Businessmirror march 15, 2018

media partner of the year

United nations

2015 environmental Media Award leadership award 2008

BusinessMirror A broader look at today’s business

www.businessmirror.com.ph

n

Thursday, March 15, 2018 Vol. 13 No. 155

Effect on investments made Senate cautious on TRAIN 2

S

By Butch Fernandez

@butchfBM

enators on Wednesday said they will not be swayed by calls to rush the passage of the Duterte administration’s second package of the Tax Reform for Acceleration and Inclusion (TRAIN 2) law, apparently shaken by an international think tank’s opinion that the second tax-reform bill will hurt the inflow of investments to the country.

“We will study the matter carefully, as it very much impacts on the Philippines’s reputation as an investment destination,” said Sen. Juan Edgardo M. Angara, chairman of the Senate Ways

and Means Committee tasked to scrutinize tax laws.

Angara, responding to a query by the BusinessMirror, said his committee will tackle the concerns raised by BMI Research,

2016 ejap journalism awards

business news source of the year

P25.00 nationwide | 6 sections 48 pages | 7 days a week

Matching the educational system with an uneven and segmented economy

GATCHALIAN: “We have to be cautious in removing incentives because some industries are not as competitive.”

Rene E. Ofreneo

laborem exercens which announced on Tuesday the results of its analysis on the TRAIN 2 version submitted by the Department of Finance to the House of Representatives.

BMI noted that the second tax-reform bill could derail the inflow of investments because the removal of tax incentives will more than negate the encouraging impact of the reduction in corporate income-taxes.

BMI, a research arm of Fitch

fter getting their diplomas this April, where will the nonacademic senior high graduates go? Most likely, a majority will spend months, even two to three years or more, searching for jobs.

The 2017 labor force data show that unemployment, totaling roughly around 2.5 million, is highest among those with high-school diplomas, followed by those who are able to finish college. The first group constitutes almost one-third of the unemployed, 31.8 percent, while the college finishers account for one-fifth of the total, 19.6 percent. In contrast, those who have completed elementary schooling represent 6.5 percent of the unemployed.

Continued on A2

Continued on A11

A

PHL food security assured despite shrinking number of farmworkers

By Jasper Emmanuel Y. Arcalas

M

@jearcalas

ore workers are leaving the farm sector based on data from the Philippine Statistics Authority (PSA), as the sector’s share in total employment fell to just 25.43 percent in 2017, from 46.03 percent in 1993. But Agriculture Secretary Emmanuel F. Piñol is not worried, saying this could indicate that agriculture in the Philippines is modernizing.

L abor employ ment in t he farm sector declined for the sixth

WELL WELDER This March 14 photo shows an unnamed female showing what she learned after graduating from a Technical Education and Skills Development Authority (Tesda) course called “Electrical Installation and Maintenance.” Tesda, a government agency, partnered with P&G Philippines Inc. in a program, launched on March 14, that aims to “empower women in technical skills” so they can be hired in jobs dominated by men. NONIE REYES

Statistics agency ready for shift to federalism

By Cai U. Ordinario

T

@cuo_bm

he Philippine Statistics Authority (PSA) could become the first federalismready agency.

In an interview on the sidelines of the Philippine Statistical Development Program 2018 to 2023 Consultative Workshop on Wednesday, National Statistician Lisa Grace Bersales said the presence of the PSA in all regions and provinces

makes it easy for the agency to transition into a federal format.

Bersales, who was the former dean of the University of the Philippines (UP) School of Statistics, also said that, in her view, the PSA should remain a national agency even under a federal form of the government.

“We are in all provinces anyway, so we’re ready for any federal system.

And its my opinion, not the PSA’s, [that] we should remain [a] national [agency], even as we provide the

PESO exchange rates n US 52.0380

federal system statistics,” Bersales told BusinessMirror.

The national statistician said the PSA is now holding its strategic-planning sessions for 2019 onward, and the plan will include a chapter on the shift to a federal form of government.

The sessions will tackle several issues, such as staffing and outsourcing. Bersales said the PSA is looking to fill as many as 600 positions by the end of 2018.

Continued on A12

10.257 million The number of farmworkers in 2017, according to the Philippine Statistics Authority

straight year in 2017 and sunk to a seven-year low of 10.257 million, data from the PSA showed. This was also the first time in 15 years that employment in agriculture fell below 11 million.

In contrast, the share of the services and industry sectors in total employment grew steadily.

Roehlano M. Briones, senior research fellow at Philippine Institute for Development Studies (Pids), said these sectors may have attracted farmworkers who are in search of better pay.

From 2002 to 2016, data from the PSA showed that employment in the services sector recorded an average annual growth of 3.52 percent. Last year it fell by a mere 0.43 percent.

The sector’s share in total employment improved to 56.28 percent last year, from 46.62 percent in 2001.

See “Food security,” A12

It took the PHL’s ‘best minds’ 4 days to crack political-dynasty riddle

By Bernadette D. Nicolas

A

@BNicolasBM

fter deliberations—considered a “hard labor”—the consultative committee (Con-com) was unanimous in voting to adopt anti-political dynasty provisions for a Charter seen to replace the 1987 Constitution of the Republic of the Philippines.

Eighteen of the 20 members stood and voted in favor of the “selfexecuting provisions” that may yet wipe political dynasties off the face of Philippine politics.

Con-com member and De La

Salle University professor Julio C. Teehankee told the BusinessMirror the committee “labored really hard to craft the provisions as to prevent any potential loopholes.”

“As much as possible, we don’t want the provision to be ambivalent or ambiguous,” Teehankee said, noting that they also wanted to have a clear definition of “political dynasty” so that it would not be subject to different interpretations.

He believes the anti-political dy nast y prov isions the committee adopted were “the best” the country can have, given the current realities.

“After more than three decades, at least we already have something instead of none and, of course, we could have been more [strict], extending it [the ban] to the fourth degree, but we also need to take into consideration the other political realities,” he said without elaborating.

Deliberation

DURING an en banc session, the committee deliberated on its proposed anti-dynasty provisions, which included a subsection on a definition of a political dynasty.

See “Best minds,” A2

n japan 0.4883 n UK 72.6659 n HK 6.6373 n CHINA 8.2287 n singapore 39.6691 n australia 40.8863 n EU 64.4803 n SAUDI arabia 13.8757

Source: BSP (14 March 2018 )

A2 Thursday, March 15, 2018

BMReports BusinessMirror

www.businessmirror.com.ph

Effect on investments made Senate cautious on TRAIN 2 Continued from A1

ratings agency, also said the planned corporate-tax cut to 25 percent is not enough, because the Philippines’s neighbors are offering much lower rates.

“Given the increase in foreign direct investments [FDI] recently, as well as the country garnering the title of best investment destination recently, we should tread carefully,” the senator suggested.

Angara also assured that the Senate panel will “view the incentives review, not just from the standpoint of foregone revenue, but from the standpoint of jobs,

Best minds. . .

Continued from A1

In the proposed provisions, the Con-com said “a political dynasty exists when a family— whose members are related up to the second degree of consanguinity or affinity, whether such relations are legitimate, illegitimate, half or full blood—maintains or is capable of maintaining political control by succession or by simultaneously running for or holding elective positions.”

Under such definition, the Con-com adopted two more provisions. The first bars any second-degree relative of an incumbent official from running “for the same position in the immediately following election.”

The second provision adopted prohibits second-degree relatives “from running simultaneously for more than one national and one regional or local position.”

The ban on succession means that an

incomes, technology transfer and overall development.”

Senate President Aquilino L. Pimentel III, however, is sought to play down apprehensions in the business community over the TRAIN 2 package.

“TRAIN 2 is supposed to be revenue neutra l,” the Senate leader said, adding “its aim is to rationalize the tax system.”

Sen. Sherwin T. Gatchalian, who chairs the Senate Committee on Economic Affairs, cautioned against the inclusion of provisions that will remove existing incentives meant to attract more investors to the country.

While noting that the Phil-

ippines is known to have the highest corporate income-tax rate, “one positive aspect of TRAIN 2 is to be competitive.”

“I would be cautious because [one reason] t hose investors came here was for the incentives offered,” the senator said, adding: “It would not be fair to remove incentives in the middle of their operations.”

“It would not send a good signal,” he stressed.

“We also need to consider promoting the country as a bright spot, but the ease of doing business has not improved, unlike our neighbors,” Gatchalian added, noting that the worsening traffic

condition also “affects the cost of doing business.”

The senator advised concerned administration officials to go slow in tinkering with existing incentives meant to lure more investors.

“We have to be cautious in removing incentives because some industries are not as competitive,” he said, “or else they won’t set up here anymore.”

Current Philippine laws grant an attractive package of incentives, including income-tax holiday for a maximum of eight years, followed by a perpetual 5-percent tax on gross income earned, and zero value-added tax on local purchases and up to 30 percent of local sales,

among others.

The new tax-reform proposal now calls for an overhaul and streamlining of these incentives, including a limit on Philippine Economic Zone Authority incentives to a maximum of 10 years and to increase the 5-percent tax on gross income earned to 15-percent tax on net income.

“Despite the proposed corporate income-tax cut, we note that tax rates in the Philippines will still be one of the highest and least competitive in the region, and the repealing of tax incentives to investors will likely make it worse. This comes at a time when other countries in the region are

trying to offer more tax incentives in order to attract FDI,” BMI Research said.

“Although the quid pro quo approach may be fiscally prudent, it creates more uncertainty for businesses. We believe that this could weigh on investment over the nearterm, as investors adopt a wait-andsee approach,” it added.

The Philippines, after being a laggard in FDI, registered an alltime high FDI inflow in 2017, the Bangko Sentral ng Pilipinas (BSP) reported just this week.

The BSP said FDI in 2017 hit a total of $10.05 billion for the whole year, 21.4 percent higher than the $8.28 billion seen in 2016.

incumbent official’s spouse, children and children-in-law, brother and sisters and brothers- and sisters-in-law, parents and parents-in-law, and grandparents-in-law may no longer run to fill the post to be vacated by their relatives.

Under the prohibition on multiple positions, no two members of any dynasty as defined under the provisions may hold any two regional or local positions at the same time.

The committee also added a provision that empowers the future Congress to provide additional prohibitions.

Ali Pangalian Balindong, who belongs to a political dynasty in Lanao del Sur, voted in favor of the anti-dynasty provisions. “I come from a province that can claim to be the capital of political dynasties, and my family is no exemption. But after listening to the deliberations and to former Chief Justice [Reynato S.] Puno, I have decided to be part of history,” Balindong said.“I. therefore, support the banning of political dynasties in this country.”

Pimentel’s take

grateful” they were able to come up with something to address the “disturbing reality in Philippine politics.”

Gods’ ire

there are dynasties in 73 out of 81 provinces.

Another study submitted to the committee revealed there are at least 295 political families who control power in various regions. Metro Manila had the most number at 31, while regions with the most number of dynasties apart from National Capital Region are Central Luzon with 21, Calabarzon (Cavite, Laguna, Batangas, Rizal, Quezon) with 20, Bicol region with 15, Western Visayas with 12, Mimaropa (Mindoro, Marinduque, Romblon, Palawan) with 11 and Central Visayas with 10.

Another study by a unit of the Asian Institute of Management showed that 50 percent of positions for governor was contested by political dynasties.

For the House of Representatives, 43 seats were won by a political dynasty over another dynasty, while 71 seats were won by a dynasty over a non-dynasty.

The Con-com has also agreed in principle the president and vice president should be elected as a team.

CON-COM member and former Senate President Aquilino Q. Pimentel Jr. said it took the committee some time to come up with the definite proposed provisions.

We needed to be “very careful with the wording” so that the regulation and its exemptions would be clearly understood by the people, according to Pimentel.

He noted that the problem with the provision on anti-political dynasty under the 1987 Constitution was the way it was worded.

“The ban against political dynasties was mainly dependent on action by Congress in making a law and, therefore, Congress, you know, [has] the leeway, to pass or not to pass the law and this is where we are at, facing the situation up to today so [after more than 30 years] on to the present constitution, nothing has happened,” Pimentel said. “So it’s better [to] spell it out without need of any congressional action.”

He believes “the people would still be

Different scenarios

FOR Con-com member and lawyer Susan Ubalde-Ordinario, the committee had difficulty with the different scenarios that might arise once the provisions were implemented.

Ordinario said they had “to take all things into consideration since this is a constitution for the people and for the next years to come.”

“We are also cognitive of the fact [that] we cannot solve all the problems and we cannot also foresee that we are [addressing] the concerns because there are too many permutations possible,” she said. “But we hope with this, plus the forthcoming political reform agenda, political party system, the electoral reforms, all of these can contribute towards the real democratic field.”

IN his speech, Puno, the Con-com chairman, said he would rather put himself in harm’s way rather than to put the country’s democracy in harm’s way.

“I do not give a nanosecond thought to the possibility that in voting to prohibit political dynasties, we shall be incurring the ire of the gods in our political firmament whose fortunes may be compromised,” Puno said.

Puno also noted the enabling law to regulate political dynasties that will come from Congress “has been written in invisible ink.”

He also reminded fellow Con-com members that in drafting the Constitution, “we cannot be blinded by any fear, even the fear of the omnipotents in our politics.”

“With our vote today, they shall be omnipotent no more,” he said.

Political bases

ACCORDING to a study by University of the Philippines Professor Rolando G. Simbulan,

www.businessmirror.com.ph

The Nation BusinessMirror

DOF official: Inequality, not poverty, is root of discontent

By Cai U. Ordinario

@cuo_bm

P

rotest rallies and other public disturbances are rooted not in poverty but in inequality, according to an official of the Department of Finance (DOF).

In his discussion at the Philippine Statistical Development Program (PSDP) 2018 to 2023 Consultative Workshop on Wednesday, DOF Undersecretary Karl Kendrick T. Chua said this is the reason why there is a need to produce more data on inequality.

Currently, the Philippine Statistics Authority (PSA) only produces data on inequality, particularly the Gini coefficient—a measure of income inequality—from the Family Income and Expenditure Survey (FIES).

“We do not get rallies from having many poor people: It is for having very divisive inequality for people to see that although they are not poor, many people enjoy far more than they do. That is why they become destructive and engage in some form of violence,” Chua said.

Chua added that inequality is “the bigger problem” compared to poverty. This is especially important since the Philippines is on track to becoming an upper-middle income country by 2022, and a high-income country by 2040.

He said that an upper middle income country has a per capita income of $4,000 like China and Thailand, while a high-income country had a per capita income of $12,000 like Malaysia and South Korea.

Chua added there is a need to expand data on welfare, particularly on

assets. He said the FIES only accounts for income derived from employment and/or entrepreneurial sources.

In a fast-growing economy, Chua said, there is already a need to also account assets, particularly property assets which can produce passive income.

“As the economy becomes richer, these people become richer, so does their income from assets and their expenditure out of those assets become so important,” he said.

“So for instance, we would now need to understand better instead of just having passive income or other income in the FIES, understand whether they get the right income from interest income, dividends from mutual funds, that is so important,” he added.

Chua also said that under the PSDP, the PSA should strive to generate annual poverty data. He said policy-makers would appreciate this information, especially now that the last FIES was taken in 2015.

He said the poverty picture could have already changed given that the last three years saw a 25-percent jump in nominal GDP growth.

In 2015 the poverty incidence in the country was estimated at 21.6 percent. The target of the Duterte administration is to bring this down to around 14 percent by 2022.

“I think we are, in summary, doing quite well in this area of income and welfare statistics. But the challenge going forward is how to do better now that we are becoming a high-income country, upper-middle income country in 2022, and high-income country, 2040,” Chua said.

Only 289 barangay officials are on Duterte’s narco list—PDEA

By Rene Acosta @reneacostaBM

T

he Philippine Drug Enforcement Agency (PDEA) said on Wednesday said that only about 289 barangay officials were on the “narco list” of President Duterte, and not 9,000, as earlier reported by an official of the Department of the Interior and Local Government (DILG).

PDEA Director General Aaron Aquino said the figures, which were way below the number disclosed by DILG Undersecretary Martin Diño several days ago, was based on the agency’s National Drug Information System.

“There are 289 barangay officials in the narco list of President Duterte based on the Philippine Drug Enforcement Agency National Drug Information System [PDEA- NDIS], far from the 9,000 barangay officials as previously reported,”Aquino said.

He said that those in the list were 143 barangay chairmen and 146 barangay kagawad.

“Out of these 289 barangay officials, 41 were arrested, five died in legitimate police operations, 27 homicide under investigation, three recorded natural deaths, five used other names or aliases, and one politically motivated death. As of this date, 207 barangay officials are active in the illegal-drug trade based on PDEA’s record,” the PDEA director general said.

