Businessmirror may 08, 2017 by BusinessMirror

PHL’S BEST DEVELOPER FOR TWO STRAIGHT YEARS

Megaworld bagged the most coveted Best Developer title at the 2017 Philippines Property Awards, a historic feat for the real-estate giant, as the company won the title for the second straight year. Megaworld won a total of 26 awards during a gala dinner in Makati City held last Thursday night attended by major developers and real-estate practitioners. Among the company’s major awards include Best Universal Design Development for St. Moritz Private Estates, Best Office Development for Alliance Global Tower, Best Mixed-Use Development for Eight Forbes Town Road, Best Residential Architectural Design for One Uptown Residence, Best Retail Architectural Design for Uptown Mall, Best Residential Landscape Architectural Design for The Florence, Best Retail Landscape Architectural Design for Uptown Mall and a special recognition in Corporate Social Responsibility.

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Monday, May 8, 2017 Vol. 12 No. 207

Govt prefers use of public funds for infra projects

By Cai U. Ordinario

@cuo_bm

OKOHAMA, Japan—The Duterte administration is keen on using government funds to hasten the rollout of various infrastructure projects than go through the public-private partnership (PPP) route, according to the chief of the Department of Finance (DOF).

$17.5B The total amount of loans and grants approved by the ADB in 2016

Finance Secretar y Carlos G. Dominguez III told reporters here on the sidelines of the 50th Asian Development Bank (ADB) Governors’ Annual Meeting that the “lengthy negotiation process” for PPP projects could delay infrastructure projects. “In most projects, it is quicker Continued on A2

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PPP conversations #2 with Ayala Group PPP Lead Alberto C. Agra

he Ayala Group is one of the leading proponents and believers of the Philippine Public-Private Partnership (PPP) Program. Since 1996, it has been engaged in a water concession and, in the recent past, has been awarded the Muntinlupa-Cavite Expressway tollway, automated fare-collection system, extension of Light Rail Transit 1 system and integrated terminal system under the build-operate-transfer law. Lawyer Solomon M. Hermosura, managing director, group head of corporate governance, general counsel, compliance officer and corporate secretary of Ayala Corp.,tells us Ayala’s PPP journey in this second edition of PPP conversations. Continued on A15

‘FED RATE HIKE WON’T BMReports CUT ASEAN+3 GROWTH’ Tax justice remains elusive goal for PHL

OKOHAMA, Japan—The hike in interest rates in the US will not dampen growth in the Asean+3 region, according to finance ministers and central bank governors. The US Federal Reserve (the Fed) is expected to raise interest rates further this year and next year. Finance chiefs and central bank governors expect three more interestrate hikes in 2017 and three to four rate hikes in 2018. In a news briefing last Friday, Asean+3 cochairman and Philippine Finance Secretary Carlos G. Dominguez III said the finances of economies in the region have

been robust and will enable them to weather external risks, such as higher US interest rates. “Asean+3 [economies] have experienced robust financials, certainly since the Asian crisis 20 years ago. We learned a lot of lessons that improved the corporate governance and supervision. I believe that we are better prepared than any other time for external events, such as the Federal interestrate increases,” Dominguez said. However, Doming uez sa id Asean+3 economies must remain vigilant mainly due to the uncertainties surrounding the rate of the See “Fed rate,” A2

PESO exchange rates n US 49.9270

By Rea Cu

@ReaCuBM

Part One

OME say justice wears a long white gown. However, the song didn’t say what injustice wears. We can only surmise that when it comes to taxes, justice wears gray. Tax justice, to note, is when a sound tax system is in place. “One of the basic principles of a sound tax system is theoretical justice,” Abrea Consulting Group President Raymond A. Abrea told the BusinessMirror. “It means the burden of tax should be based

Taxpayers file their income-tax returns at the Bureau of Internal Revenue District Office in Makati City. ALYSA SALEN

on the ability to pay of taxpayers.” Hence, Abrea explained, tax injustice is when the poor or ordinary employees are burdened by both income tax and valueadded tax (VAT), while the rich and large corporations are able to get away with not paying taxes either through avoidance or evasion, he told the BusinessMirror through electronic mail. Eduardo C. Tadem of the Freedom from Debt Coalition (FDC) pointed out that the presence of tax injustice in the Philippines is very much felt. Continued on A2

n japan 0.4440 n UK 64.5157 n HK 6.4155 n CHINA 7.2404 n singapore 35.6545 n australia 36.9809 n EU 54.8448 n SAUDI arabia 13.3139

Source: BSP (5 May 2017 )

BMReports BusinessMirror

A2 Monday, May 8, 2017

Tax justice remains elusive goal for PHL Continued from A1

Tadem has said in a report last year the poor are being burdened with both indirect and direct form of taxes, while the rich have ways and means on how to evade taxes or get huge deductions from their original tax rates.

Pay more

ACTION for Economic Reforms (AER) Senior Researcher Jo-Ann L. Diosana explained that the concept of tax injustice varies between social groups. For AER, tax justice also states that the people or citizens who have more money should pay more taxes. “The various groups have varied definitions— it depends on the inclination or the bias,” Diosana told the BusinessMirror. “But in general, when we talk about justice, it is about fairness of the tax system: that those who have the ability to pay should pay.” Diosana added that in order for the tax system of the country to be just, inequalities should be addressed. There are two equities to the Philippine tax system: the vertical equity, which tackles the income rates of Filipinos in general and the horizontal equity, which translates still in line with the income of the citizens but who belong under

Manila. . .

Continued from A16

Since the late 1960s Pernia said the ADB has already extended $17 billion in ODA to the Philippines. More are expected, he said, and this includes a $101 million-worth loan and grant to create feasibility studies. “[ADB] President [Takehiko] Nakao wants to do something more for the Philippines, and we were talking about project implementation facilitation,”Pernia added. “It’s not a definite kind of assistance. It could be a technical assistance, grant or it could be in the form of allowing us to hire technical experts to do the monitoring, and doing the technical aspects of implementation so there will be no delays.” ADB Vice President for Operations Stephen Groff said the bank is on track to meeting its target to double its assistance to the region from 2014 to 2020. Groff said the ADB is also looking at partnering with other

Fed rate. . .

Continued from A1

increases and the timing. “We have to double up on our supervision and our watchful waiting so we can handle those external events,” Dominguez said. Nonetheless, Philippine Centra l Bank Deputy Governor Diwa C. Guinigundo said economies in the Asean+3 have “sufficient buffers” to counter any risk brought by higher US interest rate—ample foreign-exchange reserves and faster economic growth. Guinigundo said large consumption demand in Asean+3 economies will be enough to support the region’s strong economic growth. He also said the intra-Asean trade in mer-

Tax reform. . .

Continued from A16

Under the proposal, the excise will be implemented in two schedules. For the lower bracket, if the net manufacturer’s price/ importer’s selling price is P600,000, the excise tax will be 3 percent by 2018, and it will increase to 4 percent by 2019. For the higher bracket, if the net manufacturer’s price/ importer’s selling price is over P3.1 million, the excise tax will be P1,468,000 plus 90 percent of the value in excess of P3.1 million in 2018. For 2019 if the net manufacturer’s price/importer’s selling price is over P3.1 million, the excise will be P1,824,000 plus 120 percent of the value in excess of P3.1 million.

different sectors or situations, she explained. The vertical equity in a tax system is a method of collecting income tax in which the taxes paid by a worker increases with the amount of income then person earns. Horizontal equity is an economic theory pointing out that individuals with similar income and assets should pay the same amount in taxes. The concept applies to citizens that are considered equal regardless of the tax system implemented.

Vertical, horizontal

DIOSANA noted that vertical equity should primarily be addressed if the government wants to fix the country’s tax system and address tax injustice. This includes the imposition of proper tax rates to the different classes in a society based on their individual incomes earned. Again, those earning more should pay more. “Since taxes have different functions [including], to raise revenues, redistribute income and redistribute wealth, it also has to be efficient,” she explained. “So for us, we are trying to balance all of these objectives under one tax system. We are biased more toward the aspect of not using the tax system as a way to provide services for those who need more social services.” To address the horizontal equity aspect of institutions, such as the China-led Asian Infrastructure Investment Bank to better provide development financing for Developing Member-Countries (DMCs). He added there is “plenty enough space” for old and new development institutions to help DMCs address their infrastructure needs which is estimated to cost some The ADB said the 45 DMCs must invest $26.166 trillion until 2030. This translates to $1.744 trillion or 5.9 percent of the region’s GDP annually.

Initiative

THE ADB said Southeast Asian economies need to invest 5.7 percent of GDP until 2030. This means investing a total of $3.147 trillion between 2016 to 2030 using 2015 prices and an annual investment of $210 billion until 2030. “With respect to the Philippines, specifically, we’re quite encouraged by the government’s ‘Build, Build, Build’ initiative,” Groff said. “We need to really be vastly increasing infrastructure

the tax system, meaning the needs of the varying sectors under a community, the government should not rely on the tax system to provide service for these sectors, but instead, lean toward the expenditures side to answer the inequality, according to Diosana. She pointed out this is what the government should be doing, under the law, through its implementing agencies. “If we look at the tax system, which is under the fiscal policy, we cannot separate it from expenditures,” she added. “It [collecting taxes] has to go hand in hand with how we spend.” The AER explained that if the government implements too much exemptions and benefits for taxpayers through the tax system, it becomes more susceptible to loopholes. The latter adds more to the problems that need to be addressed, the AER explained. “In terms of the horizontal equity, you should address that through expenditures. The government can directly address the needs of the different vulnerable sectors though the expenditure side,” Diosana said, citing social protection as an example. Instead of giving tax credits to persons with disabilities, senior citizens, single parents, children and women, the government can have a direct program on social protection for them, she added. To be continued financing in the Philippines. The Philippines, as you know, really underspent on infrastructure for 20 years to 30 years and we will slowly start to creep up.” Apart from infrastructure, Dominguez said the bank is in the best position to help countries that are greatly vulnerable to climate change, like the Philippines. Dominguez said climate-change finance is difficult to access. He said this is where multilateral development banks can come in, since they can easily obtain access to these funds. The problem with access is there has to be data or science that will justify the need of the country to tap into these kinds of assistance. Dominguez added there is great uncertainty with regard to determining the exact speed of global warming, and determining whether or not government’s processes can keep up with the speed of climate change. “Resources have to be marshalled, and you know the banks, [especially] the multilateral banks, are the best agencies to push this ahead, [since] it’s [hosting the meeting] very, very challenging,” Dominguez said.

chandise goods and services has increased and has become an important component in the region’s overall trade performance. In a meeting, the Finance Ministers and Central Bank Governors of the Asean+3 agreed on the “Yokohama vision”, which pushes for greater resiliency and integration in the region. However, the region’s leaders failed to reach a consensus on the International Monetary Fund (IMF) delinked portion of the Chiang Mai Initiative Multilateralisation (CMIM) Precautionary Line (PL). The CMIM was established a network of bilateral swap agreements to help limit currency volatility, and the introduction of the CMIM-PL which serves as a crisis prevention facility. The CMIM-PL was initially created to allow members of the CMIM draw up to 30 percent

of their maximum borrowing amount without requiring IMF lending conditions. In 2014 the IMF delinked portion was raised to 30 percent but the leaders wanted to increase this to 40 percent this year. But no consensus has been reached in this year’s meeting. The GDP growth of the Asean+3 region is expected to settle an average of 5.2 percent in 2017 with inflation under control, despite the global uncertainty, according to the Asean+3 Macroeconomic Research Office (Amro). Amro expects the Philippines alone to post a growth of 6.8 percent this year and 7 percent next year. It also expects regional emerging markets of Korea, Asean-5‚ Malaysia, Indonesia, the Philippines, Singapore and Thailand—and Vietnam to remain resilient. Cai U. Ordinario

Deceptive

government,”said Teves.“When we have already collected all taxes due the government and find out that there is still a deficiency, that’s the time to impose additional tax measures,” he added. Teves said instead of taking a determined bid to plug tax loopholes and in strictly implementing tax laws, government finance managers opted for an easier way out of the dilemma by pushing Congress into passing additional taxes, particularly on fuel. He also warned that enactment of the measure will impact on the lives of majority of Filipinos who are mostly law abiding. Meanwhile, Party-list Rep. Carlos Isagani Zarate of Bayan Muna called on the people, particularly the organized sectors, to oppose the “deceptive, antipeople” tax-reform package under House Bill (HB) 4774 being pushed by the DOF. Zarate said the latest version of the bill tempered the increases in auto-excise tax. “Although it maintained largely the same provisions in a previous version, a few changes were made, including a lower rate of increase.” Party-list Rep. Arlene Brosas of Gabriela said the passage of the administration’s tax-reform package at the committee level does not bode well with poor Filipino families, and even with the middle class, despite the income-tax reduction under the measure. She said the savings from the lowering of income tax under the HB 4774 “will just be gobbled up by hikes in the prices of oil and other commodities due to higher excise-tax and the expanded coverage of VAT [value-added tax].” “The lowering of income tax serves as the icing on top of a very bad, stale cake. Underneath, we see an avalanche of price hikes arising from higher excise tax on oil and the expansion of VAT coverage that will surely hit both the poor and the middle class,” said Brosas. “Rents, gas prices, jeepney and bus fares, money remittance fees, airfare and electricity bills, among others, will increase under the proposed tax reform. In particular, poor women will bear the brunt of increased budget pressures due to costlier utilities and consumer goods,” she added. She said the supposed savings of the middle class from lower income taxes will be offset by higher excise taxes on oil and automobiles, not to mention the longer list of VAT-able goods and services. “Income-tax reduction and restructuring should be pursued independently, rather than lumped with the baggage of new and higher taxes, as expressed in the deceptive packaging of HB 4774,” Brosas said.

For his part, PDP-Laban Rep. Arnolfo A. Teves Jr. of Negros Oriental said the approval of the tax-reform bill that would impose additional taxes on fuel will essentially exempt smugglers and corrupt state-revenue collectors from prosecution. Teves, citing a statement issued by Finance Undersecretary Karl T. Chua, said the DOF official admitted the government can easily raise P230 billion annually if the Bureau of Customs improves its revenue collection efficiency. He said the amount is P16 billion over the estimated P214 billion that the government expects to gain from imposing the P6 per liter excise tax under the bill. “Before we start imposing additional taxes, we should first improve our collection on present tax and duties due the

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Govt prefers use of public funds for infra projects Continued from A1

for government to implement it rather than go through that lengthy negotiation process, which will take up to 30 months or go through a process where it is opened to a [Swiss] challenge and everybody will throw a monkey wrench into it,” Dominguez said. Apart from speeding up project implementation, he said another benefit will be in terms of access to financing. Dominguez said some lenders do not want to assume the risk involved in construction. By undertaking the construction of public infrastructure projects, the government assumes the construction risk. This then prompts lenders to offer a premium in their lending to the Philippines. However, Dominguez said this does not mean the government will no longer engage the private sector in its infrastructure program. As in all government projects, Dominguez said the actual civil works will be bidded out to the private sector since the government does not have the capacity to do construction work on a massive scale. “We’re not going to construct it ourselves. We will bid it out. That’s where the private sector comes in. In supplying the services to actually implement [projects],” Dominguez said. According to the ADB, increasing investments in infrastructure is key to sustaining Asia’s growth.

DOT. . .

Continued from A16

The Tourism chief said she knew a number of developers were already doing some serious and conscious efforts to contribute to the goal of sustainable tourism. “[But] I challenge you all to do more. At present, we still have tourism destinations that lack facilities and amenities. There are some that don’t have them at all. Worst, we have a few that are on the brink of decline due to uncontrolled environmental degradation. Certainly, these are concerns that we, the private and public sectors, must work on together. But please, allow me to emphasize the relevance of tonight’s recognition program in promoting best practices in property development that we can also use to address issues in the tourism industry.” Teo also lauded the real-estate industry for ramping up its investments in Mindanao. “Wherever you go, your projects serve as catalysts for growth, especially in emerging urban centers outside of Metro Manila. As a Mindanaoan, I fully appreciate the value of this...because I know how much these contribute in uplifting the lives of ordinary Filipinos.” Terry Blackburn, founder and managing director of PropertyGuru Asia Property Awards, echoed Teo’s observation, saying the real-estate industry’s contribution to the Philippine economy is something everyone should be proud of. “Although Manila remains the heart of the real-estate industry, quality developments can now be found everywhere in the country,” he said in his opening remarks. “As well as residential development giving more and more Filipinos the chance to own their own home for the first time, economic growth continues to be supported by world-class retail and office developments,” he added. Megaworld Corp., property concern of taipan Andrew Tan, bagged its second Best Developer award, plus eight other special awards and 17 Highly Commended honors, out of 25 nominations—the most for any developer this year. In a news statement from PropertyGuru Philippines, JLL Philippines Chairman Lindsay J. Orr, head of the 10-member panel of judges for the awards, said: “The blueprint for Megaworld’s success is not only apparent in its pioneering integrated urban township concept that’s been

The Manila-based multilateral development bank said this is part of its new long-term strategy dubbed as “Strategy 2030”. ADB President Takehiko Nakao said Asia will need $1.7 trillion annually to finance investments in power, transport, telecommunications and water until 2030. Nakao said the ADB is ready to support its Developing MemberCountries (DMCs) in this regard and to increase investments needed for social sectors, especially health and education, which were identified as the second most important priority area in Strategy 2030. “The ADB is supporting an increasing number of privatesector projects in education, health and agriculture,” Nakao also said. “Funding micro-, small- and medium-sized enterprises through local banks will remain a priority.” Total ADB operations last year, including cofinancing and technical assistance, reached $31.7 billion. ADB’s loan and grant approvals reached a record high of $17.5 billion, a 9-percent increase from the previous year. Climate finance reached $3.7 billion, up from $2.6 billion in 2015. Also, cofinancing with public and private partners increased to $13.9 billion. This includes ADB’s first two cofinanced projects with the Asian Infrastructure Investment Bank for roads in Pakistan and a natural-gas project in Bangladesh.

perfected for many years, but also in its dedication to nation-building by introducing the world-class developments in provincial areas.” Describing the developer’s projects as aesthetically pleasing, sustainable and environment friendly, the judges said, “the company in the past year has excelled in producing some of the industry’s best designs and commercial development, earning once again the distinction of being the year’s Best Developer.” One of the awards for Megaworld was for Best Universal Design Development, a new category this year that was awarded to its low-rise project, St. Moritz Private Estates. Other awardees included Prince Allumer Development Corp. for Best BPO Office Development; AppleOne Properties Inc. (Best Condo Development in Cebu) for AppleOne Banawa Heights; and Damosa Land (Best Residential Development in Davao) for Damosa Fairlane. Robinsons Land Corp. (RLC) picked up the award for Best Retail Development for its Robinsons Galleria Cebu, as well as a Special Recognition in Sustainable Development that it shared with green boutique developer ArthaLand, and an honor for RLC President Frederick D. Go, chosen by the editors of Property Report magazine as the 2017 Philippines Real Estate Personality of the Year, for “leading the company that transforms people’s dreams into reality through real-estate projects that last generations”. The main category winners in the Philippines now advance to the seventh annual PropertyGuru Asia Property Awards grand finals in Singapore in November at the Sands Expo and Convention Centre, where they will compete with 15 other markets in the region and be crowned the “best in Asia”. In congratulating this year’s Philippines awardees, Hari V. Krishnan, CEO of PropertyGuru Group, said, “Continued commitment to the property sector’s growth definitely fuels progress and the Philippine real-estate market has shown a lot of promise on this front.” He added there were also lots of opportunities for growth and improvement, specifically on transparency and sustainability.“As developers across the archipelago become more focused on their goals, I can see a fantastic future for the industry and it will be great to witness its ongoing transformation into a regional real-estate player with outstanding and innovative commercial and residential offerings.”

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Editor: Dionisio L. Pelayo • Monday, May 8, 2017 A3

Illegal-drugs trade a ₧120-B-a-year industry–Pdea

HE Philippine illegal-drugs trade is now a P120-billionper-annum industry that supplies over 4 million users.

