Businessmirror march 28, 2017

Subverting corruption

By Henry J. Schumacher | Special to the BusinessMirror

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hen corruption has become systemic, it resembles organized crime. It has its own parallel system of recruitment and hierarchy, or rewards and punishments, of contracts and enforcement. This parallel system has some inherent weaknesses: for example, in no country in the world are bribery and extortion legal.

Therefore, they must be kept (somewhat) secret. The money gained must be hidden. New members cannot be openly recruited. The mechanism for enforcement is illicit.

»Continued on A2

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Tuesday, March 28, 2017 Vol. 12 No. 167

PHL to conduct test on all Brazilian meat imports

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By Jasper Emmanuel Y. Arcalas

@jearcalas

he Philippines will soon subject all meat and meat products imported from Brazil to laboratory tests to ensure that these are safe for consumption, the Bureau of Animal Industry (BAI) said on Monday.

While Manila has not suspended meat imports from Brazil, the BAI said it wanted to step up the inspection of shipments of all meat products from the world’s largest exporter of red meat and chicken.

Inflation seen pushing higher as summer signs manifest

By Bianca Cuaresma

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@BcuaresmaBM

he early signs of summer, indicated by the temperature beginning to climb higher up the scale, were seen helping push inflation, or the rate of change in prices, still higher in March to as much as 3.8 percent, the Bangko Sentral ng Pilipinas (BSP) said on Monday.

In a forecast, BSP Governor Amando M. Tetangco Jr. said the projected growth in prices was to remain above 3 percent in March, as the effects of higher energy costs and global petroleum prices weigh heavily on the basket of commodities Filipinos typically consume during the month.

Tetangco told reporters the BSP anticipated inflation to have hit from 3 percent up to 3.8 percent in March. “The higher power rates in Meralco [Manila Electric Co.]serviced areas due to the Malampaya maintenance shutdown, along with the weaker peso, could be

partially offset by the decline in fuel and food prices this month,” the Central Bank governor said.

Inflation in February averaged the highest since 2014 at 3.3 percent.

Despite the upward trek of inflation in previous months, the Central Bank recently announced it has scaled back the inflation forecasts for both 2017 and 2018.

Central Bank Deputy Governor for the Monetary Stability Sector Diwa C. Guinigundo announced just last week the revised forecast inflation of only 3.4 percent this year, down from the February forecast of 3.5 percent.

The inflation forecast for 2018 was also scaled back from 3.1 percent originally to only 3 percent.

The BSP, likewise, said the balance of risks surrounding the inflation outlook remains tilted toward the upside, as dictated by the transitory impact of the proposed tax-reform package and possible adjustments in transportation fares and electricity rates.

See “Inflation,” A2

PESO exchange rates n US 50.3500

“On [the BAI’s part], all meat and meat-product imports coming from Brazil, especially those from the sole meat plant accredited by the government, will undergo 100-percent laboratory testing,” BAI Assistant Di-

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Right time for PHL manufacturing resurgence

55,581.853 MT The volume of meat products imported by the Philippines from Brazil last year

rector Simeon S. Amurao Jr. told the BusinessMirror in an interview.

“We used to do laboratory testing of meat imports, but on a random basis. So, starting this week, it will be 100-percent inspection of all meat imports from Brazil,” Amurao added.

Amurao said only one Brazilian meat-packing plant was accredited to export meat to the Philippines. He Continued on A2

the entrepreneur Manny Villar

I

t is high time we pushed through with industrialization, particularly manufacturing, if we are to sustain fast-paced growth for the economy, which is needed to create a significant impact on poverty alleviation.

Industries, as well as the services sector, drive our economy, which needs to grow to create employment and other livelihood opportunities. Economists and other experts have identified manufacturing industries as a prolific generator of good-paying and long-lasting jobs.

Continued on A10

BMReports Reserve, incoming projects ease PHL power worries This March 16 photo shows the Davao San Miguel power station, also known as the Malita power station, a 628-megawatt (MW) coal-fired power plant in Davao Occidental province. Aboitiz Power Corp. President Antonio R. Moraza has assured Energy Secretary Alfonso G. Cusi not to worry about power supply, as “Mindanao is bursting with power”. NONIE REYES

By Lenie Lectura

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@llectura

Part Two

HE demand, supply and weekly reserve data that the National Grid Corp. of the Philippines (NGCP) submitted to the Department of Energy (DOE) were mainly based on the power generators’ proposed planned out-

age schedule for the first half of the year. The BusinessMirror obtained a list of major power plants in Luzon that are scheduled to go offline this year to undergo maintenance work.

One of these is the Calaca 1, which underwent maintenance shutdown at the start of the year.

The 300-megawatt (MW) power

plant is still offline but expected to resume operations in the second half of April.

Likewise, the 367.5-MW Pagbilao 1 is still out from March to June this year. It will go online on June 6. It is the only power plant allowed to go on maintenance shutdown from April up to early June.

Meanwhile, Santa Rita mod-

ule 10 (250 MW) will resume operations in early April, following a maintenance shutdown that commenced in March.

The Santa Rita module 40 and the San Lorenzo modules 50 and 60, with a capacity of 250 MW each, will go offline on separate days in June.

Continued on A2

n japan 0.4541 n UK 62.9073 n HK 6.4831 n CHINA 7.3130 n singapore 36.0286 n australia 38.4171 n EU 54.5945 n SAUDI arabia 13.4263

Source: BSP (27 March 2017 )

A2 Tuesday, March 28, 2017

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Reserve, incoming projects ease PHL power worries Continued from A1

The Santa Rita module 40 will resume operations in July, along with the Santa Rita module 10, 20 (250 MW) and 30 (250 MW), which are also set to undergo maintenance shutdown for a few days in the same month.

The 300-MW Calaca 2 will shut down for a few days in July and the whole month of August up to early September. Pagbilao 2 (367.5 MW) is also out from June 20 up to July 4, while Sual 2 (600 MW) will be offline from August 5 to September 3 this year.

Post-summer

SHERW I N T. Gatcha lian, chairman of the Senate Committee on Energy, said they expect the power supply as stable for the summer season.

“From our briefings with the DOE and from our internal assessment, as long as walang malaking planta na papalya, we’re quite stable

for summer,” Gatchalian said when sought for comment.

However, toward the end of the year, the data indicates significant shutdowns. This is because there will be simultaneous outages of Sual 1 (600 MW), San Lorenzo module 60 and Southwest Luzon Power Generation Corp. (SLGPC).

Based on the schedule, Sual 1 will go offline on September 16 up to October 15. The San Lorenzo module 60 is scheduled for maintenance from end-September to endOctober. The SLGPC’s Unit 2 (150 MW) is out from end-September to mid-October.

For November, only one power facility is scheduled for maintenance. This is the San Lorenzo module 50.

For December, San Lorenzo module 50 and 60 will go offline for a few days.

“I think the supply of power is adequate,” Meralco Chairman Manuel V. Pangilinan said, referring to the summer months. However,

“sometime October”, Pangilinan expressed concern.

“We might see pressure arising from some of these plants being shut down for maintenance,” he said in an interview.

Meralco deals

MERALCO has power-supply agreements (PSAs) with Calaca, Pagbilao, Sual, Santa Rita and San Lorenzo plants. The utility firm is preparing on how to fill up its supply requirements when these plants are out.

AbotizPower Corp., a major player in the power sector, said the country has “plenty of power”.

AboitizPower President Antonio Moraza said when the Malampaya gas field went offline for 20 days from January 28 to February 16 “there was no effect” on power supply, even as some power plants’ maintenance schedule coincided with that of Malampaya’s.

“I told [Energy Secretary Alfonso G.] Cusi that if there is one thing he should not be worried

Subverting corruption

How can these corrupt systems be subverted? Obviously, we cannot count on members or the above mentioned “system” in the government and in the private sector to clean themselves. Instead, we must analyze the corrupt system—both in the government and in the private sector and ask: “How might they be destabilized?” Who is ‘we’?

It can be a new political leader and his or her team, or a new mayor or head of a public enterprise. As did Mayor Jesse M. Robredo in Naga City.

But it can also be you and me as members of civil society. Around the world we see new examples of citizen activism, of business groups entering into “integrity pacts”, of intellectuals, journalists and religious leaders going beyond lectures and sermons to analyze corrupt systems and work together to subvert them.

It is obvious that the fight against systematic corruption should focus on systems rather than individuals. I like this formula: Corruption = Monopoly + Discretion - Accountability In the long term, curing systemic corruption requires better systems—in the government and

in the private sector. Successful leaders of government agencies and companies understand that better systems go well beyond better laws and new codes of conduct.

I like the above formula. Corruption flourishes when someone has monopoly power over a good or service and has discretion to decide how much you receive and where accountability and transparency are weak. So, to fight corruption we must reduce monopoly power, reduce discretion and increase accountability in many ways.

Reducing monopoly power means enabling competition; in this context we are so happy that the Philippines has the Philippine Competition Act today and has a Philippine Competition Commission (PCC), which has a good group of commissioners.

However, it would be great if the PCC were allowed to do its job without court interference, in the interest of removing monopoly/duopoly so that corruption can be properly addressed, reduced and finally eliminated.

Limiting discretion means clarifying the rules of the game and making them available to everyone. This includes putting govern-

about, [it] is power supply. The country has sufficient power,” Moraza said. “I can’t project an end of the world scenario but, with normal demand, we should not have issues at all. Mindanao is bursting with power, as well.”

Study implications

TO better plan ahead, the DOE wants to compel power firms to make public the planned schedule of their power plants that will undergo maintenance shutdown.

Under the current setup, power firms submit to the NGCP their preferred schedule one year ahead of the actual planned shutdown.

The NGCP, for its part, coordinates with the power-generation firms regarding their planned maintenance activity. Both parties try to adjust the schedule if necessary.

The grid operator said the DOE is also being consulted on this.

Cusi said his office is the one that approves the proposed maintenance schedule, “but we want to

Continued from a1

ment contracts and procurement plans online, create online manuals on what is required to obtain a permit, build a house, start a business and so forth.

Another example: Simplify the tax code, make it simpler to understand and reduce thereby the effective discretion of BIR employees.

Enhancing accountability means many things, and creative leaders in government and the private sector use a remarkable variety of methods. One way to improve accountability is to improve the measurement of performance.

Another method is listening and learning from businesses and from citizens. This includes mechanisms for public complaints, but it goes beyond the reporting of individual instances of abuse to the diagnosis of corrupt systems. Accountability is also increased by inviting outsiders to audit, monitor and evaluate.

This is exactly the reason why we created Integrity Circles as one of the main avenues to address accountability, transparency and integrity. We did this in the Integrity for Jobs (I4J) project, a project co-funded by the European Commission and the Konrad-Adenauer Foundation. We started with nine

LGUs and are happy to announce that 60 LGUs are now part of this endeavour. Cebu province is part of this movement. Allow me to add that Integrity Circles are composed of people working in the LGU, being involved in business, and representing civil society (in many cases the church). Remember: Citizens know where bribery shapes the services they receive (or don’t receive).

This knowledge can be culled in many ways. But let’s not forget the press; the media can be and should be an important source of accountability.

What about ethics and morality?

Successful leaders in the government and the private sector must set a good example. As mentioned above, the key to fight corruption are better systems that provide better incentives for imperfect human beings to perform in the public interest—and to avoid corruption.

Let me conclude by highlighting the work we are doing in the Integrity Initiative to create the Integrity Nation NOW. As mentioned in previous columns, Integrity starts with I. We need you to become part of our movement. Contact me under Schumacher@ integrityinitiative.com

make it known to the public. We want to post it on our web site.”

Gatchalian, however, is apprehensive on Cusi’s move, saying doing so may have an effect on the wholesale price at the spot market.

“Ang ayaw natin dito magkaroon ng [What we don’t want here is to have an] information and use that information to collude,” Gatchalian said. “Then again, we have to study the implications.”

Crucial move

GATCHALIAN stressed that planning is crucial in preventing power outages during maintenance shutdowns. As such, he proposed for the DOE to exert its authority to prevent curtailment of power. “[The] DOE needs the legislation to give them more teeth,” the senator said. “Dapat wala nang pakiusap, more on reinforcement dapat para hindi tayo mawalan ng kuryente [There should be no more pleading but more on reinforcement so that we won’t have

a power outage].”

In the past years, it is the DOE chief that requests power firms to hold off their maintenance schedule during summer months when demand for electricity is at its peak.

“From what I learned, nakikiusap lang ang mga previous DOE secretaries, but di naman pwedeng nakikiusap lang,” Gatchalian said.

“There has to be a stronger mandate for the DOE para hindi sabaysabay ang [so there would be no simultaneous] shutdowns.”

He added the shutdowns also affect the pricing: market prices will also go up.

“The forecasting should be reviewed also,” Gatchalian said, adding that “if the DOE needs the legislation then we can propose one.”

Gatchalian’s proposed legislation is not yet in place, but he stressed that the end goal here is to give the DOE more teeth.

“It will be a collective effort of the system operator [NGCP] and also the DOE.” To be continued

PHL to conduct test on all Brazilian meat imports Continued from A1

said it is one of the 21 meat-packing plants currently being investigated

by Brazilian authorities.

The BAI official said the National Meat Inspection Service (NMIS) will conduct the inspection of meat imports from Brazil.

He said this could take anywhere from five to seven days. ”The container of imported meat will be brought to the government’s cold storage, where the NMIS will take a sample of the imported meat for laboratory testing,” Amurao added.

