Businessmirror may 10, 2017

BMReports

Tax justice remains elusive goal for PHL By Rea Cu

@ReaCuBM

Conclusion

A

CCORDING to non-governmental group Action for Economic Reforms (AER), the increase in the tax rate of the tobacco products in the country and the tax scheme shifting to a unitary one is a form of tax justice, since it not only prevents Filipinos from dying due to smoke-related diseases, but also eases the tax burden on the poorer sector of society. AER senior economist Jo-Ann Diosana explained that most of those who consume cigarettes are the poor, so they are the ones taxed more. A higher tax on cigarettes will push more poor consumers to stop smoking, according to Diosana. Since cigarettes are cheap, it should be priced higher because it poses great harm to society and to those who consume it, the AER official said. Continued on A2

Posters encouraging others to be their best no matter their status in life are posted along the C-10 Road in Tondo, Manila. According to non-governmental group Action for Economic Reforms, the only way the government can provide for the vulnerable sectors is through the provision of services through a better tax system. NONIE REYES

media partner of the year

United nations

2015 environmental Media Award leadership award 2008

BusinessMirror A broader look at today’s business

www.businessmirror.com.ph

n

Wednesday, May 10, 2017 Vol. 12 No. 209

E

@BcuaresmaBM

xperts welcomed the appointment of current Central Bank Deputy Governor for the Supervision and Examination Sector Nestor A. Espenilla Jr. as the next Bangko Sentral ng Pilipinas (BSP) governor, noting the positive effects of “continuity”, amid changing financial market conditions.

On Security Council reform

“Under Espenilla’s leadership, the BSP will continue to adhere strictly to its inflation-targeting framework.”

Teddy Locsin Jr.

free fire

I

Several economists on Tuesday issued their early assessment of Espenilla’s appointment to the post, as announced by President Duterte’s economic managers late Monday. See “Espenilla,” A2

business news source of the year

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

‘Espenilla appointment bodes well for economy’ By Bianca Cuaresma

2016 ejap journalism awards

wrote this while the meeting was going on and powers big and small gave their views and publish it as merely my personal view. For the past 20 years, there have been indefatigable efforts to reform the Security Council; particularly its permanent membership exclusive to the original five in order to reflect geopolitical realities today. The five are the US, Russia (ex-USSR), China (Republic of China under the Kuomintang), the UK, which liberated France; and France, in deference to the singular resistance to Nazism posed by General de Gaulle. Continued on A11

P26.93-B tax-evasion Rice imports not needed as PHL case filed vs Mighty has ample supply–Guinigundo A T no t h er t a x- e v a s ion case, this time to the tune of P26.93 billion, was slapped against Mighty Corp., as the government threatens to confiscate the cigarette manufacturer’s assets if it fails to settle its tax liabilities. The Bureau of Internal Revenue (BIR) charged before the Department of Justice (DOJ) Mighty Corp. officials President Lt. Gen. Edilberto P. Adan, AFP (Ret.); Executive Vice President Oscar P. Barrientos; Vice President for External Affairs and Assistant Corporate Secretary Alexander D. Wongchuking, and Treasurer

Ernesto A. Victa. They were charged with unlawful possession of articles subject to excise tax without payment of the tax, and for possessing false, counterfeit, restored or altered stamps, in violation of the National Internal Revenue Code of 1997. The case stemmed from the raid conducted in a warehouses in Bulacan, where the cigarettes seized carry fake tax stamps. “As a consequence of the criminal act of Mighty Corp., together with its responsible corporate officers, of using fake internal revenue stamps, it evaded payment of Continued on A12

PESO exchange rates n US 49.8550

By Cai U. Ordinario @cuo_bm

he National Food Authority Council (NFAC) is standing by its decision to not import rice, as the country has sufficient stocks, according to one of its members, Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa C. Guinigundo. In a recent inter view with Guinigundo, the BSP official said Filipinos need not worry about spikes in the price of rice because the country will have enough

GUINIGUNDO: “If we import now, prices will fall because [we] still have rice stocks of up to 70 days.”

stocks due to better harvest. “[The] expectation is better harvest so [this will add to the buffer stock]. If we import now, prices will fall because [we] still have

rice stocks of up to 70 days, which is even higher than last year’s 69 days,” he said. He said the price-monitoring report showed that well- and regular-milled rice have been declining by five to 10 centavos, or even lower, on a weekly basis. This means, Guinigundo said, that government-to-government importation of rice will be a “last resort” for the Philippines. The BSP official said this will prevent the National Food Authority (NFA) from incurring more debt. Currently, the NFA

has a standby authority from the NFAC to import 250,000 metric tons (MT) of rice. If this option is taken up by the government, should there be a shortage caused by natural calamities or similar events, this will automatically cost the already heavily indebted NFA to incur an additional P24 billion in debt. “If the buffer stock will not be enough based on the monitoring, that’s the time to activate the 250,000 MT standby authority from the council. See “Rice imports,” A2

n japan 0.4403 n UK 64.5223 n HK 6.4048 n CHINA 7.2202 n singapore 35.4739 n australia 36.8229 n EU 54.4716 n SAUDI arabia 13.2954

Source: BSP (9 May 2017 )

BMReports BusinessMirror

A2 Wednesday, May 10, 2017

Rice imports. . . Continued from A1

This is the last resort [because] the government pays for this. Where does the government get the money for this? We borrow,” Guinigundo said. He said the private sector should be allowed to import rice, especially now that its waiver relating to the special treatment for rice will expire on June 30. This means that imported rice can freely enter the Philippines starting July. However, the Philippine government has yet to determine the tariff rate for rice and amend Republic Act (R A) 8178, which allowed quotas on rice imports. Despite the potential problems which could be created by this, Finance Secretary Carlos G. Dominguez III said he is confident that the country can afford to engage in any legal action filed against it at the World Trade Organization’s (WTO) Dispute Settlement Body (DSB). “There’s so many ifs there. But the policy direction is let the market operate normally and to, again, separate the regulatory function, the buffer stocking function from the NFA. To just put things in the right place so that they won’t come up with a potentially schizophrenic organization,” Dominguez said. Earlier, trade experts and the National Economic and Development Authority (Neda) expressed concern that the failure to amend R A 8178 under a post-quantitative restriction (QR) on rice scenario could open the country to WTO sanctions. Former Tariff Commissioner George Manzano told the BusinessMirror that sanctions can be imposed if the WTO receives valid complaints regarding the entr y of r ice impor ts to the Philippines. Sanctions from the WTO could mean trade partners asking for concessions, such as lower tariffs on specific goods or nondelivery on the trade pacts. It could also mean allowing the entry of greater dairy and livestock imports. The presence of these concessions was used by the economic managers to prevent

Pampanga. . . Continued from A12

near empty. Stacks of used egg cartons fell from the shelves, and a half-eaten pot of cold rice sat on the stove. “You know what you’ve done in this room,” an investigator told Deakin. She showed him a photo of several children. Shrugging, he said one of them was probably a few doors away with her cousin. Minutes later, two girls, 9 and 11 years old, were rescued by the police. The AP did not interview the girls Deakin told the police about;

Tax justice remains elusive goal for PHL Continued from A1

Also, a purpose of the higher tax rate on cigarette products, other than lessening tax burdens on the poor, is to regulate behavior or to shape the behavior of smokers, helping them to decrease their intake or stop consuming altogether. “That is the tax justice, not just in terms of computing for the tax burden, but also, in a perspective that you are helping Filipinos to behave properly,” Diosana said. “If a smokers lessens his or her cigarette intake, or chooses to stop completely, there wouldn’t be any cost at all, whether it be health or the person’s out-of-pocket cost.”

Benefactors

UNDER the two-tiered tax system, cigarettes with a net retail price (NRP) of P11.50 and below are taxed at P25, while those with a NRP of above P11.50 per pack are taxed at P29 for every pack. Under the unitary tax scheme implemented this year, a flat tax rate of P30 per pack of cigarettes is imposed with a 4-percent annual increase in the succeeding years. The proposal to address the unchanged tax rates imposed on fuel and oil prices in the country is another form of addressing vertical inequity, since most of those who consume fuel products are among the affluent sectors, Diosana added. According to data from the DOF, the excise tax on diesel in the country has remained at P0 per liter since the year 1997, while excise rates on gas started at P4.35 per liter in the same year. “It has been a while since we tweaked the taxes on fuel, we even lowered it to P0 for diesel since 1996,” Diosana said. “So who are the ones benefiting from the static taxes?” She added: “Essentially, victims of such raids need immediate and long-term counseling and care. But in the tranquil garden of a shelter for sexual exploitation survivors about 60 miles south of Deakin’s town house, 19-year-old Cassie described her ordeal. The AP did not use her whole name to protect her privacy. The youngest daughter in an impoverished family, Cassie believed the man who came to her village promising a better life if she’d go to the city with him. She was 12. Within months, the man bleached her dark skin, straightened her hair and began waking her at 4 a.m. to work. “He needed some girl to show her

We need to make the rich pay more, while the poor or ordinary employees continue to give their fair share. Unlike now, more than 85 percent of the total collections from individuals are from employees, while the professionals and selfemployed, who obviously make more than fixed-income earners, are contributing less than 15 percent.”—Abrea

you subsidize the taxes on fuel because you did not increase it. You did not partner it with the growth of the economy, if the taxes were increased, the government would have a bigger fund already that can be used for social services for the vulnerable sectors.” Under the first package of the DOF’s CTRP, staggered increases in excise oil prices will be implemented that will also be indexed to inf lation. This year a rate of P3 per liter was imposed on diesel products, gradually increasing to P5 per liter in 2018 and P6 per liter by 2019. “That is why I emphasized that the tax system should not veer far away from spending,” Diosana said. “[The tax system and spending] should always be together, since the spending can also address the impact with the increase in fuel taxes.”

CTRP

A way seen by tax experts to address tax injustice is to implement much needed reforms in the tax system. That’s why we desperately need the CTRP to correct and end tax injustice, Abrea Consulting Group President Raymond A. Abrea told the BusinessMirror. “We need to make the rich pay more, while the poor or ordinary employees continue to give their fair share,” Abrea said. “Unlike whole body in front of the camera,” she said.The abuse ended when her older sister found out and went to the police. Some buyers try to brush off the abuse, saying they’re not directly touching the children. “It’s not just a virtual crime. It is an actual crime,” said human-rights attorney Sam Inocencio, who heads International Justice Mission’s Philippines office, which supports local law enforcement with investigators and attorneys. “Online sexual exploitation is possibly the most evil thing that I’ve seen.” In 2013 online sex exploitation of children gained global attention

now, more than 85 percent of the total collections from individuals are from employees, while the professionals and self-employed, who obviously make more than fixedincome earners, are contributing less than 15 percent.” The AER is also pushing for the passage of the CTRP, as the measures taken into account to build the form of the proposal is noted to be comprehensive, and that other stakeholders were consulted in the crafting of the reform measure, not just on the tax system, but also, in administrative measures in government agencies as well. “The only way that you can provide for the vulnerable sectors is through the provision of services, and how will you be able to provide services without a fresh source of funding, there is no other way but through taxation,” Diosana added.