The premier antidrug agency said that, this year, some P14.49 billion worth of illegal drugs have already been seized, or 12 percent of the estimated supply. “The drug problem in the country is massive, and now poses a threat to the national security. Status quo is not acceptable, we need to do something now,” said Director General Isidro S. Lapeña of the Philippine Drug Enforcement Agency (Pdea). Lapeña stressed illegal-drugs users must be weaned from addiction to reduce the demand for drugs, and eventually stop the problem in the country. He said the top three narcotics in the Philippines are methamphetamine hydrochloride or shabu, marijuana and ecstacy, which are mainly distributed in the streets by small-time pushers. These illegal substances are manufactured by transnational drug syndicates. University of the Philippines Political Science professor Ranjit Rye noted that the Philippines’s own drug market is “becoming bigger and bigger”. “Unless we do something about it, we will have the problems of many mature narco-states, like Colombia and Mexico. So do we want to go there?” he asked, noting the need to understand the social, economic and political consequences to the country of illegal-drugs use. The United Nations World Drug Report 2016 identified the Phil-

Navy task group off to Singapore

RP Gregorio del Pilar led Naval Task Group (NTG) 80.5 that sailed on Saturday to participate in the 50th anniversary celebrations of the Republic of Singapore Navy (RSN) scheduled from May 11 to 19. Capt. Donn Anthony Miraflor, NTG 80.5 commander, said the theme for the RSN event is “RSN50: Maritime Nation, Maritime Force”. After the activity, NTG 80.5 will be deployed to Sasa Wharf, Davao City, to augment the contingent preparing for the Navy’s 119th founding annivesary there. The naval chief of staff, Rear Adm. Allan Ferdinand V. Cusi, presided over the send-off ceremony for the BRP Gregorio del Pilar, a former US Coast Guard Hamilton-class cutter, and NTG 80.5. This International Defense and Security Engagement will be highlighted by the attendance of the Navy flag officer in command, Vice Adm. Ronald Joseph S. Mercado, at Singapore’s First International Maritime Review; International Maritime Defense Expo (Imdex) Asia 2017 and Fifth International Maritime Security Conference, which will serve as an opportunity to solicit modernization initiatives that could best benefit the Navy and the Philippines. In addition, the Navy contingent will engage in friendly discussions and exchanges with other participants of Imdex 2017 through the Sixth WPNS Multilateral Sea Exercise; Third International Naval Engineering Conference; and Maritime Information-Sharing Exercise. PNA

COA finding based on erroneous application of laws–banana firm By Jovee Marie N. dela Cruz

@joveemarie

HE Tagum Agricultural Development Co. (Tadeco) over the weekend said the initial findings of the Commission on Audit (COA) that were partly the basis of the Solicitor General for issuing a legal opinion against the joint-venture agreement (JVA) between the Bureau of Corrections (BuCor) and the Davao-based Tadeco “are based on the erroneous application of laws and constitutional provisions”. In a statement, Alex Valoria, Tadeco president and CEO, said the COA identified the contract between the BuCor and the company as leasehold and tenancy agreement governed by Republic Act (RA) 1199, when the agreement cannot be classified as such. “With all due respect to the COA and the Solicitor General, the provisions they had cited as bases for calling out the supposed violations committed under the Tadeco-BuCor agreement cannot be applied to this case,” Valoria added. “No one would argue that the land where the Davao Penal Colony stands, which is under the BuCor, is a government reservation. Thus, it is inalienable land and cannot be the subject of a lease agreement as stated under RA 1199,” Valoria said. He said the contract between the BuCor and Tadeco is a JVA, with the primary purpose of helping the rehabilitation of inmates at the Davao Prison and Penal Farm (DPPF). “It’s goal of making profits is only secondary to the main goal of inmate rehabilitation,” he said. He said the BuCor and Tadeco are prohibited under the Public Land Act (Commonwealth Act 141) from entering into a lease arrangement. “Moreover, Tadeco cannot be identified as a tenant of the BuCor land, because it is a juridical entity and not a person capable of performing the actual cultivation of the land, which is essential in a leasehold and tenancy agreement,” Valoria added. The House Committees on Good Government and Public Accountability and on Justice are set to conduct on Tuesday their joint preliminary investigation into the JVA between the BuCor and Tadeco, which is owned by the family of Floirendo. The JVA has been denounced as “grossly disadvantageous to government” by House Speaker Pantaleon D. Alvarez, who sponsored the resolution enabling the congressional inquiry. Both Alvarez and Floirendo are known political allies and personal friends of President Duterte.

ippines as among the departure and transit countries in Asia for cocaine. It said cocaine seizures in Asia tripled from the period 1998 to 2008 and 2009 to 2014, in line with indications that cocaine consumption among the upper classes in several of the more developed Asian countries has started to rise. The most frequently mentioned Latin-American countries of origin, departure and transit for cocaine shipments to Asia in the period 2009 to 2014 were Bra-

zil, Colombia, Peru, the Plurinational State of Bolivia, Argentina and Mexico. On the other hand, heroin trafficking in the Americas continues to increase, with heroin and morphine seizures rising during the same period on reported increases in opium production in Latin America over those periods. It was estimated a total of 247 million people worldwide used drugs in 2014. Presidential Communications Secretary Martin M.

Andanar said there is so much work to be done to further address the illegal-drugs problem in the country. “The illegal-drugs trade has met its match, notably the political will and unwavering resolve of our President, and his relentless mission to divert our country from the dangerous trajectory of becoming a narcostate. The consequence of becoming a narco-state is unacceptable to us and the next generation. In both economic and social terms, we cannot allow a menace to society to dictate our nation’s destiny,” he added. PNA

Economy

A4 Monday, May 8, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

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‘Factory output likely grew 11.4% in March’

By Bianca Cuaresma

@BcuaresmaBM

hilippine industrial production likely posted a double-digit growth in March, as all subsectors posted hikes in output, according to the think tank arm of international credit-ratings agency Moody’s Investors Service. In its recent views on Asia Pacific data releases for the upcoming week, Moody’s Analytics said industrial production may have expanded by 11.4 percent in March. The country’s industrial production grew by 1.7 percent in February this year. The Philippine Statistics Authority (PSA) is set to release official data on factory output on Wednesday. “Manufacturing strength has been fairly broad-based among the subsectors, with food production doing particularly well,” Moody’s Analytics said. “We look for electronics output to continue to rally in the coming months because of improved external conditions. Even with this, the main driver of production growth will be booming domestic demand, as rising incomes and infrastructure projects drive consumption and investment,” it added.

The optimism of Moody’s Analytics has been backed by positive outlook given by IHS Markit for the country’s manufacturing sector throughout the year. International think tank IHS Markit is a partner of regional business media organization Nikkei in compiling Asia’s monthly Purchasing Managers Index (PMI). IHS Markit economist Bernard Aw remained optimistic of the Philippine manufacturing’s growth in the near-term, saying there were further signs that growth momentum will be sustained for the rest of the quarter, particularly as forward-looking indicators, such as new orders and expectations, continued to show “robust trends”. Aw also said reports of increased construction activity, together with greater public infrastructure spending is expected to support the manufacturing industry in the coming months.

File photo of a garment factory in the Philippines ILO in Asia and the Pacific

In January data from the PSA showed the value of factory output rose by 11.6 percent, slower than the 25.9 percent recorded in the same period last year.

In terms of volume the PSA said the year-on-year hike was at 9.3 percent. The agency said this was mainly due to the improved performance of 14 major sectors,

with significant increases noted in nine major sectors led by wood and wood products. Other major sectors that recorded two-digit growth were ba-

sic metals, footwear and wearing apparel, transport equipment, petroleum products, food manufacturing and fabricated metal products.

Govt in talks with Beijing on Northrail–Dominguez House committee approves By Cai U. Ordinario

@cuo_bm

OKOHAMA, Japan—The national government is currently in discussions with the Chinese government in an effort to resolve the Northrail issue, according to the Department of Finance. In an interview on the sidelines of the 50th Asian Development Bank Annual Governor’s Meeting in Yokohama, Finance Sectary Carlos G. Dominguez III said the arbitration in Northrail is not only a “managerial headache” but a “huge” financial burden for the government. “I signed this huge check for an idiot thing that never gets done. I tell you, my hands bleed when I do

that. And there’s some more to pay so [lets end it]. What’s past is past, everybody made a mistake here, lets move ahead. I think that’s the right way to go,” Dominguez said. In 2012 the Aquino administration took China to court to determine the exact amount the Philippine government needed to pay for the botched railway project. However, industry sources told the BusinessMirror there are already indications the country may lose this legal battle, prompting the need for a new strategy. Dominguez said no one knows how the arbitration will end but as of now, the Duterte administration is determined to resolve the issue by beginning “unofficial”

talks with Beijing. “Unofficial discussions have been held within our government,” Dominguez said. “We have to settle all of these issues. You know, sitting down and suing each other is contemplating the past and arguing the past. We should be forward-looking, and if we can settle those issues, we should settle them.” Last year the National Economic and Development Authority (Neda) said the Chinese government is keen on reviving its cooperation with the Philippines through the provision of Official Development Assistance (ODA) loans in the next few years. Neda Undersecretary for Investment Programming Rolando G.

Tungpalan told the BusinessMirror that the country may forge a multiyear bilateral engagement with the Chinese government. Due to the National Broadband Network-ZTE fiasco 10 years ago and the Northrail project, Tungpalan said the country’s ODA cooperation with China has been “stalled”. Since the cooperation agreement will be done bilaterally, between the Philippine and Chinese governments only, he said the ODA loans may be extended through the China Eximbank. It can be noted that the China Eximbank is the same institution that was supposed to finance the Northrail project.

Palace: Lobby money sealed Lopez’s fate in CA By Butch Fernandez @butchfBM & Elijah Felice E. Rosales @alyasjah

r esident Duterte duly respects the independence of the powerful Commission on Appointments (CA), but he knew so well that lobby money might have oiled the rejection of former Environment Secretary Regina Paz L. Lopez, his spokesman said on Sunday. “The President’s statement that there was lobby money highlights the existence of certain vested interests in the appointment of officials,” Presidential Spokesman Ernesto C. Abella told Malacañang reporters in a text message. Abella was referring to Duterte’s remark last Thursday in Davao City, where the Chief Executive expressed dismay over Lopez’s rejection as environment chief. “Lobby money talks,” he said, without further elaborating on whom he was referring to. However, Abella noted Duterte’s swipe at the CA was not in any way intended to tarnish the integrity of the appointing body. “Some members of the commission have decided according to principle and conscience and even came out to explain their votes.” He said the President recogniz-

es the autonomy of the CA, explicit by the fact that he did not intervene in the confirmation process of his embattled appointee. Lopez’s fate as head of the Department of Environment and Natural Resources (DENR) was sealed last Wednesday, with the CA voting 16-8 against her confirmation. Right after, Lopez took a dig at lawmakers who thumbed down her confirmation, saying they were “influenced by business interests”. Lopez earned the ire of businessmen, particularly those invested in the mining industry, after she ordered the closure and suspension of 28 mining operations. She also canceled 75 mineral production sharing agreements whose mining tenement was located within or near watersheds. The CA’s rejection of her appointment was widely condemned by various state officials, cause-oriented groups and religious leaders, among others. In a statement, National AntiPoverty Commission Chairman Liza L. Maza said Lopez was not confirmed “because of her radical opposition to the liberalized mining industry”, adding her rejection was a failure to recognize that poverty and environmental issues are interrelated. Presidential Commission for the

Urban Poor Chairman Terry L. Ridon noted Lopez was “a tough act to follow”, given her tenacity to stand against abusive mining firms. Green group, Climate Reality Project-Philippines, said Lopez did a tremendous work in just nine months as head of the DENR, labeling her decisions as “long-term, comprehensive and holistic”. In a radio interview, Bishop Antonieto D. Cabajog of Surigao said he is worried “abusive” mining firms might continue operating in his province now that Lopez was gone for good.

Proof needed

Senate President Aquilino L. Pimentel III wants “credible proof” before supporting an inquiry into Duterte’s allegation lobby money swayed lawmakers to reject confirmation of Lopez as secretary of environment. “We need more credible proof other than mere verbal allegations which can be done by anyone anytime,” Pimentel said, referring to Duterte’s controversial “money talks” comment following the unanimous plenary vote rejecting Lopez at last week’s session of the CA. A call to have the CA leadership investigate Duterte’s claim of lobby money talks was made Sunday by a House CA member, Mindoro Ori-

ental Rep. Josephine Ramirez Sato, who was best remembered during CA hearings for asking the most well-researched questions and asking Lopez to respond to the serious issues raised against her. According to Sato, if unchallenged, the reckless remarks of Duterte could unjustly damn the entire CA and undermine public trust in a constitutionally created body. Sen.Richard J. Gordon, in a text message to the BusinessMirror, echoed the sentiments of other lawmakers who indicated they would rather “not dignify” the President’s unsubstantiated offthe-cuff remarks. In a separate interview, Sen. Panfilo M. Lacson admitted he found it “very unfortunate” coming as it did from the President. “At most, I see it inappropriate. Kasi parang sweeping na ’yan. Ibig sabihin may suspicion sa lahat na bumoto sa rejection na may lobby money involved.” Lacson added: “Sa akin napakaunfair noon kaya nagsalita ako, huwag naman ganoon. ’Di lang mga member na bumoto to reject kundi pati buong CA, which is an independent and constitutional body. Member nga nito both Houses of Congress pero labas ito ng Kongreso kasi constitutional body ito na naaayon sa Constitution.”

substitute coco-levy bill By Jovee Marie N. dela Cruz @joveemarie

he House Committee on Agriculture and Food has endorsed for plenary approval a substitute bill seeking to convert the assets of the coconut levy into a trust fund. Rep. Jose Panganiban Jr. of ANAC-IP, committee chairman and one of the authors of the bill, said their proposed measure, or an “An Act Establishing the Coconut Farmers and Industry Development Trust Fund and Providing for its Management and Utilization”, seeks to help coconut farmers nationwide. The bill refers to coconut-levy funds as the “various funds generated from levies, taxes, charges and other fees exacted or imposed pursuant to or in connection with the sale of copra rececada or its equivalent in other coconut products, and collected for the most part from coconut farmers, planters, millers, refiners, processors, exporters, desiccators and other end users of copra rececada or its equivalent in other coconut products.” “The benefits due to coconut farmers, especially the poor and the marginalized under various statutes shall be consolidated and their delivery expedited,” Panganiban said. The lawmaker added the Supreme Court has declared in 2012 that the coconut-levy fund is government-owned to be used solely for the benefit of coconut farmers and for the development of coconut industry. Panganiban, citing the Bureau of Treasury (BTr), said “the total amount of the coconut-levy fund is P62.5 billion in cash, deposited in special account in the general fund, which is not earning interest because it cannot be invested, adding that it needs a law in order to be utilized.” He said the other amount of P13.09 billion is held in escrow and earning interest. He also cited the Presidential Commission on Good Government (PCGG) report, which stated that

as of 2014 the coconut levy assets amount to around P20 billion. The bill calls for the establishment of the Coconut Farmers and Industry Development Trust Fund, depositing the trust fund in the BTr, and using the P10-billion initial trust fund within two years from the approval of the “Coconut Farmers and Industry Development Plan” by the President. The bill also provides for the creation of the Coconut Farmers and Industry Development Trust Fund Committee, under the Office of the President, which shall monitor the implementation of the Coconut Farmers and Industry Development Plan and approve disbursements out of the trust fund. Nine representatives from the coconut farmers’ organizations (three representatives each from Luzon, the Visayas and Mindanao) will be named as members of the Coconut Farmers and Industry Development Trust Fund Committee. The bill also provides for the creation of an ad hoc committee that will prepare every 10 years a plan of programs, projects and activities to be funded from the trust fund, and whose members include nine representatives from the coconut farmers’ organizations (three representatives each from Luzon, the Visayas and Mindanao). It also mandates the PCGG to undertake a full accounting and inventory of all coconut-levy assets; and the Commission on Audit (COA) to audit the inventory of the coconut-levy assets prepared by the PCGG. Nacionalista Party Rep. Luis Raymond Villafuerte of Camarines Sur, underscored the urgency of the proposed law, saying coconut farmers have been waiting for the said measure for 32 years already. Villafuerte said the coconutproducing provinces or areas must be given priority in the allocation of funds since the coconut-levy was derived from the said provinces or areas, adding that it should be stated in the implementing rules and regulations to be implemented so it will not be politicized.

The Regions BusinessMirror

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Robinsons Land to build new Bogo transport terminal

DA eyes structure at Benham Rise

By Manuel T. Cayon | Mindanao Bureau Chief

NFANTA, Quezon—Agriculture Secretary Emmanuel F. Piñol is looking at the possibility of putting up a multirole structure at Benham Rise off eastern Luzon to stop further foreign poaching.

By Charles R. Pepito Correspondent

HE Gokongwei-led Robinsons Land Corp. (RLC) is currently undertaking the transfer of the Bogo Central Transport Terminal in Cebu from its present location in Barangay Gairan to Cayang, where it will construct its mall and hotel. The construction of the new terminal is expected to cost P80 million. This is in line with the company’s commitment to the City of Bogo to construct a full-service transport terminal that will be operating 24/7 to accommodate transients and commuters bound to and from Cebu City, municipalities and other cities in northern Cebu. The full-service terminal is slated for turnover and completion by July 2017. It will have loading and unloading bays for buses, jeepneys and vans. Its facilities include a terminal office, a comfortable passenger waiting area, a baggage area, male and female toilets with person with disabilities toilet and an array of food-cart choices. The terminal’s modern design is complemented with greenery and landscaping that match Bogo’s laidback environment. Bogo City Mayor Carlo Jose Martinez said construction of terminal started in January at no cost to the city government. “RLC will gauge how big the mall they are going to construct by starting a bus terminal to measure the volume of traffic in the City of Bogo,” Martinez said. Martinez said RLC will turn over the project to the city upon its completion and the city will operate it. The partnership agreement stipulated that RLC will be exempted from paying real-property taxes for five years. “All revenues generated in the bus terminal, taxes, fees, charges all go to the city,” Martinez said. Martinez said they have been eyeing the transfer of the existing transport terminal to prevent big buses from entering the Poblacion area with narrow roads. “We are happy. There will be rerouting in the city center where big buses are no longer allowed to enter for safety of our residents,” he said.City Public Information and Communications Office Chief Rhett Vincent Minguez said the transfer of bus terminal would also decongest the city center, considering the number of new commercial establishments, including fast-food chains, in the area. Bogo City is the fastest-growing city located north of Cebu. It is known for its sugarcane produce, rich fisheries and leisure sites for tourism. It has become the commercial hub for traders, merchants and nature lovers, as well. Twenty-nine barangays will directly benefit from the upcoming transportation infrastructure.

Editor: Efleda P. Campos • Monday, May 8, 2017 A5

BINATBATAN

A native dance in Vigan depicts separating cotton from the pod using a bamboo stick. The dance, the main attraction of the Binatbatan Festival, is usually celebrated during the first week of May. Dancers from the city and neighboring areas participate in the street-dance showdown. Here, they perform at the famous cobbled street called Calle Crisologo. MAU VICTA

Household population in Eastern Visayas reached 4.2 million in 2015 By Elmer V. Recuerdo Correspondent

ACLOBAN CITY—The household population of Eastern Visayas reached 4,425,172 persons in 2015. This is 335,438 higher than the 4,089,734-household population reported in 2010. The figure was based on the 2015 Census of Population (POPCEN) conducted in August 2015. The household population comprised 99.7 percent of the total regional population, while the remaining 0.3 percent is comprised of the institutional population, or those residing in collective or institutional living quarters, such as hospitals, orphanages and military camps; and Filipinos in Philippine embassies, consulates and missions abroad. Leyte (excluding Tacloban City) had the highest number of household population among provinces with 1.72 million, accounting for 38.8 percent of the total household population in the region. Biliran recorded the smallest household population with 170,735. Among cities (excluding Tacloban City), Ormoc City, Leyte had the highest number of household population with 214,464. The City of Borongan, Eastern Samar recorded the least number of household population with 68,464. Tacloban City, the lone Highly Urbanized City (HUC) in the region, recorded a total of 240,513 household population.

