, 52; Michael Montel, 42; Alejandra Sacdalan, 48; Jonathan Tagarino, 46; Yolanda Villanueva, 45; Gina Carbon, 47; Maila Caluya, 47; Ligaya Banares, 63; Zaldy Pelonia, 52; Lilia Felix, 54; Roselyn Oliveros, 28; Rosalinda Zamora, 40; Criza Mae Castor, 24; Aileen Casita, 51; Marivic Arojo, 33; Mark Justine Doromal, 29; Ricardo Rojas, 50; Vilma Evite, 46; and Evangeline Soriano, 52. The surveillance, according to the DFA, was done upon its request following reports regarding fixers selling the passport appointment slots for a fee. As the DFA tries to resolve the problems in its passport appointment system, it assured it is conducting initiatives to at least satisfy demand. Abejuela said the DFA has already launched the Passport on Wheels (POW) program, where four POW vehicles make rounds in various local government units to process applications of those waiting to secure an appointment. He added that the DFA also started Saturday operations at Aseana office since February 10 to accommodate more passport applications. It also has plans to open eight more consular offices and launch an e-payment system to make things easier for passport applicants. “Let us not patronize these unscrupulous individuals. Rest assured that the DFA is doing its best to offer the best services to the public,” he ended. PNA
Editor: Vittorio V. Vitug • Monday, March 5, 2018 A3
Calabarzon PDEA director, 61 personnel discharged
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By Rene Acosta
@reneacostaBM
regional director of the Philippine Drug Enforcement Agency (PDEA) and 61 others, including agents, have been relieved of their posts following irregularities in the conduct of their antiillegal-drugs operations.
PDEA Director General Aaron Aquino relieved Archie Grande, director of the PDEA Regional Office in Calabarzon, and 61 agents and administrative and technical personnel assigned in the operations unit group. “They were discharged from duties after intelligence reports linking them to a series of unlawful arrests and extortion activities in the provinces of Batangas and Cavite,” Aquino said. According to reports, those relieved were also involved in the unlawful issuance of PDEA regionalized identification cards (IDs) to confidential assets or informants. On February 24 a certain Jhay-R Repana, 31, who introduced himself as a PDEA agent, was involved in a shooting incident in Barangay BF Homes, Parañaque City. Repana was later arrested in a follow-up op-
eration by local authorities in a hospital in Santa Rosa, Laguna, resulting in the seizure of one plastic sachet of shabu, drug paraphernalia and a firearm inside his vehicle. A certain Joseph Martin Patrick Borjal, who tried to assist Repana to the hospital, was also apprehended after showing a PDEA ID alleging he is a confidential agent. “PDEA does not issue IDs to nonorganic personnel, including assets and confidential informants. We only authorized the issuance of an ‘Agent’s Agreement’—a project-based contract [maximum of six months] to them, to perform intelligence works against specific high-value targeted [HVTs] drug personalities,” Aquino noted. Aquino added that he will not hesitate to dismiss the relieved personnel if evidence so warrants. “Those personnel are now undergoing thor-
ough investigation and were placed in the agency’s administrative holding unit. If they are found guilty after due process, we will dismiss them right away,” he said. “Once the credibility of an organization is put at stake, in this instance, the PDEA, we will not tolerate anyone who deliberately besmirch its integrity. We will remove rogue agents from our ranks so they will not have the chance to influence the others,” he added. The PDEA chief reiterated his warning to the public to be wary against unscrupulous people who masquerade as agents out to discredit the agency. He encouraged the public to remain vigilant in spotting these impostors. On February 4 several persons wearing fabricated PDEA uniforms, while tagging along alleged arrested drug personalities and were aboard two vehicles, were captured on closed-circuit television cameras in Barangay Ususan, Taguig City. However, the same group managed to elude arrest after engaging the authorities in hot pursuit in the same barangay two weeks later. The Taguig City police identified the suspected fake PDEA agents as Ryan de la Cruz, Noel Rosas, Anthony Ordoñez, Myrene de Vera, Ghakiez Tekma and Aristotle Go Quintana. Three others were not identified. The suspects are now facing charges for kidnapping, violation of Republic Act 7610, or the Antichild Abuse Act, and usurpation of authority.
Economy
A4 Monday, March 5, 2018 • Editors: Vittorio V. Vitug and Max V. de Leon
BusinessMirror
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Pids to review govt’s free-tuition policy
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By Cai U. Ordinario
@cuo_bm
he Philippine Institute for Development Studies (Pids) will soon conduct an evaluation of the Duterte administration’s freetuition policy as it seeks to conduct more project evaluation studies in the next four years.
Newly installed Pids President Celia Reyes, who is the first female head of the government-run think tank, told the BusinessMirror in an interview that the review of the free-tuition policy was requested by the Pids Board of Trustees. The Board of Trustees includes Socioeconomic Planning Secretary
Ernesto M. Pernia, who sits as chairman, and members Raphael Perpetuo M. Lotilla of the Philippine Center for Economic Development and the University of the Philippines School of Economics and former Pids President Gilberto M. Llanto. “The board has requested that we also take a look, even if it is still at
the very initial stage, an evaluation of the free-tuition program. We need to look at the actual impact both in terms of the budget implications, as well as impact on the private education sector, and whether the poor are actually benefiting from the program,” Reyes said. Apart from project evaluations, Reyes said that, in the next four years of her term as president of the Pids, the think tank will also focus on forging linkages with research institutes abroad. Recently, she said the World Inequality Laboratory, led by economists from the Paris School of Economics and University of California Berkeley, approached the Pids for possible research collaboration. Reyes said this is an opportunity for the Pids to learn new research methods and approaches, as well as increase its exposure in doing collaborative research that will allow the
Group submits new bid for regional airport hub By Lorenz S. Marasigan @lorenzmarasigan
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NOTHER group has officially pitched in a $12-billion unsolicited proposal to solve the airport-congestion problems in Metro Manila, promising to deliver a new “aerotropolis” that will compete for traffic with air hubs in Asia. The proposal, submitted by Sangley Airport Infrastructure Group Inc., involves the development of the Philippine Sangley International Airport (PSIA), which is envisioned to be a regional airport hub that can accommodate about 120 million passengers every year once fully developed. Led by Solar Group’s All-Asia Resources and Reclamation Corp. (ARRC) and the Sy family’s Belle Corp., the company proposed to create a new air metropolis that involves the reclamation of about 2,500 hectares of land, the rehabilitation of the Danilo Atienza Air Base and the construction of the PSIA. Under the proposal, the group intends to reclaim 500 hectares of land north of the Sangley peninsula, which will be used for the development of airport infrastructure and a commercial establishment to complement the project. The Danilo Atienza Air Base, according to the group, will be rehabilitated to accommodate general
aviation movements, thus reducing congestion at the decades-old Ninoy Aquino International Airport (Naia) during its development. “Upon inauguration, the Danilo Atienza Air Base area will be transformed into an aerotropolis district, where service buildings, office towers, hotels, conference centers and other related developments would be established,” the group said in a statement. The PSIA will be designed with two parallel independent runways and sufficient airside and terminal capacity to accommodate future demand for domestic, international and transfer traffic, “not only for the Philippines but for all Southeast Asia.” “The new airport hub is also envisioned to compete with other premier Southeast Asia airports like the ones in Bangkok, Seoul, Hong Kong and Singapore,” the group said. Its design is “optimized” in relation to wind conditions and obstacle limitation surfaces zones. The new airport will also reduce restrictions on land in Metro Manila while also operating with a significantly reduced noise impact than the Naia due to its new location off Manila Bay. The proposed concession period is 50 years. “The project supports the government’s multi-airport strategy as it complements other airport infrastructure projects of the government such as Clark International Airport,”
the group said. Given its design, the airport is also envisioned to “put the Philippines on a par with other progressive countries in Asia in terms of airport infrastructure as it allows an expansion of both runway and terminal capacity with lesser constraints.” The project will be conducted at no cost to the government and is seen to open a new regional gateway that can accommodate “millions of passengers and significantly help increase tourist arrivals.” Aside from this, there are several unsolicited proposals that the government received for the development of airports in Metro Manila. San Miguel Corp., for instance, proposed to build a $15-billion airport in Bulacan. It received the original proponent status for the said offer recently. This proposed airport is seen to replace the Naia. Two other proposals, on the other hand, involve the redevelopment of the Naia. One group, called the Naia Consortium, proposed to spend P350 billion to develop the decades-old air hub over a period of 35 years. Megawide Construction Corp., on the other hand, offered to spend about $3 billion to rehabilitate, modernize and expand the decades-old airport over a period of 18 years.
Decision day: To close or not to close Boracay
Pids to look beyond the Philippines. “In particular, I’d like to promote global partnerships. This means working with international research institutions outside the Philippines and doing collaborative research. The other is enhancing the research process within Pids,” she said. “As there has been a big demand for Pids research outputs, we should ensure that we provide very good policy recommendations and we can do this by enhancing the research process,” she added. Last Thursday Reyes took her oath as the sixth president of the 40-year-old think tank. She is the first female president of the Pids and will take over the reigns from Llanto, who will become part of the Pids Board of Trustees. Reyes specializes in the field of econometrics and has conducted and published numerous research and policy papers on poverty as-
sessments and evaluations of socialprotection programs. She is also the network leader of the Community-Based Monitoring System (CBMS), providing free technical assistance to local government units in the country in the implementation of the CBMS. The CBMS is a local poverty-monitoring tool she developed under the Micro Impacts of Macroeconomic Adjustment Policies project. As an expert in poverty research, Reyes has been engaged as project leader and resource person in various consultancy projects of international organizations, such as the Asean Secretariat, United Nations Children’s Fund, United Nations Development Programme, Australian Agency for International Development, Canadian International Development Agency, Oxford Poverty and Human Development Initiative, International Development Research Centre and
World Bank, among others. She has also served as president of the Philippine Economic Society in 2011 and has been an adviser to various national government technical working groups on poverty monitoring and indicator systems in the country since the early-1990s. Reyes is currently the chairman of the interagency committee on poverty statistics convened by the Philippine Statistics Authority, as well as the editor in chief of the Philippine Journal of Development, the Pids’s multidisciplinary socialscience journal that publishes policy-oriented studies and researches on development issues in the AsiaPacific region. Reyes is a cum laude graduate of Bachelor of Science in Statistics at the University of the Philippines and has a Doctor of Philosophy degree in Economics from the University of Pennsylvania.
Moving from Creative Industries to Creative Philippines
‘C
reative Philippines” was the battle cry used at a highly interactive roundtable organized by Arangkada Philippines last week to discuss “policy changes, initiatives and recommendations” to get “Creative Industries” into the position they deserve. And we were not talking about the position in this country only, we had clear ideas what role Creative Philippines should play in the Association of Southeast Asian Nations and beyond. The excited and exciting participants came from all major creative sectors, with main focus on: Advertising, digital marketing and graphic design; Animation and film; Architecture and interior and product design; Fashion and lifestyle; Software and game development; and Visual and performing arts. It was well understood that the Creative Economy of the world today goes beyond the subsectors mentioned above; it recognizes the role of creativity throughout the economy. It includes policies that nurture Creative Clusters and encourages cities and communities to embrace creativity to attract creative people to live and work together. It became obvious that the creative Filipino makes the difference, from performing on Broadway to creating animations for studios in Hollywood and Central Europe; from designers in many parts of the world to more than 1 million creative Filipinos working as freelancers from Batanes to Tawi Tawi. It is unfortunate that the contribution of creative industries to
mestically and internationally. Providing grassroots creative education and training is a must.
creative philippines By Henry Schumacher the Philippine economy remains unmeasured. But the participants decided not to look back but move forward and create a public-private dialogue / partnership in making use of the battle cry Creative Philippines and look at incentives for the sector and create the financial, educational and technology infrastructure and support to develop the creative industries as an obligation by government and the private sector. It was clearly understood that investors in this sector have to be targeted and invited from around the world, while the locally created intellectual property needs to be exported (after the intellectual-property rights have been secured). The participants from government and the private sector also discussed the “7Ps for a successful Creative Economy,” developed by Tom Fleming, Creative Consultancy/British Council:
PERCEPTION—elevate Creativity as a National Priority. Build, for example, Creative Philippines as a brand to market the Philippine creativity internationally.
PESOS— build business and government confidence behind investing in Philippine creative industries and creative enablers, for instance creative hubs, etc. Demonstrate how creative industries can have higher long-term growth potential than other industries. PLACE—the Philippines has to build creative places that attract a wide cross-section of creative people; such creative cities, clusters, communities or hubs are necessary to ignite a virtuous circle of continuous innovation and creativity. PIPES—strengthen fundamental “hardware” and “software” needed for creativity to thrive; access to highspeed Internet in all key cities—and beyond—are needed; investments in creative cultural incubation spaces are needed too. PROPERTY—develop a robust roadmap to grow and protect the “Intellectual Properties Treasury” of the country in innovation (patents) and content (copyrights and trademarks). PICTURE—develop a consistent data framework and feed to measure and analyze the country’s creative economy progress. There is no doubt in my mind, that the roundtable set the stage to make Creative Philippines happen.
protect Filipino Creative Workers do-
Comments are welcome—contact me at Schumacher@eitsc.com.
Sen. Juan Miguel F. Zubiri, chairman of the Committee on Trade and Finance, said he will be proposing a bill to create a Boracay Island Development Authority, a private sector-led body that will oversee the development of the popular island resort. He added this would be something similar to the Subic Bay Metropolitan Authority. Teo said she agrees with Zubiri’s proposal: “Maybe the government can handle it first, then turn it over to the private sector.” Meanwhile, Cimatu said he will be presenting at the Cabinet meeting on Monday “the outcome of the less-than-one-month compliance to [President Duterte’s] directive [to fix Boracay’s problems]. Without finishing the sewage system, I can’t say [if we will close the island.]” BIWC has been tasked to connect its two sewerage-treatment plants to maximize their use. At present, one is underutilized, while the other is overused. The DENR chief stressed it was “really impractical” to close the island to tourists immediately as Año wanted, if its problems have not yet been solved. “This will depend
on the total things I’m doing now. The compliance to easement [rules]. The compliance to solid waste [law]. There are problems other than the sewage issue. This is an integrated problem, and we’re trying to solve it one by one.” He cited traffic congestion along the main road of the island as a major issue, as well. “We are even looking to [construct] a diversion road and we have been discussing that we have to do it immediately so we can decongest. If there is a diversion road, the problem of congestion will ease. We have an integrated approach to the problems. When after several months, when everything is okay na, then only then can I make a recommendation [to close it or not].” Año had told task force members he wanted an immediate closure while time was still on its side, and it will be able to implement rehabilitation plans for the island before the establishments found to have violated env ironmenta l and easement laws can file cases against the government.
PEOPLE—recognize, value and
continued from a1
secretary-designate] Gen. [Eduardo M.] Año wants to close off the island immediately, so demolitions of illegal structures could be done and the sewage problem can be resolved. [Tourism] Secretary [Wanda Corazon T.] Teo wants it to be closed during the habagat [monsoon] season. [Environment] Secretary [Roy A.]
