A TOAST TO ‘MISSION: PHL!’ Ambassadors, members of the diplomatic community, aid development organizations, and representatives from the private sector, civil society, youth and government agencies, in partnership with the BusinessMirror, toast “Mission: PHL”—the BusinessMirror’s Envoys&Expats Awards launch—at the City Garden Grand Hotel in Makati City on Thursday night. Leading the launch are BusinessMirror Publisher T. Anthony C. Cabangon (center, second row) and Aliw Media Group Chairman D. Edgard A. Cabangon (center, right, front row), with Public Works Secretary Mark A. Villar (center, left, front row). NONIE REYES
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n Friday, March 23, 2018 Vol. 13 No. 163
Govt gung-ho on RCEP. But is PHL ready for it?
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By Elijah Felice E. Rosales
@alyasjah
anila’s aggressive stance to push the immediate conclusion of the China-led Regional Comprehensive Economic Partnership (RCEP) has left local stakeholders—especially exporters and consumers—wondering if the Duterte administration is walking the talk in the form of safety nets and capacitybuilding programs.
ORTIZ-LUIS: “The reality is our SMEs are the most financially starved, and they are not given proper service by the government.”
Positioned as the counterpart of the now US-less Trans-Pacific Partnership (TPP), the RCEP members account for almost half of world population, at least 30 percent of global GDP and over a quarter of world exports. In 2016 RCEP negotiating-countries combined for a population of 3.53 billion people, Continued on A2
BSP maintains key policy rates anew
T new pse building Motorists pass by the new Philippine Stock Exchange building in Bonifacio Global City, while a
By Bianca Cuaresma
@BcuaresmaBM
he Bangko Sentral ng Pilipinas (BSP) on Thursday again kept interest rates steady, but it expressed readiness to change its policy stance should inflation accelerate in the coming months. The Monetary Board, in its second monetary-policy meeting of the year, decided to maintain its policy rate steady at 3 percent during the meeting. Corresponding rates on overnight lending and deposit facilities were also kept unchanged. BSP Governor Nestor A. Espenilla Jr. said in his post policy statement that the decision of the Monetary Board was based on their models showing inflation “easing naturally” going forward in 2019.
huge LED screen on the building’s façade shows a schedule of the stock rights offering ceremony on March 22. ALYSA SALEN
See “BSP,” A2
Govt on track to converting rice QR into tariffs by June By Cai U. Ordinario
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@cuo_bm
he National Economic and Development Authority (Neda) remains confident that Congress would be able to pass
a measure mandating the conversion of the quantitative restriction (QR) on rice into tariffs by June. Neda Assistant Secretary Mercedita A. Sombilla told the BusinessMirror that the Philippines would be able to fulfill its commit-
PESO exchange rates n US 52.0760
ment to the World Trade Organization (WTO), despite the failure of the Senate to submit its version of the measure for plenary hearing before its Lenten break. Sombilla, who represents the oversight agency in the National
Food Authority Council (NFAC), said the Neda was instructed by Sen. Cynthia A. Villar to draft another version of the bill, which will be discussed once Congress resumes session on May 14. Continued on A12
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BORACAY CLOSURE COULD LEAD TO GOVT LOSS OF OVER P6.7 BILLION IN TAXES By Ma. Stella F. Arnaldo
@akosistellaBM Special to the BusinessMirror
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HE government is seen losing over P6.7 billion in taxes from the closure of Boracay Island. “This is just on the sales taxes alone,” said Jose Clemente III, president of the Tourism Congress of the Philippines (TCP), MANNY Casidsid, president of Masboi who estimated it based on the Paraw Association, expresses the 12-percent value-added tax from group’s concern if the announced the P56-billion tourism receipts total closure of Boracay Island will earned by the economy from Bo- push through, at a news conference racay last year. “If you add the organized by the Boracay Tourism corporate income tax, it will be Stakeholders held on Thursday in more,” he stressed at a joint news Makati City. ALYSA SALEN conference of tourism stakeholders on Thursday. The Philippine Tour Operators Association, Boracay Foundation Inc., the Masboi Paraw Association, the Organization of Hotel Sales and Marketing Professionals, the Motorboat Association of Boracay and the Boracay Island Hopping Association also attended the news conference. The stakeholders requested for the government to be “transparent” in its rehabilitation program for the island, and a proper dialogue with those who will be affected by the closure. “We need to be informed of what it [the government] plans to do,” Clemente stressed. They also proposed “60 days for stakeholders to undertake individual rectification, cleanup and rehabilitation of their respective properties,” and the closure of establishments that have violated environmental and zoning regulations. Continued on A12
NFAC thumbs down calls to hike palay-buying price
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he National Food Authority Council (NFAC) has decided to retain the support price for palay, despite the recommendation of the Department of Agriculture (DA) and grains retailers to increase it to P20 per kilogram (kg). A source privy to the matter said the NFAC sidelined proposals to hike the National Food Authority’s (NFA) support price, thus, retaining the threshold at P17 per kg. “For now, yes, [then] use strategies of procurement, including incentives,” the source told the BusinessMirror when asked if the
₧17 per kilogram The current palay support price of the National Food Authority
NFAC had decided to keep the current support price of the food agency. In the NFAC meeting on Monday, the NFA was instructed to purchase more palay from farmers, especially at the early days of the harvest months. The food regulator was also directed to utilize creative strategies in the form of incentives to attract farmers to sell their rice
n japan 0.4911 n UK 73.6563 n HK 6.6376 n CHINA 8.2289 n singapore 39.6860 n australia 40.4370 n EU 64.2618 n SAUDI arabia 13.8877
See “NFAC,” A2
Source: BSP (22 March 2018 )
BMReports BusinessMirror
A2 Friday, March 23, 2018
www.businessmirror.com.ph
Govt gung-ho on RCEP. But is PHL ready for it? Continued from A1
GDP of $23.8 trillion and GDP per capita of $6,759. With the TPP signed on March 8, negotiators of the China-ledRCEP are now pressured to conclude their own trade deal this year—if and only if they can resolve contentions on the proposed agreement. Trade Undersecretary Ceferino S. Rodolfo Jr. said complications can be owed to the six non-Asean negotiating countries— Australia, China, India, Japan, New Zealand and South Korea—because they do not have existing bilateral free-trade agreements (FTAs). The Asean-led RCEP is aimed at consolidating the FTAs of its negotiators and create a multilateral trade deal. “If it is just us [Asean countries], we have no problem concluding the RCEP because we have existing FTAs with the other six negotiating countries. The problem is with China, New Zealand, Japan and India because they have no FTAs among them,” Rodolfo earlier said. The Philippines is ready to remove import duties on 92 percent of all tariff lines under the RCEP.
The expected gains
And, as the RCEP’s fate continues to hang in the balance, some business leaders are now sharing their uncertainty over what future the trade deal holds for domestic industries. This includes Sergio R. OrtizLuis, president of the Philippine Exporters Confederation Inc. In an interview with the BusinessMirror, Ortiz-Luis said that as far as exporters are concerned, the RCEP should be considered as an opportunity for local businesses to expand their market. “Well, it will definitely help,” he said in Filipino and English. This, Ortiz-Luis said, is what excites ex-
NFAC. . .
Continued from A1
to the government. Agriculture Secretary Emmanuel F. Piñol, in an earlier interview with the BusinessMirror, asked the NFAC to augment the buying price for palay. He said this will balance the scale and will benefit all parties—the government, farmers and consumers. “The rule of thumb is that the commercial price of rice is double the farm-gate price. So if the buying price is P20 per kg, the retail price should only be P38 to P40 per kg,” Piñol said. “I think the retail price is affordable to everyone. The increase in support price would also make farmers happy,” he added.
BSP. . .
Continued from A1
Inflation expectations are now more manageable than the projections seen in the previous monetarypolicy meeting, after economic managers decided to recalibrate the consumer price index (CPI) basket.
porters—the potential of the RCEP to open new markets, if not strengthen their capacity in existing markets. The trade deal will erase almost all tariff lines implemented by negotiating countries, which is theoretically beneficial for the economy. “It should help, especially in the complementation of products here in the region,” Ortiz-Luis said. He pointed to the “problem” of Southeast Asian countries producing the same raw materials and products, thus forcing them to compete with each other. Ortiz-Luis said the RCEP might shun competition in favor of complementation. He believes once the proposed agreement is enforced, it will harmonize not only the free flow of goods and services, but also the products manufactured by RCEP negotiating countries. The domestic industry that will benefit the most under complementation is the electronics and semiconductors sector, the Philexport chief said. He explained that once the RCEP is implemented, it will streamline the importation of parts needed to assemble electronic products. The electronics and semiconductor industries have been delivering the biggest export revenues of the Philippines for decades now. Ortiz-Luis added that the country has a competitive advantage in terms of massproducing electronics and semiconductors that will put it ahead of its fellow RCEP negotiators. Last year five RCEP economies were among the top 5 importers of Philippine-made electronic products, namely China, Singapore, Japan, Thailand and South Korea.
But is PHL really ready for RCEP
Still, for Ortiz-Luis, these questions remain: Are we really ready to enter into another trade deal if the government can-
not provide well for its small and medium enterprises? How can SMEs compete with larger multinational firms that are capable of dominating the market? Are SMEs even aware of how they can utilize the RCEP to their advantage? “The reality is our SMEs are the most financially starved, and they are not given proper service by the government. Yes, there are programs for them, but those programs just scratch the surface,” he said. Appearing to be an irony, the country can be considered as last in terms of SME development when it was one of those that pioneered it in the region, Ortiz-Luis noted. He added that its allocation from the national budget is indicative of how neglected it is as a sector.
Walk the talk
The Philexport chief brought up once again his suggestion to take a chunk from the government’s Conditional Cash Transfer program and recalibrate it to financing SMEs. Under the General Appropriations Act of 2018, the government allocated P89.41 billion to the CCT program, but only P5.18 billion to the Department of Trade and Industry (DTI), which is tasked to develop the small businesses. Of that allocation, the DTI assigned P2.25 billion of its purse for the development of SMEs. This is unbelievable for Ortiz-Luis, as SMEs make up a huge portion of businesses in the country. In 2016 the Philippine Statistics Authority listed a total of 915,726 business enterprises operating in the country. SMEs account for 911,768, or 99.57 percent, of that number, with most of them involved in wholesale and retail trade; repair of motor vehicles and motorcycles; accommodation and food-service activities; manufacturing;
and financial and insurance activities. “What about sharing? What if the government reallocates 20 percent of the CCT to lending for SMEs with rules on not how much you can collect back, but by how many jobs were created and how many of them graduated from being micro to small, from being small to medium? SMEs should be the backbone of our economy, but right now, they are very weak,” Ortiz-Luis lamented. He added that, without substantial financing for SMEs, the potential of the RCEP to improve domestic industries might just remain a potential. He also said he hopes the upcoming Asean summits this year will provide the government a wider perspective on how important SMEs are to the economy. Ortiz-Luis’s concern about the future of local sectors under the RCEP is not new, as it was raised vehemently last year by Ibon Foundation. In a statement last November, the think tank told the government to only enter into the proposed agreement if it is based on equal footing and mutual cooperation that will benefit the people and the economy more than multinational firms.
The vow
For his part, Trade Secretary Ramon M. Lopez said the DTI is doing its duty of educating SMEs how they can utilize multilateral FTAs, including the RCEP when it reaches conclusion. “In all the seminars we conduct around the country, [we have them] doing business in FTA, like [the] RCEP,” Lopez told the BusinessMirror. He also said local enterprises should not worry about being defeated by multinational firms in the market, as the Philippines will retain agricultural products under its sensitive list in the RCEP. With this, tariff on the country’s sensitive
products, such as rice, sugar and garlic, will not be removed immediately once the trade deal is enforced.
Consumers worried
On the other hand, Laban Konsyumer Inc. President Victorio A. Dimagiba said the country should also push forward consumer rights in RCEP negotiations and Asean discussions. “When the country hosted the Asean summit last year, the main activity was the micro-entrepreneurship mentoring, but the Asean has more than 600 million consumers that deserve recognition of their rights and availability of redress for substandard and defective goods and services,” Dimagiba told the BusinessMirror. With trade ministers eyeing to finalize the RCEP this year, the trade officialturned-consumer-rights activist urged the government to take a bold stand by promoting the welfare of the buying public in the talks. He said this should be a crucial subject now for the region, especially with the rise of the e-commerce industry. Dimagiba also suggested the Asean Committee on Consumer Protection be democratized and opened to consumer groups from the Asean member-states. “There exists an Asean Committee on Consumer Protection that is largely a cooperation among government regulators,” he said. “The Asean should open up membership to consumer organizations in the region. The Asean should follow the lead of the Consumers International, where both government and consumer organizations collaborate and cooperate,” he added. Leaders of the regional bloc are scheduled to gather in Singapore from April 25 to April 28 for the 32nd Asean Summit to discuss regional and international issues.
However, the source said this formulation must be translated first into a proper study to ensure it will not affect the government’s overall economic plan. The source cited the intensive study the government did before it actually enacted into law the Tax Reform for Acceleration and Inclusion—the first of the five tax-reform packages. “If presented with new facts and data, it is possible [to increase the farm-gate price]. What is important is the effect of the decision to the Filipino people and economy as a whole,” the source said. “ To increase the farm-gate price is not an easy decision. If not studied properly, it will increase the price of rice in the market and it might skyrocket our inflation
that will result to the government not attaining its target for this year of 2 percent to 4 percent,” the source added. In a news briefing on Thursday, Cabinet Secretary Spokesman Jonas George S. Soriano said the counci l ordered the NFA to prioritize buying from farmers, especially at the early days of the harvest months. The food regulator was also directed to utilize creative strategies in the form of incentives to attract farmers to sell their rice to the government. Soriano also reported the procurement for 250,000 metric tons (MT) of rice is scheduled to begin. This import was previously approved by President Duterte and was put on standby status.
“The said rice import is set to arrive May of this year. This is to allow the NFA to have enough buffer stock for the upcoming lean months of the year, in which rice harvest is at its lowest,” Soriano said. The importation will beef up the NFA’s buffer stock, currently pegged at less than 40,000 MT, enough for just 1.15 days. The food regulator is mandated to maintain at least 15 days of stockpile at any given time to be used in case the country is hit with calamity or placed in an emergency situation. He added the mode of the importation will still be gove r n me nt - to - pr i v at e s c he me, and will also make use of the same terms of reference (TOR) as that of the previous importa-
tion. “ The reason of using the same TOR is to ensure immediate procurement of imported rice based on the guidelines of the procurement law,” the Palace official said. Soriano also said the NFAC is urging Congress to “act with urgency” in legislating the amendment of Republic Act 8178, or the Agricultural Tarrification Act of 1996. The amendm—nt will allow the country to convert its expired quantitative restriction in the World Trade Organization into tariff. “It is also worth noting that the proceeds of the tariff will accrue to the government’s agricultural-enhancement fund to be used for the farmers in the form of farmer-service interventions,
appropriate technology and machines, among others. As such, the council is again requesting for Congress to pass this bill at the earliest possible time,” Soriano said. The NFA Council also recommended the conduct of a special audit on the NFA, particularly with its procurement and distribution operations. “The audit shall be administered by the Commission on Audit so as to assess the current NFA operations to determine points for improvements and streamline bottlenecks in the agency’s procurement and distribution processes with the end goal to make NFA cost effective and operationally efficient,” Soriano added.
Following the Philippine Statistics Authority’s (PSA) decision to update the CPI base year from 2006 to 2012, the BSP now projects inflation to hit 3.9 percent. In its February exercise, the BSP said inflation is expected to breach the 2-percent to 4-percent target rate and hit 4.3 percent. This, however, is based on the 2006 CPI base year.