Aquino said that pursuant to

Executive Order 15, the PDEA, as lead group of the Interagency Committee on Anti-Illegal Drugs, “has the verified precise data on the barangay officials linked to illegaldrug activities.” “ This information was obtained from the report of Barangay Anti-Drug Abuse Council [Badacs] nationwide,” he added.

Earlier, Diño claimed that 9, 000 barangay officials, who were involved in illegal drugs, were on Duterte’s list, a revelation that prompted barangay officials, especially in Metro Manila, to prod the official to name them.

The report came as the country is in the thick of its preparations for the barangay elections in May, unless otherwise postponed anew.

Diño, a former barangay captain, said village officials linked to drugs will be removed from office.

Aquino has reiterated his call to barangay officials to activate their respective Badacs and be cooperative and proactive in the anti-illegal drug campaign.

He believed that the number would increase once the validated list of barangay officials involved in the illegal-drug trade is submitted to the PDEA. The PDEA said that the DILG is fully supporting the PDEA in the antidrugs campaign by providing “information on drug personalities for verification and immediate action to finalize the list of politicians involved in the illegaldrug trade.”

Editor: Vittorio V. Vitug • Thursday, March 15, 2018 A3

DOJ orders probe of prosecutors behind dismissal of drug raps vs Lim, Espinosa

F

By Joel R. San Juan

@jrsanjuan1573

aced with a barrage of criticisms, Justice Secretary Vitaliano N. Aguirre II ordered the National Bureau of Investigation (NBI) on Wednesday to investigate for possible irregularities the government prosecutors behind the dismissal of the drug case lodged against Cebu businessman Peter Lim, self-confessed drug lord Kerwin Espinosa and several others.

The justice chief issued Department Order (DO) 152, ordering the investigation of members of the panel who conducted the preliminary investigation on the illegal-drug trade complaint filed by the Philippine National Police. Aguirre stated the panel members should be investigated “possible misfeasance, malfeasance or nonfeasance or other violations of law” in dismissing the case.

The controversial resolution that may have cleared Lim and Espinosa, convicted drug lord Peter Co and several others was signed by Assistant State Prosecutors Michael John Humarang and Aristotle Reyes.

Senior Assistant State Prosecutor R assendell Rex Gingoyon recommended the approva l of the resolution.

Acting Prosecutor Gen. Jorge Catalan approved the dismissal of the case.

“In the interest of the service, the NBI, through Director Dante A. Gierran, is here by directed and granted authority to conduct an investigation and case buildup to determine possible misfeasance, malfeasance or nonfeasance or other violations of law

by members of the panel of the NPS [National Prosecution Service] over the dismissal of the case, entitled PNP-CIDG-MCIU v. Peter Lim, Kerwin Espinosa et al, and if evidence so warrants, to file appropriate charges thereon,” the order read.

Reyes was appointed by Malacañang early this year as presiding judge of Regional Trial Court Branch 15 in Lucena City, Quezon Province. He was also the prosecutor who handled the filing of criminal charges against Customs f i xers Ma rk Ruben Taguba, Richard Tan, Manny Li, Kenneth Dong, Eirene Mae Tatad, Teejay Marcellana, Chen I-Min, Jhun Ming Jhun and Chen Rong Huan in connection with the smuggling of P6.4 billion worth of shabu from China in May last year.

Under the Revised Penal Code, malfeasance is doing an act prohibited by law or doing an act ought not to be done, while misfeasance is the improper or irregular performance of an act and nonfeasance is the nonperformance, failure or refusal to do an act which one is required to do.

I n d i s m i s s i n g compl a i nt ,

against Lim, Espinosa, Co, Lovely Impal, Max Miro, Ruel Malindangan, Jun Pepito, and several others known only through their aliases, the justice department held that the complaint, which was based on the testimony of respondent-turned witness Marcelo Adorco, failed to of fer e v idence to est ab lish probable cause to indict Lim and his co-accused for illegaldrug trade.

The DOJ did not give weight to the affidavits submitted by Adorco, implicating Lim and several others in the illegal-drug transactions of Espinosa.

Adorco served as driver and bodyguard of Espinosa.

The DOJ held that Adorco’s affidavits are “unworthy of consideration” due to inconsistencies and contradictions.

In another apparent attempt to appease the public outcr y over the dismissal of the complaint, Aguirre issued DO 151 creating a new panel of prosecu-

In the interest of the service, the NBI, through Director Dante A. Gierran, is hereby directed and granted authority to conduct an investigation and case buildup to determine possible misfeasance, malfeasance or nonfeasance or other violations of law by members of the panel of the NPS over the dismissal of the case, entitled PNPCIDG-MCIU v. Peter Lim, Kerwin Espinosa et al, and if evidence so warrants, to file appropriate charges thereon.”—DOJ order

Demafelis’s family, relatives granted Tesda scholarships

By Claudeth Mocon-Ciriaco Correspondent

T

Line fix

A Manila Electric Co. lineman performs a routine maintenance check of power lines and cables atop an electric post in Las Piñas City. The utility firm has recently announced a possible hike in electricity rates for the March billing period. NONIE REYES

DBM allots P2 billion for national IDentification system implementation

B

udget Secretary Benjamin T. Diokno expressed hope Congress will pass the proposed national identification (ID) system into law as early as next week.

At a news briefing on Wednesday, Diokno said lawmakers from both houses of Congress have given their support on the measure.

The House of Representatives approved its version of the measure,

House Bill 6221, in September 2017, while Sen. Panfilo M. Lacson Sr. delivered his sponsorship speech on the bill on March 12.

“We can get it started this year, and I’m confident that we can do it within this year,” he said.

Diokno said this national ID “will actually render the other IDs redundant,” and its implementation is long overdue.

tors to review the dismissal of the said criminal complaint.

Designated as the reviewing prosecutors were Senior Assistant State Prosecutor Juan Pedro Navera, Assistant State Prosecutor Ana Noreen Devanadera and Prosecuting lawyer Herbert Calvin Abugan, while Senior Deputy State Prosecutor Richard Anthony Fadullon was designated as the Acting Prosecutor General.

The new panel will resolve the motion for reconsideration filed by the PNP-Criminal Investigation and Detection Group (CIDG) seeking the reversal of the first resolution.

“The panel of prosecutors and the acting prosecutor general shall resolve the motion for reconsideration under existing laws, rules and regulations,” the order said.

President Duterte has also expressed dismay over the dismissa l of the complaint and vowed to invoke h is “power of super v i sion a nd cont rol ” to review the dismissal of the drug case.

“By having this ID, you can say that you exist,” he said, adding that “this is one way of efficiently distributing programs of the government.”

Diokno said the ID system has been allocated with P2-billion funding, which has been placed under the 2018 budget of the Philippine Statistics Authority (PSA). It can be implemented within a year once it is signed into law, he added.

The budget was given to the PSA, since the agency is the country’s national registrar, he said.

Diokno added the Duterte administration wants to adopt the Indian model national ID system, which was implemented in three years.

Beneficiaries of the government’s cash-transfer program would be the first to benefit from the proposed ID system, he said.

The ID will have information about the holder’s demographic details like name, sex, date of birth, place of birth and address and will lessen the need for at least 33 sectoral IDs currently being issued by various government agencies.

Even foreigners who are residents of the Philippines will have their own national ID under this program. PNA

he Technical Education and Skills Development Authority (Tesda) has extended government assistance to the family of slain overseas Filipino worker Joanna Demafelis whose body was found in a freezer more than a year after she was reported missing in Kuwait.

Tesda Director General Guiling Mamondiong, upon instructions from President Duterte, said the agency granted free training scholarship assistance package to the family of Joanna whose remains arrived in the country on February 16.

Mamondiong said that the training scholarship assistance package will include free skills training, free competency assessment, free entrepreneurship training, training support fund and starter tool kits.

Florencio Sunico Jr., Tesda director for Region 6, said that the beneficiaries of the program are Joanna’s siblings Rausten Mark Demafelis, Housekeeping NC II; Rhozell Mae Demafelis, Cookery NC II; Criselda Demafelis, Cookery NC II. They will enrol at the Leon Ganzon Polytechnic College in June 2018 under the “Free TVET scholarship program.

Also given assistance were Joie Demafelis of PNR, Western Bicutan, Taguig City, and Jonathan Demafelis, of Barangay Lopez Jaena Extension, San Dionisio, Parañaque City. Both will take the Automotive Servicing NC II or III course.

Economy

A4 Thursday, March 15, 2018 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

House panel endorses mandatory SIM card registration bill for plenary debate

By Catherine Joy L. Maglalang | Correspondent

T

he House Committee on Information and Communications Technology has recently endorsed for plenary approval a bill mandating the registration of SIM cards.

Committee Chairman Rep. Victor Yap of the Second District of Tarlac said that House Bill (HB) 7233 effectively substitutes 14 other measures to establish a SIM-card registration mechanism to help lawenforcement agencies solve cases and stop acts of terrorism.

“This bill will help investigators track criminals who use phones for illegal activities, as well as curb incidents, such as bullying, fraud, inciting of violence and the loss of phones through theft,” Yap said.

According to the Philippine National Police Anti-Cybercrime Group, the use of unregistered SIM card numbers in crimes, particularly in cybercrime, is a frequent hurdle in police investigations due to the anonymity it provides its users.

“With the mandator y SIMcard registration, law enforcers would now be able to identify

offenders,” he added.

The Tarlac lawmaker added the bill would also help the government provide better services to the people and support its goal of financial inclusion.

“Once this bill passes into law, SIM-card users won’t have to submit personal information and proof of identification to their mobile operators just to access ‘mobile money’ services. They’ll be able to easily make use of traditional retail financial services, such as remittances, payments, savings, credit and insurance among others using their phones,” Yap said.

Under HB 7233, direct sellers of SIM cards would be required to register the full names, date of birth, gender and address of buyers, as well as the cell phone and serial number of the SIM card they purchased. The address listed out

by consumers must be the same as the address listed in a valid government-issued ID with photo.

Mobile-phone service providers would also be required to maintain a SIM-card register of their subscribers containing information required for registration, which would be submitted to the Department of Information and Communications and Technology every six months.

Yap also doused fears about consumers’ privacy, stating that a confidentiality clause has been included in the proposed measure to ensure that the personal information provided won’t be used for other purposes.

“Technological advancements in mobile-phone services may have provided [to] Filipinos with easier means of communication, but it has also exposed our people to unprecedented security risks. As the industry continues to innovate, so

too should our laws,” Yap said.

The HBs filed on SIM-card registration are: HB 590, 931, 1193, 1258, 2328, 2648, 2809, 3649, 3661, 4014, 4404, 4646, 5382 and 5591, authored by Reps. Mariano Michael M. Velarde Jr. (BuhayParty-list), Francis Gerald A. Abaya (First District, Cavite), Roy M. Loyola (Fifth District, Cavite), Rozzano Rufino B. Biazon (Lone District, Muntinlupa City), Magnolia C. Antonino (Fourth District, Nueva Ecija), Wes Gatchalian (First District, Valenzuela City), Winston Castelo (Second District, Quezon City), Maximo B. Rodriguez Jr. (Second District, Cagayan de Oro), Federico S. Sandoval II (Lone District, Malabon City), Carmelo B. Lazatin II (First District, Pampanga), Joel Mayo Z. Almario (Second District, Davao Oriental), Manuel Luis T. Lopez (First District, Manila) and Gus S. Tambunting (Second District, Parañaque City).

This bill will help investigators track criminals who use phones for illegal activities, as well as curb incidents, such as bullying, fraud, inciting of violence and the loss of phones through theft.”—Yap

Cebu workers joined company excursion on eve of union polls

By Nelson S. Badilla | Correspondent

F

oreign investors should strictly observe and abide with local labor laws and never deny Filipino workers’ freedom to participate in trade union election.

This was the message of the Partido Manggagawa (PM) to the owners and management of a French-owned company in the Mactan Export Processing Zone (MEPZ).

In a news statement sent to the BusinessMirror on Thursday, Dennis S. Derige, PMCebu spokeman, criticized the “blatant interference” in the union election conducted last week by the owners and lawyer of the Kor Landa Corp.

Kor Landa Labor Union-Piglas, a union affiliated with PM, was supposed to hold an election of new set of officers on March 7.

Derige said that, on March 6, or on the eve of the certification election at the Kor Landa, a big number of the firm’s workers were “brought to a resort and were lectured overnight against voting for the union.”

Derige said that the “anti-union” activity, which he described as “abduction,” was intentionally done “[u]pon the orders of Kor Landa’s French owners, Amaury and Manuelle Christine, and company lawyer Atty. [Cecilia] Go…” The Kor Landa Labor Union-Piglas, brought the anti-union scheme of the owners of the Kor Landa to the attention of the election officer appointed by the Department of Labor and Employment (DOLE) and asked for postponement of the union’s election.

The request was denied.

Derige said Kor Landa Labor Union-Piglas filed a protest at the DOLE 7 and walked out of the proceedings.

The case is pending at the DOLE 7.

Kor Landa is a jewelry accessories assembler at MEPZ I in Lapu-Lapu City with some 307 workers, the majority of whom are women.

In the same news statement, Derige disclosed that the union busting at the Kor Landa was “certainly not the first time that such a tactic—abducting workers before a scheduled certification election and forcing them to listen to anti-union lectures—was employed by locators at MEPZ. But by exposing this brazen interference at Kor Landa, we hope that it will be the last time so that workers can exercise the freedom to unionize and thereby improve their working conditions.”

The right to form a union is mandated by the Philippine Labor laws.

All business establishments, including the foreign-owned, are directed to observe and follow the labor laws of the country.

But “union busting” remains a serious problem in the country.

BETTER SANITATION Sen. Cynthia A. Villar (second from right) leads the distribution of 5,000 toilet bowls to Baseco compound residents in Tondo, Manila, on Tuesday. Also in photo are Engr. Nilo Marayag, head of the Environmental Health and Sanitation Cluster for Metro Manila at the health department, together with one of the beneficiaries of the project. Villar commended the participation of government agencies to build a communal septic tank and gave toilet bowls for Baseco residents to address poor sanitation in the area. The project is in partnership with the following departments: Health; Social Welfare and Development; Environment and Natural Resources; and Public Works and Highways. PNA/Avito Dalan

Vapers urge Congress to craft separate law on e-cig regulation

V

apers in the Philippines are appealing to legislators to regulate electronic cigarettes differently from conventional cigarettes, given the emerging evidence showing that e-cigarettes or “vapes” are a less harmful alternative to tobacco and a viable smoking-cessation tool.

Vapers Philippines recommended the noninclusion of e-cigarettes in the Tobacco Regulation Act (Republic Act 9211), i.e., separate and distinct regulatory framework for e-cigarettes in terms of advertising and promotions, sale and distribution, and use.

Mark Czerwin Erana, public-relations officer of The Vapers, said, “We underscore our position that vaping and smoking should not be lumped together, especially in use regulation.”

“Appropriate regulation of e-cigarettes can help millions of Filipino smokers quit and prevent them from developing serious sickness and dying prematurely,” said Joey Dulay, president of the Philippine E-Cigarette Industry Association (Pecia).

Pecia and The Vapers Philippines are among the stakeholders invited to attend the public hearing of the Committee on Trade and Industry of the House of Representatives last Tuesday. The meeting, chaired

by Rep. Fernejel G. Biron, tackled several pending bills seeking to regulate e-cigarettes.

House Bill (HB) 532, authored by Party-list Rep. Rodel M. Batocabe of Ako-Bicol seeks to regulate the packaging, use, sale, distribution and advertisement of electronic smoking devices, amending for the purpose Republic Act 9211, otherwise known as the Tobacco Regulation Act of 2003.

Dulay pointed out that HB 532 seeks to include e-cigarettes in the Tobacco Regulation Act. This effectively regulates e-cigarettes in the same way as regular cigarettes and will result in untoward effects, he explained. It will give the public the wrong

impression that e-cigarettes are just as harmful as regular cigarettes. “Putting the same graphic health warnings will confuse the public and discourage smokers from switching to these less harmful alternative,” Dulay said. “Then, e-cigarette users will be forced to occupy smoking areas used by cigarette smokers, thereby exposing them to the poisonous chemicals in cigarette smoke that they are trying to avoid in the first place.”

Dulay called on legislators to consider the British regulatory model. Last year about 2 million people in England used e-cigarettes and completely stopped smoking, while nearly half a million more were using e-cigarettes as an aid to stop smoking. In its Tobacco Control Plan 2017-2022, the British government clearly stated its intention to support consumers in stopping smoking and adopting the use of less-harmful nicotine products, particularly e-cigarettes.

