Businessmirror march 27, 2017

BMReports

Reserve, incoming projects ease PHL power worries By Lenie Lectura

@llectura

Part One

P

OWER-industry stakeholders are expecting a brownout-free summer in Luzon for as long as no major power plants conk out simultaneously. According to the Department of Energy (DOE), the optimistic outlook is borne out of adequate power supply in the grid amid an expected spike on power consumption brought about by intense heat during summer months. “We should be okay,” Energy Secretary Alfonso G. Cusi said. Based on a weekly demand, supply and reserve profile, the forecast for Luzon’s power reserve for the 13 weeks of summer beginning March 25 would hit below 3,000 megawatts (MW) on the week of May 13 to 19 at 1,869 MW. The peak power reserve is forecast on the last week of March at 2,990 MW. Continued on A2

The Department of Energy is banking on sources of energy, like this solar power plant that sits on a rice field in San Rafael, Bulacan, as the summer months arrive in the Philippines. It is during this period that demand for power increases. NONIE REYES

media partner of the year

United nations

2015 environmental Media Award leadership award 2008

BusinessMirror A broader look at today’s business

www.businessmirror.com.ph

n

Monday, March 27, 2017 Vol. 12 No. 166

Socioeconomic Planning Secretary Ernesto M. Pernia said the increase in infrastructure spending is in keeping with the govern-

Legislation in the world of PPPs PPP Lead

@cuo_bm

he Duterte administration’s infrastructure spending would reach 7.4 percent of GDP by 2022 with the expected completion of 55 “flagship projects”, according to the chief of the National Economic and Development Authority (Neda). ment’s goal of cutting poverty incidence by creating more jobs. “So, for the whole term of President Duterte, the cumula-

business news source of the year

P25.00 nationwide | 5 sections 36 pages | 7 days a week

Infra spending to hit 7.4% of GDP by 2022–Pernia 55 T By Cai U. Ordinario

2016 ejap journalism awards

Alberto C. Agra

W

The number of flagship projects that the government intends to complete by 2022

tive amount spent on infrastructure would be close to P9 trillion,” Pernia said. The Neda chief said infrastructure projects are “crucial” in providing jobs not only during construction but

hy are laws critical for public-private partnerships (PPPs)? What is the power of the national legislative body (Congress) and local legislative councils in PPPs? What is the extent of this power? ■ The need for laws. The rule of law is critical for PPPs. PPPs cannot be governed by rule of men and women. Laws set policies, and must be followed. A PPP framework embodied in a law ensures stability, consistency, transparency, integrity, accountability, reliability and enforceability. Having a PPP law and adherence to this law is essential for public engagement, stakeholder participation and investor confidence. Continued on A15

See “Infra spending,” A2

PROTECT RICE FARMERS Japan open to more Filipino workers BEFORE QR EXPIRES–PCC By Catherine N. Pillas

By Elijah Felice E. Rosales

I

@alyasjah

t will surely benefit the consumers, but lifting the quantitative restriction (QR) on rice, without providing the agriculture sector with the appropriate protection, will burden rice farmers, an official of the Philippine Competition Commission (PCC) said. In an interview with the BusinessMirror last Friday, PCC Economics Director Benjamin E. Radoc Jr. said the government, particularly the Department of Agriculture (DA), should provide rice farmers the proper safeguards before it allows the entry of more rice imports. “The DA must prepare the sector first before we open the market [to foreign entities],” Radoc said. As the state’s antitrust agency, the PCC perceives the lifting of the QR presents opportunities to con-

sumers. Without the constraint, buyers can now choose between local rice and foreign rice, which is expected to be cheaper due to low production cost. Once the QR expires, Radoc said the country will be flooded with Thai and Vietnamese rice, which he described as not only cheaper, but also of better quality. “Filipino rice farmers are not the best producers of [the staple] for these reasons: because of technology, the culture of land that we have. So, if you are the DA, help them identify where they are better at,” he said. The PCC official said the DA must examine the comparative advantage of Filipino farmers, and to look into opportunities it can offer to farming households. Radoc urged the DA to cooperate with local government units in assisting farming households develop See “Rice famers,” A16

PESO exchange rates n US 50.3390

P

@c_pillas29

assing rates for Filipino caregivers and nurses under the people-to-people exchange provisions of the Philippines-Japan Economic Partnership Agreement (Pjepa) remain dismally low, but this will be a point of improvement moving forward, Japan’s top envoy to the Philippines assured. Japanese Ambassador to the Philippines Kazuhide Ishikawa made the pledge in a speech before the business community during the Makati Business Club’s General Membership Meeting last Friday. Signed on September 9, 2006, the Pjepa is considered a milestone in Philippine international trade relations, because it is the first bilateral economic-partnership agreement entered into by the country. In outlining the dimensions of Japanese-Philippine relations, Ishikawa said active people-topeople exchange, apart from

ISHIKAWA: “Active peopleto-people exchange, apart from tourism, is still a priority.”

tourism, is still a priority. Under the Pjepa framework, Filipino nurses and caregivers are allowed entry to Japan, so long as they pass several requirements. These include Japanese-language proficiency and national licensure examinations. Candidate nurses and caregivers are required to undergo six months of language training in the country and in Japan to prepare them for the tests. They may be required to undergo on-the-job training for at least three years before being allowed to take licensure exams.

The difficulty of the examinations and the process to qualify have been points of contention of the Filipino applicants before, and the numbers reflect this. Ishikawa showed data that from 2009 to 2016, the average passing rate for nurses for the national examinations is at 11.5 percent, while that of caregivers’ are at 43.2 percent. Out of a total of 1,633 candidates for both categories, only 249 have successfully hurdled the examinations to become permanent healthcare workers in Japan. Ishikawa said they are working to improve passing rates, as he proposed measures such as extension of test hours and additional hours of training. While significant changes on easing the regulations on the entry of Filipino workers to Japan have yet to happen, tourism is at least one area where people-to-people exchange will assuredly increase. According to Ishikawa, half-amillion Japanese tourists visit the Philippines annually, while an aver-

age 300,000 Filipino tourists visit Japan every year. These numbers are seen increasing, as visa requirements for Philippine tourists have been relaxed two years ago. Japan is the Philippines’s largest source of official development assistance, and is also its top trading partner. Pjepa emphasizes cooperation on a wide range of areas, including human-resource development, science and technology, trade and investmen promotion, small and medium enterprises, and the environment. The pact also covers financial services, energy and environment, and transportation, among others. It promotes the liberalization of tourism- and travel-related services; business-process outsourcing; banking and other financial services; recreational, cultural and sporting services; advertising; management consulting; audiovisual services; environmental services; and valueadded services in telecommunications, among others.

n japan 0.4538 n UK 63.0395 n HK 6.4813 n CHINA 7.3103 n singapore 35.9795 n australia 38.3885 n EU 54.2956 n SAUDI arabia 13.4245

Source: BSP (24 March 2017 )

BMReports BusinessMirror

A2 Monday, March 27, 2017

www.businessmirror.com.ph

Reserve, incoming projects ease PHL power worries Continued from A1

On the average, there would be roughly 2,233 megawatts (MW) in power reserve in 13 weeks, the data revealed.

Enough reserve

ENERGY Undersecretary Felix William B. Fuentebella said there is enough gross power reserve in Luzon during the summer months, even as there will be days in May when power supply is low. “For the Luzon grid, the NGCP [National Grid Corp. of the Philippines] said the April 22 to 28 week up to the week of June 3 to 9 supply is low,” Fuentebella said. “However, this will not trigger a yellow alert; [not] critical, unless may masira na planta [a power plant breaks down] or [we experience] line-tripping incidents.” A yellow alert is issued by the NGCP when contingency reserve is less than the capacity of the largest synchronized unit of the grid. In Luzon this is equiva-

lent to 647 MW, or one unit of the Sual power plant. Based on the NGCP demand, supply and weekly reserve profile for January to June 2017, the low power supply in Luzon could occur starting April up to early June this year. Based on data, two weeks in May have the lowest reserve levels, specifically May 13 to 19 and May 20 to May 26, where gross reserves were placed at 1,859 MW and 1,872 MW, respectively.

No worries

AVAILABLE capacity is expected to reach 11,589 MW for May 13 to 19 and 11,492 MW for May 20 to 26, compared to demand of 9,730 MW and 9,620 MW, respectively. Visayas is expected to register low power supply in the week of June 3 to 9. However, Fuentebella is not worried because the Luzon and Visayas grids are interconnected. “But the Visayas is interconnected with the Luzon grid so it can import power from Luzon when needed,” the DOE official said.

On the other hand, there is excess power supply in Mindanao. “With so much supply, there is a need to increase the demand or the load,” Fuentebella said. “This is a signal for economic zones and big business to go there.” According to University of the Philippines (UP) Electronics Engineering Prof. Rowaldo del Mundo, the country’s power situation is “much better than when the Malampaya gas facility went on shutdown”. “The important thing is everybody now is conscious about the possible consequences if our power-system situation worsens,” of the UP Electrical and Electronics Engineering Institute’s del Mundo said. “Offhand, in general, we’re in a much better situation for the summer period.” However, Fuentebella said the NGCP data has yet to be updated. According to him, the NGCP is still waiting for an official declaration of the summer period from the Philippine Atmospheric Geophysical and Astronomical Services

Forecast for Luzon’s power reserve based on a weekly demand, supply and reserve profile WEEK

Power reserve (in megawatts or MW)

May 13 to May 19

1,869 MW

May 20 to June 2

1,872 MW

May 6 to May 12

1,907 MW

June 3 to June 9

1,947 MW

April 22 to April 28

2,081 MW

June 10 to June 16

2,089 MW

April 29 to May 5

2,157 MW

April 15 to April 21

2,252 MW

June 24 to June 30

2,336 MW

June 17 to June 23

2,429 MW

April 8 to April 14

2,435 MW

April 1 to April 7

2,666 MW

March 25 to March 31

2,990 MW

Source: Department of Energy

Administration (Pagasa). “We are still waiting for the latest data from NGCP,” Fuentebella said. “This is forthcoming.” He explained that the available data the DOE currently has from the NGCP was submitted in September last year.

Committed projects

SEPARATELY, a DOE data states that several power projects in Luzon, with a total capacity of 1,444 MW, are targeted either for commercial operation and commissioning this year. Of the total committed capacity for the year in Luzon, 720 MW of capacity will be sourced from coal, 650 MW from gas, 29.515 MW from solar, 12 MW from geothermal, 22.9 MW from biomass and 10 MW from battery storage. The coal-power projects are being developed by SMC Consolidated Power Corp. in Limay, Bataan (300 MW) and Pagbilao Energy Corp. in Quezon (420 MW). Energy World Corp. is targeting the commissioning of its 650-MW gas project in Pagbilao, Quezon, in June for Unit 1, September for Unit 2 and December for Unit 3. For solar, the committed power projects

Infra spending. . . Continued from A1

NORTHEAST MONSOON AFFECTING EXTREME NORTHERN LUZON EASTERLIES AFFECTING EASTERN SECTION OF THE COUNTRY (As of 5:00 AM - Mar. 26, 2017)

also after the projects have been completed. The government intends to implement a 24-hour cycle for all its infrastructure projects to ensure the speedy completion of projects. “Many of these projects will create jobs, in construction then later on they will facilitate the setting up of enterprises and farm activity that would generate further employment,” he said. The Neda said it will unveil the list of flagship projects after it is presented to the President next month. The list already includes the 15 projects identified for Chinese loan financing during the Duterte administration. The Neda estimated that these will cost $6.96 billion. Three of these projects—the Chico River Pump Irrigation Project, New Centennial Water Source-Kaliwa Dam Project and North-South Railway Project—will be funded this year. The three projects are estimated to cost $3.44 billion or some P172.42 billion. Increasing the government’s infrastructure to GDP ratio has been a major challenge for the Philippines and is one of its key development constraints, according to multilateral development banks (MDBs), such as the Asian Development Bank (ADB). The country’s infrastructure to GDP ratio steadily grew from 1.8 percent in 2011 to 5.1 percent in 2016, the first time the country’s infrastructure spending to GDP ratio reached and breached the 5-percent mark. In its latest report, titled Meeting Asia’s Infrastructure Needs, ADB said Southeast Asian economies need to invest 5.7 percent of GDP until 2030. This means investing a total of $3.147 trillion between 2016 to 2030 using 2015 prices. This translates to an annual investment of $210 billion until 2030. These estimates, ADB said, are based on a baseline scenario which places total infrastructure investments in the region to increase to $2.171 trillion between 2016 and 2030 from $1.095 trillion in the 2010 to 2020 period.

with target commercial operation for the year are the 18 MW of Next Generation Power Technology Corp. in Mariveles, Bataan; 1.675 MW of CW Marketing & Development Corp. in Santa Rosa, Laguna; 3.82 MW of SPARC Solar Powered Agri-Rural Communities Corp. in San Rafael, Bulacan; and 5.02 MW of SPARC in Morong, Bataan. A 1-MW solar project of Bosung Solartec Inc. in Ilocos Norte is targeted for commissioning this year. A 12-MW geothermal plant in Batangas by Maibarara Geothermal Inc. is scheduled for commercial operations in August this year. The biomass projects lined up for target testing and commissioning this year are the 1.5MW of Asian Carbon Neutral Power Corp. in Tarlac; 4.5 MW of Bicol Biomass Energy Corp. in Camarines Sur; 6.1 MW of AseaGas Corp. in Batangas; and the 10.8 MW of San Jose City I Power Corp. in Nueva Ecija. The battery storage of AES Philippines Power Partners Co. in Zambales will be operational in December this year. These power projects are on top of the new ones that recently started delivering power to the grid. These include the 414MW San Gabriel and the 87-MW Avion gas plants of the Lopez Group. This translates to an annual investment of $145 billion in the 2016 to 2030, from $100 billion in the 2010 to 2020 period. The ADB also said the 45 developing member-countries (DMCs) in Asia Pacific must invest $26.166 trillion until 2030. This translates to $1.744 trillion, or 5.9 percent of the region’s GDP annually.

Focus on resettlement

To ensure that infrastructure projects are completed on time, the Neda said the government would also focus on the resettlement of informal-settler families (ISFs). For years, Neda officials said the country’s infrastructure projects have been hampered by resettlement issues more than right-of-way acquisitions (ROWA). Neda Public Information Staff Director Jonathan L. Uy said that, even if the interagency Investment Coordination Committee (ICC) speeds up the approval of projects, the resettlement efforts are not coordinated, causing delays. “We’ve seen this already in the past. You accelerate approval but you don’t attend to the resettlement [so] nothing happens,” Uy recently told reporters. This entails involving the key shelter agencies, particularly the National Housing Authority, which provides affordable housing units to ISFs. Neda Undersecretary Rolando G. Tungpalan said the government is now working on a “systematic move” to anticipate the resettlement requirements for infrastructure projects. Tungpalan said the Housing and Urban Development Coordinating Council is now obtaining information on the projects, particularly the North-South Railway Project South Line, which would require a Rowa spending of P54 billion. The NSRP Southline was initially designed as a narrow gauge railway. However, the ICC-Cabinet Committee recently approved the Department of Transportation’s proposal to use standard gauge for the railway. “With the decision to adopt standard gauge from narrow gauge, that will require [more space, more] right-of-way [and more] families [will be] affected,” Tungpalan earlier told the BusinessMirror.

news@businessmirror.com.ph

The Nation BusinessMirror

House eyes probe into recent ERC decisions By Jovee Marie N. dela Cruz @joveemarie

T

HE House of Representatives may look into two recent decisions by the Energy Regulatory Commission (ERC) involving interim Maximum Annual Revenue (iMAR) and the extension of the deadline for compliance with the Competitive Selection Process (CSP) in the procurement of power supply by distribution utilities (DUs). In a hearing last week, Party-list Rep. Harry Roque of Kabalikat ng Mamamayan called attention to reports that the ERC, while Chairman Jose Vicente B. Salazar was on official leave, had favored a higher iMAR, which could add to the burden to power consumers. ERC Commissioners Patricia Asirit, Gloria Taruc, Alfredo Non and Geronimo Santa Ana reversed an earlier decision to peg the iMAR at P41 billion and raise it to P43.8 billion. The reversal made by the three commissioners will translate into some P 2. 8 bi l l ion i n i nc re a s e d transmission charges. Based on the ERC web site, Non has gone on record as proposing an even higher iMAR for the grid corporation at P45.3 billion.