Amurao said the imported meat sourced from Brazil will only be allowed transshipment upon the clearance of the NMIS. In an interview last week, Amurao made an assurance that no “rotten” meat from Brazil is being sold in the local market.

He said the BAI would immediately impose a total ban on Brazil meat imports if it finds out that “rotten” beef was able to enter the Philippines.

On March 17 Brazil’s federal police raided companies that allegedly bribed government inspectors to allow the shipment of rotten meat and meat tainted with salmonella.

Foreign news reports indicated 21 meat-packing plants were targeted by the police in an operation dubbed as “Operation Weak Flesh”, while three meat-packing plants have been shut down by the Brazilian government.

Inflation. . .

Continued from A1

The Monetary Board also cited the “beneficial effects” on inflation of the removal of quantitative restrictions on rice importation.

Rice accounts for 9 percent of the consumer price index, which typically represents the proverbial basket of commodities regularly consumed by Filipinos.

Given the current inflation path, Tetangco was careful in giving away

Russians. . .

Continued from A12

On the infrastructure side, China is set to finance P172.42 billionworth of infrastructure projects in the country this year.

This is part of a list of 15 projects identified for Chinese financing during the Duterte administration. The Neda estiates these will cost $6.96 billion. The Neda said no infrastructure projects

A report from Reuters revealed that BRF, the world ’s biggest poultry exporter, and JBS, the world’s top beef producer, were part of the dozens of firms targeted in the police probe. However, both companies have denied any wrongdoing and assured consumers that their products meet rigorous quarantine standards, the Reuters report added.

The scandal forced major buyers of Brazilian meat to either suspend imports or impose more restrictions on shipments.

China, South Korea, Chile and Egypt earlier banned all Brazilian meat imports. But these countries eventually decided to limit the ban to the 21 meat-packing plants currently under investigation.

Data from the BAI showed that the Philippines imported 55,581.853 metric tons (MT) of meat and meat products from Brazil last year, 5.86 percent higher than the 52,505.429 MT recorded in 2015.

Beef accounted for 33.3 percent of meat purchases from Brazil.

Government data showed that beef imports reached 18,524.966 MT, 69.04 percent higher than the 2015 record of 10,959.168 MT. More than half of the country’s meat imports from Brazil was mechanically deboned meat (MDM) of chicken. Chicken MDM imports last year amounted to 30,557.036 MT, 18 percent lower than the 37,314.374 MT purchased in 2015. hints as to where the policy settings were headed, saying only the BSP will continue to monitor developments and keeping the monetary targets within bounds.

“The BSP will remain watchful of economic and financial developments that could affect the inflation outlook, in line with its commitment to price stability conducive to a balanced and sustainable growth of the economy,” Tetangco said.

The inflation target for the year still ranges from a low of 2 percent to no more than 4 percent. have been lined up for Russian funding.

The national government intends to boost infrastructure to GDP ratio well beyond its target by 2022. Pernia said the government aims to boost infrastructure to GDP ratio to 7.4 percent by 2022.

Pernia said this is based on the projection of the spending needed for the government’s 55 f lagship projects, which could exceed P1.2 trillion.

www.businessmirror.com.ph

BusinessMirror Special Feature

Tuesday, March 28, 2017 A3

Economy

A4 Tuesday, March 28, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon

briefs rollback on diesel, kerosene pump prices

Oil companies announced on Monday a price rollback in diesel and kerosene pump prices effective on Tuesday morning.

This is the fourth consecutive week of price reduction.

Pilipinas Shell will reduce diesel price by P0.25 per liter, and kerosene by P0.15 per liter at 6 a.m. of March 28.

Phoenix Petroleum, PTT Philippines and Total Philippines are also implementing the same price adjustment at 6 a.m.

Petron Corp. and SeaOil will implement their respective price reductions at 12:01 a.m. of Tuesday.

On March 22 gasoline prices went down by P0.80 per liter, diesel price

by P1.10 per liter, and P1.20 per liter for kerosene.

Oil firms also implemented a downward price adjustment on March 14 in gasoline by P0.35 per liter, diesel

by P0.60 per liter and kerosene by P0.70 per liter.

A week prior to that the prices of diesel and gasoline also went down by P0.10 and P0.55 per liter, respectively.

“This is to reflect movement in the international oil market,” the oil firms said. Lenie Lectura

BusinessMirror

DOE: Enough power supply for summer months

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By Lenie Lectura

@llectura

here are 20 power plants that are scheduled to go offline during summer months, but the Department of Energy (DOE) said on Monday there is enough power supply during this period.

“We are confident that we will not experience any interruption. DOE Secretary [Alfonso G.] Cusi gave us instructions to make sure that we have sufficient plans and activities para masiguro ’yun. So, we have looked into, No. 1, what are the plans that are coming in? The big ones that are coming in are, in April and May, the Limay-Bataan power plants from San Miguel group and aside from that, he [Cusi] also instructed us to look into the scheduled maintenance of the power plants during that period, so we are looking at the 20, but the biggest one is the Pagbilao Unit 1,” Energy Undersecretary Felix Wil-

liam B. Fuentebella said.

These power plants will undergo maintenance shutdown on separate dates, from April 22 to June 10, this year. He did not identify the 20 power plants.

Fuentebella said supply in Luzon during summer months is over 10,000 megawatts (MW), as against a demand of 9,000 MW to 9,200 MW. “Yes, we have sufficient reserves.

For Mindanao and the Visayas, 2,000 MW each supply. Demand for both is about 1,500 MW. Ganoon din, sufficient din,” Fuentebella added.

The DOE official said state-run Malaya power plant is on standby, in

20 The total number of power plants scheduled to go offline this summer

case there is a need for the government to tap it.

“It’s a must-run unit, so, aside from the plants that we are looking into, the Malaya is ready to run. And also, we have a massive campaign for conservation, because the demand side is forgotten sometimes that we play a very important role, the consumers,” Fuentebella added.

Aside from Malaya, there are new power plants recently put up by the private sector. “What I can say is that there are plants that are coming in this summer, we have two units of 150 MW in Limay from San Miguel,”

By Jovee Marie N. dela Cruz @joveemarie

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Side-street shoe mart Hundreds of pairs of shoes of different make and designs are displayed at a side-street stall along the Divisoria district, dubbed as the country’s bargain-sale capital, where a host of other consumer items is sold at very low prices compared to mall prices. ALYSA SALEN

Palace disallows airport Customs personnel to open passenger luggage sans ‘X’ mark

By Recto Mercene @rectomercene

d.o.l.e. region 3 allots p85.97m for s.p.e.s. in c. luzon CITY OF SAN FERNANDO, Pampanga—The Department of Labor and Employment (DOLE) regional office here has allotted some P85.97 million for the implementation of the Special Program for the Employment of Students (SPES) in Central Luzon.

DOLE-3 Technical Support and Services Division for Employment and Welfare Head Alejandro Inza Cruz said the amount will represent the 40-percent government share for the salaries of the SPES beneficiaries.

Under the program, Inza Cruz said the 60-percent share for the SPES beneficiaries’ salaries will be shouldered by participating private companies and national government agencies (NGAs), while participating local government units’ approved share will be based on their corresponding classification.

He noted that the SPES beneficiaries will be receiving salaries based on the prevailing minimum and applicable LGU wage rates in the region.

So far, he said, some 397 employers, comprising 248 private firms, 134 LGUs, two NGAs and 13 schools from different parts of the region, will be participating in this year’s SPES. PNA

the DOE official said.

The DOE, in a data presented earlier, said the forecast for Luzon’s power reserve for the weeks March 25 to 31, April 1 to 7, April 8 to 14, April 15 to 21, April 22 to 28, April 29 to May 5, May 6 to 12, May 13 to 19, May 20 to June 2, June 3 to 9, June 10 to 16, June 17 to 23, and June 24 to 30 are 2,990 MW, 2,666 MW, 2,435 MW, 2,252 MW, 2,081 MW, 2,157 MW, 1,907 MW, 1,869 MW, 1,872 MW, 1,947 MW, 2,089 MW, 2,429 MW, 2,336 MW and 2,134 MW, respectively.

Fuentebella noted there is enough gross-power reserve in Luzon during the summer months, even as there will be days in May when power supply will be 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. However, this will not trigger a yellow alert. Hindi critical, unless may masira na planta or line-tripping incidents,” Fuentebella said.

A yellow alert is issued by NGCP when contingency reserve is less than the capacity of the largest synchronized unit of the grid. In Luzon this

is equivalent 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 26, where gross reserves were placed at 1,859 MW and 1,872 MW, respectively.

Availability 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.

The Visayas is expected to register low-power supply in the June 3 to 9 week, but the DOE official is not worried because the Luzon and the Visayas grids are interconnected. “…Visayas is interconnected with the Luzon grid, so it can import power from Luzon when needed,” Fuentebella 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. This is a signal for economic zones and big business to go there,” he added.

SHS-induced drop in college enrollment to prevail in next 3 to 4 years, lawmaker says

SSS EYES MANDATORY OFW COVERAGE The state-run Social Security System (SSS) said it is asking the help of lawmakers to implement the mandatory coverage of overseas Filipino workers (OFWs) following its goal to expand its members’ coverage, while providing security protection for the country’s new heroes.

SSS President and CEO Emmanuel F. Dooc said the shift to mandatory OFW coverage is one of the provisions of the proposed charter amendment the pension fund is pushing in the legislative stage.

“Our objective is not just to strengthen enforcement of compliance for the coverage of employers and employees in the private sector, but also to encourage self-employed individuals and voluntary members, like OFWs, to register and be active in the system,” he added.

Latest data from the Philippine Statistics Authority showed that OFW statistics stood at 2.4 million as of 2016. Of this number, only about 20 percent were paying members of the SSS, or about 500,000 OFWs, with contributions reaching P4.64 billion.

This number, however, represents only 13 percent of the estimated 3.84 million Filipinos working on temporary status abroad, as per latest data of the Commission on Filipinos Overseas. PNA

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ustoms personnel at airports across the country have been disallowed to open all pieces of luggage carried by passengers, unless such luggage has been marked with the letter “X”.

The letter X is usually marked

by Customs agents, who have subjected arriving luggage to x-ray examination and found these to contain suspected taxable merchandise or illegal items, such as guns and other contraband.

In a memorandum order issued by the Cabinet secretary, addressed to the Department of Finance and to the Customs commissioner, the Bureau of Customs (BOC) was told to discontinue the opening of luggage at the airports.

The directive was issued by Cabinet Secretary Leoncio B. Evasco Jr. during the First National Anti-Poverty Commission meeting held at the Heroes Hall at the Malacañang.

At the meeting, President Duterte instructed the BOC to refrain from opening the luggage of passengers arriving in the country. Evasco’s memorandum is a formality issued for the finance secretary and the customs commissioner.

Airport customs officials said they will abide by the new order.

“But if the luggage has an X marking after going through the x-ray scanning machine, we will ask the

passenger to open his luggage for inspection, because it might contain illegal drugs, guns or highly taxable items,” a customs agent said, who asked not be named in print.

Republic Act 10863, otherwise known as Customs Modernization and Tariff Act, Section 420 on Conditions for Physical Examination, said: “This section allows physical examination: 1. If directed by the commissioner; 2. If the goods are subject to alert order; 3. There are controversies surrounding the declaration.”

Ninoy Aquino International Airport Authority Customs District Collector Ed Macabeo, following the directive of Customs Commissioner Nicanor E. Faeldon, had set up “green and red lane” counters at the arrival areas where passengers may choose where to exit.

Red lane means “something to declare”, while the green lane is for those with “nothing to declare”.

Passengers who pass through the red lane, even without having anything to declare, will automatically be examined.

Likewise, those with luggage bearing the X mark after passing the x-ray scanning are also subject to physical examination, “pursuant to the new tariff law on nonintrusive or use of x ray,” Macabeo added.

Nevertheless, no physical examination will be implemented for those passengers who passed through the “nothing to declare” section at the arrival area.

Senate eyes probe against ‘overpriced’ e-passports

By Butch Fernandez @butchfBM

T

he Senate is poised to conduct an inquiry into complaints by overseas Filipino workers (OFWs) against “overpriced” new digital passports, also called e-passports.

Sen. Joel Villanueva suggested that the Committee on Foreign Relations, which has jurisdiction over matters involving the Department of Foreign Affairs (DFA) charged with issuing the required travel documents, could inquire into the matter to keep it affordable to OFWs. “We can look into it, but maybe we can refer it to the Committee on Foreign Relations,” Villanueva, labor committee chairman, said last Monday.

The Philippine Association of Free Labor Unions, in a news statement, appealed to the government to lower the cost of acquiring DFA-issued e-passports, priced at P950 plus P250 for overtime charges for express-lane service.

The old passports, also called machinereadable passports, cost OFWs only P500, or P700 if an applicant wants it facilitated.

The labor group estimated that some 17,000 new passport applicants, mostly OFWs, apply at the DFA and its consular offices daily, generating huge source of government revenue.

It noted, however, that except for the electronic chip embedded in the e-passport that capture data and security features, no other enhancement were included to justify the high cost of new passports.

member of the House Committee on Higher and Technical Education on Monday said senior high school-induced low enrollment will affect colleges and universities nationwide for the next three to four academic years.

Party-list Rep. Salvador Belaro Jr. of 1-Ang Edukasyon, in a news statement released on Monday, said low freshman enrollment this school, year will carry over to the next year when the freshmen become sophomores and until this year’s freshmen graduate from their four-year and fiveyear courses.