BSP Deputy Governor for the Monetary Policy Sector Diwa C. Guinigundo on Thursday said this 2006-based CPI forecast is equivalent to 3.8 percent using the 2012 CPI basket. For 2019, the BSP projects inflation to go down to 3 percent, from the 3.1-percent forecast earlier as adjusted to the 2012 CPI base. The government also carries the 2-percent to 4-percent
target inflation range up until 2020. Espenilla, however, said the BSP observed that the risks to the inflation outlook remain tilted to the upside, as price pressures emanate from pending petitions for adjustments in minimum wages and transportation fares. Pressures could have been higher, the BSP chief added, if not for inflationary mitigating factors, such as institutional arrangements in setting transportation fares and minimum wages, unconditional cash transfers as well as transport subsidies.
“The Monetary Board noted that inflation expectations have started to rise and will, therefore, need to be monitored closely in the coming months,” Espenilla said. “It was also observed that economic growth remains solid enough to absorb some policy tightening if warranted,” he added. Espenilla also said broader second-round effects in the inflation front will be particularly monitored by the Central Bank. “If it happens [stronger secondround inflationary effects], that is the one that will move the Monetary Board to change the monetary-policy stance to tightening,” Espenilla said. The governor added that the Monetary Board stands ready to“act quickly” to shifting conditions.
“The Monetary Board stands firm in its intent to take immediate and appropriate measures to ensure that the monetary-policy stance continues to support the BSP’s price and financial stability objectives,” Espenilla said in his statement. This is the first time that the BSP directly addressed potential tightening measures and the potential timing of their course of action, contrasting earlier policy statements that emphasize the “appropriateness” of monetary-policy settings for the given review period. “We need to convey to the market that if it warranted, the Monetary Board is prepared to tighten monetary policy. This is to address the continuous fears of analysts that it looks like the bsp is behind the curve. The BSP is not behind the curve,” Guinigundo said.
associated with yellow fever and not Dengue.” Halstead further emphasized: “Dengvaxia does not cause any illness.” Two things have to be considered to conclude that the death of a vaccinated child is due to Dengvaxia: 1) the death or infection was caused by the dengue virus, which can be done by virus isolation or the identification of NS1; and 2) knowing if an individual is either seronegative or seropositive. However, the WHO says, there is no commercially available efficacious testing kits in the market to date. Halstead
added that Dengvaxia is effective against dengue upon questioning from Sen. Joseph Victor G. Ejercito. Dr. Minguita Padilla, an associate professor at the UP-PGH and a consultant at the St. Lukes Medical Center said: “some media outlets forgot to focus on these very important points. They were concentrating on the drama rather than importance of these medical findings based on empirical data that Halstead mentioned. These medical information should be disseminated to all the affected parents to stop the hysteria.” Butch Fernandez
‘Ready to act quickly’
A difference in the governor’s post monetary policy statement, however, was seen in Espenilla’s final sentences, expressing readiness to act quickly should second-round effects come to fruition.
Dengvaxia. . . Continued from A12
cannot be based on an autopsy,” which is contrary to the pronouncements of the PAO, which has been conducting autopsies and announcing these deaths to have been caused by Dengvaxia. Haltstead debunked earlier pronouncements of Dr. Suzy PinedaMercado connecting neurotropism and viscerotropism. He said: “Neurotropism and Viscerotropism are not appropriate terms to use in relation to Dengvaxia. These are
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The Nation BusinessMirror
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3 Beechcraft TC-90 planes leased from Japan set for turnover on Monday By Rene Acosta
@reneacostaBM
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he Philippine Navy will get hold of the remaining three of five units of Beechcraft TC90 that it leased from Japan during the scheduled turnover ceremonies in Cavite on Monday. Navy Spokesman Capt. Lued Lincuna said the three maritime aircraft will be received from the Japan Ministry of Defense (JMOD) through the Japan Maritime Self Defense Force (JMSDF), at the Naval Air Group (NAG) Headquarters at Sangley Point, Cavite. The three TC-90 aircraft were part of the five training planes leased by the Department of National Defense (DND) from the JMOD for the use of the Navy, especially in its maritime patrol in the West Philippine Sea. The leasing of the TC-90s at a “minimal cost” of $9,000 annually was part of the efforts to enhance the Navy’s capability, also in humanitarian assistance and disaster response (HADR) operations, limited transport and maritime domain awareness. Two of the five ordered aircraft were delivered and transferred by
the Japanese military to the Armed Forces of the Philippines (AFP) in March last year. In January this year one of the two donated TC-90 that were christened into the Navy’s service made its maiden maritime patrol over the West Philippine Sea. Lincuna said the delivery and transfer to the Navy of the three remaining leased aircraft will be graced by Defense Secretary Delfin N. Lorenzana. Meanwhile, the AFP Northern Luzon Command (Nolcom) will build a facility on Mavulis Island in Itbayat, Batanes, that will be used as a shelter for both soldiers and fishermen. Nolcom Spokesman Lt. Col. Isagani Nato said the construction of the facility, which is being supported by local officials in Batanes, will begin in April. “The structure will serve as a multipurpose shelter for locals fishing in the vicinity double up as shelter for Nolcom troops visiting the island to guard our maritime domain in that isolated area during poaching season,” Nato said. “Also, amenities will be provided to cater to the needs of the recipients considering the proximity of the place to the nearest island town,” he added.
DILG’s Año backs holding of May SK, barangay polls
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@joveemarie
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he Makabayan bloc on Thursday filed an opposition-in-intervention to the quo warranto petition filed by the Office of Solicitor General (OSG) against Chief Justice Maria Lourdes A. Sereno. Party-list Reps. Antonio L. Tinio and France L. Castro said the petition filed against the chief magistrate before the Supreme Court (SC) is “wrong and unconstitutional.” “We [have filed an] opposition-in-intervention to the quo warranto petition filed by the OSG against Sereno so that we could be included in the proceedings and support the Chief Justice from the quo warranto case filed against her,” Tinio said. “As Chief Justice, which is an impeachable public official, she can only be removed from her office by means of impeachment, which Congress has jurisdiction,” he added. The 1987 Constitution, he said, specifically provides for the exclusive mode of removing from office a “special class” of public officials. “Only the President, the Vice President, the members of the Supreme Court, the members of the constitutional commissions and the Ombudsman may be removed from office on impeachment on several grounds,” Castro, for his part, said. Tinio said that removing the Chief Justice through the courts and by her own peers threatens judicial independence and separation of powers. “Impeachment is the jurisdiction of Congress. The continuation of the quo warranto petition would ultimately weaken the branches of government and give more power to the Executive,” he said. “All allegations in the quo warranto are already part of the Articles of Impeachment,” Castro stated. “If those who want her out of the Chief Justice position have sufficient evidence for their grounds for impeachment, then they should follow the correct and constitutional procedure to impeach a Chief Justice,” Tinio added.
By Jonathan L. Mayuga
@jonlmayuga
nterior Secretary Eduardo M. Año on Thursday welcomed Senate President Aquilino L. Pimentel III’s announcement that the barangay and Sangguniang Kabataan (SK) elections this May will proceed as scheduled. In a news statement issued on Thursday, Año also said pushing through with the polls will give the youth a chance to elect their new set of SK officers. More important, he added, the barangay and SK elections will lead to the implementation of the SK Reform Act, or RA 10742, under a new set of youth leadership. Among the progressive provisions of the new SK law is its anti-dynasty provision, the first in the country’s history.
Makabayan bloc comes to Sereno’s aid, says quo warranto petition vs CJ ‘wrong, unconstitutional’ By Jovee Marie N. dela Cruz
Editor: Vittorio V. Vitug • Friday, March 23, 2018 A3
The filing of a quo warranto petition by the OSG only means that the masterminds of the impeachment against Sereno are not confident that their case will withstand the Senate trial. “This is a desperate attempt from the proponents of the impeachment case against the Chief Justice to completely control the Judiciary,” he said. “The credibility and trust of the people in the Judiciary and justice system is what is at stake. The Judiciary should not let the Executive use their institution as an instrument for an emerging dictator and a tyrannical rule,” he added.
Dangerous
For his part, Party-list Rep. Carlos Isagani T. Zarate said that the filing of the quo warranto case against Sereno sets a “very dangerous and ruinous precedent that can even be used against any impeachable officer, including other justices of the Supreme Court who go against the wishes of and in the crosshairs of the administration or interest groups.” “The Supreme Court itself ruled that it is forbidden to shortcut or circumvent the impeachment process. In the past, it did not even allow the disbarment of a justice of the High Court because it maintained that the proper process is through impeachment, so the same process should also be accorded to CJ Sereno,” Zarate said. “As it is, the quo warranto case is wrong and unconstitutional because it robs the Filipino people the means to properly hear and judge the side of CJ Sereno through a trial at the Senate, seating as an impeachment court. As representatives of the people, we will not allow this legal short cut to take that power away from the people and, at the same time, undermine the Judiciary as an institution by letting CJ Sereno’s peers to oust her,” the lawmaker said. Zarate also said all allegations in the quo warranto case are already part of the Articles of Impeachment and have already been approved by the Congress Justice Committee. “It would be to the best interest of the country if CJ Sereno is given her fair trial in the Senate impeachment court.”
The Supreme Court itself ruled that it is forbidden to shortcut or circumvent the impeachment process. In the past, it did not even allow the disbarment of a justice of the High Court because it maintained that the proper process is through impeachment, so the same process should also be accorded to CJ Sereno.”—Zarate
Section 10 of the said law on qualifications of an SK candidate is that he or she “must not be related within the second civil degree of consanguinity or affinity to any incumbent elected national official or to any incumbent elected regional, provincial, city, municipal or barangay official in the locality where he or she seeks to be elected.” “There is so much potential for genuine change with the anticipated implementation of SK Reform Act, as the youth will lead the way to
electoral reforms in the country and initiate their own political reforms and development in their communities,” Año stated. “If we don’t hold the elections, we are missing out the opportunity to give the youth a chance to meaningfully contribute to barangay development,” he added. The SK Reform Act raised the age requirement of SK officials from 15 to 17 years old to 18 to 24 years old to legally enter into contracts and be held liable for any violation of the law. The new SK law also mandates the Department of the Interior and Local Government (DILG) and the National Youth Commission (NYC) to jointly design and implement the mandatory and continuing training programs for SK officials. This includes capability building on leadership, program and project development and sustainability, financial management, and accountability and transparency. Meanwhile, DILG Spokesman Assistant Secretary Jonathan E. Malaya said that all elected SK officials must undergo the mandatory training programs assuming office. “The DILG has developed modules
for the new set of officials. We are hoping that this training will equip our youth leaders with the necessary skills to perform their functions well,” he said. Malaya added that during their incumbency, SK officials must attend the continuing training programs to be undertaken by the NYC in coordination with the DILG. “Deliberate failure to attend the said training programs shall constitute sufficient ground to disqualify SK officials or subject them to disciplinary actions,” he said. The new SK law allows SK officials to participate in local governance, through the creation of a Local Youth Development Council (LYDC), which will be composed of representatives of youth and youth-serving organizations in the provincial, city and municipal level. “The LYDC will also assist the planning and execution of projects and programs of the SK,” Malaya said. The filing of the certificate of candidacy for the barangay and SK elections is scheduled from April 14 to 20, 2018, as per Commission on Elections Resolution 10246.
Economy
A4 Friday, March 23, 2018 • Editors: Vittorio V. Vitug and Max V. de Leon
BusinessMirror
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House okays mandatory SIM-card registration bill on second reading
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By Jovee Marie N. dela Cruz
DBM’s Diokno sees approval of natl ID proposal
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@joveemarie
he House of Representatives has recently approved a measure requiring the registration of all users of subscriber identity module (SIM) cards. Voting through viva voce, lawmakers passed on second reading House Bill 7233 on Wednesday to help law-enforcement agencies in tracking down lawless criminals who use mobile phones with postpaid and prepaid SIM cards to pursue nefarious activities, such as kidnapping for ransom and petty crimes like theft. The lower chamber is expected to approve the bill on third and final reading when session resumes in May. The bill seeks to establish a system of sale and registration of SIM cards for all users of SIM cards by registering essential data in a registration form set up for the purpose. It also provides for the mandatory registration of end users who are foreign nationals. The measure mandates all public telecommunication entities (PTEs) and direct sellers of SIM cards to establish a register and submit the same to the Department of Information and Communications Technology (DICT). The bill, however, provides for a confidentiality clause that prohibits disclosure of any information of a subscriber, unless upon subpoena of lawful order from a court, or written request from a law-enforcement agency in relation to an ongoing investigation, stating that a particular number requested was used in the commission of a crime. It mandates all PTEs to maintain a SIM-card register of their subscribers and to submit the same to the DICT every six months. All PTEs are required to keep the data of their sub-
scribers and the DICT shall ensure that these data are being kept with utmost confidentiality. The measure also mandates the registration of existing prepaid SIM card phone subscribers, the failure to comply therewith, within the prescribed period shall authorize the PTEs to automatically deactivate its services to specific existing prepaid SIM-card subscriber. Violators of the act, if committed by a PTE, shall face a fine of P300,000 for first offense; P500,000 for second offense; and P1 million for third and subsequent offenses. If committed by a direct seller, a penalty of suspension of operation and a fine ranging from P5,000 to P50,000 shall be imposed.
