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A broader look at today’s business Wednesday, March 7, 2018 Vol. 13 No. 147

Days of ‘no quorum’ at lower house over

By Cai U. Ordinario @cuo_bm & Samuel P. Medenilla sam_medenilla

Following the Philippine Statistics Authority’s (PSA) release of data on Tuesday, which showed that inflation rose to a three-year high of 4.5 percent, economists said consumers should brace for higher commodity prices.

Ateneo Center for Economic Research and Development (Acerd) Director Alvin P. Ang told the BusinessMirror that this was mainly caused by high food prices. “[Higher inflation rate] is expected. I think it’s because of rice.

The inflation rate in February

The government was not able to manage the issue well. Prices were supposed to increase, but not by much,” Ang said. The National Food Authority’s (NFA) announcement that its stockpile would last for only 1.7 days encouraged private traders to jack up rice prices. Ang said this is due to the failure of the government to communicate properly the rice situation.

PESO exchange rates n US 51.9430

he previous Congresses were hounded by quorum woes that derailed the passage of important measures. But this is no longer the case in the 17th Congress, which started a habit of ensuring the legislative mill is always churning during session days. With this, Majority Leader Rodolfo C. Fariñas Sr. of the First District of Ilocos Norte said the lower chamber—which has 56 standing committees—remains on track with its legislative agenda. He said lawmakers have vowed to exert all efforts to pass pending measures identified as priorities of the 17th Congress and the Legislative-Executive Development Advisory Council. This is despite the impeachment process against Chief Justice Maria Lourdes A. Sereno and the move to change the 1987 Constitution. “Under the leadership of Speaker [Pantaleon] Alvarez, we will even work harder and better for the good of the people,” Fariñas told the BusinessMirror.

Daily roll call

Fariñas said the lower chamber will continue to implement a Continued on A2

One Charter under siege: Would amending Constitution enhance PHL economic devt?

@jonlmayuga @akosistellaBM Special to the BusinessMirror

By Jovee Marie N. dela Cruz @joveemarie

Foreign and local tourists go about their business, unaware of the possible fate of Boracay. Task Force Boracay—composed of the secretaries of the departments of Environment and Natural Resources, the Interior and Local Government, and of Tourism—has discussed the possibility of closing the world-famous island resort for two months. Stella Arnaldo

the Interior and Local Government (DILG) to declare a state of calamity in Boracay. “If Boracay is under a state of calamity, assistance could be given to those who will be displaced financially,” the President said in his speech during the oathtaking of the members of the Presidential Anti-Corruption Commission at the Rizal Hall in Malacañang. It had been expected that Duterte would

@joveemarie

BMReports

By Jonathan L. Mayuga & Ma. Stella F. Arnaldo

By Jovee Marie N. dela Cruz

See “Inflation,” A2

Cimatu tasked to decide on closure of Boracay nvironment Secretary Roy A. Cimatu, who was reportedly authorized by President Duterte to decide on the fate of Boracay, will assess the cooperation of Boracay stakeholders in the implementation of remedial measures before he makes a final recommendation on the island’s possible closure. “If they will not cooperate, well, the secretary might eventually recommend closure,” lawyer Jonas R. Leones, Cimatu’s designated spokesman, told the BusinessMirror. “Given our deadline by the President, the DENR secretary is determined to work faster and the cooperation of all stakeholders is needed.” Government sources, who attended the Cabinet meeting on Monday that stretched late close to midnight, confirmed the decision of Duterte to wait for Cimatu’s recommendation. “The DENR was given the authority to decide whether or not to close Boracay, per [instruction of] President Duterte,” said a government source in a Viber message to the BusinessMirror. Leones said this means “the President has faith and trusts Secretary Cimatu.” But President Duterte said on Tuesday he is mulling over the proposal of the Department of

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‘Higher February inflation rate no cause for concern’ 4.5% T he acceleration of inflation in February and expectations that prices would continue to rise in the coming months do not warrant an increase in wages and an adjustment in key policy rates, government officials and local economists said on Tuesday.

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decide on the fate of the popular island-resort after Cimatu would have presented an update on what Task Force Boracay has accomplished so far since being instructed to rehabilitate the island. Aside from the DENR, the task force members include the departments of the Interior and Local Government, Tourism, Public Works and Highways, and of Justice. See “Cimatu,” A12

Part Three

NOTHER lawmaker who believes amending the 1987 Constitution would benefit the country is Party-list Rep. Eugene Michael de Vera of the Arts Business and Science Professional (ABS).. De Vera believes relaxing the economic provisions of the Charter would spur economic growth. He believes provisions that need to be liberalized are three sections of Article XII (National Economy and Patrimony) and one section of Article XVI (General Provisions). The first set refers to ownership of private lands, corporations and public utilities that the Constitution said should only be vested in

rightful heirs and/or natural-born citizens of the Philippines. The majority stake (60 percent) in these entities should be wholly owned by Filipinos, the sections upheld. Section 11 of Article XVI on General Provisions, meanwhile, states that the ownership and management of mass media shall be limited to citizens of the Philippines or to corporation or cooperative or association, wholly owned and managed by such citizens. “With these existing provisions, no substantial foreign capital would be infused in our local economy, as the foreign investors would be limited to only 40 percent without controlling interests and even no part in management in franchise investments,” de Vera said. Continued on A2

n japan 0.4894 n UK 71.9359 n HK 6.6315 n CHINA 8.1904 n singapore 39.4105 n australia 40.3337 n EU 64.0925 n SAUDI arabia 13.8511

Source: BSP (6 March 2018 )

BMReports BusinessMirror

A2 Wednesday, March 7, 2018

www.businessmirror.com.ph

One Charter under siege: Would amending Constitution enhance PHL economic devt?

Days of ‘no quorum’ at lower house over

“If we open up and somehow allow controlling interests of foreign investments with foreign management participation, business environment would be bullish [in the Philippines]. No one in his right mind would place monies in business without having a say in its affairs,” de Vera added. In land ownership, the lawmaker said, the country should allow foreigners to purchase private lands but “on a limited scale only, on residential land only, subject to the restrictions that Congress may provide.”

mandatory daily roll call to ensure a quorum on all its sessions. “To assure this, we need a roll call every day,” Fariñas said. Last year the leadership has implemented a “lockout policy”— through a memorandum—for latecomers to the 4 p.m. sessions to prevent congressmen from entering the plenary hall. Fariñas said the move also seeks to discipline members of the lower chamber. “Except those who are deemed present under Section 71 of our rules, all members are enjoined to be at the session hall before 4 p.m. as those appearing, after the roll call shall be marked absent,” Fariñas said in his memorandum. The lower chamber has 292 members and 147 lawmakers are needed to declare a quorum. The only significant incident when a quorum delayed the passage of a measure was in January, the approval of the House Concurrent Resolution 9 to constitute Congress as constituent assembly has suffered a temporary setback, as some of the minority lawmakers questioned the plenary quorum.

Continued from A1

Groupthink

DURING previous public consultations of the House Committee on Constitutional Amendments, several organizations have supported, as well as opposed, proposals amending economic provisions in the Charter. The Management Association of the Philippines (MAP) said that if the government will allow foreigners a 100-percent ownership, “[we] think Filipino companies can compete.” “Filipino business groups are prepared to [face] the competition,” a statement by the MAP said. The group composed of managers also recommended to the lower chamber some amendments to the economic provisions of the 1987 Constitution that limit foreign ownership in the country. One of these is the Section 7 of Article XII, which restricts land ownership. “Again we have long-term landlease agreements that allows up to a maximum of 50 [years] or maybe additional 25 more years, we think that, since land will be here and

Inflation. . .

[to] develop land you need capital, if you open it up, we think that can spur [economic growth], especially countryside development,” the MAP said. The 1987 Constitution states that “in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals, corporations or associations qualified to acquire or hold lands of the public domain.” Former Finance Secretary Margarito B. Teves also believes some economic policies enshrined in the 1987 Constitution are binding constraints to growth. Among provisions Teves said should be amended are those pertaining to foreign ownership of land and exploitation of natural resources, foreign equity in the operation of public utilities, mass media and advertising, and practice of foreign professionals. Teves said these “protectionist” provisions, which limit foreign ownership, do not promote healthy competition in a dynamic global economy. He noted the Philippines is one of only few countries left bearing this kind of restriction in the Constitution.

1986 constitutional commission that framed the present Philippine Constitution. “We should u se a st r ateg y i n a me nd i ng our Constitution.” Villacorta, professor of Political Science and International Relations of De La Salle University Manila, warned removing these prov isions “w ithout the help consultant and experts…could be dangerous.” “They should hire consultants like what we’ve done during the 1986 constitutional commission.” He is against “totally revising the Constitution,” saying “many constitutional provisions are not properly implemented, so there is [only] a need to clearly define the provisions.” Villacorta said when they crafted the Constitution, many provisions were overlooked because of the limited time given to them to deliberate and finish their proposals. “It is wise to consult the final arbiter of the land, the Supreme Court, preferably through two separate petitions from the House and the Senate to shed light on the issue[s].”

Public utilities

IN a separate position paper submitted to the lower chamber, Villacorta acknowledge there is a need to amend the 1987 Constitution to make it attuned to the changing times. “Our Constitution was framed in 1986 and was overwhelmingly approved in a national referendum in February 1987. Since then, many changes have occurred: a new security architecture in Asia and the Pacific has evolved; mass poverty, criminality, official corruption, natural disasters and

HOWEVER, Wilfrido Villacorta, a constitutional expert, has urged lawmakers not to lift the provisions in the 1987 Constitution that deals with public utilities and natural resources. “We should do it [amending t he Const it ut ion] w it h ca re, particularly the provisions concerning public utility and natural resources, because it will not just affect our economy but also our national security,” said Villacorta, one of members of the

Continued from A1

Citing the pronouncements of the Bureau of Internal Revenue, Ang noted that some of the new taxes indicated in the Tax Reform for Acceleration and Inclusion (TRAIN) law have not yet been implemented. This, he said, could cause inflation to accelerate in the coming months. “When the full impact of the TRAIN comes, it is possible that inflation will be higher,” he said. University of the Philippines School of Statistics Dean Dennis Mapa said the increase in commodity prices could hinder government efforts to reduce hunger and poverty. Mapa noted the country’s hunger incidence rose in 2008 and 2012, when the Philippines experienced a rice-price crisis. In 2008 he said, the culprit was the volatility in international rice prices, while government efforts to achieve self-sufficiency in the staple caused price spikes in 2012. “This is a no-brainer because 22 percent of the food consumption of the poor is rice, so when rice prices are high, this automatically increases their expenditures,” he said. “Most probably they’re doing a mitigation scheme to make up for the budget given the increase in rice prices. This is especially true for those at the bottom [because they] will be affected outright,” he added. Citing the Department of Finance, Presidential Spokesman Harry L. Roque Jr. said TRAIN was not the only cause of the higher inflation rate in February. Roque also attributed the rise in inflation to high petroleum

Villacorta paper

prices, which are dictated by market forces, and more tobacco companies complying with the provisions in TRAIN. “The government’s estimate is still the same, only 0.7 [percent] will be TRAIN’s contribution to inflation,” he said.

‘No supervening event’

Despite the surge in the inflation rate, the National Wages Productivity Commission (NWPC) said it has yet to monitor any supervening event, which will allow for another round of wage hike in the Regional Tripartite Wages and Productivity Boards (RTWPBs). “The February inflation rate using 2006 base year is only 0.5 percentage point higher than the BSP’s [Bangko Sentral Pilipinas] 2 percent-to-4 percent inflation target for the whole year,” NWPC Executive Director Maria Criselda R. Sy told the BusinessMirror via SMS. “Thus, no supervening event is noted so far. The RTWPBs are closely monitoring the socioeconomic condition in the regions,” Sy added. The NWPC defines supervening event as any extraordinary increase in basic goods like petroleum and services for a given period, which is usually for three straight months. It exempts RTWPBs from the one-year ban in granting wage hikes. Labor groups expressed concern over the acceleration of inflation, which they attributed to the implementation of TRAIN and the weakening of workers’ purchasing power. “The TRAIN law has fast-tracked the weakening of workers’ purchasing power and the devaluation of wages,” Federation of Free Workers Vice President Julius Cainglet said.

pandemics have worsened. International institution and the global financial system have become even weaker, while nuclear proliferation and international terrorism have increased.” Nonetheless, he said some things remained the same citing “the fundamental aspirations of our society addressed in our present Constitution: a better quality of life, peace among all communities, equitable and inclusive development across our regions, the blessings of independence and democracy, and an independent foreign policy.” He said he is hoping that the Congress, as constituent assembly, will have more time to deliberate on the costs and benefits of the different forms of foreign equity and entitlements. “Thirty years have passed since we wrote the fundamental law. The limitations imposed regarding the foreign equity in most investment areas have given our more liberalized Asean [Association of Southeast Asian Nations] neighbors a competitive edge over us,” Villacorta said. “It has posed constraints to fulfilling our commitments under [the] Asean Free Trade Area and the Asean Economic Community,” he added. “However, under the Foreign Investment Act of 1991, foreign investors may now capitalize in domestic or export enterprises to as much as 100 percent of the capital of these enterprises provided that these enterprises are not on the negative list, and if the foreign investor is investing in a domestic enterprise, the domestic enterprise must have a paid-in capital equivalent to $200,000.”

Partido Manggagawa Chairman Renato Magtubo said minimum-wage earners will be the “most vulnerable” to the effects of higher inflation. Associated Labor Unions-Trade Union Congress of the Philippine Spokesman Alan Tanjusay echoed this and claimed the government failed to provide social safety nets for minimum-wage earners. “Indigents have it easier, they have government subsidy through the CCT [conditional-cash transfer]. Meanwhile, minimum-wage earners, who are family breadwinners and major producers of goods and services, are without support,” Tanjusay said. Former Socioeconomic Planning Secretary Cielito F. Habito, however, warned that a sudden wage hike at this point may actually be more detrimental for workers since it may trigger a “wage hike spiral.” “If the wages are increased, the price of production will also increase, which, in turn, will raise again the prices. This is what we call a wage-hike spiral. This is the danger if the action on a wage hike will be too quick, it could feed upon itself and end up as self-defeating,” Habito said.

Mitigating measures

The BSP said the rise in local prices is a “temporary development” and dispelled fears that a rate hike is needed soon. BSP Governor Nestor A. Espenilla Jr. said the strong growth of consumer prices is within the Central Bank’s expectations and expressed confidence inflation rate will normalize starting 2019. “The operative word is temporary. How temporary is temporary is what needs careful analysis,”Espenilla told reporters in an interview. “The elevated February inflation figure is in line with our updated forecast for a temporarily higher inflation than target range in 2018 due to transitory factors. Our forecast remains that inflation will decelerate back to within the government’s target in 2019,” he added. Espenilla assured, however, that the BSP will continue to monitor developments and factor in all relevant data in their succeeding reviews of monetary-policy stance. Socioeconomic Planning Secretary Ernesto M. Pernia said the CCT program, known locally as the the Pantawid Pamilyang Pilipino Programs, hould be expanded. He added there is also a need to fast-track the distribution of the unconditional-cash transfer from TRAIN to help poor families cope with rising prices. Replacing rice-import quotas with tariffs, Pernia said, will lower rice prices and raise revenues for agricultural programs, such as crop diversification and investment in disaster risk resiliency. “These measures will stabilize prices of food items and maintain or raise the purchasing power of the bottom 30 percent of households,” he added. “We must enforce fair consumer pricing among businesses. In January there were anecdotal reports that some of them are taking advantage of TRAIN by prematurely increasing their selling prices despite no additional input costs to their production and services brought about by the law,” Pernia said. With Bianca Cuaresma and Bernadette D. Nicolas

Continued from A1

Approved bills

The lower house has been active since the start of the 17th Congress in passing its priority measures. Among its approved important bills are the Ease of Doing Business Act; Free Tertiary Education Act; Free Irrigation Act; Utilization of the Coconut Levy Fund; United National Identification System Act; Enhanced Universal Health Care Act; Amendments to the Public Service Act; mental-health law; law prohibiting discrimination on the basis of sexual orientation or gender identity or expression (Sogie) and the Department of Housing and Human Settlement law. Meanwhile, other identified priority measures that will be passed by the lower chamber this 17th Congress are: the proposed revision of the Constitution; Bangsamoro basic law and minimum-wage law; Amendment to Republic Act 8178, or the Agricultural Tariffication Act; Amendments to Government Procurement Reform Act; Traffic and Congestion Crisis Act; Contract/Anti-contractualization Act; Salary Standardization Law IV; the Corporation Code of the Philippines; measure requiring legislative franchise for operating railways and the bill creating Mindanao Railway Corp./Authority. To ensure quick passage of bills, the House leadership has been implementing a strict policy on attendance and travels abroad during session days, resulting in the active participation of the members in lawmaking process. With this, Fariñas said the result of a Social Weather Stations survey (SWS) showed that the people have started to appreciate the work and reforms in the lower chamber. Fariñas is referring to a December 2017 SWS survey, which showed that the House of Representatives obtained a +43 satisfaction rating—the highest since 1988. However, despite the consistent plenary quorum, the BusinessMirror tried, but failed to obtain a copy of the attendance records of lawmakers from the Office of the Secretary General. The Office of the Secretary General explained to the BusinessMirror that it needs the approval of all lawmakers for it to secure a copy of the record.