At the committee meeting, Pecia and The Vapers Philippines also submitted the latest Evidence Review of E-Cigarettes commissioned by Public Health England, which was released on March 2.

The main findings of the 2018 PHE review include:

Vaping poses only a small fraction of the risks of smoking, and switching completely from smoking to vaping conveys substantial health benefits.

E-cigarettes could be contributing to at least 20,000 successful new quits per year and possibly many more.

Many thousands of smokers incorrectly believe that vaping is as harmful as smoking; around 40 percent of smokers have not even tried an e-cigarette,

Less than 10 percent of adults understand that most of the harms to health from smoking are not caused by nicotine.

The evidence does not support the concern that e-cigarettes are a route into smoking among young people.

www.businessmirror.com.ph

DENR starts investigation of ‘smoke belching’ steel mills in NCR, Davao and Pampanga

By Jonathan L. Mayuga @jonlmayuga

T

HE Department of Environment and Natural Resources (DENR) has acted on the complaint of the Clean Air Philippines Movement Inc. (Capmi) against five steel mills accused of causing air pollution and operating without necessary permits.

Acting on the complaints filed by the group through its president, Manuel J. Galvez, which was reported by the BusinessMirror on January 3, Director Metodio U. Turbella of the DENR’s Environmental Management Bureau (EMB) said violations committed by the mills will be dealt with accordingly as stipulated

by Department Administrative Order 2000-81, or the implementing rules and regulations of the Philippines Clean Air Act. To recall, in October last year, Capmi filed various complaints at the DENR-EMB Central Office against Melter Steel Corp., Real Steel Corp. and Wan Chiong Steel Corp., all in San Simon, Pampanga; Davao Mighty Steel Corp. in Davao and MetroDragon Steel Corp. in Caloocan City, National Capital Region (NCR), for various violations of the Clean Air Act and the Environmental Impact Assessment, or environmental compliance certificate (ECC) law of the Philippines.

Republic Act 8749, or the Clean Air Act of 1999, is the law that protects air quality, while an ECC is a vital requirement before any industrial establishment can be given the needed permit to engage in a business.

In the complaint, Galvez said they have discovered that some factories emitting deadly smoke are able to operate without a permit and an ECC, two basic requirements for business operation in the Philippines.

The air pollution brought about by the operation of these factories pose “a clear and present danger” and serious risks to the health of the general public, especially the factory workers inside these establishments, Galvez said.

The complaint against the five

steel mills prompted Environment Secretary Roy A. Cimatu to immediately call a thorough investigation.

In a letter to the BusinessMirror dated March 5, Turbella said the DENR-EMB Central Office, Region 3 and Region 11, had already formed a team and conducted inspection and sampling of the steel mills’ emission from November to early-December 2017.

A notice of violation was subsequently issued to Wan Chiong Melters and Real Steel Corp. for operating their Air Pollution Source Installations without a valid permit to operate.

On the other hand, the DENREMB Region 11 will call a technical conference with the concerned parties concerning the Davao Mighty Steel Corp.

An air quality monitoring on the nearby communities will also be conducted to assess the ambient air quality in the area.

On the other hand, the DENREMB NCR Office has already called a conference with the concerned parties, including the Metro Dragon Steel Corp. after conducting their inspections and issuing a notice of violation and notice of adverse findings against the steel mill on December 5, 2017.

The EMB is a lien bureau of the DENR and is in charge of issuing ECC and the primary agency mandated to implement the Philippine Clean Air Act. The Philippines is struggling to reduce air pollution and achieve the international standard. The acceptable amount of total suspended particles, or TSP, in the air is 90 micrograms per normal cubic meter of air (ug/Ncm).

Around 80 percent of air pollution is caused by smoke-belching vehicles, while around 20 percent are from stationary sources or factories.

In Metro Manila the DENREMB said there is marked improvement in ambient air quality as TSP levels went down as low as 116 ug/Ncm—the closest it got to achieving the international standard.

Redas software to enhance energy sector’s quake response

By Lenie Lectura

T

@llectura

he Department of Energy (DOE) and the Department of Science and TechnologyPhilippine Institute of Volcanology and Seismology (DOST-Phivolcs) are set to sign an accord on Friday to enhance the capacity of the energy sector in determining the areas of concern for earthquake incidents, using a state-ofthe-art software dubbed as Rapid Earthquake Damage Assessment System (Redas).

The Redas is a tool for emergency preparedness, contingency planning and mainstreaming disaster-risk reduction on adverse effects of earthquake.

The use of Redas will benefit the energy sector by having a near real-time simulated earthquake-hazard information that can help assess the situation on the ground.

The DOE, for its part, will pursue Redas training to support and strengthen the disastermanagement capabilities of the energy sector.

The signing of the memorandum agreement between DOEPhivolcs is entitled “Capacity Enhancement of the Energy Sector on Hazard, Risk Assessment and Exposure Database Development Through the Use of the Redas Software.”

The partnership of the DOE and DOST-Phivolcs is in line with the recently signed Department

Circular 2018-01-0001, or the “Adoption of Energy Resiliency in the Planning and Programming of the Energy Sector to Mitigate Potential Impacts of Disasters,” also known as the Energy Resiliency Policy.

Under the said policy, a task force on energy resiliency was created to oversee the implementation of the DOE circular. The task force, which will be headed by the DOE, will ensure that government agencies and private institutions are prepared for the development and adoption of their respective resiliency programs.

Other members of the task force include the National Electrification Administration, National Grid Corp. of the Philippines, National Power Corp., National Transmission Corp., Philippine National Oil Co. and Power Sector Assets and Liabilities Management Corp.

“Ensuring resiliency energy infrastructure—the ability to restore and sustain availability and accessibility of energy in the most timely and efficient manner, in the aftermath of natural and man-made disasters—is now more pronounced, and there is a need to institutionalize the development, promotion and implementation of a resiliency compliance plan to strengthen the capacity, safety culture and disaster preparedness and response capability of the energy sector,” the circular stated.

Agriculture/Commodities BusinessMirror

www.businessmirror.com.ph

Editor: Jennifer A. Ng • Thursday, March 15, 2018

A5

PHL chicken inventory down 40%–NMIS

By Jasper Emmanuel Y. Arcalas

T

@jearcalas

he country’s dressedchicken inventory as of February 20 declined by 40.83 percent to 14,384.64 metric tons (MT), from last year’s 24,314.63 MT, the latest data from the National Meat Inspection Service (NMIS) showed.

Data from the NMIS indicated that the latest chicken inventory was lower compared to the levels recorded last month and the previous week by 6.02 percent and 22.18 percent, respectively.

The bulk of the dressed-chicken inventory, or 53.06 percent, came from local producers. Locally produced dressed chicken as of February 20 declined by more than half to 7,632.66 MT, from 13,241.54 MT recorded in the same period last year.

Among all the regions in the country, Region 3 or Central Luzon recorded the highest inventory of local chicken at 3,992.89 MT, followed by the National Capital Re-

gion (NCR) with 1,352.6 MT. Imported dressed chicken in the country’s cold storages as of February 20 reached 6,751.98 MT, 39.02 percent lower than the 11,073.09 MT recorded a year ago.

The NMIS, an attached agency of the Department of Agriculture, said the figures did not include fresh, chilled chicken and mechanically deboned meat, as well as those already in distribution channels. The agency also said the survey covered only accredited cold-storage facilities.

Data from the NMIS also showed that frozen-pork inventory as of February 20 rose by 32.57 percent

to 22,158.02 MT, from 16,714.14 MT recorded in the same period last year.

Of the inventory during the period, the bulk consisted of imports at 21,024.58 MT. Locally produced pork in cold storages reached only 1,133.44 MT, according to NMIS data.

Region 4A had the highest frozen-pork inventory at 8,888.40 MT, of which 8,032.78 MT were imported, figures from the NMIS showed.

Region 3 had the second-highest frozen-pork inventory at 7,678.71 MT, of which 7,662.73 MT were imports.

However, the country’s frozen-

pork inventory as of February 20 was 8.63 percent, and 14.28 percent lower than the previous week’s and last month’s inventory, respectively.

The NMIS said the frozen-pork inventory included carcass, primal and specialty cuts. The survey covered accredited commercial and inhouse cold-storage facilities.

Filipino traders are allowed to purchase pork and chicken from abroad, and they usually do so via the minimum access volume (MAV) scheme of the World Trade Organization. Pork and chicken imported through the MAV scheme are slapped with lower tariffs.

DA opens 2nd communal veggie garden in Quezon City

T

o enable city dwellers to produce food for their own consumption, the Department of Agriculture (DA) has established another site where they can learn to grow vegetables in small spaces.

An Urban Agriculture-Pagkain Para sa Masa (UA-PPSM) site was put up at the Agricultural Training Institute (ATI) Compound in Quezon City.

Themed “Sa maliit na espasyo, may pagkain tayo,” the DA said the UA-PPSM seeks to teach city residents how to grow vegetables and other foodstuff by introducing the values of basic food production, healthy food systems and clean urban environment.

“The DA is exerting efforts to lessen hunger in the urban com-

munity. The project is in line with the President’s directive to make food available and affordable,” DA Undersecretary for Special Concerns Ranibai Dilangalen said in a statement.

Dilangalen added the project also seeks to wipe out hunger by 2030.

The UA-PPSM is composed of four major components: (1) urban farming, which includes technical assistance for the residents in the area and turned over of initial inputs, such as facilities and equipment for new sites; (2) mushroom culture; (3) feeding program with the children beneficiaries in Barangay Vasra; and (4) turnover of hydroponics-aquaponics technology farming system from Aboitiz Foundation Inc. and Aboitiz Equity Ventures Inc.

A memorandum of agreement designating the ATI Compound as area for communal vegetable garden was signed by Dilangalen, ATI OIC Director Luz A. Taposok, Aboitiz Foundation Inc. F V P and COO Mar ibeth Marasigan, and Aboitiz Equity Ventures Inc. Vice President for External Cor porate Relations Christopher Camba.

T he UA-PPSM wa s f i rst launched on May 31, 2017, at the Barangay Bahay Toro in Quezon City. Following the kickoff, the DA has established communal gardens at Bago Aplaya, Davao, on August 25 and Sitio Pagalungan, Lugay-Lugay, Cotabato City, on February 5.

The DA is set to establish UA-PPSM in Taguig City on April 12.

FARMERS’ TRAINING PROGRAM IN LANAO

SM Foundation kicked off its second training program in Lanao, this time in Marawi City. An orientation program for 156 participants was conducted in Barangay Dulay Proper, Marawi City, by SM Foundation, led by SM Foundation AVP for Livelihood Programs Cristie Angeles and Harbest Agribusiness Corp. Arsenio Barcelona. The participants belong to KSK Batch 165 and are internally displaced persons of the once war-torn Islamic City. Guests at the program orientation were Barangay Capt. Minsoari Ala; Nelia Soriano, livelihood chief of NHA; Noraidah Busran, SLP Regional project coordinator DSWD 12; Director Raynilo Aniñon, OCD-ARMM Task Force Bangon Marawi; Hon. Majul Gandambra, mayor of Marawi City; and Housing and Urban Development Coordinating Council Chairman Eduardo del Rosario, who is also the chairman of Task Force Bangon Marawi. SM FOUNDATION PHOTO

A permaculture garden is not just about organic farming

P

UERTO PRINCESA CITY—Since March is Women’s Month, I thought it would be fitting to feature Filipinas who are promoting sustainable farming and dining.

For this week, I interviewed Sarah Queblatin, founder of Green Releaf Initiative, a nongovernmental organization (NGO) that uses holistic systems like permaculture and ecovillage design to help local communities that are in transition. These include these include the farmers and indigenous groups who are recovering from Superty phoon Lawin that hit Kalinga in 2016 and the families who were displaced by last year’s Marawi conflict.

It was actually through her work in Marawi that I first learned about Sarah. She was one of the speakers in a forum on the Marawi conf lict, which was held last October in Ateneo de Manila University, and she talked about a permaculture garden that a group of internally displaced people (IDPs) living in an evacuation center in Iligan city. I’ve always been curious about permaculture after learning about it from a Bruneian entrepreneur and wellness advocate who told me that she hired a permaculture expert to design her home garden which is now supplying her with organically grown fruits and veggies. I thought that was one thing to aspire for as soon as I get my own small space for a garden.

Permaculture, which is a portmanteu of the words “permanent agriculture” and “permanent culture,” is a system of agricultural and social design. Developed in the 1970s

by Australian agriculturists Bill Mollison and David Holmgren, its basic tenets include caring for the Earth, caring for the people and setting limits to population and consumption. Permaculture design aims to minimize waste, human labor and energy input by building a more holistic system.

It was influenced by concepts derived from organic farming, agroforestry, sustainable development and applied ecology.

Sarah said that apart from providing food and water, the permaculture designed garden in Iligan city is also serving as a healing space for IDPs. This is not a novel concept for a certified permaculture designer like Sarah as she was mentored by Rosemary Morrow—a renowned permaculturalist who has worked in countries like East Timor,

Prime Sarmiento

prime commodities Vietnam, Afghanistan and Solomon Island to help communities recovering from war and natural disasters.

“This is beyond sustainable agriculture,” Sarah said in a recent phone interview. Permaculture design is about life-cycle design and offers a preventive rather than reactive solution. It’s practical, simple and uses the resources that are locally available. She cited Green Releaf ’s project in Iligan City.

The project started during the third quarter of 2017 and, at that time, it was raining almost every day in Iligan city. The daily rains inspired the community to design a water catchment system, allowing the IDPs to use stored rainwater for laundry and cleaning.

But what attracted Sarah more to permaculture is its holistic and integrative approach to solve a problem. She realized the importance of such approach during the time spent working for various NGOs in Manila.

She noticed that most NGOs tend to focus on a single sector or cause, forgetting the fact that everything is interconnected and, therefore, needs a more holistic solution.

For example, it would be difficult to solve an environmental problem or work on peace building unless one understands the need for more livelihood or changing the community’s mind-set on how to relate with nature.

“I worked with disaster-affected and conflict-affected communities. It made me see that there’s a need for a more a holistic approach,” she said.

So Sarah explored not only the concept of permaculture but also the related concept of forming an ecovillage. An ecovillage is a community that is designed by its members based on four dimensions of sustainability— social, culture, ecology and economy—to re-

generate social and natural environments.

Sarah, who has always wanted to live in an ecovillage, decided to uproot herself from Manila to live in an ecovillage in Palawan in 2012. She lived there—on and off—for the next three years where she learned to live in harmony with nature and do some inner work following the death of her mother in 2013. Her grieving also gave her time to meditate more on her life’s mission.

“I realized my path is working with transitional communities into designing better systems,” she said.

By 2015 Sarah left the ecovillage and took up courses on permaculture design in Nueva Ecija, Palawan and Australia. It was also around this time that she worked as advocacy coordinator for the Global Ecovillage Network (GEN). She left GEN last year to focus on Green Releaf.

At present, Sarah and Green Releaf have expanded their work in Mindanao by designing a permaculture garden in an elementary school across the evacuation center in Panao, Lanao del Norte. Most of the displaced children go to this school and Sarah believes that this garden will provide food and a safe space for healing the children’s trauma.

She’s also talking with the administrators of Mindanao State University in Iligan to build a permaculture site in the university.

Green Releaf is also helping the Department of Education and a local community in Kalinga to design a permaculture demo site at the Balawag National High School.

And after living in Manila and Palawan for several years, Sarah moved back to her hometown in Cebu City where Green Releaf is also based. While she has no garden of her own as she lives in a condo, Sarah will apply what she learned in urban gardening by pitting up a permaculture garden demo site in a weekend farmers’ market just across her condo building.

Prime Sarmiento is a longtime business journalist who specializes in food, agribusiness and commodities-trade reporting. Her stories have been published in both local and international publications, including Nikkei Asian Review, China Daily, Science and Development News Network and Dow Jones Newswires.

Comments and ideas are welcome at prime. sarmiento@gmail.com.

Add cow manure to your list of renewable-energy sources

T

he average Holstein cow produces over 100 pounds of manure a day.

It’s a lot of poop. It’s also a lot of potential power.

On some farms, that energy is already being collected: The manure’s tossed into an anaerobic digester system where gas concentrates and then has to be stripped of water, carbon dioxide, and other elements before being mixed with traditional natural gas and used for heat.

David Simakov, assistant professor of chemical engineering at the University of Waterloo in Ontario, is working to make that process more efficient. He and his colleagues are researching ways to boost the energy content of this raw biogas with a refining process that uses hydrogen in a chemical reaction to convert carbon dioxide into methane.

This conversation doubles the production rate of the older separation techniques, producing so much renewable natural gas that the volume could be stored, and eventually used as a natural battery.

