Businessmirror may 08, 2018

Sensitive data needs to be protected through encryption

N

By Henry J. Schumacher

SENTAVIO | DREAMSTIME.COM

umerous high-profile events in 2017 and early 2018 have made it abundantly clear that all enterprises and government agencies are responsible and liable for the protection of personal data collected from customers and clients—no exceptions. New regulations, such as the European Union’s General Data Protection Regulation, which goes into effect on May 25, will back those expectations of protection with substantial penalties and fines for noncompliance.

Continued on A12

media partner of the year

United nations

2015 environmental Media Award leadership award 2008

BusinessMirror A broader look at today’s business

www.businessmirror.com.ph

n Tuesday, May 8, 2018 Vol. 13 No. 206

Palace: Policies in place vs debt trap, red tape M

By Bernadette D. Nicolas

@BNicolasBM

ALACAÑANG on Monday insisted firm policies are in place against falling into a debt trap, as warned by a lender; and errant public officials. As if to emphasize, President Duterte also issued on Monday a deadline for a bureaucrat’s response to any request or inquiry from the public.

In a news briefing, Presidential Spokesman Harry L. Roque Jr. pointed to the President’s policy on dealing with other states, and on dealing with public officials and their penchant for traveling abroad.

Roque first cited Duterte’s independent foreign policy as helping the government realize its goals under the Chief Executive’s “Build, Build, Build” slogan.

Roque issued this statement

68

The number of countries covered by the Belt and Road Initiative following the Asian Development Bank’s warning that countries actively engaged in China’s “Belt and Road” initiative (BRI) may fall into a debt trap. With an announced investment as high as $8 trillion, BRI is a massive trade and infrastructure project that aims to link Asia, Europe and Africa, covering at least 68 countries.

T

@ReaCuBM

HE Philippines is keen on the idea of joining a regional insurance pool to hedge against calamities hitting the Association of Southeast Asian Nations (Asean) region.

Insurance Commissioner Dennis B. Funa said there is a possibility for the country to enter into the Southeast Asia Disaster Risk Insurance Facility (Seadrif), which is aimed at providing climate and disaster risk-financing and insurance solutions to Asean-member countries.

However, Funa has misgivings that the Philippines may use up more of the fund provided by the facility since the country is more exposed to natural calamities.

“Possible, but I don’t think they want us there. We are exposed to

more natural disasters than them,” Funa told the BusinessMirror.

“We would end up utilizing more of the funds than them.”

The Seadrif is a regional catastrophe risk pool having similarities to a reinsurance-based disaster liquidity facility, designed to provide participating countries in Southeast Asia affected by natural disasters with immediate rapid response financing.

Finance ministers from Cambodia, Japan, Lao People’s Democratic Republic (Laos), Myanmar and Singapore have jointly agreed to establish and implement the Seadrif this year to strengthen financial resilience among member-countries against climate and disaster risks in the region.

“We look forward to the official establishment of Seadrif by the end See “Disaster-prone,” A12

PESO exchange rates n US 51.6470

business news source of the year

P25.00 nationwide | 4 sections 24 pages | 7 days a week

Management man Manny B. Villar

THE ENTREPRENEUR

M

any people questioned President Duterte when he ran in the 2016 pressidential election because of lack of experience in running a national office. After all, his only experience as a chief executive was during his tenure as mayor of Davao City, which was not even in a major region like Metro Manila.

Even before the presidential election was over, when different surveys indicated that he was leading the other candidates, a lot of people predicted that the Philippine economy would lose whatever gains it had achieved under previous administrations and would end in chaos under a Duterte presidency.

Continued on A10

Continued on A2

DISASTER-PRONE PHL WARMS UP TO ASIAN INSURANCE POOL

By Rea Cu

2016 ejap journalism awards

Senators set China missile probe at WPS

By Butch Fernandez @butchfBM

& Jovee Marie N. dela Cruz @joveemarie

S

JOINT EXERCISE Defense Secretary Delfin N. Lorenzana (center), US Ambassador to the Philippines Sung Kim (second from left), Armed Forces of the Philippines chief Lt. Gen. Carlito G. Galvez Jr. (fourth from left), 3rd US Marine Expeditionary Forces commander Lt. Gen. Lawrence Nicholson (fifth from left) and Northern Luzon commander Lt. Gen. Emmanuel B. Salamat link arms during the opening ceremony of the Joint US-Philippines military exercise, dubbed “Balikatan 34-2018,” on Monday, at Camp Aguinaldo, Quezon City. About 8,000 US and Philippine troops are taking part in the annual exercise aimed at enhancing their interoperability in counterterrorism and humanitarian assistance and disaster response. Contingents from Australia and Japan are also taking part in the two-week exercise. See story on A8. AP

enators are setting the stage for a full-blown inquiry into the reported Chinese missile installation within the West Philippine Sea (WPS) territories, even as they acknowledged the Duterte administration’s friendly ties with mainland China.

Sen. Antonio F. Trillanes IV confirmed on Monday he was finalizing the resolution that would authorize the Senate committees to summon Executive officials to testify and update senators on China’s “militarization” of the WPS. Continued on A2

n japan 0.4733 n UK 69.9145 n HK 6.5801 n CHINA 8.1206 n singapore 38.7362 n australia 38.9470 n EU 61.7646 n SAUDI arabia 13.7718

Source: BSP (7 May 2018 )

BMReports BusinessMirror

A2 Tuesday, May 8, 2018

Palace: Policies in place vs debt trap, red tape Continued from A1

The ADB warns countries undertaking “unsustainable borrowing” to fund infrastructure projects under the BRI. Roque added the government sees no problem with the ADB’s warning.

He said China is not solely the source of funds being used for ushering in the country’s “golden age of infrastructure.”

“What is good with the President’s foreign policy is [that] China and Japan are competing in not just lending us money but also in giving us grants,” Roque said. “What [happened] when we had the independent foreign policy is that we became friends [to] all of the countries in Asia, not just China, but also Russia and India.”

Troubles

THE BRI is seen as a key program to connect regions and the broad integration and cooperation across countries in Asia.

However, ADB President Takehiko Nakao said in a briefing during the 51st ADB Annual Meeting last week that there will be “trouble in repayment,” “if countries borrow too much for certain infrastructure without looking seriously at the viability and feasibility.”

“We should consider debt sustainability very carefully,” Nakao said. Earlier, too, the International Monetary Fund already raised concerns that the BRI can lead to a “problematic” increase in debt.

Hence, the international lender of

Piñol. . .

Continued from A12

The National Food Surplus Campaign shall be undertaken by the NNC in tandem with the DSWD, the departments of the Interior (DILG), Environment (DENR), Education (DepEd), Trade (DTI), Health (DOH), Science (DOST), and Agriculture (DA), the FDA and other concerned agencies and the LGUs. The campaign aims to raise awareness of the impact of a food surplus and strategies to minimize food waste, starting at the household level. The campaign shall also promote a food surplus hierarchy and

Disaster-prone. . .

Loan with a Catastrophe-Deferred Drawdown Option (CAT-DDO 2), which provides $500 million of standby financing. “ T hat is why we have the CAT-DDO program facilitated by the World Bank on insuring the

last resort recommended a careful management of financing terms is critical, especially for countries where public debt is already high.

Likewise, the Center for Global Development concluded in its March report that 23 countries are at a risk of debt distress due to additional financing related to the BRI. The US-based think tank added that eight of these countries are at the “highest risk.”

“In all ‘highest-risk’ countries, the proportion of external debt that is owed to China and its banks will rise, sometimes dramatically, under the Belt and Road Initiative,” the report read.

These eight countries include Lao PDR, Maldives, Djibouti, Montenegro, Mongolia, Tajikistan, Kyrgyzstan and Pakistan.

Home front

ALSO on Monday Malacañang issued Memorandum Circular (MC) 44, directing all government agencies, including government-owned and -controlled corporations, to respond to all public requests and concerns within 15 days from receipt thereof.

Dated May 4, MC 44, a copy of which was issued to reporters on Monday, covered government offices or agencies performing frontline services as defined in Republic Act (RA) 9845, or the Anti-Red Tape Act of 2007.

“Frontline services” under the law is defined as the process or transaction between clients and recommend means of reducing individual food waste.

To educate the younger generation, the DepEd shall have the duty to ensure the prescribed curriculum includes informative materials on the following: the current global and national food waste situation; ways to minimize food waste; national and local food waste-prevention programs and food recovery.

The following steps shall be followed in edible waste distribution: 1) Owners of covered establishments shall segregate their edible and inedible food surplus; 2) Before donation, a duly accredited health inspector of the LGU shall check if the

Continued from A12

government assets,” Funa said.

He added, however, the commission is still studying the proposal of the Philippine Insurers and Reinsurers Association for insuring private residence and establishments.

“That is a more complicated mat-

government agencies involving applications for any privilege, right, permit, reward, license, concession or for any modification, renewal or extension of the enumerated applications and or requests which are acted upon in the ordinary course of business of the agency or office concerned.

The memorandum also cited RA 6713, or the Code of Conduct and Ethical Standards for Public Officials and Employees, which provides that all public officials and employees shall within 15 working days from receipt thereof, respond to letters, telegrams or other means of communications sent by the public and that the reply must contain the action taken on the request.

“Whereas the State shall provide the means to strengthen the people’s channel of communication to the government by promoting and emphasizing the importance of responsive and ser v ice - or iented gover nment agencies and instrumentalities, with the objective of fostering transparency and accountability,” the memorandum read.

Probe

ON May 7 Roque said the President will investigate the controversy involving the interim president of the Philippine Health Insurance Corp. (PhilHealth), who spent more than half a million pesos for travel last year, when the agency tallied a loss

of nearly P9 billion.

T he Commission on Aud it (COA) said in its April 18 report that PhilHealth Officer in Charge Celestina Ma. Jude de la Serna incurred P627,000 travel expenses in the same year that the PhilHealth tallied a net loss of P8.920 billion. In 2016 the agency incurred a loss of P251 million.

Aside from the travel expenses, the COA also flagged the P143,881 worth of allowances, which all had notices of disallowances.

The COA also noted that it also asked de la Serna to explain the money she spent for video conferences amounting to P152,000.

Roque promised that the cleansing of the ranks in the PhilHealth will be given priority. “ The priority of the President is to give universal health care,” he said. “And if there will be no cleansing of the ranks in PhilHealth, the universal health care [goal] will not be realized.”

Following the resignation of Dr. Hildegardes C. Dineros, the PhilHealth board of directors voted de la Serna to her position in April 2017. Prior to her appointment to the Philhealth board representing overseas Filipino migrant workers, de la Serna served as chief of two hospitals in Bohol.

De la Serna’s father, Victor, was President Duterte’s law professor.

He was later on appointed by the President as a member of the consultative committee tasked to review the 1987 Constitution.

edible food surplus is fit for consumption based on the standards set by the NNC and FDA; 3) Upon certifying that the edible food surplus is fit for consumption, the edible food surplus shall be donated to accredited food banks to be determined by the DSWD; 4) The food banks shall coordinate with the DSWD and LGUs in distributing the edible food surplus to food insecures. Meanwhile, the inedible food surplus, together with the food waste determined as unfit for human consumption, shall be distributed to farms for use as compost or fertilizer in a manner to determined by the DENR, DOST and DA. Owners of food-related establishments

shall submit a report to the DSWD and the DENR to include data on the amount (in tons) of their edible and inedible food surplus, organized according to the manner of disposal, including donation, and composting or discarding.

The penalty of prison mayor shall be imposed on anyone found reselling donated food surplus. If the offender is a juridical entity, the responsible officers shall be held liable.

A fine of P500,000 shall be imposed on anyone who makes edible food surplus unfit for consumption or prevent the redirection of edible food surplus to food banks or inedible food surplus to waste management and recycling enterprises.

ter because it will probably require legislation to implement,” Funa said. “And, of course, the matter on how to enforce it is very tricky.”

He also cited the Disaster Risk Reduction and Management Fund under the general appropriations Act. All of these fall squarely under a general plan called the National Disaster Risk Reduction and

Management Plan 2011-2028, according to Funa.

With Jovee Marie N. dela Cruz

Programs

ALSO in July last year the Philippines launched a parametric catastrophe risk-insurance program for government properties with the collaboration of the Department of Finance, the Government Service Insurance System, World Bank and the United K ingdom Department for International Development.

Under this program, the GSIS, as the insurer, will provide catastrophe risk-insurance coverage for the national government, with priority for those agencies involved in disaster risk-management, and 25 selected and disaster-prone provinces.

The premium for program was allocated under the National Disaster Risk Reduction and Management Fund of the 2017 General Appropriations Act (RA 10924) in the amount of P1 billion ($19.5 million), inclusive of cost for documentary stamp tax. Premiums have two categories: disaster-specific and province-specific.

For disaster-specific premiums, P500 million of the fund will be allocated 79.2 percent (P396.1 million) for typhoons and 20.8 percent (P103.9 million) for earthquakes. The other P500 million will be province-specific and split equally among the 25 provinces at P20 million each.

www.businessmirror.com.ph

Senators set China missile probe at WPS Continued from a1

Senate Resolution 722 filed by Trillanes specifically asked the Senate Committee on National Defense and Security, chaired by Sen. Gregorio B. Honasan II, to conduct an inquiry, in aid of legislation, on China’s installation of missile systems on three fortified outposts in the Spratly Islands, which is being claimed by the Philippines, “with the end in view of asserting the country’s sovereignty and territorial integrity, and ensuring that this militarization by China does not pose any threat to the Philippines’s defense and security.”

‘Poor action’

At the House of Representatives, meanwhile, Rep. Edcel C. Lagman of the First District of Albay said Duterte’s poor action against the recent move of Beijing is “grossly unpatriotic and gravely disheartening.”

“President Duterte’s inordinately lame response to China’s alarming missile buildup in the West Philippine Sea is grossly unpatriotic and gravely disheartening,” Lagman said.

He adde d t he P reside nt ’s “pathetic response” is consistent with his erratic decision to shelve any discussion with China on the verdict by the Permanent Court of Arbitration in The Hague in favor of the Philippines and against China’s adverse claims over West Philippine Sea.

Alarmed

Trillanes also deplored the Duterte administration’s seeming indifference to China’s blatant militarization of Philippine territory. “We, as a nation, should be alarmed by China’s militarization of the WPS. However, Duterte continues to invite China in by being its lapdog,” he said.

In a news statement released later in the day, Trillanes suggested that “now is the time for [the] Philippine Government to invoke its Enhanced Defense Cooperation Agreement [Edca]with the United States.”

“Militarily, in the short term, we should fast-track the implementation of the Edca, and encourage freedom of navigation patrols by the US and other allies,” the senator said.

“In the medium term, we should strengthen our security alliances with the US, Japan, Australia and the Asean, and continue our Armed Forces of the Philippines modernization.”

Trillanes proposed that Philippine officials concerned should “diplomatically...reassert our victory in the international Arbitral Tribunal. At the same time, the senator added, “We should also initiate a regional security summit to raise international awareness on the WPS situation.”

He noted that Philippine ships, “whether commercial or nav y ships,” that sail through the area may be in danger from the Chinese missile systems and may trigger a “misencounter.”

Trillanes recalled that as a former Navy officer, he used to join naval patrols in the Philippines’s exclusive econimic zone. “Now they are no longer allowed to do that under this administration.”

It was earlier reported by the news media outfit Consumer News and Business Channel that China installed anti-ship cruise missiles and surface-to-air missile systems on three fortified outposts at Fiery Cross Reef (Kagitingan Reef), Subi Reef and Mischief Reef in the Spratly Islands claimed by the Philippines.

The resolution noted that based on US intelligence report, the Chinese missiles were “moved to the

outposts in the Spratlys within the past 30 days.”

It added that the anti-ship cruise missiles (also called YJ-12B), can hit surface vessels within 295 nautical miles of the reefs.

“Meanwhile, the surface-toair missile system, called the HQ-9B, can target drones, aircraft and cruise missiles within 160 nautical miles,” the Trillanes resolution stated.

Apart from military installations, the resolution added that “China’s extensive reclamation in the disputed territories also included airstrips, which have been recently utilized when China deployed advance fighter jets to the West Philippine Sea.”

