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The Integrity Initiative

Culture of integrity and level playing field By: Henry J. Schumacher

Special to the BusinessMirror

eveling the playing field and building a culture of integrity. With these objectives in mind, the Makati Business Club (MBC) and European Chamber of Commerce of the Philippines (ECCP) formed the Integrity Initiative in 2010. What started as a project has, meanwhile, resulted in the creation of the Integrity Initiative Inc. (II Inc.) II Inc. is a nonprofit organization, with five founding shareholders: MBC, ECCP, American Chamber of Commerce, Management Association of the Philippines (MAP) and Finex. It is primarily engaged in a long-term

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Tuesday, March 7, 2017 Vol. 12 No. 146

By Jovee Marie N. dela Cruz

Catholic Church and other religious groups should be taxed for running schools and owning other properties, noting that these undertakings are not part

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Correspondent

Part Two

ER siblings’ future gave her a checkered past. At 22, Liza (not her real name), knew how to play men as a guest relations officer (GRO) at a nightclub in San Juan City. My sisters are still in school and they rely on me to stay there, according to Liza. “Isang Grade 5, Grade 3 at Grade 1…tinutulungan ko lang ang aking mga magulang. High school lang ang natapos ko at hindi na ako nag college,” she said. Liza has always dreamt of leaving her GRO stint. She wanted to own a small restaurant, she said. That opportunity came after the city government of San Juan offered training courses on food processing. Liza did not hesitate to enroll. At 24 today, she only returns to those memories of playing to men’s sexual desires when she encounters difficulties. Nightlife on Quezon Boulevard in Quezon City. NONOY LACZA

PESO exchange rates n US 50.3730

Of aging farmers and food security The Entrepreneur

ALVAREZ: “These schools don’t cater to the poor. They always increase their tuition.”

Manny B. Villar

f the three major economic sectors—services, industry and agriculture—the latter is probably the most challenged, particularly because one of the challenges— weather disturbances—is beyond human control and often very destructive. However, agriculture is the one economic sector that cannot be abandoned. Even the most industrialized nations, like the United States and Japan, maintain and continue developing a viable farming sector. Food security, after all, is essential to every person and every country. In the Philippines, which boasts of large tracts of fertile lands, establishing food security is a continuing and sometimes daunting struggle, not only because of the many destructive typhoons that visit every year, but other factors, as well.

of nonstock, nonprofit activities. “Why don’t we check out if these schools are really nonstock, nonprofit if indeed these are nonstock nonprofit. I think it’s high time we tax these,” Alvarez told the Cabinet secretaries, particularly Finance Secretary See “Alvarez,” A2

Cities reckon with downsides of thriving nightlife industry By Claudeth Mocon-Ciriaco

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@joveemarie

eligious groups with business establishments could be the next target of the government’s revenuegeneration drive, after the leadership of the House of Representatives instructed the Department of Finance (DOF) to look into their income-tax declarations. Speaker Pantaleon D. Alvarez, during the hearing of the House Committee on Ways and Means on the Comprehensive Tax Reform Package, said the

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Alvarez: It’s high time we tax religious groups

Continued on A2

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private sector-led campaign to promote common ethical and acceptable integrity standards in the business community and among various sectors of society. II Inc. aims to continue the activities that were initiated by the Siemensfunded Project SHINE that developed an Integrity Certification and Awards program where companies can be audited, accredited and certified based on compliance to ethical ways of doing business and strict integrity standards. The following describes the key achievements of the II Inc. so far: ■ Created an “Integrity Pledge” for both the public and private

Continued on A10

DOT sees Italian divers as new growth potential By Ma. Stella F. Arnaldo

@akosistellaBM Special to the BusinessMirror

HE Department of Tourism (DOT) is eyeing a huge share of the estimated 350,000 scuba divers in Italy. It recently participated in the European Dive Show (Eudi 2017) in Bologna, and gave visitors a taste of the diverse marine life that can be seen in the Philippine waters, according to a news statement from the agency. Tourism Undersecretary for Public Affairs Katherine Chloe de Castro, who headed the Philippine delegation to the dive show, said many visitors to the dive show were particularly drawn to the Philippine booth to experience the Underwater 360º interactive tours through virtualreality technology. Participating dive-tour operators also received interesting queries for the exciting dive packages on sale at the venue, the Bologna Exhibition Center. “We are truly honored and excited to be part of this big event,” de Castro said. “Our contingent presented Philippine dive products that were just incredible.”This is the first time the DOT participated in Eudi. Being in the heart of the so-called Coral Triangle, the Philippines “can also boast of a veritable smorgasbord of dive sites that appeal to the different preferences of the amateur and professional divers,” de Castro stressed. “More important, our ‘more fun’ brand will work to amplify our mustexperience proposition.” The Coral Triangle refers to the region in the western Pacific Ocean, which includes the waters of Indonesia, Malaysia, the Philippines, Papua New Guinea, Timor

Leste and Solomon Islands. According to the World Wildlife Fund, the area was named as such because of “its staggering number of corals [nearly 600 different species of reef-building corals alone],” and which is home to “six of the world’s seven marine turtle species and more than 2,000 species of reef fish. The Coral Triangle also supports large populations of commercially important tuna, fueling a multibillion-dollar global tuna industry. Over 120 million people live in the Coral Triangle and rely on its coral reefs for food, income and protection from storms.” During the three-day show last weekend, there were presentations highlighting the biodiversity of the Philippine depths led by world-renowned underwater photographers Marcello Di Francesco, Pietro Cremone and Erik Karel Florent Goossens. Many of their works have appeared in prestigious magazines, such as National Geographic and various dive publications. De Castro said the DOT is targeting Italian free divers, underwater photographers and other dive enthusiasts to enjoy the Philippines’s marine resources. “Our presence in this prestigious annual dive exhibition is, likewise, timely so we can establish partnerships with tourism bodies, underwater photography clubs and dive tour operators,” she stressed. Visitor arrivals from Italy grew by 20 percent to 25,945 in 2016. The DOT said it hopes to tap into Italy’s dive population, of which about 40 percent, or 120,000 divers, regularly travel abroad to engage in their sport. With growing air connectivity between continents, tourists are keen on visiting novel, long haul and emerging dive destinations such as the Philippines. See “DOT,” A2

n japan 0.4426 n UK 61.9386 n HK 6.4886 n CHINA 7.3015 n singapore 35.7306 n australia 38.2029 n EU 53.4357 n SAUDI arabia 13.4321

Source: BSP (6 March 2017 )

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A2 Tuesday, March 7, 2017

Cities reckon with downsides of thriving nightlife industry Continued from A1

I don’t want to go back to that life, the former-GRO told the BusinessMirror.

‘No prob’

SAN Juan City Mayor Giua Gomez said the city has no problem when it comes to bars and clubs. “We have only few, I think,” Gomez said. “We already closed unregulated bars and nightclubs even before, when I started my term as a mayor in 2010.” According to Gomez, restaurants, not clubs and bars, are the booming business in her city. To help women shun jobs as GROs, Gomez said they encourage them to undergo training for free courses being offered by the city government. “We envision the city of San Juan to be a place where every resident is productive and everyone has the opportunity to study, work, start and own a business,” she said. Gomez said the city has established the San Juan Manpower & Livelihood Training Center. She said the city also offers consultations on livelihood courses that “help anybody [who] needs a job and income.”

Training hub

ACCORDING to Gomez, the San

Alvarez. . .

Continued from A1

Carlos G. Dominguez III, who attended the lower chamber’s hearing. Alvarez also directed the Bureau of Internal Revenue to submit to the lower house the income-tax returns of schools and other institutions owned and operated by religious groups. “Those religious schools registered as nonstock, nonprofit and claim exemptions from their income, educational income. Do we even believe them? Any school may register as nonstock, nonprofit so that they don’t need to pay taxes,” he said. The Speaker, however, denied

Juan Manpower & Livelihood Training Center continuously accepts enrollees and offers courses, such as caregiving, dressmaking, tailoring, food processing, cosmetology and reflexology. The center urges every resident to indulge in these activities to improve their skills or make an enviable career. “It is also one way of preventing the town’s youth from engaging in undesirable vices,” she said. For the last four years, the center has produced graduates. They also witnessed denizens receiving training on reflexology, Swedish shiatsu and stainless welding. Some of the center’s graduates are, at present, working in Canada, Taiwan and the United States, while some have started their own businesses at the comfort of their homes, according to Gomez. “We are just trying to say here that we are not turning our backs for persons like them,” she said. “We are here to help them and give them a second chance.”

Dominic Garcia, San Juan City BPLO chief, said they inspect business establishments every March. He said these inspections are conducted together with staff of the San Juan City Bureau of Fire Protection, City Health Office and Environment Office.

Garcia explained there are different levels before an establishment, like a bar or nightclub, will be given a permit to operate by the city government. “For us here in BPLO, we do give the business permit. There is also a fire clearance from BFP, while the food and beverage is being regulated by the health office.” Garcia, who is also a lawyer, said it is very challenging to inspect the bars and clubs, as these operate during night time. “My people will do an overtime work when they conduct inspection,” he said, adding that, to ensure the safety of his personnel, they are being assisted by the city government’s Task Force Disiplina and a policeman. He said there are only few clubs and bars operating in the city and are located along the bridge in Araneta Avenue. “We don’t have a Red light district here, unlike other cities,” he said, citing that there are only less that 20 bars and night clubs operating in the city. He stressed that the clubs and bars are not even considered as “high-end”. “The clubs only cater to trike drivers or shall we say the masses,” he said, stressing that such industry only contribute 1 percent to the city’s revenue amounting to over P850 million.

that he wanted to impose taxes on religious institution following criticism from Catholic Church against the passage of the deathpenalty bill in the lower chamber. Alvarez is the principal author of the death-penalty bill. “These schools don’t cater to the poor. They always increase their tuition fees. “That’s not nonstock, nonprofit; that’s profitable business,” he said. A lvarez said other pr ivate schools impose lower tuition but they pay taxes to the government. “Why are these schools run by religious institutions, which impose expensive tuition fees, are exempted from income tax? Isn’t that unfair to other private schools?” he said.

Dominguez, however, recognized the 1987 Constitution provides tax exemptions to charitable institutions and churches. Under Section 28, Article VI of the Constitution, charitable institutions, churches and parsonages or convents appurtenant thereto, mosques, nonprofit cemeteries and all lands, buildings and improvements, actually, directly and exclusively used for religious, charitable, or educational purposes shall be exempt from taxation. During the same hearing, Socioeconomic Planning Secretary Ernesto M. Pernia said that, while revenues from tuition are exempted from taxation, “they have revenue from commercial activities. Those are taxed”.

Rules

Decent homes

GOMEZ said she believes it is not enough to provide necessary resources and tools for sex workers but to provide a decent home for them so that they can leave prostitution. The three-term mayor was referring to the Saint Joseph Ville, a part of her flagship projects aimed at uplifting the lives of her constituents and upgrading the environment of the city, which envisions itself as a City of Excellence, a globally competitive and dynamic community of empowered residents. The total cost of the housing project, funded by the National Housing Authority, is P197.7 million. According to Gomez, the contractor Struktura Teknika Services Co., in joint venture with three builders, completed construction last May. The six buildings of five floors each offers 24 square meters floor area per unit. It is also home to 340 qualified informal-settler families displaced by the fire in Barangay Saint Joseph on December 25, 2012. “We really want to get rid of that [prostitution], that is why we want to provide them with earning and home,” Gomez said, citing that another in-city housing project will soon be provided for San Juaneños. To be continued

DOT. . .

Continued from A1

While there are no direct flights between the Philippines and Italy, earlier interviews with sources at Philippine Airlines indicated that the pioneering flag carrier has been keen on offering Rome or Milan as another European destination because of their large population of overseas Filipino workers. At present, its only European destination is London. Eudi 2017 organizers had hoped they would top last year’s record which included 220 top-level exhibitors representing leading brands of dive products and services, dive clubs, tourism and marine conservation organizations, and over 39,000 participants from Europe alone. Aside from officials of the DOT, the Philippine delegation to Eudi 2017 included representatives of Buceo Anilao, Asia Holidays, and H20 Viaggi.

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Culture of integrity and level playing field Continued from A1

sector, which provides key measures and control activities intended to ensure transparency and integrity in business transactions. Signatories to the pledge commit themselves to the performance of these measures and controls by adopting a “Unified Code of Conduct” for doing business. ■ The Integrity Pledge signatories today number over 3,000 and include 45 government agencies and 233 business and industry associations and professional organizations nationwide. Five thousand new Certified Public Accountants (CPAs) also recited and signed the Integrity Pledge as of July 2016 as part of a new partnership with the Board of Accountancy (BOA). ■ Developed an online integrity assessment tool for signatories to assess their level of compliance and gaps in their integrity management systems, policies and practices. Out of more than 3,000plus signatories to the Integrity Pledge, 256 have signed up for the online integrity self-assessment tool, while 33 companies with selfassessment ratings have been validated by the Integrity Initiative, 16 of which have achieved the highest “advanced” rating. To help companies address gaps and achieve advanced status in their integrity assessment and validation, II Inc. has developed learning modules, conducted integrity planning workshops and developed a system for third-party validation of company self-assessment. ■ Established an Integrity Consortium (ICon) comprised of 233 organizations working with the private sector. These organizations encourage and/or require their members to sign the pledge and, together as a consortium for integrity, engage with other sectors of society to build a culture of integrity and promote the formation of Integrity Circles. The ICon is also tapped for the annual Integrity Nation Now Summit and Campaign to spread the advocacy across sectors and regions, including the Asean. The II Inc. has also established partnerships with other international, regional and local organizations, as well as enterprises to promote sharing of information and research capabilities, as well as sharing of financial and technical resources. Since the Department of Public Works and Highways (DPWH) issued Department Order 86 on September 24, 2013, requiring all their project contractors to sign their own version of the Integrity Pledge, more than 800 companies have been complying with the directive on an annual basis. T his yearly renewal of commitment serves as an initial mechanism for screening out contractors that are not willing to engage in ethical business w ith the DPW H and ensures that only compliant bidders join the procurement process. It is trusted that the new management of the DPWH will continue enforcing the Integrity Pledge for companies wishing to deal with the department. In partnership with the BoA, the Philippine Institute of Certified Public Accountants (Picpa) and the Association of Certified Public Accountants in Public Practice (Acpapp), II Inc. will provide a platform that will require accounting firms and professionals to declare a commitment to transparency and compliance to ethical business practices. The partnership will also enable CPAs to learn the integrity compliance standards and align their continuing education with the help of ethics and compliance experts. The BoA will also incentivize the whole process to promote sustainability by giving continuing pro-

fessional education (CPE) credits to CPAs who will participate in the validation of Integrity Initiative signatory companies. Six private-sector networks signed an MOU on regional cooperation on anticorruption in the Asean business community, paving the way for the establishment of the Regional Working Group on Business Integrity with the purpose of creating a culture of integrity in the Asean business community, moving toward a corruption-free Asean. Another regional campaign to combat corruption is the “Integrity Has No Borders”—an advocacy campaign that aims to create an enabling environment for companies to say “No” to corruption and bribery, regardless of where they are in the Asean, to pave the way for shared growth and progress. Further recognition of Project SHINE’s and II Inc.’s efforts is the inclusion of the II program in the Third Country Action Plan of the Philippines to the Open Government Partnership. The plan includes a commitment by the Integrity Initiative to get 10,000 signatories from Philippine-based companies by 2017 and a commitment by the government to establish a public-sector framework that will promote the II validation and certification system through an executive order (EO), and provide nonfiscal incentives to companies that make the import decision to commit to ethical business processes, sign the integrity pledge and live up to the commitments lined up in the pledge. Given these achievements and commitments, much still needs to be done: The business sector at large has to understand that unethical business practices cannot remain the norm if we truly want the Philippines to compete globally, attract more investments and achieve inclusive growth. The private sector, in partnership with the government and other sectors, must do their part in ensuring that the anticorruption efforts and current progress is firmly anchored on the principles of fair competition, good corporate governance and social responsibility. The private sector may support institutionalizing anticorruption efforts by emphasizing the need among business people to conduct their business in an ethical manner. Furthermore, we recommend t hat gover nment incent iv i ze compliance and recognize organizations that commit to improve their integrity systems. As part of the Open Government Partnership, the Integrity Initiative will best deliver on its committed 10,000 signatories by the end of 2017 if an EO in support of ethical business practice will be signed by the President. A draft EO has been submitted to both the Executive Secretary and the secretary of finance. The Integrity Initiative is a nonpartisan organization whose sole purpose is to level the playing field for businesses through employing ethical business standards and practices. Our efforts will not only complement and supplement the current thrusts of the new administration to more aggressively address corruption but will also ensure that the private sector will do its part in cleaning up its own ranks and building a level playing field. These ideas have been widely accepted by the Duterte administration, which encourages us in the Integrity Initiative to drive these ideas forward, in the Philippines and in Asean. This is the first of a series of articles pushing the campaign of the Integrity Initiative Inc. to eliminate corruption in public and private transactions.

