Businessmirror march 13, 2018

TOLERATING CORRUPTION?

By Henry J. Schumacher

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NUVOLANEVICATA | DREAMSTIME.COM

or years the Integrity Initiative tries to create Integrity Nation, a nation where transparency and integrity rule and corruption is no longer part of everybody’s life. Have we succeeded?

Obviously not, if you read the latest Corruption Perception Index, published by Transparency International, in which the Philippines scored 34 out of 100 and a ranking of 111th out of 180 countries.

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Tuesday, March 13, 2018 Vol. 13 No. 153

Trump’s higher steel duty potential bane to ‘BBB’

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By Elijah Felice E. Rosales

@alyasjah

NITED States President Donald J. Trump’s latest protectionist policy—slapping higher tariffs on steel and aluminum products—could give President Duterte a big headache in the coming months.

T h i s, accord i n g to Tr ade Undersecretary Ceferino S. Rodolfo Jr., is because such a move would disrupt the global market

and create a glut of steel in the days to come, presenting complications to a highly liberalized market that is entering its so-called golden

RODOLFO: “We are guarding against those countries that might dump because that is what is dangerous with steel.”

age of infrastructure.

“What is alarming here—and what the Department of Trade and Industry [DTI] is preparing for—is when the United States increases its barriers, what will happen to the

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@BNicolasBM

he stranglehold of political families on many Philippine provinces may soon be broken after the consultative committee (Con-com) tasked to review the 1987 Constitution to disallow relatives of elective officials up to the second degree of consanguinity and affinity to succeed them.

The “regulated ban” covers parents, siblings, grandparents, children and grandchildren (whether legitimate, illegitimate, legitimated, adopted or step). Step relatives, such as step parents and step brothers and sisters, step siblings and stepchildren are also prohibited, as they are considered the same as blood relationship.

An incumbent official’s spouse, parents-in-law and brothers-in-law and sisters-in-law, grandparentsin-law, spouses of the politician’s siblings and their spouses are also not allowed as they are covered by the second-degree ban by affinity.

Because of the complexity of the issue, the committee also deferred voting on whether relatives of incumbent officials up to second degree of consanguinity and affinity will be allowed to simultaneously run or hold multiple positions.

Former Chief Justice Reynato S. Puno, chairman of the Con-com, said there should be a self-executing provision on political dynasties in the Constitution.

“If we don’t make this self-executing, it would be a problem. We have seen this problem for almost 32 years, and Congress has not given a solution on this, so this is our chance to finally give this problem a final solution,” Puno said.

Asked if he sees Congress supporting the regulated ban, Puno said: “It’s not a matter of confidence. We will do what we think is right. It’s up to our countrymen.”

In a separate interview, Puno said he expects the regulated ban on political families to spur economic growth, noting that areas considered a stronghold by political families are mired in poverty.

The former Chief Justice also told the BusinessMirror that he will propose to the committee on Tuesday to grant Congress the power to enact laws that will extend the regulated ban up to the third or fourth degree of consanguinity and affinity.

“I will propose that the seconddegree ban would just be the starting point since we cannot make full steps [immediately],” Puno said, noting that it would be hard to implement a fourth-degree ban right away.

Arthur N. Aguilar, chairman of the Subcommittee on Economic Reforms and Fiscal Administration, said he sees “profound economic benefits” in the medium term and long term when regions are freed up from traditional political dynasties.

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A most laudable act Manny B. Villar

THE ENTREPRENEUR

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s a businessman and environment advocate, I consider President Duterte’s initiative on Boracay as one of his most laudable acts in his less than twoyear-old presidency.

It is something that should have been done a long time ago, even before tourists discovered the white sands of Boracay Island in Aklan as one of the best beach destinations in the world.

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CONSULTATIVE COMMITTEE OPTS FOR ‘REGULATED BAN’ ON POLITICAL DYNASTIES

By Bernadette D. Nicolas

2016 ejap journalism awards

Job-generating FDI hit all-time high $10.05B in 2017–BSP

By Bianca Cuaresma

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five-year dairy program. “The entry of investors made things easier for us because we can use our money for other areas [where dairy farms can be set up]. We can consider Negros Occidental, which has a lot of forage because they have sugarcane, and maybe establish another farm in Busuanga,” Piñol said in an interview before he flew to Papua New Guinea on March 7.

oreign direct investments (FDI) attracted by the Philippines hit an all-time high last year, reflecting the sustained confidence of investors in the country’s growth prospects.

The Bangko Sentral ng Pilipinas (BSP) on Monday reported that FDI in 2017 reached $10.05 billion, 21.4 percent higher than the previous year’s $8.28 billion.

FDI are the nonresidents’ investment to the Philippines in search of longer-term yield. Known to be job-generating and longer-lasting, FDI are more coveted than foreign portfolio investments.

“Investors continue to view the country as a favorable investment destination on the back of the country’s sound macroeconomic fundamentals and growth prospects. All major FDI components registered increases during the year,” the BSP reported.

For 2017 FDI peaked in October, when inflows hit almost $2 billion.

April and August were also good months for the Philippines as FDI breached $1 billion.

The end-2017 FDI is also a confidence booster for economic managers, as it surpassed the projected $8-billion FDI inflows for the year.

See “DA,” A12

See “Job-generating,” A12

MALAY TRADE This March 12 photo shows Trade Secretary Ramon M. Lopez (from left), Zaid Ibrahim & Co. (Zico) Managing Director Chew Seng Kok, Zico Chairman and Senior Partner Datuk Seri Dr Nik Norzrul Thani, Malaysia’s Minister of International Trade and Industry Dato’ Sri Mustapa bin Mohamed and Ambassador Extraordinary and Plenipotentiary Designate of Malaysia Dato’ Raszlan Abdul Rashid during an event in a hotel in Makati City launching the Malaysia Promotion Program (MPP). The MPP aims to promote greater trade, investment and tourism activities between Malaysia and the Philippines. Previous editions of MPP were held in London and Sydney. Manila was chosen for the 2018 edition. Trade between Malaysia and the Philippines in 2017 reached $5.93 billion, up 21.4 percent from 2016. Malaysia’s exports to the Philippines were valued at $3.84 billion, while imports accounted for $2.09 billion. NONIE REYES

DA tweaks cattle-importation program

By Jasper Emmanuel Y. Arcalas

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@jearcalas

he Department of Agriculture (DA) has allowed the private sector to import cattle and put up the necessary dairy facilities, effectively saving the government millions and fasttracking the implementation of its banner dairy program.

Agriculture Secretary Emmanuel

2,000

The total number of cattle that the ACDI Multipurpose Cooperative wants to import F. Piñol told the BusinessMirror there are now two investors that will participate in the DA’s

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n japan 0.4885 n UK 72.1762 n HK 6.6477 n CHINA 8.2219 n singapore 39.5731 n australia 40.8677 n EU 64.1486 n SAUDI arabia 13.8906

Source: BSP (12 March 2018 )

A2 Tuesday, March 13, 2018

BMReports BusinessMirror

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Trump’s higher steel duty potential bane to ‘BBB’ Continued from A1

countries supplying it with steel?” he told the BusinessMirror.

Trump has authorized the imposition of higher tariffs on steel (25 percent) and aluminum (10 percent) in spite of strong opposition from his fellow Republicans and Washington’s trading partners. “The actions we are taking today are not a matter of choice; they are a matter of necessity for our security,” Trump said during the signing of his order.

Rodolfo is worried steel-exporting countries that would lose market share in the US because of Trump’s order would turn to another export destination to recover lost sales. And they might just target the Philippines, given its massive infrastructure upgrade under the “Build, Build, Build” (BBB) program.

The US is the world’s largest steel importer. In 2016 it accounted for about 8 percent of steel imported globally and the volume it had imported was 15 percent higher than that of Germany and South Korea, second- and third-largest steel importers, respectively.

It imports steel and aluminum from over 110 countries and territories, of which the top sources are Canada, Brazil, South Korea, Mexico, Russia, Turkey, Japan, Taiwan,

Germany and India. It also imports from China, Thailand, South Africa and the United Arab Emirates.

Out of this list, only Canada and Mexico are exempted from Washington’s new levies. Australia is also expected to get the White House’s nod for an exemption.

PHL is obvious alternative

The others will have to seek alternative markets where they could export their steel. This is where the Philippines enters the picture, Rodolfo said, as it is a perfect spot for these exporters on two grounds: its liberalized regime and its need for steel.

“They would normally go to countries with the highest demand and more open regime. Here in Southeast Asia our neighbors have their steel industry very protected.

It is difficult to enter. For us, we are trying to strike a balance because we have a high demand, so we allow them to import their steel as long as it is compliant with our standards,” Rodolfo said in English and Filipino.

The trade official said steel exports are welcome to enter the domestic market as long as they are not substandard. He, however, fears some countries will dump their excess steel to the Philippines, such that the government will need to

tighten its trade regulations.

“Second is we are guarding against those countries that might dump because that is what is dangerous with steel. Steel is a high fixed-asset business. That means, investments in such are not only capital-intensive, but also powerintensive that you cannot just turn on and off. It is either you produce at a high capacity or you shut down the plant,” Rodolfo said.

Dumping is when a firm exports a product at a price lower than its value in its own country or another market. As such, it may cause material injury to the market targeted for dumping, or materially retarding the domestic industry producing the like product.

“I would not assume countries will dump their steel to us, but there is a possibility of an oversupply in the market. What is the implication of this oversupply to us? [That is] to the extent that we are needing steel and construction materials for our Build, Build, Build program. We will accept their steel as long as its quality is good and not unfairly traded—that is, not dumped, not subsidized,” he added.

Trade remedies

Should countries take advantage of the government’s infrastructure

program and dump their steel in the Philippines, the Philippine Iron and Steel Institute (Pisi) is demanding authorities to strictly enforce trade remedies. The group believes this is the only way to guard against dumping in the face of recent developments in global trade.

“Trade remedies, like the antidumping law and countervailing duties and safeguards, are available for the affected steel sector. Support of the DTI, the Department of Finance and Tariff Commission are necessary in these measures,” Pisi President Roberto M. Cola told the BusinessMirror.

The government can impose antidumping duties on firms found guilty of exporting their products at a price lower than its normal value under Republic Act (R A) 8752, or the Anti-Dumping Act of 1999. The DTI—in the case of nonagricultural products, such as steel—can impose an antidumping duty “equal to the margin of dumping on such product, commodity or article and on like product, commodity or article.”

This is on top of ordinary duties, taxes and charges imposed by the law. RA 8752, however, provides that “the antidumping duty may be less than the margin, if such lesser duty will be adequate to remove the

injury to the domestic industry.”

As head of the premier group for the country’s steel industry, Cola views Washington’s imposition of stiffer tariffs on steel and aluminum as a “double-edged sword” for local manufacturers and consumers. He admitted it will really disadvantage domestic producers, but will benefit consumers due to the abundance of available steel in the market.

“In general, the oversupply of steel in the world market is not good for steel manufacturers because it depressed steel prices that impact on profitability. On the other hand, it benefits the consumers of steel,” Cola said. “There is ample supply of competitively priced billets, hot-rolled coils/plates and cold-rolled coils/sheets that are used as raw materials by manufacturers. On the other hand, the local manufacturers will have to compete with similar imported steel-finished products.”

Generally, a healthy domestic steel industry is a must for a country’s industrialization drive.

However, even if the glut of steel in the global market will potentially harm the country’s steel industry, Cola said the Pisi will not demand that the government adopt some form of protectionism. “I will not recommend to

adopt some form of protectionism for the steel industry because it will just encourage smuggling,” he said.

Standards monitored

For her part, BBB Program Chairman Anna Mae Y. Lamentillo said the government has in place check mechanisms to ensure all materials used for construction are of good quality. “The standards are in place,” she reassuringly told the BusinessMirror.

Lamentillo shared that the Depar tment of Public Works and Highways conducts random inspection on ongoing construction projects—and this will be pursued v igorously for those listed under the BBB—to look into the materials contractors are using. T hese inspections are done before, during and after the construction.

Apart from this, contractors secure the government a warranty that allows it to change the materials that are proven to be defective or substandard, Lamentillo said.

The warranty lasts for one year.

With this, Lamentillo is confident the glut of steel in the global market will not affect the ongoing infrastructure binge, as long as authorities strictly enforce their regulations.

CONSULTATIVE COMMITTEE OPTS FOR ‘REGULATED BAN’ ON POLITICAL DYNASTIES Continued from A1

“It’s about time we give our regions and provinces some fresh blood,” Aguilar said, noting that this would be good to the economy as this will pave the way for talented and young public servants to join the government.

“It will result in, I think, a better environment, where new businesses can come up in regions and in areas where it is controlled by a political dynasty,” he said.

Lawyer Susan Ubalde-Ordinario, vice chairman of the Subcommittee on Economic Reforms and Fiscal Administration, agreed with Aguilar that regulating political dynasties would be beneficial to the economy.

“Political power and economic power very often come together, especially in the local scene, so if we de-

stroy political dynasties, the tendency is we will be able to separate this so that control of the operations of government will not be too controlled or strictly kept in the hands of the few,” Ubalde-Ordinario said.

“In that way, politicians also cannot put up policies within their local governance units that would prevent competition. That will open up the economy so that more people will be interested to invest,” she added.

Last week the committee-of-the whole reached a consensus on a second-degree ban following review of various expert research and studies on political dynasties in the Philippines.

Ronald U. Mendoza, dean of the School of Government of Ateneo De Manila University, said the political dynasty regulation will strengthen po-

litical parties since more young leaders will have a chance to run for office and work together.

Mendoza also said “it’s politically more feasible” to impose a regulated ban rather than a total ban.

Asked whether Congress and the President would back the initiative, he said: “Some of them will likely fight it—and this is where we need the leadership of the President.”

“If he really wants to bring genuine change and better governance, then he should use political capital and public support on this key reform,” Mendoza added.

Political analyst Ramon C. Casiple said the second-degree ban would be acceptable even to the political elite and is also a feature of the Sangguniang Kabataan law.

Casiple also noted that the move to regulate political dynasties will also “equalize the political playing field and ensure democratic access to public service.”

“Con-com has been open to political reforms so far,” said Casiple, executive director of Institute for Political and Electoral Reform. “But its recommendations would still be submitted to the President who will recommend to Congress. The Con-com is in a position to push for reform.”

According to the study of Professor Rolando G. Simbulan of University of the Philippines, there are political dynasties in 73 out of 81 provinces in the country.

Puno and former Budget Secretary Salvador Enriquez Jr. led the study, which found out there are at least 295

political families who control power in various regions, a study submitted to the committee showed.

Metro Manila had the most number at 31, while regions with the most number of political dynasties apart from National Capital Region are Central Luzon with 21; Calabarzon (Cavite, Laguna, Batangas, Rizal and Quezon), 20, Bicol region, 15; Western Visayas, 12; Mimaropa (Mindoro, Marinduque, Romblon and Palawan), 11; and Central Visayas, 10.

The Asian Institute of Management Policy Center Study also found that 50 percent of positions for governor was contested by political dynasties, while in another 11 percent, members of the dynasties had no opponent in the 2013 elections.

For the House of Representatives,

43 seats were won by a member of a dynasty over another dynasty, while 71 seats were won by a dynasty over a non-dynasty.

The Con-com has also agreed in principle last week that the president and vice president will be elected as a team. On February 27 the committee voted 11-7 in favor of the federalpresidential form of government, citing familiarity with the system.

The federal-presidential system adopts the current setup of national government with three branches, particularly Executive, Legislative and Judiciary.

However, in a federal setup, the country will have federal states with their own systems of government. This is also the same system being followed in the United States.

Korean visitors in Cebu reached 1 million in 2017 Continued from A12

He said over 840,000 tourists from South Korea arrived in the region, mostly staying in Cebu’s islands, including Bantayan, Mactan, Camotes, Oslob and Malapascua, as well as Cebu City. He added it was possible that South Korean arrivals in Cebu “may have reached 1 million in 2017,” although data are still being collected.

“I wouldn’t be surprised if Cebu would soon be known as the ‘Seoul of the Philippines,’ the Koreans’ home away from home,” he said.

Tamano also underscored the agency’s “holistic approach” in promoting tourism to overseas markets, which combine eco-agrifaith attractions and destinations.

“This year’s Sinulog festival alone drew hundreds of thousands of international and domestic tourists into Cebu City,” he said.