Roque also questioned why the reversal of the earlier decision in favor of the higher iMAR was made by Asirit, Taruc , Non and Santa Ana at the time that Salazar was on leave following investigations related to the suicide of ERC Director Jose Francisco Villa Jr. Santa Ana was the ERC officer in charge when they moved to raise the iMAR and that Salazar had no part in the reversal of the earlier decision. Congressmen also called for further probe on the move by the ERC to extend the deadline for the implementation of the CSP, which allegedly paved the way for some “midnight deals” to be sealed between power distributors and generators. The ERC chairman, upon questioning by the congressmen, admitted he opposed the extension, on record, but had to respect the decision of the majority. The extension earlier came under fire as cause-oriented groups raised concer ns t hat t he move favored some of the country’s biggest power distributors. The CSP required DUs to call for at least two bids for their power requirements. CSP rules allow them to buy from affiliate power generators only as a last resort.

MWSS chief cites PWWA, SMC

A

DMINISTR ATOR Reynaldo V. Velasco of the Metropolitan Waterworks and Sewerage System (MWSS) lauded the institutional efforts of the Philippine Water Works Association (PWWA) and San Miguel Corp. on their respective advocacies for water-supply development, conservation, sanitation, improvement of wastewater treatment plants and environmental protection. Addressing the delegates to the Water Philippines 2017 exhibition from all over the Philippines and the Asia-Pacific region, Velasco said the three-day water conference underscored the commitment of all toward a common goal: finding and searching for water and sanitation solutions for a better future. “The conference theme is attuned to the World Water Day celebration, March 22, as it focuses on wastewater and ways to reduce and reuse as over 80 percent of all the wastewater from our homes, cities, industry and agriculture flows back to nature polluting the environment and losing valuable nutrients and other recoverable materials,” Velasco said. Citing the World Health Organization’s call on the need to improve the collection and treatment of wastewater and safely reuse it, Velasco said, “we need to reduce the quantity and pollution load of wastewater we produce, to help protect the environment and our water resources.” He stressed that, “these are major concerns that we all need to address in Metro Manila, and rest assured that under the Duterte administration, we will address this squarely with our partners in

the water ser vice, Manila Water and Maynilad, in their bid to beef up their wastewater-treatment plants. He also cited the Philippines’s largest conglomerate, San Miguel Corp., for leading the way on its own water sustainability challenge to reduce usage and educate employees, business partners and communities about water stewardship. “It is laudable that among its future goals would be to reduce its operational water use by 50 percent across its businesses, employing measures that include water recycling, conservation and rainwater harvesting to meet its target by 2025,” Velasco said. On PWWA, which is the umbrella national organization of the country’s water-supply industry and the main organizer of Water Philippines, along with Asean Business-UBM Asia, Velasco lauded the collective efforts of the general membership, now led by PWWA President Eulogio Agatep II, “for unifying the water industry in the last four decades to bring the desired needs of the large segment of Filipino people for potable, safe and adequate water and improvement of water services.” Velasco challenged the PWWA board to put up a research and study center on water-supply development in an effort to make PWWA as an institution in the field of water supply and development. “Our programs should reflect PWWA’s strategy of strengthening and promoting local institutions for the efficient administration of sanitation systems and water supply around the country,” Velasco said. Claudeth Mocon-Ciriaco

MWSS Administrator Reynaldo V. Velasco (center) receives a plaque of appreciation for serving as guest speaker at the gala dinner of Water Philippines 2017 from the organizers, the Philippine Water Works Association and UBM Asia. From left, PWWA President Eulogio Agatep, UMB Malaysia Chairman Datu Tan Shri, PWWA Executive Director Nenette Javier and Managing Director of Asean BusinessUBM Asia M Ghandi.

Editor: Dionisio L. Pelayo • Monday, March 27, 2017 A3

Labor center seeks House probe on e-passport project

A

N umbrella organization of labor unions is urging the House of Representatives to look into the government’s e-passport project with a view to cutting down its cost and make it more affordable for the working class, notably Filipino migrant workers.

The Philippine Association of Free Labor Unions (Paflu) said the e-passports being issued by the Department of Foreign Affairs (DFA) cost P950, plus P250 for “overtime charges” if the applicant was in a hurry and opted to use the express-lane service. In a statement, Paflu said the old marooncolored machine-readable passport cost only P550, or P700 “if you want it faster.” “Except for the electronic chip that is embedded in the e-passport that captures data and security features, there are no other enhancement to justify the high cost. Digital products are getting cheaper, not going expensive,“ Paflu President Terry Tuazon said. “With 17,000 new applicants [daily] who troop to the various consular offices all over

the country, that’s a lot of money for the government,” Tuazon noted. It was estimated that APO-Production Unit (PU) and its private partner stand to rake in a whopping P25.5 billion from the e-passport contract. In the statement, Paflu slammed the alleged overpricing of the new digital passport and branded it “antiworker”. “Many of the passport applicants are workers who leave their family to work abroad. Data indicates that there are 5,000 Filipinos who leave the country everyday either as tourists, as migrant workers or immigrants to other countries for good,” Tuazon added. In batting for the congressional inquiry, the

Paflu invoked the government policy to raise the quality of life of the marginal Filipinos. “The prudent policy is to make life a little bearable for our workers and not to impose additional burden. The abolition of the terminal fee is in line with this policy thrust,” Tuazon added. Paflu also assailed the DFA’s decision to decommission the Bangko Sentral from the passport project, and grant the multibillionpeso contract to the APO-PU, also a state-run printing facility.

Economy

A4 Monday, March 27, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

news@businessmirror.com.ph

‘PHL should tap $100-B climate-change fund’

F

By Jovee Marie N. dela Cruz

@joveemarie

ollowing the signing of the Paris Agreement on Climate Change, a vice chairman of the House Committee on Appropriations on Sunday said the Philippines can access the proposed $100-billion global fund to help developing economies that are vulnerable to climate change.

Nacionalista Party Rep. Luis Raymund F. Villafuerte Jr. of Camarines Sur said the additional funds would help farmers cope with the ill effects of climate change, and make Philippine infrastructure more “climate-resilient.” “In the future, the Philippines can access this additional financing to build climate risk-resilient infrastructure; improve our management of irrigation water for our farmers; and teach our farmers new climatechange-adaptive technologies to protect our communities from the adverse effects of the now erratic weather patterns,” Villafuerte said. President Durterte has signed the Paris Agreement on Climate Change on March 1. According to Villafuerte, the Senate ratification of the agreement is “timely and significant”, as this would mean the process on the Philippines’s accession to the climate-change treaty would likely be completed before Earth Day on April 22. He recalled the Philippines and other countries most vulnerable to climate change have sought $100 billion in additional financing from global institutions to help protect themselves from the destructive effects of global warming, such as

droughts, rising sea levels, devastating storms and other extreme weather events. “Coming from a province and region that is highly vulnerable to climate change, the President’s signing of the Paris Agreement and the Senate’s ratification of this accord are certainly welcome. Once we complete the ratification process, we would now have a full seat in the conference of parties that will tackle the treaty’s implementation,” he said. “We would now have a say in the conference, and we can lobby for more funding on behalf of emerging economies, such as the Philippines, that are most vulnerable to climate change,” Villafuerte added. The lawmaker is referring to the next round of meetings of the parties to the Paris Agreement scheduled this November in Bonn, Germany. He said Camarines Sur, one of the six provinces of Bicol, has been most vulnerable to the changing weather patterns triggered by global warming. Six of the average 20 typhoons that enter the country each year pummel Bicol. Under the Paris Agreement, the Philippines pledged a 70-percent cut in emissions by 2030, on condition that it would receive assistance from

EL Niño dried up farmlands in the Philippines. Bloomberg

developed countries in mitigating the effects of climate change.

Climate tax

Villafuerte said the House of Representatives should do its part by approving his proposal imposing “climate” tax on carbon-dioxide (CO2) emissions. “Would-be proceeds from this proposed tax are to be used solely for programs designed to help, especially the most vulnerable Philip-

pine communities, better adapt to unpredictable weather cycles and other disastrous effects of global warming,” he said. Villafuerte is the author of House Bill (HB) 4939, or the Piso Para sa Kalikasan Act, which seeks to impose a climate or carbon tax on electricity—equivalent to P1 per 1 kilogram of CO2 emission—on the monthly electricity bills of residential or household consumers. The bill said consumers will be

exempted from paying this proposed climate tax if their monthly consumption do not exceed 60 kilowatt- hours (kWh) each, or if the electricity they consume are generated from renewable energy sources. He added CO2 emissions from electricity and heat production have doubled in the Philippines from 25.83 percent of total fuel combustion in 1972 to 49.74 percent in 2013. Villafuerte said HB 4939 is both a “revenue-generating meas-

ure and a tool to protect and preserve the environment.” The lawmaker said its swift congressional approval will send a loud and clear signal to the global community of “the country’s strong commitment to international climate policy, and the Congress’s affirmation of the people’s right to a balanced and healthy ecology, as well as the State’s paramount duty to safeguard such right for the present and future generations.”

FPI alerts Faeldon on destruction of seized angle bars Meralco to outsource 243 MW for summer power-supply need T he Federation of Philippine Industries (FPI) has alerted Customs Commissioner Nicanor E. Faeldon on possible irregularities in the destruction of seized contraband angle bars, as local manufacturers fear these substandard steel products could eventually end up in the domestic market. In a letter to Faeldon, FPI Chairman Jesus L. Arranza said several Bureau of Customs (BOC) guidelines are not being fol-

lowed in the destruction of some 320,100 kilograms of confiscated angle bars that were auctioned off last November 18 and won by Luchu Enterprises. “Contrary to the Conditions ‘E’, ‘F’ and ‘G’ in the additional requirement for angle bars (scrap) specified in the Notice of Public Auction, no Department of Trade and Industry (DTI) representative was present;” “Second, we observed that the official weighing ticket from Asian Terminal Inc. was handwritten, which is not the standard practice. We are sure you will also find this as something that is unusual for an official weighing ticket”; “Third, per the instruction of Auction and Cargo Disposal Division Acting Chief Oscar B. Villalva, the destruction of the auctioned angle bars should be in a time frame of one container per day, or five containers per week. Proof of this is Villalva’s letter to Sean Perez of the South Harbor International Operations. However, based on our monitoring, the initial five containers of angle bars were destructed from February 2 to 14, or about three weeks, which is not compliant with the instructions provided,” Arranza said. Also, Arranza said that, contrary to the additional requirements stated in the Notice of Public Auction, the Steel Angles, Shapes and Sections Manufacturers of the Philippines Inc. was not notified prior to the schedule of destruction. “In addition, we would like to request the BOC to closely monitor the excess tonnage of the destructed angle bars to make sure that the winning bidder will pay them and will not find their way into the local market,” he added. Arranza said local manufacturers fear that if Faeldon will not closely monitor the destruction of the seized angle bars, they could end up being sold in the market, which also poses a threat to lives and properties of the public as these are substandard steel bars.

By Lenie Lectura

T

@llectura

HE Manila Electric Co. (Meralco) will source 243 megawatts (MW) of electricity from three power producers to help fill up the utility firm’s power requirements for the summer months. Meralco has recently signed respective interim power-supply agreements (Ipsa) with 1590 Energy Inc., Toledo Power Corp. (TPC) and Panay Power Corp. (PPC). 1590 Energy, which owns the 225-MW Bauang diesel plant in La Union, will supply Meralco 170 MW. Meralco and TPC, meanwhile, signed a deal for a 28-MW capacity to be sourced from the power firm’s 40-MW bunker-oil fired plant in Toledo, Cebu. The third Ipsa involves 45 MW of electricity that Meralco will buy from PPC, which operates the 72-MW bunker-oil plant in Iloilo. Aside from these power-supply agreements, Meralco said the company is working to source 220 MW of power capacity from the new gas plant of Lopez-led First Gen Corp. Meralco Senior Vice President for Customer Retail Services and Corporate Communications Alfredo Panlilio said there is an ongoing negotiation with San Gabriel for 200 MW. An Ipsa is expected to be signed soon, Panlilio added. Early this month Meralco President Oscar Reyes said the utility firm, which services 6 million customers in its franchise area, was negotiating for more power deals.

He said that in order to ensure continuous and reliable electricity for Meralco customers, there is a need for Meralco to source additional peaking capacity. These agreements, if approved by the Energy Regulatory Commission (ERC) on time, will mitigate its exposure to the Wholesale Electricity Sport Market during the summer months. Based on the power-situation outlook for 2017 and succeeding years, Meralco foresees a peaking-capacity deficit in its portfolio, especially for the summer months. Based on the utility firm’s distribution-development plan for 2015-2020, Meralco’s aggregate-capacity requirement is forecasted to grow by a compounded- average growth rate of 3.7 percent. Meralco said the need to secure more power deals is meant to address significant peakingcapacity deficit, as well as possible occurrences of scheduled maintenance shutdowns and forced outage of power plants. And when needed, Meralo could always activate its Interruptible Load Program (ILP), which works by calling on business customers with loads of at least 1 MW to run their own generator sets, if needed, instead of drawing power from the grid. With the ILP, power supply from the grid that will not be consumed by participating customers will be available for use by other customers within the franchise area. Through this, the aggregate demand for power from the system will be reduced to a more manageable level, helping ensure the availability of supply.

Alvarez wants to look into Davao banana lease contract

T

he leader of the House of Representatives has recently filed a resolution investigating the “grossly disadvantageous” 25-year lease contract signed by the Bureau of Corrections (BuCor) and banana firm Tagum Agricultural Development Co. Inc. (Tadeco). In House Resolution 867, Speaker Pantaleon D. Alvarez has directed the House Committee on Good Government and Accountability to look into the lease agreement where the government would

get a guaranteed payment of P26.542 million per year for using the Davao Penal Colony’s 5,308 hectares of land. Tadeco is owned by the family of Davao del Norte Rep. Antonio Floirendo Jr., the biggest campaign financier of President Duterte. According to Alvarez, Tadeco and the BuCor entered into a joint- venture agreement (JVA) on July 11, 1969, allowing the company to lease from BuCor land located in the Davao Penal Colony for the former’s banana plantation.

“Tadeco and BuCor executed a consolidated JVA dated September 26, 1979, in which the former leased 5,212.46 hectares of land from the latter, and combines the provisions of said joint-venture agreement and all its amendments and supplements into a single instrument that will serve as the sole repository of the terms and conditions thereof; and extended the lease period to 25 years, interestingly, instead of the reported prevailing

practice of leasing with a term of just 10 years,” Alvarez said. In 1989 Alvarez’s resolution said the consolidated joint venture agreement was amended to escalate rates in land rentals, royalties and profit shares. On May 21, 2003, Alvarez said it was renewed, and based on the new contract, the BuCor shall receive a guaranteed annual production share of P26.54 million, which will automatically increase by 10 percent every five years. Jovee Marie N. dela Cruz

news@businessmirror.com.ph

AseanMonday BusinessMirror

Editor: Max V. de Leon • Monday, March 27, 2017 A5

Cebu, Bohol gear up for Asean meetings

C

EBU CITY—The provinces of Cebu and Bohol in the Visayas will host some of the 31st Association of Southeast Asian Nations (Asean) summit meetings from April 3 to 22.

The Asean summit meetings in Cebu will take place from April 3 to 7, while the meetings in Bohol will be from April 18 to 22. The local organizing committees in the two provinces said preparations are under way to ensure the success of the meetings. The preparations include the Department of Health-Region 7 (DOH7) and the Police Regional Office-7 (PRO-7).