However, Belaro said, many colleges and universities were able to cushion the financial impact of the enrollment drop by offering senior high school (SHS). “[Currently], enrollment in Grade 11 reached about 1.5 million and a good chunk of them chose SHS offered in colleges and universities,” said Belaro, a House assistant majority leader.

But Belaro added that college freshman enrollment will still be low next school year because there is still Grade 12 of SHS rolling out in June.

“That enrollment dip will also carryover through the next four to five years,” the lawmaker said.

According to Belaro, a growing number of colleges and universities are moving the start of their school

year to August, but most higher-education institutions still have June as their school-opening month.

Standard

MEANWHILE, Belaro also called for the passage of his House Bill 4044, which seeks to establish a standard academic calendar for all education levels nationwide.

“That way, classes shall start and end as much as possible and practicable, for all our kindergarten, basic education and collegiate levels,” he said.

Presently, Belaro added that schools are given the free hand to establish their own calendars.

“As such, families where there are more than one child studying could not properly fix their schedules, especially when it involves the whole family, thereby, compromising the basic need of family bonding and proper schedule planning,” he said.

Under the bill, there shall be a standard academic calendar for all levels in all schools in the country, such that as much as possible and practicable, classes would start and end at the same time, and that vacation time shall be synchronized, for all kindergarten, basic education and collegiate levels of education in the country.

It added the Department of Education and the Commission on Higher Education shall collaborate and formulate the necessary rules and regulations to implement the act.

New I.A. administrator Tourism Secretary Wanda Corazon T. Teo swears in

new Intramuros Administrator (IA) lawyer Guiller Asido at the Department of Tourism office in Makati City on Thursday. Asido was recently the COO of the Tourism Infrastructure and Enterprise Zone Authority, and has served in various capacities in different agencies of the government.

A graduate of the University of Santo Tomas and holds three degrees—Master of Laws (cum laude), Bachelor of Laws and Bachelor of Arts, major in Literature.

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Tuesday, March 28, 2017

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

Prosecutors seek to arrest ousted S. Korean leader

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Chinese Premier Li Keqiang (left) receives a hongi, a traditional Maori greeting, from Maori elder Prof. Piri Sciascia at Government House in Wellington, New Zealand, on Monday. Li is on three-day visit to New Zealand for high-level talks at a time that both countries are pushing to expand free trade. Mark Mitchell/NZ Herald via AP

New Zealand, China plan to expand free-trade deal

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ELLINGTON, New Zealand—New Zealand and China announced on Monday they would open talks soon to expand a successful free-trade deal in place for nearly a decade.

The announcement came during a visit by Chinese Premier Li Keqiang. New Zealand Prime Minister Bill English said the nine-year-old deal had been a huge success and resulted in trade bet ween t he countr ies tripling. He said an upgrade to the agreement would ex pand trade further, and that talks would begin next month.

Li also praised the deal, saying it was the first that China had signed with a developed nation and remained the most ad-

9

The number of years the free-trade deal between the two countries has been existing

vanced. He said the deal helps send a signal to the world.

“It’s important to the peace and stability of the region and beyond,” he said.

New Zealand hopes that a renegotiated agreement would allow it to sell more dairy products to China, while China also hopes to sell more goods in New Zealand and erase a small trade deficit.

T he or ig ina l dea l imposes tariffs on certain New Zealand products sold in China after limits are reached.

“One of the issues from New Zealand’s point of view is that the growth in trade has been so strong that some of the safeguard levels set back in 2008 are quite low levels, and the dairy industry has raised this issue with us,” English said.

The countries announced several other agreements, including one that allows chilled New Zealand meat to be exported to China

under a six-month trial. China already accepts frozen sheep and beef meat.

“This agreement has the potential to be worth hundreds of millions of dollars for our farmers, exporters and the wider economy,” New Zealand Trade Minister Todd McClay said in a statement.

Other agreements include an increase in the maximum number of direct flights allowed between the countries, a joint climate action plan and strengthened cooperation on China’s “One Belt, One Road” program.

The approach from China and New Zealand to free trade stands in contrast to that of the US, where President Donald J. Trump has pulled out of a planned Pacific free-trade agreement and has expressed skepticism about other such agreements.

Li traveled to New Zealand after visiting Australia and is scheduled to stay until Wednesday. AP

EOUL, South Korea—South Korean prosecutors said on Monday they were seeking to arrest former President Park Geun-hye on charges of bribery and abuse of power and other criminal charges.

Whether they can arrest Park, who was removed from office in a historic court ruling this month, will depend on whether the Seoul District Court will issue an arrest warrant.

If arrested, Park would be the first former South Korean leader put behind bars since two former military dictators were imprisoned on corruption and mutiny charges in the mid-1990s.

On Monday prosecutors formally asked the court for the warrant. It usually takes several days before the court studies evidence and decides whether an arrest warrant is justified.

Prosecutors have been discussing whether they have enough evidence to apply for an arrest warrant since they questioned her for more than 20 hours last week.

On Monday prosecutors accused Park of conspiring with a longtime confidante, Choi Soon-sil, to collect tens of millions of dollars from big businesses, including more than $38 million in bribes from the South Korean electronics giant Samsung.

Both Choi and Samsung’s top executive, Lee Jae-yong, have been arrested and indicted on bribery and a number of other criminal charges.

When they indicted Choi and Lee, prosecutors had already identified Park as a criminal accomplice.

“The suspect abused her power by using her tremendous status and authority as president to help collect funds from businesses,” prosecutors said in a statement on Monday, explaining why they thought she needed to be arrested. “Although there have been a number of pieces of evidence collected, the suspect has denied most of them and there is a danger of her destroying incriminating evidence if she is not arrested.”

Kim Sung-won, a spokesman for the Liberty Korea Party, to which Park belongs, called the prosecutors’ decision to seek her arrest “regrettable.”

But the opposition Democratic Party said it was “historic.” The party said it would be only fair to arrest Park because Lee of Samsung was already under arrest. Park was named by prosecutors as an accomplice when Lee was arrested.

“Former President Park has never properly acknowledged or apologized for the abusive manipulation of government affairs by her and her associates,” said Youn Kwan-suk, a Democratic Party spokesman.

South Korea’s political parties are in the middle of primary races to select their candidates for a presidential election on May 9. The National Assembly voted overwhelmingly on December 9 to impeach Park on charges of corruption and abuse of

New York Times News Service

Merkel party’s win spells reality check for election challenger

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Japan cherry blossom season begins, marking start of spring Cherry blossom season has officially kicked off in Tokyo, marking the beginning of spring for the Japanese. Visitors take pictures of blooming cherry blossoms at Ueno Park in Tokyo on March 25. The flowers normally first bloom in southern Japan where the climate is warmer. Tokyo is the first city this year to announce the start of the popular flower season. AP/Eugene Hoshiko

power, and she was formally removed from office on March 10.

Park was the first South Korean leader to be forced from office in response to popular pressure since the country’s founding president, Syngman Rhee, fled into exile in Hawaii in 1960 after protests against his corrupt, authoritarian rule.

Since she took office in early 2013, Park had been dogged by allegations that Choi was influencing government affairs from the shadows—and using her connections with the president for personal gain.

On Monday Park was also accused of leaking secret government documents to Choi, who had no clearance for handling them, to help her influence state affairs for her personal benefit.

Those long-suppressed allegations— journalists reporting them had been sued by Park’s aides—began shaking her government last fall, when a deluge of what prosecutors considered incriminating evidence began spilling out through the local news media and disgruntled former associates of Choi.

Huge crowds rallied in central Seoul every Saturday for months, demanding that Park be removed from office.

Park has apologized repeatedly for the scandal. She has vehemently denied any legal wrongdoing, although most South Koreans consider her removal a crucial step toward ending what they see as corrupt ties between government and big business, a bane of South Korea’s young democracy.

As president, Park also refused to be questioned by prosecutors or testify at the Constitutional Court, calling the impeachment politically biased.

Now that she is a private citizen, she no longer enjoys the presidential privilege of immunity from criminal investigation. Still, she has remained defiant, refusing to accept the Constitutional Court’s ruling.

“It will take time, but I am sure that the truth will be known,” she said on March 12, when she moved out of the presidential Blue House, where she first lived when her father, Park Chung-hee, was the country’s dictator from 1961 until his assassination in 1979.

Two former presidents—the military dictators Chun Doo-hwan and Roh Taewoo—were questioned by prosecutors in 1995 on suspicion of bribery. The two men, former army generals, also faced sedition and mutiny charges for their roles in the 1979 military coup that brought them to power and in the 1980 massacre of antigovernment demonstrators in the southwestern city of Gwangju.

Chun was sentenced to death—the sentence was later commuted to life in prison—while Roh was sentenced to 17 years. Both were pardoned and released in December 1997.

ngela Merkel’s election victory in Saarland state delivered a reality check in this year’s contest for the chancellery, underscoring the challenge facing the Social Democratic Party (SPD) trying to deny her a fourth term.

Energized by the candidacy of former European Parliament President Martin Schulz, the SPD headed into the ballot with a poll bounce. Instead, Merkel’s Christian Democratic Union (CDU) posted its biggest win in the state in 13 years, after a campaign that included raising the specter of the anticapitalist Left party entering the state government.

“For Merkel, this is a positive start into the election year and should help to calm the mood within her alliance of Christian parties,” Carsten Nickel, a risk analyst at Teneo Intelligence in Brussels, said in a research note. “The SPD will recognize that it is still a long way to taking over the chancellery in September.”

Merkel’s CDU took 40.7 percent of the vote last Sunday, a gain of 5.5 percentage points over the last election in 2012, while the SPD declined 1 point to 29.6 percent and the Left took 12.9 percent, according to official results.

The CDU benefited from a popular state premier, Annegret Kramp-Karrenbauer, a Merkel ally who supported her throughout the refugee crisis even as some other party leaders turned on her.

It’s a respite for Merkel, who has come under pressure from party allies to sharpen

her campaign against the SPD, which has surged to parity in national polls ahead of the September 24 election in Europe’s biggest economy. For Schulz, the result was a return to Earth and a signal that coalition options for his party may be limited if it wins the national election.

“The Social Democrats don’t have a free ride,” Josef Janning, head of the Berlin office of the European Council on Foreign Relations, said in an interview. “The Schulz hype isn’t as strong as they thought.”

At the same time, Merkel’s popularity has bounced back after she faced attacks in Germany and abroad for her refugee stance. Her approval rating climbed 5 points to 60 percent in a monthly Infratest Dimap survey in March, putting her 8 points ahead of Schulz. Even so, the poll put support for her CDU-led bloc only 1 point ahead of the SPD at 32 percent, reflecting tightened polls nationwide.

“If there’s any message in this, Merkel has a fair chance,” Janning said.

I n S a a r l a n d K ra m p - K a r re n b a u e r deployed a trusted CDU attack line—a warning that a victorious SPD would open a path to a government including the Left.

The party is led in the state by former German Finance Minister Oskar Lafontaine, who abandoned the SPD to found the new party more than a decade ago.

While Merkel plans to comment on the election result on Monday, leaders of her party said the result was a vote for stability. Bloomberg News

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Brexit ultimatums will backfire on United Kingdom, Sweden warns

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a k i ng a h a rd l i ne i n Brexit negotiations will hurt the United Kingdom.

That’s the message from Sweden, one of Britain’s closest allies in the European Union (EU), just days before Prime Minister Theresa May triggers Article 50 and starts negotiations to leave the bloc after more than four decades of an ambivalent relationship.

A nn Linde, Sweden’s EU affairs and trade minister and the woman representing Scandinav ia’s big gest economy in Brexit ta lks, says the UK’s negotiating tactics are d amag ing its chances of getting a good dea l.

She also says the EU is show ing a sur pr ising degree of unit y in its approach.

“They have been really tough on the UK side,” Linde said in an interview in Stockholm on Friday. “That’s a position they have chosen, but it doesn’t make it easier to have constructive discussions when the point is to reach an agreement.”

Sweden had adopted a relatively conciliatory stance toward the UK after Britons voted to leave the EU in June. The country stands to lose a lot if talks break down since the UK is its third biggest export market outside the Nordic region, behind Germany and the US. But Sweden’s government is now warning the administration in London that it can’t expect a deal that provides the benefits other members enjoy without also accepting some costs. What’s more, any agreement struck can’t be allowed to leave Britain in a better position than remaining EU members, Linde said.

“There’s no doubt about that,” Linde said. “They shouldn’t get as good conditions when they’re on the outside as when they’re on the inside. The EU will never accept that they only pay for the goodies, but avoid things where we have a shared responsibility.”

Sweden also opposes the UK’s goal of negotiating a trade deal alongside other issues, such as the rights of EU citizens in Britain.

Linde said she “supports” the EU’s calculation of a £60-billion ($65-billion) fee that Britain should pay for past commitments to the bloc, a provision she said ought to be negotiated before any trade pact.

Linde underscored Sweden’s opposition to any UK plan to turn itself into a tax haven, and said it’s important the two sides decide on who should arbitrate in trade disputes.

“The UK has so far been very, very tough” in stipulating “that the European Court of Justice shouldn’t be allowed to be the judge in disputes,” Linde said.

“That’s absolutely central to the functioning of the EU, not least when it comes to trade.”

According to Linde, Sweden will do everything in its power to make sure divorce proceedings are finished on time, so that the two sides can then start negotiating a trade deal. But she made clear the onus is on the UK to show flexibility.