‘Free debates also gone’

Meanwhile, members of the minority groups called on the leadership to allow free discussions and

debates among its members—both from majority and minority—before passing a bill. Party-list Rep. Tom S. Villarin of Akbayan said the lower chamber is now a well-oiled machine running in cadence to the dictates of Alvarez. “It churns out legislation fast through a command system of the supermajority. It leaves out a deliberative and democratic process in favor of time-bound, must-do actions requiring only viva voce of ‘ayes’ crowding out the ‘nayes.’ In the eyes of the supermajority, they are doing it for our people. In the eyes of our people, we are doing it for power,” Villarin told the BusinessMirror. W hile recognizing the passage of several important measures, Party-list Rep. Teddy Baguilat Jr. of Ifugaoalso said the lower chamber should act independently in passing its legislative agenda. “On the positive side, we have passed a number of progressive bills, such as the Sogie Act, mental-health and AIDS bills, the free public Wi-fi and tertiary education laws,” he said. “But we have also ceased to be an independent, genuinely deliberative body since members are kowtowed into being a rubberstamp for the administration in declaring and extending martial law, and passing of the death penalty and the [call for] constituent assembly [to amend the Charter],” Baguilat added. According to the lawmaker, members are coerced into being submissive and surrendering their free will by following the executive’s position. “Dissenters are punished by being removed from key House positions, or worse, having budgets for their constituencies slashed,” he said. “Congress is also being used as an instrument for witchhunting and public persecution, as in the case of Sen. Leila De Lima, Chief Justice [Maria Lourdes] Sereno’s impeachment and the Dengvaxia hearings.” Party-list Rep. Ayik Casilao of Anakpawis also said Congress being independent and coequal to other branches of government is now just a written principle as, in reality, the 17th Congress acted in “kowtowing the Duterte regime’s marching orders.” “While there are pro-people legislations that the 17th Congress acted upon—free irrigation, free tuition—these bills were drowned by anti-people measures, such as the TRAIN law, National ID System, martial law in Mindanao and several other pieces of legislation deemed disadvantageous to the people,” Casilao added.

Budget bill

Fariñas, meanwhile, said Congress will involve the public in the crafting of the National Expenditure Program (NEP), or the proposed national budget for 2019. “ To further strengthen our unity, we will embark again on the Northern and Central Luzon Familiarization and Inspection Trip from March 15 to 18 to visit the provinces of Aurora, Quirino, Isabela, Nueva Vizcaya, Nueva Ecija, Tarlac, Pampanga and Bulacan in order for us to know the real situation in these areas when the National Expenditure Program is presented to us by President Duterte in July,” he said. “More so, we can already inform the concerned executive departments of programs and activities we would want to see in the NEP,” he added. The President is expected to transmit to Congress his 2019 proposed national budget right after his State of the Nation Address in July. The passage of the annual budget is always included in the priorities of the lower chamber.

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House leaders to wait for SC ruling on Sereno ouster suit before voting By Jovee Marie N. dela Cruz

@joveemarie

he leadership of the House of Representatives said on Tuesday that the lower chamber will wait for the Supreme Court (SC) to rule on the removal petition against Chief Justice Maria Lourdes A. Sereno before voting on the Articles of Impeachment. House Majority Leader Rodolfo C. Fariñas Sr. of Ilocos Norte said “there will be no plenary voting [before our Lenten break on March 21], but we will approve it at committee level.” “This is my view as chairman of the Committee on Rules, if I find that there is a serious challenge on the legitimacy of the officer in question, I would wait for the ruling. This will be of utmost importance by the Supreme Court, that will be resolved in a month’s time, I don’t think that’s too long,” he added. The House Committee on Justice is set to vote on Thursday to determine the existence of probable cause to impeach Sereno. Speaker Pantaleon D. Alvarez said the House may opt to await the SC ruling before the plenary decides whether or not to send the impeachment case to the Senate for trial. He added there is also nothing wrong if the justice committee is preparing the articles of impeachment even before the actual voting to speed up the process. Alvarez added he is leaving it to Fariñas to map out the proper course of action for the House. If the case reaches the Senate for trial, Alvarez said he would leave the task of prosecuting Sereno to other more qualified lawmakers. Instead, Alvarez said he would rather stay in the sidelines to watch the proceedings.

Proper action

Alvarez, meanwhile, said the filing of a peti-

tion for quo warranto by the Solicitor General before the SC to question the validity of the appointment of Sereno is a proper course of action. Alvarez, however, said the ongoing impeachment process and the quo warranto petition are two separate causes of action that can proceed independently of each other. “That’s a proper course of action, quo warranto, because there are two separate causes of action. The impeachment process is exclusive to Congress, but it presupposes a valid appointment. Now, what quo warranto questions is the validity of the appointment itself. So, quo warranto is proper because that power is exclusive to the judicial branch of government,” he said. Alvarez allayed concerns that the quo warranto proceedings lodged against Sereno would set a dangerous precedent and open the floodgates of similar suits to seek the ouster of impeachable officials. “No, it wouldn’t because what is the subject of quo warranto here is the validity of the appointment. If the appointee has complied with all the requirements then he could never be the subject of a quo warranto proceeding,” he added. Likewise, Alvarez dismissed the contention of Sereno’s camp that her appointment as Chief Justice is valid because it complied with the basic constitutional requirements and that the submission of the Statement of Assets, Liabilities and Networth is just a supplementary requirement imposed by the Judicial and Bar Council. Article XI, Section 17, of the Constitution provides: “A public officer or employee shall, upon assumption of office and as often thereafter as may be required by law, submit a declaration under oath of his assets, liabilities and net worth.” “As a lawyer, I think there is good basis for the quo warranto petition,” he said.

Editor: Vittorio V. Vitug • Wednesday, March 7, 2018 A3

Senators forgive solicitor general for ‘not knowing what he is saying’

By Butch Fernandez

@butchfBM

enators, mandated by the Constitution to sit as impeachment court judges when the House of Representatives votes to oust Chief Justice Maria Lourdes A. Sereno, are not keen on picking a fight with Solicitor General Jose C. Calida, who filed a quo warranto petition asking the Supreme Court (SC) to oust Sereno.

Effectively bypassing Congress, Calida justified his quo warranto filing at the SC, claiming, “I don’t want her [Sereno] to suffer the ignominy of what the late [Chief Justice Renato] Corona suffered at the hands of politicians who judged him unfairly.” Asked if Calida’s remark, besides damning the past crop of senator-judges in the Corona impeachment case, also prejudged the ability of today’s senators to give Sereno a fair trial, Sen. Francis G. Escudero brushed it off as an ignorant remark, for lack of knowledge. “He [Calida] should be forgiven for not knowing what he is saying,” Escudero said

in a text message to BusinessMirror. Sen. Emmanuel Joel J. Villanueva also begged off from responding to Calida’s comment, saying: “It is very difficult to say anything at this time considering that the articles of impeachment is still with the House of Representatives.” Villanueva added they cannot assume that the articles of impeachment against Sereno will be transmitted to the Senate. “If it happens, I will be acting as a member of the jury, and we have to be impartial with everything the impeachment court will tackle,” he said. Moreover, Villanueva told the BusinessMirror that, “right now, we can

only prepare and study the procedures, precedents, including that of the previous Corona impeachment and make sure we will be ready to scrutinize the articles of impeachment, the facts and the arguments of both sides.” Still, Villanueva assured that he will “perform my constitutional duty according to the dictates of reason, the law and my conscience.” Under the Senate Impeachment Rules, at least two-thirds of the 24 senators, or 16 of the 23 incumbent senators, are needed to convict an impeachable official, like Sereno. Former Sen. Rene Saguisag, recalling the lessons of past impeachment cases, however, found “no parity” with the impeachment and conviction of Corona in 1992, save that Corona was “rendered jobless” because of the law Saguisag had coauthored and sponsored, referring to Republic Act 6713 on mandatory filing of statements of assets, liabilities and net worth, or SALNs. “By giving today an alleged violator a chance to correct and comply, under that law, which is not heeded, he may get away with a fine not exceeding P5,000, not an offense rising to an impeachable level. The case of Corona is distinguishable, in my view, when the people, through the House and Senate, nullified the egregious appointment via impeachment and conviction,” Saguisag said.

Economy

A4 Wednesday, March 7, 2018 • Editors: Vittorio V. Vitug and Max V. de Leon

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Factories seen sustaining double-digit hike in output

By Cai U. Ordinario

@cuo_bm

he double-digit growth in manufacturing output will likely be sustained for the whole of 2018 due to robust consumer demand, according to the National Economic and Development Authority (Neda). On Tuesday the Philippine Statistics Authority (PSA) said the manufacturing sector’s Volume of Production Index (VoPI) grew 21.9 percent in January, faster than the 14.9 percent recorded in the same period a year ago. In a statement, Socioeconomic Planning Secretary Ernesto M. Pernia attributed this to strong consumer demand, which will be supported by the Tax Reform for Acceleration and Inclusion (TRAIN) law. “Manufacturing output is expected to sustain growth in 2018 on the back of robust consumer demand, higher government consumption and continued gains in investments,” Pernia said. “The sustained momentum in global trade growth will also provide additional boost to manufacturing growth, particularly exportoriented sectors,” he added. Pernia also said industry firms’ outlook for the first quarter of 2018 remains optimistic because of improvements in production capacity, new product lines and enhanced marketing strategies. These, the Neda said, will likely boost the manufacturing sector’s production and sales performance this quarter. However, Pernia said, some firms remained cautious because of risks, such as the volatility in exchange rates, higher global commodity prices and weather disturbances.

“The perceived negative effects, however, will be offset by improved infrastructure that is partly being financed by TRAIN. Moreover, the succeeding packages of the TRAIN are intended to make our tax regime internationally competitive,” Pernia added. “To support the upward growth trajectory of manufacturing, the government must create and maintain an environment that is conducive to innovation and entrepreneurship, and enhance the production capacity of local suppliers of raw materials and intermediate goods, especially micro, small and medium enterprises,” he said. Pernia added there is a need to improve connectivity among production site, processing areas and markets, and continuing to pursue bureaucratic and regulatory reforms to reduce the cost of doing business across all levels of government must also be pursued. In the PSA’s Monthly Integrated Survey of Selected Industries (Missi), the Value of Production Index (VaPI), rose by 20.4 percent. The growth led the three-month moving average growth rate of VoPI and VaPi back to positive territory at 1.1 and 0.4 percent, respectively. Missi is a report that monitors the production, net sales, inventories and capacity utilization of select manufacturing establishments to provide flash indicators on the performance of the manufacturing sector.

Workers assemble a car in a factory in Santa Rosa, Laguna. NONIE REYES

JFC to senators: More nonworking holidays to harm PHL economy By Elijah Felice E. Rosales

@alyasjah

usiness groups are urging senators to stop adding more nonworking holidays on the growing list of the country’s holidays, as this could erode the competitiveness of industries and slow down the country’s growth. In a letter to Sen. Francis G. Escudero, the Joint Foreign Chambers (JFC) of the Philippines and the country’s largest business groups said the Senate should “consider the negative consequences legislating any additional nonworking holidays.” Escudero sits as chairman of the Senate Committee on Education, Arts and Culture. The letter was submitted to senators in light of measures filed in the upper and lower chambers declaring July 27 of every year as a special nonworking holiday to commemorate the founding anniversary of Iglesia ni Cristo; the last Monday of January as National Bible Day; and other bills proposing additional holidays. “With the recent enactment of the law declaring December 8 every year as a nonworking holiday to commemorate the Feast of the Immaculate Conception of Mary, the chamber and business groups are increasingly concerned that the high number of regular and special nonworking holidays is damaging the competitiveness of the country,” the letter read. The business groups hit the Senate for “flipflopping” from its earlier position to oppose all proposals for new nonworking holidays. They said it was “regrettable” senators reversed from that stance and approved the December 8 holiday. But they commended the Senate for approving Senate Bill 1270 declaring the last Monday of January as National Bible Day as a working holiday. They added it was the “proper thing” to do, so as to not place additional burden on employers by adding another paid holiday. “One of the fastest-growing industries in the

country, business-process outsourcing estimates that every nonworking holiday costs P750 million in extra expenses on overtime. This is an industry where costs exceed India by 10 percent to 15 percent,” the letter read. Citing figures from the labor department, the business groups said there was a total of 20 holidays in the country in 2017—12 regular, seven special nonworking and one local. Special nonworking holidays were at a high in 2015, when there was a total of 12 nonworking days. “While we do not have data on the effect of paid holidays on other industries, we should recognize the severe impact that additional paid holidays will have on other large sectors of the economy, including manufacturing, transportation and logistics, and tourism. Further, day workers lose a day of pay on holidays when they have no work,” the letter read. The business groups also lamented there are over 100 local nonworking holidays proclaimed each year. Accounting this into the whole set, they said most firms will have to observe at least 21 holidays annually. In comparison with other Southeast Asian countries, the Philippines has more holidays than Vietnam with 12, Malaysia with 14 and Thailand with 17. On the other hand, Indonesia has more than the Philippines with 26 holidays. Instead of creating more nonworking holidays, the business groups urged Malacañang and the legislature to only enact new working holidays and no more of nonworking holidays. “The economy is growing at sustained high and more inclusive levels, foreign direct investments have reached record levels, job creation is strong and poverty is declining. At the same time, our competitors are not sleeping and [working] hard to improve the success of their companies and work forces,” the letter read. The letter was signed by the American, Australia-New Zealand, Canadian, European, Japanese and Korean chambers. Along with the foreign groups, it was also approved by the Bankers Association of the Philippines, Information Technology and Business Process Association of the Philippines, Makati Business Club, Management Association of the Philippines, Philippine Association of Multinational Companies Regional Headquarters, Philippine Chamber of Commerce and Industry, and the Semiconductor and Electronics Industries in the Philippines.

Govt to hike processing capacity on rising demand for passports By Jovee Marie N. dela Cruz

@joveemarie

HE Department of Foreign Affairs (DFA) announced on Tuesday it will increase its passport-processing capacity to address the demand for Philippine passports. During a hearing at the House of Representatives on slow passport processing, Foreign Secretary Alan Peter S. Cayetano said the demand for passports is continuously increasing after its validity was extended from five years to 10 years. “When we took over, the demand shot up. So, in 2016 alone to 2017, the demand for passports surged to 600,000. The 10-year passport really became a hit,” said the DFA chief during the hearing by the House Committee on Foreign Affairs and House Committee on Good Government and Public Accountability. While APO Production Unit Inc., the company producing the passport, was able to print up to 28,000 every day, the consular offices were only able to process around 14,000 daily, he added. With this, Cayetano said, the DFA is eyeing to establish more offices to increase its daily processing capacity to 31,000 daily. “There’s a wide gap between the demand for passports and the DFA’s capacity to receive and process applications,” he added. “The demand far outweighs the capacity.” Meanwhile, Cayetano said, the DFA is now looking for a new technology that will allow holders to renew their passports online. He added the foreign affairs department is eyeing to launch the online renewal system next year. He added the rise in demand for passports can be attributed to the steady growth of the middle class, boom in international travel, increased availability of airports outside Metro Manila and increase in the number of international flight options linking regional hubs such as Clark, Cebu and Davao to international destinations.