As a bonus, the new method results in lower carbon-dioxide emissions.

“We’re not inventing any chemical reaction or process,” said Simakov, who coauthored a paper on biogas published in January in the International Journal of Energy Research, said in an interview. It’s just “a bit of engineering” to lower the cost of the refining, he said.

Ironically, producing the hydrogen needed for the chemical reaction takes a lot of electricity and constitutes the most expensive input in the whole process. The key to making it economically viable?

Renewable power from solar,

wind or hydroelectric sources.

Methanation, as the process is called, can be viewed as a way to improve the performance of solar or wind power, according to Patrick Serfass, executive director of the American Biogas Council.

Wind and solar power is intermittent and must be stored for use at times when there is no sun or wind. Rather than storing that power in batteries, it can be used to create renewable natural gas that can be utilized during those energy gaps.

The process can “ bridge the variability of wind and solar with the reliability of energy from biogas systems,” Serfass said.

Manure, you see, is just a smelly natural battery.

Simakov’s research is still three to five years from producing renewable natural gas economically, but the eventual payoff is promising.

The United States has the potential to produce enough raw biogas to power 7.5 million homes and reduce emissions that contribute to global warming by equivalent of as many as 15.4 million vehicles, according to the biogas council.

Overall, more than 2,200 sites in the US produce biogas, with the potential to add 13,500, according to the biogas council.

Europe has more than 10,000 operating digesters, and some communities are already essentially fossil-fuel-free because of them.

“The potential is very big because, once we have this technology for converting animal waste, we can apply it at other places, such as landfill sites,” Simakov said.

Bloomberg News

TheBroa

Business

Thursday, March 15, 2018

A6

PHL’s system to harmonize environment, s

I

By Jonathan L. Mayuga

N January businessmen saw green. Weeks later, they were red in the face.

Early this year, executives of a joint venture between Hotel of Asia Inc. and Newcoast Southbeach Inc. announced plans to build what they claim would be the biggest “green” hotel on Boracay Island in the Western Visayas Region. The businessmen pointed to a 2-hectare property sitting at the beachfront on the world-famous tourist paradise as the location of such property.

Their plans may have to wait.

At least until an ongoing crackdown against erring establishments on the island paradise in the municipality of Malay, Aklan province, stops.

The Task Force Boracay (TFB) headed by Secretary Roy A. Cimatu of the Department of Environment and Natural Resources (DENR) has uncovered grave violations of environmental laws, including the construction of resorts and hotels without the benefit of an environmental compliance certificate (ECC).

As early as February this year, the DENR’s Environment Management Bureau (DENR-EMB) has stopped accepting online application for the processing of ECCs and Certificate of Non-Coverage (CNC) for development projects on Boracay Island following President Duterte’s marching order to the TFB to address environmental problems besetting the country’s top tourist destination.

A BusinessMirror report said the proposed project with a 1,001-room capacity is an environmentally critical project to be built on an environmentally critical area. This area is the beachfront of an island flocked by tens of thousands of local and foreign tourists.

Boracay is currently besieged by various environmental problems, including the massive destruction of timberland or forest land and wetland areas, water pollution, poor solid-waste management and perennial flooding.

Threatening to shut down and stop tourism activities on the island, Duterte tagged Boracay as the country’s biggest “cesspool” because of the direct discharge of untreated wastewater into the beach, polluting its “pristine” waters and aquifer in many parts of the island.

Early this month, the TFB composed of the DENR, the Department of Tourism (DOT) and the Department of the Interior and Local Government (DILG) declared a six-month moratorium on new construction on the entire island.

The DOT also stopped accreditation for resorts on the island.

While several establishments on the islands have approved ECCs, some senators during a series of on-site public hearings were puzzled as to how some establishments were able to construct without an ECC. The lawmakers also expressed surprise on how some establishments were able to secure ECCs for environmentally critical projects over equally environmentally critical areas such as wetlands and forestlands.

Could this be happening elsewhere in the country?

What is an ECC?

AN ECC is a requirement under the Environmental Impact Statement (EIS) System established under Presidential Decree 1586 signed by then-President Ferdinand E. Marcos on June 11, 1978.

According to DENR Department Administrative Order (DAO) 2003-30, specifically the implementing rules and regulations of the law, an ECC is “a document issued by the DENR through the EMB after a positive review of an ECC application, certifying that

based on the representations of the proponent, the proposed project or undertaking will not cause significant negative environmental impact.”

The ECC also certifies the proponent has complied with all the requirements of the EIS System and has committed to implement its approved Environmental Management Plan.

An ECC contains specific measures and conditions that the project proponent has to undertake before and during the operation of a project and, in some cases, during the project’s abandonment phase to mitigate identified environmental impacts.

Currently, an ECC is issued by the respective regional offices of the EMB where the project is located or the DENR-EMB Central Office for big-ticket projects. Aside from an ECC, the DENR-EMB also issues CNCs, which are documents issued by the DENR stating that the proposed project is not covered by the Environmental Impact Assessment System and, hence, the proponent is not required to secure an ECC.

Flawed IRR

VARIOUS environment groups claim several flaws exist in the EIS System. These groups alleged this system is ineffective in assessing the environmental impact of development projects.

The Davao-based watershed advocacy group Interface Development Interventions (IDIS) even said DAO 2003-30 watered down the essence of the law.

The law behind the EIS System requires all government and corporate companies to prepare an environmental impact assessment (EIA) for any environmentally critical project or any activity situated within the environmentally critical area (ECA) to determine the project’s impact on the quality of the environment.

But DAO 30-2003 altered previous guidelines that had explicitly called for mandatory consultations, social acceptability and other environmental safeguards in the EIS system, the IDIS said in a study presented in a forum at the Human Rights Center of the Jesuit-run Ateneo de Manila University.

IDIS commissioned the legal study from the alternative law group Sentro ng Alternatibong Lingap Panlegal (Saligan) in 2011.

In its review, Saligan claims DAO 30-2003 is inconsistent with the precautionary principle of the EIS System law.

Under the DAO 30-2003, only projects that pose a potentially significant impact to the environment shall be required to secure ECCs, which goes against the principle that an environmentally critical project or a project in an environmentally critical area is required to secure an ECC, the Saligan report had said.

The DAO also withers down the previous DAO 37-1996 provisions of public participation and social acceptability under the EIS System.

The conduct of mandatory public hearing is now limited to environmentally critical projects and public hearing becomes EMB’s discretion.

Under DAO 30-2003, not all projects with ECCs are required to form multipartite monitoring teams (MMT), a body set up to monitor the proponent’s compliance with the conditions of the ECC. MMTs are now only required for ECPs and MMT reports are only required to be submitted twice a year and not quarterly.”

AERIAL view of Boracay Island, taken on April 23, 2017. LEN4FOTO | DREAMSTIME.COM

‘Colorful’ Boracay case

DENR-EMB Director Metodio U. Turbella said he is not aware of development projects with no ECCs. If such a case even exists, the project proponents will be in a lot of trouble, Turbella said.

Without an ECC, the project or business operation will undergo thorough investigation, he explained. Turbella added that the proponent may be slapped with cases for violation of environmental laws, penalized and fined or, worse, receive a cease-and-desist or stop-operation order.

The establishment and its facilities may also be dismantled, he added.

However, Turbella described the case of Boracay Island as “unique.”

“Boracay is very colorful,” he said. “You cannot compare Boracay to other areas that have zoning and areas declared as alienable and disposable land.”

Turbella added Boracay is an ecotourism destination but also, as a whole, is a timberland or forestland.

Proclamation 1064

WHILE Boracay is a certified tourism magnet, the island is not different from other areas.

Vast areas in Boracay have been declared as agricultural land by virtue of Proclamation 1064 signed by President Gloria Macapagal-Arroyo on May 22, 2006. The order designated 400 hectares of reserved forest land for protection purposes and 628.96 hectares for agricultural land.

Some property owners have been arguing with the government over Boracay, insisting on their property rights on the island, portions of which had been classified

as alienable and disposable land.

The legality of Proclamation 1064 was questioned by private resort owners on the island before the Supreme Court.

In 2008, however, the SC affirmed Proclamation 1064 and junked the petition filed by property owners, many of whom have no land titles.

Property owners with land titles on the island are not covered by the SC decision.

Some parcels of land on Boracay Island are titled lands by virtue of judicial titling that started as early as the late 1930s.

‘Marriage contract’

TURBELLA likens the ECC to a contract between a groom and bride without which a union or partnership is unlawful or illegal.

With this, he believes the Boracay case is unique and there is no way it should be happening elsewhere in the country.

“It is impossible that a business or building can operate with no ECC. Before anything else, there should be an ECC,” he said in Pilipino. “It is like a marriage contract.

Without an ECC, there should be no contact. They should [not] be together in one room.”

He said isolated cases that have been reported to the DENR or complaints reported by the media will be investigated, nevertheless, citing the case of five mills that were the subject of a complaint filed by certain groups.

According to Turbella, business establishments should comply with the terms and conditions of their approved ECC, which include compliance of various environmental laws, particularly the Clean Air Act, the Clean Water Act, the

Ecological Solid Waste Management Act and the Hazardous and Toxic Waste Management Act. “These four laws form part of the terms and conditions of an ECC,” he said.

Any violation of these laws, he said, is a violation of the ECC and may be a ground for the imposition of penalty and fines that will hurt the business financially.

Another basic requirement in granting ECC is proof of authority, according to lawyer Michael Drake P. Matias.

Matias, who is also chief of the DENR-EMB’s Environmental Impact Assessment Management Division, said these are documents proving the proponent has the right over the property to implement development projects.

For projects on privately owned lands, a land title or lease agreement or proof of ownership over the land is a must, he said.

If the project is to be constructed and the business operation is to be done in lands of public domains such as forest, wetland, foreshore land or coastal areas, a tenurial instrument is required.

Tenurial instruments may be in the form of Forest Land Use Agreement for Tourism Purposes, Community-Based Forest Management Agreement, Special Land Use Permit, Industrial Forest Management Agreement (Ifma) and Socialized Industrial Forest Management Agreement (Sifma).

Without a tenurial instrument, the issuance of an ECC for projects within lands of public domain such as forest land, wetland, foreshore land or other environmentally critical areas is, per se, illegal, especially for environmentally critical projects.

Without an ECC, any construction or business operation undertaken on these areas would be declared illegal.

Slap on the wrist

MATIAS added that a violation of environmental laws is not necessarily a violation of the terms and conditions of an ECC. Any alleged violation which usually comes after an investigation of a complaint should be conducted by the DENR regional offices, according to Matias. He cited as an example the discharge of wastewater. “[That] is not a violation of the ECC; it is a violation of the Clean Water Act. It may be a part of compliance of the ECC. But if you violated the laws— clean air, clean water, ecological solid waste and toxic waste— the company will be prosecuted based on the laws violated,” Matias said.

“Under clean water, you will be issued a notice of violation.

Then you will be invited to attend a technical meeting. For purpose of clarity, for me, they [violators] should be prosecuted based on environmental laws violated and not on the ECC,” he added.

Matias noted the Philippine EIS System, particularly the ECC requirement, is an old law and imposes only a minimal fine of P50,000. Under the Clean Water Act, the fine ranges from P10,000 up to P200,000 a day.

Severe fines

MATIAS said that the penalty and fines under the Clean Water Act are more severe and will deter any company from violating the law.

He also noted that the types of

aderLook

sMirror

www.businessmirror.com.ph | Thursday, March 15, 2018

A7

social progress fraught with ECC violations THAT FAILED TO MEET THE TERMS AND CONDITIONS OF THEIR ECCs ACCORDING TO FORMER DENR SECRETARY REGINA LOPEZ: |COMPANIES

• United Paragon Mining Corp. (Longos Mining Project in Sitio Longos, Paracale, Camarines Norte) • Ipilan Nickel Corp. (Ipilan Nickel Project in barangays Ipilan, Mambalot, Maasin and Calasaguera in Brooke’s Point, Palawan) • Core Copper-Gold Corp. (Lupon Mining Project in Marayag and Calapagan, Lopon, Davao Oriental) • Lebach Mining Corp. (Nickel Deposit Mining Project in Barangay Ipilan, Brooke’s Point, Palawan)

ISSUED SHOW-CAUSE ORDERS ON PAIN OF LOSING ECCs DURING THE TOUR OF DUTY OF SECRETARY LOPEZ: |PROJECTS

• SMTC Chromite Mining and Trading Project, Barangay Luban, Mati, Davao Oriental (Sinophil Mining and Trading Corp.)

• Consolidation of quarry projects, Kiwalan and Dalipuga, Ilaigan City, Lanao del Norte (Mindanao Portland Cement Corp./LaFarge) • Iron-ore pelletizing plant project, Katipunan Villanueva, Misamis Oriental (Philippine Sinter Corp.)

• Proposed limestone, pozzolan and associated minerals quarry project, Pinamungajan, Cebu (Century Peak Corp.)

• Cement plant and power plant project, Barangay Sacsac, Pinamungajan, Cebu (Century Peak Corp.)

• Bulalacao coal mining project, Cambunag Bulalacao in Mindoro Oriental (Filipinas Systems Inc.) • Iron ore mining, Doña Remedios Trinidad, Bulacan (Ore Asia Mining and Development Corp.)

• Sacobia Sun Valley Resort, Clark Special Economic Zone in Mabalacat, Pampanga (Donggwang Clark Corp.)

• Smelting plant project, San Isidro, San Simon, Pampanga (Wan Chiong Steel Corp.)

• Wellex Area II mining project, Loreto, Dinagat Island Province (Wellex Mining Corp.)

• Barobo alluvial gold-mining project, Barobo, Surigao del Sur (PhiGold Metallic Ore Inc.) • Veneer manufacturing expansion, Canayugan Bayugan, Agusan del Sur (Hantex Manufacturing Corp.)

Centralized processing

notices of violation should specify the environmental law allegedly violated.

“An ECC is a requirement before business starts operation. The purpose is to determine what [the possible impact of the project is],” Matias said. “Under the law, you cannot implement a project without an ECC. But, it doesn’t mean that if you have an ECC, you can start a business.”

According to Matias, the ECC owner still needs to secure many permits. “[These include] business permit, permit to operate and other permits being required by LGUs.” He said even with approved ECCs, it does not reflect the actual development that is happening in the country because, in some cases, even with approved ECCs, development projects are sometimes delayed or implemented years later.

“I don’t know if the ECC will be reflective of development projects.

In the Central Office, we only issue environmentally critical projects like power plants,” Matias said.

“Power plants take years before implementation. One ECC we issued in 2012 has not yet started because there is a pending case.”

Cimatu probe

LAST year, Cimatu had ordered an immediate investigation into the possible violations of environmental laws by five steel mills accused of emitting high air pollution levels that are detrimental to the environment and public health.

The investigation stemmed from reports about the alleged labor and environmental violations committed by Melter Steel Corp., Real Steel Corp., Wan Chiong Steel Corp., all in San Simon, Pampanga, Davao Mighty Steel Corp. in Davao

and MetroDragon Steel Corp. in Caloocan City, for various violations of Republic Act 8749 or the Clean Air Act and the Environmental Impact Assessment, or ECC law.

The labor-rights group Philippine Association of Free Labor Unions (Paflu) and environmental group Clean Air Philippines Movement Inc. (Capmi) alleged the air pollution at the mills exceeded the maximum level set by the World Health Organization (WHO).

Paflu and Capmi had earlier lodged a complaint with the Department of Labor against the mills based on their findings for allegedly exposing their workers to health risks.

Capmi also claimed the companies were able to operate without an ECC. The investigation, according to Turbella, is being conducted by the DENR-EMB regional office with jurisdiction over the companies—in this case, DENR-EMB Central Luzon.

“It is not possible that these companies are able to construct without an ECC,” he said. “Perhaps there is something wrong about the complaint.”

The complaints filed since October by Capmi before the DENREMB are still under investigation.

Lopez’s audit

REGINA PAZ L. LOPEZ has been criticizing the agency she led for being “corrupt.”

During her stint as DENR chief, she had ordered a nationwide review of ECCs, which she said should not have been issued to project proponents because of their respective potential environmental and social impacts on the areas they operate in.

Between 2016 and 2017, Lopez had issued ECC cancellation

and show-cause orders for several projects. Mostly mining operations, these projects are within or near an environmentally critical area—a watershed, a protected area, or a unique forest and biodiversity-rich area with critically endangered species.

Subsequently, Lopez’s campaign placed around 800 previously issued or approved ECCs under review.

The review is on top of the mine audit that also includes environmental and biodiversity considerations among the audit criteria.

