Issuu

United nations

2015 environmental Media Award leadership award 2008

BusinessMirror A broader look at today’s business

www.businessmirror.com.ph

Thursday, March 30, 2017 Vol. 12 No. 169

D.T.I. chief SAYS MARKET FORCES SHOULD DICTATE COST OF PRIME GOODS

Lopez wants govt to stop setting SRPs T By Catherine N. Pillas

@c_pillas29

he government is giving up its power to set suggested retail prices (SRPs) for prime commodities—often a contentious matter between businesses and regulatory agencies—as long as industry competition is healthy.

2016 ejap journalism awards

business news source of the year

P25.00 nationwide | 5 sections 28 pages | 7 days a week

the broader look

JAO 1, S. 1993

The joint administrative order that mandates concerned agencies to issue SRPs when necessary

“We’ll let the market decide. Setting of the SRPs is a company decision; and supermarkets, more often than not, follow the SRPs and even price them below the suggested

Nathanwallen | Dreamstime.com

media partner of the year

Continued on A2

PHL weaves growth potentials of Manila hemp »A6-A7

This one’s for the books: BDO branch in Cebu paid only P35 in taxes for 2015

protect benham rise Sen. Sherwin T. Gatchalian (left), chairman of the Committee on Economic Affairs, questions National Security Council Adviser Hermogenes C. Esperon Jr. on the actions needed to protect the country’s interest in Benham Rise during the joint public hearing on Senate Bill 312, which seeks to create the Benham Rise Development Authority. ROY DOMINGO

Bello’s travail: Cracking a nut For frustrated billionaires, called ‘contractualization’ the Philippines isn’t fun laborem exercens

Rene E. Ofreneo

fter nine months of unresolved tripartite debates, Secretary Silvestre H. Bello III issued Department Order (DO) 174. The Order has pleased no one. The trade unions, which have been batting for the total prohibition of “contractualization”, were the most unhappy. The Order looks like a renumbered DO 18-A (issued by the Aquino administration in 2011), which the unions want fully replaced. DO 174, like DO 18-A and the earlier DO-18-02 (2002)

and DO 10 (1997), more or less reaffirms the legality of job and service contracting. However, DO 174 tries to tighten the rules governing the operations of manpower agencies and imposes higher renewal/ registration fee (from P25,000 to P100,000) and proof of higher capitalization (P5 million). Rene Magtubo, the spokesman of a labor coalition opposing the Order, claims DO 174 does not “cure” the “epidemic” of contractualization. The unions wonder why the good secretary has failed to exercise his power under Article 106 to “strictly prohibit” the following: labor-only contracting; contracting out jobs performed by union members and regular employees; fixed-term employment; contracting out regular jobs or functions as defined by the Labor Code; and agency hiring. Continued on A11

PESO exchange rates n US 50.1800

By Andy Mukherjee

Bloomberg

ne of the first things President Duterte’s economic team did last September, three months after the drugsbusting former city mayor became president of the Philippines, was call for bids to upgrade and operate the Ninoy Aquino International Airport (Naia). From San Miguel Corp. (SMC) and Ayala Corp. to Metro Pacific Investments Corp. and Aboitiz Equity Ventures Inc., the $1.5-billion public-private partnership is the kind of big-ticket infrastructure project the country’s conglomerates have been waiting for for years. Besides, it’s critical for the booming Philippine economy to get a roomier airport, given the International Air Transport Association’s forecast of 140 million passengers by 2035,

more than double current levels. Yet, it’s unclear if Duterte will actually upgrade the Naia, or back SMC’s plan to build a brand-new, $14-billion, six-runway facility in Bulacan. He may even choose to go with rival Henry T. Sy Sr.’s SM Group, which has teamed up with the Tieng brothers to construct an air and seaport at Sangley Point, south of Manila. This last project has the added attraction of having a Chinese company onboard. Duterte wants to bury a territorial dispute with its powerful neighbor. Hitching his country to Beijing’s One Belt, One Road bandwagon—as long as China Communications Construction Co. bears a chunk of Sangley Point’s $20-billion cost— isn’t a bad option. With so much riding on Duterte’s final decision, investors shouldn’t be surprised if the President See “Billionaires,” A2

branch of BDO Unibank Inc., the country’s biggest bank owned by tycoon Henry T. Sy Sr., has been accused of tax evasion by Cebu City Mayor Tomas R. Osmeña for paying only P35 in business taxes for 2015. Osmeña has already issued an order, dated March 22, 2017, to the branch manager to explain why it should not be closed immediately. “Do you know how much the BDO branch in Jones paid in business taxes for 2015? P35. Not P35 million. Not P35,000. P35,” Osmeña said in his Facebook post. He referred to the BDO branch on Osmeña Boulevard, formerly named Jones Avenue, the main thoroughfare linking the city’s central business district and uptown areas. “BDO is run by tax evaders and law breakers. They will be shut down,” Osmeña said in post that has gone viral in Cebu. It already has 19,000 likes and 10,858 shares since last weekend. He also uploaded a copy of an order he issued, dated March 22, 2017, to show cause in five days “as to why the City of Cebu shall not order the immediate closure of BDO-Cebu Osmeña branch”. Addressed to Branch Manager Pilarino M. del Rio, records from the Business Permit and Licensing Office, the Mayor’s Office and the Treasurer’s Office showed that the

OSMEÑA: “Do you know how much the BDO branch in Jones paid in business taxes for 2015? P35. Not P35 million. Not P35,000. P35.”

BDO branch only declared a gross income of P6,986 in calendar year (CY) 2016. According to the order, this amount was reflected in its CY 2016 Business Permit 1161. The same amount was reflected in its application for renewal CY 2016 and CY 2017. The mayor said the branch reported 11 employees, composed of a manager, a cashier and nine employees. “By no stretch of the imagination would the amount of P6,986, or a gross income of P582 a month, be enough to cover the employee salaries…and other overhead expenses,” Osmeña pointed out. Because of these reasons, he accused the branch for falsifying its application and evading payment of the correct taxes. Earlier, bank officials had maintained that they complied with the legal requirements.

n japan 0.4516 n UK 62.4841 n HK 6.4599 n CHINA 7.2915 n singapore 35.9018 n australia 38.3024 n EU 54.2647 n SAUDI arabia 13.3814

See “BDO,” A2

Source: BSP (29 March 2017 )

A2 Thursday, March 30, 2017

BMReports BusinessMirror

Lopez wants govt to stop setting SRPs Continued from A1

schedule of the manufacturers,” Trade Secretary Ramon M. Lopez said on the sidelines of the closing ceremony for the European Union’s Trade Related Technical Assistance 3 on Wednesday. The Department of Trade and Industry’s (DTI) authority to issue the SRPs is found in its Joint Administrative Order (JAO) 1, Series of 1993, with the departments of Agriculture, Health and Environment and Natural Resources issued in 1993, which states: “The implementing agency may, whenever necessary, issue

Billionaires. . . Continued from A1

chooses to do nothing. The Aquino airport upgrade was put on hold in February. And this is what is making billionaires anxious. From airports to energy—where the country has, in the words of one conglomerate, gone “hog wild” on renewables—businesses are waiting for clear policies, so they can place their bets accordingly. Infrastructure in the Philippines is all about one billionaire trying

SRPs for certain basic necessities and/or prime commodities for the information and guidance of concerned trade, industry and consumer sectors.” The JAO serves as the implementing rules and regulations of the Price Act, according to a competition report prepared by the Department of Justice in 2015. These agencies, including the Department of Energy, are empowered to issue SRPs after conducting a review on the manufacturer-set prices. Lopez said he intends to review the legislation that grants this authority. “I’m telling the Philippine

Competition Commission, there should be no ‘approval’ process in the DTI when it comes to SRPs,” Lopez said. “If we observe in an industry that they all increased at the same time, of course, we’ll call their attention. We still have to review industries that are dominated by a few players.” Manufacturers of basic goods and prime commodities are enjoined to submit t heir pr ice sc hedu les to t he DT I ’s Consumer Protection Group for the monitoring of their price movements. Although not explicitly stated in the law, these prices undergo a review process, wherein

to beat another. A consortium of Ayala and Aboitiz won the right to build and operate an expressway in 2014, but Ramon S. Ang’s SMC whined about a typo in its bank guarantee. Former President Benigno S. Aquino III was forced to do a rebid, which SMC then lost to Manuel V. Pangilinan’s Metro Pacific. The government earned $300 million more than it would have by sticking with the original winner. Still, the 47-kilometer road won’t be ready until 2020 and traffic congestion in Manila extracts a price on the economy every day. Other shortages will take even

longer to clear. Sen. Francis G. Escudero supports Duterte’s decision to build bridges. It fills an obvious need in a nation of more than 7,000 islands, he said. Even so, the politician wonders how long it will take the task to get done when even feasibility studies and firm cost estimates aren’t available yet. Dithering on urgently needed infrastructure has proved very expensive for the Philippines, and the longer Duterte delays hard decisions, the more worrisome the situation will get. Not just for jittery billionaires, but also for investors.

the DTI decides if the modification in prices is justified. The Executive department then issue approved SRP schedules, which serve as pricing guides for supermarkets and other retailers. The DTI earlier justified the issuance of the SRPs as a consumerprotection tool—essentially to prevent profiteering on the part of retailers, and to set a guide for consumers as to the range of reasonable price hikes. But Lopez said that, as long as there is competition in commodities and price segments, he would let market forces dictate the movement of prices.

BDO. . .

Continued from A1

They succeeded in securing a temporary restraining order, after the mayor had threatened to close down another branch for paying only P2,000 in business taxes. “We have complied with the requirements but despite that, the city government has refused to accept payments for local taxes and fees, and issue the permits contrary to what they did in the past,” BDO said. Last week, however, Osmeña discovered that another branch paid only P35. The chief executive of BDO, Nestor Tan, had said the bank is planning to put up 50 to 70 branches this year. He said most of these branches would be built outside the National Capital Region.

www.businessmirror.com.ph

Rice info. . .

“This is something we don’t want our stakeholders to miss—to take advantage of the technology we have. For example, there’s an incoming typhoon, through this, we could see the path of typhoon, and we would learn immediately the potential damages that it could cause,” Cayanan said. “So, now, if the crops that are going to be affected by typhoon are mature enough for harvest, then we can deploy some postharvest facilities to save them.” Cayanan also said Prism would not replace the role of the PSA as the government’s primary source for palay data, but instead would serve as a complementary to it. “The message was very clear. It was highly noted that the PSA, the DILG [Department of the Interior and Local Government] and other major components [of rice sector] already agreed that they will coordinate—not to compete or contrast, which would be more appropriate—but to coordinate to come up with data and information needed by the farmers,” Cayanan said. He disclosed the budget for the creation of Prism is around P25 million to P35 million. Cayanan estimated that it would be the same amount of funding needed to sustain and further more improve Prism. “Until next year it will be having a budget coming from PhilRice. But as it progresses, we

will have to find source of sufficient budget for Prism, which could come from the GAA [General Appropriations Act],” Cayanan said. Dr. Eduardo Jimmy Quilang, Prism project leader and PhilRice deputy executive director for research, said it took them at least four years to develop Prism from 2013 to 2017. Quilang said Prism would also release monthly and quarterly reports on the country’s rice production. “Prism has an 85-percent accuracy assessment of the products we produce, like the rice map. We have field implementors who do ground validation,” Quilang said. “For example, if a certain area is indicated as a rice farm in the Prism, the personnel would go there. If they see that rice is not really planted in that specific area, then they would put a red mark on it in the Prism data base. So, that’s how we measure our accuracy,” Quilang added. Earlier, Agriculture Secretary Emmanuel F. Piñol said his department is having difficulties crafting programs for the country’s cash crops due to the lack of “reliable and accurate” agricultural data and statistics. “I believe we cannot do sound planning if the data that we use and the statistics we rely on are not accurate.” Piñol said he has ordered the nationwide validation of all agricultural data, adding that the current and available agricultural data and statistics in the country are “inaccurate and outdated”. “In fact, we’re currently designing a program wherein we will really go down to the village level, and we are going to use drone technology for the data collection.”

BDO is eyeing a 10-percent growth in net profit in 2017 to P28.810 billion, from the 2016 projection of P26.129 billion, amid the robust domestic economy that would sustain the expansion of its core businesses. BDO posted a net income of P19.321 billion in the first nine months of 2016. BDO expects net interest income to grow 16 percent this year to P76.556 billion, from the projected P65.780 billion in 2016. Total assets are expected to reach P2.6 trillion this year. BDO has more than 1,000 operating branches and over 3,000 automated teller machines nationwide. It also has a branch in Hong Kong and 26 overseas remittance and representative offices in Asia, Europe, North America and the Middle East. Acting on BDO’s application for issuance of a writ of preliminary injunction, a

local court issued an injunction order on March 28, enjoining the Cebu City mayor from performing any act that leads to and/ or causes the closure of BDO’s branches in Cebu City, including requiring information or document not prescribed by existing law and regulations, as well as making statements similar to those made in the newspapers. “With this injunction order, BDO looks forward to having its pending businesspermit applications in Cebu City be acted upon by the city mayor, considering that BDO has submitted all the required documents needed by the city government. BDO assures its Cebu City branch personnel and clients that it has complied with legal requirements in ensuring continuing business and uninterrupted service in Cebu City, and this injunction order is an affirmation of its compliance,” BDO said in a statement.