They keep “using the mantra ‘better no deal than a bad deal’, and they repeat that they’re prepared to leave if they don’t get a good deal, and in such a situation the WTO [World Trade Organization] rules would kick in immediately” after the deadline of the divorce negotiations on March 29, 2019, Linde said. “There is no back-up plan,” Linde said. “That would be the end” and very bad for both sides, she said.

Qatar to seal major deals in UK

Qatar said it would announce major new investments in the UK this week, deepening the countries’ trade ties as London prepares to quit the European Union.

The emirate’s prime minister, Sheikh Abdullah bin Nasser bin Khalifa Al-Thani, is leading a

delegation of more than 400 officials and business executives to London and Birmingham to a two-day meeting with UK counterparts, according to government statements. The visit concludes on Tuesday, a day before UK Prime Minister Theresa May plans to start the two-year clock on Brexit negotiations by invoking Article 50 of the Lisbon Treaty. “ Transforming the countr y into a global center for knowledge-based industries and innovation is one of the most vital goals of the state of Qatar,” AlThani said in a statement that disclosed planned investments without giving details. The emirate looks to cooperate with the British government and UK firms to achieve that goal at a time when the UK “sets a course as Global Britain”, he added.

Qatari investments would help to cushion the economic fallout from Brexit on both sides. Ahead of the break, the UK is taking steps to maintain foreign investments, going as far as to provide written assurances to Nissan Motor Co. in an effort to stem competition from other EU members that want to poach talent and capital.

Big stake

Qatar, too, has a big stake in keeping the UK economy and asset prices strong during and after Brexit. It’s the world’s biggest producer of liquefied natural gas, and delivers 90 percent of the UK’s imports of the fuel. The emirate stepped in to invest billions in Barclays Plc. during the global financial crisis, and has built up a stock and real estate portfolio worth more than £40 billion ($50 billion) over the past decade.

The delegation to the UK this week includes chief executive officers of Qatar Investment Authority, Qatar Petroleum and Qatar Airways. “Qatar doesn’t see Britain leaving the EU as impacting their relationship, and it may be an opportunity for it to be stronger,” Rachel Pether, an adviser at the Sovereign Wealth Fund Institute, said in a phone interview from Dubai on March 22.

Protecting the value of Qatari assets in the UK—which range from Harrods department store, a stake in J Sainsbury Plc and tony properties such as Savoy Hotel and the Shard skyscraper—isn’t the only motivation behind the emirate’s road show. Lower oil prices have sapped government revenue, forcing Qatar, the richest country in the world on a per-capita basis, to issue $9 billion bonds in May. Officials are seeking more investment flows as the country diversifies its economy away from oil and gas, and continues a $200-billion infrastructure upgrade before the 2022 World Cup. “We want to attract institutional money from the UK, especially through our forthcoming exchange-traded fund that will list on the Qatar Stock Exchange,” Fahmi Alghussein, CEO of Doha-based asset manager Amwal Llc., who plans to attend the London trade event said.

One indicator of Qatari appetite for investment in the UK is continued purchases of real estate, both by the state fund and individuals. Foreign investors see the top end of London’s property market as an attractive haven, with the pound’s slump offsetting political uncertainty, according to Laurence Ronson, sales director at Ronson Capital Partners.

“London looks like exceedingly good value in terms of a weakened sterling,” Ronson, who is developing two luxury buildings in the capital, said in an interview in Doha on March 23. “We’ve seen that with Chinese, Middle Eastern and American money looking at opportunities. All the doom and and gloom that has been predicted post-Brexit has not happened.

In fact, the economy is growing.”

Bloomberg News

President Donald J. Trump looks over toward Budget Director Mick Mulvaney (left) after signing an executive order in the Oval Office of the White House in Washington on March 13. Trump signed the “Comprehensive Plan for Reorganizing the Executive Branch”. From left are, Mulvaney, Small Business Administration Administrator Linda McMahon, Housing and Urban Development Secretary Ben Carson, United Nations Ambassador Nikki Haley, Interior Secretary Ryan Zinke, Vice President Mike Pence, Transportation Secretary Elaine Chao and Commerce Secretary Wilbur Ross. AP/Pablo Martinez Monsivais

Dealt a setback, GOP aim to push tax cuts W ASHINGTON—Picking themselves up after the bruising collapse of their health-care plan, President Donald J. Trump and Republicans in Congress will start this week on a legislative obstacle course that will be even more arduous: the first overhaul of the tax code in three decades.

Trump’s inability to make good on his promise to repeal the Affordable Care Act (ACA) has made the daunting challenge of tax reform even more difficult. Not only has Trump’s aura of political invincibility been shattered, but without killing the ACA, Republicans will be unable to rewrite the tax code in the sweeping fashion that the president has called for.

The grand plans of lower rates, fewer loopholes and a tax on imports may have to be scaled back to a big corporate-tax cut and possibly an individual-tax cut.

A lot of people think Trump might go for this to get an easy win.

“They have to have a victory here,” Stephen Moore, a Heritage Foundation economist who advised Trump during the presidential campaign said. “But it is going to have to be a bit less ambitious rather than going for the big bang.”

Because of the arcane rules of lawmaking in Congress, there may be little choice. If Republicans intend to act again without the help of Democrats, they will need to use a procedure called budget reconciliation to have the Senate pass tax legislation with a simple majority. To make their changes to the tax code permanent, their plans cannot add to deficits over a period of 10 years.

Eliminating the $1 trillion of AC A taxes and the federal spending associated with that law would have made this easier.

Because they failed, Republicans will struggle to reach their goal of cutting corporate-tax rates without piling on debt. Speaker Paul Ryan acknowledged on Friday, “This does make tax reform more difficult.”

20% The proposed tax that would make imports more expensive, and is expected to spur domestic production

Under pressure to get something done, some Republican deficit hawks appear ready to abandon the fiscal rectitude that they embraced during the Obama administration to help salvage Trump’s agenda.

In a rare shift, Rep. Mark Meadows of North Carolina, whose House Freedom Caucus effectively torpedoed the health legislation, said on Sunday on ABC’s This Week he would not protest if tax cuts were not offset by new spending cuts or new streams of revenue, such as an import tax.

“I think there’s a lot of flexibility in terms of some of my contacts and conservatives in terms of not making it totally offset,” he said.

“Does it have to be fully offset?

My personal response is no.”

The health-care failure also makes the tax overhaul more politically complex as the fissures within the Republican Party have been laid bare.

Trump followed Ryan’s lead and lost, making it more likely that the White House will try to steer the direction of tax legislation.

“I would be surprised given the health-law debacle if the Trump administration sits back and lets Congress fashion the

legislation without weighing in on the substance,” Michael J. Graetz, a tax-law professor at Columbia University said. “That is one of the lessons that the administration will take from the failure of the health bill.”

It remains unclear whether Trump and Ryan are in agreement on taxes.

Since last summer Ryan and Rep. Kevin Brady of Texas, chairman of the Ways and Means Committee, have been aggressively pitching a reform blueprint that includes a “border adjustment tax” .

It would be a 20-percent tax on imports that, by making imports more expensive, would spur domestic production, they said. They think the plan would raise $1 trillion to compensate for the lower revenue that much lower tax rates would probably bring in.

Ryan and Brady are unlikely to simply hand over tax policy to the White House. Brady said last Sunday that getting rid of the contentious border-tax provision would have “severe consequences”, and that he hoped to produce a bill based on the House plan this spring that would be passed later this year.

Brady’s tax-writing committee is expected to convene a meeting about an overhaul on Tuesday.

“We have so much in common with the Trump administration, it wouldn’t make sense to have a separate tax bill from Secretary Mnuchin, a separate one from Gary Cohn, a third from whomever,” Brady said on Fox News, referring to Treasury Secretary Steven Mnuchin, and to one of Trump’s top economic advisers. “Why not take the basis of the House plan?”

Changing the tax code affects every person and industry. Lobbyists are hoping to shape tax legislation. As plans become more concrete, business groups will be ready to pick them apart.

Trump has at times expressed admiration for some form of border tax as a way to give an advantage to US producers. However, facing a backlash from retailers, energy companies and conservative think tanks that warn consumer prices will soar under the House Republican plan, Trump and Mnuchin have sounded cool to the idea.

Many Senate Republicans are

also skeptical, raising the prospect that Ryan’s tax vision could suffer the same fate as his health plan, toppling under the weight of divisions within his party.

If Trump does try to go his own way, he could propose a taxcut plan that disregards deficits and assumes that robust economic growth will make up for lost revenue.

A nother idea would be reforming taxes in pieces, with a focus on reducing business-taxrates first, and then addressing tax rates for individuals later.

Or, as Moore advises, he could try to make a grand bargain with Democrats that combines a tax overhaul with a plan for more infrastructure spending.

Trump is under added pressure not to again fail supporters whom he promised would “get sick of all the winning”.

“They need to cut taxes, cut spending and build the wall,” Judson Phillips, founder of the conservative group Tea Party Nation said. “If they will do that, the base will be forever in love with them.”

He said he did not want Trump to get bogged down in Ryan’s complicated tax agenda.

But after consuming the first t wo months of his presidenc y focused on hea lth care, it is unclear how prepared Tr ump and his administration are to tack le ta xes. T he administration sa id last mont h its ta x plan was just weeks away, but nothing mater ia lized.

A nd t he Treasur y Depar tment, which will take a leading role in crafting a plan, remains understaffed, with crucial policy positions unfilled, and most of its leadership still awaiting Senate confirmation.

Mnuchin said last week he was ready to get going, predicting that a tax overhaul would be simpler than health care. The fact that no one has seriously tackled ta x reform since 1986 suggests other wise. “ It ’s l i k e a s k i n g w he t he r climbing Kilimanjaro or another mountain of equal height is harder,” said Graetz, who was a Treasury Department official in the early 1990s. “They are both very hard, very exhausting and seem to occur once in a generation.”

New York Times News Service

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United Airlines bars 2 girls in leggings from boarding

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Russia’s leading opposition figure Alexei Navalny is arrested by the police in downtown Moscow, Russia, last Sunday. Navalny and his supporters hold anticorruption demonstrations throughout Russia. But authorities are denying permission and the police have warned they won’t be responsible for “negative consequences” or unsanctioned gatherings. Evgeny Feldman for Alexey Navalny’s campaign photo via AP

Nationwide protests bring thousands to Russia’s streets

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OSCOW—Russia’s opposition, often written off by critics as a small and irrelevant coterie of privileged urbanites, put on an impressive nationwide show of strength last Sunday with dozens of protest across the vast country. Hundreds were arrested, including Alexei Navalny, the anticorruption campaigner who is President Vladimir Putin’s most prominent critic.

It was the biggest show of defiance since a 2011-2012 wave of demonstrations rattled the Kremlin and led to harsh new laws aimed at suppressing dissent. Almost all of Sunday’s rallies were unsanctioned, but thousands braved the prospect of arrest to gather in cities from the Far East port of Vladivostok to the “window on the West” of Saint Petersburg.

An organization that monitors Russian political repression, OVD-Info, said it counted more than 800 people arrested in the Moscow demonstrations alone. That number could not be confirmed and state news agency Tass cited Moscow police as saying there were about 500 arrests.

Navalny, who was arrested while walking from a nearby subway station to the demonstration at Moscow’s iconic Pushkin Square, was the driving force of the demonstrations. He called for them after his Foundation for Fighting Corruption released a report contending that Prime Minister Dmitry Medvedev has amassed a collection of mansions, yachts and vineyards.

Navalny is a persistent thorn in the Kremlin’s side. He has

800 The unconfirmed number of people arrested in the Moscow demonstrations alone, although Tass cited Moscow police as saying 500 were arrested

served several short jail terms after arrests in previous protests and has twice been convicted in a fraud case, but given a suspended sentence. Even though the conviction technically disqualifies him, he intends to run for president in 2018—an election in which Putin is widely expected to run for another term.

Putin has dominated Russian political life, as president or prime minister, since 2000.

No overall figures on arrests or protest attendance were available.

Some Russian state news media

gave relatively cursory reports on the demonstrations, while the state news TV channel Rossiya-24 ignored them altogether in evening broadcasts.

T he US go ve r n me nt con demned the arrest of Navalny and of peaceful protesters, calling for their immediate release.

“The Russian people, like people everywhere, deserve a government that supports an open marketplace of ideas, transparent and accountable governance, equal treatment under the law, and the ability to exercise their rights without fear of retribution,” State Department Spokesman Mark Toner said in a statement.

The police estimated the Moscow crowd at about 7,000, but it could have been larger. The 1-hectare Pushkin Square was densely crowded as were sidewalks on adjacent Tverskaya Street.

In Sa int Petersburg about 5,000 protesters assembled in the Mars Field park, shouting slogans including “Putin resign!” and “Down with the thieves in the Kremlin!”

Russia’s beleaguered opposition is often seen as primarily a phenomenon of a Westernized urban elite, but Sunday’s protests included gatherings in places far from cosmopolitan centers, such as Siberia’s Chita and Barnaul.

“Navalny has united people who think the same; that people don’t agree with the authorities is obvious from what is going on in the country today,” Anna Ivanova, 19, said at the Moscow demonstration.

“I am a bit scared.”

Scuffles with the police erupted sporadically and the arrested demonstrators included a gray-haired man whom the police dragged along the pavement. The police cleared the square after about three hours and began herding demonstrators down side streets.

“It’s scary, but if everyone is afraid, no one would come out onto

the streets,” 19-year-old protester Yana Aksyonova said.