Opposed
Party-list Rep. Carlos Isagani T. Zarate of Bayan Muna, as expected, opposed the SIM-card registration proposal, saying that it is poised to infringe on the privacy of subscribers and will become an additional burden to mobile-phone users. “Mandatory registration for prepaid mobile-phone subscribers is not the answer to terrorism, crime or the impunity that persists in our country. Contrarily, we at Bayan Muna see the great risk of misuse of registered user’s personal information and exchanges as being proposed today by some legislators,” Zarate said. “The current set up is already subject to abuse by authorities and criminals for racketeering [like the spam texts], harassment
FIESTA event Director Marita Carlos of the Department of Science and Technology-Philippine Council for Agriculture, Aquatic and Natural
Resources Research and Development Applied Communication Division (in black dress) and Northern Mindanao Consortium for Agriculture, Aquatic and Natural Resources Research and Development-Regional Research and Development Coordinating Council (NOMCAARRD-RRDCC) Chairman and Central Mindanao University (CMU) President Dr. Maria Soliven (fourth from right) lead the ribbon cutting during the opening ceremony for the Farm and Industry Encounters, through the Science and Technology Agenda (Fiesta), held at the CMU Convention Center in Bukidnon on Wednesday. NOMCAARRD hosted its first-ever Fiesta celebration on March 21 and 22. PNA photo by Ben Briones
and extortion of civilians. There are already many reports of surveillance, threat and harassment of activists through their mobile phones,” he added Zarate said the proposal could easily extend to all online activities with the aid of the Cybercrime Law. “Real-time collection of data is unconstitutional, as it blatantly violates the right to privacy. However, for the intention of the SIMcard registration proposal to deter crime to be effective, it must have access to all mobile-phone exchanges as it happens. There would be a virtual Big Brother trafficking all our mobile-phone exchanges,” he added. Zarate also said the burden of registration will be on subscribers. “Prices of SIM cards and prepaid credit are also expected to shoot up because telcos will pass the additional cost of registration to
subscribers if this proposal becomes law. Also, the almost 100 million prepaid SIM-card users will have to line up in the few offices of the NTC [National Telecommunications Commission]and present valid IDs to register their SIMs, and most probably have to pay for registration,” the lawmaker said. He said the NTC has only one office per region, numbering to only 15
This is an administrative nightmare for the government to make sure that the almost 100 million prepaid subscribers’ data are safe. This is not an expense that the government should prioritize.” —Zarate
Budget reform bill ensures transparency, accountability in public spending–solon
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he budget reform bill approved on third and final reading by the House of Representatives by a 158-8 vote on Tuesday, aims to ensure public spending integrity and accountability through greater transparency, fiscal responsibility, result orientation, efficiency and effectiveness. Rep. Joey S. Salceda of the Second District of Albay, House appropriations committee vice chairman, House Bill (HB) 7302 as “breakthrough” proposal expected to revolutionize the country’s budget-management system and, among others, support the government’s push to substantially increase investments in infrastructures. Certified urgent by President Duterte, Salceda steered the measure’s plenary deliberation to approval. Its strategic elements include the following: 1) It shifts from an obligation-based budgeting to an annual cash-based budgeting making the appropriations law the authority of agencies to contract out and disburse funds within the fiscal year; 2) It enforces a one-fund-concept wherein monies received by the national government shall accrue to the general fund and remitted to the national treasury; special funds shall be authorized by law and limited to trust fund, revolving and retained funds; 3) Special Purpose Funds shall be limited to National Disaster Risk Reduction and Management Fund, Contingent Fund, and the Statutory Shares of local government units (LGUs), the details of which could not be determined during the budget preparation stage; 4) Savings can be declared only due to completion, fiscal discontinuance or abandonment of an activity or project for which the
appropriation is authorized; 5) In case fiscal discontinuance or abandonment of a project or activity, the same shall no longer be proposed for funding in the next two fiscal years; allotments not used due to fault of the agency shall also not be considered savings; 6) The bill authorizes constitutional officers to use savings to cover a deficiency in any existing item of appropriation within their respective offices; 7) It, likewise, provides integrated financial management information system, a single portal of all financial transactions and reports to be used by national government agencies, government-owned and -controlled corporations (GOCCs) and LGUs to integrate budgeting, cash management and accounting processes. The bill also provides sanctions and penalties for failure to comply with the reporting and posting of requirements, among which are: 1) The Department of Budget and Management will not approve any request for release of allotments under the negative list, modifications or use of savings; 2) The Commission on Audit may disallow any expenditure; and 3) Disbursements may be rendered void. A substitute for 13 other proposals in the lower house, HB 7302 is titled “An Act to Reform the Budget Process by Enforcing Greater Accountability in Public Financial Management [PFM], Promoting Fiscal Sustainability, Strengthening Congress’ Power of the Purse, Instituting an Integrated PFM System, and Increasing Budget Transparency and Participation.” Salceda said HB 7302 “ensures accountability and integrity in the use of public resources through transparency, fiscal responsibility,
nationwide, saying “SIM-card registration would face administrative challenges as 90 percent of all SIMcards in the country are prepaid.” “ T his is an administrative nightmare for the government to make sure that the almost 100 million prepaid subscribers’ data are safe. This is not an expense t hat t he gover nment shou ld prioritize,” Zarate said.
result-orientation, efficiency and effectiveness through an integrated system of planning, programming, budgeting, management, internal control, accounting, reporting and review of public finances.” Duterte’s ambitious “Build, Build, Build” program has identified at least 75 flagship projects worth about P180 billion to be undertaken over the next decade, which need the backing of a more transparent, result-oriented budgetary reforms, said Salceda, a noted economist. He pointed out that the new measure “enforces the power of Congress to authorize all appropriations and hold government offices accountable in the use of public funds, as well as the responsibility of all agencies to propose, execute and deliver results committed in the appropriations acts.” It promotes “people empowerment in the management of public resources by enforcing their right to access to information on, and to contribute in the formulation and implementation of the financial affairs of the government,” he added. The Budget Reform Act applies to the management of revenue, expenditure, financing arrangements, and assets and liabilities of national government agencies, GOCCs and LGUs. Salceda said HB 7302 strengthens Congress’s oversight power by monitoring and reviewing actual performance and results against targets, and hold government agencies accountable for their financial and nonfinancial performance. The measure “mandates the Office of the President to approve the Statement of Policy and Medium Term Fiscal Strategy for submission to Congress, as well as the Budget Priorities Framework to identify the priority areas of government spending,” he added. PNA
udget Secretary Benjamin E. Diokno said he is “pretty optimistic” that the proposed national ID system would be approved and passed into law in the near term. At a briefing on Wednesday, Diokno said that the Senate last Monday approved its version of the measure, authored by Sen. Panfilo M. Lacson Sr. The House of Representatives approved its version of the bill in September last year. Diokno said he is hopeful that lawmakers “will use the [Lenten] break to resolve their differences” on the proposed measure. “I think there are no major disagreements between the House version and the Senate version. So again, probably as soon as they convene, they will just ratify [it],” he said. “In the meantime, we’re doing all the work we can do to push the national ID system. As you know, there’s already a budget for that, P2 billion, in the 2018 budget,” he added. Earlier, Diokno said the budget was given to the Philippine Statistics Authority as allocation for program implementation within a year once it is signed into law. He said beneficiaries of the government’s cash-transfer program will be the initial beneficiaries of the proposed national ID system. The ID will carry information on the holder’s demographic details, such as name, sex, date of birth, place of birth and address and will reduce 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. Diokno said the government wants to tap a third party to help in the initial implementation of the ID system, which will eventually be maintained by the Department of Information and Communications Technology. The ID will not be sophisticated but will use biometrics using scans of all 10 fingers as well as the irises, he said, noting that it will be called foundational ID and has a higher ranking than the existing unified multipurpose ID. PNA
Tadeco lawyers: House probe into land deal faces blank wall
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awyers of the privately owned Tagum Agricultural Development Co. (Tadeco) on Thursday said a House inquiry into the allegedly questionable land deal between the government and Tadeco has “drifted far afield and failed to bring home allegations of [any] wrongdoing.” The Tadeco lawyers issued the statement as the House Committee on Good Government and Public Accountability had difficulty pursuing the basic charges levelled against Tadeco. During the fifth hearing held on February 7, Speaker Pantaleon D. Alvarez, on whose behest the probe was being conducted, presented as witness Engr. Ruben Tacugue who claimed that the joint-venture agreement between Tadeco and the Bureau of Corrections (BuCor) covered an excess of 4,000 hectares. Tacugue also testified that Tadeco illegally closed certain public roads within the sprawling banana plantation in Davao del Norte province. Committee Chairman Rep. Johnny Ty Pimentel of the Second District of Surigao del Sur, thus, ordered the Department of Public Works and Highways (DPWH) Engr. Noel Basanes to submit an inventory of public roads and other structures within the Davao Penal Colony (Dapecol). Pimentel also directed Tacugue to conduct a survey of the Dapecol reservation area despite the testimony of Regional Executive Director Ruth Tawan-Tawan of the Department of Environment and Natural Resources (DENR) that a survey of the Dapecol land has been previously conducted. Hence, Tacugue’s survey as ordered
would be “extraneous and a waste of valuable time and taxpayers’ money,” the lawyers said. Meanwhile, a DPWH team led by Basanes conducted an ocular inspection of the alleged public roads within Tadeco, while Tacugue surveyed the Dapecol property as directed by Pimentel. The Tadeco lawyers led by Nicolas Banga argued that the DPWH team formed the assumption because there is no clear indication that these are not public roads as attested to by Gov. Anthony del Rosario of Davao del Norte and Dapecol Supt. Gerardo Padilla that the BuCor own the property in question, and that there was no right of way established in the area. Banga clarified that the farm roads in the Dapecol area “were not public roads but for a specific government purpose.” Nonetheless, the DPWH team dismantled swing beams on a Dapecol farm road in Barangay Tanglaw, Dujali, Davao del Norte. The DENR sources said that Tacugue simply adopted an earlier survey undertaken in 2012, and 2013, pursuant to House Resolution 1481 issued by the 15th Congress because his latest survey contradicted his earlier statement that there is an excess of 4,000 hectares. The Tadeco lawyers also questioned the timing of the inquiry, saying their client has been in existence for some 65 years now, contributing significantly to national economic and social developments by providing jobs and religiously paying its tax obligations to the government.
Agriculture/ Commodities www.businessmirror.com.ph
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Editor: Jennifer A. Ng • Friday, March 23, 2018
Rice imports seen declining this year
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hilippine rice imports could decline by 300,000 metric tons (MT) this year due to higher paddy output and the changing eating habits of consumers, according to the United States Department of Agriculture’s Foreign Agricultural Service (FAS).
In its latest Global Agricultural Information Network report, FAS in Manila projected that the country’s purchases of imported rice could go down to 1 million metric tons (MMT), from the previous year’s 1.3 MMT. “Rice production is expected to increase 980,000 MT to just over 19.5 MMT in marketing year [MY] 17/18 before reaching 19.6 MMT in MY 18/19,” the report read. “The Philippine Department of Agriculture [DA], equipped with a higher 2018 budget, is expected to aggressively pursue rice self-sufficiency in the next two years.” The report noted that the DA’s rice self-sufficiency programs are geared toward expanding and improving irrigation services, as well as increasing the use of quality planting seeds, including hybrids.
The implementation of the taxreform program in January, according to the report, would raise food and feed consumption starting this year, as cuts in personal-income taxes would hike disposable incomes. This would allow consumers to purchase more meat and wheat-based products. “[Also], continued economic growth has resulted in a growing middle class and shifts in food-consumption patterns. This is evident through the rapidly expanding food retail sector and fast-food industry,” the report read. “Philippine Statistics Authority [PSA] data show that from 2012 to 2016, per capita rice consumption has been decreasing in favor of wheat and protein. No significant change in rice consumption is expected through MY 18/19,” it added.
FAS in Manila said wheat imports are expected to increase 550,000 MT to 5.75 MMT in MY 18/19, driven mainly by growing feed demand. “Also on feed demand, MY 18/19 corn imports are expected to increase 200,000 MT to 700,000 MT.” Citing industry estimates, overall feed production reached roughly 11.75 MMT in 2016, up 3 percent from 11.38 MMT in 2015. “The domestic livestock and poultry industries continue to be the bright spots of Philippine agriculture, primarily due to the performance of the hog and chicken industries. Next to rice [which accounts for over a fourth of total agricultural output], hog and chicken production are the top contributors to Philippine farm output, with shares of 14.8 and 12.0 percent, respectively,” the report read. “Although there was an avian flu outbreak in August 2017, timely response by the Philippine DA arrested the spread and contained the damage of the disease. Poultry’s output grew 4.6 percent in 2017 compared to the previous year’s level, with chicken production gaining 4.3 percent. During the same period, the livestock sector gained 1.1 percent last year compared to the 2016 level, with hog production expanding 1.5 percent,” it added.
Exhibit shows women-farmers in PHL work more, paid less
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he conditions of women- fa r mers, i nc lud i ng the huge gap in the pay they receive compared to their male counterparts, were highlighted in an exhibit mounted by t he Ph i l ippi ne R ice R e search Institute (PhilRice) in its headquar ters in Muñoz, Nueva Ecija. In the exhibit, titled The Land Nurturers, photo stories show that women outnumber the men by 2 percent during planting season. They also spend two days more than the men in harvesting and about three days in drying rice grain. Dr. Diadem B. Gonzales-Esmero, PhilRice Gender and Development focal person, said the exhibit aims to increase awareness on the conditions of the women-farmers. “The contributions of women in rice farming are not noteworthy, but their issues are not given much attention. Other than working hours and wage, we also learned that they also have the least access to some services,” Esmero said in a statement.
“ These are based on data we gathered from three international and national studie s a nd i nt e g r at e d t he re su lts in this ar t and photo exhibit,” she added. In their 2016 study, “Women at Work in the Farm,” Dr. Irene R. Tanzo and her colleagues found that the women-farmers in Quezon and Zamboanga del Norte are engaged in more than half of the 51 farm activities from land preparation until selling of rice. They are mostly involved during pulling of seedlings, transplanting and harvesting. Despite equal work, Tanzo’s study on cross-country hired farm labor and wage differences showed t h at womenfarmers earn less than the men by around P108 a day. In Nueva Ecija, the women-farmers’ wage
Pilmico to source corn from farmers’ co-op in Bukidnon
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ilmico Foods Corp., the food and agribusiness subsidiary of Aboitiz Equity Ventures Inc., has partnered with a local farmers cooperative for an inclusive sourcing project for corn—a primary ingredient in producing animal-feeds products. Under the program, Pilmico said in a statement that it will directly source corn from the Mantibugao Agrarian Reform Beneficiaries Farmers Cooperative (MARBFC), a farmers’ cooperative organized in Mantibugao, Manolo Fortich, Bukidnon. MARBFC actively pursues various projects and ventures to assist its 300 members in gaining access to improved production resources, facilities and livelihood opportunities. The beneficiary cooperative
was selected through the support of the Department of Agriculture (DA) Corn Program Team and the Manolo Fortich, Bukidnon local government unit (LGU). The partnership was formalized during a ceremonial memorandum of agreement signing held recently at Cagayan de Oro City, witnessed by Manolo Fortich Mayor Clive Quiño and DA Region 10 Director Carlene Collado. This is the first time Pilmico, which has been producing highquality animal-feeds products for more than 20 years, has ventured in an inclusive sourcing program with a local farmers group. MARBFC, will serve a portion of Pilmico’s corn requirements for its various feeds products. Collado, in his remarks, said the project is in
line with the DA’s strategy in “providing livelihood opportunities and technical assistance with the hope of improving lives of farmers associations and cooperatives”. “The day that we have been waiting for has come. We thank the hard work of the DA, our mayor and to Pilmico for initiating the inclusive sourcing project for corn. That is the first time that we can actually can go directly to the big companies and sell our produce,” MARBFC Chairman Benjamin Magtajas said. “It’s a dream come true for us farmers, that starting today, we are able to work with big companies like Pilmico,” Magtajas added.
Unrelenting drought means more suffering for Argentine soy
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t was already looking bad for Argentina’s drought-stricken farmers. Now, it could get even worse, with the nation’s soybean crop at risk of plunging to its lowest in nine years. Unrelenting dryness has parched fields across the Pampas, the nation’s main growing region. Crop prognosticators have been cutting their production forecasts all season, and the lingering drought means the estimates are likely to go even lower. To understand why, look no further than Ariel Striglio, a 52-year-old farmer of prime Pampas farmland near the town of Chabas in Santa Fe province. His late-planted soy is in bad shape. Growth has been stunted, and in some cases plants are no taller than shin height. Striglio has slashed his forecast for yields by half since planting. “I’ll only cover costs here,” he said as he opened up a green pod to inspect the seeds inside. The pod, like many others in the baked field, had just two seeds. Under normal conditions, it
would have had three. The drought has sparked global concerns over supplies of soy meal because Argentina is the world’s biggest exporter of the protein made from soybeans that’s used for animal feed. Meal futures in Chicago have jumped 15 percent this year as volatility climbed. The gains could be mean higher costs for meat producers like Tyson Foods Inc. and China’s WH Group Ltd.
Two phases
Argentina’s soybean crop is planted in two phases. Most beans, known as the early crop, are planted in October and November. They are beginning to be harvested now. The other third, known as the late crop, is planted in December and early-January and won’t be collected until May. Those late beans are currently going through the critical yield-defining growth phase in brutally dry conditions, raising speculation that production estimates will continue to fall. Bloomberg News
Pilmico COO Tristan S. Aboitiz, said Pilmico will continue to collaborate with the LGU and communities to promote the agriculture industr y, ultimately advancing business and communities. “Our partnership with MARBFC is a culmination of the hard work of our partners from the DA, the local government of Manolo Fortich, Bukidnon, and most important, MARBFC. I am honored that Pilmico is a part of this pioneer project and we hope that the successful rollout will serve as an example for more of these kinds of partnerships in the future,” Aboitiz said.
is around P50 less than the men during crop establishment and P216 during threshing. T he study of Dar yl Leyesa of National Rural Women Coalition-Philippines also revealed that women work for 11 hours during planting and harvestings days. In the farm household, they take the lead decision-making role in nine of 12 production areas, including farm capital, animal raising and vegetable growi ng. Her m a le cou nter pa r t, meanwhile, decides over the seed s a nd where/when to sell their produce. Moreover, when compared with the woman workers in corn, coconut, sugar, vegetables and onion, the women rice farmers had the least access to school and health-care facilities. Launched on March 5 and installed at PhilRice main building, the exhibit is open to the public until April 6. PhilRice Gender and Development Focal Point System spearheaded the exhibit program.