Continued from A12

news@businessmirror.com.ph

The Nation BusinessMirror

Making dreams come true for children of military heroes

ANCE was only 4 years old when his father, Army Sgt. Narciso Lawrence Layug,

died. He remembers how his mother broke the news to him, “Anak, si dad nandun na sa heaven [Son, daddy’s in heaven.]” To which he replied, “Sundan natin, bisitahin natin siya. Malapit lang naman iyon, at may pamasahe tayo [Let’s visit him. It’s not that far a place, and we have money for the commute.]” Years later, the family left the province for Manila. As they rebuilt their lives in the city, mother-and-son became the best of friends, and helped each other in running the household. Lance is only one of the many children supported by Help Educate and Rear Orphans (Hero) Foundation—a nonprofit organization that provides educational assistance in the form of stipends to children of fallen soldiers. To help support military families, Fort Bonifacio Development Foundation Inc. (FBDFI), Bonifacio Global City’s social responsibility arm, and the Bonifacio Global City Estate Association recently turned over P1 million and P200,000 worth of cash

donations, respectively, to the Hero Foundation. “Wars, insurgencies and natural disasters keep military families apart. When an unfortunate incident leaves servicemen killed or incapacitated in the line of duty, their families are equally left impaired. The surviving parent and children are left to deal with bouts of emotional and financial stress, and their future suddenly becomes unstable. This is why we have partnered with the Hero Foundation to help some of the children have a more secure tomorrow through education,” said Aileen Zosa, executive vice president of the Bases Conversion and Development Authority (BCDA) and vice chairman of FBDFI. Zosa explained that the Hero Foundation’s cause is so close to home, because BGC, now a vibrant business and lifestyle district, was once a military base. “While BGC has evolved by leaps and bounds through the years, we acknowledge that what once stood here is an integral part of the city’s history. We feel that by assisting the Hero Foundation, we are honoring this side of our past.” Claudeth Mocon-Ciriaco

Editor: Dionisio L. Pelayo • Thursday, March 30, 2017 A3

‘Philippines’s sovereignty over Benham Rise not threatened’

By Azer N. Parrocha | Philippines News Agency

ATIONAL Security Adviser Hermogenes C. Esperon Jr. on Wednesday said there was no threat from other nations on the sovereignty of the Philippines over Benham Rise.

In a Senate committee hearing on the bill creating the Benham Rise Development Authority (BRDA), Esperon said that, although he did not see current threats, he did not rule out possible threats in the future. “There could be [potential threats] but we don’t see any right now. Pronouncements of the [Ministry of] Foreign Affairs of China are saying that they recognize our sovereign rights over Benham Rise,” Esperon told Sen. Sherwin T. Gatchlian, chairman of the Senate Committee on Economic Affairs. To recall, the Department of National Defense previously reported that a Chinese survey ship was seen plying the waters of Ben-

ham Rise for around three months last year. Chinese Embassy, however, denied the ship intentionally sailed to Benham Rise, and said it simply passed on international waters, noting China had the right of freedom of navigation. Esperon said, at present, the government could not determine if the Chinese research ship conducted researches in the seabed. However, the Department of Foreign Affairs (DFA) has already sent a note verbale to China. Esperon explained China had the right to pass through Philippine waters, but only in the name of freedom of navigation and innocent passage, which he defined as

“passing from your point of origin to your point of destination by the safest means or route”. Although supportive of the proposal to create a BRDA, he said, first and foremost, the government should know “what we really have in the area”. “…The first priority should be organizing maritime, scientific researches in the area. Since we do not know yet what is in the area. Let us strengthen our research capabilities,” Esperon said. He, meanwhile, suggested the creation of a Department of Maritime Resources and Ocean Affairs to have a single body to tackle these issues. DFA Acting Executive Director Maria Lourdes Montero also denied there was a breach in protocol that took place. She revealed the request of China to conduct scientific research in Benham Rise in 2015 was rejected. “On the recent movement of Chinese vessels, we are not sure as to the conduct of activities there. We do not have the actual details. At this point, given that we don’t have the exact information, I would not be in the position to say that a breach has actually occurred,”

Montero said. “If I may say, ‘breach’ may be a strong word, because we don’t have the complete details. We would like to note that the ocean is quite vast, it’s divided in different zones… they can exercise such as freedom of navigation or innocent passage,” she added. Montero said one recommendation she could give to improve process of the Philippines in undertaking research in the area is to build the capacity of the DFA’s technical agencies. “…We have very good scientists, we have very good technical people, but they share a common experience with respect for the need for resources, equipment, training and additional personnel. We do rely a lot on our technical agencies. Our recommendation is really to somehow strengthen our technical agencies,” Montero said. Benham Rise is a 13-millionhectare underwater landmass that is about 250 kilometers off the coastline of Aurora province. It officially became part of the Philippines in 2012, when the United Nations Commission on the Limits of the Continental Shelf ruled that the Benham Rise area fell under its exclusive economic zone.

Group asks govt for stricter maritime security Do not lower age of criminal By Marvyn N. Benaning Correspondent

HE Duterte administration should include the strict implementation of the policy on International Ship and Port Facility Security (ISPS) in its war against illegal drugs and terrorism. This is a necessity, since the Philippines is an archipelago and 90 percent of trading is being done through various ports all over the country. Capt. Jesser Cordova, National Maritime Safety and Security Agency (NAMSSA) Inc. director general, made the statement following the abduction of the captain and the chief engineer of the passenger carrier Super Shuttle Roro 9 on March 23 in General Santos City by alleged Abu Sayyaf bandits. Cordov a sa id t h i s i nc ident

could have been prevented if a maritime-security plan had been implemented in a l l ships and ports, noting such a plan had been largely neglected. “There is a loophole in the of security plan being implemented by the government, because international criminals, like drug smugglers and peddlers, terrorists and the like, utilize most of our maritime ports, vessels and the huge maritime territory of the country in committing their crimes,” Cordova said. He explained maritime-security problem in the country can be resolved if the government will push for the implementation of the two executive orders issued by then-Presidents Gloria Macapagal-Arroyo and Benigno S. Aquino III. He said that in 2004, Arroyo s i g ne d E xe c ut ive O rde r ( EO) 311, “Designating the Office of

Transport Security as the Single Authority Responsible for the Security of the Transportation Systems of the Country, Expanding its Powers and Functions and for other Purposes.” Section 1B of the EO clearly states that in the case of sea transport and maritime infrastructure, by ensuring that the International Maritime Organization-International Ship and Port Facility Security Code (IMO-ISPS) must be implemented, and that a National Security Program for Sea Transport and Maritime Infrastructure is formulated, developed and implemented. In 2016 Aquino issued EO 197, which is an expounded version of EO 311, stating that the Philippines is a contracting party to the 1974 International Convention on the Safety of Life at Sea (Solas), as amended, including Chapter XI-2

thereof, on Special Measures to Enhance Maritime Security, which adopts the ISPS Code, which is an international framework through which governments, shipping companies, and port authorities can cooperate to detect and deter acts that threaten security of the maritimetransportation system. Cordova stressed that a continuous and sustainable effort on the strict implementation of the ISPS Code and the high awareness among ports and personnel nowadays, as well as in the coming years, will assure safe and secured port facility. He added that sustained effort on the strict implementation of the ISPS Code and the high awareness among ports and personnel nowadays, as well as in the future, are needed to assure safe and secured port facilities and vessels.

Floirendo: I’m not involved in plot to unseat Alvarez

DP-Laban Rep. Antonio Floirendo Jr. of Davao del Norte on Wednesday dispelled rumors that he is plotting to unseat Speaker Pantaleon D. Alvarez Jr. In a statement, Floirendo, son of the late banana magnate Antonio Sr., denied that he was behind any plot to oust Alvarez as Speaker and have him replaced by Lakas-Kampi Rep. Gloria Macapagal-Arroyo of Pampanga, who was removed as deputy speaker on March 15 for voting against the death-penalty bill. “I never attempted to talk to Arroyo nor would I ever support any plot to oust Speaker Alvarez, who, in the first place, is a good friend of mine and whom I fully supported during the last election and in his bid for the speakership,” Floirendo said. “If ever there is an iota of truth to the ouster plot, I am 100 percent not a part of it,” he added. Alvarez and Floirendo are allies of President Duterte. Floirendo was Duterte’s biggest campaign contributor in the May 2016 elections, with a contribution amounting to P75 million. The rift between the Duterte al-

lies developed when Alvarez filed a graft complaint against Floirendo before the Ombudsman for his alleged unconstitutional “business interest” over his banana company Tagum Agricultural Development Co. Inc. (Tadeco). Alvarez also filed House Resolution 867 calling for a congressional inquiry into the allegedly grossly disadvantageous 25-year lease contract signed by the Bureau of Corrections and Tadeco. Floirendo said he considered Alvarez a “good friend” and the beef between them could just be a “brotherly misunderstanding” that could be quickly resolved. Floirendo, however, admitted he was hurt by the Speaker’s moves against him. “Admittedly I am hurt by the action of Speaker Alvarez against me. It not only affects me, but also my family, as well as the people of Davao del Norte. But that’s politics. What is important is that I know deep down my conscience that I have not done anything wrong nor have I committed any criminal act,” he said.

BETTER EQUIPPED

The Philippine Red Cross recently received two new ambulances from Ayala Corp., Ayala Land Inc. and Globe Telecom. The vehicles were turned over to humanitarian group at the PRC Tower compound in Mandaluyong City. From left, Ayala Foundation President Ruel Maranan, PRC Chairman Richard Gordon, Globe Chief Human Resources Officer Renato Jiao and ALI External Affairs Head Dindo Fernando.

“I welcome any complaint to be filed against me and I am ready to face them with a clear conscience,” he added. Alvarez, for his part, is unperturbed by alleged threats to unseat him as speaker, saying that “they can pull the trigger and give their best shot”. Rumors about unseating Alvarez

flared up when the House leadership stripped lawmakers of their committee and deputy speaker posts for voting against the death-penalty bill. Majority Floor Leader Rodolfo Fariñas on March 15 declared vacant the posts of Arroyo and 11 other committee chairmen who voted against the deathpenalty bill. PNA

responsibility, UN child-rights envoy asks Senate, House

HE United Nations (UN) had sent a letter to Senate President Aquilino L. Pimentel III and Speaker Pantaleon D. Alvarez Jr., urging both leaders of Congress not to lower the minimum age of criminal responsibility (MACR), as this move would only further expose children to violence in prison facilities and, instead, lead to further reoffending. In a letter, Marta Santos-Pais, UN Special Representative of the secretary-general on violence against children (VAC), urged Alvarez and Pimentel to focus on improving the implementation of the country’s Juvenile Justice and Welfare Act or Republic Act 9344. Santos-Pais also cited the JJWA as the basis to advance the implementation of the commitments made in the Association of Southeast Asian Nations’s Regional Plan of Action on the Elimination of VAC in 2015. “Research shows that lowering the age of criminal responsibility and punitive criminal justice to youth offenses has negative consequences; including risks of being used in criminal activities at increasingly younger ages; compromising completion of education and access to opportunities for vocational skills; and stigmatizing them as criminals; and exposing them to further violence, neglect and social exclusion,” Santos-Pais said. The House of Representatives’s Sub-Committee on Judicial Reforms under the Committee on Justice is drafting a bill to lower the MACR from 15 to 9. Child-rights non-governmental organizations and advocates, along with some members of the House and the Senate and the government’s Juvenile Justice and Welfare Council, oppose the move, saying law enforcement should focus on cracking down on syndicates and parents who exploit children to commit crimes. United Nations Children’s Fund Philippines Representative Lotta Sylwander said, “Why penalize children who are themselves victims and do not have the maturity to discern right from wrong? In any case, the percentage of children involved in crime is less than 2 percent, punishing and incarcerating children is not going to have any impact on crime reduction. This will only condemn and damage the children for life, instead of giving them a chance to reform.” “The underlying and structural factors that bring about child abuse, exploitation and violence must be addressed first. We need to invest in the full implementation of the juvenile justice law, which is a much commended law. Then there should be support for parenting programs to deter at-risk children from committing crimes.” The UN envoy cited research in neuroscience that shows “the human brain is not fully developed in its capacity for cognitive functioning and emotional control until well into the period of young adulthood. When we expose children to toxic stress or violent environments—such as in prisons—this will have irreversible damages to their brain architecture and create high long-term financial costs for families and the government.” This was echoed by Liane Alampay of the Ateneo de Manila Psychology Department and of the Psychological Association of the Philippines. Alampay noted here is a difference between children’s knowledge of right and wrong; and in acting in accordance with that knowledge and of what the consequences of their actions would be. “Adolescents below age 15 tend to act on their emotions—including fear, hunger, peer pressure, threats and desperation—which is why they are pressured to commit crimes by adults, like syndicates or even their parents.” Claudeth Mocon-Ciriaco

The Regions

A4 Thursday, March 30, 2017 • Editor: Efleda P. Campos

BusinessMirror

Thousands of drug reformists attend symposium in Bulacan By Catherine Joy L. Maglalang | Correspondent