Among the major tourist attractions in Cebu are Magellan’s Cross and Shrine, the Basilica de Santo Niño, Taoist Temple, Fort San Pedro, the Carbon Market for danggit shopping, Lake Danao, with culinary delights, such as sutukil, chocolates made by local artisanal confectioners, the famous lechon Cebu and Chicharon Carcar, as well as seafood restaurants.

The DOT is currently promoting other key destinations in the country, moving away from marketing

Boracay Island, a popular resort island in Western Visayas, due to ongoing rehabilitation efforts.

Overall, South Korea continued to be top source market for tourists in the Philippines, with 1.6 million in arrivals. The market accounted for 24 percent of the total arrivals that year, which reached some 6.6 million. Meanwhile, Presidential Spokesman Harry L. Roque Jr. on Monday said there is no proclamation yet on the state of calamity in Boracay.

There was supposed to be a meeting on Monday on Boracay’s fate.

However, Roque said they held it earlier last Friday because Environment Secretary Roy A. Cimatu was not available on Monday.

Roque also announced that there will be another meeting this week with Arch. Felino Palafox Jr. “So no decision has been made by…at least the three secretaries, because there is a second round of meeting to be held this week.”

Asked on when the proclamation can be expected, Roque said: “I can’t say, but I will inform you if one has been issued. I understand that no less than the municipality of Malay is also considering the possibility of a similar declaration of the state of calamity because, under the law, the local government unit or the national government can declare such declaration.” With Bernadette D. Nicolas

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Angara salutes Marines with bill strengthening elite military unit

‘T

he Philippine Marine Corps [Marines] might be few, but they remain proud and always faithful to their sworn honored duty to the country.”

Sen. Juan Edgardo M. Angara made this observation in the explanatory note of a bill he filed last Tuesday seeking to enhance the effectiveness of the Marine Corps as a formidable military unit against threats to the national security.

The measure, labeled “An Act establishing the Philippine Marine Corps, defining its power and functions, appropriating funds therefore, and for other purposes,” was hailed by his colleagues as a move in the right direction.

“Philippine history is replete with significant campaigns executed by the Philippine Marine Corps. During the 1960s the Marines spearheaded the conduct of strategic maneuvers against the Hukbalahap. In the following decade, the Marines were in most parts of Luzon neutralizing terrorists,” Angara noted.

“While in the 1980s the group skillfully maintained order despite the county’s political turmoil. The Marines also curtailed the lawlessness of extremist groups in Mindanao from 1990s to 2000s,” the lawmaker added.

“At present, the Philippine Marines Corps is not only challenged by growing criminality, but is also tested by worsening natural disasters that harm the people in the same manner.”

In filing Senate Bill (SB) 1731,

Angara noted that while the Constitution mandates that there should be an Army, an Air Force and a Navy in the Armed Forces of the Philippines (AFP), the Philippine Marine Corps “remains an integral part of the nation’s psyche—a force in readiness.”

Angara also stressed that despite the lack of a charter, the Marine Corps has provided “seamless transition of power between sea and land domains.”

SB 1731, according to Angara, aims to provide an enabling law that would institutionalize the Marine Corps as a branch of service “distinct, autonomous, yet complementary to the Army, the Air Force and the Navy under the AFP,” in the process generating an initiative to guarantee peace, safety and order in the entire country.

Being archipelagic in nature, Angara said, there is a need for the country to have a comprehensive, but easily deployable amphibious force to conduct both seaborne and on-shore tactical operations to protect the national territories and the people.

Under the proposed law, the Marine Corps is seen as a highly competent military unit in responding to “extraordinary exigencies, and developing multinational cooperation and engagements to preserve peace and order in the country.”

“It is clear that the Marines will be empowered to further perform their duty with the proper legislation to provide such mandate.”

DFA seeks measures to ensure protection of OFWs in Kuwait

By Recto Mercene @rectomercene

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oreign Secretary Alan Peter S. Cayetano on Monday lauded the progress of bilateral talks for a labor agreement between the Philippines and Kuwait, even as he expressed hopes for the crafting of “practical measures” to ensure the safety and welfare of Filipino migrant workers to that tiny emirate in the Persian Gulf.

“Our negotiations with Kuwait have so far been going well, but we need to put in place more practical measures that would ensure the safety and welfare of our kababayan [countrymen] working there,” he said.

The foreign chief also commended officials from the Philippine Embassy in Kuwait and the Department of Labor and Employment (DOLE) for convincing their Kuwaiti counterparts to agree to the conditions laid down by President Duterte shortly after he declared a ban on the deployment of new workers to the Gulf state.

Cayetano said the negotiating panel, led by Labor Secretary Silvestre H. Bello III and Ambassador Renato Villa, was able to secure Kuwait’s commitment that would guarantee Filipino domestic workers a minimum monthly salary of Kuwait dinar KD120.00 (P20,795); rest hours of at least eight hours per day; possession of their passports and mobile

phones; and limiting their work to only one household.

“As we move forward in the negotiations, we hope to incorporate more practical measures that would better protect our kababayan working there from exploitation and abuse,” the foreign secretary added.

Among the measures Cayetano said he would want to see in the agreement would be payment of salaries direct to the bank account of Filipino workers whenever feasible.

“This will ensure that our kababayan do not get shortchanged and will receive the salary they originally signed up for,” he said.

The foreign secretar y added he also wants to see an effective mechanism that would allow Filipino workers to file their complaints directly w ith Kuwaiti authorities.

He mentioned instances where employers try to preempt cases against them by filing false charges, such as theft against their Filipino employees.

Citing previous labor agreements with other countries that were entered into by the Philippines but could not be effectively implemented, Cayetano said he wants the agreement with Kuwait to be implementable.

“We really must work with Kuwait to make sure we come up with an implementable agreement that would contain guarantees for the protection of our workers,” he said.

Editor: Vittorio V. Vitug • Tuesday, March 13, 2018 A3

Sereno defies calls to quit CJ post ahead of Senate impeachment trial

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By Joel R. San Juan

@jrsanjuan1573

MBATTLED Chief Justice Maria Lourdes A. Sereno remains defiant despite mounting calls for her to step down to spare the Judiciary from politics arising from her impending impeachment trial before the Senate.

In a speech before the Coalition for Justice organized by her supporters at the University of the Philippines (UP) Diliman, Sereno pleaded anew to her fellow magistrates, judges and court employees to allow her to defend the rule of law and the Judiciary’s independence by answering all the allegations against her during the impeachment trial.

She maintained that succumbing to calls for her to step down would be detrimental to the Judiciary’s independence and would only “embolden those who demand a subservient Judiciary.”

“To do so would invite the kind of extra-constitutional adventurism that treats legal rights and procedures like mere inconveniences that should be set aside when it suits the powers that be,” Sereno said.

“I will not resign. I am determined to wage till the logical end this battle started by those who seek to undermine the Constitution and the Judiciary. I am resolute in carrying on the good and noble fight for judicial independence. I will finish the course of this thorny race,” she added.

While acknowledging the resignation is an easy way out, Sereno pointed out that such move is the right thing to do.

The Chief Justice also lashed

back at her detractors, saying that the mess currently happening in the Judiciary arising from her impeachment was not her doing.

“We should all remember that I have yet to start telling my side of the story. You should all wait for my side before the Senate,” Sereno said.

The chief majestrate was forced to file an indefinite leave earlier upon the prodding of his fellow magistrates in order to shield the Supreme Court (SC) from politics.

Last week, through a vote of 382, the House Committee on Justice found probable cause in the impeachment complaint filed by lawyer Larry Gadon against Sereno.

Gadon, in his complaint, accused Sereno of culpable violation of the

Constitution, corruption, other high crimes and betrayal of public trust.

Meanwhile, during yesterday’s flag ceremony held at the SC, various groups in the Judiciar y jointly issued a statement ca l ling for Sereno’s resignation.

In a joint statement, the Philippine Judges Association (PJA), Supreme Court Employees Association (SCEA), Supreme Court Assembly of Lawyer Employees (Scale), Philippine Association of Court Employees (PACE) and the Sandiganbayan Employees Association (SEA) urged Sereno to step down to save the Judiciary from “disrepute that affects the honor and integrity of justices, judges and court employees.”

T he g roups ca l led on Sereno to ma ke sacr if ices to preser ve the Jud iciar y as an independent institution.

“We, the entire force of the judiciar y, which includes judges, officials and court employees under your leadership, are pleading you, our beloved Chief Justice Maria Lourdes A. Sereno, to do the timely and necessary sacrifice for the institution that you gave so much time and love in these past years. We are calling for the benefit of the entire Filipino community, to step down to your post as Chief Justice)” the

I will not resign. I am determined to wage till the logical end this battle started by those who seek to undermine the Constitution and the Judiciary. I am resolute in carrying on the good and noble fight for judicial independence. I will finish the course of this thorny race.”—Sereno

Duterte to induct 106 PNPA grads on March 23

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Commercial rice glut

A warehouse man replenishes commercial rice stocks at a private rice depot in San Andres, Manila. Presidential Spokesman Harry L. Roque Jr. has debunked the National Food Authority’s (NFA) claim that the country’s rice buffer stock has dwindled to two days consumption, way below the 15-day requirement at any given time, saying NFA’s stocks represent just a “minority” of the country’s overall rice supply.

NONIE REYES

Balik Scientist Act to help trigger PHL technology inflows—Salceda

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dramatic reversal of the so-called brain drain that saw Filipino scientists and technologists leaving the country for better earning opportunities abroad is expected to happen under the Balik Scientist Act, which the bicameral conference committee of Congress will ratify shortly for the President’s signature.

Rep. Joey S. Salceda of the Second District of Albay, principal author of the measure in the lower house, said

the Balik Scientist Act will trigger the flow of modern technologies into the country that will help speed up development as Filipino scientists working broad, armed with the latest scientific know-how, flock back home to avail themselves of the benefits and incentives the new law offers.

The Balik Scientist Act, which aims to institutionalize the existing Balik Scientist Program (BSP), Salceda said, will “encourage Filipino scientists and technologists

groups said in a statement read by SCEA President Erwin Ocson.

The statement was signed by Ocson, PJA President and Regional Trial Court (RTC) in Marikina Judge Felix Reyes, Scale President Atty.

Rene B. Enciso, PACE President Atty.

Maria Fe O. Maloloy-On and SEA President Mike Balon.

The groups lamented that the impeachment proceedings in recent months have put the entire Judiciary in disrepute, thereby affecting the honor and integrity of its justices, judges, officials who have been pitted against each other. They said Sereno’s impeachment has resulted in a “distressing atmosphere” in the Judiciary.

The situation, according to the group, was aggravated by the fact that the Court en banc has taken cognizance of the petition for quo warrants and ordered her to file her comment thereto, instead of dismissing it outright.

“The Court can no longer endure a prolonged environment of this kind.

Its officials and personnel, truly dedicated and conscientious public servants, cannot go through another set of hearings and go against each other again in the Senate,” the groups added.

PJA is an SC-authorized association of regional trial court (RTC) judges with about 1,200 incumbent members nationwide while PACE is a nationwide organization of court employees.

Judges and court employees also wore red anew to show their desire for Sereno to resign.

Aside from impeachment, a quo warranto case had been filed against Sereno before the SC by Solicitor General Jose C. Calida, seeking the nullification of her appointment as Chief Justice for her failure to comply with the requirements necessary for her to be eligible for the post.

abroad to come home, share their expertise and help speed up the country’s development in exchange for a package of benefits that is globally competitive.”

The measure, he added, will widen the Philippines’s chances to be on a par with other countries in terms of science, technology, research and development. He noted that the country’s scientific environment had experienced a drought in the past due to the exodus of the best

minds, encouraged by large pay and unlimited opportunities abroad.

Established under Presidential Decree 819 in 1975 and extended until 1986, the BSP had somehow served as a wake up call for Filipino researchers and technologists employed abroad, that they now stand to be compensated well at home where they can share their expertise with their compatriots, he added.

The BSP was strengthened anew through Executive Order 130 in

1993, due to “the remarkable outcome of the program and the presence of many highly trained overseas professionals who have the expertise in the priority areas of agriculture, energy and nutrition development.

Despite the success of the BSP, however, Salceda noted that there were still many Filipino scientists, technology experts and researchers outside the country who were not tapped due to circumstances that cannot be addressed by the existing program.

resident Duterte will officially induct 106 members of the Philippine National Police Academy (PNPA) “Maragtas” Class of 2018 as commissioned officers in the police, jail on March 23 in Camp General Mariano Castañeda in Silang, Cavite.

Seventy six of the graduating cadets will join the Philippine National Police, while 13 will serve in the Bureau of Jail Management and Penology, and 17 in the Bureau of Fire Protection.

The Maragtas Class of 2018 is composed of 79 males and 27 female graduates. Topping the class is 24-year-old Police Cadet Fritz John Napalinga Vallador of Kabankalan City, Negros Occidental, who will receive the coveted Presidential Kampilan Award and a Plaque of Merit from Duterte.

Graduating second is Police Cadet Francis Pang-ay Fagkang, 24, of Sacasacan,Sadanga,Mountain Province,who will receive the Vice Presidential Kampilan Award and a Plaque of Merit from Vice President Maria Leonor G. Robredo Graduating third of this class is Police Cadet Jess Torres Agustin of Anchokey, Kabayan, Benguet, who will receive the Secretary of the Interior and Local Government Kampilan Award.

The other graduating cadets in the top 10, and in the order of merit, are Police CadetJesstonyFabroAsanionfromBarangay Bulawon,SantaCruz,Zambales;FireCadet Myrick Aquino Paldingan from Mankayan, Benguet; Police Cadet Christian Villacarlos Juego from Barangay Salawag, Dasmariñas, Cavite; Police Cadet Cherry Mae Lumogda Montaño from Barangay Fatima, General Santos City; Police Cadet Stephen Torrevillas Abrica from Basak, San Nicolas, Cebu City; Jail Cadet Arjay MarcaidaCuasayfromBarangayMarcelo, Parañaque City; and Police Cadet Maricar Sison Ansus from Barangay Salvacion, Bacon, Sorsogon City. Rene Acosta

Economy

A4 Tuesday, March 13, 2018 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

PSA reports 46.6-percent decline in residential condo construction

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By Cai U. Ordinario

@cuo_bm

near 50-percent drop in the number of residential condominium projects has triggered a slowdown in the growth of private construction nationwide, according to the Philippine Statistics Authority (PSA).

Preliminary data from approved building permits in the fourth quarter showed the number of residential condominiums constructed contracted 46.6 percent.

This led to a growth of only 3.6 percent in construction projects nationwide in the last quarter of the year.

“The number of residential building constructions declined by 4.3 percent to 23,693, from 24,752 reported during the same period of 2016,” the PSA said.

The total number of constructions in the fourth quarter of 2017 reached 33,445, higher than the 32,282 constructions recorded during the same quarter in 2016.

Apart from residential condominiums, other residential constructions

posted contractions in the fourth quarter of last year.

All types of residential constructions, except other residential structures, showed decrements in number.

Data showed apartment/accessoria contracted 10.2 percent; single-type houses, 3.5 percent; and duplex/quadruplex, 4 percent.

The lower number of construction led to a 0.9-percent contraction in total construction value in the October-toDecember period last year.

Total value of constructions estimated at P81.7 billion, lower than the P82.4 billion recorded during the fourth quarter of 2016.

Residential constructions valued at P41.6 billion decreased by 12.4 percent, from P47.5 billion recorded during the same quarter of 2016.

“This was attributed to the decline in construction values of residential condominiums at 31.6 percent, and single house type of construction at 4.5 percent,” PSA said.

Meanwhile, the top 5 regions, in terms of number of constructions, comprised 56.5 percent of the total.

Calabarzon led other regions, where a total of 7,292, or 21.8 percent of the total constructions, were registered.

Central Luzon ranked second with 3,611, or 10.8 percent of constructions, followed by Region 7 (Central Visayas) with 2,804, or 8.4 percent; National Capital Region (NCR) with 2,625, or 7.8 percent; and Davao region with 2,575, or 7.7 percent of total constructions.

At the provincial level, the top 10 provinces in terms of the number of construction projects accounted for 44.3 percent of the total.

Cavite topped the list of provinces with 3,129, or 9.4 percent of total constructions, followed by Batangas and Cebu with respective shares of 1,636, or 4.9 percent, and 1,593, or 4.8 percent.