Cimatu still has questions, but is considering it.” Other gover nment sources noted that the Cabinet secretar ies shou ldn’t be hast y on recommending the island ’s closure. “ The President gave the task force six months to solve Boracay’s problems. Only then will he consider to close it or
not. Ba’t nila pinangungunahan si Presidente?” After the Senate hearing last Friday, Año told the BusinessMirror that Task Force Boracay “would relay to the President what was discussed today because it was he who said, if there would not be any changes, ‘I will close it.’ He means business. If it can be shown that everyone is willing to contribute to save Boracay, then the President will reconsider it.” The senators had asked the task force not to include the closure option in its recommendations. It was revealed at the hearing that there were about 19,000 workers on the island who will lose their only source of income if the island is closed. (See, “DENR chief wants Boracay to remain open,” in the BusinessMirror, March 3, 2018) Last Thursday and Friday members of the task force, which include officials of the Departments of Environment and Natural Resources (DENR), Interior and Local Government and of Tourism, conducted marathon meetings to
discuss several issues pertaining to the easement and sewage issues, as well as the need for baseline figures for the body to be able to make its proper recommendations to Duterte. The task force is composed of the three agencies and will be expanded to include the departments of Justice and of Public Works and Highways. One of the issues raised during the meetings was the number of local government and DENR officials who are responsible for the problems Boracay is now facing. Another point raised is the carrying capacity of the island and what year was it breached. The DENR is expected to determine how many people—tourists, local population and workers—the island can still carry. Tourist arrivals on the island grew from 634,263 in 2008 to some 2 million in 2017, indicating an average growth of 13.2 percent in 10 years, data from the DOT showed. Partial data also showed there were 430 resorts with 14,697 rooms in 2017, up from 408 resorts with 11,246 rooms the previous year. At the Senate hearing last Friday,
Agriculture/Commodities BusinessMirror
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PIDS: Govt should pursue agri-venture schemes, block farming
T
he Agribusiness Venture Arrangements (AVAs) and Sugarcane Block Farming (SBF), two government initiatives aimed at boosting farm productivity and income of agrarian-reform beneficiaries (ARBs), should be encouraged. According to a study by state think tank Philippine Institute for Development Studies (Pids), AVAs and SBF can be successful as long as adequate government support is given to ARBs from the farm production stage to marketing and postproduction activities. Likewise, the government must provide a policy environment for Philippine exports crops to be competitive. Three of the country’s biggest export crops—banana, pineapple and sugarcane—have been covered under the Comprehensive Agrarian Reform Program (CARP). Through AVAs, ARBs who were awarded with lands planted with high-value crops, such as banana and pineapple, can implement an agribusiness venture with private investors to make farming more economically viable for them. Meanwhile, sugarcane farmers owning farms that are 10 hectares or less can set up cooperatives or organizations through SBF to consolidate their operations and attain economies of scale. Recently, however, AVAs and SBF have been the subject of increasing scrutiny following reports that ARBs have not been successful in their partnerships with private investors as shown in a 2016 study of the United Nations Food and Agriculture Organization. These have prompted lawmakers in both houses of Congress to propose legislations to review the AVAs and change some of the provisions governing how they are implemented. “While it is true that many farmers have entered into one-sided contracts, there are also existing arrangements which have benefited the farmers as indicated,” the authors of the PIDS study maintained. Thus, they suggested that it may be worthwhile to look into the conditions of the successful AVAs that can be inputted in the proposed bills. To strengthen the implementation of AVAs and SBF, the authors noted that the persistent problems faced by ARBs need to be resolved. First, they noted that farmers or
cooperatives should have security of tenure over the land awarded to them so that they can partner with private investors. They added that “labor, farm machinery, and irrigation should also be available and accessible to them.” Provision of credit is another necessity highlighted by the Pids study. It cautioned that unless capital is provided, individual farmers will always be tempted to go into a lease agreement without thinking of its consequences. “Financial assistance is needed by the farmer to ensure that recommended inputs are applied. If government cannot provide the needed capital, it should look into the possibility of providing subsidized inputs to farmers or cooperatives,” the study suggested. Since banana, pineapple and sugarcane are export crops, the government does not have control over their prices. However, the study pointed out that the government can provide the necessary policy support, such as pushing for lower tariffs for banana and pineapple. Doing so can potentially increase the country’s share in the global market for these high-value crops, which, in turn, will benefit local farmers. For the SBF to be successful, the Pids study recommended that the Department of Agrarian Reform must sustain the support services being given to the ARBs. It also urged the government to lobby for the imposition of a quota on corn syrup after 2018 to ensure that the local demand for sugar will increase. “Corn syrup, which is from China, was identified as a sugar substitute only in 2017 and, therefore, an importation quota has not yet been set. This reduced the demand for sugar by soft drinks companies, which, in turn, led to a decline in sugar prices,” the authors explained. The study cautioned that creating a new government entity that would address the needs of the banana and pineapple industry is costly and tedious. According to the authors, it may be more practical and feasible for the Department of Agriculture or the Department of Trade and Industry to create a section within its organization that will look into the concerns of the two industries.
BENGUET’S CASH CROP Farmers in upland areas in Benguet province harvest
cabbage, one of the high-value crops grown in the area. The produce would be delivered to the La Trinidad vegetable trading post and lowland markets. LAILA AUSTRIA
Editor: Jennifer A. Ng • Monday, March 5, 2018
Let traders import rice freely–experts L
By Cai U. Ordinario
@cuo_bm
ocal economists called on the Duterte administration to remove the legal monopoly of the National Food Authority (NFA) to import rice if it wants to stabilize the price of the staple.
According to economists belonging to the Foundation of Economic Freedom (FEF), it is only when the government is given the sole authority to import the staple that the Philippines faces periodic situations of unstable supply with rising rice prices. “If private traders can freely import rice, they can quickly respond more to the needs of the rice market. The price of rice in our rice-exporting neighbors is about half the domestic price of rice,” the FEF said in a statement sent over the weekend. “There is no reason rice prices should become unstable and rise since there is plentiful supply from our neighboring countries that can be easily tapped by our private traders,” it added. The FEF also said the NFA is “at fault for giving the rice cartel room to manipulate rice prices” simply
because it failed to immediately import rice when its stockpile started to go down below the required 15-day level. The economists said the NFA did not restock its emergency rice inventory to the required 15-day level in case of emergencies and natural calamities. This despite the the Marawi City siege and the eruption of Mayon Volcano in Albay. The FEF said the rice stock in NFA warehouses caused rice traders to get “greedy” and raise rice prices to P40, P45, P50 or P60 per kilogram (kg), depending on the quality. The group noted that it was only at this time when the NFA sought the President’s clearance to import 250,000 metric tons of rice to beef up its supply, a move that would have been more effective if done sooner. Last month the NFA said it sought the NFA Council’s (NFAC) go signal to
Milk co-op mailing highlights suicide risk for dairy farmers
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ONTPELIER, Vermont— Accompanying the routine payments and price forecasts sent to some Northeast dairy farmers last month were a list of mental-health services and the number of a suicide prevention hot line. The Agri-Mark dairy cooperative got the resources out to its 1,000 farmers in New England and New York following the suicide of a member farmer in January, and one the year before. “I know there’s a number of farmers out there that are under such tremendous stress that we’re worried about that same thing happening,” said Bob Wellington, an economist for Agri-Mark Inc., which owns Cabot Creamery. Farmers are facing their fourth year of payments well below their cost of production, due in part to a national and global oversupply of milk, he added. Prices paid to farmers hit an average of $24 per hundred pounds of milk in 2014, the highest price since at least 2000. They quickly dropped to an average of about $17 per hundred pounds of milk in 2015, $16 in 2016 and $17 last year. “They’re really getting frustrated, getting concerned and in some cases they’re getting almost desperate about how they’re going to pay their bills, how they’re going to support their families,” Wellington said. The farm prices have no direct correlation with what consumers pay for milk.
According to a 2016 Centers for Disease Control and Prevention report , people working in farming, fishing and forestry had the highest rate of suicide. Agri-Mark is also creating its own assistance program for its members and isn’t alone in its concern. “Financial duress magnifies some of the personal issues like depression, or anxiety, or something else that’s underlying can be triggered by a severe economic downturn in the dairy industry,” said Ed Staehr, executive director of NY FarmNet, a free confidential service for New York farmers that offers personal and financial consulting at their homes. Vermont has a similar program called Farm First.Minnesota has set up a free, 24-hour confidential help line as stress, anxiety, depression, financial burdens, and other mental and emotional problems continue to affect farmers and other rural residents. It also provides workshops for people who work with and serve farmers, such as bankers and suppliers, to understand mental health. Since the department started promoting the help line in early-October through December, 39 calls came in including from a few suicidal farmers and others who called about fights with a spouse, anxiety or physical manifestations of stress, like not sleeping, said Meg Moynihan, a dairy farmer and adviser for the Minnesota Agriculture Department. AP
import rice as early as November. “If the NFA had the stocks, NFAC Chairman Leoncio Evasco can address this issue by injecting more NFA rice into the market. But without adequate stocks, NFA cannot effectively bring down the price. Accordingly, the poor will have to pay more for the rice,” FEF said. “This shows that behind every attempt by the rice cartel to manipulate rice price is a mistake of the NFA.” Earlier, senators urged the government to raise the support price of the NFA. The increase in its buying price aims to encourage farmers to sell their harvest to the food agency.
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National Economic and Development Authority (Neda) Undersecretary for Planning and Policy Rosemarie G. Edillon, however, said that apart from the indebtedness of the NFA, increasing the support price of the NFA would accelerate inflation. Also, prices become volatile whenever the NFA imports rice and then floods the market with cheaper rice. This causes commercial rice prices to decline steeply. While it has yet to run the estimates of how much a P1 to P3 hike in NFA support price will impact on inflation, Edillon said it is likely that the Nedawould thumb down proposals to increase it.
Banking&Finance BusinessMirror
A6 Monday, March 5, 2018 • Editor: Jun B. Vallecera
www.businessmirror.com.ph
51st annual ADB meeting ‘High inflation a knee-jerk reaction in Manila to feature experts to recent reforms’ on global economic trends By Bianca Cuaresma
By Rea Cu
@ReaCuBM
I
nfluential thinkers in the fields of international economics, history and digital technology are set to speak on global economic trends that will shape the world’s future in a runup to the 51st Annual Meeting of the Board of Governors of the Asian Development Bank (ADB) in Manila in May, the Department of Finance (DOF) announced last Sunday. The DOF said historian Peter Frankopan and economist Paola Subacchi will be among the key speakers at the May 4 forum hosted by the Philippines, which will also include Dr. Naoyuki Yoshino, dean of the ADB Institute, as one of the panelists. Frankopan is a professor of
global history at Oxford University, while Subacchi is an expert on international financial and monetar y systems and is the former director of International Economics Research at Chatham House. The 51st ADB Annual Meeting, to be held from May 3 to 6
at the ADB headquarters in Mandaluyong City, will be attended by the finance and development ministers and central bank governors of the ADB’s 67 membereconomies, of which 48 are from the Asia-Pacific region. Finance Secretary Carlos G. Dominguez III, who is this year’s chairman of the ADB Board of Gover nors, sa id some 3,0 0 0 representatives from the bank ’s development partners, private sector and civil society organizations, media and the academe are expected to take part in the four-day event in Manila. This year’s annual meeting, with the theme “Linking People and Economies for Inclusive Development,” will be preceded by a series of conferences meant to examine the changing global and regional realities and challenges and, more impor tant, determine how the bank can play an “even more effective role” in helping attain inclusive growth for the poorest communities in its member-economies, Dominguez said. The finance chief said the slew of discussions in the upcoming ADB annual meeting on inclusive growth are in sync with the
Duterte administration’s strategy on economic inclusion, which is through massive investments in infrastructure projects that will link communities to the mainstream of wealth creation, and higher spending on social services such as health care and education to liberate millions from poverty at the soonest possible time. He said the Philippines’s hosting of the ADB Annual Meeting is “fortuitous” for the country, as it will provide the government the opportunity to set the spotlight on the domestic economy’s strong growth, and its reform agenda to sustain and make it inclusive by improving living standards and dramatically bringing down the poverty rate by 2022. Before this year’s event, 15 previous annual meetings were also held in Manila, with the most recent one in 2012 and an earlier small-scale meeting in 2003. Headquartered in Manila and established in 1966, the ADB is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration.
Perspectives Global fintech funding remains strong to close out 2017
D
uring the fourth quarter of 2017, financial-technology (fintech) funding globally remained steady, with $8.7 billion invested across 307 deals. The solid quarter helped propel annual global fintech funding to over $31 billion—equaling the amount raised in 2016, though falling short of 2014 and 2015 when a frenzy of investment spiked results to extraordinary levels.
Early fintechs maturing beyond niche beginnings
The concept of fintech has matured greatly since its inception. Early innovation area, such as payments and lending, have seen strong maturation, with more established fintechs now looking to move beyond niche markets to offer adjacent services and, in some cases, full stack solutions. For example, Europe has seen a number of fintechs (e.g. Klarna, Zopa and Revolut) apply for banking licenses in order to expand their product offerings. Meanwhile, countries like Australia and the US are mulling over the introduction of fintech-focused banking licenses, which could spur investment over time should they move forward.
Characteristics of fintech investors changing
While venture capital (VC) fintech deals’ volume has declined significantly over recent years, particularly at the angel and seed-stage levels, this decline is partly a result of the evolution of fintech as a whole. Both fintech companies and investors have matured significantly—with maturing companies looking for bigger rounds of funding, and investors shifting their focus from making widespread investments to placing bigger bets aimed at achieving value or sustainability.
Corporate investors becoming more strategic
Globally, corporate investors have also changed their approach to investing in fintechs. Initially, many corporates took a portfolio approach to fintech investing—providing smaller pools of money to a larger group of fintechs in order to develop a better understanding of opportunities and innovations. Now, corporate investors have become confident as to how fintech can help them achieve real value and are focusing on mak-
ing strategic investments that can help defend their profit pools or help them explore or expand into adjacencies.
B2B focus continues to be a key investor priority
Fintech focused on the B2B market, including payments platforms, SME lending platforms and SaaS solutions aimed at making back-office processes more efficient and effective remain a priority for fintech investors. Globally, many financial institutions face significant financial pressures and challenges, particularly related to regulatory reporting and compliance. With regulatory requirements only expected to rise in most jurisdictions, regulatory technology (regtech) solutions are becoming key focus areas for B2B investors and corporates.
Blockchain expectations high heading into 2018
Blockchain continued to garner a significant amount of attention from investors in 2017, with VC investment in particular achieving a record high of $512 million. Blockchain use cases continued to be developed in numerous jurisdictions. In Singapore, for example, three Asian banks and the Monetary Authority of Singapore (M A S) recently worked together to develop a blockchain proof-of-concept (PoC) aimed at streamlining know-your-customer (KYC) processes. Regulators and governments have been keenly supportive of blockchain efforts, particularly in the Middle East and Singapore. Blockchain consortia continued to be a key means for developing solutions globally, although the introduction of new consortia has slowed compared to previous years, while the makeup of older consortia has shifted dramatically. For example, insurance consortium B3i announced 22 new members in fourth quarter of 2017, while banking consortium R3 accepted insurance company AIA as a new member. Several consortia have also seen some members splinter off in order to form smaller, more targeted groups. There are signs that 2018 may finally see production capable blockchain solutions. For example, the Australia Stock Exchange announced that it would be replacing its equity settlements process in 2018 with a blockchain-enabled solution that it has
been pilot testing. The progress of this initiative could become a bellwether as to how blockchain interest and investment will unfold heading into the new year.