ITY OF MALOLOS—At least 4,300 drug reformists attended on Wednesday a symposium on illegal drugs in the Bulacan Capitol Gymnasium in this city. The symposium, dubbed “Kampanya para sa Pagsugpo sa Ipinagbabawal na Gamot”, was sponsored by the provincial government of Bulacan, Provincial Peace and Order Council, and the Provincial Anti-Drug Abuse Council. Gov. Wilhelmino Sy-Alvarado; Vice Gov. Daniel Fernando; Bulacan Philippine National Police (PNP) Director Romeo Caramat Jr.; Agnes Alipio, senior health program officer of the Department of Health (DOH) in Central Luzon; Rowena Tolentino and Rhealyn Manansala of the Technical Education and Skills Development Authority (Tesda)-Bulacan; Department of

the Interior and Local Government Director in Bulacan Darwin David; League of Municipalities of the Philippines Bulacan Chapter President Ambrosio Cruz Jr.; Provincial Administrator Eugenio Payongayong; and other local officials attended the symposium. Caramat said police operatives already visited 31,360 houses in the whole province from July 1, 2016, to March 26, 2017. They also revisited 1,501 houses with 37,369 surrenderees, of whom 36,357 are users and 1,012 are pushers. The figures represented 1.13 percent of the total population. He said the city of Malolos had the most number of

surrenderees, while the city of San Jose del Monte had the least. Caramat said killing is a misconception in the war against illegal drugs. He said added that, with the huge number of reformists, the jails in the province suffer from overcrowding. He said Aaron Aquino, PNP director in Central Luzon, wants to come up with Bahay Pagbabago reformation centers in the 21 municipalities and three cities in the province of Bulacan with the help of every local chief executive and chief of police. He added there are 25 Bahay Pagbabago in the province, including the one inside the provincial headquarters. Caramat said there were 1,520 graduates of Bahay Pagbabago, with 66 drug reformists currently enrolled in the reformation program. Reformists under the program are entitled to free food, water and electricity. He added every reformist is prohibited from smoking, drinking alcoholic beverages and using gadgets while undergoing the reformation program. Caramat said all reformists con-

duct a morning exercise; undergo moral-recovery sessions and training under Tesda on livelihood programs, such as welding and massage-therapy courses; basket, door mat and soap-making courses; and receive livelihood projects, such as fishball and lugaw food carts. He said they also benefit from free medical checkup conducted by the DOH. Caramat said 420, or 28 percent, of the 1,520 graduates from the Bahay Pagbabago program are employed. He added some local government units provided scholarship for family members of reformists to be granted next school year. Alipio said the phases of addiction includes abstinence, experimentation, recreational, occasional and habitation, among others. She said the signs of drug abuse are change in clothing and appearance, new peers, mood swings, change in working or schooling attitude or habit, and strong craving for prohibited drugs. She said addictive substances include stimulants, such as shabu, to feel hyperactive; depressants, such as heroine and alcohol, among others.

news@businessmirror.com.ph

CPP to NPA: Intensify war vs military By Rene Acosta @reneacostaBM

HE New People’s Army (NPA) has been ordered by its political wing to intensify and accelerate its war against the government, noting President Duterte has yet to deliver his promised change after eight months in office. The order was issued by the Communist Party of the Philippines (CPP) to the NPA on the latter’s 48th anniversary on Wednesday. It came in the aftermath of a statement by the CPP about its plan to declare a cease-fire at the end of this month. “Carry out extensive and intensive guerrilla warfare on an ever-widening and deepening mass base and toward developing fullscale guerrilla warfare,” the CPP, through its central committee, ordered the rebels. “Accelerate the recruitment of armed personnel in all regions across the entire archipelago. Recruit large numbers from the educated youth and working class to become cadres and political officers in the New People’s Army,” it said. T he CPP a lso ordered t he rebels to increase their fighters in villages and build guerrilla units in the municipal level, while expanding, consolidating and building new guerrilla fronts around the country.

The government and the rebels, through the National Democratic Front of the Philippines (NDFP), are set to resume peace talks in the Netherlands next week. Negotiations would focus on socioeconomic reforms and, possibly, even a bilateral cease-fire. The CPP said it will declare a cease-fire for its fighters in preparation for the talks, but Duterte said it may not be reciprocated by the government, unless it is put into writing with its parameters. He said the rebels must stop their attacks and collecting taxes. The CPP claimed Filipino people are “becoming increasingly restive over the unfulfilled promises of Duterte” as they demand “national sovereignty, industrialization, genuine land reform, an end to bureaucratic corruption and widespread poverty and oppression.” It said that, while the rebels are willing to engage the Duterte administration in talks and forge a peace agreement, they are also aware of the dangers of “pacification, especially as a result of a prolonged cease-fire without substantial gains for the Filipino people.” Me a nw h i le, t he m i l it a r y, through its spokesman Brig. Gen. Restituto Padilla, has warned soldiers to be on alert against any possible attacks by the rebels in marking their anniversary.

SC orders judge dismissed in frat case resulting in 2012 death of neophyte DENR, LGU, mining firms roll out integrated area devt plan for Masbate town By Joel R. San Juan @jrsanjuan1573

HE Supreme Court (SC) has ordered the dismissal from service of a Cavite trial court judge after being found administratively liable for dismissing the case against 10 members of the Lex Leonum fraternity involved in the fatal hazing of San Beda law student Marc Andrei Marcos in 2012. Ordered dismissed from the service, as well as the forfeiture of retirement benefits, was Judge Perla V. Cabrera-Faller, presiding judge of Regional Trial Court Branch 90, Dasmariñas City, Cavite. The Court affirmed findings of the Office of the Court of Administration (OCA), which said Cabrera-

Faller was guilty of gross ignorance of the law and for violating Rule 1.01 and Rule 3.01, Canon 3 of the Code of Judicial Conduct, but modified its recommended penalty. Instead of imposing a six-month suspension from the service without salary as recommended by the OCA, the Court held the respondent judge should be dismissed from the service. C abrera-Fa l ler ’s d i sm i ssa l stemmed from her orders issued in 2013, recalling the arrest warrants against the accused, saying these were inadvertently issued despite an earlier finding of probable cause for the issuance of such; for sending the record of the case to the archives even prior to the return that accused could not be apprehended in violation of the six-month period

under Administrative Circular (AC) 7-A-92; and for hastily dismissing the criminal case without hearing the side of the prosecution. “Without a quibble, Judge Cabrera-Faller demonstrated lack of knowledge and understanding of the basic rules of procedure when she issued the questioned orders,” the Court ruled. The Office of the Prosecutor (OCP) issued a resolution on May 8, 2013, recommending the prosecution of several Lex Leonum fraternity members for violation of Republic Act (RA) 8049, otherwise known as the anti-hazing law. In the same resolution, the OCP also recommended Cornelio Marcelo, the person assigned to be the buddy or “angel” of Marc Andrei

during the initiation rites, be discharged as a state witness. Subsequently, the information for violation of RA 8049 was filed against Jenno Antonio Villanueva, Emmanuel Jefferson Santiago, Richard Rosales, Mohamad Fyzee Alim, Chino Daniel Amante, Julius Arsenio Alcancia, Edrich Gomez, Dexter Circa, Gian Angelo Veluz, and Glenn Meduen alias Tanton, alias Fidel, alias ER and alias Paulo, before the RTC. Finding probable cause to sustain the prtosecution of the accused, Cabrera-Faller issued an order dated June 3, 2013, directing the issuance of a warrant of arrest and, at the same time, the archiving of the entire record of the case until the arrest of the accused.

ARMM allots ₧132.5M for infra projects in ravaged Basilan town

ISPELLING the perception that Basilan is a conflict-ridden province, the Autonomous Region in Muslim Mindanao (ARMM) is bullish about developing its far-flung communities. The war-torn town of Al-Barka will receive P132.5 million worth of infrastructure projects from the ARMM.

BROCCOLI IN ABUNDANCE Heads of broccoli are displayed by a vegetable stall owner in the Baguio City Public Market. Broccoli now sells for P25 per kilo.

MAU VICTA

For so long, it was the defense camp of the Abu Sayyaf and was once a battle ground between the Special Armed Forces and the Moro Islamic Liberation Front. The locals fled during military operations that ravaged the town. Today, it is poised to become a modern and safe community. Planned afoot are a 7-kilometer road, several water systems and bridges. In the past five years, the ARMM invested P7.865 billion for road networks, bridges and waterworks. The government appropriated P887 million worth of infrastructure projects in Basilan, most of it used to build roads. ARMM Gov. Mujiv Hataman said the government has given attention to many municipalities to improve its quality of life. Now, Al-Bakar and other conflictridden areas will be the main priority. Said Sarifa Anzala, a resident from Al-Bakar, said in the local dialect, “We have lived in appalling conditions for many years. Now, we see hope as we see projects being built here. People are coming back to our town again and more are coming to serve the community.”

By Jonathan L. Mayuga @jonlmayuga

HE Department of Environment and Natural Resources (DENR) has rolled out an Integrated Area Development Plan (IADP) for Aroroy, a gold-rich town in Masbate Province. The DENR, Filiminera Resources Corp. (Filiminera), Philippine Gold Processing and Refining Corp. (PGPRC) and the local government unit (LGU) of Aroroy signed an agreement for the implementation of the IADP for the town. The IADP, the first accord under DENR Department Administrative Order 2017-02 signed by Secretary Regina Paz L. Lopez, calls for the formulation and implementation of a si x-year Sustainable Integrated Area Development (SIAD) Action Plan by the government, civil society and the private sector. The SIAD is “an approach, a strategy and a guiding philosophy that weaves environmental considerations with social justice and human development” and is aimed at applying areabased inter ventions and concepts on natural resources development programs. DENR Undersecretary Philip Camara, one of the signatories to the MOA, said Lopez, an environmental advocate, wants to show “the DENR can work with the mining companies for the sake of the environment.” The DENR recognizes Filminera and PGPRC are bound by law to use the SDMP funds in the eight barangays identified as part of their impact area. The MOA will bring in the DENR to implement programs that will include all other barangays of Aroroy not within the impact area of the mine site. The IADP will be aligned with all relevant DENR programs, like the National Greening Program (NGP), Biodiversity Program, Biochar Program for Agricultural and other Wastes, Coastal Research and Management, Clean Water and Air Programs, and Solid Waste Management Program. Aside from third-party experts, the proponents will coordinate and collaborate with other agencies such

as the Department of Social Welfare and Development (DSWD), Department of Science and Technology (DOST) and experts from universities, and agencies of the DENR, such as the Mines and Geosciences Bureau (MGB) and Environmental Management Bureau (EMB). The LGU of Aroroy is confident of the project’s output. “We are looking forward to this project since this is for the development of Aroroy. We would like to see harmonious relationships forged through this agreement,” Aroroy Mayor Arturo Virtucio said in a statement. Both the mayor and the vice mayor of Aroroy said they see this project as a vehicle to develop Aroroy into a model municipality that hosts a mine site, while operating in a green economy. Aroroy became a first-class municipality from fourth-class status because of its considerable share in the internal revenue allotment because of the operations of Filminera and PGPRC. “ This is for the people of Aroroy. It will be a vehicle where we can empower them while upholding responsible mining,” Aroroy Vice Mayor Eric Castillo said. The Aroroy MOA brings toget her t he LGU, DENR , FRC and PGPRC into a partnership to develop and run an I ADP, where a multisectoral group will be consulted to ensure the participation of all stakeholders and other LGUs. The process will include gathering baseline data on the socioeconomic cost of industries w it hin A roroy; conduct ing a multisectoral consultative workshop to plan the development of the municipality; formulating an investment priority program to identify priority projects and match these with potential investors; creating social enterprises that will sustain the economy of the municipality during mining and milling operations, and postmining or closure plans; showcasing successful projects in the municipality as a model for other host mining communities; and incorporating development models and best practices from other mining communities.

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

The World BusinessMirror

Thursday, March 30, 2017

White House calls for immediate budget cuts to finance border wall

ASHINGTON—President Donald J. Trump is proposing immediate budget cuts of $18 billion from programs like medical research, infrastructure and community grants so US taxpayers, not Mexico, can cover the down payment on the border wall. The White House documents were submitted to Congress, amid negotiations over a catchall spending bill that would avert a partial government shutdown at the end of next month. The package would wrap up $1.1 trillion in unfinished spending bills and address the Trump administration’s request for an immediate $30 billion in additional Pentagon spending. The latest Trump proposal, disclosed on Tuesday, would eliminate $1.2 billion in National Institutes of Health research grants, a favorite of both parties. The community development block grant program, also popular, would be halved, amounting to a cut of $1.5 billion, and Trump would strip $500 million from a popular grant program for transportation projects. Some of that money would help pay for parts of the wall. Like Trump’s 2018 proposed budget, which was panned by both Democrats and Republicans earlier this month, the proposals have little chance of being enacted. But they could create bad political optics for t he str ug gl ing Tr ump W hite House, since the administration asked earlier for $3 billion to pay for the Trump’s controversial US-Mexico border wall and other immigration enforcement plans. Dur ing the campaig n, Tr u mp re p e at e d l y prom i s e d Mexico would pay for the wall, a claim the country has disputed. “The administration is asking the American taxpayer to cover the cost of a wall—unneeded, ineffective, absurdly expensive— that Mexico was supposed to pay for, and he is cutting programs vital to the middle class to get that done,” said Senate Minority Leader Chuck Schumer, Democrat-New York. “Build the wall or repair or build a bridge or tunnel or road in your community? What’s the choice?”