Completing the list are Iloilo with 1,378, or 4.1 percent of total constructions; Davao del Sur, 1,297 or 3.9 percent; Laguna, 1,252 or 3.7 percent; Fourth District of NCR with 1,221 or 3.7 percent; Bohol with 1,168 or 3.5 percent; Bulacan, 1,081 or 3.2

percent; and Davao del Sur, 1,070 or 3.2 percent.

In terms of value of construction, the share of the top 5 regions amounting to P59 billion comprised 72.3 percent of the total.

NCR, ranking third in the number of constructions projects, however, occupied the top slot in terms of value of construction estimated at about P22.7 billion, or 27.8 percent of the total.

Completing the top 5 were Calabarzon with P13.8 billion, or 16.8 percent of total value; Central Visayas, P9.3 billion or 11.4 percent; Central Luzon, P7.8 billion or 9.6 percent; and Davao region, P5.5 billion or 6.7 percent.

Construction statistics from approved building permits relate to administrative-based data on new constructions and additions, alterations and repairs of existing residential and nonresidential buildings and other structures proposed to be constructed in all cities and municipalities of the country in a specific period.

For this publication, data for the provinces of Mountain Province, Sulu, Tawi-Tawi and Lanao del Sur are not included in the tabulation as these provinces did not submit any approved building permit before the generation of preliminary tables. However, if any, these are to be included in the annual tabulation.

www.businessmirror.com.ph

Consumer Rights Day reminder: The caveat of online shopping

By Elijah Felice E. Rosales @alyasjah

A

S the e-commerce industry continues to gain popularity in the country, two non-governmental groups warned the buying public of possible risks of purchasing items from the Internet.

In a joint statement ahead of World Consumer Rights Day on Thursday, Laban Konsyumer Inc. and EcoWaste Coalition said they recognize the growing sector of online shopping in the country. However, they also said stiffer regulations on e-commerce sites must be enforced to ensure their services are maintained at high standards.

“The fast growth of digital technologies has allowed consumers to shop online anywhere and anytime. With the ever-present mobile phones and other e-devices, consumers now have easy access to an extensive range of goods or services with just the touch of a button,” said Victorio Mario A. Dimagiba, president of Laban Konsyumer.

Dimagiba, a former trade undersecretary, said adulterated and dangerous products are in abundance in the Internet, and the government must address this as part of its mandate to protect consumers. “But not all things being sold online are created equal,” he said.

“Just like in offline shopping, consumers need to be on their guard against adulterated, counterfeit, mislabeled and poor-quality products that may pose health and safety risks. The risks are real, so

regulatory agencies and e-commerce sites need to take greater measures to protect consumers from online cheats and unfair business practices,” Dimagiba added.

Dimagiba’s sentiment was shared

by Anthony Dizon, chemical-safety campaigner of EcoWaste Coalition.

For Dizon, a stronger online protection is needed to be enforced, as consumers might fall prey to false advertising, labeling claims and bogus and hazardous goods.

“The online sale of goods, such as cosmetic and wellness products with banned, controlled or undeclared ingredients, is a serious matter as the consumption of such products may result to acute or chronic poisoning that can have adverse health effects, especially to women and children,” Dizon said.

He claimed some cosmetic products sold online have mercury, hydroquinone or tretinoin. A heavy metal dangerous to health, mercury is extremely hazardous even in small amounts, especially to pregnant and nursing mothers.

On the other hand, hydroquinone and tretinoin are classified as drugs in the country due to their harmful effects to the body. Contact with the two drugs can result to sensitivity to light, skin redness and permanent skin discoloration.

To be clear, Laban Konsyumer and EcoWaste Coalition said they are not against the rising popularity of online stores. They said they just want a fairer and safer platform for consumers in the digital marketplace.

www.businessmirror.com.ph

Banking&Finance BusinessMirror

PHL gets triple A rating for 1.46-B renminbi-denominated bond float

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By Rea Cu

@ReaCuBM

within the target band [of 2 percent to 4 percent] set by the BSP [Bangko Sentral ng Pilipinas],” the credit rating agency said in its report.

It likewise said the successful implementation of President Duterte’s 10-point socioeconomic agenda, citing among them the first package of the comprehensive tax reforms—Tax Reform for Acceleration and Inclusion— “will help the Philippines achieve more rapid and equitable economic growth in the following years.”

“The Republic of the Philippines has a well-established institutional framework, but its governance capacity is moderate, albeit improving remarkably in recent years,” the report added.

In its credit rating report on the Philippines, Lianhe said the country’s strengths lie in its strong and consistent economic growth, with employment continuously improving; government debt ratios that are continuously improving and well covered by fiscal revenue; large

Insurance industry posted record growth in 2017–IC

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he Insurance Commission (IC) on Monday reported record growth for the insurance industr y in 2017, with premiums increasing 11.97 percent to P259.8 billion, from P231.8 billion in 2016.

Insurance Commissioner Dennis B. Funa said: “In 2017 the life-insurance sector accounted for 77.94 percent of the industry total premiums, or P202.50 billion, while the nonlife insurance sector and MBA [mutual benefit association] sector accounted for 18.70 percent and 3.37 percent, respectively.”

Based on the unaudited quarterly statistical report as of December 31, 2017, submitted by all industry players, the life-insurance sector reported an increase of 10.78 percent in premiums collected to P202.50 billion as of end 2017, from P182.79 billion in 2016.

“From total premiums generated by the life-insurance sector, 74 percent were generated from the sale of variable lifeinsurance products. In fact, premiums collected from variable life-insurance products increased by 12.29 percent, while premiums collected from traditional life-insurance products increased by 6.83 percent,” he added.

The industry’s assets reached an alltime high of P1.56 trillion as of end of 2017, representing 18.95-percent growth from P1.31 trillion recorded in 2016.

The life-insurance sector holds P1.26 trillion, or 81 percent, of the industry’s total assets, while the nonlife insurance

sector and MBA sector hold P221.74 billion and P77.47 billion, respectively.

“The increase in the total assets of the life-insurance sector is attributed to the 78.16-percent increase in reinsurance accounts receivables or those amounts collectible arising from reinsurance transactions to P4.65 billion as of end of 2017, from P2.61 billion in 2016. The growth in total assets of the nonlife sector is due to the increase in receivables from reinsurance transactions,” he said.

As of year-end 2017, the receivables from reinsurance transactions of the nonlife sector reached P64.12 billion compared to P38.79 billion in 2016, representing an increase of 65.31 percent.

The industry’s invested assets are mainly composed of investments in government and corporate bonds, which is approximately 47 percent, and in the stock market which is approximately 29 percent of the total invested assets.

In terms of net worth, the industry posted P320.3 billion for 2017, which showed 18.14-percent increase from P271.1 billion in 2016.

The life-insurance sector posted a total paid-up capital of P20.6 billion in 2017, or 26.13 percent better than the P16.3 billion in 2016. This is, likewise, a factor in the growth in the life sector’s net worth, the IC said.

The nonlife insurance’s net worth increased by 13.89 percent, while the MBA sector posted a 21.76-percent hike in net worth. Rea Cu

Case clippings

By Justice S J Ranada Jr. SUBSIDIARY IMPRISONMENT–Proviso in judgment Where the MTC convicts on accused of violation of BP Blg. 22, imposing a fine as penalty instead of imprisonment, but does not provide for imprisonment in case of insolvency, the accused cannot be made to undergo subsidiary imprisonment in case of insolvency.

There is no provision in the Revised Penal Code that infers that subsidiary imprisonment may be imposed in case such accused is found to be insolvent.

People v. Alapan 10 Jan. 2018

GR 99527 Martires, J

A5

Philippine bank supervisor takes aim at male-dominated boards

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he Philippine government’s initial venture to raise funds through renminbi-denominated bonds, or Panda bonds, has sent clear signals that optimism on the economy’s growth outlook has sound basis.

The Department of Finance (DOF) said a major Chinese credit rating agency has given a Triple A (A A A) rating with a stable outlook for the Philippines’s planned issue of Panda bonds worth 1.46 billion renminbi, citing the country’s strong and consistent economic growth, low level of external debt and ample foreign and current account reserves as plus factors for its float this year.

The DOF said China Lianhe Credit Rating Co. Ltd. also factored in the strong economic ties between Manila and Beijing, and the Duterte administration’s stable source of payment from growing government revenues in its positive credit rating assessment for the Philippines’s planned issuance of renminbi bonds. “… Lianhe Ratings expects the Philippines to have a GDP growth of around 6.80 percent in 2018. At the same time, the Philippine unemployment rate is expected to remain stable, and CPI [consumer price index] growth may stay

Editor: Jun B. Vallecera • Tuesday, March 13, 2018

remittance inflows that contribute to the country’s ability to earn foreign exchange; low level of external debt and the very strong capacity to repay these obligations; and stable source of repayment from growing government revenues.

Lianhe also said the Philippines’s Panda bonds “have the lowest expectation of default risk.”

Lianhe’s rating was based on the Philippines’s application for registration of 1.46-billion renminbi-denominated Panda bond float with a tenor of three years, and the net proceeds to be remitted outside of China to serve as part of the Philippines’ international reserves.

National Treasurer Rosalia V. de Leon told financial reporters on Monday that the credit rating was expected, as the Philippine government’s planned Panda bond issuance is aligned with that of other economies, as well.

“That’s [A A A rating] expected because, prior to the Philippines, there are also other sovereigns who went to the Panda market, like Poland and Hungary. So we see that, given [that] we are aligned, Poland is higher rated than us, but Hungary I think is about the same, so we expect that we will get that A A A rating also,” de Leon said.

As for the planned issuance of the Panda bond, de Leon said the Bureau of the Treasury continues to look at market conditions and, if it is deemed favorable to the country, then the float will be issued.

“We got an A A A rating, so following that we are watching the market closely, and if there will be an opportunity for us to be able to go ahead and trigger the issue, then we will do so,” she added.

he Philippine Central Bank’s female deputy in charge of supervising the nation’s lenders has a message for their chief executives: Get more women onto your boards.

“Right now, we have a lot of women in big banks, but almost none of them are at the top,” Chuchi Fonacier, 57, said in an interview at her office by Manila Bay. “We encourage diversity.”

The career Central Banker joins a growing global momentum to break down barriers to gender equality in senior corporate and government roles. In the Philippines men hold 82 percent of the 265 board seats at the nation’s biggest lenders, and some banks have no women on their boards at all, according to the Central Bank.

“Companies that have more women at the senior management level do better in terms of return to shareholders, profitability,” said Mariam Jaafar, partner and managing director at Boston Consulting Group in Singapore. A BCG survey of 98 companies with the Technical University of Munich last year showed that innovation also increases as the proportion of female managers rises.

Fonacier is one of two female Central Bank deputies. The other, Cyd Tuaño-Amador was also appointed last year. Fonacier started as a bank auditor in 1984 and took over supervision of the sector last July.

When meeting bank presidents, Fonacier says two of her key requests are to toughen cybersecurity and to put more women in senior roles. “There’s a different approach when women are involved. Women are more intuitive, pay more attention to details and have more patience,” she said.

Balancing boardrooms in Asia is complex because of the breadth of cultural variation. Gender discrimination in Asian workplaces is mostly “unconscious,” according to a study by Insead Emerging Markets Institute and Deutsche Bank AG. In conservative Southeast Asian countries like Malaysia and Indonesia, women face “deep-rooted cultural bias,” Boston Consulting says. Societal norms often pressure women to give up careers to raise a family, producing a gender gap in senior roles. Even in the advanced economy of Singapore, men outnumber women 4-to-1 on the boards of top banks, the stock exchange’s Diversity Action Committee has said.

Emergency fund is a must

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he only thing certain in life is that the future is uncertain. As we pursue our goals, fortuitous events may occur. These events can put a major strain on our finances. They can become tough obstacles to our quest for a better tomorrow. Therefore, it is a must that we prepare well for the future. One example of good preparation is by building an emergency fund. This fund, as its name suggests, is meant to address unexpected expenses. Some examples of unexpected expenses are those you incur with a sudden loss of job, change in job conditions, unfavorable health developments, accidents and damages in assets. An emergency fund can help shield us from obtaining cumbersome debt or selling our valuable assets. Building an emergency fund can’t be done overnight.

It is a process that requires discipline.

Before we know where we want to go, we should know first where we are now. Hence, the first step is to be able to understand and address our current financial situation. A company’s financial performance is viewed through financial statements related to profitability and liquidity. The same concept can be applied to people. The personal cash-flow statement is an example that assesses a person’s financial situation.

Personal net cash flow is the difference between personal inflows and personal outflows. Personal inflows include your salary, profit from business and income from investments. Personal outflows include nondiscretionary and discretionary expenses. Nondiscretionary expenses are expenses related to the purchase of basic items like food, clothing

Genesis Kelly S. Lontoc

personal finance and shelter. Discretionary expenses are those that have a great chance of either being minimized or avoided. By listing down all of our inflows and outflows, we get an idea of our personal profitability condition, and we also get a chance to improve it.

Another personal financial tool we can use is the personal balance sheet.

This will compare our assets and liabilities. Liquidity gaps arise if the current liabilities are greater than the current assets. The knowledge of our profitability condition and liquidity condition will then help us in planning better for our future actions.

Once the financial situation has been determined, and its comparison with the bigger life financial goal has been identified, the next step is to determine a practical goal for the emergency fund.

There are various recommendations on how much the emergency should be.

Maybe, an emergency fund that is worth around six to 12 months of the monthly lifestyle expenses can be applied. Living within one’s means helps optimize the monthly lifestyle expenses. This recommended period can be enough to manage the tide, especially in case of sudden job loss, to give the one enough time to either look for new work or explore other

Fonacier

Bloomberg photo

In her 34 years at the Central Bank, in roles that went from counting cash in banks’ vaults to investigating the nation’s biggest financial scams, Fonacier said she had to chart her career differently from male colleagues.

Golf etiquette

“As a woman in an industry that’s full of men, you have to be factual and stick by the rules,” the deputy governor said. “You can also never arrive at decisions or deals in golf courses or over a bottle of beer. It’s seen as unbecoming of a woman.”

Lack of women in senior company roles means female executives don’t get to socialize as much as their male counterparts, says Cecilia Borromeo, president of the Development Bank of the Philippines, one of three female bank presidents in the country. “That limits my exposure to businesses, and I compensate for that with a lot of reading.”

Deloitte Touche Tohmatsu Ltd. estimates women comprise only 11 percent of all company board directors and 3 percent of CEOs. About 30 percent of the nation’s lawmakers and 25 percent of its ministers are women, according to the World Economic Forum.

Gender bias in the country was highlighted recently after President Duterte told former communist rebels to shoot female comrades in the vagina to make them “useless,” the latest of several gender-based remarks by the country’s leader that have been denounced by women’s and human-rights groups. They haven’t dented his popularity: Duterte’s approval rating stood at 80 percent last December, according to a Pulse Asia survey. Bloomberg News

income opportunities. If one is the sole breadwinner in the family, the emergency fund will have to take into account the total monthly family lifestyle expenses for it to be ample.

Where should we put the emergency fund? There are many options. However, the decision should be primarily based on easy access and liquidity. It will be very difficult to fund an emergency concern using a nonliquid asset like a realestate property, given the time and effort needed to convert it to cash. Ideally, the emergency fund must be maintained separately from the monthly lifestyleexpenses fund. One option would be to place in bank deposits. Regular savings accounts and special savings accounts are popular choices. Another option is to place the emergency fund in investments that can be easily redeemed.

Should we put most of our money in the emergency fund? No. We have monthly lifestyle expenses, and the emergency fund is not meant for these items. We might miss out on other good investment opportunities that can allow us to potentially beat inflation over time and give us greater wealth in the future through higher purchasing power. Still, the emergency fund is a crucial step we need to take in our quest for financial freedom, since having it will give us a buffer to support the pursuit of our life goals.

Gemmy Lontoc is a registered financial planner of RFP Philippines. To learn more about personal financial planning, attend the 68th RFP program this March 2018. To inquire, e-mail info@rfp.ph or text <name><email> <RFP> at 0917-9689774.

A4 Tuesday, March 13, 2018 • Editor: Lyn Resurreccion A6

The World BusinessMirror

www.businessmirror.com.ph

Cuba’s likely next president pledges more responsive govt

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ANTA CLARA, Cuba—Cuba last Sunday took the final political step before a promised transition from the founders of the Communist state to a younger generation of officials.

People queue to vote in front of an image of Cuba’s Argentine-born revolutionary hero Ernesto “Che” Guevara at a voting center during elections for national and provincial representatives for the National Assembly in Santa Clara, Cuba, on March 11. AP/Ramon Espinosa

Along with millions of Cubans, 57-year-old Vice President Miguel Diaz-Canel voted to ratify a government-approved list of members of the National Assembly, which convenes on April 19.