VC investment in insurtech rises over $2 billion in 2017
Insurance technology (insurtech) continued to be a hot area of fintech investment globally, with VC investment in particular reaching a record high of $2.1 billion in 2017. Numerous fintech companies sprouted worldwide over the year aiming to take ownership of myriad niche markets. Corporate participation in insurtech also remained very high. Insurtech offerings matured significantly during 2017, from advances in automation to the evolution of personalized insurance offerings, demonstrated by the growth of motor telematics insurance. New insurance business models also continued to evolve, with on-demand products growing quickly, and on-demand insurers Cuvva and Trov further developing and expanding their value propositions. Looking ahead to 2018, insurtech is expected to hit its stride in terms of investment. Traditional insurance companies are expected to take innovation up a notch, while blockchain consortia (e.g., B3i) are expected to expand and further develop and test specific use cases. Segments expected to heat up include autonomous vehicle insurance, cyber insurance, and aviation and drone insurance. Cor porates are a lso e x pected to increase their focus on the application of artificial inteligence in insurtech in order to make processes, such as underwriting, more efficient. The article “Global fintech funding remains strong to close out 2017” by Ian Pollari, KPMG International, was taken from KPMG’s publication entitled “The Pulse of Fintech Q4 2017.” © 2018 R.G. Manabat & Co., a Philippine partnership and a member-firm of the KPMG network of independent member-firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in the Philippines. For more information on KPMG in the Philippines, you may visit www.kpmg.com.ph.
@BcuaresmaBM
W
hile the economy is abuzz with the spike in inf lation rate and its implications going forward, an economist of Singapore-based DBS Bank said the significant rise in the prices of consumer goods may just be a “knee-jerk” reaction to recent reforms. In his commentary on the upcoming inflation numbers for February, DBS Bank economist Gundy Cahyadi said the higher growth in commodity prices as seen in early-2018 may just be temporary and fleeting. “While the surge in CPI [consumer price index] inflation took us by surprise, it remains to be seen how persistent was the impact from the tax reforms on general prices,” Cahyadi said. “At this juncture, we think that the impact was more like a knee-jerk reaction, although a more pronounced implication may still be felt through the impact on underlying price expectations,” he added. The Singapore-based economist forecasts a more optimistic tone to local inflation, saying the growth of consumer prices likely have reached 3.8 percent in February. This is lower than the Central Bank’s 4-percent to 4.8-percent inflation forecast range for the month. “As it is, higher food prices and the possibility of higher crude oil prices are enough to drive up price expectations going forward.
The upward trend in inflation persists,” the economist said. Earlier this week, the Bangko Sentral ng Pilipinas (BSP) said inflation could have reached as high as 4.8 percent in February, as higher food and utility prices continue to hound the economy. The BSP particularly said inflation could settle within 4 percent to 4.8 percent for February this year, which means the price growth will accelerate above the inflation target for the month. The government keeps a 2-percent to 4-percent target range on average for inflation in 2018. Failure to keep inflation within the target by the end of 2018 will warrant a public explanation by the Central Bank to the Palace. The BSP Department of Economic Research said the high inflation projection for the month is due to higher electricity and food prices in February. Should BSP’s inflation forecast be realized, the economy in February will see the highest acceleration of consumer prices since 2014. Cahyadi, meanwhile, said aside from inflation, eyes are also focused on the trade data this week, follow ing the multiyear high $4-billion deficit in December. “Robust investment growth will continue to support import g row th going for ward, while export growth may see some pullback this year, following a stellar year in 2017,” Cahyadi said. “As such, we continue to see a widening trade-current account deficit going forward,” he added.
LandBank acquisition of PDS shares to boost govt’s capital markets development program
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hE total acquisition cost of the 66.67-percent common shares of the Philippine Dealing System Holdings Corp. (PDS) at P360 per share will reach P1.5 billion, the Land Bank of the Philippines (LandBank) recently disclosed. LandBank President Alex V. Buenaventura said the bank will use corporate funds or existing capital for the purchase of the PDS shares. “ T he re a re 6 . 250 m i l l ion shares total; if we buy 66.67 percent, that w ill be equivalent to 4.167 million shares. If we buy at P360 per share, that will be a total buying amount of P1.5 billion,” Buenaventura told financial reporters. Last week LandBank’s Board of Directors approved the proposal to purchase at least 66.67 percent of the common shares of PDS at P360 per share. “Our offer of P360 per share is 12.5 percent higher than the PSE [Philippine Stock Exchange] offer of P320 per share. LandBank’s acquisition of PDS will not only serve as a potentially profitable investment but is also, more important, aligned with the government’s capital markets development program,” he added. In January this year, stateowned LandBank said it has started its own due diligence audit of the PDS, days after the PSE made known its plan to acquire the PDS. LandBank ’s plan to acquire more than three-fifths of PDS rivals the PSE’s proposed merger with the fixed income market. Landbank currently owns 1.56 percent of PDS through the Bankers Association of the Philippines,
while the PSE has 69.03 percent of the shares after signing a series of share purchase agreements with stakeholders. Finance Secretary Carlos G. Dominguez III said the LandBank’s proposal to acquire PDS will help promote the use of corporate bonds by small and medium industries in terms of tapping the capital markets. “We believe that the LandBank offer is generous and aggressive,” Dominguez said. Buenaventura earlier said that LandBank has long ago started its due diligence for the transaction and is currently in the process of securing the necessary regulatory approvals of the acquisition. This includes the application for regulatory relief from the Securities and Exchange Commission (SEC). “When we decided to offer to acquire, we already submitted to SEC an application for exemption from the 20-percent cap,” he added. Under the Securities Regulation Code, or Republic Act 8799, no single industry can exceed 20-percent ownership in an operating exchange. Rea Cu
www.businessmirror.com.ph
The World BusinessMirror
Editor: Lyn Resurreccion • Monday, March 5, 2018 A7
Trade war set: Trump threatens to tax EU cars
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nited States President Donald J. Trump set the stage for a trade war by slapping tariffs on steel and aluminum imports, daring other countries to retaliate and leading the European Union (EU) to warn that it would target iconic American brands. In turn, the US president put the European auto industry in his sights. Hours after Trump said in a Twitter message that “trade wars are good, and easy to win,” European Commission President Jean-Claude Juncker said the bloc was prepared to respond forcefully by targeting imports of Harley-Davidson Inc. motorbikes, Levi Strauss and Co. jeans and bourbon whiskey from the US. Juncker’s threat heightened the prospects of a global free-for-all, as the World Trade Organization (WTO) said the potential of escalating tensions “is real” and the International Monetary Fund warned the restrictions would likely damage the US and global economy. Trump tweeted last Saturday that “If the EU wants to further increase their already massive tariffs and barriers on US companies doing business there, we will simply apply a Tax on their Cars which freely pour into the US.”
Anger from Asia, Europe, Republicans
The president faces anger from manufacturers and trade partners in Asia and Europe, as well as from allies, such as Republican lawmakers, after announcing tariffs of 25 percent on imported steel and 10 percent on aluminum for “a long period of time.” He’s expected to sign the formal order as early as the coming week after certain formalities are completed, Peter Navarro, director of the National Trade
Council at the White House, said last Saturday in an interview on satellite radio. Commerce Secretary Wilbur Ross said last Friday the president has chosen to impose the tariffs on all countries and products, dimming the hopes for nations, such as Australia still pressing for an exemption. Trump in a tweet last Friday morning warned of more trade actions ahead, casting them as reciprocal taxes, a term he has used for imposing levies on imports from countries that charge higher duties on US goods than the US currently charges. “We will soon be starting RECIPROCAL TAXES so that we will charge the same thing as they charge us. $800 Billion Trade Deficit-have no choice!” Trump said in the tweet. The president last Saturday derided “our ‘very stupid’ trade deals and policies” of the past. Other countries “laugh at what fools our leaders have been. No more!” The aggressive stance stoked fears of an unchecked cycle of trade retaliation and roiled investors, who dumped stocks last Thursday. After the decision on tariffs initially depressed global markets, US stocks pared losses of more than 1 percent last Friday, while Treasuries slumped with the dollar as the wave of selling sparked by the threat of a trade war eased. The planned tariffs—justified on the basis that cut-price metal imports hurt both American producers and national security—now raise the prospect of retaliatory
Friday that China urges the US to follow trade rules.
‘Stupid’ move
Laborers work in the steel market in Yichang in central China’s Hubei province on August 1, 2016. China has expressed “grave concern” about a US trade policy report that pledges to pressure Beijing but had no immediate response to President Donald J. Trump’s plan to hike tariffs on steel and aluminum. Chinatopix Via AP
curbs on US exports and higher prices for domestic users.
To weaken international trade conventions
While the practical impact may yet turn out to be limited, the political environment for global trade has just taken a turn for the worse. Trump’s actions “could lead to other trading partners taking similar actions and could ultimately weaken the international trade conventions, like WTO rules, more generally,” according to a Goldman Sachs Group Inc. research note last Friday.
EU to retaliate
The EU is prepared to retaliate against select US imports in a way that would maximize political pressure on American leaders. Harley-Davidson is based in House Speaker Paul Ryan’s home state of Wisconsin, while bourbon whiskey hails from Senate Majority Leader Mitch McConnell’s home state of Kentucky. San Franciscobased Levi Strauss is headquartered in House Minority Leader’s Nancy Pelosi’s district. The CEO of Germany’s Siemens AG was the latest to slam the tariff plan.
How tariffs on metal may affect beer prices
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S President Donald J. Trump announced sweeping trade tariffs on imported steel and aluminum, raising the specter of a possible trade war, one question has repeatedly come up: Will Americans drink less beer? More than $100 billion in beer is sold in the United States a year, much of it in aluminum cans. And the industry has argued that proposed tariffs, up to 10 percent on aluminum, would amount to an unintended tax. It said people would lose their jobs as a result, and that higher prices for a six pack could drive beer drinkers elsewhere for their refreshment. The Trump administration has said that a flood of metals from other countries pose a threat to national security, and that the tariffs can help bolster domestic industries. To help make that point, Wilbur Ross, commerce secretary, appeared on CNBC last Friday, saying that there would be a minimal impact across industries. He had with him a series of props, including—what else?—a can of Budweiser beer. n Aluminum is great, and the US imports a lot of it. Beverage makers love aluminum cans because they chill quickly, stack easily and keep light out (something that’s especially important for beer). New production techniques mean the cans can be made with less and less aluminum. The wall of a can is 0.097 millimeters thick—about as thick as a human hair. Aluminum produced in the United States would not be subject to the tariff, but the US imports most of its aluminum. In 2016 52 percent of alu-
President Donald J. Trump’s decision to place a tariff on aluminum has the beer industry angry over higher costs. Jens Mortensen/The New York Times
minum for domestic consumption was imported, up from 11 percent in 2012, according to Interior Department statistics. Canada is the leading source. But recycling is an essential part of the aluminum story. The metal is 100-percent recyclable—it can be remelted and used over and over—and is one of the most commonly recycled commodities. A typical aluminum can contains 70-percent recycled metal, the Aluminum Association said. n The beer industry is facing higher costs. Within hours of Trump’s announcement of a tariff, big brewers responded. After all, about 60 percent of beer is packaged in aluminum. The Beer Institute, a trade group, said the 10-percent tariff on imported aluminum would amount to a $347-million tax on the beverage industry. It estimated that higher expenses
and lost sales would force the layoff of about 20,300 workers. “Like most brewers, we are selling an increasing amount of our beers in aluminum cans, and this action will cause aluminum prices to rise,” MillerCoors, maker of Coors, Miller High Life and dozens of other brands, said in a tweet storm. “It is likely to lead to job losses across the beer industry.” The company went on to say it buys as much aluminum as it can from domestic products. “However, there simply isn’t enough supply to satisfy the demands of American beverage makers like us,” the company said. “American workers and American consumers will suffer as a result of this misguided tariff.” n But on a per-can basis… A beer can costs about 10 cents to make, the Beer Institute said. In the unlikely event that the can is made entirely of imported aluminum—no recycled or domestic content—the 10-percent tariff might add a penny to the cost, or 6 cents to a six-pack. That’s probably not enough to drive away many beer drinkers. That is not to say brewers and other beverage makers may not be penalized for using aluminum cans. Scores of industries, from automakers (Ford placed a big bet on aluminum with its F-150 truck) to candy makers (Hershey buys acres of foil to wrap its Kisses), could face unexpectedly higher costs because of the administration’s decision. The impact on individual consumers, however, may take more time to gauge. New York Times News Service
“After a great-tax reform aimed at creating jobs, now a lousy approach on fair trade,” Joe Kaeser said on Twitter last Saturday. “Not good for customers, not good for jobs. Not good for a free world.”
Muted China response
The official response in China, the world’s largest steel producer and the main target of the tariffs, was muted. Foreign Ministry Spokesman Hua Chunying said in Beijing last
Industry insiders were less restrained. The US measures “overturn the international trade order,” Wen Xianjun, vice chairman of the China Nonferrous Metals Industry Association, said in a statement. “Other countries, including China, will take relevant retaliatory measures.” Li Xinchuang, vice chairman of the China Iron and Steel Association, called the move “stupid.” China has already launched a probe into US imports of sorghum, and is studying whether to restrict shipments of US soybeans—targets that could hurt Trump’s support in some farming states.
Threat to national security
While China accounts for just a fraction of US imports of the metals,
it is accused of flooding the global market and dragging down prices. US allies, seeing their industries threatened, responded with bafflement and dismay. Some also panned the idea that metal imports pose a threat to national security. “Steel and aluminum imports from Japan, which is an ally, do not affect US national security at all,” Japan Trade Minister Hiroshige Seko told reporters in Tokyo last Friday. “I would like to convey that to the US when I have an opportunity.” The impact of the step hinges in part on which nations will be affected, said Alex Wolf, senior emerging markets economist at Aberdeen Standard Investments in Hong Kong, who previously worked at the US State Department. “Until we see the final scope of the tariffs and the response from global trading partners, it’s hard to say it’s the start of a tit-for-tat trade war,” Wolf said. Bloomberg News
After a great-tax reform aimed at creating jobs, now a lousy approach on fair trade. Not good for customers, not good for jobs. Not good for a free world.” —Kaeser
A8 Monday, March 5, 2018
The World BusinessMirror
China sets stage for Xi’s historic power grab to rule indefinitely
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EIJING—President Xi Jinping is poised to make a historic power grab as China’s legislators gather from Monday to approve changes that will let him rule indefinitely and undo decades of efforts to prevent a return to crushing dictatorship. This year’s gathering of the ceremonial National People’s Congress (NPC) has been overshadowed by Xi’s surprise move—announced just a week ago—to end constitutional two-term limits on the presidency. The changes would allow Xi— already China’s most powerful leader in decades—to extend his rule over the world’s second-largest economy, possibly for life. “This is a critical moment in China’s history,” said Cheng Li, an expert on elite China politics at the Brookings Institution in Washington. Meanwhile, US President Donald J. Trump appeared to praise Chinese counterpart Xi Jinping’s efforts to extend his tenure in a speech to donors, CNN reported. “He’s now president for life. President for life. And he’s great,” Trump told Republican backers gathered last Saturday at the president’s Mara-Lago estate, CNN said, citing a recording of his remarks. “And look, he was able to do that,” Trump said, according to CNN. “I think it’s great. Maybe we’ll give that a shot some day.” Bloomberg News hasn’t heard the recording and couldn’t verify the substance or tone of Trump’s remarks. The White House didn’t immediately respond to requests for comment. When asked about China’s termlimits move last week, White House Press Secretary Sarah Sanders called it a “decision for China to make about what’s best for their country.” “The president has talked about term limits in a number of capacities during the campaign,” Sanders said. “It’s something that he supports here in the United States. But that’s a decision that would be up to China.” The US president has spoken positively of Xi’s rapid consolidation of power, telling Fox Business News last October that “some people might call him the king of China.” Still, the Trump administration has branded China a “revisionist” power and describes the country’s efforts to alter international norms as a threat to US security. The move is widely seen as the culmination of the 64-year-old Xi’s
efforts since being appointed leader of the ruling Communist Party in 2012 to concentrate power in his own hands and defy norms of collective leadership established over the past two decades. Xi has appointed himself to head bodies that oversee national security, finance, economic reform and other major initiatives, effectively sidelining the party’s No. 2 figure, Premier Li Keqiang. Once passed, the constitutional amendment would upend a system enacted by former Chinese leader Deng Xiaoping in 1982 to prevent a return to the bloody excesses of a lifelong dictatorship typified by Mao Zedong’s chaotic 1966-1976 Cultural Revolution. “Deng Xiaoping’s abolishment of lifetime tenure for the leadership and more institutionalized transitions in power are very much in question,” Li said. Passage of the proposed constitutional amendment by the congress’s nearly 3,000 handpicked delegates is all but certain. However, observers will be looking to see how many delegates abstain from voting as an indication of the reservations the move has encountered even within the political establishment. Last Sunday Zhang Yesui, the legislature’s spokesman, told reporters the move is only aimed at bringing the office of the president in line with Xi’s other positions atop the party and the Central Military Commission, which do not impose term limits. “It is conducive to upholding the authority of the Central Committee of the party with Comrade Xi Jinping at the core and also to unified leadership,” Zhang said. Chinese authorities have tightly controlled discussion about the move, scrubbing social media of critical and satirical comments. State media have been largely muted about the topic, but the official People’s Daily sought to reassure the public by saying in a commentary that the move did not signal a return to lifelong rule.