Occupation

“Duterte’s undue and suspicious policy of accommodation, if not subser vience, to China has resulted to a virtual forfeiture by the Philippines of the favorable arbitral award and has condoned China’s continued illegal occupation and militarization of the strategic areas,” Lagman continued.

Instead of immediately ordering the filing of a diplomatic protest and instituting other viable options against China under international law and the United Nations Convention on the Law of the Sea (Unclos), Lagman said the President is banking on China’s alleged promise of protecting the Philippine.

“How can a military trespasser on Philippine territory profess to protect our country and against whom, when China itself is the aggressor?” Lagman asked.

“No less than China has not denied validated reports that it has deployed anti-ship and groundto-air missiles on three reefs in the Spratly Islands which are mostly within Philippine territory,” he said.

War

Meanwhile, Party-list Rep. Carlos Isagani T. Zarate of Bayan Muna said the Philippines country is in “danger of becoming a theater of war between the US and China as troops and war materiel of the two competing imperialist powers are within striking distance of each other within Philippine territory.”

Zarate issued a separate statement as the Armed Forces of the Philippines has imposed media ban on the coverage of joint military field exercises with the US in the 34th Balikatan exercises i n Z a mba les a nd Ta rl ac following reports that China has installed missile systems in the areas it occupied in the West Philippine Sea. “This is a very difficult and worrisome situation where the Philippines is stuck between a rock and wall, especially with the intensifying Sino-American economic, military and political rivalry. With the Visiting Forces Agreement and the Enhanced Defense Cooperation Agreement with the US, the Philippines essentially became a US military base and can be targeted by China,” Zarate said.

“It is gravely wrong and not reassuring for Malacañang to say that the missiles are not pointed at the Philippines. It is not a sound foreign policy to play one superpower against another, especially if both of them are in your territory. It is our country and people who will suffer not them,” he added.

Zarate said it would be best to rescind all the treaties, like the US Military Defense Treaty and Edca, as these only make us magnet for attacks.

Economy

A4 Tuesday, May 8, 2018 • Editors: Vittorio V. Vitug and Max V. de Leon

briefs fuel pump-price rollback on Tuesday Oil companies are implementing a price rollback on Tuesday. In separate advisories, the price of gasoline will go down by P0.30 per liter, diesel

by P0.30 per liter and kerosene will decrease by P0.60 per liter.

Seaoil, Phoenix Petroleum and Pilipinas Shell said they would implement their respective price rollbacks at 6 a.m. of May 8.

Other oil firms will implement the same price adjustment.

For the past three weeks, oil prices went up.

On May 1 gasoline prices went up

by P0.85 per liter, diesel by P0.70 per liter and kerosene by P0.70 per liter.

On April 24 oil firms increased gasoline prices by P0.40 per liter, diesel by P0.65 per liter and kerosene

by P0.65 per liter.

They also raised prices of gasoline on April 17 by P0.35 per liter, diesel by P0.55 per liter and kerosene by P0.80 per liter.

The Department of Energy is currently drafting a circular on unbundling of petroleum product prices to provide consumers with the necessary information regarding fair pricing.

The draft circular has been en route for review and later be scheduled for consultation with industry players and other stakeholders. Lenie Lectura

p9.5-b subsidy for urban transport service in 2015

Filipino taxpayers spent P9.5 billion to subsidize urban transportation services in 2015, according to the Philippine Statistics Authority (PSA).

PSA data showed Filipinos did not subsidize transportation services in 2014, but extended subsidies worth P3.8 billion in 2013.

The bulk of the subsidies extended to the transport sector in 2015 was allotted for urban and suburban railway transport and inter-urban passenger railway transport worth P9.5 billion, and another P45,000 was extended to local bus line operations.

“Subsidies are all special grants in the form of financial assistance or tax exemption or tax privilege given by the government to aid and develop an industry,” the PSA stated. Cai U. Ordinario

BusinessMirror

Group slams plan to tap foreign labor for ‘BBB’ projects

L

By Samuel P. Medenilla

@sam_medenilla

abor group Sentro ng mga Nagkakaisa at Progresibong Manggagawa (Sentro) has criticized the proposal raised by lawmakers that will pave the way for the entry of foreign workers in the country to participate in the Duterte administration’s “Build, Build, Build” (BBB) projects.

In a news statement, Sentro Secretary-General Joshua Mata said it was “grossly insensitive” for Rep. Joey S. Salceda of the Second District of Albay for issuing the suggestion, which he said, would only worsen joblessness in the country.

“It is also grossly insensitive of this [administration] to even think of getting foreign workers to build the country’s planned infrastructure projects when we have not even addressed our own growing unemployment problem,” Mata said.

Mata added the BBB program must “maximize local inputs, including labor,” since most of the infrastructures that will be built under the program will be paid by Filipino taxpayers.

As for those funded through foreign loans, the labor leader urged the government to be wary of its conditions, especially loans from China.

“Sentro warns the government not to follow the footsteps of other countries who are now saddled with onerous loans from China, which, as a condition, utilizes Chinese raw materials and labor,” Mata said.

Mata a lso raised concer ns about the welfare of foreign workers, who will be employed for the BBB program.

He said they will be vulnerable to exploitation since they are not covered by the Philippine Labor Code.

“Unless migrant workers are allowed to join or form unions in the destination country, labor standards in their line of work would most likely deteriorate,” Mata said.

Last week Salceda said the government could consider tapping workers from Burma and China for its manpower needs for the BBB, amid the prevailing labor shortage in the local construction industry.

The lawmaker said this is a must since the Technical Education Skills Development Authority (Tesda) and education institutions cannot meet the 3.9 million labor-force requirement in the construction industry in the coming months.

Mata, however, said Salceda’s proposal is no longer necessary if the government would just raise the number of Tesda trainees and increase the wages of workers in the construction industry.

“The government should make the wages for skilled Filipinos more competitive so that the overseas Filipino workers [OFWs] in Kuwait and other parts of the globe who are skilled enough could have the option of coming home and take the challenge for themselves in the rebuilding and modernizing their own country,” Mata said.

red monday at sc

VARIOUS groups and members of the Judiciary renewed their call for embattled Chief Justice Ma. Lourdes Sereno to resign from her post and not wait for the Supreme Court (SC) to decide the quo warranto petition filed by the Office of the Solicitor General seeking the nullification of her appointment as Chief Magistrate.

On Monday judges and court employees wore red shirts and red neckties during the flag-raising ceremony to demonstrate their stand in favor of Sereno’s ouster.

Philippine Judges Association President Judge Felix Reyes and SC Employees Association (SCEA) President Erwin Ocson were spotted wearing red.

In a brief statement issued on Monday, SCEA said they again held the “Red Monday” protest to renew their call for change in the Judiciary.

“This is to show our collective action to show the truth and pursue reform in the Supreme Court and the judiciary,” the group stressed in Filipino. Joel R. San Juan

to address the country’s shortage of construction workers.

Legal attachés

IN a related development, Rep. Wes Gatchalian of the First District of Valenzuela renewed his call to the Department of Foreign Affairs for the immediate deployment of legal attachés in countries where there is a high population of OFWs, to assist both the consular and diplomatic officials and the OFWs facing legal problems in the host foreign countries. Gatchalian is the author of House Resolution 810 filed in February of 2017 expressing the same sentiment.

“Protecting our OFWs in foreign countries is primarily a legal problem. As much as we want to protect our citizens, we have to do so in a manner that is mindful of the

It is also grossly insensitive of this [administration] to even think of getting foreign workers to build the country’s planned infrastructure projects when we have not even addressed our own growing unemployment problem.”—Mata Instead of listening to few “economic technocrats” like Salceda, Mata said the government should hold public consultations on how

sovereign rights and prerogatives of our foreign partners.” Gatchalian said. “Our actions should, therefore, always be adherent

with their domestic laws, as well as our treaty obligations. It is in this context that I am renewing my call for the immediate deployment of legal attaches to provide expert and competent legal advice not only to our OFWs but also to our officials abroad.” he added.

Gatchalian’s statement comes on the heels of the controversy involving diplomatic officials in Kuwait who performed what has been reported as a “clandestine rescue mission” for an allegedly abused OFW from her sponsor’s home. Reports of the said incident were immediately followed with strong reactions from the Kuwaiti government, ultimately leading to the expulsion of the head of the diplomatic mission, Philippine Ambassador to Kuwait Renato Villa.

“I am, of course, very pleased that we have been able to save our kababayan from further harm. I believe that, first and foremost, protecting our OFWs should always be our primary goal.” Gatchalian said.

“But I am concerned over the reports that our diplomatic officials committed unlawful acts in doing so. This is something which I believe we should and could avoid, for otherwise, our good intentions are immediately tainted, and we lose our ground with our foreign partners to demand that our citizens be given better treatment.” he added.

Under the Migrant Worker’s Act, it is the declared policy of the state to provide “legal assistance” to distressed OFWs in foreign countries.

DTI reminds buyers on caveat of online, e-commerce purchase

By Elijah Felice E. Rosales @alyasjah

T

pcso vows to act on asap desk complaints

Philippine Charity Sweepstakes Office (PCSO) Assistant General Manager for Charity Sector Dr. Larry Cedro assured that complaints arising from At-Source-Ang-Processing, or ASAP desks, with partner-hospitals will be acted upon to improve the delivery of charity services to patients.

The PCSO official issued the statement in response to complaints of erring social workers in some partnerhospitals and those who give preferential treatment or priority to their relatives, friends, or close acquaintances.

He said that with the public’s empowerment through social media and other mediums, the PCSO is more conscious and aware of the public’s feedback.

www.businessmirror.com.ph

Kids’ toy

An itinerant toy balloon vendor peddles a bunch of colorful balloons around the district of Palanan in Makati City over the weekend. The summer season, fiestas, parties and toddlers fascinated with the flying toy tied to a string still largely dictate the demand and sale of balloons. ALYSA SALEN

Lawmaker launches P100-M pilot tech-voc training program

A

lbay pilots this school year a P100-million technicalvocational (tech-voc) training program under the newly implemented Universal Access to Quality Tertiary Education Act (UAQTEA), or Republic Act 10931. The program, which targets 6,300 youth beneficiaries, focuses on the tech-voc aspect of the new law Rep. Joey S. Salceda of the Second District of Albay, RA 10931 principal author, recently launched the pilot program in Albay. He said the program aims to address the “diverse range of skills and learning styles” of his youth constituents, some of whom may not avail themselves of the free four-year standard college courses. The pilot program targets some 8,300 student beneficiaries.

RA 10931, the lawmaker said, was designed to highlight not only the free four-year college courses, but also tech-voc education, which was not given equal focus previously, even with the Technical Vocational Education and Training (TVET) program in effect.

He added his pilot program aims to improve, maximize and enhance the services of the Technical Edu-

cation and Skills Development Authority (Tesda) in Albay, the Daraga Human Resources Development College, the Daraga Community College—as pilot institutions—and later on all other accredited local government unit-run tech-voc schools in the province, under the UAQTEA. The lawmaker said his Second District congressional office has allocated 5,000 slots for Training for Work Scholarship with a budget of P25 million and 1,500 slots for the Special Training for Employment Program, with P15 million, administered by Tesda. Another 1,800 slots will also be allocated by June, with a budget of P54 million for the free TVET under RA 10931.

Salceda said giving special attention to the tech-voc aspect of the UAQTEA will allow the country’s educational program to address the emerging global trend that seeks to bring back and revitalize techvoc training in schools. Citing recent findings on global educational trends, Salceda said focus on vocational training is hinged on the fact “that people have a huge and diverse range of different skills and learning styles.”

The latest figures from the US Bureau of Labor Statistics show that only “about 68 percent of high-school graduates in the US attend college; this implies that over 30 percent of them end up with neither academic nor job skills.” The same report said “almost 40 percent of students who begin fouryear college programs don’t complete them, which translates into a whole lot of wasted time, wasted money and burdensome student-loan debts.” Salceda noted that the Philippines may share the same predicament, and free tech-voc training would effectively address the issue.

Salceda formulated the UAQTEA based on the Universal Access to Quality Tertiary Education program he carried out when he was Albay governor for nine years, before he returned to Congress in 2016. He subsequently filed the free college tuition bill that became RA 10931.

Now Albay stands to benefit from that pioneering effort, with an initial batch of 30,000 enrollees under UAQTEA for the current school year.

Of this number, about 17,000 will enroll in state universities and colleges and another 12,000 in local universities and colleges. PNA

he trade department is urging consumers to always check the standards of the products they buy to make sure these products passed government tests, amid a noted increase on online transactions with the rise of the e-commerce platform.

In a recent news statement, the Department of Trade and Industry’s Bureau of Philippine Standards (DTI-BPS) told the buying public to persistently look for Philippine Standard (PS) and Import Commodity Clearance (ICC) marks on critical products. Close checking must be done on electrical and electronic products, lamps, wiring devices, wires and cables, mechanical and construction materials and chemicals, according to the DTI-BPS. The trade agency also recognized more and more consumers are choosing to buy products online as part of the growing e-commerce industry. However, the DTI-BPS advised they should not rely on label claims on the Internet and must do their part also when making purchasing decisions.

Trade Undersecretary Ruth B. Castelo said that, while the DTI-BPS monitors trading activities online, both merchants and consumers should still do their part in making sure e-commerce is a platform for fair trade. She told online sellers to strictly adhere to standards set by the government, and warned violators will be held responsible.

“The department monitors purchase transactions not only in the establishments, but also in online stores. We urge the online merchants to be responsible in ensuring that the critical products that they are distributing and selling have the required labels, including the PS and ICC marks,” Castelo said.

Under the current DTI-BPS’s product certification scheme, there are 73 critical products and systems that are required to be inspected and evaluated based on specific Philip-

pine National Standards. Once it passes government tests on performance and safety requirements, the product will be issued with a PNS license or an ICC certificate.

A product with a PNS or ICC mark is allowed to be distributed and sold in the market. The product is also required to be attached with a label indicating its brand name, date of manufacture, name and address of manufacturer and country of origin, among others.

DTI-BPS Director James E. Empeño said it is important for consumers to be aware of the PS and ICC marks, as these regulations were made to protect the buying public from substandard and harmful products.

“The PS and ICC marks guarantee a consumer that a product has undertaken extensive safety and performance inspection prior to its sale and distribution,” he said.

In March two non-governmental organizations warned consumers of the possible risks of purchasing items from the Internet. In a joint statement, Laban Konsyumer Inc. and EcoWaste Coalition pressed the government to recognize the rise of e-commerce sites and place stiffer regulations on them to ensure their products are maintained at high quality.

Laban Konsyumer President and former Trade Undersecretary Victorio A. Dimagiba said the fast-growing digital technologies produced a platform where people are just a click away from making purchases. But with convenience comes a price, he warned, and said “not all things being sold online are created equal.”

“Just like in offline shopping, consumers need to be on their guard against adulterated, counterfeit, mislabeled and poor-quality products that may pose health and safety risks. The risks are real, so regulatory agencies and e-commerce sites need to take greater measures to protect consumers from online cheats and unfair business practices,” Dimagiba added.

www.businessmirror.com.ph

Banking&Finance BusinessMirror

Editor: Jun B. Vallecera • Tuesday, May 8, 2018

‘Bank accounts help cut remittance cost’

C

By Cai U. Ordinario @cuo_bm

ountries in Asia and the Pacific, including the Philippines, should encourage families of migrant workers to save and open bank accounts, the International Fund for Agricultural Development (Ifad) said in its latest report.

Ifad said in its report, titled “RemitSCOPE—Remittance markets and opportunities—Asia and the Pacific,” this would bring down the cost of sending and receiving remittances.

Currently, transaction costs of sending $200 worth of remittances in the Philippines is at 5.2 percent, nearly twice the

3-percent target set under the Sustainable Development Goal.

“By promoting financial inclusion, and moving toward accountto-account transactions, remittance families will be enabled to save and invest more,” Ifad said.

Ifad added 40 percent of remittances worldwide goes to the rural areas.

In the Philippines as much as 56 percent of remittances are sent to the provinces.

Improving financial inclusion, particularly in rural areas, will also help reduce poverty, as well as boost the trickle-down effect of growth and development.

“Rural remittances are particularly important in Asia and the Pacific because remittances ‘count’ more in small towns and villages where living expenses are lower, and typically the cost of sending remittances to rural areas is higher than to corridors linking high-volume urban markets,” Ifad said.