Diaz-Canel, who is expected to assume Raul Castro’s seat as president that day, said the country’s next government would be more responsive to its people.

He told reporters in the central city of Santa Clara that “the people will participate in the decisions that the government takes.”

“The people can also recall someone who doesn’t fulfill their responsibilities,” Diaz-Canel said.

“There has to be a focus on ties to, links with the people, to listen to the people, deeply investigate the problems that exist and inspire debates about those problems.”

Diaz-Canel also lamented the downturn in relations with the

United States under President Donald J. Trump, saying “the reestablishment of relations has been deteriorating, thanks to an administration that has offended Cuba.”

In a bit of political theater that may prove to be a shift in style from Castro’s, Diaz-Canel waited in line to vote alongside other citizens. Most officials are swept to the front of lines to vote in front of local and international media.

“We’re almost in the future that we’ve been talking about—a transition,” said Jose Ramon Machado Ventura, the 87-year-old second vice president who fought along with Castro to overthrow strongman Fulgencio Batista in 1959.

“We’ve been in transition since January 1, 1959. Now, the change is generational.”

Despite the change in tone, few Cubans last Sunday expected Diaz-

Canel to bring about immediate or dramatic reform.

The vice president has long been seen as Castro’s hand-picked successor, and he has consistently emphasized maintaining continuity in Cuba’s single-party political system and centrally planned economy.

Despite a series of reforms instated by Castro at the beginning of his decade in power, the Cuban government maintains its monopoly on most forms of economic activity and the Cuban economy remains mostly stagnant and unproductive.

Young Cubans, in particular, are widely disenchanted by a lack of economic opportunity and the state’s tight control of virtually all aspects of life on the island.

Tens of thousands of Cubans have left the island over the last decade, draining highly qualified professional from key institutions like Cuba’s prized medical and educational systems.

“I think the change will be for the good, because it seems to me that some of the measures that have been taken in the past have become obsolete,” said Daniela Aguero, a 26-year-old doctor. “Now there will be changes to improve our economy and our policies.” AP

Seoul envoy praises China’s Japan finance minister under fire as Abe school scandal deepens role in fostering new nuke talks

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EIJING—South Korea’s national security director on Monday praised the role of Chinese President Xi Jinping’s administration in nudging North Korea toward denuclearization talks, following word of a possible summit between President Donald J. Trump and the North’s leader Kim Jong Un. Chung Eui-yong briefed top foreign policy adviser Yang Jiechi on the recent inter-Korean talks and was to meet with Xi later in the day.

“Our President, Moon Jae-in, and the [South Korean] government believe that various advances toward achieving the goal of peace and denuclearization of the Korean Peninsula were made with active support and contribution from President Xi Jinping and the Chinese government,” Chung told Yang.

Yang said China insists on all parties “sticking to solving the issue through dialogue and consultation.”

“As long as all parties insist on solving the issue politically and maintain this direction, we can undoubtedly lead the situation on the Korean Peninsula to move forward in the direction in which the global community hopes for,” Yang said.

Chung announced last week that Trump had said that he would meet Kim by May “to achieve permanent denuclearization” of the Korean Peninsula.

Chung said Kim told the South Koreans during talks in Pyongyang that he’s “committed to denuclearization” and pledged that “North Korea will refrain from any further nuclear or missile tests.”

Suh Hoon, chief of South Korea’s spy agency, was also visiting Japan to brief officials there on the progress in talks.

North Korea’s foreign trade, more than 90 percent of which passes through China, has taken a major hit since Beijing agreed to increasingly harsh UN Security Council resolutions aimed at pressuring Pyongyang into ceasing its nuclear and missile tests and rejoining denuclearization talks.

China’s trade crackdown shows how it remains indispensable both in persuading Pyongyang to agree to talks and in fostering and safeguarding a longer-term solution, Renmin University foreign affairs expert Cheng Xiaohe wrote in the ruling Communist Party newspaper Global Times on Monday.

“China’s faithful implementation helped make the Security Council’s resolution effective,” Cheng wrote, citing a 52-percent decline in trade with South Korea in January against the year before that required “significant sacrifice” on China’s part.

While China supports maintaining sanctions for the time being, it is prepared to restore its trading relationship with the North in the event of a breakthrough in order to “create a favorable external environment for North Korea’s sustainable economic development,” Cheng wrote.

By way of geography, its growing influence and established interest on the Korean Peninsula, China “was bound to play an important role in promoting denuclearization of the Korean Peninsula, in particular, and shaping the geopolitical order in Northeast Asia, in general,” Cheng wrote.

The editorial followed remarks by Chinese Foreign Minister Wang Yi last week that the offer of summit talks was at least a partial result of Beijing’s call for a “dual suspension” of North Korean nuclear activities in return for a postponement of US-South Korean war games.

Trump has spoken with both Chinese President Xi Jinping and Japanese Prime Minister Shinzo Abe since last Thursday’s announcement, and said Xi “appreciates that the US is working to solve the problem diplomatically rather than going with the ominous alternative.”

Trump also said China “continues to be helpful!” Trump has repeatedly urged China to do more to pressure North Korea into abandoning its nuclear program. AP

J

apanese Finance Minister Taro Aso is coming under pressure to resign as a scandal over alleged favors to a school with connections to Japanese Prime Minister Shinzo Abe deepened.

Hiroshi Moriyama, a lawmaker in Abe’s ruling Liberal Democratic Party (LDP), said on Monday he received a report from the Finance Ministry admitting that documents on the sale of public land to the school were altered.

The yen strengthened and stocks gave up some of their gains on concern that the scandal could derail Abe’s economic stimulus program.

The Finance Ministry will concede its involvement in the alteration of 14 papers, removing the names of multiple politicians, including some with Cabinet experience, the Yomiuri newspaper reported earlier, without saying where it got the information.

Opposition lawmakers said that Aso, who is also Abe’s deputy, must

take responsibility.

The name of Abe’s wife, Akie, was among those deleted from documents, Kyodo News reported without saying where it got the information.

The prime minister told parliament in February last year that he’d resign if any link emerges between himself or Akie and the land deal. Calls to the premier’s private office weren’t answered.

The scandal, which has dogged Abe for more than a year, probably won’t hurt his ruling LDP’s grip on power after a resounding general election win last autumn, but it could hamper his bid to become Japan’s longest-serving leader.

It’s blown up again at a bad time for the prime minister, who is battling to get exclusions from steel and aluminum tariffs as President Donald J. Trump bemoans the United States’s trade deficit with its ally. He also has to contend with Japan’s increasingly isolated stance on North Korea af-

ter Trump agreed to meet with Kim Jong Un. Jun Okumura, a visiting scholar at the Meiji Institute for Global Affairs in Tokyo, said Aso will probably resign over the issue, and that the scandal will make it harder for Abe to win a third term as leader of the ruling LDP this autumn.

“If Aso resigns, the Abe Cabinet itself will be in danger, together with much of the momentum for its policy agenda,” Okumura said. “Aso is a political whale” and “his resignation would be much more damaging than that of the relatively junior Cabinet ministers that we have seen.”

The nation’s tax chief stepped down last Friday amid questions over his involvement in the deal, a resignation that came on the same day as an official at a regional finance ministry bureau in charge of the sale was found dead, in a suspected suicide.

The scandal is dominating newspa-

per front pages and TV news programs, and the approval rating of Abe’s Cabinet dropped to 48 percent in a poll published by the conservative Yomiuri newspaper late last Sunday—6-percentage points down on the previous survey last month.

About 70 percent of respondents to a separate Fuji News Network survey said Aso should step down.

Questions have been raised about whether Abe’s wife’s connection to the school meant its operator was able to buy government land cheaply.

Abe has repeatedly denied any involvement on his part, or that of his wife Akie, in the sale of land to Moritomo Gakuen, an educational foundation that subsequently filed for bankruptcy.

The foundation ran a kindergarten in Osaka known for espousing elements of the prewar nationalist curriculum, as well as for its explicit backing of Abe, and had planned to use the land for an elementary school. Bloomberg News

Putin’s Russia: From basket case to resurgent superpower

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OSCOW—Vladimir Putin and his Russia look more invincible today than at any other time in his 18 years in power.

Since Putin last faced an election in 2012, Russians have invaded Ukraine, annexed Crimea, blanket-bombed Syria, been accused of meddling in the US presidential election and claimed to have a scary new nuclear arsenal.

“No one listened to us. You listen to us now,” he said earlier this month, boasting about those weapons.

Putin will overwhelmingly win reelection as president on March 18, again. So why bother holding a vote at all?

He disdains democracy as messy and dangerous—yet he craves the legitimacy conferred by an election.

He needs tangible evidence that Russians need him and his great-power vision more than they worry about the freedoms he has muffled, the endemic corruption he has failed to eradicate, the sanctions he invited by his actions in Crimea and Ukraine.

“Any autocrat wants love,” said analyst Andrei Kolesnikov of the Carnegie Moscow Center, and Putin gets that love “from high support in elections.”

Expected to win as much as 80 percent of the vote, Putin will further cement his authority over Russia, a czar-like figure with a democratic veneer.

During his 14 years as president and four years as prime minister of the world’s largest country, Putin has transformed Russia’s global image, consolidated power over its politics and economy and imprisoned opponents.

He has offered asylum to Edward Snowden, quieted extremism in long-

restive Chechnya, hosted phenomenally expensive Olympic Games and won the right to stage this year’s World Cup. Now 65-years-old, he’s not planning to leave anytime soon.

For 19-year-old art history student Maria Pogodina, “Putin is all of my conscious life, and so it’s clear I have a lot to say thank you for.”

Yet, Pogodina worries about some of his policies as she prepares to vote and hopes to see a gradual transformation.

“I am not talking about revolution, no way,” the teenager said, summing up the stance of many Russians of all ages.

“I hope and believe it won’t happen and that we can avoid civil conflict.”

The election will confirm Putin’s argument that to improve life in Russia, the country needs continuity more than it needs drastic change, independent media, political opposition, environmental activism or rights for homosexuals and other minorities.

Russia will remain disproportionately dependent on oil prices, and its 144 million people will stay poorer than they should be—and many will remain convinced that the world is out to get them.

Putin’s most important mission in the next six years will be working out a plan for what happens when his next term expires in 2024: Will he anoint a friendly successor or invent a scheme that allows him to keep holding the reins?

Today’s all-powerful Putin bears little resemblance to the man who took his tentative first steps as president on the eve of the new millennium.

Catapulted to power on Boris Yeltsin’s surprise resignation as president, Putin walked into his new office December 31,

Former President Boris Yeltsin (left) smiles as he holds a door before leaving his study, as then-Russian Acting President and Premier Vladimir Putin listens in Kremlin, Russia, on December 31, 1999.

Sputnik, Kremlin Pool Photo via AP

1999, in a suit that seemed too big for his shoulders. His low-level KGB background made him seem shifty, and many Russians regarded him as little more than a puppet of the oligarchs then pulling the Kremlin’s strings.

Russia was still emerging from a tumultuous post-Soviet hangover. Contract killings dominated headlines, its army couldn’t afford socks for its soldiers, and its budget was still dependent on foreign loans.

Eighteen years later, Putin’s friends run the economy and Russia’s military is resurgent.

An entire generation has never known a Russia without Vladimir Vladimirovich

Putin in charge. And an increasing number of other leaders—President Donald J. Trump among them—are emulating his nationalist, besieged fortress mentality.

The once-feisty Russian media has fallen silent. Kremlin propaganda now has a global audience, via far-reaching networks RT and Sputnik.

Yet, while Putin looks invulnerable on the surface, he has reason to worry.

The Kremlin is lashing out at opposition leader Alexei Navalny’s recent investigations of corruption, fearing they could spur public uproar. And the battle for succession threatens to cause damaging splits within Putin’s inner circle. AP

The World BusinessMirror

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Tuesday, March 13, 2018

A7

Ending term limits for China’s Xi is big deal

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he roughly 3,000 delegates of the National People’s Congress, China’s legislature, voted almost unanimously last Sunday to end a two-term limit on the presidency, one of the main leadership posts held by Xi Jinping.

While the overwhelming approval by the party-controlled congress was not a surprise, the repercussions go beyond just allowing Xi to stay on longer.

Here’s what is at stake, and why ending the term limit matters.

one of the framers of the Constitution. “The French president begins with one term of seven years, with an option for a second term. But that’s different. They have opposition parties who pick their faults every day.”

Why is the limit in place now?

How did it become important?

One lesson that China drew from the upheavals of the Cultural Revolution was the danger of concentrating power in one supreme, unassailable leader who ruled for life.

In 1982, when China was recovering from that chaotic era, lawmakers approved a new Constitution that said the president and also the vice president “shall serve no more than two consecutive terms.”

It is sometimes said that Deng Xiaoping, who led China after Mao, introduced the term limit to prevent the top leader from again becoming too powerful. But that’s not entirely true.

Back then, the Chinese presidency was not such a powerful post.

Deng wielded much of his power informally, without titles or term limits, and through his control of the military.

Even so, the politicians and legal experts who drafted China’s 1982 Constitution saw lifelong tenure as a recipe for tyranny, especially in a one-party state.

“If someone stays in office for 15 years, the people won’t dare express their opinions to him,” said Fang Yi,

The presidential term limit became more important in the 1990s, when Deng prepared to pass power to his successor, Jiang Zemin.

Under Deng in the 1980s, there was turmoil in succession, as two protégés were forced to resign following student demonstrations.

Deng tried to ensure the success of his final choice, Jiang, by setting him up in China’s three most powerful posts: Communist Party general secretary, chairman of the commission in charge of the military and the presidency, which Jiang took over in 1993.

But Deng also wanted to ensure that Jiang did not stay on indefinitely. He started a succession cycle by also promoting Jiang’s younger heir-apparent, Hu Jintao.

Under Jiang and later Hu, a new norm formed. The top leader had clear authority because he held all three main posts. But he had to hand them to a successor after about a decade.

“The 3-in-1 leadership system and form—of party general secretary, state president and military commission chairman—is not only

Chinese President Xi Jinping casts his vote for an amendment to China’s Constitution that will abolish term limits on the presidency and enable him to rule indefinitely, during a plenary session of the National People’s Congress at the Great Hall of the People in Beijing, on March 11. AP/Andy Wong

If someone stays in office for 15 years, the people won’t dare express their opinions to him.”–Yi necessary but also the most fitting for a great party and a great country like ours,” Jiang said in 2004.

That arrangement allowed two of the most stable transitions of power in China’s modern history, from Jiang to Hu in 2002, and then Hu to Xi six years ago.

Is the presidency powerful in China?

In China the political job that matters most is the general secretary of the Communist Party.

The party controls the military and domestic security forces, and sets the policies that the government carries out.

China’s presidency lacks the

authority of the American and French presidencies.

This difference is ref lected in language. In Chinese, China’s president is called zhuxi, which really translates as “chairman.”

Foreign presidents get a different title, zongtong.

So, in effect, Chinese people are referring to Xi as the “state chairman,” though in English his title is officially translated as “state president” to put him on an even footing with other world leaders.

Still, the Chinese presidency is not entirely ceremonial. The president has the power, acting with the legislature, to declare war or a state of emergency.

In times of crisis, disagreement between a party leader and president could cause trouble.

The presidency has become increasingly prominent thanks to China’s growing global stature.

At home, Xi usually speaks as party leader; abroad, he appears as president, who is the formal head of state.

Xi relishes the prestige of state visits to the White House or Buckingham Palace, which might be awkward if he were not president.

Why change the system?

The official Chinese news media have said that Xi wants to abandon the term limit so that he can keep his trinity of leadership posts. According to Xinhua News Agency and other party-run news outlets, having a term limit on just the presidency is unreasonable because neither of Xi’s other two major posts—party leader and military chairman—has

a similar limit.

Of course, this argument does not address the other solution to that inconsistency: imposing limits on the party and military posts. His action leaves little doubt that Xi is clearing the way to remain top leader for a long time to come, and without clear rivals.

If the term limit remained, Xi would have to step down as president at the end of his next five-year term, in 2023. Any successor could potentially become a rival.

Xi seems determined to remain “3-in-1” leader because he sees himself on a historic mission to make China into a great power.

Achieving that will take more than a decade, Xi has said.

