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Monday, March 6, 2017 Vol. 12 No. 145

Chinese tourists boost visitor arrivals in PHL 85,948 C

Changing the rules of the concession game

@akosistellaBM Special to the BusinessMirror

Dat a f rom t he Depa r t ment of Tourism (DOT) show Chinese visitor arrivals jumped by some 76.5 percent to 85,948 in January 2017, the largest growth recorded among 12 major tourism markets of the Philippines.

This helped boost the total number of tourists who visited the country to 631,639, from the 542,258 who arrived in January 2016. “We are now seeing the fruits of President Rodrigo Roa Duterte’s reaching out to China. Doors to more

BMReports

The number of Chinese tourists who visited the country in January

economic opportunities and peopleto-people exchanges are wider more than ever, now that ties between Manila and Beijing have seen a new day,” Tourism Secretary Wanda Corazon T. Teo said in a statement. The huge leap in Chinese visitors in January enabled the market to

By Claudeth Mocon-Ciriaco Correspondent

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Part One

IGHTLIFE is a significant contributor to a city’s economy. Nightclubs, bars and watering holes have brought employment, as well as contribute to the sale of alcohol and tobacco products. However, there are downsides, Quezon City Public Order and Safety and City Information Officer Ares Gutierrez told the BusinessMirror. These downsides, however, are being addressed in a balancing act between revenue and public order, Gutierrez said. He pointed to the city’s Business Permits and Licensing Office (BPLO), which “properly regulates” the nature and/or operations of various business activities within the city. “Besides BPLO, we also have the Liquor Licensing Regulatory Board [LLRB] for business establishments like clubs, bars and the like,” he said. According to documents provided by Gutierrez, the LLRB processes applications for a liquor license, or a permit to operate Continued on A2

Nightlife in Cubao, Quezon City.

PESO exchange rates n US 50.3070

NONOY LACZA

PPP Lead Alberto C. Agra

A

re concessions public-private partnership (PPP) arrangements? What is a concession? What are examples of concession agreements? What are the harmful effects of changing the rules of the concession game during the life of the contract? ■ Concession broadly speaking. Broadly, a concession is a license, franchise or grant of authority. Without a concession, a proprietary function or the “business” aspect of government cannot be “shared” or entrusted to a private-sector proponent (PSP) or concessionaire. Continued on A15

Continued on A2

Cities reckon with downsides of thriving nightlife industry

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By Ma. Stella F. Arnaldo

HINESE tourists helped power the 16.5-percent increase in visitor arrivals in the first month of 2017.

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SMC KEEN ON CONVERTING MALAYA TPP INTO LNG PLANT By Lenie Lectura

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@llectura

he power business of San Miguel Corp. (SMC) has expressed interest in converting the 650-megawatt (MW) Malaya Thermal Power Plant (TPP) into a liquefied naturalgas (LNG) plant. SMC President Ramon S. Ang said his company will participate in the auction should a plan to rebid the power asset pushes through. “Yes, we want to,” Ang said in a text message. The bidding process for the plant has already commenced, with four firms interested to participate in the auction. SMC, however, was not able to submit its letter of interest to the Power Sector Assets and Liabilities Management Corp. (PSALM), which manages the assets and liabilities of the National Power Corp., as mandated by the Electric Power Industry Reform Act of 2001. The bidding process could start all over again, after Energy Secretary Alfonso G. Cusi said he intends to require the winning

bidder to convert Malaya plant, which runs on diesel, into an LNG plant. “Part of the condition is to convert Malaya into LNG. We want power supply from Malaya to continue once privatized. If we have to rebid it for that reason then it’s better to rebid it,” Cusi said. T he bid documents purchased by the four interested firms do not indicate the conversion of the Malaya plant into an LNG facility. Cusi said it is up to PSALM to do this, since it is the one undertaking the bidding process. Cusi, as energy secretary, sits as PSALM’s vice chairman in the PSALM Board. The finance secretary is the chairman of the PSALM Board. In the planned conversion, Cusi cited the need for more power-generating capacity, particularly baseload power, which is defined as power that runs 24/7. LNG, Cusi said, has been identified as baseload. “What I am trying to say is

n japan 0.4398 n UK 61.7116 n HK 6.4810 n CHINA 7.3013 n singapore 35.6206 n australia 38.0824 n EU 52.8676 n SAUDI arabia 13.4188

See “SMC,” A2

Source: BSP (3 March 2017 )

A2 Monday, March 6, 2017

BMReports BusinessMirror

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Cities reckon with downsides of thriving nightlife industry Continued from A1

or engage in a liquor business in Quezon City. The agency is also mandated to supervise and regulate the establishment and operations of manufacturers, distillers, distributors, dealers, wholesalers and retailers of liquor and other intoxicating beverages. The LLRB also promulgate rules, regulations and guidelines necessary for the proper implementation of four City Ordinances: NC 85, Series of 1985; NC 86 series of 1989; SP 896, Series of 2000; and SP 1016, Series of 2001. There is also an agency that seeks to protect clubgoers or bar patrons, according to Gutierrez.

Ozone Disco

GUTIERREZ added the Bureau of Fire Protection is tasked to conduct regular inspection of all business establishments to make sure safety systems and features are present. These features ensure that every-

one is safe should an unwanted fire occur, Gutierrez said. We learned the hard way in 1996, he said, citing the Ozone Disco tragedy that left 162 people dead. Twenty-one years ago on March 18, 1996, a fire broke out at that club in Tomas Morato, a known nightlife circuit. The Ozone Disco Club fire is officially acknowledged as the worst fire in Philippine history and among the 10 worst nightclub fires in the world. Gutierrez said that, while a city may benefit from the after-hours economy for employing citizens, “it has its downside and social costs”. “There is proliferation of underground businesses, like prostitution, binge drinking and the like,” he said, adding that illegal drugs can be included in that economy, as well. To address this problem, Gutierrez said the local government implements a city-wide liquor ban. The ban mainly aims to prevent increasing untoward alcohol-

related incidents. The ordinance states that no establishment, including sari-sari (small neighborhood) stores, shall serve any liquor from 10 p.m. until 8 in the morning.

Inspections

GUTIERREZ noted that proliferation of clubs and bars might be contributing factors in the transmission of sexually transmitted diseases, like HIV/AIDS. “We can’t deny, it: if you open up a business and you start to sell liquors, some patrons will look for girls, then you will have a GRO [guest relations officer].” To address this situation, Gutierrez said the city government looks at meeting the information gap among minors, especially high-school students. He said they do this through an awareness campaign against HIV/AIDS. The local government, Gutierrez said, distributed a textbook on HIV/AIDS in all public schools

in the city. But it is not only HIV/AIDS that we are alarmed, but the possible proliferation of tuberculosis (TB) in the workplace, particularly in business establishments operating up to the wee hours of the morning. Gutierrez said all of the workers in the city are required to have health and occupational certificates. “We require the waitresses, cooks, GROs to have the health and occupational permit to make sure na wala silang sakit na nakakahawa [they don’t carry contagious diseases] ,” he said. “Hindi lang naman HIV/AIDS kundi pati na rin [It’s not only HIV/AIDS but also] TB.”

Pasay City

ONE of the known nightlife entertainment district is Pasay City. According to the city’s health office, the local government is also active in raising awareness. The office ensures that all information education and communication (IEC) materials that guide workers in the

Chinese tourists boost visitor arrivals in PHL Continued from A1

land in third place among the top tourism markets of the Philippines. “We have to keep the momentum going now that we are in the implementation phase of the National Tourism Development Plan [NTDP] for 2016-2022, which aims to unleash the potentials of our tourism industry and make it more competitive,” Teo said. She said a lot of impetus was already gained by the country’s successful hosting of the Miss Universe beauty pageant on January 30. According to the NTDP, the Duterte administration is targeting to attract 6.5 million foreign visitors in 2017, rising annually to 12 million by 2022. Tourists in the first month of 2017 contributed some P21.7 billion in revenues to the country’s econo-

my. This was a slight dip, however, from the P21.9 billion generated in January 2016, probably brought on by the slowdown in visitor arrivals from the United Kingdom, traditional high spenders. In January visitors from the UK grew only 4.5 percent compared to the 26-percent surge in January 2016. Also, despite the 76.5-percent jump in Chinese tourists, this growth was actually lower than the 130.2-percent rise recorded in January 2016. In addition, there was an almost 30-percent drop in visiting balikbayan or Philippine passport holders permanently r e s i d i n g a b r o a d (e x c l u d i n g o v e r s e a s Fi l i p i no w or k e r s), according to DOT data. South Korea remained the largest source of visitors for the Philippines, rising by some 4.9 percent to 154,367. This was followed by the

United States at 99,435 (up 17.7 percent); China; Japan, 51,516 (up 23.6 percent); and Australia, 27,826 (up 10.1 percent). Other top sources of tourists in January 2017 were Canada at 24,352 (up 15.4 percent); Taiwan, 21,926 (up 41.3 percent); the UK, 15,747 (up 4.5 percent); Singapore, 12,000 (down by 10.5 percent); and India, 11,805 (up 31.84 percent). India makes its first appearance in the list of top visitor markets of the Philippines edging out Malaysia, 10,215 (down 7.7 percent); Hong Kong, 10,006 (up 23.04 percent); and Germany, 8,917 (up 7 percent). The DOT also reported that the average expenditure of tourists in the Philippines amounted to P3,659 per day, while each tourist spent an average of P38,823 (about $761) during the month in review.

Tourists also stayed an average of 10.61 nights. South Koreans were the top spenders in January 2017 at P6.5 billion, followed by Americans at some P3.7 billion the Japanese at P2.12 billion, Australians at some P1.6 billion and Canadians at P1.09 billion. Aside from the recent Miss Universe beauty pageant, other events and travel fairs the DOT and its marketing arm, the Tourism Promotions Board, have lined up to market the Philippines are the yearlong meetings of the Association of Southeast Asian Nations; the ongoing ITB Berlin travel and trade show; Madrid Fusión Manila in April; the Incentive Travel Meetings Exhibitions in Frankfurt in May; Imex America in Las Vegas in October; and the World Travel Market in London in November.

diagnosis, treatment and prevention of HIV/AIDS in the workplace are distributed to all entertainment establishments in the city. The health office said the IEC materials contain information on sexually transmitted diseases (STDs), specifically on the modes of transmission and the prevention of HIV/AIDS and sexually transmitted infection (STI). These materials also contain the causes and consequences of these diseases, myths and fallacies associated with STIs, legal rights of entertainment workers, resources or support related to HIV/AIDs. The office also distributes a primer on Republic Act 8504, or the Philippines AIDS and Control Act of 1998. Mayor Antonino Calixto has said the provision of these information materials on HIV/AIDS and STI is mandated under the newly approved Implementing Rules and Regulations of City Ordinance (CO) 2341, or the Pasay City Aids Prevention and Control Ordinance.

SMC. . .

Continued from A1

that even after privatization we would not run out of power. The country still has to source power, so why not convert it to LNG so we can have baseload power? “It’s an expression of concern on my part. The winning bidder may just operate Malaya as it, is so why not convert it to a superior technology that will qualify as baseload,” Cusi said? APT Global Inc., Phinma Energy Corp., Riverbend Consolidated Mining Corp. and AC Energy Holdings Inc. submitted letters of interest. Their bids will be evaluated in preparation for the auction set on March 8 as stated in the original bid documents. PSALM has yet to announce if a new auction will take place. Ang has also expressed interest to bid for the Agus and Pulangi Power Plant Complexes.

CO 2341 orders owners to post the materials in the establishment’s dressing rooms, comfort rooms and other appropriate places, as well as in lodging houses, to inform the employees and clients in the prevention and control of STDs. At present, Pasay is strictly requiring all entertainers and other with similar occupations to attend AIDS/STI Awareness Seminars before they are issued a mayor’s work permit/license or occupational health permit, as required by CO 236, Series of 1993. The said ordinance, likewise, requires regular STI examination on all entertainers and others with similar nature of occupation every two weeks by the Social Hyg iene C l i n ic of t he Pa say Health Department. The Anti-AIDS campaign of the city government is in line with Calixto’s “Travel City” campaign, which seeks to promote the city as the entertainment and leisure center of the country. To be continued “Yes, SMC will join the bid of all government projects,” he added. Finance Secretary Carlos G. Dominguez III earlier proposed to rehabilitate the power facility before it is sold to prospective investors. “We have to fix it first. It’s operating only 40 percent of its total capacity,” he said, adding that an option being looked at is to privatize the operation and maintenance of the power asset. Cusi agreed. “Rehabilitate it first before it is privatize, that is correct. This is the opportune time to rehab it first then privatize after.” The Agus complex has 728-MW installed capacity, consisting of six cascading power plants strategically located along the Agus River. The Pulangi complex is a 255MW hydropower facility with three generating units. Both facilities, however, already have derated generation. Both supply Mindanao electric power consumers more than 50 percent of its total electricity requirements.

Tariffs. . .

Continued from A16

importation shall be used to augment the Rice Industry Development Fund. For this purpose, the NFA must have a separate accounting for its tariff-free rice imports,” the bill read. Yap said the Rice Industry Development Fund should be established and used to support the implementation of the Rice Industry Competitive Enhancement Program of the government. Upon the enactment of the bill, the DA, together with relevant agencies would be given a maximum of 180 days to finalize the rice road map to restructure the government’s delivery of support services for the sector. As part of this road map, Yap said a five-year rice program will be implemented to provide alternative livelihood for those who will be affected by the shift in the import policy.

Trump. . .

Continued from A16

Japan. Other initiatives include slow-going or stalled negotiations on free-trade pacts with India, South America’s Mercosur bloc and the Gulf Cooperation Council, and on an investment accord with China. Katainen stressed the prospect of improved EU ties with China, which has clashed with Europe over trade issues, including Chinese shipments of steel and export restrictions on raw materials. “It’s our intention to speed up our investment-agreement negotiations,” he said. “I think the relationship between Europe and China will deepen.” Bloomberg News

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Electricity users join call for RCOA implementation By Joel R. San Juan

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@jrsanjuan1573

HE National Association of Electricity Consumers for Reforms (Nasecore) has joined the mounting calls for the Supreme Court to junk the petition seeking to stop the government from implementing retail competition and open access (RCOA) in the power industry. In its motion for intervention filed last week before the Court, Nasecore Executive Director Rafael Antonio Acebedo asked the tribunal to dismiss the petition for lack of merit, saying “any decision or resolution to the contrary will definitely prove harmful to the welfare and interest of the electricity consuming public.” Nasecore said it filed the motion in an effort to reverse the Court’s ruling against RCOA, a policy meant to give consumers the choice to choose their own electricity supplier. It argued that without RCOA “certain industry players will be able to monopolize and abuse the electricity market.” The SC earlier issued a temporary restraining order (TRO) that stopped the implementation of RCOA, which was supposed to take effect on February 26, based on a petition filed by the Philippine Chamber of Commerce and Industry, Ateneo de Manila University, San Beda College (Alabang) and mall owner Riverbanks Development Corp. “One of the pillars of the restructuring of the energy industry, as envisioned by the Epira [the Electric Power Industry Reform Act of 2001], is the establishment of retail competition and open access. The framers of the Epira believed that the migration of

electricity consumers to the competitive retail electricity market would lead to market competition thereby leading to lower and reasonable electricity prices,” Nasecore said in its comment in intervention. “Nasecore is intervening in the present case based on the ground that the issues raised herein are matters of transcendental importance, public service, policy and interest, and that its electricity consumers-members will be directly, actually and greatly affected by the annulment of the Department of Energy [DOE] and Energy Regulatory Commission’s [ERC] assailed issuances in this petition,” Acebedo said. Nasecore said it “vehemently disagrees” with the petitioners who wished to stop RCOA, which is covered by DOE Circular DC-2015-06-0010, series of 2015; ERC Resolution 5, Series of 2016; ERC Resolution 10, Series of 2016; ERC Resolution 11, Series of 2016; and ERC Resolution 28, Series of 2016. “The assailed issuances are valid and reasonable regulatory measures geared toward the promotion of the avowed purposes of the Epira, among others, promote true market competition and prevent harmful monopoly and market power abuse in the electric power industry,” Nasecore said. The group pointed out that it is holding on to EPIRA’s promise to promote true market competition and prevent harmful monopoly and market power abuse in the electric power industry. It hopes that this promise will bring the cost of electricity down not just for the large electricity consumers but also for the end-users at the household level.

Editor: Dionisio L. Pelayo • Monday, March 6, 2017 A3

Troops kill 4 more Abu bandits in another clash

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By Priam F. Nepomuceno | Philippines News Agency

OUR more Abu Sayyaf bandits were killed while seven high-powered firearms were seized, as troops from the 64th Marine Company clashed with the brigands in Sulu early morning on Sunday.

The Marines were on operations in Barangay Lumipad, Talipao, Maimbung town,in response to reports that the bandits were gathering in the area when the gun battle broke out. In the ensuing encounter, four of the bandits were killed, forcing the reminder to scamper for cover, the Joint Task Force Sulu commander, Col. Cirilito Sobejana, said. “After scouring the site of encounter, the Marines found the bodies of four Abu Sayyaf Group members and recovered seven highpowered firearms, including two M-16 rifles and two M-203 grenade launchers,” he added. With Sunday’s encounter, the number of ASG bandits killed by government forces since Friday has climbed to 14. On Friday Joint Task Force Sulu troops battled an estimated 120 of the bandits, reportedly led by Radullan Sahiron, at Barangay Igasan, Patikul town, around 9 a.m. In the two-hour gun battle, 10 bandits were killed and an undetermined number

were wounded. The Western Mindanao Command (Westmincom) chief, Maj. Gen. Carlito Galvez, lauded the 64th Marine Company for its successes against the bandit group, as well as the civilians who gave the Marines the timely information. “Our troops are more than motivated to go after these bandits who know nothing but to victimize innocent civilians for their own personal gain,” he added.