The total number of households in the region increased by 13.9 percent in 2015, from 865,657 household in 2010 to 985,913 households in 2015. L ey te (e xc lud ing Tac loban City) recorded the most number of households among provinces with 405,873. Bi l iran recorded t he least number of households with 38,518. Among cities (excluding Tacloban City), Ormoc City, Leyte had the highest number of households with 50,341, while the City of Borongan, Eastern Samar recorded the least number of households with 15,120. Tacloban City, the HUC in the region, registered 50,547 households in 2015, from 45,478 households in 2010. The average household size (AHS) in the region in 2015 was recorded at 4.5 persons, lower than the AHS of 4.7 persons in 2010. This means that based on the recent census taking, on the average, a typical household in Eastern Visayas had less than five members. Northern Samar recorded the highest AHS in the region of 5 persons. Leyte (excluding Tacloban City) posted the lowest average household size of 4.2 persons. Among cities (excluding Tacloban City), the City of Catbalogan, Samar had the highest average household size at 4.9 persons, closely followed by Calbayog City, Samar with 4.8 persons. The City of Baybay, Leyte recorded the lowest AHS of 4.1 persons.

Publicly listed Robinsons Land Corp. signed a partnership with the local government unit of Bogo City for the establishment of Bogo Central Transport Terminal, which will serve commuters going to and from Cebu City and other cities in the northern part of Cebu. This new terminal will have a modern design, is complemented by greenery and landscaping that matches the city’s laid-back ambiance. (Contributed Artist’s Perspective)

Piñol disclosed the plan before 700 fishermen in this province, who received fiber-glass fishing boats, commitment of storage plants, and assignment of security personnel against poachers. Piñol and a team of scientists and technical divers were scheduled to proceed to Benham Rise over the weekend. Piñol said the structure, if constructed, would serve as a research and docking facility, aside from its main intention to prevent foreign fishermen. Taiwanese and Vietnamese fishermen have been identified by locales as the common poachers in the area. He said the Department of Agriculture would assign scientists to man the research station, as he also asked the Polilio Island town officials to recommend one local resident to be hired at the local Bureau of Fisheries and Aquatic Resources.

“The resident will be our local contact on aquatic issues in this area,” he said. A woman village official from Polilio confirmed poachers were present and have become aggressive, “hitting our bancas”. Piñol said he would also ask National Police Chief Director General Ronald M. dela Rosa to assign police in the patrols and to charge arrested poachers and those engaged in illegal fishing. He has also committed two patrol boats. Piñol said the Benham Rise structure would have an ice-producing capacity to ensure fishermen docking at the structure will have ice supply for their fish catch. Shortly before he left for the Benham Rise expedition last Friday afternoon, Piñol committed eight 38-footer fiberglass boats and 200 30-footer fiberglass boats in several coastal towns of Quezon.

Agriculture/Commodities

Monday, May 8, 2017 • Editor: Jennifer A. Ng

BusinessMirror

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IRRI, govt to conduct irrigation research By Jasper Emmanuel Y. Arcalas

@jearcalas

he International Rice Research Institute (IRRI) said it has entered into an agreement with the National Irrigation Administration (NIA) to determine the most efficient way of distributing irrigation water.

IRRI said it has inked a threeway memorandum of agreement with the NIA and Pinag-Isang Damdamin ng mga Magsasaka ng Mabacan River Irrigation System Inc. (Pidammaris), a farmers’ association, to conduct a study on the distribution of irrigation water. “The project will look at rice productivity and water use, sustainability of rice-production systems, water quality and the overall operations and management of a local irrigation system, with the goal of developing a model approach for other irrigation systems under the NIA,” IRRI said in a statement. The Los Baños-based institute noted rice uses approximately 30 percent of the freshwater used for crops worldwide. Also, more than 80 percent of developed freshwater resources are used to irrigate rice. “Thus, any means to reduce the need for and actual usage of water without compromising yield will help improve distribution in areas with irrigation and improve supply in areas with scarce water supply,” IRRI said. Under the agreement, IRRI would allocate 20 to 40 hectares

of Zeigler Experiment Station (ZES) at its Laguna-based headquarters to serve as the research site for the project. The NIA would provide the access to irrigation water from a main canal that it maintains, located at the lowland area of the IRRI farm, according to IRRI. “To protect the water supply for other rice farms serviced by the NIA, a threshold will be determined, beyond which IRRI will be allowed access to water for purposes of the research,” IRRI said. “Water use will be paid for by IRRI, which has also committed to assist the NIA in calibrating the Mabacan River Irrigation System [RIS], using IRRI instruments to measure flow rates, and IRRI staff to lead the collection. The Mabacan RIS flows out of a watershed in Calauan, a nearby municipality,” it added. Pidammaris will be responsible in monitoring the discharges of irrigation water from the NIA canals flowing to the ZES and will also handle the maintenance of the canals and monitoring of the irrigation water quality, according to IRRI.

Sustained campaign vs beverage firms using high-fructose corn syrup urged

Local milk production up 3.78% in 2016–NDA T he country’s local milk production in 2016 grew 3.78 percent to 21,160 metric tons (MT), from 20,390 MT recorded in 2015, according to the latest report of the National Dairy Administration (NDA). In its report, titled “Philippine Dairy Update”, the NDA attributed the expansion of production to the increased number of the milk-producing herd in the country. “Based on the report of the Philippine Statistical Authority [PSA], the noted intervention by the NDA and Philippine Carabao Center [PCC] for cattle, carabao and goat milk production coupled with higher demand for cow’s and carabao’s milk resulted in higher milk production and better pricing,” the report read. The NDA said the value of local milk production last year reached P715.42 million, 10 percent higher than the P653.30 million recorded in 2015. Data from the NDA showed that the number of dairy-producing herd in 2016 reached 55,776 heads, 7.25 percent more than the 52,005 heads recorded in 2015.

by 3 percent to 8,495.79 MT, from 8,778.40 MT in 2015. Through various interventions, the NDA said it has “successfully improved” the country’s average milk yield per day last year by 3.77 percent to 57.97 MT per day, from 55.86 MT per day recorded in 2015. “Of the total milk output of 21.16 million liters [21,160 MT], production from NDA-assisted dairy farms accounted for 74 percent, or a total of 15.62 million liters [15,620 MT],” the report read. However, despite the increase in production, the share of local milk output to the country’s total supply last year shrank due to the increase in imports. “The increase in local production of 4 percent accompanied by an increase in imports of liquid milk by 55 percent, resulted in 24-percent share of local production to total liquid milk supply [lower than the previous year’s level of 32-percent share],” the report read. “Hence, local production contributes one glass out of four glasses of liquid milk supply,” it added. The Philippines bought a total

“Of this inventory, dairy cattle registered a number of 25,697 heads and the number of dairy carabaos reached 17,802. Goat inventory totaled to 12,277 heads,” the report read. Data from the attached agency of the Department of Agriculture showed that dairy cattle population last year expanded by 5.96 percent, while the number of cattle and goats increased by 2.91 percent and 17.44 percent, respectively, compared to their levels in 2015. “By animal source, 64 percent of the total volume of milk produced came from dairy cattle, 33 percent from carabao and 3 percent from goat,” the NDA said. T his meant t hat t he loca l dairy cattle population produced 13,542.4 MT of the total milk output, while, carabaos accounted for 6,982.8 MT and goats supplied the remaining 634.8 MT. NDA data also showed that Luzon remained as the top milkproducing island in the country, accounting for 40.15 percent of the total output last year. However, milk production in Luzon dropped

Responsible farming

BLOOMBERG

ACOLOD CITY—The Sugar Alliance of the Philippines urged Negrenses to help sustain the boycott of beverage firms using high-fructose corn syrup (HFCS) as alternative sweetener. The group’s Spokesman Emilio Yulo III made the call, as composite price of sugar as of last Friday dropped to P1,200 to P1,250 per 50-kilogram bag. “We are appealing for sustained campaign against beverage companies using HFCS,” Yulo said, as he disclosed that the alliance is “very much worried” with the industry’s fate in the succeeding crop year. Industry stakeholders have attributed the massive decrease in sugar prices to the unregulated importation of HFCS, prompting the Sugar Regulatory Administration to issue Sugar Order 3, regulating the entry of the commodity, a move questioned by Coca-Cola Femsa Philippines in court. On April 18 the Senate Committee on Agriculture, Trade, Commerce and Entrepreneurship conducted a hearing on the impact of increasing importation of HFCS. On May 16 the House Committee

FILE PHOTO

on Agriculture and Food will also conduct an inquiry in aid of legislation on the impact of the importation, use and sale of HFCS on the sustainability of the sugar industry. Yulo urged Negrense lawmakers to support the sugar industry during the congressional hearing. In support of the sugar industry protest against Coca-Cola’s use of HFCS, local government units (LGUs) in Negros Occidental holding their fiesta celebrations have banned the sale of Coke products. Among these is Pontevedra town, which is prohibiting the sale of Coke products during its Handurayo Festival and annual town fiesta from May 4 to 9. Other LGUs that joined the Coke boycott include Hinigaran town, during the Hinugyaw Festival from April 20 to 30, and La Carlota City, during the Pasalamat Festival from April 24 to 30. Isabela town also prohibited the sale of Coke products during its town fiesta on April 19 to 22. Gov. Alfredo Marañon Jr. was the first to declare the ban of Coke products in this year’s Panaad sa Negros Festival from April 22 to 30 in Bacolod City. PNA

hen discussing agrifood supply chains, our main focus is the interlink between the farmer, the food processor and the food consumer. The supply chain itself has handicapped the ability of the Philippines to guarantee food security and increase its agricultural products’ competitiveness at an international level. Farm-to-market infrastructure, including roads and logistics services, are an important hindrance to the supply chain. It is estimated that 20 percent to 50 percent of fresh goods are damaged during the journey from market to consumer (postharvest losses are estimated at 30 percent, compared to just 6 percent in Thailand). Additionally, the lack of a support framework, such as effective cooperatives, to ensure that farmers are able to access the market at competitive prices, has meant that they are vulnerable to middlemen. And I fully agree with Ernie Ordoñez, who mentioned in his column the other day: Extension work is key to agriculture success. One aspect when discussing the agrifood supply chains is unfortunately not high on the Philippine

Henry J. Schumacher

europe Beat agenda: the use of excessive antibiotics in farming. We are aware that antibiotics are used in animal husbandry, poultry farming and aquaculture in the Philippines and many countries around the world, including the US. The US Food and Drug Administration has estimated 80 percent of all antibiotics sold in the US are used on animals. While antibiotics are used to ensure better health and survival of animals bred for food, little concern has been raised so far about what that does to the food consumer. A British government report estimates that about 700,000 people worldwide currently die annually due to antibiotic-resistant infections. If current trends continue, this mortality rate will rise to 10 million yearly by mid-century. And how is the situation in the Philippines? In one of my last visits to

the Department of Health (DOH), I saw a big sign: 80 percent of Filipinos are antibiotic resistant! The lack of effective national surveillance and supervision of antibiotic use in animal products masks the severity of the threat. Here is a good example that things can be changed: to meet increasing demand for meat raised without certain antibiotics, top US chicken company Tyson Foods Inc. and rival producers are turning to sanitizing wipes, bacteria-reducing fog and even oregano to keep birds healthy. Yum Brands Inc.’s KFC became the last of the big three US chicken restaurants to move away from antibiotics important to human medicine. McDonald’s Corp. and privately held Chickfil-A had already made similar commitments earlier. Tyson, one of KFC’s suppliers, set a goal in April 2015 to eliminate the use of human antibiotics from its broiler flocks, or those raised for meat, by the end of September 2017. More than 90 percent of broiler chickens in its supply chain were raised without antibiotics also used by humans in its fiscal year 2016.

of 65,600 MT of ready-to-drink liquid milk from abroad last year, 53.77 percent higher than the 42,660 MT imported in 2015. Despite the government’s intervention to hike local milk production, it failed to achieve its target output of 47,160 MT in 2016, as indicated in the Dairy Industry Roadmap (DIR) 2010-2016, which was prepared by the NDA. To expand the number of dairyproducing herd, Agriculture Secretary Emmanuel F. Piñol said the government would create a national registry program to establish the genetic lineage of the animals. “The Department of Agriculture [DA] would also support the establishment of municipal multiplier farms and learning centers in the different parts of the country and provide financial assistance for feed mills,” Piñol said in his Facebook post dated May 4. The DA chief, who served as a key speaker during the recent 20th Dairy Congress and Expo in Camiguin, announced that the DA would craft a 10-year Philippine Dairy Industry Development Roadmap. Jasper Emmanuel Y. Arcalas

The company also plans to switch its retail line of Tyson-branded chicken products to birds raised without any antibiotics. Given the fact that 80 percent of Filipinos are antibiotic-resistant, this problem also needs to be addressed in the Philippines, both in terms of supervising the raising of chickens and hogs. This definitely part forms of responsible farming that the Department of Agriculture and its agencies should promote and control. At the same time, the DOH and the Food and Drug Administration (FDA) have to provide information to patients who are buying antibiotics that they have to use antibiotics for a number of prescribed days. We have to get away from the habit of halting the use of antibiotics as soon as the first sign of health improvement becomes visible. As we do not get complete packages with written information on application and side effects of medicines at pharmacies, patients are short-changed and endangered. Again, this is something the DOH and the FDA should look into.

news@businessmirror.com.ph

AseanMonday BusinessMirror

Indonesian CB warns vs slowing key sectors

AKARTA—A senior official at Indonesia’s central bank expressed concerns about the slowing key sectors of manufacture and trade in the first quarter this year, which are below the economy growth in the period of 5.01 percent. He said the slowing growths in the two sectors, which have significant contributions to the nation’s economy, may hinder the nation’s efforts in pursuing higher growths in the following quarters this year. “Manufacture sector, which only grew 4.21 percent from January to March this year, was way too low for the economy, given the facts that Indonesia has great potential as manufacture basis [for investors],” Bank Indonesia (BI) Deputy Governor Mirza Adityaswara said last Friday. The figure was lower than 4.59 percent in the corresponding period last year. Manufacture contributed 20.47 percent to the nation’s economy growth in the first quarter. Mirza said the government

should intensify the implementation of reform drive in manufacture sector to further boost it, and simplify the procedures to start business both in the central government and in regional ones. Besides the manufacture sector, Mirza was also concerned about slowdown in trade sector that stood at 4.77 percent. The sector accounts for 13.8 percent of the nation’s economy in the period this year. “Growth in the sector can actually grow up to 6 percent during vibrant season. The slowing growth in the first quarter showed that demands in family consumption have not entirely recovered,” he said. Commenting on the 5.01-percent growth attained by the nation’s economy in the first quarter, Mirza said it was above the central bank’s initial estimate at below 5 percent. The Indonesian central bank initially forecast that the nation may see 5-percent to 5.4-percent economic growth this year. PNA/Xinhua

Editor: Max V. de Leon • Monday, May 8, 2017 A7

Cambodia sees WEF on Asean to boost regional devt, stability

HNOM PENH—The World Economic Forum (WEF) on Asean 2017, to be held in the Cambodian capital next week, will yield substantive outcomes to further promote sustainable development, peace, stability and prosperity in the Asean region. According to a Cambodian Foreign Ministry statement, President Duterte, Vietnamese Prime Minister Nguyen Xuan Phuc, Lao Prime

Minister Thongloun Sisoulith, representatives of heads of state and government and ministers from across Asia-Pacific region will take

part in the May 10 to May 12 forum. Cambodian Prime Minister Samdech Techo Hun Sen will open the forum on May 11 under the theme: “Youth, Technology and Growth”. “The [WEF] on Asean 2017 is expected to focus on how the region’s expanding young and dynamic work forces can be engaged in ways that build the brightest future for the region,” the statement said. It added that the forum will also provide an opportunity to raise Cambodia’s international profile and enhance the national prestige of Cambodia.

“Furthermore, it will contribute to the promotion of investment opportunities and tourists to the kingdom where the majority of huge potentials has yet been unlocked,” the statement said. The WEF was established in 1971 as a not-for-profit foundation with its headquarters in Geneva, Switzerland. The forum holds annual meetings in Davos, Switzerland, but also convenes regional meetings each year across Africa, Europe, Latin America and the 10-member Asean. Last year the WEF on Asean was held in Kuala Lumpur, Malaysia. PNA/Xinhua

Indonesia: About 200 remain at large after jail break

US expresses concern for detained Cambodian human-rights workers

HNOM PENH, Cambodia— The US has joined the European Union (EU) and UN humanrights agencies in expressing concern over the extended pretrial detention of five Cambodian human-rights workers held for more than a year. The five current or former staff members of the group Adhoc—the Cambodian Human Rights and Development Association—are being held for allegedly bribing a woman to change testimony that was damaging to then-Deputy Opposition leader Kem Sokha, who was accused of acting illegally in connection with an alleged extra-marital affair. The related cases are generally seen as part of a campaign by Prime Minister Hun Sen’s government to weaken its political opponents, especially ahead of nationwide local elections this June. Hun Sen and his ruling Cambodia People’s Party have hounded the opposition through the courts, which are considered to be under their political influence. A Cambodian court late last month agreed to allow a six-month extension of the activists’ pretrial detention. “They have been subjected to a never-ending nightmare of deliberate delays and political manipulation of the judicial system designed to punish them, and intimidate civil society to stifle

any criticism of the government as the country heads into commune, and then national, elections,” New York-based Human Rights Watch and Forum-Asia, a network of human-rights organizations, said last month. Cambodia’s veteran opposition leader Sam Rainsy, the head of the Cambodia National Rescue Party, is facing prison time for defamation and other charges he alleges are groundless and politically motivated. He has stayed in exile and resigned his position, which is now held by Kem Sokha. Under a recently passed law, the party was threatened with dissolution unless Sam Rainsy resigned. A statement released last Friday by the US State Department noted the delay in holding a trial and how it stressed the detainees’ families. It urged Cambodia to meet its obligations under international human-rights statutes. The EU issued a similar statement on Thursday calling for the rights of the detainees to be upheld. Cambodia’s Foreign Ministry expressed dismay over the EU’s reference to the activists’ extended detention, which it described as “absolutely the domestic affair of Cambodia”. It said the statement violated the Vienna Convention on Diplomatic Relations. AP

A plain-clothed police officer arrest an inmate who escaped from Sialang Bungkuk Prison in Pekanbaru, Riau province, Indonesia, on May 5. Hundreds of police and soldiers were deployed to search for some scores of inmates who escaped last Friday from the overcrowded prison on Sumatra island. AP

EKANBARU, Indonesia— Indonesian authorities said about 200 inmates remained at large two days after a mass escape from an overcrowded prison on Sumatra island. The prison break last Friday occurred when prisoners were let out of their cells at Sialang Bungkuk Prison in Pekanbaru, the capital of Riau province, to perform prayers. They broke through a prison door, overwhelming the few guards on duty.