Last year Xi showed his intent to stay in power by declining to promote a potential successor into the new Politburo Standing Committee, the party’s most powerful body. Xi and Hu both served political apprenticeships in the Standing Committee before taking over.

Will Xi will be leader for life?

Xi has produced plenty of surprises in his first five years in power, not least his decision to abolish the term limit before his second term as president had even started. So predicting Xi’s future steps isn’t easy.

Even so, The People’s Daily said earlier this month that ending the presidential term limit does not “imply a system of lifelong leadership.” The point seems to be that while Xi may be around for a while, he won’t be another Mao, who remained in power even as he grew ill and incoherent with age.

But Xi has not specified how many terms he plans on. Perhaps Xi himself does not have a firm idea yet. Or perhaps he figures he can enhance his power even further by keeping everyone else guessing. New York Times News Service

Saudis said to use coercion, abuse to seize billions

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I YADH, Saudi Arabia— Businessmen once considered giants of the Saudi economy now wear ankle bracelets that track them. Princes who led military forces and appeared in glossy magazines are monitored by guards they do not command.

Families who flew on private jets cannot gain access to their bank accounts. Even wives and children have been forbidden to travel.

Last November the Saudi government locked up hundreds of influential businessmen—many of them members of the royal family—in the Riyadh Ritz-Carlton in what it called an anticorruption campaign.

Most have since been released, but they are hardly free. Instead, this large sector of Saudi Arabia’s movers and shakers are living in fear and uncertainty.

During months of captivity, many were subject to coercion and physical abuse, witnesses said.

In the early days of the crackdown, at least 17 detainees were hospitalized for physical abuse and one died in custody with a neck that appeared twisted, a badly swollen body and other signs of abuse, according to a person who saw the body.

In an e-mail to The New York Times last Sunday, the government denied accusations of physical abuse as “absolutely untrue.”

To leave the Ritz, many detainees not only surrendered huge sums of money but also signed over to the government control of precious real estate and shares of their companies—all outside any clear legal process.

The government has yet to actually seize many of the assets, leaving the former detainees and their families in limbo.

One former detainee, forced to wear a tracking device, has sunk into depression as his business collapses.

“We signed away everything,” a relative of his said. “Even the house I am in, I am not sure if it is still mine.”

As the architect of the crackdown, Crown Prince Mohammed bin Salman, prepares to travel to the United States this month to court American investment, Saudi officials are spotlighting his reforms: his promise to let women drive, his plans to expand entertainment opportunities and his moves to encourage foreign investment.

They have denied any allegations of abuse and have portrayed the Ritz episode as an orderly legal process that has wound down.

But extensive interviews with Saudi officials, members of the royal family, and relatives, advisers and associates of the detainees revealed a murkier, coercive operation, marked by cases of physical abuse, which transferred billions of dollars in private wealth to the crown prince’s control.

Corruption has long been endemic in Saudi Arabia, and many of the detainees were widely assumed to have stolen from state coffers. But the government, citing privacy laws, has refused to specify the charges against individuals and, even after they were released, to clarify who was found guilty or innocent, making it impossible to know how much the process was driven by score-settling.

Part of the campaign appears to be driven by a family feud, as Crown Prince Mohammed presses the children of King Abdullah, the monarch who died in 2015, to give back billions of dollars that they consider their inheritance, accord-

ing to three associates of the Abdullah family.

And although the government said the campaign would increase transparency, it has been conducted in secret, with transactions carried out in ways that avoid public disclosure, and with travel bans and fear of reprisals preventing detainees from speaking freely.

Most people interviewed for this article spoke on the condition of anonymity to avoid the risk of appearing to criticize Crown Prince Mohammed.

The government said in its email that “the investigations, led by the attorney general, were conducted in full accordance to Saudi laws. All those under investigation had full access to legal counsel in addition to medical care to address preexisting, chronic conditions.”

In a separate statement last Sunday announcing new anticorruption departments in the attorney general’s office, the government said King Salman and Crown Prince Mohammed “are keen to eradicate corruption with utmost force and transparency.”

Before dawn on November 4, Prince Alwaleed bin Talal, the kingdom’s most famous investor and one of the world’s richest men, was asleep at a desert camp when he was summoned by the royal court to see King Salman, according to two associates of his family.

He returned to Riyadh, where his guards were dismissed, his phones taken from him, and he was locked in the Ritz.

Over the next 24 hours, similar calls lured in more than 200 people, including some of the kingdom’s wealthiest and most powerful men.

They included Prince Mutaib bin Abdullah, a son of King Abdullah

and head of one of the country’s three main security services; Fawaz Alhokair, who owned the kingdom’s franchises of Zara, the Gap and dozens of other stores; Salah Kamel, an elderly businessman from the Red Sea port city of Jiddah; and many other princes, businessmen and former government officials.

Most ended up in the Ritz, where they could watch television and order room service but had no Internet or phones.

Outside, their relatives panicked, and managers of their farflung businesses drew up contingency plans to keep operations running, unsure of how long their bosses would be gone.

Eventually, the detainees were allowed to reassure their families through short, monitored calls.

Many were prevented from contacting their lawyers, but Prince Alwaleed spoke weekly with some of his managers, his associates said.

He remained out of public sight until January, when the royal court allowed a journalist from Reuters to interview him in the Ritz to counter a BBC report that he was being kept in a cell-like room.

“Rest assured that this is a clean operation that we have,” the prince told Reuters, having visibly lost weight and grown a beard. “There is a misunderstanding, and it is being cleared.”

Within a few hours, he was released, but even close associates say they do not know what agreement he made with the government.

In the early days of the Ritz detentions, as many as 17 detainees required medical treatment for abuse by their captors, according to a doctor and a US official.

Relatives of some of the detainees said they were deprived of sleep,

Inside the Ritz-Carlton Hotel, where the Saudi government locked up hundreds of influential businessmen in what it called an anticorruption campaign, in Riyadh, Saudi Arabia, on February 26. As the Saudi crown prince comes to the US to court investment, new details cast doubts on his claims of a transparent, legal anticorruption effort. Tasneem Alsultan/The New York Times

roughed up and interrogated with their heads covered while the government pressured them to sign over large assets.

Evidence of such abuse has been slow to emerge, but officials from two Western governments said they deemed the reports credible.

One case involved a Saudi military officer who died in custody.

One person who saw the corpse of the officer, Maj. Gen. Ali al-Qahtani, said his neck was twisted as if it had been broken, and that his body was badly bruised and distended. His skin showed other signs of physical abuse, the person said.

A doctor and two other people briefed on the condition of the body said it had burn marks.

In the e-mailed response to questions about al-Qahtani, an official of the Saudi Embassy in Washington said, “All allegations of abuse and torture of those investigated during the anticorruption proceedings are absolutely untrue.”

Al-Qahtani, an officer in the Saudi National Guard who was believed to be about 60, was not wealthy himself, so his value as a

major anticorruption target is questionable. But he was a top aide to Prince Turki bin Abdullah, a son of the late King Abdullah and a former governor of Riyadh, and the interrogators may have been pressing the general for information about his boss, Prince Turki.

Last November al-Qahtani was taken to a hospital for radiological scans and other treatment, where he showed signs of having been beaten, according to a doctor briefed on his condition.

He was returned to the hotel for further interrogation, and later pronounced dead at a military hospital. The kingdom has never publicly provided an explanation of the general’s death.

Whatever pressure was applied in the Ritz, the goal was to get detainees to sign over assets.

The kingdom’s public prosecutor said in January that the government had reached settlements worth $106 billion, and other officials have said they expect the process to yield $13 billion in cash by the end of 2018. New York Times News Service

The Regions

Tuesday, March 13, 2018 • Editor: Efleda P. Campos

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BusinessMirror

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DOTr to move Zambo airport to new location

By Manuel T. Cayon

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@awimailbox Mindanao Bureau Chief

AMBOANGA CITY—The city government here is upbeat that the national government has approved the transfer of its airport to a location east of the city to allow more development to take place rather than confine it to a constricted downtown-area development.

City Planning Chief Rodolfo P. Sicat told reporters here about the optimism of the city government on the visit this week of a team from the Department of Transportation (DOTr) to conduct the geotechnical study of the planned site for a new airport.

Sicat divulged this at the sidelines of the launch on Monday of the Zamboanga-Sandakan, Malaysia air connectivity.

He sa id t he st udy wou ld

complete the latest among several national government studies on transferring the airport to the Barangay Mercedes and Barangay Talavar area, 17 kilometers east of this city.

The planned airport was first attempted for inclusion in the Medium Term Public Investment Development Plan of the thenDepartment of Transportation and Communications (DOTC) in the last year of Secretary Joseph Emilio

A. Abaya, which did not make it to the list of projects for funding.

The DOTr funded the sixth study supposed to be finished by November last year, Sicat said. Although the project was left unfinished, “by the mere fact the DOTr funded it up to its completion, we hope this feasibility study would proceed to its next level.”

“Otherwise, why was it funded if it would not proceed?” he said.

The existing airport sprawls in an area covering 121 hectares of the airport, and another area still being used for a 12-hole golf course. A briefer by the Department of Tourism said the airport is currently among the top-10 busiest airports in the country and, last year, it handled 8,870 aircraft movements and recorded 1 million passengers and 13 million units of cargo.

The airport has flights to Manila, Cebu and Davao, and the booming missionar y route to Tawi-Tawi, the country’s southern backdoor.

Sicat said the DOTC then projected the Zamboanga airport to receive as many as 1 million passengers by 2020, a level that

peaked its capacity for its existing infrastructure. He added the city government could neither request the needed upgrading or improvement, saying the proximity of the airport to the downtown area, at 2 kilometers, “has restricted the development of the urban area of the city.”

He said the urban expansion was being forced to take a linear and littoral direction instead of a much broader and multiple directions, which would allow the city government to relocate the city hall and build a bigger and new urban area with wide streets.

He added the SM and Robinson’s chains of shopping malls already indicated interest at relocating at the prospect of a vacated airport.

“Other businesses and enterprises are all looking forward to expand or relocate to that area.”

Despite the boom in construction and entry of new shopping malls, the urban area remained constricted at six hectares.

In the 1994 price index, the relocation of a new airport would have cost only P20 billion.

However, the cur rent cost

of bet ween P4 0 bi l l ion a nd P 6 0 b i l l io n w ou l d s t i l l b e manageable, he added.

He said the leveled area would not be expensive and would take only a filling up of the place.

In a related development, Transportation Secretary Arthur P. Tugade ordered the immediate improvement of the Zamboanga International Airport after seeing first hand the air hub’s “sorry state.”

Expressing his “great dismay” over the airport’s facilities, Tugade listed those that need immediate attention as the small-baggage carousel, the lack of appropriate gang chairs and passenger seats at boarding areas and the multiple potholes on the two runways.

“I find it hard to accept that this is the airport that the people of Zamboanga are using,” he said. “It needs further attention.”

He ordered the immediate procurement of gang chairs to ensure passengers will be provided with comfortable seats, as well as a newbaggage carousel to facilitate efficient baggage handling.

Tugade said he would closely coordinate with the National

DOF: Japan to donate 27 heavy equipment to help rehab Marawi

By Rea Cu

DICT clusters now rolling out public Wi-fi

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@ReaCuBM

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HE Department of Finance (DOF) said Japan is set to turn over 27 units of heavy machinery to the Philippine government this month, to further help in the reconstruction and rehabilitation of Marawi City.

The DOF’s International Finance Group reported to Finance Secretary Carlos G. Dominguez III during its recent Executive Committee meeting that, aside f rom t he 27 he av y m ac h i nery, 200 electric vehicles from a n A sia n Development Ba n k (ADB)-funded project of the Department of Energy will also be turned over to Task Force Bangon Marawi to help provide livelihood opportunities for residents in the conflict-torn city.

Japan’s donation of heav y equipment to Marawi City is part of Tokyo’s ¥2.5-billion or $22-mi l l ion g rant under t he Philippine-Japan Economic and Social Development Program, which includes the support for the reconstruction of the city and the provision of coastal-monitoring radars to the Philippine Coast Guard.

During the fourth meeting of the Philippines-Japan High Level Committee on Infrastructure Development and Economic Cooperation held in Cebu City in February, representatives of both countries discussed a proposed ¥2-billion or $18-million grant from Japan still in line with the rehabilitation of Marawi City.

“The turnover of equipment

would be a symbol of Japan’s strong commitment for the reconst r uc t ion of Ma raw i a nd demonstrate the robust bond between our two countries,” said Dr. Hiroto Izumi, special advisor to Japanese Prime Minister Shinzo Abe. Bot h sides a l so ag reed to “steadily implement” for the next five years their joint commitments on major fields of bilateral cooperation, particularly on the implementation of the Duterte administration’s big-ticket infrastructure projects that Japan has pledged to support through funding and technology assistance.

Dominguez said both sides look forward to the signing of the Exchange of Notes for the grant financing for the Davao City Waste-to-Energy project, as well as the loan-financing packages for the Pasig-Marikina Channel Improvement Project Phase IV and the MRT 3 Rehabilitation and Improvement Project “in the coming months and after all internal approvals are completed.”

NOSE DIVE A daring tour guide shows his skills in diving via the Blue Water River in Baggao, Cagayan. The Northern Sierra Madre is home to a number of waterfalls and upland rivers.

LEONARDO PERANTE II

Pampanga governor wants training for women empowerment strengthened

By Joel P. Mapiles Correspondent

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ITY OF SAN FERNANDO —Pampanga Gov. Lilia Pineda instructed the Provincial Manpower Training Center (PMTC) to strengthen and broaden the training program for the empowerment of women, especially those in the marginalized sector.

The lady governor emphasized the value of women, saying their role is not limited to household chores and taking care of their husband and children.

“Empowered women should

explore outside the four corners of their homes. There is more we can do to help our families and society as well,” Pineda said.

Pineda added wives should work hand in hand with their husbands in building a happy and financially stable family.

“Speaking of practicality, both parents should work to sustain the needs of their family. Nowadays, the cost of living is very expensive.

Women can share some of the financial burden. Men should allow their wives to work,” the governor said.

The governor announced

that the PMTC is open to all Kapampangan women who are interested in learning or upgrading their skills.

The Public Employment Service Office will also help them seek jobs based on their skills.

She also mentioned the livelihood programs of Pampanga under the Provincial Cooperative and Entrepreneurial Development Office.

“The women’s sector is not weak. Being a woman is not a struggle. Being a woman is a privilege. We should be proud of being a woman,” she added.

DOT eyes Samar as alternative as Boracay undergoes rehab

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A C L O B A N C I T Y—T h e Department of Tourism (DOT) is looking at Samar province as an alternative destination to Boracay, one of the country’s most popular islands, as it undergoes rehabilitation from environmental abuse.

Speaking to tourism stakeholders during the last day of Spark Samar Travel Fair 2018 at SM Megamall last Sunday, DOT Undersecretary Katherine S. de Castro said Samar

tourist spots are on the list as priority sites for promotions.

“Secretary Wanda [Corazon] Tulfo Teo instructed me to look for alternative less-known sites while the rehabilitation of Boracay is going on.

[The] DOT will be more aggressive in promoting Samar and ensuring that natural resources are well-taken care of,” de Castro said.

The official recalled how she helped promote Samar to tourists in

Housing Authority for the relocation of informal settlers affected by the Zamboanga seige.

The transport chief also ordered the immediate removal of the containers of Allison Cargo from the airport, as it “adversely” affected airport security.

The P160-million budget for the asphalt overlay has been secured, and construction has been scheduled pending the award of the deal.

But Tugade gave an ultimatum to airport officials, and instructed them to start the asphalt overlay of the entire runway, as well as the repair of potholes “today,” to ensure the safety of the aircrafts and their passengers during landing and takeoff.

Sealing of cracks will commence immediately.

Asphalt overlay of the whole r u nw ay w ou l d t a k e s e v e r a l months, as work can only be done at night till early morning, when there are no more incoming or outgoing flights.

“W hen I return, and these have not been fixed, I will make sure that someone will pay for it,” Tugade said.

2011 as the host of the travel show Trip na Trip produced by ABS-CBN News and Current Affairs and Bayan Productions.

“I found out that people in Samar are nice, and they embraced us with open arms. With this, we are looking forward to increasing the number of visitors in Samar and its further development. It’s time for Samar to show the world why it’s more fun in the Philippines,” she added.

In a statement, the DOT said the multidepartment group overseeing the ongoing shake-up of noncompliant establishments to environmental laws is proposing a two-month closure of Boracay.