Ex pedito Medalla, head of Taskforce Medical of DOH-7, said medical staff in all hospitals in Central Visayas will be put on Code White alert starting March 28 until April 25. A Code White alert requires all doctors and nurses in hospitals to be ready for any emergencies. Medalla said 31 medical personnel would also be on standby in the different venues and hotels in Cebu

and Bohol, where the ministers, senior officials and the technical working group would be having their meetings. Chief Supt. Noli Talino, PRO-7 director, said they are considering another cell-site shutdown as part of the security measures for the Asean Summit meetings in Cebu and Bohol. Some cell sites in Cebu City and Lapu-Lapu City were temporarily shut down during the Sinulog Grand Parade and the swimwear competition of the 2017 Miss Universe Pageant in January this year. Talino said they are considering all possible scenarios, including terrorism attacks, security threats and the possible shutting down of telecommunication signals during the summit. But Talino said the shutdown of telecommunications signals would depend on the security situation during the Asean summit meetings. PNA

Ex-guerrilla vows to keep fight for East Timor unity

Supporters of presidential candidate Francisco “Lu-Olo” Guterres raise their fists as they shout slogans in Dili, East Timor, on March 21. An unofficial vote count shows the former guerrilla leader has won East Timor’s presidency in the first election without UN supervision since peacekeepers left in 2012. AP

D

ILI, East Timor—A former guerrilla fighter vowed Saturday to keep peace and unity as East Timor’s new president, delivering a victory speech after the final tally showed he was on course to win the election. Francisco “Lu-Olo” Guterres received 57 percent of the vote in Monday’s election, according to final figures announced late Friday. His main rival, Antonio da Conceicao, got 32 percent. The remaining votes were divided among six other candidates. The results released by the National Election Office still need to be vetted by the Court of Appeals before they are official. While East Timor’s president has a mostly ceremonial role, the prime minister heads the government. East Timorese voted overwhelmingly in 1999 to end 24 years of brutal Indonesian occupation that killed more than 170,000 people. Indonesia’s military and pro-Indonesian militias responded to the independence referendum with scorched earth attacks that devastated the East Timorese half of the island. Guterres received a visit from da

Conceicao conceding the election soon after the final results were released last Friday. Da Conceicao, the current minister of education and social affairs, said he had accepted the result. “He was a guerrilla fighter during our resistance time. He deserved the people’s trust and I’ll always respect him,” da Conceica said of his rival. Guterres welcomed the concession and gave a victory speech at his residence. “I’ll be president for all people in East Timor, even those who didn’t vote for me,” he told a crowd of supporters. “I’ll keep fighting for peace and unity of our nation.” Guterres led guerrilla attacks against occupying troops from the hills, rising quickly through the ranks. Eventually he became the rebels’ top commander. It was his third attempt to win the presidency since 2007, when Jose Ramos-Horta, a Nobel Peace Prize laureate, secured an easy victory over him in a second-round vote. Guterres lost to current President Taur Matan Ruak in the 2012 election, but this time he had strong support from

resistance hero and former Prime Minister Xanana Gusmao, who remains influential in politics. Meanwhile, the Democratic Republic of Timor-Leste honored US Sen. Jack Reed for his work in the former East Timor island. Reed received the highest honor that a foreigner can be given from the country formerly known as East Timor. The Order of Timor was presented to the Rhode Island Democrat from the Democratic Republic of Timor-Leste, nearly two decades after Reed visited the island on a fact-finding trip to learn more about the residents’ struggle for freedom. Reed has been an advocate for the Timorese people during his time in both the US House of Representatives and Senate. He says he first learned about human-rights violations occurring on the small Southeast Asian island from a group of concerned Portuguese-American citizens and from college students and professors from Brown University. A former colony of Portugal, the island was later occupied for two decades by Indonesia. AP

Jokowi pledges faster land reform with millions of land certificates

J

AKARTA—President Joko Widodo (Jokowi) has pledged faster process of land reform, saying certificates would be issued for 5 million pieces of land property this year. With the certificate, a citizen dare claim, “Yes I own NKRI [the Unitary State of Indonesia]”, the President said when addressing a group of recipients of land certificate in the subdistrict of Panyabungan, Mandailing Natal, North Sumatra last Saturday. Many pieces of land property have no certificates in the country, and many have false certificates resulting in many cases of land dispute in the country.

Jokowi gave a target for the Agrarian Affairs Minister Sofyan Djalil to issue certificates for 5 million pieces of land property this year. The minister was told to move much faster after normally his office issued only up to 700,000 certificates a year. Jokowi said, so far, the biggest problem has been shortage in number of land surveyors. Therefore, he asked to increase the number of the surveyors. “The target for next year is certificates for 7 million pieces of land,” the president said. Only 46 million of 106 million pieces of land property in the country have

been given certificates. The president wants that the process of certification be wrapped up by 2025. The government would continue to push for land reform with faster distribution of land certificates to create justice in land use and ownership of resources in the lands, he said. If realization falls short of the target, ones have to stand to account for the failure from the heads of the district land office (BPN) to the provincial BPN and the minister in charge, the president warned. “All leaders are charged with carrying their duties and reaching the targets,”he said. PNA/Antara

US immigration judge grants asylum to Singapore blogger

C

HICAGO—A blogger from Singapore who was jailed for his online posts blasting his government was granted asylum to remain in the United States, an immigration judge ruled. Amos Yee, 18, has been detained by federal immigration authorities since December when he was taken into custody at Chicago’s O’Hare International Airport. Lawyers said he could be released from a Wisconsin detention center as early as Monday. Judge Samuel Cole issued a 13-page decision last Friday, more than two weeks after Yee’s closed-door hearing on the asylum application. “Yee has met his burden of showing that he suffered past persecution on account of his political opinion, and has a well-founded fear of future persecution in Singapore,” Cole wrote. Yee left Singapore with the intention of seeking asylum in the US after being jailed for several weeks in 2015 and 2016. He was accused of hurting the religious feelings of Muslims and Christians in the multiethnic city-state. Yee is an atheist. Many of his blog and social-media posts criticized Singapore’s leaders. He created controversy in 2015 as the city-state was mourning the death of its first prime minister, and he posted an expletive-laden video about Prime Minister Lee Kuan Yew just after his death. Such open criticism of political leaders is discouraged in Singapore. The case raised questions about free

speech and censorship, and has been closely watched abroad. Cole said testimony during Yee’s hearing showed that while the Singapore government’s stated reason for punishing him involved religion, “its real purpose was to stifle Yee’s political speech”. He said Yee’s prison sentence was “unusually long and harsh”, especially for his age. Singapore’s government criticized the decision. “Yee had engaged in hate speech against Christians and Muslims. The US adopts a different standard, and allows such hate speech under the rubric of freedom of speech,” the Ministry of Home Affairs said in a statement last Saturday. “It is the prerogative of the US to take in such people who engage in hate speech,” the ministry said. “There are many more such people around the world who deliberately engage in hate speech, and who may be prosecuted. Some of them will no doubt take note of the US approach, and consider applying for asylum in the US” The ruling was praised by others. “I think this is a major embarrassment for the government, that all along claimed Amos’s persecution was not political,” Kenneth Jeyaretnam, an opposition politician who gave testimony supporting Yee’s asylum, told The Associated Press (AP). Jeyaretnam said the decision “may create waves in Singapore. It may show Singaporeans that there’s nothing to be

afraid about. The Singapore government is a paper tiger. We don’t have to swallow the brainwashing that is constantly put out.” His father, the late J.B. Jeyaretnam, attained folklore stature in the country’s politics and was bankrupted after contesting a series of lawsuits by the ruling People’s Action Party. The party has dominated national politics since Singapore’s independence in 1965, and its detractors often were taken to court on defamation or other charges. US-based Human Rights Watch applauded the asylum decision. “Singapore excels at creating a pressure-cooker environment for dissidents and free thinkers who dare challenge the political, economic and social diktats from the ruling People’s Action Party. It’s clear the Singapore government saw Amos Yee as the proverbial nail sticking up that had to be hammered down,” said a statement from Phil Robertson, Human Rights Watch deputy Asia director. Yee’s lawyer Sandra Grossman said her client was elated. “He’s very excited to begin new life in the United States,” Grossman said. Yee told the AP in a phone interview from jail this month that he feared returning to Singapore. But he said he’d continue to speak out, and had already planned a line of T-shirts and started writing a book about his experiences. “I have an infinite amount of ideas of what to do,” he told AP. AP

A6

Agriculture/Commodities

Monday, March 27, 2017 • Editor: Jennifer A. Ng

BusinessMirror

news@businessmirror.com.ph

Govt told to look into feed wheat imports

DA to unveil ‘efficient’ compact corn mill developed by PhilMech T

BLOOMBERG

By Jasper Emmanuel Y. Arcalas

T

@jearcalas

he Philippine Maize Federation Inc. (PhilMaize) urged the Department of Agriculture (DA) to investigate the importation of feed wheat last year and determine whether the entire volume was used by manufacturers of animal feeds.

PhilMaize President Roger V. Navarro claimed that not all of the feed wheat imported last year went to feed millers. “In our estimate, there’s a big entry of feed wheat, which seems suspicious. To avoid paying the 12-percent value-added tax [VAT] for subsequent flour sales, foodgrade wheat was declared as feed wheat,” Navarro told reporters in a recent interview.

“Of the 1.6 million metric tons [MMT] estimated wheat imports last year, there’s a discrepancy of 300,000 metric tons [MT], which were unutilized. So where is that 300,000 MT? There could be more,” he added. The BusinessMirror tried to get hold of officials of the Philippine Association of Flour Millers Inc. and the Philippine A ssoc i at ion of Feed M i l lers

I nc . b e fore t h i s stor y we nt to press. Currently, milling wheat imports are exempt from tariffs, but are subject to a 12-percent VAT on the subsequent flour sales, payable at the time the wheat was imported, according to a Global Agricultural Information Network (Gain) report. Both feed wheat imports and wheat flour imports are subject to a 7-percent duty. The Gain report also noted that feed wheat imports are exempted from the 12-percent VAT. Milling and feed wheat imports from signatories to the AseanAustralia-New Zealand Free Trade Agreement are duty-free. Navarro said the discrepancy in the volume of wheat imports may be attributed to technical smuggling. “The imports were declared as feed wheat but are being used for food.” “The government should really investigate this, [especially since]

the consumption of feeds by the livestock and poultry sectors is not increasing,” he added. Navarro said he would raise the issue of the imported feed wheat before the corn board in a meeting scheduled this week, which would be attended by Agriculture Secretary Emmanuel F. Piñol. Citing industry data, the Gain report prepared by the United States Department of Agriculture’s Foreign Agricultural Service indicated that the country’s feed wheat imports reached 2.5 MMT last year. “Milling wheat imports over the past several years have remained in the range of 2.1 to 2.3 MMT per year, but are expected to increase as additional capacity becomes operational,” the report read. “The increase in imports has come from feed wheat, which reached around 2.5 MMT in calendar year 2016, according to industry data,” it added.

he Department of Agriculture (DA) said over the weekend it is ready to commercially roll out a compact corn mill, which could help farmers increase milling efficiency by more than threefold. The Philippine Center for Postharvest Development and Mechanization (PhilMech) said the field tests it conducted on the compact corn mill showed that the equipment’s design is better than those currently being used in the country, both locally manufactured and imported. “The improved model has an output of 240 kilograms per hour [kgs/hr], which is a 49-percent increase over the 161 kgs/ hr of the initial model,” PhilMech Executive Director Dionisio G. Alvindia said. “Based on data gathered by PhilMech, most of the corn mills in use in the Philippines today, which do not have a compact design of the agency’s model, have outputs ranging from 39.4 kgs/hr to 73.5 kgs/hr,” Alvindia added. He said the compact corn mill designed by PhilMech allows easy transport and can be manufactured in the country using mostly local parts. PhilMech, an attached agency of the DA, said several farm machinery makers are keen on applying for a license from the agency to manufacture the compact corn mill. Alvindia said the participation of local manufacturers during pilot testing also improved the process of fabricating the commercial unit and made it easier to maintain. “Most manufacturers of farm machinery in the Philippines are mostly small and medium enterprises that have the ability to fabricate using mostly local materials equipment, like threshers

for palay (unmilled rice), hand tractors, various types of driers, corn- and rice-milling machines, among others,” he said. A lv i nd i a sa id t he t he de germinator efficiency of the improved PhilMech model is 94.7 percent compared to the 81.2 percent of the initial model. Its product recovery also improved to 72.3 percent from 64.7 percent, while the cost of mil ling per output was reduced to P0.95 per kilo from P1.18 of the initial model. Dergemination is the process of milling corn seeds into corn grits, the form which the livestock sectors utilize for feeds. Corn mills process corn grits into bugas, or milled corn that is currently promoted as a staple that could even replace rice on the table, according to PhilMech. “It is touted to be more nutritious than rice. Consumption of ‘bugas’ is popular in the Visayas and parts of Mindanao, while more health buffs are beginning to try it,” PhilMech said. Alvindia said he has mandated the teams that have developed technologies to make sure that all licensed manufacturers must comply with the original design and specifications by the agency, including materials used. “All PhilMech-designed prototypes of equipment underwent rigorous field and pilot testing so the agency can come up with the most feasible design that is easy to use, durable in design and feasible to operate,” he said. “ So t he m a nu fac t u rers of the PhilMech-designed equipment must make sure the product specifications are met, and the materials used should have the same standards as the PhilMech model approved for mass commercia lization,” A lv ind ia added. Jasper Emmanuel Y. Arcalas

Brazil hails victory as China, Why the focus on agriculture? Chile and Egypt lift meat ban Q

B

razil’s under-fire meat industry received a major boost as China, Chile and Egypt began lifting restrictions on imports from the Latin American country. Agriculture Minister Blairo Maggi announced China’s “total reopening of the market for Brazilian meat” in a statement released last Saturday by the ministry’s press office. “This testifies categorically to the solidity and quality of the Brazilian sanitary system and is a victory for our exporting capacity,” he wrote. Chile and Egypt also confirmed changes to their bans. Operation Weak Flesh, the Brazilian police investigation into allegations that inspectors were bribed to approve the sale of tainted meat, dealt a body blow to the country’s agricultural industry. Brazil accounts for about 20 percent of global beef exports and almost 40 percent of chicken exports. Twenty-five countries put some kind of restriction on Brazilian meat imports in the wake of the scandal. The first available data from the Trade Ministry showed meat

$5.5B The value of beef exported by Brazil last year

exports plunged 99.9 percent from the daily average to $74,000 last Tuesday. China, including Hong Kong, is the biggest export market for Brazilian meat, buying about a third of the $5.5 billion of beef shipped from Latin America’s largest economy last year, according to the meat exporters group Abiec. Hong Kong’s restrictions on Brazilian meat remain in place. Accord ing to the ministr y of agriculture, China’s ban on Brazilian products will be suspended on Monday, with the exception of meat processed in 21 plants still under investigation by Brazilian authorities. Fiftyseven Brazilian meat-processing plants will be able to send their goods to China as they did before March 19, when Chinese

customs stopped accepting all Brazilian meat imports for inspection, in accordance with a government order.

President’s statement

President Michel Temer welcomed China’s ruling and described it in a statement as recognition of Brazil’s agriculturaldefense system. Temer said on Thursday he intended to call the Chinese premier to clarify the situation. Chinese government officials couldn’t be reached for comment. Zhang Lian from Yadongsheng Import-Export Ltd., who has 270 tons of frozen Brazilian beef en route to Shanghai, said he had been notified of the decision and that import-processing would resume as usual next week. Also last Saturday, Chile’s Agriculture and Livestock Service said it was modifying its ban on Brazilian meat imports to prohibit only those products from plants under investigation. Egypt also resumed imports from authorized slaughterhouses, the agriculture ministry said in a statement. Bloomberg News

uestions c o u l d b e raised why I am writing regularly on the future of agriculture? How close have I been to agriculture so far? 1. In the 1950s my grandfather insisted that I plant potatoes with him? Did I like it? No. Did I have a choice? No. 2. Some three years ago, my friend Arnel Bacer and I debated why his family in Camarines Norte, with access to 14 hectares of land, was just able to survive. We came to the conclusion that we should start implementing fundamental changes in the approach to agri-development, using his family farm as an example. I will explain what happened since that debate below. 3. I have just decided to get involved in “urban farming”—I will write about that in the next columns.