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Marcos hits use of delaying tactics by Robredo’s camp

HE legal team of former Sen. Ferdinand R. Marcos Jr. on Monday said dilatory tactics are being employed by Vice President Maria Leonor G. Robredo, saying they were designed to prevent the truth about the massive cheating in the May 2016 elections from coming out. “Today [Monday], we will file the reply of Senator Marcos and just a brief statement: Not content having cheated Marcos and her way to the vice presidency, Leni Robredo is continuously cheating the Filipino people by depriving them of their rightful vice president and for the speedy resolution of this election protest,” lawyer Victor Rodriguez, Marcos’s spokesman, told reporters after filing the reply to the opposition of Robredo to his motion to set his election protest for preliminary conference before the Supreme Court, acting as the Presidential Electoral Tribunal. “We have refuted all her lame justification on why the preliminary conference should not proceed notwithstanding the Court’s clear pronouncement that “‘it is beyond dispute the Tribunal have jurisdiction,’” Rodriguez noted. “We have waited an inordinate amount of time, but instead of work-

ing for its expeditious resolution, it has become obvious that delay is the name of Robredo’s game. She is afraid of the truth and determined to suppress at all cost the genuine will of the people. She is determined not to proceed with the preliminary conference sapagkat nga po natatakot siya na maisambulat ang katotohanan,” he added. In an 11-page reply to Robredo’s opposition of his motion to set the case for preliminary conference, lawyer George Erwin Garcia, Marcos’s counsel, said Robredo’s objection to set the case for preliminary conference is “obviously dilatory” because by law, the tribunal could have set the same as early as September 9, 2016. “To date, more than five months have lapsed since the filing of the ‘Answer Ad Cautelam to the CounterProtest’, the last pleading in this case. It thus behooves this Honorable Tribunal to immediately schedule the conduct of the Preliminary Conference in this case as mandated by its own rules of procedure. Protestee Robredo’s opposition to the setting of the preliminary conference is obviously dilatory in nature. This Honorable Tribunal should not be swayed by her ambiguous and distorted arguments,” the pleading said. PNA

Editor: Dionisio L. Pelayo • Tuesday, March 7, 2017 A3

Senators confront Lascañas over conflicting testimonies

By Butch Fernandez

@butchfBM

HE Senate Committee on Public Order on Monday started hearings into the alleged existence and activities of the Davao Death Squad (DDS), with the panel chairman Sen. Panfilo M. Lacson stressing that the confessed prime witness, retired policeman Arthur Lascañas, should help turn up corroborating evidence because his testimony is rendered weak from the start by his admission that he lied earlier to Senate investigators. Lacson, in his opening statement, also noted that based on jurisprudence, his own experience as a police investigator and his personal ordeal because of the fabrications against

him by lying witnesses in the past, he was very cautious in handling testimonies of witnesses like Lascañas, who had made a 360-degree turnaround from his October 3, 2016, testi-

mony at the Senate justice committee. Last October he flatly disputed the testimony of another confessed DDS member, Edgar Matobato, and said there was no DDS, and it was all just media hype. But at the February 20 news conference called by Sen. Antonio F. Trillanes IV and in his February 19 affidavit, Lascañas said there was indeed a DDS, and he was an original member. The main inspiration for the group was the crime-busting mayor then of Davao City, Rodrigo R. Duterte, now the President, Lascañas said on February 20. He alleged that the then mayor ordered, and even gave cash rewards, for some of the successful hits. Lacson, in his opening statement, said the Supreme Court itself, in the case of People v Felipe Mirandilla Jr. had acknowledged that it is quite alright for witnesses to contradict themselves at times, because human memory could falter through time. The SC had said that as a rule, self-contradiction and contradictory statements of witnesses must be reconciled, Lacson noted, but the High Court has stressed that this principle arising from human expe-

rience (where memory could falter) “applies only to minor matters”, and “do not apply to self-contradiction on material facts”. Otherwise, Lacson said, the rule of “falsus in uno, falsus in omnibus” must apply. Jurisprudence is consistent, Lacson added, “that for testimonial evidence to be believed, it must not only come from a credible witness but must be credible in itself tested by human experience, observation, common knowledge and accepted conduct that has evolved through the years.” Concluding his opening statement, Lacson clarified that his committee “is not a court of law” and “neither a prosecutor that seeks existence or absence of probable cause”. “In a democracy as ours,” Lacson explained, “it is important not to stifle dissent, or the voices of those who genuinely manifest compunction or are led to speak truth because of spiritual renewal—an apparent reference to Lascañas’s claim that he is surfacing to spill the beans on the DDS because he had a spiritual experience when he was seriously ill.”

Economy

A4 Tuesday, March 7, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

DENR, USAID launch ₧1.2-billion biodiversity-conservation project

SEN. Cynthia A. Villar (from left), United States Ambassador to the Philippines Sung Kim and Environment Secretary Regina Paz L. Lopez exchange pleasantries during the Department of Environment and Natural Resources-United States Agency for International Development launching of Protect Wildlife Project, a new biodiversity-conservation project to help protect and manage the Philippines’s diverse habitats and species, at a hotel in Quezon City on Monday. The project will use a comprehensive strategy that combines technical assistance for government and civil-society partners, partnership for conservation financing, behavior-change campaigns and social marketing, science and technology, and environmental law enforcement. PNA

O enhance the protection and conservation of the country’s rich biological diversity, the Department of Environment and Natural Resources (DENR) has partnered with the United States Agency for International Development (USAID) to launch Protect Wildlife Project.

A five-year, P1.2-billion project, Protect Wildlife aims to address biodiversity loss and wildlife trafficking in the Philippines. Proponents of the project have identified two pilot areas. These are the Palawan province, including Tubbataha Reef; and the Sulu Archipelago, including Zamboanga City and Tawi-Tawi province. Environment Secretary Regina Lopez and US Ambassador to the Philippines Sung Kim led the launch during simple rites held at Sequoia Hotel in Quezon City on Monday. Coorganized by the USAID and

the DENR’s Biodiversity Management Bureau (BMB), the event was part of the World Wildlife Day, which was celebrated on March 3. A follow through of the continuing collaboration between the two governments along with the private sector, civil society and individual communities to strengthen natural and environmental resource management in the country, Kim said the project aims to highlight the importance of biodiversity in improving the quality of life and ensuring sustainable development in the Philippines. “’Protect wildlife’ is not only

DOTr slates bidding of ‘unbundled’ regional airports deal on March 13

ESPITE criticisms that unbundled regional airports deal is not commercially viable, the transportation department will push through with the contracts’ prequalification conference this month. According to a bid bulletin, the prequalification of bidders for the P108.2-billion regional airport development program is slated for March 13. The previous administration started the auction for the contract to develop and operate five airports around the Philippines in two packages to make it more enticing to investors. The first package consists of the Bacolod-Silay Airport (P20.26 billion) and Iloilo Airport (P30.40 billion), while the second bundle is composed of the New Bohol or Panglao Airport (P2.34 billion), Laguindingan Airport (P14.62 billion) and Davao Airport (P40.57 billion). However, the Duterte admin decided to unbundle them to hasten the bidding for the said deals. The private partner will undertake the operation and maintenance of the airport, as well as provide additional facilities and other necessary improvements to enhance passenger safety, security, access, passenger and cargo movement efficiency, and operational efficiency under a defined concession period. Private-sector interest in the deals have waned, as unbundling the packages made them not economically viable. Metro Pacific Investments Corp.’s partner has backed out of the bidding due to the unbundling. A number of companies also claimed that only Davao and Iloilo are viable deals. Lorenz S. Marasigan

the name of our project. It is also the imperative for all of us to take care of the species with which we share the planet,” he said in a news statement. For her part, Lopez said: “Conservation is not protecting nature from people. It is protecting nature for people.” The perspective of the DENR under her leadership was area development, and making sure that the resources, especially its flora and fauna, in an area are enjoyed by the people themselves, Lopez said. She added that nurturing the country’s endemic species was the country’s contribution to humanity. “Wildlife is therefore an integral part of developing areas. Taking care of them will give us great ecotourism zones that can help people in the communities and lift them out of poverty,” Lopez stated. DENR-BMB Director Theresa Mundita Lim welcomed the launching of the Protect Wildlife Project, saying the project focuses on improving the benefits provided by ecosystems for food, water, livelihood and ecotourism. “With the Philippines being both

one of the world’s most megadiverse countries and a critical biodiversity hot spot, we need to see how we can communicate development programs more effectively so that people will appreciate better the benefits of conservation,” Lim said. She added among the strategies to be used in the project include improving the attitude and behavior of stakeholders toward biodiversity, and intensifying their involvement in conserving and financing biodiversity initiatives. The project will also enhance the competencies of stakeholders and implementers, such as local government units, civil-society organizations, academe and other government agencies on biodiversity conservation. Lim said the project also highlights the need to fight threats posed by wildlife trafficking, illegal fishing, land-use conversion, irresponsible mining and indifference of stakeholders. “The more habitats deteriorate and wildlife existence is endangered, the less we benefit from the goods and services that ecosystems provide to sustain human life,” Lim pointed out. Jonathan L. Mayuga

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PHL population to breach 113M+ mark by 2022 By Cai U. Ordinario @cuo_bm

F left unchecked, the Philippines’s population could balloon to 113.8 million by the end of President Duterte’s term by 2022, according to the Commission on Population (Popcom). In a news statement issued on Monday, the anticipated population count would be an increase of 9.798 million from the 2017 estimate of 104 million. This means nearly 2 million Filipinos are added to the country’s population every year until 2022. Popcom also said that, apart from the population boom, mothers dying during childbirth may rise by an additional 1,000 each year in the next six years. “These will be the first of the many adverse effects of derailing the full implementation of the Responsible Parenthood and Reproductive Health [RPRH] Act of 2012 [Republic Act 10354, or simply, RPRH law] with a temporary restraining order [TRO] by the Supreme Court [SC], still hanging in the air,” the Popcom said. These are also among the major reasons the government has decided to target the reduction of the country’s total fertility rate (TFR) to 2.1 percent, according to the Philippine Development Plan (PDP). The country’s medium-term macroeconomic blueprint for 2017 to 2022 stated that lowering the TFR also means increasing contraceptive prevalence to 65 percent, from 37.5 percent. This also includes reducing the proportion of adolescents who have begun childbearing to 6 percent, from 13.6 percent in 2016. “Once the demographic precondition of this phenomenon is reached, the county will aim to maximize its potential dividend for economic growth,” the PDP stated. Speeding up the demographic transition will be supported by efforts to maximize the gains from the demographic dividend. These include reducing the number of women who die in childbirth or the maternal mortality ratio per 100,000 live births to 90 women from the 2016 baseline of 114 women. This also entails the reduction of the under five mortality rate per 1,000 live births to 22 from 27 in 2013 and reducing the prevalence of stunting among

The number of Filipinos added to the total local population from 2017 to 2022

children under five to 20 percent from 33.4 percent. The PDP also stated that maximizing the demographic dividend also means reducing youth unemployment to 8 percent, from 11 percent. “Optimizing the increasing labor force for more productive economic output requires a quality human resource. Thus, it entails the improvement of health, education and total well-being of the human capital,” the PDP said. The Legislative Agenda to Maximize Demographic Dividend for 2017-2022 includes the institutionalization of local population and development policy, and adopting a national policy on the prevention of teenage pregnancy. The agenda also included strengthening of the national population development policy. Ernesto M. Pernia, socieconomic planning secretary, said the RPRH law will enable couples, especially the poor, to have an informed choice on the number and spacing of children they can properly care and provide for. Apart from increasing the budget, Pernia said the new administration is also working on addressing the TROs issued by the SC on RPRH-related programs. The first TRO was issued by the High Court against the distribution of contraceptive implants, Implanon. The implants were bought by the government for P400 million and will be distributed to poor women nationwide. The other TRO that prevents companies authorized to import other contraceptives, pills, condoms and IUDs, among others, from renewing their authorization to import. As a consequence of the TRO, Pernia said, there will be no importation of these commodities or supplies which threatens the full implementation of the RPRH law.