The ECCs ordered canceled include that held by Austral-Asia Mining Corp. for a nickel mine in Mati, Davao Oriental. The ECC application of MRL-Egerton Gold Philippines for its mining projects in Lobo and San Juan towns in Batangas were also rejected. Both are within biodiversity-rich areas.

Lopez, acting as DENR chief, had also canceled the ECC of Century Properties Corp. for its Nova

by Century Project, a housing project, within the La Mesa Watershed.

The order was made final and executory.

Lopez’s ECC cancellation and show-cause order issuance spree came side by side with a 10-month crackdown on irresponsible mining operations. She issued mine closure and suspension orders that affected 26 large-scale mines. She also revoked 75 Mineral Production Sharing Agreements (MPSAs).

Lopez also revoked the financial and/or technical assistance agreement of Sagittarius Mines Inc. for the multibillion-dollar Tampakan Copper-Gold Project, whose ECCs for the project were also revoked on the basis that the projects are situated within or near watersheds.

DURING her watch, Lopez issued an order centralizing the processing of ECC applications, in effect clipping the powers of the EMB regional offices.

She said the order was based on the initial findings of the ECC review undertaken in her time in office. The review revealed that the DENR, under the administration of President Benigno S. Aquino, whose family was a friend of the Lopez clan, was too lenient in approving ECC applications.

To recall, Lopez signed on February 15 DAO 2017-04, titled “The amendment of DAO 2016-07 dated May 19, 2016, on manual of authorities on technical matters,” which centralizes the processing of all ECC applications.

Under the order, the project proponent, specifically of environmentally critical projects, as well as non-environmentally critical projects but are situated in environmentally critical areas, needs to get the approval of the Office of the DENR secretary.

An average of 5,000 ECCs is filed every year for various development projects since an ECC is a prerequisite before they can start construction and eventually do business. As a result, the number of approved ECCs issued by DENR in 2016 and 2017 declined, compared to that in 2013, 2014 and 2015.

A five-year back-review of approved ECCs by the DENR revealed that in 2016, the DENR-EMB Central and Regional Offices approved a total of 356. In 2017, the number went down to just 177.

In 2013, a total of 4,081 ECCs were approved; 4,100 in 2014 and 2,813 in 2015.

Curiously, the Central Visayas Region, where Boracay is situated, has the most number of approved ECCs between 2013 and 2015. In 2013, a total of 404 ECCs were approved; 452 in 2014 and 385 in 2015.

In 2016, a total of 11 ECCs were approved in the same region and 1 in 2017.

Decentralized processing

SINCE an ECC is a prerequisite in applying for the building permit, permit to operate or business permit, development activities in many areas slowed down.

An official, who requested anonymity, told the BusinessMirror the DENR Central Office during Lopez’s watch was deluged by ECC and CNC applications. The official, who is not authorized to speak on the matter, said reversing Lopez’s order was recommended.

Eventually, Cimatu restored the power of DENR-EMB regional offices to undertake the processing of ECC applications.

Department Administrative Order (DAO) 2017-18, signed by Cimatu in July last year, aims to address the problem brought about by Lopez’s order as part of the ECC audit.

“In the interest of service and in order to expedite the issuance of ECCs in the regional level consistent with the directive of the President to fast-track the issuance of government permits and licenses,

DAO 2017-04 is hereby suspended indefinitely,” Cimatu’s order read.

With the processing of ECCs back in the hands of DENR-EMB regional offices, there is an expected spike in the number of approved ECCs.

Rampant violation

DENR Undersecretary for Policy and Planning, International Affairs and Foreign-Assisted Projects Jonas R. Leones, however, said violations of the EIS System, particularly the construction and operation of businesses, with or without ECCs, are rampant and may, in fact, be happening in other tourism destinations for a long time.

Leones said the DENR is now looking at ECC violations committed by business establishments, particularly in tourist destinations, all over the country. These include areas that are up for development.

In the case of Boracay, Leones said some of the establishments were built without an ECC.

Some were built on forestlands and wetlands. According to him, all these establishments will receive a notice of violation from the DENR. Leones, the designated spokes­ man of Cimatu and former Director of the DENR-EMB, said some businesses are in the habit of constructing establishments even without securing an ECC.

He said this happens with the collusion of concerned local government units (LGUs).

When this happens, he said there is speculation that money changes hands.

“After being caught, they [project proponents] will later on file for an ECC,” he said.

The problem is, when there is a violation of environmental laws, they will likely pay for the consequences of their actions, Leones added.

Poor monitoring

LEONES admitted there was leniency on the part of the DENREMB, particularly the DENR-EMB regional offices, in implementing the EIS System in relation to the ECC requirement.

Leones said concerned DENR regional officials are likely to face criminal and administrative charges in Boracay. These are for allowing business establishments to be built without ECCs and for some with ECCs but undertook construction on timberlands or wetlands.

He said a DENR regional official would be in trouble if there was a violation and the regional office failed to issue a notice of violation.

Also, if the office failed to order the company to stop the project or do corrective measure if the establishment is already constructed.

“Definitely, heads will roll and charges will be filed,” he said.

Some officials of the DENR regional offices have been subjected to internal investigation and some were relieved and transferred to other areas, quietly, for irregularity involving granting of ECCs whenever a complaint is filed with the DENR Central Office, according to a person privy to the matter.

Law enforcement

SANS citing specific cases, Leones said the DENR had issued numerous notices and show-cause orders before.

Many of these have been resolved or addressed, according to him. He added some of the project proponents were slapped with fines for violations of the terms of conditions of ECCs or relevant environmental laws such as the Clean Water Act, the Clean Air Act, the Ecological Solid Waste Management Act and the Toxic and Hazardous Waste Act.

Leones believes the DENR has enough people to implement the Philippine EIS System.

“In Boracay, we have 160 people now working full time,” he said, referring to teams conducting resort-to-resort inspections from different regions in the country.

Leones said even before the Duterte administration, the DENR had issued numerous notices of violations, including some of the establishments on Boracay Island.

But he admitted that the DENR and the government, in general, fell short of enforcing environmental laws.

“We have the laws, but the problem is enforcement.”

In case of violation of environmental laws such as the Clean Water Act, the Clean Air Act, the Toxic and Hazardous Act, or the Solid Waste Management Act, cases are elevated to the Pollution Adjudication Board (PAB). The PAB determines the exact amount of fine that violators may be fined under these laws.

Crackdown, culprit

LEONES claims the rampant violation of ECCs and various environmental laws is now being addressed by the DENR. “We are starting with tourism destinations,” he said.

“Now, even if they [business establishments] agree to comply with the ECC, because they already violated the law, their establishments are subject for demolition; especially those built on forestlands and wetlands,” he said.

The DENR is cracking down on other tourism areas to prevent another Boracay, Leones said. The move will address environmental problems while they are still manageable, he added.

Leones said, however, the DENR is not the lone culprit in this fiasco and pointed to other government agencies as contributors to the environmental ills plaguing Boracay.

He said the local government unit should have done its part in enforcing the law.

The tourism department, he added, should have tightened the issuance of accreditation for hotels, resorts and other tourism destinations by ensuring that the construction has fully complied with the requirements under the Philippine EIS System, particularly the required ECC. According to Leones, Duterte had already ordered Cimatu to go after corrupt officials.

“So we will file charges and, definitely, heads will roll.”

Banking&Finance

A8 Thursday, March 15, 2018 • Editor: Jun B. Vallecera

BusinessMirror

ADB issues $3.25-billion 5-year bonds to boost capital resources

T

By Cai U. Ordinario @cuo_bm

he Asian Development Bank (ADB) has returned to the US dollar bond market and issued $3.25 billion worth of debt papers to boost its ordinary capital resources.

The Manila-based multilateral development bank said this is in line with its plan to raise $25 billion from the capital markets this year.

The five-year bond, with a coupon rate of 2.75 percent per annum payable semi-

annually, will mature on March 17, 2023.

It was priced at 2.871 percent to yield 25 basis points over the 2.625-percent US Treasury notes due on February 28, 2023.

“We are very pleased with the strong reception to our second benchmark

Legacy of associations

N

owadays in the association world, I hear a lot about building a “legacy,” especially in the context of what associations “leave behind” after organizing events in a venue destination.

In his article in Legatus magazine, Paul J. Voss writes that the word legacy has been used exclusively as a noun for nearly 500 years but has expanded its original meaning and now signifies a “gift” or “bequest” transmitted from one person (or one generation) to another. He adds, “used as a noun in this fashion, legacy carries a wholly positive meaning and represents an act of love, charity and care.”

In “Three Legacy Opportunities for Associations,” an article in the April 2017 issue of Boardroom magazine, Keith Burton and Kristen Tremeer wrote: “International professional associations that convene congresses in destinations around the world mustn’t miss out on the opportunity to leave a legacy that reflects the values of the association, whether tangible or intangible, social, or economic or environmental.” It then offers three legacy opportunities for associations: n Community engagement: Examples are planting a vegetable garden for a seniors’ center, building a playground for a preschool or constructing a library at a community center. It’s a “volun-tourism” approach that gives visitors to a destination a chance to interact with local residents they might not have otherwise been able to meet. n Content-driven: Examples range from the establishment of an endowment in a relevant university department to a scholarship for participants from developing economies to attend future congresses, or using the host association’s members as congress volunteers. n Skills transfer: An example is a mobile clinic in an underdeveloped facility staffed by leading physicians, who treat and train their local counterparts or special training sessions for students in a particular field.

But how about legacy “beyond events?”

What legacy do associations give to society? Below are some examples of what Philippine associations and other member-serving organizations have done and are still doing. These outstanding legacy projects have been recognized by the

Association World Octavio Peralta Philippine Council of Associations and Association Executives (PCAAE) through its annual “Ang Susi” Awards: The Cement Manufacturers’ Association of the Philippines’s “Road Safety Program” aims to standardize roadsafety guidelines among all its membercompanies’ trucking contractors.

The National Confederation of Cooperatives’s “Aflatoun Social and Financial Education Program” allows children from diverse socioeconomic backgrounds to manage their own savings accounts and learn about savings, spending and budgeting, among others.

The Philippine Franchise Association’s “Certified Franchise Executive (CFE) Program” offers franchise professionals the opportunity to learn, grow professionally and reach a recognized standard of excellence in the franchise community.

Alalay sa Kaunlaran Foundation’s “Agriculture Value Chain for Onion Farmers in San Jose City: Onion and Vegetable Producers Cooperative” helps onion farmers to have a sustainable agricultural livelihood and uplift their socioeconomic condition by adding value to their produce with stable pricing and market availability.

These legacy projects demonstrate that associations not only provide services to members but also benefits to a wider community and, in effect, contribute to the socioeconomic development of the country.

The column contributor, Octavio “Bobby” Peralta, is concurrently the secretarygeneral of the Association of Development Financing Institutions in Asia and the Pacific and CEO of the Philippine Council of Associations and Association Executives.

PCAAE enjoys the support of Adfiap, the Tourism Promotions Board and the Philippine International Convention Center. Email obp@adfiap.org

Case clippings

By Justice S J Ranada Jr. JUDGMENTS–Lack of analysis and legal basis A decision involving, among others, a collection case is void where it contains neither an analysis of the evidence of plaintiff and defendant as regards the outstanding balance of the latter’s loan obligation, nor a reference to any legal basis in reaching its conclusion as to said defendant’s civil liability to plaintiff. Such decision deprives defendant of his right to due process under Section 14, Article VIII, of the Constitution.

Go v. East Oceanic 19 Jan. 2018

GR Nos. 206841-42 Del Castillo, J

offering in 2018. We are happy to accommodate ongoing demand for ADB paper with this new five-year issue following the solid performance of our dual tranche outing in January,” said ADB Treasurer Pierre Van Peteghem.

The transaction was lead-managed by Bank of America Merrill Lynch, HSBC, Morgan Stanley and RBC Capital Markets. A syndicate group was also formed consisting of Credit Agricole, Daiwa, DBS Bank, SMBC Nikko and Wells Fargo.

The issue achieved wide primary market distribution with 39 percent of the bonds placed in Europe, the Middle East, and Africa, 34 percent in Asia, and 27 percent in the Americas.

By investor type, 55 percent of the bonds went to central banks and official institutions, 27 percent to banks, and

@ReaCuBM

T

he Insurance Commission (IC) on Wednesday announced that it has shut down the operations of five nonlife insurance firms and placed them under conservatorship for failure to meet the statutory capital requirement.

The companies placed under conservatorship were First Integrated Bonding & Insurance Co. Inc., Investors Assurance Corp., Metropolitan Insurance Co., Inc., Plaridel Surety & Insurance Co. and Premier Insurance & Surety Corp.

Insurance Commissioner Dennis B. Funa said the regulatory action to close down the five nonlife companies came following their failure to comply with the statutory minimum net worth requirement.

The five insurance companies were ordered to cease from issuing new and renewing any kind or character of insurance business and were placed under conservatorship after the Commission’s verification that they failed to comply with the mandated increase in net woarth requirement of P550 million.

“These companies are not operating on net losses. Based on their respective 2016 annual statements, these companies have positive net worth but short of the minimum amount required under the Insurance Code,” Funa said.

Funa appointed a conservator for each of the companies. Every conservator has a mandate to take charge of the management of the company and its assets and liabilities.

“The process of placing a company under conservatorship is primarily aimed at restoring the viability of the company and

Metrobank slashes offer price of SRO

By VG Cabuag @villygc

L 18 percent to fund managers and other types of investors.

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration.

Established in 1966, ADB has more than 50 years of development partnership in the region. It is owned by 67 countries, 48 from the region.

IC placed five nonlife insurance companies under conservatorship

By Rea Cu

www.businessmirror.com.ph

allowing the Commission, through the appointed conservator, to be more directly involved in the management of the company. To achieve this objective, a conservator is empowered by law to exercise all powers necessary to preserve the assets of the company,” he added.

Funa clarified that placing these companies under conservatorship does not necessarily mean they will close shop.

“Under the regime of conservatorship, the operations of the company will be business as usual under the management of the IC-appointed conservatorship, including the processing of claims and payment of valid claims, except that it cannot sell new insurance business. This means all insurance contracts issued before the conservatorship order remain valid, and the obligation of the company toward its policyholders still exists until the expiration of their policies,” he said.

Earlier, six nonlife companies were issued individual Servicing Licenses by the IC as a consequence of their voluntary surrender of licenses due to their inability to comply with the P550-million minimum net-worth requirement.

Under the Insurance Code, existing insurance companies are required to have a minimum net worth of P550 million, from the previous P250 million, by the end of 2016. The capitalization requirement will again increase to P900 million in 2019, and further jump to P1.3 billion by 2022.

“This does not also prevent the company from infusing fresh capital either from its existing shareholders or from a new investor in order to meet the minimum net-worth requirement,” Funa said.

ender Metropolitan Bank and Trust Co. on Wednesday said it slashed its offer price of its stock rights offer (SRO), selling it at 22-percent discount, and expects to raise some P60 billion from the sale that will begin next week.

Metrobank said it is offering 799.84 million common shares at P75 apiece.

Eligible shareholders are entitled to subscribe to one rights share for ever y 3. 976 com mon sh a res he ld a s of March 21.

The offer price is based on a 22-percent discount to the 10-day volume-weighted average price of Metrobank common shares listed on the Philippine Stock Exchange, the bank added.

The bank’s shares closed at P96.50 at the Philippine Stock Exchange.

The stock rights offer will commence at 9 a.m. on March 22 and end at 12 p.m. on April 4, it added.

Proceeds of the offer, among others, will be used to fund its acquisition of the 40-percent stake in Metrobank Card Corp., enabling it to increase its ownership to 100 percent.

GT Capital Holdings Inc., Metrobank’s controlling and majority shareholder, earlier said it intends to subscribe all of its full rights entitlement in Metrobank’s stock rights offer.

UBS AG, Hong Kong Branch is acting as joint global coordinator, joint bookrunner and international underwriter; First Metro Investment Corp. is acting as global coordinator, bookrunner, issue manager and domestic lead underwriter; while DBS Bank Ltd. is acting as co-manager and co-underwriter.

Metrobank earlier said it seeks to capitalize on the growth opportunities of large cap cor porates and espec i a l ly i n it s core f ra nc h i se, t he middle market and small to medium enterprises segments.

Rising per capita levels also bode wel l for the potentia l in the growing consumer space, specif ica l ly in c red it c a rd s, auto loa ns a nd home mortgage, it said.

Over the past six quarters, Metrobank has delivered over 20-percent loan growth, faster than the industry average.

The bank’s total asset base is currently the second largest in the country, and expanded 16 percent to P2 trillion as of September 30, 2017.