Ifad said using innovative technologies could help reduce the cost of remittances and save time in sending and receiving financial support from overseas Filipino workers.

The Philippines was cited by Ifad as a model of money-transfer operators (MTOs) in sending and receiving remittances alongside Bangladesh, Malaysia, Nepal and Pakistan.

The MTOs use mobile-phone

Multilateralism seen relevant despite rapid tech change F

inance Secretary Carlos G. Dominguez III is optimistic the Asian Development Bank (ADB) will remain functional and valuable in the decades to come no matter the c ha l lenges brought about by technological progress, the continuing reconfiguration of Asian economies and the dramatic political events across the globe.

The finance chief thanked the ADB leadership for the “great work” it has done to ensure the success of the 51st Annual Meeting of its Board of Governors in Manila, which took place from May 3 to 6. “ The pace of technological change, the continuing reconfiguration of the Asian economies and the dramatic political events around us do challenge our institutions. But the passion to happily cope with change, rethink the way we do things and collectively peer into the future we might not fully grasp yet keep us hopeful that this great institution, the ADB, will be functional and valuable to all its members in the decades to come,” said Dominguez, who chairs the ADB Board of Governors this year.

Dominguez

At the opening session of the meeting of the ADB Board of Governors, Dominguez said the ADB should help “future-proof ” member-countries against the sweeping impact of disruptive change by aiding them in harnessing the rapid advances in digital technologies to improve productivity and strengthen economies.

He said ADB’s Strategy 2030 is a “good beginning” in meeting this challenge as it provides the

institution with a road map that will not only let member-countries adjust to the new balance of power in the global economy in which the Asia Pacific is the center of gravity, but also help them cope with the enormous forces unleashed by new technologies.

“Rapid, and especially disruptive, technological progress carries both risks and rewards. The ADB is a vital institution for the region in ensuring the risks are mitigated and the rewards evenly distributed,” he added.

The delegates to the 51st Annual Meeting, which numbered over 4,000, included finance ministers and central bank governors of ADB member-countries, bankers, representatives from the private sector, civil society, academe, multilateral institutions and the media.

“The ADB, as the region’s main concourse of development ideas, should help member-countries to better harness the forces of technological change. It needs to develop the means to support member-countries from falling into the wrong side of the digital divide,” he said. Rea Cu

networks, Internet-based tools and introduce d ig ita l money initiatives to send and receive remittances.

The report stated that cashto - c a sh t ra nsac t ions rem a i n by far the most common form of transfer. It is only recently that technology is beginning to move markets toward accountto-account transfers through digital operations. T here are now over a million payment locations through the region, reflecting the greater digitalization of transactions.

“For digitalization of transfers to happen, regulators and private-sector companies need to work f u r t her toget her to ha r moni ze lega l a nd reg u l atory frameworks between countries and support the design of products dr iven by customer needs,” said Pedro de Vasconcelos, Ifad senior remittance expert.

India, China and the Philippines are the top remittancereceiving countries in the world with inflows reaching $69 bil-

lion, $64 billion and $33 billion, respectively.

The remittances received by the Philippines accounted for 10.2 percent of GDP in 2017 and posted a growth of 5.7 percent between 2008 and 2017.

In the region, de Vasconcelos said families generally spend about 70 percent of remittances to meet basic needs, such as food, clothing, health care and education.

He added that the remaining 30 percent, amounting to $77 billion, could be saved and invested in asset-bui ld ing or incomegenerating activities, helping families to build livelihoods and their future.

The report will be presented at the Global Forum on Remittances, Investments and Development-Asia Pacific to take place in Kuala Lumpur this week.

The forum will bring together more than 300 policy-makers, private-sector stakeholders and civil-society leaders to map out the road ahead for enhanced remittances.

BPI reports flat earnings in Q1

T

he Bank of the Philippine Islands (BPI) on Monday announced little changed retained earnings in the first three months as both income and expense rose during the period.

It reported a P6.25-billion net income in the first quarter, flat from last year’s performance and 16.4 percent up from the previous quarter.

In particular, total revenues for the quarter stood at P18.45 billion, up by 2.7 percent from the same period last year.

Broken down, its net interest

income totaled P12.51 billion, up 8.9 percent due to the expansion in average asset base. Interest income from loans grew by 18.4 percent due also to the improvement in loans.

Net interest income would have been higher if not for higher interest expenses traced to higher DST (documentary stamp tax) rates on deposits that increased the cost of funds by 5 basis points. BPI total loans stood at P1.21 trillion, up 17.2 percent from last year due to higher corporate loans. Bianca Cuaresma

A.M. Best affirms Malayan Insurance stability rating

M

ALAYAN Insurance takes the lead in the nonlife insurance industry as global insurance ratings company A.M. Best reaffirms its stability grade for 2018, reflecting its strength and reliability in the Philippine market.

“The ratings reflect Malayan’s balance sheet strength, which A.M. Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management,” A.M. Best said in a statement.

Malayan’s strong profile in the corporate segment of the Philippine nonlife market merited the citation the largest in terms of premium and second largest in terms of capital and surplus.

It further noted that Malayan manages credit risk by maintaining a panel of strongly rated reinsurance counterparties.

The insurer retained its financial strength rating at “B++” (Good), while its issuer credit rating is retained at “bbb+” with a stable outlook for both categories, according to A.M. Best.

The lead position in the insurance market is also evident in the Insurance Commission’s rankings released in 2017, stating that the company remains number one in terms of gross premium written (GPW) and net premium written (NPW) for year 2016.

Founded in 1899, A.M. Best is the world’s oldest and most authoritative insurance rating and information source.

“Malayan Insurance is the only nonlife insurer in the country rated

by A.M. Best, standing as a testament to both the company’s strength, as well as its dedication to provide world-class insurance protection to its wide customer base.

A5

Banks abhor near horizon money

T

he Bureau of the Treasury (BTr) reported mixed results in its Treasury bills (T-bills) sale on Monday when it awarded only P9 billion of the P15 billion on offer given the reduced offering on the term-deposit facility (TDF) of the Bangko Sentral ng Pilipinas (BSP) to P60 billion.

National Treasurer Rosalia V. de Leon said the auction committee awarded in full the 91- and 182-day buckets since these were where the bids were thickest. The BTr rejected all bids for the 364-day tenor as bids for the government security went as high as 4.338 percent.

“A lot of the bids flocked to the shortest end of the curve, the 91 and 182 day, because [of the] reduction on the TDF volume to P60 billion. This shows preference for the short end.

The banks are also waiting for the results of the MB [Monetary Board] policy rate discussions on Thursday and the release of the GDP data,” de Leon told financial reporters.

Last week the BSP reduced the volume offered on its TDF to P60 billion from P110 billion, pointing out that investors are expected to hold on to their cash for the coming barangay elections on May 14.

The seven-day TDF sale was reduced to P30 billion, from the previous P40 billion, and only P20 billion for the 14-day TDF from the previous P30 billion and P10 billion for the 28-day TDF from the previous P20 billion.

“The preference continues to be [on the short end] because of the uncertainties on inflation. They see inflationary expectations are also building up so everything, hopefully, will have a calming effect on what would really be the action of the MB on Thursday,” de Leon said.

Had the auction committee accepted all bids for the 364-day tenor of only P4.580 billion when the full offer was P6 billion, the one-year rate would have increased by 35.2 basis points from the previous rate of 3.986 percent. “[The 364-day] rate is at 4.25 [percent]. That’s already the rate of our retail Treasury bond with a tenor of three years so it’s like they are bidding for the bond. I think the banks are really testing the tolerance level of the Treasury. It’s not something that we will easily accept because they also see our liquidity position. They should know by now also. And besides, you saw the revenue collection of the BIR [Bureau of Internal Revenue] and the BOC [Bureau of Customs] that is also adding to the buffer of the Treasury,” she said. Rea Cu

C-level executives and the social media

E

xecutives today, mostly the baby boomers, are faced with a technolog y-driven world. The dilemma they often face is whether to dabble in social media or not. There are different views. But whether social media is a boon or bane to an executive is often a question of how he makes use it to benefit his career, his business or even in his personal life.

In a survey by CEO.com in 2016 on Fortune 500 CEOs, 60 percent or 300 have no social-media accounts on any of the six major social networks like LinkedIn, Twitter, Facebook, Google+, Instagram and YouTube.

The fear of breaking the boundary on social and private lives is always in the mind of the executives. But with proper use, social media can help improve customer relationship with the business.

Facebook and LiknedIn are more of a social nature than media. They are more about strengthening relationships. Twitter and YouTube, on the other hand, are more of media than

social because they are often used to broadcast messages. Facebook pages are more business-like and more company or business use. They are more popular than other web sites because of the ease in interaction and in the updates. But we are not talking here of social media being used for the sake of the company but by the executive himself.

Social media can best be used by executives for more meaningful engagement with clients. Allowing your clients to see the more personal side of you and vice versa creates a stronger personal relationship as long as you are careful with what you post. You can be authentic, but with care. Like avoiding discussions on political or religious views. You do not go criticizing a political issue that can go against the political views of others or impose denominational views. One may post spiritual values and in a Christian country like ours one is free to post Christian messages without having to criticize doctrinal differences.

FINEX free enterprise Wilma C. Inventor-Miranda One thing about social media is that it works faster compared to emails, just perfect for most executives who do not have time for postings and response. But clients understand that when you have your own personal Facebook account, they should avoid discussing business issues there. Such postings are more person a l. L i n ked I n, on t he ot her hand, is more of business while Viber and W hatsApp can be both business and personal.

One need not be close to a client but social media can and does

br i ng t he m c lose r. B e i ng a ble to show your friends on Facebook to see the more personal side of you and vice versa helps create an emotional bond that can lead to stronger client relationships.

However, one just does not post any t hing and shou ld be caref u l t o no t f l o o d t h e i r a c c o u nt w it h nonsense posts.

In an interview by The Economist w it h Eden Yin, senior lect urer in marketing at the University of Cambridge Judge Business School, he said: “Building a strong brand means creating strong emotions. There’s no better medium than social for creating a meaningful and emotional bond, because it is so intimate.”

But one has to be authentic, too. You just do not build relationships to grow your business but to have more meaningful ties with others. A business is built on trust and when people trust you, even if there are problems later on, they will go the extra mile to try to understand your side because they know

you better. And social media helps create that familiarity which is otherwise nonexistent, especially when you are not able to interact constantly in other forms of communication or even on a face-to-face interaction due to lack of time.

With the speed technology advances, the business models also changes with a cultural shift. You just have to know how to capitalize the cultural shift and adopt new business models as needed.

The important thing to remember is that social media can be a boon if used properly. If not, it can backfire.

But without it, you might be left behind as technology advances.

Wilma Miranda is a managing partner of inventor, Miranda and Associates, CPAs, member, board of directors—KPS Outsourcing Inc. and treasurer of Negros Outsourcing Services Inc. The views expressed herein do not necessarily ref lect the opinion of these institutions.

A6

Tuesday, May 8, 2018 • Editor: Lyn Resurreccion

The World BusinessMirror

www.businessmirror.com.ph

Malaysia’s election a close fight I n financial centers around the world, it looks like Malaysian Prime Minister Najib Razak will easily win reelection this week.

“I expect this to be a non-event with Najib coming away with a resounding victory,” said Edwin Gutierrez, the London-based head of emerging-market sovereign debt at Aberdeen Standard Investments, which oversees £575.7 billion ($821 billion) globally. “That is pretty much the overwhelming consensus from the market.”

But on the ground in Southeast Asia, there’s more uncertainty.

Analysts and politicians on both sides of the aisle are warning of a close fight in the May 9 election as Najib’s coalition looks to extend its unbroken 61-year rule.

Najib last month predicted a better performance this time around compared with five years ago, when his Barisan Nasional coalition won 133 constituencies—roughly 59 percent of parliamentary seats—in its worst performance ever.

Failure to improve may increase pressure from within his ruling United Malays National Organisation party to step aside.

This time he’s facing a fourparty opposition bloc led by Mahathir Mohamad, the country’s longest-serving leader who fell out with the ruling party.

While Mahathir has demonstrated an ability to win Malay votes, his diverse coalition has at times struggled to present a

cohesive message to voters.

Tight race

Recent moves from Najib’s administration suggest some anxiety.

Last month, authorities introduced a law to jail offenders who spread fake news, which has been criticized as an attempt to stifle dissent.

Mahathir’s party was temporarily banned from campaigning and the government has redrawn electoral boundaries, an exercise which opposition lawmakers say will benefit the ruling coalition.

“If BN fails to gain a considerable margin from 133, then questions will continue if he is still the right man for the job from inside and outside his party,” said Asrul Hadi Abdullah Sani, an analyst from consultancy BowerGroupAsia in Kuala Lumpur.

Polls show that any victory may hinge on two states in Borneo that account for a quarter of seats in parliament despite holding only about 20 percent of Malaysia’s population. The disparity helped explain why in 2013 the opposition won the popular vote for the first time yet lost the election.

‘Momentum’

In Peninsular Malaysia, Mahathir’s Pakatan Harapan coalition is set to win 43.7 percent of the popular vote compared with 40.3 percent

Supporters attend an event to launch the Barisan Nasional Women Manifesto in Kuala Lumpur, Malaysia, on April 24. Five years after leading his party to its narrowest victory yet, Najib said he’s expecting a “better result” in an election that will pit him against his one-time mentor. Brent Lewin/Bloomberg

for Barisan Nasional, according to the latest poll by Merdeka Center.

Still, the ruling coalition is expected to win on the back of Malay support and multicornered fights, the pollster said based on a survey conducted from April 28 to May 1.

“Definitely, we have the momentum in terms of machinery, preparation and also unity, but we never take things for granted,” said Zaidel Baharuddin, the executive secretary of the ruling coalition’s youth arm. “Nothing is a done deal.

Voters can change their mind in the last 48 hours.”

Najib, who has survived a corruption scandal and a slump in oil

If BN [Barisan Nasional] fails to gain a considerable margin from 133, then questions will continue if he is still the right man for the job from inside and outside his party.”—Asrul prices, is counting on an economic upturn and a divided opposition to boost his Barisan Nasional coalition’s fortunes in the election.

The $297-billion economy expanded at the fastest pace in three years in 2017, foreign investment is pouring in and a recovery in oil pric-

es promises to lend a bounce to the nation’s energy-export earnings.

Voter anger

Still, voter anger about the rising cost of living has become a key campaign issue. The government has sought to mitigate the pain with

cash handouts, tax reductions and allocations for affordable homes.

The opposition bloc has highlighted bread-and-butter issues while also keeping the spotlight on a money-laundering scandal involving state fund 1Malaysia Development Bhd., which has implicated Najib. He has denied any wrongdoing.

“This election is about food on the table for the Average Joe,” said opposition politician Rafizi Ramli, who runs a separate research outfit that tracks voter sentiments. “And it’s very difficult to predict how that translates into votes unless you have direct access to how the common people feel.”

The election may come down to settlers under the Federal Land Development Authority, a group of farmers who make up the majority of voters in 54 out of 222 federal constituencies.

Sentiment among them soured after the agency was hit by a string of financial scandals, prompting the ruling coalition to announce cash handouts and replanting grants to keep their support.

Younger Malay voters are also key as youth unemployment soars.

Both Najib and Mahathir are vying to win over Malays, which comprise about 60 percent of registered voters.

Lisa J. Ariffin, a 28-year-old Malay student, said her 75-yearold mother won’t vote for Barisan Nasional for the first time in her life. She remains undecided.

“I just feel that it’s not great leadership and it’s time for a change,” Ariffin said. “But at the same time I’m not confident with the opposition.” Bloomberg News

Worry, fear in Iran as Trump Hawaii volcano destroys dozens decides on nuclear agreement of homes, forces evacuations W P

TEHR AN, Iran—On the streets of Tehran, every day seems to bring more worry and fear ahead of President Donald J. Trump’s decision this week on whether to pull America out of the nuclear deal with Iran.

Exchange shop windows that once showed rates for Iranian rial to US dollar transactions have gone blank, as black-market rates have skyrocketed to 70,000 rials to the dollar, far higher than the newly government-imposed rate of 42,000 for $1.

Busy shopping districts that once saw newlyweds buying refrigerators and other major appliances now largely stand empty as people save their money. Some talk openly about leaving the country for anywhere else.