Central Visayas workers get ₧13 wage increase

aily minimum-wage earners in Central Visayas will be receiving an additional P13 in their salaries starting on March 10, the Department of Labor and Employment (DOLE) said. In Wage Order ROVII-20 issued by the Regional Tripartite Wages and Productivity Board, the increase covers private-sector workers in the provinces of Cebu, Bohol and Siquijor. In a news statement, the DOLE said the wage adjustment takes effect on Friday, the 15th day after the publication of the wage order in the local newspaper of

regional circulation. Commercial and industrial sector workers in Class A cities and municipalities or the expanded Metro Cebu will receive a new daily minimum wage of P366, while workers in Class B, including the cities of Toledo, Bogo and the rest municipalities in Cebu, except the islands of Bantayan and Camotes, will receive a daily rate pay of P333. The daily minimum wage of workers in Class C, including Bohol and Negros Oriental, will be pegged at P323. Class D comprising the municipalities of Siquijor and the islands of Bantayan and Camotes

will now be at P308. In the agricultural sector, workers in Class A cities and municipalities will receive daily rate of P348 (nonsugar) and P316 (sugar); and P318 (nonsugar) and P303 (sugar) for the workers in Class B. Workers in Class C cities and municipalities will receive P303 (nonsugar and sugar) daily pay, while workers in Class D municipalities will be afforded with P288 (nonsugar) and P303 (sugar) daily wage. On the other hand, DOLE Regional Director Exequiel Sarcauga noted that the new wage order does not cover household or

domestic workers, persons in the personal service of another, as they are covered by Wage Order RBVI-D.W. 1, which was issued by the board in December 2015. Likewise, the new wage order is not applicable to workers of duly registered Barangay Micro Business Enterprises. Sarcauga added that apprentices and learners should receive not less than 75 percent of the prescribed minimum wage rates. Qualified handicapped workers should be able to receive the full amount of increase as specified in the new wage order. PNA

ECC grants benefits to miner with work-related hearing loss

he Employees’ Compensation Commission (ECC) recently granted employee compensation (EC) benefits to a miner from Benguet after sustaining noiseinducedhearinglossinhis24yearsofserviceataminingfirm. Baltazar Bodtan worked as an underground environmental supervisor who was responsible for the installation, maintenance of ventilation equipment, waste disposal and ensuring adherence to standard operation procedures in the use of mining machines. On September 27, 2007, Bodtan underwent audiometry examination and it was discovered that he

had moderate and sensorineural hearing loss with a 49-percent hearing handicap. In 2008 Bodtan filed for an EC Permanent Partial Disability (PPD) claim but was denied because of his failure to submit additional audiometry examinations showing that his hearing impairment progressed to a state of permanent disability. Two years after his retirement in March 2015, Bodtan underwent another audiometry examination and the results showed monoaural impairment with a total hearing handicap of 44 percent.

He also underwent medical examination and was diagnosed with spinal arthritis and hypertension. The ECC recognized the dangerous conditions of working underground and noted that Bodtan’s hearing loss may have been caused by exposure to high-frequency noise since he had been exposed to these factors on a daily basis for 24 years. The ECC stated that Bodtan met the conditions for compensability of occupational hearing loss wherein he was exposed in the workplace to harmful noise levels in the higher frequencies, such as explosive blasts and

long sustained noise from drilling machines. The ECC ordered the Social Security System to grant Bodtan EC disability benefits plus reimbursement of medical expenses for his succeeding consultation due to noise-induced hearing loss.

However, ECC sustained the decision of the SSS on denying his claim for EC disability benefits due to hypertension and musculoskeletal disorders because there were no reports or documents of illness from the employer that would prove that the other illnesses he claimed were work-related. PNA

Agriculture/Commodities BusinessMirror

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Editor: Jennifer A. Ng • Tuesday, March 7, 2017

NFAC to look into govt-led rice importation By Jasper Emmanuel Y. Arcalas

@jearcalas

he National Food Authority Council (NFAC) said it will investigate the government’s rice importation transactions after NFA officials refused to allow the extension of the deadline for the arrival of rice imported via the minimum access volume (MAV) scheme. Cabinet Secretary Leoncio B. Evasco Jr., who is also ex-officio chairman of the NFAC, said he will push for the creation of a special committee that will look into the government’s rice imports during the council’s next meeting. “I will propose the creation of a special committee to investigate officials who have been making a cash cow out of government-led importations,” Evasco said in a statement. He also said the NFAC has long been requesting the NFA for copies of the terms of reference of all international and domestic cargo handlers. Evasco said the NFA management has yet to provide the council with these documents. Evasco noted that cargo handling does not go through the regular procurement process prescribed by Republic Act 9184, or the Government Procurement Reform Act, as it is considered as supplier’s choice.

“It creates serious doubt on the part of the NFAC when some of the NFA’s executives have been insisting on government-to-government procurement despite lack of recommendation to import from the National Food Security Committee [NFSC],” he said. The NFSC recommends to the NFAC whenever there is a need to purchase imported rice. The council has the final say on the volume and the timing of the importation. Despite the lack of recommendation from the NFSC to import rice, Evasco said the NFA informed Hanoi that Manila would purchase rice from Vietnam this month for the food agency’s buffer stock. “We have received a copy of NFA Administrator Jason Laureano Y. Aquino’s letter to Vietnam embassy, informing the latter that the Philippine government will open a state-to-state importation this month for its buffer-stock. That

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letter was sent to Vietnam embassy behind the Council’s back,” he said. Evasco said this could be the reason behind the “blatant refusal” of Aquino to honor and implement the NFAC’s decision to extend rice importation through the MAV scheme by a month or until March 31. As of press time, Aquino could

not be reached for comment. NFA Spokesman Marietta J. Ablaza said the food agency will issue a statement on the allegations made by the NFAC on Tuesday. The NFA is one of the 12 agencies tasked with resolving food security and poverty issues that are under the administrative supervision of

Govt to hike investments in R&D activities to boost farm output T he Duterte administration vowed to increase its investments in research and development (R&D) activities to boost the farm sector’s productivity, according to the Philippine Development Plan (PDP) 2017-2022. “Investments will be increased to cover the direct cost of R&D, build a critical mass of human resources and improve infrastructure in support of the Harmonized National R&D Agenda for Agriculture, Aquatic and Natural Resources 2017-2022,” Chapter 8 of PDP, titled Expanding Economic Opportunities in Agriculture, Forestry and Fisheries, read. “This agenda espouses the use of advanced and emerging technologies, such as biotechnology, genomics, bioinformatics, nanotechnology and ICT [information and communications technology] as tools to find science and technology solutions to AFF [agriculture, fisheries and forestry] problems and to develop new products with significant impact to the sector,” it added. In Chapter 14 of the PDP, titled

Vigorously Advancing Science, Technology, and Innovation, the government bared its plan to craft a Harmonized National R&D Agenda (HNRDA) that would serve as a road map to advancing R&D in the country. “Funding support will be provided for the implementation of the HNRDA, which defines the country’s priorities and guides public investment in R&D. The agenda will consolidate and promote basic and applied research in agriculture, aquatic resources, natural resources, health and nutrition, drug discovery and development, industry, energy, defense and security and emerging technologies,” it read. The government said it will prioritize the development of R&D in sectors that would benefit the most from advanced technologies and innovative practices, such as the agriculture sector. “This is expected to translate to an increase in incomes and jobs, especially in the countryside. The government will also foster the de-

velopment of networks and markets, and undertake effective marketing strategies through the extensive use of quad-media and the organization of fora, fairs and exhibits,” the chapter read. The PDP noted that, despite the significance of R&D in developing technologies and identifying good farm and fishery management practices, the share of R&D programs remains low in the total budget of the Department of Agriculture (DA) and Department of Science and Technology-Philippine Council for Agriculture, Aquatic and Natural Resources Research and Development. “In 2015 the aggregate budget was at P3.8 billion or only 0.28 percent of the AFF GVA [in current prices], which is lower compared to the 1-percent level recommended for developing countries,” it read. The government also noted that the farm sector’s R&D capacity is “quite weak” because most of the scientists and researchers in the sector work on a contractual basis due to the limited number of

permanent work positions. The PDP said the government would tap the expertise of private and public institutions and think tanks to strengthen the farm sector’s R&D capacity. “The coordination and complementation between DA and LGUs [local government units] will be strengthened for a more efficient delivery of extension services and feedback on farm-related problems,” it read. “State universities and colleges will also be tapped to hasten he diffusion of good farm and fishery practices, indigenous and local knowledge and appropriate technologies,” it added. The national government is keen on growing farm production by 2.5 percent to 3.5 percent annually starting this year until 2022, when the President steps down from office, according to the PDP. The previous administration had targeted to increase annual agriculture and fisheries output by as much as 5 percent. Jasper Emmanuel Y. Arcalas

Trump and a possible El Niño may confound palm-oil market bears

alm-oil bears are growing in confidence this year with production in the two largest growers expected to surge as plantations recover from the scorching effects of El Niño. The factors that may stand in the way, however, include Donald J. Trump and a possible early return of El Niño. The quarterly average price of the oil used in everything, from lipstick to chocolate, is expected to slide about 12 percent by the fourth quarter. That would end a bull run that gave the commodity its biggest annual gain in six years. It all depends on exactly when the predicted production surge in Malaysia and Indonesia starts. That will be a key focus as traders and executives gather in Malaysia’s capital for an annual palm-oil conference

starting Monday. The bullish factors they will be watching for include the possible El Niño as well as biodiesel policy decisions from Indonesia and the Trump’s administration in the US, according to Oscar Tjakra, senior analyst at RaboResearch Food & Agribusiness in Singapore. Futures in Kuala Lumpur, the global benchmark, are forecast to average at 2,650 ringgit ($595) a metric ton in the fourth quarter, from 3,020 ringgit so far in the first, according to the median estimate of analysts compiled by Bloomberg. Olam International Ltd., one of the world’s largest food traders, is among those predicting the fall, saying in earnings last week they are bearish on palm oil from the late second quarter onward. “Sluggish palm-oil demand and

expectation that palm production cycle will shift to a seasonal uptrend from March continue to provide downward pressure for palm oil prices,” RaboResearch’s Tjakra said in e-mailed responses to questions. Palm oil is expected to see “minimal harvest disruptions and logistical issues for the rest of the first half,” he said. “There are still, however, uncertainties about weather in the second-half of 2017,” he said. “El Niño could reemerge.” Forecasters are predicting El Nino may make a comeback less than a year after the world said goodbye to one of the strongest of the weather events on record. Recent observations suggest the likelihood of El Niño in 2017 has risen to about 50 percent, according to Australia’s

Bureau of Meteorology on February 28. Malaysia’s Meteorological Department said February 20 that some models anticipate the onset as soon as March to May. If El Niño develops in the second half of the year, the impact on fresh fruit bunches will be felt six to nine months later and that would affect production in 2018, Rabobank’s Tjakra said. “It depends on how strong it is,” said Franki Anthony Dass, managing director of plantations at Sime Darby Bhd., the world’s biggest grower of palm oil by acreage. “If El Niño appears and it affects production, prices will go up,” Dass told Bloomberg in Kuala Lumpur on February 27, while adding that the impact may not be as severe as last year’s “super El Niño.” Bloomberg News

the Office of the Cabinet Secretary. The National Economic and Development Authority (Neda) said expanding the government’s rice procurement program would help stabilize the farm-gate price of the staple and allow farmers to earn more. “In anticipation of the farmers’

good harvest this summer season, the NFA should procure directly from local farmers to boost its buffer-stock. That is the best way to protect them [farmers]. Assuring our local farmers that they have a steady market for their produce whatever happens,” Neda Secretary Ernesto M. Pernia said in a statement.

PHL industrial crops production declined in Q4–PSA report

he production of crops used by the industrial sector, such as sugarcane and tobacco, posted declines in the fourth quarter of 2016, according to the latest report of the Philippine Statistics Authority (PSA). In its quarterly report titled Major Non-Food and Industrial Crops Quarterly Bulletin, the PSA said tobacco output in the Octoberto-December period dropped 15.5 percent to 1,142 metric tons (MT), from 965 MT recorded in 2015, the PSA said. “The 15.5-percent loss is explained by less area harvested this period in Northern Mindanao (Misamis Oriental), as more were harvested during the third quarter because of contract growing of Virginia variety by Phillip Morris Fortune Tobacco and higher prices,” the PSA added. The PSA said Northern Mindanao remained the top tobaccoproducing region, accounting for 94.3 percent of the total production in fourth quarter. However, output in the region declined 19.1 percent to 910 MT, from 1,125 MT recorded in 2015. Virginia was the top variety, accounting for 82.4 percent of total production, while native variety and Burley variety accounted for 13.5 percent and 4.1 percent, respectively, according to the PSA report. The volume of sugarcane produced in the fourth quarter last year dropped by 15 percent to 6.29 million metric tons (MMT), compared to the 7.40 MMT produced in the same period in 2015, the PSA said. “Sugarcane for centrifugal sugar, which constitutes 98.5 percent of the total sugarcane production, drove the overall decrease of sugarcane production, as its production went down by 15 percent,” the PSA said.

“This was due to less canes harvested in Negros Island region (Negros Oriental) and less area harvested in Northern Mindanao (Bukidnon) due to delayed milling caused by drought during the first semester of 2016. Also, the harvest in Negros Island region was affected by heavy rains during December,” it added. The bulk of sugarcane production came from Negros Island region, with a share of 78.4 percent, the PSA report noted. Western Visayas contributed 9.8 percent to total production. Coconut production in the fourth quarter declined by 5.2 percent to 3.77 MT, from 3.97 MMT recorded in 2015. The PSA said the lingering effects of El Niño caused coconut trees to develop smaller nuts in Davao region and Zamboanga Peninsula. “The top 4 coconut-producing regions for the quarter are Northern Mindanao, Davao region, Zamboanga Peninsula and Calabarzon. These regions had a collective production of 1.71 MMT and comprised 40.3 percent of the national coconut production,” the PSA said. The PSA also said the production of dried coffee berries went down in the fourth quarter by 3.3 percent to 32,170 MT, from 33,250 MT in 2015, due to damages caused by Typhoon Lawin in the Cordillera Administrative Region, particularly in the Kalinga area. “Of the total coffee production, Robusta coffee was the topproduced variety at 68.8 percent; followed by Arabica, 26.0 percent; Excelsa, 4.3 percent; and Liberica, 0.9 percent,” the PSA said. The PSA said the top coffee-producing regions were Soccsksargen, the Autonomous R e g ion i n Mu s l i m M i nd a n ao, Davao region and Western Visayas. Jasper Emmanuel Y. Arcalas

Tuesday, March 7, 2017

The World BusinessMirror

US trade war hit would spread beyond China stocks–Nomura

he collateral damage from any United States-China trade fight would likely spread far beyond the markets of Asia’s largest economy, according to Nomura Holdings Inc.

for the presidency. A majority of investors polled by Nomura expect some kind of spat over trade between the world ’s biggest two economies, with companies in industries that have large trade surpluses with the US likely to be the target of penalties, based on Japan’s experience. P re s i d e nt R o n a l d R e a g a n sl apped t a r i f fs on Japa nese items, inc lud ing motorc yc les and TVs during the 1980s, and engineered a stronger yen via the Plaza Accord.