Back to Camarines Norte:

We bought 8,000 coffee trees from Nestlé and agreed in a supply agreement with Nestlé. The 8,000 trees were intercropped with coconut trees in the hilly area of the farm. We have just concluded year three and delivered the first small quantity of coffee to the Nestlé buying station. Result: we

Henry J. Schumacher hit the top quality grade! In year five which is at the end of 2018, Bacer and family should be able to harvest 8,000 kilograms and will hopefully be paid around P800,000 at that time. What else did Bacer do to change the income levels of the farm? a. He created two fishponds for tilapia and is raising fish now for sale in the neighborhood and the next wet-markets; b. They extended the rice area by 50 percent and are able to sell rice today; c. They expanded the vegetable area continuously and are now able to sell vegetables jointly with fish and rice; d. Coconuts are harvested and sold every three months; e. Bacer built a swimming pool, which is fed by the river and cre-

ated housing; this resort-type development is already now attracting visitors who rent the area for entertainment or for countryside relaxation/holidays—against paying fees of course! Are we done? Of course not; these changes that have happened during the last four years are inspiration to look at other things that can be done.

What have we learnt so far?

Ideas are good but without access to funding they will not fly. Technical skills are needed and the continuous training of workers that are hired by Bacer is needed to move up the skills levels; here deeper cooperation is needed with the local government units and with Nestlé (extension work on a more regular basis). It is absolute essential to think in agri-food supply chains; this means that the produce has to be transported to the potential customers/markets (we had no choice but to buy a secondhand truck in order to keep middlemen out); supply chains are also needed to reduce postharvest losses. Are readers interested to learn from Arnel Bacer? Contact him at arnelbacer@yahoo.com.

news@businessmirror.com.ph

The World BusinessMirror

Editor: Lyn Resurreccion • Monday, March 27, 2017 A7

China exec sees ‘unstoppable momentum’ of globalization

C

HINESE Vice Premier Zhang Gaoli told a gathering of Asian leaders that the world must commit to multilateral free trade under the World Trade Organization and needs to reform global economic governance. Negotiations on the 16-nation Regional Comprehensive Economic Partnership, an Asia-wide agreement that’s favored by China, should be concluded soon and regional cooperation, such as with the Asean, should be advanced, Zhang said on Saturday in a speech at the Boao Forum for Asia, an annual conference on the southern Chinese island of Hainan. “The river of globalization and free trade will always move forward with unstoppable momentum to the vast ocean of the global economy,” Zhang said. China will remain a strong force in the world economy and for peace and stability, he said, adding that countries must respect one another’s core interests and refrain from undermining regional stability. China has become a strong advocate for free trade after US President Donald J.

100

The number of countries that favor China’s One Belt, One Road initiative, which seeks to develop new land and sea trade links with Asia, Europe and Africa Trump’s election, with President Xi Jinping and other top leaders working to boost its role in global governance. Asian countries are committed to globalization, Zhang said, mirroring Xi’s defense of free trade before the World Economic Forum in Davos. He said it brings new pitfalls

CARGO ships at berth BLOOMBERG

that must be taken seriously. Globalization should be made more inclusive and leaders must work hard to address unevenness to make development fair, he said. Zhang, 70, serves on the Communist Party’s seven-member standing committee, the top ruling body. As vice premier, he oversees the execution of economic policies and is head of a small leading group to promote Xi’s One Belt, One Road initiative. Major projects for this have already been undertaken and the initiative, which seeks to develop new land and sea trade links with Asia, Europe and Africa, has

already been applauded by more than 100 countries, he said before an audience that included heads of state and top leaders from Madagascar, Micronesia, Nepal, Afghanistan and Myanmar. China’s government will hold a summit, called the Belt and Road Forum for International Cooperation in Beijing in May. In a speech earlier this month, Zhang said China opposes the many forms of protectionism and is willing to work with the rest of the world on globalization. “The world economy is in a deep adjustment, growth is weak and trade protectionism is rising,” he said. Bloomberg News

UK food lobby calls for tariff-free trade with EU after Brexit

I

NDUSTRY bodies representing the United Kingdom food-supply chain have called on the government to seek a tariff-free trade agreement with the European Union during coming Brexit negotiations. In a joint statement on Sunday, the British Retail Consortium, the National Farmers Union and the Food and Drink Federation urged Prime Minister Theresa May to also ensure transitional trade agreements with the EU are in place before the UK leaves the bloc. “We cannot operate in isolation,” the industry groups said in the statement. “We call on the government to adopt an approach that will ensure stability and continuity for agri-food and drink businesses.” A recent report commissioned by Wm Morrison Supermarkets Plc. found that the UK imports almost half of the food it eats and that onethird of the food it consumes comes from the EU. The industry groups are pressing their case ahead of March 29, when the UK has indicated it will trigger Article 50 of the Lisbon Treaty, formally starting the process of leaving the EU. The mantra within the British government as it prepares to hammer out the terms of the breakup is that walking away from talks without agreement is better than a bad deal. The groups called on the government to seek out their advice before signing new trade agreements. The request echoed that of the heads of five of Britain’s biggest trade bodies, who in January urged the government to draw on the industry’s experience. The food-supply chain employs 3.9 million people in total and generates £108 billion ($135 billion) for the economy annually, the groups said. Bloomberg News

A10 Monday, March 27, 2017

The World BusinessMirror

www.businessmirror.com.ph

HK elite elect China-backed candidate as city’s leader

H

ong Kong’s former No. 2 official, Carrie Lam, was elected as the city’s chief executive, giving China its preferred choice to lead the fractious financial hub.

Lam, 59, won 67 percent of votes cast on Sunday by an electoral college of 1,194 businessmen, professionals and politicians that selects leaders for the former British colony, according to final results. Her chief rival, ex-Financial Secretary John Tsang, 65, got 31 percent, despite greater popularity among the general public and support from the committee’s prodemocracy bloc. A third candidate, retired judge Woo Kwok-hing, received 1.8 percent. The result will make Lam, a career civil servant, the city’s first female leader when her five-year term begins on July 1. She became the favorite to win, after her unpopular former boss, outgoing Chief Executive Leung Chun-ying, bowed out last December and Chinese officials pushed behind the scenes to rally support for a candidate seen as compliant to Beijing’s agenda.

Lam’s primary tasks will be healing divisions over Beijing’s perceived encroachment on Hong Kong’s affairs, and bolstering an economy vulnerable to China’s slowdown and US interest-rate increases. Lam’s pledge to ramp up growth through spending more and cutting taxes will be aided by a projected budget surplus of HK$92.8 billion ($11.9 billion) for the current fiscal year. Lam’s popularity has suffered amid weeks of media reports about Chinese officials working to quash opposition to her on the loyalist-dominated election committee. She trailed Tsang 29.5 percent to 46.6 percent in a poll of 1,009 adults published on March 16 by the South China Morning Post newspaper. “She is viewed—and she said so herself—as C.Y. Leung’s successor to continue his administration and policies,” said Jason Y. Ng, a lawyer who wrote Umbrellas in Bloom, a chronicle of the mass democracy protests in 2014. “She is too much of a known entity. There will be no honeymoon period at all.” China promised to give Hong Kong a “ high degree of autonomy” before the UK relinquished control two decades ago. Lam’s inauguration ceremony will take place on the 20th anniversary of the handover, giving her an immediate test for handling a politically sensitive occasion. President Xi Jinping may attend the event, which is accompanied by an annual prodemocracy march, in what would be his first visit to Hong Kong since taking power in 2012. The Post reported on March 6 that the commander in chief might also review a military parade while in town. Lam has promised a more accommodating approach after the mass protests and legislative gridlock that marked Leung’s tenure. She told Bloomberg last month she would focus on boosting the economy rather than potentially decisive issues, like an election-reform proposal, that prompted student demonstrators to occupy swaths of the city in 2014. Lam, who had planned to retire this year, was raised in a walk-up apartment in the city’s Wan Chai district. While studying sociology at the University of Hong Kong, she showed an activist streak, supporting a group of Yau Ma Tei boat people during efforts to relocate them. Upon graduation, she joined the government. She has held about 20 positions over 36 years, including a 2007-2012 stint as development secretary when she persuaded villagers to relocate to make way for new projects. As Leung’s top deputy, she was known for championing China’s policy goals without inspiring the same animosity from the opposition as her boss. That reputation took a hit during a December trip to Beijing, when Lam—who was then mulling a run—announced plans to build a Hong Kong offshoot of China’s Palace Museum. The surprise move prompted a backlash, with lawmakers accusing her of failing to consult the public about the project or her choice of architect. Bloomberg News

US joins ‘constructive’ G-20 climate meeting, German govt says

O

fficials representing the world’s largest economies, including the United States, put global climate talks back on track in Berlin last Friday, after failing last week to agree on language supporting the Paris accord, the German government said. Group-of-20 (G-20) climate and energy ministers held a “constructive” meeting over a plan to address global warming, setting the stage for further negotiations leading up to the July summit in Hamburg, where US President Donald J. Trump, China’s President Xi Jinping and other leaders will gather, the German Environment Ministry said in a statement to Bloomberg. The climate meeting comes a week after the US, China, India and Saudi Arabia successfully pushed to have a reference to global warming dropped from a statement issued by G-20 finance ministers and central bankers. German officials were frustrated by the move and said they would continue using their role as host of this year’s G-20 meetings to support efforts to fight global warming. “It’s an important concern to push implementation of the Paris accord,” the German Environment Ministry said in its statement. The climate treaty offers “manifold chances to modernize economies, boost competitiveness and create jobs and growth.”

Economic push

The climate plan presented by Germany emphasizes economic growth opportunities from clean energy, underscoring Chancellor Angela Merkel’s strategy to sell the idea to Trump and preserve the global effort to rein in greenhouse gases. There’s scant evidence the strategy will pay off. Trump has derided climate change as a hoax and during his campaign threatened to pull the US out of the Paris accord. Since taking office, he’s called for relaxing fuel-economy standards for cars and trucks and proposed sweeping cuts to climatechange research. The moves have sparked concern among environmentalists around the globe. On Thursday United Nations Secretary-General Antonio Guterres acknowledged countries may be retreating on climate-change efforts, but didn’t single out the US. The US was represented in talks last Friday by State Department official Griffin Thompson. A State Department spokesman declined to comment on the meeting. Germany was represented by Economy and Energy Ministry Division Head Thorsten Herdan. Germany will try to rally support for its climate plan during three meetings in May, with the aim of gaining enough backing to be adopted by G-20 leaders, including Trump, at the Hamburg summit on July 7 and 8. Bloomberg News

The World BusinessMirror

news@businessmirror.com.ph

US admits its forces were behind air strike on Mosul

B

AGHDAD—An air strike targeting Islamic State (IS) militants in the Iraqi city of Mosul that witnesses say killed at least 100 people was, in fact, launched by the US military, American officials said last Saturday. US officials did not confirm the reports of civilian casualties but opened an investigation. In the days following the March 17 air strike, US officials had said they were unsure whether American forces were behind the attack. The statement issued by the USled coalition said the air strike had been requested by Iraqi security forces to target IS fighters and equipment “at the location corresponding to allegations of civilian casualties”. US-backed government troops were fighting IS forces in that area of western Mosul, the statement said. The coalition said it takes all allegations of civilian casualties seriously and a formal Civilian Casualty Credibility Assessment had been opened to determine the facts surrounding this strike and the validity of the allegation of civilian casualties. “Our goal has always been for zero civilian casualties, but the coalition will not abandon our commitment to our Iraqi partners because of ISIS’s [Islamic State in Iraq and Syria] inhuman tactics terrorizing civilians, using human shields and fighting from protected sites, such as schools, hospitals, religious sites and civilian neighborhoods,” the coalition said. Altaf Musani, representative of the World Health Organization (WHO) in Iraq, told The Associated Press (AP) in the Jordanian capital of Amman that the organization's priority was quick treatment for those wounded. “It is our understanding that there was an incident and we have worked with the local health actors and they have confirmed more than 100 are dead,” Musani said. Musani said that, since the operations in Mosul began last October, there have been at least 5,300 people referred to hospitals in and around the city. He added that since the attack on western Mosul began last month, “we have managed to capture more than 1,300” cases.

“When you take a better look at what those numbers mean, what is worrying for the WHO and aid actors is that roughly 30 percent of the total numbers are women,” he said. “Roughly 30 percent of that large number are children under 15, and that is deeply concerning because of the capacities needed to treat those wounded coming out of the front lines.” President Donald J. Trump campaigned on a promise to dramatically ramp up the assault on IS militants and has vowed to eradicate it. US Secretary of State Rex Tillerson and US Defense Secretary Jim Mattis met in recent days with Iraqi Prime Minister Haider al-Ababi and foreign ministers from the coalition partners at the State Department to explore new ideas to expand the fight against IS in Mosul. Earlier last Saturday, senior Sunni Muslim politicians expressed concern over reports of air strikes that allegedly killed the civilians. Residents reported two air strikes hitting a residential area on March 13 and 17. The Iraqi Defense Ministry has provided no immediate comment. In tweets published on his official account, Parliament Speaker Salim al-Jabouri said “we realize the huge responsibility the liberating forces shoulder” and call on them to “spare no effort to save the civilians”. In a statement issued on his web site, Vice President Osama al-Nujaifi, himself from Mosul, described the incident as a “humanitarian catastrophe”, blaming the US-led coalition air strikes and excessive use of force by militarized Federal Police forces. Al-Nujaifi put the number of civilians killed at “hundreds”. He called for an emergency parliament session and an immediate investigation into the incident. Residents of the neighborhood known as Mosul Jidideh told the AP on Friday that scores of residents were believed to have been killed by two air strikes that hit a cluster of homes in the area. Resident Ahmed Ahmed said there were over a hundred people within the cluster taking refuge from the missiles. AP reporters saw at least 50 bodies being recovered from the wreckage of the buildings. AP

briefs uk police: westminster attacker acted alone LONDON—British police investigating an assault on Parliament that claimed four victims and wounded dozens say they still believe the assailant acted alone. The police said late Saturday there is no information indicating that further attacks are planned. Deputy Assistant Commissioner Neil Basu said it may never be possible to fully determine the motives of attacker Khalid Masood, who was shot dead last Wednesday after running over pedestrians with an SUV and fatally stabbing a policeman. Basu said “that understanding may have died with him”, as the police appealed for people who knew Masood or saw him to contact investigators. One man remains in custody in the case. He has not been charged or named. Masood, 52, had convictions for violence and spent time in prison. He also worked in Saudi Arabia teaching English. AP

greek police nab two truck drivers in smuggling try

THESSALONIKI, Greece—Greek police say they have arrested a Turkish truck driver and a Bulgarian truck driver who were carrying a total of 20 migrants near Greece’s northeastern land border with Turkey. The police said last Saturday that the Turkish driver was carrying eight Pakistanis, one Iraqi and one Syrian, and the Bulgarian truck driver arrested last Friday was carrying 10 Pakistani men. The police said the number of undocumented migrants arrested crossing the land border from Turkey averages about 400 per month, but they are expecting an increase as the weather improves. Migrants crossing the Greek-Turkey land border are not covered by the EU-Turkey agreement on refugees, which sends refugees back to Turkey. Those admitted in Greece as refugees, mostly from Syria and Iraq, are processed for resettlement, while others such as the Pakistanis are expelled. AP

bulgarians’ vote in election unlikely to bring clear winner SOFIA, Bulgaria—Bulgarians are heading to the polls for the third time in four years, in a snap vote that could tilt the European Union’s poorest member-country closer to Russia. Polls last Sunday opened at 7 a.m. (0400GMT) and first results from exit polls are expected shortly after they close at 8 p.m. (1700GMT). Some 6.8 million Bulgarians are eligible to vote in an election widely predicted to bring about a fragile government coalition and a fragmented legislature where nationalist and populist parties could become kingmakers. AP

Monday, March 27, 2017 A11

North Korea’s ambition seen in a bid to breach global banks

W

The United Nations Security Council, led by current council president United Kingdom’s Boris Johnson, votes on a resolution concerning North Korea on March 23. AP/Richard Drew

hen hackers associated with North Korea tried to break into Polish banks late last year, they left a trail of information about their apparent intentions to steal money from more than 100 organizations around the world, according to security researchers. A list of Internet Protocol addresses, which was supplied by the security researchers and analyzed by The New York Times, showed that the hacking targets included institutions like the World Bank, the European Central Bank and big US companies, including Bank of America. While some of the Polish banks took the hackers’ bait, the scheme was detected fairly quickly, and there is no evidence that any money was stolen from the intended targets. Yet, security researchers said the hit list, found embedded in the code of the attack on more than 20 Polish banks, underlines how sophisticated the capabilities of North Korean hackers have become

as their goals have turned financial, in addition to efforts to spread propaganda, heist data and disrupt government and news web sites in countries considered enemies. The list of targets, which has not been previously reported, is part of a growing body of evidence showing how North Korea, a country that is cut off from much of the global economy, is increasingly trying to use its cyber-attack abilities to bring in cash—and making progressively bolder attempts to do so. North Korea’s hacking network is immense, encompassing a group of 1,700 hackers aided by more than 5,000 trainers, supervisors and others in supporting roles, South Korean officials estimate.