Chinese President Xi Jinping is seen on a large screen at the opening session of the Chinese People’s Political Consultative Conference in Beijing’s Great Hall of the People on March 3. AP/Ng Han Guan
“This amendment does not mean changes in the system of retirement for party and state leaders and also does not imply that leaders will have lifetime tenure,” the party’s mouthpiece said last Thursday. Still, a number of prominent Chinese figures have publicly protested the move, despite the risk of official retaliation. Li Datong, a former editor for the state-run China Youth Daily, wrote that lifting term limits would “sow the seeds of chaos” and urged Beijing’s lawmakers to exercise their power by rejecting the amendment. Wang Ying, a businesswoman who has advocated government reforms, called the proposal “an outright betrayal.” Many expressed shock and disbelief at what they perceived to be a return to the Mao era, and the massive upheaval, violence and chaos of the Cultural Revolution 50 years ago that has barely faded from memory. Already, the blanket and entirely positive coverage of Xi in official propaganda has drawn comparisons of a cult of personality to rival Mao’s. State network China Central Television broadcasts near-daily segments featuring anyone from factory workers and farmers to space engineers and soldiers applauding for Xi in uniform enthusiasm for several minutes. His airbrushed, blemishand nearly wrinkle-free face often dominates the front pages of state newspapers. But some analysts note there are a number of key differences between
briefs
➜ Pope declares new feast day devoted to the Virgin Mary VATICAN CITY—Pope Francis has made the devotion to the Virgin Mary a new fixed celebration in the Roman Catholic calendar. The Vatican published a decree last Saturday in which Francis declared that the Mary “Mother of the Church” feast would be celebrated on the Monday following Pentecost. This year, it falls on May 21. The decree said Francis wanted the devotion to “encourage the growth of the maternal sense of the Church in the pastors, religious and faithful, as well as a growth of genuine Marian piety.” History’s first Latin American pope is particularly devoted to Marian piety and frequently refers to the church as “mother.” In 2016 Francis set another feast day for another key woman in Christ’s life, declaring July 22 as the feast of Saint Mary Magdalene. AP
➜ France, UN leaders worried about Syria’s eastern Ghouta BEIRUT—The office of French President Emmanuel Macron said he and United Nations Secretary-General Antonio Guterres are extremely worried about the continued violence in Syria’s eastern Ghouta despite a cease-fire resolution. Macron’s office said in a statement that he and Guterres spoke last Saturday and expressed their “grave concern” and called for a full implementation of the resolution. The statement said UN convoys should be delivering aid to hard-hit populations in the region. Macron was set discuss the cease-fire last Sunday with the president of Iran, which backs Syrian President Bashar al-Assad. France has also tried in recent days to pressure Russia to use its influence with Assad to freeze government bombings. AP
➜ Campaign rally for Putin’s reelection fills Moscow stadium MOSCOW—Tens of thousands of Russian President Vladimir Putin‘s supporters have gathered for a campaign rally at Moscow‘s sprawling main sports complex.
Xi Jinping is not loved and admired the way that Deng Xiaoping was. Xi Jinping is feared within the party.”—Tsang Xi and communist China’s revolutionary founders that mean any major policy failure could obstruct Xi’s ambitions. “Xi Jinping is not loved and admired the way that Deng Xiaoping was. Xi Jinping is feared within the party,” said Steve Tsang, director of the China Institute at London’s School of Oriental and African Studies. Xi has also waged an expansive anticorruption crackdown that some perceive as at least in part a purge of his rivals. This has surely won him many enemies, making the prospect of ceding power potentially risky. Tsang said the party would follow Xi as long as things went well but that any serious economic misstep over the next five years would threaten Xi’s ability to extend his rule. “I don’t think it’s a foregone conclusion that he will have a third term,” Tsang said. Xi’s power grab will be seriously tested by how he tackles grave challenges at home and abroad. Chief among them is slowing growth in the state-dominated economy that is forecast to fall further as regulators try to get rising debt in check by tightening controls to cool booms in bank lending
and real-estate sales. Abroad, China is faced with the task of maintaining stability and avoiding the outbreak of war on the neighboring Korean Peninsula, while also managing escalating frictions with the US that threaten to evolve into a trade war.Some observers say extending Xi’s rule gives him greater authority to address such challenges and carry out his vision of fighting corruption, eliminating poverty and transforming China into a modern leading nation by midcentury. Others say the risk of policy missteps is multiplied because Xi has made it politically risky for people to disagree with him and challenge his unbridled power. The decision to scrap term limits was a case in point, Tsang said, noting that party leaders must have foreseen that such a move was going to be deeply unpopular, yet seemed unable—or unwilling—to steer Xi away from it. “What it does reveal is Xi Jinping is creating and deepening a moral hazard that now people will not want to say anything to contradict him, not only in public but even in private,” Tsang said. AP and Bloomberg News
The crowd at the rally held two weeks before Russia‘s presidential election filled the Luzhniki stadium, which has the capacity for more than 81,000 people. Police estimated the overall turnout at the complex, which includes other sports facilities, to be 130,000. The event last Saturday featured entertainers and an appearance by Putin. He told the cheering crowd: “We want to make our country bright, forward-looking into the future, because our ancestors lived here, we live here, our children live here and our children and our grandchildren will live here.” AP
➜ Merkel’s fate hangs on vote by potential coalition partner FRANKFURT, Germany—German Chancellor Angela Merkel is awaiting the results of a vote by her potential coalition partner—the center-left Social Democrats—to learn if she will be able to form a new government. The Social Democrats started counting ballots last Saturday night that its members cast on a proposed coalition government deal with Merkel‘s conservatives. Party workers were to work through the night at the party‘s Berlin headquarters using high-speed letteropening machines. The result is expected to be announced last Sunday at around 9 a.m. (0800 GMT). AP
➜ US Cuba embassy staff cuts permanent WASHINGTON—Citing mysterious "health attacks" in Havana, the United States says it is making permanent its withdrawal of 60 percent of its diplomats from Cuba, extending an action that has hurt the island nation's economy and cramped Cubans' ability to visit the US. Last October the State Department ordered nonessential embassy personnel and the families of all staff to leave Havana, arguing the US could not protect them from unexplained illnesses that have harmed at least 24 Americans. But by law, the department can only order diplomats to leave for six months before either sending them back or making the reductions permanent. The six months expired last Sunday. So the department said last Friday it was setting in place a new, permanent staffing plan that maintains a lower level of roughly two-dozen people—"the minimum personnel necessary to perform core diplomatic and consular functions." AP
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Moon to send envoys to Pyongyang
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outh Korean President Moon Jae-in will send his top national-security adviser, as well as his chief spy, as special envoys to Pyongyang on Monday in a bid to persuade Kim Jong Un to open talks with Washington, in the latest bid to avoid a potential conflict over the country’s nuclear program. The 10-member group will be led by Chung Eui-yong, national-security adviser, and Suh Hoon, the chief of the National Intelligence Service. They will meet with North Korean officials on the two-day trip, Moon’s top communication officer Yoon Young-chan said at a briefing. They will discuss the possibility of United States and North Korea talks “aimed at denuclearization” and inter-Korean relations, he said. The envoys will then travel to Washington to discuss the result of the meeting, Yoon said, adding that South Korea will closely coordinate with Japan and China. Moon’s intention to dispatch his top aides, revealed after a 30-minute phone conversation with US President Donald J. Trump last Thursday, came less than a month after Kim invited Moon to visit Pyongyang. The US and North Korea exchanged war threats last year as Kim detonated his most powerful nuclear device and test fired intercontinental ballistic missiles. While both the United States and the North say they’re open to talks, and South Korea is eager to broker an agreement, how much each party will concede in talks is unclear. The White House’s statement following the Trump-Moon phone conversation said the two leaders “noted their firm position that any dialogue with North Korea must be conducted with the explicit and unwavering goal of complete, verifiable and irreversible denuclearization.” Moon also wants to rid North Korea of nuclear weapons, but his own road map for North Korea’s denuclearization consists of two steps: freeze first and complete disarmament second. North Korea’s spokesman for the Ministry of Foreign Affairs told the state-run Korean Central News Agency late last Saturday that it won’t accept US preconditions. “We have intention to resolve issues in a diplomatic and peaceful way through dialogue and negotiation, but we will neither beg for dialogue nor evade the military option claimed by the US,” it said. “In decades-long history of the DPRK [Democratic People’s Republic of Korea]-US talks, there had been no case at all where we sat with the US on any precondition, and this will be the case in future, too,” the spokesperson said in comments carried by the North’s official Korean Central News Agency. “The US attitude shown after we clarified our intention for DPRK-US dialogue compels us to only think that the US is not interested in resuming the DPRKUS dialogue.” “It is the consistent and principled position of the DPRK to resolve issues in a diplomatic and peaceful way through dialogue and negotiation,” the spokesman said. “The dialogue we desire is the one designed to discuss and resolve the issues of mutual concern on an equal footing between states.” The 10-member group will also include Vice Unification Minister Chun Hae-sung, who has been working at the center of the inter-Korean conversations since January. Suh, who was deeply involved in the coordination and negotiation of two previous inter-Korea summits during his nearly-30-year stint at the intelligence agency, is widely believed to have been orchestrating moves for dialogue recently. As the chief of the national security council overseeing inter-Korean relations, diplomacy and national defense, Chung is in charge of Seoul’s relations with the Trump administration. Bloomberg News and AP
CAAP 10th Anniversary A BusinessMirror Special Feature
www.businessmirror.com.ph | Monday, March 5, 2018
Excellence in the Skies T
HIS March 5, 2018, the Civil Aviation Authority of the Philippines (CAAP) celebrates 10 years of its commitment to ensuring a safe, secure, and green Philippine sky. A decade ago in 2008, Republic Act No. 9497 was enacted into law. And by its virtue, the CAAP was created. Aviation had an early start in the Philippines, and the creation of CAAP in 2008 was not where it all began. Before it became the CAAP that we know today, the office governing Philippine aviation underwent numerous name changes, from the Office of Technical Assistant of Aviation Matters in 1931, it became the Aeronautics Division in 1933. In 1936, the passage of the Civil Aviation Law of the Philippines created the Bureau of Aeronautics. Only a bit more than a decade later in 1947, the Bureau of Aeronautics was renamed Civil Aeronautics Administration (CAA). After 32 years, the CAA was placed under the Ministry of Transportation and Communications and was once again renamed as the Bureau of Transportation (BAT). Then in 1987, it was renamed as the Air Transportation Office (ATO) headed by the Assistant Secretary for Air Transportation. And then only two decades later in 2008 the ATO was abolished, creating the Civil Aviation Authority of the Philippines. CAAP now reaps the fruits of its years of hard work, but its journey was not always smooth sailing. CAAP’s creation is the main component of an intensive civil aviation reform program launched by the government. Months before CAAP’s creation in March 2008, the Federal Aviation Administration (FAA) downgraded the Philippines to “Category 2” rating after finding out several deficiencies to the country’s air transport and aviation sector. Then in 2010, the EU banned airlines from the Philippines from flying to Europe. Determined to get past these turbulent times and prove itself as a competent aviation regulator, CAAP has since worked towards bettering its services and facilities. Its efforts showed to be paying off as just in April 2014, following a successful International Aviation Safety Assessment (IASA), the FAA determined that the Philippines has met the criteria for a “Category 1” rating. And in June 2010, the EU lifted its ban on Philippine commercial flights, allowing all of the country’s airlines to once again fly over Europe’s skies. As it marks its tenth anniversary this 2018, CAAP finds more reasons to celebrate its remarkable accomplishments that continue to bring pride to the country and a brighter future for the aviation industry. Beset by all the pressure from international aviation authorities and other challenges in the industry, CAAP’s present team of leaders spearheaded by Capt. Jim C Sydiongco as Director-General, Capt. Donaldo Mendoza as Deputy
Director-General for Operations, MGEN. Ricardo Banayat (Ret.) as Deputy Director-General for Administration, and Undersecretary for Airport and Aviation Capt. Manuel Antonio Tamayo, the CAAP has braved all tests and is continuously streamlining the organization and the entire aviation industry in the country. Director-General Sydiongco and his team have made a significant progress in setting new benchmarks for performance and safety advancements in the future of the country’s aviation industry.But before becoming the head of the country’s aviation regulator, Director-General Sydiongco flew all over the world as a former commercial pilot for Philippine Airlines and Taiwan’s Eva Air. Upon retirement, he then used his flying experiences as safety consultant of then Manila International Airport (MIA) General Manager Alfonso Cusi and Cebu Pacific’s flight safety head, before becoming Cebu Pacific’s vice president for flight operations. As a veteran in the aviation industry, Sydiongco’s experience as pilot serves great importance in his current position as CAAP chief. With his goals of fully automating and digitalizing the services of CAAP, upgrading the standards of flying schools through regulations, and supporting young aviation professionals, Sydiongco is bringing the country’s aviation sector to greater heights. En route to excellence in the skies, the CAAP is steadily performing its duties of providing safe and convenient air travel experience. Just last year, Philippine airports’ were named and given recognition for its facilities and service. From a survey conducted by Sleepinginairports.net four Philippine airports, namely the Iloilo International Airport, Mactan-Cebu International Airport, Clark International Airport, and Davao International Airport joined the 2017 list of the top 25 best airports in Asia. While eight airports in the country were awarded with a one-star rating for On- Time Performance (OTP) based on the results of a 2016-2017 survey conducted by the United Kingdom-based air travel intelligence company Official Aviation Guide (OAG). On top of the regional airport’s achievements, the country’s main international gateway, the NAIA, is no longer included in the top 20 worst airports in the world, and even in the top 5 worst airports in Asia for 2017 list by travel website The Guide to Sleeping in Airports. In 2017, CAAP became one of the country’s biggest dividend contributor by contributing P5.83 billion to the Treasury. That same year, the CAAP also passed the Universal Safety Oversight Audit Programme (USOAP) of the ICAO Coordinated Validation Mission with an overall result of 69.68%, higher than the global average. And in May 2017, Puerto Princesa International Airport’s new terminal was opened.