80%

A mong the top 25 exporters from China to the US, more than 80 percent are owned by companies outside the mainland, according to a study by the Tokyo-based bank. W hile some manufacturing stock s face g reater r isk, the diversity of ownership means C h ina itsel f isn’t as v u l ner able as Japan was in the 1980s, when most of its big exporters were Japanese and Washington imposed curbs similar to those now being f lagged by President Donald J. Trump, Nomura says. “A trade war between the US and China could very well equally, if not more, impact stocks listed in

Taiwan, Korea and the US,” wrote Nomura’s chief of China equity research Wendy Liu and analyst Erin Zhang. “China’s case is more complex than Japan’s experience in the 1980s.” Taiwan owns a majority of the biggest exporters to the US, which include Quanta Computer Inc.’s Shanghai-based unit, Tech-Com and Pegatron Corp.’s Maintek Computer and Protek, the Nomura data show. Investors have been bracing for more information from Trump, who talked of boosting tariffs on imports into the US and labeling China a currency manipulator while campaigning

With economy up, crime down, why are the Dutch discontent?

H E H AG U E , N e t h e r l a n d s —T h e economy is up, unemployment is down and some Dutch prisons are so empty the government has been renting out cells. So why do polls indicate that the Netherlands’s ruling par ties are set to suffer big losses before a March 15 national election, while the party of rightwing anti-Islam lawmaker Geert Wilders appears poised to make substantial gains? “It’s not the economy, stupid,” Prof. Gerrit Voerman of the University of Groningen said, tweaking the campaign message Bill Clinton used in his successful 1992 march to the White House. Instead, Voerman said, “It’s about identity.” Wilders’ campaign slogan sums it up: “The Netherlands ours again!” The nationalist refrain, which echoes US President Donald Trump’s campaign call to make America great again, is a theme that could dominate elections in two other European nations this year— France and Germany. How Wilders’ Party for Freedom fares next month should provide an indication of the prospects for fellow far-right nationalists Marine Le Pen, the presidential candidate for France’s National Front party, and Frauke Petry of the Alternative for Germany. In the Netherlands pollsters predict that Prime Minister Mark Rutte’s People’s Party for Freedom and Democracy will lose about 15 of the 40 seats it holds in the 150-seat House of Representatives. Wilders’ party, which currently has 12 lawmakers in the chamber, is on track to become one of the biggest, if not the biggest, parliamentary faction, despite a recent decline in polls. However, Wilders’ hard-line anti-Islam, anti-immigration platform and rhetoric has driven away potential coalition par tners among mainstream par ties, meaning that he is unlikely to be able to form a government even if he wins the popular vote in this country whose elections all but guarantee coalitions. Wilders’ one-page election manifesto

leads off with two “us-against-them” themes. The Party for Freedom pledges to “de -Islamize” the Netherlands by shutting all mosques, banning the Quran and halting all immigration from majority Muslim nations. It also commits to remove the Netherlands from the European Union, which it helped found 60 years ago. After decades of immigration, around 5 percent of the Dutch adult population is Muslim, according to the Central Bureau for Statistics. Many of Wilders’ supporters have a deep-rooted sense that new, often Muslim, arrivals in the nation of 17 million are treated better by the government than longtime residents. Wilders pounced this week on figures from the statistics bureau showing that despite the drop in unemployment the number of people eligible for welfare rose last year, a trend mainly driven by refugees granted residency permits, the bureau said. “Thanks to Rutte, the Netherlands has become the ATM for many immigrants,” Wilders tweeted. His supporters agree. “People who come here get everything and people from the Netherlands have to survive on a few cents,” Jo Hendriks, a 65-year-old Wilders voter from Rotterdam, said. “The foreigners go to the food bank in their Mercedes to get food.... I live near a food bank and I see it with my own eyes.” Economic Affairs Minister Henk Kamp, a veteran member of Rutte’s party, observed recently that “people are inclined to look at other issues” during election campaigns, if the economy is doing well. The Dutch economy expanded for 11 consecutive quarters and grew by 2.1 percent in 2016. Meanwhile, crime has been steadily declining for years, so much so that the country has in recent years rented out prison cells to Belgium and Norway and even housed asylum-seekers in disused jails. Ahead of Dutch elections, mainstream parties carefully outline their plans to keep the economy healthy and run them past a government-funded think tank to prove that their projections are sound. AP

The percentage of the companies, from among the 25 exporters from China to the US, owned by firms outside the mainland His administration also lobbied to remove barriers in areas where the US was competitive. China is currently the biggest source of US imports, with its share of about 21 percent similar to Japan’s stake in the mid-1980s, Nomura said, citing International Monetary Fund data. Companies that make machinery and transport equipment are among those with the most to lose if trade tensions escalate, because China accounted for more than 20 percent of US imports in 2016 in those sectors, according

to Nomura. The bank flagged 18 stocks listed either on the mainland or in Hong Kong with more than 10 percent of sales coming from North America that chiefly manufacture outside of the US. They included Sichuan Chengfa AeroScience and Technology Co., a Chengdu-based maker of aircraft parts, wigmaker Henan Rebecca Hair Products Co. and Intel Corp. supplier Semiconductor Manufacturing International Corp.

Three things

Because American companies generally have greater access to China’s market today than they did to Japan’s in the 1980s, that means they have invested more in country and are “making good money” in China, the Nomura analysts wrote. That limits the chances of a damaging trade war. There are three key things to watch, in Nomura’s analysis—US Commerce Secretary Wilbur Ross’s trade agenda, the April Treasury Department foreign-exchange report where the US will decide whether to dub China a currency manipulator, and the future of the Sino-American framework for economic dialog, which under President Barack Obama saw annual meetings of top economic policy-makers. “China’s case has more parties owning a stake than Japan in the 1980s, which means that the odds of a trade war are lower than otherwise,” the Nomura analysts concluded. Even so, “only a minority of investors in Europe and Asia believe that reconciliation between the US and China is likely without a trade war,” they wrote. Bloomberg News

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May warned: ‘Worst of all worlds’ in UK migration crackdown

he United Kingdom government risks producing the “worst of all worlds” if it tries to tailor post-Brexit immigration rules for specific industries, according to a study by a House of Lords panel. Seeking to avoid labor shortages in key industries, Bloomberg reported last week that Pr ime Minister T heresa May is consider ing a sector-bysector approach when deciding which European Union nationals would qualify for work visas after Britain leaves the EU. Such an approach received short shrift in the report from a home affairs subcommittee of Parliament’s upper house. R e le a s e d on Mond ay, t he peers warned a piecemeal system cou ld “ fa i l to de l iver a meaning f u l reduction in immigration, while also proving more onerous and cost ly for employers, prospective applicants and those charged with enforcement.” May’s administration wants to cut annual net immigration from near-record levels of more than 300,000 at the time of last June’s referendum to the target of the “tens of thousands” that her Conservative Party promised voters. The prime minister has interpreted the Brexit vote

as a call to curtail free movement of labor from the EU. A s it seeks to control the number of workers from abroad, the government wants to balance the needs of businesses that have become dependent on foreign employees both for skilled work in places like hospitals and banks, and for jobs that Britons don’t want on farms and restaurants. The House of Lords committee said the assumption that British workers will fill the jobs vacated by EU migrants is “simply not there” and warned that restor ing control of national borders may not prove enough to slow immigration or revive wages. It recommended a new immigration system be phased in over time and urged the government to be wary of endangering the economy by cutting off access to foreign skills. The Lords last week complicated May’s Brexit planning by a me nd i n g t he go ve r n me nt ’s w ithdrawa l bil l to g uarantee the rights of EU citizens already in the UK. Monday’s report said the government was right to pursue a “two-way agreement” in which European leaders safeguard the rights of UK nationals living in their countries. Bloomberg News

Conspiracy theory’s journey: From talk radio to Oval office

A SHINGTON—It began at 6 p.m. on Thursday as a conspirator ia l rant on conservative talk radio: President Barack Obama had used the “ i n s t r u m e nt a l i t i e s o f t h e federal government” to wiretap the Republican seeking to succeed him. This “ is the big scandal,” Mark Levin, the host, told his listeners. By Friday morning, the unsubstantiated allegation had been picked up by Breitbart News, the site once headed by President Donald J. Trump’s chief strategist, Stephen Bannon. Less than 24 hours later, the president embraced the conspiracy in a series of Twitter posts accusing his predecessor of spying on him, setting in motion the latest head-spinning, did-hereally-say-that furor of Trump’s six-week-old presidency. Previous presidents usually measured their words to avoid a media-feeding frenzy, but Trump showed again over the weekend that he feeds off the frenzy. Uninhibited by the traditional protocols of his office, he makes the most incendiary assertions based on shreds of suspicion. He does so without consulting some of his most senior aides, or even agencies of his own government that might have contrary information. After setting off a public firestorm with no proof, he then calls for an investigation to find the missing evidence. To his adversaries, Trump’s bomb-throwing seems like a calculated strategy to distract from another story he wants to avoid. In this case, they said last Sunday, he clearly wanted to turn the conversation away from Atty. General Jeff Sessions, who

recused himself last week from any federal investigation into the Trump campaign’s ties with Russia in response to reports that he had met with Russia’s ambassador during the presidential race. Instead of what Sessions did or did not do, the Sunday talk shows were dominated by discussion about what Obama did or did not do. But in shifting the story, Trump also kept the Russia investigation front and center, rather than his initiatives on health care, taxes or jobs. His first address to Congress, which won him plaudits for being presidential, was last week but now feels ages ago. Even some Republicans pointed out that if an eavesdropping warrant had been approved, it would mean that a judge was convinced that someone in Trump’s circle might have committed a crime or acted as a foreign agent. “I’m very worried that our president is suggesting that the former president has done something illegally,” Sen. Lindsey Graham, Republican-South Carolina, told the audience at a town hall-style meeting in his home state over the weekend. At the same time, he said, “I would be very worried if, in fact, the Obama administration was able to obtain a warrant lawfully about Trump campaign activity with a foreign government.” This was hardly the first time Trump made a shocking accusation without evidence. He claimed that more than 3 million people voted against him illegally last November, giving Hillary Clinton a victory in the popular vote. Republican and Democratic officials alike said there was no indication of any such thing, and

Trump’s promised investigation has so far led nowhere. Nor was it the first time Trump leveled astonishing allegations against Obama. He spent years promoting the false claim that Obama was not born in the United States, promising an investigation to uncover the truth and backing down only last year, during his campaign. And last summer, he asserted that Obama was “the founder of ISIS [Islamic State in Iraq and Syria].” The White House remained firm last Sunday even after Obama’s office denied ordering a wiretap and James Clapper, the former director of national intelligence, said on NBC’s Meet the Press that there had been no wiretapping of Trump or his campaign. James Comey, the Federal Bureau of Investigation (FBI) director, privately asked the Justice Department to issue a statement that Trump’s claim was false, senior officials said, but the department had not done so as of Sunday evening. “Everybody acts like President Trump is the one that came up with this idea and just threw it out there,” Sarah Huckabee Sanders, a W hite House spokesman, said on This Week on A BC News. “ There a re mu lt iple ne w s out le t s that have reported this. And all we’re asking is that we get the same level of look into the Obama administration and the potential that they had for a complete abuse of power that they’ve been claiming that we have done over the last six months.” Sanders pointed to reports in “multiple outlets”, including The New York Times, as the foundation for the allegation. Levin, the radio host, likewise, read from a series

of mainstream news reports during an appearance on Fox and Friends on Sunday. “The evidence is overwhelming,” he said. “This is not about President Trump’s tweeting. This is about the Obama administration’s spying, and the question isn’t whether it spied.” He added, “The question is who they did spy on, the extent of the spying—that is, the Trump campaign, the Trump transition, Trump surrogates.” But the news organizations he and Sanders cited have not reported that Obama tapped Trump’s phones, as the president claimed on Twitter. The Times has reported that several of Trump’s associates are being investigated for their connections with Russians and that law-enforcement agencies have examined intercepted communications. It has not reported that those associates themselves have necessarily been wiretapped, but it has reported surveillance of Russians, which is commonplace. News outlets have noted that a phone call between Michael Flynn, Trump’s first national security adviser, and Russia’s ambassador to the United States, Sergei Kislyak, was monitored, leading to Flynn’s resignation because his account of the conversation did not match the intercept. It is common for the US to monitor the communications of Russia’s ambassador. The Times also reported that before leaving office, Obama officials tried to spread information about Russian meddling in the election and possible links between Russia and Trump associates, in order to leave a trail for government investigators. New York Times News Service

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Tuesday, March 7, 2017

Raising worries in South Korea

N. Korea launches 4 ballistic missiles

EOUL, South Korea—North Korea launched four ballistic missiles from its long-range rocket launch site on Monday morning, the South Korean military said. The launch prompted South Korean security officials to call for the early deployment of an advanced United States missiledefense system that has provoked China. The missiles took off from Tongchang-ri, in northwest North Korea, and flew an average of 620 miles before falling into the sea between North Korea and Japan, said Noh Jae-chon, a South Korean military spokesman. The ty pe of missile fired was not immediately clear, but Noh said it was unlikely that they were intercontinenta l ba l listic missiles (ICBM), which the North had recently threatened to test-launch. During a meeting of the South Korea’s National Security Council, Hwang Kyo-ahn, the acting president of South Korea, called for the early deployment of the US missile-defense system known as Terminal High-Altitude Area Defense (THAAD). The United States and South Korea have agreed to complete the THA AD deployment within the year. They say it is meant to protect South Korea and US

620 miles The average distance the missiles flew from Tongchang-ri, in northwest North Korea, before falling into the sea between North Korea and Japan military sites there from North Korean missiles. But China says TH A AD would undermine its own nuclear deterrent and has hinted at economic retaliation against South Korea. Hwang also called on his government to look aggressively for “ways to effectively strengthen the United States’s extended deterrence” for South Korea, referring to Washington’s ability to deter attacks on its allies with the help of its nuclear forces.

A visitor walks by the TV screen showing a news program reporting about North Korea’s missile firing, at Seoul Train Station in Seoul, South Korea, on Monday. North Korea fired four banned ballistic missiles that flew about 1,000 kilometers, with three of them landing in Japan’s exclusive economic zone, South Korean and Japanese officials said, in an apparent reaction to huge military drills by Washington and Seoul that Pyongyang insists are an invasion rehearsal. The letters on the top read “North Korea, fire missile.” AP/Lee Jin-man

Hwang did not elaborate, but his comment came days after The New York Times reported that President Dona ld J. Tr ump’s national security deputies recently discussed various options against North Korea, including the possibility of reintroducing nuclear weapons to South Korea as a bold warning. “If North Korea gets a hold of nuclear weapons, its consequences are too horrible to think about,” Hwang said. In his New Year’s Day speech, the North Korean leader, Kim Jong Un, said his country was in the “final stage” of preparing for its first ICBM test.