Shut down

THE roster of cuts were sent to Capitol Hill as a set of options for GOP staff aides and lawmakers crafting a catchall spending bill for the ongoing budget year, which ends September 30. Those talks are intensifying, but Senate Republicans are considering backing away from a showdown with Democrats over whether to fund Trump’s request for immediate funding to build a wall along the US-Mexico border. Senate Democrats have threatened to filibuster

any provision providing money for the wall. And many Republicans aren’t very enthusiastic about it and say the White House hasn’t given them many specifics to go on. “I’d like to hear the details. What is this wall?” asked Sen. John McCain, Republican-Arizona. Asked about including Southern border wall financing in the broader spending package, Sen. Roy Blunt, Republican-Missouri, a key negotiator, said: “They will not pass together. That’s just my view.” Blu nt added , “ My v ie w i s there’s a path to get 60 votes” in the Senate, the total required to overcome a Democratic filibuster. Blunt is a member of the Senate GOP leadership team and a major player on health and human services accounts. The government would shut down except for some functions at midnight on April 28 without successful action on spending. GOP leaders are eager to avoid a politically damaging shutdown, especially in the wake of last week’s embarrassing failure to pass the Trump-pushed bill to repeal and replace former President Barack Obama’s health-care law.

Made progress

NEGOTIATORS have made progress on the core elements of a dozen must-do funding bills, but have ignored the White House’s list of cuts in doing so. But the White House badly wants funding for the Mexico wall and hasn’t fully engaged in the Capitol Hill negotiations. Pitfalls lay ahead in the talks, and the situation is especially fragile because of divisions among GOP ranks and uncertainty over who’s playing the lead role at the White House on the particulars of budget work. A c cord i n g to ne w d e t a i l s sent to Congress, the administ rat ion wa nts i mmed i ate f unds to complete an existing bar r ier in the R io Grande Va lley, $500 mil lion to complete 28 miles of border levee wa l l near Mc A l len, Texas, and $350 mil lion for constr uction a long t wo seg ments near San Diego. Other cuts include $434 million to immediately eliminate a program to encourage community ser v ice opportunities for senior citizens, eliminating $372 million in remaining funding for heating subsidies for the poor, and cutting $447 million in transit grants. W hite House budget office spokesma n John C z wa r t ac k i said the proposals were not being shared with the media. A Capitol Hill aide described the cuts to The Associated Press, speaking only on condition of anonymity because the budget document is not yet public. AP

US official: Trump to meet China’s Xi first week in April

ASHINGTON—Chinese President Xi Jinping will meet with President Donald J. Trump the first full week of April, a senior State Department official said on Tuesday. The first in-person encounter between the leaders comes after Trump sharply criticized China during the presidential campaign. But he is now seeking Beijing’s help in pressuring North Korea over its nuclear weapons and missile programs. Trump and Xi also are likely to discuss the US president’s threats to counter what he claims are unfair Chinese trade practices. Trump has promised to raise import taxes on Chinese goods and declare Beijing a currency manipulator. It’s unclear if Trump will follow on either threat while seeking China’s cooperation on North Korea. Though the White House hasn’t formally announced Xi’s visit, the leaders are expected to gather at Trump’s Mar-a-Lago resort in Florida—where Trump hosted Japanese Prime Minister Shinzo Abe in February.

The State Department official confirmed the timing of Xi’s trip while discussing Secretary of State Rex Tillerson’s upcoming travel plans. Tillerson had planned to skip a meeting of Nato foreign ministers scheduled for April 5 and 6 so he could attend Xi’s meeting with Trump, the official said. The Nato gathering in Brussels was rescheduled for Friday so Tillerson could attend, said the official, who briefed reporters on a conference call on condition of anonymity even though Trump has criticized media for using anonymous sources. Under Trump, regular opportunities for journalists to question Tillerson or other State Department officials in public have been significantly curtailed. The agency held no televised briefings, a State Department mainstay for decades under administrations of both parties, for six weeks after Trump’s inauguration. They resumed in March under a new format: Two televised briefings per week and two overthe-phone briefings. AP

In this photo taken on March 10, a boy named Giel wears a small white bracelet on his ankle indicating that he’s just finished treatment at an outpatient therapeutic program, as he stands on the outskirts of Udhaba, near Aweil, in South Sudan. The world’s largest humanitarian crisis in 70 years has been declared in three African countries on the brink of famine, just as President Donald J. Trump’s proposed foreign-aid cuts threaten to pull the United States back from its historic role as the world’s top emergency donor. AP

Worst humanitarian crisis hits as Trump slashes foreign aid

AIROBI, Kenya—The world’s largest humanitarian crisis in 70 years has been declared in three African countries on the brink of famine, just as President Donald J. Trump’s proposed foreign-aid cuts threaten to pull the United States from its historic role as the world’s top emergency donor. If the deep cuts are approved by Congress and the US does not contribute to Africa’s current crisis, experts warn that the continent’s growing drought and famine could have far-ranging effects, including a new wave of migrants heading to Europe and possibly more support for Islamic extremist groups. The conflict-fueled hunger crises in Nigeria, Somalia and South Sudan have culminated in a trio of potential famines hitting almost simultaneously. Nearly 16 million people in the three countries are at risk of dying within months. Famine already has been declared in two counties of South Sudan and 1 million people there are on the brink of dying from a lack of food, UN officials have said. Somalia has declared a state of emergency over drought and 2.9 million of its people face a food crisis that could become a famine, according to the UN. And in northeastern Nigeria, severe malnutrition is widespread in areas affected by violence from Boko Haram extremists. “We are facing the largest humanitarian crisis since the creation of the United Nations,” Stephen O’Brien, the UN humanitarian chief, told the UN Security Council after a visit this month to Somalia and South Sudan.

Less money

AT least $4.4 billion is needed by the end of March to avert a hunger “catastrophe” in Nigeria, Somalia,

2.9M

The number of people in Somalia who are facing a food crisis, according to the United Nations

South Sudan and Yemen, UN Secretary-General Antonio Guterres said in late February. But according to UN data, only 10 percent of the necessary funds have been received so far. Tr u mp’s pro p o s e d bu d ge t would “absolutely” cut programs that help some of the most vulnerable people on Earth, Mick Mulvaney, the president’s budget director, told reporters last week. The budget would “spend less money on people overseas and more money on people back home,” he said. The United States traditionally has been the largest donor to the UN and gives more foreign aid to Africa than any other continent. In 2016 it gave more than $2 billion to the UN’s World Food Program, or almost a quarter of its total budget. That is expected to be reduced under Trump’s proposed budget, according to former and current US government officials. “I’ve never seen this kind of threat to what otherwise has been

a bipartisan consensus that food aid and humanitarian assistance programs are morally essential and critical to our security,” Steven Feldstein, a former deputy assistant secretary of state in the Obama administration, told The Associated Press (AP).

More painful

IN an interview last week with the AP in Washington, Senate Majority Leader Mitch McConnell rejected the proposed cuts to foreign aid. “America being a force is a lot more than building up the Defense Department,” he said. “Diplomacy is important, extremely important, and I don’t think these reductions at the State Department are appropriate because many times diplomacy is a lot more effective— and cer ta in ly cheaper—t han militar y engagement.” The hunger crises in Nigeria, Somalia and South Sudan are all the more painful because they are man-made, experts said, though climate change has had some impact on Somalia and Nigeria’s situations, said J. Peter Pham, the head of the Africa Center at the Atlantic Council. South Sudan has been ent re nc he d i n c i v i l w a r s i nc e late-2013 that has killed tens of t hou sa nd s a nd prevented widespread cultivation of food. In Nigeria and Somalia, extremist groups Boko Haram and alShabab have proven stubborn to defeat, and both Islamic organizations still hold territor y that complicates aid efforts.

Other donors

IF Trump’s foreign aid cuts are approved, the humanitarian funding burden for the crises would shift to other large donors like Britain. But the US’s influential role in rallying global support will slip. “Without significant contributions from the US government, it is less able to catalyze contributions from other donors and meet even minimal life-saving needs,” Nancy Lindborg, president of the

United States Institute of Peace, said in prepared remarks to the Senate Foreign Relations Committee on Wednesday. Meanwhile, neighboring African countries will feel the immediate consequences of famine, experts said. On Thursday the UN refugee chief said Uganda was at a “breaking point” after more than 570,000 South Sudanese refugees had arrived since July alone. Others fleeing hunger could aim for Europe instead.

International response

JOSEPH Siegle, director of research at the Africa Center for Strategic Studies, told the AP: “We are going to see pressure on neighboring countries, in some cases people joining traditional migration routes both from the Sahel into Europe, or south into various destinations in Africa.” “You have 19 countries facing some degree of food stress in Africa, and three of them are facing famine conditions. A ll three of them are facing conf lict, and the vast majority of the countries facing more serious crises are nondemocratic governments,” Siegle said. He described a series of possible consequences. Most likely there will be increased flows of people migrating from Somalia and the vast Sahel region north into Libya, where trafficking routes are a valuable source of finance for the Islamic State, he said. Closer to home, people from South Sudan and Somalia seeking food likely will strain the resources of neighboring countries where political will and goodwill to refugees can be fleeting, said Mohammed Abdiker, director of operations and emergencies with the International Organization for Migration. T he regional consequences will depend on how the international community responds, Abdiker said. Alex De Waal, executive director of the World Peace Foundation, summed up the situation: “Famine can be prevented if we want.” AP

TheBroad

Business

A6 Thursday, March 30, 2017

PHL weaves growth potentials of Manila hemp

By Jasper Emmanuel Arcalas

ROM producing high-quality textiles to the first-ever abaca-made unmanned aerial vehicle (UAV)— this is how the Philippines plans to stretch the potentials of abaca fiber. According to former Philippine Fiber Development Authority (PhilFida) Executive Director Victor Prodigo, PhilFida is moving closer to this goal. The development of an UAV, commonly known as “drone,” is nearing fruition, according to Prodigo, following successful meetings with three Philippine universities and the Department of Science and Technology (DOST). “If the funds will be approved, then the universities—University of the Philippines Diliman, Ateneo de Manila and De La Sale University—in partnership with PhilFida and DOST-Pcaarrd [Philippine Council for Agriculture, Aquatic and Natural Resources Research and Development] will create the first drone made of abaca,” Prodigo told the BusinessMirror. “Abaca is lightweight and at the same time durable that can withstand severe hits, making it ideal [for the parts of a drone].” Abaca fiber is three times stronger than cotton and two times stronger than sisal fibers, making it the

strongest type of plant fiber. Due to its ideal quality for manufacturing, abaca fibers are extensively used to produce ropes, woven fabrics, tea bags, currency paper, cigarette paper, diapers and bed sheets, among others. Abaca grading, or the quality of abaca fiber, is determined based on the strength, cleaning, color, texture and length of the fiber. In terms of cleaning, the standard graders for hand- and spindle-stripped abaca fibers are: S2, S3 (excellent quality); I, G, H (good quality); JK, M1 (fair quality); and Y, OT (residuals). Prodigo said they are expecting to produce the first drone prototype before the year ends should the funding for the project be approved on or before June. “We already have the available facilities,” the former PhilFida chief said. “The three universities will provide expertise in communication, engineering and design, while PhilFida will provide the laboratory and raw materials.”

Bank notes

PRODIGO also disclosed there are already ongoing talks between PhilFida, the Department of Agriculture (DA) and the Bangko Sentral ng Pilipinas (BSP) to produce banknotes locally using locally sourced abaca fiber and locally made security notes. “The Central Bank is buying security papers from London, where our currency is also being made. So we had a preliminary meeting with the Central Bank to discuss the possibilities of buying security notes locally instead of importing,” Prodigo said. “That’s a good start as they want to prioritize Filipinomade products.” Prodigo said the United Kingdom imports from the Philippines raw materials, such as abaca fiber and pulp, that are needed to manufacture security paper. After which the UK exports the security paper back to the Philippines to be used for the manufacturing of bank notes, Prodigo explained. The UK remains to be the top importer of local abaca fiber and pulp to date. “So what they [BSP] want now is to produce the security paper locally,” Prodigo said. “There are no definite projects on how it would happen but they are willing to put up needed facilities or get investors who would produce the materials locally.” Prodigo also said they are looking at the possibility of having the name “Manila hemp” patented. Globally, abaca fiber is known as Manila hemp as the Philippines accounts for at least 85 percent of global abaca production.

Road map 2017-2022

IN the Philippine Abaca Roadmap (PAR) 2017 to 2022, a copy of which was obtained by the BusinessMirror, the government noted that bankrolling various interventions aimed at hiking abaca output to 221,238 metric tons (MT) by 2022 would require a budget of P7 billion. The government also intends to expand abaca plantations to 231,859 hectares from the current 181,859 hectares. Under the road map, the PhilFida would expand abaca plantations by 17,000 hectares this year, by 10,000 hectares next year, 9,000 hectares in 2019 and another 9,000 hectares in 2020. The government is targeting to increase abaca plantations by 5,000 hectares in 2021. PhilFida, an attached agency of the DA, is targeting to expand plantations in the Davao region by 13,000 hectares and by 8,530 hectares in Northern Mindanao. These additional plantations would be concentrated in lowland areas. “In the past several years, our abaca supply has been insufficient, because developments were focused on the upland areas,” Prodigo said. “Yes, there’s a huge abaca hectarage in the upland, but supply or production is limited.” He explained that “the limitations are caused by, first, cultural management—the farmers do not do much fertilization—and, second, they only harvest twice a year.” According to Prodigo, farmers harvest around May and December, “because the abaca plantations

are far from them, given that they live in the lowlands.” The PAR noted that “planting from upland to lowland to convert unproductive and idle lands has gained support among farmers and the private sector.” In five years the PhilFida is targeting to rehabilitate 50,000 hectares of abaca plantation: 800 hectares this year; 7,000 hectares in 2018; 10,000 hectares in 2019; 20,000 hectares in 2020; and 5,000 hectares in 2021. The road map indicated that the rehabilitation and expansion of abaca plantations would increase output to 80,000 MT this year; 106,600 MT in 2018; 124,852 MT in 2019; 154,645 MT in 2020; 190,632 MT in 2021; and 221,238 MT in 2022. The annual abaca output of the Philippines is pegged at 72,734.71 MT.