1,700 The estimated number of North Korea’s network of hackers aided by more than 5,000 trainers, supervisors and others in supporting roles

Because of the country’s poor infrastructure, the hackers typically work abroad, in places like China, Southeast Asia and Europe. Like other North Koreans allowed to work abroad, the hackers are constantly monitored by minders for possible breaches in allegiance to the government. The security firm Symantec said it believed that the hackers behind the Poland attack were also behind two other major breaches: the theft of $81 million from the central bank of Bangladesh and a 2014 attack on Sony Pictures, which rocked the film industry. “We found multiple links, which gave us reasonable confidence that it’s the same group behind Bangladesh as the Polish attacks,” said Eric

Chien, a researcher at Symantec, which studied both attacks. The firm has not traced the attacks to a specific country’s government, but US officials have blamed North Korea for the Sony attack, partly based on intelligence that came from US breaches of North Korea’s computer systems. The list of targets uncovered in the Polish attack—including big US financial institutions, like State Street Bank and Trust and the Bank of New York Mellon—is illuminating for its ambition, Chien added. “It’s one thing to go after Bangladesh,” he said, “but it’s a whole other thing to take on the US.” US prosecutors are investigating North Korea’s possible role in the Bangladesh heist, according to a person briefed on the inquiry, who asked to remain anonymous because the details are confidential. Last Tuesday Richard Ledgett, a deputy director of the National Security Agency, said research linked the Sony Pictures attack to the Bangladesh heist. He also affirmed that he believed nation states were now robbing banks. All of this represents a troubling new front in cyber warfare, Ledgett said at an event sponsored by the Aspen Institute. “That is a big deal,” he said. New York Times News Service

Trump becomes ensnared in fiery GOP civil war

W

A SHINGTON—President Donald J. Trump ignites a lot of fights, but his failure to repeal the Affordable Care Act (ACA), the biggest defeat in his short time in the White House, was the result of something else: a long-running Republican civil war that humbled a generation of party leaders before he ever came to Washington. A precedent-flouting president who believes that Washington’s usual rules do not apply to him, Trump finds himself shackled by them. In stopping the repeal of President Barack Obama’s proudest legacy— the Republican Party’s professed priority for the last seven years—from even coming to a vote, the rebellious far-right wing out-rebelled Trump, taking on and defeating the party establishment with which it has long been at war and which he now leads. Like every one else who has tried

to rule a fissured and fractious party, Trump now faces a wrenching choice: retrenchment or realignment. Does he cede power to the antiestablishment wing of his party? Or does he seek other pathways to successful governing by throwing away the partisan playbook and courting a coalition with the Democrats, whom he has improbably blamed for his party’s shortcomings? “It’s really a problem in our own party, and that’s something he’ll need to deal with moving forward,” said Rep. Tom Cole of Oklahoma, an ally of the center-right on Tuesday Group, which stuck with Trump in the health-care fight and earned the president’s praise in the hours after the bill’s defeat. “I think he did a lot—he met with dozens and dozens of members and made a lot of accommodations— but in the end, there’s a group of people in this party who just won’t

say yes,” Cole said. “At some point, I think that means looking beyond our conference. The president is a deal-maker, and Ronald Reagan cut some of his most important deals with Democrats.” Trump is not there yet. Before becoming a presidential candidate, he seemed to have little fixed ideology. But as president, he has operated from the standard-issue Republican playbook, embracing many of the positions of Speaker Paul Ryan and the party establishment. While he is angry and thirsty for revenge, he seems determined to swallow the loss in hopes of marshaling enough Republican support to pass spending bills, an as-yet unformed tax overhaul and a $1-trillion infrastructure package—legislation that could attract considerable Democratic support but has the potential to split the party. On Friday evening, a somewhat

shell-shocked president retreated to the White House residence to grieve and assign blame. In a search for scapegoats, he asked his advisers repeatedly: Whose fault was this? Increasingly, that blame has fallen on Reince Priebus, the White House chief of staff, who coordinated initial legislative strategy on the healthcare bill with Ryan, his close friend and a fellow Wisconsinite, according to three people briefed on the president’s recent discussions. Despite the public displays of unity with the speaker, Trump and his team regret outsourcing so much of the early drafting to Ryan. One aide compared doing that to a developer’s staking everything on obtaining a property without conducting a thorough inspection. And they were stunned by his inability to master the politics of his own conference.

New York Times News Service

Green Monday BusinessMirror

A12 Monday, March 27, 2017

www.businessmirror.com.ph • Editor: Lyn Resurreccion

Unregulated ecotourism can destroy caves, archaeological sites–experts Story & photos by Jonathan L. Mayuga

G

@jonlmayuga

IGANTES ISLANDS—While ecotourism is one of the country’s economic growth drivers, experts warned that once unregulated, it can adversely impact the environment, disturb or destroy ecosystems and lead to biodiversity loss, experts said. This is the concern raised in the case of Gigantes, a group of islands and islets near Panay Island in the municipality of Carles, Iloilo, which is experiencing a tourism boom with still no ecotourism plan in place. Community stakeholders on Gigantes, particularly Gigantes Norte and Gigantes Sur, are overwhelmed by the influx of tourists, after the beauty of the islands were “discovered” after Supertyphoon Yolanda (international code name Haiyan) struck in 2013. Lack of appreciation of Gigantes’s unique ecosystems is a major issue. Jorge Ebay, program manager of the Building Resilient and Sustainable Small Island Communities on Gigantes Islands, a partnership between the Foundation for the Philippine Environment (FPE) and the University of the PhilippinesVisayas Foundation Inc., said the booming ecotourism on the islands is a serious threat to their fragile ecosystems. “Appreciation of the environment and the ecosystems, its marine and coastal resources, and caves is lacking even among locals,” Ebay said. FPE Executive Director Oliver Agoncillo said there should be a distinction between tourism and ecotourism, noting that ecotourism should always give premium to environmental protection and conservation than profit or revenue. “Tourism can both be a threat and solution,” he said, explaining that the FPE’s capacit y-bu i ld ing initiatives, in partnership with UP Visayas and community stakeholders in Gigantes, hope to address the problem posed by ecotourism. The government is currently

eyeing at least P414.14 billion in private-sector investment to develop the country’s tourism potential, with the hope of increasing tourist arrivals to accommodate 12 million visitors by 2022. Accord ing to the Nationa l To u r i s m D e v e l o p m e nt Pl a n (NTDP) of 2016-2022, privatesector investments would “cover the needs of travelers, such as accommodation, transport units [and] aircraft acquisition.” COO Guiller B. Asido of the Tourism Infrastructure and Enterprise Zone Authority (Tieza) reported that there is an estimated shortfall in the number of hotel rooms at 120,000. Under the NTDP, the Duterte administration is hoping to attract 89.2 million domestic tourists and generate revenue of some P4 trillion from domestic and foreign travelers by 2022. Target employment is 6.5 million people, which will raise the share of tourism jobs to 14.4 percent of total employment, and reach 702,000 poor beneficiaries. Environment Secretar y Regina Paz L. Lopez is also eyeing ecotourism as a strategy in ensuring environmental protection, and natural resources and biodiversity conservation through partnership with communities in the implementation of the P8-billion Enhanced-National Greening Program. The Department of Environment and Natura l Resources (DENR) is the lead implementing agency in the ambitious program, which lumps food security and self-sufficiency, and antipoverty employment as part of a massive reforestation program. Mea nwh i le, i nfor m a l tou r packages on Gigantes include cave

Stone masks and burial markers are on display at the path leading to the Bakwitan Cave.

The entrance to the Bakwitan Cave

Graffiti on the walls of the Bakwitan Cave

visits. There are more than 50 caves all over the islands. Most of the caves are specialized ecosystems, because they are karst caves under limestone karst forest. Aris Neil T. Cristales of the Western Visayas Caving Association said the caves on Gigantes need to be properly classified before they are opened to tourism activities. Cristales said that, without proper training, entering caves could be perilous for tourists, especially because the danger that lurks inside them remains unknown. “There may be dangerous gases that can kill you,” he said. According to Cristales, about 20

of the Gigantes’s caves have been explored so far, and they offer great potential, not only for tourism, but also for cave-resources protection and conservation, as the ecosystem in some of the caves remains intact. Besides being home to endemic species of geckos and frogs, some of the caves are sacred burial grounds of the islands’ first settlers. Little is known about Gigantes’s history, and artifacts in these caves need to be protected, said Larry Joey Alag, a dive instructor who is involved in training tourists guides on the islands. The local government unit of Carles has yet to finalize its Tourism Plan, and

is still in the process of building its tourism data base. “We were overtaken by the tourist arrivals. Right now, we are finalizing the tourism plan. Regulating the tourism industry became a problem, after visitors started to pour in after Yolanda,” said So-San B. Marcelo, Carles tourism officer. She said the sustainable tourism plan would consider putting in place a guideline for the tourism industry. In an interview with the BusinessMirror, Larry Joey Alag, secretary-general of the Philippine Life Savers who also train tour guides, said some caves on Gigantes have been explored by treasure hunters long ago. Some of the caves, he said, could still be saved, with the help of the National Museum. Some of the caves frequented by tourists were already desecrated, foremost of which is the Bacwitan Cave, which, according to Alag, used to be a relocation site for communities seeking shelter during the wrath of strong typhoons. Historically, the cave was also used as hiding place by the people to escape from Japanese forces during World War II. It was lear ned t hat loca ls themselves unwittingly helped treasure-hunters excavate and smuggle out important artifacts. “One time, I was offered to buy an old clay jar. Knowing it was dug from the caves, I, instead, gave the local a reward and kept it,” Alag told the BusinessMirror in Filipino. Alag added he intends to convince the residents to have the artifacts examined by experts. “Much can be learned from

these artifacts. I am no expert in this but, from what I’ve learned through my own research, these should help the people discover the culture of their ancestors,” he said. Director Theresa Mundita S. Lim of the DENR’s Biodiversity Management Bureau said not all caves should be open to tourism. “ That is why we are conducting cave classification to determine how to manage these caves,” she said. Some caves, Lim said, should be protected to protect the species that depend on the cave ecosystem. Bats are among cave-dwelling wildlife considered to be keystone species that needs to be protected against ecotourism. When disturbed, bats tend to relocate. Guano, the minerals deposited by bats in caves, help other species survive, thus, allowing the cycle of life to continue even without the aid of sunlight. The discovery of the artifacts in the caves on Gigantes, she said, should be an added reason to study the links between ecosystem, historical and cultural links in those areas, she added. Marcelo said around 27,000 foreign and local visitors were registered in Carles. The actual number of visitors, she said, could be a lot higher because they have no control over the number of people coming from other areas who do not register in the Tourism Office. The unbridled development, particularly the construction of rooms in resorts to accommodate tourists on Gigantes, is a challenge, noting its potential environmental impact.

Tagum City cites artificial reef project, supports ‘MPA networking’ initiative

T

agum City is expanding the artificial coral reef within its 22-hectare marine-protected area (MPA), which it considers a big boost to the local fishermen’s productivity. Over the last decade, Tagum City has allocated over P10-million budget for its marine-conservation project. In a statement, Tagum City Mayor Allan L. Rellon said its artificial reef has expanded from 2 hectares to 3 hectares to boost its positive impact in sustaining marine life in the area. “Like many other cities and municipalities in the Davao Gulf, the limited marine ecosystem of Tagum City is under considerable pressure from industrial development, growing population and pollution. We see the need to prioritize marine-conservation initiatives in order to reduce the threats to our marine ecosystem,” Rellon said. The City Agriculture Office of Tagum started the Artificial Coral

Reef (ACR) Project in 2007. In 2013 the management of ACR was transferred to the City Environment and Natural Resources Office (Cenro). The artificial reef cover is one of the factors that contributed to the increase in fish stock within the city’s 15-kilometer municipal fishing ground. In 2007 the recorded fish stock was estimated at 2,487 per 1000 square meters. It d w i nd le d to 1,411 p e r 1,000 sq m in 2014, after strong t y phoons battered Mindanao in consecutive years. Siltation f rom t he r i v e r s a nd s t ron g waves destroyed the reefs, inc lud ing severa l insta l led artificial coral reefs. The Cenro doubled its efforts in installing reef balls to expand the coverage of the artificial coral reef. In 2016 the fish stock increased by more than 100 percent. The ACR also helped improve the coral reef condition by 19 percent from

2007 to 2016. This benefited the local fishermen since the fish catch increased. Currently, the area is enclosed with around 50 mooring buoys to prevent encroachment by erring fishermen from neighboring towns. There were 200 reef balls put into place in 2016. As of this year, the ACR covers 3 hectares of the MPA. The coral recruitment, a process where tiny larvae of corals attached themselves to the reef balls and start a new coral-reef community, takes about three months before branching can be visible. The city government received technical assistance from the Department of Environment and Natural Resources (DENR) Davao region. “We installed reef balls during the Amihan [northeast monsoon] season. We do it every week. We learned during our assessment in 2014 that if the reef balls were placed beyond 30 feet, the coral

recruitment is slower than those in the range of 20 feet to 30 feet,” said Rodel Chua, focal person for Coastal Management Unit. Destructive methods of fishing, including the use of dynamite, were rampant from the early 1980s to 1990s. The illegal and unregulated fishing continued until 2005, when Tagum City established an MPA in Barangay Liboganon. Through a city ordinance passed in 2007, a 22-hectare offshore MPA was declared, in order to restore its once beautiful reef. While there are no commercial fishers in Tagum, encroachment in the MPA and municipal waters of Tagum by small fishermen from neighboring towns remains a problem. Tagum’s Bantay Dagat (sea patrollers) now monitors the area, at least, three hours during daytime and six hours at night. Only the registered small fishermen are allowed to fish, with the use of hook-and-line and mesh net.

Tagum City has two patrol boats, and it subsidized all the necessary expenses for the law enforcement, including fuel and salary of the Bantay Dagat, Chua said. Tagum is also part of the m a r i ne - conser v at ion projec t called SMARTSeas PH, a nationwide marine-conservation project by the Department of Environment and Natural Resources, United Nations Development Program and Global Environment Facility being implemented by the WWF-Philippines. Based on the connectivity study conducted by the University of the Philippines Marine Science Institute, under the project the municipal waters of Tagum, is one of the “sinks” of fish eggs in the Davao Gulf area. This is one of the reasons there are lots of fish in the area, despite the condition of the coral reef. SMARTSeas is a multistakeholder marine-conservation project, which includes Tagum as one of its priority sites.