PIT

THE implementation of lowering personal income-tax rates from 32 percent to 25 percent along with other offsetting measures to help address revenue losses from such a move is expected to create a revenue gain impact of P302.2 billion in 2018. Losses are expected to reach P139.6 billion. According to the DOF, the CTRP, when seen as a package, will provide benefits to as much as 99 percent of the population. after researchers at the Netherlands-based nonprofit Terre des Hommes launched a realistic-looking animation of a 10-year-old Filipino girl named Sweetie. They took the fake girl on chat groups and online forums. Pedophiles swarmed. In 10 weeks, analysts identified 1,000 men in 71 countries who had tried to get illegal images. The proliferation of crimes, along with new mandatory reporting, led to 8.2 million reports last year to the National Center for Missing and Exploited Children’s CyberTipline related to online child sexual exploitation. That compares with 8.3 million reports in the 17 years prior. Officials at both ends of the abuse agree they need to collaborate to stop it, and last month the US committed $3 million. Deakin’s bust turned out to be one of the largest seizures of its kind in the Philippines. His Cherry Mobile Touch HD tablet—which can be wiped clean and reset with a four digit code—had more than 4,000 contacts. One computer had another 13 networked into it, from servers he said were around the world. There were 30 hard drives. Neighbor Bessie Geronimo was teary-eyed. She’d seen children going in and out. Now, she wondered, could she have intervened? “Oh, I pity those children,” she said. Authorities from a village police substation said a housekeeper filed a complaint against Deakin last year: he wasn’t paying her, she said, and she was worried about what he was doing with children in the bedroom with the door closed. They visited his house but had no authority for a raid. “There are many such places,” the security officer Mike Wood said. AP

www.businessmirror.com.ph

Espenilla. . . Continued from A1

He will take over from Amando M. Tetangco Jr., who will end his second term as BSP chief on July 3. “In our view, this is a positive appointment for a few reasons. First, it bodes well for a seamless transition and policy continuity—we think under Espenilla’s leadership, [the] BSP will continue to adhere strictly to its inflation-targeting framework,” international financial services company Nomura said. “Second, it validates official rhetoric earlier that President Duterte understands the importance of maintaining an independent and credible central bank,” it added. “Third, apart from preserving Tetangco’s legacy, a key task for the next governor will be to address reform issues, including, among others, amendments to the bank-secrecy law, the antimoney laundering act and the BSP charter, as we have argued before,” Nomura further said. In a news conference at the BSP Complex on Tuesday afternoon, Espenilla said “drastic deviations” should not be expected and highlighted continuity of reforms for his upcoming term as governor. Espenilla further said among his legislative agenda include the push for the pending amendments in the BSP charter, the relaxation of banksecrecy law, and the expansion of antimoney laundering provisions to other sectors in the economy. The incoming BSP governor also talked about his plans on continuing the expansion of financial inclusion in the country through digitalization of the payments system in the country, as well as reforms in the capital market. “Those are very big shoes to fill up. It’s like a basketball team. Our captain is graduating. I think I don’t have to reinvent everything. I will be able to sleep at night because [Tetangco] has developed a very strong BSP team,” Espenilla said. ING Bank Manila economist Joey Cuyegkeng is one of the economists who welcomed Espenilla’s appointment, saying it demonstrates “the President’s confidence with and trust on his economic team”. “The decision also displays the strong influence of his economic team, especially Finance Secretary [Carlos G.] Dominguez [III],” Cuyegkeng said. “BSP monetary policy under the future governor is unlikely to change. Inflation targeting would remain while the risk-related policy bias would continue.... Overall, the decision is positive not only for the monetary system but for the economy—continuity and progress and display of President’s

New campaign. . . travelers, that’s why they like Thailand and Vietnam because the prices of Philippine tours compared to the 2 destinations are higher.” At present, she said, Japan and China are the top two destinations for Taiwanese travelers. She pointed out that Taiwanese also love good food and love to eat, and go to destinations that are rich in history. Yet, the tourism attaché pointed out that, “in terms of accessibility, the Philippines should be the first choice of Taiwanese as we have several daily flights from Taipei to Manila, Boracay and Cebu, and we have also flights to Puerto Princesa from Taipei two times a week, and three times a week from Kaohsiung to Manila.” There are five airlines servicing these routes bet ween Ta iwa n a nd Ph i l ip pine: Philippine Airlines Cebu Pacific (CEB), AirAsia, Eva Airlines and China Airlines (CAL). “For their island holidays, Boracay is one of their top choices. It is easy for us to sell Boracay and Cebu; the market for these destinations is good,” she stressed. Jav ier said DOT-Taiwan is also “developing new markets to other destinations such as Iloilo, Guimaras, Bacolod and the Ilocos region; re-introducing golf in the Philippines; developing the MICE [meetings, incentives, conventions, exhibitions]

preference and disposition to economic expertise [and his economic team],” the economist added. Espenilla also bared particulars of his early plans upon his assumption of the governor post in an interview with select reporters—most of which represent continuity of Tetangco’s reforms in his 12-year term. “I will push for financial-market reforms, constantly look out for opportunities for liberalization, possible phasedown in reserve requirement, develop capital markets and implement more reforms,” he told select reporters in an interview. “My main advocacy is to put in place regulation and processes that will make financial markets work more efficiently and make doing business easier. This is slow burn but high yielding. Financial inclusion is a priority and I plan to ‘digitize’ the financial system while making sure that necessary safeguards are in place. This is going to be a balanced approach, not going in one direction,” Espenilla added. “The phasedown of the reserve requirement will happen in stages and is not associated with relaxation of monetary policy. I want to change the approach of reserve requirement and turn it into a nonmonetary tool to an open market tool,” he further said. The incoming BSP governor, however, declined to comment on the path of future monetary policy, except that he will continue and adopt the current “structured process” of being data-dependent. Tetangco is scheduled to step down in July after two consecutive terms as the central bank chief. He is the first governor to serve two consecutive terms, and under a total of three different presidents. Tetangco has earlier expressed confidence in the appointment of Espenilla, saying the choice of an “insider” for the position ensures the continuity of the policy and thought process in the BSP. “I am confident that with him at the helm, the BSP will continue to be a pillar of support to the economy that should remain among the top performing economies in the world,” Tetangco earlier said. Espenilla is a veteran central banker and currently serves as the deputy governor for the supervision and examinations sector. He is deputy governor since April 2005. He joined the BSP in 1981, and continued as a working student in 1982. With about 35 years of central banking experience, Espenilla’s name has been linked to several banking regulation that made the local lending industry into one of the most resilient in recent history. With a report from Kathleen

Jose Ma. Stella F. Arnaldo

Continued from A12

market; aggressively promoting the Philippines to study English as a Second Language; and increasing our dive market and sporting events.” Mea nwh i le, she e x pl a i ned that the bus ad-wrap campaign in Taipei was a spin-off of the art competition/poster design contest held last November. The winning designs were printed on MRT Easy Cards, loaded with NT$200. “My office was delighted and grateful with the positive response of the Taiwanese, as many artists joined and supported the invitation.” The art competition was a collaboration among DOT-Taiwan, the Manila Economic and Cultural Office as well as PAL, CEB, CAL and Eva Air. “This bus ad-wrap campaign is a way of extending DOT-Taiwan’s immense gratitude to the huge support of the Taiwanese and in recognition not only to the winners, but to all the participants. DOT-Taiwan hopes that this endeavor will enhance and strengthen Philippines image as a fun and family-oriented destination for Taiwanese and other markets,” Javier underscored. T he launch of the bus ad campaig n was a lso the of f icial launch in Taiwan of DOT’s #WhenWith Filipinos ad campaign, featuring the “Anak” TVC.

news@businessmirror.com.ph

The Nation BusinessMirror

DOJ: Duterte to sign 2 treaties in Russia to boost campaign against criminality, terrorism

T

O boost the government’s campaign against criminality and terrorism in the country, President Duterte is set to sign two treaties when he visits Russia scheduled later this month. Justice Undersecretary Antonio Kho said the Mutual Legal Assistance and Extradition treaties will be among those that will be signed during the President’s official visit Russia. “The signing of the two agreements during the visit of President Duterte to Russia will be a significant step forward in combating the scourge of criminality, including terrorism and drug-related crimes,” Kho said. “We will continue to enhance our relationships with other countries to address our common challenges in the face of increasing attacks from criminal syndicates,” he added. Kho said this was made possible after officials from the Department of Justice, the Department of Foreign Affairs (DFA), the Philippine Embassy in Moscow, and officials from the Russian Ministry of Justice, Ministry of the Interior, Office of the Attorney General and the Office of the President met for six days of negotiation late last month at the Philippine Embassy in Russia to hammer out the details of the said agreements. Kho led the Philippine delegation to the negotiation with their Russian counterparts. For his part, Ambassador Carlos Sorreta said the signing of the two agreements during the President’s visit will highlight the importance both countries give to fighting crime, including those committed by terrorists and international drug syndicates. At the same time, Sorreta said negotiation has also achieved significant progress on the proposed Transfer of Sentenced Prisoners (TSP) Agreement, though he said further talks would still be needed. He said the TSP, most likely, will be signed after Duterte’s visit. “The negotiators did their best to complete their work on the TSP Agreement, including negotiating into the weekend. They were able to come to agreement on the language for a number of articles. But given the differences in our criminal law and procedure, we will still have to work out common language on some remaining issues,” the envoy said, adding he is confident the agreement will be signed before the end of the year. PNA

UN members hit Duterte’s antidrugs war

S

@butchfBM

S

enators on Tuesday approved a resolution creating a new congressional oversight panel to keep tabs on disbursements of millions of pesos in intelligence and confidential funds allocated to various agencies. Following its approval, the Senate promptly named six of its members to sit in the watchdog panel to be chaired by Sen. Gregorio B. Honasan II with Senators Panfilo M. Lacson Sr., Richard J. Gordon, Emmanuel D. Pacquiao, Paolo Benigno A. Aquino IV and Francis N. Pangilinan as members. In voting to adopt Senate Resolution 361, the senators acknowledged the need “for the Senate to oversee the efficiency of concerned government institutions in the production of accurate and timely intelligence information to better deal with the threats to national security, including the maintenance of peace and order”. Honasan, in sponsoring the measure, explained that “in light of the recent threats to our country’s national security, including disturbance to peace and order by lawless elements, the importance of gathering intelligence information by concerned government

Among the critics are the United States, Germany, France, Canada, Japan, Italy, Australia, Austria, the Netherlands, New Zealand, Switzerland, Sweden, Spain, Denmark, Iceland, Ireland and Luxembourg. The others are Botswana, Brazil, Bulgaria, Chile, Costa Rica, Croatia, the Czech Republic, Estonia, Ghana, Guatemala, Hungary, Latvia, Lithuania, Montenegro, Slovakia, Slovenia and Timor-Leste. Under the UPR, the humanrights situation in each UN membercountry is reviewed every four years at the UN Human Rights Council (UNHRC) in Geneva.

agencies cannot be overstated”. With the passage of the resolution, he said, the new Select Oversight Committee on Intelligence and Confidential Funds in the 17th Congress would “allow the Senate to continue exercising its oversight functions over the use, disbursement and expenditures of confidential and intelligence funds granted to certain government agencies; and to provide vigilant legislative oversight over the conduct of these activities”. Moreover, the Senator noted that in the 2017 General Appropriations Act alone, P5.48 billion has been allocated for confidential and intelligence funds (CIF) “to implement programs and activities of the government, relative to national defense, peace and order and national security”. Honasan added these CIF “are not subject to the regular auditing rules and procedures of the Commission on Audit”, the resolution stressed. He recalled that the previous Congresses “each had a Senate Select Oversight Committee on CIF. Honasan invoked Section 14, Rule X of the Senate which, he said, provides that “whenever necessary, special committees shall be organized, the membership and jurisdiction of which shall be determined by the Senate President”.

MMDA set to clear more congested areas

T

he Metropolitan Manila Development Authority (MMDA) aims to clear other heavily congested areas in Metro Manila before the end of the year. In a news release issued on Tuesday, MMDA Officer in Charge Thomas Orbos said the agency is now targeting Balintawak, Cubao, Quiapo, Alabang, Monumento and Divisoria, which are known traffic choke points in the metropolis. Orbos said the MMDA intends to start towing and impounding illegally parked vehicles in these areas before December this year. “We want to continue these operations and to strike while the iron is hot, so to speak, and while we have the momentum

By Marvyn N. Benaning | Correspondent

EVENTEEN industrialized countries and 17 developing nations have expressed serious concern over the bloody antidrugs war launched by President Duterte at the third cycle of the Universal Periodic Review (UPR) in Geneva, Switzerland, of the human-rights situation in the Philippines.

Honasan heads new six-man oversight panel on intelligence, confidential funds By Butch Fernandez

Editor: Dionisio L. Pelayo • Wednesday, May 10, 2017 A3

on our side,” he said, citing the agency’s success in opening up four lanes to motorists after clearing Baclaran’s service road of street vendors and illegal terminals without any untoward incident. “Everyone thought that clearing and cleaning Baclaran is an insurmountable task, but nothing is impossible if we work together to achieve a common goal,” Orbos said. The clearing of major road networks and inner streets in Metro Manila complements the agency’s implementation of various traffic schemes, such as the number-coding scheme, in a bid to improve the notorious traffic congestion in the metropolis. Claudeth Mocon-Ciriaco

Countries from every UN region expressed concern over the deaths in connection with the “drug war”, with many calling for probes into the killings, and accountability for the perpetrators, none of whom was ever arrested or prosecuted. At least 7,000 people, mostly poor urban residents, have been killed in connection with the drug war since June 30, the day Duterte took office, said John Fisher, Geneva director of the US-based Human Rights Watch (HRW). “Duterte has repeatedly urged the killing of drug dealers and users, stating, for example, on August 6, 2016:

‘My order is to shoot to kill you. I don’t care about human rights, you better believe me’,” Fisher added. “ The Philippines is facing a growing chorus of international concern at the human cost of President Duterte’s murderous ‘war on drugs’,” he noted. “The government’s denial and def lection of criticism shows it has no intention of complying with its international obligations. The UNHRC should establish an international inquiry and, if killings without accountability continue, reconsider the Philippines’s council membership,” Fisher stressed.