DOLE to support legislation protecting women workers

HE Department of Labor and Employment (DOLE) announced it will be supporting two pending “pro-women” legislation in Congress to boost the protection of female workers in the workplace. This was bared by DOLE Undersecretary Jacinto V. Paras in a news briefing last week. Paras said the government agency would endorse the passage of the amendment in the Anti-Sexual Harassment Law and the Expanded Maternity leave bill in time for the celebration of Women’s Month. For the amendment of the Anti-Sexual Harassment Law, he said they will submit their position paper once they are asked by lawmakers to do so. The proposed law in the Senate and the House of Representatives will expand the coverage of sexual harassment so it will not only occur person to person. “With the new bill, it [sexual harassment] could also happen through your e-mail or any device with social media. You can be sued for it,” Paras said. “The secretary will write the Senate of our endorsement of that bill.” Paras is referring to Senate Bill 1251 or the gender-based electronic violence bill filed by Sen. Risa Hontiveros-Baraquel. He added that despite the opposition of employers against the Expanded Maternity Bill, the DOLE would support the new legislation “since it will allow mothers to provide longer and better care for their newborns.” Samuel P. Medenilla

Agriculture/ Commodities www.businessmirror.com.ph

BusinessMirror

Editor: Jennifer A. Ng • Wednesday, March 7, 2018

‘Only NFAC can talk about rice situation’ By Bernadette D. Nicolas

@BNicolasBM

ALACAÑANG has ordered the National Food Authority (NFA) to desist from making pronouncements about the current rice situation, saying the food agency’s statements about its stockpile may have caused the recent increase in rice prices. Starting on Tuesday, Presidential Spokesman Harry L. Roque Jr. said the NFA Council (NFAC)—the highest policy-making body of the NFA— s the only one authorized to speak on the country’s rice situation. “During the Cabinet meeting on Monday, there was an acknowledgment that the statements made by NFA Administrator Jason L.Y. Aquino caused panic, which probably caused prices to rise,” Roque told reporters in a news briefing in Malacañang. Roque also said there was “some disagreement” on the figures presented by the NFAC on Monday but, “ultimately, there was agreement that there is no

rice shortage.” He added, however, that Aquino did not attend the Cabinet meeting. “The President instructed that there will be a cluster Cabinet meeting for about two hours in the next Cabinet meeting next month, and Aquino will be invited to that meeting,” he said. Roque said the NFAC told the members of the Cabinet that there is “absolutely no shortage of rice.” In January the NFA revealed that its stockpile has fallen to less than 100,000 metric tons (MT), or equivalent to three days of national consumption. The food agency attached to the President had urged the NFAC to import rice

to beef up its dwindling stockpile. The NFAC green-lighted the proposal of the food agency to import, but its requested volume of 250,000 MT would only arrive in June, after rice farmers have harvested the dry-season crop. Because it has been mandated to ensure national food security and stable prices, the NFA buys paddy from farmers and imports rice. Part of its stockpile is sold to the poor at a lower price. “The reality is that NFA rice constitutes just a fraction of the Philippines’s rice supply. The bulk of our national inventory constitutes commercial rice. Henceforth, it will be the NFAC that shall speak on the current rice situation,” Roque said. Agriculture Secretary Emmanuel F. Piñol told the BusinessMirror that the Department of Agriculture (DA) is not covered by the President’s directive. “[The order] only pertains to the rice supply of the NFA. The DA can always report on the country’s rice output. Besides, we are not part of the NFAC,” Piñol said. Piñol disclosed that it was Roque himself who made the proposal to task the NFAC to speak on the NFA’s rice situation to ensure that the public would get only “accurate information.” With Jasper Emmanuel Y. Arcalas

PMFTC launches 2018 Bright Leaf Agriculture Journalism Awards

MFTC Inc., on February 27, launched the 12th Bright Leaf Agriculture Journalism Awards in Central Luzon, the country’s rice granary. As an agricultural company, the Bright Leaf is PMFTC’s way of honoring the most important and outstanding agricultural news stories that were able to raise the discourse of critical agriculture issues, and celebrating the best photographs that captured the spirit of Philippine agriculture in a single frame. “As one of the pioneer award-giving bodies in agriculture journalism, Bright Leaf continues to honor and give due recognition to journalists and photographers, who are the people behind the stories that pay tribute to the struggles and successes of our country’s farmers and other producers. They are the brave messengers, who bring to public attention the importance of agriculture in our everyday lives,” PMFTC External Affairs Director Bayen Elero-Tinga said. This year’s Bright Leaf competition introduces a new and special category—the Best Online Story, which will be awarded to the best agriculture news or feature story published in an online news web site. The addition of this new award category is in keeping with the current trend of readers getting their information speedily in the

digital space. The launch took place at the Bistro Maloleno in Malolos, Bulacan, and was well-attended by Bulacan-based journalists from print and broadcast news agencies. In the last 12 years the Bright Leaf Awards has truly built a legacy of being the premier agriculture journalism competition in the country. From only 82 entries in its first year, Bright Leaf now reaps hundreds of entries as the judges search for the best exemplars of agricultural journalism in 2018. With the theme 12 Years of Bounty for the season, Bright Leaf invites journalists nationwide to submit entries to the following categories: n Agriculture Story of the Year; n Agriculture Photo of the Year; n Tobacco Story of the Year; n Tobacco Photo of the Year; n Best Television Program or Segment; n Best Radio Program or Segment; n Best Agriculture News StoryNational; n Best Agriculture News StoryRegional; n Best Agriculture Feature StoryNational; n Best Agriculture Feature StoryRegional; and n Best Online Story After the Malolos launch, Bright

Leaf will be visiting key cities across the Philippines to engage media practitioners and invite them to join the Bright Leaf Awards. There is no entry fee in joining the competition. Journalists and photographers may submit as many entries for consideration. However, an entry may not be submitted in more than one category. Entries should be published, aired or broadcast between September 1, 2017, and August 31, 2018. The deadline for entries is September 1, 2018. Entries may be in English or any of the Philippine languages. For entries that are not in English, participants will need to submit an English translation. Winners will be announced during the 2018 Bright Leaf Awards ceremony in November, and will be receiving cash prizes, iPads and an all-expense-paid trip to an Asian country. For more information, you may contact the Bright Leaf Secretariat through their mobile numbers (0945) 477 2035 or (0929) 195 0620, their landline (02) 9755236, or send an email to secretariat@brightleafawards. com. You can also visit the Bright Leaf web site at www.brightleafawards.com or its Facebook page www.facebook. com/brightleafawards/ to learn more information about the competition and past winners.

Existing policies not enough to protect sardines–experts

FILE PHOTO

I T I NG a recent st udy, experts said sardines are getting smaller and smaller, and they spawn earlier to adapt to heavy fishing pressure and changes in the environment. Unless the government acts with dispatch, experts fear that the sardine species may eventually become extinct. The government, they said, must craft a national management framework to address the overfishing of sardines, or face the consequences of declining fish stocks. In a statement, Jimely Flores, a senior marine scientist of Oceana Philippines, said an effective management framework for sardines is “a necessary guide in the implementation of policies that are based on science and research.” The management framework, she added, should include data from the National Stock Assessment Program (NSAP) of the Bureau of Fisheries and Aquatic Resources (BFAR). “We have called on the BFAR to reconvene the technical working group, and together with our scientists, craft the much-needed management framework for sardines,” Flores said. Accord ing to Flores, t he management framework should include “timely and transparent” scientific data for policy support, and a review process for implementation. “We need to work together in sustainably managing our sardines through science-based policies. This way, we can ensure that

there will be sardines, a small but important fish, forever,” she said. Dr. Wilfredo Campos, a scientist from the University of the Philippines in the Visayas, said: “Sardines are being overfished and existing policy measures are not enough to protect them, especially spawning fish.” Their studies show that sardines are getting smaller, and spawn and mature early. Catching sardines would be more sustainable if they are allowed to mature for at least two years, so they can reproduce more, he said. He said instinctively, sardines are adapting to overfishing—somehow, maturing earlier than they used to and be able to reproduce. “To keep up with being caught too quickly, they biologically adapt by maturing early to compensate for their population loss. They remain small, and spawn less compared to ideal, mature sardines,” Campos said. Experts noted that fishermen caught 344,730,201 kilograms of sardines worth P7.43 billion in 2015. Sardines are also crucial in the food chain, eaten by high-value fish, such as tuna, mackerel and scad, plus larger predators like sharks and dolphins. A recent study made by the Social Weather Stations (SWS) also showed that 71 percent of typical Filipino families eat seafood, especially sardines, at least five times

per month, proving that seafood is a significant source of animal protein diet. However, they also noted that the fish they eat are getting smaller and more expensive. In 2012 the BFAR ordered a closed season for sardines in major fishing grounds, including the Visayan Sea and the Zamboanga Peninsula, to ensure that they will be protected during the spawning months. However, experts said it is also important to protect sardines after the spawning season. Dr. Jose Ingles, an advisor to the Environmental Defense Fund (EDF) in the Philippines, said that after the closed season, there’s often a “race to fish” for sardines, where commercial fishers may end up catching the juveniles which are expected to spawn next season. “There should be other additional measures to protect the little fish that were produced during the spawning season. These include setting catch limits and reducing fishing efforts which will help protect the juvenile sardines, especially during the race to fish season,” Ingles said. He also emphasized that these measures must be urgently implemented in fishing grounds that are already overfished. Additional measures, such as setting catch limits and reducing fishing effort, can protect juvenile sardines, especially during the race-to-fish season. Ingles said these measures must be urgently implemented in fishing grounds that are already overfished. Jonathan L. Mayuga

Palm futures may rise to 2,700 ringgit/ton by June, Mistry says

ODREJ International Ltd.’s Dorab Mistry is turning slightly bullish on palm oil. Benchmark palm oil futures may gradually rise to 2,700 ringgit ($690) a ton by June, the highest level since last November, Mistry said at an industry conference in Kuala Lumpur on Tuesday. He trimmed his production estimates for top growers Indonesia and Malaysia by 500,000 metric tons each to 37.5 million tons and 20.5 million tons respectively. Crude palm oil prices in Rotterdam may

rise to $750 a ton, he said Palm oil climbed 2.7 percent in February to close the month at 2,559 ringgit a ton as a drought in Argentina sent soybean prices surging. However, palm prices have fallen about 4 percent this month after top buyer India increased import duties, triggering concerns of a reduction in appetite for the oil used in everything from cooking oil to shampoo. In January Mistry saw palm trading in a range of 2,500 ringgit and 2,700 ringgit until August.

In an alternative bullish scenario, oil palms could suffer tree stress as haze returns to Southeast Asia this year, leaving Malaysian output unchanged in 2018 and Indonesian production up by just 2 million tons, Mistry said. Consumption of an extra 1 million tons of palm-biodiesel in Indonesia could be a game changer, he added. In that scenario, combined stockpiles in the two countries could be well below 4.5 million tons, or even nearer to 4 million tons, by July, Mistry said.

Although such “fireworks” aren’t expected, Rotterdam prices of crude palm oil may reach $800 a ton, he said. High import duties on palm oil in India is a temporary solution, Mistry said, adding it would be better to cut taxes on crude palm oil to 34 percent. That would widen its spread to refined, bleached and deodorized olein and lead to a big increase in refining activity. Still, inflation may soon be a problem for India and the import taxes may fall by May, he said.

The World

A6 Wednesday, March 7, 2018 • Editor: Lyn Resurreccion

BusinessMirror

China now seen facing ‘impossible challenge’ on budget, tax and GDP

HINA is attempting to pull off an unusual fiscal feat: Cut taxes, boost spending and shrink the deficit, all with a slowing economy.

Premier Li Keqiang on Monday announced the first budget-deficit goal reduction since 2012, to 2.6 percent of GDP, from 3 percent. He also pledged tax cuts of 800 billion yuan ($126 billion) for companies and individuals and set a 6.5-percent annual economic growth target—the same as last year’s target but slower than the actual performance of 6.9 percent. In the context of China’s multiyear effort to slow debt growth, a

tighter fiscal budget sends a powerful signal—even the state is tightening its belt. But while Li used exactly that metaphor in his annual work report this week, policy-makers left some wriggle room by saying that the deficit target left space for “macro regulation.” Cutting taxes while spending more and shrinking the deficit is an “impossible challenge,” said Freya Beamish, chief Asia economist at Pantheon Macroeconomics

Ltd. in London. “These targets suggest tight monetary conditions and tight fiscal policy, with GDP growth holding up, despite an intensified deleveraging campaign,” she said. “Something’s got to give. We reckon it’s fiscal policy, though monetary policy could also turn out on the easier side, with the yuan also set to weaken.” Resurgent producer-price inflation and robust nominal growth that have boosted corporate pricing power and profits since 2015 are both set to ease this year, making it harder for indebted companies to cut debt, Beamish said. “The government will have to continue with the same fiscal support as last year,” but also spend more and increase off-balance sheet borrowing, she said. Alicia Garcia Herrero, chief AsiaPacific economist at Natixis SA in Hong Kong, cites calculations showing China’s revenues as a

percentage of output clearly declining since 2015. That’s a trend that hasn’t had any obvious policy response, she said in an e-mail. “The 2.6 percent does not look consistent with ample growth nor does it look achievable without fiscal reform,” she said. “Squaring the circle of stable growth and reduced stimulus will be tough to do,” Bloomberg economists Tom Orlik and Fielding Chen wrote in a report. They forecast a slowdown to 6.3-percent growth this year. There are hidden channels to pump funds into the world’s secondlargest economy if growth looks to be faltering too much. This stealth spending isn’t shown in the deficit ratio of the general public budget that’s released annually. Leaders still plan to expand issuance of special purpose bonds, which are sold by local governments

to finance items such as highways, railroads and other construction projects. The securities are designed to be covered by returns of the projects, not general revenue. Special-purpose bond issuance will jump to 1.35 trillion yuan this year to prioritize “supporting ongoing local projects to see them make steady progress,” the Finance Ministry said Monday. That’s up from 800 billion yuan in 2017 and 400 billion yuan in 2016. “While the general public budget deficit ratio is lowered, the deficit ratio covering all government accounts is largely stable,” Liu Liu, an analyst at China International Investment Corp. in Beijing, said in a note. The combined deficit of general public budget and government-managed fund budget could rise to 4.1 percent of GDP this year, from 4 percent last year, Liu wrote. Bloomberg News

Judge, police help oust Trump Hotels from Panama property

A NA M A CIT Y—Workers pried President Donald J. Trump’s name from signs outside his family company’s luxury hotel in Panama on Monday, as Trump’s executives were ousted from their management offices in a business dispute under orders from Panamanian officials. Trump’s security guards also left. The end to a 12-day standoff over control of the property came early in the day when a Panamanian judicial official and police officers backed the hotel’s majority owner, Orestes Fintiklis, as he took possession of the offices. The Trump-affiliated management and security officials then left the 70-story, waterfront high-rise. “This was purely a commercial dispute that just spun out of control,” said Fintiklis, a Miami-based private equity investor and head of the hotel owners’ association. “And today this dispute has been settled by the authorities and the judges of this country.” The Trump Organization’s lawyers, however, said Panamanian courts had, in fact, made no determination on the underlying dispute — a management contract held by the Trump group that it claims is still valid—and had only appointed an interim management until an international arbitration panel rules on the issue. “Trump Hotels is totally convinced it will not only prevail, but that it should also be paid damages,

A MAN removes the word Trump off a marquee outside the Trump Ocean Club International Hotel and Tower in Panama City, on March 5. Escorted by police officers and a Panamanian judicial official, the owner of the Trump Panama City hotel has taken control of the property. A team of Trump security officials left the property. AP

costs and other charges related to today’s actions,” the lawyers said in a statement. The Trump Organization didn’t say who the new management was or why the Trump name was removed from the hotel. The Panamanian Embassy in Washington did not immediately respond to a request for comment. A Panamanian judicial official told The Associated Press a statement would come later in the day.