Local police chief Susanto, who goes by one name, said 242 men were recaptured by Sunday morning, leaving about 200 still at large. Authorities were initially uncertain about how many prisoners had escaped from the prison, estimating the numbers at between 100 and 300. The police said some of the men surrendered or were returned by their families while others were captured by residents, police and soldiers. Various officials have said the

prisoners were angry at poor conditions and treatment. The prison has a capacity of about 360 but, according to local Police Spokesman Guntur Aryo Tejo it is holding more than 1,870 men. Tejo said four of the recaptured inmates were apprehended by the police late Friday about 100 kilometers from the prison on a bus heading for neighboring West Sumatra province. Hundreds of police and soldiers have been deployed since

Friday in the hunt for the prisoners. Jailbreaks are common in Indonesia, where overcrowding has become a significant problem in prisons that are struggling to cope with poor funding and an influx of people arrested under a war on drugs. Friday’s escape was the biggest since July 2013 when about 240 prisoners, including several convicted terrorists, escaped following a deadly riot at a prison in Medan, the capital of North Sumatra province. AP

Thai government revokes passport of fugitive Red Bull energy drink heir

ANGKOK—Thailand’s government has canceled the passport of a fugitive heir to the Red Bull energy drink fortune who is wanted on deadly hit-andrun charges, a Foreign Ministry official said. Vorayuth “Boss” Yoovidhya will no longer be able to enter other countries on that passport and his immigration status is invalid in whatever country he is currently visiting, making him subject to penalties under that country’s laws, Foreign Ministry Spokesman Busadee Santipitak said last Friday. Vorayuth fled Thailand last month just before a warrant for his arrest was issued. He flew to Singapore two days before he was due to appear before prosecutors in one of several planes jets owned by his family’s companies, but left two days later. His current whereabouts are unknown. The warrant was issued almost five years after Vorayuth allegedly left a motorcycle police officer dead after crashing into him with his

IN this April 5 file photo, Vorayuth “Boss” Yoovidhya, whose grandfather co-founded energy drink company Red Bull, walks to get in a car as he leaves a house in London. Thailand’s government has canceled the passport of the fugitive heir to the Red Bull energy drink fortune who is wanted on deadly hitand-run charges, a Foreign Ministry official said on May 5. AP

Ferrari at high speed. Police Maj. Gen. Apichart Suribunya said earlier this week that Thailand on Friday would begin the process of having Interpol issue a Blue Notice advising officials in 190 countries that Vorayuth is wanted. His family is half-owner of the Red Bull energy drink company, which has brought them an estimated wealth of more than $20 billion. Earlier this year, The Associated Press (AP) watched Vorayuth, 32, and his family enjoying a $1,000-anight vacation in Lao PDR, and reported on more than 120 socialmedia postings of him traveling in luxury through more than nine countries since the accident, snowboarding in Japan, attending Grand Prix races with team Red Bull and visiting beach resorts. All that time he’d been repeatedly telling prosecutors, through his attorney, that he was sick or out of the country on business when called in to face charges. His attorney and Red Bull have not

responded to requests for comment. Since the AP report, friends and family who had been posting his photos on social media over the years have stopped. Although his Facebook page is still up, the name has changed, and was updated with a photo of an airplane wing. Vorayuth is not necessarily immobilized by having his Thai passport revoked. It is possible to obtain a passport in several countries by making a minimum level of investment, or in some cases, what amounts to almost a straight cash payment. Former Thai Prime Minister Thaksin Shinawatra has been abroad since 2008 to avoid serving a prison term for what he has described as a politically motivated conviction on a conflict of interest charge. He had his Thai passports—an official one and an ordinary one—revoked, but holds passports from Montenegro and reportedly Nicaragua, and travels frequently from his home in exile in Dubai. AP

Monday, May 8, 2017 • Editor: Lyn Resurreccion

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France chooses new prexy, deciding Europe’s fate

ARIS—Voters across France were choosing a new president on Sunday in an unusually tense and important election that could decide Europe’s future, making a stark choice between pro-business independent Emmanuel Macron and far-right populist Marine Le Pen. With Macron the pollsters’ favorite, voting stations opened across mainland France at 8 a.m. (0600 GMT) under the watch of 50,000 security forces guarding against extremist attacks. Polling agency projections and initial official results are expected as soon as the final stations close at 8 p.m. (1800 GMT.) The most closely watched and unpredictable French presidential campaign in recent memory ended with a hacking attack and document leak targeting Macron last Friday night. France’s government cybersecurity agency, ANSSI, is investigating the hack, which Macron’s team says was aimed at destabilizing the vote. T he fate of the European Union may hang in the balance as France’s 47 million voters decide whether to risk handing the presidency to Le Pen, who dreams of quitting the bloc and its common currency, or to play it safer with Macron, an unabashed pro-European who wants to strengthen the EU. Global financial markets and

France’s neighbors are watching carefully. A “Frexit” would be far more devastating than Britain’s departure, since France is the secondbiggest economy to use the euro. The country also is a central pillar of the EU and its mission of keeping postwar peace via trade and open borders. The vote will help gauge the strength of global populism after the victories last year of a referendum to take Britain out of the EU and Donald J. Trump’s US presidential campaign. In France it is a test of whether voters are ready to overlook the racist and anti-Semitic past of Le Pen’s National Front party. Le Pen has broadened the party’s appeal by tapping into—and fueling—anger at globalization and fears associated with immigration and Islamic extremism. Macron has argued that France must rethink its labor laws to better compete globally and appealed for unity and tolerance that Le Pen called naive. Either candidate would lead

People vote in the French presidential election at a polling station in Paris, France, on May 7. France votes on Sunday in a crucial presidential runoff between centrist Emmanuel Macron and far-right candidate Marine Le Pen. AP/Emilio Morenatti

50,000 The number of security forces deployed across France to guard against extremists

France into uncharted territory, since neither comes from the mainstream parties that dominate parliament and have run the country for decades.

The winner will have to try to build a parliamentary majority in elections next month to make major changes. Voting began on Saturday in overseas territories, from SaintPierre-et-Miquelon, an archipelago near Newfoundland, to French Guiana and the French West Indies and beyond. French citizens also turned out in droves to vote in the Canadian province of Quebec. Fears of outside meddling hung over the race after France’s election campaign commission said on Saturday that “a significant amount

S. Koreans want leader to create jobs, lessen corruption

EOUL, South Korea—Creating jobs, ending corruption and boosting stubbornly low birthrates should be high on a to-do list for South Korea’s next president after a campaign mostly dominated by security and foreign-policy issues. There’s concern that the economy will likely take a back seat to North Korea when South Koreans pick their next leader on Tuesday. Voters have been rattled by a row over who should foot the bill for a US antimissile system deployed in the country to defend against North Korean aggression, after President Donald J. Trump suggested that South Korea should pay more for US security commitment. Public demand for change in South Korea’s economic system remains high as growth and wealth continue to be concentrated in the hands of top few family-run business giants known as chaebol. Anger over allegations of collusion between big businesses and the government helped trigger massive monthslong protests that led to the ouster of President Park Geun-hye in March and the arrest of the de-facto leader at Samsung, South Korea’s largest business group. Leading presidential contenders have tried to tap into the discontent over economic injustice, high youth unemployment and increased inequality between those with full-time jobs at chaebol and those who are underemployed or looking for work. But the lack of concrete reform plans means that none of their economic agenda gained much attention during the campaign. “Candidates fell short of expectations from the public and could not thoroughly cover the reform agenda to change the economic system,” said Park Sang-in, a professor at Seoul National University’s Graduate School of Public Administration. “Their talks on jobs and innovation were so superficial that they could not win public support.” On jobs, the two main contenders hold different views on what the government should do.

South Korean presidential candidate Moon Jae-in of the Democratic Party greets supporters during an election campaign in Goyang, South Korea. AP/Lee Jin-man

Moon Jae-in, the front-runner from the main opposition Democratic Party, believes that a bigger government would be better for creating jobs and says South Korea needs more public workers. His main rival Ahn Cheol-soo also puts jobs high on his policy agenda but says the government should not be heavy-handed in intervening in the private sector and instead focus on making the markets fair and friendlier for innovation. “The origin of every crisis in South Korea is jobs,” Moon said during an economic debate. “It is because economic growth has continued without creating jobs and markets have failed to create jobs for a long time.” Moon’s campaign pledges include creating 810,000 jobs in the public sector, including bureaucrats, firefighters and social workers, at a cost of 4.2 trillion won ($3.7 billion) per year. Moon said he will add an extra budget of 10 trillion won ($8.8 billion) immediately once he takes office and a lion’s share of that will be allocated for job creation. Ahn’s campaign has argued that Moon’s approach is no different from the previous governments that have relied on chaebol for economic growth, showering them with special treatment that resulted in cozy ties that in many

cases led to corruption. Instead, his team supports the idea of easing regulations to encourage companies to take risks while the government focuses on supporting small firms. “So far, South Korea’s growth has been led by the government while giving special treatments to chaebol. That should change now,” Ahn said. “When the private sector, especially when small- and medium-sized companies and venture firms grow, more quality jobs will be created.” The two leading candidates also differ in what would be the best way to help small companies and encourage the country’s young talents who are drawn to high wages and job security at Samsung, Hyundai and other big businesses, to take more risks and work at small firms. Moon has pledged that the government will pay the salary of one in every three workers at small companies for three years. Ahn has promised that the government will guarantee high wages to young workers at small firms by giving $440 per month to an employee hired by a small company for two years. The new South Korean president, who will take office on May 10, will face a narrowing window of opportunity to restore the vitality in Asia’s fourth-largest economy.

There has been a growing sense of doom and lack of hope, especially among South Korea’s young generations. Youth unemployment has surged last year to nearly 10 percent—the highest since 2000. Flagging birthrates have never surpassed 1.3 babies per woman for nearly two decades. Government welfare spending is among the lowest in the world. Corporate culture is famous for being unfriendly to family or to raising children with one of the world’s longest working hours. That has created a vicious cycle of growing number of people who postpone or even give up on starting a family. Both Moon and Ahn recognize that the next administration should change all: the hereditary succession at the big businesses that distort market rules; the gaps between the full-time, stable jobs and contract jobs; the corporate culture and long working hours hostile to raising children. Whoever wins, South Korea will likely see attempts to limit the power of chaebol’s founding families, whose influence is compared to emperors even though they hold a small stake in publicly listed companies founded by their fathers or grandfathers. To pass down the companies to the next generation of the founding families, it was common for them to make an elaborate scheme involving giving lucrative businesses to their sons and daughters and creating a complicated web of cross-shareholding. On chaebol reforms, Moon and Ahn’s pledges have been almost identical. They have promised to stop such unfair business leadership successions and to respond sternly to the white-collar crimes committed by chaebol’s founding families. The role of the trade regulator will be increased, they say. Improving corporate governance with the measures that would allow minority shareholders to have their voices heard on companies’ boards is also a key part of the chaebol reform plans for both candidates. AP

of data”—and some fake information—was leaked on social networks following the hacking attack on Macron. The leaked documents appeared largely mundane, and the perpetrators remain unknown. It’s unclear whether the document dump will dent the large polling lead Macron held over Le Pen going into the vote. The commission urged French media and citizens not to relay the leaked documents. French electoral laws impose a weekend news blackout on any campaigning and

media coverage seen as swaying the election. Le Pen’s campaign could not formally respond due to the blackout. The Macron team asked the campaign oversight commission to bring in cybersecurity agency ANSSI to study the hack, according to a government official who spoke to The Associated Press on condition of anonymity because they weren’t authorized to discuss the details publicly. ANSSI can only be called in to investigate cyberattacks that are “massive and sophisticated”—and the Macron hack appears to fit the bill, the official said. The documents leaked last Friday were widely circulated on farright sites based in the US. Experts dissecting the data said they spotted a couple of Russian names in the dump. From depressed northern France to the streets of Paris, some voters were just looking forward to the end of the vitriolic campaign. In Henin-Beaumont in northern France, where Le Pen cast her ballot on Sunday, 28-yearold Thomas Delannoy said the campaign “looks like reality TV”. The construction painter called the electoral process “laughable”, saying that neither candidate had a platform with which he could identify. Many voters expressed similar frustration, and a big question remaining on Sunday was how many of them would bother to vote. Unions already plan a protest on Monday regardless of whether Le Pen or Macron wins. AP

Trump weighing 95% cut to drug office, chief warns

he Trump administration is weighing a cut of almost 95 percent of the budget for the White House Office of National Drug Control Policy (ONDCP) at a time the president has pledged to aggressively combat opioid addiction, according to an internal memo. The office, which coordinates much of US drug strategy, including responses to trafficking, could see several grant programs for drug prevention discontinued under the proposal, which was decried by prevention advocates and members of Congress from both parties when it was reported last Friday. “These drastic proposed cuts are frankly heartbreaking and, if carried out, would cause us to lose many good people who contribute greatly to ONDCP’s mission and core activities,’’ Richard Baum, acting director, wrote Friday in a staff memo that was provided to news outlets. President Dona ld J.Tr ump pledged to take on the opioid epidemic during his presidential campaign as he traveled to many communities ravaged by heroin use and overdose deaths. White House Spokesman Sarah Sanders last Friday had dismissed reports about the proposed budget cuts, which were first reported by Politico, saying the president was committed to addressing the opioid crisis. “We haven’t had a final document and I think it would be ridiculous to comment on a draft version of something at this point,” she said. A spokesman for the Office of Management and Budget (OMB) provided a list of federal drug prevention programs in several agencies, indicating that changes to the drug policy office may be part of a broader restructuring. The fiscal year 2018 budget “is still under review and is not by any means a finalized document,” John Czwartacki, a spokesman for OMB, said in a statement. “Reports that suggest budgetary numbers or policy decisions are premature

and subject to change.”

Heroin epidemic fueled by legal drugs

Trump is scheduled to release his proposed budget for fiscal year 2018 later this month. Congress will have the final say on whether or not to accept his proposals. “We have a heroin and prescription-drug crisis in this country and we should be supporting efforts to reverse this tide, not proposing drastic cuts to those who serve on the front lines of this epidemic,” Sen. Rob Portman, an Ohio Republican, said in a statement. Trump signed an executive order on March 29 creating a “Commission on Combating Drug Addiction and the Opioid Crisis,” which directed the drug policy office to use its funds to cover the costs of the commission. “Opioid abuse has become a crippling problem throughout the US,” Trump said before signing the order. “This is a total epidemic. And I think it’s almost untalked about compared to the severity that we’re witnessing.” Scott Gottlieb, Trump’s pick to lead the US Food and Drug Administration, said in his confirmation hearing that tackling the opioid epidemic should be the agency’s highest priority. The crisis “has staggering human consequences,” Gottlieb said. Baum said the cuts proposed by the OMB would make it harder for the commission to achieve its goals. The commission is led by New Jersey Governor Chris Christie, a Trump supporter who also has been a strong advocate for addiction treatment. “OMB’s proposed cuts are also at odds with the fact that the President has tasked us with supporting his Commission on Combating Drug Addiction and the Opioid Crisis,’’ Baum said in the letter. A candidate to run the ONDCP, Republican Representative Tom Marino of Pennsylvania, withdrew from consideration on May 4 citing family reasons but said he’d remain in Congress. Bloomberg News

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US to attend climate talks; no decision yet on pullout

ASHINGTON—The US says it will continue attending UN climatechange meetings, even as President Donald J. Trump considers pulling the US out of a global emissionscutting deal. While US representatives are in Bonn, Germany, next week for the UN talks, Trump’s advisers will meet on Tuesday to discuss what to do about the global pact, known as the Paris Agreement, officials said. The conflicting signals suggested the administration was trying to keep its options open while Trump decides whether to withdraw, a move the international community would strongly oppose. Though Trump’s inclination has been to leave the agreement, he’s allowed his daughter, White House adviser Ivanka Trump, to set up an extensive review process, a senior administration official said. The goal is to ensure Trump receives information from both government experts and the private sector before a making a decision. To that end, Ivanka Trump will hold a separate meeting on Tuesday with Environmental Protection Agency Administrator Scott Pruitt, the official said. Pruitt is a chief proponent of leaving the deal and has questioned the science that says humans are contributing to global warming. And the decision to participate in next week’s UN climate talks shouldn’t be construed as a sign that Trump has decided to stay in the Paris pact, a State Department official added. To the contrary, the US will be sending a “much smaller” delegation than it has in years past, the official said. The officials weren’t authorized to discuss internal deliberations publicly and requested anonymity. Under the Paris deal, brokered by former President Barack Obama and world leaders in 2015, nations agreed to nonbinding pledges to cap or reduce emissions of heat-trapping greenhouse gases. The pact helped solidify a global consensus about addressing climate change that environmental groups worry may be undermined if the world’s largest economy withdraws. “If the US pulls out, it will be a pariah,” said Andrew Light, a climate adviser at the World Resources Institute. “It will be on the sidelines, and that’s going to hurt American businesses.” Trump, as a candidate, threatened to “cancel” the deal, but since taking office has said he’s studying it and plans a final decision soon. US officials say the timeline is being driven by the Group of 7 (G7) summit, which Trump will attend late this month in Italy. Trump needs to announce a decision before that summit so that leaders can determine whether and how to address climate-change issues during the G-7. The State Department official said that the US was focused on ensuring that no decisions are made in Bonn next week “that would prejudice our future policy”, undermine competitiveness for American businesses or restrict US economic growth. The US delegation will be led by Trigg Talley, the US deputy special envoy for climate change. The Trump administration has left the special envoy role vacant after the official who held the position in the Obama administration departed. Under the Paris deal, the US committed to cut its emissions 26 percent to 28 percent by 2025, compared to 2005 levels. Since Trump took office, the US has started deconstructing the set of regulations and climate policies that Obama put in place to help achieve the US target. AP

Monday, May 8, 2017

US jobless rate of 4.4% at 10-yr low

he jobless rate dropped to 4.4 percent in April, the lowest level in more than a decade, the government said last Friday, signaling the economy’s resilience and showing a labor market closing in on full capacity. Employers added 211,0 0 0 workers, the Labor Department said, helping to quell doubts raised by sluggish growth in the first quarter and anemic hiring in March. The economic anxiety and uneven fortunes that figured so prominently in the presidential campaign have not disappeared, particularly outside of the country’s flourishing urban centers. Wage growth was also modest, with the year-over-year increase staying just baby steps ahead of inflation. But some of the labor force’s weakest corners improved, with declines in the ranks of discouraged workers and of those working part time who would prefer fulltime jobs. The average monthly gain in jobs since February reached 174,000. “Great news,” Labor Secretary Alexander Acosta said last Friday morning on Twitter, adding in a later statement that further work was needed “on bridging the skills gap and on expanding opportunity”. Republicans were not alone in paying homage to the labor market’s strength. “The momentum in the job market is really impressive,” said Jason Furman, chief economic adviser during the Obama administration. “I’m frankly surprised that this late into an expansion the economy is still adding jobs well above the steadystate pace.” The April figures renewed a conversation among economists about

211,000 The number of new workers in April

whether the economy was at “full employment”, the point at which everyone who wants a job can get one at the current level of pay. There was less agreement on who deserved the credit. Republicans crowed about how many jobs had been created since President Donald J. Trump took office in January, while Democrats pointed to the ongoing economic legacy of President Barack Obama. Three months is still a short span in the life of an administration, and Trump has not yet pushed through the main planks of his pro-growth agenda, like tax reform or a large investment in infrastructure. Even so, some economists gave the president credit for a jump in optimism. “Sharp increases in consumer and business confidence can have real consequences that show up in increased hiring and investment,” said Douglas Holtz-Eakin, a former director of the Congressional Budget Office who advised Sen. John McCain, Republican-Arizona, during his 2008 presidential campaign. Holtz-Eakin added that Trump’s freezing of new regulations and elimination of others were having