In Febr uar y t he Nor t h launched a ballistic missile that the US Strategic Command determined was not a threat to the US, but North Korea has said it is ready to test-launch an ICBM. The North ’s missile launching came as the US and South Korea were conducting t heir annual joint militar y exercise. North Korea calls such drills a rehearsal for invasion and has often responded by conducting missile tests. On Thursday the North Korean military called the joint exercise a drill for “nuclear war” and vowed to take unspecified strong measures. The next day,

Japan moves to highest alert level after N. Korea fires missiles

apan moved to the highest possible alert level after North Korea fired four ballistic missiles simultaneously into nearby waters, the latest provocation from Kim Jong Un’s regime. Three of the missiles fell into Japan’s exclusive economic zone, with one dropping about 350 kilometers west of the nation’s northern Akita prefecture, government spokesman Yoshihide Suga told reporters after a meeting of Japan’s National Security Council. Authorities were still analyzing the type of missile launched, he said. The launches “clearly show that this is a new level of threat” f rom Nor t h Korea, Japanese Prime Minister Shinzo Abe told lawmakers in Tokyo. American officials held phone calls afterward with counterparts in Japan and South Korea, which rely on the United States for security. While North Korea routinely test-fires missiles—including more than two dozen last year— the timing of these launches is particularly sensitive. Tensions have escalated in recent weeks between China and South Korea over American plans to deploy a missile-defense system known as Terminal High-Altitude Area Defense (THA AD) on the peninsula, part of measures to thwart Kim from gaining the ability to strike the continental US with a nuclear warhead. The launches also come as South Korea and the US undertake annual military drills that Pyongyang has called a prelude to an invasion, and right after the start of the National People’s Congress in Beijing—a gathering aimed at showcasing President Xi Jinping’s command over foreign and domestic affairs.

Rare public spat

Longtime allies China and North Korea had a rare public spat last month after Beijing banned coal imports last month after the death of Kim’s half-brother, Kim Jong

the North’s main state-run newspaper, Rodong Sinmun, hinted at more missile tests, saying, “New strategic weapons of our own style will soar into the sky.” North Korea has boasted of an ability to strike the continental US with a nuclear-tipped missile. It has never tested a missile capable of f lying across the Pacific, although it has displayed what outside analysts said were ICBMs during military parades in recent years. Strong doubt also remains over the North ’s claim that it can manufacture a nuclear warhead small enough to be fitted onto such a missile. But its test

Nam, in a Malaysia airport. Beijing accounts for more than 70 percent of its neighbor’s trade and provides food and energy aid. The missiles, launched early on Monday from the country’s northwest, flew around 1,000 kilometers into the East Sea, also known as the Sea of Japan, Roh Jae-cheon, spokesman for South Korea’s Joint Chiefs of Staff (JCS), told reporters in Seoul. There was a “low chance” the projectiles were intercontinental ballistic missiles (ICBM), he said. Kim Young-woo, a South Korean lawmaker and chairman of parliament’s National Defense Committee who was briefed by the JCS, said the projectile looks similar to the Pukg uksong-2 missile that North Korea testfired last month. “It seems like the North lowered the angle to aim longer in distance this time as part of its attempts to test it in various ways,” Kim said by phone, adding that he plans to convene his committee at 3 p.m. Since taking power about five years ago, North Korea’s Kim has fired dozens of missiles and conducted three nuclear tests in

defiance of a United Nations ban on his weapons development. In January, he said his country was in the final stages of preparations to test-fire an ICBM, prompting US President Donald J. Trump to retort on Twitter: “It won’t happen!” The yen reversed an earlier decline and gained 0.18 percent against the dollar. The Topix index of Japanese shares fell 0.18 percent, while South Korea’s benchmark stock gauge was up 0.16 percent. Seoul’s decision to deploy the THAAD missile-defense system has angered Beijing, prompting China to take economic retaliation. The China National Tourism Administration verbally ordered local travel agencies to stop selling tour packages to South Korea. The Korea Economic Daily said on Sunday, citing unidentified officials, that Chinese authorities suspended businesses of four Lotte Mart stores for a month.

‘Deeply concerned’

South Korea responded by saying it would ensure Korean companies don’t face unfair trade measures in China. South Korea’s

government is “deeply concerned about the measures taken in China and will closely monitor the situation and strengthen responses,” Trade Minister Joo Hyung-hwan said on Sunday. In addition to the two this year, North Korea fired at least 25 projectiles last year, according to the UN. Pyongyang also detonated two nuclear devices in 2016. Trump vowed to deal with North Korea “very strongly” after its February missile test. North Korea relations have fallen to their worst point in decades and talks are off the table until the regime is ready to give up its nuclear weapons, South Korea Unification Minister Hong Yong-pyo said last week in an interview. “It’s been over 20 years since North Korea’s nuclear threats started, and tensions are at their worst,” Hong, who oversees policy on North Korea, said in Seoul. “For the time being, the South Korean government’s stance is that the North should show a will to denuclearize,” he said. “That means any dialogue should be based upon denuclearization.” Bloomberg News

New York Times News Service

FBI chief pushes Department of Justice to refute Trump

A member of Japan Self-Defense Force stands by a PAC-3 Patriot missile unit deployed against the North Korea’s missile firing, at the Defense Ministry in Tokyo on Monday. AP/Shizuo Kambayashi

on February 12 demonstrated its advancing ballistic-missile technology. The test involved Pukguksong-2, a new intermed i ate -ra nge ba l l i st ic m i ssi le that the North said can carry a nuclear warhead. T he multiple missile launchi ngs i l lu st rated t he f r u st rat ion of t he Un it e d Nat ion s Sec u r it y Cou nc i l over its inabilit y to halt or contain North Korea’s nuclear ambitions w ith pu nit ive econom ic sa nct ions. An investigative report released a week ago by a panel of experts concluded that the country’s leaders had developed an international smuggling network to foil the sanctions and outmaneuver enforcement measures. The report described a matrix of North Korean companies with bogus identities used to accrue cash, technologies and materials for the government’s weapons development. In remarks to reporters on Mond ay mor n i ng , Yosh i h ide Suga, the chief Cabinet secretary to Japan’s prime minister, Shinzo Abe, said the missiles appeared to have fallen into the sea in an exclusive economic zone around Japan. Suga called the missile launch a “serious threat to our security”, as well as “extremely problematic behav ior from the v iewpoint of security of aircraft and ships”. He said the government had protested to North Korea. “We just cannot accept such repeated provocations,” he said.

ASHINGTON—Federal Bureau of Investigation (FBI) Director James B. Comey asked the Justice Department this weekend to publicly reject President Donald J. Trump’s assertion that President Barack Obama ordered the tapping of Trump’s phones, senior US officials said on Sunday. Comey has argued that the highly charged claim is false and must be corrected, they said, but the department has not released any such statement. Comey, who made the request on Saturday after Trump leveled his allegation on Twitter, has been working to get the Justice Department to knock down the claim because it falsely insinuates that the FBI broke the law, the officials said. A spokesman for the FBI declined to comment. Sarah Isgur Flores, spokesman for the Justice Department, also declined to comment. Comey’s request is a remarkable rebuke of a sitting president, putting the nation’s top law-enforcement official in the position of questioning Trump’s truthfulness. The confrontation between the two is the most serious consequence of Trump’s weekend Twitter outburst, and it underscores the dangers of what the president and his aides have unleashed by accusing the former president of a conspiracy to undermine Trump’s administration. The White House showed no indication that it would back down from Trump’s c l a i m s. La s t S u n d ay t h e p re s i d e nt demanded a congressional inquiry into whether Obama had abused the power of federal law-enforcement agencies before the 2016 presidential election. In a statement from his spokesman, Trump called “reports” about the wiretapping “very troubling” and said Congress should examine them as part of its investigations into Russia’s meddling in the election. In addition to being concerned about potential attacks on the bureau’s credibility, senior FBI officials are said to be worried that the notion of a court-approved wiretap will raise the public’s expectations that federal authorities have significant evidence implicating the Trump campaign in colluding with Russia’s efforts to disrupt the presidential election.

Comey has not been dealing directly with Atty. General Jeff Sessions on the matter, as Sessions announced last Thursday that he would recuse himself from any investigation of Russia’s efforts to influence the election. It had been revealed last Wednesday that Sessions had misled Congress about his meetings with the Russian ambassador during the campaign. Comey’s behind-the-scenes maneuvering is certain to invite contrasts to his actions last year, when he spoke publicly about the Hillary Clinton e-mail case and disregarded Justice Department entreaties not to. It is not clear why Comey did not issue a statement himself. He is the most senior law-enforcement official who was kept on the job as the Obama administration gave way to the Trump administration. And while the Justice Department applies for intelligence-gathering warrants, the FBI keeps its own records and is in a position to know whether Trump’s claims are true. While intelligence officials do not normally discuss the existence or nonexistence of surveillance warrants, no law prevents Comey from issuing the statement. In his demand for a congressional inquiry, the president, through his press secretary, Sean Spicer, issued a statement last Sunday said, “President Donald J. Trump is requesting that as part of their investigation into Russian activity, the congressional intelligence committees exercise their oversight authority to determine whether executive branch investigative powers were abused in 2016.” Spicer, who repeated the entire statement in a series of Twitter posts, added that “neither the White House nor the president will comment further until such oversight is conducted.” A spokesman for Obama and his former aides have called the accusation by Trump completely false, saying that Obama never ordered any wiretapping of a US citizen. “A c ardinal rule of the O bama administration was that no White House official ever interfered with any independent investigation led by the Department of Justice,” Kevin Lewis, Obama’s spokesman, said in a statement last Saturday. New York Times News Service

The World BusinessMirror

Tuesday, March 7, 2017

briefs

Peugeot to buy GM’s Opel, creating Europe’s No. 2 carmaker PARIS—General Motors Co. (GM) is selling its loss-making European car business—including Germany’s Opel and British brand Vauxhall—to French automaker PSA group. The €2.2 billion ($2.33 billion) deal announced on Monday in Paris by GM and PSA—maker of Peugeot and Citroen cars—will realign the industry and create Europe’s No. 2 automaker after Volkswagen. The combined company could make 5 million cars a year. PSA will join with French bank BNP Paribas in the purchase, which foresees taking over 12 manufacturing facilities that employ about 40,000 people, according to a joint statement by the companies. Amid concerns about job losses in multiple countries, PSA CEO Carlos Tavares promised to keep existing GM commitments to workers. AP

Australian trekker dies near Mount Everest base camp KATHMANDU, Nepal—An Australian trekker has died near the Mount Everest base camp, possibly due to high-altitude sickness, police said on Monday. The 49-year-old man died on Friday at Lobuche village, located just below the base camp, at 4,940 meters, said Nepalese police official Khil Raj Bhattarai. Police identified the man as Jones Matthew Oldisworth. His body was taken to Kathmandu, Nepal’s capital. Australian news reports said the man was from Melbourne. Thousands of foreign trekkers hike up to the base camp during the spring and autumn season, when the weather is favorable. The popular trek lasts about two weeks, and the trekkers are allowed only up to the base camp. Only climbers with a special permit are allowed to go beyond and attempt to scale the world’s highest peak. High-altitude sickness is also common for visitors to the area who are not used to the thinner level of oxygen. AP

E.u. to approve new military training headquarters BRUSSELS—The European Union (EU) is set to approve the creation of a headquarters for its military training missions in Somalia, Mali and the Central African Republic. EU foreign policy chief Federica Mogherini said she would urge foreign and defense ministers on Monday to “take immediate decisions on the establishment of a military planning and conduct capability.” She said it would provide a “more efficient approach to the existing military training missions we have.” The term “headquarters” is taboo in Brussels, with members like Britain saying the EU must not waste money by doing similar things to North Atlantic Treaty Organization (Nato.) Arriving for the meeting, British Defense Secretary Michael Fallon said just that, urging his European partners “to cooperate more closely with Nato to avoid unnecessary duplication and structures”. AP

Helicopter crash in central Japan mountains kills 9 TOKYO—Japanese authorities confirmed on Monday that all nine people aboard a rescue helicopter that crashed in snow-covered mountains in central Japan have been pronounced dead. The Fire and Disaster Management Agency said in a statement that the nine men—seven firefighters, an engineer and the pilot—were aboard a rescue helicopter that crashed during a training flight last Sunday. The helicopter, belonging to Nagano prefecture’s rescue unit, crashed on the side of Mount Hachibuse, about 250 kilometers northwest of Tokyo. TV footage showed the mangled aircraft buried in deep snow, sitting belly-up with its broken pieces scattered around. The cause of the crash was under investigation. Japanese public broadcaster NHK said the helicopter is a 15-seat Bell 420EP made by Bell Helicopter, based in Fort Worth, Texas. AP

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China’s congress cracks down on critics

EIJING—Chinese authorities have shut down activist Ye Haiyan’s blogs and forced her to move from one city to another. Left with few options, she now produces socially conscious paintings to make a living and advocate for the rights of sex workers and people with HIV or AIDS.

Using calligraphy brushes, Ye creates images of naked women and sex workers alongside symbols, such as the Chinese characters for equality, or paints roosters, a Chinese homonym for prostitute. “I’ve started to understand that painting is also a form of expression and the natural reflection of my thoughts,” Ye said. She was recently evicted from her last home in an artists’ enclave on Beijing’s outskirts ahead of the annual meeting of China’s ceremonial parliament that opened last Sunday. Far from the pomp of the 10-day gathering at Beijing’s Great Hall of the People, Ye is among those caught up in an annual roundup of people the ruling Communist Party consider threats to the state, all to ensure the session passes without incident. Known critics are placed under tightened restrictions and ordinary people coming to Beijing with grievances are prevented from traveling or snatched off the streets of the capital. This year’s meetings also come amid China’s broadest and most intense assault on civil society since nongovernmental groups were grudgingly allowed more freedom to operate more than a decade ago. Since coming to power almost five years ago, President Xi Jinping has shown little tolerance for dissent, and a sustained crackdown launched

100 The estimated number of people who the police arrested last year for exercising their right to freedom of expression

in July 2015 has seen hundreds of activists and independent legal professionals detained. More than a year and a half later, eight are still in detention or prison. “It has been worsening every year since Xi Jinping came to power and this past year has been no different,” said Frances Eve, researcher at the Network of Chinese Human Rights Defenders. Activists estimate that police arrested more than 100 people last year for exercising their right to freedom of expression, including Huang Qi and Liu Feiyue, who ran web sites reporting on human-rights abuses and critiquing government policies. A series of trials saw some activists convicted under vague l aws aga inst subversion a nd l e a k i n g s t a t e s e c r e t s , w it h prosecutors blaming unidentified troublemakers abroad for