EU parliamentarian calls for end to killings

THE Philippine UPR Watch delegation met with members of the European Parliament (MEPs) on Monday to seek support for a just and lasting peace, and galvanize universal condemnation for extrajudicial killings under the Duterte administration. Francesco Giorji, attending on behalf of Pier Antonio Panzeri, chairman of the European Parliament Subcommitee for Human Rights, assured the UPR Watch delegation of their support for the group’s calls for a stop to all summary killings. Giorji was accompanied by other

members of the subcommittee secretariat in separate meetings that were held at the MEP offices. MEP Estefan Eck of Germany said he will definitely relay the UPR Watch’s message to his colleagues at the Delegation for the Relations with the Lands of Southeast Asia and the Union of Southeast Asian states. An independent, Eck belongs to the Confederal Group of the United European Left-Nordic Green Left. Ma r ie C h r i st i ne Verg i at of France expressed her complete agreement that genuine peace in the country cannot be achieved unless the roots of the armed conflict in the Philippines are resolved. While acknowledging the high degree of difficulty of being a humanrights defender in the Philippines, she wished everyone a productive session in Geneva and thanked the delegation for sharing their views with the European Parliament. The Philippine UPR Watch delegation is in Europe for the Third Cycle of the UN Universal Periodic Review of Human Rights in the Philippines held on May 8 in Geneva, where Sen. Alan Peter S. Cayetano delivered the Philippine government’s report on the implementation of recommendations made during the previous UPR in 2012.

Economy

A4 Wednesday, May 10, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

Meralco slashes May power rates

T

By Lenie Lectura

@llectura

he Manila Electric Co. (Meralco) announced on Tuesday a P0.29-per-kilowatt-hour (kWh) reduction in electricity rates this month, mainly on the account of lower generation charge. T he dow nward adjustment brings this month’s overall rate to P9.60 per kWh, P0.29 per kWh lower from last month’s rate of P9.89 per kWh. A typical residential household with a monthly consumption of 200 kWh will enjoy an equivalent of P58 decrease in total bill. The rate slash this month is mostly due to the downward move-

ment in the generation charge. Overall generation charge decreased this May by P0.2126 per kWh, from P5.0965 per kWh in April to P4.8839 per kWh for this month, inclusive of the last installment of the incremental liquid fuel cost due to the Malampaya maintenance shutdown from January 28 to February 16, 2017. Contributing to the down-

₧9.60/kWh This month’s overall rate, which is P0.29 per kWh lower from last month’s rate of P9.89 per kWh. Meralco attributed the reduction to lower generation charge.

ward movement is the decrease in the cost of power sourced from independent power producers (IPPs) and power-supply agreements (PSAs). The utility firm noted a P0.87-perkWh decrease in the cost of power sourced from IPPs and the P0.14per-kWh decrease in PSA prices. The shares of IPPs and PSA purchases to Meralco’s total requirements are 38.5 percent and 40.6 percent, respectively. On the other hand, there was

an increase of P0.68 per kWh in power supplied through the Wholesale Electricity Spot Market (WESM) due to plant outages and higher power demand in Luzon. The share of WESM this month stood at 20.9 percent. This month there was a slight increase of P0.02 per kWh in the transmission charge of residential customers, while taxes and other charges went down by a combined amount of around P0.10 per kWh. Meralco’s distribution, supply and metering charges, meanwhile, have remained unchanged for 22 months, after these registered reductions in July 2015. Meralco reiterated it does not earn from the pass-through charges, such as the generation and transmission charges. Payment for the generation charge goes to the power suppliers, while payment for the transmission charge goes to the National Grid Corporation of the Philippines.

news@businessmirror.com.ph

Export drop blamed on sluggish Q1 cargo-volume growth in ports By Lorenz S. Marasigan @lorenzmarasigan

N

O thanks to a significant drop in export volumes and the critical developments clouting the local mining industry, traffic at the ports of the Philippines grew at a slower pace during the first quarter of 2017, the chief of the port regulator said on Tuesday. Data from the Philippine Ports Authority (PPA) showed cargo volume for the first quarter of the year increased by 4.15 percent to 54.298 million metric tons (mmt), from 52.133 mmt in the same period the year prior. “The healthy economic performance explains the sustained robust operations of Philippine ports at large,” PPA General Manager Jay Daniel R. Santiago said. This, however, is slower compared to the 8- percent growth in volume in 2016. “The slower pace is due primarily to the overall decline in export cargo volume, which dropped 8 percent for the first quarter compared to last year,” Santiago said. Domestic cargo volume, likewise, posted positive figures at 23.825 mmt, which is higher by 4.91 percent than the 22.710 mmt registered in 2017, while foreig n cargo volume posted a 3.57-percent increase, from 29.422 mmt in 2016 to 30.473 mmt this year. For the first quarter of 2017, export volume is only at 9.04 mmt, compared to the 9.78 mmt handled in the same period last year. Container volume, meanwhile, totaled 1.521 million twenty-foot equivalent units (TEUs), which is 4.08 percent higher than the 1.461 million TEUs handled last year.

4.15%

The increase in cargo volume in Philippine ports to 54.298 MMT in the first quarter of the year, from 52.133 MMT in the same period the year prior Passenger traffic was almost flat at 15.893 million against the 2016 figure of 15.753 million. The nominal growth was due to the change in the period of the Holy Week commemoration, while the reliance by the sea-traveling public on roll-on, roll-off vessels, fastcraft and motorized bancas as primary mode of transportation for domestic interisland connectivity remained as the primary reason in passenger traffic. Vessel calls, on the other hand, fell by 1.59 percent to 103,499 calls, from 105,174 calls last year, wherein domestic vessels recorded most of the posted decrease. The reduced vessel traffic was a result of successive cancellation of trips due to inclement weather by the Philippine Coast Guard and the routine maintenance of passenger vessels that limited the number of trips. In terms of productivity, particularly the Manila Ports that handled some 85 percent of the total cargo volume to and from the Philippines remain very healthy, with a combined yard utilization of 55 percent, with berth occupancy rate of 61 percent and quay crane productivity of 25 moves an hour per crane.

MGB chief ‘sidelined’ by Lopez pushes for responsible mining

U

Boosting farm tourism

Sen. Cynthia A. Villar, chairman of the Senate Committee on Agriculture and Food, views the directory summarizing farm-tourism destinations in the country, following simple ceremonies on Monday on the 2nd floor of the Senate Building in Pasay City. PNA/Avito C. Dalan

Velasco: Dam projects assure Metro Manila of ample water supply in next 25 to 50 years

I

F the grand plan will push through, Metro Manila and its nearby provinces will be assured of safe, clean, affordable and sustainable water in the next 25 to 50 years with the possible implementation of the long-overdue flagship dam projects, namely, Kaliwa and Laiban, to include the rehabilitation of the Wawa Dam under the Duterte administration. This was disclosed by Metropolitan Waterworks and Sewerage System (MWSS) Administrator Reynaldo V. Velasco at the recent book launching of the 15th year commemorative book of fhe Ramos Peace and Development Foundation (RPDEV) graced by former President Fidel V. Ramos and other top government officials and leaders in the water industry. Velasco assured the stakeholders “the new MWSS Board of Trustees, under the administration of President Duterte, will deliver the needed dam projects long started and stalled during FVR presidency to ensure adequate, safe, potable, affordable and sustainable water supply for Metro Manila and the adjoining provinces serviced by MWSS.” Describing the privatization of MWSS as “a master stroke of a genius” by the Ramos administration, Velasco revealed that MWSS has achieved a total serviced area at 96 percent, as well as reduced unaccounted-for water at 10.6 percent by Manila Water and 32 percent by Maynilad. “Another bright spot of the successful legal framework of the PPP between MWSS and concessionaires was the opening of new opportunities beyond borders. These two water partners have shared their best practices to other parts of the country and also our Asean neighbors, like Vietnam, Myanmar, Indonesia and Cambodia, some—I understand—with your blessings and support,” Velasco told Ramos.

ndersecretary for Mining Mario Luis J. Jacinto, the concurrent director of the Mines and Geosciences Bureau (MGB), on Tuesday said he is optimistic on working with retired Gen. Roy Cimatu following his appointment as Department of Environment and Natural Resources (DENR) secretary. “We will continue the things we need to do here [at MGB],” Jacinto told the BusinessMirror in a telephone interview, adding he believes in the wisdom of President Duterte’s appointment of Cimatu, a former chief of staff of the Armed Forces, and vowed to work with the new DENR chief. “I’ve known General Cimatu when he was the AFP chief of staff [when] I was in Mindanao. But I am not sure if he’ll remember me,” Jacinto said. An appointee of the current administration, Jacinto was reportedly “sidelined” by former Secretary Regina Paz L. Lopez, whose hands-on policy led to the closure or suspension of 28 large-scale mines and the cancellation of 75 Mineral Production Sharing Agreements (MPSAs) plus the Financial and/or Technical Assistance Agreement of the multi-billiondollar Tampakan-Copper Gold Project. Days before Lopez’s appointment was rejected by the bicameral Commission on Appointments, the feisty former DENR chief declared a policy to ban prospective openpit mines. But even as Lopez has been taken out of the picture, Jacinto said erring mining companies that fail environmental standards are not yet off the hook.

He said the DENR-MGB will be strict in enforcing the Philippine Mining Act of 1995 to ensure that only responsible miners will be allowed to operate. Irresponsible mining, he said, will not be tolerated and erring companies still face possible closure. “Once we close the mine, we will close it for good,” Jacinto vowed. The review of the controversial Executive Order (EO) 79, which allowed several mining companies to expand their mining-tenements review is ongoing, will push through, he added. “It will be part of the review process. What we are going to do is review EO 79 and will make the recommendation for policy change, if necessary,” Jacinto said. Section 7 of the implementing rules and regulation of EO 79 allowed mining companies to expand their areas outside the regular process of expanding MPSA acquisition. Recent findings showed 16 mining companies were able to expand their mining tenements through an amendment of their MPSAs. The amended MPSA annexed certain areas covered by another MPSA application or exploration permit. The mechanism allowed the MPSA areas to expand by as much as 35,000 hectares, despite the moratorium on new mining projects and processing of mining permits following the signing in July 2012 of EO 79 by former President Benigno S. Aquino III. Ironically, records show that most of the expansion took place at the homestretch of Aquino’s term in the late-2015 and early 2016. Jonathan L. Mayuga

www.businessmirror.com.ph

BusinessMirror

Wednesday, May 10, 2017 A5

BM-MAY 10 & 17, 2017

A6

The World BusinessMirror

Wednesday, May 10, 2017

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

Syria rejects foreign forces in safe zones

B

EIRUT—Syria on Monday dismissed the idea of foreign forces patrolling four so-called deescalation zones that are to be established under a deal struck by Russia, Iran and Turkey, suggesting Damascus would agree only to Russian “military police” who are already on the ground.

Syria planned to abide by the agreement signed in Kazakhstan last week, Foreign Minister Walid al-Moallem told reporters in the Syrian capital, but he cautioned it was “premature” to say whether the deal would succeed. “There will be no presence by any international forces supervised by the United Nations,” al-Moallem said. “The Russian guarantor has clarified that there will be military police and observation centers.” Though he did not specify who the military police would be, he appeared to be referring to Russian observers already in Syria. Al-Moallem also vowed Syrian government forces would respond “decisively” to any violation by the rebels. “There are still logistical details that will be discussed in Damascus and we will see the extent of

commitment to this agreement,” al-Moallem said.