The luxuries amassed by Medvedev include a house for raising ducks, so many placards in Sunday’s protests featured mocking images of yellow duck toys.

Some demonst rators c a r r ied running shoes—a reference to Navalny’s assertion that tracking shipments of running shoes for Medvedev helped reveal his real-estate portfolio.

Others showed up with their faces painted green, a reminder of a recent attack on Navalny in which an assailant threw a green antiseptic liquid onto his face.

“People are unhappy with the fact that there’s been no investigation” of the corruption allegations, Moscow protester Ivan Gronstein said.

There were no comments reported from Putin, Medvedev or other top Russian politicians, leaving in doubt what the Kremlin’s strategy may be for countering the protests.

Previous waves of demonstrations have dissipated through inertia or the intimidation of increasingly punitive measures; under a 2014 law, holding an unauthorized protest is punishable by 15 days in jail, or five years imprisonment for a third offense.

In Vladivostok the police forcefully detained some demonstrators near the city’s railway terminal, in one case falling down a small grassy slope as they wrestled with a detainee.

News reports and social media reported demonstrations in large cities throughout the country, including Novosibirsk, Tomsk and Krasnoyarsk. At least 25 people were reported arrested in Vladivostok and 12 in Khabarovsk.

About 40 people were detained in a small protest in the capital of Dagestan, a restive republic in the Russian Caucasus, according to Tass. AP

nited Airlines (UA) barred two teenage girls from boarding a flight last Sunday morning and required a child to change into a dress, after a gate agent decided the leggings they were wearing were inappropriate.

That set off waves of anger on social media, with users criticizing what they called an intrusive, sexist policy, but the airline maintained its support for the gate agent’s decision.

The girls, who were about to board a flight to Minneapolis, were turned away at the gate at Denver International Airport, the company said last Sunday. United doubled down on that decision, defending it in a series of tweets last Sunday.

The incident was first reported on Twitter

by Shannon Watts, a passenger at the airport who was waiting to board a flight to Mexico.

In a phone interview from Mexico last Sunday afternoon, Watts said she noticed two visibly upset teenage girls leaving the gate next to hers. Both were wearing leggings.

Watts went over to the neighboring gate and saw a “frantic” family with two young girls, one of whom was also wearing leggings, engaged in a tense exchange with a gate agent who told them, “I don’t make the rules, I just enforce them.”

Watts said the girl’s mother told her the two teenagers had just been turned away because the gate agent said their pants were not appropriate travel attire. The woman had a dress in her carry-on bag that the child was able to pull on over her pants, and the family boarded the flight.

“The girl pulled a dress on,” Watts said.

“But please keep in mind that the dad had on shorts that did not hit his knee—they stopped maybe 2 [inches] or 3 inches above his knee—and there was no issue with that.”

Watts judged that the two girls who were barred from boarding were in their “young teens” and the girl who changed into a dress was 10 or 11.

Watts described the situation in a series of tweets before her flight to Mexico took off.

By the time she landed her tweets had been

shared widely, often accompanied by sharp criticism directed at the airline.

Jonathan Guerin, a spokesman for United, confirmed that two teenage girls were told they could not board a flight from Denver to Minneapolis because their leggings violated the company’s dress code policy for “pass travelers,” a company benefit that allows United employees and their dependents to travel for free on a standby basis.

G u e r i n s a i d p a s s t r ave l e r s a re “representing” the company and as such are not allowed to wear Lycra and spandex leggings, tattered or ripped jeans, midriff shirts, flip-flops or any article of clothing that shows their undergarments.

“It’s not that we want our standby travelers to come in wearing a suit and tie or that sort of thing,” he said. “We want people to be comfortable when they travel as long as it’s neat and in good taste for that environment.”

He said both teenage girls stayed behind in Denver, “made an adjustment” to their outfits and waited for the next flight to Minneapolis. Guerin did not know if they had successfully boarded or not, and also had no information about the girl Watts said she saw change into a dress at the gate.

The company largely confirmed Watts’s account earlier in the day in a response to her on Twitter that did little to mollify the concerns of its critics.

In a series of dozens of tweets, the company said the incident was not simply the result of an overzealous gate agent.

Instead, it said United Airlines reserved the right to deny service to anyone its employees deemed to be inappropriately dressed. It also referred to the dress code applied to pass travelers.

“In our Contract of Carriage, Rule 21, we do have the right to refuse transport for passengers who are barefoot or not properly clothed,” the company tweeted.

It added, “There is a dress code for pass travelers as they are representing UA when they fly.” New York Times News Service

‘Bathroom bill’ to cost North Carolina $3.76B R

ALEIGH, North Carolina—Despite Republican assurances that North Carolina’s “bathroom bill” isn’t hurting the economy, the law limiting lesbian, gay, bisexual and transgender (LGBT) protections will cost the state more than $3.76 billion in lost business over a dozen years, according to an Associated Press (AP) analysis.

Over the past year, North Carolina has suffered financial hits ranging from scuttled plans for a PayPal facility that would have added an estimated $2.66 billion to the state’s economy to a canceled Ringo Starr concert that deprived a town’s amphitheater of about $33,000 in revenue. The blows have landed in the state’s biggest cities, as well as towns surrounding its flagship university, and from the mountains to the coast.

The AP analysis—compiled through interviews and public records requests— represents the largest reckoning yet of how much the law, passed one year ago, could cost the state. The law excludes gender identity and sexual orientation from statewide antidiscrimination protections, and requires transgender people to use restrooms corresponding to the sex on their birth certificates in many public buildings.

Still, AP’s tally is likely an underestimation of the law’s true costs. The count includes only data obtained from businesses and government officials regarding projects that canceled or relocated because of HB2.

A business project was counted only if AP determined through public records or interviews that HB2 was why it pulled out.

The AP also tallied the losses of dozens of conventions, sporting events and concerts through figures from local officials. The AP didn’t attempt to quantify anecdotal reports that lacked hard numbers, or forecast the loss of future conventions.

Bank of America CEO Brian Moynihan— who leads the largest company based in North Carolina—said he’s spoken privately to business leaders who took projects elsewhere because of the controversy, and he fears more decisions like that are being made quietly.

“Companies are moving to other places, because they don’t face an issue that they

face here,” he told a World Affairs Council of Charlotte luncheon last month.

Other measures show North Carolina has a healthy economy. By quarterly gross domestic product, the federal government said, North Carolina had the nation’s 10th fastest-growing economy six months after the law passed. The vast majority of large companies with existing North Carolina operations have made no public moves to financially penalize the state.

HB2 supporters say its costs are tiny compared with an economy estimated at more than $500 billion per year, roughly the size of Sweden’s. They say they’re willing to absorb those costs if the law prevents predators from posing as transgender people to commit assaults in restrooms—acts the law’s detractors say are entirely imagined.

Lt. Gov. Dan Forest, one of the strongest supporters, accused news organizations of creating a false picture of economic upheaval.

He declined a request for an interview based on AP’s analysis.

“The effect is minimal to the state,” Forest told Texas legislators considering a similar law. “Our economy is doing well. Don’t be fooled by the media.”

But AP’s analysis shows the economy could be growing faster if not for projects that have canceled.

Those include PayPal canceling a 400-job project in Charlotte, CoStar backing out of negotiations to bring 700-plus jobs to the same area, and Deutsche Bank scuttling a plan for 250 jobs in the Raleigh area.

Other companies that backed out include Adidas, which is building its first US sports shoe factory employing 160 near Atlanta rather than a High Point site, and Voxpro, which opted to hire hundreds of customer support workers in Georgia, rather than North Carolina.

“We couldn’t set up operations in a state that was discriminating against LGBT” people, Dan Kiely, Voxpro founder and CEO, said in an interview.

All told, the state has missed out on more than 2,900 direct jobs that went elsewhere. AP

The Regions BusinessMirror

news@businessmirror.com.ph

House leader files bill postponing barangay, SK elections anew

By Jovee Marie N. dela Cruz @joveemarie

and Joel R. San Juan @jrsanjuan1573

A

LEADER of the House of Representatives has filed a bill postponing anew the October 2017 Barangay and Sangguniang Kabataan (SK) elections.

House Bill 5359, filed by Nacionalista Party Rep. Robert Barbers of Surigao del Norte, said deferment of barangay elections will curtail the country’s drug problem.

The bill seeks to reset the synchronized barangay and SK elections scheduled on the fourth Monday of October 2017, to the fourth Monday of May 2020.

“There is a need to postpone the 2017 barangay elections to rid barangays of officials linked to illegal-drugs operations. The barangay election was postponed last year for the very same reason, and obviously, we have yet to consider our communities drug-free.

The drug problem begins at the grassroots level; therefore, this is where we should start cleansing,” Barbers said.

Barbers added that prior to the elections, incumbent officials must be terminated in order to give way to a set of “untainted” officers in charge the President himself will appoint.

Earlier, President Duterte said he wants the October 2017 barangay elections postponed because he does not want those financed by drug lords to win.

“Incumbent officials stand to enjoy an extended term, but fail to address the drug problem that our President has been seeking to exterminate since Day 1. We have given them another year, but the question is, have they proven themselves worthy to be called ‘leaders’ of a country that is dying to be freed from the shackles of illegal drugs? I don’t think so. That is why, I personally think that the smartest move would be to delay the elections once again and to appoint incorruptible officers in charge who will help us traverse the road to recovery—the road to a drug-free Philippines,” Barbers said.

Meanwhile, Democracy Watch Philippines, a citizen-led organization, on Monday expressed opposition to the plan of Duterte to declare barangay positions vacant and, instead, appoint barangay officials as part of the effort of the government to address the country’s problem on illegal drugs.

In an inter v iew, Democrac y Watch Philippines Secretary-General Claudette Guevara said Duterte’s plan “goes against the basic tenets of democracy”, such as the right of the people to freely choose their leaders.

Guevarra said scrapping the barangay elections would make barangay officials accountable to the appointing power instead of their constituents.

“It will put into question the principle of accountability,” Guevara said, adding it would be impractical for Duterte alone to appoint all 336,810 barangay officials throughout the country.

“Barangay governance will be at a standstill when all seats will be declared vacant as the processing of the appointment of more than 300,000 individuals will take a considerable amount of time,” Guevara said.

Last week Duterte said he wants the barangay elections postponed again. It was originally scheduled on October 31, 2016. Duterte said he will not allow drug-tainted personalities to be elected as barangay officials.

Election lawyer Romulo Macalintal said appointing, instead of electing, barangay officials would violate the provisions of the 1987 Constitution.

He said no less than the 1987 Constitution recognizes barangay executives as being “elective local officials”, meaning they must be elected.

“Any law or executive order declaring as ‘vacant’ all existing elective barangay positions and to appoint their replacements is unconstitutional,” Macalintal said.

Editor: Efleda P. Campos • Tuesday, March 28, 2017 A9

Hungary opens €10-M fund to support bilateral business cooperation with PHL

By Manuel T. Cayon | Mindanao Bureau Chief

D

AVAO CITY—The government of Hungary has opened a €10-million fund to bolster future activities between Philippine and Hungarian businesses to kick off a business forum on Tuesday in Manila, timed with the reopening of the Hungarian Embassy, which closed in 1995.

Péter Szijjártó, minister of foreign affairs and trade of Hungary, told reporters here his government has put up the fund to provide financial support to the business cooperation between the two countries.

He brought with him a contingent of 15 business leaders in the field of trade, “especially in food industry, water management, agriculture technology and machinery.”

“Investments will be a business decision, and if they need support we will provide it,” he said, shortly after he and Ambassador Jozsef Bencze signed four cooperation agreements with their Filipino counterparts, acting Foreign Affairs Secretary Enrique A. Manalo and Virgilio S. Almario, chairman of the National Commission on Culture and the Arts.

Szijjártó said his government

would leave it to the business community to decide how much they need to enhance their trade cooperation and transactions.

He said the business contingent that accompanied him would attend the Hungary-Philippines Business Forum and discuss the details of the business dealings they would have in the future. The forum is organized by the Hungarian National Trading House and the Philippine Chamber of Commerce and Industry.

“As for Filipinos who may be interested in investing in Hungary, we have made very important moves, very important measures in Hungary in free trade which are very attractive,” he said.

He cited the recent measure that introduced Europe’s lowest corporate income tax of 9 percent, and the lowest personal income tax at 15 percent.

“There are wide varieties in cashing in investment,” he said.

The opening of its embassy in Manila has an important effect on the bilateral relations of both countries, he said, adding now, it would be easier to travel or study in Hungary,

unlike when the nearest embassy was still in Jakarta.

He said 45 Filipinos were recently granted scholarships to different universities in Hungary.

Szijjártó signed two cooperation agreements with the Philippines on Monday, including the Agreement on Economic Cooperation that established the Philippines-Hungary Joint Economic Commission, as well as an agreement of cooperation between the diplomatic institutes of the two countries.

Bencze also signed a cultural cooperation program with Almario.

The Hungarian ambassador emphasized the more important agreements were his and Manalo’s commitment to support each other’s membership applications in different United Nations and international bodies.

“We are both members of the human-rights committees in the UN, and we will work for a balance and fair approach for everyone. We made an agreement to support each other, on the Philippine membership in the executive board in the Unesco [United Nations Educa-

tional, Scientific and Cultural Organization] and the international maritime organization, and the Philippine support to our membership in the committee for the elimination of racial discrimination,” he said, adding, despite the posturing of some European Union members questioning President Duterte’s war on illegal drugs, “we are a country which never comments on domestic and internal issues [of other countries].”