“The capital raising exercise is expected to enable the bank to pursue these business prospects to sustain the loangrowth momentum, leveraging on the bank’s sales and distribution network that has rapidly expanded in the preceding years. To that end, the bank intends to focus on enhancing customer experience through digitization initiatives and branch efficiencies,” it said.

Prudential to spin off M&G to focus on growth in Asia

P

rudential Plc. plans to spin off its M&G Prudential unit and sold £12 billion ($16.7 billion) of United Kingdom annuities to Rothesay Life as the company focuses on growth outside Europe. The shares soared.

Prudential’s increasing business in Asia, in particular, had led to talk that the firm would look to spin off or sell its UK operations. That speculation increased last year when Britain’s largest insurer combined its UK asset-management unit with its insurance business.

The spin-off firm is likely to be included in the FTSE 100.

“The new M&G Prudential has much stronger prospects and the separation has the capability to unlock quite a large amount of value for shareholders,” said Berenberg analyst Trevor Moss, who estimates the company could be worth as much as £15 billion. “The UK business valuation has suffered as a consequence of being a small part of the sum of the parts and being a low-growth business in recent years.”

Prudential climbed as much as 5.8 percent in London trading, the biggest gain since November 2016, and was up

4.7 percent at 1911 pence as of 8:30 a.m.

Looking East

The UK’s largest insurer, which derives about one-third of its earnings from Asia, is benefiting from an expanding middle class and growing insurance coverage in the region. Household wealth in Asia is predicted to rise from $53 trillion to $78 trillion over the next five years, creating opportunities for asset managers and insurers to sell products.

The parent company will remain headquartered in London and retain its other listings. The timing of the demerger is subject to a number of factors, including the completion of the sale of the UK annuities.

The sale is part of a strategy to make the company more capital light as insurers look to exit that type of business to free up money for share buybacks, debt repayment or acquisitions.

Bloomberg News reported last week that Rothesay, backed by Blackstone Group LP, was in pole position to buy the annuities.

M&G Prudential will be led by its current CEO John Foley, according to a

Wednesday statement, and remains on track to deliver an earlier plan for £145 million of annual cost savings by 2022.

Assets under management at M&G Prudential rose 13 percent to £351 billion last year after record net inflows from external managers.

National champions

“There’s a lot more they can do in the market,” Prudential CEO Mike Wells said in a call on Wednesday, referring to M&G Prudential. “As far as what more the group can do for them, I think it’s a harder question. They’ve grown to a size and scale where they are capable of being national champions.”

Spinning off the firm will mean it’s no longer competing with Asia or other parts of the business for capital, he said. “If the UK has very good returns but it’s not equivalent to the other two markets, there’s a conflict there that wouldn’t exist if you’re standalone.”

The group will rebalance its debt within the two groups prior to the demerger.

That may include redeeming issued debt as well as new issuances, according to the statement. Bloomberg News

Metro BusinessMirror

www.businessmirror.com.ph • Editor: Max V. de Leon

Thursday, March 15, 2018

DENR rescues 313 exotic pets, arrests ‘recidivist’ wildlife trader

By Jonathan L. Mayuga

A

@jonlmayuga

uthorities stormed a residential area in Pasay City and rescued more than 300 assorted wildlife animals, mostly cockatoos, as part of an ongoing campaign against illegal wildlife trade, an official of the Department of Environment and Natural Resources (DENR) said on Wednesday.

T he raiding team ar rested Abraham Bernales, a pet stall owner in the Cartimar Market in Pasay City, during a buy-bust operation at the suspect’s house in Pasay on Tuesday.

Bernales has been convicted twice in previous years for illegal wildlife trade, a violation under Republic Act (RA) 9147, or the Wildlife Resources Conservation and Protection Act. A criminal complaint has been

filed against Bernales for illegal trading and illegal possession of wildlife species in violation of Section 27(e) and (f) of the Wildlife Act before the Department of Justice.

If found guilty, Bernales could be slapped with penalties of at least four years in prison and/or a fine of P300,000.

Director Theresa Mundita S. Lim of the DENR’s Biodiversity Management Bureau (BMB) said the suspect has been under sur-

veillance by the National Bureau of Investigation Environmental Crime Division (NBI-EnCD) and the DENR-BMB’s wildlife lawenforcement team for the past two months after receiving a tip from a concerned citizen through the social media.

The suspect was maintaining several heads of Sugar glider, an exotic mammal native to Australia, New Ginea, Moluccas Island and Indonesia, in his residencecum-wildlife holding and trading area in San Gregorio Village, Pasay City.

“Social media is a very powerful tool in the fight against illegal wildlife trade,” Lim said, citing the successful raid by the NBIEnCD and the DENR-BMB team of wildlife law enforcers.

Lim added the DENR continues to receive tips from netizens, providing valuable information about illegal wildlife trade happening in their areas.

“We are able to get information from social-media [users] and immediately start surveillance and case buildup,” Lim said.

According to the NBI-EnCD, they received information from an asset on March 12, about a major shipment of endangered

cockatoos and other animals from Indonesia to be delivered to Bernales, prompting the NBIEnCD and DENR-EMB to plan and execute the buy-bust operation.

A total of 312 heads of various species of wild fauna endemic or native to Australia, Indonesia and New Guinea, comprised of Papua New Guinea, a separate country, and the Indonesian island-provinces of Papua and West Papua, collectively and formerly called Irian Jaya.

The seized wild animals, with an estimated market value of P50 million, are composed of 106 sulfur-crested cockatoos, 26 Moluccan cockatoos, 23 black palm cockatoo, 17 black-capped lories, 16 rainbow lories, seven red bird of paradise, three large fig parrot, two wallaby, 110 sugar glider and three emu.

Five of the sugar glider were already dead when the raiding team pounced on Bernales’s residence.

Lim said the rescued animals are now under the care of the BMB-managed National Wildlife Rescue and Rehabilitation Center at the Ninoy Aquino Parks and Wildlife Center.

As a standard operating procedure, the rescued animals will

be screened for possible diseases like avian influenza.

Except for the wallaby, sugar glider and emu, all the seized animals are listed under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (Cites). Being on the Cites list, trade of these species is subject to Cites Export Permit from the countries of origin and corresponding import permit from the country of destination.

The DENR-BMB is the designated national Cites Management Authority in the Philippines for terrestrial species, as provided under Section 19 of the Wildlife Act. For non-Cites species like the wallaby, sugar glider and emu, a clearance from the DENR, through the concerned regional office, is required prior to importation.

Lim said the latest arrest of unscrupulous businessmen engaged in the illegal wildlife trade sends a very strong signal to the international community to stop using the Philippines as a source or a conduit of illegal wildlife trade.

“We will not allow illegal wildlife traders to profit from our endangered species,” Lim said.

‘Green, Green, Green’ program to make cities sustainable

By Bernadette D. Nicolas

A

@BNicolasBM

fter “Build, Build, Build” and “Jobs, Jobs, Jobs” comes “Green, Green, Green.”

The Department of Budget and Management (DBM) on Wednesday launched Green, Green, Green, a unique assistance program that aims to make the country’s 145 cities more livable and sustainable through the development of public open spaces.

A component of the Duterte administration’s national infrastructure development program Build, Build, Build, Green, Green, Green will support city governments in creating open spaces through the establishment of forest parks and botanical gardens, upgrading streets and waterfronts and revitalizing plazas.

According to Budget Secretary Benjamin E. Diokno, P2.5 billion has been appropriated for this in the 2018 budget.

The Green, Green, Green program aims to improve the connectivity and accessibility of spaces through construction of ecofriendly bike lanes and walkways.

Sustainability of spaces will also be enhanced through the construction of green infrastructure like bioswales and pervious surfaces, which can aid during rainy season and flooding.

Green, Green, Green is also expected to improve livability of urban areas through various activities and methods, such as landscap-

More open spaces like the famous Luneta Park in Manila will be developed under the “Green, Green, Green” program. Alysa Salen

ing, turfing and tree planting; and transform streetscapes through installation of eco-friendly street furniture, fixtures and shading.

With the rising urban density in the country, creating more challenges for the local government units (LGUs) and citizens, over-

crowding and traffic congestion, as well as lack of open spaces where people can socialize and practice an active lifestyle, are now daily obstacles to urban dwellers.

These conditions significantly make cities less livable and less sustainable, and also make com-

munities more vulnerable against natural and man-made disasters.

With these intensifying issues, there is a pressing need for LGUs and citizens to find ways to manage urban evolution to steer their cities toward sustainable development.

According to a World Health Organization report, successful cities provide a minimum of 9 square meters of green space per citizen. Thus, by acknowledging and building on the great potential of public open spaces in cities and urban zones, governments and citizens can improve the overall quality of life.

DBM Assistance to Cities Program Manager Julia Nebrija said they also plan to reclaim the spaces in Metro Manila.

“There are many unutilized spaces we can repurpose. In New York and other congested cities, they were able to find ways to establish open areas,” Nebrija said.

DBM Director Leila Rivera of the Local Government and Regional Coordination added there will be conditions for participation of city government.

“City governments have to submit an expression of interest and conceptual design of proposed projects,” she said, adding that a circular will be released to specify the funding guidelines.

Nebrija and Rivera are also set to lead the technical workshop on Green, Green, Green, which will begin on March 15.

The workshop, to be attended by city mayors and two officers from

Malapitan built, renovated 36 health centers in Caloocan since 2013

By Nelson S. Badilla

A

Correspondent

total of 36 health centers in different barangays in Caloocan City have been built, renovated or repaired since 2013.

The latest that was built and opened recently to the public was the health center in Barangay 165, or Barangay Bagbaguin. “ T he const r uc t ion of new

health centers or renovation of existing ones only showed that the health of the city residents is a priority of Mayor Oscar G. Malapitan,” according to Caloocan City’s Public Information Office.

The construction, renovation and repair of health centers in the city started after Malapitan was elected mayor in 2013. He was reelected in 2016 polls.

The project also has the full support of the mayor’s son, Rep.

Dale R. Malapitan of the First District of Caloocan City.

As a matter of policy of Malapitan, all health centers in Caloocan City should have a doctor, nurse, midwife and set of medical equipment and steady supply of different medicines.

Malapitan also assured the patients that the doctors, nurses, midwife and their staff would be patient-friendly, which, according to the mayor, is part of good public governance.

The residents who have respiratory tract diseases, gastrointestinal diseases, urinary tract infection, maternal and child care, including pre- and postnatal care, family planning, immunization and nutrition, pedia cases, tuberculosis, noncommunicable diseases like hypertension and diabetes, leprosy, anti-rabies vaccination and sexually transmitted infection could proceed to the health centers in their respective barangays.

each local government, will focus on discussions on the importance of establishing and maintaining welldesigned public open spaces in an urban area, as well as the best practices and lessons on designing public open spaces in the Philippines.

Award-winning landscape architect and urban planner, Paulo Alcazaren, and landscape architect and University of the Philippines College of Architecture lecturer, Faith Dumaligan will be the resource speakers for the workshop.

A9

Maynilad water bills to see drop in rates by April

B

eginning April 1, the water tariff for Maynilad customers will be slightly reduced due to the appreciation of the peso against foreign currencies.

In a Metropolitan Waterworks and Sewerage System (M WSS) Boa rd Resolut ion dated March 8, 2018, Maynilad was granted a Foreign Currency Differential Adjustment (FCDA) of 0.55 percent of the Basic Charge of P35.48 per cubic meter (cu.m.), or an average reduction of P0.20 per cu.m.

This is lower than last quarter’s FCDA of 0.60 percent of the Basic Charge.

For Maynilad residential customers who consume 10 cu.m. of water a month, the second- qu a r ter FCDA w i l l translate to a decrease of P0.06 in their monthly water bill.

Meanwhile, those consuming 20 cu.m. and 30 cu.m. of water per month will see a reduction of P0.22 and P0.46 in their monthly water bill, respectively.

FCDA is a tariff mechanism granted to utility companies to allow them to recover losses or give back gains arising from the fluctuating movements of the peso against other currencies. This is because Maynilad pays for the foreign-dominated loans of the MWSS, as well as for its own loans used to fund projects that will improve services for its customers.

Maynilad is an agent and contractor of the MWSS for the West Zone of the Greater Manila Area, which is composed of the cities of Manila (certain areas), Quezon City (certain areas), Makati (certain areas), Caloocan, Pasay, Parañaque, Las Piñas, Muntinlupa, Valenzuela, Navotas and Malabon—all in Metro Manila; the cities of Cavite, Bacoor and Imus, and the towns of Kawit, Noveleta and Rosario—all in Cavite province.

A10 Thursday, March 15, 2018 • Editor: Angel R. Calso

Opinion

BusinessMirror

www.businessmirror.com.ph

editorial

Protecting our OFWs

T

he death of a Filipina maid whose body was found stuffed in a freezer in Kuwait has ignited nationwide outrage that prompted President Duterte to ban the deployment of Filipino workers to the Gulf state. Saying he is ready to take drastic steps to protect Filipinos working abroad, the President offered free flights home to about 10,000 Filipinos who had overstayed their visa in Kuwait.

Reports said the body of Joanna Demafelis was found on February 6 in a Kuwait City apartment that had reportedly been abandoned for more than a year. Her body reportedly bore torture marks, and there were indications she was strangled.

Duterte justified his bold decision to stop deployment to Kuwait, saying: “The Filipino is no slave to anyone, anywhere and everywhere.

Every unlawful physical injury that is inflicted on an overseas Filipino worker is an injury I personally bear as the head of this republic.”

Foreign Secretary Alan Peter S. Cayetano said Kuwait had expressed outrage over Demafelis’s death and promised do everything it could to render justice. This developed after the Philippines lodged a protest over Demafelis’s case and at least six other recent deaths, mostly of Filipino housemaids in Kuwait. Cayetano said the Philippine embassy should be given access to investigations by Kuwaiti authorities.

A few days after the deployment ban was announced, Cayetano broke the news about the arrest in Lebanon of Demafelis’s employer. Nader Essam Assaf is now reportedly in the custody of Kuwait authorities, but his Syrian wife, who is also a suspect in Demafelis’s death, remains at large.

The President earlier said he did not want a quarrel with Kuwait, but warned he may resort to drastic steps, such as a complete ban on the deployment of Filipino workers, if Kuwait fails to safeguard and protect Filipinos working there. Kuwait responded and agreed to open labor negotiations with the government.

Cayetano said the government is pushing for a labor pact with Kuwait that would provide strong guarantees on the safety and welfare of Filipino household service workers. He said: “President Duterte wants this agreement to be different from the other agreements we signed with other countries by making sure that whatever is written there will translate into real, actionable measures that will protect our maids from exploitation and abuse.”

Prior to this, the Philippines has already secured the commitment of Kuwait on several matters for Filipina maids, including the minimum monthly salary of 120 Kuwaiti dinar (around P20,000); 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 go to press, an eight-member Kuwaiti delegation has confirmed arrival in Manila on March 15 and 16 for the proposed “Agreement on Domestic Workers’ Recruitment, Employment, and Protection Between the Government of the Republic of the Philippines and the Government of the State of Kuwait.”

Reports said Ambassador Ghanim Saqer Al-Ghanim, assistant minister for legal affairs of the Ministry of Foreign Affairs, would lead the Kuwaiti delegation that would participate in the negotiations. Other members of the Kuwaiti panel are from the Residence Affairs Department of the Ministry of Interior and the Public Authority for Manpower of the Ministry of Labor.

We hope that the two sides will be able to craft a labor pact that will ensure the safety and well-being of our household service workers in Kuwait. The Philippine government must ensure that Filipina maids abroad are not exposed to violence, exploitation and sexual harassment of their employers.

Since 2005

BusinessMirror A broader look at today’s business ✝ Ambassador Antonio L. Cabangon Chua Founder Publisher

T. Anthony C. Cabangon

Editor in Chief

Jun B. Vallecera

Managing Editor Associate Editor News Editor

Max V. de Leon Jennifer A. Ng Vittorio V. Vitug

Senior Editors

Ruben M. Cruz Jr. Angel R. Calso

Creative Director Chief Photographer

Eduardo A. Davad Nonilon G. Reyes Judge Pedro T. Santiago (Ret.) Benjamin V. Ramos Adebelo D. Gasmin Marvin Nisperos Estigoy Aldwin Maralit Tolosa Rolando M. Manangan Loida S. Virtudazo

BusinessMirror is published daily by the Philippine Business Daily Mirror Publishing, Inc., with offices on the 3rd floor of Dominga Building III 2113 Chino Roces Avenue corner De La Rosa Street, Makati City, Philippines.

Tel. Nos. (Editorial) 817-9467; 813-0725. Fax line: 813-7025.