De-escalation

ON another diplomatic track, the United Nations’s Syria envoy, Staffan de Mistura, announced plans to reconvene talks in Geneva between representatives of Syrian President Basharal al-Assad’s administration and opposition leaders on May 16. A statement from de Mistura’s office late Monday said he hoped the agreement struck in Kazakhstan would be fully implemented, to achieve “significant de-escalation in violence” and help underpin the political talks in the Swiss city. The cease-fire deal went into effect over the weekend, bringing a general reduction in violence, but clashes continued, particularly in central Syria. There are still questions about how the

agreement will be enforced. Russia and Iran, which support Assad, and Turkey, which backs the rebels, may deploy armed forces to secure the four so-called de-escalation zones, in what would amount to unprecedented coordination between the three regional powers. The UN Security Council president says Russia wants a vote early this week on a resolution supporting the deal. Uruguay’s Ambassador Elbio Rosselli told reporters “there are consultations ongoing” on the text. Several other council diplomats said a vote on Monday or Tuesday— as Moscow is seeking—is highly unlikely, explaining that they need details on the zones. The US is not party to the deescalation agreement.

Proposal

US Defense Secretary Jim Mattis said the US would take a close look at the proposal for “safe zones” in Syria, but he said the plan poses many unanswered questions, including whether it would be effective. “We’ll look at the proposal, see if it can work,” Mattis told reporters traveling with him to Copenhagen, where he will attend a meeting of the US-led coalition battling the Islamic State group. “Will it affect the fight against ISIS? I think the international community is united in the sense of wanting to see ISIS put on its back foot.” A l-Moallem, Syria’s foreign

minister, said he hopes the agreement will, as a start, achieve a separation between Syrian armed opposition groups and extremist groups, such as al-Qaeda, saying the former must force the latter to leave the de-escalation zones. But even if the agreement is enforced, it is unlikely to end the conflict. Despite several rounds of UN-mediated negotiations in Geneva, the government and opposition remain at odds over Assad’s future role in Syria. Al-Moallem suggested government forces’ next target is Deir el-Zour, where IS militants are besieging parts of the eastern city that are under government control and are home to tens of thousands of people. He said the government aims to regain control of all of Syria, adding that areas bordering Iraq will be a priority.

Agreements

AL-MOALLEM said the government’s alternative to stalled negotiations has been the implementation of “reconciliation agreements” around the country. Such agreements have seen the surrender of rebel-held areas to government forces and their allies,

often after a prolonged period of siege, in exchange for safe relocation to opposition-held areas elsewhere in the country. As the foreign minister spoke to reporters, hundreds of rebels and their families left aboard buses from a besieged opposition-held neighborhood of Damascus for rebel-held areas in the country’s north, according to state TV and opposition activists. The Britain-based Syrian Observatory for Human Rights said around 1,500 people were expected to leave the Damascus neighborhood of Barzeh on Monday, and more in the coming weeks. Syrian state TV said some 60 buses and ambulances of the Syrian Arab Red Crescent were on hand for the evacuations. Barzeh came under siege last month, after government forces captured a major road near the area, separating it from rebelheld eastern suburbs of Damascus. Tens of thousands of people living in besieged areas around Damascus, Homs and Aleppo— Syria’s largest city—have surrendered under similar agreements in recent months, agreeing to relocate in what critics have said amounts to forced displacement. AP

briefs

German exports, imports hit record heights in March

BERLIN—Germany statistics agency says the country exported more goods in March than in any previous month, though imports also rose to reach a record. The Federal Statistical Office reported on Tuesday that exports were up 0.4 percent over February, while imports increased 2.4 percent, according to figures adjusted for seasonal and calendar variations. Exports totaled €118.2 billion ($129.3 billion), while imports reached €92.9 billion for a trade surplus of €25.4 billion. AP

Spain: Migrants charge border fence; 6 injured

MADRID—Spanish officials say about 300 migrants have tried to scramble across the 6-meter border fence separating the north African enclave city Melilla from Morocco, with many throwing stones and other objects at the police. Melilla’s Interior Ministry office say most of the migrants have been pushed back by Spanish and Moroccan police, but about 100 managed to enter the city. It said three officers and three migrants were treated for injuries following Tuesday’s incident. AP

Iranian state TV: Death toll in mine explosion rises to 42

TEHRAN, Iran—Iranian state TV says search crews have found seven more bodies at the site of a coal mine explosion last week, bringing the total death toll in the incident to 42. Tuesday’s report quotes Reza Morovati, an official in the Golestan government, as saying the bodies have been taken to “forensics experts for identification”. The explosion last Wednesday has been blamed on methane gas that had accumulated in the Zemestanyurt mine, which employs over 500 workers. AP

California seen to end ban on communists in govt jobs

SACR AMENTO, California— Being a communist would no longer be a fireable offense for California government employees under a bill passed on Monday by the state Assembly. Lawmakers narrowly approved the bill to repeal part of a law enacted during the Red Scare of the 1940s and 1950s, when fear that communists were trying to infiltrate and overthrow the US government was rampant. The bill now goes to the Senate. It would eliminate part of the law that allows public employees to be fired for being a member of the Communist Party. AP

Indian tycoon Vijay Mallya guilty of disobeying top court

NEW DELHI—India’s top court on Tuesday found wanted tycoon Vijay Mallya guilty of disobeying its order barring him from transferring $40 million to his children. Mallya, who f led to London last year, is wanted in India on charges of money laundering and bank demands that he pay back more than a billion dollars in loans extended to his now-defunct airline. India has been seeking his extradition over the charges, which Mallya denies. AP

Russia’s V-Day parade marred by thick clouds

MOSCOW—Thick clouds have forced the cancellation of the traditional dramatic conclusion to Russia’s annual Victory Day parade on Red Square—the roaring flyover by scores of military aircraft. The parade marking the anniversary of Nazi Germany’s surrender is a highly ritualized display and marked changes in its order are unusual. The Defense Ministry had said cloud-seeding planes would be deployed to disperse the overcast skies on Tuesday above Moscow. That has been done previously when poor weather threatened. AP

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

The World BusinessMirror

Wednesday, May 10, 2017

A7

Clash over school sex assaults: Did they happen?

E

STILL, South Carolina—The numbers are horrific: At least four students, ages 11 to 14, victimized by as many as 30 kids in one of the largest single cases of sexual assault reported on US school grounds. And yet four years later, it’s as if nothing happened. The sheriff’s office investigated and filed an incident report, but eventually stopped asking questions after multiple fruitless attempts to discuss the case with a prosecutor. Estill Middle School said it couldn’t determine what, if anything, happened in the gym bathroom. The former school principal couldn’t even recall the incident when asked about it. But to the grandmother of two girls who claimed they were forced by classmates to perform oral sex, there is no doubt that something terrible happened. She filed a lawsuit against the school district for failing to keep kids safe from harm. “They were at a schoolhouse, where they were supposed to be protecting my kids,” she said. In a yearlong investigation, The Associated Press (AP) uncovered about 17,000 official reports of sex assaults by students in US elementary and secondary schools over a four-year period. That tally is an undercount because such attacks are widely underreported, and states vary in their efforts to track, classify and catalog sexual violence by students. AP’s analysis was based on state education records and supplemented by federal crime data, where the 2013 incident reported at Estill Middle School stood out. Boys and girls ranging from 11 to 16 were sneaking into the gym bathroom to engage in sexual activity, according to the sheriff ’s office investigative report, which classified the conduct as forcible rape, forcible fondling and disorderly conduct. “The teachers, staff and administration regularly failed to supervise students in the gym and regularly allowed students of the opposite sex to enter the bathroom with each other,” the grandmother’s suit alleges, claiming the school demonstrated “gross negligence” by allowing, or at least turning a blind eye to, student sex on school grounds.

‘A he-said, she-said’

IN a March 2013 incident report, Deputy Quintina Orr of the Hampton County Sheriff ’s Office said she was initially called in to investigate a bullying incident involv ing several si xth-grade girls, who told her they’d seen the others having sex in the bathroom over many months. Orr, the school’s resource officer, also reported the vice principal said that on February 22 she saw “several males running out of the girls restroom inside the gym” during fifth period and asked Orr to investigate further. Orr spoke with everyone involved, she told the AP in a recent interview. Many of the kids said they’d engaged in sexual activity in the bathroom, or that they’d seen others doing it. No one told her explicitly that they were forced, Orr said, but one girl gave her pause: She seemed to have a developmental disability. Because of the ages involved— and the kids’ legal inability to consent—Orr reported that what happened inside the bathroom was, at worst, forcible rape. She listed five victims: two 11-year-olds, two 12-year-olds and a 14-year-old. Twenty-nine boys and girls were listed as potential perpetrators, including some who she said stood watch outside the

bathroom to warn if adults approached. (The numbers in her report differ slightly from the federal data, which included four victims and 30 culprits.) Four years later, Orr thinks she was wrong to use the word “rape”, though she noted she never got any guidance from the prosecutor’s office on the correct charge. In hindsight, “sex crimes, sexual misconduct” would have been a more appropriate description, she said. Sitting behind his desk at the Hampton County Sheriff ’s Office, Lt. Perry Singleton agrees. He said Orr was a good law officer, but that she used the wrong terminology and that “sexual assault” would have been better. In the end, it didn’t matter. Singleton said he and Or r pursued the case with a prosecutor, several months after the incident and presented her with the students’ statements. But they never heard anything. Orr pressed on, her report showed. She tried calling the prosecutor on her cellphone and at her office several times over the next month. She noted in her report that the rape crisis center, where some of the girls had been referred, wanted to know why no charges had yet been filed. When she approached Singleton again, he told her “not to worry about it.” “It was a he-said, she-said,” Singleton told the AP. “ There was nobody who said, ‘I did this.’ It was just, ‘I saw him do this, I saw her doing that.’ There was nothing concrete, and we would have had a problem if that case went to court.” Duffy Stone, Hampton County’s chief prosecutor, said his office didn’t pursue criminal charges because the students’ statements were wildly inconsistent and their ages made it almost impossible to determine who would be considered a victim and who a perpetrator. Under state law, if both children were under 14, neither could legally consent to sex. Asked if any of the children said they were forced into sex, Stone said no, “none that we could prove.” The principal at the time, Synetria Hawkins, is now an assistant at the school. Orr wrote in her report that when Hawkins was asked whether she had time to review video footage of the gym on the day of the February 22 incident to match it to student statements, she said no. When contacted by AP, Hawkins said she did not remember the sheriff ’s office investigation. She did not return multiple messages left on her school voicemail, cellphone and at her home seeking further comment. It is not clear to what extent the school itself investigated, as required under federal law and US Education Department guidelines. Orr’s report noted that “a few parent interviews were conducted” along with plans for further meetings with students and parents. In a statement to the AP, the school district said it interviewed the students and their parents or guardians but that no one was disciplined “due to inconsistent stories among the students allegedly involved and a lack of evidence indicating that the alleged behavior occurred.” Ralph Smiley, an attorney representing Hampton County District 2, said he could not provide

In this February 1 photo, a bicyclist passes a mural along the town’s business district in Estill, South Carolina. Estill lies in the heart of South Carolina’s Low Country. Industry, once reliant on cotton, rice and indigo, long ago died. AP

any details on the school’s investigation and declined to comment on whether any policies were changed as a result of the incident. In its response to the grandmot her’s l awsu it, t he sc hool m a i nt a i ned it d id not h i ng wrong, and suggested that if the girls suffered, they were “comparatively negligent in instituting, engaging in, and continuing the conduct which resulted in [their] injuries.”

Struggles in the ‘Corridor of Shame’

“THE school told us it was the girls’ fault,” the grandmother said, lips curled, “that they wanted it.” She bristles at assertions that the girls were willing participants. The girls weren’t perfect, she said. They made mistakes just like anybody. But at 12 years old, they should have never been put in this position. She spoke on condition that her name not be used, because the girls and her other grandchildren still go to district schools. In a town this size, word gets around. She lives in a tiny trailer in a town 20 minutes outside of Estill where the walls shake each time a train roars by. At home, she could watch the girls. But at school, she trusted someone else to look after them. “Why weren’t they supervised?” she said. “What will happen to other children?” Estill lies in the heart of South Carolina’s Low Country. Its population, now 2,000, dwindled by nearly 16 percent between 2000 and 2010. Weather-worn homes are crumbling and storefronts are boarded up. Industry here died long ago. Most parents have no choice but to send their children to the public schools. Ninety-eight percent of students at Estill Middle a re A f r ic a n- A mer ic a n ; more than 90 percent receive free or reduced lunch. Decades ago, the school district joined others in suing the state, arguing that funding reliant on property taxes made it impossible for rural schools in this economically depleted region to provide even a “minimally adequate” education for their mostly poor students.