DOTr Sec. Arhtur Tugade, CAAP Dir. Gen. Capt. Jim Sydiongco with CAAP officials at the CNS-ATM Inauguration on January 16, 2018.
The CAAP meanwhile, opened 2018 with a milestone through the inauguration of the Communications Navigation Surveillance/Air Traffic Management or the CNS/ATM systems which will help minimize flight delays and enhance air traffic safety in the country. With capacity expansion as one of its goals, CAAP has simultaneously commenced with the expansion of Kalibo International Airport in Aklan and embarked in the processing of night rating regional airports which include: the Naga Airport in Naga City, Camarines Sur, Tuguegarao Airport in Tuguegarao, Cagayan, Cauayan Airport in Cauayan City, Isabela, Cotabato Airport in Awang, Maguindanao, Pagadian Airport in Pagadian, Zamboanga Del Sur, Ozamiz City Airport (Labo Airport) in Labo, Ozamis, Dipolog Airport in Dipolog, Zamboanga Del Norte, Dumaguete Airport (Dumaguete– Sibulan Airport, Sibulan Airport) in Sibulan, Negros Oriental, and Caticlan Airport (Godofredo P. Ramos Airport, Boracay Airport) in Malay, Aklan. On top of these airport milestones, The CAAP is also working towards minimizing the negative effects of aviation and air transport in the environment. To this, the CAAP is in the process of improving fuel efficiency by an average annual rate of at least 2% per year, reducing the total aviation CO2 emission by an average of 2% per year until 2020, and enhancing awareness and compliance to the program on carbon footprint reduction in the aviation sector. To promote the green airport concept, all frequently used CAAP airports will now be installed with solar power systems to power up office lightings and small equipment as well as runways lights and lighted cones.
INAUGURATION OF THE NEW COMMUNICATIONS, NAVIGATION, SURVEILLANCE/AIR TRAFFIC MANAGEMENT (CNS/ATM) SYSTEM
President Rodrigo Duterte Inaugurates the CNS-ATM Systems at the Philippine Air Traffic Management Center at the CAAP Compound in Pasay City on January 16, 2018.
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RESIDENT Rodrigo Roa Duterte led the inauguration of the new Communications, Navigation, Surveillance/Air Traffic Management (CNS/ATM) System project at the CAAP central office in MIA Road, Pasay City on January 16, 2018. President Duterte, together with Executive Secretary Salvador Medialdea, DOTr Sec. Arthur Tugade, Civil Aviation Authority of the Philippines (CAAP) Director General Jim C. Sydiongco, Japanese Ambassador to the Philippines Koji Haneda, and the Japan International Cooperation Agency (JICA) Chief Representative Susumo Ito unveiled the marker signalling the turnover of the facility to the CAAP. The JICA committed a Php 10.8 billion loan amount for the project, a satellite-based flight data-processing system which aims to improve air traffic efficiency and quality infrastructure in the Philippines.
The project, completed in 2017 under the JICA Official Development Agency (ODA) yen loan scheme, aims to help minimize flight delays and enhance air traffic safety in the country with the installation of upgraded communication, navigation, surveillance / air traffic management systems nationwide including en-route surveillance radars in Aparri, Laoag, Cebu-Mt. Majic, Quezon-Palawan, and Zamboanga and airport surveillance radars in NAIA2, Mactan, Bacolod, Kalibo, and Davao. Before, the CAAP only uses three radars (NAIA1, Clark, and Tagaytay) in managing the country’s air traffic. As a result, it could only cover 30% of Philippine air space. When President Rodrigo Duterte came into office, DOTr Secretary Tugade focused on expediting the project after it was delayed for two years. In his speech, President Duterte praised
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the improvement in the country’s aviation sector and also reminisced about flying in Davao during his childhood. DOTr Sec. Tugade meanwhile said that the shadowing operation of the new CNS/ATM is part of the Duterte administration’s efforts to make life more comfortable for Filipinos and its riding public. He also pointed out how the project added 10 more radars to the only three radars (NAIA1, Clark, and Tagaytay) the archipelagic country has. Tugade also mentioned how Philippine airports being lifted from the lists of worst airports and the country’s bettering punctuality records as signs of the country’s improving aviation sector. The new CNS/ATM Systems project established an aviation infrastructure to more than 40 airports, air navigation facilities, and air traffic control facilities nationwide, from Basco, Batanes in the North to Jolo in the South.
With the support of the CNS/ATM program implementation, the CAAP will soon establish the Performance-Based Navigation (PBN) System on all public aerodromes by the year 2020 to reach its goals in improving air traffic management and infrastructure and significantly reduce fuel burn and carbon emissions. Engaging with our neighbors in aviation, the CAAP is now working towards fully adopting the Beijing Declaration’s visions in aviation safety, air navigation services, accident investigation, and human resource development that was discussed at the first Asia Pacific Ministerial Conference on Civil Aviation last January 31 to February 1. In the next few months, projects such as the Opening of Bicol
International Airport in 2022, the completion and commercial operations of New Bohol Airport’s (Panglao International Airport) by August 2018, Tacloban City’s Daniel Z. Romualdez Airport’s terminal extension soft opening on March 16, 2018, and the inaugural flight of Cagayan North International Airport in Lal-lo, Cagayan are just some of what the country can look forward to in terms of improvements in the country’s airports. In line with these achievements, the CAAP will commemorate its ten years with a two weekslong celebration joined by its employees, stakeholders, and friends. With the theme, “Ten Years of Excellence in the Philippine Skies,” the agency is set to kick-off celebrations with a thanksgiv-
ing mass on March 5 and launch its Gender Awareness Development (GAD) gender-neutral restrooms with a blessing ceremony. On the succeeding days, the aviation regulator is set to continue its celebrations with a clean- up drive, a bloodletting program, a sports fest, and fun run. A fellowship night on March 16 will then cap off the anniversary festivities. As the Philippines’ aviation safety oversight mechanism, CAAP is responsible for providing safe and efficient air transport and regulatory services in the country. Headed by Sydiongco as director general, CAAP is stationed at the Old MIA Road in Pasay City and in 12 area centers around the Philippines and also employs approximately 6000 employees.
The Regions BusinessMirror
A10 Monday, March 5, 2018 • Editor: Efleda P. Campos
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526 Bukidnon lumads await DAR help to take over 1,023 hectares of their ancestral land
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By Cha Monforte
Correspondent
T was a milestone win, but previous administrations could not enforce their final takeover of the lands their ancestors owned.
For over 20 years, 526 lumads in Butong, Quezon, Bukidnon, have been camping at the gate of their 1,023.97-hectare ancestral land that two milling corporations made into sugar plantations. And in those two long decades, dust along the road had hardened as plaques on the faces of the Butong lumads following all the many dilatory legal tactics of two milling corporations—Escaño Hermanos Inc. and Busco Sugar Milling Corp. Inc. But it was only during the Duterte administration when they hope to be able to recover their ancestral land. In 1991 the 526 lumads— known as the petitioner group of Evencio Balag a.k.a. Datu Labugdang—started petitioning for their ancestral land via the government’s land-reform program. On July 13, 1998, they won their case, only to wait for another two decades for the full implementation of the writ of execution that would lead to their installation to the land of their forefathers. That 1998 decision of the Department of Agrarian Reform Adjudication Board (Darab) Case 109, with Datu Labugdang as petitionerappellant and Escano Hermanos Inc.
and Jose Escano as respondents-appellees, and the Busco Sugar Milling Co. as respondent-intervener, was signed and approved by all of the seven-member National Adjudication Board, except former Agrarian Reform Secretary Ernesto Garilao, who did not take part. The case was a typical story of a lumad occupant being suddenly called as trespasser, a squatter, and being evicted from his ancestral land by one suddenly waiving a title under the Torrens System of the country. But the threatened lumad occupant, crying land grabbing, chose to fight in court and one day won over the titleholder who occupied the land. But the lumad occupant had no power to force himself to occupy the land that was rightfully his due to the unwillingness of local agrarian officials and law enforcers of implementing the decision against the land usurper. It was only on November 20, 2017, when Darab 10 Regional Adjudicator Noel Carreon directed Bukidnon Provincial Darab Sheriff Efren Paypa, with upport assistance of the Philippine National Police, “to enforce and execute the decision of this case dated July 13,
OT waiting for new BIMP D travel connections this year
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A M B OA N G A C I T Y—T h e Department of Tourism (DOT) and the Mindanao Development Authority (MinDA) are awaiting the final go-signal to two new connections in the East Asean Growth Area, as the DOT called on Filipino millennials to tap its “Go South” travel promotions. The DOT held in late-February a consultation here with the business and travel and tours sectors on the probable benefit and opportunities opened for this city once Cebu Pacific Air starts its announced Zamboanga City-Sandakan, Malaysia air route, adding to the bustling Zamboanga City-Kota Kinabalu route in Malaysia. Tourism Secretary Wanda Corazon T. Teo said the reopening of the Sandakan route would “bring enormous benefits” to stakeholders of both countries. “There is already a healthy flow of economic activity between these gateways,” she said. Zamboanga “is a natural geographical gateway and it was proven last year when it handled 8,870 aircraft movements, moved 1 million passengers and 13 million cargos,” she said. The proposed route, she added, would cut down travel by a significant 45 minutes, from the current sea transportation by the “roll-on, roll-off”
(Ro-ro) cargo ship that takes 14 hours. “The reduction of travel time would open up new possibilities for tourists who do not have the luxury of time,” she added. The other connection awaited for final confirmation this March would be the Buliluyan, Palawan-Kudat, Malaysia, a cruise tourism venture between these two points. The sea connection would follow closely the launch last year of the Ro-ro route between Davao City and General Santos City in Mindanao, and with the bustling city of Bitung in Indonesia. The route has been stalled, however, over cargo volume issue. “We are optimistic with the upcoming cruise tourism,” Teo said. She added the two upcoming air and sea connections would boost the department promotions to Filipino millennials to “go south,” adding “we believe in the vast tourism offerings of the island, including the Autonomous Region in Muslim Mindanao, specifically Tawi-Tawi.” “With its beautiful beaches and its location as a natural gateway, there is vast potential for the island,” she said. Thus, she added, “the proposal of MinDA to develop the Tawi-Tawi integrated seaport and economic zone would prove to be a worthwhile endeavor.” Manuel T. Cayon
LUMAD families show their determination and unity in awaiting the national government’s help to finally reinstate them in their ancestral lands 20 years after the Department of Agrarian Reforms Adjudication Board sided with the 526 lumads from Butong, Quezon, Bukidnon, in a case they filed against the two sugar-milling companies that made their 1,023.97-hectare ancestral land into sugar plantations. CHA MONFORTE
1998,” to fully enforce the order. But still Carreon’s order could not yet be enforced as of press time. “We are thankful to President Duterte for finally hearing us,” said Jeffrey Batag Adajar, the eldest son of now deceased Datu Labugdang, and chairman of the Kaligtungan Balag Community Workers Association, the agrarian-reform beneficiar y (AR B) group of the Butong lumads. ARB association consultant Arnold Gomez, who helped the group communicate with national DAR officials, said he was optimistic of the “fast actions favoring the poor ARBs” by President Duterte’s appointees at the national level.
In his team’s consultation-assessment with the lumads’ group on February 27 and 28 at Butong in Quezon town, Bukidnon, the ARB lumads expressed optimism that Duterte’s tough stance will favor the dispossessed over the influential sugar millers. He said that after being informed of the lumads’ plight, DAR national officials are gearing up for the final implementation of the writ of execution of the old 1998 DAR decision favoring the ARB lumads. Gomez said they informed DAR national and regional officials through letters of the lumads’ plight and Carreon’s unenforced order. The letter was addressed
to Agrarian Reform Secretary John Castriciones, copied to Paolo Quazon, head executive assistant secretary; Karlo Bello, undersecretary for operations; and Junjun Malsi, assistant secretary for field operaitons. The ARB lumads are asking national DAR officials to step in and come to the area to finally install them. Gomez said “it would finally happen” given the track record of Castriciones and his officials. The Darab national decision on July 13, 1998, placed the 1,023.9779 hectares under the Comprehensive Agrarian Reform Program, through the compulsory
scheme of RA 6657, in favor to the petitioners—Datu Labugdang and his group. The decision further resolved that another 62 hectares subject to the Supreme Court decision of May 16, 1983, be immediately surveyed by the DAR and the Department of Environment and Natural Resources and awarded to the actual occupants headed by Datu Balag. With the Escaños and the Busco company losing in the decision, they delayed the decision from being implemented when they resorted to making motions for reconsideration in the Darab national sala and a petition for review at the Court of Appeals (CA). The legal maneuvers were later junked by Darab and the CA for lack of merit and basis. The ARB lumads then filed a writ of execution at the provincial Darab on January 12, 2017, and the Board on October 19, 2017, found it meritorious. At least two writs of executions were made pursuant to the 1998 national Darab decision. The first writ was made by then-Regional Adjudicator Jimmy Tapangan, directing Bukidnon Darab Sheriff III, who made a partial return report that Quezon Maro Earl Declaro, “did not honor the writ” and “was the one who placed” new landowners in the Butong area, to the detriment of Datu Labugdang’s group. On November 20, 2017, Carreon penned his order to implement the writ of execution pursuant to the 1998 national decision and addressed to Paypa.
DENR chief issues directive to reclaim four ‘missing’ Boracay wetlands By Jonathan L. Mayuga
@jonlmayuga
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USINESS establishments and illegal settlers have encroached on wetlands on the island of Boracay and the Department of Environment and Natural Resources (DENR) wants them out. Environment Secretary Roy A. Cimatu said in a statement that he has already issued a directive to reclaim the wetlands and restore their ecosystem services and values. During the public hearing conducted by the Senate Committee on Environment and Natural Resources, chaired by Sen.Cynthia A. Villar, held at a resort in the pollution-challenged island paradise last Friday, Cimatu said the wetlands need to be restored because they act as a catchment area during the rainy days and they prevent flooding. Experts say wetlands are the link between land and water, and are some of the most productive ecosystems in the world. Wetlands are important because they protect and improve water
quality, provide fish and wildlife habitats, store floodwaters and maintain surface water flow during dry periods. Cimatu noted there are actually nine wetlands in Boracay, based on an old map of the island. But an investigation by the DENR’s National Task Force Boracay (NTFB) revealed that four of these wetlands are now “missing.” The missing wetlands, he said, are now occupied by a mall, a resort hotel and around 100 illegal settlers, who contribute to water pollution on the island. He added the DENR has already issued notices of violation (NOVs), cease-and-desist orders, and de-
molition notices for the purpose of reclaiming the wetlands. “We have advised them to selfdemolish. We will reclaim all nine wetlands,” Cimatu vowed. During the hearing, Cimatu said he plans to revive the Community Environment and Natural Resources Office (Cenro) on the island, which was abolished as a result of the government’s rationalization plan in 2014. He added he was surprised to learn the DENR has no office in Boracay. The DENR chief said the abolition of the Cenro Boracay posed a problem on the management of the island in terms of compliance with environmental laws. “The weakest link of the DENR is enforcement of environmental laws,” Cimatu said. As of February 26, the DENR had already issued 207 NOVs to establishments found violating environmental laws. NOVs were issued to 116 establishments for violating Republic Act (RA) 9275, or the Philippine Clean
Water Act; 77 for violation of RA 8749, or the Philippine Clean Air Act; five for violation of both laws; and nine for those operating without a valid environmental compliance certificate (ECC), which is required under Presidential Decree 1586, or the Environment Impact Statement System. The NTFB reported that out of the 578 establishments surveyed and inspected, 383 are connected to the sewage line of the island’s water and sewage-system providers and 195 are not. A total of 382 are connected to the Boracay Island Water Corp. (BIWC) sewer line and one to the Boracay Tubi System Inc. Meanwhile, Cimatu directed the BIWC to repair and rehabilitate its wastewater-treatment plants (WTP) in barangays ManocManoc and Balabag. The Balabag WTP exceeded capacity and caused wastewater to leak from its burst pipes. The leak has been found to be the source of the foul odor in some parts of the barangay.