“In the Davao Gulf we aim to network the protected areas and create an ecological linkage of the cities and municipalities, so we can harmonize their efforts in managing the gulf sustainably. Tagum is one of the cities that we assist in improving their MPA management plan, creating a sustainable alternative source of livelihood for communities in the coastal areas, and increasing their capacity on fishery law enforcement,” SMARTSeas Project Manager Ricky Biyo said. Mayor Rel lon suppor ts the MPA net work ing in the Davao Gu lf, say ing Tag um w il l ma xim i z e it s av a i l able resou rces and log istics to f ur ther intensif y their fisher y law enforcement and MPA patrol ling, and support neighboring cities and municipa lities, as wel l. The Davao Gulf is one of the country’s 10 major fishing grounds, and is the second top corridor of marine mammals. Jonathan L. Mayuga

Biodiversity Monday BusinessMirror

Asean Champions of Biodiversity Media Category 2014

Monday, March 27, 2017 A13

Editor: Lyn Resurreccion • www.businessmirror.com.ph

KATUNGGAN PARK

A man-made mangrove forest thrives in Iloilo Story & photos by Jonathan L. Mayuga

A

@jonlmayuga

man-made mangrove forest in Leganes, Iloilo province, is now becoming a magnet for birds, a variety of spawning fish species, mud crabs and other marine wildlife.

Dr. Jurgenne Primavera of the Zoological Society of the London-Philippines watches as Wilson Batislaon, municipal environment and natural resource officer of Leganes, Iloilo province, narrates how the Katunggan Park came to be.

T he 15 -hectare K atung gan Park in Barangays Gua-an and Nabitasan, which used to be fishponds, is now thickly covered with mangroves. From being an abandoned, under uti lized and unproductive fishpond, proponents of the project reverted the area into a mangrove forest for climatechange mitigation and adaptation—and later a tourist and learning destination.

Milkfish producer

Located 11 kilometers north of the capital Iloilo City, Leganes is a fourth-class municipality that used to be one of the province’s top producers of milkfish. It has 187 hectares of coastal area and most were used for fishpond operations. Because of the environmental damage caused by the fishpond s, t he bu si ness bec a me unsustainable. The area eventually went from being underutilized to abandoned, making it totally unproductive.

Rehabilitation

In 2009 the plan to rehabilitate the abandoned fishponds—to revert the underutilized and unproductive fishpond into mangrove forest—was conceived. “It all started in 2009, when we explored the possibility of reverting these abandoned and underutilized fishponds into a mangrove forest. We started with 9.5 hectares and now we are eyeing to expand the park,” said Wilson Batislaon, municipal environment and natural resource officer (Menro) of Leganes. By 2012 the area was successfully reverted into mangrove forest, attracting fish and other marine wildlife. “There is also a good number of birds in the park now,” he said.

LGU-led project

Speaking mostly in Filipino, Batislaon said the project is a result of a partnership between the local government unit (LGU) of Leganes and the Zoological Society of London (ZSL), through its community-based Mangrove Rehabilitation Project. According to Batislaon, the project started rolling after the signing of a memorandum of agreement between the LGU and the ZSL. Developed through assisted natural regeneration and active monitoring and maintenance, the area was eventually

15 ha

Primavera and Batislaon with the mangrove forest behind them.

The area covered by Katunggan Park in Leganes, Iloilo province

conver ted and named as the K atunggan Park. An agricultural technician, Batislaon said he had to undergo training and learn from experts, led by Jurgenne Primavera, chief mangrove scientific advisory of ZSL-Philippines.

Mangroves 101

Primavera provided “Mangrove 101” lecture to members of the media during a visit organized by the Foundation for the Philippine Environment (FPE) at the Katunggan Park early this month. She underscored the importance and proper way of rehabilitating the country’s mangrove forests. “Planting mangroves should be done properly. You plant only the right species, otherwise, they will be a waste,” she said in Filipino. Primavera added reverting abandoned, underutilized and unproductive fishponds to mangrove forest is the way to go, especially because the country is vulnerable to storm surges. She sa id, besides being a n e c o s y s t e m it s e l f , a h e a lt h y m a ng rove forest cou ld b e a sou rce of food a nd l ivel i hood for communities. People living in coastal areas with no protection against stor m surges, she said, are sure to per ish, citing what happened during the 2013 o n s l au g ht o f S u p e r t y p ho o n Yol a nd a (i nter n at ion a l code name Haiyan). Areas with thick mangrove forests, she said, were least affected because they were protected by the mangrove forests. “In some areas, the mangrove species that were planted in the wrong areas were easily washed away,” Primavera noted.

Best practice

“FPE has an ecosystem-based disaster-risk reduction management program that we are scaling up. Based on our experience in Leyte, we are looking at the Katunggan experience as a model,” FPE Executive Director Oliver Agoncillo said. The lessons learned from the

A wooden viewing area stands over the mangrove forest in Katunggan Park.

experts, even before Yolanda occurred, were utilized in the rehabilitation of what is now known as Katunggan Park. According to Batislaon, from September 2009 to 2015, more than 86,000 mangrove seedlings were planted in the area. In Januar y 2010 the Leganes LGU allocated P147,000 for mangrove rehabilitation. “From there, the project went on. We rely on volunteerism from our partners. Students from state colleges and universities in Iloilo do most of the planting,” he said. In March 2011 a bamboo hut was constructed, which serves as reception and rest area for volunteers. The park now has 230 meters of elevated pathway made of wood and mostly bamboo materials. Visitors can also view the entire mangrove forest park from atop a viewing deck.

Problems and solutions

“Before, this is an open area. You can even see the goats. People [living nearby trespass in the park to] gather wood and mangroves to make charcoal,” Batislaon said. “We were afraid then. Our caretaker said the trespassers had bolo or machete,” he said.

To prevent trespassers, they lobbied for the passage of a municipal ordinance and sought the assistance of the local police for protection. “There is now an ordinance. We asked the police to enforce the law. Because of that ordinance, they [local residents] were afraid to enter the area,” he said.

Good politics

After the election in 2010, he sa id t he newly elected mayor of L ega nes, A dol fo E . Jaen, suppor ted t he project. “Even t hough t here was a change in leadership, we saw good politics, good governance. The new mayor supported the project,” he said. Usua l ly, he said, a change in leadership of ten mea ns a c h a nge i n p ol ic ies; proje c t s were discontinued. Not in this case in Leganes. “Even though the mayor is new, he supported the project. Bantay Dagat [Sea Patrol] were deputized. We were authorized to apprehend trespassers. From then on, we did not hesitate to arrest trespassers,” he said.

Visitor magnet

After covering the area with

mangrove forest, people started to visit. This encouraged the proponents of the project to turn it into a park and learning center. “Visitors can help by giving donation. Some donate P10, P20 and we are thankful for it because we use it in maintaining the park,” he said. “In a month, we have 200 students or visitors. During school days, at least a thousand students visit. But we are regulating the visit. We have a protocol. We do it by batches. We orient them first, teach them the proper way of planting mangroves,” he said. He explained that the park could not accommodate a very huge crowd. A group of 15 per batch, he said, is ideal to minimize potential adverse impact. “We teach them [visitors on] what to plant, how to plant, when to plant. In August and September, there is no planting because it will only go to waste. The waves are too strong,” he said.

100-percent target

Leganes has 6 kilometers of coastline, and about 75 percent are already covered with mangroves. “We are hoping to stretch it to cover 100 percent,” Batislaon said.

According to Primavera, it is ideal to have at least 100 meters of mangrove forests along the coastline. In Leganes there are some areas with mangrove forests that are 200 meters thick. Batislaon said at least 10 hectares to 15 hectares of abandoned, underutilized and unproductive fishponds in Leganes can still be recovered and converted into mangrove forests. He said now that the mangrove forest in Leganes is thriving, fishermen themselves said their daily fish catch has improved. For his work, Batislaon won the 2016 Walt Disney Conservation Hero Award—one of many whose pione e r i ng con se r v a tion efforts were recognized by the Disney Conservation Fund (DCF). Batislaon was nominated by ZSL America. “In the continuing battle to save the Philippine environment, Agricultural Technician Wilson Batislaon has provided critical support by galvanizing and guiding the restoration of 15 hectares of abandoned fishponds to mangrove habitats,” the DCF web site said. DCF said Batislaon has engaged more than 500 students and teachers, out-of-school youths, government and private-sector employees, civil-society members and the Philippine Coast Guard to plant more than 20,000 mangroves in dozens of sessions since 2009, in close collaboration with ZSL. “Wilson [Batislaon] has tirelessly worked to raise government funds and to establish regulations to protect mangroves, culminating in the launching of the Katunggan Eco-park in 2014,” DCF said. DCF supports organizations worldwide working through its “Reverse the Decline, Increase the Time” initiative to reverse the decline of threatened species and increase the time kids and families spend in nature. T he f und honors conser vationists who have gone above a nd b e y ond , d e mon s t r at i n g passion, courage and tenacit y in tack ling some of the big gest c ha l lenges in protect ing t he planet’s resources. The Katunggan Park in Iloilo is a best practice and mangrove rehabilitation model for LGUs.

A14 Monday, March 27, 2017 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

In comparisons, PHL is terrible

I

F you listen to the international press and media—and often the local—you will discover the following about the Philippines: “Positives: friendly people, good English and nice beaches. Negatives: everything else”.

The problem with these assessments is that they are based on comparisons, and are not objective. Of course, Filipinos are friendly to visitors in comparison to North Korea, where tourists must assume their hotel room is “bugged”. Australia is an English-speaking country but, because of unique slang and accent, many outsiders would have trouble following a normal conversation between two Aussies. And talking about Australia, the beaches around the city of Darwin are inhabited by the sometimes-fatal box jellyfish, 10-foot-long saltwater crocodiles and sharks—lots of sharks. Comparisons are usually flawed and, therefore, inaccurate. However, we can make valid comparisons when looking at two things that are similar in many respects, like coffee shops. We can rationally compare quality, price and ambiance, and that is probably fair. An article in the Bangkok newspaper The Nation was titled “Thailand and Philippines: Twins separated at birth”. While weak on content, the title does illustrate the mind-set about Philippines/Thailand comparisons. Maybe “separated at birth” means the Philippines was conquered into slavery by the Spanish, and then made a submissive of the United States. Thailand has been a sovereign nation since 1782 and was never colonized. But that is ancient history. What about today, where Philippine electricity costs are nearly double that in Thailand? The Philippines even generates less of its electricity from fossil fuels than Thailand. What are we doing wrong that they are doing right? Except, Thailand gets nearly 70 percent of its power from natural gas, which is cheaper than oil. More important, Thailand produces 37 million cubic meters of natural gas, while the Philippines produces 4 million. Another nation that is constantly compared to the Philippines is Vietnam, where twice as much power comes from hydroelectric than in the Philippines. Vietnam has 47,000 kilometers of rivers; the Philippines has 3,200 km. Vietnam produces 11,000 megawatts of hydropower; the Philippines produces 2,800 MW. However, we all know that the problem in the Philippines is politics, problems that neither Thailand nor Vietnam has. Of course, the average term of a Thai prime minister is less than two years. Maybe some of Thailand’s “political stability” comes from the new constitution that allows the military to appoint all members of the 250-seat Senate. But why can’t the Philippines have the political stability and continuity that does create better economic results like in Vietnam? Maybe we should start with the death penalty for “those who abuse their positions and/or power, have accepted or will accept directly or through intermediaries” any bribe over P7 million, like in Vietnam. We know that Philippine politics is a kind of problem that Vietnam solved. There is only one legal party in Vietnam—the Communist Party—and elections are clean. In the last election, Prime Minister Nguyen Tan Dung was elected with 95.38 percent of votes and President Truong Tan Sang was elected with 80.19 percent in their respective districts. Maybe when making comparisons about the Philippines, we should think of this conversation: “You are terrible at basketball. Why can’t you be like your kuya?” “My kuya is 6'9", I am 5'10". Do the math.”

The country’s highest-paying jobs Atty. Jose Ferdinand M. Rojas II

RISING SUN

M

arch is ending and for many students, it’s graduation time. Those who are preparing to go to college are now thinking about what course to take. Young workers who are not satisfied with their current jobs are most probably looking at new prospects. It is the right time to be talking about careers. In the past, Jobstreet and the Department of Labor and Employment (DOLE) have released lists of highpaying jobs in the Philippines. If salary is one’s basis for choosing what career to embark on, then it would be helpful to do a quick review of some of the country’s most lucrative jobs. For fresh graduates, it will be careers in travel and tourism, telecommunication, computer/information technology (hardware and software) and hotel/hospitality. For those who have one to four years’ working experience, good options are careers

in oil and gas engineering, aircraft maintenance, information technology (IT) instrumentation and technical support. Some months ago, the DOLE cited the latest study of the Bureau of Local Employment (BLE), stating that jobs in the creative industries, mining, aviation, computer services, banking and finance, business-process outsourcing (BPO) and manufacturing are all good options for young workers. According to the DOLE, the BLE came up with the list “through the identification of median monthly

TKO

Since 2005

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

Publisher Editor in Chief Managing Editor Associate Editor News Editor City & Assignments Editor Senior Editors

T. Anthony C. Cabangon Jun B. Vallecera Max V. de Leon Jennifer A. Ng Dionisio L. Pelayo Vittorio V. Vitug Lorenzo M. Lomibao Jr., Gerard S. Ramos Lyn B. Resurreccion, Efleda P. Campos

Online Editor Social Media Editor

Ruben M. Cruz Jr. Angel R. Calso

Creative Director Chief Photographer

Eduardo A. Davad Nonilon G. Reyes

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

Judge Pedro T. Santiago (Ret.) Benjamin V. Ramos Adebelo D. Gasmin Marvin Nisperos Estigoy Aldwin Maralit Tolosa Dante S. Castro

BusinessMirror is published daily by the Philippine Business Daily Mirror

HOM

Publishing, Inc., with offices on the 3rd floor of Dominga Building III 2113 Chino Roces Avenue corner De La Rosa Street, Makati City, Philippines. Tel. Nos. (Editorial) 817-9467; 813-0725. Fax line: 813-7025. (Advertising Sales) 893-2019; 817-1351, 817-2807. (Circulation) 893-1662; 814-0134 to 36. E-mail: news@businessmirror.com.ph.

www.businessmirror.com.ph

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

Siegfred Bueno Mison, Esq.