Chinese Premier Li Keqiang’s image is displayed on a huge screen as he delivers a report at the opening session of the annual National People’s Congress at Beijing’s Great Hall of the People last Sunday. China’s top leadership, as well as thousands of delegates from around the country, are gathered at the Chinese capital for the annual legislature meetings. AP/Ng Han Guan

inciting antigovernment activity. China last year also passed a law tightening controls over foreign non-governmental organizations (NGOs) by subjecting them to close police supervision. “Promoting and protecting human rights is now considered a crime,” Eve said. Many of those convicted confess under duress, including torture by the police, she said. While China’s high court forbids such practices, they are believed to remain common within a police force with broad powers to arrest, question and detain. China routinely rejects accusations of human-rights abuses, pointing to vast improvements in quality of life wrought by three decades of economic development. Speaking at a news conference last month, foreign ministry spokesman Geng Shuang said China maintains a dialogue on improving human rights around the world, but added, “The Chi-

nese people have the right to say what the real situation of China’s human rights is.” The authorities rarely comment on activists such as Ye, who used to have thousands of followers online and her own NGO advocating for legalized prostitution and offering advice on sexual health. Her efforts, including protests against light sentences given to the abusers of schoolgirls, got her noticed by the public and, more ominously, the police, who she says pressured her to close her NGO and move several times. Worried about the impact on her 17-year-old daughter, she sent her to the US last month to study with help from a US-based filmmaker. Ye says she’s gotten a boost from internationally famous artist and activist Ai Weiwei, who bought one of her paintings “depicting a fat woman, a sex worker wishing to earn a lot of money and go home

to build a house.” A i previously bought up her belongings when she was evicted from an apartment in 2014 and ex hibited the household items—an old refr igerator, a washing mac hine, ca rdboa rd boxes—at one of his shows at the Brooklyn Museum. Ye reluctantly left her studio on the orders of police last week. An officer reached at the Songzhuang Public Security Bureau on Monday declined to comment on the case. Ye said she went to stay with friends in the countryside and within days again ran into pressure to leave. “The Communist Party secretary of the village told local residents not to rent to me because I’ve long been on the blacklist,” Ye said. “They think that a person like me should be the target for ‘social stabilization,’” she added, using the government’s term for suppressing dissent. AP

Iran indicts member of team in nuke-negotiation deal

E H R A N , I r a n — I r a n ’s judiciar y has indicted a member of the countr y’s team that negotiated the nuclear deal with world powers, a spokesman said last Sunday, likely an Iranian- Canadian national previously detained by authorities on suspicion of espionage. An Iranian-American also faces charges after allegedly taking $3.1 million from people after promising to help them emigrate to foreign countries, judiciary spokesman Gholamhosein Mohseni Ejehi said, according to reports by Iran’s official Islamic Republic News Agency. In the case involving the nuclear team member, Ejehi said it would be up to a court to decide whether to try the individual charged. Ejehi did not directly name the team member who had been indicted, nor did he explain what charges the indictment carried. However, Ejehi did say the person involved was a dual national with the initials D.E. That suggests the person indicted likely is Abdolrasoul Dorri Esfahani, a dual Iranian-Canadian national. Last August hard-line news outlets said authorities detained Esfahani, who reportedly worked as a member of a parallel team focusing on lifting economic sanctions as part of the deal. He later was granted bail, which is rare in Iran for those accused of having committed a serious crime. After the 1979 Islamic Revolution, Esfahani reportedly served as a member of the Iranian team working at The Hague on disputes between Iran and the United States over pre-revolution purchases of

Iranians walk through Tajrish bazaar in northern Tehran, Iran, on July 19, 2016. Iran’s economy rebounded out of a recession after the nuclear deal with world powers, the International Monetary Fund said on February 28, though uncertainty over future sanctions and problems plaguing the country’s domestic banks could cause fiscal trouble ahead. AP/Vahid Salemi

military equipment from the US by Iran. He is a member of the Ontario Institute of Chartered Accountants in Canada. He also has served as an adviser to the head of Iran’s Central Bank. The Associated Press could not reach Esfahani for comment. John Babcock, a spokesman for Canada’s Global Affairs department, said officials were aware of reports of the detention of a Canadian citizen in Iran, but declined to comment further. The nuclear deal remains a sore

spot for Iranian hard-liners, but it was a foreign-policy victory for moderate President Hassan Rouhani. Rouhani is widely expected to seek a second term in Iran’s May presidential election. Meanwhile, Ejehi announced the case against the unnamed Iranian-American, who presumably faces fraud charges. “The person has been detained but they were not a government official,” he said. The US State Department said it was “aware of media reports al-

leging the detention of an American citizen in Iran,” but declined to comment further. There have been several Iranian-Americans detained in the wake of the nuclear deal, which saw Iran agree to limit its enrichment of uranium in exchange for the lifting of some economic sanctions. A mong t hem a re I ra n i a nAmerican businessman Siamak Namazi and his octogenarian father, Baquer Namazi , who are serving 10-year prison sentences for “cooperating with the hostile

American government.” Also detained is Robin Shahini, who is serving an 18-year prison sentence for “collaboration with a hostile government.” Iran does not recognize dual nationalities, meaning that those it detains cannot receive consular assistance. In most of the recent cases, dual nationals have faced secret charges in closed-door hearings before Iran’s Revolutionary Court, which handles cases involving alleged attempts to overthrow the government. AP

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Malaysia protecting ‘dignity’ in expelling NoKor ambassador

alaysia is protecting its “sovereignty and dignity” by expelling the North Korean ambassador, the prime minister said on Monday, as relations between the countries frayed over the poisoning of Kim Jong Nam, the estranged half brother of North Korea’s leader. In an attack many believe was orchestrated by Pyongyang, Kim died less than 20 minutes after two women wiped VX nerve agent on his face at Kuala Lumpur airport on February 13, authorities say. The women, one from Vietnam and one from Indonesia, have been charged with murder. North Korea has denied any role in the killing and accused Malaysia of conspiring with its enemies. North Korean Ambassador Kang Chol has rejected a Malaysian autopsy that found Kim was killed with VX nerve agent, a banned chemical weapon. On Monday Prime Minister Najib Razak said the decision to expel Kang sent a clear message. “It means that we are firm in defending our sovereignty and dignity,” Najib said. “Don’t ever insult our country and don’t try to cause disruptions here.” Kang faced a Monday deadline to leave the country after authorities here declared him “persona non grata” last Saturday. Malaysia’s finding that VX killed Kim boosted speculation that North Korea was somehow behind 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, as Malaysian government officials have confirmed. Ri Tong Il, a former North Korean deputy ambassador to the United Nations, has said Kim probably died of a heart attack because he suffered from heart disease, diabetes and high blood pressure.

It means that we are firm in defending our sovereignty and dignity. Don’t ever insult our country and don’t try to cause disruptions here.” —Najib

Health Minister Subramaniam Sathasivam said pathologists have ruled that out. “We are saying, based on autopsy findings, there was no heart attack,” he told reporters at Parliament. Still, a lawyer for the Vietnamese suspect said news of existing health problems should be cause for a new autopsy. “When doctors performed the first autopsy, they had no information of [his] illness. This is very important because new information could be found,” attorney Selvam Shanmugam, who represents Doan Thi Huong, told Vietnam’s state-run online newspaper Zing. The two women accused of poisoning Kim say they were duped into thinking they were taking part in a harmless prank. Malaysia is looking for seven North Korean suspects, four of whom are believed to have left the country on the day of the killing. The 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. North Korea has a long history of ordering killings of people it views as threats to its regime. Kim Jong Nam was not known to be seeking political power, but his position as eldest son of the family that has ruled North Korea since it was founded could have made him appear to be a danger. AP

Editor: Max V. de Leon • Tuesday, March 7, 2017 A9

Australian leader to continue free-trade talks in Indonesia

We’re making very good progress there and I look forward to discussing it further when I’m in Jakarta tomorrow.” —Turnbull

Australian Prime Minister Malcolm Turnbull (right) meets with Indonesian President Joko “Jokowi” Widodo before the annual leaders’ talks at Admiralty House in Sydney on February 26. AP

ustralia’s prime minister said on Monday that he was looking forward to discussing a free-trade deal with Indonesia while attending a regional forum in Jakarta.

Malcom Turnbull on Tuesday will attend the first Indian Ocean Rim Association leaders’ summit in the 20-year history of the 21-nation organization. Turnbull’s one-day visit to Jakarta comes nine days after Joko “Jokowi” Widodo ended his first Australian visit as Indonesia’s president.

The leaders used that Sydney visit to commit to finalizing a bilateral free-trade agreement this year after 17 years of negotiations. Jokowi said the deal must remove all Australian barriers to the importation of Indonesian palm oil and paper. Turnbull has welcomed trade

concessions that Indonesia has already made, including reduced tariffs on Australian sugar and fewer restrictions on Australian live cattle imports. “We’re making very good progress there and I look forward to discussing it further when I’m in Jakarta tomorrow,” Turnbull told reporters in the Australian city of Melbourne. Indonesian trade official Thomas Lembong, chairman of Indonesia’s Investment Coordinating Board, told Australia’s Fairfax Media that his government wanted to see “concrete proof of unfettered and natural trade” in Indonesia palm oil, paper and wood products. David Brewster, an Australian

Asean haven status gives baht headache to Thai central bank

hailand’s popularity among bond investors is creating a headache for policymakers counting on exports and tourism to drive growth. Some $2.1 billion of foreign money has flowed into the nation’s debt this year, making it the top destination among Southeast Asia’s emerging markets. That’s buoying the baht, the region’s best developing-nation performer in 2017, and spurring speculation the currency will cope with rising US interest rates better than its peers. It’s also causing problems for policy-makers who are trying to revive an economy whose growth has slowed for the past two quarters. Bank of Thailand Governor Veerathai Santiprabhob said on February 23 that foreigners saw the country as a “safe haven” and the baht’s strength wasn’t helping the economy. “It’s an export-oriented economy, and if their currency is resilient while others are weakening, it’s negative for them,” said Masakatsu Fukaya, a Tokyo-based emergingmarket trader at Mizuho Bank Ltd. “The central bank may hint that it will take some steps to address the baht’s outperformance, or verbally intervene in the market.” With an economy registering a current-account surplus of more than 10 percent of GDP, as well as growing foreign-exchange reserves, foreign funds have been lured to Thai debt, but the country has also benefited as other Southeast Asian markets lost their luster. Investors have turned cautious on Malaysia due to changes to rules on forwards late last year that deterred currency hedging, while foreign funds already have big positions in Indonesian debt, said Vincent Tsui, an economist

$2.1B

The amount of foreign money that flowed into Thailand’s debt market this year

at AllianceBernstein Lp. in Hong Kong. Meanwhile, the travails of President Duterte have damped demand for Philippine assets. Foreigners own 8.4 percent of Thai bonds, according to a Bloomberg calculation using central bank figures, compared with 38 percent in Indonesia and 31 percent in Malaysia. The demand for Thai notes has helped drive a 2.2-percent increase in the baht against the dollar this year. That compares with advances of 0.8 percent in Indonesia’s rupiah and Malaysia’s ringgit, and a 1.3percent drop in the Philippine peso. Markets are positioning for a Federal Reserve (the Fed) interestrate increase next week, so inflows to the region are likely to moderate, said BOT Assistant Governor Chantavarn Sucharitakul. In the event that the Fed doesn’t hike, Thailand won’t be the only country that could see its currency appreciate, she said.

Appreciation bet

Thailand’s outsized external surplus makes the baht a one-way appreciation bet, according to Tim Condon, head of Asia research at ING Groep NV in Singapore and the most accurate Asian currency forecaster in Bloomberg rankings in the first half of 2016. The baht will end the year

at 34 a dollar, he said in a February 28 note, 3.1 percent stronger than current levels. The currency fell 0.1 percent to 35.05 a dollar as of 10:23 a.m. in Bangkok on Monday. If the currency does strengthen that much, it will make it difficult for Thailand to sustain a recovery in exports that started in the middle of last year. Overseas sales have risen in six of the eight months through January, after a run in which they dropped in 16 of the previous 17 months. China, the US and Japan take the most Thai shipments, in that order. The baht has rallied 10 percent against the yen over the past six months, and gained 2.3 percent against the yuan. It’s declined 1 percent against the dollar. Given the importance of exports to Thailand—they accounted for 69 percent of GDP in 2015, according to the World Bank—it will also make reviving economic growth tougher. GDP increased 3 percent in the fourth quarter from a year earlier, the slowest pace in a year, and more than 1.5 percentage points less than Malaysia, Indonesia or the Philippines. While the central bank has tools

to manage the baht, it can only reduce volatility and can’t go against the market trend, said BOT Governor Veerathai. In a sign the authority has probably been selling baht to stem gains, the country’s reserves stockpile has swelled 5.5 percent this year to $181.3 billion. “The baht’s appreciation could provide some headwind for the exports,” said Vasu Suthiphongchai, a Bangkok-based fund manager at Manulife Asset Management. “But the Bank of Thailand is doing its best to mitigate it, as evident in the rising foreign-exchange reserves from intervention.” After more than a year of disinflation, price pressures are quickly mounting across Southeast Asia as fuel costs rise, putting central banks on watch after years of policy easing. In Malaysia consumer prices rose at the fastest pace in almost a year in January and economists see that as closing the door on another interest-rate cut this year even though the economy could do with more stimulus. From Singapore to Thailand, central banks are bracing for faster inflation. The recent spike has been

mainly caused by oil prices, which have surged 25 percent in the past six months. In a region where countries like Indonesia have been prone to high inflation in the past, and currencies are vulnerable—notably in Malaysia— central banks will need to monitor closely for any signs that rising fuel costs are spreading more broadly to prices in the economy. “The obvious risk is that complacency leads central banks to miss inflation pressure spreading to the spending-driven CPI components, forcing more aggressive rate hikes and greater growth slowdowns down the road,” said Timothy Condon, head of Asian research at ING Groep NV in Singapore. The pick-up in inflation isn’t unique to Southeast Asia as higher commodity prices drive up costs across Asia. China’s factory prices have snapped years of deflation, with some analysts saying this is the hidden side of the global reflation trade. For now, core measures of inflation in Southeast Asia—which exclude volatile items, such as energy and food costs—remain contained, taking the pressure off central banks to take immediate action to tighten policy. In Malaysia, where inflation reached 3.2 percent in January, the core measure was at 2.3 percent. The government’s projection is for headline inflation to average 2 percent to 3 percent this year. “We’ve had a big swing from really depressed numbers,” said Sean Callow, a senior strategist at Westpac Banking Corp. in Sydney. “Until there’s evidence that core inflation is on the rise and wages up with it, I don’t think we’re going to have any inflation dynamic going on in the region.” Bloomberg News

National University researcher on Indian Ocean security, said he expected Turnbull would be one of the few national leaders to attend the summit that will be chaired by Jokowi. “His attendance at the meeting is probably primarily driven by the Jakarta relationship, wanting to show solidarity with Jokowi,” Brewster said. Turnbull later said in a statement that Australia had a fundamental interest in ensuring economic development in the Indian Ocean region and enhancing dialogue on shared security challenges. The summit will agree to a statement on shared values and objectives, including a commitment to international law, and a declaration on countering violent extremism. Australian interest in the grouping of predominantly developing states on the Indian Ocean fringe has deepened in the past five years, with the economic growth of India and China and a relative decline in influence in the region of the United States, Australia’s most important strategic partner, Brewster said. India is a member of the group, while China has observer status. AP