Troops recover Kantner’s body

JOINT Task Force Sulu troops recovered late Saturday afternoon the remains of Juergen Kantner, who was beheaded by the bandits on February 26. Kantner’s severed head and body were discovered 5: 45 p.m. at the Sitio Talibang, Barangay Buanza, Indanan town, Sobejana said. He added that the corpse was discovered by troops conducting combat, search-and-

retrieval operations. “[The National Police’s] Soco [Scene of the Crime Operatives]-Sulu was requested to conduct site preservation for evidence and postmortem procedure. The cadaver shall be kept at KHTB [Kutang Heneral Teodulfo Bautista] Hospital Morgue while the documentary requirements prior to transport are being completed,” Sobejana added. Kantner was kidnapped by the bandits, who intercepted his yacht Rockall that was cruising on the waters off Sulu last November. His companion, 56-year-old Sabine Mertz, was allegedly raped then shot and killed by the bandits. The bandits earlier released a video showing Kantner begging for his government to pay the P30-million ransom demanded by the Abu Sayyaf before 3 p.m. on February 26, or else he would be executed. With Rene Acosta

Our troops are more than motivated to go after these bandits who know nothing but to victimize innocent civilians for their own personal gain.”—Galvez

Economy

A4 Monday, March 6, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon

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Govt eyeing to double export receipts by 2022

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By Cai U. Ordinario

@cuo_bm

he national government plans to double receipts from merchandise and service exports by 2022, according to the new economic blueprint of the Duterte administration, dubbed as the Philippine Development Plan (PDP).

Under the PDP 2017-2022 the government is targeting to increase merchandise exports to as much as $62 billion and service exports to $68.6 billion, from $32.8 billion and $24 billion, respectively. This means the value of merchandise exports must increase to around $5.167 billion and $5.717 billion monthly by 2022, from $2.733 billion and $2 billion, respectively, recorded from January to September 2016. “The government will focus on providing support and promoting products where the country has comparative advantage and has the potential for competitive advantage,” the PDP read. This will be supported by the government’s efforts to pursue new and maximize existing bilateral,

regional and global partnerships, and integration. The government will encourage micro, small and medium enterprises to maximize export opportunities and increase the utilization of preferential trading agreements. It also intends to intensify the promotion of Philippine goods and services, as well as market intelligence. The Duterte administration said it will explore new markets for local products. The government is keen on minimizing the cost of production and delivery of goods and services by instituting reforms; improve the quality of goods and services; and encourage innovation. These efforts will be supported by a legislative agenda that pushes for the tax-reform program; insti-

AN elevated view shows the shipping containers stacked at International Container Terminal Services Inc.’s port in Manila. The Duterte administration said it will roll out various measures to increase revenues from merchandise and services exports by 2022. Nana Buxani/Bloomberg

tutionalization of the extractive industry-transparency initiative; unified pension-reform bill; government rightsizing bill; budget-reform bill; and real-property valuation and assessment reform act. The Duterte administration

said it also supports the following measures: local government unit (LGU) income-classification bill; LGU property-insurance bill; amendment of the Local Government Code of 1991; proposed amendments to the Bangko Sen-

Manufacturing sector seen attracting more investments this year By Catherine N. Pillas @c_pillas29

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he Board of Investments (BOI) said Philippine factories will have more work in 2017, as the manufacturing sector’s share in investment pledges this year would rise to 20 percent from 11 percent last year. With major manufacturing projects already in the pipeline for the year, BOI Managing Head and Trade Undersecretary Ceferino S. Rodolfo said the government is targeting to double the manufacturing sector’s share of investment pledges this year. Government data in 2016 showed the manufacturing sector accounted for 11 percent, or P49 billion, of the P441.8-billion haul last year. Assuming the BOI will reach its target of P500 billion in investment pledges by year-end, the share of manufacturing should be at 22 percent, or P110 billion. The BOI made the pronouncement after five Chinese companies announced they will invest some $10 billion in aviation, oil downstream, renewable energy, iron and steel, and shipbuilding/ ship-repair industries. Trade Secretar y R amon M. Lopez said he also secured $14.5 billion in pledges, for expansion and new projects from Japanese

If our relationship with China before has been characterized by resource-generating sectors, like in mining and extractive industries, in terms of trade just export-import, now there’s really been a deepening of relations through investments in manufacturing.”—Rodolfo

companies, during an investmentpromotion visit last week. The government’s renewed confidence in the manufacturing sector can also be attributed to the improvement of ties between the Philippines and China. Rodolfo, in a meeting with top Chinese businessmen last week, expressed confidence that China’s “Going Global Policy”—a government directive meant to spur outbound investments of China-based businesses—will be in sync with Manila’s Manufacturing Resurgence Program. “If our relationship with China before has been characterized by resource-generating sectors, like in mining and extractive industries, in terms of trade just export-import, now there’s really been a deepening of relations through investments in

manufacturing,” he said. The five Chinese companies and their possible projects are: Aviation Industry Corp. of China (Avic) International Aerodevelopment Corp., which intends to explore opportunities in industrial cooperation toward aerospace-parts manufacturing, aviation maintenace and also capacity-building; Liaoning Bora Enterprise Group Co. Ltd., which will invest some $3 billion in construction and operation of a retail network and oil-storage terminal, refinery projects and allied industries; Huili Investment Fund Management Co. Ltd., which will partner with a Philippine company for an integrated steel mill with initial investments pegged at $3 billion; Dalian Wanyang Heavy In-

dustries Co. Ltd., which is targeting to invest $2.8 billion and is doing feasibility studies for a 4,000- to 5,000-metric-ton wasteto-energy gasification project using solid waste collected from homes and businesses using stateof-the-art technology; and YiDingTai (YDT) International, which would invest $1.5 billion in the development of ship-building and ship-repair facilities for regional-sized vessels with 15,000 deadweight tons and below. These five major projects are expected to fill the gaps in the country’s manufacturing sector. With the inf lux of cheaper impor ts of China, especia l ly in the higher-valued f lat-steel products, companies have been discouraged to invest locally in steel-making. The vice president of Huili Investment Fund Management Co. Ltd. said they are looking into producing both long and flat products. “These [projects] are coming at an opportunite time because the Philippines is spending 7 percent of GDP on infrastcuture. With that goal, we have investments in construction-related industries,” Rodolfo noted. Data from the country’s investment-promotion agencies indicated that Chinese investments reached only P1.52 billion last year.

Jewelry makers target $830,000 revenue from Hong Kong trade show

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ewelry makers participating this week at the Hong Kong International Jewellery Show target to generate around $830,000 (P41.75 million) in revenues, as they intensify marketing efforts abroad to boost sales amid weak demand on local market. Meycauayan Jewelry Industry Association Inc. (MJIA) Chairman Cecille Ramos said 10 members of her group are exhibiting fine jewelry made of gold, silver, titanium or stainless steel for interested buyers at the five-day international trade fair slated until today, March 6. Ramos said they are eyeing buyers from the United States, Europe and Dubai. She noted the Philippines needs to continue participating for at least three years to maintain brand recognition and recall and sustain

interest of potential buyers. Ramos further said the jewelry show in Hong Kong, now recognized as one of the world’s most

successful exhibition centers in the world, is well participated by buyers and visitors also from Asian and Middle East countries.

“We have to increase presence in international markets because our domestic market is not that strong,” she added. Ramos said jewelry manufacturers are participating both in international and domestic trade fairs to promote globally competitive Filipino-made jewelries in terms of “quality, design and price”. Jewelry is classified as an emerging sector under the Philippine Export Development Plan 2015-2017. The Department of Trade and Industry (DTI)-Export Marketing Bureau, in partnership with MJIA and Philippine Trade and Investment Center in Guangzhou, coorganized the outbound business matching mission cum trade-fair participation in the Hong Kong jewelry show. The DTI funded the booth rental costs. Philexport News & Features

tral ng Pilipinas charter; enactment of the Payment Systems Act; amendment of the Anti-Money Laundering Act; enactment of Islamic banking; and the amendment to the provisions of Republic Act (RA) 1405 (Law on Secrecy of

Bank Deposits) and RA 6426 (Foreign Currency Deposit Act). The country’s total merchandise exports from January to November 2016 declined by 5.2 percent to $51.36 billion, from $54.16 billion in the same period in 2015.

Transco thumbs down NGCP’s prepayment of concession cost By Lenie Lectura

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@llectura

HE National Transmission Corp. (Transco) is opposed to the prepayment scheme of the concession fee (CF) made by the National Grid Corp. of the Philippines (NGCP) to the Power Sector Assets and Liabilities Management Corp. (PSALM). In a letter to PSALM Officer in Charge Lourdes Alzona dated February 28, newly appointed Transco President Melvin Matibag said his office “strongly disagrees with PSALM’s action to accept the P57.88- billion prepayment by NGCP”, because this “is not in accordance with the pertinent provisions of the concession agreement” [CA]. NGCP won the concession to operate and manage the grid system in December 2007 for $3.95 billion. The government still owns the assets. It is only NGCP that operates the country’s power-transmission network for 25 years. NGCP remitted to PSALM P57.88 billion in July 2013 to prepay its 10th to 30th deferred payments for concession fees. The prepayment corresponds to 51.59 percent of the outstanding concession fee as of July 16, 2013. According to Transco, the prepayment was made contrary to the provision of the CA, which states that “so long that there is no amount due to PSALM or Transco under this agreement [including deferred payments] and other transaction documents that are in arrears, the concessionaire shall have the option to prepay any deferred payment or any portion thereof, including the right to determine which efered payment or portion thereof is being prepaid.” However, NGCP has an outstanding obligation to Transco amounting to P3.92 billion at the time of the prepayment. Still, the prepayment was allowed and accepted by PSALM, Matibag said. Based on an “audit observations and recommendations” document, the said prepayment was not approved by the PSALM Board

considering that, as alleged by NGCP, it was the PSALM president who requested the payment. NGCP only heeded to help PSALM on its fiscal dilemma. Transco was not consulted either. The PSALM Board is chaired by the Finance Secretary Emmanuel Ledesma was the PSALM president at the time the prepayment was made. “Inasmuch as PSALM failed to inform Transco prior to its acceptance of the CF prepayment, Transco was not given the chance to express comments/opinion nor assert its objection on the matter, considering that Transco’s financial condition is the one at stake,” Matibag said. Matibag said that, while the prepayment was perceived as deduction from the CF receivable from NGCP, Transco views it differently. He said the payment has been disadvantageous to the government considering that it resulted in foregone revenue of P26.07 billion. “The CF prepayment…as of July 16, 2013 resulted in Transco’s ‘actual loss’ of revenue for P12.62 billion for years 2013 to 2016 and P9.95 billion for years 2017 to 2020 and an estimated loss of revenue for P3.5 billion for years 2021 to 2024, or a total loss of TransCo’s revenue for years 2013 to 2024 in the amount of P26.07 billion due to a reduction n the concession fee interest earnings,” he said. Should another prepayment will be allowed, Matibag said this will result in additional loss of revenue of P33.52 billion, which will cause an adjusted lumpsum revenue loss for P59.59 billion for years 2013 to 2029 to Transco and to the government attributed by a reduction in the concession fee interest earnings. As such, Matibag told PSALM in his letter to address the issues of the 2013 prepayment, ensure that Transco will be notified of NGCP’s offer to make another prepayment, and exercise jurisprudence and good governance.

Agriculture/Commodities BusinessMirror

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Editor: Jennifer A. Ng • Monday, March 6, 2017

A5

‘Govt won’t import rice to boost buffer stock’ By Jasper Emmanuel Y. Arcalas

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@jearcalas

he interagency National Food Authority Council (NFAC) said it has rejected proposals to import rice via a government-togovernment transaction in the first half of the year to boost the country’s buffer stock. Cabinet Secretary Leoncio B. Evasco Jr., ex-officio chairman of the NFAC, said National Food Authority Administrator Jason Laureano Y. Aquino’s proposal to import via government to government was thumbed down by the council. In an interview last Thursday, Undersecretary Maia Chiara Halmen Reina A. Valdez of the Office of the Cabinet Secretary (OCS) said Aquino wanted the NFA to purchase 1 million metric tons of imported rice to beef up the country’s buffer stock. “When you import via government to government, the NFA would again incur debt, while rice imported under the minimum access volume [MAV] is paid for by

the private sector,” Evasco said in a statement. Citing the National Economic and Development Aut hority (Neda), he said it would also be ill-advised for the government to impor t r ice now, as Filipino farmers will har vest their crop soon. The Bangko Sentral ng Pilipinas (BSP), which is also one of the members of the NFAC, said the government is more partial to buying rice directly from local farmers to beef up the food agency’s stocks. “Being more aligned with the Duterte’s thrust to support the farmers, the NFA Council deemed it best if the NFA would purchase its buffer stock from farmers

instead of resorting to importation,” BSP Deputy Governor Diwa C. Guinigundo said. Aquino issued an order on March 3 directing the NFA field offices to purchase 4.6 million bags, or 230,367 metric tons (MT), from local farmers to increase the government’s buffer stock. He said the order is in time for the summer crop harvest from March to June. Aside from local production, Evasco said the country’s rice stock will be augmented by imports bought via the MAV scheme of the World Trade Organization.

NFAC's assurance

Evasco assured qualified rice traders that they will be allowed to bring in the remaining inbound volume of rice under the 2016 MAV until March 31. He made the pronouncement following the “repeated refusal” of the NFA management to extend the original deadline of February 28 for the arrival of the 2016 MAV rice. Out of the approved 692,340 MT, the NFA said 258,640.65 MT have yet to arrive in the country. “It is not for [Aquino] to decide whether an extension of MAV is proper, let alone as to which sources of origin is entitled thereto. It is a decision, which the NFAC has to make as a

collegial body. We [council] have made a decision, and we made it very clear, it is extended up to March 31,” Evasco said. On Februar y 27 NFAC announced that it has extended the deadline of rice imports under MAV for another month. However, in an order released on March 1, Aquino said the extension granted by the NFA is only for rice shipped from India and Pakistan. “There’s no need to extend the deadline because there were others, including farmer cooperatives, that participated in the MAV and have complied with the deadline. If these co-ops can do it, why can’t the others?” Aquino asked. The NFA is one of the 12 agencies that have been placed under the direct supervision of the OCS pursuant to Executive Order 1, which aimed to streamline agencies that deal with poverty reduction. Evasco sits as the ex-officio chairman of the NFAC, while Aquino serves as its vice chairman. Other members of the NFA Council include the BSP governor, Development Bank of the Philippines chairman, president of the Lank Bank of the Philippines (LandBank), finance secretary, trade secretary, Neda and a farmer sector’s representative. Evasco said of the 10 members of the council, nine were present

during the February 27 meeting and voted for the extension of M AV importation. Neither Aquino nor his representative attended the meeting. “Aquino by using my name has canceled the first two NFAC meetings, thus the Council was compelled to convene the third time on February 27, during which he deliberately absent himself,” he said. During the February 27 meeting, the NFAC has also authorized Evasco to sign import permits of qualified traders under the 2016 MAV rice-importation program. Previously, only the NFA administrator has the sole authority to sign the permits. Under Section X of the 2016 MAV Guidelines, in order to secure an import permit, qualified rice importers should submit electronic copies of documents that they submitted to the LandBank not later than five days before the arrival of rice shipment. Any rice inbound shipments in the country without an import permit from the NFA is considered illegal. Because of Aquino’s refusal to implement the NFAC’s order, Evasco said Aquino is facing “serious disciplinary sanctions” that could lead to his removal as chief of the food agency. “It seems to us that he does not have even the slightest un-

derstanding of his office and even undermining the NFAC’s authority that were causing serious prejudice to the country’s food security. We are afraid he is not fit for the job. He must be dealt with accordingly,”Evasco said. On March 2 the OCS said the NFAC said it has already issued a directive to Aquino to immediately and strictly implement its decision pursuant to NFA Resolution 8512017-B, which orders the extension of MAV deadline. However, the NFA released a statement on March 3 that it sees no need to extend the arrival of rice imported under the MAV scheme. Last December the NFA allowed 210 farmers’ organizations and private firms to import 692,340 metric tons (MT) of rice, lower than the country’s annual MAV of 802,500 MT. The NFA list available on its web site also showed that 194 qualified rice traders, including AgriNurture Inc. and Pilmico Foods Corp., will import 642,340 MT of rice under the country specific quota (CSQ). Of the total rice to be imported under the CSQ, 293,100 MT of rice will be bought from Thailand and Vietnam. Sixteen qualified applicants were allowed to import a total of 50,000 MT of rice under the “omnibus origin” category, according to the NFA list.

AseanMonday

A6 Monday, March 6, 2017 • Editor: Max V. de Leon

BusinessMirror

Malaysia declares North Korean ambassador ‘persona non grata’

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UALA LUMPUR—Malaysia has declared on Saturday night the ambassador of North Korea to the country as “persona non grata” and asked him to leave Malaysia within 48 hours, amid a row over the investigation into a North Korean man’s death.

The decision was made after the ambassador, Kang Chol, failed to show up at a meeting after he was summoned by Malaysia’s Ministry of Foreign Affairs on the same day, said the Foreign Minister Anifah Aman in a statement, adding no other senior official came to the meeting either. Anifah said the ministry has sent a diplomatic note to the North Korean embassy last Saturday evening to inform the North Korean

government that Kang should leave Malaysia within 48 hours from the scheduled time of the meeting, which should have taken place at 6 p.m., March 4, according to the statement. The expulsion of the ambassador came after Kang and the North Korean government accused the Malaysian side several times of “colluding with hostile forces” in its investigation into the death of the North

IN this February 20 photo, North Korean Ambassador to Malaysia Kang Chol speaks to the media outside the North Korean Embassy in Kuala Lumpur, Malaysia. Malaysia’s foreign minister said last Saturday, that the government has expelled North Korean ambassador for refusing to apologize for criticizing investigations into the murder of the exiled half brother of Pyongyang’s leader. AP

Korean man on February 13 in Kuala Lumpur, and refused to trust the investigation. Anifah said the North Korean side also failed to make an apology for the accusations Kang has leveled against Malaysia, and there is no sign of a forthcoming one. Previously, Malaysia has recalled its ambassador in Pyongyang and said it would rescind visa-free entry for North Korean citizens. These measures are part of the process by Malaysian government to review its relations with North Korea, according to the statement. Malaysia also defended its impartiality in the investigation, citing the release of Ri Jong Chol, a North Korean man arrested as a suspect following the killing. Ri was deported back to North Korea last Friday and during his transit stay in Beijing, he accused the Malaysian police of coercing him to confess his crime. PNA/Xinhua

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Relatives of MH370 passengers to fund search

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UALA LUMPUR, Malaysia—Family members of those onboard the missing Malaysia Airlines Flight MH370 began a fund-raising campaign last Saturday to finance a private search following the suspension in January of a multinational endeavor after nearly three years of fruitless effort. As family members of the 239 passengers and crew marked the third anniversary of the disappearance of the Boeing 777 with an art exhibition, songs and personal tributes, Transport Minister Liow Tiong Lai said the search will only resume when “credible evidence becomes available”. “We have to take matters into our own hands. This is one way we can do it,” Australian Danica Weeks, 40, whose husband Paul was onboard the tragic flight, said of the fund-raising campaign. “Hopefully, we can be successful as that’s all we got. We will keep fighting.” Flight MH370 disappeared on March 8, 2014, vanishing from radar shortly after takeoff from Kuala Lumpur en route to Beijing. The plane is believed to have crashed in the Indian Ocean, claiming the lives of all 239 crew and passengers onboard. PNA/Kyodo

Japan’s emperor in Thailand to pay respects to late king Deported North Korean accused Malaysia police of threatening to harm his family

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Japan’s Emperor Akihito and Empress Michiko wave to bid farewell as they depart from the Phu Bai airport in the central city of Hue, Vietnam for Thailand, ending their six-day long royal visit in the southeast communist country on March 5. AP

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ANGKOK—Japanese Emperor Akihito has arrived last Sunday in Bangkok to pay his respects to the late Thai King Bhumibol Adulyadej, following a weeklong trip to Vietnam aimed at winning support against Chinese expansionism.