Samar Gov. Sharee Ann Tan welcomed the pronouncement of the DOT, as the local government sees tourism as the main economicgrowth driver in a province known for typhoons and conflict.

“We are ready to welcome tourists after years of empowering, engaging and equipping our communities with skills needed to fortify the province’s community-based tourism initiatives,” Tan said.

Since the introduction of Spark Samar tourism campaign, tourist arrivals grew from 118,018 in 2013 to 207,709 in 2016. The governor is eyeing 298,000 tourists to Samar by 2019 or 2020. PNA

AVAO CITY—Wi-fi connections are now being rolled out in designated places and are expected to be done before the end of the year.

In the Cluster 3 in Mindanao, consisting of the Davao region and Region 12 or the Soccsksargen growth region, Wi-fi connections have been installed in at least the government’s provincial or municipal capitols, in their parks, state universities, rural health units and designated public high schools.

In this city, Wi-fi connections have been installed at the City Hall and the People’s Park, at broadband speeds of 25 megabytes per second. Connections were also being worked out at the University of Southeastern Philippines, Magsaysay Park, Davao City Overland Transport Terminal and the Davao City National High School.

Erlito Tancontian, assistant Cluster 3 director, said the provinces would have their capitol building and the vicinity and their public parks wired soon. “Also their designated public high schools and colleges and their rural health units, too.”

The full-blast installation would come soon after the Philippine International Trading Corp., an affiliate unit of the Department of Trade and Industry, would have picked the winning bids in installing the Wi-fi connections.

A side from the two telecommunication companies, Smart Communications and Globe Telecom, more than 10 other Internet-service providers have filed their bids.

In the case of Davao City, usage would be limited to one hour to allow as many users as possible.

“We have until the rest of the year to install them,” he said.

He added, though that there were still dead spots in some highways, as the two telecoms struggle with alleged underspending on cellular sites. In fairness, he said, “the telecoms are now allocating money to improve their systems.”

He added the alleged reluctance of local governments to grant permits to the telecoms unless the latter met the requirements may not hold true during the term of President Duterte. “The President has been clear about the position of the administration regarding the slow Internet in the country, and I believe the local governments are aware of the complaints of Filipinos.”

He said the broadband speed would greatly improve once the move to allow shared use of the cellular towers would be in full blast. Manuel T. Cayon

Global Eye BusinessMirror

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Big tech firms are already behaving like the big banks

By Lionel Laurent Bloomberg

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icture a bank that lends $1 billion to small businesses in 12 months, holds $150 billion in corporate bonds, runs the world’s largest money-market fund, offers mobile payments and credit cards, and gives customers cash balances that can be topped up across thousands of homely brick-and-mortar outlets.

Except it’s not really a bank at all, but a technology firm.

Google offers payments; Apple Inc. invests its cash in company securities; Amazon.com Inc. lends money and offers account balances in-store; Alibaba Group Holding Ltd. manages customer funds like an asset manager. Many seem quite comfortable nibbling at the best bits of finance without actually taking on the burden of being a licensed bank.

Unsurprisingly, banks don’t like this state of affairs. Barclays Plc. CEO Jes Staley predicted last October that technology would be a battleground for finance over the next 15 years, and called for regulators to “extend their reach” and level the playing field. Finance firms are lobbying heavily against an application by Square Inc., a fintech start-up run by Twitter cofounder Jack Dorsey, to be regulated as an industrial loan corporation, a kind of halfway house between bank and nonbank.

The bankers have a point, to a degree. The bigger and more sprawling tech firms get, the more regulators need to be alert to systemic risks posed by nonbanks that could affect broader financial markets.

Apple owns more corporate

debt than the world’s biggest bond funds; Alibaba’s financial affiliate is now being reined in after ballooning in size. The Financial Stability Board is studying how tech firms manage their cash as part of its regular report on shadowbanking assets.

But regulators should also be wary of intervening too much.

One reason shadow finance is so popular is the wave of rules brought in after the financial crisis designed to shrink the banking industry. If risk is being spread across nonsystemic actors who are unlikely to need a government bailout if things go wrong, what’s the problem? Tech firms, along with funds and insurers offering direct lending, are filling a void left by banks—not destabilizing the system, reckons Norm Champ, a partner at law firm Kirkland & Ellis. They’re unlikely to go much further for now.

Besides, are banks so sure that regulators would come down on their side? Regulators might take the view that banks and nonbanks should be equally free to offer financial services on the same shelf as groceries or books, whether you’re Square, WalMart Inc. or Barclays. Banks may have the advantage of trust and experience in financial matters, but in a free-for-all war that pits platform against platform, they won’t all be winners.

Big Tech knows it has plenty to lose from a too-eager dive into the world of regulated banking (advertising revenue from banks, for one thing.) And lenders should also remember there is such a thing as healthy competition. A level field might be harder to play on than they think.

A customer uses an automated teller machine inside an M&T Bank branch in New York, on January 13. Tech companies are threatening big banks. Daniel Tepper/Bloomberg

Editor: Angel R. Calso • Tuesday, March 13, 2018 A9

After years of energy chaos, Germany gets a champion

Wind turbines operate on the Innogy SE wind farm in Bedburg, Germany. RWE's green-energy business Innogy has demand for all the shares for sale in its initial public offering as the company heads toward the biggest European listing in years. Martin Leissl/Bloomberg

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By Brian Parkin | Bloomberg

ON SE’S €22-billion ($27.1-billion) bid for Innogy SE establishes a German energy champion after Angela Merkel’s radical energy policy wrought years of upheaval on the country’s once-mighty utilities.

With investors from Italy and France weighing their own offers for the operator of green power plants and grid networks, EON last Sunday announced a complex deal with Innogy’s main shareholder, RWE AG. The transaction would solidify EON and RWE as the main German electricity and gas providers and keep Innogy out of the hands of foreign utilities that have gained scale over their German counterparts in recent years.

Seven years ago, a nuclear meltdown in Japan prompted Merkel to push for greener alternatives, upending the energy business. Once among the most profitable utilities in Europe, EON and RWE wrote off billions from their balance sheets, saw their market value slump and ended splitting up themselves. For a leading lawmaker in the chancellor’s

coalition, EON’s move bolsters the weakened German companies against larger rivals, such as Enel SpA of Italy and Electricite de France SA. “This is a chance for two key German energy companies,” Joachim Pfeiffer, a lawmaker who speaks on economy for Merkel’s ruling CDUCSU caucus in parliament, said in an interview. “Fifteen years ago, they were global players. Now look at them, hardly a shadow of their former selves. Now they have a chance to become real players, a powerhouse in Germany and in Europe.”

It comes at a delicate time for Merkel, who is attempting to balance her party’s instinct for open markets against protectionist moves from the United States and China. US President Donald J. Trump last week imposed trade

tariffs that will hit European businesses and has threatened limits on German car imports. German industry has expressed concern about China’s ability to buy up overseas assets without opening to foreign firms.

“A mega-company is being created here with matching market clout,” said Wilfried Gillrath, managing director of Lichtblick SE, Germany’s biggest provider of green power to the retail market with 1 million customers. “That’s a danger to competition in the power market and can lead to higher prices for consumers. This merger must be scrutinized.” The deal is the latest step in the transformation of German’s energy business under Merkel’s ambition to shut coal and nuclear plants in favor of wind and solar. “This gives us two powerful companies in the international marketplace,” North Rhine-Westphalia state premier Armin Laschet, a party ally of German Chancellor Angela Merkel, told ARD television.

Deal terms

Innogy was born less than two years ago, spun off as the cleanenergy business of RWE, which retained a controlling stake. In the transaction outlined last Sunday, EON will emerge with the retail and network businesses of both companies. RWE will end up owning the combined renewable-generation

businesses as well a large stake in EON, returning green-energy assets that it had spun off.

According to one person familiar with the deal, the transaction gives Innogy an enterprise value of €43 billion once debt is included. Relatively small amounts of cash will change hands: EON will pay about €5 billion to buy out Innogy’s minority shareholders, while RWE pays EON €1.5 billion.

For relatively little cash outlay, the deal take three relatively small businesses and creates one the largest grid and utility players in Europe and pure generation company with a strong renewables portfolio, the person said, asking not be identified before management speaks publicly.

Executives from the companies are likely to start explaining the rationale on Monday when Innogy has its annual news conference to discuss earnings and strategy. RWE and EON follow on Tuesday and Wednesday.

Still, the complexity of the deal and RWE’s reversal of strategy left some analysts scratching their heads.

“The only thing that’s clear is that they’ve kept it all German,’’ said Arash Roshan Zamir, a utilities and clean energy analyst at Warburg Research. “That will be a relief for the unions, the municipal stakeholders and politicians. We have a messy merging of interests.’’

Innogy was weakened last December when its CEO Peter Terium departed, amid complaints from investors that he had lost focus on profits and dividends in favor of an overseas investment push. With an interim CEO promising a new strategy and the board looking for a permanent replacement, Innogy was vulnerable to a takeover.

For EON, buying Innogy’s assets gives it some scale to compete with larger utilities, such as Enel, Iberdrola SA and Engie SA, which, according to people familiar with the deal, were considering their own bid for the German energy company. EDF ranks as the biggest owner of power generation capacity worldwide, followed by Enel and Duke Energy Corp. in the US, according to Bloomberg New Energy Finance data. RWE ranked 10th and EON 13th.

“Combining renewable assets with EON’s should help RWE better compete with other utilities at future renewable auctions,” said Elchin Mammadov, an industry analyst at Bloomberg Intelligence. “However, bringing renewables back into RWE makes me wonder whether the company has a clear, long-term strategy for the future.”

US oil-export surge means Opec’s production cuts may be doomed

By Pratish Narayanan Bloomberg

O

il risks sliding back under $60 a barrel as a surge in US shipments to Asia threatens to undermine a deal between the Organization of Petroleum Exporting Countries (Opec) and its allies, according to ING Groep NV. While the producer group complied with a pledge to curb output and ease a glut in 2017, US flows that are gaining a bigger slice of the prized Asian market may prompt some nations to boost supplies, said Warren Patterson, a commodities strategist at the Dutch bank. The resulting fallout could drag down crude prices after a rally of more than 40 percent since June, he said.

“The longer the deal goes on, it’s going to start falling apart,” Patterson said in an interview in Singapore, referring to an output-cut agreement between the Opec and other producers, including Russia.

“They continue to give market share away to the US.” Brent crude, the benchmark for more than half the world’s oil, traded at $65.45 a barrel at 7 a.m. in London on Monday,

compared with about $45 last June. ING forecasts Brent at $57 in the second half of 2018. Prices were at more than $115 in mid-2014, before a global glut sparked the biggest crash in a generation. West Texas Intermediate, the US marker, is currently near $62 a barrel.

Crude’s rebound since last year is encouraging American drillers to pump even as they make efforts to be disciplined on spending, Patterson said. “We need to see prices in the short-term trade below $60 to reduce that incentive for US producers,” he said.

As American output continues to expand, more exports will sail to Asia, the traditional bastion of Middle East producers.

In February even Saudi Arabia’s state oil company considered participating in these flows via a US unit, before determining it wasn’t economically viable at the time.

Bullish calls

ING’S outlook is in contrast to bullish views from Royal Bank of Canada and Goldman Sachs Group Inc. to BMI Research and Societe Generale SA, which see prices supported as strong demand soaks up supply from the US. While Patterson does see

healthy oil consumption, he said growth may slow and fail to completely absorb gaining American output.

While the US is now pumping more than 10 million barrels a day, surpassing a record set in 1970, that boom is being accompanied by a surge in overseas shipments, helping drain stockpiles at the nation’s largest storage hub. Exports have averaged about 1.5 million barrels over the past six months, almost double the level in the previous six months, Energy Information Administration data show.

Asia is the biggest buyer of the supplies.

Opec should beware as US shale producers are set to steal a bigger slice of the market in Asia, which consumes more oil than any other region, according to industry consultant Wood Mackenzie Ltd. Crude shipped overseas from the US will soar to almost 4 million barrels a day by the mid2020s, rivaling shipments from Iraq and Canada, it said last week.

Asia is “a market that the Middle East does not really want to give up,” ING’s Patterson said. “We think compliance is likely to slip. The deal will still officially be in place, but once we get into 2019 there’s no chance that we will see some sort of deal.”

The silhouette of pumpjacks are seen as the moon rises in the Permian Basin near Midland, Texas, on March 2. Chevron, the world's third-largest publicly traded oil producer, is spending $3.3 billion this year in the Permian and an additional $1 billion in other shale basins. Its expansion will further bolster US oil output, which already exceeds 10 million barrels a day, surpassing the record set in 1970. Daniel Acker/Bloomberg

A10 Tuesday, March 13, 2018 • Editor: Angel R. Calso

Opinion BusinessMirror

www.businessmirror.com.ph

editorial

Carbon cutting

H

onoring the country’s commitment to the Paris Agreement on climate change does not rest solely with the national government. Indeed, many local governments and communities are proving to be leaders and innovators in voluntarily implementing their own climate-change policies and cutting their own carbon emissions.

Based on total installed on-grid capacity contribution, coal is still the leading power source in the country, providing 8,049 megawatts out of the total 22,262 MW as of end 2017, according to data from the Department of Energy, an overall share of 36.2 percent, up from 34.6 percent in 2016.

Despite this, a few local governments are still determined to ditch coal as a source of electricity in favor of cleaner forms of power generation.

This could very well be the demand shift in energy sourcing that Federico Lopez, chairman and CEO of First Philippine Holdings, First Gen and Energy Development Corp., talked about in his speech during the second Philippine Environment Summit held in February.

Lopez said as more renewable-energy sources come onto the grid and become cheaper, REs, “in due time, will permeate our lives whether we like it or not.”

He said coal power plants are likely to end up as underutilized or stranded assets in 10 years, or even less, given the rapid pace of renewables.

Sorsogon City and Guimaras province recently joined a growing list of local governments that are determined to phase out coal use and become total RE consumers.

Sorsogon City vowed to pursue environment-friendly programs and practices following the local government’s decision to approve a resolution, declaring itself a “Clean Energy City.”

In pursuit of the declaration, the city government adopted a policy, “prohibiting all offices in Sorsogon City from issuing any permit, authorization, endorsement or any expression of support to the development of coal-fired power-plant projects in the city.”

The resolution noted that Sorsogon City is “vulnerable to the effects of climate change like strong typhoons and climate surges.”

“It cannot, in good conscience, allow coal-fired power plants in the city because of their destructive effects to the environment and their negative impact to climate change,” it said. During ceremonies coinciding with the visit of the Greenpeace flagship, the Rainbow Warrior, to the province on February 24, Guimaras Gov. Samuel T. Gumarin and the municipal mayors of the island declared Guimaras as the first coalfree province in the Visayas.

“We want to show the world that we don’t need dirty energy to power development. The people of Guimaras have embraced renewables over dirty, polluting energy. We want to show that a sustainable development path, powered by renewable energy, is not only possible, but more viable. And we hope that our humble example will resonate to other provinces and to the world,” Gumarin said.

Guimaras is home to the 54-MW San Lorenzo wind farm, which has been operational since 2014, and is said to be the first wind farm in the Visayas. There are plans for expanding it with an additional 40-MW in Barangay Sebaste, Sibunag.

The power generated from the wind farm is directed to the grid and shared with member-consumers across Luzon and the Visayas through the Wholesale Electricity Spot Market. With the 40-MW expansion, the operators of the wind farms expect to be able to cover the energy demands of neighboring Iloilo province.

In 2016 Ilocos Norte, touted as “the undisputed wind energy capital of the Philippines,” was the first province in the Philippines to ban coal use and production when its provincial government passed Resolution 017-2016.

Ilocos Norte is host to the Energy Development Corp.’s (EDC) 150-MW Burgos Wind Power Project, the Northern Luzon UPC Asia Corp.’s 8-MW Caparispisan Wind Power Station and the Northwind Power and Development Corp.’s 52-MW Bangui Wind Power Project.

Other RE projects include the 5-MW Agua Grande hydroelectric-power plant in Pagudpud town and solar farms—the 20-MW facility of Soleq Philippines Inc. and the 4.1-MW and 2.6-MW facilities of the EDC. The leading role of these local governments in climate-change action is quite commendable. Such policies, actions and movements only show that with or without the national government’s firm leadership in tackling climate change, local governments can still do a lot to lower their carbon emissions and transform their cities and provinces into greener, healthier and more prosperous places to live in.