Quezon SP okays mental-health program for all constituents By John Bello Correspondent
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UCENA CITY—The Sangguniang Panlalawigan (SP) of Quezon seeks to institutionalize and promote a mentalhealth program for the province to help persons with mental illness and remove the stigma to those afflicted with it. Provincial Second District Board Member Elizabeth Sio, SP Committee on Health and Sanitation, led a committee hearing last Tuesday
to formalize the creation of a technical working group that would assist the Provincial Council on Mental Health Care and Psychosocial Support. Sio, along with her colleague Fourth District Board Member Rhodora Tan sought the support and advice of various resource persons to come up with an effective and efficient mental-health program for persons afflicted with mental-health problems and their reintegration to their families and communities.
Sio, who authored SP Resolution 669 that enacted the provincial ordinance creating the provincial council on mental-health care and psychosocial support, first showed in the committee hearing a slide presentation defining mental illness as referring to a wide range of mental-health conditions or disorders that affect mood, thinking and behavior. Forms of mental illness include depression, anxiety disorders, schizophrenia, eating disorders and addictive behaviors. Nydia Fermo and Dario Flores,
both psychiatrists of the Quezon Medical Center (QMC), claimed during the committee hearing that Quezon province ranks second to the number of cases of mental illness after the National Capital Region (NCR). When sought for specifics at his OPD office yesterday at the QMC, Flores sought to downplay the number of mental-health cases in Quezon province, saying that was 10 years ago, while at present, only one or two patients with mild mental-health problems come to
consult him daily. Data provided by Daniel Urgelles, electronic field health-service information system coordinator at QMC, revealed there are five leading cases of mental morbidity in Quezon. These are neurotic, stress-related somatoform disorders with 26 afflicted; schizophrenia, schizotypal and delusional disorders with 12; mood disorders with five; organic, including symptomatic, mental disorders with one; and unspecified mental disorder with two, partial data last year showed. Urgelles said their
data showed very few cases of persons with mental-health problems in the province so he was surprised at the claims made by the Fermo and Flores that Quezon ranks second after the NCR. At the committee hearing, Ador Culing, a technical staff to Vice Gov. Sam Nantes, sought to clarify after learning that Quezon is No. 2 in mental-health cases after the NCR about the kinds of mental illnesses in the province, their gender, age and causes of those afflicted with mental disorders.
Green Monday BusinessMirror
A12 Monday, March 5, 2018
www.businessmirror.com.ph • Editor: Lyn Resurreccion
Guimaras is going green with renewable energy Story & Photos by Jonathan L. Mayuga @jonlmayuga
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ore and more local government units (LGUs) are willing to take the sustainable development path offered by renewable energy.
Making a bold step in the effort to go green through renewable energy is the islandprovince of Guimaras in Western Visayas, which declared during a simple ceremony on February 24, the ban on coal and other fossil-fuel energy. The declaration coincided with the visit of Greenpeace’s Rainbow Warrior in the province. Dubbed as “Balangaw: The Climate Justice Ship Tour of Rainbow Warrior,” Greenpeace, along with the Climate Reality Project, gave recognition to the province, led by Gov. Samuel T. Gumarin and the town of San Lorenzo, for their decision to ban coal and other dirty sources of energy in the province. Interviewed by the BusinessMirror a day before the event, Naderev Saño, executive director of Greenpeace Southeast Asia, said the declaration made Guimaras the first coal-free province in Western Visayas. In the Philippine leg of tour and the iconic ship’s v isit to Gu i m a ra s, Greenpeace h ighlighted what it considers the positive side of the climatechange discourse—solution to the climate cr isis. Guimaras is proud to be home to the 54-megawatt (MW) wind farm called San Lorenzo Wind Farm, one of the biggest in Southeast Asia. “We are elated by the action of the province of Guimaras and their commitment to break away from coal and shift to renewable energy,” said Saño, a former vice chairman of the Climate Change Commission.
Leadership
During the event, backed by other officials of the province, Gumarin declared a permanent ban on coa l and ot her d ir t y sources of energ y, opting to go for clean renewable energy sources like the wind. “Essentially, the announcement is something we are very happy about because it is very important,” Saño said. He recalled that Rep. Joey S. Salceda of the Second Distinct of Albay has declared the province coal-free when he was its provincial governor. Proponents of coal energy, Saño added, are persistent in marketing it as a necessity. “Many are made to believe by proponents of coal projects that coal is good for the country and the people. We are happy that the province of Guimaras has shown leadership. It takes courage to say no to coal because we know coal peddlers are powerful. Despite that, they [Guimaras people] stood up against it and declared that they will not allow coal in the province,” he said.
Energy self-sufficiency
Guimaras is energy self-sufficient because the P6.5-billion, 54-MW San Lorenzo Wind Farm that became operational in 2014 has been producing power way beyond the 7-MW requirement of the entire province. The island-province’s population is 200,000. Known as the mango capital of the Philippines, the provincial government is eyeing to shift from an agricultural province to an agri-eco tourism province, with the solar-wind farm among its tourist destinations on top of the beach
resorts around the island. By 2020, Phinma Energy Corp. is eyeing to operate a P4-billion 40-MW wind farm also within the province, boosting its current power-generation capacity from 54 MW to 94 MW.
‘Grid-locked’
Guimaras, however, is not 100-percent coal-free because of its connection to the main power grid. The excess power generated by the San Lorenzo Wind Farm goes to the Panay Grid, which is connected to the Negros Grid, and to the Cebu, Leyte and Luzon grids. “Technically speaking, Guimaras is connected to the national grid, but the bulk of the power it produces is consumed by Iloilo. Guimaras has a very small demand for electricity,” Saño noted. This is the reason the electricity rate in the province is still high. The electricity that it produces goes around and comes back tainted with energy generated from coal and other dirty energy sources. “Our grid is not smart. The wind power generated by Guimaras does not go back [to it] immediately because it is connected to the main power grid and Iloilo is the main beneficiary,” he explained.
A girl sits at a fallen tree trunk in San Lorenzo, Guimaras, in Western Visayas. In the background is one of 27 wind turbines comprising the San Lorenzo Wind Farm.
remote because of the fact that the Philippines has many huge power plants in the pipeline. The problem with huge power plants that run on fossil fuel is that coal is imported and the failure of one power plant makes the Philippines vulnerable to power interruption. With renewable energ y, the power pl a nt s a re d i s persed . Having small power plants is advantageous because a breakdown of one will not easily cause power-supply shortage. “As said in a saying, never put all your eggs in one basket,” he said. He advised that the government should regulate the use of electricity, such as in big buildings, where too much electricity is used for air-conditioning units. Saño lamented that people have to wear jackets because it is very cold with the buildings having centralized air-condition.
Renewable-energy solution
“The biggest impact of Guimaras’s ban on coal is the demonstration that renewable energy is possible. It can even energize an entire province,” Saño said. Debunking claims that renewable energy is not reliable, he added that the base-load concept is already outdated. M a ny a re s ay i ng — most ly fossil-fuel companies—that renewable energy is not efficient. Even former President Benigno S. Aquino III said in one of his State of the Nation Address that power generation stops at night when there is no sun or when there is not enough wind. “Of course, that is not true. We now have efficient powerstorage technology where we can store the electricity generated by wind turbines or solar farms,” Saño noted.
LGUs going green
Energy security
“R enewable energ y w i l l g ive us real energ y secur it y because we w i l l no longer need impor ted f uel, a nd t he su n a nd w ind a re f ree. Hence, t hey a re more rel i able,” he sa id. “Renewable energy is interconnected. If it is connected to an efficient and smart grid, the dispatch of electricity that goes contributes to the grid,” Saño added. According to Saño, it is high time that the government breaks free from the mentality that coal is cheaper, reliable and is necessary for growth and development as other countries had done. “The economic consideration in renewable energy is viable. Even in terms of cost, solar is cheaper than coal. It is no longer a debate about which is cheaper. We are not yet talking about the environmental destruction. All the fuels that we are using are imported and they have big impact on the economy,” he said.
Unlimited potential
Blessed w it h s o mu c h re newable energ y, Saño said the
Guimaras Gov. Samuel T. Gumarin poses for photographers with the plaque declaring the province’s 100-percent commitment to the “Seal of Climate Leadership,” banning coal and other dirty sources of energy in Guimaras.
Phi l ippines shou ld invest in renewable-energ y and become a renewable energ y leader. “One way of demonstrating the countr y’s leadership is that we are blessed with so much r e n e w a b l e e n e r g y. We h a v e 70,000 -megawatt wind energ y capacit y. T hat is rough ly 70 times our current demand. And this is wind alone. The potential of producing solar energ y is also unlimited. We also have ocean current. A ll in all we have a 160,000 -megawatt capacity, more than enough for the country’s total energy requirement,” he said. “Moreover, since renewable energy is free, it cannot be monopolized. This is a real power for
the people because the renewableenergy facilities will be owned by the people,” he added.
Supply and demand
Saño said there’s a need to learn more about supply and demand. “We need to become more efficient in terms of using our supply and accurate in forecasting our future demand.” He lamented: “We don’t want to supply if there’s no demand. Accurate forecasting is important. We need to know our longterm demand. That is what we lack. We are wasting energy and we are producing more than what we need.” T h e p o s s i b i l it y o f p o w e r overcapacit y, he sa id, is not
According to Rodne Galicha, Climate Reality Project Philippines countr y manager, more and more local government units (LGUs) are embracing renewable energ y and are turning their backs on coal. Guimaras, he said, is one example of an LGU that chose to take the path of sustainability. He added that the fight against coal should also be complemented by highlighting communities that are using renewable energy. “There are a lot of places in the provinces that are opening up to renewable-energy investment,” he said. Negros Island, Leyte, Aklan, Batangas, Romblon and Sibuyan Island are all going green with renewable energy. Romblon, Romblon, he added, is now installing windmills. “We need to highlight solutions while we oppose coal. Solutions are already happening and it is possible, especially in small islands, such as in Sibuyan and Romblon, and here in Guimaras,” he said.
Policy problem
Galicha, however, added that while it is costly, the government should find a way to separate
clean energy, or energy produced through renewable energy and that from fossil fuels like coal or diesel. “What we are looking at is to have energy freedom to choose what energ y we want to use. Whether dirty or clean. But that will take time,” he noted. Having a smart grid that can separate clean from dirty energy is a big challenge. But he said there are solutions so that the people in communities hosting renewable energy plants can benefit from the clean energy they produce. “ T he gover nment must invest a lot to en su re energ y freedom. People want to brea k free from coa l. Host communities shou ld be the first and foremost benef ic i a r y of t he renewable energ y produced in their area,” he said. Like in Guimaras, he added the LGU and the proponent of the wind farm should find a way to reduce the cost of electricity so that the people will benefit in terms of lower electricity rate. To encourage investment in renewable energ y, he said the government should offer more incentives and subsidies. This will allow the government to realize and adapt to the trend that leans heavily in favor of renewable energ y. “For instance, in terms of a loan, interest should be lower if the borrower is using it for renewable energy,” he proposed. A ccord i ng to Ga l ic h a, t he conce pt of i ndu st r i a l i z at ion and coa l as a cheap source of energy is being debunked by the globa l trend he ca l ls sustainable development revolution. “We need to recognize that there are solutions. With the current international trend and business model, coal will become a stranded asset. The policy is in place for renewable energy but, despite the institutionalized direction, the Philippine government is moving away from renewable energy. Many people are now aware of climate change and want to go renewable. We know what happened 200 years ago when we embraced industrialization,” he said.
Biodiversity Monday BusinessMirror
Asean Champions of Biodiversity Media Category 2014
Monday, March 5, 2018 A13
Editor: Lyn Resurreccion • www.businessmirror.com.ph
The elusive, majestic biggest fish
Cracking the mysteries of the whale shark
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ALAPAGOS ISLANDS, Ecuador—It’s the biggest shark—and the biggest fish—in the sea, often found roaming in warm waters around the globe with its huge mouth agape in search of dinner. Yet, despite its hulking appearance, the whale shark has only tiny, almost useless teeth and is sometimes so docile that entire boatloads of people can swim alongside the enigmatic, spotted beast. It’s also one of the least-understood animals in the oceans. In an attempt to solve some of the most enduring mysteries, a group of scientists spent several weeks diving with whale sharks in the Galapagos Islands l a st s u m me r a nd f a l l . T he y tried some never-before-used techniques on the species in the wild: taking blood samples and doing ultrasound exams, all while swimming furiously beside them under water. Here’s what’s known about these massive marine animals and what scientists are still trying to find out:
Whale or shark?
While they are comparable in size to whales, whale sharks are sharks. They typically grow to be bigger than a double-decker bus: between 6 meters to 16 meters and more than 20 tons. But, as filter feeders, the enormous whale sharks are dangerous only to the plankton, fish eggs and tiny fish they chomp on. The gentle giants aren’t particularly fast when compared to other sharks, but a simple wave of their tail propels them through the water faster than any human could ever sw im. They have broad, f lat heads, and their entire dark-blue bodies are covered in dots that act as camouf lage under water.
After years of being overhunted by fishermen, whale sharks are endangered and at risk of extinction.
Hangout spots
Whale sharks prefer warm waters and are often found feeding at locations around the world—including Australia, the Philippines, Mexico and even in the oil fields off the coast of Qatar. Hundreds of whale sharks— mostly young males—congregate in these areas at certain times of the year to scoop up fish eggs; it’s unknown where adult females are feeding then. The vastness of the ocean usually makes the shy animals hard to find—Jacques Cousteau only ever saw two in his decades of sea exploration.
Tracking whale sharks
Marine biologists have been tagging whale sharks in recent years to track their movements. Others are tr y ing to answer questions about their life and reproductive cycles. Only one pregnant whale shark has ever been found: In 1995 a dead whale shark was found off the coast of Taiwan with 300 embryos inside, all at different stages of development. “The million-dollar questions are, where are they mating, hunting and where do their young live?” said Jonathan Green, director of the Galapagos Whale Shark Project. A n inter nationa l d atabase was launched to identify as many whale sharks as possible through their distinctive
Jonathan Green checks on a fin-mounted satellite tag on a whale shark in the Galapagos Islands area of Ecuador in 2017. Despite typically being bigger than a double-decker bus, the elusive whale shark has only tiny, almost useless teeth. It’s also one of the leastunderstood animals in the ocean. Simonjpierce.com via AP
dot pattern; each shark has a unique configuration of dots that act like a fingerprint. More than 8,000 sharks have been logged so far. Because scientists can only afford to spend a few weeks in the Galapagos each year, they depend on photos taken by visiting divers to figure out what the whale sharks are up to. So far, none of the sharks spotted in the Galapagos has been seen anywhere else. Researchers in the United States and Japan are also working to sequence the whale-shark genome.