The monarchies—two of a handful remaining in Asia—have maintained close ties. Bhumibol first visited Japan in 1963, touching off a decades-long friendship with numerous visits back and forth, most recently a visit by Akihito to Thailand in 2006. Akihito, accompanied

by his wife Empress Michiko, was to lay wreathes and sign a condolence book at the Grand Palace in Bangkok before meeting with King Vajiralongkorn Bodindradebayavarangkun, who ascended the throne after the death of his widely revered father last October. AP

Malaysia Airlines ‘aggressively hedging’ on forecast oil will increase to $70

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alaysia Airlines Bhd. projects oil prices will increase to about $70 a barrel toward the end of this year and has aggressive fuel hedging in place as the money-losing national carrier seeks to return to profitable operations. “At the moment we are hedged about 65 percent of the current year at about a little bit north of $60,” CEO Peter Bellew said in a Bloomberg TV interview with Haidi Lun last Friday. “We are quite aggressively hedging 12 months ahead on a quarter-to-quarter basis and taking a fairly prudent approach to it.” Malaysia Airlines is projecting a return to what Bellew calls “more consistent profitability” in 2018, following an expected loss this year as it fills a larger portion of seats amid demand from markets leading with China. The ringgit’s depreciation against the dollar since Donald J. Trump won the US

presidential election last November is a big concern for Malaysia Airlines, the CEO said. T he Ma laysian cur renc y— which has weakened more than 5 percent since the US election—may strengthen over the next six to nine months, helping to bolster the carrier’s earnings, Bellew said. Demand for seats on Malaysia Airlines plunged after the carrier lost two planes in 2014, with one vanishing over the Indian Ocean en route from Kuala Lumpur to

Beijing and another shot down over Ukraine. Chinese passengers have since returned to Malaysia Airlines, making the country its strongest market now, Bellew said. The carrier still needs more wide body planes to carry the influx of tourists from China to Malaysia and is projecting to fly as many as 5 million Chinese travelers in three to four years, he said. “My problem with Chinese is I don’t have enough aircraft right now to operate f lights there,” Bellew said. “We are seeing no problems with our brand or reputation among Chinese nationals.” There are some bargains in the aircraft market now and Malaysia Airlines may add six to seven planes in 2018, Bellew said. It’s in talks with Boeing Co. on the 787 aircraft while negotiating with Airbus SE on the A330 neo, he said. Bloomberg News

UALA LUMPUR, Malaysia— A North Korean chemist deported from Malaysia accused the police of threatening to kill his family unless he confessed to the assassination of the half brother of North Korea’s leader, calling it a plot to tarnish his country’s honor. Ri Jong Chol spoke to reporters in Beijing early Saturday while on his way to Pyongyang. Malaysian authorities have said there’s insufficient evidence to charge Ri over Kim Jong Nam’s killing at Kuala Lumpur’s airport on February 13. Ri was detained four days after the attack but the police never said what they believed his role was. Two women—one Indonesian, one Vietnamese—have been charged with murder after the police said they smeared Kim’s face with VX, a banned nerve agent considered a weapon of mass destruction. Ri said he wasn’t at the airport the day Kim was killed but that the police accused him of being a mastermind and presented him with “fake evidence”. He said they showed him a picture of his wife and two children, who were staying with him in Kuala Lumpur, and threatened to kill them. “These men kept telling me to admit to the crime, and if not, my whole family would be killed, and you, too, won’t be safe. If you accept everything, you can live a good life in Malaysia,” Ri said. “This is when I realized that it was a trap...they were plotting to tarnish my country’s reputation.”

The police did not immediately respond to a request for comment last Saturday. Immigration Director General Mustafar Ali said last Friday Ri has been blacklisted from reentering Malaysia. Malaysia is looking for seven other North Korean suspects, four of whom are believed to have left the country on the day of the killing. Three others, including an official at the North Korean Embassy and an employee of Air Koryo, North Korea’s national carrier, are believed to still be in Malaysia. The police last Friday issued an arrest warrant for the Air Koryo employee, Kim Uk Il, but didn’t say why he is a suspect. The police say he arrived in Malaysia on January 29, about two weeks before Kim was killed. Kim’s death has unleashed a diplomatic battle between Malaysia and North Korea. Malaysia said it was scraping visa-free entry for North Koreans, while the Foreign Ministry said it was “greatly concerned” about the use of the nerve agent. Malaysia has not directly accused North Korea of being behind the killing, but the ministry statement came hours after a North Korean envoy rejected a Malaysian autopsy finding that VX killed Kim. Ri Tong Il, a former North Korean deputy ambassador to the United Nations, said the man probably died of a heart attack because he suffered from heart disease, diabetes and high blood pressure. He said that if VX had been used,

others besides Kim would have been killed or sickened. Malaysian police have brushed off Ri’s claim of a heart attack and insisted he was murdered. The two female suspects at an airport terminal were caught on grainy surveillance video smearing what Malaysian authorities say was VX on his face and eyes, though both reportedly say they were duped into thinking they were playing a harmless prank. Kim died within 20 minutes, authorities say. No bystanders reported falling ill. The police said the women had been trained to go immediately to the bathroom and wash their hands. The police said the four North Korean suspects who had left the country put the VX liquid on the women’s hands. The police can’t confirm whether the two women may have been given antidotes before the attack. An antidote, atropine, can be injected after exposure and is carried by medics in war zones, where weapons of mass destruction are suspected. Malaysia’s finding that VX killed Kim boosted speculation that North Korea orchestrated the attack. Experts say the oily poison was almost certainly produced in a sophisticated state weapons laboratory, and North Korea is widely believed to possess large quantities of chemical weapons, including VX. North Korea is trying to retrieve Kim’s body, but has not acknowledged that the victim is Kim Jong Un’s half brother. AP

North Korean Ri Jong Chol speaks to reporters from behind a fence at the North Korean Embassy in Beijing early Saturday. Malaysian authorities last Friday deported the only North Korean detained in the killing of the half brother of North Korea’s leader after releasing him because of a lack of evidence to charge him. AP

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The World BusinessMirror

Monday, March 6, 2017 A7

China targets 6.5% growth in drive to reduce risk

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hina set a 2017 growth target of “around 6.5 percent, or higher if possible”, as focus shifts to easing risk and ensuring stability before a twice-a-decade leadership transition this year. The objective outlined last Sunday in the work report presented by Premier Li Keqiang to the National People’s Congress (NPC) gathering in Beijing compares with last year’s target range of 6.5 percent to 7 percent. Economists surveyed by Bloomberg project 6.5-percent expansion this year. Other objectives included: The M2 money supply growth target was lowered to about 12 percent, from 13 percent last year. Consumer price index target of about 3-percent increase was unchanged from last year. Fiscal budget deficit ratio goal at 3 percent of GDP, also unchanged. Retail sales growth goal lowered to about 10 percent, from around 11 percent last year Top leaders working to under-

pin an economic expansion that stabilized last year also are shifting to a more neutral policy to reduce financial risks from excessive borrowing. Economic and social stability are key priorities before President Xi Jinping and his cadres gather later for a reshuffling of top officials, which is planned for the fourth quarter. “China has lowered the economic development targets across the board,” said Zhou Hao, an economist at Commerzbank AG in Singapore. “China’s policy stance has turned to risk control and bubble deflating. This means that the monetary policy will gradually tighten.” The work report reiterated that China would pursue a prudent and neutral monetary policy this year.

3%

The estimated target increase in consumer price index that was unchanged from last year The People’s Bank of China has left the benchmark rate at a record low, while starting to tighten money market rates, and analysts expect further measures to cool lending without choking the wider economy ahead of the 19th Communist Party Congress. Li’s report sounded a hopeful note with the addition of language calling for growth above the target if possible, while also emphasizing the need to reduce threats to that expansion. China is confident it can keep systemic financial risk in check, and is “highly cautious” of the dangers from bad loans, bond defaults, shadow banking and online finance.

Despite pledges to keep an eye on emerging risks, the credit taps are still flowing freely. Aggregate financing, the broadest measure of new credit, climbed to a record 3.74 trillion yuan ($545 billion) in January. The credit-to-GDP ratio rose nearly 100 percentage points in eight years to 260 percent by the end of 2016, according to Bloomberg Intelligence estimates. Top leaders also face external uncertainty. Potential threats include a sharp drop in exports due to slowing demand or rising trade barriers—US President Donald J. Trump has promised tariffs on Chinese goods—and faster-thanexpected rate hikes by the Federal Reserve. The work report also outlined objectives for attacking excess capacity by cutting 150 million metric tons of coal capacity this year and reducing steel capacity by 50 million metric tons. Urban home buying by both local and new residents will be supported, while another 6 million housing units will be renovated in urban areas, according to Li’s report. Financial regulation will be

“proactively and prudently reformed” and the industry’s ability to serve the real economy will be strengthened, the report said. Officials also vowed to accelerate reforms of state-owned enterprises and said “more will be done to energize the nonpublic sector”. They also plan more support for technological innovation and the development of emerging industries. The annual gatherings of the NPC and the Chinese People’s Political Consultative Conference, are known as the “two sessions”. They include release of Li’s government work report and accompanying reports from the Ministry of Finance and top economic planning body, the National Development and Reform Commission, outlining plans for everything from ammonia-nitrogen emissions to mobile-phone roaming charges. Over the longer term, policymakers aim for a 6.5-percent average growth pace to achieve the party’s promise of building a “moderately prosperous society” by 2020 with GDP and income levels double those of 2010. Xi isn’t wedded to the 6.5-percent goal due to concerns

about rising debt, a person familiar with the situation told Bloomberg News last December. The upcoming Party Congress marks a critical juncture in Xi’s leadership and will show the extent to which he has consolidated support since taking power in 2012. If retirement conventions hold, 11 of 25 Politburo members—including five of seven members on its supreme Standing Committee— would be expected to step down, leaving positions open. Party leaders have repeatedly emphasized the need to maintain control before the conclave. Xi told a meeting of his National Security Commission—its first known meeting since 2014—that safeguarding “political security” was the top priority. “A slightly lowered and somewhat more flexible growth target is about as good as we could have asked for,” said Andrew Polk, Beijing-based head of China research at Medley Global Advisors, which advises institutional investors. “We’d still like to see an abandonment of the growth target altogether, but that is just not in the DNA of China’s government.” Bloomberg News

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The World

Monday, March 6, 2017 • Editor: Lyn Resurreccion

BusinessMirror

Trump, offering no evidence, says Obama tapped his phones

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EST PALM BEACH, Florida —President Donald J. Trump on Saturday accused former President Barack Obama of tapping his phones at Trump Tower the month before the election, taking to Twitter to call his predecessor a “bad (or sick) guy.”

Without offering any evidence or providing the source of his information, Trump fired off a series of Twitter messages claiming that Obama “had my ‘wires tapped.’” He likened the supposed tapping to “Watergate/ Nixon” and “McCarthyism.” Trump’s aides declined to clarify whether the president’s explosive allegations were based on briefings from intelligence or law-enforcement officials or on something else, like a news report. A spokesman for Obama, Kevin Lewis, issued a statement dismissing the claims. “A cardinal rule of the Obama administration was that no White House official ever interfered with any independent investigation led by the Department of Justice,” he said. “As part of that practice, neither President Obama nor any White House official ever ordered surveillance on any US citizen. Any suggestion otherwise is simply false.” Officials from the Obama administration called Trump’s accusation shocking and untrue. They pointed to long-standing laws and procedures intended to ensure that presidents cannot wiretap a rival for political purposes. Trump’s decision to lend the power of his office to such a claim— without offering any proof—was remarkable, even for a leader who has repeatedly shown himself willing to make assertions that are false or based on rumors. It would have been difficult for federal agents, working within the law, to obtain a wiretap order to target Trump’s phone conversations. It would have meant that the Justice Department had gathered sufficient evidence to persuade a federal judge that there was probable cause to

believe he had committed a serious crime or was an agent of a foreign power, depending on whether it was a criminal investigation or a foreign intelligence one. In one message, which Trump sent from his Palm Beach, Florida, resort at 6:35 a.m., the president said he had “just found out” that his phones had been tapped before the election. Speculation online quickly turned to the possibility that Trump had been reading an article on the Breitbart News site or listening to the conservative radio host Mark Levin; both have embraced the theory in recent days. The Breitbart article, published on Friday, claimed that there was a series of “known steps taken by President Barack Obama’s administration in its last months to undermine Donald Trump’s presidential campaign and, later, his new administration.” One former senior law-enforcement official who worked under Obama said that it was “100-percent untrue” that the government had wiretapped Trump, and that the current president should be pressed to offer any evidence for his assertion. Ben Rhodes, a former top national security aide to Obama, said in a Twitter message directed at Trump on Saturday that “no president can order a wiretap” and added, “Those restrictions were put in place to protect citizens from people like you.” It has been widely reported that there is a federal investigation, which began during the 2016 presidential campaign, into links between Trump associates and the Russians. The New York Times reported in January that among the associates whose links to Russia are being scrutinized are Paul Manafort, Trump’s onetime campaign chairman; Carter

President Donald J. Trump arrives at Joint Base Andrews in Maryland on March 3. Without offering any evidence or providing the source of his information, Trump alleged that former President Barack Obama had tapped his phones in the months before the presidential election, in a series of tweets sent on Saturday morning. Stephen Crowley/The New York Times

Page, a businessman and foreignpolicy adviser to the campaign; and Roger Stone, a longtime Republican operative who has said he was in touch with WikiLeaks before it released a trove of Democratic National Committee e-mails last summer. Trump appeared last Saturday to suggest that warrants had been issued by the Foreign Intelligence Surveillance Court, claiming that Obama’s administration had once been “turned down by court” in its supposed efforts to listen in on conversations by Trump and his associates. In the fall, the FBI examined computer data showing an odd stream of activity between a Trump Organization server and Alfa Bank, one of Russia’s biggest banks, whose owners have long-standing ties to President Vladimir Putin. The FBI concluded at the time that there might have been a benign explanation for the communications, like marketing e-mail or spam. It is not clear whether the bureau obtained a warrant from the Foreign Intelligence Surveillance Court, known as a FISA warrant, as part of that line of inquiry; there is no evidence it did. During the transition, the FBI—

which uses FISA warrants to eavesdrop on the communications of foreign leaders inside the United States—overheard conversations between the Russian ambassador to the United States and Michael T. Flynn, whom Trump had named national security adviser. Trump has pointedly and repeatedly questioned in conversations how it was that Flynn’s conversations were recorded, and wondered who could have issued a warrant. After the Washington Post reported that Flynn and the ambassador, Sergey I. Kislyak, had discussed sanctions that the Obama administration had just imposed on Russia, Flynn was pushed out of his post by the White House because he had lied to Vice President Mike Pence about the nature of the calls. Trump’s allegations represented a sharp change in his tone toward Obama. The current president has frequently spoken about how much he admires Obama for the gracious way he handled the transition. But since taking office, Trump has frequently clashed with the intelligence agencies over the Russia inquiries, including efforts to examine the attempts by that country to influence

the presidential election and the contacts between Trump’s aides and the Russian government. In recent days, the president has appeared increasingly angry about leaks of information that he believes are coming from law-enforcement and intelligence officials who are holdovers or recently departed from Obama’s administration. People close to Trump have described him as determined to stop those people from sabotaging his administration. Across the government, efforts are under way to find and punish officials who are leaking information to the news media. Trump’s mood was said to be explosive before he departed for his weekend in Florida, with an episode in which he vented at his staff. The president’s ire was trained in particular on Donald F. McGahn, his White House counsel, according to two people briefed on the matter. Trump was said to be frustrated about the decision by Jeff Sessions, his attorney general, to recuse himself from participating in any investigations of connections between the Trump campaign and Russia. Trump has said there were no such connections. New York Times News Service

Migrants confront judgment day over old deportation orders

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here are a little more than two weeks between Juan, an electrician in the Bronx, and the date he cannot forget: 8 a.m. March 21, 2017, when the federal government has told him to report for deportation. Two weeks to decide: Avoid it, and try to preserve the American life he has built for a little longer, even as a fugitive. Go, and lose it all: his wife and son, his job, his apartment, his world. “I would feel like an animal if I stay here and hide,” said Juan, 29, who asked that his last name not be used. “I want to prove that I can follow the laws. I want to make my case at this meeting, but I know that if I go, they’re going to deport me.” In an immigration system mottled with escape hatches and hobbled by scant resources, Juan, who fled Colombia six years ago, is one of nearly 1 million people who have managed to linger in the United States despite having been ordered out of the country by an immigration judge—some of them more than a decade ago. And with the Trump administration intent on sweeping perhaps millions of immigrants

962,000 The number of people facing outstanding deportation orders, which grew by half since 2006

without legal status out of the country, the White House has not had to look far to make a quick mark. Because people with deportation orders have had their day in court, most of them can be sent out of the country without seeing a judge, sometimes within hours of being arrested. “People who have been ordered deported and who are still here are the low-hanging fruit,” said Stephen Yale-Loehr, an immigration law professor at Cornell University. “Trump has said he has wanted to deport more people. The easiest way to get those numbers up are to take those people who’ve been ordered deported and go after them.” President Donald J. Trump’s immigration agency has offered what looks like a preview: Immigration

and Customs Enforcement agents recently deported to Mexico an Arizona mother who had been ordered out of the country four years ago. But the follow-up will be complicated. The backlog of what the government calls “fugitive aliens” has persisted through Republican and Democratic administrations, inflamed conservatives who oppose illegal immigration, and resisted the immigration authorities’ attempts at enforcement. Since 2006, even as the overall total of unauthorized immigrants in the United States has dipped, the number facing outstanding deportation orders has grown by more than half, to around 962,000 people from 632,726. More than half of them come from Mexico, El Salvador, Guatemala or Honduras. (Another 13,200 or so, as of early February, were already in the custody of customs officials.) Despite the Bush and Obama administrations’ oft-stated commitments to focus on expelling those who pose a serious danger to their communities, slightly less than 1 in 5 people facing deportation has been convicted of a crime in the