“We understand that only the Filipino people have the right to make a decision about who is leading this country, as we expect others not to judge and criticize our domestic and internal developments. We respect the decision of your people,” he said. “So far, we see an openness on the side of the Philippine administration and this bilateral cooperation is based on the mutual respect and cooperation.”

He noted “you are leading the Asean, and Hungary is pushing for a free-trade agreement to be signed soon between the Philippines and the European Union.”

Record number of ‘pawikan’ released at Aboitiz Cleanergy Park East Visayas RDC

has new advisor

E

NVIRONMENTAL advocate and Davao City Mayor Sara Duterte recently led the release of hatchlings from the very first pawikan (hawksbill turtle) eggs discovered this year at the Aoitiz Cleanergy Park in Davao City.

A total of 169 hatchlings—the largest number released to date— were guided into the ocean to ensure they can grow and thrive properly in the wild and, eventually, return to the Aboitiz Cleanergy Park upon maturity.

Also present during the event were Rodger Velasco, Davao Light EVP and COO; Davao Light and Agua team members; representatives from the Department of Environment and Natural Resources; barangay officials; and other advocates.

Located in Punta Dumalag, Davao City, the Aboitiz Cleanergy Park —managed by the Aboitiz Foundation and Davao Light— showcases urban-based habitat conservation and biodiversity management. It is one of the few identified nesting sites of the critically endangered pawikan and is also home to 66 other species.

In addition to being a pawikan sanctuary, the Aboitiz Cleanergy Park is also a haven for various species of trees, birds and fish through a mangrove forest and a coastal forest, a fish sanctuary, seagrass beds and coral reefs. To encourage awareness, it is open to students, researchers, conservationists and other individuals who support environment conservation. Visitors are treated to an outdoor biodiversity learning experience via its mixed natural and built structures, like the turtle viewdeck, mangrove boardwalk, learning center and observatory deck, botanical garden and nursery that will propagate the area’s 29 native tree species.

Private weather information prov ider Weat herPh i l ippi nes Foundation has also installed an automated weather station to add to the park’s multibiodiversity research function.

In 2016 the Aboitiz Foundation stepped up its conservation campaign with “#BetterWorld for the Pawikans”, a drive to raise funds for the protection and preservation of the hawksbill turtle in Punta Dumalag, one of the last few remaining natural habitats for this turtle specie. This fund-raising will not only secure the sanctuary for the hawksbill turtles but also spread greater public awareness on how everyone can help ensure its

By Elmer V. Recuerdo Correspondent

T

DAVAO City Mayor Sara Duterte leads the release of 169 pawikan hatchlings in a drive spearheaded by the Aboitiz Foundation recently.

survival amid climate change and environmental degradation.

As of January 2017, 19 nests and 2,726 eggs have been found, 2,655 eggs have been transferred and 2,045 hatchlings have been released.

As part of its Environment for a #BetterWorld campaign, the Aboitiz Foundation spearheads the implementation of programs t hat promote env ironment a l conservation and biodiversity

enhancement, which, in turn, suppor ts the United Nations Sustainable Development Goals, specifically on Life Below Water (Conserve and sustainably use the oceans, seas and marine resources for sustainable development) and Life on Land (Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, halt and reverse

land degradation and halt biodiversity loss).

Aboitiz Foundation Inc. is the corporate foundation of the Aboitiz Group. Established in 1988, it implements corporate social responsibility interventions, especially in communities where Aboitiz companies operate. The foundation focuses its efforts on education, enterprise development, environment, and health and well-being.

ACLOBAN CITY—The Regional Development Council (RDC) in Eastern Visayas unanimously approved the selection of Presidential Management Staff Undersecretary Ferdinand B. Cui, who hails from Catbalogan City, as the new advisor of the RDC 8 Advisory Committee (AdCom).

The selection is in response to Cui’s discussion on the “President’s Governance Agenda Towards Responsive Results Delivery for Juana and Juan de la Cruz” during the First Quarter 2017 RDC 8 Full Council Meeting, presided by the new RDC 8 Chairman Tacloban City Mayor Cristina G. Romualdez on March 22, 2017.

Cui strongly advocated among the officers and members of the council to place the people at the center of all RDC strategies and challenged the council to transform from a coordinative body to a collaborative and integrative mechanism by adopting the whole-of-government approach.

He said this can be done through integrated governance, which should result to the delivery of result outcomes, such as poverty alleviation, reduced inequality and maximized demographic dividend.

Interagency convergence and national governance and local governance convergence were identified as key factors in achieving integrated governance and can be achieved through the conduct of results-oriented planning, budgeting, implementation and monitoring and evaluation.

Prior to his selection as advisor of RDC 8’s AdCom, Cui told the BusinessMirror in an interview that a special focus for Samar Island’s three provinces is already being discussed in the Cabinet.

“The President and the Cabinet are cognizant that all three provinces are among the poorest in the country,” he said. “May namumuo nang special focus ngayon and pinaguusapan na sa Cabinet.” Cui said the problem facing Samar is similar to what Bohol experienced 15 years ago.

“Bohol had a problem with peace and order and underdevelopment 15 years ago. But, look where Bohol is now,” he said. “The key is parallel efforts in addressing underdevelopment and peace and order. You cannot separate development from security.”

A10 Tuesday, March 28, 2017 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Getting hotter

W

E surely hope you enjoyed that refreshing burst of cold weather we got in January and February, because it’s over.

While Philippine Atmospheric, Geophysical and Astronomical Services Administration (Pagasa) said there is no heat wave yet in the country, one doesn’t need to pore through the weather bureau’s records of average everyday temperatures this past week to know that this summer is expected to be scorching.

Just go out for a walk, and you’ll be drenched in sweat in no time. You might even experience nausea and dizzy spells.

The heat index in the National Capital Region had already been measured as high as 38 degrees Celsius last week, and Pagasa said the hot weather can only get hotter in the coming days, with the hottest yet in May. We expect the Department of Health to come out with advisories soon to warn the public against heat-related illnesses.

In the past years, even the Metropolitan Manila Development Authority (MMDA) had allowed its traffic enforcers and street sweepers to take one-hour breaks in the afternoon during summer to prevent them from suffering heat stroke, which is considered a medical emergency. All those whose jobs entail being outdoors should do the same.

It is not just getting hotter in the Philippines. Climate-change studies have found that global warming has increased heat records everywhere.

A recent story by The Associated Press reported the Earth sizzled to a third straight record-hot year in 2016, according to various international weather groups.

The National Oceanic and Atmospheric Administration calculated that the average global temperature for 2016 was 14.84°C, or hotter by 0.04 degrees than 2015.

The National Aeronautics and Space Administration’s (Nasa) figures are higher, at 0.12°C hotter than 2015.

The British meteorological office, the World Meteorological Organization and other monitoring groups also agreed that 2016 was the hottest, the fifth time in a dozen years that the globe has set a new annual heat record. Records have been set in 2016, 2015, 2014, 2010 and 2005.

Gavin Schmidt, director of Nasa’s Goddard Institute of Space Studies in New York, said his calculations show most of the record heat was from heat-trapping gases from the burning of oil, coal and gas. Only about 12 percent was due to El Niño, which is a periodic warming of parts of the Pacific that change weather globally, he said.

“Of course, this is climate change, it’s overwhelmingly climate change,” said Corinne Le Quere, director of England’s Tyndall Centre for Climate Change Research.

Well, there are more than a few things we could do here in the Philippines to help mitigate both climate change and the hot weather.

We could shed our overreliance on coal, oil and fossil fuels for our energy needs.

The government should also strictly implement the provisions of the Clean Air Act. All the smoke-belching buses, jeepneys, trucks and other vehicles that are still running on our roads, despite clearly failing emission standards, are worsening air pollution, which, in turn, not only makes our cities hotter but more dangerously unhealthy.

Those of us who’ve been stuck together with these smoke-belchers along traffic-clogged roads in Metro Manila and other urban centers know only too well they are causing not only air pollution, but also our early deaths from lungrelated illnesses. They should not be allowed on our roads, period! Air pollution costs P130 billion per year, according to a World Bank report, and 80 percent of air pollution is from traffic.

Another thing we could do is to stop cutting trees. Trees improve air quality by absorbing pollution and greenhouse gases, and also help beautify and cool our cities.

We should also have more parks, gardens and recreational spaces in our cities. We need greener infrastructure, and more oases to cool hot and tired pedestrians and commuters.

Metro Manila, for instance, has very little green cover left—only about 13 percent, according to the MMDA. It is one of the lowest-ranked cities in the Asian Green City Index, a measurement of the environmental performance of 22 urban cities across the region by the Economic Intelligence Unit.

No wonder it’s hot here!

Since 2005

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

Right time for PHL manufacturing resurgence Manny B. Villar

THE Entrepreneur Continued from A1

T

he industry sector, according to the Labor Force Survey of the Philippine Statistics Authority (PSA), accounted for 17.2 percent of total employment in October 2016, or 7.17 million out of the 41.66 million employed members of the labor force.

The largest group of workers in the industry sector was in the construction subsector, which made up 47.5 percent of total employment in the industry sector. Second was the manufacturing sector, which accounted for 47.4 percent.

Many years ago, our manufacturing sector’s growth was stunted, and our country’s march toward industrialization was virtually halted when our policy-makers decided to follow the western prescription of liberalization without putting in place adequate safety nets to protect domestic industries. We lost whatever competitive advantages we had, and we became dependent on foreign-made goods.

I have been advocating, even during my 21 years as member and leader of both houses of Congress, the revival of the manufacturing sector, and I still do so today, as a private businessman.

I believe that recent developments in the global economy are improving the chances for a successful resurgence of Philippine manufacturing industries.

One particular development is the rising wages in China. We all know that low wages, among other factors, enabled China to outprice and beat most countries in the global markets, catapulting the oncesleeping giant to become the world’s second-largest economy.

What current-account problem?

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We can now compete with China, because Chinese labor is no longer as cheap as when it started penetrating the global markets.

The New York Times recently headlined a report as: “Chinese labor, cheap no more”. Another story on Bloomberg online was titled “Made in China not as cheap as you think”.

CNBC, in a report headlined “‘Made in China’ isn’t so cheap anymore”, noted the rapid rise in labor costs in China’s manufacturing sector. The report cited a research by Euromonitor, which found that hourly wages in China had increased by 64 percent since 2011, or more than five times the current hourly wages in India.

The high labor costs are driving foreign investors in China to relocate their manufacturing facilities to other developing countries where wages are low.

Bangko Sentral ng Pilipinas Governor Amando M. Tetangco Jr., in a statement in January, expressed optimism that the country would be able to sustain its growth momentum. Among other factors, he cited the resurgence in manufacturing, which is making the economy’s growth drivers “more diversified”.

Asian Development Bank President Takehiko Nakao shared the

OUTSIDE THE BOX

T

he financial press and media suffer from self-importance and self-delusion. Self-important thinking of “knowing” better than anyone else; self-delusion in believing that the public is dependent on them for enlightenment.

However, that is true for all “topic journalism”, whether it is show business, food or fashion.

Of course, “news” about any of these or other subject is different.

If you are interested in the latest automobile or gadgets, there is important information found in the press and media. The same is true for “business news”, such as which companies are doing what.

Even some objective appraisal and analysis is good, like which skincare products work best.

But those of us who talk about the financial markets and the pieces that are part of the economy may sit at the top of the “Intellectual Ego Pyramid”.

Yes, the world has a terrible debt problem, and there is going to be a reset in the next years. Yes, the

financial markets are important, because everyone living outside the jungle, not wearing a loincloth, has a monetary stake in what happens.

Certain economic conditions do need monitoring.

Even so, anyone who shops regularly at a supermarket or the palengke and goes to a mall a couple of times a month knows almost as much about the economic situation as any “expert”. The numbers may not be as evident, but the results are clear. If all the cashier booths are open on payday weekend, business is good.

If not, there may be a problem. You don’t need a PhD in Economics to figure that out.

Recently, there has been much talk about the Philippine “current account” (CA). To start with—although I may have missed one

When you detail the specifics of the Philippine CA, you find out that capital flow (that’s real cash money) took a drop in the middle of 2016 and is starting to climb back higher. The real problem for the CA in 2016 was the balance of trade. Oil prices going up 50 percent really killed our trade numbers.

—every article or commentary I have read includes a definition/explanation copied and pasted from Wikipedia. That alone is scary. The key phrase constantly used—from Wikipedia—“The current account is an important indicator about an economy’s health”. Further, “The CA indicates if the Philippines is a ‘net lender’ or ‘net borrower’ to the rest of the world”.

The CA measures two things for both the public and private sectors: capital flows and trade flows. The net lender/net borrower idea is falsely defined. Every time a local company buys a foreign company—like Jollibee buying US Smashburger—that can have a negative CA effect. When profits are returned, that can have a positive affect. The “net lender” thing means that Jollibee took local money to buy a foreign asset. Its current foreign-generated income was not

same optimism. In a speech during the ADB’s 50th anniversary last month, Nakao said the 6.8-percent GDP growth posted in 2016 reflected, in part, gains from a manufacturing resurgence.

During the fourth quarter of 2016, when GDP grew by 6.6 percent, the industry sector posted the highest growth rate among the three major sectors at 7.6 percent. In particular, the PSA identified manufacturing among the main growth drivers in the same quarter.