Managers can expect pay hike of 5% at most in Singapore

ingaporean managers and senior staff can prepare for 5-percent pay increases at most this year as the labor market stabilizes. About 93 percent of companies in Singapore say they will keep or raise headcount this year, according to a survey by recruitment consultancy Michael Page of almost 450 businesses in the city state. Only 36 percent said they will recruit new hires. Singapore’s unemployment rate recently hit a six-year high of 2.2 percent, though the country still remains one of the easiest places in the world to find work. Across Asia, 48 percent of the 3,400 companies in the survey said they plan to increase wages by 5 percent or less, compared with 58 percent of Singapore-based firms. “While employers have agreed that salaries are an important retention tool, other popular employee-engagement initiatives include opportunities for career progression and learning and development,” the consultancy said in a report. The hot jobs in Singapore are in the digital, technology and health-care industries, which is where Singapore’s government is pledging more investment. In the less buoyant financial services sector, financial-technology jobs should be helped by a funding plan in place to support locally based firms, according to Michael Page. The gig economy is also becoming a bigger feature in Singapore’s economy: 68 percent of all companies surveyed are using contractors, especially in technology and business support industries. More companies are adopting strategies such as annual leave, medical benefits and completion bonuses to attract more professional contract workers, said the consultancy. Bloomberg News

A10 Tuesday, March 7, 2017 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Hope for drug addicts

resident Duterte has been condemned by various sectors for allegedly condoning, if not directly ordering, the execution of people for drug-related offenses since he began waging his war against drugs. While the Philippines may have indeed become a precarious place for drug traffickers and their cohorts in the government under his watch, we would like to believe the President has also offered plenty of motivation and support for drug addicts who wish to turn a new leaf. Before Duterte’s term, there was no adequate budget for rehabilitation centers and community-based treatment programs. The biggest government rehab centers in terms of bed capacity were the National Bureau of Investigation-Treatment and Rehabilitation Center (NBI-TRC) in Tagaytay, the Narcotics Command (Narcom) facility in Bicutan and the NBITRC in Cebu City. There used to be only 11 government drug-rehab centers—five in Metro Manila, three in Luzon, two in the Visayas and one in Mindanao—clearly not enough to care for the conservative estimate of about 2 million drug dependents in the country, an estimate which had easily doubled by the President’s own admission after he launched his antidrugs crusade. There was always a shortage of beds in overcrowded government rehab centers, and the waiting list for drug dependents who recognized their addictions but did not have the money for professional treatment was increasing by the day. The majority of drug-rehabilitation centers were privately owned, and most families of drug addicts cannot afford the treatments they offer, which runs on the average upward of P40,000 a month. Since Duterte assumed office, there has been a significant effort to build new rehab centers with the help of the private sector, increase the bed capacities of existing ones and even include drug-rehab treatment in the coverage of the Philippine Health Insurance Corp. (PhilHealth). This year the construction of drug-rehabilitation centers has been earmarked in the Investment Priorities Plan of the Board of Investments (BOI), with the national government promising to build additional facilities on a P2-billion budget. In the last six months alone there has been an influx of funding from big businesses to help local governments provide for addiction treatment. D.M. Consunji Inc. started the ball rolling with a P23-million donation to the Department of the Interior and Local Government’s program for rehabilitating addicts, but things quickly escalated. San Miguel Corp. is now building a network of drug-rehab centers in various areas around the country, including facilities in Bataan, Pampanga, Cavite and Cebu, under a P1-billion grant it committed to give the government. In Marawi City in Lanao del Sur, Jaime Augusto Zobel de Ayala and Fernando Zobel, representing the Ayala Foundation, signed an agreement with local officials to build the first drug-rehab center in the city, a four-story, 70-bed facility called Siyapen, the Maranao word for “care”. After meeting with Duterte, Chinese real-estate billionaire Huang Rulun, who traded in Binondo in the 1980s, funded the construction of a massive 10,000-bed rehab center worth P1.4 billion inside Fort Magsaysay in Nueva Ecija. Businessman Andrew Tan, who owns property developer Megaworld Corp., liquor firm Emperador Inc., McDonald’s Philippine master-franchise owner Golden Arches Development Corp. and gambling firm Travellers International Hotel Group Inc., signed a partnership agreement with several government agencies to build another rehab center in Taguig, in a 6,852-square-meter land in Camp Bagong Diwa that can accommodate 500 addicts. Resorts World Manila, through its corporate foundation, is also funding the construction of a 1.2-hectare, 224-bed rehab center in Barangay Malagos in Davao City worth P200 million. Many other provinces, cities and towns have rallied to follow suit, starting their own treatment programs for addicts with the help of the private sector. Meanwhile, PhilHealth approved in January a P10,000 benefit package for the medical detoxification of its drug-dependent members. It is incumbent upon the government as part of its comprehensive strategy against illegal drugs to find ways of providing more low-cost drug treatment programs for addicts. In this effort, the Duterte administration has not been entirely remiss, even while most media attention has been focused on its all-out effort to catch, prosecute and yes, at times, even kill drug pushers and traffickers in the country.

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THE Entrepreneur Continued from A1

N the Philippines, which boasts of large tracts of fertile lands, establishing food security is a continuing and sometimes daunting struggle, not only because of the many destructive typhoons that visit every year, but other factors, as well.

One of these is the aging of the Filipino farmer: I have seen reports saying the average age of Filipino farmers at present is 57 to 59, which means they’re almost at retirement age, and will soon join the ranks of senior citizens. It also means that new generations of young farmers are not going to the agriculture sector. The title of an article published by IRIN, an online publication focusing on crisis issues, seems prophetic: “Filipino farmers—a dying breed?” The article, published in February 2013, quoted an agriculture department official as saying that, with an average age of 57 years and assuming an average life span of 70, the Philippines might experience a “critical” shortage of farmers in 15 years. We may be seeing that even now. I saw some newspaper reports say-

ing farm owners in Central Luzon were already finding it difficult to hire workers during the planting and harvesting season. The classical Filipino song, “Magtanim ay ’di biro”, offers a good explanation on why the children of farmers no longer want to follow in their parents’ footsteps. The parents themselves, who endured decades of backbreaking work and poverty, naturally want their children to have better lives. That’s Filipino culture and is part of our family values. Based on government reports, poverty incidence is highest in the agricultural sector. So, for many farmers and their children, the way out of poverty is out of farming and into other means of livelihood, like working in the industrial sector or in the business-process outsourcing

industry. With the growing urbanization in many parts of the country and the revival of many industries, like manufacturing, the Philippines is gradually shifting from a mainly agricultural into an industrial economy. This serves as an attractive magnet for the youth in the agricultural communities. As I said at the beginning, however, we cannot abandon agriculture because food security is vital to our survival as a nation. The aging of Filipino farmers may lead to food insecurity. I think the issue regarding the number of farmers is affected by the structure of farming itself. It requires many workers because of the small size of farms. The 2012 Census of Agriculture of the Philippine Statistics Authority (PSA) reported 5.56 million farms covering 7.19 million hectares, which translated to an average area of 1.29 hectares per farm. According to the report, 99 percent, or 5.51 million, of the farms in the country were operated by the households or by individual persons. These farms covered 6.78 million hectares or an average area of 1.23 hectares per farm. Farms operated by partnerships accounted for 0.8 percent of total farms and corporations a mere 0.04 percent. The solution is not to maintain a large number of farmers but to make

Things are not what they appear to be John Mangun

OUTSIDE THE BOX

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Of aging farmers and food security

ou have to admit it. It is tough being a human being. Look at your family dog’s life—eat, sleep, bark at strangers and then sleep some more.

But, certainly, our difficulties come from having awareness and consciousness, what some might call a soul. However, three is also a physical aspect to awareness. You can look into a mirror and know that you are looking at a reflected image of your own face, noticing that smudge of spaghetti sauce on your chin. All humans can do that. Interestingly, though, some members of certain animal groups can do the same thing. Scientists have developed the “Mirror Test”, when a smear of scentless white dye is put on an animal’s face and then the subject is placed in front of a mirror. Seventy-five

percent of young-adult chimpanzees put a hand to their own face and try to rub off the dye. They have the self-awareness to realize they are looking at their own image and something is not right. Maybe what separates man from the beasts is that we have a daily flood of information. And facts are complicated to process and digest. While there has been a huge proliferation of “fake news”, studies have shown that 80 percent of us can relatively quickly discern between what is probably true and what “facts” are false, exaggerated, or incomplete. But it is disturbing that maybe 20 percent still believe the tabloid headline that

“Tom Curse is a Space Alien”. However, we desperately need the world to at least seem less complicated. It was much easier to explain that thunder was the result of the god Thor pounding his hammer. But that is not the case and most of what we see and hear needs a warning like on the side mirror of cars made in the United States and Canada: “Objects in mirror are closer than they appear”. The Protestant Reformation against the “false doctrines and ecclesiastic malpractice” of the Roman Catholic Church was supposedly this great religious, intellectual and cultural awakening. The political and economic power of the church in Europe was forever diminished. But was there more to it? In the three decades after excommunicated German priest, Martin Luther, posted his “95 Theses” of objections to Catholic teachings, virtually all of the Reformation leaders were given employment by what we would now call “Big Government” and “Big Business”. Catholics could not lend money for interest or any type of fee under the sin of usury. It was the Catholic

farming a productive and profitable enterprise. One expert I met recently told me that raising productivity does not require increasing farm areas but using hybrid seeds that produce more than the traditional seeds. Experts who spoke at a forum last year said farming could be a profitable venture through consolidation of farms, which would require a fewer number of operators. This and the use of hybrid seeds and other technology will help farming gain economies of scale. Dr. Santiago R. Obien, senior technical adviser of the Department of Agriculture’s National Rice Program, said during the forum that in developed countries, farmers make up only about 3 percent of the population. He cited South Korea, whose farming population declined from 53 percent of the total population in 1960 to 16 percent at present. These farmers, according to Obien, are well-off. Encouraging consolidation or corporate farming will not only solve the anticipated shortage of farmers but also help achieve the goal of food security. Let’s not stop the youth from the farms who want to seek their fortunes in the cities and industries, but let’s help those who stay become successful entrepreneurs in the farms. For comments, e-mail mbv.secretariat@gmail. com or visit www.mannyvillar.com.ph.

want-to-be bankers—political and economic elite hiding in the shadows —who funded the Protestant Reformation. The rise of Protestantism in the 16th century weakened Rome’s influence, and its dictates against usury became irrelevant in many areas. The Swiss reformation leader John Calvin wrote in 1545 criticizing the use of certain passages of scripture invoked to oppose the charging of interest. This marked the start of the development of banking in Northern Europe and what we now call “capitalism”. We are told that the world is caught in a negative—or positive depending on your personal opinion—populist uprising against the established order. The “people” are taking back political power and it is effecting elections, law-making, and even the currency exchange rates, according to one central bank governor. But things are never what they appear to be. E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stockmarket information and technical analysis tools provided by the COL Financial Group Inc.

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Opinion

Bridge to progress

What’s next after Paris Accord ratification?

BusinessMirror

Ernesto M. Hilario

ABOUT TOWN

he aggressive infrastructure program of the Duterte administration is off to another good start with last week’s groundbreaking ceremony for the Cebu-Cordova Link Expressway (CCLEx). President Duterte was guest of honor at the event, where he joined local officials, as well as key officers of Metro Pacific Investments Corp. (MPIC) and its subsidiary, Metro Pacific Tollways Development Corp. (MPTDC), in getting the project off the ground. The CCLEx will connect Cebu City to the municipality of Cordova. It will be an 8-kilometer toll bridge facility consisting of a main bridge stay cable, an approach viaduct, on-and-off ramps, toll plaza and secondary bridges. It will cost P27.9 billion to build. “It not only symbolizes the future we are trying to get to, but also demonstrates the progress that we’ve already made to get to this day,“ said

commerce, real-estate development, and tourism-related activities in Cebu province as a whole.

Why can’t we defeat Abu Sayyaf?

The Abu Sayyaf bandit group has been around since the mid-1990s— more than two decades, in fact—and committed many atrocities, but it looks like the government is unable to annihilate them. Last we checked, the military had fielded close to 10,000 troops to hunt down the bandits who have terrorized Mindanao from their strongholds in Basilan and Sulu and have launched kidnapping-for-ransom, beheadings of captives and bombings.

CCLEx is considered a trailblazer because it is the first public-private partnership outside Metro Manila and is the first bridge venture of MPIC/MPTDC. The P27.9-billion budget includes right-of-way costs, as well as the rehabilitation of Guadalupe River. The project was fasttracked by using the PPP provision of the Local Government Code. MPTDC, through its subsidiary, Cebu-Cordova Link Expressway Corp., will design, build and operate the bridge. MPTDC currently operates some of the country’s major expressways, such as the North Luzon Expressway, Subic-Clark-Tarlac Expressway and Manila Cavite Toll Expressway. Manuel V. Pangilinan, chairman of MPIC and MPTDC. CCLEx is considered a trailblazer because it is the first public-private partnership (PPP) outside Metro Manila and is the first bridge venture of MPIC/MPTDC. The P27.9billion budget already includes right-of-way costs, as well as the rehabilitation of Guadalupe River. The project was fast-tracked by using the PPP provision of the Local Government Code. MPTDC, through its subsidiary, Cebu-Cordova Link Expressway Corp. (CCLEC), will design, build and operate the bridge. MPTDC currently operates some of the country’s major expressways, such as the North Luzon Expressway, Subic-Clark-Tarlac Expressway and Manila Cavite Toll Expressway. The CCLEx is one of the biggest infrastructure projects outside Manila implemented since Duterte became President. CCLEx underscores MPIC’s full support for Duterte’s inclusive growth agenda anchored on an aggressive infrastructure build-up. The project will further boost MPIC status as No. 1 in the Philippine tollroad business. The governors of Cebu and Bohol fully support the project and are looking forward to more bridges to be built connecting the islands in the Visayas and Mindanao. The expressway will be the third bridge that will link Mactan Island and mainland Cebu. The project will benefit Cebuanos in more ways than one. Vehicle traffic is expected at 40,000 once the bridge is completed by 2020. It will not only ease traffic congestion in Metro Cebu, but also benefit plane passengers as this bridge will have a direct link between Cebu City and the Mactan-Cebu International Airport. For Cordova Mayor Mary Therese Sitoy-Cho, the new bridge will boost Cordova’s local economy and allow it to become one of the highly urbanized cities of Metro Cebu and eventually become a competitive ecotourism gateway in the Visayas. The construction of the bridge will open up 5,000 jobs to residents of Cordova. The project will also provide an additional source of revenue to the town from taxes and permits. The bridge project will generate jobs, as well as boost trade and

The latest atrocity by the Abu Sayyaf Group is the beheading of their German captive, Juergen Gustav Kantner, after the deadline they imposed for the ransom payment lapsed on February 26. The bandits demanded P30 million in ransom for the release of Kantner, whom they seized in November last year. The military estimates that the strength of the Abu Sayyaf is only around 200 to 400 men, yet they have managed to keep the military at bay despite its formidable land (infantry, crew-served weapons and tanks), air (attack helicopters and lately even supersonic jets) and sea (various patrol craft capable of intercepting small but fast seacraft). On February 25 the Philippine Air Force launched air strikes against the bandits in Sulu as the deadline approached for the group to behead its German captive. What is clear is that the purely military approach is not working. The Abu Sayyaf apparently draws logistical and moral support from communities where it operates. Besides, they have intimate familiarity with the jungle terrain. At this point, we must ask why the Abu Sayyaf is still operating in Sulu, where the Moro National Liberation Front (MNLF), led by its founding chairman, holds sway. Is the MNLF actively supporting the Abu Sayyaf despite Misuari’s recent pledge to help the Duterte administration achieve peace in Mindanao? The long-term solution to the Abu Sayyaf clearly lies in socioeconomic programs that will uplift the living conditions of Basilan and Sulu which are among the poorest provinces in the country. But the government cannot even set up livelihood programs in communities where the Abu Sayyaf operates. Thus, the need for the Armed Forces of the Philippines to relentlessly go after the bandits and win over the communities that support them. We see the Abu Sayyaf continuing to kidnap both foreigners and locals and hold them for ransom unless the Duterte administration is able to put a stop to their attacks on government forces and atrocities against innocent civilians.