United States. The causes for delays can vary. Deportations have been deferred for humanitarian reasons—like allowing mothers to stay with sick children in the United States—or they have been frozen while an appeal is mounted. The Obama administration put off deportations for thousands of immigrants it did not consider priorities, including Juan, the Bronx electrician, and Guadalupe García de Rayos, the Arizona mother, often law-abiding people with strong ties to their communities. “Felons, not families; criminals, not children,” President Barack Obama said in 2014, describing the kinds of people he wanted deported. The government also postponed deportations for people who were likely to face torture if they were sent back. Some deportations are simply impossible to carry out: About onequarter of the immigrants with outstanding deportation orders come from countries that refuse to take back deportees, including China, Haiti, Brazil and India. Trump has threatened to stop issuing visas to people from these

countries. In the past, diplomats have urged caution on this front, not wanting to disrupt international relationships over the issue of deportees. And many people under final orders have slipped through gaping cracks in the immigration system. Court notices—either mailed to outdated addresses or illegible to Spanish speakers—are routinely missed, leaving judges to issue deportation orders for people who miss their chance to argue their case. Nearly one-quarter of judges’ decisions rendered in 2015, for example, involved cases where the immigrant in question was absent. The months and, sometimes, years it takes for immigration and asylum cases to wind through a clogged court system can cause authorities to lose track of immigrants living and working in the country, because they have fled or simply moved. The White House has sought to make it harder for immigrants to be remain free inside the United States, while their requests for asylum plod through the courts. They will be detained more often, or asked to wait in Mexico until a judge can rule. New York Times News Service

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Trump biz: Got $1M in subsidies for energy efficiency in 2012

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he Trump White House has wasted no time in targeting proclimate policies, freezing energyefficiency standards finalized during the last days of the Obama administration. Its “America First Energy Plan” makes no mention of renewable energy or energy efficiency, and it is focused on fossil fuels. But in 2012, Donald J. Trump, the businessman, played a different tune. That year Trump finished securing almost $1 million in energy-efficiency incentives and low-interest loans from New York state to fit a Trump-branded residential tower in Westchester County with eco-friendly fixtures, state records show. “I strongly believe in clean energy, in conserving energy, all of that—more than anybody,” Trump is quoted as saying in a fact sheet about the project, at Trump Tower at City Center in White Plains. As part of the project, a state-of-the-art power system that recycles energy was installed. TheTrump Organization also received smaller incentive payments in 2011, for a total of about $40,000, for energy-saving projects at two separate condominium buildings in Manhattan, according to state records obtained under New York’s Freedom of Information Law. Changes in federal policies by the Trump administration would not necessarily alter energy-efficiency subsidies in New York state. But Trump’s acceptance of them highlights the seeming dissonance between his use of environmental subsidies and incentives while at the helm of his sprawling business, and his administration’s public hostility toward financial support for clean energy and energy efficiency. In the past, Trump has said he has tried to take every advantage of laws to help himself and his business. Amanda Miller, a Trump Organization spokeswoman, did not respond to questions about the clean-energy incentives. The White House did not respond to a request for comment. As a candidate and as president, though, Trump has advocated reducing environmental regulations. And there are concerns about the future of federal tax credits for energy-efficient buildings under Trump’s promised tax overhaul. “Donald Trump’s own properties benefited from energy-efficiency upgrades, courtesy of successful clean-energy and climate-change policies,” said Dave Anderson, a policy analyst at the Energy and Policy Institute, an organization that supports renewable energy and that has been tracking Trump’s use of energy-efficiency incentives. “However, his incoming administration appears to be heading in a very different direction on clean energy and climate change,” Anderson said. In documents filed in New York state, the Trump Organization is listed as the managing agency for the buildings that received the incentives. In the case of the Trump Tower at City Center, the real estate itself is owned by the developer, LC White Plains Residential II. The retrofits that the Trump Organization made to the Trump Tower at City Center are especially advanced. The building’s new power system, called a cogeneration system, traps thermal energy from two generators and uses it for the heating of air and water, said Larry Gomez, the property’s resident manager. It installed energy-efficient hallway lights that are controlled by motion sensors and a cover on its rooftop swimming pool to minimize evaporation and to reduce pool-heating costs. “It’s saved the building a fortune in energy costs,” Gomez said—about $300,000 a year. Gomez said though he had never spoken directly with Trump, he was commended by his bosses for his work on energy efficiency. He has received calls from managers at other Trumpbranded properties for advice on energy efficiency, he said. (Trump Tower in Manhattan seems to be one of the properties in greatest need of energyefficiency updates—it uses more energy than most comparable buildings in New York.) New York Times News Service

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Monday, March 6, 2017

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China defense budget to rise 7% C

hina indicated a continued slowdown in defense spending growth this year, as President Xi Jinping presses ahead with a sweeping military overhaul. The defense budget will rise “about 7 percent,” National People’s Congress Spokesman Fu Ying told a briefing ahead of China’s annual legislative session in Beijing. A n actua l spending target wasn’t expected until Sunday, when the Ministry of Finance releases its 2017 budget at the start of the 11-day legislative gathering. Last year the country budgeted a 7.6-percent uptick in military spending to 954.4 billion yuan (equal to $147 billion at the time), the slowest increase since a 7.3-percent rise in 2010. Seven percent would be the slowest expansion in more than a decade, tracking the broader trend in the country’s economy. The increase consolidates China’s lead as the world’s secondlargest military spender, accounting for more than 10 percent of the global arms total, said Siemon Wezeman, a senior researcher with the Stockholm International Peace Research Institute. More than two decades of expansion have helped China build a modern military capable of projecting force further from its coasts, while spurring anxious neighbors to upgrade their own defenses. Fu said China was committed to peace and described tensions in the South China Sea, where the country’s land-reclamation campaign has been criticized by the US and rival claimants, as “easing”. “We advocate dialogue and peaceful solutions to disputes of sovereignty and maritime rights,”

300,000

The number of army personnel President Xi Jinpin has called to cut from the 2.3-million-member People’s Liberation Army said Fu, a former vice foreign minister and ex-ambassador to the UK “Meanwhile, we should possess the capacity to protect our sovereignty and interests.”

Trump’s increase

The slowdown in defense spending comes as economic growth continues to cool. The annual work report set to be delivered by Premier Li Keqiang on Sunday is expected to set a growth target of “about 6.5 percent,” compared with last year’s 6.7-percent expansion, according to a Bloomberg survey of analysts last month. China’s military outlays are dwarfed by US expenditures, which may be boosted further as President Donald J. Trump seeks to add $84 billion to defense spending over the next two years. On Thursday Trump pledged during a visit to the USS Gerald R. Ford—the first of a new class of nuclear-powered aircraft carriers—to maintain a dozen carriers. The USS John F. Kennedy, which would be the 12th if no others were decommissioned, is already under

Chinese leaders (from front left) Wang Qishan, Yu Zhengsheng, Chinese President Xi Jinping, Premier Li Keqiang and Liu Yunshan stand during the start of the opening session of China’s annual National People’s Congress in Beijing’s Great Hall of the People on Sunday. China’s top leadership and thousands of delegates from around the country are gathered at the Chinese capital for the annual legislature meetings. AP/Mark Schiefelbein

construction. “I’m afraid the US worries that China will surpass the US in terms of capability,” Fu said. “In fact, China, as a developing country, has a big gap with the US, but China’s army-building will continue.” China is in the midst of its biggest military overhaul since the aftermath of the Korean War. Xi has called for cutting 300,000

personnel from the 2.3-millionmember People’s Liberation Army and updating its Soviet-inspired command structure. The armed forces have also been rocked by Xi’s antigraft campaign, with the defense ministry announcing last December the first bribery investigation against an incumbent general. Xi is tilting the military away

from a traditional land-based force to favor the naval and air forces needed to protect maritime resources and trading routes vital to China’s economy. As China pursues its “One Belt, One Road” initiative to build an intercontinental web of infrastructure and trade links, it has greater need to project power further from home. “ T here is a threat percep-

tion, but it’s not so much that somebody will invade China, but more issues related to economic security, access to resources, access to markets and to be able to protect that because without that the economy will collapse,” Wezemen said. “There’s also posturing. To be a major power, you have to show you have military might.” Bloomberg News

Mexico’s econ chief: In China trade war, US meat looks like dog food Nafta has room A for improvement

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exico’s top trade negotiator will grant President Donald J. Trump this: North American Free Trade Agreement (Nafta) is in need of updating. He doesn’t agree, however, that the US auto industry has gotten the short end of the stick. Nafta has served the US, Canada and Mexico well, Economy Minister I ldefonso Gu aja rdo said last Friday at a luncheon hosted by the Detroit Economic Club. But when he was negotiating the original agreement in the 1990s, he didn’t have a cell phone, there was no such thing as e-commerce, and Mexico’s energy and telecommunications sector lacked competition. “Nafta is 23-year-old agreement—we need to bring it up to modernity,” Guajardo said. Trump has been determined to wring more favorable terms from Nafta, though he hasn’t been explicit on what he wants to change. The president has criticized automakers—including Ford Motor Co., Toyota Motor Corp. and BMW AG—for building vehicles south of the border and has threatened to tax imported vehicles. It’s necessar y to recognize what’s worked well with Nafta and push back against the notion that the rapidly expanding Mexican auto industry has taken the lion’s share of growth, Guajardo said. He visited Detroit ahead of planned discussions around the possible renegotiation of

the free-trade agreement.

Capital investment

“Of the 100 percent of investments that have been made in the auto sector in the last five years, 72 percent have been in the US,” he said. W hile in Michigan, Guajardo was scheduled to meet with Joe Hinrichs, Ford’s head of the Americas, and Mustafa Mohatarem, General Motors Co.’s chief economist, according to company representatives. He also visited with auto-parts company executives that have factories in Detroit and Mexico, he said during his speech at the MotorCity Casino Hotel. In an interview last Friday, Guajardo said he would break off talks if the US proposes the kind of big border tax suggested by Trump. “The moment that they say, ‘We’re going to put a 20-percent tariff on cars’, I get up from the table,” he said in the interview. “Bye-bye.” Trump has called Nafta unfair and responsible for a “massive” imbalance favoring Mexico. The country shipped $294 billion worth of goods north last year while the US sent $231 billion south. Without Nafta, trade between Mexico and the US would be ruled by World Trade Organization (WTO) strictures limiting tariffs either country can impose on the other. That means an import tax like the one Trump has suggested could result in a WTO challenge, Guajardo said. Bloomberg News

s Donald J. Trump’s campaign threats of a trade war with China loom over American industry, executives are left to determine how they might navigate that conflict. For the US meat industry, the answer might be snoring softly next to the food bowl in your kitchen. The US sells billions of dollars of beef, pork and chicken to countries all over the world, a mutually beneficial relationship that allows companies to find buyers for cuts of meat Americans shun, like offal and pig ears. If those markets should close, said Tyson Foods Inc. CEO Tom Hayes, such technically edible animal parts will likely land in your dog’s breakfast. “If, in fact, there was a situation where there wasn’t a primary use market, we’d use it for rendering,” Hayes said in an interview this week with Bloomberg. “We do a lot of rendering of our products

for pet food.” R e nder i ng i s t he pro cess of grinding up giant heaps of raw food and animal material, heating them and separating them into components like liquid and solid fats for use in soap, explosives— and Fido’s kibble. It’s a safe and effective way to recycle the approximately £59 billion of what would otherwise be waste produced by the meat, supermarket and restaurant industries. “We supply people that make pet food and we have our own pet foods business,” Hayes said. Of a trade war with China, he said: “Our view is that things won’t get there, but if they do, we have options.” He noted that the 82-year-old company has “been through tough times before.” But while American dogs and cats (if they knew what was going on) might be salivating over the possible influx of pig ears, t here’s a catch for t he meat industry: profit.

An American-raised pork product sold to China (and perhaps included as the main ingredient in pig-ear salad) fetches a higher price than if it was rendered and sold domestically, ending up on a shelf at your local Petco. “Rendering is often below 10 cents a pound,” says Brett Stuart, chief executive of market analysis firm Global Agri-Trends. “A year ago, it was $2.80 a pound for pig ears in China.” And it’s not just the ears. The US pork industry exported a total of $791.4 million in “pork variety” in 2016, with Hong Kong purchasing $256.7 million and China buying $245.2 million, according to the US Department of Agriculture (USDA). China is the world’s largest pork importer, and, according to an October 2016 USDA report, “remains an important market for US exporters.” Between January and August 2015, the country accounted for

6 percent of total US pork shipments. For the same period in 2016, it was 12 percent. While trade restrictions would mean major changes across the agriculture industry, meat producers will face a particular challenge, thanks to international variations in consumption preferences. “Grain is grain is grain,” Stuart said. “But once you start talking about meat, there are so many different products and different values in all markets.” For now, though, Hayes is reluctant to alter a company strategy that brought in $4.1 billion in sales from 115 countries last year. “It’s really important to the countries that we export to that they continue to have availability of our products,“ he said. Stuart echoed the sentiment: “One would hope that we don’t hurt through trade restrictions a thr iv ing, globally competitive manufacturing business at home.” Bloomberg News

Many of world’s wealthiest are getting older—and plotting what’s next

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orenzo Servitje Sendra was the oldest person on the Bloomberg Billionaires Index when he died last month with a $4.2-billion fortune. Thinking ahead, the Mexican billionaire had already transferred his stake in Grupo Bimbo, the world’s largest breadmaker, to his heirs, enabling them to sidestep what amounts to a $2.1-trillion headache for the wealthy. That’s the total net worth—roughly equal to the GDP of India—controlled by the 218 billionaires over age 70 on the Bloomberg index, a daily ranking of the world’s 500 richest people. “By far the biggest handover

ever to the next generation is about to happen,” PWC and UBS noted in a 2016 report on billionaires. “Without careful planning, many of today’s fortunes will suffer substantial erosion.” The problem is most acute in the US and Europe, where about a quarter of the billionaires on the index are age 80 or older, compared to 20 percent in Asia. In mainland China, where only chemical maker Xu Chuanhua has reached that milestone, just 3 percent of the wealth is in the hands of the elderly, with about 40 percent held by billionaires under age 50. Russians have their own version

of the headache, with private wealth controlled mostly by a generation of businessmen who profited from the chaotic post-Soviet economy. For those billionaires, passing the business on isn’t an option when so much of the value is tightly woven into personal connections at the Kremlin. In the United States Sumner Redstone’s $3.8-billion fortune became embroiled in a bitter and public feud when the 93-year-old’s frail health sparked a legal battle between his daughter Shari Redstone and Viacom Inc.’s former CEO Philippe Dauman, hobbling the media company’s efforts to

make deals to stream programs on the Internet. Swedish billionaire Ingvar Kamprad and Germany’s Dieter Schwarz side-stepped that risk through elaborate, tax-friendly holding structures they created to control assets when they’re gone. Italian billionaire Leonardo del Vecchio, 81, sold Luxottica Group SpA, the eyewear business that makes up the bulk of his $18-billion fortune, to Essilor International SA in January. That was to prevent a tug-of-war among his children for control of Luxottica as del Vecchio looks to transfer his wealth to the next generation. Bloomberg News

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UN: If confirmed, chemical attacks in Mosul a war crime

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The number of patients admitted to hospital for exposure to chemical weapons Victims of a possible Islamic State chemical attack, civilians Ekhlas Meshal, 30, holds her injured 2-month-old child Rami, as she sits next to her injured 2-year-old daughter Dima who are receiving treatment in a hospital in Irbil, Iraq, last Saturday. A doctor in western Irbil said last Saturday 10 people with injuries caused by chemicals have been admitted to his hospital over the last two days. AP/ Khalid Mohammed

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RBIL, Iraq—The United Nations warned that the alleged use of chemical weapons in Mosul, if confirmed, would be a war crime and a serious violation of international humanitarian law, according to a statement released last Saturday.

“This is horrible,” Lise Grande, the humanitarian coordinator in Iraq, said in the statement. “There is never justification—none whatsoever— for the use of chemical weapons.” The alleged attack occurred this week in eastern Mosul, an area declared fully liberated by Iraqi forces

in January. The attack hit a neighborhood along the Tigris River—which roughly divides the city in two. Doctors in an urgent-care hospital in the nearby city of Irbil say they began receiving patients showing symptoms of chemical weapons exposure last Thursday.