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Friday, March 23, 2018
The World BusinessMirror
Trump targets Chinese goods for $50-B tariffs
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ASHINGTON—President Donald J. Trump on Thursday plans to announce at least $50 billion worth of annual tariffs and other penalties on China for its theft of technology and trade secrets, which administration officials say has robbed US companies of billions of dollars in revenue and killed thousands of jobs.
T he measures wou ld mark Trump’s most aggressive move yet against a fast-rising economic rival that he has accused of preying on the United States. The measures will be targeted at imported Chinese goods in as many as 100 categories—hitting everything from shoes and clothing to consumer electronics—and will impose restrictions on Chinese investments in the United States, people briefed on the measures said. Trump will instruct the Treasury Department to pursue restrictions on certain types of Chinese investments to counter C hina’s a mbit ious indust r ia l policy, which aims to dominate cutting-edge sectors like artificial intelligence and mobile technology, officials said. For Trump, the steps fulfill a frequent campaign pledge to crack down on China, which he has characterized as an “economic enemy” that has “taken advantage of us like nobody in history.” But the actions will only ratchet up tensions with the Chinese government at a moment when Trump needs its support for his campaign to curb North Korea’s nuclear program. The announcement comes hard on the heels of Trump’s tariffs on steel and aluminum imports, which are scheduled to go into effect on Friday and are aimed at combating a flood of cheap metals into the United States, including Chinese steel. Taken together, Trump’s actions demonstrate his resolve to turn away from a decades-long move toward open markets and integrated world economies, and toward a more starkly protectionist approach that erects barriers around a Fortress America. The moves risk further isolating the United States at a delicate geopolitical moment by inflaming key allies, as well as China.
China has long argued that both sides benefit from the flow of Chinese money into the United States. At a daily news briefing on Wednesday, Hua Chunying, a spokesman for China’s Foreign Ministry, reiterated that the country does not want a trade war, and that the economic ties between the two countries have lowered costs for American consumers. Hua added that China would be ready to retaliate, without providing details. “If the day did come when the US took measures to hurt our interests, we will definitely take firm and necessary countermeasures to safeguard our legitimate interests,” she said. The effect of the China tariffs would be larger and more concentrated than the steel and aluminum measures and would have a bigger impact on US consumers, who are heavy purchasers of electronics, clothing and other Chinese imports. The steel and aluminum tariffs would affect imports of roughly $33 billion, excluding Canada and Mexico, which are expected to be exempt from the measures, said Joseph Parilla of the Brookings Institution. The China moves would affect at least $50 billion a year in imports, officials said. Chinese companies have also been placing big bets on US companies. New Chinese acquisition deals in the United States once totaled tens of billions of dollars annually, according to Rhodium Group, which tracks Chinese investments abroad, though last year they fell sharply to $8.7 billion
A container is loaded onto a cargo ship at the Tianjin port in China. Farmers, electronics retailers and other US businesses are bracing for a backlash as President Donald J. Trump prepares to target China for stealing American technology or pressuring US companies to give it away. AP/Andy Wong
as China cracked down on money leaving its borders. Chinese companies have purchased many nonstrategic assets like movie theaters and the Waldorf Astoria hotel in New York. But they also sought out deals in cutting-edge areas like semiconductors and start-ups related to autonomous driving as China looked to upgrade its technological capabilities. China sees the US stranglehold on fundamental technologies as a long-term economic and security threat to its rise as a superpower. Unlike the metal tariffs, which caused bitter divisions within the Trump administration and were opposed by many Republican lawmakers and businesspeople, the technology moves against China are likely to be politically popular on Capitol Hill and throughout some industries. “Their theft costs us over $350 billion per year, so the bigger the better,” said Daniel DiMicco, a steel executive and trade adviser to the Trump campaign, referring to the forced transfer of intellectual property and other unfair practices alleged by the administration. The business community, which long defended China against accusations of theft of intellectual property, has grown more dissatisfied with adverse treatment in the Chinese economy. With the Chinese government and stateowned enterprises playing an ever-larger role in the market, the environment for US companies has steadily deteriorated.
Their theft costs us over $350 billion per year, so the bigger the better.”—DiMicco
Still, US business groups expressed concern over the possibility that the United States tariffs would spur others around the world to raise their own trade barriers. “A focused effort to fix the problems is better than imposing sanctions that will bring collateral damage to American households, farmers and manufacturers,” Jake Parker, vice president of China operations for the US-China Business Council, said in an e-mailed statement. The country, under the leadership of President Xi Jinping, has sought to build up businesses it considers critical for defending its national security interests and meeting its economic goals. Beijing has been enlisting US companies in its effort. As it looks to create its own national champions, China has been forcing American stalwarts like Qualcomm, Advanced Micro Devices and Hewlett-Packard Enterprise to create joint ventures, hand over their technology or develop local expertise. If they do not, companies risk losing access to China, the world’s second-largest economy. But China’s national security interests are colliding with those of the United States. A worry is that companies are handing over critical technology that the United States needs for its military, defense or infrastructure. By transferring technology, they may also be giving an edge to Chinese rivals that one day may prove dominant. This month, the US government blocked Broadcom’s hostile bid for Qualcomm, a chipmaker, citing national security concerns. The fear was that the acquisition would weaken Qualcomm, allowing China an advantage in the race to build the next generation of wireless technology. New York Times News Service
Editor: Lyn Ressureccion | www.businessmirror.com.ph
For Putin, pressure pays off in facing weak, divided West
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he United States and Europe appeared last week to be lining up alongside the United Kingdom for a new round of pressure against Vladimir Putin over Russia’s alleged use of a nerve agent to poison a former spy outside London. But the West’s united front didn’t last long. President Donald J. Trump didn’t even bring up the case in a call to congratulate Putin on his election landslide on Tuesday. The same day, the European Union said no new sanctions are on the table over what Western leaders call the first offensive use of a nerve weapon in Europe since World War II. That’s just the reaction the Kremlin seems to have been counting on. “Putin’s bet that the West is weak and divided is being confirmed,” said Valery Solovei, a political scientist at the Moscow State Institute for International Relations. “The Russians very adeptly take advantage of this.” Putin’s increasingly aggressive approach—from alleged cyberattacks on the US power grid to video displays of missiles heading for Miami to the poison attack, which Russia denies any role in—has caught many in Western capitals off guard.
Dividing opponents
But according to insiders and analysts in Russia, the Kremlin’s push is driven by more than the desire to appear to be standing up to the West ahead of last Sunday’s presidential elections. By highlighting divisions and weakness among those who would seek to isolate Russia, Putin is demanding a new detente, but one on his terms. “It’s based on a belief that he has to knock them against the wall before they will sit down at the table,” said Igor Bunin, a political consultant who advises the Kremlin. Initially, the Kremlin was euphoric about the election of Trump, who praised Putin publicly and called for warmer ties. But the enthusiasm soon faded as the new president proved unable to deliver on his promises. Now, the pressure is back on to deepen differences among Russia’s rivals, with no hint of concessions, especially since Kremlin officials credit the tough line with the West with helping Putin at the ballot box. “Putin’s victory has shown the West his popularity and that pressure is pointless, so now the ball is in the West’s court,” said Gleb Kuznetsov, a political consultant who works for the Kremlin. “In this situation, when the West is talking about Russia as evil, no change or steps toward reconciliation can come from the Russian side.” Western officials seem to be struggling to respond. Just before he was fired, US Secretary of State Rex Tillerson admitted that
efforts to work with Moscow after Trump’s election had failed. “Quite frankly, after a year, we didn’t get very far,” Tillerson told reporters on March 13. “Instead what we’ve seen is a pivot on their part to be more aggressive. And this is very, very concerning to me and others that there seems to be a certain unleashing of activity that we don’t fully understand what the objective behind that is.”
Clear strategy
Solovei, the political scientist, said Putin’s goal is clear: “Recognition of the new foreign-policy status quo, lifting of sanctions and setting the conditions for an unobstructed transfer of power” in Russia when his term ends in 2024. “And his strategy is clear: strategic patience in difficult conditions,” he added. Western analysts say the approach seems to be working. “So far Putin has been proven right,” Joerg Forbrig, senior program director of the German Marshall Fund of the US, said by phone from Berlin. “He must feel the West is splintering.” Publicly, Russian officials deny trying to weaken the western alliance, but they do little to hide their joy when that’s what seems to happen. “Everyone has different interests. They can’t just line up and follow lock-step,” Vladimir Dzhabarov, first deputy chairman of the international affairs committee in the upper house of parliament, said in a telephone interview. He especially welcomed Trump’s call to congratulate Putin and the idea of a summit. “That would be great.” The Kremlin also touted the apparent success of Putin’s video displays of new missiles he said rendered US defenses useless, a display Trump mentioned in his account of the call. “In Washington, they heard the president’s state of the nation speech,” Spokesman Dmitry Peskov said on Wednesday, noting that Putin and Trump had agreed on the need to avoid a new arms race.
Declining power
Putin “wants to improve relations with the West,” said Vyacheslav Fetisov, a member of parliament from the ruling party who’s played hockey with the president regularly for years. “But he understands his responsibility that when he turns the country over to those who come after him, it must have authority. The only thing better than a victory is another victory.” But while Putin’s tough approach may help win him support among voters at home and highlight his opponents’ weakness in the short term, it may not be as effective at delivering him the recognition of Russia’s resurgent power that he seeks. Bloomberg News
With police near, suspected Austin bomber blows himself up P
FLUGERVILLE, Texas—As a SWAT team closed in, the suspected bomber whose deadly explosives terrorized Austin for three weeks used one of his own devices to blow himself up. But police warned that he could have planted more bombs before his death, and they cautioned the city to stay on guard. Mark Anthony Conditt, an unemployed college dropout who bought bomb-making materials at Home Depot, was tracked down using store surveillance video, cellphone signals and witness accounts of a customer shipping packages in a disguise that included a blond wig and gloves. His motive remained a mystery. Police finally found the 23-year-old early on Wednesday at a hotel in a suburb north of Austin. Officers prepared to move in for an arrest. When the suspect’s sport-utility vehicle began to drive away, they followed.
Conditt ran into a ditch on the side of the road, and SWAT officers approached, banging on his window. Within seconds, the suspect had detonated a bomb inside his vehicle, blasting the officers backward, Austin Police Chief Brian Manley said. One officer then fired his weapon at Conditt, the chief said. The medical examiner has not finalized the cause of death, but the bomb caused “significant” injuries, he said. Police discovered a 25-minute video recording on a cell phone found with Conditt, which Manley said he considers a “confession” to the bombings. It described in great detail the differences among the bombs, he said, but no motive. “It is the outcry of a very challenged young man talking about challenges in his own life,” Manley said of the recording. Law enforcement officials did not immediately say whether Conditt acted alone in the five bombings in the Texas capital and
suburban San Antonio that killed two people and badly wounded four others. Fred Milanowski of the US Bureau of Alcohol, Tobacco, Firearms and Explosives said investigators were confident that “the same person built each one of these devices.” Investigators released few details about Conditt, except his age and that he was white. Neighbors say he was homeschooled. He later attended Austin Community College from 2010 to 2012, according to a college spokesman, but he did not graduate. In a 2012 online blog that the college spokesman said Conditt created as part of a US government class project, he gives his opinion on several issues, often in response to someone else’s commentary. Conditt wrote that gay marriage should be illegal, argued in favor of the death penalty and gave his thoughts on “why we might want to consider” eliminating sex offender registries.
In the “about me” section of the blog, Conditt wrote that he wasn’t “that politically inclined” but did view himself as conservative. Jay Schulze, who lives in Pflugerville, said he was jogging on Tuesday night when he was stopped by police and asked about the bombings. He said police flew drones over Conditt’s home for about six hours between Tuesday evening and early Wednesday morning. Schulze described the home as “a weird house with a lot of people coming and going” and a bit rundown. A neighbor who watched Conditt grow up said he always seemed smart and polite. Jeff Reeb said he has lived next to Conditt’s parents for about 17 years and described them as good neighbors. Conditt had visited his parents regularly, he said. Conditt’s family released a statement saying they had “no idea of the darkness that Mark must have been in.” His uncle, Mike
Courtney, said his nephew was a “computer geek” who was intelligent and kind. Austin was hit with four bombings starting on March 2. The first explosions were from packages left on doorsteps. Then a bomb with a tripwire was placed near a public trail. A fifth parcel bomb detonated early on Tuesday at a FedEx distribution center near San Antonio. Rep. Michael McCaul, a Republican from Austin, said Conditt’s “fatal mistake” was walking into a FedEx store to mail a package because that allowed authorities to obtain surveillance video that showed him and his vehicle, along with his license plate number. From there, investigators could identify the suspect and eventually track him using his cell phone. Police warned of the possibility that more bombs had yet to be found. “We don’t know where this suspect has spent his last 24 hours, and therefore we
still need to remain vigilant to ensure that no other packages or devices have been left to the community,” Manley said. By late afternoon, federal officials had a “reasonable level of certainty” that there were no more package bombs “out in the public,” said Milanowski, the agent in charge of the Houston division of the ATF. But authorities urged continued awareness just in case. “We think we’re on top of this, but we just don’t know,” FBI agent Chris Combs said. Homemade explosives were recovered from Conditt’s home in Pflugerville, a community where portions of Friday Night Lights were filmed. His two roommates were detained for questioning. One was later released. Investigators said one room in the home contained bomb components and explosive materials but no finished bombs. They were analyzing Conditt’s Internet history to find out how he learned to make bombs. AP
www.businessmirror.com.ph | Editor: Lyn Ressureccion
The World BusinessMirror
Friday, March 23, 2018
A7
Facebook’s chief admits mistakes in guarding data
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AN FRANCISCO—Facebook’s chief executive, Mark Zuckerberg, on Wednesday publicly addressed for the first time the misuse of data belonging to 50 million users of the social network and described the steps the company would take to safeguard the information of its more than 2 billion monthly users. Although his statement addressing a chorus of criticism fell short of a fullthroated apology, Zuckerberg said that Facebook would contact users whose data had been harvested through a personality quiz app and passed along to the political data firm Cambridge Analytica. “We have a responsibility to protect your data,” Zuckerberg said on Wednesday in a Facebook post, “and if we can’t then we don’t deserve to serve you.” Zuckerberg, 33, was trying to quell the crisis over the disclosure last weekend that Cambridge Analytica had used data that had been improperly obtained from Facebook as the firm worked on behalf of Donald J. Trump’s presidential campaign. “Are there other Cambridge Analyticas out there?” Zuckerberg said later in an interview with The New York Times. He added, “Were there apps which could have gotten access to more information and potentially sold it without us knowing or done something that violated people’s trust? We also need to make sure we get that under control.” Zuckerberg said the company would investigate apps like the third-party quiz app that had previously obtained access to “large amounts of information” from the social network. He also said the company would restrict thirdparty developers’ access. “We also made mistakes, there’s more to do, and we need to step up and do it,” he wrote in his Facebook statement. The Cambridge Analytica revelations added to the questions that have been raised about Facebook’s handling of user data and security. Those questions have only intensified as the company has faced criticism over the role its platform played in Russian attempts to influence the 2016 presidential election and the way it has been used to spread misinformation on the Internet. The resulting backlash is Facebook ’s worst crisis since it was founded by Zuckerberg and others in 2004. The information, photos and other content that users post and their frequent engagement with the platform is crucial to the social network, and to the company’s profitability. Questions about user privacy and security threaten the company’s standing at a time when people are already uneasy about whether the use of technology can bring good or ill. Last Friday, after The New York Times, The Observer of London and Channel 4 in Britain told Facebook that Cambridge Analytica had not deleted all the data it had obtained, the social network banned the political consulting firm and Alexander Kogan, the Cambridge University researcher who created the personality quiz app that was used to harvest user data. “This was a breach of trust between Kogan, Cambridge Analytica and Facebook,” Zuckerberg wrote on Wednesday. “But it was also a breach of trust between Facebook and the people who share their data with us and expect us to protect it.” Facebook representatives confirmed that Cambridge Analytica representatives met with Facebook on Tuesday to discuss lifting the ban. Zuckerberg told The Times he did not rule out allowing Cambridge Analytica back, saying Facebook must first conduct a “full forensic audit of the firm” and “have full confirmation that there’s no wrongdoing here.” The reaction to the Cambridge Analytica disclosure has been severe. Politicians in the United States and Britain have called for Zuckerberg to explain how his company handles user data, and state attorneys general in Massachusetts and New York have begun investigating Cambridge Analytica and Facebook. A #DeleteFacebook movement calling on people to close their accounts has also gathered steam.