(Advertising Sales) 893-2019; 817-1351, 817-2807.

(Circulation) 893-1662; 814-0134 to 36. E-mail: news@businessmirror.com.ph.

www.businessmirror.com.ph

Printed by brown madonna Press, Inc.–San Valley Drive KM-15, South Superhighway, Parañaque, Metro Manila MEMBER OF

John Mangun

OUTSIDE THE BOX

T

his past Monday I attended an event hosted by the Shareholders Association of the Philippines (SharePHIL), titled “Cryptocurrency: The Truth & the Myth”.

The speakers included Nico Jose “Nix” Nolledo, chairman and CEO, Xurpas; Nichel Gaba, CEO, Philippine Digital Asset Exchange (PDAX); and Ephyro Luis Amatong, commissioner, Securities and Exchange Commission. The keynote address was delivered by the Honorable Nestor A. Espenilla Jr., Bangko Sentral ng Pilipinas (BSP) governor.

While following SharePHIL since its inception several years ago, I am skeptical of people with a “car and driver” looking out for the interests of other people that have to park their own cars. Of course, that is an unfair exaggeration, but experience teaches us that it is prudent to ask, “What’s in it for you?” or me for that matter.

The officers of SharePHIL include

individuals that I have known for 20 years and more. This could be an “Old Boys’ Club” inside the “Old Boys’ Club” of the Philippine Stock Exchange (PSE). But I also know that these men and women have dedicated their professional careers to making a positive difference.

My suggestion would be that SharePHIL focuses more on the specific issues that the PSE has not effectively addressed to protect shareholder interests. However, that may be an incorrect perception of someone on the outside looking in.

Therefore, I am becoming a member of SharePHIL and I strongly encourage you to do the same if you are a local stock-market investor.

Let me rephrase that. I insist you join SharePHIL because I hear too

many complaints about the PSE. It is time to put your “money where your mouth is” on the investor issues that affect all of us. Together, through SharePHIL, positive changes can be realized. So, no more complaining without action. Start here: http:// www.sharephil.org.

What are cryptocurrencies? Who knows and who cares. Just buy, buy and buy some more, and become a millionaire. Right?

Even after studying the topic for several months, it took Nix Nolledo about 30 minutes to bring me up to speed and that surprised me since I am a dinosaur. In full disclosure, I have been initiating negotiations to do some business with his company Xurpas.

One takeaway is that the “hype” about cryptos may be greater than the reality of ownership and trading.

You may be surprised to learn that the total current value of all cryptos is less than twice the total value of all issues on the PSE. However, crypto “tokens” are at about the same stage of development as the electric light was 100 years ago.

Governor Espenilla’s presentation was thorough and knowledgeable. He is carrying on the legacy of the Philippines having the best central bank governors on earth. In

summary, the BSP is open to new ideas and financial products. But, in the words of John Wayne, “Young fella, if you’re looking for trouble, I’ll accommodate you.”

While other nations’ regulators are sticking their heads in the sand by allowing an anything goes environment or sticking their heads in the sand by stopping everything connected with cryptos—China has done both—ours are trying to be proactive.

SEC Commissioner Amatong echoed the BSP, basically saying, “We already have a rule book. It’s called the Securities Regulation Code. Follow it.” Crypto tokens have been classified as a security until Congress changes the law. However, the US is regulating cryptocurrencies as a commodity, so the story is not over.

Congratulations are in order to SharePHIL Chairman Evelyn R. Singson and President Atty. Francisco Ed. Lim (yes, the former president of the PSE) for their successful efforts.

I eagerly await the next SharePHIL event. Be there.

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

Matching the educational system with an uneven and segmented economy Dr. Rene E. Ofreneo

LABOREM EXERCENS

Lorenzo M. Lomibao Jr., Gerard S. Ramos Lyn B. Resurreccion, Efleda P. Campos Dennis D. Estopace

Online Editor Social Media Editor

Chairman of the Board & Ombudsman President VP-Finance VP Advertising Sales Advertising Sales Manager Group Circulation Manager VP HR and Admin

The Shareholders Association of the Philippines

Continued from A1

A

nd yet, the bulk of the work force and the employed are those with limited educational attainment (elementary dropouts, elementary graduates, high-school dropouts, high-school graduates and college dropouts).

The above pattern is not likely to change with the graduation of the first batch of senior high students. It is only natural for those with higher educational attainment to look for better-quality jobs. They are not easy to find in an uneven and segmented Philippine economy.

On the other hand, elementary graduates and dropouts generally come from poor families. Many cannot afford not to work for a month or even a week or a day. They tend to occupy the low end of the labor market. A big number work as “unpaid family workers” (6 percent of the 40 million employed), in family farms or microbusinesses. These unpaid fam-

ily workers are in the country’s largest labor catch basin—the informal economy, where there is “free entry” because most of the economic activities are rarely registered, recorded and regulated. The informals include the impoverished fisherfolk found all over the archipelago, the sacadas and landless farmers, forest settlers, displaced indigenous peoples, gold panners and small-scale camote miners, home-based workers and producers, street-based peddlers and vendors, and so on and so forth.

There is so much segmentation in the informal economy or “informal sector.” What is clear is that this sector is huge. Estimates on

the size of the informal economy vary, from 45 percent given by the labor department statisticians to 75 percent computation made by the Employers Confederation of the Philippines.

The formal sector, however, is also segmented. Registered enterprises vary in sizes, technology and market. There are more than a million registered enterprises. Government estimates indicate that 99 percent of these enterprises are micro, small and medium, collectively called the MSME sector. The micros, employing less than five workers per enterprise, account for 90 percent of the total number of establishments.

A majority of these MSME enterprises, being small, are not likely to welcome K to 12 teachers and administrators trying to arrange the “work immersion” or “work exposure” for senior high students. The students are likely to disrupt the rhythm of work and productivity in a small enterprise setting.

On the other hand, many in the medium and large enterprises are also not prepared to roll the red carpet for the “work immersion” for the senior high students. Again, aside from their disruptive impact on the work rhythm, the program has a cost in terms of organizational and work

adjustment for the enterprise. As it is, most of the work immersion appears to be in the hotel, restaurant, fastfood and service-related businesses.

Some employers even benefit from the work immersion because they get extra hands in delivering services at a cheaper rate.

In manufacturing, the likely enterprise cooperators for the senior high students are those doing lowtechnology assembly work, such as putting together parts of an electronic transistor. In high-quality production work and ISO-certified processes, employers will not allow secondary students to join the assembly lines, unless these students are already being primed for longer-term skilled work. If these students are accommodated, they are likely to be placed in low-tech areas, such as the packaging section for finished products or in the delivery of nonsensitive and unbreakable materials.

Another problem for K to 12 education planners is the uneven economic development across the archipelago. Some regions, such as the National Capital Region, Region 4, Region 3, Region 6 and Region 11 have a well-developed formal sector and a fairly good number of possible See “Ofreneo,” A11

Opinion

BusinessMirror

www.businessmirror.com.ph

The Stockholm Consensus Dying like a grain of wheat (Numbers 1-3) Msgr. Sabino A. Vengco Jr.

Alálaong Bagá

Cecilio T. Arillo

database Part One

‘I

T is now evident that some of the recommendations of more traditional economics were not valid. Policy-makers cannot rely on simple policy guides, such as holding the fiscal balance in check, using monetary policy to control inflation, providing macroeconomic stability, and then leaving it to the market to do the rest.”

Thus, said the 13 distinguished economists, led by 2001 Nobel Laureate Joseph E. Stiglitz, “when they lay out, not a blueprint for policy, but a set of eight principles that we hope can help frame country-level policies and promote global discourse and the design of multilateral policies. These principles are increasingly needed in today’s rapidly changing and globalizing world.”

“Assuming that such an approach will promote growth that trickles down to the poor is not a tenable premise. Indeed, we owe some of our current predicament to too close an adherence to that dated advice,” they said.

Because of limited space, this column broke the eight principles into a three-part series, based on the original form of the Initiative for Policy Dialogue (IPD) at the Columbia University, founded in July 2000 by Stiglitz himself. A network of leading economists, political scientists and premier academic and policy centers in the global South and North, IPD brings the issues of developing countries to academics and the fruits of academic research to policy-makers.

Here’s Numbers 1 to 3, in its original format, of the eight principles: 1. GDP growth is not an end in itself We believe that, while policies to promote GDP growth are needed, that must not be an end in itself but a means to creating the resources needed to achieve a range of societal objectives, which include improved health, education, employment, security, as well as consumption.

Individual wellbeing is multidimensional and policy should aim for improvements in all of the dimensions valued by society, not just income. There is, for instance, a need to provide better nutrition to all pre-school children and to ensure that everybody has basic healthcare, and to recognize that these are well within the realm of the feasible.

If the right policies are not in place, GDP growth may come at the expense of these dimensions of well-being, including those related to local environmental and global climate degradation. It is also worth keeping in mind that GDP growth in itself may not lead to the eradication of oppressive norms and discriminatory practices against vulnerable groups. These usually require deliberate interventions.

We recognize the need to acknowledge that there will not be a single prescription deemed appropriate for all economies. Cultural and social contexts differ, as do histories. This leads to different aspirations in different societies and also plays a role in determining what will work and what will not.

In the past there was a propensity to prescribe a uniform policy code (developed in some rich country) for all nations. While there are broad policy principles we all need to pay heed to, there has to be space for diversity and context-specificity of policy.

2. Development has to be inclusive We believe that policy should help ensure that development is socially and economically inclusive, and not leave behind groups of the population whether identified by

If the right policies are not in place, GDP growth may come at the expense of these dimensions of well-being, including those related to local environmental and global climate degradation. It is also worth keeping in mind that GDP growth in itself may not lead to the eradication of oppressive norms and discriminatory practices against vulnerable groups. gender, ethnicity, or other social indicators.

There should be particular focus on extreme deprivation in the range of dimensions of wellbeing, and especially on individuals who suffer simultaneous deprivation on many dimensions. But a focus on the most deprived is not enough.

The gap between rich and poor, and across salient social groupings, is also important. The sharp rises in inequality of income and wealth witnessed in recent decades and the observed level of inequality of opportunities in access to basic services like health and education are ethically indefensible, undermine social cohesion, and fuel a spiral of policy capture by elites which further exacerbates inequality.

High inequality tends to rob the poor of voice and so results in a weakening of democracy. The empowerment of women and of historically discriminated groups is a priority in its own right, but it also provides a sound basis for economic efficiency.

When there is political turbulence and social conflict, development is not possible; and where development policies are not inclusive, they are likely to trigger social conflict. Overall, inclusive development is the only socially and economically sustainable form of development.

3. Environmental sustainability is a requirement, not an option Although it will be mediated and implemented differently in each country and regional context, we believe that development policymaking must take on environmental sustainability as a central objective.

This is related directly to local environmental degradation, where income growth in isolation can create a false indicator of wellbeing and progress. Further, competition over resources and environmentally related migration can lead to insecurity and conflicts, which undermine development.

At the global level, climate change is a long-term threat to the viability of the planet and, equally, a short to medium term threat to livelihoods, agriculture and habitat in many countries. Mitigation efforts must be pursued first and foremost at a global level, while adaptation policies require active intervention and support at national and local levels.

These are problems that cannot be left to the free market to solve. Regulatory interventions by the state and a certain amount of multi-country policy coordination are indispensable.

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

A

week away from the Semana Santa, the week made holy by the death and resurrection of Jesus, we are primed more intensely for the event of Calvary and its significance for humankind. John (12:20-33) leads our meditation on the thoughts and experience of Jesus relating to his passion and death on the cross.

The hour of Jesus IT was a paradoxical setting: the chief priests and Pharisees were increasingly convinced that Jesus should die (11:50.57), while some Gentile proselytes to Judaism wanted “to see” Jesus. In John’s gospel “to see” is to perceive with the eyes of faith, to come to believe. At the beginning, the first disciples themselves curious about Jesus were invited to “Come and see” (1:39). Later, Jesus would say that “When I am lifted up from the earth, I will draw everyone to myself” (12:32), as He in our last Sunday’s gospel pointedly made the connection that everyone seeing Him

lifted up on the cross and believing in Him will have eternal life (3:14).

The Greeks would still have “to see” Jesus hanging on the cross, before they could be said to have “seen” Jesus and have come to believe in Him. The fullness of faith hinges on the hour of Jesus lifted up on the cross and raised in exaltation.

Although John omitted from his gospel the episode in Gethsemane, our present text has all the elements found in the synoptic accounts: the acknowledgment that the hour has come, the agony, the cry to the Father, the acceptance of the passion, and the consoling affirmation from

Thursday, March 15, 2018 A11

heaven. Twenty-six times “the hour” of Jesus is referred to in the gospel according to John. It is not chronological time, but the divinely designated process of Jesus’ return in glory to His heavenly Father. It is what the entire Paschal Mystery of the passion, death and resurrection of Jesus consists of. It is the coming of our salvation; it is what Jesus came for. And Jesus would not be driven away from Calvary if that would be where the hour leads.

A grain of wheat that dies

Whatever Jesus does would be for the glory of the Father. So, the hour is the glorification of the name of God, as it glorifies the Son of Man. Reminiscent of the voice confirming Jesus after the baptism at the Jordan and, likewise, on the mountain of His transfiguration, the voice from heaven reached down to Him, “I have glorified it and will glorify it again.”

In effect, Jesus in His suffering and death receives divine approval and the guarantee that in everything it was the Father’s will He was doing. The people misunderstood the voice; they were on a different wavelength. They were not focused on God’s things.

To drive home the irony of Jesus’ death and His glory intertwined

True competition for a better economy Ariel Nepomuceno

DECISION TIME

I

N 2015 the Philippine Competition law (PCL) was passed prohibiting abuse of dominant position, anticompetitive agreements, mergers and acquisitions. This piece of law does not outlaw dominance in the market or monopolies per se. What it proscribes are price fixing, division or sharing of geographical markets, limiting or controlling production, markets or investment and bid rigging.

On the other hand, abuse of dominant position covers imposition of barriers to the entry of new players or preventing current players from increasing their market share, selling goods below market prices in order to stop competition and restricting sales in an anticompetitive way.

Recently, we were made aware of the plans of the Philippine Competition Commission (PCC) to raise the threshold for deals that need its approval as part of its new mergers

and acquisition rules. The reasons behind these, per Chairman Arsenio Balisacan, are rapid economic growth, growing inflation rate and the difference in the way the economy is structured right now. The threshold for deals have been there for quite some time and given that the P1-billion threshold was too low, many approvals are now pending before the PCC. Many companies engaged in mergers, joinders and other similar activities are being

negatively impacted due to delays in the approval process. Data updates show that around 130 or more deals are with the PCL and many are still being studied or recommendations being prepared.

The proposed modifications to the rules, among others, pertain to early case termination, exemptions for merger notification, leniency measures like fine reduction or immunity of suit to be granted to entities, which disclose critical information and inspection guidelines when the PCC decides to do site visits or examinations. These mechanisms are not new in the business world.

In fact, different antitrust bodies in Europe, Asia Pacific and even in the United States have these salient provisions in their own laws. The results are positive and encouraging because corporations are quickly drawing up their own antitrust compliance programs and are fully embracing the ethical culture that these kinds of laws have brought about.

That the antitrust drive of our government is serious was demonstrated about three weeks ago, when the PCC declared void Udenna

inseparably, Jesus gave the parable of the grain of wheat. The gravity of what is being explained is introduced by the formula: “Amen, amen, I say to you.” The grain of wheat falls to the ground and dies, to produce much fruit and greater life. This is foremost in commentary to the passion and death of Jesus, which includes already the certainty of His triumph in bringing everlasting life to the world.

Jesus’ metaphor of the grain dying and giving life unavoidably becomes an invitation and a challenge of faith and love to the reader or listener.

Alálaong bagá, the true follower of Jesus does exactly that—follow Jesus in dying like a grain of wheat.

It is to believe and live accordingly in the paradox of Jesus’ “lifted up” in ignominy and in glory, where to die is to become more, while not to die is to be condemned to being nothing. To love God above all and to love others as oneself, we have to learn to “hate” our life in this world and be ready to give it up for what is really greater, so that we all can be lifted up to the life that is truly eternal.

Join me in meditating on the Word of God every Sunday, from 5 to 6 a.m. on DWIZ 882, or by audio streaming on www.dwiz882.com.

Corp.’s $120-million acquisition of the shares of a Dutch company that made its owner a partial owner of 2Go Group Inc. The violation revolves around the requirement of the PCC that a notification be made where a transaction’s value is more than P1 billion, a deal that was done two years ago. A fine of almost $19 million was also imposed on Udenna and the Dutch company.