“The mortar hit our house, right inside the living room where we were sitting,” said Nazim Hamid, whose children had burns to their faces, arms and legs. The family was being treated in the Irbil hospital. “There was a very bad smell, it was some kind of gas,” he said. “My kids were affected, some of them were burned and some of them had difficulty breathing.” Hussein Qader, the deputy director of the hospital, said all 10 patients admitted for exposure are in stable condition and will be discharged in the coming days. Islamic State (IS) has used chemical weapons in Iraq and Syria at least 52 times, according to a report published late last year by IHS conflict monitor, a London-based research and intelligence gathering group. The report said at least 19 of the 52 attacks took place in and around Mosul. Iraqi and US-led coalition officials have repeatedly expressed concern regarding IS chemical weapons attacks. However, IS-claimed insur-

gent attacks in Iraq and attacks targeting civilians attempting to flee Mosul cause far greater numbers of injuries and deaths to civilians. Most of western Mosul is still under IS control despite a handful of recent gains on the city’s southwestern edge by Iraqi forces over the past two weeks. The US-led coalition campaign of air strikes has been pivotal to securing those territorial gains, but has also resulted in civilian casualties and damage to infrastructure. Coalition air strikes in Iraq and Syria between November and January killed 19 civilians and wounded two, according to a statement from the Pentagon on Saturday. The report brings the total number of civilian casualties acknowledged by the coalition to at least 220, according to the Pentagon. Independent monitoring organizations put the number of civilian casualties much higher. Airwars, an independent monitoring group based in London estimates the minimum number of civilian casualties caused by air strikes to be at least 2,463. The Pentagon report added that 19 reports of strikes resulting in civilian casualties were still being assessed, 11 of which occurred in and around Mosul. Iraqi forces launched the operation to retake Mosul last October and began a push to retake the city's western half last month. After more than two years of slow territorial victories against IS by Iraqi ground forces backed by US-led coalition air power, western Mosul is the last significant urban area IS controls in Iraq. AP

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Somalia: 110 dead from hunger in past 48 hours due to drought

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OGADISHU, Somalia—Somalia’s prime minister said last Saturday that 110 people have died from hunger in the past 48 hours in a single region—the first death toll announced in a severe drought threatening millions of people across the countr y. Somalia’s government declared the drought a national disaster last Tuesday. The United Nations estimates that 5 million people in this Horn of Africa nation need aid, amid warnings of a full-blown famine. Prime Minister Hassan Ali Khaire spoke during a meeting with the Somali National Drought Committee. The death toll he announced is from the Bay region in the southwest part of the country alone. Somalia was one of four regions singled out by the UN secretary-general last month in a $4.4-billion aid appeal to avert catastrophic hunger and famine, along with northeast Nigeria, South Sudan and Yemen. All are connected by a thread of violent conflict, the UN chief said. The UN humanitarian coordinator, Stephen O’Brien, was expected to visit Somalia in the next few days. Thousands have been streaming into Somalia’s capital, Mogadishu, in search of food aid, overwhelming local and international aid agencies. Over 7,000 internally displaced people

checked into one feeding center recently. The drought is the first crisis for Somalia’s newly elected Somali-American leader, President Mohamed Abdullahi Mohamed. Previous droughts and a quarter-century of conflict, including ongoing attacks by extremist group al-Shabab, have left the country fragile. Mohamed has appealed to the international community and Somalia’s diaspora of 2 million people for help. About 363,000 acutely malnourished children in Somalia “need urgent treatment and nutrition support, including 71,000 who are severely malnourished,” the US Agency for International Development’s Famine Early Warning Systems Network has warned. Because of a lack of clean water in many areas, there is the additional threat of cholera and other diseases, UN experts say. Some deaths from cholera already have been reported. The government has said the widespread hunger “makes people vulnerable to exploitation, human rights abuses and to criminal and terrorist networks.” The UN humanitarian appeal for 2017 for Somalia is $864 million to provide assistance to 3.9 million people. But the UN World Food Program recently requested an additional $26million plan to respond to the drought. AP

Syrian army retakes Palmyra town as IS defenses crumble B

EIRUT—Syria’s military announced last Thursday it has fully recaptured the historic town of Palmyra from the Islamic State (IS) group as the militants’ defenses crumbled and IS fighters fled in the face of artillery fire and intense Russia-backed air strikes. The development marks the third time that the town—famed for its priceless Roman ruins and archaeological treasures IS had sought to destroy—has changed hands in one year. It was also the second blow for the IS in Syria in a week, after Turkish backed opposition fighters seized the Syrian town of al-Bab from the militants on February 23, following a grueling three month battle. In neighboring Iraq, the Sunni extremist group is fighting for survival in its last urban bastion in the western part of the city of Mosul. For the Syrian government, the news was a welcome development against the backdrop of peace talks under way with the opposition in Switzerland. “You are all invited to visit the historic city of Palmyra and witness its beauty, now that it has been liberated,” the Damascus envoy to the UN-mediated talks, Bashar al-Ja’afari, told reporters in Geneva. “Of course, counterterrorism operations will continue until the last inch of our territory is liberated from the hands of these foreign terrorist organizations, which are wreaking havoc in our country,” he added. The Damascus military statement said troops gained full control of the desert town in central Syria following a series of military operations carried out with the help of Russian air cover and in cooperation with “allied and friendly troops”—government shorthand for members of Lebanese militant Hezbollah group who are fighting along Syrian President Bashar al-Assad’s forces. IS defenses around Palmyra had begun to erode last Sunday, with government troops reaching the town’s

Russian soldiers stand on a road, as smoke rises from a controlled land-mine detonation by Russian experts inside the ancient town of Palmyra, Syria, in the central Homs province in April 14, 2016. AP/Hassan Ammar

outskirts last Tuesday. The state Sana news agency reported earlier that government troops had entered the town’s archaeological site—a United Nations Educational, Scientific and Cultural Organization World Heritage Site— around midday, then the town itself, as IS militants fled the area. This is the Syrian government’s second campaign to retake Palmyra. It seized the town from IS militants in March 2016 only to lose it again

10 months later. Before the civil war gripped Syria in 2011, Palmyra was a top tourist attraction, drawing tens of thousands of visitors each year. The Kremlin spokesman, Dmitry Peskov, had said earlier that Russian President Vladimir Putin was informed by his defense minister that Syrian troops had gained control of Palmyra, with support from Russian warplanes. The Syrian government’s push

has relied on ground support from Hezbollah and Russian air cover, according to Hezbollah’s media outlets. Archeologists have decried what they say is extensive damage to its ruins. Drone footage released by Russia’s Defense Ministry earlier this month showed new damage to the facade of Palmyra’s Roman-era theater and the adjoining Tetrapylon—a set of four monuments with four columns each at the center of the colonnaded road

leading to the theater. A 2014 report by a UN research agency disclosed satellite evidence of looting while the ruins were under Syrian military control. Opposition factions have also admitted to looting the antiquities for funds. IS militants have twice used the town’s Roman theater as a stage for mass killings, most recently in January, when they shot and beheaded a number of captives they said had tried to escape their December advance.

Other IS killings were said to have taken place in the courtyard of the Palmyra museum and in a former Russian base in the town. The developments in Palmyra came against the backdrop of the talks in Geneva, which have been without any tangible breakthroughs so far. Diplomats and negotiators have set their sights on modest achievements in the latest round, after a week of discussions centering on setting an agenda for future talks. Last Thursday UN Special Envoy to Syria Staffan de Mistura held another round of meetings with both the government delegation and opposition groups. Russian Deputy Foreign Minister Gennady Gatilov told reporters on Wednesday that “the parties have agreed to...discuss all issues in a parallel way, on several tracks.” After a Damascus request, the issue of terrorism is also on the table, he had said. Russia is a key sponsor of Assad’s government. A top Syrian opposition negotiator, Nasr al-Hariri, said the talks would likely culminate in a closing ceremony last Friday and the parties may be back in Geneva for further discussions in a few weeks. Setting the agenda and strategy to guide discussions has proven difficult as the main conflicting parties dig in their heels over form and semantics. In Turkey the country’s foreign minister said with the completion of an operation to retake the IS-held town of al-Bab in northern Syria, Turkish troops will head to the Syrian town of Manbij next, to oust US-backed Syrian Kurdish forces that Ankara views as terrorists and a threat to Turkey. Foreign Minister Mevlut Cavusoglu said on Thursday that Turkey would not shy away from attacking the Kurdish group that dominates the Syria Democratic Forces, which captured Manbij last year after weeks of deadly fighting with IS. AP

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P174M released for DA experiment stations damaged by Typhoon Yolanda By Elmer V. Recuerdo

GMR-Megawide ready to build cable-car system to ease congestion around Mactan-Cebu airport

Correspondent

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ACLOBAN CITY—More than three years after Supertyphoon Yolanda (international code name Haiyan) destroyed the facilities of the Department of Agriculture (DA) in Eastern Visayas, repairs for the damaged experiment stations can already start after funds finally came. DA Regional Director U-Nichols Manalo said a total of P173,833,078 was allocated to the region to restore office and its experiment stations. The funds, released last December 12, came from the Yolanda Rehabilitation and Reconstruction Program (YRRP) 2016. Manalo said the immediate repair of damaged experiment stations is very important, because this is where research and development to improve agriculture productivity are being conducted. It is also in these stations where technologies are developed and are allowed to mature before these are promoted to farmers and other clientele. There are five experiment stations in Eastern Visayas, three of them in the towns of Babatngon, San Miguel and Abuyog in Leyte. One experiment station is in Eastern Samar, the Salcedo Crop and Livestock Experiment Station in the town of Salcedo, and the other one is the San Jorge Experiment Station in Samar. Recently, a team of engineers, architects and information staff from the DA regional office visited the stations to conduct ocular inspections, prevalidations and documentations of all the facilities under rehab. Manalo said the bulk of the allocated fund for each station will be used in rehabilitating its building complex and training halls, perimeter fences and gates, staff houses, irrigation systems and the stations’ road networks that are deemed necessary because of the detriments it may cause, especially during rainy season. Rehabilitation work in these stations have already started, as well as repairs and improvement of its office building. The DA has also started the rehabilitation of the Animal and Plant Quarantine Services Building and the office’s guesthouse. The total project cost reached P42,871,467.49.

THE HUNT FOR BAGUIO’S BEST ‘LONGGANISA’ A stall owner is busy preparing different kinds of longganisa (native sausage) sold at the Baguio City Public Market. Making longganisa became a scale industry in Baguio City in the 1940s, when families renowned for their meat products started producing them, each family with their own secret recipes infused with the usual garlic, salt and spices. MAU VICTA

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IGANTES ISLANDS—Officials of Barangay Lantangan in the Municipality of Carles, Iloilo province, are now in a quandary after the Commission on Audit issued a “stop-payment order” for the barangay. Because of the order, officials of the biggest of four barangays on the Gigantes Islands have not received their monthly honorarium since September 2016, while appointed barangay officials, which include tanod or watchmen, health workers and even bantay-dagat, have not received their honorarium for the months of September to December 2015 and September 2016 until February 2017. Samuel Suguano Sr., a barangay kagawad of Lantangan, told the BusinessMirror in an interview the nonpayment of their honorarium is causing a sweeping demoralization and failure of governance. “Other barangay kagawad and volunteers are already demoralized and are no longer functioning because of this,” Suguano said.

@lorenzmarasigan

GMR-Megawide Cebu Airport Corp. Chief Executive Advisor Andrew Harrison said his group is “trying to meet” with officials of the local government units in Mactan and Cebu to thresh out the details of the cable-car proposal. “The traffic situation in Cebu is becoming a problem. If we don’t solve it now, it will become bigger over time,” he said in an interview. Harrison added the proposal involves the construction of a cable-car system that will run from the airport to up to 10 stops. “The beauty is you only require the footings, as the issues of right-ofway are minimal,” he said. “We will start from Mactan to serve resorts and key interchange points. It can also be extended.”

Should the local governments agree to this proposal, it will take the company 12 to 14 months to finish the facility. Harrison said it will be “much cheaper” for the commuters, and will help ease the congestion along major choke points in Cebu. The company’s alternative to this, however, requires more work and will entail issues on right of way. “We have another proposal, which is a battery-operated vehicle that carries six people without a driver. It will run through an elevated facility and will use sensors to guide the vehicle,” Harrison said. This, however, will prove to be a challenge, because “it will need a lot more infrastructure for that road way.”

BCDA: Central Luzon to get ‘tons of benefits’ from Clark Green City project By Catherine Joy L. Maglalang Correspondent

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ITY OF SAN FERNANDO, Pampanga—“Tons of benefits” await the people of Central Luzon through the Clark Green City (CGC) project. “It [CGC] w i l l def in itely strengthen the position of Region 3 as the country’s newest growth hub, leveraging also on the existing gains of the Clark Special Economic Zone,” Bases Conversion and Development Authority Assistant Vice President for Corporate Communications Leilani Macasaet said. Accordingly, with the government committed to help enhance road networks and other transportation infrastructure to and

Gigantes Islands barangay officials appeal to DILG for help @jonlmayuga

By Lorenz S. Marasigan

HE operator of the MactanCebu International Airport is offering to build a cablecar system in the “Queen City of the South” to ease congestion on the roads leading to the air hub.

SIX MONTHS WITHOUT PAY By Jonathan L. Mayuga

Editor: Efleda P. Campos • Monday, March 6, 2017 A11

“Iyong ibang tanod at bantaydagat namin, ayaw na mag-report. Pati iyong taga-linis ng kalat at basura, ayaw na rin mag-trabaho,” he said. Blaming their punong barangay Jonas Bensurto and barangay treasurer Romeo Chao, Suguano said the betrayal of public trust inhibits the development of the barangay and prevents Giganteswide efforts to promote naturalresource conservation and protection, tourism management and health promotion. Suguano is now appealing to Interior Secretary Ismael Sueno to step in to fix the problem. Suguano said they have already sought the help of Municipal Mayor Siegfredo Betita and appealed to members of the Sangguniang Bayan, but to no avail. In a letter dated March 3, 2017, Suguano wrote in behalf of other kagawad of Barangay Lantangan to expedite action on their complaint against their erring Punong Barangay. He said that in 2015, concerned barangay officials had filed a complaint against Bensurto, which led to the official’s suspension.

from the region, the presence of CGC will further lure businesses to the area, helping drive economic growth by providing employment opportunities and generating new sources of revenue for the local government units. “Among the benefits are in the areas of agricultural produce, population, gross regional domestic product, tourism and real estate,” she said. Known as the “Fertile Central Plains” and the “Rice Granary of the Philippines”, given the abundance of rice and vegetables in the region, Central Luzon produces three-fourths of the country’s total rice harvest, in addition to sugarcane and corn. She said that, aside from being a producer of agricultural

products, the region is also the Philippines’s biggest hog and poultry producer, contributing to 18 percent and 26 percent of the national output, respectively. “Based on the 2015 data of the Philippine Statistics Authority, Region 3 is the country’s third-largest region in terms of population size, with approximately 11.22 million people. It increases by 1.95 percent annually, on average, in six years,” Macasaet said. She said Central Luzon is home to the second-largest source of labor (4.3 million people), with the main industry employers in the industrial manufacturing sector and the business-process outsourcing (BPO) industry. “In terms of the gross regional

domestic product of the region, the accelerated growth brought about by the industry sector grew the economy by 4.6 percentage points, accelerating from 4.4 percent in 2013 to 9 percent in 2014,” Macasaet said. She said that, compared to the information-technology (IT) facilities in Metro Manila and Metro Cebu, Metro Clark is the only established IT-BPO hub still enjoying tax incentives for new IT parks and facilities developers. With the increase in the number of expatriates, Central Luzon has the third-highest number of foreign-citizen households, with approximately 16,000. Multiple value investments, particularly in the economic and free-port zones of Clark and Subic,

translate to economic expansion in Central Luzon, generating trade and employment opportunities. “Through this, visitor arrivals increased by approximately 21 percent at 3.1 million visitors in 2014,” she said. The region is becoming home to the expansion projects of real-estate developers outside Metro Manila. Several local developers already have their presence in Central Luzon, particularly Ayala Land Inc., Alveo Land Corp., Amaia Land Corp., Vista Land and Landscapes Inc., Robinsons Land Corp., Communities North Inc. and FilinvestLand, among others. “The rise in real-estate developments in Central Luzon is a mark of the high purchasing power of the population, as well as presence of higher land values,” Macasaet said.

Bogo City high-school team to compete in Singapore

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HE 13-member Team Masiyentista of the City of Bogo Science and Arts Academy (CBSA A) will be competing in the Shell Eco-Marathon (SEM) Asia 2017 in Singapore. Team Masiyentista will be competing against 100 teams in Singapore from March 16 to 19, to push the boundaries of energy efficiency. It is one of 14 teams to represent the Philippines in this renowned international event and the only team to represent the whole Visayas region. The SEM is an annual competition sponsored by Shell that challenges student teams to design, build, test and drive the most fuelefficient vehicles. It is held around the world with events in Europe, the Americas and Asia, with the Asian leg being held in Singapore this year. Team Masiyentista will participate in the Prototype-Internal Combustion Engine category with a gasoline-run vehicle, affectionately called Labyug, after a former mode of transportation that locals used. It has a carbon-fiber exterior and is shaped like a raindrop to allow it to cut through the air as efficiently as possible. The team is confident that Labyug will finish with a record fuel efficiency of not below 200 km/l.

a racer for Team Masiyentista

The team competed last year in the SEM 2016 in Manila, where it won fifth place in the Best University Launch, despite being the only secondary school participating in that event. Other teams were composed of engineering students, owing to the technical background of conceptualizing

and building the vehicles. The students hail from CBSAA, a public school, with extensive support from the local government. Chastren Soon, faculty adviser, said their participation in SEM Asia 2017 marks a milestone for CBSAA in molding innovative leaders and globally competitive students, cre-

ating a bridge for students to transcend a world of mere blueprints to actual application. Bogo City Mayor Carlo Martinez said, “The SEM Asia 2017 is a wonderful opportunity to showcase the ingenuity, knowledge and skills of our young Bogohanons on the global stage.” Charles R. Pepito

Green Monday BusinessMirror

A12 Monday, March 6, 2017

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

Wetland park in urban Manila rises to preserve the last coastal frontier S 7 By Stephanie Tumampos | Special to the BusinessMirror

even of over 2,200 identified wetlands in the world as listed by the Ramsar Convention are in the Philippines. These are the Puerto Princesa Subter ranean R iver Nationa l Park in Palawan; the Tubbataha Reefs National Marine Park in Sulu; the Agusan Marsh Wildlife Sanctuary in Agusan del Sur; the Naujan Lake National Park in Oriental Mindoro; the Olango Island Wildlife Sanctuary in Cebu; the Negros Occidental Coastal Wetlands Conservation Area in Negros Occidental; and the Las Piñas-Parañaque Critical Habitat and Eco-Tourism Area (LPPCHEA). Among these, only LPPCHEA is in an urban area— in Metro Manila. T he impor tance of hav ing wetlands is an indicator of a healthy environment. For LPPCHEA, it means more—it will be constructed as a park to attract tourists and visitors alike. “Our wetlands park is divided into two, the Las Piñas side and the Parañaque side, and we are all overlooking the Manila Bay,” Sen. Cynthia A. Villar said at a news conference at the Senate while opening an exhibit showcasing the wetland wonders of the Philippines. “We have 30 hectares of mangrove forest, 82 species of birds, three of them are endangered,” Villar said. Envisioned as a very important tourist attraction in Metro Manila, the LPPCHEA wetlands is planned out to be constructed with facilities for Filipinos and tourists to visit and appreciate nature up close.