“All of us are thinking about the uncertain future ahead of us,” said Mohammad Khaleghi, a 27-year-old appliance salesman on Tehran’s Amin Hozour Street. “Everybody is doing that. Everybody is afraid of the future—even myself. I do not know what is going to happen, if I can survive in this business or not. This situation concerns us all.”

The sense of foreboding gripping the Iranian capital ahead of Trump’s Saturday deadline to decide what to do about the deal is a far cry from the jubilant street celebrations that greeted the 2015 nuclear accord with world powers.

Then, people spoke with hope about Iran slowly losing its pariah status with the West, cemented in the aftermath of the 1979 Islamic Revolution and the hostage crisis at the United States Embassy in Tehran.

Others praised President Hassan Rouhani, himself a cleric, and Iran’s other relative moderates for lifting the crippling economic sanctions that choked Iran over its contested nuclear program.

Today though, few can point to any benefit of the atomic accord.

“We do not feel any particular impact especially in our economy or

on our life,” said Shadi Gholami, a 25-year-old architect. “It is as if such a deal does not exist at all.”

While the nuclear deal offered a salve in allowing Iran to sell crude oil and natural gas in the international market, the deal has not helped address its high unemployment, particularly among the youth in this country of 80 million people.

Banks remain saddled with massive bad loans from the sanctions era.

Government corruption also remains.

“Our economic problems have nothing to do with the deal or Trump.

Our problem is that our officials just think of their own pocket,” said Ladan Shiri, a 33-year-old sales manager at a private company. “If they really thought about the people and not just their own profits, our people would not have the troubles they have today.

This is the main problem.”

Ali Forouzi, a 33-year-old industrial engineer, agrees.

“It is not nice to always blame others, such as America and Trump for our troubles. I believe that the root of our problems is inside the country,” Forouzi said.

“If we are strong enough internally, nobody can hit us from the outside, but unfortunately our problems arise from the internal system. This includes the lack of good coordination between our government and other bodies, as well as within the people themselves.”

Trump himself has been a divisive figure in Iran even apart from his long criticism of the nuclear deal.

Though the United States is home to many Iranians, Trump included Iran in his travel bans, stopping families from getting visas to visit loved ones.

Iranians also have criticized him for calling the Persian Gulf “the Arabian Gulf.”

Trump’s actions have been a boon to hard-liners within Iran’s government, who point to them as a sign that America is the “Great Satan” of the post-revolution years.

“If Trump pulls out, it will show very well to the world and to our own people how disloyal America is to its treaties and the truth will be revealed,” Forouzi said. “It may even give a better picture of us internationally because we have been committed to our promises.”

Seyed Reza Mousavi, a 58-yearold Shiite cleric, said the deal had “disarmed superpowers” and showed Iran’s strength.

“We are not scared by Trump’s decision and will resist and stand up to him without wavering,” the cleric said.

“Even if he pulls out of the deal we will not be harmed. We have chosen our path and it is the United States that will be harmed, not us, if he does it.”

One way the US could be harmed is in North Korea, said Alireza Yarmohammadi, the 52-year-old director of a health care and cosmetics company.

North Korean leader Kim Jong Un may never take Trump seriously ahead of promised talks between the two leaders.

“It is not very easy for America to leave the deal because if it does, North Korea will not hold talks with it,” Yarmohammadi said. “They will not reach a deal with a country that is disloyal to another accord which is only 2 years old. Besides, the next president may come and say that they do not accept a previously reached deal.”

But closer to home, Iranians increasingly talk among themselves of trying to leave the country for a better life abroad.

Western Europe remains a choice for those with ties there, while those with the money head visa-free to Armenia, Georgia and Serbia to buy citizenship.

“Oftentimes I think that if I want to live a better life I must emigrate from Iran,” said Gholami, the architect. “This thought is always with me.”

She added: “I wish here was a place where I could live in peace and quiet beside my friends and family. But sometimes things become so bitter that we have no choice.” Bloomberg News

AHOA, Hawaii—Hawaii’s Kilauea Volcano destroyed 26 homes and spewed lava hundreds of feet into the air, leaving evacuated residents unsure how long they might be displaced.

In revised figures last Sunday, Hawaii County officials said another four unspecified structures were covered by lava.

Hawaii officials said the decimated homes were in the Leilani Estates subdivision, where molten rock, toxic gas and steam have been bursting through openings in the ground created by the volcano.

Some of the more than 1,700 residents who have been evacuated were allowed to briefly return to gather medicine, pets and other necessities.

Officials say residents would be able to do so each day until further notice as authorities monitor which areas are safe.

Amber Makuakane Kane, 37, a teacher and single mother of two, said her three-bedroom house in Leilani Estates was destroyed by lava.

The dwelling was across from a fissure that opened last Friday, when “there was some steam rising from all parts of the yard, but everything looked fine,” Makuakane said.

Last Saturday she received alerts from her security system that motion sensors throughout the house had been triggered. She later confirmed that lava had covered her property.

Makuakane grew up in the area and lived in her house for nine years. Her parents also live in Leilani Estates.

“The volcano and the lava—it’s always been a part of my life,” she said. “It’s devastating...but I’ve come to terms with it.”

Lava has spread around 36,000 square meters surrounding the most active fissure, though the rate of movement is slow. There was no indication when the lave might stop or how far it might spread.

“There’s more magma in the system to be erupted.

As long as that supply is there, the eruption will continue,” US Geological Survey (USGS) volcanologist Wendy Stovall said.

Cherie McArthur wondered what would become of her macadamia nut farm in Lanipuna Gardens, another evacuated neighborhood near Leilani Estates.

One of the year’s first harvests had been planned for this weekend.

“If we lose our farm, we don’t know where we’re going to go. You lose your income and you lose your home at the same time,” said McArthur, who’s had the farm for about 20 years. “All you can do is pray

Lava burns across the road in the Leilani Estates in Pahoa, Hawaii, on May 5. Hundreds of anxious residents on the Big Island of Hawaii hunkered down last Saturday for what could be weeks or months of upheaval as the dangers from an erupting Kilauea Volcano continued to grow. AP/Marco Garcia

and hope and try to get all the information you can.”

About 250 people and 90 pets spent last Saturday night at shelters, the American Red Cross said.

The number of lava-venting fissures in the neighborhood grew overnight from eight to as many as 10, Stovall said, though some have quieted at various points. Regardless, USGS scientists expect fissures to keep spewing.

The lava could eventually be channeled to one powerful vent while others go dormant, as has happened in some previous Hawaii eruptions, Stovall added.

Kilauea, one of the world’s most active volcanoes, has been erupting continuously since 1983.

The USGS’s Hawaiian Volcano Observatory issued a notice in mid-April that there were signs of pressure building in underground magma, and a new vent could form on the cone or along what’s known as the East Rift Zone. Leilani Estates sits along the zone.

The crater floor began to collapse last Monday, triggering earthquakes and pushing lava into new underground chambers that carried it toward Leilani Estates and nearby communities.

A 6.9-magnitude earthquake—Hawaii’s largest in more than 40 years—hit the area last Friday. AP

The World BusinessMirror

www.businessmirror.com.ph

Tuesday, May 8, 2018 A7

As deal looks elusive

China pulls punches on US trade talks

W

ith Donald J. Trump’s team of trade negotiators having come and gone with no public signs of a deal, China tried to strike a positive tone while reiterating that the United States shouldn’t make unreasonable demands.

State media over the weekend offered a somewhat positive assessment of the US trade talks, urging more negotiations, while saying the Americans should be “rational and pragmatic.”

And in a move that would meet some US demands, the Commerce Ministry is studying measures to further lower import tariffs on some food, pharmaceuticals and medical instruments, Economic Information Daily reported on Monday, citing unidentified people.

“In the next couple of months, we expect continued negotiations will likely result in a scale-back of the current proposal on tariffs as China quickens its implementation of some announced opening and reform measures,” UBS Group AG chief China economist Wang Tao said in a note.

“As a result, we expect any direct impact on exports and economic growth from higher tariffs will be limited.”

Two days of discussions ended last Friday in Beijing with an agreement to keep on talking but little else, leaving the US threat of tariffs on as much as $150 billion of Chinese

imports still in play.

The list of demands from each side, seen by Bloomberg News, showed just how wide the gulf between the world’s two biggest economies remains.

The US wants China to cut its annual trade surplus by $200 billion by the end of 2020 and not retaliate against US tariffs.

It also wants a halt to subsidies and other government support for its “Made in China 2025” plan that targets global domination in strategic industries from robotics to newenergy vehicles.

China’s demands included asking the US to stop an investigation into the country’s acquisition of sensitive American technologies, adjust

deficit,” it said. “China will further open up its economy so the international community can benefit from its large and fast-developing market. But China will do so on its own conditions, not to suit the agenda of other countries.”

Irreconcilable differences

A container ship is unloaded at the Port of Oakland in Oakland, California, in Demcember 2017. AP/Ben Margot

an export ban on ZTE Corp., and lift bans on exports of integrated circuits to China.

Making China a scapegoat for the ills of the US economy may appease some uninformed voters, but it would hardly reduce the trade deficit,”—‘China Daily’

The US approach was “all stick, no carrot,” said Stephen Roach, author of the 2014 book Unbalanced: The Codependency of America and China and former chairman of Morgan Stanley Asia.

“America threatens from a position of weakness and strategic miscalculation that can only backfire,” said Roach, now a senior fellow at Yale University.

The “softening tone” at the talks is welcome as it gives room for

further discussions to find common ground, the state-run China Daily newspaper said in an editorial last Friday. But it rebuffed the US call to quickly slash its trade surplus, saying it can only be reduced gradually, not through “unilateral, ill-thought-through trade actions,” it said.

“Making China a scapegoat for the ills of the US economy may appease some uninformed voters, but it would hardly reduce the trade

UBS’S Wang said she doesn’t expect all core trade differences to be resolved, meaning lingering tension and uncertainty will likely weigh on China’s export orders and related business investment. If that slowdown is notable, she expects the current credit tightening policies, especially those related to infrastructure investment, may be relaxed or reversed.

One of the Trump administration’s biggest fears is that China swamps industries from artificial intelligence to aircraft manufacturing in the same way it did steel and aluminum previously, shutting the US out of sectors in which it now holds an advantage, former Reserve Bank of India Governor Raghuram Rajan said in a Bloomberg Television interview.

“I’m not saying there’s no reason for concern in industrial countries, but I think there are ways of making this work much better,” said Rajan, now a professor at the University of Chicago. “It shouldn’t be driven primarily by a fear of China.

It’s going to be hard for China to stay at the frontier of these areas.

There is room for a win-win discussion.” Bloomberg News

Indonesian low GDP growth Putin’s econ ambitions for new term held hostage by tensions adding to currency woes P

I

ndonesia’s economy expanded at a slower pace last quarter than economists had forecast, a setback for the government after 8-interest rate cuts in the past two years. Stocks and the currency fell.

Gross domestic product rose 5.06 percent in the first quarter from a year earlier, the statistics bureau said in Jakarta on Monday.

Median estimate of 23 economists surveyed

by Bloomberg was for growth of 5.19 percent.

Compared with the previous quarter, GDP fell 0.42 percent; economists estimated a decline of 0.3 percent Indonesia’s central bank had been cutting rates since the beginning of 2016 in a bid to spur growth in Southeast Asia’s biggest economy.

While consumer spending has been sluggish, growth was supported last year by a pick up in exports.

Financial markets have been roiled in recent weeks as higher US interest rates prompted outflows from emerging markets.

That’s closed the door on further easing

by Bank Indonesia and raised the prospect of the first rate hike since November 2014 as policy-makers look to protect a currency trading at its lowest since January 2016.

The rupiah extended its drop to a new 28-month low of 13,978 against the dollar on Monday. Stocks retreated from a gain of as much as 1.2 percent.

Sluggish demand

Finance Minister Sri Mulyani Indrawati

said last week that while the weakening currency presents risks for economic growth, the government would look to sustain economic momentum by extending assistance to lowincome groups.

The government is forecasting growth of 5.4 percent this year.

Consumer demand continued to disappoint, with household spending rising 4.95 percent in the first quarter from a year earlier, little changed from the fourth quarter.

Growth in government spending slowed to 2.73 percent from 3.81 percent in the fourth quarter.

“It continues the story of the previous four quarters in which consumer spending was below expectations, and means there are downside risks to the government achieving it’s growth target of 5.4 percent for 2018,” said David Sumual, the chief economist at PT Bank Central Asia.

The data complicates the central bank’s job, but Sumual expects policy-makers will follow through with a rate increase later this year. Bank Indonesia is set to announce a rate decision on May 17.

“The numbers from the consumer side of things are still below expectations and that’s why the central bank might think hard about their next step,” he said.

Rising oil prices and stronger global growth helped to support growth last quarter, the statistics office said.

Bloomberg News

resident Vladimir Putin is promising Russians a “decisive breakthrough” in living standards in the new six-year term he starts on Monday and even is said to be considering naming a prominent economic reformer to a top job to help deliver it. But within the Kremlin, few see much hope for his push amid the deepest standoff with the West in decades.

Putin is hoping to dial back the tensions a bit after the latest and most painful salvo of United States sanctions battered the ruble and dealt a blow to the economy by cutting off one of Russia’s largest companies—aluminum giant United Co. Rusal—from the global financial system.

To help rebuild economic links with the US and Europe, Putin is considering appointing Alexei Kudrin, a former finance minister revered by investors for the promarket overhauls he led in the Russian leader’s first two terms, to a new post to lead efforts to revive economic growth, according to officials familiar with the plans.

But there’s little appetite for real changes, these people said, as the deepening tension with the West has strengthened the hand of those arguing for self-reliance and an even greater role for state companies and financing.

Those, like Kudrin, who argued for reducing the conflict in order to focus on economic development, are on the defensive after four years of steadily increasing sanctions from the US and European Union have isolated Russia’s biggest banks and companies from vital financing and technology.

Belousov promotion

“The task now is to overcome the techno-

logical lag behind the West while surrounded by unfriendly forces abroad,” said Evgeny Minchenko, a Moscow political consultant who works with the Kremlin. Modernization will be “authoritarian,” he added.

In a move that would create a powerful potential counterweight to Kudrin, Putin is considering promoting his economic adviser, Andrey Belousov, a supporter of a strong state role in the economy, to the post of deputy prime minister, according to four government officials.

He could take over the role of economic chief from Igor Shuvalov, known for his pro-market views and ties to private-sector tycoons.

Prime Minister Dmitry Medvedev is expected to keep his post, with formal confirmation possible as early as Tuesday. Many of the other top jobs could be filled by the end of this week, officials said.

“Even if Kudrin joins the government, he won’t be able to do much given the current political framework,” said Andrei Kolesnikov, an analyst at the Carnegie Moscow Center. “It will just be running in place.”

Despite the doubling of oil prices over the last two years, Russia has struggled to get its economy back into high gear. Slow growth threatens to reverse Russia’s rise in the ranks of global economies under Putin, undermining the Kremlin’s ability to pay for its military buildup.

Putin in March warned in his annual state-of-the-nation speech that Russia faced a “loss of its sovereignty” if it didn’t manage to revitalize the economy and overcome the technological lag with the rest of the world.

Public support for Putin remains strong, according to polls, but opposition continues to simmer. Hundreds were detained by police in cities across Russia last Saturday at protests against Putin’s rule.

The Russian leader is expected to formalize his economic goals in a decree to be signed soon after his inauguration on Monday, including a big boost in spending on long-neglected areas like health care, education and infrastructure.

Kremlin Spokesman Dmitry Peskov declined to comment last Friday on possible plans for the new term.

Painful moves

Painful steps, including tax hikes and an increase in the pension age, planned to help cover the cost of the new spending are likely to come later, people familiar with the plans said.

With the latest US sanctions driving affected private companies to demand more state aid, the Kremlin’s economic role is growing.

“Nothing can or will change fundamentally in Putin’s new term because the political system remains the same,” Kolesnikov said. “The government will continue to be the main source of funds and driver of development.”

At present, while the Kremlin is eager to avoid further increase in geopolitical tensions, there’s no readiness to take a softer line, say Kremlin and government officials. An early test will come in mid-May when parliament takes up a plan for retaliatory measures against US businesses in the wake of the last round of sanctions. Bloomberg News

May under pressure from Tories on both sides of Brexit split P rime Minister Theresa May declared her “absolute determination” to make a success of leaving the European Union (EU) as she came under new pressure from Conservatives on both sides of the Brexit debate.