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Manny B. Villar

THE Entrepreneur Continued from A1

S

peaking at a business forum early last month, the President warned that he would close Boracay Island because it had become a cesspool.

The President described the 1,000-hectare island as a looming environmental disaster that could drive visitors away. Boracay attracts 2 million visitors a year, and generates more than P56 billion in revenues for the government.

He gave the Department of Environment and Natural Resources (DENR) six months to clean up the island.

In another speech last week, the President said he was considering the issuance of a declaration of a state of calamity in Boracay because “it is a public interest, public safety and public health” issue.

Following the President’s state-

ment, reports about the current situation in Boracay came out. In one television news report, a video showed dark water being drained through a large pipe into the sea, while tourists were swimming not too far from the area.

Other reports said many of the businesses operating on the island were not disposing of their wastewater through the local treatment system.

The DENR said that because of illegal settlements by informal settlers and even businesses, five of Boracay’s nine wetlands had disappeared in the past 10 years.

Boracay clearly shows what hap-

Stock market superstitions

T. Anthony C. Cabangon

Editor in Chief

Senior Editors

A most laudable act

John Mangun

OUTSIDE THE BOX

A

superstition is normally defined as “a widely held but unjustified belief in supernatural causation leading to certain consequences”. Some make sense—although not supernatural, as in, “It is bad luck to walk under a ladder” because the guy on top may drop a hammer on your head.

Others, like “breaking a mirror will bring you seven years of bad luck,” have root in history in that when first commercially available, mirrors were ridiculously expensive. Breaking one was like taking your new Maserati out for a spin and going full speed into a concrete wall. People figured if you were that “unlucky” with your mirror, it was probably a forecast of things to come.

Superstitions about black cats went both ways. The ancient Egyptians revered black cats; the Medieval Europeans were scared to death of them. Maybe a better term than “superstition” for the stock market would be “false belief,” and this can cost you money.

“The trend is your friend” is

one of those. The trend is not your friend. It is Satan in the Garden of Eden with lying promises. It is Anubis taking Egyptian souls to the underworld. The trend is the Fourth Horseman of the Apocalypse riding a pale horse with the name “Death.”

Just ask anyone who bought Bitcoin at $19,000.

The trend seduces a person into believing that what happened in the past will continue in the future.

With sweet and convincing words, you easily miss the fact that things have changed like a lover who suddenly had to work overtime in the office. And, suddenly, you have been replaced without warning.

I will talk more about this at the Financial Literacy Summit 2018 for

The implementation of sanitation measures in Boracay should extend to all other resorts in the country. There should be no compromises—we should be strict in applying sanitation standards in all of our resorts. I’m glad that the President’s initiative has served as a wake-up call, and stakeholders in other resorts are planning for environmental cleanup drives in their respective areas. pens when we neglect to protect the environment.

Closing the island, as the President warned, would displace many people, deprive families of their livelihood and the government of revenues, and would taint the country’s image in the world tourism industry.

Hopefully, the situation would not reach that point. Six months may not be enough to solve all of Boracay’s sanitation problems, but there would be significant change because none of the stakeholders—Boracay residents, local government and businesses—would do everything to keep the island open.

The Department of Tourism

Believing that “higher risk returns a higher reward” will cost you money. Initially, some investors do not want to handle higher risk for the higher reward.

That is fair. However, the truth is that during the last 10 years, data shows higher risk has actually generated lower returns in the equity markets.

The Global Filipino Investors at the SMX Mall of Asia on April 8.

Believing that “higher risk returns a higher reward” will cost you money. Initially, some investors do not want to handle higher risk for the higher reward. That is fair. However, the truth is that during the last 10 years, data shows higher risk has actually generated lower returns in the equity markets.

Risk is often measured by price volatility in that prices fluctuate more, creating difficulty in knowing whether you are on the right side.

It is not that prices are necessarily going down but that an investor gets caught on the wrong side of the trade.

Since 2012 the highest “risk” is found in the Latin American stock markets, yet the overa ll retur n was negative. T he S&P’s 500 Index showed half the

(DOT) said it was suspending for six months the accreditation of resorts in Boracay, during which all the establishments must acquire and maintain individual water-treatment facilities, and connect to the central sewerage system.

According to the DENR, its inspection of 578 establishments on the island found that only 383 were connected to the wastewatertreatment plants being operated by the Boracay Island Water Corp.

The implementation of sanitation measures in Boracay should extend to all other resorts in the country.

There should be no compromises— we should be strict in applying sanitation standards in all of our resorts.

I’m glad that the President’s initiative has served as a wake-up call, and stakeholders in other resorts are planning for environmental cleanup drives in their respective areas.

On Panglao Island in Bohol, the DENR and local officials have scheduled a massive clean-drive in an effort to protect and save Panglao, and avoid the same fate as Boracay.

The department earlier said at least 400 establishments on the island were found violating environmental laws. The Environmental See “Villar,” A11

risk and gave back a 15-percent annual return.

Look at the opposite of that high risk/high reward belief. The five largest local companies—“the least risky”—generated a 41-percent return had you bought equal amounts of all five. SM Investments Corp. gained 51 percent in 2017. The five most volatile PSE Composite Index issues went negative by 2.9 percent.

But aren’t those issues that suddenly go up by 50 percent in one day “high risk/high return”? The reality is, those are “low risk/high return” issues. Come and see me at the FinLit Summit and I will tell you why.

Believing that you can “manage risk” is false. You can’t. In fact, there is no such animal as “risk management” in stock trading. There is only “risk avoidance.” Saying that you can manage risk is like saying you can manage a speeding bus without brakes slamming into the back of your car. You might be able to reduce the damage by wearing seat belts, like selling a losing stock position.

But what you need to know is how to avoid risk. Don’t believe the stock market superstitions.

E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stock-market information and technical analysis tools provided by the COL Financial Group Inc.

Opinion BusinessMirror

www.businessmirror.com.ph

Back to PPP?

The Washington Consensus

Beijing clarifies stand on loans to PHL Ernesto M. Hilario

Cecilio T. Arillo

database

T

HE 10 Washington Consensus (WC) policies that renowned economist and 2001 Nobel Prize winner Joseph E. Stiglitz argued against, such as privatization, deregulation, liberalization and macro-stability centered around fighting inflation, were predicated on a view that markets worked well and there was a limited role for the government.

“Standard theory, dating back to Adam Smith, had argued that in perfect markets, the pursuit of self-interest by firms and households would lead, as if by an invisible hand, to the well-being of society,” Stiglitz said.

“My theoretical research had explained why Adam Smith’s invisible hand was invisible—it wasn’t there.

Whenever there was imperfect information or incomplete markets —as is always the case—there is a presumption that markets are inefficient and selective intervention can improve well-being. And my experience in developing countries, crisis countries and countries in transition confirmed these theoretical insights,” Stiglitz pointed out.

“By 2016 there was a growing agreement that the WC policies were wrong—they often had the opposite effect from that intended. Rather than accelerating growth, they retarded development; rather than enhancing stability, they had helped usher in an era of unprecedented instability,” Stiglitz bewailed.

The WC was presented in 1989

by Englishman John Williamson, a senior fellow since 1981 at the Peterson Institute for International Economics in Washington, D.C. Williamson used the term to summarize 10 commonly shared policies

by Washington-based institutions at the time, including the International Monetary Fund (IMF), World Bank and the US Treasury Department, “which were believed to be necessary for the recovery of countries in Latin America from the economic and financial crises of the 1980s.”

The 10 are: 1. Fiscal policy discipline, with avoidance of large fiscal deficits relative to GDP; 2. Redirection of public spending from subsidies (“especially indiscriminate subsidies”) toward broadbased provision of key pro-growth, pro-poor services like primary education, primary health care; 3. Tax reform, broadening the tax base and adopting moderate marginal tax rates; 4. Interest rates that are market determined and positive (but moderate) in real terms; 5. Competitive exchange rates; 6. Trade liberalization: of imports, with particular emphasis on elimination of quantitative restrictions (licensing, etc.); any trade protection to be provided by low and relatively uniform tariffs; 7. Liberalization of inward foreign direct investment; 8. P r i v at i z at i o n o f s t at e enterprises; 9. Deregulation: abolition of regulations that impede market entry or restrict competition, except for those justified on safety, environmental and consumer protection grounds, and prudential oversight of financial institutions; and 10. Legal security for property rights.

To counter the WC, which is still in effect in many developing countries today, including the Philippines, nine renowned economists and four former chief economists of the World Bank (Stiglitz included), put together what they called the Stockholm Consensus, which will be published in its original form in my succeeding columns, laying out eight principles of development policy, which included the need to make development inclusive, to attend to inequality, to make development

environmentally sustainable and to get the right balance between the market, the state and civil society.

They met over two days in Stockholm, Sweden, on September 16 and 17, 2016, to discuss the challenges faced by today’s economic policymakers. The Swedish International Development Cooperation Agency and the World Bank hosted the meeting.

The new consensus emphasized too that one-size-fits-all policies don’t work: There are large differences not only between developed and developing countries, but also among the developing countries, calling for nuanced and tailored policies.

In his best-selling new book, Globalization And Its Discontents-Revisited, published this year by W.W. Norton and Co. Inc., Stiglitz criticized each of the central pillars of the WC policy framework.

“The Washington Consensus argued for deregulation, including the financial sector. I argued that such liberalization could lead to very costly economic volatility, and poorly managed trade liberalization would not lead to more growth and there could be many losers,” Stiglitz said.

Indeed, the “new discontents” in the advanced countries have made this conclusion abundantly clear. In the aftermath of the 2008 crisis, few doubted Stiglitz’s study.

“In privatization,” Stiglitz explained, “why it often failed, in both developed and developing countries, mentioning experiences in developed countries [e.g., United Kingdom railroads] and developing countries [e.g., Chile’s pension funds and Mexico’s roads]. In Mexico the government had to spend nearly $8 billion to renationalize just part of the privatized highway system.”

The WC, also known as “Structural Adjustment Program,” were the macroeconomics policies created and imposed by narrow-minded neoclassicists or neoliberals of the IMFWorld Bank on debtor countries in order to access loans. These policies usually come in exchange for trade liberalization, privatization, devaluation, so-called tax reform, deficit spending and floating rate exchange.

They are what the late Harvardtrained Filipino economist-lawyer Alejandro Lichauco described as “neocolonialists who have dehumanized Filipinos.”

As early as March 2009, Stiglitz and 17 other United Kingdom economic experts reported that the policies of the IMF-World Bank and other supportive financial institutions had pushed the very policies of deregulations and financial and capital market liberalization that led to the economic crisis in the US and its spread around the world.

Indeed, the past administrations cannot escape responsibility for their failures to prevent the country from falling into these erroneous policies because they controlled the currency, contracted debts, shaped the budget and decided the economic priorities with their hot shot Filipino technocrats and economists, mostly IMFWorld Bank disciples.

The ball game is now with President Duterte and Congress to correct these erroneous and destructive policies, using the Stockholm Consensus as a guide.

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

ABOUT TOWN

T

he Duterte administration pushed for the prompt passage of the Tax Reform for Acceleration and Inclusion (TRAIN) bill last year to raise more revenues to fund infrastructure and other vital programs.

But, according to Socioeconomic Planning Secretary Ernesto M. Pernia, the first package of the TRAIN law is expected to yield only around P90 billion in additional revenues during the first year of implementation, much lower than the P134 billion forecast in the original proposal. Economic managers have also lowered revenue targets in the medium term, or from 2018 to 2022.

Hence, the expected lower additional revenue generation from TR AIN will require a shift in the financing of infrastructure projects.

The National Economic and Development Authority had wanted to fund 78 percent of the P9.04-trillion budget for infrastructure until 2022 through annual appropriations, with the balance to be funded by a mixture of official developmend assistance (ODA) and foreign borrowings.

Apart from tax revenues, the government wants to tap ODA in the form of concessional loans from friendly governments, such as Japan and China, and from multinational financial institutions, such

as the World Bank and the Asian Development Bank.

Early on, the Duterte administration said it was moving away from the previous reliance on public-private partnership (PPP) programs for infrastructure and other projects in favor of tax reform and ODA loans.

The government is considering additional borrowings as an option, but bigger participation by the private sector in the “Build, Build, Build” program appears to be on the horizon.

Recently, President Duterte tossed the idea of adopting the Swiss challenge system, where the private sector can submit unsolicited proposals to the government. With the Swiss challenge, third-party players can match or surpass the original proposal. The original proponent will also have the option to regain control of the project by surpassing third-party offers.

Does this indicate that the government is having second thoughts about the tax reform/ODA formula to finance infrastructure and other flagship projects? We’ll know soon enough.

Big sugar versus your body David Leonhardt

new york times

T

he sugar industry and its various offshoots, like the soda industry, have spent years trying to trick you.

Big Sugar has paid researchers to conduct misleading—if not false—studies about the health effects of added sweeteners. It has come up with a dizzying array of euphemistic names for those sweeteners. And it has managed to get sugars into a remarkable three-quarters of all packaged foods in American supermarkets.

Most of us, as a result, eat a lot of sugar. We are surrounded by it, and it’s delicious. Unfortunately, sugar also encourages overeating and causes health problems. As confusing as the research on diet can often seem, it consistently points to the harms of sugar, including obesity, diabetes and other diseases.

Virtually the only way to eat a healthy amount of sugar is to make a conscious effort. You can think of it as a political act: resisting the sugar industry’s attempts to profit off your body. Or you can simply think of it as taking care of yourself.

I’m one of those people with a raging sweet tooth. I consider ice cream to be a gift from the gods, and I stash small chocolates in too many drawers. A couple years ago, I realized that I needed to cut back. If the ice cream and chocolates were going to stay, other sweeteners had to go.

So my wife and I went cold turkey for one month: no added sweeteners. No sugar, no honey, no corn

Villar. . .

continued from A10

Management Bureau earlier issued notices of violation to 81 establishments for their lack of sewage- and wastewater-treatment facilities.

With more than 7,000 islands, the Philippines has one of the most number of attractive beach destinations in the world. Different travel web sites list as many as 20 top beach destinations in the country, which means many more beach re-

Tuesday, March 13, 2018 A11

WE received an e-mail from the Chinese embassy on an issue concerning Philippines-China bilateral relations. Chinese Foreign Ministry spokesman Geng Shuang held a news conference on March 9, where he answered a question on an article from a Chinese newspaper, which cited a Chinese scholar’s view on China’s loans to the Philippines under its official development assistance program.

The question was: “Recently, the English version of the Global Times cited a Chinese scholar’s view that China is willing to provide assistance as the Philippine government proposed a large-scale investment plan to develop its economy.

The loans provided by China are usually accompanied by repayment agreements, which will use certain natural resources as collateral. Could you confirm that? And the Philippine media said that China provides loans with terms that require the Philippines to compromise on the South China Sea issue. What’s your comment on this?

Here’s the spokesman’s answer in full: “In principle, we do not make specific comments on the viewpoints of think thanks, media, experts or scholars.

“However, we have noted that the Philippine side has already made remarks on this, so I assume a response from our side is also due. I would like to say that the view of the relevant scholar only represents himself, not the official stance of the Chinese government.

“Since the turnaround of China-

Restaurant desserts are often family-size servings marketed as individual portions. The marble-loaf cake at Starbucks, for example, has more sugar than most adults should eat in an entire day. Your grandparents didn’t eat desserts like this.

When you eat out, think of every dessert as a serving for two.

It’s better to put some in the garbage than on your waistline.

syrup, no stevia. It wasn’t easy, but it worked. We discovered which sugars we missed and would go back to eating—and which had needlessly snuck into our diets. Along the way, we also ate fewer processed foods and more vegetables, fruit, eggs, nuts, meat and fish.

In a column last year, I described this “month without sugar,” and I’m still hearing from readers who have done it themselves or are considering it. I highly recommend it. But I have also heard from readers who want to consume less sugar without first going cold turkey.

Fair enough. The sugarless month is just a means to an end, and there are other means. Working with experts and colleagues, I’ve now put together an online guide to cutting back on sugar without spending more money or losing the pleasure of eating. That last part is important. Done right, a less sweet diet can be more enjoyable than a sugar-packed one.

Our overarching suggestion is

to choose a couple of simple rules.

Don’t agonize over the sugar content of every single thing you eat.

You’ll make yourself miserable and you will probably give up before too long. Instead, decide on two or three systemic changes, and stick to them.

You can add changes later.