Interventions

UNDER the road map, the PhilFida would allocate P5.55 billion, or 80.38 percent, of its total budget for fiber production. The PhilFida plans to set aside P910.906 million for its fiber-processing and utilization programs and P400 million for its research and development. The remaining P44.92 million would be used for fiber-trade development. The PhilFida would also introduce an “intensive planting method,” which seeks to boost yield per hectare by shortening the growth period of harvestable abaca plant to 12 to 16 months from the typical 18 to 24 months.

The increase in output is expected to boost the country’s annual abaca-fiber exports by 10 percent to 15 percent annually starting this year until 2022, according to the road map. Data from the PhilFida showed that last year’s abaca output of 72,734.71 MT was 8 percent higher than the 67,328.94 MT recorded in 2015. The Bicol region remained as the top abaca-producing region in the country, accounting for 39 percent of the total output. Its production reached 26,685.1 MT last year, 14.1 percent higher than the 2015 record of 17,708.56 MT. The bulk of the abaca produced by the Bicol region came from the province of Catanduanes, accounting for 88 percent of the total output. The province’s production in 2016 reached 25,167.06 MT, 6.9 percent higher than the 23,540.48-MT recorded output in 2015.

Abaca exports

DATA from the PhilFida also showed that export revenues from abaca in January to October 2016 reached $113.52 million, which is 17 percent higher than the $96.95 million recorded in the same period in 2015. Abaca pulp accounted for the lion’s share of the earnings at 68.4 percent. Exports receipt from abaca pulp grew 18.4 percent to $78.50 million, from $66.30 million earned in 2015. The UK and Germany were the top two importers of local abaca pulp during the 10-month period,

derLook

sMirror

www.businessmirror.com.ph | Thursday, March 30, 2017

Shoes made from abaca and other indigenous fibers are displayed in a shopping mall in Manila. The Philippines is looking to further the growth potentials of abaca, known globally as “Manila hemp”, with the first-ever abaca-made unmanned aerial vehicle in the pipeline. Nonie Reyes

accounting for 37 percent and 32.3 percent of purchases, respectively. Abaca-pulp exports to the UK grew by 38 percent to 7,161.856 MT, from the 2015 record of 5,189.646 MT. However, abaca-pulp exports to Germany declined during the 10-month period by almost a quarter, or around 19.2 percent, to 6,214.938 MT, from 7,695.483 MT recorded in 2015. PhilFida data also showed that export receipts from abaca fiber in the January-to-October period expanded by more than a quarter, or 27.5 percent, to $21.071 million, from the yearago level of $16.52 million. The UK and Japan were the

top two importers of local abaca fiber during the 10-month period, accounting for 48.3 percent and 37.1 percent of the total exports, respectively. Shipments of local abaca fiber to the UK increased by 7.8 percent to 5,469.375 MT from 5,075 MT volume imported in the same time period in 2015. Meanwhile, Japan’s purchase of local abaca fiber declined 2.5 percent during the 10-month period from 4,304.5 MT in 2015 to 4,195 MT last year. Despite the continuous increase in the revenues earned by the country from abaca exports, Prodigo said the Philippines is not meeting the whole demand for abaca by the global market.

“Although our abaca exports are continuously increasing, in reality we are not meeting the total global demand for it,” Prodigo told the BusinessMirror. “According to one of our consultants, there’s still a 50-percent global market share or demand that the Philippines can fill or supply.”

Cooperativism

FOR more than a decade now, Catanduanes remained the top abacaproducing province in the country. Catanduanes’s output accounted for more than a quarter, or 32 percent, of the total abaca produced by the country last year. And for Catanduanes-based Pinoy Lingap-Damayan Multipur-

pose Cooperative (PLDC), increasing the production of abaca fiber is a challenge they are willing to take. “We were challenged and encouraged by [Agriculture Secretary Emmanuel] Piñol to increase our abaca production, because there’s a growing demand in the world market,” PLDC General Manager Antonio Jimenez Jr. told the BusinessMirror. “So in the part of PLDC, we will be venturing into abaca production.” Jimenez said the PLDC plans to identify idle lands, “where there’s no agricultural production at all.” “We might enter into a leasecontract agreement, then we will plant abaca in the identified areas.” Jimenez added that the PLDC is looking at idle lands situated in the mountains, as most of the abaca production in Catanduanes bountifully thrives in the upland areas. “Yes, it’s easier to grow abaca in the lowland areas rather than in the mountain side due to logistical concerns, but there’s no sufficient lowland areas here in Catanduanes as most of them are already planted with rice,” Jimenez explained. “Besides, there are a lot of idle mountain lands here that we can convert to productive abaca-producing areas. We are looking at planting at areas of the mountain near the roadside to ease logistical concerns and expenses.” PLDC is a 12,000-strong cooperative, with 4,000 members being abaca farmers. The remaining members are rice farmers and government employees, among others, according to Jimenez.

Government support

THE Catanduanes-based PLDC is one of the beneficiaries of the DA’s Philippine Rural Development

Project (PRDP). Under the DA-PRDP, the PLDC was given P25.4 million worth of development assistance to raise the commercial value of abaca from P55 per kilogram to P75/kg, a feat the PLDC successfully achieved in October last year. The components of PLDC’s P25.4-million enterprise project funded by PRDP include two warehouses to house the raw and semiprocessed fibers, several trucks and forklift for delivery, tools and equipment, and working capital for operating expenses and cash for buying raw materials. Citing PRDP’s timetable, Jimenez said they expect to receive the first tranche of the funding assistance by April this year. He said they expect construction of the warehouses completed by October.

Lessons learned

PRIOR to the DA-PRDP assistance, the PLDC had no experience in dealing with abaca trading, except for the fact that many of their members happened to be abaca farmers themselves. “We really studied hard, especially because at first, we had difficultly learning the right pricing of abaca fiber, including the grading of the commodity depending on the quality,” Jimenez said. Jimenez said before the PLDC ventured into abaca trading, the barangay-level abaca traders were the sole ones in power, controlling the farm-gate price of the province’s top agricultural product. “When we ventured into abaca trading—given that the PRDP’s coverage is province-wide—we adopted the abaca pricing in Virac, Catanduanes,” Prodigo said.

“Because the farmers in our locality didn’t have the capacity to go to Virac every week to sell their abaca fibers, they just resort to selling them to barangay-level traders.” According to Jimenez, when the PLDC adopted the farmgate pricing in Virac for abaca fibers, barangay-level traders followed suit. “They also increased their buying price of abaca fiber from the farmers,” he added.

PLDC plans

TO date, Jimenez said the farmgate price of raw abaca fiber in the province of Catanduanes has remained above the P70-per-kilogram mark, with barangay-level traders even offering higher buying prices today. At present, PLDC’s buying price of abaca fiber is dependent on its quality. Jimenez said their buying price, for example, for S2-grade abaca fiber could reach as much P76 per kilogram. PLDC buys raw abaca fiber which they process into specific grade requirements of their client-manufacturers. Jimenez said based on PLDC’s data, they are buying 25 MT to 35 MT of raw abaca fiber weekly. Jimenez said the PLDC currently sells abaca fiber to Leytebased Pulp Specialty Philippines Inc. (PSPI), which has an abaca manufacturing plant in Caraga, Albay. The PLDC also sells to Albaybased rope-manufacturer Pacific Cordage Corp. Jimenez said they are now looking at their third abaca manufacturing client, the Las Piñasbased Pacific Continental Co. Inc., which buys S3-grade abaca fiber at P11.50 higher than the Catanduanes price of around P70/kg.

Thursday, March 30, 2017

The World BusinessMirror

Activists arrested by immigration authorities are released on bond

URLINGTON, Vermont— Two advocates for dairy farm workers were released on bond on Tuesday following their arrests by Immigration and Customs Enforcement (ICE) about two weeks ago. Zully Palacios and Enrique Balcazar, who are in the US illegally, said they were still fighting for the release of a third activist, who remained behind bars. Palacios and Balcazar, leaders of immigrant rights group Migrant Justice, were arrested by plainclothes ICE officers over immigration violations. They don’t have criminal records and weren’t charged with criminal offenses. They said they believe ICE targeted them because they are activists. The third activist, Cesar Alexis Carrillo Sanchez, was taken into custody when he arrived at a courthouse to face a now-dismissed drunken-driving charge. A judge denied Sanchez bond, and Migrant Justice organizers said they believe he remains in a New Hampshire detention center. ICE said Sanchez told them he entered the US illegally and is facing deportation. President Donald J. Trump, a Republican, has pushed to expand ICE’s role and has called for thousands of new border patrol and ICE agents. He has said his immigration and deportation policies are necessary and are meant to keep the United States safe.

Difficult times

PALACIOS is from Peru, and Balcazar and Sanchez are from Mexico.

Balcazar spoke on Tuesday about Trump’s policies through a Spanish-English interpreter. “We, as an immigrant community, are facing very difficult times with the executive orders from the Trump administration,” Balcazar said in Spanish. At the news conference at which Balcazar spoke, the National Education Association (NEA) awarded Migrant Justice the Cesar Chavez Human and Civil Rights Award, one of its most prestigious awards. The NEA said it gave the award before it usually does in June to call attention to Migrant Justice and the nationwide arrests of immigrants. “We denounce in the strongest terms possible the arrest of these activists and call for the immediate release of the detained Migrant Justice leaders,” NEA President Lily Eskelsen Garcia said. US Sen. Bernie Sanders, an independent, Patrick Leahy, a Democrat and US Rep. Peter Welch, also a Democrat, said in a statement they have expressed serious concerns to ICE officials over the arrests. T hey a lso are ask ing about the potentia l impact in Ver mont of Tr ump’s executive order ca l ling for increased immigration enforcement. “Instead of focusing on removing those people who pose a threat to public safety or national security, the Trump Administration is targeting all undocumented persons, including the people that help keep our dairy farms and rural economy afloat,” their statement said. AP

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

Chinese anger, fears exposed in France after police killing

ARIS—Chinese immigrants and China’s government are protesting a police killing in Paris that prompted violent street clashes and exposed the fears and frustrations of France’s large Asian community. Protesters gathered on Tuesday in northeast Paris for a second day of demonstrations over the fatal shooting of a Chinese man in his apartment, and the police launched an internal investigation into a death that took on diplomatic implications. C h i nese Foreig n M i n i st r y spokeswoman Hua Chuny ing said China had summoned a representative of the French Embassy in Beijing on Tuesday and urged French officials to “get to the bottom of the incident as soon as possible”. Chinese authorities “hope that Chinese nationals in France can express their wishes and demands in a reasonable way”, Hua said. Residents and police gave conflicting accounts of what happened before the man was shot to death by police on Sunday evening. Police said an officer fired in self-defense during a raid after

The number of people of Chinese origin living in France, as estimated by Pierre Picquart, an expert on China at the University of Paris VIII

the man wounded an officer with a “bladed weapon”. Rumors circulated among Chinese immigrants that 56-year-old Shaoyo Liu was in front of his children while cutting up fish with scissors and had not hurt anyone. Protesters outraged by the killing and baton-wielding police clashed for several hours on Monday night. Three police officers were injured and 35 protesters arrested, authorities said on Tuesday.

‘A priority’

WITH chants of “murderers” and candles that spelled “opposition to violence” lining the road, scores of demonstrators broke down barricades, threw projectiles and set fire to cars. A ut hor it ie s s a id 26 d e m onstrators were held for participating in a group planning violence, six for throwing projectiles and three others for violence against police that saw a police car damaged by arson. Witnesses said that one man of Chinese origin was injured in the clashes, according to China’s staterun Xinhua News Agency. Fra nce’s Foreig n Mi n ist r y re s p o nd e d Tu e s d ay b y c a l l ing the secur it y of Chinese in France “a pr ior it y”. The ministry confirmed that an inquiry has started to shed light on the circumstances of the shooting. The move did not calm some 100 people from Paris’s Asian community who gathered at the police station on Tuesday afternoon, including families and friends of people detained the night before. “Justice must be done, the killer must be punished!” the protesters shouted. A meeting of the Chinese community in Paris was planned to discuss possible further actions. France is home to Europe’s largest population of ethnic Chinese, a community that routinely accuses police of not doing enough to protect it from racism.