In 2014 the state Supreme Court ruled in their favor. Bud Ferillo, who made a documentary about these schools in 2005 and now runs a program about race and inequality at the University of South Carolina, said that the crumbling buildings and dismal learning conditions that characterized the “Corridor of Shame” schools were only part of the problem. “Everything from violence to inappropriate sexual behavior can happen when nobody’s looking,” he said. “I heard about it a lot from both administrators and teachers, and even from some parents who knew that they were sending their children each day into dangerous territor y. T hey believed they had little or no choice if they wanted their kids to get any kind of education.” This was not the first time Estill faced allegations that students were being victimized—and that little was done to stop it. The sheriff ’s deputy that Orr replaced as school resource officer, Larry Heyward, was convicted last year of sexually assaulting a student at the school and sentenced to 15 years in prison. Hey ward ’s victim, now 19, wonders why his teachers never asked any questions when week after week, month after month, Hey ward would pull him out of class and into his office, where much of the abuse occurred. Or why nobody said anything when Hey ward choked or Tased the boy in the hallway, in full view of students, teachers and administrative staff. “I just don’t understand why me and two other boys were sent to his office ever y week and nobody ever noticed that. Nobody bothered to notice,” he said. The AP is not identif ying him because it does not name victims of sexual abuse. Orr believes the Heyward case affected students in the school, leading them to act out sexually. In its wake, she said, the school district failed to give students counseling or training on “how to report what’s wrong and what’s right.” Lara Hart, an attorney who represented Hampton County District

2 in the lawsuit against the state, noted that children sometimes are harmed on campus, even at the most affluent schools. “Children are hurt because children are hurt everywhere, for a variety of reasons. We try to protect them as much as we can,” she said. “I feel a lot for Hampton 2. They do the very best they can but they don’t have much. These children have a lot of needs, and they can’t get a leg up. It’s a hard, hard job and they need more support. At the end of the day, it’s the children who are suffering.” But the grandmother insists that school officials could have done more, worked harder to figure out why the girls were left alone in the gym. Her girls, she said, are still suffering. One went wild: She started acting out at school, so badly that she was sent for a stint at juvenile detention. The other

went silent: She stopped seeing friends, and asked to be homeschooled. Neither wants to talk about it ever again, not even to the attorneys trying to assist in a civil suit the grandmother filed against the district. T he grandmother said she isn’t after money. She just wants to make sure her granddaughters—now in high school—and her other grandchildren will be safe at school. “How could you let that happen to a 12-year-old child?” said the girls’ aunt, standing at the grandmother’s bedside with a hand on her shoulder. “How c ou ld you let t hem go f rom ou r home, where we’re protect ing t hem, to t he sc hool a n d l e t t h a t h a p p e n? H o w cou ld you h ave let t h at h ap pen when we put ou r c h i ld i n your ca re? How cou ld you have let t h at h appen? ” AP

A8

The Regions BusinessMirror

Wednesday, May 10, 2017 • Editor: Efleda P. Campos

news@businessmirror.com.ph

DA okays P20.13-B infra projects under PRDP

T

₧3-billion infrastructure plan bared for Mabalacat

By Jasper Emmanuel Y. Arcalas @jearcalas

HE Department of Agriculture (DA) said it approved P20.13 billion worth of infrastructure and enterprise development subprojects, aiming to hike production of high-value crops in the country, under the Philippine Rural Development Project (PRDP). Agriculture Secretary Emmanuel F. Piñol said that as of May 5, the PRDP-approved various infrastructure and enterprise development subprojects supporting the local production of coconut, abaca, banana, rubber and coffee. “For infrastructure development, the project has approved 372 subprojects worth P19.3 billion. The enterprise-development component has 479 approved subprojects with a total cost of P829.97 million,” Piñol said in a statement on May 9. Piñol said most of the approved infrastructure subprojects are farmto-market roads (FMRs) with a total length of 1,642 kilometers. The 225 FMR projects cost about P17.82 billion or 89 percent of the entire infrastructure portfolio, which is

expected to benefit at least 316,000 households across the country, Piñol said. “We have already completed 31 FMRs stretching 105 kilometers, while 194 FMRs equivalent to 1,537 kilometers are at various stages of implementation and procurement,” Piñol said. The remaining P1.48 billion worth of approved infrastructuredevelopment subprojects include, among others, communal irrigation systems, potable water systems and solar dryers and facilities of enterprise-development subprojects, such as warehouses and processing centers, Piñol said. The DA chief said under the PRDP’s enterprise-development component, at least 678 proponent

By Ashley Manabat Correspondent

Piñol

groups composed of farmers or fishers associations and cooperatives have benefitted from the approved subprojects. “This represents 90,775 individual farmer beneficiaries, who are members of the groups. This does not include nonmembers who will benefit from our interventions,” Piñol said. There are 374 infrastructure a nd enter pr i se - de ve lopment subprojects amounting to P24.163 billion under the pipeline, he said. “Aside from the total approved infrastructure subprojects, there are 290 pipelined subprojects amounting to P23.24 billion, which the department hopes will be covered by its proposal for the PRDP’s expansion,” he said. “The enterprise-development component reported it has 84 pipelined subprojects worth P923.58 million in its portfolio,” he said.

M

A B A L AC AT C I T Y— A five-year development plan worth more than P3 billion was announced by Mayor Ma r ino Mora les here on Monday. Morales said the infrastructure-development plan will have four major components, with the majority to be finished by 2019. Most of the projects will be built under the Public-Private Partnership (PPP) Program with Alloy MTD Philippines Inc. (Ampi), Morales said. The first component is the Mabalacat Bus Terminal (MBT) in Barangay Dau that will undergo a major renovation to turn it into a first-class bus terminal, the mayor said. The new MBT will cost P500 million and will be done under the PPP program with Ampi, as well as a joint-venture agreement with the Castro family. The second component is the public market that will be reconstructed into a four-story building under the PPP with Ampi, he said. The new public market will

be worth P200 million with an underground parking. The third component is the Mabalacat City College in Barangay Dolores, which will be leveled to the MacArthur Highway, Mora les sa id. T he c it y gover nment w i l l f inance the improvement, he added. The fourth component is the Techno-Economic Hub that will be put up in a 12-hectare lot, owned by property developer Willie Tan of Hausland Development Corp., at the north eastern portion of the city in Barangays Cacutud and Tabun, he said. The fourth is the biggest and most ambitious project worth P2.5 billion, Morales said, adding this will fulfill his dream of putting up a “Makati north of Manila” someday. The Techo-Economic Hub will have a commercial center, a transport terminal, business-process outsourcing buildings, hospital, leisure park and other business projects. Meanwhile, Morales said the Dau-Clark gate at the Clark-Mabalacat-Angeles Road (CMAR) will be opened soon leading to the newly paved, widened and lighted Quezon Drive in Barangay

Dau toward the MacArthur Highway under a tripartite agreement with the Clark Development Corp. (CDC), the city government and Barangay Dau. The mayor said this will help ease traffic along the busy MacArthur Highway. Morales also said the MabigaClark gate at the CMAR will also be opened, passing through Mabiga Island Resort in the village. This will provide an alternate route to motorists going to the Clark Freeport Zone (CFZ), he said. The San Joaquin-Clark gate and road extension at the CMAR will also be started this year, Morales said. The project is billed at P130 million and will have a bridge component and funded by the CDC. Morales said the road-interconnecting ramp from Barangay Dolores to Panday Pira Street in Clark will also be constructed as part of the city’s development plan. With the construction of the interconnecting ramp finished, motorists will no longer have to traverse the heavily congested MacArthur Highway in the city proper and instead go directly to the CFZ.

IT/BPM companies to gather at 2017 Transformation Summit in Cebu

C

EBU City is set to host the 2017 Transformation Summit on May 22 in Cebu City. The summit is dubbed as the main annual information technology/ business-process management (IT/ BPM) event. IT/BPM players will gather to learn about the future of the industry during the event organized by the Cebu Educational Development Foundation for Information Technology (Cedfit). Previously known as the Cebu Digital Transformation Summit, participants will have the opportunity to listen to IT/BPM industry experts and executives. Among them are Raoul Teh, CEO of JPMorgan Chase & Co. Philippine Global Service Center, who will talk on work force-capability building; JP Palpallatoc, digital lead of Accenture Philippine Delivery Center, who will speak about the Tech Vision 2017; and Chris Pennington of Fitch Learning UK,who will discuss

cyber crime and cyber security. Jonathan De Luzuriaga of the IT and Business Process Association of the Philippines (IBPAP) will give updates on the IT/BPM Roadmap 2022. Also in attendance are GMRMegawide’s Chief Executive Advisor Andrew Harrison and Cebu City Mayor Tomas Osmeña. Topics will be followed up through a panel discussion with industry executives, consultants, university deans and key government representatives. The 2017 Transformation Summit, which Cedfit is independently organizing, is the result of Cedfit’s evolution as a full-time industry association starting this year. Cedfit said the IT/BPM industry in Cebu has grown exponentially, and it is high time to have an industry association. The upcoming summit is aligned with Cedfit’s mission to drive Cebu’s sustainable growth toward highervalue services through proactive

intervention in talent development and assessment, strong academeindustry ecosystem inter-linkages, active support in industry development and promotions and strategic collaborations and plans. Cedfit will also be inviting the summit delegates to join the third Cebu IT/BPM Recognition Night on the same day at the Cebu Provincial Capitol. The 2017 Transformation Summit rate is P2,000 for members of the academe, information and communications technology councils and local government units; P2,500 for Cedfit members; and P3,500 for nonCedfit members. The fee includes a conference kit, meals and snacks at the plenary session. The on-site rate will be different at P2,500 for the academe, information and communication technology councils and local government units; P3,000 for Cedfit members; and P4,000 for non-Cedfit members. Charles R. Pepito

PSA in CL warns against fake documents

C

ITY OF SAN FERNANDO—An average of 10 spurious documents daily are uncovered by the Philippine Statistics Authority (PSA) regional office here, lending credence that fixers in cahoots with forgers and counterfeiters are now operating with impunity within the vicinity of the government center in this city. This was disclosed by Edgardo G. Pare, PSA regional director, at his office here on Monday. “They approach fakers,” Pare said about people who want to fast-track corrections on their documents. “They usually end up with more problems.” “The fake documents used to be made in Recto in Manila, but now forgers abound even in the vicinity of this government center,” he said. Pare said PSA security papers are being stolen and used by forgers to fake documents. “We process an average of 5,000 documents a day during peak months like today,” he said, adding they receive a lot of complaints. “But even if we add computers and personnel, it’s still the same, because there is a process we follow,” he said. The peak months usually start in

March when students graduate, and in April, when fresh graduates start looking for jobs, and then May and June, Pare said. The lean months are usually from October to December when the PSA averages around 3,000 documents processed daily, he added. “We have about 170 million documents in our date base,” Pare said. The PSA regional office has eight cashiers, while other cashiers are assigned to partners like SM City malls and Savemore, which have longer processing dates of more than a week before the documents are released, he said. Pare also said the PSA has local government unit partners like Porac, Arayat and Lubao in Pampanga and Capas in Tarlac, where people can go to get their birth certificates and other documents. “These are called Batch Request Systems,” he said. Pare said people should avoid travel agencies for the processing of their documents because they charge higher rates. The PSA regional office services mostly Pampanga, Tarlac and Bulacan residents, while Olongapo City and

Cabanatuan City, which are also in Region 3, have their separate processing centers. Pare said the proper thing to do for those seeking corrections in their documents like a misspelled name in their birth certificate is to petition the municipal-civil registrar where they were born. Then, they undergo a process, which usually takes two months. In case of multiple entries, Pare said the BREN-Link will appear. Birth Reference Number Linking or BRENlinking is a process of linking two or more vital-event records for the same event and person. This consequently allows the issuance of only one record per person (who has multiple registrations or whose record has been annotated) after verification. “And then it will be the municipal civil registrar who will submit the corrections to the PSA, which will be annotated in the document,” he said. “The only things that cannot be corrected are the citizenship and the legitimation status of a person,” he said. “If you were born illegitimate, you cannot become a legitimate child, because this is specified in the public code.” Ashley Manabat

ExportUnlimited BusinessMirror

Editor: Efleda P. Campos • Wednesday, May 10, 2017

A9

DTI-EMB, PHL companies conduct IT-BPM seminar in Tokyo

T

By Agnes Legaspi | Assistant Director, DTI-EMB

OKYO, Japan—The Philippine team, composed of the information and communications technology (ICT) and business-process management (BPM) companies, on Tuesday organized an IT–BPM seminar and prearranged a business-to-business (B2B) meeting in Osaki Bright Core, Tokyo, Japan, as part of the Outbound Business Matching Mission for the IT-BPM service.