Under President Duterte’s independent foreign policy, huge investments are expected to come to the Philippines, particularly from China and Japan. Local media reported last week that Japan’s seven major trading houses—Marubeni, Sumitomo, Toyota, Tsusho, Sojitz, Mitsubishi and Mitsui—have expressed interest in investing up to P198.5 billion in various projects in the Philippines.

The ball is now in our park, and it is up to us to grab this opportunity to propel the country into the industrial arena, and make up for the many years of delay in our economic development.

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

enough to cover the purchase price.

So what’s the problem?

The “economic health” issue is a bit twisted, too. What is a more important health indicator: Blood pressure, body mass index, or blood sugar? None of the above. In fact, you can have a fat guy like me who has perfect blood pressure and blood sugar. Japan’s economy is a disaster; the CA (as a percentage of GDP) is +2.9 percent—just like the Philippines. Australia has a negative CA to GDP of 4.9 percent. Vietnam is +1.4 percent, while Thailand comes in a +8.1 percent.

When you detail the specifics of the Philippine CA, you find out that capital flow (that’s real cash money) took a drop in the middle of 2016, and is starting to climb back higher.

The real problem for the CA in 2016, was the balance of trade. Oil prices going up 50 percent really killed our trade numbers.

Wikipedia is a great source for finding out when your favorite celebrity was born. Like Wiki, those of us in “financial journalism” may not always be your best source of financial and economic analysis.

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

Opinion BusinessMirror

opinion@businessmirror.com.ph

Celebrating 60 years of the Rome Treaties

Philippines: The 72nd-happiest country in the world

By European Union Ambassador Franz Jessen

O

n March 25 the European Union (EU) marked 60 years since the signing of the Rome Treaties, the first step toward a united Europe. Since the birth of the European Communities in 1957, the citizens of our member-states have enjoyed six decades of unprecedented peace, prosperity and security. The contrast to the first half of the 20th century could not be greater. Two catastrophic wars in Europe between 1914 and 1945 left millions dead, and a continent devastated, divided and prostrate. For countries that had long been at war, European integration has been the most successful peace project in our history.

However, we are living in unpredictable times and the 60th anniversary of the Rome Treaties is the opportunity not only to reaffirm our commitment to the values and objectives on which the European project is founded but also to take pragmatic and ambitious steps forward.

The world is going through a time of great uncertainty: the global balance of power is shifting and the foundations of a rules-based international order are too often being questioned. The EU will be an increasingly vital power to preserve and strengthen the global order. The EU is the second global economy. We are the largest global market and the leading foreign investor in most parts of the globe. The EU has achieved a strong position by acting together with one voice on the global stage, by playing a key role in removing barriers to trade as a member of the World Trade Organization, as well as concluding bilateral trade deals with many important partners around the world—such as the recent Comprehensive Economic and Trade Agreement (Ceta) deal with Canada. This allowed EU exporting firms to flourish and create over 30 million jobs.

We invest more in development cooperation and humanitarian aid than the rest of the world combined. The EU is increasingly active as a global security provider.

We stand for multilateralism, for human rights, for international cooperation.

We stand for sustainable development, inclusive societies, the fight against all inequalities—in education, in democracy and human rights.

For us, this is not charity: it is also a smart investment in our own security and prosperity.

The EU is the world’s largest financial donor of development aid.

We were instrumental in planning the UN Sustainable Development Goals and are already implementing them, as well as working to update the European Consensus on Development Policy. EU development aid goes to around 150 countries in the world and increasingly focuses on the poorest places in the world. In the period 2014 to 2020, about 75 percent of EU support will go to countries which are often hard hit by natural disasters or conflict, something that makes their citizens particularly vulnerable. The EU is the only donor worldwide which gives support in all countries that are fragile or suffer from conflict.

We stand for better global rules, rules that protect people against abuse, rules that expand rights and raise standards. It is thanks to our engagement—the union together with its member-states—that the global community has set up innovative agreements, like the Sustainable Development Goals, the Paris Agreement on Climate Change and the Addis Ababa Action Agenda on Financing for Development. In a world of reemerging power politics, the EU will have an even more significant role to play.

A more fragile international environment calls for greater engagement, not for retrenchment. This is why the EU will continue to support and help the United Nations: our cooperation with the UN covers peace missions, diplomatic efforts, human rights, tackling hunger and fighting criminality. The EU is also a strong and active partner of regional organizations, like the African Union and the Arctic Council.

The EU also stands ready to help those affected by natural and man-

made disasters. Humanitarian crises continue to take a heavy toll internationally, and in 2016 the EU allocated relief assistance of over €1.5 billion for food, shelter, protection and health care to 120 million people in over 80 countries. The EU has been, since the start of the Syrian conflict in 2011, the largest single donor of humanitarian aid to care for the millions of men, women and children displaced by the conflict.

Any country in the world can call on the EU Civil Protection Mechanism for help. Since its launch in 2001, it has intervened in some of the most devastating disasters the world has faced, like the earthquake in Haiti (2010), the triple-disaster in Japan (2011), the floods in Serbia and Bosnia and Herzegovina (2014), the Ebola outbreak (2014), the conflict in Ukraine (2014), the earthquake in Nepal (2015), the refugee crisis in Europe and Hurricane Matthew in Haiti (2016).

In 2013 Supertyphoon Haiyan/ Yolanda hit the Philippines with a force equivalent to a Category 5 hurricane. In view of this, apart from the Civil Protection Mechanism, the EU had also adopted a Special Measure 2013 for the Philippines’s Typhoon Haiyan/Yolanda Reconstruction Programme financed from the development cooperation budget of the EU in the amount of €9.99 million, apart from the humanitarian assistance worth € 30 million, which makes the total of assistance to be €40 million.

Whatever events may bring in the future, one thing is certain: The EU will continue to put promoting international peace and security, development cooperation, human rights and responding to humanitarian crises at the heart of its foreign and security policies.

In the Philippines, since its official inauguration of the European Union Delegation in 1991, the EU has been sharing its values, knowledge, resources, experiences and culture with the Philippines.

With a GDP 10 times that of the Philippines, trade is one obvious area that delineates the growing and deepening relations. The EU is the largest foreign investor in the country, providing an estimated 500,000 jobs to the Filipino people.

The Philippines is taking advantage of the Special Incentive Arrangement for Sustainable Development and Good Governance, (GSP+) status, with duty-free exports of 66-percent tariff lines, worth around €1.6 billion in 2016.

These economic benefits will help the country not only economically, but also to strengthen implementation under core international conventions on labor rights, environment protection, governance and human rights. Ongoing negotiations of a free-trade agreement with the EU would lead to opportunities for Filipino business and people far beyond as recent deals have shown.

High-level exchanges have continuously taken place over the years.

Development cooperation has grown substantially through the years, promoting inclusive growth and the strengthening of the rule of law.

The EU will continue its role in the peace process and its engagement in Mindanao. We are confident that the cornerstones of lasting peace will soon be firmly laid down. After all, peace is in the DNA of the EU as manifested in the Treaties of Rome, signed 60 years ago.

Tuesday, March 28, 2017 A11

Edgardo J. Angara

I

N celebration of International Day of Happiness, the United Nations (UN) released its 2017 edition of the World Happiness Report, aimed at providing an alternative approach to measuring development and prosperity beyond purely economic terms like GDP. For this year’s report, the Philippines ranked 72nd out of 155 countries, much higher than our ranking of 82nd out of 157 last year.

This complements the Social Weather Stations survey released in March, which showed that, out of the 1,500 respondents, 91 percent claim to be “very/fairly happy with life, in general”.

While the UN World Happiness ranking is computed using various factors, such as level of GDP, freedom, and life expectancy, among others, our jump in the rankings appears to have come from higher levels of “social support”.

Academicians and authors Terrance Albrecht and Mara Adelman define social support as “verbal and nonverbal communication between recipients and providers that reduces uncertainty about the situation, the self, the other,

or the relationship, and functions to enhance perceptions of personal control in one’s experience”. Social support may be in tangible form, which means the actual delivering of the physical needs and services to recipients.

For the World Happiness Report, social support is basically measured by the respondents’ answers when asked whether they have someone to count on in times of trouble. By that measure, it appears many Filipinos are happy because of support they receive—a result borne out of efforts of their families, the local communities and the State.

To cite an example of State support, the recently approved 2017 General Appropriations Act (GAA)

Up in arms Ernesto M. Hilario

ABOUT TOWN

E

arlier this month the urban-poor group Kalipunan ng Damayang Mahihirap (Kadamay) deviated from its standard practice of organizing rallies in the usual sites—Mendiola, among others—and adopted a more daring protest tactic: occupying still-unfinished government housing projects, at first, in two towns in Bulacan and, lately, in Rodriguez, Rizal.

When told about this, President Duterte said something to the effect that this is pure and simple anarchy, but did not say what move he would take.

The government’s decision to allow negotiations with the militant group identified with the mainstream Left, instead of sending police and soldiers to forthwith evict the settlers from housing built by the National Housing Authority (NHA), could be part of the Duterte administration’s effort to pursue the peace process with the National Democratic Front.

After occupying six low-cost housing projects in Bulacan, Kadamay members attempted on March 18 to occupy vacant houses in two sites in Rodriguez town, Rizal province, but were stopped by the police and National Housing Authority (NHA) personnel.

Four days later, at least 500 Kadamay members tried to reenter the La Solidaridad premises,

barricading a road leading to Eastwood Side subdivision, also in Rodriguez. But policemen and soldiers, assisted by NHA personnel, secured the project sites.

According to Baque Corp., the project developer, the La Solidaridad houses were constructed for soldiers, policemen and firemen.

More than 500 families live in the estates, which have a total of 2,000 houses. At least 243 firemen moved there in April 2015.

Kadamay members have reportedly occupied some 5,262 houses since March 8. But the NHA has issued notices to families occupying a total of 764 houses in Pandi, Bulacan, to vacate the premises, or else face eviction.

The National Union of People’s Lawyers (NUPL) has defended the action of Kadamay members by saying that the right to adequate housing is “universally recognized”. It has also urged an investigation of alleged “corrup-

will finally provide universal healthcare for all Filipinos, as they will automatically be enrolled as a member of PhilHealth upon availment of medical services in government-owned hospitals. Further, this year’s GAA has made sure that tuition will be free in all state universities and colleges (SUCs), empowering the youth to pursue relevant education.

Also, P17.9 billion has been allocated to fund the social pension of indigent senior citizens. This is significantly higher that the P8.7billion social pension funding last year. And, while we have yet to reach a universal social pension system for our elderly, it is important to note that, since the enactment of Republic Act 9994, or the Expanded Senior Citizens Act—which included the social pension provision to indigent senior citizens—there has been a gradual increase in the number for recipients from 2011 to 2017.

The State subsidy for full tuition in SUCs and longer maternity leave periods have already passed the Senate. Meanwhile, the proposed Mental Health Act has also passed on second reading. This measure will make mental-health services a permanent component of the country’s national health system.

A vital measure is the bill institutionalizing a health-care

After occupying six low-cost housing projects in Bulacan, Kadamay members attempted on March 18 to occupy vacant houses in two sites in Rodriguez town, Rizal province, but were stopped by the police and National Housing Authority personnel. tion and criminal negligence” in the NHA that led to the waste of billions of pesos in public funds on abandoned housing units.

How will the Duterte administration now deal with this unarmed uprising by urban-poor families via occupation of government housing projects? Will there be a peaceful resolution of the standoff through negotiations? What if dialogue fails?

Will the police and the military be called in to firmly assert government authority?

Affordable medicines

WE can look forward to lower prices of lifesaving medicines soon.

That is, if a mandatory pricereduction scheme is put in place by the Duterte administration through the Department of (DOH). According to Health Secretary Paulyn Jean Rosell-Ubial, the government is “determined to maximize the instruments provided in the law and undertake reforms to ensure that we bring prices down for consumers overall and increase government subsidy that will ease the burden of patients”. The goal of the mandatory price-reduction scheme is to make

package for the child’s first 1,000 days, considering that a human being’s first 1,000 days is crucial not only for newborns but for mothers, as well. Sen. Sonny M. Angara is the author of the bill.

Also among other youth-friendly bills he filed is the One Family, One Graduate bill, ensuring that every indigent Filipino family will have at least a college graduate.

This goes hand in hand with his other measure that aims to provide discounts on fare, food, medicine and other school fees to underprivileged students in all levels throughout the country.

The above plethora of State subsidies granted only in the last two years must have made Pinoys, indeed, happy.

National Public Radio correspondent Eleanor Beardsley said, “Economists have long understood the importance of going beyond economic data to gauge the true well-being of a society, [as the] GDP alone cannot measure [the] quality of life”. Therefore, this year’s World Happiness Report should serve as a more comprehensive guidebook for our country to build on what is already good—and improve on things that still need change.

E-mail: angara.ed@gmail.com, Facebook and Twitter: @edangara

prices of medicines that are higher in the Philippines, compared to our Asian neighbors, brought down to affordable levels.

The DOH will soon create a council of experts that will review all the prices of drugs in the market and submit recommendations to Duterte for the regulatory pricing.

The agency wants to implement a Maximum Drug Retail Price (MDRP) scheme to reduce costs.

With the prohibitive cost of medicines here, we do not really have a sustainable health system, even as we already benefit from Republic Act (RA) 9502 (or Cheaper Medicines Act) and RA 6675 (Generics Act of 1988) that seek to reduce high drug prices. Generics now account for 65 percent of total pharmaceutical sales, compared to only 40 percent in previous years.