E-mail: ernhil@yahoo.com.

Edgardo J. Angara

resident Rodrigo R. Duterte recently approved the historic Paris Accord on Climate Change, which the Senate is expected to ratify soon. Despite his previous misgivings, it appears the President changed his mind when most of his Cabinet were for the deal and when it became clear the Philippines could still revise or renegotiate its pledge—or intended nationally determined contribution (INDC)—of reducing carbon emissions by 70 percent by 2030.

The next big step is to implement and rally the people behind helping achieve the goal of limiting global warming to 2 degrees Celsius or less from pre-industrial levels. Ratifying the deal will enable the country to avail itself of the United Nations’ Green Climate Fund (GCF), consisting of funds, technology transfer and capacity-building.

When the GCF was founded in 2010, several industrialized countries committed to put up a fund of $100 billion a year by 2020. So far, $10.3 billion has been pledged and as of February 28, 2017, $1.5 billion has been raised for mitigation and adaptation projects in developing countries. The GCF aims to finance projects that help reduce carbon emissions by

Tuesday, March 7, 2017 A11

promoting renewable-energy (RE) generation and energy efficiency in transport, buildings, cities, industries and home appliances. It also targets increasing climate resilience in health, food, water security, livelihood, infrastructure and ecosystems—especially in developing countries. Our technical and environmental experts should identify our own areas of priority and begin to craft initial project plans for which foreign funding could be applied. We could learn from what has already been done around the world in terms of climate-change mitigation and adaptation. Or, more important, turn to our experiences with great natural disasters, like Supertyphoon Yolanda. But are we ready to implement the Paris Accord? For years the UN has lauded our climate-change laws to be among the most progressive and forward-looking in Asia, if not the entire world. For example, the Climate Change Act of 2009 (Republic Act [RA] 9729)

Who pays protection money? Paul Donovan

he Trump administration is contemplating different methods of trade protection. Whether through tariffs or a border tax, trade protection is a consumer tax. The tax distorts markets to persuade consumers to buy more expensive domestic goods they do not want, instead of cheaper imported goods they do want. A trade protection tax may protect jobs in inefficient domestic industries. Those jobs are paid for through a lower real standard of living (the cost of the tax). From a presentation perspective, a trade protection tax can be made to look attractive. The benefit of “1,000 American jobs saved ” is more tweetable than the cost of “0.2-percent increase in prices”. Economically, the costs nearly always outweigh the benefits, but in a world of hashtag economics, reality often loses out to fake news. A consumer tax has the potential to redistribute living standards. Different people buy different sorts of goods and services. Thus, different people will be affected in different ways by a consumption tax. Looking at trade

in value-added data and different consumption patterns, economists can get a sense of which groups in America suffer most under a trade protection tax. If a trade protection tax were applied by product, then trade protection against something like food imports would do far more harm to the living standards of low income Americans than to high income Americans. Low income Americans spend a relatively high proportion of their incomes on food. The impact of trade protection on food would be almost 70 percent more serious for the lowest income Americans than for the highest income Americans. It is a different situation for cars. Low income Americans do not buy new cars. Trade protection against

Edsa revisited Cecilio T. Arillo

database Conclusion

Passing of the Torch

O brand President Corazon “Cory” C. Aquino as a “plain housewife” is an understatement. Lest we forget, Cory is the daughter of a prominent haciendero in the province of Tarlac, with affluent family members entrenched in politics and business. She married Benigno “Ninoy” Aquino Jr. who also hails from an influential family in Central Luzon. The Aquinos themselves, although not

as landed as the Cojuangcos, were well-todo. Ninoy’s great grandfather pioneered sugarcane planting in Concepcion, Tarlac, and became that town’s mayor in 1885. Ninoy’s father, Benigno Sr., inherited Hacienda Tinang, and followed in Don Braulio’s political footsteps. Given the number of politicians from families with sugarcane plantations, one may well believe that the Lord intended the one-year gap between plantings to be devoted to politics, fully or in combination with those other divertissements of the gentleman-farmer—touring the world, cockfighting, raising thoroughbred horses, adding the latest cars to the garage, or some other way of spending

superfluous fortune. The Cojuangcos and the Aquinos were good examples of plutocracy—power drawn out of wealth, and wealth begotten from power. It is not surprising, therefore, that Cory’s sympathy were for the elites, primarily, of course, for her family members. The controversial sale of Philippine Airline stocks to an investment group headed by her relatives, the bargain sale of numerous companies to her brother-in-law Ricardo “Baby” Lopa, the bequest of the Philippine Long Distance Telephone Co. (PLDT) to her Cojuangco nephews, and the overt refusal to redistribute the Hacienda Luisita lands to peasant farmers as promised, to name a few, were proof of Cory’s measures to

car imports, therefore, has little direct consequence for a low income American. However, high income Americans have a strong inclination to buy new cars, and as their cars are either imported or contain a high number of imported components, the impact of trade protection in the auto sector hurts high income Americans over three times as much as it hurts low income Americans. Looking across the spectrum of products for which we have data, tariffs on products other than cars will consistently hurt low income Americans more than they will hurt high income Americans. This, perhaps, helps to explain the increasing concern expressed by Republican, as well as Democrat politicians in the US, about the consequences of tariffs for “working Americans” (although the damage to retired Americans, who are disproportionately low income, is potentially more severe). What happens if the trade protection is not applied to specific sectors, but is instead a blanket tax on a country or group of countries? Again, there is a difference as to whether the auto sector is included. For low income Americans, a universal trade protection tax against China would be about twice as damaging as a tax against

protect their wealth and nothing but their wealth alone. Oligarchic families breed political dynasties, and with the passing of the torch to the second Aquino president, it is almost expected that the vicious cycle will continue. In fact, in a July 2015 report, research group Ibon stated that one of the clear legacies of the [Noynoy] Aquino administration is the “wealth of richest tripled”. The report further declares: “What government claims to have been inclusive growth benefited only a few families and corporations. The wealth of the 10 richest Filipinos has more than tripled at 250 percent from P650 billion in 2010 to P2.2 trillion in 2015. Twelve Filipino billionaires have joined the world’s billionaires listed in Forbes Magazine, among them Henry Sy who rose from 97th a year ago to 73rd wealthiest in the world in 2015.” Another fact, Ibon noted, is that “in the middle of Aquino’s term, the combined net worth of the 25 richest Filipinos was equivalent to the combined income of more than 70 million poorest Filipinos”. Huge sectors of Filipino industries are almost entirely monopolized by a few elite political families. One of these families’ juicy cash cows is the publicprivate partnerships (PPPs), where the government spends billions to guarantee their profits. Proof of this is the P57.2 billion allocation for PPP projects from the 2015 national budget. Meanwhile, only a small group of corporations seem to qualify for PPP projects

mandates that each LGU should craft a local climate change action plan (LCCAP). However, in November 2016, the Climate Change Commission (CCC) reported that since 2013, only 167 cities and municipalities out of the 1,634 across the country—or only 10 percent—have completed such LCCAPs. Close to a decade after the country enacted the Renewable Energy Law of 2008 (RA 9513), the uptake of RE technologies is still very sluggish, bogged down in part by the myth that RE is still more expensive than traditional energy sources. But, the fact is, the cost per megawatt of solar has already dropped by 80 percent and wind by almost 50 percent since 2010. Many have said that since Yolanda, the Philippines has gained a measure of moral suasion to demand concerted global action against climate change. Now is the time for the Philippines to walk the talk. E-mail: angara.ed@gmail.com, Facebook and Twitter: @edangara

the Euro area, and about three times as damaging as a tax against Mexico. That may seem surprising, but Mexican goods have a high US component to them, meaning that “Made in Mexico” is more “Made in Mexico with US help”. For high income Americans, a trade protection tax against China is about twice as damaging as a tax against Mexico—higher income Americans are less inclined to buy goods made in China than are low income Americans. A trade protection tax is a direct tax on the living standards of Americans. For most goods other than cars, it is a tax that will be paid disproportionately by low income Americans. Paul Donovan’s latest book The Truth About Inflation was published by Routledge in April 2015. Visit www.ubs.com/pauldonovan for more research. Paul’s commentaries in the UBS series of documentaries on Nobel Laureates in economics is available at www.ubs.com/nobel. Paul Donovan is the managing director and deputy head of global economics of Zurich-headquartered UBS. He is responsible for formulating and presenting the UBS Investment Research global economic view, drawing on the bank’s worldwide resources. Donovan took up philosophy, politics and economics at Oxford University. He holds an MSc in financial economics from the University of London. In the Philippines his column will appear exclusively once a month in the BusinessMirror.

amounting to as much as P189 billion— those companies owned by Sy, Ayala, Pangilinan and Cojuangco. This is while millions of regular Filipino workers keep on struggling with low income and wages. Wages barely increased but the prices of commodities and utilities kept on increasing. According to Ibon, in nominal terms, the average daily basic pay is only P367.35 for all industries, with workers in private households and agriculture receiving the lowest pay. The real value of average daily basic pay nationwide increased only by P9, or 3.5 percent, in the period between 2010 to 2014. As a result, the country’s few rich became richer while the greater population who are poor, became poorer. This is again due to the fact that the government’s pro-elite policies are bent on serving the profit-seeking interests of big businesses, even at the expense of millions of Filipinos suffering in chronic poverty. To quote the words of Louie Montemar, a political science professor at Manila’s De La Salle University, little is being done to destabilize the Philippines’s oligarchical dominance of the elite. He tells Agence France-Presse in an interview: “There’s some sense to the argument that we’ve never had a real democracy because only a few have controlled economic power. The country dances to the tune of the tiny elite.”

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

2nd Front Page BusinessMirror

A12 Tuesday, March 7, 2017

Palace OKs 3-year investment blueprint M By Elijah Felice Rosales @alyasjah & Catherine N. Pillas @c_pillas29

alacañang has approved the 2017 Investment Priority Plan (IPP) that lists 10 preferred areas for the grant of fiscal incentives, noticeable of which is the inclusion of rehabilitation centers to reflect the Duterte administration’s war on drugs. T he Board of Investments (BOI) said it is now finalizing the general policies and specific guidelines of the new threeye a r i nvest me nt s blue pr i nt , which sets an end to the grant of perks to business-process outsourcing firms in Metro Manila

by 2019, consistent with the drive to funnel fresh capital to the provinces. “The list differs significantly from the 2014 IPP with the inclusion of more micro, small and medium enterprise-oriented, innovation-driven, health and en-

vironment conscious activities. There is a deliberate policy to shift investments to the countryside,” the memorandum read. The preferred activities include: all qualified manufacturing, including agri-processing; agriculture, fishery and forestry; strategic services; infrastructure and logistics, including LGU-PPPs; health-care services, including drug rehabilitation; mass housing; inclusive business models; environment and climate change; innovation drivers; and energy. The President, through Memorandum Order 12, Series of 2017, required “all government agencies and entities…to issue necessary regulations to ensure [the] implementation [of IPP] in a synchronized and integrated manner”. It also mandates the chairman of the BOI to submit an annual report to the President on the achievements and execution of the IPP. The new IPP “reflects the administration’s desire to see economic growth spread to a broader segment of the population”. It intends

to intensify the implementation of the government’s comprehensive national industrial strategy. The BOI is set to conduct IPP road shows in key cities all over the country to inform and promote to the various stakeholders the salient features of the new IPP. Among the more contentious areas of the new IPP is the lowering of the price ceiling for incentives-eligible low-cost housing from the previous P3 million to P2 million per unit. The BOI also limited the location of qualified housing projects to those outside of Metro Manila. The scope of manufacturing activity, however, has been expanded to boost investments in the sector. For tourism, the BOI eased the geographical limitations on incentives availment for hotel development. In the previous IPP, hotel developments in Metro Manila, Cebu City, Mactan and Boracay are not entitled to income-tax holiday. Accommodation developments in these area are now eligible for incentives, except for Boracay.

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Mines absent in 10 poorest provinces G

overnment data belie the claim of Environment Secretary Regina Paz L. Lopez that mining brings hardships to communities, as records show that none of the 10 poorest provinces in the country hosts a mine, a mining executive said. “Studies do not support the contention that mining increases poverty incidence in the area where it operates. On the contrary mining spikes the household income in mine sites. Barangay Didipio in Nueva Vizcaya, host community of OceanaGold’s Didipio Mines, has interesting numbers on income level, employment sources and crops production,” said Chito Gozar, OceanaGold senior vice president for Communications and External Affairs. Data from the Philippines Statistics Authority in 2015 First Semester Poverty Statistics listed among the poorest provinces Lanao del Sur, Sulu, Sarangani, Bukidnon, Siquijor, Northern Samar, Maguindanao, Bukidnon, Sultan Kudarat, Zamboanga del Norte and Agusan del Sur. Gozar said these provinces do not host a mine yet achieved the highest poverty incidence rate, with 70.2 percent for Lanao del Sur, 61.8

in Sulu and 54.5 in Saranggani. Results of the 2015 socioeconomic assessment conducted by UPLB Foundation covering the Didipio Mine’s host and neighboring communities indicate a significant increase in the mean household income in most of the communities covered by the Social Development Management Program, with Didipio having a mean household income of P19,380, which is above the Philippines national average income (P17,166) and the national poverty threshold (P18,935). A major change in the economy of Didipio took place with the entry of OceanaGold into the barangay to mine. Previously an agricultural settlement, farming was the primary source of household income. Didipio residents shifted from farming to wage/salary earners, 86 percent of them with a few households (12 percent) sticking to farming and small business operators (5 pecent). The shift may be attributed to the employment opportunities created by OceanaGold and other private firms operating in affiliation with the mining operations for better income and security of tenure.