Writing in the Sun newspaper last Sunday, the British prime minister pledged to leave the single market and the customs union and build “a new relationship with EU partners that takes back control

of our borders, our laws and our money.”

With less than a year to go before Britain leaves the bloc, May’s Tory government remains deeply divided with a battle raging over future customs arrangements.

Conservatives demanding a clean break have rejected two middle-ofthe-road customs options May has proposed, with leading campaigners such as Foreign Secretary Boris Johnson fearing she will tie the United

Kingdom too closely to the EU. But Tories who want to keep the UK inside the customs union are plotting to join the opposition Labour Party to defeat May in a crucial vote on the issue that could come later this month. If she sides with either wing, May faces a backlash that could oust her from power.

Partnership option

One option floated is for a customs partnership, under which the UK

would collect tariffs on behalf of the EU and then refund any companies whose goods aren’t destined for use in one of the 27 member-states.

Business Secretary Greg Clark said the proposal remains under consideration, despite May being outnumbered by opponents at a cabinet meeting last week.

Clark disclosed that he spoke to Toyota Motor Corp. officials last week as he raised concerns that thousands of jobs could be at stake if

auto plants that rely on just-in-time deliveries of components sourced from outside the country moved out of the UK. He said Toyota has almost 3,500 UK employees.

“Doing what it takes to get the minimum of frictions is something we have made a public commitment to, and we need to make sure we get that right,” he said in an interview on the BBC’s Andrew Marr Show last Sunday.

Clark also suggested that a customs transition period with the EU could be extended as it may take until 2023 to put new infrastructure in place.

“It would be a mistake to move from one situation to another to a third,” he said. “If we can make progress as to what, which I think we can, as to what the right arrangement is for the long term, then it may be possible to bring that in over that period of time.” Bloomberg News

A8

The Regions BusinessMirror

Tuesday, May 8, 2018 • Editor: Dennis D. Estopace

www.businessmirror.com.ph

US-PHL military exercise to use Marawi experience

F

By Rene Acosta

@reneacostaBM

OR the first time in the annual joint military exercise between the Philippines and the United States, troops would train in urban warfare using the experience of Filipino soldiers in the Marawi City siege.

SHARP CHOICES A local tourist looks at different types of knives being sold at a stall in Camalig, Albay. This first-class municipality of nearly 70,000 is being developed as a tourism site, according to its Mayor Ahrdail G. Baldo.

NONOY LACZA

DENR sets deadline for Palawan biz to demolish illegal structures

V

IOLATORS of the easement rule in Coron, Palawan, have until May 30 to self-demolish their illegal structures, officials of the Department of Environment and Natural Resources (DENR) in Mimaropa region said.

Earlier, the DENR-Mimaropa region issued 75 business owners a notice to vacate (NTV) and remove or self-demolish their structures that were built on the waters and within the easement zones of Coron, Palawan. Mimaropa is composed of the provinces of Mindoro (Occidental and Oriental), Marinduque, Romblon and Palawan.

The NTV was served by members of Task Force Coron on April 20 to owners of business establishments in four barangays, namely, Tagumpay, Poblacion 1, Poblacion 3 and Poblacion 5.

The establishments include hotels, restaurants, dive shops, laundry shops, and lodging and boarding houses.

By self-demolishing their structures, owners of these business establishments can salvage as much construction materials as they can. This will save them money in rebuilding their establishments, where they will be allowed to operate.

The NTV specified provisions of the Water Code of the Philippines, which prohibit occupation of river banks, seashores and lakes within a zone of 3 meters in urban areas and 40 meters in forest areas.

Barangay Tagumpay is classified as timberland, the rest as urban areas.

The notice also cited the Civil Code of the Philippines, which defines shores “and others of similar character” as a property of public dominion. The Civil Code also declares as nuisance “establishment, business or condition of a property, or anything else that obstructs or interferes with the free passage of any body of water.”

“It is clear as stated under the law that there should be no structures in these places. We are just enforcing the law to protect and ensure that Coron

remains protected, clean, orderly and beautiful,” Roman G. Legaspi, head of the intergovernmental agency Task Force Coron, was quoted in a statement as saying.

Coron is famous for its pristine island beaches and breathtaking landscapes. It receives an increasing number of tourists every year, with an estimate of 178,000 tourists recorded in 2016.

The influx of tourists caused business establishments to mushroom, some of which not only encroached on easement zones but also contributed to water pollution by discharging untreated wastewater directly into the Coron Bay. This aggravated Coron’s water problem, which is mainly attributed to the town’s lack of a centralized wastewater-treatment facility.

“We are looking beyond the problem of encroachment,” Legaspi said.

“We want to make sure that business establishments are also following the law on proper disposal of solid waste and wastewater, and all other environmental laws.”

In a related development, the DENR-Mimaropa cautions establishment owners affected by the cleanup drive in Coron and elsewhere in the region not to deal with impostors posing as DENR officials.

“We urge you not to deal with people who obviously want to extort from business owners,” DENR Mimaropa Regional Director Natividad Bernardino said.

“The DENR does not authorize anyone to deal with business owners other than members of the Task Forces, which were tasked to lead the cleanup and rehabilitation of beaches in Coron, El Nido and Puerto Galera,” Bernardino added.

The warning came about following reports that DENR field officials in Oriental Mindoro and Palawan were receiving calls and text messages from unknown persons identifying themselves as Environment Secretary Roy A. Cimatu, seeking copies of establishments that were issued NTVs. Jonathan L. Mayuga

Fish kill affects 100 hectares of fishponds in Bulacan

C

ITY OF MALOLOS—A fish kill has affected about 100 hectares of fishponds in Obando, Bulacan.

Wilfredo Cruz, regional director of the Bureau of Fisheries and Aquatic Resources (BFAR) for Central Luzon, said the fish die-off started manifesting last Saturday right after an earthquake was felt in the area.

Cruz surmised the earthquake could have released ammonia gas from the ground into the fishponds and suffocated the fish with depletion of oxygen.

A BFAR team has been sent to the area to assess the situation and come up with assistance to affected fishpond operators, Cruz added.

He said they recommend that the dead fishes be buried at least 1-meter deep in the ground to prevent them from spreading diseases caused by decaying body parts.

On the other hand, Raul Agustin of the provincial disaster risk reduction management office of Bulacan, said fish kill is a natural occurrence whenever earthquakes occur because the water quality of the fishponds are being altered by the earth’s movement.

Fishpond operators also noted that fish kill occurs whenever there is a sudden, heavy downpour during the summer months and jeopardizing the water quality of the fishpond.

The fish kill has already caused foul odor affecting several barangays of Obando, some residents said. Kristen Roz Mateo

The annual bilateral exercise, which runs for two weeks and officially began on May 7, would see both American and Filipino troops training for the gaps that have been identified out of the siege of Marawi city last year by combined fighters of the Islamic State and the Maute Group.

“This year’s Balikatan will not only focus on humanitarian assistance and disaster relief, which, are of course, very important here in the Philippines, but will also incorporate training identified in the post-Marawi action reports such as military operation in urban terrain,” US Ambassador Sung Kim said.

“Marawi showed that we need to work together to overcome the complex challenges we face in today’s world. That includes international terror networks, as well as natural threats,” the envoy added.

Armed Forces Northern Luzon Command commander Lt. Gen. Emmanuel Salamat said the counterterrorism training, with the backdrop of the terror-sieged Marawi, was the latest innovation in the 34th Balikatan, whose activities will mostly be held in the operational areas of the Nolcom.

“The bulk of this training will be done in Nueva Ecija, with our special operations forces together

with US special operations forces… to be able to effectively combat future scenarios [where] we can effectively employ necessary tactics, procedures needed in countering terrorism,” Salamat said.

Salamat was one of the officials who led the formal opening of the biggest military exercises between the two countries that would involve 8,000 Filipino and American troops.

“We have set up mock facilities, mock-up facilities to be able to design the training activities in a scenario that will appreciate the kind of military urban terrain environment that both forces can benefit from the Marawi experience,” added Salamat, who is the Philippines co-exercise director.

One of the important recommendations that the Armed Forces of the Philippines (AFP) made in the post-Marawi operations was to train more soldiers in counterterrorism operations, especially in urban warfare.

Defense Secretary Delfin N. Lorenzana said the military exercises will not only broaden the defense relationships between the two countries but will increase and develop the effective interoperabi lit y bet ween the two forces.

SMEs bare innovation in pyro-musical tilt

P

ULILAN, Bulacan—Local fireworks manufacturers from the towns of Santa Maria, Bocaue, Pandi, Baliuag and San Ildefonso displayed innovation during a pyro-musical competition last Sunday night at an open carpark of a shopping center here.

The competition was part of the opening program for the 10-day activities included in this town’s “Kneeling Carabao” festival.

Officials of the Bulacan Pyrotechnic Regulatory Board and the Philippine Pyrotechnics Manufacturers and Dealers Association Inc. said the competition shows local manufacturers are slowly but surely making their way into the international market.

Some of them point to Executive Order 28 of President Duterte,

which he signed in June last year, as having drastically forced reluctant traditional fireworks manufacturers to shift to technologically innovated fireworks products.

Most of these small and medium enterprises (SMEs) benefited from the five-day seminar workshop conducted by the Department of Science and Technology-Industrial Technology Development Institute in January this year to help local stakeholders cope up with the technological advancement in the fireworks industry, added the officials, who didn’t want to be identified.

The province of Bulacan is wellknown for fireworks products. The town of Bocaue, to note, is considered the fireworks capital of the country. Kristen Roz Mateo

Cebu PB seeks Palace help on Bantayan development

T

HE Cebu Provincial Board (PB) is seeking the assistance of the Office of the Cabinet Secretary through the Performance and Projects Management Office (PPMO) to provide technical assistance in the preparation of a road map for the development of Bantayan Island.

The PB has recently passed the resolution sponsored by Fourth District Board Member Horacio Franco requesting Cabinet Secretary Leoncio B. Evasco Jr., through PPMO Executive Director Undersecretary Gloria Jumamil to send a qualified team to Cebu to conduct a thorough study and in-depth research on Bantayan Island.

Bantayan Island is an island located in the Visayan Sea comprised of the three municipalities of Santa Fe, Madridejos and Bantayan. The island is popularly known for its distinct resources, white beaches and marine products. It is also considered the egg basket of the Province of Cebu.

Franco said the entire island is eyed for appropriate development to boost its ecotourism potential.

However, Franco said the introduction of vital development plans and projects in the place needs proper planning and in-depth research or study in order to ensure that the finances to be used and allocated in developing the island shall not be

put to waste but rather to uplift and promote economic growth, public convenience and the general welfare.

“In short, the entire Bantayan Island needs right now of a comprehensive or integrated development master plan as a vital guide for its needed development,” Franco said.

He added the assistance from higher authorities and from the national government, which has enough resources and most qualified individuals with sufficient know-how and knowledge in the preparation of the master plan is a paramount ingredient in guaranteeing the proper development of the island. “The PPMO could be of

great help in achieving this noble endeavor,” Franco added.

Executive Order 99 signed by then-President Benigno S. Aquino III on October 31, 2012, provides for the creation of the PPMO. The office is primarily responsible for putting in place and driving a systematic approach to, and delivering results relative to the Performance and Projects Roadmap.

Among its functions is to coordinate with all concerned agencies and bureaus for the efficient management and timely implementation of the programs and targets under the Performance and Projects Roadmap.

Environment Secretary Roy A.

Cimatu earlier ordered officials to inspect the seas off Bantayan Island and other places tourist destinations to check if what happened to Boracay Island is not happening in these areas.

Cimatu said that owners of houses and buildings must have to maintain a sewage treatment plant so that anything that goes to the sea must be treated first.

Robert Lim Joseph, a tourism advocate and now a consultant of Tourism Secretary Wanda Teo, during his visit in Cebu last week said the closure of Boracay Island is an eye-opener as all of the resorts are not following the rules and they also dumped waste into the sea. Charles R. Pepito

“Interoperability is an enabler for nation building. It facilitates meaningful contribution by partners or allies as the current formulation of the United States’s national security strategy states.

We must always be prepared to act alone, and that is our most advantageous course, but many of our security objectives are best achieved or can only be achieved through our alliances and other formal security structures,” Lorenzana said.

According to Kim, this year’s actual exercises will be joined by Japan and Australia, which, in previous war games, have sat only as observers, along with membercountries of the Association of Southeast Asian Nations.

“This special bilateral event is made even more meaningful by the participation of our close partners, Japan and Australia.

And we hope that there will be greater multilateral dimensions for future Balikatan exercises,” Kim said.

Lt. Gen. Lawrence Nicholson, commander of the US 3rd Marine Expeditionary Force, said the Balikatan was the most diverse military exercise in the area of operations of the Pacific Command.

“We’re doing more different kinds of things over two weeks than any other exercise, so I think this allows in exercise to demonstrate everything, from disaster relief to medical, to engineering, to close combat, to amphibious warfare,” said Nicholson, who is the exercise’s US co-director.

Meanwhile, Salamat said journalists are allowed to cover any activities of the Balikatan, contradicting the statement of the AFP Public Affairs Office that journalists are only permitted to cover the opening and closing ceremonies of the war games.

Uproar forces Kalibo mayor to stop Aklan River dredging

K

A LIBO, A k lan—K alibo Mayor William S. Lachica officially ordered the stoppage of the ongoing testing of the planned dredging operation at Bakhaw Norte, Kalibo.

“I have to stop the planned dredging, since I have received numerous complaints from the residents that they are opposing the project,” Lachica said.

The Sangguniang Bayan of Kalibo (Kalibo Consultative Council) also endorsed a resolution opposing the project.

Lachica said the STL Panay Resources Inc., the company involved in the dredging, also failed to complete to submit the required papers for their operation.

Kalibo Councilor Daisy Briones said she was informed that the STL Panay Resources has yet to apply for a business permit to the local government of Kalibo prior to the dredging.

Briones said STL Panay Resources executives met with the local council members several times already for a dialogue.

Despite these meetings, the STL has yet to get the council’s nod for the project.

STL Panay Resources Project Engineer Roger Vergara said they already had the approval both from the Department of Environment and Natural Resources, the Department of Public Works and Highways and the Aklan Provincial Government. Jun N. Aguirre

Global Eye BusinessMirror

www.businessmirror.com.ph

A Nafta deal in May? Negotiators will try, but it won’t be easy

By Eric Martin & Josh Wingrove | Bloomberg

C

abinet-level negotiators from the three Nafta nations meet again in Washington this week to attempt a breakthrough on the trade deal in May. It won’t be easy.

Several contentious issues remain unresolved after more than eight months of talks between the United States, Mexico and Canada to renegotiate the North American Free Trade Agreement (Nafta). Discussions last took place in late-April and will resume on Monday, with US Trade Representative Robert Lighthizer expected to host Mexico’s Economy Minister Ildefonso Guajardo and Canadian Foreign Affairs Minister Chrystia Freeland. Despite insisting that he wants to secure a deal in the coming weeks, Lighthizer hasn’t shown signs of softening on proposals that Canada and Mexico see as damaging to their interests.

Guajardo and Freeland, meanwhile, have pledged not to back down.

“You can’t say to the other side of the table, ‘You give us everything we want, and by the way the clock is ticking, so you only have 24 hours to do it,’” said Carla Hills, the former US Trade Representative who negotiated Nafta under President George H. W. Bush in the early-1990s. “It just won’t work that way.”

Nafta deadlines

Lighthizer is pushing to get a Nafta deal soon to meet deadlines that would allow the US House and Senate to debate and approve an agreement this year. Waiting until 2019, when a new Congress takes over, “changes the whole way you have to kind of construct the deal,” he said last week.

The US official is fresh off a trip to Beijing, where two days of trade discussions ended with China agreeing to keep on talking, and little else. The US asked China to reduce support for high-tech industries and help cut a trade deficit in goods that reached a record $375 billion last year, according to a document seen by Bloomberg.

As it parries with China, the US is also threatening to impose tariffs on steel and aluminum imports from Canada and Mexico by June 1 if they can’t agree to a new Nafta deal by then. Washington is negotiating tariff exemptions with other allies, as well, including the European Union, as part of its strategy to protect domestic metal producers from foreign competition. This week’s Nafta ministerial talks are scheduled to start on Monday and could run as long as Wednesday, said a Canadian official familiar with the plans, speaking on condition of anonymity. Talks are held in private, although Freeland and Guajardo often provide updates to waiting reporters.