Robert Adams, 52, the department of transportation project manager, walking onto the nearly complete Kosciuszko Bridge between Brooklyn and Queens in New York on April 18. The economy added 211,000 jobs in April, the Labor Department said, after weak hiring figures for March. The jobless rate declined to 4.4 percent. Jake Naughton/The New York Times

a measurable impact. “The observed pace of regulatory activity has come to a standstill,” he said. In contrast, he argued, a persistent rollout of regulations by the Obama administration had added millions of dollars in costs for businesses each week. Another major factor in the economy’s performance is, of course, the Federal Reserve (the Fed) Board, which put a confident stamp on the economy this week and plans to raise interest rates further this year. The jobs report last Friday strengthens that case, though another report is due before Fed policymakers meet again in June. And the wide swing between March’s disappointing jobs growth figure, which was revised to 79,000, and April’s vibrant one was a useful reminder

that every monthly jobs report provides only a temporary and incomplete snapshot of the economy. Whatever effect Trump’s policies are having, economists agree that presidents always tend to be given much more responsibility for the economy’s ups and downs than they deserve. “We have a big, big economy and the overall shape is made by millions and millions of individual decisions,” said Michael Strain, an economist at the American Enterprise Institute, a conservative think tank. “We tend to give too much emphasis to role of the president.” Certainly, the administration’s solidly pro-business agenda has buoyed many executives. At the same time, they have steadily compl a ined about a g row ing

shortage of workers. “It’s not an employer’s market,” said Patrick Bass, chief executive of Thyssenkrupp North America, which makes elevators, steel and other industrial products. Based in Germany, Thyssenkrupp employs more than 15,000 people in the US, but “the labor market is very competitive at all levels”, Bass said. “We have more positions open than we’ve been able to fill.” Yet, if shortages were as acute as advertised, then wages would be bid up at a faster rate. Average hourly earnings, though, rose by 0.3 percent in April, bringing the year-over-year growth to 2.5 percent. Last year at this time, increases were the same but inflation was lower, further shrinking the impact of any wage increases. New York Times News Service

Repeal of health-care act would hurt US job engine, experts say

rom Akron to Youngstown and Canton to Cleveland, as in cities and towns across the country, workers who once walked out of factories at the end of each shift now stream out of hospitals. While manufacturing employment has fallen nearly 40 percent in northeastern Ohio since 2000, the number of health-care jobs in the region has jumped more than 30 percent over the same period. In Akron, the onetime rubber capital of the world, only one of the city’s 10 largest employers still makes tires. Three are hospitals. “People who used to make deliveries to factories are now making them to hospitals,” said Samuel D. DeShazior, Akron’s deputy mayor for economic development. Akron’s transformation is echoed in places as varied as Birmingham, Alabama, Los Angeles and Pittsburgh, along with rural areas, like Iron County, Missouri, where health care accounts for one-fifth of all employment. T he outsize economic role of the US health-care industry heightens the risks posed by the Republicans’ effort in Washington to repeal the Affordable Care Act (ACA), enacted in 2010 under President Barack Obama, and it comes at a delicate moment for the broader economy. While the government reported last Friday unemployment was at its lowest point in more than a decade, the health-care industry has been an engine for much of that hiring—adding jobs at more than three times the rate of the rest of the economy since 2007. Nor is the growth limited to hospitals. With help from the vast expansion of Medicaid enrollment that began three years ago, nursing homes, outpatient centers and

Employees walk into the Clinic Tower at LAC+USC Medical Center in Los Angeles on May 5. The healthcare sector has been adding jobs at more than three times the rate of the rest of the economy since 2007, but those jobs could be threatened by the insurance coverage losses if the Affordable Care Act were repealed. Jenna Schoenefeld/The New York Times

medical labs have also grown, turning a fragmented industry into a strong political force. Governors on both sides of the aisle, as well as many moderate Republicans on Capitol Hill, have expressed concern over whether the repeal will hurt local economies, especially in places where health care has softened the blow from struggling industries like retailing now or manufacturing in the past. Moreover, in a recovery plagued by uneven growth and widening income inequality, the sector has been a reliable source of steady gains. Health care now equals almost one-fifth of GDP, up from 13 percent in 2000, and it is poised to leapfrog retailing and leisure and hospitality as the second-largest source of overall employment, after professional and business services, accounting for one in eight privatesector jobs.

The boom in health care did not begin with the ACA. The industry was among the only parts of the economy to emerge relatively unscathed from the Great Recession, and it has flourished under Democratic and Republican presidents alike. “Demographics and the expansion of Medicare and Medicaid in past decades contributed to the rise of health care’s share of the economy, and Obamacare extended that,” said Michael Gapen, chief US economist at Barclays. Nevertheless, he warned that if the legislation approved by the House on Thursday were to become law, which is far from certain given skepticism of the bill in the Senate, it could undermine overall economic growth. “It’s not trivial, and it’s much easier to constrain activity than to promote it,” Gapen said. “Reversing Obamacare is negative for the

economy in the next year or two.” The cost of providing coverage to millions more Americans has its own economic consequences. Many employers, particularly small businesses, complain that they are straining under the demands imposed by the law. They argue that the ACA stifles economic growth by forcing companies to pay heavy taxes and meet cumbersome regulatory burdens. Critics of the law, including many of the Republican backers of the proposed overhaul, say businesses and individuals are also being forced to pay for overly generous coverage. Whatever the macroeconomic dangers, economists say the potential effects on individual consumers are just as worrisome. The House version of the repeal legislation does include significant tax cuts, which usually stimulate economic activity—but with most of the savings going to wealthier households, that bounty is likely to be saved, not spent. At the same time, losing insurance coverage tends to constrain household spending, while increasing financial insecurity among families, according to Matt Notowidigdo, a professor of economics at Northwestern. A 2016 paper Notowidigdo worked on showed an uninsured hospital stay doubles the risk of bankruptcy for individuals, while lowering credit scores and leaving consumers with an average of $6,000 in unpaid bills. The proposed legislation poses more risks for some parts of the country than others, said Mark Duggan, a professor of economics at Stanford University. For example, about 9 percent of the population in Florida buys cov-

erage through the new exchanges created under the ACA, more than any other state. “If you lower the subsidies for coverage of 1.8 million Floridians, that will reduce what they can spend on other goods and services,” he said. Duggan said states, like Kentucky, Arkansas, New Mexico and West Virginia, would be hard hit by the planned cuts in Medicaid, estimated at more than $880 billion over 10 years. Another vulnerable slice of the population is workers who are a few years away from 65, when Medicare kicks in. “If there is a group that loses out the most, it’s near-seniors,” said Craig Garthwaite, director of the Healthcare Program at Northwestern’s Kellogg School of Management. “Their health care is so expensive, but the tax credit in the House bill caps out at $4,000.” Garthwaite, who is a registered Republican and describes himself as a conservative economist, said there were few benefits for local economies in the bill, “and from an individual standpoint, it will be financially crippling for the poor.” Already, he added, “we’re seeing hospitals pause and adjust to the uncertainty by rethinking expansion plans.” Hospitals, in particular, have been able to grow in recent years, with more of their patients now covered by either Medicaid or insurance purchased in the new exchanges. At the same time, an aging population and expensive new treatments like drugs to treat hepatitis C and once-fatal forms of cancer have increased demand from consumers at many health care providers, even as they have strained budgets. Health care now accounts for nearly one-fifth of overall consumer spending. New York Times News Service

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82 Chibok girls set free in Boko Haram exchange

AIDUGURI, Nigeria—Eightytwo Chibok schoolgirls seized three years ago by Boko Haram have been freed in exchange for detained suspects with the extremist group, Nigeria’s government announced early on Sunday, in the largest release negotiated yet in the battle to save nearly 300 girls, whose mass abduction exposed the mounting threat posed by the Islamic Statelinked fighters. The statement from the office of President Muhammadu Buhari was the first confirmation that his government had made a swap for the girls. After an initial release of 21 Chibok girls in October, the government denied making an exchange or paying ransom. T he Apr i l 2014 abduct ion by Boko Ha ra m brought t he extremist group’s rampage in northern Nigeria to world attention and, for families of the schoolgirls, began years marked with heartbreak. Some relatives did not live long enough to see their daughters released. Many of the captive girls, most of them Christians, were

276 The number schoolgirls kidnapped from Chibok in 2014

forced to marry their captors and give birth to children in remote forest hideouts w ithout ever knowing if they would see their parents again. It is feared that other girls were strapped with explosives and sent

on missions as suicide bombers. As word of the latest release emerged, long-suffering family members said they were eagerly awaiting a list of names and “our hopes and expectations are high”. Before Saturday’s release, 195 of the girls had remained captive. Now 113 of the girls remain unaccounted for. The freed girls were expected to meet with Buhari on Sunday in the capital, Abuja. A Nigerian military official with direct knowledge of the rescue operation said the freed girls were found near the town of Banki in Borno state near Cameroon. “The location of the girls kept changing since yesterday when the operation to rescue them commenced,” said the official, who spoke on condition of anonymity because he was not authorized to make the announcement. Boko Haram remains active in that area. On Friday the US and Britain issued warnings that the extremist group was actively planning to kidnap foreigners in an area of Borno state “along the Kumshe-Banki axis”. The 276 schoolgirls kidnapped from Chibok in 2014 are among thousands of people abducted by Boko Haram over the years. The mass abduction shocked the world, spark ing a globa l #Br ingbackourg irls campaig n supported by former US first lady Michelle Obama and other ce-

This May 12, 2014 file image taken from video by Nigeria’s Islamic extremist network, shows the alleged missing girls abducted from the northeastern town of Chibok. Eighty-two girls kidnapped from their Nigerian boarding school by jihadists three years ago have been released, a government official said on Sunday. Family members said they were awaiting names and other information before celebrating. AP

lebrities. It has put tremendous pressure on Nigeria’s government to counter the extremist group, which has roamed large parts of the north and into neighboring countries. “This is a very, very exciting news for us that we have over 80 of our girls coming back again,” Bukky Shonibare with the #BringBackOurGirls campaign told Sky TV. “Their life in captivity has been one that depicts suffering, it depicts the fact that they have

been starved, abused and as we have seen before some of those girls have come back with children, and some of them have also come back with news of how they have been sexually abused.” The latest negotiations were again mediated by the Swiss government and the International Committee of the Red Cross, Nigeria’s government said. At the initial release of girls in October, the government said the release of another 83 would be

Syria violence kills 4, wounds child despite safe zones

EIRUT—Violence left at least four opposition fighters dead and a child wounded in central and southern Syria last Saturday despite relative calm prevailing across the warravaged country after a deal to set up “deescalation zones” in mostly opposition-held areas went into effect, opposition activists and government media outlets said. The casualties were the first after the implementation of the agreement hammered out by Russia, Turkey and Iran—the latest attempt to bring calm to the countr y—commenced at midnight last Friday. T he establishment of safe zones is the latest international attempt to reduce violence amid a six-year civil war that has left more than 400,000 dead, and is the first to envisage armed foreign monitors on the ground in Syria. The US is not party to the agreement, and the Syrian rivals have not signed on to the deal. The armed opposition, instead, was highly critical of the proposal, saying it lacks legitimacy. Details of the plan must still be worked out over the next several weeks. There were limited reports of bombing in northern Homs and Hama, and the southern province of Daraa, areas expected to be part of the deescalation zones, activists said. It is not clear how the ceasefire or deescalation zones will be enforced in areas still to be determined in maps to emerge a month from now. Russian officials said it would be at least another month until the details are worked out and the safe areas established. In the tangled mess that constitutes Syria’s battlefields, there is much that can go wrong with the plan agreed upon in talks last Thursday in Kazakhstan. Syria’s government has said although it will abide by the agreement, it would continue f ight ing “ter ror ism” wherever it exists, parlance for most a r med rebel g roups f ight ing government troops.

COL. Gen. Sergei Rudskoi of the Russian General Staff, speaks to the media in the Defense Ministry in Moscow, Russia, on May 5. Russia’s military says the agreement setting up four deescalation zones in Syria will go into effect at midnight. The military also says the deal, which was signed by Russia, Iran and Turkey in Kazakhstan the day before, could be extended to more areas of the war-torn country. AP/Pavel Golovkin

The armed opposition delegation to the talks in the Kazakh capital of Astana said in a statement released early last Saturday that the truce should include all of Syria and not just specific areas. It sa id some m aps of t he deescalation zones that were released are not accurate, and will not be accepted, because the armed opposition did not negotiate them. Still, opposition activists in southern, central and northern Syria told The Associated Press last Saturday that the situation was more calm last Saturday than previous days, with little shelling and air strikes reported. The government-controlled Syrian Central Military Media reported there was “relative clam” last Saturday morning in the deescalation zones, nine hours after the deal went into effect.

The Britain-based Syrian Obser vator y for Human R ights, which has activists on the ground across the country, said the government’s helicopter gunships dropped at least 10 barrel bombs on the rebel-held Latamneh area and its surroundings in central Syria, where fighting was reported between rebels and troops. It added that government forces shelled rebel-held neighborhoods of the capital Damascus. “ Des pite some v iol at ion s, the situation is much calmer than before,” said opposition act iv ist Moha mmed a l-Homsi, spea k ing v i a Sk y pe f rom northern Syria. Ahmad al-Masalmeh, who is based in the southern province of Daraa that borders Jordan, said there were six breaches in the province when government forces shelled opposition-held areas. The Observatory and al-Ma-

salmeh said government forces targeted a rebel position near the southern town of Khirbet Ghazaleh, killing four fighters. It was not immediately clear if the fighters were members of the al-Qaeda-linked Levant Liberation Committee that is usually excluded from cease-fires. T he Obser v ator y a nd t he Ghouta Media Center, an activist collective, said a child was wounded when government forces shelled the Damascus suburb of Kfar Batna. Syrian state TV said rebels shelled the central governmentheld town of Mahrade, but had no immediate word on casualties. Syrian, Russian, Turkish and US-led coalition aircraft sometimes operate in the same areas in Syria. It is not yet clear how the new plan would affect flightpaths of coalition warplanes battling militants from the Islamic

State (IS) group and other radical groups—and whether the American air force would abide by a diminished air space. The Pentagon said the deescalation agreement would not affect the US-led air campaign against the IS. The US military said in a statement that Gen. Joseph Dunford, the chairman of the US Joint chiefs of Staff, spoke last Saturday with Gen. Valery Gerasimov, the Russian Federation chief of General Staff about the recent Astana agreement, and affirmed their commitment to deconflicting operations in Syria. Both also agreed to maintain regular contact, the statement said. Russia and Iran—two of the plan’s three sponsors—are key allies of President Bashar al-Assad’s government, and both are viewed as foreign occupation forces by his opponents. Rebels fighting to topple Assad are enraged by Iran’s role in the deal, and blame the Shiite power for fueling the sectarian nature of Syria’s conflict, now in its seventh year. Turkey, the third sponsor, is a major backer of opposition factions, and has also sent troops into northern Syria, drawing the ire of Assad and his government. Yet, troops from the three countries are now expected to secure four safe zones. An official with Russia’s military general staff said other countries might eventually have a role in enforcing the de-escalation areas. Russian Col. Gen. Sergei Rudskoi told reporters last Friday that personnel from Russia, Iran and Turkey will operate checkpoints and observation posts. But it’s difficult to imagine how many boots on the ground wou ld be needed to monitor the yet to be mapped areas or how and where e x act ly Russian, Iranian and Turkish troops would patrol. A previous cease-fire agreement that went into effect on December 30 helped reduce overall violence in Syria for several weeks, but eventually collapsed. Other attempts at a cease-fire in Syria have all ended in failure. AP

coming soon. But at the three-year anniversary of the kidnapping in April, the government said negotiations had “gone quite far”, but faced challenges. Buhari late last year announced Boko Haram had been “crushed”, but the group continues to carry out attacks in northern Nigeria and neighboring countries. Its insurgency has killed more than 20,000 people and driven 2.6 million from their homes, with millions facing starvation. AP

Protests continue in Venezuela; Hugo Chavez’s statue destroyed

ARACAS, Venezuela—Women banged on pans, and some stripped off their white shirts last Saturday as they protested Venezuela’s socialist government in an event the opposition billed as a “women’s march against repression”. As they marched, local media carried a video showing people toppling a statue of the late President Hugo Chavez the day before in the western state of Zulia. Thousands of women took over streets in major cities all around the South American country. Wearing the white shirts of the opponents of country’s increasingly embattled government, the women sang the national anthem and chanted, “Who are we? Venezuela! What do we want? Freedom!” Some sported makeshift gear to protect against tear gas and rubber bullets. Others marched topless. One woman came in her wedding dress. As they have near-daily for five weeks, police in riot gear again took control of major roads in the capital city. Clashes between police and protesters have left some three dozen dead in the past month. Local news media carried a video circulating on Twitter of the Chavez statue being pulled down. The media reported that students destroyed the statue as they vented their anger with the food shortages, inflation and spiraling crime that have come to define life here. Several young men could be seen bashing the statue that depicted the socialist hero standing in a saluting pose, as onlookers hurled insults as the late president. Defense Minister Vladimir Padrino Lopez last Friday denounced the protest movement, and said opposition “terrorists” were attempting a kind of nonconventional warfare. The protest movement has drawn masses of people into the street nearly every day since March, and shows no sign of slowing. Last Saturday, some of the women marchers approached soldiers in riot gear to offer them white roses and invite them to join the cause. AP

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To lift growth, make it easier for women to work, Yellen says

N an unusually personal speech, Janet L. Yellen, the Federal Reserve (the Fed) chairman, said last Friday policies making it easier for women to work could significantly improve the nation’s economic growth.

The sweeping movement of women from the home to the work place during the mid-20th century, she said, was a “major factor in America’s prosperity”. But that progress has stalled in recent decades, leaving women less likely than men to hold paying jobs. Bringing more women into the work force with policies, like expanding the availability of paid leave, affordable child care and flexible work schedules, she said, could help to lift the US economy from a long stretch of slow growth. “Evidence suggests that many women remain unable to achieve their goals,” Yellen said in a speech at Brown University. “If these obstacles persist, we will squander the potential of many of our citizens and incur a substantial loss to the productive capacity of our economy at a time when the aging of the population and weak productivity growth are already weighing on economic growth.” Yellen cited one recent estimate that raising women’s participation to the same level as men’s could increase the nation’s annual economic output by 5 percent. Women’s participation in the work force increased gradually through most of the 20th century, then rose more rapidly from the early 1970s through the early 1990s. About one-third of working-age women held jobs outside the home in the years after World War II. By the early 1990s, about three-quarters of those women worked. Since then, however, the trend

5% The estimated percentage of increase in US annual economic output if women’s work participation is raised to the same level as men’s, Federal Reserve Chairman Janet L. Yellen said

has stagnated. The proportion of women ages 25 to 54 either working or looking for work stood at 75 percent in April. That remains more than 10 percentage points lower than the figure for men in the same age range working or seeking work, which was 88.6 percent in April. Yellen’s speech was unusually narrative and unusually personal. Speaking at her alma mater, she told the stories of other women who graduated from Brown, including her husband’s aunt, Elizabeth Stafford Hirschfelder. She said Hirschfelder, who graduated in 1923, faced discrimination throughout her career as a mathematician. “I believe that Betty Stafford Hirschfelder was denied opportunities and greater success simply because she was a woman,” she said.

Ivanka Trump (left), daughter and adviser of US President Donald J. Trump, attends a panel at the Women 20 Summit in Berlin on April 25. With her are International Monetary Fund Managing Director Christine Lagarde (center) and German Chancellor Angela Merkel. The conference aims at building support for investment in women’s economic empowerment programs. AP/Markus Schreiber

Yellen, who is 70, said women of her own generation had faced fewer obstacles and had more opportunities. “I enrolled at Brown fully planning to attend graduate school and have a career, as did many of my classmates in the Class of 1967,” she said. She noted that changes in policy supported and reinforced changes in society. A 1974 law, for example, allowed women to apply for loans without a male cosigner. Women gained entry into a wider range of professions, and the gap between men’s and women’s wages

narrowed significantly. Nancy H. Teeters became the first woman appointed to the Fed’s board in September 1978. Yellen said their increased work force participation had produced clear benefits not only for women, but also for men, for the children of working women and for the US economy. “The evidence shows that the rise in women’s participation has contributed to widespread improvements in the safety and productivity of our workplaces, to the health of families and to the macroeconomic success that our country

has enjoyed,” she said. She spoke at a conference titled “125 Years of Women at Brown.” That progress, however, has stalled in the US even as the participation of women in the work force has continued to rise in other developed countries. The US, which had one of the highest rates of participation in the early 1990s, fell to 17th among 22 developed nations in one recent analysis. That analysis, a 2013 study by Francine D. Blau and Lawrence M. Kahn, both of Cornell University, attributed much of the difference

to government policies. The United States lags behind other countries in the availability of paid maternity leave, affordable child care and flexible work schedules. Blau and Kahn estimated that adopting European policies on those issues could close more than half of the gap in the United States between male and female labor force participation. Yellen also cited research showing that women still make about 10 percent less, on average, than men with similar backgrounds who work in similar positions. New York Times News Service

US far-right activists promote hacking attack against Macron

fter months of trying to move the political needle in favor of Marine Le Pen in the French presidential election, American far-right activists last Saturday threw their weight behind a hacking attack against her rival, Emmanuel Macron, hoping to cast doubt on an election that is pivotal to France and the wider world. The efforts were the culmination of an extended campaign against Macron after his candidacy began to gain steam this year, with digital activists in the US and elsewhere sharing tactics, tips and tricks across the English- and French-speaking parts of the Internet. It is unclear whether the leaked documents, which some experts say may be connected to hackers linked to Russia, will affect the outcome of the election last Sunday between Le Pen, the far-right candidate from the National Front, and Macron, an independent centrist. But the role of American far-right groups in promoting the breach online highlights their growing resolve to spread extremist messages beyond the US. “It’s the antiglobalists trying to go global,” said Ben Nimmo, a senior fellow of the digital forensics research lab at the Atlantic Council, a think tank, who has studied the far right’s recent efforts against Macron and others in France. “There’s a feeling of trying to export the revolution.” The leak, which involved posting campaign documents, like e-mails and accounting records to message boards, occurred late last Friday, hours before a legal prohibition on campaign communications went into effect across France.