A fight for nature in Metro Manila

V ill a r has been lead ing t he f ight to protect a nd conser ve the last remaining coastal wetl a nd in Met ro Ma ni l a. Being t he c h a i r m a n of t he Sen ate Com m it te e on Env i ron me nt a nd Nat u r a l R e s ou rce s , he r

The number of wetlands in the Philippines out of the 2,200 identified worldwide

work has been foc used on pre ser v ing t he nat u ra l resou rces of t he cou nt r y. In 2011 Alltech Contractors Inc. was issued an environmental clearance certificate (ECC) for t he Parañaque-L as Piñas Coastal Bay Project Land Reclamation that has caused an uproar among environmentalists and conservation groups. Villar, during the press conference, assured the members of the media the company has already given up. In January Environement Secretary Regina Paz L. Lopez has canceled the ECC of the company due to its potential harm to the environment. “The company has informed us that they will not be doing the reclamation anymore. So the Supreme Court [SC] justice, who was handling the case, said we’re okay and they [company] are planning to do it [reclamation] in the Bulacan area already,” Villar said. “This is victory.” Flooding is a major problem in the coastal areas of Metro Manila. Villar, in an interview with the BusinessMirror, said, “If we are not going to stop reclamation, Las Piñas, Parañaque and Bacoor [in Cavite] will be flooded.” “I believe this would really be an attractive tourism destination for the people, especially in Metro Manila,” Villar said, as she pointed out the only sites Filipi-

Different bird species, such as Chinese egret and the black-winged stilt, enjoy the environement at the Las Piñas-Parañaque Critical Habitat and Eco-Tourism Area (LPPCHEA). Sen. Cynthia A. Villar pushes for the recognition of LPPCHEA as an urban tourism destination as she leads the celebration of the World Wetlands Day. She told a news conference at the Senate the promotion of LPPCHEA is timely, given the plan of the Department of Tourism to revitalize urban tourism in Metro Manila. Roy Domingo

Sen. Cynthia A. Villar, chairman of the Senate Committee on Environment and Natural Resources, with Rey Aguinaldo, the focal person of Las Piñas-Parañaque Critical Habitat and Eco-Tourism Area (LPPCHEA), explains at a news conference at the Senate the Las PiñasParañaque Wetland Park plan, which is aimed to conserve and preserve LPPCHEA, the only urban wetland listed in the Ramsar Convention. Stephanie Tumampos

nos usually go to in the metropolis are malls. She said the LPPCHEA is a good alternative and, at the same time, it is the right time to preserve the area. More than 30 hectares of the area’s mangrove forest can stop a storm surge and “we have 82 species of birds recorded already and 47 of which are migratory”, Rey Aguinaldo of the Department of Env ironment and Natura l Resources-National Capital Region (DENR-NCR) and the focal person for LPPACHEA told the BusinessMirror at the sidelines of the news conference.

“These [birds] come from China, Korea, Russia and Siberia, and they go down here.” One proof is the existence of the Siberian ruby-throat bird that is found in LPPCHEA during migration season, he said. Three endangered species are also found in LPPCHEA—the Philippine duck, Chinese egret and the black-winged stilt. Villar told Senate newsmen that the Chinese egret is very important. “We have 1,000 of the 100,000 remaining [Chinese Egret] in the world,” she said. That is 1 percent of the whole world

population of the bird. Mudflats in lagoons are also deemed important, since it is a place where both birds and local fishermen can benefit from. “When it is low tide and the water recedes, there is a lot of food for the birds,” Aguinaldo told the BusinessMirror. Besides, fishermen can catch bigger fishes. “The lagoon is a spawning ground for fishes for the fishermen in Manila Bay,” Villar said. “If there’s no spawning ground, there will be no big fishes in Manila Bay,” she added.

Conserving the last coastal frontier in Manila

LPPCHEA was enlisted as a Wetland of International Importance by the Ramsar Convention in March 2013. With this, a motion to preserve the area has been acted upon, and plans for facilities and environmental activities were planned. Different organizations and agencies are set to work to complete the LPPCHEA Wetland Park. Villar Sipag, the non-governmental foundation created by the Villar family, will spend for the construction of the Wetland Centre Wave worth P10 million to P20 million by October this year. “This [Wetland Centre Wave] is

at the entrance,” Villar said. “It is where the people who will visit the wetland go and gather.” It will be the entrance facility of the park, where comfort rooms and parking areas will be constructed. “We would like to finish it by October 2017 because there will be a convention here sponsored by the United Nations,” Villar said, referring to the Convention on the Protection of Migratory Animals. Besides Villar Sipag, the DENR will also develop nature trails and the boardwalks in the area, which will cost around P10 million. The Department of Tourism is set to give a P45 million for the development of the site as ecotourism. Various facilities—such as a center complex, view towers, bird hides and even a bambusetum, or a garden of bamboo plants—are being planned. An office for the DENR will also be constructed to monitor the site. Aguinaldo said guides would assist students, bird photographers and the public to help them identify the birds and provide guidelines on bird watching. “ The whole Manila Bay area is a bird site. It has been existing before Metro Manila was de ve lop e d ,” A g u i n a ldo s a id . “We will develop the trails, so people can have access inside the wetlands and could see the trees and birds.” Villar has petitioned the SC for a Writ of Kalikasan to protect the habitat for reclamation. She emphasized that the Manila Bay portion of LPPCHEA is a cove. “If it is reclaimed, we will have a problem with flooding because there’s no place for the water to go out,” she said. “Some portions of Manila Bay are open seas and water flows out there directly.” Aguinaldo said he has coined LPPCHEA as the “ last coastal frontier in Metro Manila”. The LPPCHEA is the only habitat that will have a wetland museum in the Philippines. “It is a wetland that is very near the airport in Metro Manila so many people can visit the area,” Villar told the BusinessMirror. She said other wetlands are hidden and far, “so we can do a wetland museum [in Metro Manila].”

Haribon trains conservation leaders to protect Naujan Lake watersheds

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a r ibon Fou nd at ion kicks off the Biodiversit y Fe l low s P rog r a m (BFP), a training course for local leaders and environmental officers in the municipalities surrounding the biodiversityrich Naujan Lake National Park (NLNP) in Oriental Mindoro. BFP is a coaching and mentoring program that aims to train conservation leaders in effective management and protection of the NLNP sub-watersheds in the four neighboring municipalities of Naujan, Victoria, Socorro and Pola. In his message, Eugene Gonzales of the Philippine-American Fund addressed the participants whom he said were once like him in their quest for knowledge of the rather elusive concept of biodiversity and its importance. “It is the diverse and connected cycle of life,” he said in Filipino. NLNP covers a vast 21,655 hectares of land that is abundant of biodiversity and inhabited by threatened and endemic species, such as the tamaraw, Philippine pine, Mindoro warty

pig, Philippine tea k, Mindoro bleeding-heart pigeon and the Philippine duck, which is listed v u lnerable by the Internationa l Union for Conser vation of Nature (IUCN). Despite its ecolog ica l impor tance, the NLNP and its sub-watersheds a re t h reatened by pressu res t h at c au s e it s d e g r a d at io n , inc lud ing land-use conf licts, over- e x t ract ion of resou rces and poor waste management. “The protection of the mountains and forests that surround the Naujan Lake is the focus of this training,” Haribon Project Manager Noel Resurreccion said.

Conservation begins in knowledge

Danilo Balete, research associate from the Field Museum of Natural Histor y, discussed about the importance of understanding how ecolog y and ecosystems function in order to confront the various threats to the Naujan Lake watersheds. He cautioned against the rampant nature-degrading activities

in the guise of development projects and proposals, and distinguished the consumptive and productive use of natural resources. “Will you risk erosion after a typhoon for the sake of money?” Balete asked the participants concerning business and development pursuits that distress the mountain ecosystems. According to a study by the Karlsruhe Institute for Technology and the University of the Philippines, various forms of agroforestry and agriculture that caused the soil and forest degradation in Mindoro result in “unsustainable rates of erosion and reduced biodiversity”. Mindoro had the largest decrease in forest cover area in the entire Mimaropa region, a news report said in 2015. “I live near the Naujan Lake. In our community, erratic weather conditions have been strongly felt by ordinary people in the recent years because of our declining forests,” lamented Leonardo Camo, chairman of the Victoria Organic Farmers Association. Farmer leader Reymundo Dimasacat echoed

the same sentiment for their village in Socorro municipality. He recalled that back in the days they did not pay attention to the flooding in their communities until it worsened through the years. “I learned from this workshop that the big floods are caused by our deforested mountains,” he said. In his session on lake ecology, Dr. Rey Papa, associate professor from the University of Santo Tomas, emphasized that the problem of lakes will not be understood without considering the problem of watersheds. “Lakes are sentinels of climate change,” he said. “What happens to a lake is an indication of how the area is affected by climate change.” Raquel Umali, OIC of the Municipal Planning and Development Division in Naujan, said lack of public awareness is a major factor that aggravates environmental problems. “This is the reason we need to strengthen environmental governance, though the implementation is challenging.” Victoria Mayor Joselito Malabanan told Haribon that their municipality

is faced with the grave issue of mining that threatens not only his constituents living near the lake but also the different species of fish and migratory birds. “Through this training, I hope to benefit from this opportunity to learn about reforestation that will also improve the climate-change adaptation efforts in our municipality,” Malabanan said.

Empowered protectors

Alex Villanueva, vice chairman of the Batuhan Upland and Lowland Farmers Association (Bulfa) in Pola, said: “This workshop is unlike the usual seminars I frequent. BFP gave us a wider picture of how we should use our natural resources that keeps the next generation in mind.” Villanueva told Haribon that through his association, he plans to propose a policy or livelihood program in their barangay that pursues sustainable practices. “Even as a 72-year-old man, I remain hopeful that with the new perspectives gained from this course, our hurting nature

will bounce back if we only work together,” Camo said. “I thank Haribon and USAID [United States Agency for International Development] for putting the Biodiversity Fellows Program together and I hope to see the realization of what we have started here.” Haribon chief Belinda de la Paz commended the participants’ active engagement throughout the three-day workshop. “The insights and experience you shared prove that much work is laid before us. Nonetheless, we are headed to a good start.” Umali said her added capacity would help strengthen her advocacy in effective environmental governance in the Naujan municipality. Furthermore, she hoped to see greater heights for the program she underwent. “I want this program to reach other regions in the Philippines too so that our impact will be great.” “I dream to see our forests back to life—our trees, lakes and species living harmoniously,” Camo said. Haribon’s BFP is supported by the USAID.

Biodiversity Monday BusinessMirror

Asean Champions of Biodiversity Media Category 2014

Monday, March 6, 2017 A13

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

Abra River Basin

Integrated river mgt ‘a must’ for sustainable devt By Jonathan L. Mayuga

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@jonlmayuga

a re pr ior it i z ed accord i ng to an economic indicator, in most cases the benefit and their correspond ing generat ion cost. For large hydropower project, the site is in the Binongan River, a river named after a barangay in the municipality of Tineg, Abra province, Barangay Supo in the municipality of Luba and in the municipality of Bakun in the Benguet province.

First of Two Parts

he government is pushing for integrated river management and development of the country’s major rivers to protect the country’s freshwater resources, and develop the country’s economic potential visà-vis the challenge posed by human pressure and changing climate. In 2012 the Department of Environment and Natural Resources (DENR), through the River Basin Control Office (RBCO), developed master plans for each of the 18 major river basins in the country, including the Abra River Basin. The lead government agency for the integrated planning, management, rehabilitation and development of the country’s river basin, RBCO commissioned Berkman International Inc. to conduct a comprehensive study and craft the Integrated River Basin Management and Development Master Plan for the Abra River Basin. Berkman completed the master plan for the Abra River Basin in 2014, highlighting the importance of implementing an integrated river-management plan to ensure sustainable development within the river basin. It took into account the existing conditions, various land and water uses, and potential impacts of present and future human activities and impacts of climate change.

Food, water source

Encompassing a total area of 4,923 square kilometers, covering the provinces of Benguet, Abra, Ilocos Sur and Mountain Province, the Abra River Basin is one of the country’s major sources of food and water in Luzon. According to RBCO, the Abra Watershed provides a life-support system within the river-basin region’s 519 barangays in 52 provinces. Around 78.41 percent of land within the river-basin is classified as forest land, while the remaining 21.59 percent are alienable and disposable land. The countr y’s sixth-largest river in terms of watershed size,

the Abra River has a length of 178 km from its source in the vicinity of Mount Data in Benguet province. Around 20,320 hectares of land within the Abra River Basin are rice paddies, while another 5,119 hectares are dedicated for corn production. A vast tract of land covering a total of 1,981 hectares are planted to vegetable during the wet season and 847 hectares are dedicated to root crops.

Diversified ecosystem

The Abra River Basin is home to a diverse species of fish and other fish species, and is key to the survival of a diverse plant and animal wildlife that thrive within the forests. Some of the animal species that thrive within the river basin are carpa, milkfish, crabs, damselflies, diving beetle, dragonflies, eel, fish-flies, frogs, goby, leech, may-flies, shrimp, stone-flies, tilapia, turtle and water scavenger. Species of trees that thrive in the area include abutra, agakong, agoho, bagras, bangkal, bayog, big nai, g melina, yename, isis and pitogo. Within the river basin are the four protected areas of Mount Data National Park, Tirad Pass National Park, Bessang Pass Natural Monument and the Northern Luzon Heroes Hill National Park. T hese protected a reas a re vastly unexplored. Experts have recently come up with a report about unique species of rodents—cloud rats—that are endemic to particular rats atop the mountain, despite the decades of abuse in the area.

Threatened water resources

A fisherman tends to his fish cage in Abra River in Barangay Guinabang, Santiago, Ilocos Sur. Mau Victa

Environmental degradation

According to RCBO, the Abra River Basin is “a biodiversified ecosystem with water quality once capable of supporting diverse aquatic species, which served as life sources for communities along the river’s routes”. Mining , hu ma n pressu re brought about by population growth, urbanization and technology advancement contributed to the pollution of the river, “upsetting the ecological balance within the river system and its surroundings”. It added that the deforestation of the pine forests upland—owing to slash-and-burn farming method or cu ltivation system, log g ing of timber for f uel, housing , f ur nit ure -ma k ing and tunnel shor ing in mining areas—had caused soil erosion and r iver siltation. In addition, chemical pesticides, herbicides and fertilizers used by farmers might have aggravated the poisoning of the river. A study said, “The array of human activities overloaded the amount of materials and changed the nature of contaminants entering into the river, thus impairing its natural mechanism for self-purification.” “ The assimilating and sustaining capacit y of the r iver today shows signs of stressful conditions,” it said.

Biodiversity conservation

Director Theresa Mundita S.

Lim of the Biodiversity Management Bureau (BMB) of the Depa r t ment of Env i ronment and natural Resources (DENR) said it is important to protect the Abra R iver Basin. “If you protect the river basin itself as a source of water and food, you are protecting the ecosystem that is important to the survival of the species in those parks,” Lim said. She sa id any development plan in the area should integrate and take into consideration the protected areas. Lim noted the Mount Data National Park is home to unique species of cloud rats, which is on Mount Data. On the other hand, the Tirad Pass National Park, she said, is known as staging and nesting ground of assorted bird species, including migratory birds. Protecting these areas, Lim said, will help stop biodiversity loss of tree and plant species, as well.

Water uses

Citing records from the National Water Resources Board (NWRB), agriculture is the most dominant water-related sector in Abra province. Out of 130 NWRB-registered water users, only seven are for domestic, one for industrial and one for power. The total potential irrigable area in Abra is 25,665 hectares, or only about 6 percent of its 397,555 hectares of land area. According to the NWRB, as

of the end of 2012, approximately 16,297 hectares, or 63 percent, of the potential irrigable area have already been developed for irrigation. In total, 343 are registered water users in the basin, with 129 located in Abra province and 84, 86 and 44 in Benguet, Mountain province and Ilocos Sur, respectively. Of the 343 water users, 47, or 14 percent, are intended for domestic supply, 3 percent for power and 3 percent for industrial purposes. Eighty percent of water use is intended for irrigation. Most of the power users are in the upper watershed areas in the provinces of Benguet and Mountain provinces, while Ilocos Sur has the most number of users for domestic purposes.

Renewable energy

THE Abra R iver is a potentia l source of renewable energ y, as wel l. Citing prev ious studies conducted by Nationa l Power Cor p. (NPC), Nationa l Electr ification Administration (NEA) and other agencies, the Master Plan for Abra R iver Basin said approximately 220 hydropower potentia l sites are in Luzon, and 17 of these sites are in Abra. The total power potential of Abra province is estimated to be 465 megawatts. N PC a nd N E A st ud ies on t he potent i a l of a hyd ropower project for Abra R iver ind icate a compa rable a ssessment of t he a lter nat ive sc hemes t hat

According to the master plan, t he coast a l resou rces in t he Abra River Basin are limited to those found in the coastlines of Caoayan, Santa and Vigan City of Ilocos Sur. Inland aquatic resources, on the other hand, are those found along the Tineg River and Abra River. The sustainable use of inland and coastal resources in the Abra River Basin is severely affected by pollution caused by mine tailings, indiscriminate dumping of household waste in the river or its banks, overfishing and use of small-sized nets. A s coa st a l a re a s a re a l so tapped as tourism and possible industrial areas, the planners of the master plan for the river basin warned against more intensive development that will ultimately destroy the marine habitat and productivity at coastal areas, “if proper protection measures and coastal management” are not observed in the affected areas. T he planners a lso said brack ish and freshwater wet lands scattered around the prov ince must be preser ved to maintain a wel l-ba lanced productive aquamar ine ecolog y. However, due to urbanization and intensified industrialization, these areas are converted to other land uses and are being polluted from natural and man-made sources. It was observed that fishing activities along the rivers are constrained by pollution owing to mine tailings, and industrial and tour ism development in some portion of protected areas. Like in other areas, the cropping activities and settlements along buffer zones are blamed for the pollution in the rivers, apparently, because of laxity in implementing env ironmenta l laws and regulations, ignorance and poverty, and absence of landuse plans of local government units. To be concluded

3,898 ha. set for bamboo plantation in W. Visayas

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fa r m e r s’ bamboo -propagation skills-building program has been carried out in Iloilo bamboo capital, Maasin town, as part of government’s target to plant bamboo on 3,898 hectares in Western Visayas. Farmers in Iloilo have started training on bamboo planting, having been encouraged of bamboo’s high return on investment and quicker payback compared to other longgestating crops. Bamboo plantations are hoped to flourish in the Western Visayas provinces of Aklan, Antique, Capiz, Iloilo and Guimaras after this first bamboo-planting training in Maasin, according to Ecosystems Research and Development Bureau (ERDB) Executive Director Dr. Henry A. Adornado. “Bamboo is considered to be the best conservation material, because of its low maintenance compared to other plantations, besides the fact that there is a high return on investment [ROI] and faster payback in bamboo,” Adornado said. The Reducing Emissions from Deforestation and Forest Degradation Monitor placed bamboo’s ROI at 26 percent, based on studied plantations in Central America. A total of 68 farmers and bamboo-industry

leaders were trained by the ERDB on bamboo propagation, plantation development and rehabilitation. Adornado said the Department of Environment and Natural Resources, ERDB’s mother agency, is targeting to plant bamboo on 1 million hectares. It will be part of the extension of the National Greening Program (NGP) up to 2022. The enhanced NGP will rehabilitate the remaining 7.1 million hectares of denuded areas in the Philippines using species such as bamboo. “This learning event will help solve the shortage of raw materials for the bamboo industry. This is also in line with the government’s goal of reducing poverty, mitigating climate change, rehabilitating watersheds and conserving biodiversity,” Adornado said. The Biodiversity, Coastal, Wetlands, Ecotourism Research Center (BCWERC) urged Western Visayas farmers to practice sciencebased planting systems to enable more bamboo plants to survive. “We are a bamboo-producing region, and we have an abundant bamboo supply in Maasin, Iloilo. But we should plant and grow bamboo in a science-based manner,” said Dr. Alicia L. Lustica, BCWERC head.