To complement these, the DOH will ensure the wider use and availability of generic drugs through the Philippine Health Agenda Medisina ng Bayan program. This program aims to ensure accessibility to safe, effective and quality medicines for all patients in all government health facilities, with priority to be given to the marginalized, underserved and vulnerable segments of the population.

The 1987 Constitution provides that the State shall adopt an integrated and comprehensive approach to health development. Cheaper medicines are part and parcel of government efforts to ensure health for all Filipinos.

E-mail: ernhil@yahoo.com.

Trump’s top generals ask Congress to join the war on terror

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ecretary of Defense James Mattis and Joint Chiefs of Staff Chairman Joseph Dunford found something constructive to tell senators on an appropriations subcommittee this week, even if it had nothing to do with the Pentagon budget. The two men challenged lawmakers to finally provide a legal basis for the US war against terrorist groups.

It’s something that President Barack Obama was never able to get from Congress. So instead, for his entire presidency, Obama based US counterterrorism efforts abroad mostly on the authorization for the use of force that Congress passed shortly after the September 11 attacks. The logical problem here is obvious: today’s biggest terrorist enemies—groups such as Islamic

State (IS), al-Qaeda in the Arabian Peninsula and Al-Shabaab in Somalia—didn’t exist in 2001. Thus it’s absurd to say they count among the terrorists who “planned, authorized, committed or aided” the September 11 atrocities. Nor are they covered by the follow-on 2002 authorization to invade Iraq.

This is more than legal semantics.

Congress has for too long abdicated its role in American war making, another example of it ceding evermore ground to the executive branch on matters of highest national importance.

And now that President Donald J. Trump is reportedly looking at counterterrorism actions going well beyond the Obama approach —including bringing IS members and other new terrorists to

Guantánamo Bay, and loosening the rules on and broadening the air war in Yemen and Somalia—the legal precariousness poses a tangible threat. Any new detainees brought to Gitmo would have a strong claim to US courts that their imprisonment is illegal, while international authorities could more easily make the case that drone strikes in Somalia or Yemen are war crimes.

Another important, if overlooked, aspect is the effect on the troops. As General Dunford puts it, the men and women in harm’s way “would benefit from an authorization for the use of military force that would let them know that the American people, in the form of their Congress, were fully supportive of what they’re doing out there”.

Of course, there are many issues

to be hashed out on the language of a new measure. Would it have geographic constraints, or allow the US the fight the jihadists wherever they go? Would it be indefinite or have a sunset date of two or three years?

Would it replace the 2001 measure or just augment it? In any case, a new authorization should include requirements for the administration to report regularly to lawmakers and the public on where actions have taken place and what groups have been added to the target list.

But before Congress can even start grappling with these questions, it needs to get serious about its constitutional requirement to get involved. Let’s hope Generals Mattis and Dunford gave lawmakers the boost of courage they needed.

Bloomberg View

2nd Front Page BusinessMirror

A12 Tuesday, March 28, 2017

‘Impeach bid vs VP to derail passage of govt’s priority bills’ E

By Elijah Felice E. Rosales

@alyasjah

ven the head lawyer of President Duterte believes the impeachment of Vice President Maria Leonor G. Robredo will only disrupt the enactment of the Duterte administration’s priority measures.

In an interview with Malacañang reporters on Monday, Chief Presidential Legal Counsel Salvador S. Panelo said Duterte will not interfere in the legal proceedings of the impeachment because he himself does not want the grievance to progress.

“Personally, he [Duterte] doesn’t want it. As far as he is concerned, it will derail the focus of both subjects of impeachment,” Panelo said.

Panelo said lawmakers are concerned that the impeachment proceedings would divert their at-

tention away from more pressing legislative matters.

“Even members of the Congress are saying that if they concentrate on the impeachment, their concern for other measures, which are probably more important, will be affected,” he said.

Earlier, House Speaker Pantaleon D. Alvarez said he is keen on impeaching the vice president.

However, Panelo said it is still up to Congress if it wants to push through with its plan to prosecute Robredo. He said if lawmakers “feel

10 The number of priority bills that Malacañang and Congress want to fast-track for approval

the impeachment is important, then they [should] prioritize it.”

Last week Malacañang and Congress have firmed up a list of 10 priority bills, including the tax-reform measure, to be fast-tracked for approval when lawmakers resume regular sessions on May 2, after a six-week recess.

Apart from the Comprehensive Tax Reform Program, which provides downward adjustments in personal income- and corporate income-tax rates, the Leg-

islative-Executive priority list includes bills on condonation of land amortization and arrears on interest payment, revised base pay schedule of military and uniformed personnel, pension reform for uniformed personnel and the security of tenure bill.

In addition, Senate and House officials also agreed to speed up the passage of “common priority bills” of Malacañang and Congress: on utilization of the coconutlevy fund, Occupational Safety and Health Hazards Compliance Act, National Mental Health Act, Unified National Identification System Act and the National Transport Act intended to address the transporttraffic crisis.

At least four of the 10 agreed priority bills were reported to be “in the advanced stage of the Legislative process”, which means these are now ready for plenary consideration when sessions resume on May 2, including the coco-levy fund utilization, the National Transport Act, Occupational Safety and Health Hazards Compliance Act and the National Mental Health Act.

Uber, millennials drive Asia’s best-performing telecom stock

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ber driver Akhmad Andy Riyanto spends about three times more than the average user on his mobilephone service in Jakarta—and it’s helped PT XL Axiata become Asia’s best-performing telecom stock.

XL Axiata, a unit of Malaysia’s Axiata Group Bhd., has rallied 42 percent this year, the top stock in the MSCI AC Asia Telecommunication Services Index. Investments in a fourth-generation network that overshadowed rivals’ spending and a reputation for providing the fastest data service in Indonesia is bringing in more users. XL Axiata shares ended 0.6 percent higher at 3,290 rupiah in Jakarta, reversing a 2.8-percent drop in intraday trading.

“People no longer want to watch YouTube and have buffering,”XL Axiata President

Director Dian Siswarini said in an interview on March 15. “Customers had just wanted the cheapest price, but right now they are looking for a balance between price and performance. They are more willing to pay.”

While the early years of industry competition were marked by intense price cuts, the focus is now on faster connectivity, said Siswarini, one of three women running a publicly listed company on the MSCI Indonesia Index. Falling revenue from voice calls also means data is the fastest-growing business, she said.

Riyanto, 20, spends about 90,000 rupiah ($6.75) a month on data and voice services, compared with an average 35,000 rupiah spent by users at XL Axiata. Similarly priced packages from Telkomsel and Indosat offer less data.

While XL Axiata claims a 15-percent market share—half the size of its next biggest competitor, Indosat—its users spend an average 40 percent more, according to data from Indosat and Axiata. Telkomsel covers most of the 17,000 islands in the archipelago but XL Axiata has been aggressively expanding its faster network.

Last year XL Axiata more than doubled its data-capable transmitters to almost 47,000 units, compared with a 43-percent increase of third- and fourth-generation networks

by Telkomsel and a 20-percent expansion

by Indosat. Telkomsel has almost 79,000 transmitters at the end of last year, while Indosat has about 32,400 units.

“They have the smallest subscriber base out of the three, so that corresponds to more data capacity per subscriber for XL Axiata,”

said Niko Margaronis, a telecommunication analyst at PT Ciptadana Sekuritas in Jakarta.

XL Axiata has twice as many transmitters per 1,000 customers than its rivals, allowing its network to be less congested.

The company’s data traffic grew 1.6 times last year, contributing to 38 percent of the company’s total revenue, after the carrier offered discounts when it introduced a 4G network. Data traffic growth at Telkomsel was at 95 percent, while Indosat reported a 1.4 times jump last year. The aggressive expansion helped boost XL Axiata’s sales per customers, overtaking Indosat. The company’s average revenue per user grew 3 percent last year to 35,000 rupiah a month, while Indosat’s fell 3 percent. Market leader Telkomsel’s average user revenue grew by 5 percent in 2016. Bloomberg News

www.businessmirror.com.ph

CEBU PACIFIC EYES FLIGHTS TO EXOTIC DESTINATIONS IN PHL

By Ma. Stella F. Arnaldo

@akosistellaBM Special to the BusinessMirror

W

ITCHES can finally ditch their brooms when flying to Siquijor and Masbate, once Cebu Pacific Airways launches its scheduled flights to those provinces.

In a statement from the Department of Tourism (DOT), Xander Lao, president of Cebgo, a wholly owned subsidiary of the flag carrier, said the airline is eyeing the opening of new routes to Siquijor and Masbate “due to insistent demand”.

Both provinces, famous for witchcraft, sorcery and elementals, are among the exotic destinations in the Philippines, with their immaculately clean waters and white-sand beaches. Tourists especially throng Siquijor during Holy Week during an annual festival that gathers witches, herbalists and shamans who cook up their healing potions or reenergize amulets.

Masbate, also famous for its aswang (shape-shifting monster) and fairies, is acknowledged as the “cattle capital of the Philippines”, and has a widely anticipated Rodeo Festival held every third week of April. A number of its residents also make a living from gold mining.

Data from the DOT show visitor arr ivals in Siquijor pegged at 61,217 in 2015.

For Masbate, tourist arrivals reached 40,651 in the first half of 2016.

Lao disclosed the new flights at the launch of the airline’s new routes in Cagayan de Oro on March 15 at the Laguindingan Airport, Misamis Oriental. The new routes connect Cagayan de Oro and Tagbilaran in Bohol, and Cagayan de Oro and Bacolod City in Negros Occidental.

“This is just the start of our expansion as tourism and aviation continues to grow,” he stressed.

For her part, DOT Undersecretary for Public Affairs Katherine de Castro welcomed the launch of more air routes, which is expected to enhance the air

connectivity of the Philippines with the rest of the world, as well as boost foreign and domestic visitor arrivals.

“Unfortunately, we do not enjoy cross-border travel like they do in other regions in the world, that is why we are largely dependent on air connectivity between our gateways to tourist destinations,” she noted.

But she stressed the two new routes of Cebu Pacific “will enhance the ‘cluster’ or ‘regional tourism’ concept, where visitors who want to go wild-water rafting in Cagayan de Oro, for instance, can quickly fly to see the Chocolate Hills and tarsiers in Bohol.”

Cebu Pacific will fly four times weekly between Cagayan de Oro and Tagbilaran, and three times weekly between Cagayan de Oro and Bacolod.

These routes are in addition to the carrier’s flights to and from Iloilo, Cebu and Davao.

Traveling between the Visayas and Mindanao in the past usually meant land trips that would take hours, then getting on roll-on/roll-offs, or ships which make overnight passages.

DOT Region 10 Director May S. Unchuan said the resulting influx of domestic and international visitors to Cagayan de Oro—one of Mindanao’s “best-kept secrets”—will economically benefit the marginal sectors of the tourism industry, such as the indigenous tribes of Mindanao.

She also assured guests of a memorable and safe visit aside from the “unbelievable hospitalit y of the people” in the region that includes Misamis Oriental, Misamis Occidental, Bukidnon, Camiguin, Lanao del Norte and the cities of Cagayan de Oro, Iligan, Tangub, Ozamiz, Oroquieta, El Salvador, Gingoog, Malaybalay and Valencia.

“We are working closely with our travel and tour operators to offer more competitive and attractive packages to diverse target markets so a lot more people would be enticed to come to our region,” she added.

Russian loans eyed for infra projects

By Cai U. Ordinario

I

@cuo_bm

f Russia can lower its interest rates for loans that will be channeled to infrastructure projects, then it can be another source of funding for the Duterte government’s planned infrastructure program, according to the National Economic and Development Authority (Neda).

Neda Secretary Ernesto M. Pernia said Russia does not extend official development assistance (ODA) loans, which carry concessional terms, and that it lends commercially. “If they lower their interest rates to levels on a par with those offered by China, which is between 2 percent and 3 percent, then that will make Russia a viable source of loans,” Pernia added.

Pernia said if it were not for the cost, the country could explore Russian funding, especially for steel bridges and railways, where they have a competitive advantage.

However, this does not prevent Russia from participating in projects by bidding for supply contracts and partnering with Filipino firms for projects that will be undertaken via the public-private partnership scheme. Apart from warming up to Beijing, Manila is also reaching out to Moscow not only for traderelated concerns but also to explore the possibility of partnerships for infrastructure projects.

“They say they have the bragging rights on steel bridges and also the building of railways. The only problem is [it’s] all [in] commercial terms, they do not have ODA. [They do not have] sovereign arrangements,” Pernia said.

On the trade side, China will buy more than $1 billion worth of farm products from the Philippines.

Russia, for its part, has indicated that it can ramp up the value of its agricultural imports from the Philippines to $2.3 billion.

See “Russian,” A2

CHILLERS OUT Mitsubishi Electric, through its local affiliate International Elevator and Equipment Inc. (IEE), brings Italian aircon brand Climaveneta to the Philippines. With the entry of Climaveneta in the Philippine market also comes the launch of the brand’s maiden product offerings, the Magnetic Levitation oil-less water-cooled and air-cooled chillers. Present during the news conference in Makati are (from left) Climaveneta Co. Ltd. Sales Support Manager-Chat Union Shamsul Fazri Ramli, Mitsubishi Corp. Manila Machinery/Global Environment and Infrastructure Business Division Head Itsuo Arakawa, IEE President Ramoncito A. Ocampo, IEE Vice President Melecio B. Vicencio and IEE Assistant Vice President Francisco T. Sarrondo. ALYSA SALEN