The Trump Hotel’s web site had ceased offering direct bookings at the hotel by early Monday afternoon. “We apologize,” the site said. “There are no available rooms for your requested stay.” The hotel owners tried to fire Trump’s company last year, but the Trump Organization disputed the termination as legally invalid. As part of his fire sale purchase of 202 of the hotel’s 369 units, Fintiklis

signed a February 2017 agreement not to challenge Trump’s management contract—a deal the Trump Organization considers binding. Fintiklis quickly changed course after the deal closed in August, arguing that alleged mismanagement by Trump’s staff and the deterioration of the Trump brand rendered keeping the property in Trump hands impossible. Late December, Trump’s management team ran off a team of

Marriott hotel executives visiting the property at Fintiklis’s invitation. “Our investment has no future so long as the hotel is managed by an incompetent operator whose brand has been tarnished beyond repair,” Orestes wrote to his fellow hotel owners in a January e-mail obtained by the Associate Press (AP). The most recent and intense feuding began on February 22, when Fintiklis came to the property with termination notices for Trump’s management team. Trump hotel officials turned away Fintiklis and his entourage, refusing to let him check into any of his private equity fund’s 202 hotel rooms. A legal complaint filed by Fintiklis said that, late that same evening, he and others in his party witnessed Trump’s management team destroying hotel documents, which Trump officials have denied. For more than a week, Trump’s hotel business staved off efforts by Fintiklis, and his allies to gain control of the property, with rival security teams skirmishing over physical control of key infrastructure. That included the administrative offices and the hotel’s closed caption security system, which was housed in the condo association within the same building. Grainy footage of the encounter obtained by the AP shows Trump security officials shoving a representative of the condo owners’ association and a brawl in a stairwell between opposing security guards. AP

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Top bank heads summoned as India widens fraud probe

EDERAL investigators are seeking to question the chiefs of India’s biggest lenders as they widen their probe into the $2-billion fraud at Punjab National Bank (PNB). The Enforcement Directorate has written to the heads of 31 banks asking to meet officials about the fraud, according to people familiar with the matter. The investigators will start with state-run PNB on Wednesday and will subsequently cover the other lenders, the people said, asking not to be identified, as the details are private. Separately, the Serious Fraud Investigation Office has summoned Chanda Kochhar, CEO at ICICI Bank Ltd., and Shikha Sharma, her peer at Axis Bank Ltd., for a meeting on Tuesday, CNBC TV18 reported. Both private lenders reportedly have exposure to at least one of the two jewelers that allegedly masterminded the fraud. “Just being summoned by the authorities doesn’t suggest that all these banks have colluded in the alleged fraud,” said Pooja Dutta, a managing partner at Mumbaibased law firm Astute Law. Authorities are seeking clarity and “are leaving no stone unturned in building up a case without any loopholes,” she said. The stock exchange has sought clarification and is awaiting a reply from ICICI Bank and Axis Bank, it said on its web site. PNB, Axis and ICICI didn’t immediately reply to e-mails sent by Bloomberg. A text message to ED Director Karnal Singh was unanswered. Calls to SFIO Director Amardeep Singh Bhatia went unanswered. The fraud was disclosed about a month ago, when PNB alleged that the jewelers colluded with some PNB officials to get fake letters of undertaking, which they used to obtain loans from the overseas branches of Indian banks. Investigators claim the scam had been running since 2011 and involves multiple regulatory infractions, leaving a web of lenders embroiled in questions about the quality of their compliance. Shares of ICICI Bank tumbled 1.3 percent as of 2:16 p.m. in Mumbai on Tuesday, the worst performer on the 10-member S&P Bankex Index that fell 0.3 percent. Axis Bank was up 0.1 percent, and PNB was down 0.3 percent. Bloomberg News

American auto industry closes ranks to oppose Trump’s tariff threats

UTOMOTIVE companies on both sides of the Atlantic pushed back on US President Donald J. Trump’s talk of a trade war with Europe using a similar refrain: Everyone will suffer if his rhetoric becomes reality. “Tariffs are not good for anybody,” Steven Armstrong, head of Ford Motor Co.’s European operations, said on Tuesday in a Bloomberg Television story at the Geneva International Motor Show. “Any form of tariff is going to be bad news for us and lift our costs, and we’re going to pass that through, probably to the consumer.” Big automakers like Volkswagen AG and Toyota Motor Corp., smaller manufacturers, such as Volvo Cars and PSA Group, and even a group representing American auto dealers echoed the sentiment in the wake of a tit-for-tat between Trump and European Commission President Jean-Claude Juncker. The comments suggest the auto industry could form a unified front after the presi-

dent tweeted he could slap levies on BMWs, Audis and other cars shipped from Europe if the United States’s planned tariffs on imported steel and aluminum are met with retaliation. The war of words adds to uncertainty for the auto industry already dealing with disruption stemming from volatile political environments, the decline of diesel and the advent of self-driving technology. “The world is already chaos, so a little bit more, a little bit less, it’s already chaos,” Carlos Tavares, CEO of PSA Group, the maker of Peugeot, Citroen and Opel vehicles, said in an interview in Geneva. “It’s better that we have an open world where we can trade peacefully.” Trump tweeted over the weekend that European cars “freely pour” into the US and have created a “big trade imbalance.” But, with more and more German cars made in America, the nation’s deficit with Europe’s largest economy narrowed to about 64,000 vehicles last year. Volvo Cars CEO Hakan Samuels-

Employees install cable into a Mercedes-Benz GLC sport-utility vehicles on the assembly line at the luxury automaker’s factory in Bremen, Germany, on January 24. BMW lost its crown as the world’s biggest luxury-car brand to Mercedes-Benz, ending its reign after more than a decade amid a cluttered lineup of aging models. Bloomberg

son said that tariffs could affect the carmaker’s plans to export from a plant it’s building in South Carolina, where half of the 4,000 projected jobs are tied to shipping S60 sedans and

XC90 sport-utility vehicles (SUVs) to overseas markets. “There’s no winner in any trade war,” Didier Leroy, executive vice president at Toyota, said in an

interview in Geneva. “The risk is for the end customer, who’ll feel the financial impact because he’ll probably pay more.” The steel and aluminum tariffs Trump announced last week touched off a firestorm that could compromise negotiations to rework the North American Free Trade Agreement. US Trade Representative Robert Lighthizer said time is running out to redo the accord as Canada and Mexico pushed back against the levies that the president hasn’t yet finalized. “I think the American government knows that, in the past, we had agreements like Nafta that shouldn’t just be destroyed on a whim,” Volkswagen CEO Matthias Mueller said. “We all put our efforts into globalization in the past decades, and I think we shouldn’t give up that idea so easily.” Combined, German car factories in the US produced 804,000 vehicles last year, with 430,000 of those exported outside the country. The

number of German cars imported into the United States has slid about 20 percent since 2014, to 494,000 vehicles, the VDA said. Trump’s beef likely stems from the lack of US automakers in Europe. While Ford is among the top mass-market brands in the region, General Motors Co. sold its German unit last year after trying and failing to establish the Chevrolet nameplate in Europe. Fiat Chrysler Automobiles NV sells Jeep vehicles in the region, but Dodge and Chrysler models are rarities because of the region’s preference for smaller cars. German automakers have been pursuing US expansion for years. Since 2013 brands like Mercedes, VW and BMW have added 5,700 jobs, increasing United States staffing to 36,500 people, according to the VDA. BMW’s largest facility in the world is in Spartanburg, South Carolina, which makes SUVs including the X3 for customers in Germany and elsewhere, while Volkswagen is expanding production in Chattanooga, Tennessee. Bloomberg News

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The World BusinessMirror

Wednesday, March 7, 2018

Trump faces last-ditch push by aides, allies to head off tariffs

RESIDENT Donald J. Trump is facing a last-ditch effort from within his own administration and Republican lawmakers to head off steep tariffs on steel and aluminum that threaten to unleash a global trade war. White House economic adviser Gary Cohn is summoning executives from United States companies that depend on the metals to meet this week with Trump to try to persuade him to blunt or halt the tariffs announced last week, according to two people familiar with the matter. Republicans in Congress are mounting an unusual public campaign to thwart the tariffs, with House Speaker Paul Ryan’s spokesman, AshLee Strong, releasing a statement urging the president to halt the plan, a rare public break between the two GOP leaders. Trump on Monday stood by his call for a 25-percent tariff on imported steel and 10 percent on aluminum, saying “we’re not backing down.” Yet, if he doesn’t retreat, Cohn may quit the administration, and some in Congress could try to

limit the president’s authority to impose trade penalties. The split in the Republican ranks on trade is coming to a head as the party struggles to hold a previously safe House seat in a special election in steel country. Trump plans to visit the area on Saturday, a few days before the vote in southwestern Pennsylvania, where recent polls show a Democrat slightly ahead in a district Trump carried by 20 percentage points in 2016. Tariff supporters are pressing Trump to announce the measures during his visit to mobilize GOP voters, but Cohn is pushing back with the meeting of executives to make the case that trade sanctions will cost American jobs. The White House session with Trump on Thursday will include representatives of breweries, beverage-can

manufacturers and automakers, along with the oil industry, said the people, who spoke on condition of anonymity to discuss a policy disagreement. A Trump order to impose the tariffs would be a huge setback for Cohn, who has vigorously opposed the move, citing concerns that it would hurt the economy. This decision is viewed inside the White House as a possible breaking point for Cohn, a former senior executive at Goldman Sachs Group Inc., and some insiders believe he will depart if Trump doesn’t take his advice on the issue. Conservative groups, including the Club for Growth, a profree market organization, have also cautioned that tariffs would hurt the economy and Republican chances to hold on to both chambers of Congress in this year’s midterm elections. Harley-Davidson Inc., the motorcycle maker based in Wisconsin, Ryan’s home state, is facing threats of retaliation from Europe over the steel and aluminum tariffs. European Commission President JeanClaude Juncker said the European Union (EU) may target imports of the company’s motorcycles, as well as Kentucky bourbon and Levi Strauss jeans.

Harley-Davidson already is being hit by a deepening slump in American motorcycle demand, which has spurred job cuts and the closing of a plant in Kansas City, Missouri. Republicans in Congress are walking a fine line—criticizing the president while offering him a way to back off his position and preserve his ability to say he imposed tough new tariffs. Lawmakers don’t have much time to change his mind. Trump announced his plan last week, and an order could be signed within days. House Ways and Means Chairman Kevin Brady of Texas and other House Republicans are seeking to blunt the tariffs’ impact by adding an “exclusion process” allowing American companies to petition for duty-free access for imports that aren’t available from US sources. The lawmakers want existing contracts for aluminum and steel to be exempted from tariffs. They also called for a review of the effects of tariffs on the economy “to determine if a different approach would better serve the interests of our American workers, job creators and consumers.”Brady said he spoke with Trump twice last week but not since the Thursday

meeting when the president unveiled his plans. “The president has not made a final decision yet,” Brady said. “I’m continuing to reach out to the White House and the trade team.” If Trump follows through with the tariffs he proposed, the Senate Finance Committee should consider holding hearings, said John Cornyn of Texas, the No. 2 Republican in the chamber. “The part that concerns me the most is the potential for retaliatory tariffs and a so-called trade war and other areas that would affect some of the more vulnerable sectors of our economy, like agriculture, for example,” Cornyn said. Sen. Mike Lee, a Utah Republican, is going a step further by pushing a bill to limit the president’s ability to impose tariffs without approval from Congress. “In a government system with checks and balances, the president should not have the power to unilaterally levy or alter tariffs,” he said on Twitter Monday. W hile Trump has regularly railed about China’s trade practices, the impact of the tariffs may be felt most by US allies, the EU, Canada and Mexico. Trump wants to protect industries that are “the backbone of

this country” and to “make sure we’re doing everything we can to protect American workers,” said White House spokesman Sarah Huckabee Sanders at a Monday briefing for reporters. Trump has used the threat of tariffs in talks with Mexico and Canada on renegotiating the North American Free Trade Agreement. Commerce Secretary Wilbur Ross recommended the tariffs after concluding that imports of steel and aluminum threaten the country’s national security. Until recently, the inquiry into the national security risks of steel and aluminum had been considered separate from the Nafta discussions. But Trump revived his complaints about Nafta being a “bad deal” for the US in a tweet on Monday and linked the talks underway in Mexico to the tariffs. Canada, the biggest supplier of steel and aluminum to the United States, and Mexico, the No. 4 source of steel, have asked to be excluded from the tariffs. On Monday US Trade Representative Robert Lighthizer said that progress on updating Nafta fell short of expectations during the latest negotiations and that time is running out for a new deal. Bloomberg News

North Korean dictator, Violence halts rare aid delivery to Syria’s eastern Ghouta Seoul envoys have B ‘openhearted talk’

EOUL, South Korea—North Korean leader Kim Jong Un had an “openhearted talk” in Pyongyang with envoys for South Korean President Moon Jae-in, the North said Tuesday. It’s the first time South Korean officials have met with the young North Korean leader in person since he took power after his dictator father’s death late-2011—and the latest sign that the Koreas are trying to mend ties after a year of repeated North Korean weapons tests and threats of nuclear war. North Korea’s state media said Kim expressed his desire to “write a new history of national reunification” during a dinner on Monday night that Seoul said lasted about four hours. Given the robust history of bloodshed, threats and animosity on the Korean Peninsula, there is considerable skepticism over whether the Koreas’ apparent warming relations will lead to lasting peace. North Korea, some believe, is trying to use improved ties with the South to weaken US-led international sanctions and pressure, and to provide domestic propaganda fodder for Kim Jong Un. But each new development also raises the possibility that the rivals can use the momentum from the good feelings created during North Korea’s participation in the South’s Pyeongchang Winter Oly mpics last mont h to ease a standoff over North Korea’s nuclear ambitions and restart talks between Pyongyang and Washington. T he Nor t h K orea n re por t sought to make Kim look statesmanlike as he welcomed the visiting South Koreans, with Kim offering views on “activating the versatile dialogue, contact, cooperation and exchange.” He was also said to have given “important instruction to the relevant field to rapidly take practical steps for” a summit with Moon, which the North proposed last month. Moon, a liberal who is keen to engage the North, likely wants to visit Pyongyang. But he must first broker better ties between

the North and Washington, which is Seoul’s top ally and its military protector. The role of a confident leader welcoming visiting and lower-ranking officials from the rival South is one Kim clearly relishes. Smiling for cameras, he posed with the South Koreans and presided over what was described as a “copatriotic and sincere atmosphere.” Many in Seoul and Washington will want to know if, the rhetoric and smiling images notwithstanding, there’s any possibility Kim will negotiate over the North’s breakneck pursuit of an arsenal of nuclear missiles that can viably target the United States mainland. The North has repeatedly and bluntly declared it will not give up its nuclear bombs. It also hates the annual US-South Korean military exercises that were postponed because of the Olympics but will likely happen later this spring. And achieving its nuclear aims rests on the North resuming tests of missiles and bombs that set the region on edge. Photos distributed by the North showed a beaming Kim dressed in a dark Mao-style suit and holding hands with Moon’s national security director, Chung Eui-yong, the leader of the 10-member South Korean delegation. Chung’s trip is the first known high-level visit by South Korean officials to the North in about a decade. The South Korean delegates have another meeting with North Korean officials on Tuesday before returning home, but it’s unclear if Kim will be there. Kim was said to have expressed at the dinner his “firm will to vigorously advance the north-south relations and write a new history of national reunification by the concerted efforts of our nation to be proud of in the world.” There is speculation that better inter-Korean ties could pave the way for Washington and Pyongyang to talk about the North’s nuclear weapons. The US, however, has made clear that it doesn’t want empty talks and that all options, including military measures, are on the table. AP

EIRUT—The first aid delivery in weeks to reach the besieged eastern suburbs of Damascus was cut short after Syrian government forces began shelling the area while aid workers were still inside, a local council said on Tuesday. Monday’s shipment was the first to enter eastern Ghouta amid weeks of a crippling siege and a government assault that has killed hundreds of civilians since February 18. The International Committee for the Red Cross (ICRC) confirmed that its joint convoy with the United Nations had to leave before offloading all its supplies on account of the deteriorating security situation. Ingy Sedky, the ICRC spokesman in Syria, said most of the aid from a 46-truck convoy was delivered to the town of Douma in eastern Ghouta, but the mission was cut short before the rest of the supplies could be unloaded. Iyad Abdelaziz, a member of the Douma Local Council, said nine aid trucks had to leave the area after government shelling and air strikes intensified in the evening. At least 50 civilians were killed Monday by shelling and air strikes in eastern Ghouta as the Syrian