In response, Macron’s team said the hackers had included fake information alongside authentic material “to sow doubt”. “Intervening in the final hour of the official campaign, this operation is clearly a matter of democratic destabilization, as was seen in the United States during the last presidential campaign,” Macron’s campaign said in a statement late last Friday, minutes before the communications prohibition went into effect. By Saturday, a trail of digital crumbs appeared to tie the attack on Macron’s campaign to Russian hackers. Forensics specialists found that one of the leaked Excel documents from Macron’s campaign had been modified on a Russian version of Excel, and edited on Russian-language computers. One document had last been modified by a Russian user named Roshka Georgiy Petrovich. Petrovich, 32, an employee of the Moscow-based Eureka CJSC, a Russian technology company, did not immediately return e-mails requesting comment. Eureka CJSC’s clients include several Russian government agencies. US intelligence officials say Russian government agencies regularly outsource political cyber attacks to Russian cyber criminals and top computer engineers. Security experts note that the digital crumbs could be the sloppy work of a Russian engineer, or studiously left as a false flag used by hackers looking to mask their true identities and whereabouts. Within hours after the hacked documents were made public, the hashtag #MacronLeaks began trending worldwide, aided by far-right ac-

Children walk past election campaign posters for French centrist presidential candidate Emmanuel Macron and far-right candidate Marine Le Pen in Osses, southwestern France, on May 5. AP/Bob Edme

tivists in the US who have been trying to sway the vote in favor of Le Pen. Jack Posobiec, a journalist with the far-right news outlet The Rebel, was the first to use the hashtag with a link to the hacked documents online, which was then shared more widely by WikiLeaks. Posobiec remains the secondmost mentioned individual on Twitter in connection with the hashtag behind WikiLeaks, according to a review of the past 100,000 Twitter posts published since late last Friday. While there is no evidence that the breach against Macron’s campaign was organized by this loosely

connected group of far-right campaigners, the US activists have been gathering on sites, like 4chan and Discord, which were previously used to coordinate support for Donald J. Trump’s presidential campaign. One popular tactic, experts say, has been “Twitter raids”, or efforts to hijack trending hashtags and topics on the social-media site and inject far-right and antiMacron propaganda. A week before the second round of the French election, for instance, online activists, many from the US and other English-speaking countries, flooded Twitter with coordi-

nated anti-Macron memes—online satirical photos with often biting captions—carrying hashtags like #elysee2017 that were linked to the campaign. That included portraying him as a 21st-century equivalent of Marie Antoinette, the out-of-touch last queen of France, and other memes made allegations of an extramarital affair. “They tried to bombard French Twitter with memes favorable to Le Pen,” said Padraic Ryan, a project coordinator at Storyful, an online marketing company that tracks social-media activity around news events. “The campaigns are showing

an increasing level of sophistication and coordination.” Just days before the last French presidential debate, an anonymous user on 4chan, whose message boards include anti-Semitic, white supremacist and other far-right discussions, posted what were said to be copies of documents showing that Macron had supposedly set up a bank account in the Bahamas to avoid paying taxes. He denied the allegations. Le Pen referred to such an overseas bank account during the vicious debate, leading to a bitter rebuttal by Macron’s team and an official investigation into the spread of the rumors. The reports were followed with another accusation, also posted on 4chan, hours before Macron’s campaign was subjected to the online leak, that he had bank accounts on the Cayman Islands. There is no evidence that he has such accounts. Despite these increasingly coordinated digital efforts by far-right activists, analysts say, their efforts had not reached the vast majority of the French electorate—until the Friday release of the hacked documents. It will most likely take until after the election to review all the leaked documents. Under France’s strict electoral rules, any publication of the material before polling day could lead to charges. Last Saturday Le Monde, a French newspaper that has been fact-checking online information during the campaign, posted a message below all of its articles about the election, saying that it would not disclose the contents of the breach until after the voting last Sunday. Le Monde said it did not want the leak to be used to disrupt the electoral process. New York Times News Service

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Green groups hit C.A. rejection of Lopez as D.E.N.R. chief

‘A sad day for the environment’ E By Jonathan L. Mayuga

“Secretary Lopez has set the highest standards for environmental stewardship and mainstreamed partnerships with civilsociety organizations—a feat that merits replication by her successor,” the group said in a statement. “Her commitment and sterling leadership in ensuring justice and equity, especially to affected communities most dependent on a vibrant web of life, is her most precious legacy for all of us. Oceana is most grateful.”

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nvironmental advocates were jubilant when President Duterte announced the appointment of Regina “Gina” Paz L. Lopez to the Department of Environment and Natural Resources (DENR). For a change, they said an environmental advocate, more than a technocrat, will head the agency mandated to manage the country’s natural wealth. The feisty Lopez was the head of ABS-CBN Foundation Inc., the corporate social responsibility arm of media network giant ABSCBN owned by her family. She also headed ABS-CBN’s Bantay Kalikasan before being named to head the Pasig River Rehabilitation Commission. Within 10 months as DENR secretary, Lopez has ordered the closure or suspension of 28 of the 41 operating large-scale mines and cancelled 75 mineral production sharing agreement. She also stopped a housing project near La Mesa Dam to protect the integrity of the La Mesa Watershed, where water servicing 12 million people are stored and treated before distribution as tap water. She subsequently ordered the ban of all destructive development projects within protected areas (PAs) to prevent biodiversity loss, and of functional watersheds to protect the country’s water source. Lopez also ordered a moratorium on fish-cage operation within the Laguna de Bay, and ordered an audit of more than 800 environmental compliance certificates. Days before the Commission on Appointments (CA) resumes hearing to decide on her fate, Lopez announced a policy banning prospective open-pit mines in the country.

‘Strike 3’

On Wednesday the C A panel, headed b y S en. M a n ny Pacquiao, voted to reject her appointment, which was adopted dur ing plenar y deliberation by the C A . Under the C A r u les, a reject ion d isqua l if ies an ap pointee from being reappointed to the same position. W hile enjoying the support of environmental groups, Lopez was facing the most number of complainants, mainly for her controversial policy pronouncements and orders, which she said, are anchored on the DENR’s adopted heart and soul—social justice—to protect the environment and prevent suffering of people in affected communities.

10 The number of months Regina Paz L. Lopez functioned as secretary of the Department of Environment and Natural Resources Expected

The Catholic Church said the rejection of Lopez’s appointment as environment chief showed that political interests won over public welfare. Caritas Philippines Executive Secretary Fr. Edwin Gariguez, however, said it was expected since some CA members have ties to mining firms. “The decision is expected, given the powerful lobby of the Chamber of Mines [of the Philippines] and the vested interest of many politicians who wantonly opted to sacrifice the interest of the environment and the poor over their own agenda,” he said. “We need to judge now the CA members and campaign not to reelect those who voted no to environmental reform agenda being pushed by Gina Lopez,” Gariguez said.

Saddened but respects process

Secretary Vernice Victorio, vice chairman of the Climate Change Commission, is saddened at the loss of a fellow environmental advocate in the Cabinet but respects the process undertaken and the decision made by the CA. “Secretary Gina Lopez fiercely supported the climate-change advocacy and played a key role in getting the Paris Agreement ratified by the current administration. We applaud her achievements and recognize her admirable dedication for the environmental movement. “We hope that she will remain a strong ally, and continue to passionately fight for shared causes concerning the future of a

Changing the rules

REGina PAZ L. Lopez (left), whose appointment as environment secretary was rejected by the Commission on Appointments on Wednesday, raises her fist together with Archbishop Ramon Arguelles (second from right) and other ralliers during the “Walk for the Environment” outside the Senate building in Manila on March 1. CBCP File

climate-smart and resilientPhilippines. We are confident that her c ourage and commitment will manifest in future endeavors.”

A game changer

Environmental groups consider Lopez as a game changer in the DENR. The agency has been accused of being against, more than being pro-environment under the previous administrations. Under Lopez, environmental protection got the upper hand against the exploitation of natural resources. “The rejection of Gina as DENR secretary is a dark day in our nation’s fights against the onslaught of destructive mining operations that have plundered our mountains and rivers and wrecked people’s lives. Today, the big corporate powers won over our suffering and struggling communities,” said Aileen Lucero, national coordinator of EcoWaste Coalition. Alyansa Tigil Mina (ATM), a coalition of mining-affected communities, said Lopez’s rejection was a disaster—a tragedy for the environment as well as the rights and welfare of the people. “Secretar y Gina’s rejection is a betrayal of the people, and specifically of mining-affected communities that are protecting their lives and livelihoods by resisting destructive large-scale mining,” said Jaybee Garganera, national coordinator of ATM. He added that it was pretty clear that the influential mining industry exerted efforts to block the confirmation of Lopez. Garganera said the endorsement of Duterte and the public’s clamor as manifested in social media and in a recent survey for the confirmation of Lopez were “no match” against the lobby of the mining industry. The ATM head issued a challenge to members of the CA who has mining interests to inhibit from the deliberation of Lopez’s confirmation.

A rejection for change

Yeb Saño, executive director of Greenpeace Southeast Asia, said Lopez’s rejection was a rejection for change. He said it was “very disappointing and worrying, and showed how destructive industries continue to hold Philippine lawmakers by their necks”. “We were made to believe, through her appointment last year, that reforms, environmental protection and social justice are still possible in this country. We thought this administration is serious in implementing change by appointing a true environmentalist in the DENR.” The CA, dominated by politicians with questionable loyalty, some of whom are receiving campaign contributions from various mining interests, blocked what could have been the golden era of Philippine environmental rehabilitation and protection under Gina Lopez, Saño lamented. “ T he rejection undermines the reforms the current administration is pushing and could be an indicator of factions between those who have benefited from old corrupt practices and those who are genuinely advancing for true, genuine and people-centered changes,” he said. Saño said as a country with scarce forests left, and with dwindling natural resources, turning to extracting minerals as a solution to poverty is superfluous at the very least, and glaringly reveals the short-sighted mind-set, if not corrupt interests, of politicians. “With mining having a serious impact on our water resources, the situation demands that we weigh which is more important: money or life. The next major battle will be fought over water, not gold. And Lopez has chosen right: she must stand proud over those who choose the foolish and obtuse option of trying to solve poverty by destroying the environment.

“ T he com m ission’s double standards show where the true loyalty of its members’ lie: nitpicking on legalities and standards when Gina chose to protect the environment, when those laws and standards were not applied when big industries were destroying the environment. Ms. Lopez but upheld and pushed for our right to breathe clean air, to drink clean water and to live in a clean and safe environment,” Saño said.

Poisonous politics

For its pa r t, t he K a l i k a sa n People’s Network for the Environment (Kalikasan PNE) condemned the CA members who voted to reject Lopez’s appointment. “ T he poisonous politics of mining plunderers succeeded in tilting the CA numbers game to their favor. The legislators who voted ‘No’ against Secretary Lopez should be fully disclosed and exposed as greedy trapo [traditional politicians] who continue to betray the interests of the Filipino public. Their interests in mining and other extractive industr ies, the only possible motive for rejecting an environmental crusader as DENR secretary, should be investigated,” said Clemente Bautista, national coordinator of Kalikasan-PNE. Kaliksan-PNE urged Duterte to ensure that the continuity of the historic mining crackdown and other meaningful reforms pushed by Lopez would be still be guaranteed. Mea nwh i le, ocea n conser vation advocacy group Oceana commends the trailblazing achievements of Lopez in bravely pushing for policies to sustainably protect the countr y’s environmentally critical areas, including protected seascapes and save them from destructive activities that threaten their ecological integrity.

UN marks 1st World Tuna Day with calls to conserve it

NITED NATIONS—The UN marked the first World Tuna Day on Tuesday with calls to conserve one of the globe’s most popular fish to be caught and eaten. General Assembly President Peter Thomson said tuna species, which are highly migratory, account for 20 percent of the value of all fish caught and over 8 percent of all internationally traded seafood. He noted that nearly twot h ird s of t he t u na fou nd in restaurants and supermarkets

around the world comes from the Pacific Ocean. “Regrettably, with the decline in the health of the oceans, the fish stocks, including tuna, face growing threats and an uncertain future,” the former Fijian ambassador said in a statement. UN Spokesman Stephane Dujarric called the tuna trade “a significant contributor to the global economy”, say ing that more than 80 countries have tuna fisheries and that thousands of tuna fishing vessels operate in all the oceans.

“However, increasing threats resulting from human activities, such as overfishing, and the impacts of climate change and ocean acidification...impact the conservation and sustainable use of tuna stocks,” he said. Dujarric urged people everywhere to “commit to protecting our precious tuna resources and their surrounding ecosystems and using these resources sustainably for generations to come”. Last December the General Assembly established May 2 as World Tuna Day to reinforce its

importance to nations around the globe. Thomson called it “an important step in recognizing the critical role of tuna to sustainable development, food security, economic opportunity and livelihoods of people around the world”. Both Thomson and Dujarric said the day also highlights the importance of the Ocean Conference to be held at UN headquarters from June 5 to 9 to support the UN goal for 2030 to conserve and sustainably use the world’s oceans, seas and marine resources. AP

A Filipino fisherman carries a tuna fish. Gregg Yan/WWF

The Chamber of Mines of the Philippines (COMP) questioned Lopez’s competency and abuse of power when she allegedly ignored “slap-in-wrist” penalties recommended by her own audit teams in issuing the mine closure orders. Lopez, who vowed to rid the DENR of corrupt officials and employees, was herself put on the spotlight when DENR career employees staged a protest condemning her decision to put on floating status more than 50 DENR officials to give way to her own team. She was also charged before the Ombudsman with four complaints for alleged graft and corruption—the latest of which was filed on the day she was rejected by the CA—for ordering several mining companies to cough out P2 million for every hectare of disturbed land for rehabilitation and another P1 million for every ton of ore to be shipped out by suspended mining companies. W hile Lopez repeatedly said s h e i s no t a nt i m i n i n g , b ut against ir responsible mining practices, COMP said she is unfit for position, for her tendency to disregard rules and regulation and the mining law.

A challenge to miners

Maintaining that its members uphold the highest standard of responsible mining practices, Rona ld Recidoro, COMP v ice president for legal and policy, said the rejection of Lopez’s appointment is not a victory for the mining industry, but a victory of the rule of law. While thanking CA for its decision to reject Lopez, Recidoro said it was just the beginning of a new chapter for the mining industry. He said the mining industry would have to work doubly hard to uplift the industry, and reiterated COMP’s commitment to work with the DENR and the next secretar y to protect the environment and promote the responsible use of the country’s natural resources. “The fight for responsible mining continues even if Secretary Lopez has been rejected. In fact, it is a challenge for the industry to work even harder so that there will be no repeat of what happened in the last 10 months,” Recidoro said.

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By Jonathan L. Mayuga

require proper training by experts. Because there is no special program for peatland conservation, it being part of the regular activities of the DENR, there are also budgetary constraints. “Training field personnel will cost money. But we do not have budget for that,” she said. The search for peatland ecosystems is being carried out by field employees of the DENR, but not all employees are equipped with the technical expertise, Navarro said.

Saving Philippine peatlands I

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n the middle of a flooded forest, if the water is acidic and the color is somehow dark, like tea, it is not polluted. You may be in a peatland.

The Department of Environment and Natura l Resources (DENR) has identified nine peatland ecosystems in the country— mostly within protected areas or in the heart of swampy forests. The total area of identified peatlands in the Philippines is 20,000 hectares. This is relatively small compared to the country’s total land area of 30 million hectares, 15 million hectares of which, having been classified as “forest lands”. DE N R of f ic i a l s , ho w e v e r, underscored the need to save peatlands because of the very important ecosystem ser vices they provide.

What are peatlands?

Peatlands are wetland ecosystems where the soil is composed of 65 percent or more organic matter derived from dead and decaying plant materials submerged under high water saturation. According to the DENR, peatlands cover an estimated area of 400 million hectares globally. This is equivalent to about 3 percent of the Earth’s land surface. Most, or 350 million hectares, are in the northern hemisphere, covering large areas in North America, Russia and Europe. Tropical peatlands occur in mainland East Asia, Southeast Asia, the Caribbean and Centra l A mer ica, South A mer ica and southern Africa where the current estimate of undisturbed peatland is 30 to 45 million hectares or 10 percent to 12 percent of the global peatland resource. According to the International Union for Conservation of Nature (IUCN) peatlands exist in at least 175 countries. While peatlands are relatively small in terms of providing services to society—particularly in providing clean drinking water and climate regulation—they have significant contribution in terms of keeping the planet cool. The IUCN reported that peatlands store 30 percent of global carbon, and when drained and damaged, they exacerbate climate change, emitting 2 gigatons of carbon dioxide (CO 2) ever y year, which accounts for almost 6 percent of all global

20,000 ha

Danger warning

The DENR-BMB’s thrust is to raise the awareness on the country’s peatlands, particularly its unique characteristics. “We are assisting in identifying peatland areas in the Philippines, assessing and characterizing them and providing recommendations on the appropriate uses and management prescriptions,” Lim said. Lim said two confirmed and most prominent peatland areas in the Philippines is in the heart of the Agusan Marsh and Leyte Sab-a. “There are reportedly peatlands in Liguasan Marsh [Maguindanao] and in Santa Teresita, Cagayan [province in Cagayan Valley], which remain to be better explored,” she said. However, Navarro said identifying peatlands is difficult, and would

According to Lim, because of its “combustible” nature, particularly when it is drained for land conversion into plantations or farmlands, or even residential areas, peatlands can easily cause fire and haze that not only contributed to worsening climate change, but also result in more immediate impacts on human health and wildlife populations, such as displacement, loss of habitat, diseases or death. “Agusan Marsh is protected, but we need more awareness and protection mechanisms, as well as more awareness on the appropriate use of our peatlands,” she said. Farmers in Agusan cultivate peatland areas, thinking they are suitable for rice or root crops with commercial value. However, farmers tend to burn agricultural waste, which could trigger fires, especially because of the combustible gas stored underneath. Sometimes, peatlands continue burning for days, threatening to destroy nearby forests. Farming activities do not only destroy peatland ecosystems, but also put communities in danger, Lim said. “There are crops and farming systems that can be adopted for peatlands, without destroying the integrity of the ecosystem. We need to disseminate and promote this information. In some peatland areas in other countries, they have also developed them for sustainable tourism. We can also look into this possibility,” she said. Partnering with local governments and communities, she said, will boost national government efforts to save peatlands while exploring options to optimize benefits from the ecosystem services they provide. “If revenue can be generated without destruction of the peatlands, then we expect that LGUs [local government units] and communities can better appreciate and be mobilized as our partners in peatland conservation,” Lim said.

tion of the UN Decade on Biodiversity 2011-2020—an excellent oppor tunit y to increase public awareness of the va lues of biodiversity and promote actions at the nationa l, reg iona l and local levels to conser ve and

sustainably manage the world ’s r ich natura l her itage. For more i n for m at ion on Asean Biodiversity Heroes, log on to heroes.aseanbiodiversity.org. For questions, send an e-mail to heroes@aseanbiodiversity.org.