Loom large

The topic of automobiles is likely to loom large. The US has pushed for changes to the 24-year-old pact that would boost domestic auto manufacturing. Its proposals include tightening the so-called rules of origin, which govern how much regional content a car must have to enjoy Nafta’s duty-free benefits, and requiring certain portions of a car to be built by people earning higher wages.

At the last round of talks Mexico was outnumbered by the US and Canada on auto wages, a battlefront that could upend the nation’s industry. Talks grew contentious, according to two people familiar with talks, although negotiators emerged striking a relatively upbeat public tone.

The head of the Mexican automotive association, which represents companies with factories in Mexico, last week said the latest US proposal is unworkable. He highlighted as problematic the demand for 40 percent of the value of cars to be made by workers earning at least $16 an hour. Mexican auto assembly workers generally make far less than that.

Editor: Angel R. Calso • Tuesday, May 8, 2018 A9

China’s big Russian oil marriage nixed amid fall of suitor CEFC

By Aibing Guo, Elena Mazneva & Judy Chen | Bloomberg

T

he big, rushed and opaque deal for an enigmatic Chinese energy company to buy into Russia’s state oil behemoth has disintegrated.

CEFC China Energy Co.’s agreement last year to purchase a $9-billion stake in Rosneft PJSC came to end as the sellers, a consortium of Qatar’s sovereign wealth fund and mining giant Glencore Plc., decided not to proceed with the deal. Qatar Investment Authority will instead take on a nearly 19-percent interest in Rosneft, Glencore said last Friday, most of which had been originally slated for CEFC. Separately, meetings scheduled on Monday for investors holding 15.1 billion yuan ($2.4 billion) in bonds issued by unit CEFC Shanghai International Group Ltd. were postponed, according to people at several underwriters, who asked not to be identified and were unable to explain the reasons for the delay.

A Shanghai-based spokesman for CEFC didn’t respond to requests for comment.

The collapse is a setback to efforts by Russia’s President Vladimir Putin to deepen strategic energy ties with China, amid isolation from US-led sanctions and a slump in oil prices. It also unwinds CEFC’s most high-profile achievement.

The sprawling conglomerate rose from obscurity in recent years to become a conspicuous player in global energy through a series of ever-bigger deals across Eastern Europe and the Middle East, mixing with industry stalwarts like Glencore and China National Petroleum Corp.

The Rosneft deal was the peak

of CEFC’s rapid rise and the culmination of Chairman Ye Jianming’s efforts to align his business with the overseas political and economic goals of Xi’s “One Belt, One Road” foreign investment initiative. But things began to unravel this year as Ye came under investigation by Chinese authorities and stepped down from management as financial troubles began to emerge.

“The fact that CEFC was unable to close the Rosneft deal was a very unusual situation,” said Neil Beveridge, a Hong Kong-based analyst at Sanford C. Bernstein & Co. “Given the reported turmoil inside CEFC, putting an end to the drama in a swift manner is good for all parties involved.”

While the deal’s failure may scupper the Kremlin’s aim of China becoming a major Rosneft shareholder, Putin can still take comfort in its success muscling into the prized Chinese energy market over the last five years, pushing aside traditional suppliers Saudi Arabia and Angola and emerging as its biggest crude oil supplier.

“Russia is still a convenient and reliable choice for China given their warm political relationship and geographical vicinity,” said Li Li, an analyst at Shanghai-based commodities researcher ICIS-China.

Strategic interest

An expansion of an oil pipeline linking the nations opened this year, doubling the capacity that Russia

A Chinese worker from XinJiang Beiken Energy Engineering Stock Co. Ltd. positions drill pipe lifting machinery during gas drilling operations for the Ukrgazvydobuvannya Subsidiary Co. of Naftogaz of Ukraine National JSC in Poltava region, Ukraine, on April 4. Ukraine transports about one-third of Russia’s natural gas supplies to the European Union through a pipeline network connected with Slovakia, Romania, Hungary, Poland and Moldova. Vincent Mundy/Bloomberg

can send directly into the world’s biggest importer. And a massive gas pipeline is slated to start up next year.

As well, a five-year deal signed last year to supply CEFC with as much as 12 million tons annually of Russian crude remains in place, according to a Rosneft spokesman.

“The Chinese market has been, is and will be strategic for the company’s business,” Rosneft’s press service said in a statement.

CEFC’s participation in the Rosneft deal marked a departure for Beijing, which has traditionally relied on state-owned CNPC or China Petrochemical Corp., known as Sinopec Group, to take stakes in foreign companies. The firm is now among several other acquisitive conglomerates, such as HNA Group Co. and Anbang Insurance Group Co., to come under scrutiny amid a crackdown on risky financing and

splashy overseas purchases.

Shedding assets

Amid the pressure, CEFC is now seeking to sell real-estate holdings and financial units. China’s Citic Group is taking a 49-percent stake in its European operations, and Reuters has reported the Chinese state investment giant is also looking at CEFC’s oil assets in Abu Dhabi. It also emerged last week that it may cut half its 30,000-strong work force.

The Glencore-QIA consortium in December 2016 agreed to jointly acquire a 19.5-percent stake in Rosneft, then announced a deal about nine months later to sell 14.16 percent on to CEFC. Now, as part of the new deal announced last Friday, QIA will own 18.93 percent of Rosneft, making it the third-largest shareholder after

the Russian state, which holds 50 percent, and UK oil major BP Plc. with 19.75 percent.

CEFC is facing 11.8 billion yuan of bonds coming due during the rest of 2018, according to data compiled by Bloomberg, and the company’s units have already missed paying a total of 85 million yuan of debt sold via an Internet finance platform.

According to a China Business Journal report after China Securities Co. held a bondholder meeting last Friday, CEFC Shanghai International must brief them on cash holdings and its repayment plan on a daily basis.

Other bondholder meetings had been scheduled for Monday by some of CEFC’s lead underwriters, including China Development Bank, China Bohai Bank Co. and Postal Savings Bank of China Co. No clear date has been set for rescheduled meetings.

Rattled emerging markets say: It’s over to you, central bankers

By Netty Ismail, Aline Oyamada, Lilian Karunungan & Srinivasan Sivabalan Bloomberg

I

t may all come down to the discipline of central banks to determine where emerging markets are headed after another tumultuous week.

A JPMorgan Chase & Co. gauge of expected swings in developingnation currencies climbed last week to the highest level since February as the dollar’s appreciation rattled investors.

Argentina unexpectedly raised interest rates last Friday for the third time in eight days to 40 percent, the highest among major economies, as the peso tumbled. Turkey’s lira and government bonds slid to record lows, fueling speculation that policymakers will have to tighten further to anchor the nation’s assets.

Investors are assessing the fate of emerging markets as the dollar strengthens and expectations for higher US interest rates harden.

Global funds pulled a net $1.2 billion from developing-nation debt from April 25 to May 2. A Bloomberg currency index that measures carrytrade returns from eight emerging markets, funded by short positions in the dollar, declined in the last three weeks as the 10-year Treasury yield held close to 3 percent.

“We have turned slightly negative in the short run for emerging markets on the back of a stronger dollar and portfolio outflows,” said Guillaume Tresca, a Paris-based senior strategist at Credit Agricole SA. “In the long run, we keep our

constructive view, especially on the bond side. It is worth highlighting that growth figures have remained steady and it seems the recent decline is temporary.”

An index of developing-market currencies weakened for a fifth week, the longest losing streak in almost three years. The MSCI Emerging Markets Index of equities slumped 1.7 percent, and the Bloomberg Barclays global EM currency government debt index slipped 0.8 percent, its fourth week of losses.

The declines may continue as data this week show US inflation accelerated, underpinning the dollar. The US currency is poised to extend gains as the Fed hikes rates each quarter, according to Mansoor Mohi-uddin, the head of foreign-exchange strategy at NatWest Markets in Singapore.

All eyes on central bankers

IN the wake of a dramatic series of emergency rate hikes to blunt a plunge in the peso, traders will look to Argentina’s central bank for more clarity on how it plans to calm distressed investors. Benchmark rates at 40 percent pulled the currency into positive territory last Friday.

The government backed up the central bank’s efforts by revising its primary deficit target, a move that Goldman Sachs Group Inc. said was “fast and bold.” Yet investors are seeking more fiscal commitment and realistic inflation targets. The peso’s 15-percent retreat this year, the most among the world’s major currencies, is fueling expectations that inflation will accelerate. It closed at 21.8642 per dollar last Friday.

Elsewhere, a recent spike in Romanian money-market rates suggests

International Monetary Fund (IMF) governors, including Nicolas Dujovne, Argentina’s treasury minister (front row, from left); Sri Mulyani Indrawati, Indonesia’s minister of finance; Christine Lagarde, managing director of the IMF; Lesetja Kganyago, governor of South Africa’s reserve bank; Steven Mnuchin, US Treasury secretary; Taro Aso, Japan’s finance minister; Philip Hammond, UK chancellor of the exchequer; and Margaret Mwanakatwe, Zambia's minister of commerce, attend the group photo at the spring meetings of the IMF and World Bank in Washington, D.C. on April 21.

Andrew Harrer/Bloomberg

the central bank may raise borrowing costs for a third time this year when it meets on Monday. And in the Philippines, investors will watch if policy-makers meeting on Thursday will lift the benchmark rate for the first time since 2014 to curb inflation and stem the weakness of the peso, the biggest decliner in Asia after the Indian rupee this year. In Peru economists expect the central bank to hold rates at 2.75 percent, amid evidence inflation has bottomed and economic growth is rebounding, ushering in the end of the easing cycle. The Peruvian sol joined a slide in emerging-market currencies over the past month to test a key support level. Serbia and Malaysia are also seen keeping rates steady this week.

Balance of power

Politics will have its say. Malaysians will vote on Wednesday in an

election contest that’s pitting Prime Minister Najib Razak against the nation’s former premier, Mahathir Mohamad. Malaysia’s benchmark stock index is close to an all-time high amid a rally in consumer stocks this year, while the ringgit is Asia’s best performer so far in 2018.

Najib is fighting for a third term that will extend 60 years of unbroken rule by the Barisan Nasional coalition. At the last election five years ago, he led his alliance to its worst showing, losing the popular vote yet winning control of the parliament by its slimmest-ever margin.

Elsewhere, Lebanon will hold its first parliamentary elections in nine years, a pivotal moment for the country as it tries to ease a crippling debt burden and avoid being dragged deeper into some of the Middle East’s escalating crises. While the polls are scheduled for Sunday, the post-ballot

focus will be on building a cabinet able to carry out measures sought by donors, a complicated task in a country where divisions have stymied reforms for decades.

President Donald J. Trump has said he’ll decide by May 12 whether the US stays in or pulls out of the 2015 nuclear deal that lifted some sanctions on Iran.

Mexican traders will follow North American Free Trade Agreement (Nafta) talks as cabinet officials return to Washington along with Canadian peers to seek breakthroughs for a final deal this month.

While risks to the agreement appear to have eased, economists say they haven’t completely disappeared and that Nafta is still a market catalyst.

Can’t get enough of data

China’s export data for April on Tuesday could give an indication on whether trade friction with the US has started to have some impact.

Indonesia reported on Monday its economy grew at a slower pace of 5.06 percent in the first quarter from a year earlier. The Philippines is also due to release gross domestic product figures on Thursday. Indonesia will also unveil on Tuesday its April foreign reserves, which should indicate the extent to which its central bank intervened to keep its currency stable.

Brazil’s April inflation data, due Thursday, will be watched closely.

Traders in swap rates are split over the possibility of another rate cut.

The real is among the worst-performing emerging-market currencies in the past month, triggering central bank intervention via rollover swaps auctions.

A10 Tuesday, May 8, 2018 • Editor: Angel R. Calso

Opinion BusinessMirror

www.businessmirror.com.ph

editorial

Freedom of choice

T

here has been a general decline of unionism in the country over the past few decades. The number of card-carrying union members would probably be just around 10 percent of the country’s work force today. The number of collective bargaining agreements (CBAs) registered with the labor department is not any more encouraging.

However, it is good to know that there are still some sectors where unionism is very strong and employers are respecting their workers’ right to self-organization.

One of these employers, it is heartening to know, is the government itself, particularly the Department of Education (DepED), where there are now two contending unions offering their services to represent teachers, at least in the National Capital Region (NCR).

Around 3,000 teachers from the NCR recently announced their dissociation from the Alliance of Concerned Teachers-NCR (ACT-NCR), forming their own union, called the DepED Teachers Union-NCR-NLU (DTU-NCR-NLU).

ACT-NCR has been the sole and exclusive collective negotiating agent representing all teaching or academic personnel of DepED-NCR. It had entered into a collective negotiation agreement (CNA, similar to the CBA in the private sector) with the DepEd on May 26, 2015, which would expire on May 26, 2018.

According to this CNA, there is now a so-called freedom period of 60 days before the agreement expires, during which another union could challenge ACT-NCR for the right to represent teachers and DepEd workers in the region.

The DTU-NCR-NLU has filed a petition for certification election to dislodge ACT-NCR as the sole bargaining agent of teachers. It needs to have the support of at least 10 percent or 6,600 of the 66,000 public-school teachers in the NCR in order to do so. The new union has gathered 3,100 signatures so far.

ACT-NCR claims the formation of a new union is “an attack on genuine progressive, militant, pro-people unionism.”

On the other hand, the leaders of DTU-NCR-NLU said thousands of teachers bolted ACT-NCR to establish their own union simply because the latter has failed to deliver on its promises and has not satisfactorily represented and fought for teachers’ rights.

Cynthia Ibale Villarin, DTU-NCR-NLU president, noted for instance how ACT’s proposed CNA contained only dental benefits, subject to the availability of funds, which is well short of teachers’ expectations.

Villarin said the DTU-NCR-NLU wants to help solve teachers’ real problems, such as their long-delayed but promised salary increase, the overdue release of their Performance-Based Bonus back in 2016, the lack of medical assistance for teachers, which is mandated by the Magna Carta for Public School Teachers or Republic Act 4670, and their perennial personal finance problems that often lead them buried in debt.

“A teachers’ union should look after teachers’ concerns and their welfare first and foremost,” Villarin said. “This is what our union stands for. We want to genuinely enhance the social and economic well-being of public-school teachers in the region and in the country, in the interests not only of the teaching profession but also good education.”

Who gets to represent NCR public-school teachers in the end? This is up to the teachers themselves. But this “freedom period” can only be good for teachers, because it allows them to choose who will represent them, who will negotiate the best terms that represent their needs.

This choice can only improve a union’s accountability and its incentives to represent teachers’ interests well at the bargaining table. It is also the same basic right to join, or refuse to join, and the freedom of association accorded to all workers under the Constitution.

It is up to these contending unions to give teachers a reason to join them.

They must go beyond generic rhetoric and offer real solutions to real problems, to help make public-school teachers’ lives better.

Since 2005

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

Jun B. Vallecera

Managing Editor Associate Editor News Editor

Max V. de Leon Jennifer A. Ng Vittorio V. Vitug Lorenzo M. Lomibao Jr., Gerard S. Ramos Lyn B. Resurreccion, Efleda P. Campos Dennis D. Estopace

Online Editor Social Media Editor

Ruben M. Cruz Jr. Angel R. Calso

Creative Director Chief Photographer

Eduardo A. Davad Nonilon G. Reyes

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

Judge Pedro T. Santiago (Ret.) Benjamin V. Ramos Adebelo D. Gasmin Marvin Nisperos Estigoy Aldwin Maralit Tolosa Rolando M. Manangan

BusinessMirror is published daily by the Philippine Business Daily Mirror Publishing, Inc., with offices on the 3rd floor of Dominga Building III 2113 Chino Roces Avenue corner De La Rosa Street, Makati City, Philippines.

Tel. Nos. (Editorial) 817-9467; 813-0725. Fax line: 813-7025.

(Advertising Sales) 893-2019; 817-1351, 817-2807.

(Circulation) 893-1662; 814-0134 to 36. E-mail: news@businessmirror.com.ph.

www.businessmirror.com.ph

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

Manny B. Villar

THE Entrepreneur Continued from A1

I

T did not happen. Instead, the Philippines is now being hailed as one of the leaders in economic growth in the world.