THIS photo released by the Syrian Red Crescent shows a convoy of vehicles of the Syrian Red Crescent arriving in Douma, eastern Ghouta, a suburb of Damascus, Syria, on Monday. Desperate for food and medicine, Syrian civilians in the war-ravaged eastern suburbs of Damascus hoped for relief on Monday as a 46-truck aid convoy began entering the rebel stronghold, the first such shipment in months. SYRIAN RED CRESCENT VIA AP

government, backed by Russia’s military, showed no signs of easing its assault on the beleaguered region, despite a United Nation Security Council resolution passed February 25 demanding a 30-day cease-fire. The convoy that reached Douma on Monday carried only a fraction

of the relief needed for the estimated 400,000 people trapped under the government’s siege. The UN’s humanitarian office said the convoy carried food for 27,500 people. But it said the Syrian government offloaded 70 percent of the health supplies, including trauma and surgical kits and insulin, before allowing

the convoy to enter eastern Ghouta. T he gover nment rout inely removes lifesaving medical supplies from aid convoys, in a pattern of denying such aid to civilians living in opposition areas. U.N. officials have complained for years about such actions by the Syrian government. AP

South Africa’s economy expands most in four years in 2017

OUTH A fr ican economic growth accelerated for the first year in four in 2017 as agricultural output surged following a recovery from the worst drought in more than a decade. GDP expanded 1.3 percent last year, more than the National Treasury’s forecast of 1 percent. Political and policy instability that hurt investor confidence in 2016 continued in 2017, curbing the recovery in Africa’s

most-industrialized economy and prompting both S&P Global Ratings and Fitch Ratings Ltd. to cut the nation’s debt to junk. The outlook improved last December, when the ruling party elected a new leader who promised to tackle graft. The economy grew an annualized 3.1 percent in the fourth quarter from the previous three months compared with a revised 2.3-percent expansion in the prior quarter, Preto-

ria-based Statistics South Africa said in a statement. The median estimate of 14 economists surveyed by Bloomberg was for growth of 1.8 percent. The improved quarterly performance came as agricultural output rallied 38 percent and mining output climbed 4.4 percent. The outlook for 2018 is improving. Business confidence climbed to the strongest since October 2015 in January, having fallen to a

three-decade low last August. The purchasing managers’ index was above 50 in February, indicating expansion in the manufacturing industry. South Africa’s economy could expand 1.5 percent this year, the National Treasury said on February 21. Growth will probably accelerate to 2.1 percent in 2020 as measures aimed at creating policy certainty and attracting investment pay off, it said. Bloomberg News

Trump dangles Israel trip for new embassy; mum on peace plan

A SHINGTON— Under twin clouds of legal investigation, US President Donald J. Trump and Israeli Prime Minister Benjamin Netanyahu presented a united front on Monday, Trump announcing he might travel to Jerusalem to preside over the opening of the new US Embassy Netanyahu had wanted, and the Israeli lavishing praise on the American leader. In a show of strong support for Netanyahu, who faces corruption allegations at home, Trump dangled

the possibility of his second visit to Israel as president. However, he said nothing about whether he would use the trip to unveil his much-vaunted but still-mysterious peace plan for Israel and the Palestinians. The president said his controversial decision to recognize Jerusalem as Israel’s capital and move the US Embassy from Tel Aviv to the holy city had improved chances for ending the conflict, despite Palestinians’ insistence otherwise. The two steps enraged the Palestinians,

who claim part of Jerusalem for the capital of an eventual state and accuse Trump of abandoning the United States role of honest broker. Trump and his wife, Melania, welcomed Netanyahu and his wife, Sara, to the White House just hours after Israeli police announced that a third confidant of the prime minister had agreed to turn state’s witness in the burgeoning corruption case. Netanyahu and his wife were questioned separately by police for hours last Friday before their departure for Washington.

Monday’s meeting also came amid the continuing US investigation into Russian meddling in the 2016 presidential campaign, a probe that may have implications for the president’s Mideast peace point man, son-in-law Jared Kushner, who recently lost his top secret security clearance. And, it took place as profound turmoil in the Middle East threatens hopes of a resumption in Israeli-Palestinian negotiations and attempts to restore stability in the volatile region more broadly. AP

Banking&Finance

A8 Wednesday, March 7, 2018 • Editor: Jun B. Vallecera

BusinessMirror

Govt partially awards ₧12-billion T-bonds amid high market rates

By Rea Cu

@ReaCuBM

he Bureau of the Treasury (BTr) on Tuesday partially awarded P12 billion in its latest Treasury bonds (T-bonds) auction, on the back of high rates set by the market.

The BTr auction committee received bids as high as P25.884 billion for its five-year T-bonds with an initial offer of P20 billion, but the committee decided to partially award only P12 billion due to the high rates set for the security.

National Treasurer Rosalia V. de Leon told financial reporters that the auction committee decided for a coupon rate of 5.5 percent for the security in line with the Treasury’s market expectations, which was higher by 87.5 basis

Saudi bourse courts foreigners in time for oil giant’s IPO

audi Arabia’s stock market is on a charm offensive as it prepares for what could be the world’s largest initial public offering (IPO). The exchange, known as Tadawul, aims to boost foreign ownership of equities to as much as 25 percent in at least the next two years from about 4 percent, CEO Khalid Al Hussan said in an interview in London, where he attended a Saudi Arabia investment conference organized by Goldman Sachs Group Inc. The bourse currently has about 120 registered Qualified Foreign Investors— who are allowed to trade Saudi stocks directly—and is reviewing applications of 180 more, he said. Foreigners have been net buyers of more than a 1 million riyals ($266,600) worth of shares for just one week since October 2015, when Bloomberg began tracking the data. “It will be great if one day our 49-percent foreign-investor limit is challenged but ideally, we will be satisfied if in the next two years or more, we have about 20-percent to 25-percent foreign ownership in our markets,” Al Hussan said. “We are telling global investors that our markets are open and are consistently encouraging them to invest with us.” The world’s biggest oil exporter has embarked on a range of reforms to diversify its economy after a plunge in crude prices crippled the nation’s finances. The reforms include a potential listing of Saudi Arabian Oil Co., the kingdom’s crown jewel, in the hope it will attract more international investors to its bourse and boost capital market activity. As part of its plan to revamp the economy and reduce dependence on oil revenue, Saudi Arabia is seeking inclusion in MSCI Inc.’s emerging-market gauge. A decision from MSCI on whether the kingdom is on the index provider’s review list is due in June. The bourse is also seeking a similar status from index provider FTSE Russell. “Index inclusion for us isn’t a question of if but of when,” Al Hussan said. “We are confident that we have taken all the necessary remedial measures which has been pointed out to us by the providers.” Saudi Arabia will have a potential weighting of 2.3 percent on MSCI’s emerging-market index, the third largest in the Europe, the Middle East and Africa, the index provider said last month. Based on that, an inclusion could result in inflows of about $30 billion to $40 billion, Al Hussan said. Bloomberg News

points than the previous auction’s coupon rate of 4.625 percent. “Otherwise, if we made a full award it will be a really steep climb. But with [a] 5.5 percent [coupon rate], I think that’s within our own market expectations and that’s also pricing in the market’s own expectations of the highly probable Fed [Federal Reserve system] rate hike this March,” de Leon said. The T-bond tenders reached P25.8 billion, but the committee awarded only a total of P12 billion, at an average annual rate of 5.452 percent, higher than the 4.530 percent in the previous auction. She added that high bid rates offered to government securities may be expected in the coming auctions since the market is taking into ac-

count the possible rate hikes expected for this year. “Well, the upward trend will really continue, given the expectations that there will be three to four rate hikes, but, hopefully, in terms of the way the increase will be tempering, the spikes will not be really abrupt. And, hopefully, that would come out after the outcome of the policy meetings of both the Fed and the Monetary Board,” she added. The previous auction for five-year government security happened last year under the country’s 20th offering of retail Treasury bonds (RTBs), with the BTr awarding P130 billion in its rate-setting auction from the P30 billion on offer. The RTB was set with a coupon rate of 4.625 percent and tenders amounting to P191 billion.

LandBank loans to agribusinesses up 53.5% to ₧82.6 billion in 2017

HE Land Bank of the Philippines (LandBank) on Tuesday said its loans to the agriculture sector in 2017 grew by 20.82 percent to P183.4 billion, from P151.8 billion in 2016. LandBank said loans intended for the support of the agriculture and fisheries sector grew 24.4 percent to P138 billion, from P111 billion in 2016. “A major driver of last year’s growth in the bank ’s loans to priority sectors was the 53.5-percent increase in loans to agribusinesses, which jumped to P82.6 billion, from P53.8 billion in 2016,” it said in a statement. Meanwhile, loans to small farmers, fishers and their associations also expanded by 11 percent, to P45.3 billion in 2017, from P40.8 billion in 2016, according to LandBank. “O t her sec tors t h at reg i stered growth in loans include education, which grew by 33.9 percent to P6.1 billion, from P4.5 billion, tourism, which was up by 35.2 percent to P8.8 billion, from P6.5 billion; and transportation, which rose by 29.5 percent to P38.9 billion, from P30 billion,” it said. “Loans for housing projects, environment-related projects and communications also increased in 2017,” the bank added. LandBank said its total loans to all the priority sectors in 2017 reached P564 billion, 28.1 percent higher than the P440 billion recorded in 2016. LandBank added that the P564billion loans to its priority sectors represent a “record-high” share of 93.8 percent against the bank ’s total loan

portfolio of P601 billion last year. The bank ’s total loan portfolio last yeargrew 22.92 percent, from 2016’s P488.9 billion. “LandBank is taking bigger, bolder steps in our drive to further increase support to our priority sectors, especially our small farmers and fishers. This is in line with our commitment to fuel development in the countryside, which is a vital part of our growth as a nation,” LandBank President and CEO Alex V. Buenaventura said. LandBank ’s identified priority sectors include small farmers and fishers (SFFs), a good part of which are agrarian-reform beneficiaries, micro, small and medium enterprises

Case clippings

By Justice S J Ranada Jr.

EVIDENCE–Documents not marked at pre-trial The trial court correctly allows the introduction of documents (not identified and pre-marked during the pretrial) during the redirect examination of plaintiff’s witness, upon plaintiff’s manifestation that the same are being presented in response to the questions propounded by defendant’s counsel, during the cross-examination. Per the Guidelines in Pre-Trial, the trial court has discretion to allow the introduction of additional documentary evidence during the trial, for good cause shown. Lara’s v. PNB Insurers 24 Jan 2018

Treasure hunting

ne of my favorite things to do is going treasure hunting. Typically, when I say that, most people would assume that would mean digging for buried treasure or taking out a metal detector on the beach or abandoned field. Actually, it isn’t really much more different than that. After all, we are looking for something valuable, which has remained undiscovered so far. When I go treasure hunting, I look for objects, assets or properties that I think are undervalued or whose value has not yet been fully realized by the market. And if the price is right, I would make an effort to acquire it. Similarly, if I feel that the market price is higher than the fair value of the asset and that the upside potential would take too long to make it worth holding on to, I would sell it and cash in on my treasure. My favorite place to do my prospecting is in my private space, like my desk in my bedroom or in my office. The best time for me is when I am just relaxing, having time to read the newspapers or surfing the Internet. Other places work

(MSMEs); agri- and aqua-projects of local government units and government-owned and -controlled corporations (GOCCs); communications, transportation; housing; education; hea lt h c a re; env i ron ment-re l ated projects, tourism and utilities. LandBank remains the single largest lender to small farmers and fishermen, and the leading provider of financial assistance to MSMEs among GOCCs and government financial institutions. It also finances projects in agriinfrastructure, agribusiness, schools and hospitals, farm-to-market roads, housing and livelihood, and other development projects of local government units. Jasper Emmanuel Y. Arcalas

FINEX free enterprise George S. Chua equally well for me, like the bar or the veranda of any of the golf clubs I am a member of and just have time by myself to leisurely smoke a cigar with some scotch, single malt or brandy. I do recall my earliest efforts in treasure hunting when I was still in college and would make money buying and selling cars. I would buy cars that were being sold cheaply that had something off with it like a bump, bad upholstery or some mechanical problem, get it all fixed and sell it at a significant profit. The big question is how do you know if something is undervalued and would have an upside potential? The market

GR 230429-30 Velasco, J

price or what the property is being bought and sold for is not necessarily the true value. As an example, I recall about 20 years ago when gold was under $300 an ounce and the value of American double eagle gold coins were practically the same as their value in gold content, that there was no or not much premium given on the numismatic value of the coin. To me it was a no-brainer, so I kept on buying gold coins almost every week. With the current price of gold at over $1,322 an ounce, I guess I did alright. Plus, I do get the benefit of owning nice gold coins to look at! Country club shares are also something I like prospecting in. Typically, I would look at the real-estate value of the country club and divide it by the number of proprietary members to come up with the notional per share value. If the notional value is much higher than the current price of the share, I would take a closer look, taking into account the cost of transferring the share, as well as how much it costs to maintain the share. I have found out through the years that, eventually, there would

www.businessmirror.com.ph

IC Commissioner Funa commends Eternal Plans

nsurance Commissioner Dennis B. Funa commended Eternal Plans Inc. for staying strong and resilient in the face of the many challenges besetting the local preneed industry today. In a message for the 37th anniversary of Eternal Plans, Funa also lauded the company for its efforts to continue serving its clients satisfactorily despite the difficulties. “For more than three decades now, you have been pushing through the torrents of change in order to realize your vision to be a leading world-class preneed company offering superior yet affordable products and services to satisfactorily address the needs of planholders,” Funa said. Citing the most recent Pre-Need Forum held in early February, where the Insurance Commission and the insurance and preneed industries collectively acknowledged and recognized the “pressing need to be better consumer champions at a time of growing complex demands from an increasingly digital society,” Funa urged Eternal Plans to continue “with a higher level of excellence, professionalism and dedication toward meeting the customers’ needs.” Funa also expressed his confidence that Eternal Plans will continue to do well and be a key player in the business. “I trust that Eternal Plans will once again be one of the pillars that will lead the preneed industry toward transformation and finding sustainable ways to capture the trust and deliver on the promise of being a reliable partner of the Filipino in building a secure future,” he said.

Nomura names new investment banking chief

omura Holdings Inc. named Yo Akatsuka as global investment banking chief, as Japan’s biggest securities firm makes a renewed push to expand its advisory business in the United States. Akatsuka, 52, will replace Minoru Shinohara on April 1, the company said, as part of an annual management shuffle announced on Tuesday. Among other key changes, current domestic brokerage unit chief Toshio Morita and Americas head Kentaro Okuda will become cochief operating officers, replacing Tetsu Ozaki, who will take the role of vice chairman, the statement showed. CEO Koji Nagai has hired at least 15 investment bankers in the US over the past year to bolster the firm’s advisory capabilities in North America. Nomura became Japan’s top mergers adviser for the first time since 2011 last year, and Shinohara said in an interview in January that he’s confident of another bumper year in 2018. Bloomberg News

be an upward adjustment of sufficient magnitude to handsomely reward the treasure hunter. Another favorite treasure hunting ground for me would be the stock market. I would normally look at the business the listed company is in and who are managing it. If the price earnings ratio is low enough and the share price is close to book value, I would take a closer look. If the regular cash dividend payout is in multiples of what you could get in the money market, I would go right in. In the 40 years I have been investing in equities, I can’t complain with my treasure-hunting formula. Treasure hunting can be just a hobby or sideline, but it is fun doing it, especially when you make money out of it. You don’t have to be an Indiana Jones to be a treasure hunter, but you need to know what you are doing. It is always easy to buy, but the key is to be able to sell it at a higher price than what it cost you to acquire it. Comments may be sent to georgechuaph@yahoo.com

ExportUnlimited BusinessMirror

HIMS holds business forum, outreach in US

TRADE Undersecretary Nora K. Terrado

By May Niña Celynne P. Layug | DTI’s Foreign Trade Service Corps

OUSTON, Texas— The Philippines Healthcare Information Management Services (HIMS) Trade and Investment Roadshow to the United States, with the theme “Unlocking Opportunities. Embracing Innovation,” held a business forum and outreach in Houston, Texas, on March 1 and 2.