The event was part of the Philippine participation at the 26th Software Development Expo (Sodec 2017) in Tokyo Big Sight, Japan. The IT-BPM seminar was participated in by 78 Japanese counterparts representing CEOs, operations managers, decision makers and industry influencers in the area of ICT and outsourcing. The event was graced by Deputy Chief of Mission Eduardo M.R. Menez, who opened the seminar. The Department of Trade and Industry’s Export Marketing Bureau (DTI-EMB) was represented by this year’s head of mission, Assistant Director Agnes Legaspi and the Philippine Trade and Investment Center in Tokyo headed by DTI Senior Official Commercial Counselor Bernardita Mathay. The DTI-EMB and PTIC Tokyo

organized the mission jointly with industry and government and partners, namely, the Philippine Software Industry Association led by Jonathan Luzuriaga and the Department of Information and Communications Technology Undersecretary Monchito Ibrahim. Legaspi welcomed the participants, giving emphasis on maximizing the time to network, negotiate and explore business opportunities during the one-to-one B2B and gather relevant information about the companies’ services and the Japanese clients’ requirements. She concluded her message with a very positive hope that full engagement of the Philippine delegation and their counterparts in this seminar and the B2B matching will further pave the way in generating more businesses and

deeper partnerships with Japan. A testimonial of the Philippine participants’ expertise was delivered by Shingo Tsuboi, president and CEO of Intelligent Business Solutions. Ibrahim provided a comprehensive talk and presentation on the topic, “Enabling digital opportunities and Innovations in the Philippines”. Meanwhile, Luzuriaga delivered a talk on this year’s Philippine theme “Go Global, Go Digital, Cocreate with the Philippines”. Nine Philippine companies presented their service offerings during the seminar, namely, Exist Software, Pointwest Technologies, Saiff Solutions, Personiv, Advance World Systems, Gulliver Offshore Outsourcing, DTSI, Tsukiden Global Solutions and Cybertech. Sodec is considered one of the most awaited annual and productive international promotion events for the IT-BPM sector. Japan is acknowledged as a major market for the Philippine IT-BPM sector, and as such, the Philippines has brought a team this year composed of various segments of the IT-BPM services not only limited to IT outsourcing, but also includes application development and management, big data, analytics, mobile and social-media platforms, BPM, security component development, cloud solution and other ICT-related functions for businesses. The event aimed to pursue further B2B opportunities and partnerships in the various segments of the IT and BPM industry. In the light of new innovations and technology-driven businesses, participating Philippine

Increasing halal awareness among PHL govt agencies By Kathleen Joyce D. Bondoc

Office of the Undersecretary for Trade and Investments Promotions Group Department of Trade and Industry

A

S the halal export industry continues to grow in the global market, the Philippines is taking steps to advance its own through halal-industry development and promotion among exporters. Eyeing an estimated $2.6trillion global halal market, the Philippine government is upbeat in maximizing opportunities for local halal products and services through various initiatives lined up by the Philippine Halal Export Development and Promotion Board led by Trade Secretary Ramon M. Lopez. To advance awareness of the halal industry, the Department of Trade and Industry (DTI) initiated on April 20 a seminar on halal fundamentals, primarily aimed at advancing awareness among concerned government agencies and authorities at the Crowne Plaza Galleria in Ortigas. “As we take into consideration the economic and cultural aspects of halal, the Halal Export Development and Promotion Board recognizes the

importance of covering all facets of Philippine halal export development and promotion, as such all the details are being covered in order to ensure that Philippine products and services are 100-percent halal certified and all related initiatives are consistently upheld and carried through by all agencies in the government,” Lopez said. Lopez noted that high on President Duterte’s agenda during the recent visit to Gulf countries is the promotion of the growing Philippine halal industry and the potential of increasing trade activities that will provide more job opportunities in the sector. With the passage of Republic Act 10817—also known as Philippine Halal Export Development and Promotion Act of 2016—DTI is geared toward an all-inclusive growth to widen the economic opportunities for the Philippines, and at the same time, strengthen its capabilities to supply the world with quality halal products and services. Promotion of the halal industry will increase the benefits of the Asean economic integration as goods traded in Asean member- countries

upcoming events

MAY 10-12

Compiled by Louise Kaye G. Mendoza DTI-EMB Knowledge Processing Division

Event: Outbound Business Matching Mission: Software and Apps Development Expo (Sodec) To be attended by: AD Agnes Legaspi andd DC Maria Teresa Loring Venue: Tokyo Big Sight, Koto, Japan

MAY 15-17

Event: Asia-Pacific Weeks Berlin 2017 To be attended by: Director Senen M. Perlada

Venue: Berlin, Germany

MAY 19-21

Event: Asia’s Ethnic Food and Ingredients Show: Ifex Philippines Venue: World Trade Center, Pasay City

MAY 23

Time: 1 p.m.-5 p.m. Event: QBO WORQSHOP: Basic Business Law with Disini and Disini Law Office

Venue: QBO Innovation Hub, G/F, DTI International Building, 375 Sen. Gil Puyat Avenue, Makati City

with a burgeoning halal market, such as Malaysia, Indonesia and Brunei Darussalam, would be easier. The seminar also highlighted the importance of understanding halal, both as a business venture and as a component of the Islamic religion and its culture, especially among non-Muslims who are venturing in the halal industry “All channels in the value chain must be able to provide a comprehensive coverage of observance in terms of halal compliance, and must consider that halal is not just a process, but significantly more than ever, a way of life in Islam,” DTI Export Marketing Bureau Director Senen M. Perlada said. The discussions were led by National Commission on Muslim Filipinos (NCMF) Commissioner Analiza G. Flores-Manalang. She discussed essential interventions, such as establishment of warehouses, dressing plants, freezing areas, transportation mechanisms and other facilities as areas of exploration for investors in the sector. Prof. Ishmael Ibrahim also discussed the topic of Halal Dynamics in the country.

DTI-EMB joins PIA in forum on AEC at Tarlac State University

T

ARLAC CITY—The Philippine Information Agency (PIA), in partnership with the Department of Trade and Industry’s Export Marketing Bureau (DTI-EMB) and other government agencies, organized a series of campus fora as part of its Asean Communication Plan. The first leg in the series was held on March 30 at the Tarlac State University, Lucinda Campus, in Tarlac City. The forum focused on the three Asean Community Pillars, namely Asean, Political Security Community (APSC), Asean Economic Community and Asean Socio-Cultural Community. Alfred Kristoffer Guiang of the Department of Foreign Affairs discussed the Asean 2017 Philippine Chairmanship and the APSC Pillar. The Philippines is hosting the Asean’s 50th anniversary this year with the theme “Partnering for Change, Engaging the World”. Justinne Marie D. Santos

AGNES Legaspi (center), Assistant Director of the Department of Trade and Industry’s Export Marketing Bureau, and Maria Teresa Loring (right), Chief of DTI-EMB’s Services Division, listen to a Japanese businessman who visited the EMB booth during the prearranged business-to-business meeting and IT-BPM seminar held in Osaki Bright Core, Tokyo, Japan during the Philippines’s participation at the 26th Software Development Expo (Sodec 2017) in Tokyo Big Sight, Japan.

and Japanese companies are said to be in the right place and the right time to gather today, as mentioned by Legaspi in her message. The Philippines’s consistent market presence in Japan for more than a decade now manifests deepening business relationships between Philippine companies and the Japanese counterparts. The Philippine IT-BPM industry is recognized as the top exportingservices sector in the country. This has positioned the Philippines as

a global player. The Philippines is now highly ranked among top outsourcing destinations in the world. Nine cities of the Philippines made it to the first 100 locations. In the same manner, the Philippines considers Japan as a major partner/market for outsourced services providing significant opportunities in IT and business-process outsourcing, being the thirdlargest IT market in the world. Consistent Philippine participation in Sodec and business matching

every year in more than a decade now has drawn considerable success, many opportunities and invaluable experiences from participating companies. For 2017 it encouraged more companies to join, as represented by the 22 established Philippine IT companies (from 16 participating companies last year). This year, featured companies will again wave their banners in the Philippine Pavilion in Sodec at the Tokyo Big Sight from May 10 to 12 inspired by this year’s theme.

A10 Wednesday, May 10, 2017 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Messy rice situation

T

he summer harvest season for rice is almost coming to an end, but the government has not yet given any indication as to what it intends to do about the buffer stock of the National Food Authority (NFA). The President has instructed his men to ditch importation and prioritize the purchase of locally produced palay.

Members of the NFA Council (NFAC), the interagency body that decides on matters pertaining to rice imports, have faithfully carried out the President’s wishes and have repeatedly thumbed down the NFA’s call to consider importation to increase its stocks. This has been good for rice farmers as the farm-gate price of palay reached nearly P19 per kilogram by the end of April. Data from the Philippine Statistics Authority (PSA) showed that the figure is nearly 6 percent higher than last year’s quotation of P17.96 per kg. The President’s directive and the signal from the NFAC encouraged them to step up their purchase of palay from local farmers. Unfortunately, this also made it difficult for the food agency to compete with private traders and follow the President’s instruction. In preparation for the lean season, which starts in July, the NFA buys rice from local farmers to augment its stocks. These stocks are usually delivered to areas that are deemed vulnerable to natural disasters before June 30. This is not being done on a whim; this is consistent with the NFA’s mandate under Presidential Decree (PD) 4, which created the food agency. It is the NFA’s responsibility to ensure that rice supply and price would be stable by importing, buying palay from farmers and distributing rice to various marketing outlets. But until now, the government has yet to give us a clear picture concerning the rice supply-and-demand situation. Agriculture Secretary Emmanuel F. Piñol said the President has already given his go signal to create a task force that will prevent hoarding and apprehend smugglers. Going by Piñol’s previous statements, the government intends to do this by inspecting all rice warehouses in the country. However, the President has yet to issue the corresponding executive order, so it remains to be seen when the government will actually start its own inventory of rice. As far as the President and his men are concerned, they are clear about one thing—they don’t want to import rice. What they cannot say, however, is how they intend to ensure that the NFA has enough rice stockpiles. Instead of straightforward answers, they argue against the NFA’s role in rice importation and the debts that have piled up over the years. They have forgotten that the law that allowed the agency to import rice and finance this via borrowings has not been amended. And they seem to have overlooked the fact that the lean season is fast approaching. Since 2005

BusinessMirror A broader look at today’s business ✝ Ambassador Antonio L. Cabangon Chua Founder Publisher Editor in Chief Managing Editor Associate Editor News Editor City & Assignments Editor Senior Editors

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

Online Editor Social Media Editor

Ruben M. Cruz Jr. Angel R. Calso

Creative Director Chief Photographer

Eduardo A. Davad Nonilon G. Reyes

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

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

BusinessMirror is published daily by the Philippine Business Daily Mirror 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

Why policy loans should not be reported to CIC Atty. Dennis B. Funa

R

INSURANCE FORUM

epublic Act (RA) 9510, otherwise known as the Credit Information System Act of 2008 (Cisa), established a centralized credit information system. Its declared policy is to “address the need for reliable credit information concerning the credit standing and track record of borrowers” and to “enable financial institutions to reduce their overall credit risk”. To implement this policy, the law established the Credit Information Corp. (CIC) “to receive and consolidate basic credit data”. Pursuant to this law, the CIC issued CIC Circular 2015-01, which classified life insurance companies, mutual benefit associations and other similar entities supervised by the Insurance Commission (IC) as “submitting entities”. Under Section 4.6 of the circular, “the submitting entity shall regularly submit the Basic Credit Data of all its Borrowers contained in its database, file or system, to the CIC not later than on the 5th day of the month and in the form/format and manner prescribed by the CIC.” The IC has, however, maintained that a policy loan is not a reportable transaction. Policy loans are defined by the US National Association of Insurance Commissioners’ (NAIC) Statement of Statutory Accounting Principles

(SAP) 49 as follows: “A policy [or contract] loan shall be defined as a loan to a policyholder, under the provisions of an insurance contract that is secured by the cash surrender value or collateral assignment of the related policy or contract.” In other words, it is a loan against the cash surrender value, at an interest rate determined by the IC. While the main benefit in a life insurance is the death benefit, there a number of benefits and one of them is the availment of the policy loan.