In fact, the International Monetary Fund (IMF) expects the Philippines to be the fastest-growing economy in Southeast Asia and second fastest in the world over the next two years, as it remains resilient to external shocks.

In its latest World Economic Outlook, the multilateral lender has retained its GDP growth projection for the Philippines at 6.7 percent for 2018 and 6.8 percent for 2019.

The IMF’s latest growth forecast for the Philippines is the fastest among members of the Association of Southeast Asian Nations and the second fastest in the world next to India’s 7.4-percent growth for this year and 7.8 percent for next year.

China is expected to grow by 6.6 percent in 2018 and 6.4 percent in 2019, while Vietnam may

grow by 6.6 percent in 2018 and 6.5 percent in 2019.

The IMF says the strong growth forecast for the Philippines would be fueled by robust domestic demand and higher investments.

The strong global growth of 3.9 percent for 2018 and 2019 will also provide a favorable external environment for the Philippines’s export sector, remittances, as wel l as the business-process outsourcing sector.

The President’s critics have not stopped looking for ways to discredit the Chief Executive, despite the high

Mangoes, eagles and malls

T. Anthony C. Cabangon

Editor in Chief

Senior Editors

Management man

John Mangun

OUTSIDE THE BOX

F

oreigners coming to the Philippines have always found things a little confusing. You go to Tokyo and you know absolutely that you are in Japan. The same is true for Paris, Dubai and New Delhi. There is no question that you have stepped into a unique if not a completely different culture and society from anyplace else.

Here in the Philippines though, you can easily find the original American “Spam” sitting on the shelf next to the Chinese Spam, and also the Danish equivalent, as well as the Filipino version of canned “luncheon meat.”

There is much about the Philippines that is totally unique. However, there is also much that is fully familiar to travelers from both the West and the East. You can find restaurants in Metro Manila that would be popular to locals in Seoul, Los Angeles, Southampton, Perth and Hong Kong. But the problem is that, sometimes, Filipinos seem to have trouble remembering that this is the Philippines. The national fruit is the

mango, while the unofficial national fruit of the United States is either the orange or the apple, so it should be easy to tell the two countries apart.

Maybe it is because both countries honor an eagle as its national bird that creates the confusion. Except, even the Philippine eagle and American bald eagle are almost as far apart as mangoes and apples.

The Philippine eagle is a mammaland reptile-eating bird that lives in the forests; the bald eagle is a “sea eagle” that primarily eats fish.

The US has experienced a fundamental shift in consumer buying habits with traditional “brick-andmortar” stores—and the malls they inhabit—closing down and going

The President’s critics have not stopped looking for ways to discredit him, despite the high performance rating and popularity that he continues to enjoy among Filipinos and the noticeable progress of the economy. In contrast to the failure by previous administrations to pursue an economic agenda separate from political and other issues, President Duterte created an economic team that focuses on implementing his economic program, including the massive P8-trillion to P9-trillion infrastructure program dubbed “Build, Build, Build.” performance rating and popularity that he continues to enjoy among Filipinos and the noticeable progress of the economy.

In contrast to the failure by previous administrations to pursue an economic agenda separate from political and other issues, President Duterte created an economic team that focuses on implementing the Chief Executive’s ecconomic program, including the massive P8-trillion to P9-trillion infrastructure program, dubbed “Build, Build, Build.”

I think Duterte is a management man. He lets the economic team

The problem is that sometimes Filipinos seem to have trouble remembering that this is the Philippines.

The national fruit is the mango while the unofficial national fruit of the United States is either the orange or the apple so it should be easy to tell the two countries apart.

Maybe it is because both countries honor an eagle as national bird that creates the confusion. Except, even the Philippine eagle and American bald eagle are almost as far apart as mangoes and apples.

out of business. A few years ago, some local commentators looked to this United States situation and concluded that the Philippines was suffering the same overbuilding of shopping malls. After all, a mall is a mall is a mall. However, malls, like eagles, are not all the same.

In practice, US malls consisted of a big, well-known anchor department store surrounded by a large number and variety of specialty shops, movie theaters, and a food court. Malls in the Philippines have been something entirely different since the Ali Mall first opened in 1976 in Quezon City.

Philippine malls are more like the central business/shopping district of a town. Not only is there a

handle the economic program, while he focuses on the more difficult ones, issues that previous presidents failed to address or at least were afraid to confront. These include drugs, and peace and order.

These are the neglected areas that needed attention. So what’s happening is that all aspects of governance are being addressed simultaneously.

Before his election as president, we did not know the extent or seriousness of the drug problem.

During the turnover ceremony at the Philippine National Police, the President said the antidrug campaign resulted in 130,000 arrests and 1.2 million drug suspects that surrendered.

Authorities also shut down shabu laboratories and seized billions worth of illegal drugs.

The President also showed strong political will when he ordered the closure of Boracay Island, one of the world’s most famous beach destinations, until it is cleaned up.

The dramatic way by which Boracay is being addressed is inspiring similar movement in other tourist destinations, and should benefit the tourism industry in the long run.

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

department store or two, along with specialty shops, but also almost every type of business that would normally be found in a small city. Unlike in the US, our malls have medical and dental clinics, travel agencies, banks and restaurants from fastfood to near-fine dining. In the past 10 years, call centers and schools from learning centers to computer colleges occupy mall space.

A consumer can get almost every product or service, from a tattoo and massage to eyeglasses and ID pictures, at a local mall. A customer can play bingo, go to church and have clothing altered all under one mall roof.

Not all malls in the US are shutting down. In fact, some are hugely profitable. However, there are a couple of consistent factors. Including even the very large Ala Moana Center in Honolulu Hawaii, all function as malls in the Philippines do as self-contained business/shopping districts. Further, all of the top 10 most profitable United States malls provide the wide variety of goods and services as do Philippine malls.

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

Opinion BusinessMirror

www.businessmirror.com.ph

China’s economy keeps growth path

Why worry about inflation Cecilio T. Arillo

database

Ernesto M. Hilario

ABOUT TOWN

I

N his latest visit to China to take part in the Boao Forum for Asia last month, President Duterte had the chance to meet again with Chinese leader Xi Jinping, who pointed out: “China-Philippines relations have experienced ‘turnaround’ to ‘consolidation’ in the past two years, ascending two steps in succession. The task of this year should be ‘improvement’ of the relationship.”

Xi reiterated that “China supports the Philippine government in actively exploring a development path that suits its national conditions” and the efforts of the Duterte administration to push forward its antiterrorism, drug-elimination and crime-eradication campaigns.

Duterte’s visit resulted in various deals. China agreed to provide P3.8 billion ($73 million) in economic and infrastructure assistance. The two governments signed agreements on economic cooperation, agricultural technology and infrastructure projects, including the Davao City Expressway and the Chico River Pump Irrigation Project.

Chinese companies also signed deals with their Filipino counterparts worth over $9 billion. The deals ranged from energy projects to joint ventures in the tourism, electronics, pharmaceutical and construction sectors.

Last month China also officially unveiled its International Development Cooperation Agency. The new agency will be responsible for developing strategic policies and guidelines on foreign aid; reforming the foreign-aid system; and drawing up plans and overseeing their implementation.

The new agency is deemed important for Chinese diplomacy and the “Belt and Road” initiative. For more than 60 years now, China has been providing assistance to other developing countries, including the Philippines, without any political conditions.

By strengthening cooperation with developing countries, and to increase aid, especially to the leastdeveloped countries, China seeks to contribute to narrowing the NorthSouth gap.

At the Boao Forum for Asia annual conference held in the southern island province of Hainan, the Asian Competitiveness Annual Report 2018 was released. The report said Asia is expected to remain the world’s fastest-growing region in the coming 20 years, or even by the middle of this century, as a result of enhanced driving forces of external growth and deepened cooperation among economically integrated markets.

In another report released in

December 2017, the Center for Economics and Business Research in London said three of the world’s four largest economies will be Asian— China, India and Japan—by 2032, with China expected to overtake the United States to top the global list by that time.

China’s transition to consumption-driven growth and greater market access to the country will create opportunities for other economies in the region. The contribution of consumption to China’s economic growth reached 58.8 percent last year, up from 51.8 percent in 2012. With a fast-growing middleincome population of 400 million and continuous efforts to open up, China is expected to become an even more important market for the world.

The Chinese economy saw a solid start in the first quarter of this year with 6.8-percent growth, the GDP reaching 19.88 trillion yuan, or about $3.2 trillion. Its GDP growth rate has stayed within the range of 6.7 percent to 6.9 percent for 11 quarters, with the jobless rate and inflation remaining stable. China’s economy expanded 6.9 percent in 2017, picking up pace for the first time in seven years.

At the same time, China’s trade with countries covered by the Belt and Road initiative continued to increase faster than its overall foreign trade in the first quarter, official data showed on April 20.

The value of China’s imports and exports to Belt and Road countries stood at 1.86 trillion yuan ($296 billion) in the first three months, accounting for 27.5 percent of China’s total trade (6.75 trillion yuan, or $1.07 trillion) during the period.

The Belt and Road initiative was first proposed by Xi Jinping in 2013 to boost trade and infrastructure investment among some 70 countries along the ancient Silk Road trade routes from Asia to Europe and Africa. In December last year, China’s National Development and Research Commission said 86 countries and international organizations already signed 100 cooperation agreements with China under the Belt and Road Initiative.

E-mail: ernhil@yahoo.com.

I

NFLATION affects everyone—rich, poor and the middle class— but it can be tamed.

A subject of great interest when this writer taught economics for more than 10 years at the postgraduate studies of the International Academy of Management and Economics, inflation means the general level of prices of goods and services is increasing. In other words, your peso buys less and less over time.

That’s why Bangko Sentral ng Pilipinas (BSP) Gov. Nestor A. Espenilla Jr. and his outstanding management team are always busy keeping inflation in check and stable, and making sure the economy grows and becomes sustainable.

The BSP is not only mandated to determine the nation’s monetary policy but it is also specifically tasked to closely monitor inflation and make sure it’s under control.

The BSP also helps people spend wisely and draws up good business plans, as they do not have to worry that the purchasing power of their money would continuously drop.

Inflation can be divided into two broad areas: quality theories of inflation and quantity theories of inflation.

The quality theory of inflation rests on the expectation of a buyer

Bloomberg View

H

igh-level trade talks last week between the United States and China grabbed headlines around the world, but in many ways, they were beside the point. In the years ahead, tariffs and industrial policy—the main focus of the talks —will probably matter less in the growing competition between the two countries, while another, much quieter initiative will matter more.

As China boosts overseas investment through its “Belt and Road” infrastructure program, it is increasingly dictating not just the terms of financing but also a broader set of technological applications.

In doing so, it is altering the global competitive landscape by defining and exporting technical standards for everything from artificial

intelligence to hydropower.

This push into global standardssetting has gone largely unnoticed.

That’s partly because it’s boring: Even broaching the topic will make investors’ eyes glaze over, and few Western governments have given it much thought. But it’s also partly by design.

The process has so far mostly unfolded domestically, and in Chinese, as China’s government has sought to develop its own set of industrial standards for companies operating within its borders. That has made the effort mostly opaque to outsiders. Yet regulators are now starting to translate those standards into English— a clear sign that they’re meant to be exported overseas. And that should worry China’s competitors.

For decades America’s ability to set domestic standards that would then spread globally benefited its economy greatly. As a recent paper by the East-West Center put it,

accepting currency to be able to exchange that currency at a later time for goods that are desirable as a buyer, while the quantity theory of inflation rests on the equation of the money supply, its velocity and exchanges.

The famous Scottish Economist Adam Smith (Wealth of Nation, 1976) and empiricist philosopher David Hume (1711-1776) were the ones who proposed a quantity theory of inflation for money, and a quality theory of inflation for production.

There are three main problems if inflation is high: 1. People on a fixed income (pensioners, wage-earners and students) will be worse off in real terms due to higher prices as this will lead to a reduction in the purchasing power of their income.

2. Labor unions will be encouraged to demand higher wages, and

this can cause a wage spiral. If strikes occur, say, in an important food industry, the nation may see a serious reduction in productivity and unemployment.

3. Exports will become more expensive for other countries to buy, and this will create a deficit on the current account.

For laymen, a monetary policy means the actions taken by the BSP to influence the availability and cost of money, credit and interest rates affecting a range of economic variables, including input and output, employment, prices of goods and services.

In other words, the BSP must have the right combination of policy or policies to promote a low and stable inflation conducive to a balanced and sustainable economic growth.

The “Taylor Rule,” named after prominent economist Prof. John B. Taylor, of the Stanford University, is an excellent guide to assessing the proper stance of monetary policy.

“It relates the setting of the currency rate to the primary objectives of monetary policy—that is, the extent to which inflation may be departing from something approximating price stability and the extent to which output and employment may be departing from their maximum sustainable levels.”

For example, “one version of the Rule calls for the money rate to be set equal to the rate thought to be consistent in the long run with the achievement of full employment and price stability plus a component

based on the gap between current inflation and the inflation objective less a component based on the shortfall of actual output from the full-employment level.”

In his best-selling book, published by Amazon (ISBN-13:97802 26791258), Monetary Policy RulesNational Bureau of Economic Research Studies in Income and Wealth, Prof. Taylor prescribes the amount by which the money rate would need to be raised or, if output and employment are weakening, the amount by which it would need to be lowered. The specific parameters of the formula are set to describe actual monetary-policy behavior over a period when policy is thought to have been fairly successful in achieving its basic goals.

Economists have been suggesting a number of methods to stop inflation. For instance, high interest rates and a slow growth of the money supply are traditional approaches that most central banks throughout the world used to fight inflation.

However, some central banks view the means of controlling the inflation differently. For instance, some follow a symmetrical inflation target (SIT), while others only control inflation when it rises above a target, whether expressed or implied. SIT is a requirement placed on a central bank to respond when inflation is too low, as well as when inflation is too high.

To reach the writer, e-mail cecilio.arillo@ gmail.com.

Germany needs a new approach to deport migrants

By Leonid Bershidsky Bloomberg View

G

ermany has a problem with migrants who have been denied asylum. Many of them don’t want to leave, and getting them to go is far from easy.

Last week police in Ellwangen in the southwestern state of Baden-Wuerttemberg attempted to pick up a 23-yearold Togolese man at a refugee hostel to deport him to Italy, the country where he first crossed the border into the European Union (EU). About 150 other Africans at the hostel wouldn’t allow it.

They heavily outnumbered the 24 officers, and forced them to hand over the keys to the man’s handcuffs. The police had to retreat. They returned in force three days later and took the Togolese man away. Twenty-seven of the hostel residents are being held for rioting.

The story made national headlines, and right-wing opposition parties latched onto the initial retreat of the police as evidence of the weakness of the German state in the face of the immigrant threat. Joerg Meuthen of the far-right Alternative for Germany party talked of a “capitulation,” and Christian Lindner, leader of the pro-business Free Democrats, spoke of “law-free zones.”

It doesn’t much matter that the police didn’t actually give up and that the riot was put down. Interior Minister Horst Seehofer, whose views on immigrants

China is quietly setting global standards

By Andrew Polk

Tuesday, May 8, 2018 A11

“standards serve as bridges between developing innovations and the marketization and industrialization of those innovations.” The specification of even everyday items, such as USB ports, has given American companies a strong advantage in selling goods in other markets.

Patents are the key conduit of this process. As standard-setting in any industry progresses, the companies that own the technology on which the standards are based benefit by either selling their equipment or licensing their patents. Telecoms are a classic example. Qualcomm Inc., which owns key patents for LTE, 3G and 4G technology, has received billions of dollars in royalties in recent years—including almost $8 billion in China alone in 2014. And that’s in an industry where standards are set through a complex global process; when countries set standards unilaterally, the benefits for their

are far to the right of Chancellor Angela Merkel’s, called the incident “a slap in the face of law-abiding people” and accused the Togolese man’s defenders of “trampling” on German hospitality.

The government’s idea of a response, pushed eagerly by Seehofer, is to set up “anchor centers” in which all newly arriving asylum applicants would be housed while their applications are processed. Those denied would be deported. Seehofer claims the centers would even be good for the asylum seekers because the program would somehow speed the processing.