Ethnic tensions

IN September 15,000 people rallied in the French capital to urge an end to violence against the Asian community after the beating death of Chinese tailor Chaolin Zhangh called attention to ethnic tensions in Paris immigrant suburbs. The victim’s lawyer said the August 2016 attack was ethnically motivated. “Chinese are victims of racist attitudes in France, especially from other ethnic groups,” Pierre Picquart, an expert on China at the University of Paris VIII, said. “They are targets for crime because they often carry cash, and many don’t have residence permits, so can be threatened easily. They’re angry with police for not protecting them enough.” “Chinese people do not like to protest or express themselves publicly, so when we see them like this, it means they are very, very angry. They’ve had enough of discrimination,” Picquart added. He estimated that there are 2 million people of Chinese origin living in France, a country with a population of about 66 million. The recent killing and clashes came after thousands of people marched in Paris to condemn the alleged rape in February of a young black man by police. The alleged incident in the Paris suburb of Aulnay-sous-Bois turned the 22-year-old, identified only as Theo, into a symbol for minorities standing up to police violence. AP

Iowa regulator keeps busy private law practice

OWA CITY, Iowa—A powerful Iowa regulator has maintained a busy and profitable private legal practice even though a law mandates she devote her “whole time” to state business, a review by The Associated Press shows. Iowa Utilities Board Chairwoman Geri Huser has been involved in 50 cases as an attorney during her two-year tenure, signing scores of filings and occasionally appearing at hearings during normal work hours. Judges have awarded her firm at least $177,000 in fees for her cases during that period. An appointee of Gov. Terry Branstad and former Democratic state Rep. Huser holds a job that includes regulating the service and rates of electric and gas utilities and reviewing plans for pipelines and transmission lines. As chair woman of the threemember board, Huser has extra administrative duties and earns a $128,900 salary. Under Huser, the board has approved eminent domain for the Dakota Access pipeline, major wind energy developments and rules on how utilities charge for customer-owned solar installations. She’s also managed to handle a variety of legal cases through a family firm, Skinner Law Office, an Altoona business she had distanced herself from when facing a potential conflict over the pipeline.

Potentially problematic

CLIENTS have included a widow who claims her stepchildren are mismanaging a $4.5 million estate, the brother of an incapacitated man seeking to become his guardian and a mobile home park who filed a small claims action against tenants. Most of her cases have involved administering estates, which includes distributing assets among heirs and takes months to complete. State spokesmen denied that Huser’s work conflicted with the

law specifying that regulators “shall devote the member’s whole time to the duties of the office”. But prior members who were lawyers, such as Sheila Tipton, have left their firms. And Richard Lozier, Branstad’s appointee for a term beginning May 1, said on Monday he would withdraw from his law firm if confirmed. State government observers said Huser’s extensive outside work was unusual and potentially problematic. The arrangement raises questions about whether Huser can be working full-time and “creates real potential for conf licts of interest”, said colleges’ lobby ist Gar y Steinke, who opposed Huser’s decision to withhold funding from university research centers. “Wow”, he said of AP’s findings. Huser, 53, declined an interview request. But board spokesman Don Tormey said she works full-time and that her legal work is allowed. Branstad appreciates Huser’s leadership and is aware of her out side employ ment , spokesman Ben Hammes said.

‘Extraordinary fees’

TORMEY said members can engage in outside activities that don’t conf lict with board work, noting that past regulators have far med and dr iven ta xis. He said Huser’s court filings—500 since joining the board on May 1, 2015—are made by assistants and that she handles time off for hearings through “ f lex scheduling, vacation and unpaid leave.” Hu ser h a s appea red i n at least five hearings, including March 9 at the Dallas County courthouse in Adel, representing a farm widow who alleges that her late husband ’s children improperly sought to evict her, removed a truck by gunpoint and locked her out of buildings. Huser asked a judge to appoint a neutral party to manage the estate. Another hearing’s expected to be set soon.

Huser’s firm has been awarded $177,244 in attorneys’ fees in cases on which she’s been a primary attorney since joining the board and expects to be awarded $20,000 more in four pending estates, filings show. Fee information isn’t available in several other cases. Estate lawyers are often awarded 2 percent of the assets, the most allowed by law. But they can also petition judges to award “extraordinary fees” for additional services such as real estate and tax issues—compensation Huser received in two recent cases. Fees vary based on estate size, and Huser’s awards have ranged from $1,300 to $30,000.

Outdated letterhead

HUSER has disclosed her outside work as required but downplayed her ties to Skinner Law Office when facing a potential conflict of interest with the pipeline. Attor ney Brad ley Sk inner, her brother, filed an objection on behalf of landowners weeks before Huser joined the board, on letterhead that listed Huser as a firm attorney. Huser and Skinner said the letterhead was outdated and that Huser no longer worked there, having sold her ownership interest in 2011. “I don’t get any income and am not paid by them,” Huser said, saying her work was done through a separate firm she owns. Huser declined to recuse, saying it wasn’t a conf lict after her brother stopped representing the landowners. She later voted to approve the pipeline. Today, she calls herself a partner in the firm. Ed Fallon, a pipeline opponent, said Huser’s outside work raised questions. “ T he c ha ir manship of t he utilities board is a full-time position,” he said. “Some of us would argue it pays too much. But you wouldn’t think it would allow you time for a second job.” AP

A10 Thursday, March 30, 2017 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

PHL as medical tourism destination

he Philippines is fast-becoming a global medical tourism destination. Annually, more than 200,000 medical tourists come to the country to avail themselves of expert services from our medical and dental professionals. Overseas Filipino workers and expatriates also travel back to the country to have their medical and dental procedures. No wonder the Philippines is now among the preferred medical tourism destinations in the world. That’s partly because we have many healthcare providers who can speak English.

Foreigners who come to the Philippines for various medical procedures know that our health and wellness facilities offer high standards of medical treatment at very reasonable prices. For example, the country has a wealth of skilled cosmetic surgeons who specialize in face-lifts, rhinoplasty, abdominal tucks and breast augmentation. Most of these operations cost a fraction of the price of those in developed countries. And many of our surgeons are considered to be the best in their field. However, the Philippines need to continually improve its healthservice offerings to climb to the top. The rising cost of health care in developed nations and an aging global population have given rise to the booming medical tourism industry where we can stake our claim. The Philippines is in a good position to compete as a result of the sector’s improved systems and high quality of health-care services, and well-trained professionals offered by the country’s leading hospitals and medical clinics. The ability of our medical facilities and practitioners to out-price the competition, while maintaining high-quality standards, places the country as a serious competitor in the global medical tourism market. Cosmetic surgery, wellness treatments and dentistry are just some of the specialty care that the country offers. One of the problems holding our medical tourism industry back from taking off is the national infrastructure deficit, since many airlines still cannot fly directly to the Philippines. For example, the quality of our airports is still lagging behind regional counterparts. The Duterte administration, however, is trying to solve this problem. Sadly, the Philippines continues to lose thousands of highly skilled health workers to First World countries that can offer high salaries and other benefits. Filipino dentists and dental surgeons working overseas are good examples. But they are also taking note of developments showing that, every year, more and more foreign patients are coming here for cosmetic dental surgery and other dental services. The main reason foreigners prefer the Philippines to other medical tourism destinations is the unbelievably low cost of dental services here. Our professionals can offer dental procedures at a cost that is 50 percent to 80 percent lower than what they cost in developed countries. The country’s medical tourism industry presents vast opportunities for growth, for creating local employment, for skill building and for solving our brain drain problem. Unfortunately, a recent incident involving a 29-year-old businesswoman who died while undergoing liposuction, breast and butt surgery at a clinic in Mandaluyong City can potentially harm the country’s medical tourism industry. While the police is doing its investigation to determine whether there is negligence during the operation, health authorities can help preserve our medical tourism gains by ensuring that our regulatory mechanisms can protect foreign patients seeking medical procedures in our health and wellness facilities. Since 2005

BusinessMirror A broader look at today’s business

The four legs of the economic table John Mangun

OUTSIDE THE BOX

here are two things that the average person is not supposed to be competent about: the human body and money/economics.

For example, acupuncture may have been used since 3,000 BC and not just in China. A mummified body found in Europe has groups of tattoos that correspond to points on the body where modern acupuncturists place their needles. You can find a huge number of people that swear by acupuncture as a pain reliever. Medical scientists dismiss this as unprovable and they are correct. But provable is the medical “placebo effect”, where a substance or treatment with no active therapeutic effect relieves pain because people think they are taking an active drug. Research suggests that for psychological reasons, some placebos are more effective than others. Large pills seem to work better than small

pills, colored pills work better than white pills. But which makes more money: companies selling paracetamol or companies selling acupuncture needles? And governments get their piece of the action on both. We are told that economics is far too complicated for the average person to understand. Further, for a nation’s economy to work, it must be under at least partial control of the government. Logical extension says that if partial control is good, then total control should be great. Except every example of total government economic control has been a total failure. There are four strong legs necessary for a nation’s economic table. The government’s regulatory

Humans influence weather extremes

✝ Ambassador Antonio L. Cabangon Chua Founder

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

Lorenzo M. Lomibao Jr., Gerard S. Ramos Lyn B. Resurreccion, Efleda P. Campos Ruben M. Cruz Jr. Angel R. Calso

Creative Director Chief Photographer

Eduardo A. Davad Nonilon G. Reyes Judge Pedro T. Santiago (Ret.) Benjamin V. Ramos Adebelo D. Gasmin Marvin Nisperos Estigoy Aldwin Maralit Tolosa Dante S. Castro

BusinessMirror is published daily by the Philippine Business Daily Mirror

HOM

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

www.businessmirror.com.ph

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

database

Jun B. Vallecera

Online Editor Social Media Editor

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

Cecilio T. Arillo

T. Anthony C. Cabangon

Max V. de Leon Jennifer A. Ng Dionisio L. Pelayo Vittorio V. Vitug

role in an economy is important and everyone complains about it in the Philippines. But the reality is that all nations suffer from over-regulation. When you are paying a group of bureaucrats and politicians to make rules, they will. Our problem is not over-regulation. It is the layers upon layers of bureaucracy like a school of sharks. From the local barangay to the national government, all have to be fed with paperwork. Yes, a federal system might help. Government is the largest single financial entity in a nation and therefore must be financially sound. It took until the middle of President Gloria Macapagal-Arroyo’s second term to finally put the government’s finances in order. A government that does not have its own fiscal house in order sucks money from the economy and it holds the private sector back from creating national wealth. However, the greater issue may be how much should the government spend as a percentage of the total economic output? The Philippine government is spending 2.3 percent of the GDP in 2017. Some studies show that the optimum amount is 3 percent to cover all services and other expenses. But does this require a 30-percent tax rate, which is basically saying that the

ounting evidence shows that the increase of devastating weather extremes in summer is linked to human-made climate change, said the latest findings on climate change relayed to Database by the prestigious Potsdam Institute for Climate Impact Research in Germany, known for short as PIK. Giant airstreams, also known as planetary waves, are circling the Earth, waving up and down between the Arctic and the tropics, transporting heat and moisture and causing droughts or floods in many areas of the globe, including the Philippines, PIK scientists said. “The unprecedented 2016 California drought, the 2011 US heat wave and 2010 Pakistan flood, as well as the 2003 European hot spell, all belong to a most worrying series of extremes,” says Michael Mann from the Pennsylvania State University in the US, lead author of the PIK study soon to be published in Scientific Reports. Mann said the increased incidence of these events exceeds what we would expect from the direct effects of global warming

alone, so there must be an additional climate-change effect. In data from computer simulations, as well as observations, we identify changes that favor unusually persistent, extreme meanders of the jet stream that support such extreme weather events. “Human activity has been suspected of contributing to this pattern before, but now we uncover a clear fingerprint of human activity,” he said. Coauthor Stefan Rahmstorf from the PIK in Germany explained that if the same weather persists for weeks on end in one region, then sunny days can turn into a serious heat wave and drought, or lasting rains can lead to flooding. “This occurs under specific conditions that favor what we call a

quasi-resonant amplification that makes the north-south undulations of the jet stream grow very large. It also makes theses waves grind to a halt, rather than moving from west to east. Identifying the human fingerprint on this process is advanced forensics.” Air movements are largely driven by temperature differences between the equator and the poles. Since the Arctic is more rapidly warming than other regions, this temperature difference is decreasing. Also, landmasses are warming more rapidly than the oceans, especially in summer. Both changes have an impact on those global air movements, PIK scientists said. They said this includes the giant airstreams that are called planetary waves because they circle Earth’s Northern Hemisphere in huge turns between the tropics and the Arctic. The scientists detected a specific surface temperature distribution apparent during the episodes when the planetary waves eastward movement has been stalling, as seen in satellite data.

Using temperature measurements since 1870 to confirm findings in satellite data

“Good satellite data exists only for a relatively short time—too short to robustly conclude how the stalling events have been changing

government needs to take 30 percent of your income? Part of the problem is the government does not always earn what it takes to provide services that are not social welfare and assistance. Agencies that provide services, like the Land Transportation Office, should not receive any funds from the national budget. These should be pay-as-you-go operations. Every agency that collects revenue from the public should not spend more than it collects. Maybe there should also be “Congressional Ukay-Ukay Stores” to fund the legislature. Most important, a prosperous economy must provide for individual upward economic mobility and that comes from the other three. An individual must have the opportunity to easily and as cheaply as possible do business or work for a salary. The government cannot take too much of individual wealth because of inefficiency through a tax system that leaves too little in private hand. Government spending must be designed to grow the economy.

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.

over time. In contrast, high-quality temperature measurements are available since the 1870s, so we use this to reconstruct the changes over time,” says another coauthor Kai Kornhuber, also from PIK. “We looked into dozens of different climate models—computer simulations called CMIP5 of this past period—as well as into observation data, and it turns out that the temperature distribution favoring planetary wave airstream stalling increased in almost 70 percent of the simulations,” he said. Interestingly, most of the effects occurred in the past four decades. “The more frequent persistent and meandering jetstream states seems to be a relatively recent phenomenon, which makes it even more relevant,” says scientist Dim Coumou from the Department of Water and Climate Risk at VU University in Amsterdam (Netherlands). “We certainly need to further investigate this—there is some good evidence, but also many open questions. In any case, such nonlinear responses of the Earth system to human-made warming should be avoided. We can limit the risks associated with increases in weather extremes if we limit greenhouse-gas emissions,” he said. To reach the writer, e-mail cecilio.arillo@ gmail.com.