Texas Honorary Consul General Ethel Mercado welcomed the Philippine delegation, headed by DTITrade and Investments Promotion Group (DTI-TIPG) Undersecretary Nora K. Terrado and composed of officials from the DTI-Board of Investments (BOI) and Export Marketing Bureau (EMB), Philippine business-process management (BPM) industry leaders and representatives from 13 companies providing information-technology and HIMS-BPM services. Attended by health-care professionals and business owners ranging from small to large healthcare facilities and institutions, the business forum held at the Texas Medical Center Third Coast Restaurant highlighted the Philippines’s strong economic growth that translates to more enhanced partnership opportunities between the Philippines and the Houston health-care industry. The delegation served as ambassadors in promoting the sector’s strengths, advantages and capabilities. Company visits to the top 3 health facilities in Houston, namely, Memorial Hermann, Methodist, and CHI St. Luke’s Health, as well as Kindred and HealthSouth facilitated discussions on the impact of technology on health care-information management. “As we see the transformative effect of the Internet of Things in the health-care industry, the Philippines will continue to advance the complementation of our services and

these emerging technologies. It also gives pride to the Philippines on the increasing role of overseas Filipino investors [OFIs] in Houston’s healthcare and IT-BPM sector that have established their own respective facilities. We will continue to enhance our services to ensure we bring value to our OFIs, as well,” Terrado said. The Houston business forum and outreach was the second track of the 2018 Philippines HIMS Trade and Investment Roadshows in the United States organized by the BOI and EMB in close coordination with the Philippine Trade and Investment Center Los Angeles and the Philippine American Chamber of Commerce-Texas. The delegation recently concluded the New York business forum and business-to-business meetings and will now proceed to Las Vegas for the country’s participation in the 2018 HIMSS Annual Conference and Exhibition, which will be attended by around 40,000 professionals, executives and vendors in the IT/HIM industry worldwide, making a vast potential for networking and investment opportunities for the country. The Philippines remains one of the leading suppliers of HIMS services worldwide, with 118,245 fulltime employees (FTEs) and revenue of $2.41 billion in 2016. The road show is part of the continuous efforts of the Philippines to help the HIMS-BPM industry reach its $5billion revenue and 210,000 FTEs target by 2022.

DTI-EMB intensifies support to local MSMEs By Myrtle Faye Solina

Trade and Industry Development Specialist, DTI-EMB

N support of President Duterte’s “AmBisyon Natin 2040,” the collective long-term vision and aspirations of the Filipino people for themselves and for the country in the next 25 years, the Export Marketing Bureau (EMB) of the Department of Trade and Industry (DTI) has intensified its assistance to local micro, small and medium enterprises (MSMEs) through its Regional Interactive Platform for the Philippine Exporters (Ripples) Plus program. Ripples Plus is a focused program that aims to expand the supply base of internationally competitive Philippine export products and services and to provide intensified, purposive and practical assistance geared toward the internationalization of MSMEs and expand the global export-market opportunities for large corporations. Ripples Plus aspires to develop both the products and the exporters themselves through program

PARTICIPANTS from different industries and regions in the Philippines and the training program coordinators join officials of the Hinrich Foundation of Germany, Leipzig University, and officials of the Department of Trade and Industry’s Export Marketing Bureau (DTI-EMB), Philippine Trade Training Center (PTTC), and the German-Philippine Chamber of Commerce and Industry (GPCCI). Seated in first row, beginning third from left: Hinrich Foundation Program Director Alexander Boome, Dr. Utz Dornberger of Leipzig University, DTI-EMB Assistant Director Agnes Legaspi, PTTC Executive Director Nestor P. Palabyab, GPCCI Executive Director Peter Kompalla and PTTC Acting Deputy Executive Director Elizabeth Manuel (second row, fifth from left).

strategies which encompass four modes of assistance: training and capacity building; marketing and promotion; support for innovation, product development and design, access to markets through mutual recognition agreements (MRAs) and certifications. In 2017 the Ripples Plus assisted 408 exporters and implemented 33 marketing and promotional activities geared toward the development of products and exporters themselves. “I was one of the lucky MSMEs

who benefited from the Ripples Plus Project Tracks 1 and 2. For the Track 2 project, the conduct of the product development included the translation of the text of the chichacorn labels in Arabic language. This will open new export markets of my chichacorn products specifically in the Middle East Asia countries,” said Clemencia A. Padre, owner of Ilocos Food Products in Region 1. “Our participation to the various trade and exhibitions and fairs allowed our cooperative to open new markets and new opportuni-

ties. Orders have increased from Manila- and Cebu-based exporters and converters. The DTI, through the Ripples Plus, made us generate a total sales of P6.40 million for 2016 and P5.06 million for 2017,” said Ma. Trina V. Sumayang, general manager of Tubigon Loomweavers Multipurpose Cooperative. This year the program aims to undertake targeted and more aggressive export promotion for priority industries, such as food and agri-marine, services, and industrial sectors.

DTI-EMB conducts info session on export tax-related matters By Patricia G. Blacer

Trade and Investment Development Specialist, DTI-EMB

HE Export Marketing Bureau (EMB) of the Department of Trade and Industry (DTI) conducted an information session regarding Section 31 of the Tax Reform for Acceleration and Inclusion (TRAIN) law and Department of Finance’s One- Stop Shop Services for Exporters on February 22 at the DTI International Building in Makati. More than 70 participants composed of exporters, businesssupport organizations, officers from relevant government agencies and other stakeholders at-

tended the seminar. Director Ernesto Hiansen, executive director of the DOF’s One-Stop Shop Center (OSSC), introduced the services of his office and how these services are relevant to exporters. The OSSC is an interagency tax credit and duty drawback center mandated to process tax credit claims of exporters and other industry sectors. Tax credit certificates (TCCs) are one of the incentives both exporters and manufacturers can enjoy to enhance their competitiveness. Hiansen said the center undertakes various facilitation measures to expeditiously process these TCC claims. Revenue lawyer Rhodora Devilla

of the Bureau of Internal Revenue (BIR) discussed Republic Act 10963, also known as the TRAIN law, in particular Section 31: Value-added tax (VAT) on sale of goods or properties, which essentially introduced new provisions on export taxes. This section covers new amendments to the National Internal Revenue Code on export sales, zero-rated sales and corresponding VAT-refund claims. The new regulation has impact on the VAT refund and zero-rated incentives enjoyed by exporters and their suppliers. Devilla further clarified that since the BIR is still in the process of crafting new revenue regulations (RRs), the status quo shall apply, which

means that until such time these RRs are implemented by identified government agencies, exporters and manufacturers can still apply for their VAT-refund claims. After the session, an open forum was conducted, where participants took the opportunity to ask questions and discuss their concerns with the resource speakers. The session was held under the Philippine Export Competitiveness Program, an EMB umbrella program that aims to boost the competitive stance of exporters and stakeholders through the conduct of information sessions, seminars and the like, with regards to export trends and new regulations.

Editor: Efleda P. Campos • Wednesday, March 7, 2018 A9

Ifex Philippines 2018 makes waves with exciting seafood edition

LOBAL buyers are up for an exciting showcase of the Philippines’s premier seafood and other food segments in the International Food Exhibition (Ifex) Philippines, the country’s biggest exportoriented food show, from May 25 to 27 at the World Trade Center in Pasay City. Organized by the Department of Trade and Industry’s Center for International Trade Expositions and Mission (DTI‐Citem), Ifex Philippines 2018 will stage its first special edition featuring “The Best of the Seas,” focusing on the fast-growing seafood market in the Philippine regions and other Asian countries. “Now an annual event, Ifex Philippines continues to be the largest and widely anticipated food trade event in the country,” said Nora K. Terrado, DTI undersecretary for Trade and Investments Promotion Group and Citem officer in charge. “For its 12th edition, we will highlight the Philippines’s finest seafood to satisfy the growing global demand for marine product and coastal cuisines, along with other exquisite food products across the globe,” Terrado said. As one of the official business events during the country’s hosting of Asean in 2017, last year’s Ifex Philippines opened more trade opportunities and innovations around the world with the showcase of the Philippines’s best and overseas participation of the European Union (EU), China, South Korea, Brunei Darussalam, Cambodia, Indonesia, Malaysia, Myanmar, Singapore, Thailand and other countries. The three-day event was attended by nearly 11,000 international and local visitors, including 2,057 highprofile trade buyers from top global retail giants and supermarkets. These buyers came from different regions across the globe, such as Europe, China and SARs, Middle East, East Asia, America and Southeast Asia. For its 12th edition, the Ifex Philippines will excite buyers with the country’s top and emerging food-export companies to promote Philippine food products and strengthen links with buyers, importers and retailers in the global market. Meanwhile, the

event will also put up an international hall to host the top seafood and nonmarine products of leading companies and manufacturers from other participating countries. Making a flavorful splash in its seafood edition, Ifex Philippines will also stage the Regional Seafood Pavilion, a regional showcase of world‐class seafood products and ingredients locally sourced from the coasts and diverse marine environments across the Philippine archipelago. “We are tapping the country’s most marine-abundant coastal regions from Luzon, the Visayas and Mindanao. This is where we will bring key suppliers to make it easier for buyers to source in one pavilion the best fish and marine products, such as tuna, milkfish, prawns, tilapia and other seafood from the Philippines,” Terrado said. The Coastal Culinary Cuisine will then complete the culinary journey in a dynamic presentation of the Philippines’s most iconic and distinct regional seafood cuisines from top international and local experts to give an exquisite experience of the country’s heirloom flavors and traditions. The marketplace is also open for a one‐stop retail experience of premium food products ranging from seafood products, fruits and vegetables, meat and poultry, processed foods, homemade regional delicacies and many more. For those wanting much more inspiration and adventure, visiting buyers and exhibiting companies can also attend export and investment seminars to get new ideas and updates on the latest regulations, trends and innovations in the food industry from renowned experts, researchers, lecturers and members of academe. The 12th edition of Ifex Philippines is supported by the Department of Agriculture and the Bureau of Fisheries and Aquatic Resources. Interested companies/exhibitor may contact Alex Lucas at 8312137, or send an inquiry at alucas@ citem.com.ph.

Zero VAT for indirect exports status quo By Ma. Divine Grace T. Derez Policy Advocacy Officer, Export Development Council

HE Bureau of Internal Revenue (BIR) clarified that the zero-percent value-added tax (VAT) for indirect exports is status quo until the conditions cited in the recently passed Republic Act 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) law are satisfied. Indirect exports include sale of raw materials or packaging materials to a nonresident local export-oriented enterprise and to an export-oriented enterprise whose sales exceed 70 percent and those considered export sales under Executive Order 226. Section 31 (a) of the TRAIN law provides three conditions that are the successful establishment and implementation of an enhanced VAT-refund system that grants 90 days from the filing of VAT-refund

application; all pending VAT-refund claims as of December 31, 2017, shall be fully paid in cash by December 31, 2019, and that the Department of Finance (DOF) shall establish a VATrefund center in the BIR and Bureau of Customs. Upon satisfaction and implementation of all of these conditions, zero VAT for indirect exports will be lifted. President Duterte vetoed some provisions of the TRAIN law, including the zero-rating of sales of goods and services to separate customs territory and tourism- enterprise zones, as this provision grants new incentives to suppliers of registered tourism enterprises. However, Section 31 (b) of the TRAIN law states that exemption under special laws or international agreements to which the Philippines is a signatory effectively subjects such sales to zero rate. These special laws include Republic Act 7948, or the amended Special Economic Zone Act, and RA 9593, or The Tourism Act of 2009.

A10 Wednesday, March 7, 2018 • Editor: Angel R. Calso

Opinion BusinessMirror

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editorial

Govt must promote high-value crops

emand for chocolates and specialty coffee continues to rise in many countries including the Philippines, yet Filipino coffee and cacao planters remain unable to cash in on this trend. Imports continue to fill the shortfall in domestic production and the requirement of local manufacturers. Farmers in other countries are earning from the inability of the Philippines to expand its plantation for high-value crops like coffee and cacao. According to the latest data from the International Cocoa Organization (ICCO), cocoa beans prices averaged $2,000 per metric ton (MT) as of March 2. Historical data from the ICCO also showed that from January 2012 up to March 2017, the international price of cocoa remained above $2,000 per MT. It even breached $3,000 per MT in 2014 and 2015. The average daily price of cocoa fell to $1,957 per MT in January but recovered and reached $2,265 per MT on March 1. These figures only show that demand for cocoa beans remains strong. As for coffee, data from Bloomberg indicated that it was priced at $121.10 per pound. Data from the International Coffee Organization also showed that the price of coffee beans did not fall below $100 per pound since 2012. Despite the favorable international price, farmers are unable to expand output. In fact, the Philippines continues to import some 70,000 MT of coffee beans just to fill the increasing demand of local consumers. Experts and even those from the private sector have sought government assistance to hike the output of the two high-value crops. The government has already drawn up road maps that outline strategies to expand the output of cacao and coffee. The end-goal of the two road maps is to wipe out imports by the time the President steps down from office. But rolling out interventions required to achieve this goal would require lots of political will and money. Farmers and even nongovernment groups have been urging the government to offer affordable production loans. This is because farmers can only start earning from planting coffee and cacao after three years. The Philippines would soon be removing its rice-import quotas, which would make it more difficult for farmers to earn from planting the staple. What the government can do now is to help farmers find alternative crops they can plant should cheap rice starts flooding the country. In areas where cacao and coffee can be grown, the government should encourage the cultivation of these two high-value crops by providing farmers the support they need. Government agencies are now in the process of crafting their budget. The Department of Agriculture said earlier that it would again aspire for a higher allocation for 2019. It is hoped that part of this increase would go to funding interventions outlined in road maps that are aimed at boosting the production of high-value crops like cacao and coffee. Encouraging the output of high-value crops is a viable alternative for some rice farmers who would soon lose their livelihood with the entry of cheap imports after the import quota is lifted. Since 2005

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World Bank’s Disaster Risk Management Development Policy Loan Dennis B. Funa

INSURANCE FORUM

he Washington, D.C.-based World Bank (WB) has extended to the Philippines a $500-million Disaster Risk Management Development Policy Loan with a Catastrophe-Deferred Drawdown Option (CAT-DDO2) as part of a larger disaster risk financing and Insurance (DRFI) strategy for the Philippines. The CAT-DDO is a contingent credit line aimed at providing immediate liquidity in the aftermath of a natural disaster. This is the second of its kind. This project started in December 2015, when it was approved by the World Bank Group’s board of executive directors, and will end in September 2018. The first CAT-DDO was implemented in September 2011 and closed in October 2014. The implementing agency continues to be the Department of Finance (DOF).

A natural calamity can cause significant damage to the economy. The World Bank noted that the onslaught of Supertyphoon Yolanda (international code name Haiyan) in 2013 slashed 0.9 percent from the gross domestic product growth that year, on top of another 0.3 percent cut the following year.