It’s clear why some sort of solution is needed. For 2016 and 2017, 406,153 people were denied asylum in Germany.

In the same two years, only 49,300 people were deported or left “voluntarily” under pressure from authorities. Many of the unsuccessful asylum seekers appeal the denials in the courts and remain in Germany while the legal wheels grind. One famous case involves a former bodyguard to Osama bin Laden, whom Germany has been trying to deport to Tunisia since 2006. The courts have refused to allow it because there was no guarantee he wouldn’t be tortured upon arrival. Meanwhile, the man is watched by domestic intelligence as a potential terrorist and has been receiving social aid. It’s clear the system isn’t working too well.

This puts pressure on the government to assert its power. But “anchor camps”

are not the answer. Everywhere the refugee detention centers exist in Europe, from Hungary (where all asylum seekers are channeled into them) to the United Kingdom (where about half of potential refugees are placed in them), they are a spot on the government’s human-rights record. Even where living conditions are adequate, immigrants spend months with nothing to do, unsure whether they should prepare to stay or go, isolated from the receiving society and unable to start adapting.

These are breeding grounds for hostility and, given Europe’s transparent internal borders, that’s a threat. Last year Germany deported 7,102 people to the EU countries where the asylum seekers had entered the union. Sometimes they come back. Anis Amri, who drove a truck into a Christmas market in Berlin in 2016, had spent time in such a facility in Italy and then served time for crimes committed there. After the attack, he traveled by train to Italy, where, more or less by accident, he was shot by a police officer.

Because of the ill feelings they breed, the detention centers might easily create more incidents like the one in Ellwangen, too.

The huge difference between the number of asylum denials and the number of deportations requires out-of-thebox thinking about the immigration system as a whole.

The system might need radical

simplification, with the citizens of a short list of war-torn nations and dictatorships automatically receiving protection. Everyone without papers or from countries not on the list should see a clear path to residency, with a number of checkpoints along the way: Language-proficiency exams, tests on cultural norms, the recognition of professional qualifications, a deadline for getting a job and a cut-off date for social assistance. Failure at any of these stages should mean the termination of temporary residence and either a voluntary departure or deportation. Any immigrant on this program (but not a qualified refugee) should know that being convicted of a crime means automatic deportation to the country of origin.

This, of course, is only an example of the kind of system a country, such as Germany, that needs a shot in the arm for its declining population growth could institute. But in any case, the system shouldn’t waste time on checking asylum seekers’ stories and then on years of appeals. It should concentrate on unconditionally helping people from clearly dangerous countries, such as Syria—and demand integration efforts from the rest, while providing the means for that integration.

No country has tried to do something like that yet. I wish Germany could get up the courage to be the first—and give up trying to get tougher in implementing dysfunctional rules.

For decades America’s ability to set domestic standards that would then spread globally benefited its economy greatly. As a recent paper by the East-West Center put it, “standards serve as bridges between developing innovations and the marketization and industrialization of those innovations.” The specification of even everyday items, such as USB ports, has given American companies a strong advantage in selling goods in other markets.

on investment for a port in Sri Lanka or a rail line in Thailand matters less to Chinese officials than the ability to push participating countries to adopt Chinese standards on everything from construction to finance to data management. For just one example, China is exporting key technical standards for the construction of high-speed rail through these projects —in large part to circumvent standards set by Western players.

Developing countries tend to voluntarily adopt standards set by high-income economies. But China’s government has taken a much more proactive role. Instead of trying to influence the likes of Pakistan, Thailand and Myanmar by changing hearts and minds, it wants to convince them to change their nuts and bolts—and their data-management practices to boot. In this context, China’s recent revisions to its national standardization law and

its cybersecurity law look far more significant; they could reverberate far beyond its borders.

Although few people would contest China’s right to determine its own technological standards, exporting those standards is another matter altogether. Billions of dollars in equipment sales and patent royalties are up for grabs in this competition. To the extent that China’s standards supplant Western ones, it will represent a direct threat to the profitability of non-Chinese companies.

This push won’t directly challenge the ability of American or European companies to innovate. But it will undoubtedly challenge their ability to commercialize technology in other markets. That emerging competition should be of utmost concern to companies and policy-makers alike —and that’s one reason China is glad that the issue isn’t even part of the discussion.

homegrown companies can be even more pronounced.

This is where President Xi Jinping’s signature foreign-policy program comes in. Most analyses of the Belt and Road initiative focus on whether individual projects will become profitable or will leave China further mired in debt. Yet the return

2nd Front Page BusinessMirror

A12 Tuesday, May 8, 2018

DA’s Piñol sees better farm yield by year-end, amid slow Q1 growth

F

By Jasper Emmanuel Y. Arcalas

@jearcalas

arm output in the first three months was seen to pace some 1 percent slower due to seasonality and high base reference, with the crops subsector still leading the increment.

Agriculture Secretary Emmanuel F. Piñol said he expects the value of agriculture production in the January-to-March period to post a “modest” growth amid higher prices of agricultural commodities.

“We expect a modest growth in the first quarter for agriculture, especially since prices of agricultural commodities have really improved,” Piñol told reporters on Monday. “I always believe that profitability is the best motivation for productivity.”

Piñol said the crops subsector, which accounts for more than half of the total agricultural output, would remain key to the expected 1-percent growth.

“For the first quarter we are expecting about a 1-percent growth over last year’s growth,” he said.

“I’m actually expecting greater growth toward the end of the year mainly because of the very good prices of agriculture commodities.”

The agriculture chief said other subsectors, which include livestock, poultry and fisheries, would post increments in the first quarter.

“For the hogs sector, they are enjoying good prices right now.

In fact, our production is slightly insufficient to meet the growing demand,” he acknowledged.

Ateneo Center for Economic Research and Development Director Alvin P. Ang told the BusinessMirror he sees farm output in the first quarter growing by “around the same level” as Piñol’s estimate, mainly because of seasonality and given the “high base” reference last year. Ang added the crops subsector would remain the main driver for growth, as the share of the other subsectors is small.

Meanwhile, Dr. Rolando T. Dy, executive director of the University of Asia and the Pacific’s Center for Food and Agri-business,

projected that the value of farm output in the January-to-March period should grow from 1.9 percent to 2.3 percent.

Dy attributed the higher agriculture output to the subsectors, including other crops, hogs, poultry and fisheries.

Dy forecast that other crops and subsectors output would expand by at least one percent to 1.5 percent.

“Other crops and subsectors, according to the Philippine Statistics Authority [PSA], accounted for 74 percent of real GVA [gross value added] in [first quarter of] 2017,” he told the BusinessMirror in an e-mail.

“Thus, a lot will depend on agri growth on other crops and subsectors [hogs, poultry and fishery]. If that goes up to 2 percent, [then] overall [agriculture] growth will exceed 2.5 percent.”

Dy pointed out that, together, the hog, poultry and fisheries subsectors account for 40 percent of the agriculture sector’s GVA. The value of farm output in the first quarter of 2017 expanded by 5.28 percent, rebounding from a dismal performance caused by El Niño during the same period in 2016, according to the PSA. All the agricultural subsectors’ output during the January-toMarch period last year, the PSA said, posted increments, with the crops subsector still the main driver for farm growth.

The PSA will release its report on the performance of the agriculture in the first quarter on May 8.

In a related development, the House Special Committee on Food Security has endorsed for plenary approval a measure reducing food waste by requiring businesses to take part in food donation and food recycling programs. Rep. Leo Rafael Cueva, the committee chairman,

Piñol: “For the first quarter we are expecting about a 1percent growth over last year’s growth.

I’m actually expecting greater growth toward the end of the year mainly because of the very good prices of agriculture commodities.”

said the substitute bill ,titled “Food Waste Reduction Act,” is ready for plenary deliberation when the session resumes next week.

The measure substituted House Bills 2496, 4263, 4675, 5746, 6235 and 6789 authored by Reps.

Conrado M. Estrella III of Abono, Evelina G. Escudero of Sorsogon, John Marvin C. Nieto of Manila, Emi Calixto-Rubiano of Pasay, Deputy Speaker Sharon S. Garin of Aambis-Owa and Rep. Luis Raymund F. Villafuerte Jr. of Camarines Sur, respectively.

Villafuerte, citing the Food and Agriculture Organization, said food security is mainly a problem of access rather than production.

In the Philippines, he said the country suffers more from losses during agricultural production

than from consumption, meaning “we waste food being produced in the country even before it hits the plates of the people.”

The lawmaker said the proposal aims to prohibit food-related businesses from throwing away edible food and donate them to food banks and charity institutions instead.

“Food establishments, in return, are given tax incentives by exempting them from the donor’s tax and shall be considered as an allowance deduction from their gross income,” Villafuerte said.

Garin said there is no law specifically combating the rising food waste in the Philippines.

Citing the Food and Nutrition Research Institute of the Department of Science and Technology, Garin said Filipinos waste an average 3.29 kilograms of food each year.

“Much is needed done to reduce food wastage. Behavioral change is necessary to combat this problem. It is high time the government does its part not only for the Philippines but also because this has become an alarming global problem,” she said.

The bill recognizes that each person has a right to an adequate standard of liv ing, including

sufficient, safe and nutritious food. Hence, it shall be a policy of the State to attain food security, end hunger and promote the efficient use of the country’s food resources.

The bill defines edible food surplus as excess food/surplus food in the retail and consumption stages, determined fit for consumption based on standards set by the National Nutrition Council (NNC) and the Food and Drug Administration (FDA).

It defines the food-insecure as persons or groups of persons who have no means and/or have difficulty producing or purchasing food.

The following are the establishments covered by the bill: food manufacturers; food establishments (restaurants, cafés, diners, fast-food chains or hotels); supermarkets with at least 500 square meters of selling space; and culinary schools that offer culinary, baking and pastry courses and with at least 50 students.

The criteria for determining the food-insecure will be made by the Department of Social Welfare and Development (DSWD) in coordination with the local government units (LGUs).

See “Piñol,” A2

www.businessmirror.com.ph

Disaster-prone. . .

Continued from A1

of this year and to continue working with our colleagues in Asean,” Singapore Finance Minister Heng Swee Keat said during a forum the 51st Asian Development Bank (ADB) Annual Meeting at its headquarters in Manila.

First in Asia

THE agreement for the Seadrif implementation was signed by the finance ministers of the five Asean member-states last Friday at the sidelines of ADB Annual Meeting.

Japanese Finance Minister Taro Aso pointed out that the joint agreement to establish the Seadrif is the first of its kind in Asia, and is a step closer to getting the facility working.

“It will be the first disaster-risk facility in Asia,” Aso said. “Today, we achieve the first step, and our next goal is to actually establish and launch the facility.”

Last year, a memorandum of understanding was signed by Cambodia, Japan, Laos and Myanmar, for the establishment of a country-led regional technical working group (TWG) on disaster-risk finance and insurance. The TWG aimed to work toward developing the Seadrif.

The World Bank has thrown its support on the idea by providing technical assistance for the establishment of the facility. The assistance was provided by the World Bank Group’s Disaster Risk Financing and Insurance Program (DRFIP), with the support of the World Bank Disaster Risk Management Hub in Tokyo.

“This is the first of such facility in Asia and certainly in Asean, so it is an innovative regional solution to narrow the protection gap,” Keat said, adding that Seadrif beneficiaries will be Cambodia, Laos and Myanmar.

According to Keat, the facility “has potential for us to support risk management for other Asean countries in the future.”

“And that’s providing reinsurance against a range of natural catastrophic risks,” he added.

Importance

GROWTH FIGURES Silhouettes of men working at a construction site at Bonifacio Global City, Taguig, are shown in this May 7 photo.

The National Economic and Development Authority has said growth in construction-related manufactures continued to post an upward trend due to higher demand for nonmetallic mineral products, particularly cement. This can be attributed to the continued implementation of public infrastructure projects. ROY DOMINGO

STILL, Funa underscored it is important to have disaster risk insurance to mitigate effects of risk brought about by natural calamities.

Funa pointed out that the country experiences a total of $3.5 billion in damages yearly due to typhoons and earthquakes and around 20 typhoons make landfall in the Philippines every year.

That is why the Philippine government has placed various financial-protection schemes, he said, citing the Development Policy See “Disaster-prone,” A2

Sensitive data needs to be protected through encryption Continued from A1

To avoid potential fines, organizations need to demonstrate initiative by establishing measurable security protocols that protect collected personal data. One of most common methods for protecting stored data is encryption.

The software required to encrypt files and hard drives is readily available and is often offered for free or at low cost. Therefore, the establishment of an encryption protocol for your enterprise does not have to incur a large outlay of resources. The five encryption applications listed below are all free to use and perform their function using the highest industr y-standard encr y ption algorithms available.

Some of the applications in this list will encrypt an entire hard drive, operating system and all. That means you will have to know the password or have a USB drive with the password file on it to access the system. Other applications will allow you to en-

crypt a single file or folder, if you prefer. The operational difference is important to keep in mind as you evaluate each app.

1. BitLocker Device Encryption

Since the BitLocker Device Encryption software is integrated directly into Microsoft Windows 10, it is probably the most obvious application on this list. You will find the BitLocker app in the Control Panel, but the best way to get to the management screen is by typing bitlocker into the Cortana search box.

BitLocker is designed to work best with a computer or device deployed with a Trusted Platform Module version 1.2 or later. The TPM is a hardware component that works with BitLocker to help protect user data and to ensure that a computer has not been tampered with while the system was offline.

Older devices with no TPM can still use BitLocker, but users will need access to a USB drive that will act as a key to the system. BitLocker encrypts the entire disk drive and

not individual files or folders.

2. FileVault 2

Similar to BitLocker, FileVault 2 is a full-disk encryption tool; however, it is limited to use on OS X Lion or later. The app prevents unauthorized access to the information on an OS X device’s startup disk using an XTS-AES-128-bit algorithm with a 256-bit key.

To turn on FileVault, navigate to the System Preferences screen and click the Security & Privacy link. Of course, you will have to enter an administrator name and password to complete the process.

Once the encryption is complete, FileVault will require you to log in every time your Mac starts up, and no account will be permitted to log in automatically.

3. VeraCrypt

VeraCrypt is an open source application based on the nowabandoned TrueCrypt 7.1. Like BitLocker and FileVault, VeraCrypt is designed as a complete drive or partition encryption tool and not

for the encryption of individual files or folders.

The software creates a virtual encrypted disk within a file and then mounts that file as a usable disk drive or USB drive. The encryption is automatic and performed on the fly, so the drive acts like a normal storage device.

Since VeraCrypt is an open source project, its documentation is a bit sparse—and it’s cryptic at best. While this application does use advanced encryption protocols and keys to create an additional level of security, it is best deployed by professionals or users with advanced skills.

4. AxCrypt

Unlike the previous applications in this list, AxCrypt is designed to be used for encrypting individual files or folders. AxCrypt integrates directly into the file explorer system of either Windows or OS X, making encryption as simple as clicking the right choice from a menu. The application can also be downloaded and installed on a

mobile device.

AxCrypt also uses the same AES encryption algorithms with 128bit and 256-bit keys as the other applications. In addition to integrating with system file explorer apps in Windows and OS X, AxCrypt integrates with cloud-based storage apps like DropBox and Google Drive, making it a flexible encryption application.

5. AESCrypt

AESCrypt is also designed to be used as an encryption tool for individual files and folders. The application integrates directly into the file explorer systems of Windows, OS X, and Linux. AESCrypt can support developers working in programming languages like Java and C#, as well.

AESCrypt is an open source project, and it uses the AES encryption algorithm, and the documentation for AESCrypt clearly states that the software can be used for business purposes as well as personal ones.

Warning—It is important to keep in mind no matter which tool

you choose to use for your encryption needs, it requires the use of a strong password. Once encryption takes place, that file or hard drive can’t be accessed without providing that password. So be careful what you encrypt, and make sure you use a password you can remember.

Computer hacking has become a professional discipline—and attacks will continue to grow in sophistication and number.

However, as mentioned above, there are many things security and business professionals can do to protect their data, their customers and —most important—their reputation, including encryption, keeping software up to date, retaining offline backups and teaching employees how to detect social engineering attacks.

Let me conclude by saying, that “ethical hackers” are available (EITSC has access to a team), that can perform vulnerability/ penetration tests.

Comments are welcome—contact me at Schumacher@eitsc.com.