Opinion BusinessMirror

opinion@businessmirror.com.ph

As PHL’s current account overheats, EU sanctions hang

From and through death, to life Msgr. Sabino A. Vengco Jr.

Alálaong Bagá

Val A. Villanueva

Businesswise

redit Suisse Head of Emerging Asia Economics Santitarn Sathirathai says the country’s current account is headed to “overheating territory”.

In a video interview with Bloomberg, he says the move of the Bangko Sentral ng Pilipinas (BSP) to keep the nation’s key rate, or the overnight borrowing rate, at 3 percent—aimed primarily at reining inflation—may not be enough. He explains inflation is influenced by factors beyond the control of the country’s fiscal guardians. These factors are commodity prices, oil and currency: “The Philippines’s current account is headed to overheating territory, as it faces a deficit after 14 years of surplus.” Current account, which is the difference between the country’s savings and its investment, is a crucial barometer of a nation’s economic well-being. It is the totality of the stability of trade (goods and services exports less imports), net income from abroad and net current transfers. A positive current-account balance shows that a country is a net lender, while a negative current-account balance means that it is a net borrower from the rest of the world. A currentaccount surplus ups a nation’s net foreign assets by the amount of the surplus, and a current account deficit cuts it by that amount. The currentaccount and the capital account are the two main apparatuses of a country’s balance of payments. In fact, the Philippines already logged a current-account deficit of $197.31 million in December 2016. The last time the country posted a full-year current account deficit was in 2002, when Asia tottered in currency mayhem. That year the deficit hit 0.347 percent of the GDP. In postAsian crisis, the worst current-account deficit happened in 1999, at 3.46 percent of GDP. For the last 14 years, we’ve enjoyed the position of being a net lender to the rest of the world. This year we are at risk of nosediving from a currentaccount surplus status to a deficit. Aside from other factors, this could be due to the fact that the recent rise in importation of capital goods and raw materials is forecasted to crush inflows from trade and remittances. Add to this the recent Federal Reserve (the Fed) hike of its benchmark interest rate at a quarter point, amid rising confidence in the US that its economy is poised for robust economic growth. The Philippine stock market and peso-dollar exchange rate are the first to feel the brunt of the Fed hike. Over the past weeks, the Philippine peso hit 50:$1 intraday, and the Philippine Stock Exchange index (PSEi) bellweather hovered in the range of 7,800 and 6,500. The Fed hike’s long-term effect on the country’s overall economic health remains to be seen. This is now in the hands of the country’s fiscal managers on how they can shield the country to either weather or soften its detrimental effects. But more worrisome for me is the

threat of the European Union (EU) to impose trade sanctions on the Philippines due to President Duterte’s war on drugs, which has pushed the international community to take closer look on how he conducts it. Just recently, the European Parliament adopted a resolution that urged EU members to encourage the Philippines to stop the extrajudicial killings related to the antidrug campaign. “In the absence of any substantive improvements in the next few months,” the resolution reads, “procedural steps with a view to the possible removal of GSP+ preferences” may be undertaken. The GSP+, or the Generalized System of Preferences Plus, refers to the complete exclusion of tariffs on twothirds of all product categories. The EU’s GSP affords developing countries, such as the Philippines, to pay less or no duties at all on their exports to the EU, giving these countries vibrant access to EU markets. Although the Department of Trade and Industry has issued an assurance that Philippine exports can endure the aftermath of such a possibility, its long-term negative effects should not be ruled out. The danger is in the snowballing of sanctions, which will affect the EU’s direct investments in the Philippines. This is not farfetched, considering how these countries strictly adhere to the rule of law. The European Parliament is urging the EU to back the establishment of an independent international investigation into unlawful killings and other violations of Duterte’s war on drugs. I cannot see any leeway for us to avoid such sanctions. For one, Duterte remains undeterred, and his bullheadedness is legendary. Also, his allies have closed ranks to protect at whatever cost Duterte and his governance. Combative against critics of the Duterte antidrug, they often bring the fight straight to the gutter. Just consider this crass jab thrown by Social Welfare Assistant Secretary Lorraine Marie Badoy at the EU in her Facebook post: “…Those in the EU, engage in online child porn for the meantime. That’s where you’re good at anyway.” In a civil but succinct reply to Badoy, the EU stressed on Tuesday that child pornography is not a flippant matter. “The issue of child pornography is extremely serious and a grave crime. It should be addressed in a serious and responsible manner,” said the delegation to the EU to the Philippines, without elaborating. Ultimately, it is Duterte’s foul mouth and his fanatics’ imprudent defense of his myopic view on how the country should be run that is hurting the Philippines’s image abroad, which, in turn, impacts on the nation’s economic growth. For comments and suggestions, e-mail me at mvala.v@gmail.com

Thursday, March 30, 2017 A11

he last of the seven signs in the Gospel according to John is the raising of Lazarus (John 11:1-45), signs that glorify the Father as they intimate the true identity of, and enkindle faith in, Jesus. The raising of Lazarus as a theophany points to the mission of Jesus, whose glory is the conquest of death with eternal life-giving love.

‘I am the resurrection and the life’ For John, the raising of Lazarus was the event that led onward to the death of Jesus. The act of bringing his friend back to life ironically set in motion the scheme by his enemies that would lead to his own death. Yet, when informed of his friend’s sickness, Jesus pointedly said it would not end in death, rather it would be for the glory of God. Just like the blindness of the man born blind, this sickness of Lazarus would not be the triumph of sin and its consequence. Jesus was sure of the power of God, of the eternal life He came to share with humankind. And when

He heard that Lazarus had died, He referred to it as a sleep from which He would like to awaken His friend. And He told His disciples, “I am glad for you that I was not there, that you may believe.” Four days in the tomb, Lazarus was gone beyond retrieval. Confronted with the grief and, at the same time, trust of Martha (and of Mary), who could only blurt out in perplexity: “Lord, if you had been here, my brother would not have died”—Jesus made the paradoxical revelation, “I am the resurrection and the life”. Its precise meaning is “Whoever believes in me, even if he dies, will live,

and everyone who lives and believes in me will never die”. Physical death is just a sleep to one who believes in Jesus, and there is a sure awakening from it in the resurrection from the dead. With faith in Jesus one cannot die forever. With Him and through Him, one is in communion with the Lord who is the source of eternal life.

‘Do you believe this?’

The inevitable question to Martha and Mary then, as well as to us all now, is, “Do you believe this?” This culminating revelation by Jesus in word and in the deed of raising Lazarus back to life demands a response of faith if its message of everlasting life is to be availed of. Do we accept Jesus as our life? Is He to us life that is stronger than death? The process of moving from death to life is started for us in Baptism, at which we are reborn to the life of faith in Jesus Christ. Our experience of the resurrection already now is in Baptism, the sacrament of our participation in the Easter victory of Jesus over death. Like Lazarus, we are summoned to pass from death to life. In the sacraments of our full initiation into Jesus Christ, in Baptism and the Eucharist, eternal life is ours. For us as initiated in the communion

Tax Law for Business

he Philippine Constitution provides that public office is a public trust, thereby ensuring that public officers are constitutionally bound to carry out their duties while being bound by the strictest sense of scrutiny. This is considering that they are accountable to the people, commanded to serve with utmost responsibility, integrity, loyalty and efficiency. This constitutional dictate has been expounded upon in the recent decision of the Court of Tax Appeals (CTA) in CTA Case 8929.

Alálaong bagá, we are challenged to reflect, “Could not the one who opened the eyes of the blind man have done something so that this man would not have died?” Darkness and death are there to be conquered. And Jesus, “perturbed” at the destructive powers of sin and death, is there to do battle with evil. His victory is total and absolute. As we move on in the Holy Week beyond death on the cross to life, we must be able to say with Martha, “Yes, Lord, I have come to believe that you are the Messiah”—our resurrection and our life. Join me in meditating on the Word of God every Sunday, 5 to 6 a.m. on dwIZ 882, or by audio-streaming on www.dwiz882.com.

Bello’s travail: Cracking a nut called ‘contractualization’ Dr. Rene E. Ofreneo

LABOREM EXERCENS Continued from A1

he employers, represented by the Employers Confederation of the Philippines (Ecop), have accepted DO 174 with some reservations, specifically on the additional rules on contracting, and the proposed stricter enforcement and monitoring of labor compliance by employers and manpower agencies. Ecop explained any measure that makes contracting difficult for business discourages investment and weakens job creation.

As to the leadership in the Department of Labor and Employment (DOLE), none is exultant over the release of DO 174. The presidential pledge to end contractualization in three months, made in the heat of the electoral campaign in early 2016, was clearly mission impossible. Now, the Executive branch is telling the trade unions: Go to the Legislature and push for the enabling laws abolishing contractualization. Indeed, contractualization is a difficult nut to crack. It is also difficult to define. The word “contractualization” does not appear in the Labor Code. However, it has become a union slang for any effort of employers to avoid the “regularization” of employees, especially the regularization of those doing tasks that are “regular and necessary” in the conduct of business. The avoidance measures take different forms: casualization of work or making regular work classified as casual; resort to five-month hiring (to avoid the regularization of “probationaries” within the six-month period as provided by law) or what is popularly called as endo system, for the “end of- contract”; the availment of the services of outside manpower agencies that deploy “project” workers who are declared to be agency employees (not workers of the contracting principals); and the excessive utilization of traineeship, apprenticeship and internship programs (meaning undertaking the programs only to avail of cheaper labor).

It is abundantly clear that the debate on the rules governing job/service contracting and the “abolition” of contractualization will continue even beyond the term of the Duterte administration. Labor economists call the phenomenon of contractualization as “labor flexibilization”, which proliferates under a regime of “flexible rules” on the hiring and firing of workers. This flexibilization is justified by many employers and economic technocrats as necessary to enable business to survive in an increasingly competitive world under globalization. This argument raises the hackles of trade unions and workers not only in the Philippines but also all over the world, for contractualization is also a global phenomenon. So what can the tripartite social partners— labor, employers and government—do? Can a tripartite consensus be forged on a truly winwin approach to the issue of contractualization? The answer of the Philippine EmployerLabor Social Partnership Inc. (Pelspi) is yes. As a backgrounder, Pelspi is a unique organization of employer-industrialists, trade union leaders and academics who are bound together by their joint commitment to the promotion of decent work for the workers, productivity for industry and competitive growth for our country. It is headed by former Sen. Wigberto E. Tañada Sr., Meneleo Carlos of the BishopsBusinessmen Conference and Jose Umali of the National Union of Bank Employees. In a series

of workshops organized by Pelspi to clarify issues on contractualization, Pelspi came up with guiding principles that are worth restating here, namely: “1. As the Constitution states, all workers, regardless of tenure and status, have basic human and labor rights. These rights, such as those enunciated in the Labor Code as labor standards and workers’ basic freedoms, should be respected by all at all times. Any abuse of the rights of any worker, regardless of tenure and status, should not be tolerated. In short, all workers—regular, probationary, casual, seasonal, project, apprentice/learner and term-based—should enjoy the protection of the law and all the benefits accorded by law. A strengthened Labor Law Compliance System should be institutionalized and fully propagated, accompanied by awarenessraising and capacity building for all enterprises and workers. “2. The endo or “555” hiring system, whether done directly by the employers or undertaken by a third-party contractor or agency, should not be tolerated. There should be penal sanctions against the willful pretermination of probationary status, including on-the-job training and apprenticeship arrangements, which are done in order to avoid regularization. “3. The rules against prohibited labor-only contracting should be tightened, and enforcement of the said rules strengthened. Any manpower or recruitment agency masquerading as a cooperative should be considered a labor-only contractor and should be blacklisted and prosecuted. The Department of Labor and Employment should also blacklist and prosecute all flyby-night manpower and recruitment agencies, including those legitimately registered, and yet are found to have violated labor laws. “4. Legitimate contractors or agencies should comply with all the pertinent labor laws (not only those listed in Articles 106-109 of the Labor Code), such as those listed in all the Books (1-7) of the Labor Code, as well as the Social Security Services, Philippine Health Insurance Corp. and Pag-Ibig laws. They should treat all workers with dignity and respect the rights of all workers, including the right to organize and form unions, the right to consultation on personnel policies, the right to equal treatment/

Liability for failure to withhold EWT by the government Atty. Pierre Martin Reyes

with the Triune God, physical death is an exodus, a passage to the fullness of our everlasting covenant with the Almighty. Life is constantly threatened by death. The Jews wanted to stone Jesus, and Thomas wanting to go with Jesus to liberate Lazarus from the hands of death told his fellow disciples, “Let us also go to die with him.” All who go with Jesus must face death; Jesus shows us the way: loving all the way even in death is the way to life.