The total area of identified peatlands in the Philippines greenhouse gas emissions. However, the IUCN noted the role played by peatlands in the supply of very important ecosystem services has not been widely appreciated. “This has led to widespread damage across the world, from the tropics to the poles, caused by a number of factors, including land-use change, pollution and, increasingly, the adverse impacts of climate change,” it says. The IUCN said in recent years, international biodiversity and c l i m ate - c h a n ge conve nt ion s have recognized peatlands as a priority for action “with peatland conser vation and restoration identified as the low-hanging fruit in tackling climate change”.

Philippine peatlands

The DENR is currently in search of peatland ecosystems, said Director Theresa Mundita S. Lim of the Biodiversity Management Bureau (BMB) of the DENR. Accord ing to t he DENRBMB, citing the 2016 Atlas of Philippine Inland Wetlands and Classif ied Caves, there are current ly n i ne ident i f ied pe at lands in the countr y. They are the Tan-ag Ilaya in Quezon Province, Sab-A in Leyte, San Teodoro and San Vicente Peatlands in Agusan del Sur; and the Agusan Marsh peatlands in Talacogon, Caimpugan, Novelle and Bayugan III, KalingayanConsuelo and Pag-Asa. The total area of identified peatlands is 17, 019.90 hectares. However, Lim said there could be more peatlands in areas that have yet to be discovered. There are other lesser known and relatively disturbed smaller areas of peatlands in Mindoro, Samar and Quezon.

Important ecosystem; carbon sink

Peatl a nds are know n to have

Agusan Marsh peatland DENR-Biodiversity Management Bureau

u nique veget at ion, Lim sa id, inc lud ing Lanipao ( Ter minalia copelandii), a nd s yzig ium f lower ing pl a nts. Lim said peatlands are also home to wild animals the same as in surrounding areas “as the peatland is part of their range, and some vegetation could provide food to bats and birds”. The DENR-BMB is calling for the preservation and conservation of peatland ecosystems. “Peatlands should be preserved, because if they are degraded or destroyed, they will emit CO 2 and contribute to greenhousegas emissions [GHG]” and climate change, Lim said. W hen preserved, peatlands could sequester more carbon, thus, limiting GHG emission. Peatlands keep carbon locked up, and absorb and store more. This is particularly important, as the Philippines is committed to reduce its carbon emission by 70 percent under the Paris Agreement. Expanding the country’s forest is being eyed as a strategy by the DENR so the country can offset its carbon emission as the country struggles to maintain growth and development. It was estimated that all peatlands in the world collectively contain 550 gigatons of carbon, twice as much as all carbon stored in the world’s forests. Once peatlands are degraded, they will emit CO 2 and other greenhouse gasses, which contribute to climate change. “Peatlands store a significant

amount of carbon. We have estimated that around 5,000 hectares of peatland in the Philippines could store up to 23 million tons of carbon. So if our peatlands are destroyed, can you imagine how much greenhouse gases we will be releasing into the atmosphere? One of the reasons for the haze in Southeast Asia in the recent years were the massive destruction of peatlands in Indonesia,” Lim said.

Defense against flood

Peatlands also act as sponge. Peatlands, hence, absorb a huge volume of water during the rainy season—releasing it slowly during the dry season. Peatlands, hence, “ensure a continuous supply of fresh water throughout the year, and play an important role in flood mitigation,” said Joy Navarro, senior ecosystems management specialist at Caves, Wetlands and Other Ecosystems Division, DENR-BMB. “Peat l a nd s a l so prov ide a healthy habitat for thousands of species, many of which are endemic, rare and endangered,” she said. A sou rce of l ive l i hood by providing timber and nontimber products for biodiversityfriendly products, such as tikog for mat-making, peatlands also have ecotourism potential. The forests of Lanipao in both the Agusan Marsh and Leyte Sab-a Basin are some of peatlands that exhibit aesthetic beauty.

Threatened ecosystem

Peatlands are among the most

threatened ecosystems. According to Lim, land conversion i s t he most ser iou s threat to peatlands. “There is not much awareness on peatlands, and, because of their unique characteristic, which allows only limited types of vegetation to grow, they are often mistaken as open areas, converted to agricultural land, but more often planted with the wrong crops. Thus, they are considered unproductive, then unsustainably altered for oil-palm plantations, or even developed as residential areas,” Lim said. Lim said one major underlying reason for all these is the lack of awareness about peatlands.

Identifying peatlands

Asean member-states to nominate 10 biodiversity heroes

he search is on for the 10 Asean Biodiversity Heroes to represent Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. The Asean Biodiversity Heroes is a program designed to recognize outstanding individuals from the Asean region who have contributed significantly to biodiversity conservation and advocacy efforts in their respective countries. One of the commemorative activities for the 50th anniversary of the Asean on August 8, the Heroes project is supported by the Asean Secretariat; the Ph i l ippi nes’s De pa r t ment of Foreign Affairs; the European Union through the Biodiversity Conservation and Management of Protected Areas in Asean Project; and Hari Foundation Inc.

(HFI), the corporate social responsibility arm of Hyundai Asia Resources Inc. The Asean Centre for Biodiversity (ACB) serves as awards secretariat. Each Asean member-state will select a Biodiversity Hero to represent their country. Members of the ACB Gover ning Board and the Asean Working Group on Nature Conser vation and Biodiversity) for each country will work together in selecting a biodiversity hero. “In nominating an individual, they will consider the relevance of the nominee’s contributions to biodiversity conservation, the impact of these contributions to biodiversity conservation efforts in their respective countries and the region, the replicability of their actions, and the recognition they received in communities where they belong,” explained

Atty. Roberto V. Oliva, executive director of ACB. Each Asean Biodiversity Hero shall receive a cash prize worth $5,000, a special heroes’ medal and a certificate. They will also receive special prizes from HFI. The heroes from the 10 Asean member-states will be known as the faces of biodiversity conservation in the Asean region. They will be invited to speak in forums, workshops, press conferences and other relevant events to share their experiences in conserving biodiversity with the aim of inspiring others to do the same. “Despite biodiversity’s crucial role in providing food, medicine, shelter, livelihood and other ecosystem services, only a small fraction of the population in the Asean region and elsewhere in the world understands biodiversity’s meaning and significance.

It is often seen as too abstract for the man on the street. With people having little or no awareness of biodiversity, there is insignificant public support for efforts to conserve plants, animals and other species. The Asean Biodiversity Heroes will help bridge the communication gap between the biodiversity experts and the general public,” Oliva said. He added, “The Asean Biodiversity Heroes will drum up interest for biodiversity advocacy by showing people that heroes can come from various walks of life—from the scientific community, government, business sector, media, youth and even the general public. Each of us can play a key part in safeguarding our natural resources.” T he A sean Biodiversit y Heroes is one of the Asean region’s contr ibutions to the celebra-

A14 Monday, May 8, 2017 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

We’re the govt: Trust us

here may not be anything more annoying than having to deal with someone in your business or personal life that you cannot trust. That includes organizations also. Most of us believe that people are basically honest. However, it might be smart to go by the Russian proverb—“Trust but verify”—used by US President Ronald Reagan when speaking of a nuclear disarmament agreement with the Soviet Union. We might watch the prices come up on the cashier screen at the supermarket as our items go through the scanner to make sure that the P65 toothpaste does not show up as P165. It makes sense to check a restaurant bill to see that we were only charged for one order of spring roll and not two. By modern definition, this would be “healthy skepticism” when we question the truth of something that we assume to be true. But if you have been cheated even more than once, the next psychological and behavioral step could be to being cynical. That is a “general attitude of distrust of others’ motives and actions”. That is sort of like the old saying, “Fool me once; your fault. Fool me twice; my fault.” We might immediately assume that there are going to be mistakes in the bill or that a colleague is not telling the whole truth and also immediately set out to verify even without any indication that something is wrong. Unfortunately, if there is always a problem with someone or something being honest or if our thinking is inclined in a certain direction, we might become paranoid. Paranoia is “characterized by suspiciousness, pervasive, long-standing suspiciousness and generalized mistrust of others”. In this state of mind, we assume that we are facing a falsehood or “hidden agenda”. We go looking to challenge what the other person says or does even if there is no evidence of any wrongdoing. We just take for granted that we are dealing with a liar or thief and then look for something to prove it. The situation today—not only in the Philippines—is that there are a multitude of people who are “paranoid” about their governments, political leaders and bureaucrats. Of course, there is the old joke, “Isn’t it a shame how 90 percent of the politicians who are crooked give the whole profession a bad name.” But to believe that all politicians are dishonest is equally as bad as assuming the opposite. One local representative recently posted on social media that a recent survey showed Filipinos most trust the US and most distrust China and Russia and that the President should listen to that opinion. Yet, when 67 percent in a survey want the death penalty restored, the response is: “We must intensify our information drive on why the death penalty shouldn’t pass.” In other words, public opinion matters when it supports the Representative’s position but should be challenged and changed when that same opinion disagrees. On the other hand, many people are firm in their conviction that politicians are bribed when they make a decision those people do not agree with but those same politicians are totally honest when we agree with their judgment. For a government to properly function, there must be trust with the people that goes both ways. The Philippines operates under a presidential system of a representative democracy with a highly centralized national government. Once the “paranoia” level or even “cynicism” reaches a critical point, some part, if not all, of that system will be changed. Which way the nation goes could be dangerous. But a major change looks like it is coming. Since 2005

Tuition free Atty. Jose Ferdinand M. Rojas II

RISING SUN

he Commission on Higher Education (CHED) and the Department of Budget and Management (DBM) have released the guidelines pertaining to the P8-billion fund for the government’s free-tuition program for 2017. It will be implemented at the start of classes this June, and then again in August. The free-tuition program is only available in state universities and colleges (SUCs) across the country. In the National Capital Region (NCR), these include the University of the Philippines (UP), Polytechnic University of the Philippines (PUP), Technological University of the Philippines (TUP), Philippine Normal University (PNU), Philippine State College of Aeronautics (PhilSCA), Eulogio Amang Rodriguez Institute of Science and Technology (Earist), and Rizal Technological University

Impossibility versus improbability

BusinessMirror A broader look at today’s business

Siegfred Bueno Mison, Esq.

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(RTU). There are more than a hundred SUCs in the whole country, so our students have many options. Another point of clarification that the CHED would like to make is that “tuition” does not refer to the entire amount charged by the school. Tuition make up about 30 percent of the total expense related to a student’s schooling. In other words, the government is exempting the SUC students from paying tuition, but they will still have to pay other fees, like miscellaneous

fees, laboratory fees, etc. They still have to spend on books, uniforms, supplies and other related expenses. For many parents, this is a lot better than getting nothing—30 percent is still big savings and it is a lot better than situations in previous years when parents and students had to endure hikes in tuition. This year offers a refreshing change from that financial difficulty. The budget for the free-tuition program is only enough for one year, which means that it is being offered for academic year 2017-2018 only. However, there are plans to make education more accessible to more students in the coming years. For those who are pushing for major education reforms in the tertiary education landscape, this is just the first step. President Duterte made a promise to the nation that the “financially disadvantaged, but academically able”, students will be given priority. In light of this promise, SUCs are being instructed to include all of their students in the free-tuition program. If the allotted budget for

n contract law, we learn that one of the requirements for a valid object of a contract is for the same not to be impossible. Article 1348 of the New Civil Code specifically states, “Impossible things or services cannot be the object of contracts.” How do we know if a thing is impossible? There are certain things in life that are absolutely impossible, like turning a square into a circle. Others are relatively impossible, like in my case, dunking a basketball. But the more important question in contract law is at what point should we determine the impossibility of the thing or the service—at the point of perfection or at the point of consummation of the contract? But there are certain things that appear to be impossible but, in truth, they are merely improbable. Such as erstwhile Environment Secretary Regina Paz L. Lopez getting the nod of the Commission of Appointments (CA)—was it improbable or impossible inasmuch as her environmental advocacy campaign is diametrically opposite to the interests of mining companies, which, for the most part, contributed to the election fund of some of the members of the CA. Another seemingly impossible but was merely an improbable incident is the fact that no Bar candidate coming from any of the Metro Manila-based law schools placed in the top 10 in the Bar exam. It may certainly be unheard of, but the

2016 Bar exam results have virtually shown that improbability is different from impossibility. For one thing, improbability means “not likely to happen” whereas impossibility means “not capable of happening”. After producing around 242 lawyers since 1953, a not-so-famous law school, Andres Bonifacio College in Dipolog City, has achieved another seemingly impossible, but merely an improbable, feat. The school finally produced a law graduate in the top 10 of the Bar exam in the person of Athalia Briones Liong, who was working as a bank employee while pursuing her law studies. One Bar candidate who shared he r p e r s on a l e x p e r ie nce i n taking the Bar exam was my former

student in the University of the East College of Law. Ivy Tomboc knows how it feels like to take the bar, twice! To her, it was a rollercoaster ride of emotions of selfpity, frustration, disappointment when she failed, and subsequent feelings of relief, satisfaction and thanksgiving when she passed. Considering the shattered confidence of some Bar candidates who failed it the first time, the likelihood of passing it the next year will be just as low as their self-esteem. But despite such improbability, Ivy took it again and passed it. I think passing the Bar exam is dependent on one’s mental preparation, psychological mind-set and divine providence. In her Facebook post, Ivy said, “Some people will judge you when you fail, yet they absolutely have no idea what you went through. You have to fight that. Because in the end, He, in His own mysterious ways, will lead you to where you are.” And I would add to Ivy’s statement one of my favorite mantra—wherever we are, we are exactly where He wants us to be. Another former student and now a new lawyer, Marlyn Manuel, entered law school at the age of 20, graduated at the age of 24, but became a lawyer only at the age of 37. She took the Bar five times. She publicly shared that God allowed her to experience multiple failures to fortify her resilience. In Marlyn’s own words, “God allowed me to become a lawyer 13 years after my graduation because He had prepared and molded my character

an SUC is not enough to cover all enrolling students, then the SUC will have to prioritize according to the student’s economic standing. Each SUC will be given a budget based on the estimated tuition income that they submitted to the DBM. This amount is being added to their fund for the coming school year. What is clear in the guidelines is that no SUC is authorized to charge tuition from their undergraduate students. Instead of charging the student, they will charge these tuition fees against CHED’s fund for the free-tuition program. It is apparent that the free tuition 2017 program of the government will offer some relief for parents or guardians who spend money on their students’ tuition. Key to the successful run is the smooth implementation of the program, especially in the regions where SUCs, parents and students may not have all the necessary information to understand and apply the guidelines. I hope that it will be implemented well so that the poor, first and foremost, will benefit.

to face the challenges of the law profession.” Taking the Bar exam more than once creates a stigma that, for some people, they can be broken. Author Ernest Hemingway once said, “The world breaks everyone and afterward many are strong in the broken places.” For Ivy and Marlyn, and for others who took the Bar exam more than once, passing the Bar was never an impossibility, for in their belief, nothing is impossible with God. As it has been said in Philippians 4:13—“I can do all things through Him who strengthens me.” One unanswered question remains as regards the recent rejection by the CA of Ms. Lopez as Department of Environment and Natural Resources (DENR) secretary. Is the fact of having an environmentalist like her to head the DENR a “need” or a “want” of our country? If it is a need, as opposed to a want, then her supporters should be appeased for such situation, similar to Ivy and Marlyn passing the Bar, will just be a matter of “when” and not “if”. If it is a need, though it might seem impossible at this time considering that she has been rejected by the CA more than once, then her supporters should simply take comfort and trust that if it is meant to be, no force on earth can stop it. Getting what we need, as opposed to what we want, is a matter of God’s perfect timing. Just ask Ivy and Marlyn. For questions and comments, please e-mail me at sbmison@gmail.com.

opinion@businessmirror.com.ph

Opinion

Marital bliss

Expanding the horizons of SMPs

BusinessMirror

Atty. Lorna Patajo-Kapunan

Joel L. Tan-Torres

legally speaking

his past long weekend, I was principal sponsor in two weddings of lovely couples Patrick and Fatima Gaspar, and Miko and Mich Alivia.

Every detail was carefully planned: the outfits of the wedding entourage; the flowers and decorations at the church and reception; the sumptuous banquet; the video presentations and program, and the necessary rituals during the reception were all impeccable. But I could not help but note to myself that so much preparation was made, but the most important, the marriage vows, seemed like it was just lifted and copied from past missals or archaic prayer books, and the prospective bride and groom did not seem to bother or care what vows they bind themselves to. “The husband is head of his wife x-x-x”. “Wives should be subordinate to their husbands x-x-x”. “Woman go and be a good housewife x-x-x”. These are still the words the solemnizing priest utters during the exchange of marital vows. While we do have separation of Church and State enshrined in the Philippine Constitution, it may be a good time to revisit our church vows and rewrite them to conform to our existing laws relating to marital relations. While it used to be that the father was head of the family, solely responsible for support of the household, had primary authority over the children and decisions over the home, the laws have changed to recognize the equal role of husband and wife in building a family. Hereunder is a brief outline of the pertinent provisions:

State recognizes the role of women in nation-building, and shall ensure the fundamental equality before the law of women and men. n Article XIII, Section 14. The State shall protect working women by providing safe and healthful working conditions, taking into account their maternal functions, and such facilities and opportunities that will enhance their welfare and enable them to realize their full potential in the service of the nation.

In case of disagreement, the court shall decide whether or not: n The obligation is proper; and n Benefit has accrued to the family prior to the objection or thereafter. If the benefit accrued prior to the objection, the resulting obligation shall be enforced against the community property. If the benefit accrued thereafter, such obligation shall be enforced against the separate property of spouse who has not obtained consent. n Article 209. Pursuant to the natural right and duty of parents over the person and property of their unemancipated children, parental authority and responsibility shall include the caring for and rearing of such children for civic consciousness and efficiency and the development of their moral mental and physical character and well-being. n Article 210. Parental authority and responsibility may not be renounced or transferred, except in the cases authorized by law (313a). n Article 211. The father and the mother shall jointly exercise parental authority over the persons of their common children. In case of disagreement, the father’s decision shall prevail, unless there is a judicial order to the contrary. Children shall always observe respect and reverence toward their parents and are obliged to obey them as long as the children are under parental authority (17a, PD 603). n Article 212. In case of absence or death of either parent, the parent present shall continue exercising parental authority. The remarriage of the surviving parent shall not affect the parental authority over the children, unless the court appoints another person to be the guardian of the person or property of the children (17a, PD 603). n Article 213. In case of separation of the parents, parental authority shall be exercised by the parent designated by the Court. The Court shall take into account all relevant considerations, especially the choice of the child over seven years of age, unless the parent chosen is unfit.