THE PATRIOT

T

here will always be trials, knots and obstacles (TKO) that will come in our lives. Some say these are God-sent to challenge us, test our resolve and make us better persons. Some weak leaders are “knocked out” when they encounter them. Others quit. In boxing, a referee rules a technical knockout (TKO) when a boxer can no longer defend himself. Some boxers simply give up, hence the term “hang up their gloves”. For leaders, the better ones learn how to adapt and fight. They don’t succumb to TKO. Good leaders accept the good with the bad, as Job did when he asked his wife: “Shall we accept good from God and not accept adversity?” Using the story of Job in his book Great Days with the Great Lives, Charles Swindoll narrated how Job’s faith and purpose was tried and tested. Job never wavered, as he was faithfully conscious that God was eternally present during these testing times of TKO. In life and in faith, Job was maybe down but never out. Someone once said, you have to play with the cards you are dealt with. Resilient leaders somehow develop the ability to work with adversity that they perform well and, ultimately, become better after experiencing tough times. Elizabeth Edwards said, “Resilience is accepting your new reality, even if it’s less good than the one you had before. You can fight it, you can do nothing but scream about what you’ve lost, or you can accept

that and try to put together something that’s good.” Hardships and adversities will always be a matter of perspective. Some whine and keep losing. Others shine and try winning! My good friend, law-school classmate and golf buddy Natus Rodriguez was named after Ignatius Loyola. And like his namesake, his life was peppered with struggles and challenges. But he never gave up. His never-surrender mind-set is reflected in his golf game. Whenever he’s in a bunker or a hazard, he always tells us there is opportunity in adversity. He will then miraculously make recovery shots à la Phil Mickelson, and find ways to bounce back. If unable to escape, he would quip—whatever doesn’t kill you makes you alive. I’m not sure if being a true blue-blooded Atenean (from grade school to law school to business school) or being named after the patron saint of soldiers had something to do with his “one big fight” attitude, but Natus will never hang up his gloves. I once

basic pay and median monthly allowances of time-rate workers on full-time basis in nonagricultural establishments employing at least 20 persons in 65 industry groups within the country.” The salaries and jobs in the DOLE/BLE study, however, are not entry-level wages and occupations. Art directors and geologists were on top of that list, specifying that art directors in the film industry were among those who are well paid. On the other hand, based on the 2016 report by JobStreet, the field of IT continued to provide the highest-paying jobs from entry level to the levels of junior and senior executives/managers. Jobs in this field include Web developer, software developer and systems administrator. The BPO industry continued to provide the highest number of jobs for jobseekers, while the retail and manufacturing industries were also coming in next. This is followed by jobs in the property/real-estate industries, and then opportunities in the construction/building/engineering businesses. It would serve our young people

well to seriously study the advantages and disadvantages of the jobs and industries they are considering before making final decisions. Sometimes trends are present, and one needs wisdom and clarity of mind to see if a seemingly high-paying career can provide long-term advantages. The government, non-governmental institutions, as well as private agencies, offer college scholarships, student loans, grants and other educational privileges. And for those who still cannot afford higher education, Technical Education and Skills Development Authority offers technical-vocational courses, which require only a high-school diploma as a minimum requirement. But, perhaps, the most significant consideration that a student/worker has to make is the prospective employee’s capabilities, skills and interests. It is always wise to match these against the job or industry to ensure longevity in the workplace. It is a good indication of whether the worker will enjoy the work, or will dedicate himself or herself fully to the job. When one loves his or her job, money and success will naturally follow.

read this in a poster: “When a storm is coming, all other birds seek shelter. The eagle alone avoids the storm by flying over it”. Natus exemplifies that eagle, as he soars over and above any struggle! It takes a great deal of courage to soar above a storm or to fight for a greater cause. Especially in public service, servant leaders will stand out and be subject of ridicule and persecution every time they fight conformity, complacency and corruption in government. I remember the late Sen. Juan M. Flavier, who was ridiculed when he relentlessly pursued and advocated the use of condoms as part of our country’s family-planning program during the 1990s. In his book, A Good Lawyer, Bobby Quitain narrated an incident where he publicly shared his maverick ideas in a forum, and felt alone when nobody supported his views. Quitain suggested that standing alone is necessary for servant leaders to have maximum impact. Using the examples of Fr. Robert Reyes (controversial running priest) and Sir William Wallace (Scottish hero depicted in the movie Braveheart), among others, Quitain said standing alone makes a statement, disturbs contentment and can spark a movement. In her “Fight Song”, singer Rachel Platten sang—“Like a small boat on the ocean sending big waves into motion. Like how a single word can make a heart open. I might only have one match but I can make an explosion...I’ll play my fight song. And I don’t really care if nobody else believes. “Cause I’ve still got a lot of fight left in me.” Leaders will always look at trials, knots and ob-

stacles positively, and turn them into sources of inspiration to recover. Whenever leaders feel alone in their quest to make things better, they find comfort in the belief that they “might have only one match, but they can make an explosion”. I am not a regular reader of the Bible. In recent months, I have, however, encountered many powerful verses that, when taken together with the tidying marathon prescribed in the KonMari method (similar to 5S), have made me see things more clearly. In hindsight, I wish I had read these powerful words of encouragement during my four and a half years at the Bureau of Immigration. One of these powerful verses is Psalm 139, which said, “You have searched me, Lord, and you know me. You know when I sit and when I rise; you perceive my thoughts from afar.... Search me, God, and know my heart; test me and know my anxious thoughts.” Looking back, I realize now that I should have worried less inasmuch as God knows where my heart was, and He was simply testing me every time I tried to fulfill the dauntless task of reforming a government agency. Whenever we encounter hardships, and definitely we will at any given point, let us all be eagles and soar above them. As to how, I learned that during these stormy conditions, the best refuge is found in His Almighty Grace. So if and when we are about to give up or on the verge of a physical TKO, the first step is to simply have a spiritual TKO here on earth—meaning to Trust, Know, and Obey Him. Believe me, this kind of a knockout works out!

opinion@businessmirror.com.ph

Opinion

Political will and ‘endo’

Legislation in the world of PPPs

BusinessMirror

By Alberto Agra

Atty. Lorna Patajo-Kapunan

PPP Lead

legally speaking

L

abor Secretary Silvestre H. Bello III signed on March 16 Department Order (DO) 174, or the Rules Implementing Articles 106-109 of the Labor Code, after months of consultations with both labor and management, pursuant to the promise of President Duterte to end illegal contracting and endo. The new DO supersedes the much-assailed DO 18-A, which was oftentimes circumvented to allow various forms of contractual arrangements and end-of-contract schemes. The official statement of the Department of Labor and Employment (DOLE) states that: “DO 174: 1) Reaffirms the constitutional and statutory right to security of tenure of workers; 2) Applies to all parties in an arrangement where employer-employee relationship exists; 3) Absolutely prohibits labor-only contracting, and specifies other illicit forms of employment arrangements; 4) Allows only permissible contracting and subcontracting as defined; 5) Reenforces the rights of workers to labor standards, self-organization, collective bargaining and security of tenure; and 6) Requires mandatory registration of contractors and subcontractors and provides clear procedures for cancellation of registration.” The new department order prohibits the following: labor-only contracting; farming of work through “cabo”; contracting out of job or work through an in-house agency; contracting out of job or work through an in-house cooperative, which merely supplies workers to the principal; contracting out of a job or work by reason of a strike or lockout, whether actual or imminent; and contracting out of a job or work being performed by union members and such will interfere with, restrain or coerce employees in the exercise of their rights to self-organization as provided in Article 259 of the Labor Code, as amended. It also prohibits contractors and subcontractors to require their employees to perform functions which are currently being performed by the regular employees of the principal; sign, as a precondition to employment or continued employment, an antedated resignation letter; a blank payroll; a waiver of labor standards, including minimum wages and social or welfare benefits; or a quitclaim releasing the principal or contractor from liability as to payment of future claims; or require the employee to become member of a cooperative; repeated hiring of employees under an employment contract of short duration. The DO also prohibits the signing of a contract that fixes the period of employment to a term shorter than the term of the service agreement, unless the contract is divisible into phases for which substantially different skills are required and this is made known to the employee at the time of engagement; and such other practices, schemes or employment arrangements designed to circumvent the right of workers to security of tenure. The order also shortens the validity of the certificate of registration of contractors and subcontractors from three years to two years and increases the registration fee from P25,000 to P100,000. Although DO 174 that Bello issued appears to be more comprehensive than any of the department orders issued in previous administrations, it does not totally abolish contracting out. The Ecumenical Institute for Labor Education and Research, speaking through its Executive Director Rochelle Poras, pointed out that DO 174 “still encourages short-term contracts and violates job security in the guise of legal contractualization”. The new rules did not end the practice of hiring workers and letting them go before they reach six months at work, which would automatically make them regular employees. Militant Labor groups Kilusang Mayo Uno (KMU) and the Partido Manggagawa (PM) protested DO 174 as “pro-contractualization”. It only “reiterated prohibitions already spelled out in the old DO 18-A, which it was meant to supersede,” PM Spokesman Wilson Fortaleza said. KMU Secretary General Jerome Adonis said the order only “proves that President Duterte’s promise of ending contractualization is mere lip service”.

Even the Associated Labor UnionsTrade Union Congress of the Philippines (ALU-TUCP), traditionally known to take conservative stand on labor issues, decried DO 174 as a “loss-loss” situation for workers and a “win-win” formula in favor of employers, manpower services and cooperatives, Spokesman Alan Tanjusay said. “While the order banned labor-only contracting, it failed to plug loopholes that would allow employers to seek the cheapest job contracts that would burden workers with low, illegal wages. It is a ‘death order’ to workers’ rights to security of tenure, right to regular direct hiring of jobs and the right to organize.” On the other hand, the Employers Confederation of the Philippines (Ecop), speaking through its acting President Sergio Ortiz-Luis, warned that DO 174 could lead to massive retrenchment, displacement of workers, and there are allegedly some portions in the DO that are not practical or even violative of existing labor laws. Ecop, however, has assured full compliance with DO 174 and employers are already allegedly preparing their offices, manufacturers and service organizations for inspections by labor laws compliance officers assigned to inspect implementation of department orders. Presidential spokesman Ernesto C. Abella, on the other hand, has hailed the issuance of DO 174 “as fulfillment of the campaign promise of the President” and as “a major step in upholding and protecting the labor rights of our great Filipino workers”. The Makati Business Club (MBC) Executive Director Peter Perfecto says DO 174 “addresses abuses, as well as considers the objectives of our global competitiveness, inclusive growth and micro, small and medium enterprises and entrepreneurship agenda”. What is clear to me from all the opinions raised and statements issued against (by labor) or in favor (by management) is that DO 174 is neither far from perfect nor completely satisfactory. Among other reasons, it does not even have a penal provision, meaning there are no penalties in DO 174 for employers/companies/agencies who violate endo (end of contract) and “555” schemes, wherein workers renew their contracts every five months and other illegal activities enumerated in DO 174. Moreover, what is prohibited to be done directly (by employers) is now allowed to be done indirectly as the DO merely differentiates “legitimate” from “nonlegitimate” contractualization instead of ending the system altogether. Admittedly, this cannot be done by mere DOLE regulation. If total abolition of contracting out is the desire of labor, this can only be done by Congress through legislation. This is when “inquiries in aid of legislation” can and should be properly used to reconcile the obvious conflicting positions of labor and management on contractualization. The endo and “555” issues need to be thoroughly studied with the end in view of transcending the present “lose-lose” situation to a “win-win” one; where labor’s right to security of tenure and fair and just compensation is protected and secured and management’s right to reasonable return in investments and to expansion and growth in order to be competitive both locally and globally is preserved. Now is not the time for mere lip service. The President can show his political will by ordering the DOLE to draft a bill (not a department order) abolishing contractualization. The bill can be certified as urgent so that it is speedily acted upon (we have seen how this was done with the death penalty). If the President wills it, he can tell Congress to give priority to this much-needed legislation instead of Congress wasting people’s money on divisive impeachment charges!

Continued from A1 n Supremacy of the fundamental law. Yes, PPP is a constitutional policy. It is a declared principle and state policy under the 1987 Constitution that “The State recognizes the indispensable role of the private sector, encourages private enterprise and provides incentives to needed investments.” PPPs cannot go out of existence by an act of Congress or by local councils. n Laws and regulations mirror this policy. As early as 1990, the stated policy of the buildoperate-and-transfer (BOT) law

was categorical and emphatic. In no uncertain terms, Congress then declared that the State recognizes the indispensable, not just important or critical, role of the private sector as the main engine for national growth and development. Simply put, there is no national development without the private sector. This constitutional policy is also reflected in the template ordinance being pushed by the Department of the Interior and Local Government. n They also supply details. While the basic law sets the policy and framework, it does not provide the “what, who, how and when”. Acts

Who’s afraid of fake news? Ricardo Saludo

DIPLOMASIA

T

his writer’s strategic research firm CenSEI was approached last week by a Los Angeles app developer about his group’s planned software for detecting fake news.

Some big tech companies are, in fact, already working on mechanisms to flag and take down false information posted online. Facebook and Google are testing such apps, and Apple aims to screen out fake news from its News app. Leading Paris daily Le Monde is among mainstream news organizations harnessing software to fight fraudulent reports. (Sadly, there are also apps to generate fake news.) Seasoned diplomats don’t need geek apps to spot lies masquerading as news. Like competent journalists and expert academics, they doublecheck and corroborate claims and accounts, especially those posted online by sources with no authority on the subject or solid reputation for credible news gathering. Not to mention checking the purported news against their own mental database of experience and knowledge accumulated over the years, in the same way as professionals in other fields, from doctors and lawyers to engineers and scientists. So, few embassy officials (or travel agents) were take in by a recent “apnews.com” post shared on Philip-

pine social-media about President Donald J. Trump’s new immigration policy supposedly giving Filipinos monthlong visas upon arrival in the United States. But fake news is the easy part of picking through the zillions of stories, views, pictures, videos and other content clogging the Web. In fact, there are far more subtle ways by which wrong or slanted information spread and take hold of the public mind, and even the hardnosed sentinels of mainstream media.

Is it news, opinion, propaganda or fake news?

Fake news lies (no pun intended) on the far end of a spectrum of public-affairs content, which has straight news reports on the other end, followed by opinion, then propaganda before descending into the mire of outright falsehood. A special category is satire, which doesn’t pretend to be factually true, but may offer valid humorous commentary. What about blogs? That’s really more like a mode of disseminating information, with a person or a group posting material often with

Monday, March 27, 2017 A15

of Congress, like the BOT law, Government Procurement Reform Act, Corporation Code and Civil Code, supply the basic details, primarily what the law is, while administrative agencies, local governments included, provide the details. For example, while the 1991 Local Government Code authorizes local governments to enter into joint ventures, it does not spell out the requirements and procedures. Local legislative councils, through local legislation, determine these. Close to 100 provinces, cities and municipalities and all the barangays of Bataan province have made such choice. n Not execute and adjudicate. Under the system of separation of powers, lawmaking is set apart from law-executing and adjudicating. The Executive branch and the courts, respectively, have those powers. Lawmaking bodies set PPPs in motion by the vesting of the authority, while national government

agencies, government corporations and local governments, following the law, prioritizes and selects the privatesector proponent, signs the contract, issues the award and manages the contract. For local PPPs, the local councils must authorize the local chief executive to sign the PPP contract. While it can investigate in aid of legislation or exercise oversight powers, Congress cannot direct the execution or nonexecution of contracts. Congress can amend or repeal PPP laws but Congress cannot contravene the Constitution, impair contracts nor provide a retroactive effect of laws curtailing contracts and rights created under then existing laws. The courts resolve controversies pertaining to the laws themselves, the actions of the agencies and liabilities of the officers. A single person or institution cannot wield all these powers. Lawmaking is just one aspect of a cycle and system.

no institution formally behind or backing the bloggers, though they may be connected to certain entities. So, a blog may contain one or some of the four broad categories of public-affairs content, from straight news to fake news. The same goes for Facebook, Twitter and other social-media pages, personal or organizational web sites, and of course, media web sites, and official pages of government, non-governmental, and international organizations. All are platforms with their respective combinations of content, depending on their objectives and desired reputation and audience. Obviously, reputable news web site would seek to avoid having fake news on them. Bloggers seeking to obtain or maintain respectability and credibility, like working journalists and scientists, would also shun bogus information, and would be quick with corrections and apologies if they inadvertently posted mistaken or misleading content. But other bloggers and agendadriven platforms may not mind and might even deliberately post dubious or biased material. Politically slanted sites would often be quick to disseminate reports favorable to their messaging without checking. Which underscores the importance of knowing the overall objectives and perspectives of web sites propounding the information being validated. Indeed, that imperative applies to all platforms and sources, even national and international entities. Every organization has an agenda, which would influence what information it puts out and highlights.

What’s your angle?