Characterization

“Policy loans are not consumer loans made in the traditional sense— they are more appropriately understood as advances that are features of the whole life-insurance contract. The parameters of the loan are based

Republican death wish

T

By Charles M. Blow | New York Times News Service

he obscene spectacle of House Republicans gathering last week in the Rose Garden to celebrate the House’s passage of a bill that would likely strip insurance coverage from tens of millions of Americans, while simultaneously serving as a massive tax break for the wealthy, had the callous feel of the well-heeled dancing on the poors’ graves.

Republicans had painted themselves into a corner. For seven years they had incessantly defamed the Affordable Care Act (ACA) as nothing short of a dispatch from the devil. They told their constituents that they had a better plan, one that provided everything people liked about the ACA and eliminated everything they didn’t. As President Donald J. Trump claimed in January, “We’re going to have insurance for everybody.” He continued, “There was a philosophy in some circles that if you can’t pay for it, you don’t get it. That’s not going to happen with us.” That, like so much else coming from these folks’ mouths, was a lie. The bill passed by the House eliminates popular features like guaranteed price protections for people with preexisting conditions, by allowing states to apply for waivers to remove these protections. Instead of universal insurance coverage, regardless of whether one could “pay for it” as Trump promised, the bill

would move in the opposite direction, pricing millions out of coverage. The ACA had made a basic societal deal: The young, healthy and rich would subsidize access to insurance for the older, sicker and poorer. But this demanded that the former gave a damn about the latter, that people genuinely believed that saving lives was more important than saving money, that we weren’t living some Darwinian “Hunger Games” of health care where health and wealth march in lockstep. Once again, the party that is vehemently “pro-life” for “persons” in the womb demonstrates a staggering lack of empathy for those very same lives when they are in the world. What is the moral logic here? It is beyond me. Let’s cut to the quick: Access to affordable health care keeps people alive and healthy and keeps families solvent. Take that away, and people get sick; run up enormous, crippling debt; and, in the worst cases, die. It is really that simple.

upon the cash surrender value of the life-insurance contract. Without an insurance policy in place, no loan could occur. Without cash surrender value associated with the insurance policy, no loan could occur. In either case, the key to the loan is the existence of the insurance policy with cash surrender value. The policy loan is an explicit mechanism to allow the policyholders to access their cash surrender value while still maintaining the policy in force—the primary purpose of insurance is the benefit, and that is a longer-term provision than any immediate need for cash. Additionally, policy loans have historically not been considered debt because the policy owner is not obligated to repay the loan.”

Characterizing life-insurance policy and policy loan

A life-insurance policy has a cash value embedded that would increase in value over time. And just like any other assets, it can provide liquid savings and may be used as a security against a line of credit by the owner. This cash value may be accessed in different ways, with each method having its own advantages and disadvantages (i.e., different tax consequences). Thus, accessing the cash value may be through a partial surrender of cash value (policy withdrawal), a policy assignment as collateral (borrowing from a financial institution) and through a policy loan. The “policy loan”, or sometimes referred to as “cash loan”, is mandated

People may conveniently disassociate a vote cast in marbled halls from the body stretched out in a wooden box, but make no mistake: They are linked. In House Speaker Paul Ryan’s feckless attempt to defend this moral abomination of a bill during his floor speech last week, he said, “Let’s give people more choices and more control over their care.” But this so-called restoration of choice would be, in practice, for many, a sentence to death. Republicans, like the Idaho congressman and House Freedom Caucus member Rep. Raúl R. Labrador, deny this most basic of truths. Labrador said last week at a town hall, “Nobody dies because they don’t have access to health care.” It was a stunning expression of idiocy. According to a 2009 study conducted by Harvard Medical School and Cambridge Health Alliance, “nearly 45,000 annual deaths are associated with lack of health insurance”, and “uninsured, working-age Americans have a 40-percent higher risk of death than their privately insured counterparts”. An analysis last month by the Center for American Progress estimates removing price protections for pre-existing conditions would mean that “individuals with even relatively mild pre-existing conditions would pay thousands of dollars above standard rates to obtain coverage.” Republicans are likely to pay dearly

under Section 233 (g) of the Amended Insurance Code. It is not a “credit facility”. Section 3 (f) of the Cisa defines a credit facility as a form of “financial accommodation”. However, in the case of policy loans, it is a right of a policy owner who has accumulated enough cash surrender value to avail himself or herself of such policy loans. It is a “right” that is spelled out in no less than a law, the Amended Insurance Code (Section 233 [g]). In a policy loan, the insurer advances a loan secured against the cash value of the life-insurance policy. While it is referred to as a loan, it is essentially an advance against the death benefit paid under the terms of the insurance policy. This may be resorted to in lieu of permanently removing the cash from the policy. The loans can be repaid to restore the value of the cash value. If there is not sufficient value in the policy to cover interest, the policy lapses. Consequently, taking loans on life insurance affects the long-term viability of the policy. There are disadvantages in resorting to policy loans. Unpaid loans shorten the life of the policy. Eventually, outstanding loans are deducted from the death benefit at the death of the insured. In the United States loans are not reported to any credit agency, and payment or nonpayment against them does not affect the policyholder’s credit rating. The same regulation is true with the Monetary Authority of Singapore. See “Funa,” A11

for this outrage. Nate Silver expressed his thoughts in a piece headlined: “The Health Care Bill Could Be A Job-Killer For GOP Incumbents,” pointing out that the Republican bill is even more unpopular than the Affordable Care Act was when it was being debated, and if Republicans face the same electoral backlash that Democrats faced, “it could put dozens of GOP-held seats in play”. Silver acknowledges that there are “mitigating factors” that could soften the blow for Republicans, but conversely adds, “There’s even a chance that Republicans could suffer a bigger penalty than Democrats did.” Last Friday The Cook Political Report changed its ratings in 20 districts “all reflecting enhanced opportunities for Democrats” and pointed out: “House Republicans’ willingness to spend political capital on a proposal that garnered the support of just 17 percent of the public in a March Quinnipiac poll is consistent with past scenarios that have generated a midterm wave.” Not only is the bill unpopular among voters, it’s also unpopular in the medical establishment. As The New York Times reported last Thursday: “It is a rare unifying moment. Hospitals, doctors, health insurers and some consumer groups, with few exceptions, are speaking with one voice and urging significant changes to the Republican health-care legislation that passed the House on Thursday.”

Opinion BusinessMirror

opinion@businessmirror.com.ph

Wednesday, May 10, 2017 A11

PCO rises to the occasion On Security Council reform Ernesto M. Hilario

Teddy Locsin Jr.

ABOUT TOWN

Free fire

Conclusion

T

he Harbor Link project is integral to the North Luzon Spine network, which seeks to decongest Metro Manila, particularly Edsa, C-5, as well as Metro Manila’s nearby provinces.

Segment 10, which completes the North Luzon Expressway (Nlex) Harbor Link, is scheduled to be finished by the end of the year. The expressway used the alignment of the Philippine National Railways (PNR) to traverse Karuhatan in Valenzuela City, Pascual Avenue in Malabon City and C-3 in Caloocan. It was built above the PNR rail tracks in some portions, and at times, alongside the tracks. Such an ingenious solution spared the project from right-of-way problems and the displacement of residents near the area. Travel time from the Manila Port Area heading to the Nlex will only be about 10 minutes. No truck ban will be imposed on the expressway. The P10.5-billion Harbor Link project also includes Segment 9, which was completed last year and became operational in March 2015; and Segment 8.2, a 7.5-kilometer, four-lane expressway that will run from Mindanao Avenue to Republic Avenue. Once Segment 10 is operational, trucks would prefer to pass there because they could do a turnaround for the whole 24 hours. Last year close to 78 million metric tons of cargo were delivered from the Manila North Harbor to other parts of North and Central Luzon. This volume is expected to increase dramatically once Segment 10 is operational. Motorists, who will be using Segment 10, will enjoy the seamless, safe and speedy travel experience like that of those plying the Nlex. Alongside the Harbor Link Project, MPIC has a set of pipeline toll road projects worth P153 billion, among them, the Cavite-Laguna Expressway, the Nlex-South Luzon Expressway Connector Road, expansion of Nlex and Cavite Expressway, and the Cebu-Cordova Link Expressway.

Use water wisely this summer

Now that summer is here—the heat index is forecast to range from 37.9 to 40 degrees Celsius in Metro Manila—water consumption will

Funa. . .

continued from A1o

There is no “credit risk” involved, which could affect a stable financial system, which is the issue sought to be addressed by RA 9510. Failure on the part of the policyowners to repay would have no impact on the financial stability of the insurer. The nonpayment of policy loans poses no risk to the insurance companies, as these are viewed more as a “return of premium”. Nonpayment can only inflict injury on the policyowner himself, the supposed borrower. Policy loans are unilateral agreements. There is no obligation on the part of the policyowner to repay. It is an incident of ownership. You are borrowing from yourself. The reason is that you have the option, in the first place, to stop paying the premiums, and the policy will just lapse. It, therefore, should not impact one’s creditworthiness. For many, it is a good option to run up a credit-card balance. The nonpayment of policy loans should therefore, not translate to “negative credit information”, which “refers to information/data concerning the poor credit performance of borrowers, such as, but not limited to, defaults on loans, adverse court judgments relating to debts and re-

certainly increase in both homes and commercial establishments. The apprehension that increased water usage could lead to a water shortage, however, is unfounded. The East Zone water concessionaire, Manila Water recently gave assurances that there is enough water supply for the entire summer. The water firm said they do not see major issues with supply or the threat of shortage of water this summer. The projected level in Angat Dam this month is about 194 meters (above sea level), which is higher compared to the same period last year, which was at 191.6 m. But this assurance should make us even more careful in how we use water, especially after the company said the outlook might still change if the summer becomes longer or when the onset of the rainy season will be late. It also noted that people should use water wisely and responsibly. It is still important to remind ourselves of these tips: 1) Always make sure that taps/ faucets are tightly closed. 2) Check for leaks regularly and have them repaired immediately. 3) When washing by hand, soak heavily soiled clothes first to remove dirt easily. Use a basin or washtub with the right amount of water. Don’t let the basin overflow under a running tap. 4) When using the washing machine, wash with a full load only every other day. Use only the necessary amount of detergents so that less rinsing is required. 5) When bathing, use a pail and dipper instead of the shower. 6) Water your plants, garden or lawn early in the morning, late in the afternoon or during the cool part of the day. 7) When washing your car, use a pail, not a water hose, and use a cotton rag instead of a sponge. These are just some of the many reminders on responsible use of water that apply to all—because we all need water to survive. E-mail: ernhil@yahoo.com. ports on bankruptcy, insolvency, petitions or orders on suspension of payments and corporate rehabilitation”. Availing of the policy loan does not mean one is in dire need of cash. It simply means that there are some expenses to be paid, and it is similar to withdrawing cash from one’s ATM or bank account. A policy loan taken out is based simply on the amount of the cash value in the life-insurance policy. Unlike taking out a bank loan, you will not be asked by the insurance company what the money is for, nor is there any collateral required. You also do not have to have a good credit standing. There is no loan approval process. Moreover, you are not confined by a fixed repayment schedule. There is no default to speak of. And you can use the policy loan for whatever use you may desire. And any repayment you make goes back to your life-insurance policy. It is not a credit facility. If one decides not to repay his policy loan, because it is his right to discontinue his life-insurance policy, why should it negatively impact his credit rating? Atty. Dennis B. Funa is the current Insurance Commissioner. Atty. Funa was appointed by President Duterte as the new Insurance Commissioner in December 2016. E-mail: dennisfuna@ yahoo.com.

Continued from A1

I

N my view, the Security Council (SC) cannot reflect a changed reality if that reality is veering away from the democratic and peaceful agenda of the original P5 at the end of World War II—a veering toward the realism of power politics, which is the antithesis of the idea of the UN. At the very least, reflecting today’s raw reality will result in a SC of increasingly lawless complexion.