The Family Code

Other laws

The 1987 Constitution

n Article II, Section 14. The

n Article 68. The husband and wife

are obliged to live together observe mutual love, respect and fidelity, and render mutual help and support (109a). n Article 69. The husband and the wife shall fix the family domicile. In case of disagreement, the court shall decide. The court may exempt one spouse from living with the other, if the latter should live abroad or there are other valid and compelling reasons for the exemption. However, such exemption shall not apply if the same is not compatible with the solidarity of the family (110a). n Article 70. The spouses are jointly responsible for the support of the family. The expenses for such support and other conjugal obligations shall be paid from the community property and, in the absence thereof, from the income or fruits of their separate properties. In case of insufficiency or absence of said income or fruits, such obligation shall be satisfied from the separate properties (111a). n Article 71. The management of the household shall be the right and the duty of both spouses. The expenses for such management shall be paid in accordance with the provision of Article 70 (115a). n Article 72. When one of the spouses neglects his or her duties to the conjugal union or commits acts that tend to bring danger, dishonor or injury to the other or to the family, the aggrieved party may apply to the court for relief (116a). n Article 73. Either spouse may exercise any legitimate profession, occupation, business or activity without the consent of the other. The latter may object only on valid, serious and moral grounds.

n Republic Act 7192. An Act Promoting the Integration of Women as Full and Equal Partners of Men in Development and Nation-Building and for Other Purposes. n Republic Act 8187. An Act Granting Paternity Leave of Seven Days with Full Pay to All Married Male Employees in the Private and Public Sectors for the First Four Deliveries of Legitimate Spouse with Whom He is Cohabiting and for Other Purposes. n Republic Act 9170. An Act Providing for the Magna Carta of Women. n Republic Act 10572 (2013). An Act Establishing the Liability of the Absolute Community or Conjugal Partnership for an Obligation of a Spouse Who Practices a Profession and the Capability of Either Spouse to Dispose of an Exclusive Property Without the Consent of the Other Spouse Amending for the Purpose Articles 73 and 111 of Executive Order 209, Also Known as the Family Code of the Philippines. With all the foregoing laws establishing the fundamental equality of men and women, it is hoped that couples who intend to commit to each other in “good times and in bad, in poverty and in plenty, in sickness and in health, for better or for worse, until death do you part”, should put as much detail and attention on their marriage vows as they do the preparations, ceremony and reception. And, of course, please tell your priest/solemnizing officer that at the end of the ceremony, he should say, “I now declare you husband and wife” not the old “I now declare you man and wife”, for doesn’t the man become a husband same as the woman becomes a wife. Understanding this basic concept may be the key to marital bliss until death do you part!

DEBIT CREDIT

T is all systems go for the very first Board of Accountancy (BOA)initiated Small Medium Practice (SMP) Summit. This summit, “Expanding the Horizons”, will be held on May 9 and 10 at the Metropolitan Club in Makati City. The SMPs that will attend the summit will get to know the latest developments and major BOA pronouncements affecting the SMPs. Speakers who will share their knowledge include members of the BOA, experienced practitioners and a former International Federation of Accountants (Ifac) officer, Paul Thompsom. I will give the keynote talk, and dwell on many exciting things happening in accountancy, in general, and in the SMP community, in particular. Under the Six-Point Expanding Horizons Strategic Plan and the more than 100 activities and initiatives, the profession and the professional accountant is well on their way of exceeding global standards. Thompson, director of the European Federation of Accountants and Auditors and former Ifac officer, will present the results of the recently concluded 2016 Ifac SMP

Global Survey. Over 5,000 accountants throughout the world, including the Philippines, responded to this survey, and contributed to the many insights gathered. During the summit, there will also be an opportunity to present the results of the ongoing sectoral survey of the BOA on the public practice. There will be a panel discussion on the future directions of SMPs with panelists from the BOA and Thompson. This will dwell on the forthcoming regulatory measures affecting SMPs in the Philippines and the global trends that SMPs should be anticipating. The most recent developments in Continuing Professional Developments (CPD) will be discussed. The SMP Summit attendees will get to know how the accountancy profession will proceed in moving toward the global standards that will double the number of CPD requirements.

Monday, May 8, 2017 A15

The SMPs in the summit will greatly benefit, knowing what value-added services that they can offer to their clients, in addition to the traditional engagements, like audit, that they currently offer. The summit will disclose the host of services that SMPs can learn and offer to their clients to meet their growing needs. The legal impediment on the Quality Assurance Review (QAR) Program of the BOA has been lifted. QAR will finally be implemented that will bring both challenges and benefits to the auditors in public practice. The SMPs in the summit will get firshand information from the BOA how QAR will proceed. The Asean Mutual Recognition Arrangement (MRA) for Accountancy Services will be an important topic in the summit. The MRA provides opportunities to the accountants in the Philippines of going cross-border to the Asean countries. The topic on networking and forming alliances among SMPs is an interesting and relevant topic in the summit. Those attending will get to know approach to forming their own alliance in the future, when the increasing demand in public practice will compel the sole practitioner to network his or her fellow practitioner. There is more demand for compilation services in the preparation of financial statements. There will

PPP conversations #2 with Ayala Group By Alberto Agra

PPP Lead Continued from A1

he Ayala Group has been an active participant in PPP projects. Why? The Ayala Group’s commitment to PPP goes beyond any single project or legal framework. Whether the project involves hard infrastructure or investments in health and education, we see PPP as an avenue to be the government’s partner in effectively and efficiently delivering on the needs of the public. What are the essential elements and ingredients for success in PPP projects?

We have been most successful in our PPP projects when stakeholders are committed to the desired outcome and cooperate toward getting the project done. We need to work closely with communities, similar to Manila Water’s previous experience in its “Tubig Para sa Barangay” program, which connected unserved and vulnerable communities to a safe and cheaper water supply. Our current work in the human infrastructure sector—health and education—is a response to glaring gaps that require complementary solutions. W h at h a s been t he g reatest

c ha l lenge t hat you have encountered in your PPP projects? These partnerships are not without their own challenges. One of the most important considerations, moving forward, is the stability and predictability of our agreements. In his inaugural address, President Duterte emphatically stated that “changing the rules when the game is ongoing is wrong”, and he ordered his department secretaries and heads of agencies “to refrain from changing and bending the rules of government contracts, transactions and projects already approved and awaiting implementation”. Upholding the sanctity of contracts allows us to work in a predictable environment. How can PPP be further enhanced as a tool for development? Another area that can be further explored is local PPP arrangements. The power of local government units (LGUs) to enter into PPPs is largely

The end of American hegemony Ricardo Saludo

DIPLOMASIA

efore the end, we recall the beginning. Seven decades ago the road to US dominance in global affairs began in the mind of George Catlett Marshall Jr., the US Army’s wartime chief of staff (1939-1945) and the nation’s 50th Secretary of State (1947-1949) and third secretary of defense (1950-1951). Addressing Harvard’s graduating class in June 1947, Marshall declared that “the United States should...assist in the return of normal economic health to the world, without which there can be no political stability and no assured peace.” Ten months later, then-President Harry Truman signed the Economic Cooperation Act (ECA) into law. The ECA eventually channeled war recovery aid totaling $13 billion (about $130 billion in today’s money) mainly to European nations over four years. Its full title spelled out its ultimate purpose: “An Act to promote world peace and the general welfare, national interest, and foreign policy of the United States through economic, financial and other measures necessary to the maintenance of conditions abroad in which free institutions may survive and consistent with the maintenance of the strength and stability of the United States.” Thus, the US asserted its “national interest and foreign policy” and main-

tained its “strength and stability” through “economic, financial and other measures necessary”. With the Marshall Plan funded by the ECA, America became the preeminent power in Western Europe, still the fulcrum of global power in the decades after World War II. The same formula of American guns and dollars established US dominance in other regions. The US became the leading trading partner of most countries, and the greenback eased out the British pound as the world currency. The North Atlantic Treaty Organization, the American-led alliance in Western Europe, was replicated by the Central Treaty Organization in the Middle East, which Washington joined in 1958; and the Southeast Asian Treaty Organization, established in 1954 by the US, Britain, France, Australia, New Zealand and the Philippines. On the money front, the World Bank and the International Monetary Fund, postwar global financial institutions

always headed by an American president and a European managing director, respectively, buttressed US dominance in the world economy. The Asian Development Bank (ADB), marking its 50th anniversary this year, shared US economic clout in Asia with Japan, from where the ADB president always hails.

The decline of American dominance

American hegemony was never unchallenged, of course. The communist Union of Soviet Socialist Republics, a continent-spanning behemoth just like the US, established its own empire of might and money. Soviet communism held sway from Czechoslovakia and East Germany in Central Europe to China and North Korea, while competing with Western democratic capitalism in Africa and Latin America. That Cold War between America and Russia ended with the USSR’s dissolution in 1991, leaving the US as the sole superpower. For nearly two decades since, Washington reigned supreme, with no real challenger on the global stage. Then came the 2007 US financial debacle, hobbling Western governments and financial systems, even as China continued its surge since its 1978 economic reforms. During that crisis, no less than then-Secretary of State Hillary Clinton visited Beijing to ask the Chinese not to unload their $1 trillion in US Treasury bills, the largest hoard of American IOUs outside America. Several years later, China had become the largest trading partner of most nations, and the leading source of aid and foreign investment in many developing nations. In Asia Beijing launched its New

be a discussion of the ins and outs of Philippine Standard on Related Services 4410. The most recent BOA pronouncements on accreditation of CPAs in public practice will be covered in the summit. The recently implemented streamlining of procedures of the accreditation process will be welcome news to the SMPs. Finally, SMPs will get to know what are expected from them in BOA Resolution 3-2016 on the Certificate of Compilation Services. They will also be able to know the latest developments of this measure that affect their clients in commerce and industry. The forthcoming SMP Summit will be an eventful gathering that SMPs should participate in for them to know what the future holds for SMPs, and how they can prepare and cope with future changes and challenges. See you in the summit. Joel L. Tan-Torres is the chairman of the Professional Regulatory Board of Accountancy. He is a Certified Public Accountant who placed No. 1 in the May 1979 CPA Board Examinations. He is concurrently a tax partner of Reyes Tacandong & Co., CPAs. He was the former commissioner of the Bureau of Internal Revenue in 2009 and 2010. This column accepts contributions from accountants, especially articles that are of interest to the accountancy profession, in particular, and to the business community, in general. These can be e-mailed to boa.secretariat.@gmail.com.

unutilized, even though the Local Government Code empowers LGUs to enter into their own PPPs and joint ventures. This may facilitate privatesector investments in local projects that are more targeted, focused and tailor-fit for each LGU’s needs. Last, your message to the PPP public? T here has been muc h debate around the viability of PPP as a legal framework. There have been calls to amend the PPP law. More recently, we understand that the government’s preference has shifted toward unsolicited proposals and operations and maintenance arrangements. We will continue to watch these spaces, participate in discussions when we have opportunity to do so, and seek to contribute toward national goals in areas in which we have relevant experience and expertise. We hope to see more Ayalas in the PPP landscape. Thank you, Ayala.

Silk Road infrastructure program, and the Asian Infrastructure Investment Bank, rivaling the ADB in funding regional development. In 2012 Washington moved to shore up its regional dominance. Then-President Barack Obama announced the Pivot To Asia policy, enhancing alliances in the region and moving to shift 60 percent of naval assets to East Asia. It also pushed new trade initiatives, one with Europe and the other with Pacific economies, excluding China. And amid increased maritime frictions between China and the Philippines, the US forged the Enhanced Defense Cooperation Agreement to escalate military deployment in the archipelago, and gain access to Philippine bases. Two elections last year, however, may have ended America’s bid to maintain its regional clout. The rise of Philippine President Duterte soured relations with Washington over criticism of his antidrugs war. He then announced “separation” from America and “alliance” with China and Russia during his Beijing visit last October. And in Washington, new President Donald J. Trump scuttled the TransPacific Partnership, leaving the trade liberalization field wide for China’s Regional Cooperation Enhancement Program. Last week American hegemony faded further. In the Asean Summit, fewer voices pushed Washington’s tough line against Beijing’s activities in the South China Sea. And Trump reportedly asked Duterte to help press Chinese President Xi Jinping on North Korea. As every top dog knows, from the peak, there’s nowhere to go but down.

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A16 Monday, May 8, 2017

Manila hosting of ADB governors’ meeting to cite PHL economy’s rise

By Cai U. Ordinario

@cuo_bm

OKOHAMA, Japan—To jumpstart the next 50 years of its existence, the next meeting of the Asian Development Bank (ADB) Board of Governors will be held in Manila next year. In a briefing, Finance Secretary Carlos G. Dominguez III considered the country’s hosting of the occasion to showcase the country’s economic success. The last time the country hosted the ADB Annual Meeting was in 2012 at the Philippine International Convention Center (PICC). “Manila is happy to host next year’s ADB Annual Meeting,” Dominguez told reporters here. “It will be an opportunity for us to showcase our achievements and lead the discussion in a unique milieu: Challenging our region’s progress.” The theme for next year’s meeting is “Linking People and Economies for Inclusive Development”, which also strikes at the heart of the Duterte administration’s 10-point agenda. The 10-point agenda focuses on the President’s objective to rebalance the economy in such a way that areas outside of Metro Manila also benefit from the country’s strong economic growth. It aims to also push for investment-led growth; improve the agriculture and manufacturing sectors; and push for the use of sustainable sources of energy in economic growth. “ T he key elements of this strategy are massive infrastructure program to bring us up to par with the region and a comprehensive tax-reform program that will support robust economic investments in the country’s future,” Dominguez said.

In the West economic nationalism and hostility to globalization appear to be on the rise. The membereconomies of the Asian Development Bank will be harmed by this emergent trend. We must prepare our economies to meet the challenge.” —Dominguez He added that armed with the goal of achieving inclusive growth in the country, the Philippines also wants to participate in improving cooperation among developing countries, including trade facilitation. By hosting next year’s meeting, the country will have a unique opportunity to help the region sustain its high economic growth, as well as combat the rising threat of protectionism. “In the West economic nationalism and hostility to globalization appear to be on the rise. The member-economies of the ADB will be harmed by this emergent trend. We

must prepare our economies to meet the challenge,” Dominguez said.

Memory lane

THE first time the country played host to the meetings was also the 50-year-old bank’s first annual meeting in 1968. The inaugural meeting of the ADB was held in 1966 in Tokyo, Japan. Since then, Manila has been the location of the annual meeting 13 more times. Many of these times the meeting was held at the ADB headquarters and at the PICC. Next year’s meeting will be held at the ADB headquarters in Ortigas Center in Mandaluyong City. Choosing the location of the annual meeting comes from countries not the ADB. Countries that would like to host the meetings usually send a formal written offer to the ADB the year before. “It’s like a tradition that we have a meeting in Japan, then the Philippines. And we just published our 50 years’ book, and we hope you can pick up the book,” ADB President Takehiko Nakao said. Nakao also shared an anecdote from the book about how Manila was chosen as the bank’s headquarters.

Good choice

NAKAO said that, based on the history of the bank, the location of the headquarters was put to a vote. The first vote saw eight votes going to Tokyo, four went to Tehran in Israel, three in Manila and 1 to Bangkok. In the second vote, Manila and Tokyo became the front-runners. In the third vote, nine went to Manila and eight went to Tokyo. “This result was a very good result, because we are closer to the center of Asia; we are closer to developing countries, and also Manila was a great city to host us,” Nakao said. “There are so many professionally English-speaking people and [offer good] hospitality. Manila was a good choice and Manila was a good choice for the

next annual meeting.” Moving forward, the ADB assured developing member-countries (DMCs) that it will continue to support areas such as infrastructure, social development, gender equality, governance, climate change and disaster risk reduction. Nakao said that, apart from its sovereign operations, the ADB will expand its private-sector operations to 25 percent of regular ordinary capital resources (OCRs) by 2020. The ADB also encouraged DMCs to continue or explore public-private partnerships (PPPs), particularly for investments in infrastructure. However, Nakao was quick to note that PPPs are not a “panacea” to the large infrastructure gap in the region, since it involves risks, such as foreign-exchange risks, completion risk and regulatory risk, among others. “PPP is not a panacea. There are many risks,” Nakao said. “That’s why it’s important for institutions like [the] ADB to be involved, to mitigate risk.”

Wish list

IN the next few years, the Philippine government sees its partnership with the ADB continuing. Socioeconomic Planning Secretary Ernesto M. Pernia expects the ADB to continue and even increase its participation particularly in terms of infrastructure. The national government is keen on ramping up its infrastructure spending to 7.4 percent of GDP by 2022, in the hope of addressing the huge infrastructure gap in the country. Based on National Economic and Development Authority (Neda) data, the ADB plans to invest, at least in the 2017-to-2019 period, around $4.997 billion in official development assistance (ODA) loans and grants. These are composed of $4.987 billion in ODA loans and $9.3 million in grants.

New proposals added to tax-reform measure By Jovee Marie N. dela Cruz

@joveemarie

he chairman of the House Committee on Ways and Means disclosed on Sunday new proposals from different sectors were incorporated in the proposed Tax Reform for Acceleration and Inclusion Act. PDP-Laban Rep. Dakila Carlo Cua of Quirino, the panel chairman, said concerns of stakeholders were heard and carefully considered during the technical working group(TWG) meetings. “Many different proposals were considered [in the tax package], including the proposals of the car industry, as well as concerns aired by consumers,” Cua said. Last week voting 17 in favor and four against, with three abstentions, the ways and means committee approved a technical working group-substitute tax-reform bill. The tax-reform package incorporating the proposals from various sectors will be submitted to the plenary for deliberations after its

approval at the House Committee on Appropriations. “The bill will be deliberated in by the appropriations committee. However, I cannot say [now] for sure when it will reach the plenary,” he said. Earlier, Cua added the lower chamber is eyeing to pass the taxreform package before Congress goes on adjournment sine die by the end of this month. Under the bill, workers earning P250,000 will be exempted from paying personal income taxes. The bill also includes P6 tax on petroleum products that could cause prices of basic goods to rise, and ad valorem tax on brand-new cars. The P6-per-liter excise-tax increase will come in three tranches of P3, P2 and P1, respectively, in three years. The panel also adopted new schedules and brackets for auto excise tax in the package. The Department of Finance (DOF) is pushing for the excise on vehicles to address traffic in the country. See “Tax reform,” A2

SUMMER AT THE BEACH A mother and her children play close to the shore with their family dog at the PC Beach in Buenavista de San Jose, Antique. ROY DOMINGO

See “Manila,” A2

www.businessmirror.com.ph

D.O.T. SECRETARY URGES DEVELOPERS TO BACK SUSTAINABLE TOURISM

Tourism Secretary Wanda Corazon T. Teo calls on real-estate developers to become advocates of a sustainable, inclusive and climate-resilient Philippine tourism industry during the PropertyGuru Philippines Property Awards 2017 held on May 4, at the Fairmont Makati. Image courtesy OF D.O.T. By Ma. Stella F. Arnaldo

@akosistellaBM Special to the BusinessMirror

ROPERTY developers and realtors should become advocates of a sustainable, inclusive and climate-resilient Philippine tourism industry, even as their projects contribute to expand the economy. This was the appeal made by Tourism Secretary Wanda Corazon T. Teo last Thursday, keynoting the PropertyGuru Philippines Property Awards 2017 held at Fairmont Makati. “Over the years, we have seen how the real-estate industry evolved from simply constructing buildings to creating livable communities and workplaces. Sustainability has become a guiding principle in your mission to provide spaces for settlement and productive activities in order to ensure that the integrity of our environment is not compromised,” Teo said. “Another aspect of sustainability that your industry is espousing is resiliency, or the ability of buildings or properties to withstand natural calamities, especially those resulting from the effects of climate change. I personally believe that your efforts to integrate disaster resiliency in your projects have helped in inculcating its value in the consciousness of Filipinos,” she added. The United Nations World Tourism Organization defines

sustainable tourism as “tourism that takes full account of its current and future economic, social and environmental impacts, addressing the needs of visitors, the industry, the environment and host communities.” She said sustainable tourism also takes into consideration the carrying capacity of local destinations, such that tourism activities are managed to prevent irreparable damage to the environment and ensure the continuing satisfaction of the country’s visitors to those spots. Teo added that sustainability can also be viewed in the lens of inclusivity. “By inclusive tourism we mean engaging more people to take part of, and benefit from, tourism. This can be done by sourcing materials and services from our localities, or by investing in undeveloped areas to jump-start local economies, such as those in the Visayas and Mindanao.” She said even while the country hosts an endless number of tourism destinations that are unparalleled in the world, “most of these are located in some of the most ecologically- and culturally-sensitive areas, such as Bohol, Palawan and Batanes. Taking this into consideration, it is incumbent upon all of us stakeholders to ensure that we are one in pursuing sustainable tourism development wherever in the country.” See “DOT,” A2