Lessons learned in the antitrust space should not be construed as anti-business or anti-investor. Competition is always a positive boost to the business and the consumer. On the contrary, killing competition kills the flourishing of the economy.

When more businesses compete, the more they improve their service, provide more perks and choices to the public, invest in research and development to delight the customer, and, in the end, result to a reduction in prices. This chain of satisfaction is like a virus that spreads quickly and expansively.

The economy wakes up from deep slumber and consumes the rays of sunshine emitted by a busy, bustling, energized market.

Trump is right to quash the Qualcomm merger

P

resident Donald J. Trump’s decision to quash an overseas bid for Qualcomm Inc. was almost certainly the right thing to do. That it came with little warning and not much explanation, however, suggests some significant flaws in the way the United States evaluates such deals.

Broadcom Ltd., based in Singapore, had made an unsolicited $117-billion offer to acquire Qualcomm, a leading US chipmaker. Amid scrutiny of the bid by the Committee on Foreign Investment in the US (CFIUS)—a panel that reviews such deals for security concerns—Trump issued an executive order blocking it. It was only the fifth such deal ever held up by a US president, and the largest by far.

Although Trump didn’t explain his decision, the bid raised some obvious national-security concerns. Qualcomm

Ofreneo . . .

continued from A10

medium and large enterprise cooperators. Senior high education planners have a clear market for their work immersion program. This is not so in other regions, such as Caraga, Western Mindanao, Region 2, Bicol and Eastern Visayas. It is, thus, not surprising, that the popular targets for work immersion are the local government units, which welcome the students to do minor errands, including preparing coffee for the local bosses.

is a major supplier for the Pentagon and holds numerous classified contracts. Its facilities are subject to a security clearance that could be jeopardized by foreign ownership. An acquisition of this kind was bound to raise red flags, whoever was doing the buying. Yet, the government also laid out a more convoluted rationale—one that could set a worrying precedent.

Last week, CFIUS warned that Broadcom, an enthusiastic cost-cutter, might slash Qualcomm’s R&D spending in pursuit of short-term profits. In doing so, it could put Qualcomm at a disadvantage in the race to offer next-generation wireless and diminish its influence in setting standards and protocols. That, in turn, could give a leg up to Qualcomm’s top competitor, Huawei Technologies Co. Ltd., which has ties to the Chinese government and which US intelligence

agencies have deemed a security threat.

That’s a long and twisted chain of logic. It suggests a broadening mandate for CFIUS and an expanding definition of national security, without much in the way of guardrails. Two concerns in particular need to be addressed.

One is that CFIUS too often leaves foreign businesses guessing about what it finds acceptable. Its primary objection to this deal, after all, concerned a company that had no obvious involvement in it. CFIUS can’t be expected to elucidate its reasoning for every decision. But it can be more open about what sectors it deems sensitive, what remedies it will accept and how it will approach technologies with dual civilian and military uses.

A second worry is that this opaque process could be abused to advance a protectionist agenda. The White House

has already invoked implausible national-security concerns to justify its reckless steel and aluminum tariffs. Some members of Congress would be all too happy to block foreign acquisitions of US agriculture and film companies. That kind of thing will only impede investment, restrict competition and encourage retaliation, while leaving the United States precious little room to criticize others for similar conduct.

Transparency is the remedy for these concerns. Congress is considering legislation to clarify and modernize the criteria CFIUS uses to evaluate deals, which is a good start. It may also identify “countries of concern” that would be subject to automatic scrutiny. That could reassure allies, offer an incentive for reform, and allay fears of broader protectionism. Bloomberg View

And yet, some industry people complain that senior high students, to be employable, need to log in at least 300 or more hours of real onthe-job training (OJT), not one to two weeks of work immersion or work exposure. Under the Germanstyle “dualtech” system, high-school students get both theory and practical learning and experience from work because cooperating German companies fully participate in the program. But how many enterprises in the Philippines are prepared to join such a program involving 300 OJT hours or more for the students?

And how many industrial enterprises

the Philippines has compared to its secondary student population? In the 2017 labor force data, manufacturing accounts for 8 percent of the employed, a shade lower than that of construction. In our neighboring Asian countries, such as Thailand, Malaysia and Vietnam, manufacturing is the leading growth sector in terms of employment and national value addition.

The Technical Education and Skills Development Authority has been promoting dualtech and other forms of industry-led vocational training. But success in industryschool cooperative training arrange-

ment also appears limited.

Overall, it is abundantly clear that so much still needs to be done in strategizing or restrategizing education planning, especially at the senior high level, in order to make the K to 12 graduates truly job-ready (aside from reaching the legal work age of 18). It is also clear that such education planning is made difficult and complicated by the character of the economy, which is uneven and segmented. Such unevenness and segmentation are reflected in the composition and distribution of the labor force as gathered by the Philippine Statistics Authority.

2nd Front Page BusinessMirror

A12 Thursday, March 15, 2018

www.businessmirror.com.ph

NO DATE AND VENUE YET FOR Asia’s premier gastronomic event

Madrid Fusión Manila 2018 on hold April 19-21 J

By Ma. Stella F. Arnaldo

@akosistellaBM Special to the BusinessMirror

UST when you thought you couldn’t get enough of a dish, someone takes the plate away from you.

That, in effect, is what’s happening to the fourth serving of Madrid Fusión Manila (MFM), which is currently on hold. No exact dates and venue have been announced for what’s been dubbed as “Asia’s premier gastronomic event.”

Originally slated to be held from April 19 to 21 at the SMX Convention Center, government sources confirmed to the BusinessMirror that the original schedule is no longer pushing through. “At the moment, the dates are still being negotiated.

But, as far as I know, it is still a go,” said one source.

Another source said, “Yes, it won’t be this April anymore. But I’m not

sure when and where it will be.”

Several sources said the Tourism Promotions Board (TPB), the marketing arm of the Department of Tourism, is now handling the event, and not just its promotions as before. In previous years, it was the office of Verna Esmeralda C. Buensuceso, director of Product and Market Development under the DOT’s Ma rket Development Group, which directly managed the event and coordinated with Foro de Debate, the original franchise holder of Madrid Fusión, regarding the invitations to the chefs.

But Buensuceso was assigned to Tokyo last year as tourism

The original schedule of MFM’s 2018 edition

attaché to Japan, shortly after the DOT held an event to recognize supporters of MFM 2017. “[April 19 to 21] were the original dates. But the government procurement of the venue and event management still has to be undergone by the TPB. So the dates had to be moved,” said a person familiar with the event.

Teresita D. Landan, officer in charge of TPB’s MICE Department confirmed to the BusinessMirror that no dates and venue have been finalized for this year’s MFM, but she did say the event was “pushing through.”

She added the DOT “advised [the TPB] sometime this year” about handling the event, and said her agency will soon be scheduling the bidding for the venue and event

management. In the past three years, the event was held at SMX Convention Center, and was managed by the Philippine Association of Convention/Exhibition Organizers and Suppliers Inc. “We’re still finalizing details of the event and checking on the availability of the chefs because, of course, without the chefs there would be no event,” she stressed.

But she acknowledged that, without an exact date, it was also difficult to pin down the chefs for the event, as well as to book a venue.

“It’s a chicken-and-egg situation,” Landan admitted, but added the TPB is eyeing the event for sometime in “July or August.”

She underscored that her office had already prepared the terms of reference for the bidding and was ready to send these out “next week.” She said event managers like Paceos, and venues like the SMX Convention Center, “are welcome to join the bidding. The Secretary [Wanda Corazon T. Teo] just wanted to open the bidding

to more participants.”

The MFM is a project first hatched under the term of former Tourism Secretary Ramon R. Jimenez Jr. and has been well-attended by chefs, culinary students and enthusiasts, food reviewers and media.

In a news statement in Januar y, the DOT said the theme for MFM 2018 is “Innovating Tradition,” which the agenc y hopes will sustain higher awareness and attendance to the culinary event, which is the only one of its kind in Asia.

During the three-day MFM, an international gastronomy congress is held featuring Spanish and international chef-speakers, as well as presenters among the local culinary world. At the same time, a trade show and product exhibit of local and international food, ingredients and wares are also on display.

This year’s supposed lineup of chefs include celebrated Filipino-American chef Tom Cunanan (Bad Saint) and James

Manufacturing investments up 244% to $1.15B in 2017–Lopez

Statistics agency ready for shift to federalism Continued from A1

LOPEZ: “It is a highly viable investment area and a source of meaningful and well-paying jobs for the people. Investor confidence [in manufacturing] is real.”

By Elijah Felice E. Rosales

T

@alyasjah

he Philippines posted a twofold surge in manufacturing investments last year to $1.15 billion, Trade Secretary Ramon M. Lopez reported on Wednesday.

Investments in the manufacturing industry rose by 244 percent, from only $334.25 million in 2016. Lopez said it accounted for at least 35 percent of the total 2017 equity capital placements at $3.3 billion against 13 percent of the total 2016 equity capital placements at $2.59 billion.

Lopez noted manufacturing continues to deliver well for the economy, as the government is banking on it to become the pillar of economic growth in the country.

He added the sector was receiving intensified backing since 2012 from the Department of Trade and Industry, which, for its part, is linking the government with private entities to bolster manufacturing.

“It is a highly viable investment area and a source of meaningful and well-paying jobs for the people,” Lopez said of the industry. “Investor confidence [in manufacturing] is real.”

The trade chief also said investors continue to trust the country in terms of its growth prospects, highlighted by the steady progress of its economy in recent years. “The Philippines continues to be a magnet for investments, and this is due to the country’s improving business environment, sound macroeconomicpolicy reforms, aggressive infrastructure buildup, much-improved peace and order and political stability, favorable demographics, growing middle class and consumer base and, of course, our people, who have always been the country’s prime asset in attracting foreign investments,” he said.

Lopez’s statement came days after the Bangko Sentral ng Pilipinas reported that the country hit a recordhigh foreign direct investment (FDI) of $10.1 billion last year. This was 21.4 percent higher than the $8.3 billion in 2016.

At least 21 industries benefited from the FDI inflows, with over a third of total equity placements put in manufacturing. On the other hand, gas, steam and air-conditioning supply; real estate; construction; and wholesale and retail trade received bulk of total investment inflows.

On top of this, the government identified food manufacturing and production of radio, television and communication equipment and apparatus as potential sunrise sectors for manufacturing. Chemical and nonchemical products, fabricated metals and basic metal and nonmetallic minerals were also seen as vibrant outputs of the industry.

Beard Foundation awardee and Top Chef Season 9 winner Paul Qui, also a Filipino-American.

Spanish chefs eyed as presenters this year are Javier Estevez (La Tasqueria), Diego Gallegos (Sollo), Pepe Solla (Casa Solla) and Roberto Ruiz (Punto MX). Other foreign participating chefs tagged as attending the Manila event are Matt Abergel (Ronin, Hong Kong); Akrama Benallal (Akrame, Paris); Curtis Duffy (Grace, Chicago); Maria Fernanda Di Giacobbe (Kakao Bombones Lab, Venezuela); LG Han (Labyrinth, Singapore); Mingoo Kang (Mingles, Seoul); Aitro Jeronimo Orive (Igg’s, Singapore); Floriano Pellegrino and Isabello Poti (Bros’, Italy); and Hajime Yoneda (Hajime, Osaka).

Locals chefs JP Anglo (Sarsa), Patrick Go (Black Sheep) and Nicco Santos (Hey Handsome) are supposed complete this year’s MFM lineup. (See, “Celebrated Fil-Am chef to speak at MFM 2018,” in the BusinessMirror, January 31, 2018.)

SNAIL PHASE This February 25 photo shows groups of students and residents dressed in nature-inspired colorful costumes parading at the streets of Makati to celebrate Caracol Festival 2018. The term caracol was derived from the Spanish word for snail, with its shell regarded as a symbol of protection from the harshness of life. Caracol Festival 2018 is the much-awaited annual cultural showcase of the city government of Makati held at the Globe Circuit Events Ground in Makati City. STEPHANIE TUMAMPOS

Food security. . .

Continued from A1

PSA data also revealed that the number of workers in the Industry sector grew by more than half to 7.369 million in 2017, from 4.713 million in 2001. From 2009 to 2017, employment in the industry sector rose by an average of 4.36 percent.

Low wages

Briones told the BusinessMirror that workers may be leaving the farm sector in droves because of low income. “Wages in agriculture, although increasing in real terms, are way, way below than those in the Industry and Services Sectors.”

“That’s a problem for the farming sector, but that is part of the process of resource allocation,” he added.

Briones also said other sectors of Philippine economy may be growing at a much faster rate than agriculture. “People would go to industries that are more productive because these industries are willing to pay more.”

While he expects more workers to leave the agriculture sector in the next few years, he said this should not have a drastic impact on production. Briones said wages in the farm sector would naturally go up as the number of workers de-

clines, giving those who remained in agriculture an incentive to stay and produce more.

“Naturally, their wages would go up, and other adjustments will follow such as mechanization. When wages are higher, then it is more worthwhile to adopt labor-saving technologies,” he said.

Data from the PSA showed that the average daily pay of farmworkers rose steadily in 2010 to 2015. In fact, average daily agricultural wage in 2015 reached P189.47, 6.18 percent higher than the P178.44 daily rate recorded in 2014.

Also, the P189.47 per day agricultural wage rate recorded in 2015 was nearly double the P98.24 average daily wage rate of farmworkers recorded in 1975.

‘Not worrisome’

While he acknowledged that the shrinking number of farm workers may be a sign of people’s waning interest in agriculture, the chief of the Department of Agriculture (DA) said this is not a cause for concern. “ It [dec l i ne i n nu mber of farmworkers] could be also an indication that the agriculture sector is modernizing. Once you modernize agriculture, you will require less manpower,” Piñol told the BusinessMirror.

The DA chief pointed to the possible increase in the income of those

living in rural areas as another factor behind the drop in the number of farmworkers.

“Because of the improvement in the economic situation of people in the countryside, they do not have to work anymore, as rice planters or corn harvesters. So, some could be transferring to other sectors,” he said.

Despite the contraction in the number of farmworkers, paddy production reached a record -high 19.276 million metric tons last year. This was 9.35 percent higher than the previous year’s 17.627 MMT. Piñol said high commodity prices encourage farmers to produce more. “When was the last time agriculture was this good? Prices of corn, palay and bananas are really high.”

If this trend continues, Piñol said the youth could be enticed to venture into agriculture. “In fact, with the increase in prices of farm commodities now, I would assume more young people would be involved in modern agriculture.”

Modern farming, he added, would make agriculture profitable and entice the youth to join the sector. Piñol said mechanization and rolling out strategies to make production more efficient would make farming more profitable and change the youth’s perception that it is a labor-intensive venture that pays little.

It also plans to add at least one more division to each regional office, which will require additional manpower of four to five employees in each unit.

Adding more employees, particularly in the regions, will not only help shift to a federal form of government but also strengthen data gathering at the local level.

In a presentation on Wednesday, Philippine Institute for Development Studies President Celia Reyes said local government units do not have positions for statisticians.

This adds to the burden in regions, which, Bersales explained, leaves PSA’s regional employees overworked. However, the earliest time to hire these additional employees can begin in 2019 or even 2020.

“They’re so overworked because all central office services are doing their own initiatives, social sector, economic, etc., but they all funnel down to the same people in the province. They are overburdened,” Bersales said.

In order to cope, Bersales added the PSA is hiring enumerators and is already experimenting on outsourcing surveys to companies that meet their requirements.

Bersales said the move to outsource surveys comes on the heels of the Commission on Audit memo discouraging all job orders starting 2019.

She added that, because of this, the PSA entered into a government-to-government arrangement with UP and the Population Institute to conduct the latest migration survey.

“But we are there as part of the supervisors, crafting of the questionnaire. So that’s a model we will try out,” Bersales said.

She added outsourcing is cheaper for the PSA and, since this can be done for special releases, it allows the agency to focus on its work on major surveys, like the Family Income and Expenditure Survey and the Labor Force Survey, among others.

The PSA was created through the passage of the Philippine Statistical Act, which was signed into law by former President Benigno S. Aquino III in 2013.

It is the surviving entity after the merger of four statistical agencies—the National Statistical Coordination Board, Department of Agriculture, Bureau of Agriculture Statistics and the Bureau of Labor and Employment Statistics of the Department of Labor and Employment.

Under the law, the PSA will be responsible for all national censuses and surveys, sector statistics, consolidation of selected administrative recording systems and compilation of national accounts.

It’s main tasks include planning; development and prescription; dissemination and enforcement of policies, rules and regulations; and coordination of government-wide programs governing the production of official general-purpose statistics and the delivery of civil-registration services.