Galapagos dives
T h e G a l a p a go s I s l a nd s a re among the few places in the world where presumably pregnant whale sharks are regularly seen. More than 99 percent of the sharks identified in the volcanic archipelago are female, and many have a swollen abdomen that suggests they’re expecting. Some scientists believe pregnant whale sharks are cruising through the Galapagos, perhaps to extreme depths close to the northern-most island or to the open ocean near the equator to give birth. Either place would probably
If we do the things that are necessary to conserve the whale sharks, we’ll be conserving the ocean itself.”—Thorrold
ensure the safety of their offspring from predators until they’re big enough to survive on their own. Yet another theory suggests whale sharks may be giving birth closer to Peru—after two newborn whale sharks were found in fisheries there recently.
Results
Because of the difficulty of conducting a medical exam on a free-swimming whale shark, researchers only obtained two blood samples, which haven’t yet been tested. The ultrasound exams were inconclusive, and Green said more powerful machines are needed. Most ultrasound machines for animals are intended for abdominal walls that are 1 to 2 inches thick—but a whale shark’s abdominal wall is about 8 inches. “When we first started studying these large animals, nobody knew how to go about it,” Green said. “Now that we have better technology and
more experience, we will hopefully be able to answer some of the fundamental questions soon.” Besides blood and ultrasound tests, scient ists successf u l ly tagged seven sharks. While not a large number, it’s important since so few whale sharks are tracked. The pressure of deep water can cause tags to drop off if the sharks dive below 2,000 meters, which the animals often do if they’re traveling long distances or possibly giving birth. But any migratory data the scientists collect when sharks stay at shallower depths can help build a picture of the sharks’ life cycle. Gre e n a nd col le a g ue s a re planning further expeditions to the Galapagos later this year to continue their research, including more blood samples and satellite tagging. “When you have so few data points, every single shark is important,” said Robert Hueter, director of the Center for Shark Research at Mote Marine Laboratory in Florida, who was not part of the Galapagos research. “These aren’t like goldfish where you can get sample sizes of hundreds at a time.”
Why it matters
In the last 75 years, the vast majority of whale sharks have been hunted by people for food and their numbers are still dropping, said Simon Pierce, chief scientist at the Marine Megafauna Foundation. Some biologists worry climate change could hurt the sharks by reducing their food supply: rising ocean temperatures could mean less plankton. “If we do the things that are necessary to conserve the whale sharks, we’ll be conserving the ocean itself,” said Simon Thorrold of the Woods Hole Oceanographic Institute in Massachusetts. For Green, who heads the Galapagos project, it’s more personal. “Even after years of diving with whale sharks, I still get goose bumps every time I see that huge blue shadow in the water. It’s an incredibly emotional experience.” AP
Asian countries hold workshop on biodiversity info sources S. Korea mulling over reviving
bulldozed forest after Olympics
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regional workshop for Asia was held recently in Thailand to provide guidance on the establishment of Clearing-House Mechanism (CHM) on information sources on biodiversity. To a s s i s t c o u nt r i e s f r o m A sia in establishing and ef fective management of Nationa l C lear ing-House Mechanisms, t he Convention of Biolog ica l Diversit y (CBD) and t he A sean Centre for Biod iversit y’s Bio d ive r s it y I n for m at ion M a n agement Unit (ACB -BIM) conducted the “Regional Workshop for A s i a n C ou nt r ie s on t he C lea r i ng- Hou se Mec h a n i sm” i n Ba ng kok , T h a i l a nd , f rom Januar y 29 to Febr uar y 2. Representatives from eight the Association of Southeast Asian Nat ions members-st ates a nd participants from Bhutan, Bangladesh, Cook Islands, Maldives, Mongolia and Nepal convened at the United Nations Conference Centre of the United Nations Economic and Social Commission for Asia and the Pacific. Officials from the CBD conducted capacity-building activities to develop the faculty of countries from Asia who are interested in setting up a national CHM, or enhance the existing ones. The five-day workshop had the CBD providing an overview of the CHM, highlighting the need for countries to understand its
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The participants to the “Regional Workshop for Asian Countries on the Clearing-House Mechanism” in Bangkok, Thailand. ACB photo
purpose and strategic content. It was emphasized that the CHM started out as a platform for sharing information, and developed into a web of information sources through which biodiversity information is exchanged, and is now intended to support national planning and reporting, specifically National Biodiversity Strategies and Action Plan and National Reports. A lexandre R afalovitch, website officer from the CBD, introduced Bioland, an online tool that prov ides support to CBD member-countries who do not have national CHM web sites or still in the process of web-site establishment.
It was emphasized that Biol a nd s up p or t h a s nu me rou s advantages, among which are free hosting and efficiency of translations. As an exercise, each participant was assigned a Bioland test site to be able to experience the functionality of the tool, and design mock CHM web sites for their respective countries. The participants presented the features of the mock CHM web sites they have created, as well as their feedback on their ex per ience in using the Bioland tool. On the other hand, ACB presented its programs, as well as its role in biodiversity management
in the region. It also highlighted the availability of the Asean CHM, and how it supports the Asean member-states. The Asean CHM was established to suppor t the implementation of the CBD and its Strategic Plan for Biodiversity 2011-2020, through effective information services and other appropriate means in order to promote and facilitate scientific and technical cooperation, knowledge sharing and information exchange and to establish a fully operational network of parties and partners. It is one of the flagship programs of ACB and managed by its BIM.
EONGSEON, South Korea—As hundreds of Olympic spectators flocked to a sparkling white ski slope cutting through the rugged mountains of Jeongseon, the marquee venue of this year’s Winter Games, Cho Myung-hwan stepped back and looked up. He let out a sad chuckle. “It’s dreadful to watch,” Cho, 62, a landscape photographer from Seoul, said as he examined the steep downhill course one day during the Olympics. “Under all the cheers and fun, there are the screams of buzzed-off trees.” Cho has visited Mount Gariwang 16 times since 2006, including several trips after 2014 to document the construction of the slope, which was finished in late 2016. He pointed to a spot near the spectator stands where he said the last tree had stood—a 24-meter (78 foot)-high Manchurian walnut tree with red and yellow ribbons wrapped around its trunk. Locals had come to the tree for generations to pray for good luck, health and childbirth. “I came here wondering whether there was a slight chance that the sacred tree would still be there,” he said. “But it isn’t.” With the Pyeongchang Games just concluded, South Korea walks into a future with questions about the long-term environmental consequences of hosting an expensive sports event in one of its poorest, oldest and most underpopulated areas. One major issue: the future of the scenic Jeongseon Alpine Center, which was built after some 60,000 trees were razed in a forest on the 1,560-meter-high Mount Gariwang. The area had been protected by
the government in the past because of its old trees and botanical diversity. The course was supposed to be demolished after the Olympics and restored to its natural state. Fierce criticism by environmentalists over the venue being built on a pristine forest caused construction delays that nearly forced pre-Olympic test events to be postponed. But Gangwon provincial officials now say they want to keep the course, or at least a significant part of it, as a future “comprehensive leisure” zone. They also say it would be difficult for the province to foot the bill for the restoration project, which experts say could cost $90 million over 20 years. A new hotel has already been built on the site; another is on the way. Regional officials talk of building mountain-bike courses, sledding parks and concert halls to complement the ski course. “It’s too late to talk about the environmental damage over Mount Gariwang,” Gangwon Province Gov. Choi Munsun said. “There’s no way to restore the forest 100 percent, and parts of the area should be used for sports facilities.” Whether Gangwon gets space to develop will be decided by the Korea Forest Service’s central mountain management committee, which will determine the restoration’s scale and method. The committee rejected a tentative reforestation plan that Gangwon was required to submit, calling for more specifics. Experts say it would be impossible to restore the forest entirely as it was. AP
A14 Monday, March 5, 2018 • Editor: Angel R. Calso
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editorial
Let the trade wars begin!
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he press and media that often act as the “Ministry of Propaganda” for business and government would like the people to believe that global trade is all harmony. Trade between nations is positive in theory for nations rich and poor. But this trade is far from an exchange of “Kris Kringle” gifts, when everyone gets what he or she asked for and a kiss on the cheek. Global trade has always been a ruthless war. War is one nation wanting to take the wealth and resources of another, which usually meant an armed conflict to seize territory. But what if a country could accomplish that goal slowly and consistently without the death and destruction involved in armed conflict? The quote “when goods don’t cross borders, soldiers will” is often attributed to French economist Frederic Bastiat. This is used to claim that without trade, there would be the armed conflict. In truth, trade and armies can be two sides of the same coin. In Middle Ages, the governments of England and France issued “Letters of Marque” to allow private armed ships (read pirates) to seize the merchant vessels of their enemies. That made sense, and even the famous Dutch jurist Hugo Grotius wrote an international law paper defending Dutch raids on Portuguese shipping as enemies of the state. But what were all these enemies fighting over? Trade routes. Every former colony, including the Philippines, clearly understands how this trade can work. You give your Kris Kringle partner a shiny engraved ball pen: you get a broken pencil. England imports Indian cotton for its textile mills and then sells the cloth back to India. US President Donald J. Trump broke off negotiations on the North American Free Trade Agreement (Nafta) with Mexico and Canada, saying his country is being abused by this “free trade.” On the 10th anniversary of Nafta, the director of Public Citizen, a think-tank founded by consumer activist Ralph Nader, outlined why consumers and business have been severely damaged by free trade. Lori Wallach wrote in The Huffington Post: “The average annual US agricultural trade deficit under Nafta stands at $800 million, more than twice the pre-Nafta level.” However, the damage works both ways. “The export of subsidized US corn did increase under Nafta, destroying the livelihoods of more than 1 million Mexican farmers and about 1.4 million additional Mexican agriculture workers.” President Trump has announced that the US will impose a 25-percent tariff on imported steel and 10 percent on aluminum. The press and media immediately denounced this as “protectionism” and against “free trade,” while painting an apocalypse scenario. Yet, the 850,000-member United Steelworkers Union, the largest industrial union, said: “The steel and aluminum sectors have been under attack by predatory trade practices. For too long, our political leaders have talked about the problem, but have largely left enforcement of our trade laws up to the private sector.” Trump responded to the criticism by saying, “Trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore—we win big.” The key weapon is a “reciprocal tax.” If another country charges an import duty of 10 percent on the products you export to them, then you charge a 10percent duty on the products they export to you. Certainly, there are economic risks and each situation must be handled uniquely. But look at our department store shelves and see all the imported products (sport shoes, for example) that used to be “Made in the Philippines.” And where is our steel industry now? One way or another, the government is going to “protect” somebody. The only question is, is it going to be “us” or “them”?
The Saturday Group celebrates 50 years Atty. Jose Ferdinand M. Rojas II
RISING SUN
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he Saturday Group of Artists has been around for 50 years. It started as an informal gathering of artists who got together to talk about art and put their passion to practice, as well as to share their works with each other and with the rest of their audience. The group evolved through the years, with some of its members ending up as National Artists. Former Saturday Group members who became National Artists include such illustrious names as Bencab, Arturo Luz, Jose Joya, Vicente Manansala, Cesar Legaspi, H.R. Ocampo and Botong Francisco. The Saturday Group of Artists meets every Saturday to hold art
‘Make change work for women’
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sessions on “on-the-spot still life, portraiture, figure sketching and even landscape painting.” And every year the Saturday Group holds an exhibit to showcase the works of its members. For 2018, as the group celebrates 50 golden years in art and culture, they are holding a special art exhibit at the Cultural Center of the Philippines’s (CCP) Main Gallery,
which opened on March 3, Saturday. Dubbed “Saturday Group Gold: Celebrating 50 Years in Art,” the show will run for two months at the CCP. Curated by Ricky Francisco, the show features the paintings of its current members (one art piece each), as well as masterpieces from the founding members. There are around 60 works of art up for viewing. “The paintings [are] presented chronologically by sections [so] one can have a feel of [the group’s] history, as well as the changing trends in the Philippine art scene.” Also on display are archival materials that present the colorful history of the group, like news clippings, still life, and nude sketches of the artists during their art sessions in the 1990s, and photos from the many trips and activities that the members organized through the years. It is indeed a celebration of 50 golden years of collaboration and friendship, and half a century of
Atty. Lorna Patajo-Kapunan
legally speaking
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he United Nations General Assembly, in its 105th Plenary Meeting on December 16, 1977, approved by resolution the declaration of an International Women’s Day. It took the Philippines 11 years during the term of the first female president, Corazon C. Aquino, to enact legislation implementing the UN resolution. Thus, on July 24, 1988, Republic Act (RA) 6949, “An Act To Declare March Eight of Every Year as a Working Special Holiday To Be Known As National Women’s Day,” was enacted under Jovito R. Salonga as President of the Senate and Ramon V. Mitra as Speaker of the House. Under RA 6949, Section 2, “to ensure meaningful observance of the holiday, all heads of government agencies and instrumentalities, including government-owned and -controlled corporations as well as local government units, and employers in the private sector shall encourage and afford sufficient time and opportunities for their employees to engage and participate in any activity conducted within the premises of their respective offices or establishments to celebrate National Women’s Day: Likewise, Presidential Proclamation 2245 (March 1, 1988) “Declaring the First Week of March of Every Year as Women’s Week and March 8, 1988, And Every Year thereafter As Women’s Rights and International Peace Day” was issued by then-
President Aquino “in solidarity with the commemoration of the struggle of Filipino women for national freedom, civil liberty, equality and human rights.” This was followed by Proclamation 227 (March 17, 1988) designating the National Commission on the Role of Filipino Women (NCRFW) as the secretariat to coordinate the observance of the month of March as “Women’s Role In History Month.” The Philippine Commission on Women (PCW), created by the Magna Carta of Women (RA 9710) to replace the NCRFW, announced that the 2018 National Women’s Month celebration will have the theme “We Make Change Work for Women.” This month aims to celebrate the achievements of women and girls in various fields and recognize their contributions to society. This theme shall be used from 2017 to 2022. It highlights the empowerment of women as active contributors to, and claimholders of, development. In his first State of the Nation
Address (Sona), President Duterte directed “all agencies, oversight bodies and local government units down to the barangay level to fully implement the Magna Carta of Women.” This is to ensure that man and woman will be partners in the pursuit of the country’s economic, social, cultural and political developments. This pursuit of development under the new administration is also anchored on the commitment of malasakit at pagbabago or true compassion and real change. Thus, the first National Women’s Month celebration under the new leadership will focus on these key foundations: partnership for change and full implementation of the Magna Carta of Women (RA 9710), captured through the theme: “We Make Change Work for Women.” Source: www.pcw.gov.ph The PCW explains the elements of the theme in this web site : (http://pcw.gov,ph/ WomenMakeChange2018).