Specific components of the training, which was administered by forester Gregorio E. Santos Jr., are preparation of potting media, nursery management, plantation maintenance, bamboo-stands management, har vesting, enterprise development and action planning. Bamboo is considered as the “green gold of life” and “grass of hope” with its wide range of application and growing relevance. It can sequester 12 tons of carbon dioxide per hectare per year. It is an effective tool in addressing soil erosion, landslides and flooding. Bamboo is also edible. Its shoots are a source of food rich in fiber, nutrients, and vitamins A, B and C. Besides its use for furniture and handicrafts, bamboo is also used in fiber, clothing, pulp and paper production, food ingredients, beauty products, architecture and construction. To expand bamboo-products manufacturing, ERDB has partnered with the departments of Science and Technology, and Trade and Industry on value-adding and marketing of bamboo products. Bamboo plants are known to be the “fastest-growing woody plants in the world, with a growth rate of 24 inches daily. This is because it has a unique rhizome-dependent

system,” according to the Plantations International. According to Western Visayas Agriculture and Resources Research and Development Consortium (Westvardec), Iloilo has 8,085 hectares of bamboo area, producing 2.42 million poles every year. Iloilo supplies raw-material requirements for 41 manufacturers, 32 domestic producers and nine exporters. Iloilo plans to establish plantations on a total of 58,200 hectares. “Aside from its household and industrial use, Iloilo, has been experimenting on other possible uses of bamboo. It is used for preparing food. Mixes of tender bamboo shoots are used to clean wounds and treat ulcers. Bamboo leaves are used to fight spastic disorders and bleeding conditions, as well as diarrhea and stomach disorders,” according to My Beautiful Iloilo. Bamboo shoots are made of 88.8-percent moisture, 3.9-percent protein, 0.5-percent fat, 5.7-percent carbohydrates and 1.1 minerals. “Its amino-acid content is higher than cabbage, carrot, onion and pumpkin. Bamboo also contains 17 different types of enzymes and more than 10 kinds of mineral elements, such as chromium, zinc, manganese, iron, magnesium,

Bamboo harvesting in Maasin, Iloilo.

nickel and cobalt.” Maasin’s major product is bamboo charcoal. The company Iloilo Kawayan Marketing in Maasin produces the charcoal that is considered to be a natural product and is ecologically friendly. “Used as a fuel, it is smokeless and odorless, and is best for barbecues. Bamboo charcoal works as a natural fertilizer and pesticide. It is also used as a deodorizer. It can filter tap water. Put pieces of bamboo charcoal in a jug of tap water, then leave it for four to five hours. The water in the jug will taste like mineral water.”

With its antimicrobial, antibacterial, antiviral and antifungal properties, bamboo charcoal is now used as soap ingredient. “It cleans the skin deeply. Because of the incredible absorbency of the bamboo charcoal with activated carbon, the soap can clean to the very bottom of skin pores and does not leave a residue on the face. The newly cleaned skin pores can receive natural moisturizing from the body’s oils.” With its ability to clean skin pore thoroughly, it can then moisturize the skin. It is a solution to acne problems.

A14 Monday, March 6, 2017 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Peso panic once again

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ne hundred years ago a Philippine peso coin was made from honest-to-god, dug from the earth, precious metal silver. If not the coin itself, at least the silver that it was made of could be taken most anyway in the world and used to exchange for goods and services. Today that same coin is made of nickel-plated steel and can be taken almost anywhere in the world (if not the coin, at least Philippine bank notes) and exchanged for local currency to purchase goods and services. Today, all currency is valued—not based on what we think the worth of gold or silver is—based on what the world thinks the US dollar is worth. One hundred years ago silver was silver. But now, there are “Eurodollars” (US dollars deposited in any bank outside the US), “petrodollars” (cost of crude oil priced in US dollars), “black-market dollars” (rate differential between the official exchange rate and “unofficial” rate), and “US dollars”. They all mean something particular and all influence the “value” and “price” of the Philippine peso. If you search the Internet for “most expensive hotel room” or the “most expensive bowl of ramen in Tokyo”, the answer will show a price in US dollars. The price in local currency will probably be listed, but for everyone to understand the “true” price, it must be in US dollars. As the peso-dollar exchange rate has breached and held the 50-toone mark—the lowest in 10 years more or less—“peso panic” has hit like an outbreak of “sore eyes”. From one local columnist: “This is not the best of times for the Philippine peso. I will not dare predict how low the peso will go. Some analysts are predicting a low of P52:$1”. Then comes a laundry list of the potential negatives always followed by “there are winners, however”, meaning those dependent on overseas worker remittances. Of course, that assumes that these “lucky” folks never buy dishwashing soap, baby formula, or anything else with an imported raw-material component, which will make the consumer product more expensive. But from a macroeconomic perspective, there is no correlation between the peso-dollar exchange rate to the nation’s economic growth. With the exception of the 1997 Asian financial crisis and the 2008 global debt collapse, the Philippine economy has not followed the currency exchange rate. The economy has moved forward during times of both an appreciating and deprecating peso against the dollar. The opposite is also true. In 2004 the average peso exchange rate to the dollar was P56.27; economic growth was 6.7 percent. In 2011 the average exchange was P43.93; annual economic growth was 3.64 percent. Certainly, the exchange rate does play into economic growth, but it is only one of many factors that determine the economic health of the country. A depreciating (or appreciating) peso is also based on the exchange rate of the dollar to other currencies—which is now at a 15-year high— and money flow into and out of the country. The dollar-appreciation trend is strong. Capital flows out of the Philippines are currently due in part to foreign mining companies converting pesos to dollars because of the recent mining operation shutdowns. The Philippine economy will survive and thrive with a depreciating peso just as always over the past 30 years. Economies—not manipulated by government and central banks—can adjust to external conditions just like we do when wearing sunglasses for “sore eyes”. The fact that other nations may not be seeing the same currency depreciation means little, if anything. All economies are created unequal. Since 2005

BusinessMirror A broader look at today’s business

All set for the new Philippine Development Plan Atty. Jose Ferdinand M. Rojas II

RISING SUN

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N February 20 the Neda Board approved the 2017-2022 Philippine Development Plan (PDP), which is based on AmBisyon Natin 2040, the Filipino people’s collective vision and aspirations for themselves and for the country. It is also linked to President Duterte’s 10-point Socioeconomic Agenda. The PDP is the result of integrated efforts from the Neda, Cabinet secretaries and technical working groups from various agencies. It is inspired, too, by ideas and input from different stakeholders and the public, in general.

So now the Filipino people have this plan that Finance Secretary Carlos G. Dominguez III has described as close to a masterpiece. “It is unlike any other medium-term development plan I have read,” he said. Next step would be for the Neda to draft an executive order that will instruct all agencies to align their programs and activities with the PDP. Socioeconomic Planning Secretary Ernesto M. Pernia said, “By the end of 2022, Filipinos will be closer

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The entire plan has seven parts: Overview of the Economy, Development Challenges, Development

Siegfred Bueno Mison, Esq.

THE PATRIOT

Founder T. Anthony C. Cabangon

7 parts of the PDP and targets

Trust and second chances

✝ Ambassador Antonio L. Cabangon Chua Publisher

to achieving their long-term aspirations. Through this PDP, the current administration will lay a solid foundation for inclusive growth, a high-trust society, and a globally competitive knowledge economy by grounding its development thrusts on malasakit, pagbabago at patuloy na pag-unlad.”

S

ervant leaders put their faith in the goodness of men. Using Barnabas trusting Saul as an example, inspirational speaker and best-selling author John Maxwell said leaders have to trust people, regardless of their past or their difficulty, to make a difference in their lives. Maxwell further added that true leaders are those who empower their people first then discover their worth, instead of testing their worthiness first before empowering them. Maxwell also used King David as an example who started developing an inner circle composed of those who he trusted—people like his father and those who were “misfits, the distressed, the debt-ridden and discontented”. When I was with the Bureau of Immigration, I unconsciously followed Maxwell’s advice and gave everyone a second chance. Some put it to good use while others, unfortunately, threw it away. There was one immigration officer, a graduate of a prestigious state university, who had served his suspension and was on floating status, a marked man (X) so to speak, when I joined the bureau. Despite knowing this, I still chose X to be part of my technical staff. Some foreign counterparts were surprised to see X in my office. Upon seeing X, these wellmeaning colleagues candidly narrated to me what they know about X, his misdeeds more specifically. I replied that X was my trust experiment and I have confidence in the

goodness of men and believing in “second chances”. Alas, in a matter of weeks, X was implicated in an extortion attempt whereby the victim herself personally told me that she handed X wads of cash in a bag right inside the very Office of the Commissioner! Charged with an administrative case, X never reported back to work and was subsequently dropped from the rolls. In the book Smart Trust, authors Stephen Covey and Greg Link explained three kinds of trust levels—the blind trust, the distrust and the smart trust. There is blind trust when a leader trusts everyone and the leader inevitably assumes a higher risk in the process. There is distrust when a leader trusts no one and he ends up doing all the work

Strategies explained in various chapters: Enhancing the Social Fabric, Inequality-Reducing Transformation, Increasing Growth Potential, Enabling and Supportive Economic Environment, and Foundations for Inclusive and Sustainable Development. As far as targets are concerned, it is largely specific, but all leading toward the general goal of making the Philippines an upper-middle class income country by 2022. Some of the specific objectives include (a) GDP growth at 7 percent to 8 percent; (b) decline of poverty rate from 21.6 percent to 14 percent; (c) decreased poverty incidence in rural areas, from 30 percent (2015) to 20 percent by 2022; (d) reduction of unemployment rate from the current 5.5 percent to 3 percent to 5 percent. Included also are difficult-tomeasure targets, like higher trust in government and society, more resilient individuals and communities, and a greater drive for innovation.

The plan includes strategies based on the three main pillars: malasakit, pagbabago and patuloy na pag-unlad. The first pillar involves the promo-

tion of anticorruption measures, improvement of the public sector’s productivity, implementation of regulatory reforms, increased access to legal aid, pursuance of corrections reforms, and the promotion of culture-sensitive governance and development. Under the second pillar, the plan is to expand opportunities in agriculture and increase the country’s presence in the global economic market. It also includes the streamlining of processes for local and foreign investors, supporting strategies to improve basic education for the people, enhancing disaster risk reduction and management mechanisms, and the adoption of universal social protection. The third pillar involves maximizing the demographic dividend and advancing science, technology and innovation. To do this, the administration plans to maintain macroeconomic and financial stability, and to observe fiscal prudence while the tax system is being reformed. According to the Neda, “a strategic trade policy will also be implemented alongside measures to promote competition and establish a level playing field.”

and accepts any and all responsibility in the process. Blind trust exposes the leader to unnecessary jeopardy, while distrust leads to inefficiency. However, when a leader trusts a few, after a careful analysis of all available information, he assumes little risk, shares responsibility and promotes productivity. This is what Covey and Link consider as smart trust—trusting subordinates combined with an appreciation of their service reputation, among others. In any organization, service reputation is how your colleagues and peers see you taking into account what you have done in the past. I was flooded with all kinds of “background information” regarding key personnel before I entered the bureau. Hardly knowing any of my future coworkers then, I had to know what to believe and who to believe. Fortunately, my Army intelligence background helped me to evaluate the accuracy of the information, as well as the reliability of the source. Since I had to choose an insider to expedite my learning curve in bureau matters, I selected a lawyer from Pampanga to be one of my very first technical assistants as he was endorsed by a law-school classmate. Background checks revealed a few irregularities about this lawyer, but they pale in comparison with the service reputation of other lawyers endorsed to me. I can vividly remember what I told him when I ended up tapping his services—“I know what you did before. And I know you will not do it

now… especially during my watch!” So I gave Atty. Vicente G. Uncad a second chance by designating him as my technical assistant. He was with me on my very first day on June 13, 2011, and on my very last day in office on January 6, 2016. More than just a colleague or a subordinate, I see him as a good friend. Going to a more sensationalized appointment in the bureau, recently confirmed by the Commission of Appointments, Justice Secretary Vitaliano N. Aguirre II has placed his trust in his fraternity brothers Al Argosino and Michael Robles. Both deputy commissioners of the bureau were presumably endorsed by Secretary Aguirre to President Duterte. Both deputy commissioners are now implicated in an extortion case that involved at least P50 million. Both have been sacked (or have resigned) after a very short stint in the bureau. If we were to apply Covey’s smart trust and in retrospect, I wish I used a more in-depth analysis in empowering people with shady characters in the bureau. If we were to apply Covey’s smart trust, Secretary Aguirre will probably have second thoughts in endorsing the appointment of a convict (homicide through reckless imprudence) to a sensitive post in government. In my book, 7 Attributes of Servant Leaders in Public Service, I suggested to current and future leaders to trust only a few good men (and women). For some people, like X and others like him, they are not worth getting a second chance.

How to reach targets

Opinion BusinessMirror

opinion@businessmirror.com.ph

Exceeding global standards

Changing the rules of the concession game By Alberto Agra

PPP Lead

Joel L. Tan-Torres

DEBIT CREDIT

T

he accountancy profession in the Philippines is in a vibrant mood. In 2016 and continuing this year, there were several milestones that arose, which affected a large sector of the profession. The Board of Accountancy (BOA) led the profession in the major developments and was focused on implementing its Six Point Expanding Horizons (EH) Strategic Plan. The EH Strategic Plan prescribes six strategies that will propel the accountancy profession to higher levels of attainment and recognition. In terms of the first strategy of “Instituting Quality and Governance Measures”, the highlight is in the conferment to the accountancy profession three prestigious awards —the Performance Governance System Institutionalized Sector, the Seal of Islands Good Governance and the Gold Trailblazers Award—by the Institute for Solidarity Asia on March 29, 2016. The Continuing Professional Development (CPD) program was enhanced to meet the global standards, including the 120 hours of CPD. Last year there were 8,255 new Certified Public Accountants (CPAs) who joined the ranks of the profession. This number represented a passing percentage of about 38 percent. The BOA pursued the third strategy to “Effectively Regulate the Profession” by prescribing measures on accreditation of CPAs in commerce and industry, submission of the certificate of compilation services, the accreditation of the partners and professional staff of partnerships and firms, the inspection of the offices of practitioners, imposition of deadline for submission of financial statements for audit, engagement reporting, the monthly posting of the list of accredited CPAs in the BOA web site and coordination with other regulators. The implementation of the long-delayed Quality Assurance Review of the work of auditors has started. Strategy 2 of “Enhance the Image and Reputation of the Accounting Professional” was attained with the continued exposure of the video “I am Accountant” in the various events of the accountancy organizations. The weekly publication of newspaper column “Debit Credit” in the BusinessMirror and the release of the new issues of the News Ledger magazine and Highest Standards Technical II Journal contributed toward projecting the image of the Filipino professional accountant here and abroad. Throughout the year, the fourth strategy to “Enhance Stakeholders Involvement and Cooperation” was pursued with various engagements with the stakeholders in the Philippines and abroad. The preparation

There were several initiatives to move the fifth strategy to “Institute Structural Changes”, including conducting dialogues with stakeholders on revisions of the accountancy law and the new accountancy academic learning and examination tracks. The new standard on Expanded Auditors Report was released last year and changed the audit landscape. for the full implementation of Asean Mutual Recognition Arrangement continued in 2016. I was also elected in April 2016 for a three-year term to the United Nations Conference on Trade and Development Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting. There were several initiatives to move the fifth strategy to “Institute Structural Changes”, including conducting dialogues with stakeholders on revisions of the accountancy law and the new accountancy academic learning and examination tracks. The new standard on Expanded Auditors Report was released last year and changed the audit landscape. The sixth strategy to “Provide Communication and Assistance Mechanisms” was attained with a large number of accountants keenly following the developments in the profession as posted in the BOA web site and Facebook. The three sectoral surveys and New CPA Tracker survey continued in 2016. The Philippine accountancy profession and accounting professional definitely is on its way to exceeding global standards. Chairman Joel L. Tan-Torres is the chairman of the Professional Regulatory Board of Accountancy. He is a Certified Public Accountant who placed No. 1 in the May 1979 CPA Board Examinations. He is concurrently a tax partner of Reyes Tacandong & Co., CPAs. He was the former commissioner of the Bureau of Internal Revenue from 2009 to 2010. This column accepts contributions from accountants, especially articles that are of interest to the accountancy profession, in particular, and to the business community, in general. These can be e-mailed to boa.secretariat.@gmail.com.

Monday, March 6, 2017 A15

Continued from A1 n Concessions as PPPs. A concession is either a distinct type of a PPP embodied in a separate contract or is integrated into other PPP modalities. The transmission concession awarded to the National Grid Corp. of the Philippines and the two water concessions granted to Manila Water and Maynilad belong to the first type. These concessions were made by government corporations. For the second type, all operate under the BOT law and its variants, i.e., build-operate-transfer, buildtransfer-operate, build-own-operate, rehabilitate-operate-transfer (ROT) and rehabilitate-own-operate

(ROO), and joint-venture arrangements carry with them concession provisions. Local concessions, say for public markets and ferry systems, can also be considered. Under the template ordinance of Memorandum Circular 120-2016 of the Department of the Interior and Local Government, a concession is defined as “A contractual arrangement whereby the financing and construction of a new facility and/or rehabilitation of an existing facility is undertaken by the PSP after turnover thereof to it, and includes the operation, maintenance, management and improvement, if any, of the facility for a fixed term during which

the PSP generally provides service directly to facility users and is allowed to charge and collect the approved tolls, fees, tariffs, rentals or charges from them. The local government may receive a concession or franchise fee during the term of the contract and/or other consideration for the transfer, operation or use of any facility. There may be a transfer of ownership of the asset or facility after the concession period has ended.” n Akin to ROT or ROO. Concessions, like the ROT and ROO modalities under the BOT law, are “brownfield” projects where there are existing facilities—like transmission lines and water pipes— that require rehabilitation and improvement. n Different laws. What sets apart concessions from the ROT and ROO modalities are the governing laws. ROT and ROO modalities are governed by the BOT law, while concession arrangements are governed by different laws.