The first CAT-DDO produced significant initiatives, such as the establishment of 80 fully functional DRRM offices in the provinces, substantially exceeding the target of 14 provinces. Similarly, over 1,487 cities and municipalities have established local DRRM offices. Also, guidelines on the use of Local Disaster Risk

There’s nothing shocking about Xi’s rise

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Reduction and Management Fund (LDRRMF) were issued. The DILG issued Memorandum Circular 201273 on April 17, 2012, to provide guidance on the eligible expenditures to be supported by the LDRRMF. Between 2011 and 2014, the Department of Public Works and Highways (DPWH) completed the retrofitting and reconstruction of 10 bridges in Metro Manila. The objective of the loan is “to enhance the technical and financial capacity of the government of the Philippines to reduce disaster risk and manage the socioeconomic and fiscal impacts of natural disasters.” The trigger for the drawdown or access is the declaration of a state of calamity as a result of a natural disaster in accordance with the Disaster Risk Reduction and Management (DRRM) Act of 2010. A declaration of a state of calamity can be national or part of the territory, in clusters of barangays, municipality, cities, provinces or regions. After Typhoon Ondoy (Ketsana) and Typhoon Pepeng (Parma) in 2009, Congress passed Republic Act 10121, or the Philippine Disaster Risk Reduction and Management Act mandating a shift from disaster

N a season of political shocks, President Xi Jinping’s assumption of supreme power has still managed to startle many longstanding observers of China. The Economist magazine dramatically declared, “The West’s 25-year bet on China has failed.” Instead of moving toward democracy, these voices suggest, China is sliding further into authoritarianism. It’s worth asking, if for no reason than to avoid more such shocks in the near future, why the “West” placed this bet on China at all. The expectation that China would amicably integrate into a global order defined by the West, and radically transform itself in the process, was always wishful thinking. Writing about Britain’s handover of Hong Kong to China in 1997, New York Times columnist Nicholas Kristof wondered if China was inheriting “a colossal Trojan horse” that over time would bring down the Beijing regime. In January 2013 Kristof predicted that Xi would initiate far-reaching economic and political reforms, including removing the body of Mao Zedong from its mausoleum in Tiananmen Square. Journalists weren’t alone in investing a quasi-religious faith

in China’s redemption by democracy and free markets. Pushing for China’s accession to the World Trade Organization, Bill Clinton claimed that the liberalization of China’s political system was “inevitable, just as inevitably the Berlin Wall fell.” Those who got Xi spectacularly wrong can at least claim that not much was known about him before he became China’s leader. But there is less of an excuse for failing to understand the very simple lesson of China’s modern history: All Chinese regimes since the collapse of the Qing monarchy in 1911 have consolidated national sovereignty and hectically pursued wealth and power through all available means. It has never been a secret that the Chinese Communist Party (CCP) grew out of China’s formative

political event in 1919, the May Fourth Movement. The CCP was both nourished by, and stoked, a widespread sentiment that China had been bullied and dishonored by Western powers and had to rebuild its strength. Mao’s anti-Westernism may have been easy to dismiss as the self-serving tactic of a megalomaniac. But his successor, the reformist Deng Xiaoping, was pretty blunt, too, once warning in posters emblazoned across China, “Our country must develop. If we do not develop then we will be bullied.” China has now developed, to the point where it’s seen as bullying foreign businesses and governments rather than being bullied by them. In this, China merely confirms the same harsh logic of geopolitics of which it was once the victim. What should surprise us even less is increasing authoritarianism in China, or that economic growth there hasn’t been accompanied by democracy. As the French thinker Raymond Aron wrote in the 1950s, “No European country ever went through the phase of economic development which India and China are now experiencing, under a regime that was representative and democratic.” In fact, in the early 20th century, democracy was doomed in such rising countries as Japan and Germany by the great and acute problems of modern development, which were made worse by successive global economic crises. The arrival of uprooted

response to disaster-risk reduction and preparedness. In line with this loan, the World Bank has supported the DPWH in revising the National Building Code of the Philippines to integrate disaster risk reduction as a key feature. This is seen to be integrated in a new Philippine Building Act. The DOF and the Insurance Commission are also reviewing the design proposed by the Philippine Insurers and Reinsurers Association on the establishment of a Philippine Catastrophe Insurance Pool for homeowners and small, medium enterprises. Another area for technical support is the development of database templates of insurance exposure and losses.

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The full loan amount is available for disbursement at any time within three years from loan signing. The amounts repaid during the drawdown period are available for subsequent withdrawal, known as a revolving feature. The three-year drawdown period may be renewed up to four times, for a total maximum period of 15 years. The government has the option to renew the CAT-DDO2.

masses into urban areas, uneven growth and the problem of social and economic inequality conspired to boost authoritarians and militarists. Today, the leaders of major nations, such as India and China, that feel left behind are trying to catch up with the winners of history. They use the latter’s ideas and technologies and might even adopt parts of their ideology. But they are bound to their own political agendas and the course of their societies will ultimately be determined by inner social and economic contradictions, rather than wishful thinking by foreigners. History also reveals, alarmingly, that, trapped by their own rhetoric, authoritarian figures and regimes tend to escalate. It is how Germany and Japan ended up declaring war on their close trading partner, the United States. Let there be no doubt: The world was a dangerous place long before Xi became China’s supreme leader and Donald J. Trump started to boast of winning trade wars. Its perils weren’t recognized because of the ideological intoxication and historical amnesia induced by the collapse of Soviet and East European regimes—the blind faith that history had no choice but to move inexorably toward a terminus of Western-style capitalism and democracy. Xi’s power-grab is simply another reminder that it’s time to put away such childish fancies and to reckon with the world as it is.

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Falling on deaf ears

Economy remains robust, but uncertainties abound

BusinessMirror

Florante S. Solmerin

Michael Makabenta Alunan

FACT IS MIGHT!

resident Duterte’s all-out war against illegal gambling remains at the back-burner because our law-enforcement agencies, especially the Philippine National Police (PNP), have yet to show their mettle in the battle to eradicate illegal gambling in our country. When Duterte signed Executive Order 13 in 2017, I believe he did not do it for a show or perhaps to appease the public from the bloody campaign of the police against illegal drugs. But unlike drugs, Duterte has not been that vocal when it comes to the fight against illegal gambling. I’ve never heard him curse or threaten to kill financiers and their protectors just like what he was doing to drug lords, protectors, street peddlers and even users. Shortly after Duterte appointed retired Marine Maj. Gen. Alexander Balutan as general manager of the Philippine Charity Sweepstakes Office (PCSO) in September 2016, the PCSO leadership and PNP Director General Ronald M. dela Rosa signed a memorandum of agreement (MOA) for the police to lead crackdowns against jueteng and all forms of illegal numbers game. In fact, the agreement empowered the PNP to protect the operation of the PCSO’s Small Town Lottery (STL) nationwide. The MOA was a boost to the STL operation. Balutan and thenchairman Jose Jorge Corpuz led the Board in crafting an implementing rules and regulations (IRR) for the expanded STL. The Board is now led by Chairman Anselmo Simeon Pinili, a retired police general and classmate of Balutan at the Philippine Military Academy “Matikas” Class of 1983. The objective is to persuade illegal gambling financiers to become

legal and form their own group now called Authorized Agent Corp. (AACs). From only 18 STL agents, the number grew to 56 in February 2017. Monthly revenue collections shot up as Balutan and Corpuz added more AACs to a total of 92. By the end of 2017, there were 83 AACs playing STL nationwide that provided the government P15.7 billion in revenues compared to P4.7 billion yearly from the past two administrations. At present, two AACs were terminated due to various IRR violations, but PCSO’s revenue collections from the STL’s Presumptive Monthly Retail Receipts continue to grow by almost P2 billion monthly since January this year. The PNP and local government units, including congressional districts, have monthly shares from the STL revenues. This should have convinced them to further support the STL operation within their area of jurisdiction. Unfortunately, with the connivance of some rogue police officers, local officials prefer to support illegal gambling for bigger payola from gambling financiers. For instance, the Peryahan ng Bayan con jueteng banned by the PCSO in 2016 reared its ugly head recently in some areas, including the Bicol region, Ilocos region, Central and Northern Luzon and also in Southern Tagalog. E-mail: fetad@yahoo.com.

on the contrary

he economy remains robust as it leads almost all other Asian countries, with its high forecast of 6.7-percent growth for 2018, but must not be the basis for complacency owing to a host of uncertainties ahead and the widening inequality amid all the sustained growth. This can be gleaned from a presentation by economist Gilbert Llanto, PhD, before the third Katipunan Conference held recently at the UP Law Center. Llanto’s presentation was his valedictory paper as he retires as president of Philippine Institute of Development Studies, a think tank under the National Economic and Development Authority. n A cut above the rest? From 2012 to 2016, economic growth averaged 6.6 percent, thanks partly to macroeconomic fundamentals during President Aquino’s administration, despite all the shortcomings and corruption that have occurred. Citing World Bank statistics from 2012 to 2016, Llanto said we were behind China’s average growth of 7.3 percent, Japan’s 7.3 percent, South Korea’s 2.8 percent, Indonesia’s 5.3, Malaysia’s 5.1 percent, Singapore’s 3.3 percent, Thailand’s 3.4 percent and Vietnam’s 5.9 percent. The smaller economies posted higher averages, which are understandable coming from low bases, thus, Cambodia grew an average of 7.2 percent, Laos, 7.6 percent and Myanmar, 7.3 percent. For 2018, our 6.7-percent growth is remarkable compared to China’s 6.3 percent, Japan’s 1 percent, South Korea’s 2.8 percent, Brunei Darussalam’s 1 percent, Indonesia’s 5.2 percent, Malaysia’s 4.9 percent, Singapore’s 2.7 percent, Thailand’s 3.3 percent and Vietnam’s 6.3 percent. Countries with higher growth rates

for 2018 are Cambodia with 6.9 percent, Lao PDR with 6.8 percent and Myanmar with 7.2 percent. Many experts see the Philippines sustaining its robust growth, a cut above the rest, over the coming years, more so with the “Build, Build, Build” infrastructure program. n Sources of growth. Services contributed 57.4 percent of GDP, mainly from trade and repair and real estate, contributing much of gross value added in Services. But in growth terms, Industry recorded the fastest growth at 7.3 percent during the last quarter of 2017, outpacing Services’ growth of 6.8 percent, while agriculture recovered with 2.4-percent growth, reversing the 1.3-percent decline in 2016. Although the economy remains consumption-driven with a strong services sector, buoyed partly by remittances of overseas Filipino workers (OFWs), the structure of the economy changed favorably with investments increasing its share of total expenditures from 15.9 percent in 2007, to 28.6 percent in 2017. Total private consumption spending steadily dipped from 71.6 percent to 68.7 percent. Government spending remained stable, while net exports declined from a positive. 2.8 percent in 2007 to a negative -7.8 percent. This is not good if imports are all spent on consumptive expenditures, but positive if imports are most for equipment and investments, increasing the local productive

Wednesday, March 7, 2018 A11

capacity to produce and export. n But rising inequality is worrisome. Unfortunately, it is too early to rejoice because of the rising “inequality paradox,” says Llanto. The paradox shows that as global inequality among countries decreases along the Gini Index from 0.8 in 1988 to 0.65 in 2013, inequality within country steadily worsened from 0.20 to 0.35. The higher the Gini Index approaches 1 percent, the worse income inequality gets, and conversely, the closer it gets to zero percent, the more equality is achieved. Dr. Sally Goerner of Capital Institute and Research Alliance for Regenerative Economics reveals an Oxfam International study that in 2010 the top 388 richest people owned as much wealth as the poorest 50 percent of the world’s population of 3.6 billion people. By 2014 this was down to 85 people. And if this trend continues, by the end of 2016 the top 1 percent will own more wealth than everyone else in the world combined, Goerner said. She added that the extremely wealthy are also extremely efficient in dodging taxes, and are estimated to have hidden $7.6-trillion financial assets in offshore tax havens. French economist T homas Picketty, famous for his best-selling book Capital in the 21st Century was the first to notice, along with Emmanuel Saez that when the top 1 percent wealthy owned 25 percent of total wealth in 1928, the bubble burst, leading to the 1930’s Great Depression years. Again, in 2007 when the top 1 percent owned 25 percent of wealth, this was followed by the 2008 global financial crisis. In-between, income inequality was less-pronounced with a suspension-bridge-like graph with inequality at less than 10 percent in the 1970s, but started climbing with financial liberalism, followed by 1999 repeal of the 1933 Glass Steagall Act that regulated separately commercial and investment banks. Subsequently, banks were liberally trading even government

employees’ pension plans in casinolike hedge funds and derivatives in Wall Street. n Roller-coaster financial markets. Ever since the last financial bubble burst in 2008, massive liquidity pumping was done through quantitative easing, bailouts, lower reserves, interest rates close to zero, etc., but only increased corporate debt from $8 trillion in 2008, to $14 trillion by early-2017, a 75-percent increase which was spent mostly to buy up their own stocks to drive-up prices, triggering financial growth on paper while the real economy was really collapsing. This can build up another financial bubble that could burst again, triggering more desperate pressures from warmongers to go to war to boost demand through more arms sales and extract more value from ravaged countries, cluelessly made to believe they need to invest more in military arms, than education and factories that generate productive jobs. The monetary bailouts have only ballooned Wall Street’s derivatives or fictitious debts to about $750 trillion in 2017, way above US GDP of $15 trillion a year, or bigger than global GDP of $70 trillion. Ironically, while the bailouts simmered down volatile financial markets, they are fueling another bubble, while the real economy is collapsing from neglect. While big banks were rescued, small banks lending to small businesses creating real physical wealth were forced into bankruptcy. From 2007 to 2012 alone, scores of these small American banks closed shop. Locally, it is advisable for government to match its urban-centered infrastructure program with programs boosting agriculture and rural manufacturing with strong backward linkages with agriculture, because it is here where 76 percent of those below the poverty line resides.

E-mail: mikealunan@yahoo.com

Trade war, what is it good for? Absolutely nothing Trump wields a popgun in the battle of wit Paul Krugman

new york times

e’ve known all along that Donald J. Trump is belligerently ignorant about economics (and many other things). But up to this point that hasn’t mattered much. He took office amid a sustained recovery that began under his predecessor, and that recovery had already lifted the US economy to the point where “normal” policy rules apply: interest rates are above zero, monetary policy is effective again, so short-term economic management is in the fairly reliable hands of the Federal Reserve, not the chaotic Trump White House. What the president didn’t know couldn’t hurt us.

But there was always reason to be concerned about the possibility of crisis—either a crisis created by outside forces, like some kind of financial collapse, or one created by the administration itself. In that case, the Fed’s rationality wouldn’t be enough. And it’s starting to look like we have a trade policy crisis on our hands. Trump has always had a thing about trade, which he sees the way he sees everything: as a test of power and masculinity. It’s all about who sells more: if we run a trade surplus, we win, if we run a trade deficit, we lose: “When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore—we win big. It’s easy!” Trump wrote on Twitter. This is, of course, nonsense. Trade isn’t a zero-sum game: it raises the productivity and wealth of the world economy. To take a not at all random example, it makes a lot of sense to

produce aluminum, a process that uses vast amounts of electricity, in countries like Canada, which have abundant hydropower. So the United States gains from importing Canadian aluminum, whether or not we run a trade deficit with Canada. (As it happens, we don’t, but that’s pretty much beside the point.) It’s true that trade deficits can be a problem when the economy is depressed and unemployment is high. That’s why I, like many other economists, wanted us to take a tougher stance on Chinese currency policy back in 2010, when we had around 9 percent unemployment. But the case for worrying about trade deficits, like the case for running budget deficits, has largely evaporated now that unemployment is back to 4 percent. So we can’t “win” a trade war. What we can do is start a cycle of titfor-tat, and when it comes to trade, America—which accounts for 9 percent of world exports and 14 percent of world imports—is by no means a dominant superpower. A cycle of retaliation would shrink overall world trade, making

the world as a whole, America very much included, poorer. Perhaps even more important in the near term, it would be highly disruptive. We live in an era of global supply chains: Just about everything produced in America (and everywhere else) uses inputs produced in other countries. Your new car may well have a chassis assembled in the United States, an engine and wiring system made in Mexico, electronics from Korea and China, and, of course, steel and aluminum from Canada. Could we produce cars without all those imported components? Yes, given time. But getting from here to there would be a huge mess: hundreds if not thousands of factories would have to close or convert over to other uses. Never mind the net loss of jobs from a full-scale trade war, which would in the end probably be a relatively small number. The point instead is that the gross job losses would be huge, as millions of workers would be forced to change jobs, move to new places, and more. And many of them would suffer losses on the way that they would never get back. Oh, and companies on the losing end would lose trillions in stock value. So the idea that a trade war would be “good” and “easy to win” is surpassingly stupid. And the way Trump seems to be starting his war is also remarkably stupid: start by protecting goods that are inputs to industries that employ far more people than those being protected? Do so in the name of national security— a justification that is, for good reason, almost never invoked—when the biggest source of those inputs is that hostile foreign power Canada? In themselves, these tariffs aren’t that big a deal. But if they’re a sign of what future policy is going to look like, they’re really, really bad.