In the said CTA case, the Commission on Elections (Comelec) was assessed for deficiency expanded withholding taxes (EWT) for its failure to withhold on its payments to suppliers, particularly involving its transactions for the automated elections. It was argued that though it was a withholding agent for EWT, it is not liable, since the nonwithholding related to the automated elections, which are taxexempt under Republic Act (RA) 8436. It, likewise, argued that it should not be held liable for interests in addition to the basic tax due, as provided in Sections 247(b) and 249 of the 1997 Tax Code as amended. As a result, the CTA ruled that the Comelec is still a withholding agent for EWT, for which it may be held personally liable. The tax exemption granted to it under

RA 9369 does not include an exemption from its duty to withhold taxes from its income payments to its suppliers. This being the case, the Comelec may be held liable for the deficiency EWT. However, the CTA ruled that the Comelec may only be held liable for the basic tax due, and not for the interest imposed in addition to the basic EWT. Section 247 of the 1997 Tax Code provides that if the withholding agent is the government, then the employee responsible for withholding and remittance of the tax shall be personally liable for the additions to withholding taxes, which include deficiency and delinquency interests. Despite the straightforward provisions of the law used in the decision, a question arises: Who is the “employee”

responsible? Though the CTA stated that the Comelec’s employee may be held liable for interests on nonwithheld EWT, it stopped short of determining who exactly that employee should be. The Comelec, just like any other government agency, is made up of different departments and offices, each with its own set of officers and employees. Should this responsible employee be the person directly in charge of paying the suppliers, or it may be the supervisor or director who authorized the payment? May the supervisor or director, likewise, be held liable for interests for nonwithholding if he or she merely signed off the payment due to “supervisor accountability?” Could such employee, likewise, be held liable beyond his or her tenure? Should

nondiscrimination and the right to health and safety standards. No contractor or agency should be allowed to operate without any operational grievance machinery put in place to process workers’ grievances or complaints. “5. The right of all workers, regardless of tenure and status, to form unions or associations, including mutual aid associations and professional organizations, should be respected. “6. The country’s social partners should unite and work together in building a more progressive economy—in line with the above-cited development framework of Pelspi —so that the economy can provide more and decent jobs for all. Part and parcel of this economic upgrading is cooperation by all in the continuous upgrading of the skills, abilities and knowledge of all workers. An integrated human-resource development is the key in building a competitive Philippine economy able to create decent jobs for all. Additionally and ideally, all workers should be able to move upward in the social and jobs ladder, as they are able to acquire more experience and better skills and higher abilities and knowledge. “7. The tripartite industry peace councils in various regions and key industries should be strengthened and, in many places, reactivated or established. This is crucial, since each industry has some unique structure that requires unique labor hiring and deployment arrangements, such as the seasonal hiring of agricultural workers in some commercial farms during harvest or planting seasons. On the other hand, certain industries, which have developed tripartite agreements on how the outsourcing of work and the use of thirdparty contractor or agency can be regulated without impairing the job and union security of the regular workers, can serve as models for others in the conduct of social dialogue on outsourcing, job contracting and other related industrial-relations issues.” The last point raised by Pelspi is the need for all sectors of society to unite in support of a stronger economy based on an integrated industrial and agricultural development program. Contractualization can only be tamed or minimized in a progressive, equitable and sustainable economy.

such accountability, though specifically stated in the law, be extended beyond a government employee’s term in office? Clearly, public office is a public trust. However, should the law be applied in such a manner as to create more responsibility than that which is necessary to carry out the duties of one’s office?

The author is a senior associate of Du-Baladad and Associates Law Offices (BDB Law), a member-firm of WTS Global. The article is for general information only and is not intended, nor should be construed as a substitute for tax, legal or financial advice on any specific matter. Applicability of this article to any actual or particular tax or legal issue should be supported, therefore, by a professional study or advice. If you have any comments or questions concerning the article, you may e-mail the author at pierremartin. reyes@bdblaw.com.ph or call 403-2001, local 311.

2nd Front Page BusinessMirror

A12 Thursday, March 30, 2017

Govt debt rose 1.5% in February to ₧6.1T on domestic borrowing By Rea Cu

@ReaCuBM

he national government posted outstanding debt 1.5 percent higher in February amounting to P6.208 trillion, from only P6.115 trillion the previous month, with the bulk of the loans obtained from domestic creditors, the Bureau of the Treasury (BTr) said.

According to data from the BTr, the core government’s outstanding debt for the month expanded by 4.5 percent compared to the same month in 2016, which amounted to P5.940 trillion. At this level, the national government debt was estimated at some 42 percent of local output, measured as the GDP. Finance Undersecretary Gil S. Beltran said the national government debt at end-2016 equaled 42.1 percent of GDP, shar ply better than the national government debt equal to 44.7 percent

of GDP in 2015. Of the total outstanding debt, domestic debt accounted for P3.985 trillion, or 64 percent, while external debt amounted to P2.222 trillion, or 36 percent. The locally sourced debt reflected an expansion of 0.8 percent, or P31.93 billion, compared to the January 2017 figure of P3.953 trillion. Year-on-year, the domestic debt showed an increase of 3.5 percent, compared to only P3.850 trillion registered in the same month in 2016. “The increment was primar-

64% The part of the government’s total obligations in February that was obtained from domestic creditors

ily due to the net issuance of government securities amounting to P31.68 billion, and the effect of peso depreciation on the value of onshore dollar bonds amounting to P0.25 billion,” the BTr said. Year-to-date growth in domestic debt was 1.3 percent, or P51 billion, from the December 2016 level of P3.934 trillion. The national government external debt of P2.222 trillion in February, on the other hand, grew by 2.8 percent, or P60.725 billion, from end-January 2017 of only P2.162 trillion. Year-on-year, external debt rose by 6.3 percent, or P132.279 billion, from P2.090 trillion in 2016.

“For the month, peso depreciation against the US dollar increased the peso value of external debt by P21.64 billion, alongside net availment worth P39.31 billion. These more than offset the impact of third currency depreciation against the US dollar, amounting to P0.22 billion,” the BTr added. The national government external debt position has increased by 3.1 percent, or P66.78 billion, from end-December 2016 level of only P2.156 trillion. Year-to-date, total outstanding the national government debt expanded by 1.9 percent, or P117.775 billion, with end-December 2016 level at P6.090 trillion. Total national government guaranteed obligations amounted to P521.826 billion in February, an increase by 0.5 percent, or P2.715 billion, from end-January level of P519.111 billion. Year-on-year, it posted a 14.8-percent increase, or P67.286 billion, from the P454.540 billion in February 2016. Indebtedness backed by the full faith and credit of the national government become direct obligations the moment the borrowing entity

is unable to pay the obligation. “The increment on national government guarantees was due to the effect of currency fluctuations and net availment on external guarantees amounting to P3.48 billion and P0.21 billion, respectively. These far outpaced the net repayment on domestic guarantees amounting to P0.97 billion,” the Btr said. Broken down, domestic guaranteed obligations totaled P232.160 billion, shrinking by 0.4 percent, or P968 million, from the January level of P233.128 billion. Yearon-year, this showed a growth of 60.7 percent, or P87.654 billion, from the recorded P144.506 billion in 2016. E x ter na l g u a ra nteed debt amounted to P289.666 billion, expanding by 1.3 percent, or P3.683 billion, compared to January level of P285.983 billion. Year-on-year, this posted a decrease of 6.6 percent, or P20.368 billion, from the 2016 level amounting to P310.034 billion. Year-to-date, the national government guarantees increased by 1.6 percent, or P8.15 billion, from the December 2016 level of only P513.673 billion.

IBON tells DENR to be firm vs big miners By Elijah Felice E. Rosales @alyasjah

i n i n g firms should not resort to international arbitration in forcing the Department of Environment and Natural Resources (DENR) to revoke its decision to suspend 28 mines and cancel 75 mineral-production sharing agreements, think tank IBON Foundation said. In a statement released on Tuesday, IBON urged the administration to stand firm with the DENR in its order to shut down mines allegedly abusing the environment, even with the threat of the Chamber of Mines of the Philippines (COMP) to escalate the closure order to international arbitration. Claiming the move is just “another mechanism of investment liberalization” that will dent government regulation, IBON believes the international arbitration is an instrument that is expected to favor foreign investments over public interest. “The World Bank International Center for Settlement of Investment Disputes, for example, is known for siding with transnational corporations and strictly enforcing decisions that include expropriation of assets.” According to a study of the think tank, foreign companies have a history of suing governments through international arbitration when their businesses are compromised. It gave as an example the case of mining firm Pacific Rim, which sued the government of El Salvador for $301 million for denying the permit for the El Dorado mine due to environmental issues. IBON told the administration to be wary of the COMP’s next steps regarding the matter. It also supported the DENR for closing down mines suspected of massively draining mineral resources and destroying ecosystem. The COMP recently warned that mining firms affected by the DENR’s closure orders can file arbitration cases should the government choose not to honor their mining contracts.

ENERGY FORUM Energy Assistant Secretary Leonido Pulido III (from left), Institute of Integrated Electrical Engineers of the Philippines Inc. Project Manager Marvin Ryan Bathan, European Chamber of Commerce of the Philippines Projects and Sector Advocacy Events Director Gerry Constantino and Department of Energy Utilization Management Bureau Director IV Patrick Aquino exchange views at the Regional Workshop on the Energy Efficiency and on Minimum Energy Performance in the Commercial and Industrial Sectors at a hotel in Pasay City on Wednesday. ALYSA SALEN

www.businessmirror.com.ph

New rice info system makes interventions more efficient By Jasper Emmanuel Y. Arcalas @jearcalas

he adoption of a newly developed rice-monitoring system would now enable the government to craft sound policies and programs for the country’s rice sector, according to an International Rice Research Institute (IRRI) expert. The IRRI turned over to the Department of Agriculture (DA) and the Philippine Rice Research Institute (PhilRice) the operation and maintenance of the Philippine Rice Information System (Prism) on March 29. “This technology is really for the [firsthand] use by the Department of Agriculture and PhilRice. It is very useful for assessing the total crop of rice, very useful in assessing the real-time status of the regions, and very useful for budgeting and for forecasting,” IRRI Deputy Director General for Communications and Partnership Dr. V. Bruce Tolentino said. “It will make the work of the department much more accurate and more efficient.” Prism is an online database-system initiative between the DA and the IRRI to support the DA national rice program by providing accurate and real-time monitoring data on the country’s rice production, according to the IRRI. Prism aims to strengthen the capacity of the DA to make sound decisions in achieving food security by delivering actionable information on rice crop seasonality, area yield and yield-reducing factors using data collected from satellites, crop models, smartphone-based surveys, statistics and maps, the agency added. “In Prism, we can get [data in relative real time every 10 days, because we have the satellite images. We just have to assess the images, and we do not have to go to the field to the survey-based,” Tolentino said, comparing the differences between the data-gathering methods of Prism and the Philippine Statistics Authority (PSA) in coming up with palay production-related reports. “Based on the images alone, we have preliminary assessment of the crop already, because we know when the crop was planted, so we can have an estimate on when the harvest will be, and that would mean we can forecast the crop production,” Tolentino added. The IRRI said the database of Prism relies on data gathered via remote sensing, crop models, in-field crop surveys, farmer interviews, weather data, official statistics and other fieldwork. Some of the data provided by Prism include the total area planted with palay, the estimated production per hectare, the health status of the crops and external factors that would affect production, such as incoming typhoons or abnormalities in weather patterns, according to the IRRI. “This means that due to the abundance of information provided by Prism to the government and policymakers, they could make decision on total harvest [in a given period], as well as decisions on trade, whether it will [be for] export or import. This is now real-time information that is available to the department for decisionmaking,” Tolentino said. Agriculture Undersecretary for Operations Ariel T. Cayanan said Prism would serve as the go-to database of the DA for its planning and monitoring of the development of the country’s rice production. See “Rice info,” A2

BOC: FPI need not worry over destruction of angle bars By Rea Cu

@ReaCuBM

he Bureau of Customs (BOC) has affirmed that it complied with proper destruction requirements set forth under its rules and regulations, addressing the issue raised by the Federation of Philippine Industries Inc. (FPI) that the contraband steel angle bars seized by the bureau were not properly disposed of. According to the BOC, it has complied with the destruction requirements under the customs law, and that the seized substandard steel products will not find their way into the domestic market.

“In response to the issue raised by the FPI regarding alleged irregularities in the destruction of seized contraband angle bars, the BOC, through the Port of Manila’s Auction and Cargo Disposal Division [ACDD], affirms that it complied with the destruction requirements as set forth under relevant customs laws, rules and procedures, ensuring that, ultimately, the substandard steel products are disposed of accordingly,” the BOC said in a statement. In earlier reports, the FPI alerted Customs Commissioner Nicanor E. Faeldon on the irregularities in the

process of destroying the contraband angle bars, triggering fears among local manufacturers that the substandard steel products could end up in the market. In a letter sent to Faeldon, FPI Chairman Jesus L. Arranza raised these concerns regarding the destruction of some 320,100 kilograms of confiscated angle bars: the lack of a Department of Trade and Industry (DTI) representative, as specified in its Notice of Public Auction; the official weighing ticket provided by the Asian Terminals Inc. was handwritten, instead of computerized; the destruction of the angle bars took

longer than what was mandate; and that the Steel Angles, Shapes and Sections Manufacturers Association of the Philippines Inc. was not notified of the destruction of the seized steel bars. Lawyer Oscar Villalva, ACDD acting chief of the Port of Manila, explained the notices of the destruction were sent to the DTI and Commission on Audit several times. The ACDD added that it cannot delay the destruction of the angle bars, even if external entities remain unresponsive to the notices they sent. “The weighing machine used was provided by Asian Terminals Inc., but while results were handwrit-

ten, the same reflected the values as shown in the machine. And the scrap metals also took a longer time to undergo destruction, because acetylene was used, instead of cutting machines,” the BOC added. Lawyer Mandy M. Anderson, the BOC’s chief of staff and spokesman, assured the public that the bureau will further investigate the matter. “The question on whether there had been irregularities on the destruction of the angle bars will be investigated. We assure the public that proper procedures will be followed. Should there be any irregularities found, those involved will be dealt with severely,” Anderson said.