In Washington, there have been more calls for regulation of Internet companies like Facebook. Zuckerberg’s troubles there were illustrated by the final passage on Wednesday of a bill to combat sex trafficking. The bill would lift liability protections that Internet companies have enjoyed for content that users post on their platforms. Facebook and other Internet giants had quietly fought the bill for more than a year, but eventually dropped their opposition. Lawmakers who have demanded that Zuckerberg testify before Congress about Facebook’s relationship with Cambridge Analytica were not appeased by his statement. “You need to come to Congress and testify to this under oath,” Sen. Ed Markey, Democrat-Massachusetts, tweeted in response to Zuckerberg’s post. Independent researchers who have used data from Facebook said that Zuckerberg’s statement did not acknowledge how the gathering of user data was fundamental to the company’s operations. “He avoided the big issue, which is that for many years, Facebook was basically giving away user data like it was handing out candy,” said Jonathan Albright, research director at the Tow Center for Digital Journalism at Columbia University. “There is no question that handing out that data made Facebook the success it is as a company. This has to be recognized as part of their business model and not just a one-off problem.” In his statement, Zuckerberg laid out a timeline of Facebook’s dealings with Cambridge Analytica. He traced the information-sharing issue to 2007, when Facebook decided to become an open platform—enabling people to use Facebook to log into other apps and share detailed personal information about themselves and their friends. In 2013 Kogan, the Cambridge researcher, created a personality quiz app that about 300,000 people installed, Zuckerberg wrote. Because Facebook was an open platform, Kogan was able to collect data on tens of millions of friends of those users who had installed the personality quiz app. A year later, Zuckerberg said, Facebook changed its policy to limit how much data third-party apps could access. “These actions would prevent any app like Kogan’s from being able to access so much data today,” he wrote. By 2015 Kogan had shared his data and findings with Cambridge Analytica, which later used the material to single out American voters. Zuckerberg said Facebook had banned Kogan’s app and demanded that the researcher and Cambridge Analytica formally certify that the data had been deleted. He did not address in his post why Facebook had not already disclosed those activities to its users whose data had been harvested by Kogan and Cambridge Analytica. “Whenever there’s an issue where someone’s data gets passed to someone who the rules of the system shouldn’t have allowed it to, that’s rightfully a big issue and deserves to be a big uproar,” Zuckerberg said in the interview. For Zuckerberg, the outcr y over Cambridge Analytica has been personally damaging. Inside Facebook, even his staunch supporters have described a tense atmosphere. Some employees have sought to transfer to other divisions, such as the messaging app WhatsApp and the photo-sharing platform Instagram, calling their work on Facebook’s main product “demoralizing.” Zuckerberg spent part of the past week hunkered down with a small group of engineers to discuss how to make information on Facebook ’s users more secure, and to potentially give them more
control of their data, according to two Facebook employees who declined to be named because the proceedings were confidential. His silence on the matter has prompted mounting criticism in the past few days. Facebook held a staff meeting on Tuesday to answer questions about Cambridge Analytica, but Zuckerberg did not appear at the event. He was scheduled to appear
at a staff meeting that was set for Friday. In his interview with The Times, Zuckerberg said that the company’s efforts to safeguard its platform from bad behavior—which includes preparing for possible interference attempts in the 2018 midterm elections— were an important part of a larger transformation at the company, which has had to adjust from its roots as a social network
for college students into a powerful global information hub. “If you had asked me, when I got started with Facebook, if one of the central things I’d need to work on now is preventing governments from interfering in each other’s elections, there’s no way I thought that’s what I’d be doing if we talked in 2004 in my dorm room,” Zuckerberg said. New York Times News Service
Banking&Finance BusinessMirror
A8 Friday, March 23, 2018 • Editor: Jun B. Vallecera
www.businessmirror.com.ph
SSS offers new loan restructuring
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By Rea Cu
@ReaCuBM
he Social Security System (SSS) has announced that it will be offering once again its Loan Restructuring Program (LRP) to delinquent memberborrowers, with the agency expecting to generate P1.2 billion from the program and condone some P2.85 billion in penalties.
SSS President and CEO Emmanuel F. Dooc said during a news conference on Thursday that the re-implementation of the LRP will be offered from April 2 to Octo-
ber 2, giving delinquent members six months to avail themselves of the service. The state-run pension fund pointed out that around 250,000
Tokyo SurPPPrises! T
he m i s s p e l le d word, “sur pr ise s ,” i n t he t i tle is not the editor’s fault. It’s my way to attract your attention. Association World But more than that, it ’s a lso my w ish to Octavio Peralta h i g h l i g ht t he “ 3Ps ” i n side t he word be cause of my memorable experience during my recent fourday educational trip in the Japanese capital, hosted by the Tokyo Convention and Visitors Bureau (TCVB) through its business events team. I have been to Tokyo many times since the 1990s and it always amazes me on what the city has to offer in terms of business event venues and touristic activities. You see, as an association executive of an international organization, I get to be invited by conference and visitors bureaus and tourism boards promoting their country or city as a venue destination for meetings, incentive travel, conventions and exhibitions (MICE). Joining familiarization and site tours is educational as there are always something new to learn. Beyond convention centers, expo areas, hotels, activity venues, there are the people, language and culture. Japan is uniquely rich in all these aspects, so I was very fortunate that an opportunity from TCVB to visit Tokyo near the start of the cherry-blossom season came about. Here are the surprisingly 3Ps I am referring to: n Purposeful: TCVB business events team did excellent research in preparing a program for us that fit our association’s need for conference-venue options and room sizes, alternative activity areas, accommodation choices—all with a diversity of price points to consider. Options included, for instance, a “one-venue only” conference and accommodation site, as well as a multiplace conference, activity and accommodation venue. Quite impressive! n Personalized: Not only were our association’s specific needs taken cared of by TCVB, but also those of our needs. There were only two participants from our association, but the TCVB customized the program for us. I thought this was unique from other similar trips I have joined in the past. As fully hosted invitees, our flight, accommodation, transfers and meals were superbly organized, much to our delight! n Pleasant surprises: In one luxury hotel we visited, we saw our names flashed on the signboard before the grand ballroom. At the tourist area of Asakusa, our rickshaw tour guide had our names written on a welcome sign. Small details do create big impressions. As we moved around the city to visit the sites, we were met by very welcoming and cheerful people and these were indeed ver y heartwarming. I am sharing this experience to provide ideas on how organizations involved in promoting MICE may handle a site and familiarization tour like what TCVB did. In the end, it is not only the “must” places to see in a destination city but the “need” sites of the association executive-visitors, as well (i.e., it must be needs-driven). It is not merely to show the visitors around, but to also make their stay as pleasant and meaningful for themselves and their association. Finally, as the 3Ps show, a destination educational tour should: (a) serve the purpose of the visitors and the associations they work for; (b) appeal to the personal expectations of the guests; and (c) provide for enjoyable experiences and delightful surppprises! The column contributor, Octavio “Bobby” Peralta, is concurrently the secretary-general of the Association of Development Financing Institutions in Asia and the Pacific and CEO and Founder of the Philippine Council of Associations and Association Executives. PCA AE enjoys the support of Adfiap, the Tourism Promotions Board, and the Philippine International Convention Center. E-mail obp@adfiap.org
members would benefit from the re-implemented LRP. The first implementation of the program occurred in April 2016, with an availment period of one year, and was able to help around 800,000 individual member-borrowers. It generated P6 billion for the pension fund. “Income is secondary, the goal is really to help borrowers. There are some who were not able to avail [themselves] of the LRP last time. And there are new members covered who are affected by calamities in 2017, like the Marawi and Zamboanga siege. The latest would be the victims of the Mayon Volcano eruption,” Dooc said. Dooc pointed out that the decrease in expected income for the LRP re-implementation was based on the number of memberborrowers, which has decreased since the previous LRP offering.
The LRP allows member-borrowers to settle their overdue loan principal and interest in full or by installment under a restructured term depending on t heir capacity. For both schemes, the SSS shall waive all the loan penalties after the member has completed paying the restructured loan. Member-borrowers must be residing or working as of the date of the disaster in a calamity or disaster-stricken area declared by the National Disaster Risk Reduction and Management Council (NDRRMC) or, in the
case of Ondoy, by the national government. The LRP has an affordable amortization, which has a lower interest rate of 3 percent, compared to the interest-rate levels of other loan packages reaching 10 percent. Mea nwh i le, t he S S S c h ief pointed out that he is hopeful that the contribution hike will happen during the second half of the year. “We remain hopeful. Personally, I remain hopeful that we can effect the contribution increase. I hope that we can still do it on the second half [of the year]. [On the] first half there’s a slim chance. Hopefully, [by] June, the earlier the bigger our collection,” he added. Earlier, the SSS said the proposal to increase the minimum monthly sa lar y credit (MSC) to P4,000 from P1,000 and the maximum MSC to P20,000 from P16,000 along with the 3-percent contribution rate hike will
increase the minimum and maximum contributions to P560 from P110, and to P2,800 from P1,760, respectively. Dooc explained that the contribution increase would translate to higher benefits for members and pensioners since benefit computation is based on the number of credited years and MSC. In January the state-run pension fund pointed out that it will ask President Duterte to once again look into the proposal to increase its minimum and maximum MSC, as well as contribution rates this year, to further increase the viability of the life of the agency. T he p e nd i n g S S S c h a r te r amendment will allow the Social Security Commission (SSC) to make changes in terms of the rates imposed currently by the pension fund. There is no provision under the current charter giving the SSC the power to adjust the rate.
Powell debuts as show-me Federal reserve chairman in shift from theory and models
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ederal Reserve Chairman Jerome Powell showed he will be guided by the US economy’s performance rather than the theories and models relied upon by his predecessors to set monetary policy for the past three decades. Fresh from overseeing his first policy-setting meeting and its first interest rate hike of 2018, Powell signaled he won’t try to guess the limits of the labor market or the growth-boosting effects of Republican tax cuts. His message: He’ll know the economy is changing when he sees it. For now, his Fed is on track to raise rates at least twice more this year and possibly three times. “There is no sense in the data that we are on the cusp of an acceleration of inflation,” Powell told reporters on Wednesday in Washington. “We have seen moderate increases in wages and price inflation, and we seem to be seeing more of that.” Shortly before Powell spoke, the Federal Open Market Committee (FOMC) raised interest rates for the sixth time since December 2015. Financial markets largely took the move in stride. The target range for the federal funds rate was increased by a quarter percentage point to 1.5 percent to 1.75 percent, the highest since the 2008 collapse of Lehman Brothers Holdings Inc. froze credit markets worldwide. “This decision marks another step in the ongoing process of gradually scaling back monetarypolicy accommodation—a process that has been under way for several years now,” Powell said in opening remarks to reporters that signaled policy continuity with his predecessor, Janet Yellen. “The Powell Fed is proceeding with a similar sense of gradual de-
signals from incoming data.” The economic data are improving in several areas, including the job market. The median FOMC estimate in the March forecasts for the unemployment rate show it averaging 3.8 percent in the final quarter of 2018 and 3.6 percent in 2019 and 2020—below the 4.1 percent rate reported in February.
Overshooting full employment
Jerome Powell, chairman of the US Federal Reserve, speaks during a news conference following a Federal Open Market Committee meeting in Washington, D.C., on Wednesday. Federal Reserve officials, meeting for the first time under Powell, raised the benchmark lending rate a quarterpoint and forecast a steeper path of hikes in 2019 and 2020, citing an improving economic outlook. Policy-makers continued to project a total of three increases this year. Andrew Harrer/Bloomberg
liberation, at least for now. The dot plot revealed policy-makers shifting toward a faster pace of tightening in outlying years, consistent with Bloomberg Economics’ expectation for them to “backfill” rate hikes into 2019-2020,” said Carl Riccadonna and Yelena Shulyatyeva, Bloomberg Economics Policy similarities aside, there were stylistic differences. In addition to keeping his remarks short— the press conference was a scant 43 minutes compared to Yellen’s somewhat longer performances— he also declined to be drawn deeply into professorial discussions about the economy. Powell, 65, is a former privateequity executive—experience the Trump administration appointee
brought up to describe how businesses consider tax policy when making investment decisions. Asked whether tax cuts will deliver supply-side benefits, he concluded, “the whole thing is very uncertain.” His lack of economic formalism came through again as he backed away from being specific about the changing relationship between labor market slack and inflation—a critical issue now for the pace of Fed tightening. “He may be even less constrained than Chair Janet Yellen in his thinking,” said Julia Coronado, president of Macropolicy Perspectives Llc. in New York. “He is not as tied to models or theory and may be more inclined to take
That would represent a three-year overshoot of the Fed’s 4.5-percent estimate for the unemployment rate that keeps labor supply and demand in balance. Still, the committee’s response was not to shift to a faster pace of rate increases this year. Officials continued to project two more rate hikes in 2018, followed by three moves in 2019 and two further increases in 2020. The moderate path is partly a result of the heavy inertia holding back inflation Fed officials see in the economy. They forecast headline inflation of 1.9 percent for this year, 2 percent in 2019, and 2.1 percent in 2020. They have been under their 2-percent target for almost every month since April 2012. A median forecast above the Fed’s 2-percent target is a “dovish development,” Roberto Perli, a partner at Cornerstone Macro Llc. in Washington, wrote in a research note. “The FOMC is telling us that PCE inflation will not hit 2 percent any time soon, and when it does the Fed won’t get too excited,” he said. “The theory would be if you get below the sustainable rate of unemployment for a sustained period, you would see an acceleration of inflation,” Powell said in response to a question. “We are very alert to it. But it’s not something we observe at the present.” Bloomberg News
Marsh files for gag order before Insurance Commission
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arsh Philippines Inc. has requested the Insurance Commission (IC) to issue a gag order preventing any more media coverage to be released about the IC’s ongoing investigation about the insurance broker’s operations in the Philippines. According to its eight-page motion, Marsh believes that news reports have come as a result of Prudential Guarantee and Assurance Inc. (PGA) “making several statements to the media and causing the publication of several print and online articles regarding the controversy between PGA and Marsh,” which, in turn, may “prejudge the issue, inf luence the Honorable Commission, or obstruct the administration of justice in relation
to the pending case.” Late last year PGA filed a complaint which questioned the practice of Marsh using “fronting insurers” to solicit business in the Philippines. Marsh did not deny this fact, stating to the IC that its fronting insurers would only be paid a nominal fee by prospective clients, while Marsh would be paid a fee commensurate to covering the insurance risk. Under Section 100 of the local insurance Code, however, a reinsurance broker can only tender brokerage services to an insurer, and cannot offer insurance brokerage nor insurance services directly to a client. Apart from its seeming violation
of IC rules, the commission is, likewise, studying whether or not Marsh is effectively conducting business in the Philippines without a license. “Contrary to what Marsh claims, there is no ‘controversy between PGA and Marsh.’ My client merely informed the Insurance Commission that someone was not operating within the established rules,” PGA counsel Jose Antonio Bernas said. “A gag order would be understandable if this were a private issue between two companies, but it is not. This is a government agency investigating allegations of unlawful and unethical activity. The public has every right to know about that.” Bernas further said that members of the IC would not likely be
swayed by media reports. “I think we have to give the commission more credit than that. Given their credentials and experience, they can surely differentiate what is relevant for news and information versus what is relevant to the case at hand,” he added. In the past year, Marsh has been beset with regulatory complaints in a number of its global operations, due to alleged confidentiality violations and unethical business practices. Among these are investigations and hearings conducted by the Financial Conduct Authority and the High Court in the United Kingdom, the Securities Appellate Tribunal, as well as private cases in the United States and the Philippines
The Regions BusinessMirror
www.businessmirror.com.ph
Editor: Efleda P. Campos • Friday, March 23, 2018
A9
Quezon eyes total tourism devt of northern part of province
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By John Bello Correspondent
UCENA CITY—The Quezon provincial government is gearing to start an all-out effort for the total tourism development of the northern part of the province.