Your rules should revolve around added sweeteners, rather than the natural ones in fruits, vegetables and dairy. It’s not that the added ones are so much worse (despite what you may have heard about high-fructose corn syrup). Many researchers believe that sugar is sugar. But people don’t generally overeat natural sugars. Have you ever inhaled five apples in one sitting?

The online guide has many more details, but here are a few rules to consider: Fix your breakfast. It’s the most sugar-packed meal, and it doesn’t need to be. Eggs, fruit, nuts, plain yogurt, plain oatmeal and traditional pita bread are delicious—and free of added sugars. If you’re pressed for time, boil a dozen

sorts are available to visitors. CNN even has a list of the least known but beautiful, Philippine beaches for travelers who want to enjoy their summer vacations with some degree of privacy.

Aside from Boracay and Panglao, among the frequently listed top beach destinations include White Island in Camiguin, Caramoan in Camarines Sur, Malapascua in Cebu, Pagudpud in Ilocos Norte, Anawangin in Zambales, Balicasag in Bohol, Apo Island in Dumaguete, Isla Naburot in Guimaras, Siargao in

Surigao, Danjugan Island in Negros Occidental and El Nido and other resorts in Palawan.

I said I welcomed President Duterte’s initiative as a businessman because I know how much tourism, whose assets include our beautiful beaches, can contribute to our economy. A few years ago I said in this column that tourism, like remittances from overseas Filipino workers and the business-process outsourcing industry, could be developed as a third leg in generating foreign exchange.

Philippines relations in 2016, China has been actively helping the Philippines develop its economy and improve people’s livelihood, and we have given our full support to President Rodrigo Duterte’s largescale infrastructure program Build, Build, Build. The Chinese government and financial institutions have also provided financing support to the Philippines, including preferential buyer’s credits, and assisted the Philippines in issuing the panda bonds, which effectively ensured the implementation of relevant projects.

“By convention, parts of China’s concessional loans require the borrowers to use certain sovereign credit as collateral, which is an international practice. China has never asked and will never ask relevant countries to use natural resources as collateral in loan agreements. In this vein, our assistance and support to the Philippines are provided with no strings attached.

“To properly resolve the South China Sea issue is the basis and important guarantee for the sound and steady development of ChinaPhilippines relations, but China will not link the South China Sea issue with bilateral economic and trade cooperation projects. China stands ready to work with the Philippines to follow through on the consensus between the two leaderships and stay committed to properly resolving differences through dialogue and consultation, ensuring the sound and steady development of bilateral relations and jointly upholding regional peace and stability.”

E-mail: ernhil@yahoo.com.

eggs, refrigerate them and grab one or two in the morning. A sign of a good breakfast plate: It has an array of natural colors.

Redo your pantry. Steer clear of staples—like sauces, crackers and breads—with unnecessary sugars.

There are plenty of unsweetened alternatives, like Victoria’s pasta sauces, French’s Yellow Mustard, Maille Dijon mustard, Saltines, Triscuits and some Trader Joe’s tortillas. Once you spend a little time reading ingredient lists, the unsweetened staples can become your defaults. Trader Joe’s is an especially good place to shop, but supermarkets work, too.

Eliminate soda. Just get rid of it. Soda and sports drinks are essentially liquid sugar, and are the largest source of added sweeteners in the American diet. Switch to flavored seltzer or, if you must, diet soda.

The health effects of diet soda still are not clear, but it seems considerably less bad.

Whip portion inflation. Restaurant desserts are often family-size servings marketed as individual portions. The marble-loaf cake at Starbucks, for example, has more sugar than most adults should eat in an entire day. Your grandparents didn’t eat desserts like this. When you eat out, think of every dessert as a serving for two. It’s better to put some in the garbage than on your waistline.

The best news about sugar is that Americans are finally catching on.

Sales of regular soda are plunging.

Some food brands are starting to brag about not adding sweeteners.

For a long time, we didn’t even realize what Big Sugar was trying to do us.

Now we do—and we can fight back.

Aside from revenues, tourism also attracts investments and creates jobs in the countryside, thereby helping raise the standard of living of Filipinos in the provinces.

Boracay, Panglao and the many other beaches are Nature’s gifts to us, and it is up to us to make them work for our benefit. We only need to keep them clean and preserve their natural attractiveness. Let us treat them as our national treasures.

For comments, e-mail mbv.secretariat@gmail. com or visit www.mannyvillar.com.ph.

2nd Front Page BusinessMirror

A12 Tuesday, March 13, 2018

RCEP talks advance as members set sights on 2018 conclusion T

By Elijah Felice E. Rosales

@alyasjah

he country’s trade chief announced on Monday that two texts will be added soon to the draft Regional Comprehensive Economic Partnership (RCEP), as major negotiations on the trade deal start in April.

In a speech at the Malaysia Business Forum, Trade Secretary Ramon M. Lopez revealed that the RCEP will have substantial documents ready before the end of Singapore’s chairmanship of the Association of Southeast Asian Nations summit. This was agreed upon by trade ministers of RCEP negotiating countries in their recent meeting in Singapore.

“During the Singapore meeting, we reaffirmed our resolve to follow our leaders’ instructions to intensify efforts this year toward the conclusion of RCEP. We also welcomed the work plan presented as part of the RCEP Trade Negotiating Committee Report to

the ministers,” Lopez said.

“In particular, there have been advances in the text negotiations, with some chapters already nearing conclusion. This will eventually be added to the two concluded chapters on Economic and Technical Cooperation and on Small and Medium Enterprises,” he added.

However, as previously shared

by Trade Undersecretary Ceferino S. Rodolfo Jr., Lopez admitted there exists a “divergence in the levels of ambition in some areas” between negotiating countries. Rodolfo earlier pointed to non-Asean countries as the cause of delay for the conclusion of the proposed agreement.

“We recognize the divergence in

LOPEZ: “During the Singapore meeting, we reaffirmed our resolve to follow our leaders’ instructions to intensify efforts this year toward the conclusion of RCEP…. In particular, there have been advances in the text negotiations, with some chapters already nearing conclusion.”

the levels of ambition in some areas. That is why we have tasked our negotiators to work out creative, innovative and pragmatic landing zones to address the challenges and sensitivities faced by some RCEP participating-countries, which include, but is not limited to, the transition period and capacitybuilding,” Lopez said.

Still, the trade chief vowed that the Philippines, along with its fellow negotiating countries, will throw in all the work to materialize RCEP this year. “These efforts will help us keep our aspiration of coming up with a good, commercially meaningful RCEP agreement that meets our commitment to achieve a modern, comprehensive, high-

quality and mutually beneficial economic partnership agreement,” he said.

In February Rodolfo said the RCEP is facing yet another year of tough negotiations due to complications brought about by non-Asean negotiating countries Australia, China, India, Japan, New Zealand and South Korea. These countries do not have existing bilateral freetrade agreements (FTAs) with each other yet, resulting in a slowdown in the finalization of the trade deal.

“If it is just us [Asean countries], we have no problem concluding the RCEP because we have existing FTAs with the other six negotiating countries. The problem is with China, New Zealand, Japan and India because they have no FTAs among them,” Rodolfo said.

The RCEP is the multilateral agreement between Australia, China, India, Japan, New Zealand, South Korea and the 10 memberstates of the Asean. It covers trade in goods, trade in services, investment, economic and technical cooperation, intellectual property, competition, e-commerce, dispute settlement and other trade issues.

Job-generating. . .

Continued from A1

Broken down, equity capital investments expanded by 25.9 percent to $3.3 billion. Equity capital placements originated largely from the Netherlands, Singapore, the United States, Japan and Hong Kong.

By economic activity, equity capital placements were channeled mainly to gas, steam and air-conditioning supply; manufacturing; real estate; construction; and wholesale and retail trade activities.

Net availment of debt instruments— or the so-called intercompany borrowings between foreign direct investors and their subsidiaries/affiliates in the Philippines—rose by 20.7 percent to hit $6 billion.

Reinvestment of earnings expanded by 9.3 percent to reach $776 million in 2017.

The all-time high FDI for the year came despite the lower December FDI, hitting $699 million for the month, 9 percent lower than the December 2016 level.

The month’s FDI decline, the BSP said, could be traced to a drop in net investments in debt instruments to $335 million.

DA. . .

Continued from A1

For the dairy farm in Bohol, the DA is partnering with ACDI Multipurpose Cooperative (MPC), the largest cooperative in the country with an asset base of more than P18 billion, according to Piñol. The DA is targeting to turn establish Bohol as the dairy capital of the Philippines.

Under the memorandum of agreement (MOA), which is still being drafted by the DA and would be in effect for 50 years, ACDI MPC will shoulder the costs of importing at least 2,000 heads of cattle and putting up the necessary dairy facilities, which include barns and milking parlor in Ubay, Bohol.

The ACDI MPC will have the right to import its Girolando cattle from any country, as long as it passes the quarantine regulations set by the Bureau of Animal Industry.

Piñol said the DA will put up the water facilities, fences and a genetics laboratory in Bohol.

The construction of the genetics laboratory would be undertaken in partnership with Filipino firm GeneX Biotech Group, which specializes in in vitro fertilization and embryotransfer technologies.

www.businessmirror.com.ph

KOREAN VISITORS IN CEBU REACHED 1 MILLION IN 2017

One of the famous activities in Cebu, which is always part of the travel itineraries of the tourists, is whale-shark watching in Barangay Tan-awan, Oslob, Cebu. FAYE PABLO

By Ma. Stella F. Arnaldo

@akosistellaBM Special to the BusinessMirror

A

BOUT 1 million South Koreans were projected to have arrived in Cebu in 2017.

A news statement from the Department of Tourism (DOT) said officials attributed the continued influx of South Koreans to the Queen City of the South to its world-class beach resorts, exotic cultural festivities and well-preserved historical sites, such as old forts, churches and Spanish-era architecture.

Shalihmar Hofer Tamano, DOT regional director for Central Visayas, which also includes Bohol, Negros Oriental and Siquijor, also credited the peace and order situation, improved air connectivity and Filipino hospitality as reasons for the boom in Cebu’s tourism industry.

“Like what Tourism Secretary Wanda [Corazon T.] Teo says, more than anything else, it’s the unique and genuine Filipino hospitality and the Cebuano

charm that attract Koreans, Japanese and Chinese visitors to the region,” he said, after a meeting with officials of the Korean Consulate and members of the Korea Travel Agencies Association (Kotaa).

In a meeting with South Korea’s Consul General Oh SungYong, Tamano assured him of the constant coordination between the Philippine National Police (PNP) and military authorities to ensure the safety of tourists, particularly in Cebu City.

It would be recalled that South Korean tourists postponed or cancelled their bookings in Cebu and Bohol last year when extremist Islamic insurgents attacked a town in Bohol. The DOT had to send officials to a wooing mission to Seoul to assure its travel agencies that the two provinces were safe for tourists.

Tamano also acknowledged the DOT-Seoul Office’s efforts in promoting Cebu and other Philippine destinations, particularly at the annual Korea Travel Fair.

Continued on A2

TOLERATING CORRUPTION? Continued from A1

FIRST CHANTS As the Holy Week draws near, residents of Barangay Santa Rosa, Cainta, Rizal, began their yearly Pabasa, a Catholic ritual involving the uninterrupted chanting of the Pasyón, an early 16th-century epic poem narrating the life, passion, death and resurrection of Jesus Christ. NONIE REYES The cost of the laboratory, however, would still be determined, as they are still identifying the suitable type of facility in the area, according to GeneX Managing Director Federico Krause.

Piñol estimates that the DA will be shelling out less than P50 million for the Bohol farm.

Furthermore, under the MOA, the DA will charge a royalty fee for every liter of milk produced by ACDI MPC and would have the right of first refusal in the offsprings produced by the Bohol dairy farm.

The royalty fee, which is still being determined, will be collected by the DA and will be used to expand and finance the department’s dairy program, according to Piñol.

Importing cattle is not new to ACDI MPC, which is comprised of active and retired members of the Armed Forces of the Philippines.

In May 2017 ACDI imported 240 dairy cattle from Australia, of which 238 are pregnant heifers and two are pure breed jersey, as part of its major cattle-production expansion program.

The ACDI MPC established its Agribusiness Division in 2015 with a “long-term goal of becoming one of the major players in securing the food supply in the country.”

The cooperative produces vegetable and breeds poultry and cattle in its 15-hectare farm in Ibaan, Batangas.

In its original plan, the DA would shoulder the entire cost of bringing in at least 5,000 heads of Girolando cattle from Brazil and constructing the necessary dairy-farm facilities in its 3,000-hectare Ubay stock farm in Bohol.

Bukidnon dairy farm

Piñol declined to name the second investor, but said he is an Italian-Dutch businessman “who fell in love with the Philippines.” The businessman proposed to bring 600 heads of imported cattle in Malaybalay, Bukidnon.

However, unlike the Bohol dairy farm, the Italian-Dutch investor would only shoulder the importation of the herd while the DA would spend for the construction of all facilities, such as barns, water facilities, fences, milking parlor and waste treatment.

The DA chief said the businessman is currently eyeing to import Holstein cattle from New Zealand for the Bukidnon dairy farm.

“If the Girolando cattle from Brazil will not be cleared by the World Organisation for Animal Health, then we are looking at bringing in Holstein, either from New Zealand or Australia.

But we prefer those from New Zealand because of genetics,” Piñol said.

The DA chief said their current plan is to produce a Philippine version of Brazil’s famous Girolando cattle, a cross-breed between

Holstein and Gir. Based on the DA’s estimate, it would cost around $4.8 million, or at least P250 million, to import the cattle and set up the dairy farm in Malaybalay, Bukidnon.

The cattle that would be imported for the Bukidnon and Bohol dairy farms would be housed in barns, according to Piñol.

With the entry of private sectors, Piñol said the DA can use the funds it would save to set up dairy farms in other parts of the country. He said the DA is planning to put up one in Baguio, Negros Occidental and Busuanga in Palawan.

“Our intention here, as far as the DA is concerned, is to increase the milk production of the country. We don’t care who produces it,” Pinol said. “If we could help in achieving that, so much the better. But if there’s somebody who will invest, then that’s also good, because the good thing about this is that they are ones processing the milk, and they would market it themselves.”

The importation of cattle is part of the DA’s plan to ramp up local milk production to meet at least 10 percent of the annual domestic requirement by 2022 and reduce the country’s reliance on imports. The DA is allotting at least P1 billion for the live cattleimportation program.

Given the indication that business does not like corruption, but unfortunately—at the same time— is not willing to financially support anticorruption, it may be useful to highlight once again how corruption hurts and convince society at large or better—every individual —to fight corruption and make a choice to only deal with companies that evidently are involved in anticorruption and have been verified or even certified that they adhere to transparency in business and implemented anti-bribery and anticorruption policies.

Let’s be very clear that corruption impacts all of us in many ways. The pain corruption creates can be divided into four categories—political, economic, social and environmental: ■ Politically, corruption is a major obstacle to democracy and the rule of law. Remember the formula I wrote about before: Corruption = monopoly + discretion – accountability? In a democratic system, offices and institutions should lose their legitimacy when they are misusing their influence for personal advantage. As we see on a daily basis, it is extremely challenging to develop accountable political behaviour in a corrupt environment.

Economically, corruption depletes national wealth (that belongs to the people). Corrupt officials invest scarce public resources in projects that will line their pockets rather than benefit communities.

Corruption also hinders the development of fair market structures and distorts competition.

Socially, corruption is exploitive.

Inequality breeds corruption by: ■ Leading ordinary citizens to see a system as stacked against them; ■ Creating a sense of dependency among ordinary citizens and a sense of pessimism for the future, which, in turn, undermines the moral dictates of treating everybody honestly; and ■ Distorting the key institutions of fairness in society, the courts, which ordinary citizens see as their protectors against evil-doers, especially those with more influence than they have.

Corruption aggravates inequality: the well-off can afford bribes, but the poor often do without basic services. Inequality, trust and corruption form a vicious circle that is very difficult to break. There is one institutional factor that has a big impact on corruption: the fairness of the legal system.

This is an institutional measure of inequality: whether courts and the police treat people of different backgrounds and incomes as equals before the law. This is the reason we support the Judicial Reform Initiative started by Finex, and seriously trust that the independence of the judicial system is not compromised.

Let me conclude by saying that working against corruption is everybody’s mandate. As we at the Integrity Initiative say: Integrity starts with I. Every person must make the decision: I am part of the solution. I will contribute to positive change. Because, if you don’t do it, you are part of the problem.

Comments are more than welcome—contact me at Schumacher@ eitsc.com.