The rising cost of defending the state Ricardo Saludo

DIPLOMASIA

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he $54-billion, 9.4-percent increase in American defense spending, trumpeted by President Donald J. Trump and his aides last week, including his speech atop the USS Gerald Ford, the most technologically advanced aircraft carrier on the planet, is sure to keep generals, admirals and accountants, too, worldwide up nights doing sums. Bullet counters in Moscow would figure that the proposed hike amounts to four-fifths of Russia’s annual defense budget. Their counterparts in Beijing, with the second-largest military spending after Washington’s, would calculate the planned boost to US defense outlays at about a quarter of the People’s Liberation Army’s (PLA) budget of about $220 billion, though analysts routinely note that the PLA hides a big chunk of its kitty. Where will all those wads of added greenbacks go, assuming the Republican-controlled Congress goes along with the unpopular, even painful, nondefense budget cuts, including State Department and foreign-aid allocations, needed to finance the Pentagon’s new toys? Well, first of all, about two-thirds of the spending lift is actually already spoken for. That’s how much the United States military exceeded budgetary caps this year. Keeping those over-the-cap programs and projects going would consume $35.5 billion of Trump’s proposed boost in the 2018 budget. That still leaves a hefty $18 billion, and defense experts interviewed by Wired magazine want to see much of it go to just keeping current equipment working, not buying

new stuff. Basic maintenance gets pared down every budget crunch; that’s why half the FA-18 fighter squadrons, among other gear, are grounded. The guys using the gear now want upkeep funding up. By how much? Wired cites $8 billion as one estimate. And Defense Secretary James Mattis may be of the same mind, if not that exact amount. He recently outlined a plan stressing force readiness over new battalions and weaponry.

Follow the guns and the money Assuming the Wired numbers check out, the $10 billion left in Trump’s proposed increase, while not peanuts at all, would hardly budge global arms spending of around $1.6 trillion a year. Nor would it shift what a McKinsey article called the center of gravity in world defense spending. As explained by Andrew Erdmann of McKinsey’s Washington office, that gun-buying fulcrum has bounced around between America and Russia, depending on the nations fighting wars, as well as the ones getting wealthier or less wealthy (see http://www.mckinsey. com/industries/public-sector/our-insights/ global-defense-spending-the-shifting-

center-of-gravity?cid=other-eml-alt-mipmck-oth-1703). For much of the last century, it stayed in Europe, as the continent’s powers fought two world wars. The gravity hub moved west to the mid-Atlantic when the US ramped up its forces and defense industries to muster men and materiel for the two conflicts in Europe. Then the center moved back to Europe after Uncle Sam went home to wartime victory celebrations and wound down its military outlays. In the past decade, the gravity of gun spending has drifted further east and, for the first time, southward, as Western nations cut defense budgets amid global recession and financial rescues in 2008 to 2009, and conflict-spooked, oil-bankrolled Middle East states and economically robust Asian nations upgrade and upsize their militaries. Those twin trends of increasing frictions and rising wealth on the Asian continent seem likely to continue, keeping the center of gravity for defense spending pretty much where it is, for now. But expect it to shift if, as expected, Trump pumps up the US military, and pressures its European allies to spend more for their security.

More bang and byte for the buck Now if one expects that more guns, tanks, ships and planes would make nations feel safer, think again. Gearing up by one army and navy invariably worries the neighbors, and often fires the starting gun for an arms race. Which can only make arms makers ride their tanks laughing all the way to the bank. A McKinsey survey of defense contractors worldwide in 2014 tipped that military sales won’t fall much in the coming years, with the outlook for Asia Pacific and the Middle East remaining most positive among all regions. The McKinsey survey cited the

Understanding international humanitarian law and human-rights law Atty. Lorna Patajo-Kapunan

legally speaking Part One

I

T is a common mistake to interchange international humanitarian law (IHL) with human-rights law and vice versa. At this stage in our country’s history, it is important to understand both humanitarian law and human-rights law. IHL regulates relations between states, international organizations and other subjects of international law. IHL consists of rules that, in times of armed conflict, seek—for humanitarian reasons—to protect persons who are not or are no longer directly participating in the hostilities, and to restrict means and methods of warfare. IHL is meant to resolve humanitarian issues arising

directly from armed conflict, whether of an international or a noninternational character. An international armed conflict (IAC) occurs when one or more states resort to the use of armed force against another state. Should China disregard the Philippines’s victory over the disputed China Sea/West Philippine Sea territories, and no diplomatic or bilateral arrangement is arrived at, it

will not be unlikely that an IAC will occur. A noninternational armed conflict (NIAC) is an armed conflict in which hostilities are taking place between the armed forces of a state and organized nonstate armed groups, or between such groups. For hostilities to be considered as NIAC, they must reach a certain level of intensity and the groups involved must be sufficiently organized. The armed conflict of our military with the Abu Sayyaf Group (ASG) and the National Democratic Front (NDF) are NIAC. International disturbance and tensions (such as riots and isolated and sporadic acts of violence) are characterized by acts that disrupt public order without amounting to armed conflict; they cannot be regarded as NIAC because the level of violence is not sufficiently high or because the persons resorting to violence are not organized as an armed group. IHL does not apply to situations of violence that do not amount to armed conflict. Cases of this type are governed by provisions of human-rights law. IHL is a compromise between two

underlying principles, of humanity and of military necessity. These two principles shape all its rules. The principle of military necessity permits only that degree and kind of force required to achieve the legitimate purpose of a conflict, i.e, the complete or partial submission of the enemy at the earliest possible moment with the minimum expenditure of life and resources. It does not, however, permit the taking of measures that would otherwise be prohibited under IHL. The principle of humanity forbids the infliction of all suffering, injury or destruction not necessary for achieving the legitimate purpose of a conflict. Under IHL, it is essential that the parties to a conflict must, at all times, distinguish between civilians and combatants in order to spare the civilian population and civilian property. Neither the civilian population as a whole nor individual civilians may be attacked. Attacks may be made solely against military objectives. Parties to a conflict do not have an unrestricted right to choose methods

or means of warfare. Using weapons or methods of warfare that are indiscriminate is forbidden, as is using those that are likely to cause superfluous injury or unnecessary suffering. It is forbidden to wound or kill an adversary who is surrendering or who can no longer take part in the fighting. People who do not or can no longer take part in the hostilities are, thus, entitled to respect for their lives and for their physical and mental integrity. Such people must, in all circumstances, be protected and treated with humanity, without any unfavorable distinction whatsoever. The wounded and the sick must be searched for, collected and cared for as soon as circumstances permit. Medical personnel and medical facilities, transports and equipment must be spared. Captured combatants and civilians who find themselves under the authority of an adverse party are entitled to respect for their lives, their integrity, their personal rights and their political, religious and other convictions. They must be protected against all acts of violence or

For the transmission and water concessions, the Electric Power Industry Reform Act, or Epira (2001) and the National Water Crisis Act (1995), respectively, are the applicable laws, even if the BOT law was already an existing law at that time. n PPPs face the same risk— successor risk. Even if governed under distinct laws and divergent regimes, concessions, like any other PPP, are exposed to the same risk. Unfortunately, after government sets policies, after a PSP wins in a bidding or challenge, after parties affix their signatures to a contract, after regulatory approvals are obtained, after loans are contracted, after investments are made by the concessionaires, during the life of the operations and management of the awarded project, there remain uncertainties. The two major concessions are now facing the futureproofing test. To be continued

Middle East, the US and India as the top markets this year. But rather than purchasing top-dollar state-of-the-art weaponry, more and more armies want affordable items, due to budgetary pressures, as Arab oil revenues slip, and maturing East Asian economies see slower growth and increased social spending needs. So, don’t expect Arab and Asian generals to line up for the most advanced jet or rocket. But there is one area where topnotch technology is a must. Cyber security, reports McKinsey London, is forecast to show strongest growth, with nearly nine out of every 10 respondents in the 2014 survey seeing high potential for hardware and software for conflicts in cyberspace, up from just over half two years before. The cyber-security boom is understandable. Hacking and other such incidents have tripled to more than 60 million between 2011 and 2015, according to data cited by the World Economic Forum (WEF) last year. And the cost of cybercrime attacks are surging, at some $16 million in America two years ago, and about half that much in Germany, Britain and Japan. The WEF adds that America, China, Russia, Israel and Britain are the top cyberwar powers, with Iran and North Korea rapidly developing capabilities, too (see https://www.weforum.org/agenda/2016/05/who-are-the-cyberwar-superpowers/). And The Wall Street Journal lists more than 60 nations developing cyber weapons. Even if he doesn’t buy a single plane, Trump, like other world leaders, will find much to spend on in keeping America safe from threats on land, at sea, in the air—and online.

Ricardo Saludo, former Cabinet secretary (20022008) and Asiaweek Magazine editor (1984-2001), heads the Center for Strategy, Enterprise & Intelligence, CenSEI.

reprisal. They are entitled to exchange news with their families and receive aid. Their basic judicial guarantees must be respected in any criminal proceedings against them.

What is the difference between ihl and human-rights law? IHL and international human-rights law are complementary bodies of international law that share some of the same aims. Both IHL and humanrights law strive to protect the lives, the health and the dignity of individuals, albeit from different angles—which is why, while very different in formulation, the essence of some of the rules is similar. For example, both IHL and human-rights law prohibit torture or cruel treatment, prescribe basic rights for persons subject to criminal process, prohibit discrimination, contain provision for the protection of women and the children, and regulate aspects of the right to food and health. To be concluded

2nd Front Page BusinessMirror

A16 Monday, March 6, 2017

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‘Tariffs from rice imports to help farmers cut cost, boost income’ 100% T By Cai U. Ordinario @cuo_bm & Jovee Marie N. dela Cruz @joveemarie

he Duterte administration vowed to allocate all the tariffs collected from rice imports for programs aimed at helping farmers cut production cost, according to the Philippine Development Plan (PDP) 2017-2022.

The country’s economic blueprint said the amendment of the Agricultural Tariffication Act of 1996, or Republic Act (RA) 8178, is included on the priority legislative agenda of the Duterte administration. “Replace quantitative restrictions [QR] on rice with tariffs. The tariff proceeds from rice imports will be plowed back to the rice sector,” the PDP read. While the PDP is cognizant of the adverse impact of the scrapping of the rice QR on small farmers, the

government said the tariff collected from imports will be used to help them recoup their losses. The Duterte administration said it has decided to allow the QR on rice to expire because of its potential impact on rice prices nationwide. Rice, the government noted, accounts for 30.6 percent of the total food expenditure of the poorest 20 percent of households based on the 2012 Family Income and Expenditure Survey (FIES). “It can help lower the price

of rice, and this will benefit the general public, including farmers who are net consumers of rice,” the PDP stated. Philippine Institute for Development Study (PIDS) senior research fellow Roehlano M. Briones said in a recent forum that the government’s rice self-sufficiency policy was responsible for increasing rice prices. The rice self-sufficiency policy was supported by the granting of a second extension of the QR on rice in 2012. Briones recommended repealing RA 8178, which exempted rice from tarrification; repealing the National Food Authority’s (NFA) import monopoly; and opening rice importation to the private sector. The PIDS senior research fellow also underscored the important role of the Executive branch in defining an “informed tariff policy”. In the first semester of 2014, poverty incidence rate rose to 25.8 percent. Former Socioeconomic Planning Secretary Arsenio M. Balisacan blamed this on the retention of the QR on rice. Rice prices posted a double-

The tariff rate that should be slapped on rice imports once the QR is removed, according to two lawmakers

digit growth of 11.9 percent in the first semester of 2014, from only 1.7 percent in the same period in 2013, on the back of a tight supply given lean harvests, coupled with less imports.

Amending RA 8178

Leaders of the House of Representatives have filed two separate bills seeking to place safety nets for Filipino rice producers by imposing tariffs in lieu of QR on rice imports and to amend RA 8178. House Bill (HB) 5023, filed by Deputy Speaker Gloria MacapagalArroyo of Pampanga, and HB 4904, filed by House Committee on Economic Affairs Chairman Arthur C.

Yap of Bohol, called for using tariff collections from rice imports for projects and programs that would enhance rice productivity and increase farmers’ incomes. Arroyo said her proposed Rice Safety Net Act of 2017 seeks to abolish the sole power of the NFA to import rice. She said the proposed legislation adopts the use of tariffs in lieu of nontariff-import restrictions to protect local paddy producers in “a direct and transparent manner” and, at the same time, generate revenues required to provide the infrastructure and finance the programs that improve farmers’ productivity. Revenues will go to a Rice Farmers Development Fund to provide the necessary support services, such as irrigation, farm-to-market roads, postharvest equipment and facilities, credit, research and development, extension services, other market infrastructure and market information. The bill seeks to repeal Sections 5 and 6 of Presidential Decree 4 (National Grains Authority Act of 1972), as amended by RA 8178.

Arroyo’s bill seeks to establish rules and regulations governing the importation of rice and to impose and collect fees and charges to ensure that imports won’t affect the price of locally produced rice. In lieu of QR restriction, the measures indicated the tariff rate of 100 percent will be imposed on rice imports beginning January 1, 2018, to provide protection for producers. It added that any subsequent reduction of the tariff rate should be based on the implementation of a comprehensive Rice Farmers Development Program to improve the sector’s competitiveness. Yap’s bill is proposing to impose a tariff rate of 100 percent on rice imports for a period of three years. Under HB 4904, the NFA may be authorized to import rice tarifffree upon recommendation of the NFA council and the Department of Agriculture (DA) secretary, and the approval of the President. “In the event that the NFA imports rice at zero tariff, half of the net income earned from the said See “Tariffs,” A2

DENR ISSUES GUIDELINES PROVIDING LIVELIHOOD FOR MINING COMMUNITIES T

he Department of Environment and Natural Resources (DENR) has issued policy guidelines for two major programs designed to provide mining communities with sustainable livelihood opportunities while protecting the environment. In line with her promise to give sustainable livelihood programs to affected mining communities, Environment Secretary Regina Paz L. Lopez signed Department Administrative Orders (DAO) 2017-02 and 2017-05. DAO 2017-02 calls for the formulation and implementation of a six-year Sustainable Integrated Area Development (SIAD) Action Plan by the government, civil society and the private sector, while DAO 2017-05 gives the guidelines on the implementation of the Biochar Program, an initiative that uses the SIAD approach. An environmental advocate, Lopez defines SIAD as “an approach, a strategy and a guiding philosophy that weaves environmental considerations with social justice and human development”. Lopez said the SIAD strategy aims to apply area-based interventions and

concepts on its natural resources development programs, including the Enhanced National Greening Program (eNGP), and integrated island development. The eNGP is a massive reforestation program of the government that doubles as investments toward sustainable community enterprise. SIAD will cover, but is not limited to, river basins and watersheds and will be initially implemented in 29 priority sites and expansion areas identified by the DENR. “Beginning this year, SIAD will be implemented in other areas of the Philippines as long as the implementers follow our guidelines and the principles behind this strategy,” Lopez said. SIAD is pursuant to the provisions of the 1987 Constitution on the policy of the State “to protect and advance the right of the people to a balanced and healthful ecology in accord with the rhythm and harmony of nature” and on the “promotion of social justice and human rights, including the commitment to create economic opportunities based on freedom of initiative and self-reliance.”

“This strategy is also in response to the clamor of the Filipino people for a system of governance that will finally reverse centuries’ worth of human suffering, environmental desolation, societal discrimination, moral hazard and historical injustice toward activating the full potential of the Philippines within the next 15 years,” Lopez said. Lopez said the Biochar Program calls for the wise utilization of abundant agricultural waste materials into marketable products created by rural communities for green energy, soil enhancement, mine revegetation, and a host of environmental products and services, making it a remarkable climate-change mitigation technology with poverty alleviation through community enterprise. Biochar is charred biomass strictly from agricultural waste like rice hull and straw, bagasse, pili shell, mango seed, coconut husk and shell and corn cobs, which are produced by high heating with very limited oxygen. Lopez clarified that cutting of trees to serve as raw materials for biochar is “strictly prohibited.”

Jonathan L. Mayuga, Rea Cu

Trump trade threat is uniting rest of the world–Katainen

U

.S. President Donald J. Tr u mp’s protec t ion ist stance may propel Asian, Middle Eastern and Latin American economic powers into marketopening alliances with the European Union, a top EU official said. Jyrki Katainen, a vice president of the European Commission, the EU’s executive arm, said Trump’s rejection of multilateral commercial deals and border-tax threat are giving impetus to the 28-nation bloc’s push for free trade or investment pacts with countries, including Japan, China, India, Saudi Arabia, the United Arab Emirates, Mexico, Brazil and Argentina. “When there has been some signals to raise protectionism, especially from the US side, the rest of the world seems to be fighting back and saying that this is not our line, this is something which we don’t want,” Katainen, 45, said in Bloomberg Television interview in Brussels. “This is music to our ears.” T he comments signa l that Trump’s “America First” approach

that seeks to reduce the US’s $502billion trade deficit may be as much an opportunity as a threat to the EU. The bloc is seeking renewed impulse as it grapples with challenges such as the UK’s planned departure from the EU, the demise of talks with Washington on a free-trade pact, Russian meddling in eastern Europe, surging populism and an influx of refugees. Katainen, a former prime minister of Finland now in charge of the jobs, growth and investment portfolio at the commission, said the EU’s “No. 1 priority” with the Trump administration is “to settle down all the tensions and try to create as smooth a trade relationship as possible” between the world’s two biggest economic partners. He declined to speculate about the risks of greater commercial disputes with Washington, saying “there’s very little on paper yet” from the new US government. At the same time, Katainen offered an unabashed defense of the liberal economic order that the EU

stands for, calling the bloc a “trade superpower” that will embrace overtures from economic partners elsewhere since Trump’s surprise election victory in November. “We have been happy to see that, during the last couple of months, many of those countries with whom we have negotiated and with whom the negotiations have been very, very slow have indicated they want to speed up the negotiations and get good agreements done with the EU,” he said. “The EU will do everything in order to materialize and capitalize on this political moment. It’s in our DNA to support freer world trade.”

Landmark trade deal

After sealing a landmark freetrade agreement with Canada, the EU is seeking to make progress on a slew of commercial goals ranging from the upgrade of a long-standing accord with Mexico to the completion of four years of talks on a deal with See “Trump,” A2