Being eyed especially is the Polillo Group of Islands (Pogi) comprising the towns of Polillo, Burdeos, Patnanungan, Panukulan and Jomalig. Gov. David Suarez is set to issue an executive order creating the Northern Quezon Development Cluster to realize the tourism potential of the island towns alongside the adjacent mainland towns of Real, Infanta and General Nakar. “Right now, we are committed to push through our development projects in Northern Quezon, especially the Polillo Group of Islands. I see the need to have plans, standards, principles and guidelines for our tourism sector regarding our island-tourismdestinations, so that’s why I am set to issue an executive order creating Northern Quezon Development Cluster to tap into our tourism potential and attract more tourists,” Suarez said in an ambush interview on Wednesday outside his office at the provincial capitol compound here. “If we don’t set standards and guidelines, our efforts would come to naught, especially in
giving tourists comfortable accommodations if we could not give them a sense of security in the places we are promoting,” said the governor who, along with wife, Party-list Rep. Anna Villaraza-Suarez of Alona, executive assistants and various department heads visited Polillo and its neighboring island towns last weekend to check on various ongoing development projects of the provincial government. Suarez expects a positive fallout from the national government’s move to close for one year well-known tourist destinations, such as Boracay, followed by Puerto Galera, due to environment and sanitation issues. The governor is gearing up for the potential tourism development of Pogi, especially its virtually untouched island beaches which the governor considers as comparable in beauty and richness to Boracay in Panay island and El Nido in Palawan. He said the annual invitational surfing competition in Real town under Mayor Diana Abigael Diestro-Aquino is drawing tourists and surfers, and can compete
with similar event in Siargao and La Union; the island-hopping of tourists in Polillo and Burdeos and the tourist lure to the long stretch of several beach resorts in Infanta town. Suarez also cited the ongoing concreting road project in Polillo and Burdeos, which is being delayed by the intermittent rains since October last year to February, causing the problems of delivering construction materials to the areas. He assured the funding allocation of P126 million for the 30.7-kilometer road project for the two island towns and expects to complete the concreting of about 25.7 km before the year ends. In pursuit of the realization of Northern Quezon as the “next frontier of development in Quezon,” the governor also cited the 24/7 electricity supply in the island towns, the near completion of the rehabilitation works of Infanta-Marikina road that has been destroyed by typhoon last year, and the establishment of Infanta Convention Center, which would be the venue for sports and cultural events and activities in Northern Quezon. The governor and his wife met with the island towns’ Provincial Union of Leaders against Illegalities volunteer members who they both considered as new heroes of the province; attended the inauguration of the new Polillo medicare hospital; distributed agricultural inputs and program cash for the beneficiaries of Tulong Panghanapbuhay sa Ating Disadvantaged or Displaced Workers; and gave cash for work-development programs being implemented by the first-term Alona party-list legislator in coordination with the Department of Labor and Employment.
Asean ‘Sydney Declaration’ presents strong position on South China Sea
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HE joint statement of the Association of Southeast Asian Nations-Australia Special Summit signed by member heads of state aired the strongest position against aggressive acts in the South China Sea. “We reaffirm the importance of maintaining and promoting peace, stability, maritime safety and security, freedom of navigation and overflight in the region. We emphasiaze the importance of nonmilitarization and the need to enhance mutual trust and confidence, exercise self-restraint in the conduct of activities and avoid actions that may complicate the situation. We reaffirm the need for states to pursue the peaceful resolutions of disputes, in accordance with universally recognized principles of international law, including the 1982 United Nations Convention on the Law of the Sea, and to comply with the relevant standards and recommended practices by the International Civil Aviation Organization and the International Maritime Organization. In this regard, we support the full and effective implementation
of the Declaration on the Conduct of the Parties in the South China Sea in its entirety and look forward to an early conclusion of an effective Code of Conduct in the South China Sea.” The declaration came at the end of the two-day special summit between Australia and the 10-member regional bloc, of which the Philippines was represented by Foreign Secretary Alan Peter S. Cayetano. President Duterte was the only head of state who did not attend the event. “The declaration raised the level of regional cooperation amid a changing geopolitical environment where the Philippines is a major stakeholder,” said Dindo Manhit, President of independent think-tank Stratbase ADR Institute. Short of an explicit reference to the Chinese militarization of the West Philippine Sea, the signatories stressed the “ importance of nonmilitarization and the need to enhance mutual trust and confidence, exercise self-restraint in the conduct of activities and avoid actions that
may complicate the situation.” In the same event, Vietnam and Australia released a joint statement that established “strategic partnership” between the two countries. “The Joint Statement on the Establishment of a Strategic Partnership between Australia and Vietnam shows how two nations with different political systems are able to build respect and shared interests that has become a model for bilateral cooperation that is aligned with the strong pronouncements of the AseanAustralia Special Summit,” Manhit said. The partnership covers a wide range of areas, including political cooperation, economic development, defense and security, education and culture, among others. “ T he A sea n’s u nequ ivoc a l support for the Code of Conduct in the South China Sea and nonmilitarization springs a new momentum for the government and a strong message against actions that run counter to building regional trust and confidence,” Manhit added.
FRESH BELL PEPPERS A vegetable helper in the vegetable trading post in La Trinidad, Benguet, sorts freshly picked green bell peppers before transporting them to lowland markets like Metro Manila. The price of green bell pepper remains stable in the trading post at P40 per kilo to wholesale buyers. LAILA AUSTRIA
Group hits coal firm’s land reclamation in Masinloc, Zambales By Jonathan L. Mayuga
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@jonlmayuga
ESIDENTS of Masinloc, Zambales are up in arms over the alleged land-reclamation activities of AES Corp., the operator of the Masinloc Coal-Fired Power Plant (MCPP) that led to the massive destruction of coral reefs. In a statement, members of Oyon Bay Protector (OBP) claimed coral reefs were destroyed because of the construction of a $1-billion expansion of AES Corp. to double the existing 600-megawatt (MW) capacity of the power plant. The group wrote a letter to Environment Secretary Roy A. Cimatu to air their grievance. The group said the power-plant operator has so far reclaimed close to a 1-hectare portion of coastal areas, including that, of a locally managed protected area using two dredging barges and earth-moving equipment. The construction of the additional 300-MW coal plant was started sometime in 2015 and is expected to go online during the last quarter of this year. “ The unauthorized massive reclamation activities of MCPP in Masinloc town must be stopped immediately, since they violated several provisions of the national integrated protected areas system Act of 1992,” said Joey Marabe, OBP Adhoc chairman. A survey in the area conducted last month by Zambales acting Provincial Environment and Natural Resource Officer Laudemir Salac revealed that MCPP’s power plant also encroached inside the protected area without the knowledge of the Department of Environment and Natural Resources and the municipal
government, Marabe said. The MCPP’s use of dredging barges and other equipment within the protected area was also without permits, as discovered by national and local government agencies, Marabe added. The plant is in a 137-hectare lot in the Mango Capital town of Masinloc, province of Zambales, about 250 kilometers northwest of Manila. It faces the South China Sea in the west and the Lawis River in the north, the National Highway No. 3 at the east and lying along the coastline of Oyon Bay in the south. “The power plant destroyed not just the protected areas of Masinloc but also the entire Masinloc and Oyon Bay Marine Reserve,” Marabe said. The Masinloc power plant, the oldest facility, was privatized by the government in 2008. AES Corp. won the auction for the Zambales-based coal-fired facility with its bid of $930 million. Subsequent local opposition and protests created problems for the plant’s developers with land-acquisition, resettlement and obtaining an environmental compliance certificate, thus significantly delaying the project’s construction. AES Corp. is an American company listed on the New York Stock Exchange, through a foreign company registered in the Philippines, Masinloc Power Partners Co. Ltd. In July last year, reports surfaced that AES is selling its controlling stake in the Masinloc power plant, as the United States energy giant realized gains from its 2008 acquisition and wants to realize “good value” from the sale as it dumps coal assets in favor of renewable energy.
BOC foils attempted car smuggling in Davao port
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AVAO CITY—The Bureau of Customs (BOC) here foiled an attempt last week to smuggle an undeclared sport-utility vehicle (SUV) after an x-ray scanning revealed the image of the car at the inner portion of the container van. The container van was supposed to contain only a used dump truck and a tractor head, Davao District Collector Erastus Sandino B. Austria said. Austria earlier issued a warrant of seizure and detention on March 12, instructing the Customs Police to confiscate the shipment’s contents. The warrant was issued following an alert order from Customs Commissioner Isidro S. Lapeña in Manila. He said the declared dump truck was placed at the opening of the container, blocking access and view to the back of the container. “And, smugglers hide items they want to smuggle at the back of the container.” “Upon physical inspection, our Customs examiner confirmed that a car was, indeed, undeclared by the consignee,” Austria said. He also elaborated on other techniques used by smugglers. “Some smugglers declare that they are importing motor-vehicle parts. But, upon closer inspection, their shipment contains a whole vehicle, with its parts disassembled,” Austria said. “It is easy for mechanics to piece together these parts.” Lapeña inspected the shipment on Wednesday during his regular port visit at the Port of Davao. “That’s one of the techniques they do,” Lapeña said during his inspection. He was referring to how the shipment was arranged to make inspection difficult, the Customs information office said. Manuel T. Cayon
A10 Friday, March 23, 2018 • Editor: Angel R. Calso
Opinion BusinessMirror
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editorial
The Canadian chopper issue
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overeign nations have always been associated with their current leaders. There is no more iconic image of World War II than the pictures of Winston Churchill, Franklin Roosevelt and Joseph Stalin meeting at Yalta discussing postwar Europe. The Cuban Missile Crisis of October 1962 was a confrontation between the two superpowers, but was also about secret direct communications between US President John F. Kennedy and Soviet Premier Nikita Khrushchev. There were even indirect messages between Kennedy and Cuba’s Fidel Castro. In this Age of Social Media, national leaders—whether president, prime minister or dictator—appear closer to the people and seemingly become the absolute face of a nation. The line between the person and country is blurred like never before. Instant “selfies” of Barrack Obama and instant tweets of Donald J. Trump are scattered to every corner of the planet. If that line between the leadership and the country is unclear, then perhaps the policies of the government are also hazy as to which purposes they serve—the person or the public. Upon assuming the presidency, Rodrigo Duterte said that he wanted US troops in Mindanao to leave and that he would no longer allow military exercises with American forces. While the annual Balikatan exercises continued, the 2017 exercises focused on disaster response and medical missions. Was that a “compromise” based on what was best for the nation or best for the Duterte policy? In early-February Prime Minister Justin Trudeau supported pushing through with the sale of 16 Canadian made helicopters worth some $200 million to the Philippine Air Force. By the end of the month, Canada said they were reviewing the deal and that it would be delayed due to questions about if the helicopters would be used for “combat operations.” Because of the delay, Duterte canceled the purchase. The Bell Helicopter 412EPI is not designed for use in military combat operations except as a support platform and has been sold to the military of nearly 40 other countries, including Thailand, China, Pakistan and Indonesia. It can be outfitted with armaments. Bell Helicopter Canada is a subsidiary of Bell Helicopter Textron USA and most of the sales did come from the US. Canada has always grappled with the morality of its military sales having helped arm the Dutch in its colonial war against Indonesia in 1946 and then arming Indonesia when it invaded East Timor in 1975. However, the controversy over the sale of the utility helicopters to the Philippines is coincidentally interesting. Trudeau has strongly supported an $11.6-billion arms sale to Saudi Arabia struck in 2014, including 119 “heavy assault vehicles” armed with 105-millimeter cannons. Canada’s Foreign Affairs Minister Chrystia Freeland confirmed that her department did not find “conclusive evidence” that the previously delivered Canadian-made light-armored vehicles had been used in human-rights abuses. Saudi invaded Yemen in 2015, involving itself in a civil war that has killed some 10,000 civilians. On March 21 Trudeau said “the [Saudi] deal is in line with Canada’s foreign and defense policies.” But as the controversy over the Saudi sale heated up in February, he was also asked whether he was concerned the Bell helicopters might be used against Filipino citizens and replied, “Absolutely.” Like all good politicians, Prime Minister “Say people-kind not mankind” Trudeau can keep both his $11-billion deal with the Saudis and maintain his global human-rights defender image. President Duterte can keep his tough guy image with “My God, you Canadians, how stupid can you get?” and add another incident to the list that “the West does not care about the Philippines.” Politicians, you have to love them.