Traveling 40,000 kilometers Joel L. Tan-Torres

DEBIT CREDIT Part Two

T

he next phase of my overseas trip that took me longer than the round-the-world distance of 40,000 kilometers was my meetings in New York City with several accountancy regulators and personalities and the Consul General of our Philippine Consulate. On March 8, I met with Jim Bracken, the vice president (Ethics and Practice Quality) of the American of Institute of Certified Public Accountants (Aicpa) in their New York office in 1211 Avenue of the Americas, New York City. We discussed various matters of Quality Peer Review process, its relationship or interaction with their accountancy regulators, namely, the National Association of State Boards of Accountancy (NASB) and enhancing audit quality. I was also informed

the Chartered Institute of Management Accountants (Cima) and the Aicpa have joined forces to create a new international accounting association, called Association of International Certified Professional. The new association will consist of approximately 600,000 current and next-generation professionals that will represent the entire breadth of the accounting profession. On March 9 I met with Ken Bishop and Louise Habermann, the president and vice president of NASB, respec-

tively, in their office in 12 East, 49th Street, New York City. The Board of Accountancy has been communicating with NASB and the Aicpa International Qualifications Appraisal Board for a negotiation for a Mutual Recognition Arrangement (MRA) for CPAs between the United States and the Philippines. With this MRA in place, each country will recognize the qualifications of the professional accountants in the other country. This recognition will ease the practice and/or work of our Filipino CPAs in most states in the US, and vice versa, The meeting with Bishop and Habermann was very informative, as we all exchanged information and viewpoints on accountancy issues in our respective countries. We all agreed to continue communicating on country developments preparatory to the start of negotiations. Bishop is very knowledgeable and recognizes the competence of the Filipino CPAs, of whom a number work for NASB or Aicpa. I also was able to visit our Philippine Consulate in 556 Fifth Avenue, New York City. I met Consul General Ma. Theresa B. Dizon-de Vega and briefed her of the results of my meeting. She was very keen on the

Globally dominant Western media often portray themselves as objective and factual. Yet, they, too, have perspectives shaping what news, views, personages and even images and video they highlight or downplay. Just compare the coverage of CNN, BBC and Voice of America with AlJazeera, RT and Xinhua, especially on topics of vital interest to the nations of those news organizations. This is especially true of war, both within and between nations. Many studies show slanted coverage of conflict, from the Vietnam War to the Syrian insurgency. Two notable reports focused on the 2011 Libyan Civil War: “News coverage of civil conflicts is biased in both democracies and autocracies” in The Washington Post, and “Filtering Revolution: Reporting Bias in International News Coverage of the Libyan Civil War”, a Harvard study. And the slant has been there from the start. Cited in a 2013 Hoover Institution article, “A Brief History of Media Bias”, American historian Chilton Williamson writes of US journalism’s formative years: “The presentation of facts simply as facts, editors and writers reasoned, cannot accomplish the exalted goal of saving civilization. To do that, facts needed to be presented according to those rhetorical patterns of thought we call opinions, patterns pointed in some particular direction of convincing an imagined jury.” So, when you next read anything, make sure to ask: “What’s his angle?” Former Asiaweek editor Ric Saludo teaches media and politics at the Asian Center for Journalism to media practictioners in the region.

MRA developments since there were thousands of Filipino CPAs in the US who can benefit from this. She also invited me to conduct a briefing for the Filipinos who were in New York and the nearby states on developments in the accountancy profession and business in the Philippines. I assured her that I will inform her of my next travel to New York City so that we can proceed with this briefing. After these successful meetings in the US, I was ready to go to my next activity in Vienna, Austria. I left for Vienna, through Moscow, on March 12. I departed New York City just on the right time to avoid the biggest snowstorm that hit the city for this winter. Chairman Joel L. Tan-Torres is the chairman of the Professional Regulatory Board of Accountancy. He is a Certified Public Accountant who placed No. 1 in the May 1979 CPA Board Examinations. He is concurrently a tax partner of Reyes Tacandong & Co., CPAs. He was the former commissioner of the Bureau of Internal Revenue from 2009 to 2010. This column accepts contributions from accountants, especially articles that are of interest to the accountancy profession, in particular, and to the business community, in general. These can be e-mailed to boa.secretariat.@gmail.com.

2nd Front Page BusinessMirror

A16 Monday, March 27, 2017

DOT targets tourists from Russia to reach 71,000 in five years T By Ma. Stella F. Arnaldo

@akosistellaBM Special to the BusinessMirror

HE Department of Tourism (DOT) is taking an aggressive approach in trying to attract more Russians to visit the Philippines.

The agency successfully participated in the Moscow International Travel and Tourism Exhibition (MITT), which was also in line with President Duterte’s policy of strengthening the ties between the Philippines and Russia. Under the DOT’s National Tourism Development Plan for 2016-2022, a copy of which was obtained by the BusinessMirror, the agency is seeking an increase in Russian visitor arrivals from 25,000 in 2015 to 71,000 by 2022, the last year of Duterte’s term of office. In a separate news statement, the DOT said a delegation, led by the government agency that included top Filipino travel and tour executives, garnered an “overwhelming response” among more than 3,000 delegates from across the globe, who gathered for business-to-business meetings during the three-day travel fair that opened on March 14. The DOT said the Philippines’s booth drew thousands of visitors and travel professionals who were eager to find out more information about the featured attractions of Palawan, Boracay, Davao and Siargao. Tourism Secretary Wanda Corazon T. Teo underscored the importance of firming up the relations between the Philippines and Russia, which can only bring tremendous benefits to the local tourism industry. “We have a great advantage compared to other countries, because the Russians, including President Vladimir Putin, have a great respect for President Duterte and his peace-and-order drive, making the Philippines a safe place to visit,” she said. Data from the United Nations World Tourism Organization in 2015 ranked Russia as the world’s sixth-biggest outbound market in terms of expenditure, spending $35 billion in travels abroad. “Russians spend more than others, and they stay for an average of two weeks with their families in the Philippines,” Teo added. More than 28,000 Russians have visited the

Russian and other foreign tour operators and interested tourists check out the Philippines’s booth at the Moscow International Travel and Tourism Exhibition, Russia’s largest travel show, held from March 14 to 16. The Philippines is eyeing an increase in Russian visitor arrivals from 25,000 in 2015 to 71,000 in 2022. DOT PHOTO

28,000

The number of Russian tourists who visited the Philippines in 2016, up 11.6 percent Philippines in 2016, up 11.6 percent from 2015, despite the European Union trade sanctions that have impacted the Russian economy, the DOT chief said. Before the ruble crashed in 2014, visitor arrivals from Russia in the Philippines were growing by 30 percent annually, which earned it a place on the DOT’s list of “high-growth target markets”, Undersecretary Benito C. Bengzon Jr. explained in an interview. “Russia is an opportunity market for us; so we usually have engagements with Moscow and Vladivostok, [which] was the naval headquarters of the Soviet Union, and up until the [region’s] breakup, a lot of Russians couldn’t even go to Vladivostok. But there’s a lot of potential, apart from [its] growing middle class, the proximity of the Philippines, etc.,” explained Bengzon, who handles the development of new tourism markets. An air-service agreement between Russia and the Philippines signed in July 2015 allows Philippine carriers to fly seven times a week

between any point in the Philippines to three points in Russia—Moscow, Saint Petersburg and Vladivostok. However, there are still no direct scheduled flight services between both countries, due to the tepid demand from tourists going to Russia. Also, there are only some 4,000 Filipinos working in Russia. The Philippines hopes to increase this number, though. Last December the Department of Labor and Employement said it was eyeing to send more skilled workers to Russia. Pioneering flag carrier Philippine Airlines (PAL) does have charter flights between Vladivostok and two points in the Philippines—Cebu and Kalibo. The peak season for charter flights for PAL is usually during the winter months in Russia, when its citizens escape the cold climate for the warmer beach destinations of the Philippines. MITT is Russia’s largest travel show and considered to be one of the top travel exhibitions in the world. Up to 28,000 industry professionals and more than 1,600 exhibitors from 182 countries and regions joined this year’s edition. To maximize the presence of the private sector in Russia, the DOT also conducted a Tourism Selling Mission on March 17 in Saint Petersburg, the second-largest city in Russia. The news statement did not say, however, who were the private-sector participants in the MITT and Saint Petersburg selling mission.

www.businessmirror.com.ph

BCDA NEED NOT PAY PROPERTY TAXES, BUT LOCATORS DO

By Joel R. San Juan

@jrsanjuan1573

T

HE Court of Appeals (CA) has declared that the properties of Bases Conversion and Development Authority (BCDA) in Fort Bonifacio, Taguig City, are exempt from payment of real-property tax, except its properties that are leased or conveyed to private entities and companies. In a 28-page ruling penned by Associate Justice Celia Librea-Leagogo, the CA’s Eighth Division affirmed the decision issued on February 11, 2016, by the Regional Trial Court (RTC) in Taguig City, which partially granted the petition filed by the BCDA seeking to declare null and void the P58,708,939 tax assessment issued by the Taguig City government. While it agreed with the BCDA that it is not liable to pay real-property tax being a government instrumentality, the RTC in Taguig held that the tax assessment issued by the Taguig City government is valid, with respect to the properties leased and conveyed to real-estate developer Megaworld Corp. (8.38 hectares), International School of Manila (69,423 square meters) and Ayala Corp. (9.76 hectares). The Taguig City government elevated the ruling issued by the RTC in Taguig before the CA, insisting that it erred in declaring that the BCDA is a government instrumentality, thus, exempt from payment of real-property tax. In upholding the RTC in Taguig’s decision, the appellate court pointed out that, under Section 133 of the Local Government Code of 1991, local governments cannot impose any kind of tax on national government instrumentalities. The CA held that, contrary to the position of the petitioner, the BCDA is neither a stock nor a nonstock corporation, thus, it does qualify as a government-owned and -controlled corporation (GOCC) based on Republic Act (RA) 7227, or the BCDA charter. “When the law vests in a governme nt instrumentality corporate powers, the instrumentality does not become a corporation. Many government instrumentalities are vested with corporate powers, but they do not become stock or nonstock corporations, which is a necessary condition before an agency or instrumentality is deemed a government-owned or -controlled corporation,” the CA explained. It noted that Section 3 of RA 10149 of the GOCC Governance Act of 2011 listed the BCDA as one of the government instrumentalities. “From the foregoing, it is clear that the petitioner-appellee’s properties, although alienable and disposable, are properties of the public dominion belonging to the State, because they are to be sold in order to raise funds, and this purpose can be tied to either public service or the development of national wealth,” the CA stressed. “Properties of public dominion are owned by the State or the Republic of the Philippines. Hence, being real-properties owned by the Republic of the Philippines, they are exempt from real-property tax,” it added. But, the CA noted that when the BCDA grants the beneficial use of the real property owned by the government to a taxable person or entity, the same becomes subject to real-property tax “Thus, the portions of the properties which are not leased to taxable entities are exempt from real-estate tax, while the portions of the properties leased to taxable entities are subject to real-estate tax,” the CA said. “The law imposes the liability to pay real-estate tax on the Republic of the Philippines for the portions of the properties leased to taxable entities. It is, of course, assumed that the Republic of the Philippines passes on the real tax as part of the rent to the lessees,” it declared. Concurring with the ruling were Associate Justices Amy Lazaro-Javier and Pedro Corales.

Rice farmers. . . Continued from A1

a “more diversified set of income”. As an alternative, the government can offer regular jobs and entrepreneurship opportunities to members of farming household, while preparing the rice sector. Radoc said imposing tariffs on rice imports is not the “proper way” to address the problem.

“If you lift the QR and replace it with tariffs, what difference will that make?” For instance, imposing a high tariff on imported rice that are on a par with those produced locally would not benefit consumers as this would not result in lower prices. “At the end of the day, we want to have a healthy competition for the consumers to benefit, and we do that because we force the producers to be more efficient,” Radoc said.

Chinese contractor seeks Oil producers call to extend output cuts beyond June more energy deals in PHL V

By Lenie Lectura

A

@llectura

Chinese engineering, procurement and construction (EPC) contractor, which bagged the contract to construct in the Philippines the biggest wind and solar projects to date, is optimistic in clinching more big-ticket projects in the country. “We hope to secure more projects. We hope this will be the start of more projects to demonstrate our commitment here,” Qingdao Hengshun Zhongsheng Group Co. Ltd. Chairman Lu Min said. “This is also a test for ourselves to make sure we would deliver the product. And from there, we hope to secure more projects and contribute back to the Philippines.” Lu was referring to the $500-million, 232-megawatt (MW) wind and

solar project that will be constructed by his company. Of the amount, $430 million is the EPC cost. “These are the biggest projects to date for wind and solar energy combined here in the Philippines. We aim to complete this around 18 months,” said Lu, while adding that this is also the biggest project in the company’s portfolio. Of the 232-MW power project, a 132-MW wind project will be put up in Burgos, Ilocos Norte, while the remaining 100 MW is a solar project in Pasuquin, Ilocos Norte. The proponent of these projects is Energy Logics Philippines Inc. (ELPI), which had been awarded with the service contracts by the Department of Energy. “What we’re trying to strive is, although construction period is 18 months, we want to, by end of this

year, have some windmills and solar panels start contributing to the grid,” Lu said. If the target timetable pushes through, the project would be competed by end-2018. “We are looking at completing this as soon as possible. We cannot commit the timeline but it’s already ongoing. The preliminary work has already started,” Lu added. Xidian Holdings Philippines Corp., which is funded by Chinese investors, led by Zhang Peng together with a Singaporean-based consortium, is the majority shareholder of ELPI. The 232-MW renewable energy projects (RE) are part of Xidian Holdings’s planned 500-MW RE investment portfolio for completion by 2020. The investment of the Chinese firm is an offshoot of the successful visit of President Duterte to China in October 2016.

enezuela, Iraq and Oman added their support for a possible extension of global oil-production cuts beyond June, as momentum builds among Organization of Petroleum Exporting Countries(Opec) members and other crude producers to prolong the strategy to re-balance the market and prop up prices. Oil ministers for the three countries commented last Sunday, a day after Algeria’s Energy Minister Noureddine Boutarfa called for an extension because he said the strategy is succeeding in paring global inventories. The ministers are meeting in Kuwait City to discuss compliance with the pledged reductions. So far, five Opec members, including Kuwait and Angola, have backed an extension of the cuts. “We are ready to support” prolonging the six-month deal, which took effect in January, Venezuela’s Oil Minister Nelson Martinez told reporters on Sunday before the meeting. “It does make sense to extend the agreement for another six months—maybe at least,” said his Omani counterpart, Mohammed Al Rumhy. Oman, unlike Venezuela, isn’t a member of the Opec.

Russia is moving ahead with its own reductions to curb a glut. “It’s important to accomplish last year’s deal first,” Russia’s Energy Minister Alexander Novak said before the meeting. Russia will target its pledged reduction of 300,000 barrels a day by the end of April, he said. Kuwait this month became the first nation to call for extending the production cuts, with Oil Minister Issam Almarzooq saying inventories had grown more than expected. Opec and 11 other major producers, including Russia, agreed last year to slash production, spurring a 20- percent increase in Brent crude prices during the last five weeks of 2016. The rally stalled this year as United States output and supplies continued to grow. Opec ministers will meet on May 25 in Vienna to decide whether to extend the deal. Brent crude futures closed last Friday at $50.80 a barrel in London, down 96 cents, or 1.9 percent, for the week. The benchmark grade has dropped 11 percent in 2017 and reached a low for the year of $49.71 a barrel on March 22. The joint ministerial monitoring committee, comprising three Opec members and two producers outside the group,

will discuss the possibility of prolonging the cuts beyond June, Novak said. With US crude stockpiles swelling to record levels and prices sinking below $50 a barrel, Opec and its partners have little choice but to keep going, according to all 13 analysts surveyed by Bloomberg. Oil inventories are high because of low US demand and higher supply, and the market should rebalance in the second half of the year, Opec Secretary-General Mohammad Barkindo told reporters in Kuwait. Inventories in countries in the Organisation for Economic Co-operation and Development are currently 282 million barrels higher than their five-year average, he said at the meeting last Sunday. Khalid Al-Falih, the energy minister of OPEC’s biggest producer, Saudi Arabia, said in a Bloomberg Television interview on March 17 that the deal will be maintained if oil stockpiles are still above their five-year average. It’s too early to decide on an extension of the output cuts, and Opec will take up the issue in May, Barkindo said at Sunday’s meeting, during which ministers will monitor compliance with the targeted reductions. Bloomberg News