By Albert R. Hunt Bloomberg View

umor can be a powerful political weapon in skilled hands. President Donald J. Trump just showed that he needs to go back to basic training. Trump rolled out his sense of humor last Saturday night at the annual Gridiron dinner, where politicians have competed for over a century for an unofficial Washington comedy crown. Presidents John F. Kennedy and Ronald W. Reagan were especially noteworthy for using Gridiron appearances to dazzle the city’s elite with their sharp and self-deprecating wit. Trump opened with a few good cracks about his hostile relationship with the press. “I’m ruining your evening in person,” he said. And he didn’t exclude jokes at his own expense, or at least at the expense of his son-inlaw, Jared Kushner, who just lost his top-secret security clearance. “We were late because Jared could not get through security,” Trump cracked. The routine went downhill from there, tumbling across the line separating well-chosen gibes from crude insults. He called House Democratic Leader Nancy Pelosi “crazy.” He boasted that in a contest against former Vice President Joe Biden, he “would kick his ass.” He belittled his own vice president, Mike Pence, comparing him to the contestants on his former reality TV show and declaring, “I’m proud to call him the apprentice.” Loya l Tr ump fans probably chuckled at their guy’s closing line mocking the many journalists in the room. He said the chance to address them gave him the most “fun I’ve had since watching your faces on election night.” The Gridiron is a 133-year-old club of 65 prominent Washington

journalists (disclosure: I’m a member) and its annual dinner is attended by leaders in politics, business and the press. Trump is the 22nd president to speak in the forum, where the goal is to have fun at the expense of political rivals and oneself. Most presidents see the event as an opportunity to score points. “Humor can serve a lot of political goals,” said Jeff Nussbaum, a former White House speechwriter who often helps Democrats find their funny sides for these venues. “It can increase likability by showing selfawareness. It can be a tool to diminish ongoing controversies, or it can provide a memorable way to hammer home a serious point.” Landon Parvin, an ex-White House speechwriter who works with Republicans, has noted the value of selfdeprecation: “If you can make fun of yourself, it says, ‘I’m just like you.’” Before his 1960 presidential run, Kennedy was facing criticism that he was going to buy the nomination through his wealthy father, Joseph P. Kennedy. At the Gridiron dinner that year, he pulled out what he said was a telegram from his father and started to read: “Don’t buy a single vote more than necessary. I’ll be damned if I am going to pay for a landslide.” More than two decades later, Reagan used his famous wit to defuse accusations that he kept too light a schedule. “They say hard work never killed anyone,” Reagan reminded the Washington movers and shakers. “But I figure, why take the chance?” Trump’s predecessor, President Barack Obama, wasn’t as amusing as Kennedy or Reagan, but his style was appreciated by audiences of elites. In 2011 Obama spoke as his legislative agenda was stalled and opponents, led by Trump, were outrageously claiming that he couldn’t prove he was a native-born US citizen, as the Constitution requires presidents to

be. Obama started his Gridiron speech with a song, “Born in the USA.” Then he noted that he’d last addressed the dinner in 2006 and continued: “Back then I was a newcomer who couldn’t get anything done in the Senate. Now I’m a president who can’t get anything done in the Senate.” The two best humorist-politicians since Will Rogers in the 1920s were not presidents, but members of Congress: Representative Morris K. Udall of Arizona, a Democrat, and Senator Alan Simpson of Wyoming, a Republican. They were far apart ideologically, but each appreciated the other’s mastery of humor. Simpson was especially quick on his feet. When a constituent demanded to know his church preference, he shot back, “Red brick.” And he knew how to make cutting fun of his own profession without insulting anybody. For example, he once noted that “about 15 percent” of most businesspeople, churchgoers and country club members “are screwballs, lightweights and boobs.” Then the scalpel came out: “You would not want those people underrepresented in Congress.” Udall, who died in 1998, once said he wanted to be buried in Chicago so he could “remain active in politics.” Maybe the best of hundreds of Udall stories was one about the New Hampshire politician who was visiting an Arizona Indian reservation right before reelection. He promised the gathering that he’d get money for a new hospital on the reservation. “Goomwah, goomwah,” the tribe enthusiastically responded. Then he vowed to build a new school. Again came the shouts of, Goomwah, goomwah. The self-satisfied politician didn’t ask what “goomwah” meant, but he soon learned. As he headed toward the corral to accept a gift of a pony, the chief cautioned, “Be careful not to step in the goomwah.”

2nd Front Page BusinessMirror

A12 Wednesday, March 7, 2018

Filipinos bought less smartphones in 2017 7% C By Lorenz S. Marasigan

@lorenzmarasigan

OMPETITION in the smartphone-manufacturing industry—which resulted in the rollout of more decent-quality phones with longer life cycles— has pulled down demand for smartphones in the Philippines by 7 percent in 2017. Demand is expected to recover slightly in 2018, however, as more and more Filipinos rely on their mobile phones for basic necessities. International Data Corp. Senior Analyst and Asean Devices Research Team Lead Jensen Ooi said shipments of smartphones to the Philippines in 2017 reached only 15.4 million, a 7-percent drop from the 16.6 million units shipped in 2016. “The decline was due to significantly reduced shipments from several local vendors and some smaller ones, as well as a result from increased competition and marketing activities from

Samsung, Oppo and Vivo,” he told the BusinessMirror. The Philippines and Myanmar were the two outliers in the “emerging Asean” market that was studied by the think tank in 2017. The decline in smartphone shipments in both countries affected the economic bloc’s numbers, resulting in a 1-percent decline in total smartphone shipments to only 100 million in 2017. “Apart from the growing popularity of the top 4 players that have been able to hold up shipment volumes, [the] majority of end users are in no rush to acquire a new handset if they have

The percentage drop in the number of smartphones shipped to the country last year

been using midrange ones, as the handsets are of decent quality and priced considerably high for this budget-conscious region, resulting in longer life cycles and replacement rates,” Ooi said. Midrange phones, Ooi explained, are mobile phones that come with features and specs similar to smartphones and are offered at a lower price. They also have better quality than feature phones. Top vendors in the market are Samsung with a share of 29.3 percent, Oppo with 17.2 percent, Vivo with 7.2 percent and Huawei with a share of 5.4 percent. “These top vendors supply the market with midrange phones that have better quality, hence, they last longer. They also come with better features and specs. So, because they

are of better quality and they cost considerably expensive for the average consumer, demand has lowered because end users no longer need to replace their phones as frequently as before,” Ooi explained. In the Association of Southeast Asian Nations region, demand for midrange handsets grew rapidly in 2017, with handsets now making up 27.1 million units of the total market versus the 17.6 million units in 2016, according to the think tank’s report. Aside from this, 4G phones now make up 81 percent of the total market with 81.1 million units in 2017, quite a leap from the 56.2 million handsets the year prior. “In 2018 local vendors will continue to feel the impact, as end users gradually shift their preference to more popular brands and are more willing to invest in their upgrade to larger screen midrange smartphones,” Ooi said of the Asean region. At home, smartphone ship-ments are expected to post a slight increase by year-end, as users adapt to the digital shift that has been happening in the Philippines for almost a decade now. “Smartphone shipments are expected to recover in 2018, increasing slightly by 4.3 percent to 16 million units,” Ooi said.

As Duterte shifts toward China, Vietnam bolsters ties with US

his week’s visit by a United States aircraft carrier to Vietnam—the first since the war—highlights a growing relationship between the former enemies that has blossomed, even as the Philippines, a long-time American ally, gets closer to China. The USS Carl Vinson arrived off the central city of Danang on Monday for a five-day visit along with two escort ships carrying some 6,000 sailors and aviators. The crew will meet with their Vietnamese counterparts, visit victims of Agent Orange, and participate in a soccer match and a concert. The visit comes as China makes progress toward a deal with the Philippines to jointly explore for oil and gas in disputed parts of the South China Sea, a move that would leave Vietnam more isolated in pushing back. Hanoi’s leaders have rejected China’s claims as a basis for joint development, and have stepped up ties with the US, Australia and India to hedge against Beijing’s rise. Tensions have risen in recent years, as China has built up its nava l presence, most v isibly with a plan to put half-a-dozen aircraft carriers in the world’s oceans. In 2014 China’s move to send an exploration oil rig into waters contested with Vietnam triggered deadly anti-China riots and clashes at sea between coast guard boats. “The government didn’t back down in 2014 and that played very well,” said Collin Koh Swee Lean, a research fellow at the S. Rajaratnam School of International Studies in Singapore. “I don’t see Vietnam changing its approach. The more the Philippines is seen bending toward China, the more Vietnam is concerned not to be seen doing the same thing.” President Duterte has shifted toward China since taking power in 2016, attracting billions of dollars in investment as he downplayed his nation’s legal victory over Beijing in the territorial disputes. On Monday Duterte’s spokesman, Harry L.

NO NEED FOR PREEMPTIVE RATE HIKE–DOMINGUEZ

he Philippines doesn’t need to raise interest rates at this point, Finance Secretary Carlos G. Dominguez III said, defying calls from a growing number of economists who say the Central Bank is moving too slowly to act against inflation risks. “To be preemptive, which is to take action before it’s needed, I don’t think that’s required at the moment,” Dominguez, who sits on the Central Bank’s seven-member board, said in an interview in Manila on Monday. “Rate-wise, I think the Monetary Board is on the right track and we keep an open mind.” The Bangko Sentral ng Pilipinas, led by Governor Nestor A. Espenilla Jr., has so far resisted pressure to tighten monetary policy, even though inflation is set to breach the Central Bank’s target band of 2 percent to 4 percent this year and the economy is showing signs of overheating. A majority of economists surveyed by Bloomberg predict the benchmark rate will be raised from a record-low 3 percent in March. Dominguez said he “doesn’t see prices running away” and inflation will probably ease because of tougher monitoring of retailers

Cimatu. . .

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Women protesters burn a mock missile with the colors of the United States flag during a rally near the US Embassy in Manila on Monday, March 5, 2018. The group is calling for an end to the US military intervention in the country. AP/Aaron Favila

Roque Jr., said the Philippines and China need a treaty before any joint exploration can take place. In Vietnam public opinion is decidedly in favor of the Americans. A 2017 Pew opinion poll found 84 percent of Vietnamese view the US favorably, compared with just 10 percent for China. “The visit marks an enormously significant milestone in our bilateral relations and demonstrates US support for a strong, prosperous and independent Vietnam,” Daniel Kritenbrink, the US ambassador to Vietnam, told reporters in Danang. The United States and Vietnam have “gone from former enemies to close partners,” he said.

‘Red line’

President Donald J. Trump’s visit to Vietnam last November laid the groundwork for the aircraft carrier visit, Vietnamese Foreign Ministry

Spokesman Le Thi Thu Hang said in a statement. It will contribute to maintaining peace, security and stability in the region, she said. While the US takes no formal position on the disputes between China and the other claimants in the South China Sea, it regularly makes so-called freedom of navigation operations to demonstrate the right to fly and sail through what it considers to be international waters and airspace. Defense ties between the United States and Vietnam expanded under President Barack Obama. His administration lifted a decades-long embargo on lethal arms sales to Vietnam in 2016, just over two decades after relations were normalized.

Crowds watching

“The will of the Vietnamese people on this issue is very united, strong and clear,” said Le Dang Doanh, an

economist and former Vietnam government adviser. “Vietnam has demonstrated goodwill toward China, but there are limits. If China crosses Vietnam’s red line, Vietnam must defend its position. The people in Vietnam strongly want the defense of its territory.” The Nimitz-class carrier, bristling with about 60 fighter jets, on Monday docked about half a mile off Danang, attracting thousands of Vietnamese who lined cliffs and bridges to get a glimpse. “It’s great for us to have such a ship here,” Nguyen Van Hieu, a 57-year-old Danang taxi driver who served in the Vietnam People’s Army during border clashes with China in the 1980s, said of the aircraft carrier. “It’s evidence that the US and Vietnam are getting much closer and that can help us balance our relationship with China.” Bloomberg News

www.businessmirror.com.ph

A separate government source, however, said Cimatu wasn’t able to make his presentation during the Cabinet meeting, as the agenda was packed full. But Duterte did instruct Tourism Secretary Wanda Corazon T. Teo to “promote Boracay only when it’s been rehabilitated. For now, let it go,” the source added. Cimatu told reporters after a Senate hearing on the island last Friday he couldn’t recommend Boracay’s closure just yet until the sewage problem and other issues are addressed. (See, “Decision day: To close or not to close Boracay,” in the BusinessM irror, March 5, 2018.) But Leones, also the DENR undersecretary for policy, planning, international affairs and foreign-assisted projects, said when push comes to shove, Cimatu“might change his mind.” Cimatu had already tasked the Boracay Island Water Co. Inc. to connect its two sewerage-treatment plants. The DENR chief, Leones added, had already asked property owners to cooperate by voluntarily dismantling illegal structures along the beachfront and to comply with the 30-meter easement rule. According to Leones, the DENR will pursue its laid out plan, dubbed “Operational Plan: Regain Paradise,” whether or not the President will eventually order a moratorium on tourism activities on the entire island. “Our plan on saving Boracay is not anchored on the possibilities of closing Boracay to tourists. Whether Boracay is closed to tourists or not, the DENR will implement our plan,” he said. In implementing Oplan: Regain Paradise, he said drastic measures will be inevitable, and it will require political will. If properly executed, the six-month plan would eliminate the problems besetting Boracay, hence, allowing it to regain its status as the country’s top tourist destination worthy of the tag “island paradise” by 2022. This will require the filing of cases and actions ranging from the issuance of notices of violation, the imposition of fines for violations of various environmental laws to closing establishments and, worse, dismantling of buildings illegally constructed in areas they are not supposed to be built.

who may have artificially pushed up prices. Policy-makers also look at other factors when deciding on rates, including the pace of tightening in the US, he said.

Weak peso

The finance secretary brushed off concern about a weaker currency, saying it helps to boost the amount of money that Filipinos living abroad can send to their families back home, while increasing the competitiveness of exports and the outsourcing industry. The Philippine peso is the worstperforming currency in emerging markets after the Argentine peso this year, losing about 4 percent against the dollar. The Philippine economy is growing more than 6 percent annually, among the world’s fastest. While that’s mainly been driven by strong domestic demand, rising trade protectionism, particularly from the US, is a worry for authorities, Dominguez said. The government will look into its effect on trade and investment, Dominguez said. “It can’t be good. This is really dangerous,” he added.

Bloomberg News A follow-through stage of one year and a way forward stage until 2022 will guide the succeeding operations, according to the document. Sen. Cynthia A. Villar, who chaired the Senate hearing, vehemently opposed the closure of the entire island and recommended that only violators be closed instead of penalizing even those who were compliant with environmental and easement laws. Villar’s family-led property firm, Vista Land & Lifescapes Inc., owns Boracay Sands Resort along Station 3, while Vista Residences is developing Costa Vista Boracay, leisure homes and condominiums in Barangay Yapak. As this developed, the Department of Tourism (DOT) said it was collaborating with the Department of Labor and Employment (DOLE) to address the possible economic displacement of some 19,000 workers on the island, if and when the President does decide to close it. “We are aware of the situation of Boracay, but we cannot just discount the thousands of employees and their families and the economic contribution of the island through its tourist receipts and job employment. We have to strike a balance between the environment and the economy,” Teo said in a news statement. The island, famous the world over for its powdery, white-sand beach, attracted over 2 million tourists last year, up 16 percent from the record number in 2016. Employment on the island also accounted for 66 percent of the entire Western Visayas region and generated revenues of some P56 billion in 2017. Lawyer Helen Catalbas, regional director for Western Visayas, noted that most of the workers on the island are from Cebu, Negros Occidental and Oriental, Manila, and other provinces in Luzon. But she said her office is already closely coordinating with the DOLE on profiling the workers on the island and with other local government units to relocate employees that may be laid off during the rehabilitation of Boracay. Teo added, “ Those who will be affected can work with the demolition of illegal structures and the construction of the improved sewage system and road infrastructure.” In the meantime, resorts and other tourism establishments can polish and upgrade their facilities and manpower during the rehab.