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Here we go James Jimenez
spox
Y
es, that viral post about the Commission on Elections (Comelec) no longer issuing voter identification cards, for voters registered from 2012 to present, is fairly accurate: the Comelec has stopped issuing voter ID cards, post-2012. The printing of voter IDs was suspended when discussions about the creation of a National ID system started up again in earnest, which actually happened long before the idea made it into the bill now being deliberated on by the Senate. Considering the possibility of duplication of efforts, not to mention concerns regarding the protection of data privacy, the Comelec decided it would be better to suspend the issuance of voter identification cards until such time that the idea of National ID either reached fruition or was finally discarded for good. However, voters who were registered prior to 2012 have had their voter IDs issued. The Comelec also
continues to issue replacements for lost voter ID cards, subject to the presentation of an affidavit of loss and the payment of a nominal fee. As of today, various Comelec offices nationwide currently still hold thousands of unclaimed voter ID cards, which, incidentally, are not required for voting. And speaking of voting, that whooshing sound you hear is the collective sigh of relief exhaled by 57,284,798 barangay and Sangguniang Kabataan voters learning that Congress went into recess this week without the Senate having done anything to support the House of Representatives’s initiative to postpone the 2018 barangay and Sangguniang
I’m worried now, as before the Iraq War
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Kabataan elections. Despite letting out a small puff of previously bated breath myself, I am guardedly optimistic at best. After all, the key personalities involved—the senators and the President—have all gone on record, saying that the village and youth polls would be proceeding as re-rescheduled. Barring the occurrence of some supervening event of earthshaking magnitude over the next seven weeks, it would appear that that’s as good a guarantee as any. In light, therefore, of the dawning of this new optimism about the fate of the 2018 polls, a few reminders: First, if you’re a voter in Luzon and the Visayas, expect your ballots to be dated October 2017, not May 2018. This is because you will be using ballots that were printed for use last year, before the polls were rescheduled for the second time. Voter in Mindanao, on the other hand, will have ballots dated May 2018 because these will have been printed only this year. Second, the ballots for the barangay elections and the Sangguniang Kabataan elections differ in one major detail. On the SK ballot, the name of the election and the titles of the positions being voted on are printed in red ink. In contrast, all of
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‘W
E will be greeted as liberators” upon invading Iraq, Vice President Dick Cheney counseled in 2003 on the eve of the war. He had already relayed a prediction that the streets in Basra and Baghdad are “sure to erupt in joy.” President George W. Bush declared that there was “no doubt” that Iraq had weapons of mass destruction. Defense Secretary Donald Rumsfeld said that an invasion would be largely self-financing and that it would last “five days or five weeks or five months, but it certainly isn’t going to last any longer.” So 15 years ago this week, the United States careered into one of the most cataclysmic, expensive and idiotic blunders of the past half-century: We invaded Iraq. The financial cost alone to the United States will top $3 trillion, according to the estimates of the economists Joseph Stiglitz and Linda Bilmes, or about $24,000 per American household. Some 4,400 American soldiers died in Iraq, along with approximately 500,000 Iraqis, according to a survey and academic study. The war helped trigger the Syria war, the genocide against the Yazidi
and Middle East Christians, the rise of the Islamic State, the strengthening of Iran and a broader Sunni-Shiite conflict in the Middle East that will claim lives for years to come. We should try to learn from these calamitous misjudgments, but I have a grim feeling in my belly, a bit like I had in the runup to the Iraq War, that we have a president who is leading us toward reckless, catastrophic conflict. Actually, toward three reckless conflicts. The first is not a bloody one: It’s a trade war. President Donald J. Trump’s tariffs and other trade actions mark the abandonment of a 70-year American effort to lead the world to a more open trade system. “Trade wars are good, and easy to win,” Trump tweeted this month—an inane echo of Cheney’s hubris about the Iraq War. The second conflict that Trump is hurtling toward is with Iran. Unless he
chooses some face-saving compromise, it looks as if Trump will pull out of the Iran nuclear deal by May 12. The risk is that Iran responds by restarting its nuclear program. This would lead to soaring tensions, the possibility of an Israeli strike on Iran, a risk of Saudi-Iranian conflict and a danger of war between the United States and Iran. Mike Pompeo, the CIA director, whom Trump has nominated to be secretary of state, is very smart—and very hawkish on Iran. Moreover, Trump is considering replacing his national security adviser, H.R. McMaster, with John Bolton, who is not a mere hawk so much as a pterosaur. (The last best hope for world peace may be Bolton’s dramatic mustache, because it’s so substantial that it might keep Trump from choosing its owner. Let’s all pray that Bolton doesn’t shave it.) The final risk, of course, is a war with North Korea. We may have a reprieve for a couple of months if Trump’s face-toface with Kim Jong Un goes ahead, but I think Americans are too reassured by the prospect of a summit meeting. The basic problem: There’s almost no chance that North Korea will agree to the kind of verifiable denuclearization that Trump talks about. Then the danger is that if a summit collapses, there’s no room to restart the process with lowerlevel diplomats. At that point, the risk of military conflict soars because all alternatives seem exhausted. Moreover, Trump’s snap decision to accept Kim’s invitation to meet under-
the text on the Barangay ballot will be printed in black ink. Third, there will be a total of 177,565 voting precincts operating on election day. You will be assigned to one of those precincts. As with all precincts nationwide, the Board of Election Tellers at your voting precinct will have a list of voters who are eligible to vote in that precinct. It will be indicated on that list which voters will receive only an SK ballot, an SK and a barangay ballot, and only a barangay ballot—voters aged 15 to 17, 18 to 30 and 31 up, respectively. This means that individual voters will simply be given the correct type and number of ballots they’re supposed to receive, without them having to prove their age. Fourth, the barangay and SK elections will be manual, which means that the ballots will not have the names of the candidates preprinted on them. You will have to refer to the official list of candidates—which will be available at every voting station within the polling place—for the names of the candidates. You should copy the names of the candidates you’ve chosen, as they appear on the list. This will ensure that your vote is credited to the person you intended to choose.
scores the risk of a mercurial president leaping into actions—which is one of the reasons we got into the mess in Iraq. The temptation to fire missiles at North Korea or Iran may also be particularly great for a president seeking to distract from a Russia investigation or an outspoken porn actress. These fears of conflict aren’t found just among Democrats but are broadly shared by many foreign policy analysts across the spectrum. Kori Schake, who worked in the Bush White House during the Iraq War, notes that Trump sometimes has spoken about North Korea the way Bush administration officials did about Iraq, and she adds: “I worry that President Trump could lead to war on the Korean Peninsula or against Iran, or by miscalculation in a number of other places where adversaries misread his intent. The president considers his unpredictability advantageous, when it is more likely to have explosive consequences.” Looking back, the biggest problem 15 years ago was that the administration was stuck in an echo chamber and far too optimistic, and Democrats and the news media alike mostly rolled over. Journalists too often acted as lap dogs, not watchdogs—and today I fear that we may be so busy chasing the latest shiny object that we miss an abyss ahead. I also frankly doubt that we as a nation have learned the lesson from Iraq. A recent Pew survey found that 43 percent of Americans still believe that invading Iraq was the correct decision. Hello?
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Charity through Alay Kapwa 2018
A barber’s tale Tito Genova Valiente
annotations
Rev. Fr. Antonio Cecilio T. Pascual
SERVANT LEADER
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N his pastoral letter for Alay Kapwa 2018, Manila Archbishop Luis Antonio Cardinal Tagle said that Lent is a season wherein “we are especially called upon to exercise charity in our dealings with our neighbor—that is to say, to have genuine concern for those who are needy and who suffer, and to perform concrete good works.” It is indeed that the pair of generosity and kindness is the best way to prepare ourselves to the Lord Jesus Christ during Holy Week because “charity, after all, is the very heart of Christian life.” It is a time for us again to repent from our sins and be united as children of God. “For several years now, during Lent, we have been conducting our Alay Kapwa Lenten evangelization and fund-raising program.” This program aims to strengthen our social services to the poor, “especially those who suffer during natural and human-caused calamities.” Last year funds raised were used to extend our assistance to the “victims of Siargao earthquake, of typhoons Urduja and Vinta, and various fire disasters in Metro Manila. We also contributed to the Marawi rehabilitation.” Caritas Manila, the leading socialdevelopment arm of the Archdiocese of Manila, also provided relief and rehabilitation assistance to 14,732 families nationwide. “With the increasing number and magnitude of disasters and calamities being responded to by Caritas Damayan, our Alay Kapwa
funds get immediately depleted. It is, therefore, our hope that we will be more generous in our almsgiving this season of Lent.” My dear brothers and sisters in Christ, we are appealing to you once again to support the Alay Kapwa 2018. “We are called to love God, and our love for God is best expressed by the love we have for our brothers and sisters.” “Let us be concerned for each other, to stir a response in love and good works” (Hebrews 10, 24). Let us take the season of Lent as an opportunity to offer our mercy and compassion to others so that God will prosper us and return our favor. May the value of generosity and kindness be our way to be united with our Savior, Jesus Christ. To know more about Caritas Manila, visit or follow us on Facebook: CaritasManilaInc. For your donations, please call our DonorCare lines 5639311, 564-0205, 0999-7943455, 0905-4285001 and 0929-8343857. Make it a habit to listen to Radio Veritas 846 in the AM band, or through live streaming at www.veritas846.ph, and follow its Twitter and Instragram accounts @veritasph and YouTube at veritas846.ph. For comments, e-mail veritas846pr@gmail.com.
Which comes first—BBL or federalism? Edgardo J. Angara
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f the structural reforms being discussed today, the Bangsamoro basic law (BBL) and the shift to federalism are the most significant. Both will profoundly alter political structure and behavior when passed. The BBL seeks to respond to the long-standing grievances of Muslim Mindanao against Manila’s neglect of the community. Along the same line, the clamor for federalism seeks to address the unequal development of the provinces. The main debate is about timing—which one should go ahead of the other. Former Chief Justice Hilario Davide, for instance, said that a BBL region could be seen as a way of gauging whether the country is prepared to make the full shift to federalism. Hence, the BBL should go first. Others suggest that federalism being a national plan should come first. In my opinion, either one can get approved ahead of the other. That, of course, is not to say that the objections to each shouldn’t be addressed. Such issues as unconstitutional provisions in BBL, concerns over financial viability, political dynasties, and even the mode of change in the Constitution. I suggest enacting either proposal will resolve some issues in the process and others rendered moot. We can expect some issues will be resolved, others will not. But that should not stop the process. The assembly may provide for a dispute-resolution if that stalemate is reached. For instance, a three-member Constitutional Court can be consti-
tuted to arbitrate with finality any dispute or differences. If the decision is to move the BBL forward first, it can adopt the Malaysian model where the constitutional monarch or head of state is rotated among the nine rulers. A ceremonial head of state will be elected by rotation among representatives of the Maranao, the Maguindanao, the Tausug, the Subanon and other tribes. The same rotation system can also be used for choosing the head of government, the Chief Minister. Both offices cannot be occupied by representatives from the same ethnic group, tribe or sultanate of the same geographic area as ceremonial head of state. That’s a precaution against conflict of interest. Other changes can be carried out through legislation or administratively. Having already discussed and debated the features of a federal system, then, federalism will no longer be an unfamiliar concept. Perhaps, the BBL exercise will enlighten the public. The essential point is that the structural change—that is, the devolution of true autonomy to local communities—can begin in earnest.
E-mail: angara.ed@gmail.com| Facebook and Twitter: @edangara
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his story happened in a barber shop. It was one of those lazy, late afternoons of Tuesday. I was having a haircut. The session was almost over when my barber, Ronnie, whispered to me: Sir, someone had paid already for your haircut. Thank God I did not quickly turn around, or I would have lost my ear. But it was almost there, the mind shoving the body to make the swift turn so one could find out what was happening. Was this a joke? Who would do such a thing, pay for someone’s most ordinary, most regular of habits—a haircut? People pay for your drinks. Some important men buy you cocktails. The scene is sheer sophistication. You are there nursing a drink, waiting for a drink, and a waiter approaches you and asks what you are drinking. In a wealthier world or in a poorer galaxy with terrific pretensions, the drink could be a martini. You look at the waiter who you feel has overstepped his role and ask why he is asking. He then gently points to you to a corner where a gentleman has already raised his glass. The man wants to buy you a drink, sir.
He reads your column. That scene is alright. That scene fits the scenario in bad movies we love to watch. But no one, I believe, no one pays for someone’s haircut. Ronnie had stopped his ministration on my hair. This gave me the chance to scan the small space of the barber shop. I was not quick enough. I caught half of the man’s body as he rushed out of the door. The other barber had inserted himself in the whispered conversation. Sir, he did not want you to see to him. But he said, he was your former student in the university. All motions and all sound ceased at that point. The talk about everything and many things stopped. They
Friday, March 23, 2018 A11
were all looking at me. They were all praising the man who did what they thought was the rarest, noblest act: pay the haircut of a person you admire or respect or miss. The barber who did my “former” student’s hair never got his name. He was a new customer, having moved back to our city after a long stay abroad. Ronnie resumed the session. I was lost in a tiny space, as I navigated a dark, narrow hall of memories. I remembered I did teach in the Jesuit university in our city many years ago. The students were good, I recalled then. I was younger and eager to make a difference. I was more patient, tolerant even. Quietly to myself, I thanked the former student for not showing himself behind me to declare that he was paying for my haircut. I would not have allowed that; worse, I would not have recognized him. Up to this day, no one has told me who that former student was. He, it seems, never told anyone of that act, which is understandable. There are so many questions I am asking about this former student. Why did he come back to the small city? Has he retired? Is he happy with his life? Then comes the more terrible questions: Was I a good teacher to him, which is why he did that rare, noble act of paying for my haircut?
Why rebase the Price Index? Alvin P. Ang
EAGLE WATCH
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ast Tuesday the Philippine Statistics Authority announced that inflation for the month of February rose to 3.9 percent, from 3.4 percent in January 2018. At the same time, they also announced that, using 2006 prices, inflation actually was higher to about 4.5 percent. Why were there two inflation rates announced? The PSA made an announcement that, beginning March this year, they will start estimating consumer price index (CPI) using 2012 as the base year. This means that the current base year that we were using, i.e., 2006, will slowly be discarded in favor of 2012.
Why is this necessary? I recall discussing with my mother the price of pandesal. She said that, when I was an elementary student, pandesal sells for P0.10 a piece. Currently, the neighborhood bakery sells it for P2.50 each. She complained that it has risen more than 10x from the last three decades and that the price increase was faster than the income increase. Her observation is correct—the price has been increasing, which could be due to a number of factors. But, since pandesal is only one of the many items included in the daily family basket, we need to take into account the purchasing power of the income rather than the increase of prices of individual product/service items. The prices of the individual goods and services in this basket are averaged and computed into an index, which we call the CPI. The changes in the CPI is what we call inflation rate. Going back to the pandesal, it may be a popular breakfast item in the 1970s, but not anymore today. If
we continue to use the same weight it has in the CPI from the 1970s to today, it will not give us an accurate measure of the average price increase of the consumer basket. Thus, the shares or weights of the components of the basket change through time. This is the most important reason for rebasing the CPI—to take account of the change in consumption pattern of the people. The base allows us to have a common reference point so that we are talking about the same time horizon. Hence, the base allows us to compute for the purchasing power of the peso today compared to the same peso value of the base year. Thus, the faster the price increase from the base year, the lower the purchasing power is today. Using 2006 prices, the purchasing power today of one peso is P 0.65, meaning the same peso in 2006 can only buy 65 centavos worth of goods and services today, losing 35 percent of value from 2006. Using 2012 prices, purchasing
power eroded by 14 percent, or that it can only buy 86 centavos worth of goods and services. This is why having low inflation is important, because it means that the peso’s purchasing power is not easily being eroded. The changing of the base is patterned from the results of the Family Income and Expenditure Survey conducted in 2012. Consider the table below from the PSA, it shows how the average family consumption basket has changed in the last six years. Composed of 11 commodity groups, the higher share remains to be food. But note significant changes, such as the almost 0.5-percent decrease in the share of alcohol, beverages and tobacco even before the “Sin” tax law was implemented in 2013 and the almost 1 percentage point increase in the share of health, suggesting that the population is becoming health conscious. It would be good to look into the details of the February 2018 inflation report for more specific commodity items
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facing arrest in their home countries who should be detained for potential extradition. (Interpol itself has no arrest authority.) The agency also issues “diffusions,” which are similar but not vetted or made public. In theory, it’s a good system. In practice, it’s being abused by Russia and other authoritarian regimes trying to punish political dissidents and others. Since 2009, the number of red notices has quadrupled, to more than 12,000 in 2016. Data on diffusions aren’t published, but that total is probably even higher. Azerbaijan, China, Russia, Turkey and Venezuela—none of them model states for the rule of law—have led the charge.
E-mail: titovaliente@yahoo.com.