Elements of the Theme
n WE stands for Women Empowerment—empowering women enables them to confidently and meaningfully engage with appropriate institutions to ensure that they contribute to and benefit from development and changes. Thus, women’s empowerment will make the change that we are espousing or any development effort responsive to women’s concerns. n Make Change Work (MCW) =Magna Carta of Women—making change work for women necessitates strengthening the implementation of the MCW at all levels. It means putting in place functional mechanisms as well as implementing and making known to citizens the
presence in the Philippine arts and culture scene. Members, past and present, artists and their patrons, lovers of art and the supporters of our local arts and culture scene must come and view the exhibit. It would be so wonderful to be a part of the Saturday Group’s journey, achievement and passion. Come and celebrate with the artists—you are invited to visit the show anytime at your convenience at the CCP. nnn
The Philippine Charity Sweepstakes Office Freedom Cup Race was held on February 25 at the Philippine Racing Club Inc. in Naic, Cavite. I would like to congratulate the winners: Pangalusian Island (with jockey MA Alvarez) in first place, Manda (with JB Hernandez) in second place, Salt and Pepper (with PR Dilema) in third place and, in fourth place, Golden Kingdom (with FM Raquel Jr.). My warm greetings to all the winners!
programs and services that address strategic gender needs of women. n Change—also means Compassionate and Harmonized Actions and Networks for Gender Equality. n We/us or kami/tayo in Filipino—who is going to pave the way for an enabling environment for women to be empowered? Who is going to ensure that the MCW is implemented at all levels? Who is going to make change work for women? If all of us, in our various capacities, whether as government officials and employees, members of the private sector, academe, non-governmental organizations, or as private individuals, can be a partner for a change that is gender-responsive. It emphasizes our collective effort, collaboration and participation to ensure that women will not be left behind in the pursuit of change. The theme emphasizes that women should be active drivers in bringing about positive changes, and that they should also reap from fruits of development efforts. This can be made possible by empowering women—enabling them to meaningfully engage with other development stakeholders, and by fully implementing the MCW. Human-rights groups have slammed President Duterte for his misogynist statements against women. In a recent press briefing, Presidential Spokesman Harry L. Roque Jr. was asked whether he could advise the President against using crude remarks against women. Roque replied. “I will advise him as recommended.” Good luck, dear Harry! Hope springs eternal!
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Most frequently asked financial questions from start-ups Filbert Tsai
DEBIT CREDIT Conclusion
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hould I pay myself? I continue in this second part of my column my advice to the start-ups on concerns of building up their business.
For sure! Do your company a favor and record the right expenses for your business. Paying yourself right helps you understand the real bottom line of your company. While we know that you plan to pay yourself through dividends, do make sure you are properly compensated in salaries. Seeing the impact of your salary on your start-up’s net income will hurt, but it’s a good wake-up call for you to start working to drive the gross margin up. And, of course, compensating yourself allows your company to save on taxes as well, as these are deductible expenses. Should I join more pitching competitions? If you’ve got excess time, go for it. Every opportunity for you to introduce your idea or product is an opportunity to sell and improve. Winning is not everything in a pitch competition. In most cases, it’s not the best idea that wins but the one that best fits the competition or the sponsoring organization. Your goal is to create brand recognition for your idea or product. You’ll never know, a potential investor might be sitting somewhere in the panel or audience. How should I price my product? There are a lot of models that you can use to sell and price your product, none of which are foolproof. Some examples are the cost-plus-margin model and the subscription model. The first is usually used for products, while the second is used for services. Whichever model you choose, remember to recover your costs. Here are some costs that you might incur: n Cost of investment Your cost to create the product should be recovered in the long run. Think of how long you plan to
recover your investment—that’s your denominator. The output is your amortized cost of investment. This is the amount you plan to recover annually from sales to cover your cost of investment. n Fixed costs These are your continuing costs to operate the product (e.g., server costs, rental expenses, maintenance, etc.). This is the cost you need to cover with your contribution margin to at least break even. n Variable costs These are the expenses that change depending on the level of output. So, to calculate for your product pricing, divide the total of your annual amortized cost of investment and your annual fixed costs by your annual sales target. The result is your target contribution margin in local currency. Last, add the variable costs per unit of your product to the contribution margin, and that’s your target price. It’s a simple concept, but it’s a bit more difficult in practice. Give your company’s chief financial officer or accountant a ring to give you that number. I hope that this will give a broader perspective to our start-up owners who needd to know the challenging environment that they constantly will be engaged in. Filbert Tsai has his own consulting firm, the UpSmart Consulting Inc. His key areas of interests are start-ups and micro, small, medium enterprises (MSMEs). His blog and page, “Ask the Accounting Advisor,” provides relevant insight for start-ups and MSMEs in the Philippines. This column accepts contributions from accountants, especially articles that are of interest to the accountancy profession, in particular, and to the business community, in general. These can be e-mailed to boa.secretariat.@gmail.com.
What can be negotiated in a competitive challenge process By Alberto Agra
PPP Lead Continued from A1
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he implementing rules and regulation of the build-operatetransfer law (BOT law IRR), which specifically lists nine modalities, and the 2013 Guidelines issued by the National Economic and Development Authority on Joint Ventures (Neda JV Guidelines) define the scope of the negotiation. The BOT law IRR and Neda JV Guidelines are couched in general terms and do not expressly spell out the matters that cannot be covered under Stage 2. The BOT law IRR provides that “negotiations shall focus on the project scope, implementation arrangements, reasonable ROR (rate of return) and other parameters determined by the ICC (Investment
I
’ve been unreasonably obsessed with the Oscars—and reliably outraged by them—since 1977, when voters passed over Network, Taxi Driver and All the President’s Men to award the best picture prize to Rocky. I attributed that lunacy to anxiety: America was reeling from the one-two punch of Vietnam and Watergate and Rocky represented a reprieve from all that. It was uncomplicated. It was optimistic. It was, as they say, “feel good.” Watch it now, and tell me how you feel. It’s precisely as hokey as you recall, but there’s something you may not remember, something with a darker tinge through the lens of #MeToo. I’m referring to the end of Rocky’s first date with Adrian. He invites her into his apartment. She tells him— not once, not twice, but three times —that she’d prefer to go home. He nonetheless wears her down, then mocks her continued protests once she’s inside. “I don’t belong here,” she says. “I don’t feel comfortable.” He’s down to his undershirt [a wife beater, no less]. She still has her winter coat and hat on. When she goes for the door, he backs her into a corner, removes her eyeglasses and declares: “I want to kiss you. You don’t have to kiss me back.” Romantic, no? It’s framed that way: Bold stallion awakens dormant passions in timid mouse. But if you
wonder where some men got the idea that “no” means “maybe” and that a squirming woman just needs a thuggish tug toward her inner vamp, well, one answer is Rocky and a long line of movies with similar suggestions and scenes. This year’s Oscars are on Sunday night, and it’s guaranteed that nominees, presenters and others at the ceremony will mention sexual misconduct, the #TimesUp movement and the imperative of female empowerment and equality. It will be a just and, I think, heartfelt discussion in an industry upended by Harvey Weinstein’s predations and the avalanche of secrets that followed. But Hollywood’s complicity in sexual abuse and harassment goes well beyond the casting couch and monsters like him. It’s a function of storytelling and archetypes across decades, of sequence upon sequence in which a woman held captive is really a woman unbound and a man
Coordinating Committee of Neda)/ Approving Body, and the terms and conditions of the draft contract for the Unsolicited Proposal, among others.” Under the JV Guidelines, “both
Disconnect to connect Siegfred Bueno Mison, Esq.
THE PATRIOT
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uring the past few weeks, I have not been able to do my usual recreational activities due to lower-back pain. I ended up spending much-needed alone time in my farm in Silang, where I always find refuge, away from all the physical and mental noise pollution in the metropolis. In the Bible, Job 33:31 tells us, “Pay attention, Job, and listen to me; be silent, and I will speak.” I have discovered only recently that the most important benefit of being silent is the ability to hear Him speak. In his international best-selling book, The Alchemist, Paolo Coelho narrated the story of Santiago, a young shepherd who crossed the African desert in search for treasure. During his journey, Santiago encountered several key people— a king, a crystal shop owner, a gypsy girl, an Englishman and, of course, an alchemist—all of whom influenced his choices during his journey. Rather than using logic, Santiago used silence to connect with the desert, the wind and, most important, his heart. It was during these silent moments that he became keenly aware of things that
Romance, rough sex or rape? By Frank Bruni | New York Times News Service
Monday, March 5, 2018 A15
is showing commendable will or ingenuity by bullying or tricking a woman into sex. On the big screen, consent has long been a fuzzy, negotiable concept. The best example is the 1940 best picture winner, Gone With the Wind. In one of the movie’s most extensively deconstructed passages, Rhett Butler, drunk and fed up with Scarlett O’Hara’s condescension, threatens to crush her skull with his bare hands, violently grabs her and lugs her up a staircase toward the bedroom. Cut to the next morning and the twinkle in her eyes. Acclaimed film critic Molly Haskell, who has paid special heed to movies’ portrayal of women, told me that while she wouldn’t put a sequence like that in a movie today, it rightly belonged in Gone With the Wind and made sense in terms of Scarlett’s character. It also dovetailed with the era’s sensibilities. “Movies don’t invent behavior,” said film historian and Wesleyan University professor Jeanine Basinger, whose many books include A Woman’s View: How Hollywood Spoke to Women, 1930 to 1960. “They reflect behavior. But in reflecting behavior with good clothes and beautiful stars, they begin to define it as cool.” “I always go back to Valentino,” she told me, referring to actor
would have otherwise escaped his notice. And he eventually found his treasure from within, using silence as a tool to discern with his heart. In this day and age, social media connects us to each other by keeping us updated and informed of the world around us. l have yet to see an event, whether it is a business conference or a social party, where people do not have their smartphones in hand. To some extent, a responsible citizen ought to be informed of what is happening in the world. However, my friend LSG once told me that there is so much romance in being alone. In solitude and silence, we discover ourselves. Disconnecting from the world allows us to connect to our heart. Marian is a lawyer whose unique dedication, determination and devotion has led her
In books, there’s a genre called “the bodice ripper” and, she noted, “The woman doesn’t rip her own bodice.” That’s a man’s work. And that idea informs countless movies in which, she said, “The man is supposed to desire and pursue, and the woman is supposed to resist and make demands.” Rudolph Valentino and the movies The Sheik (1921) and The Son of the Sheik (1926). “He carries her off— it is actually a rape thing—but it’s couched so romantically. He’s so beautiful and exotic, and he sweeps her up on the horse.” Basinger wasn’t endorsing this scenario. She was just describing its presentation. In books, there’s a genre called “the bodice ripper” and, she noted, “The woman doesn’t rip her own bodice.” That’s a man’s work. And that idea informs countless movies in which, she said, “The man is supposed to desire and pursue, and the woman is supposed to resist and make demands.” That theme persisted beyond Rocky and the 1970s. For your consideration: Coal Miner’s Daughter, 1980. On her wedding night, Loretta Lynn, just a teenager, cries “no, no, no, no” as her older husband wrestles her into submission. The next morning, when he tells her to get used to it and she
parties shall negotiate on the terms and conditions, scope, as well as all legal, technical, and financial aspects of the JV activity.” Based on these two regulations, the parties can surely discuss three things: (1) the project scope, i.e., its legal, technical and financial aspects; (2) the contract, i.e., its terms and conditions; and (3) the implementation arrangements. The question now is, “Are there limits to what can or cannot be discussed and negotiated upon and hopefully, agreed on?” It is clear that the latitude of negotiation is broad, but how broad? Without a doubt, the negotiation checklist, as used in the BOT law IRR and Neda JV Guidelines, is “inclusive,” not exclusive. The BOT law IRR uses the terms “other parameters” and “among others,” while the Neda JV Guidelines mentions “terms and conditions” and “aspects.” These terms, however, cannot be construed as absolutes or not without limits.
The “others” must be reasonably linked, relevant and related to the project as proposed in the UP. Further, following a rule on statutory construction, the “others” must be of the same kind or nature as the enumeration. But the enumeration is so broad—project, contract and implementation—giving the IA wide discretion. While the parties can discuss almost everything, the discretion is not unlimited. For one, the parties, during the negotiation stage, cannot revise the project itself. In Stage 2, the parties cannot agree to change a bridge project to a water distribution project. However, in the bridge project, water distribution pipes may be installed, which was not originally contemplated in the UP. Related components, which could render a project (more) viable or complete, can be introduced during negotiations. This is still project-related.
to a prosperous life. She graduated with distinction from a prominent law school in the country, prompting popular law firms to recruit her while she was still a student. Her experience and expertise in law eventually led her to start her own lucrative law practice. But a few years ago she decided to completely change her life—she dissolved her firm, let go of her high-profile clients, and decided to pursue a career in academe. To change one’s career so radically is never an easy decision, but Marian’s mindfulness obtained through silence guided her through the process. Of course, such a life-changing decision may be difficult for others to accept. Her clients, friends and, initially, her husband, objected to the closure of her financially rewarding law office. But her heart told her to be true to herself. In the Bible, Proverbs 4:23 tells us, “Above all else, guard your heart, for everything you do flows from it.” Despite all the financial and professional successes the firm had brought her, she realized that family was more important and chose to quit to become a present and mindful mother and wife instead. An avid practitioner of Ashtanga yoga, Marian shares that her upward and downward dog postures make her feel connected to Him, like a father embracing his daughter. Her personal mantra is “I am always enough,” and it has led her
to the realization that whatever she does will always be pleasing to Him. She has defied the traditional definition of success and has learned to not care about what others may say about her career. She thinks less of success in terms of accumulating wealth and now thinks more of meaning in terms of how she pleases Him. In her words, she said, “God has promised us abundance and so in silence, you know He will grant the deepest desires of your heart.” Standing still in silence allows us to feel His presence and discern His will. Sometimes we need to be silent and disconnect to connect. Social media is just one of the many activities that impair our ability to hear our heart. In all her successes, Marian connects to her heart in the same way Santiago connected to his. In the Bible, Jeremiah 29:13 tells us, “You will seek me and find me when you seek me with all your heart.” We can hear our hearts only when we are still, only when there is silence, in the same way that Marian prays and Santiago crosses the desert. If silence is the anchor in our ship called life, then our heart is the steering wheel that directs our journey toward the best destination in our lives.
says that she won’t, he slaps her. It’s not pretty, but it’s a necessary rite of passage—or so the movie seems to maintain. Revenge of the Nerds, 1984. Fixated on sorority women typically beyond his reach, a college nerd costumes himself so that one of them mistakes him for her boyfriend and has sex with him. When he removes his mask, she’s not appalled at his subterfuge. She’s impressed by his prowess. Overboard, 1987. Dean and Joanna luxuriate in a postcoital embrace. “Was it always like this?” she asks him. He answers, “Every time with you is like the first time.” It’s a line meant for laughs, because this was the first time: She’s a spoiled heiress suffering amnesia, and he’s a working-class hunk who has duped her into cleaning his house, caring for his kids and sharing his bed by telling her that they’ve long been a couple. From this elaborate ruse comes her ecstatic rebirth. The movie is a romantic comedy. Each of those episodes has a particular context and justification. None are intended as instructive. But all, I think, would be changed if being filmed today. Time passes, consciousness expands and movies look different in retrospect. Mark Harris, author of the book Pictures at a Revolution, which
examines the five movies from 1967 that were Oscar nominees for best picture, told me that he has repeatedly shown and discussed one of those, The Graduate, on college campuses. Only recently, though, have some students raised questions about whether the main character, Benjamin, “is a stalker of sorts in the way he pursues Elaine,” Harris said. They have a legitimate point— but it’s not the movie. “I think the least interesting thing one can say from the vantage point of the present about any piece of pop culture is that it was not as enlightened as we are today,” Harris said. “I mean, isn’t that a given?” Thirty-one years after the original, a remake of Overboard is about to be released—with the gender roles reversed. Hollywood’s present enlightenment is clear not just in its stars’ red-carpet pronouncements but in this year’s best picture nominees, including Lady Bird and The Post, and their gallery of independent, assertive female characters. In The Shape of Water, for example, the heroine isn’t victimized by the swamp creature, not unless you count his failure to pay rent on that bathtub or chip in for groceries. And she’s the one who brokers their trans-species coupling. It’s weird. It’s soggy. But it’s progress.
To be concluded
For questions and comments, please e-mail me at sbmison@gmail.com.