(http://www.psa.gov.ph/statistics/ survey/price/summary-inflation-report-consumer-price-index-2012100february-2018). The table can also help understand new business opportunities or changing demand patterns that could help pinpoint where capital can be directed. As the country’s average income grows larger, this pattern will show more significant changes moving away from food and more toward other components. For instance, the detailed report showed that more people actually have personal transport in 2012 than in 2006 and that more are spending on personal care and personal effects. Considering that the basket did not change significantly, especially in terms of food, the direction of inflation will still largely follow that of the previous base year. The lower rate for February using the 2012 base only implies that some items that weighted heavier in 2006 are not as important six years later.
COMMODITY GROUP 20012-based ALL ITEMS 100.00000000 I. FOOD AND NONALCHOLIC BEVERAGES 38.33772656 II. ALCOHOLIC BEVERAGES AND TOBACCO 1.58383114 III. CLOTHING AND FOOTWEAR 2.93241978 IV. HOUSING, WATER, ELECTRICITY, GAS AND OTHER FUELS 22.03526873 V. FURNISHINGS, HOUSEHOLD EQUIPMENT AND ROUTINE MAINTENANCE OF THE HOUSE 2.94793357 VI. HEALTH 3.89471048 VII. TRANSPORT 8.05791547 VIII. COMMUNICATION 2.92644920 IX. RECREATION AND CULTURE 1.40598409 X. EDUCATION 3.28329282 XI. RESTAURANT AND MISCELLANEOUS GOODS AND SERVICES 12.59446816
2006-based 100.00000000 38.97847415 1.99698808 2.95182960 22.46603900 3.22098848 2.99128088 7.80928290 2.26006629 1.93248368 3.36275101 12.02981593
Source: PSA
Interpol is now a crime victim he poisoning of a former Russian double agent and his daughter in Salisbury, England, earlier this month isn’t just an international scandal. It is also a crime. And while United Kingdom authorities are responsible for the investigation, their job is complicated by a crisis at Interpol. The global law-enforcement agency, which has coordinated worldwide police responses and tracked criminals since World War I, would need to assist Scotland Yard if the trail leads to the Kremlin, as seems likely. Its primary tool is the so-called red notice. These alerts—requested by national authorities and reviewed and issued by Interpol—tell local authorities of travelers
Was he a bad student, and did I save him from academic destruction, thus the payback? Teaching, as all would say, is one of the real professions in the world. The pay is generally not good but, each day, in the classroom, the teacher sharpens his wit and mind. The memories are rich and diverse. Each year, as students graduate, the teacher enables individuals to go forth, improve themselves, earn money, to conquer as well the world. If you have been a good teacher, and a former student has done well in his or her profession, you share in that achievement. If a former student has become a hardened criminal, then you participate as well in that notoriety. If the former student has become a politician, then blame yourself for the corruption that is happening, for this means you have—no excuses—failed. When the world is on the brink of destruction, be prepared: the world will put the blame on the teachers. Well, when my world reaches its waning moment, I shall be happy with the thought that, a former student, on one lazy, late Tuesday afternoon, paid for my haircut, as he rushed out so I will not see him and ask him and judge him for what life has brought to him.
The most prominent victim is Bill Browder, the American-born British financier who employed the lawyer and anti-corruption activist Sergei Magnitsky, who died under suspicious circumstances in a Moscow jail in 2009. Russia has issued two diffusions for the arrest of Browder, who now lives in London. Wang Zaigang, a Chinese democracy advocate living in the United States, has been red flagged by Beijing. Dogan Akhanli, a Turkish-German writer, was detained in Spain last year on a politically motivated red notice issued by Turkey. Interpol has made some minor reforms, but it needs to bring in an independent body. Such a board could determine which countries are abusing
the red-flag system—and then hold these countries to a higher standard of evidence before issuing red notices on their behalf. In addition, officials from those nations should be barred from top Interpol posts—the current president is Chinese—until they change their practices. Finally, member states should no longer be allowed to issue diffusions unilaterally: Interpol should vet those requests and determine whether secrecy is vital. Interpol may well need a broader overhaul, as any century-old institution would. In the meantime, it needs to take some concrete steps to protect itself from being manipulated in an increasingly authoritarian world. Bloomberg View
2nd Front Page BusinessMirror
A12 Friday, March 23, 2018
Bill banning political dynasties seen breezing through Senate
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By Butch Fernandez
@butchfBM
consolidated measure banning political dynasties is seen to breeze through the Senate, with 13 senators endorsing passage of Senate Bill (SB) 1765, which is to be known as the AntiPolitical Dynasty Act of 2018 once enacted into law. SB 1765 would ban spouses (legal and common law), siblings (full or half-blood), parents and children (legitimate, illegitimate and adopted) and the spouses of second-degree relatives vying to replace their relatives occupying elective positions.
Comprising a majority in the 23-member chamber, the 13 senators affixed their signatures signifying support for early enactment of SB 1765, which defined political dynasty as the “concentration, consolidation, and/or perpetuation of public office and political powers
SB 1765 The Senate bill endorsed by 13 senators seeking to end political dynasty
by persons related to one another within the second degree of consanguinity or affinity.” Among those who signed up as endorsers of SB 1765 were Minority Leader Franklin M. Drilon and Sens. Risa Hontiveros-Baraquel, Loren B. Legarda, Panfilo M. Lacson Jr., Grace Poe, Joseph Victor G. Ejercito, Paolo Benigno A. Aquino IV, Nancy S. Binay, Juan Edgardo M. Angara, Ralph G. Recto, Leila M. de Lima, Sherwin T. Gatchalian and Francis N. Pangilinan. The proposed law, embodied in Committee Report 367 submitted by the Committee on Electoral
Reforms and People’s Participation, specified that any person with relationship with any incumbent elective official shall not be allowed to run for or hold public office “to immediately succeed or replace the said incumbent.” It also covers other circumstances, including the following: if the incumbent is an elective barangay official, the spouse and the above relatives are prohibited to run simultaneously for any position in the same barangay, as well as in the barangays in municipalities or cities within the same legislative district; If the incumbent is an elective official of the municipality or city, legislative district or province, the spouse and above relatives are prohibited to run for or hold any elective office simultaneously with the incumbent within the same barangay, municipality, city, legislative district or province;
If the incumbent is a national elective official, the spouse and the above relatives are, likewise, prohibited to run simultaneously for any position in the national or local level as barangay captain, mayor, governor or district representative in any part of the country; and If the incumbent is a barangay captain/mayor/governor or district representative, the spouse and the above relatives are also prohibited to run simultaneously for any position in the national level. The bill further provides that persons not holding any public office shall also be prohibited from running in the same election if their election will result in a politicaldynasty relationship. Moreover, the bill empowers the Commission on Elections to deny the application for certificate of candidacy on any candidate found in a political dynasty relationship.
Govt on track to converting rice QR into tariffs by June Continued from A1
“I think they will do some legwork during their break and then hopefully it will go through the committees very fast. They promised if not this session [passage of the bill], definitely in the next session,” Sombilla said. “Yes, I am confident that they will pass it [in time for June] because I think the economic managers have already emphasized to Congress the importance of this [measure],” she added. Sombilla said the tariffication of rice QR is one of the government’s top priorities at this time. Its passage is seen as a way of preventing a repeat of the problems that have hounded the NFA in recent years. While the Duterte administration is mulling over the restructuring of the NFA, Sombilla said this would have to take a backseat for now to fast-track the approval of the ricetariffication bill. “We have to complete the rice tarification first. If we include that
in the tariffication bill, that will prolong the process of approval. That’s why we’re very careful not to touch anything about the NFA structure. We want to have that tariff first and then work on the structure of the NFA,” Sombilla said. She also said the NFAC had allowed rice imports to arrive earlier, instead of June, upon the recommendation of Agriculture Secretary Emmanuel F. Piñol. At the earliest, rice imports would arrive in mid-May, or when the summer harvest has ended. Last November Philippine Competition Commission Chairman Arsenio M. Balisacan told the BusinessM irror that removing the QR on rice and converting this into a tariff is “a step toward the right direction” as it would allow the entry of more players into the rice sector. Balisacan also said the creation of a fund that will help farmers will also not be anticompetition if it will be channeled to their needs, such as the construction of farm-to-market roads and irrigation facilities.
JCB PLATINUM CARD LAUNCH Officials from JCB and RCBC propose a toast during the launch of their newest offering, the JCB Platinum card. The launch also highlighted RCBC Bankard’s long-standing relationship with JCB, which began in 1999. RCBC Bankard Services Corp. is a wholly owned subsidiary of Rizal Commercial Banking Corp. (RCBC), one of the country’s top universal banks. RCBC Bankard is the credit-card servicing entity of RCBC. Attending the event in Bonifacio Global City are (from left) Yuichiro Kadowaki, JCB senior vice president of business development and coordination; Simon Calasanz, RCBC Bankard president and CEO; Gil Buenaventura, RCBC president and CEO; and Mikihisa Asano, JCB country manager. NONIE REYES
BORACAY CLOSURE COULD LEAD TO GOVT LOSS OF OVER P6.7 BILLION IN TAXES A s this developed, severa l stakeholders have already reported anxious tourists and a drop in their income since the island’s closure was raised by members of Task Force Boracay this month. In an interview with the BusinessMirror, Peter Tay, managing director of Boracay Adventures Travel and Tours, a tour operator on the island, said: “I’ve already received several inquiries from Chinese clients abroad, as well as clients in Malaysia and Singapore if they should push through with their trips to Boracay. Honestly, I didn’t know what to answer them because we don’t know what the government’s plans really are. Will they close Boracay? If so, when?” He said if the island is closed by April 26, as the Department of Tourism (DOT) had proposed recently, “I stand to lose about P8 million” from Chinese clients alone. Tay, a swimming and lifeguard instructor as well as PADI Master Instructor, said these clients are booked for 15 days in eight groups for his rescue training course. Tasked by the Chinese Em-bassy in Manila to liaison with Chinese tourists on Boracay, Tay also inti-
mated that there would have been an “additional seven direct flights a day from China [to Kalibo],” on top of the existing seven daily flights. But with the impending closure, these plans have been put on hold. Of the 6.6 million visitor arrivals in 2018, China accounted for 14.63 percent or 968,447 tourists. “This year they are expecting 2 million Chinese tourists; but most of them want to go to Boracay!” he stressed. Also at the news conference was Manny Casidsid, president of the Masboi Paraw Association, who said his members have already begun feeling the effects of the possible closure of Boracay. “Usually po mga P300 to P600 a day ang kita namin kada araw. [We usually earn about P300 to P600 a day],” he told this paper. “Lahat po yan napupunta sa pagkain ng mga pamilya namin, sa pag-aral ng mga anak namin. Pag maisara ho kahit dalawang buwan, ano ho’ng gagawin namin? Lalo pa kung umabot ng isang taon. Huwag naman sana. [That all goes to feeding our families and sending our kids to school. If the island is closed for two months, what are we going to do? What more if the closure reaches a year.
I hope not],” He said these days, his members who number about 700, now earn about half of their usual daily income. Pressed what they would do if the government proceeds to close the island for a year, Casidsid said, “Balik nalang po sa dati naming gawi, magbungkal sa lupa, mangingisda [we’ll go back to what we used to do, farming and fishing].” The paraw, a traditional Aklanon fishing boat with two outriggers and a sail, usually caters to tourists in Boracay who go on a sunset cruise or tours around the island where they snorkel and go to other beaches. For his part, BFI Board Director Leonard Tirol pointed out that White Beach and Puka Beach have already been cleaned up and many resorts, which received notices of violations, have already complied with the orders of the government to make immediate remedies. He noted that the local government has already closed Boracay West Cove, an establishment that was found to be operating without the necessary government permits. All these measures already being undertaken by the local govern-
ment and resort owners, he said, show that the closure of the island is unnecessary. “[Environment] Secretary Cimatu has already seen the progress that’s been made on the island.” Task Force Boracay, which Cimatu heads, has recommended the island be put under a state of calamity for six months, and closed for a maximum of one year. Tourism Secretary Wanda Corazon T. Teo, also a member of the task force, has said she is standing pat on her agency’s proposal for the closure to be only two months. (See, “Teo admits 2018 arrivals goal imperiled by Boracay closure,” in the BusinessMirror, March 22, 2018.) Meanwhile, the regional office of the Department of Labor and Employment (DOLE) in Western Visayas said it will need additional funds if the number of displaced workers in the looming closure of Boracay breaches 17,000 mark. DOLE-Region 6 Director Johnson G. Cañete expressed the concern after it was reported by some tourism stakeholders that the number of displaced workers in the island resort may reach 17,000 to 36,000 people.
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He said currently they only confirmed 7,735 workers that will be affected by the proposed closure, in the local government unit of Malay, Aklan. “We have a budget for displaced workers, but if 17,000 workers will be displaced, the Region 6 fund for the same may not be enough. Hopefully DOLE Central can spare funds or the President...if the fund will be enough,” Cañete told the BusinessMirror in a text message. The Boracay Industry Tripartite Council, headed by Cañete, said it is still hoping the government will still reconsider the closure. “As of the moment the companies are still hopeful that the closure will not happen, they rather opt for selective closure and to declare Boracay in state of calamity so that they can use the environmental fee for rehabilitating the island,” Cañete said. In a news report, the Borcay Foundation, a group comprised by business establishments in Boracay, estimated that 17,000 workers in the informal sector and 19,000 in the informal sector will be displaced because of the closure. With Samuel P. Medenilla
www.businessmirror.com.ph
Senate seeks filing of cases versus Aquino over Dengvaxia DR. HALSTEAD: “The diagnosis of Dengvaxia cannot be based on an autopsy.”
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ormer President Benigno S. Aquino III and two former Cabinet officials were among those recommended to be charged in connection with the P3.4-billion Dengvaxia vaccine fiasco. This was disclosed on Thursday by Sen. Joseph Victor G. Ejercito, chairman of the Senate Health Committee, which conducted the joint inquiry into the Dengvaxia controversy with the Blue Ribbon Committee, chaired by Sen. Richard J. Gordon. Ejercito added that apart from Aquino, also likely to face charges for the inordinate rushing of the deal with French pharmaceutical giant Sanofi Pasteur are former Budget Secretary Florencio B. Abad and Health Secretary Janette L. Garin. According to Ejercito, the consensus reached by the two panel chairmen was to include in the joint committee report their findings that Aquino may be held liable for “command responsibility.” The senator added the former Chief Executive cannot simply wash his hands to avoid liability for rushing the release of P3.5 billion to pay for the controversial vaccines feared to have endangered 830,000 children. During the joint committee inquiry, Gordon and other senate probers took note of the timeline for buying the vaccine, recalling testimonies that Aquino twice met with Sanofi officials in China and Paris, saying this facilitated the process to purchase the controversial vaccines. Apart from that, Ejercito said the committee is also recommending filing charges against Garin, whom the committee probers found to be liable for rushing the acquisition of the vaccine and the mass injection of children, despite the absence of guarantee that the vaccine was safe to inject to schoolage children. Senate probers are also looking to recommend charges against Abad for technical malversation, following findings that the P3-billion fund used to pay for the vaccine was drawn from savings without authority from Congress. Ejercito indicated the joint report on the inquiry may also include recommendation to indict Sanof i Pasteur for failing to disclose that Dengvaxia’s side effect may endanger children classified as “seronegative,” or have not had dengue.
Doctors welcome Halstead’s opinion
Meanwhile, the international dengue expert, recently concluded his testimony at the Senate Blue Ribbon Committee and consultations with the Department of Health and the World Health Organization Team. Members of the Doctors for Truth welcomed his participation in the investigation for the reason that it would clarify with finality the different opinions and positions about Dengvaxia. “He is a voice of sanity for both parents and doctors alike,” according to Dr. Lulu Bravo, director of the National Institute of Health. Halstead was intensely quizzed by the senators and clarified the issues on Dengvaxia. “The diagnosis of Dengvaxia See “Dengvaxia,” A2