It is inconceivable that the UN shall evolve into a consensus of coercion, a gathering of brute strength, which may as easily turn on the weak outside that overbearing group as on each other; they will more likely turn collectively on the weak than on each other, thereby creating spheres of influence marked by abusive practice. Whether we like it or not, the UN embodies democratic and humane ideals, and not any of the faux values being peddled as arising from speciously unique racial and cultural circumstances (e.g., Asian values of impersonal service and merit-based promotion, whose provenance, as I have proved, is Prussian). Confucian learning was neither impersonal nor meritorious. Sorry, but there is right and wrong, and only one set of genuine values so far as the UN is concerned. And that is the value system that was present at, and prompted, its creation; and which has informed its actions, more or less, consistently and erratically, since then. It is inconceivable for the UN, let alone the SC, to reflect the nonvalues of a reality that has changed for the worse, however current or pervasive that change may be. The UN and the SC must continue to reflect the values that motivated the UN’s creation, along with more than half a century of frequently frustrated, but still dogged attempts, to uphold them. We are not united here in the UN to beat our respective chests, but to make sure that chest thumping is

as far as the member-states will go in this assembly, and anything farther will be stopped by the world’s nations united. Democracy is an appropriate goal in how persons are politically treated (with decency) within the same polity. But democracy in how states behave toward each other or act together invites a situation where undemocratic, even antidemocratic states, come to dominate a SC exclusively dedicated by provenance to the promotion of democracy within countries and equality, not democracy, among states. If this development is allowed, the preponderant influence in the SC and the General Assembly will be inimical to the founding spirit of the the UN. And while it is true the P5 members of the SC turn populist and lawless from time to time, and that this argues for an expansion of permanent membership to other recent, more firmly democratic states, there remains the history of the UN’s creation as the basis for keeping to the original P5 and its expansion, only to others that morally resemble the original P5 at the Council’s creation—at least in verbal aspiration, if not consistently practical application. No doubt, if the populist and antidemocratic trend in P5 countries continues, it undermines the moral claim to keep the SC exclusive to the original 5, and argues strongly for a more inclusive SC—but one that

IN my view, the Security Council cannot reflect a changed reality if that reality is veering away from the democratic and peaceful agenda of the original P5 at the end of World War II—a veering toward the realism of power politics, which is the antithesis of the idea of the UN. At the very least, reflecting today’s raw reality will result in a SC of increasingly lawless complexion. strengthens the democratic factor in it by the inclusion of firmly democratic countries therein. A representation based on vulnerability to climate change as Saint Vincent and the Grenadines so eloquently—as well as imminent aggression, as is increasingly the case in many parts of the world—is a telling argument for inclusion, but not race or religion, given the turn that race and religion have taken in the 20th and as badly in the 21st century. But I reiterate, the SC cannot reflect merely changed realities, but must remain firmly committed to democratic values regardless of their increasing submergence in many parts of the world. The UN is not a shell devoid of values, to be filled by passing majorities more marked by the lack of any values than adherence to any real ones. Reality is not a value, but the antithesis of values. Facts do not give rise to norms. True, some realities do reflect a violation of cherished values, as apartheid societies do—be it apartheid by economic class or race. Such vulnerabilities must be addressed by an empowerment that is the inverse of the weakness it seeks to protect: the weaker they are, the more empowered should they be. The reality of the increasing dominance of lawlessness, and the selfcontradictory and self-destructive faux value that might makes right, does not give rise to a reasonable demand for greater democratic representation by antidemocratic elements in the body that protects democracy among peoples. That would be anomalous in a body

created at the conclusion of the most horrible outbreak of violence and intolerance in history. True, as time has passed, the P5 members have shown decreasing interest in and weaker commitment to advancing decency and democracy in the world. But this deplorable development will not be arrested, let alone cured, by the admission of countries with even worse records of indifference to humane values and humanitarian issues, and marred by an overactive advocacy and practice of inhumanity. The UN is about dialogue, true, but dialogue is unlikely among those who do not command a common language, in this case, the language of common real values, such as the rule of law. It is an old conundrum whether democracy and its privileges can and must extend to the enemies of democracy dead set on destroying it, substituting might for right and inevitably evil for the good the UN has in principle, and occasionally in practice, pursued. If any region deserves a permanent seat, it is Africa, whose commitment to democracy and law, against the most insurmountable odds created by colonial history and postcolonial anarchy, has excited the admiration of the decent world, defending with arms that which in its essence foreswears arms—electoral democracy. The next are other regional blocs of countries contiguous with overbearing great powers, such as in eastern Europe and the western Pacific. In our case, it would not be unreasonable to merely support the inclusion of Japan as a permanent member (for its vulnerability gives it no choice but to behave responsibly) and Germany for its salutary responses to humanitarian crises. Germany has become the conscience of the Western world—a development of which Thomas Mann, my favorite writer, would have been proud as consistent with the true German character. Other regions contain powers able to protect themselves from each other, not last with the last resort of states: the hopefully unfailing deterrence of mutual assured destruction.

Will East vs West geopolitics end with Trump joining China? Michael Makabenta Alunan

on the contrary

A

S Western mainstream media raises hell against bogey monsters like Russia’s perceived interventionism and North Korea’s belligerence, what is ignored by media are huge developments related to the forthcoming historic One Belt and One Road Initiative Summit in Beijing on May 14 and 15, which expects US President Donald J. Trump’s participation, a event seen uniting the top three superpowers (with China and Russia) leading to the likely end of the century-old East vs. West geopolitical conflict. So far, some 28 heads of nations are participating, plus top-level representatives from 110 nations, or some 1,200 delegates, including those from 60 international organizations, says Helga Zepp Larouche, founder of the Schiller Institute. Helga makes headlines in China, being known as the ”New Silk Road Lady” for pushing, with her husband Lyndon Larouche two decades ago, the Eurasian or World Land Bridge or New Silk Road, renamed by China as “One Belt, One Road” and “Maritime Silk Road Initiatives”. She urged Trump to attend the summit, anchored on Xi Jinping’s “win-win cooperation” agenda, a total contrast to the “zero-sum dog-eat-dog game” of “trade globalization” and “geopolitics” that result in “winners and losers” or massive poverty amid pockets of rising wealth for a few. Rabid neoliberal economists still argue for freer trade vs. protectionism, but the real issue is between productive development in physical wealth creation vs. monetarism, which is a separate discourse altogether.

China’s exploding global projects China is exploding in development projects, with so far over 130 bilateral and regional transport agreements; 356 international road routes; over 4,200 direct flights connecting China with 43 Belt and Road countries; and 39 China-Europe freight-train routes. It is building six major industrial development corridors radiating from China, namely: 1) China to central and western Asia, which will be extended through Iraq, Syria and Turkey, into Europe and into Africa; 2) China to western Europe all the way to Hamburg, Rotterdam and Madrid; 3) Mongolia-China-Russia corridor involving 32 large projects; 4) China-Pakistan Economic Corridor, with China investing $46 billion and creating 700,000 new jobs in Pakistan; 5) Bangladesh-ChinaIndia-Myanmar corridor; 6) ChinaIndochina Peninsular corridor. Moreover, it is building railways and water systems in eastern and central Africa, reversing centuries of colonialism, poverty and ignorance. At the summit, 20 more

China is exploding in development projects, with so far over 130 bilateral and regional transport agreements; 356 international road routes; over 4,200 direct flights connecting China with 43 Belt and Road countries; and 39 China-Europe freighttrain routes.

agreements with 20 countries will be signed. Also significant is the Kra Canal south of Thailand, connecting the Gulf of Thailand to the Indian Ocean, shortening travel by 1,200 kilometer, but affecting ships passing Singapore. It will create 3 million jobs. Another project is the 173-mile Grand Nicaragua Canal, involving over $40 billion, mostly in China investments. It will be wider, deeper and 3.5 times the Panama Canal’s length. It will also be involved with Russia in linking Siberia and Alaska at the Bering Straits, followed by massive projects all the way down to South America.

Trump can’t refuse China, Russia offer?

AS a businessman, Trump can’t refuse offers for peace and development. He promised America $1 trillion in infrastructures, but Chinese experts estimate $8 trillion are needed. US owes China $1.4 trillion in US Treasuries, which China can use as collateral to finance infrastructure investments. In Europe, Greece, Serbia, Hungary, Czech, Belarus, Italy and Portugal also want to join the New Silk Road, also tied up with Russia as part of the Brazil, Russia, India, China and South Africa coalition. In the Middle East, many want

to go developmental too with Egypt building its new Suez Canal. Turkey, which shot down a Russian plane, is now friends with Russia.

Truth about North Korea’s belligerence

Executive Intelligence Review editor Mike Billington says North Korea is not crazy enough to go to war, as it knows it could easily be wiped out. It already abandoned its nuclear war program in 1994, and by 2000, the two Korean leaders met, with former US President Carter even visiting Pyongyang, to facilitate instead a nuclear plant for power. In 2002 President Kim Daejung adopted the “Iron Silk Road” to build railroads from Busan, through North Korea, all the way to Rotterdam, plus two more railways. An industrial complex was also set up at the border in Kaesong, employing over 50,000 North Koreans by 123 South Korean companies. But Bush and Cheney blocked all plans, while Obama followed it up with his “Pivot to Asia” policy, resulting in Terminal High Altitude Area Defense missiles set up in South Korea, not really aimed at North Korea, but at China and Russia, owing to their distance capability. The Kaesong industrial complex was also dismantled. Locally, we had Enhanced Defense Cooperation Agreement and the resulting China buildup at the West Philippine Sea. As Trump is influenced by conflicting forces, it is worth watching whether he will be in Beijing next week for peace and development, or will we see escalation of conflicts, which could dangerously lead to a nuclear war that could decimate the entire civilization in an hour or two? E-mail: mikealunan@yahoo.com

2nd Front Page BusinessMirror

A12 Wednesday, May 10, 2017

Pampanga raid reveals rising patronage for webcam sex tourism

T

he suspected pedophile could see people banging on his front door. But were they neighbors? Cops? One had letters on her jacket. As David Timothy Deakin googled “What is NBI?” from the laptop on his bed, the National Bureau of Investigation smashed its way into his cybersex den. Children’s underwear, toddler shoes, cameras, bondage cuffs, meth pipes and stacks of hard drives cluttered the stuffy, twobedroom townhouse. Penciled on the wall, someone had scrawled “My Mom and Dad love me.” In his computer were videos and images of young boys and girls engaged in sex acts. “Why is everyone asking about children coming into my house?” said Deakin, 53, bare-chested and

slick with sweat, his breath sour and glasses foggy, his wrists bound with a zip tie. Deakin’s arrest on April 20 reveals one of the darkest corners of the Internet, where pedophiles in the US, Europe and elsewhere pay facilitators in the Philippines to sexually abuse children, even babies, directing their moves through online livestreaming services. This relatively new crime, webcam sex tourism, is spreading rapidly. The UN describes “alarming growth of new forms of child sexual exploitation online.” The FBI says it’s epidemic, and that at any given moment, 750,000 child predators are online. Almost every case stems from the Philippines, where good English speakers, increased Internet

750,000 The estimated number of child predators online at any given moment, according to the FBI

connections and widespread international cash-transfer systems combine with widespread poverty and easy access to vulnerable kids. There have been as many as three busts a week there this spring. The youngest victim ever, rescued a few weeks ago, was an infant, 2 months old. Most are under 12. This spring The Associated Press (AP) watched a raid, rescue and launch of a major investigation that continues to play out

on both sides of the world. “This should serve as a warning,” said NBI Anti-human Trafficking chief Janet Francisco, who led the case. “We will really put them in jail, and they will die in jail.” Even as the police burst in, Deakin was streaming illicit content through the anonymous Tor network. Agents said he had a Web page open to wipe his phone clean. They tied him up with an iPhone charging cord before he could hit the button. AP and investigators asked him repeatedly why he had the obscene images stored on his computer. “There was no children in front of the cam in my house, not even dressed, as far as I know, not even with their frigging mothers as far as I know,” he said. But he said the images and videos

may have slipped in when he downloaded massive files using BitTorrent, a data tool used legitimately by academics and artists, but also by child pornographers. FBI agents looking for abusers search BitTorrent to spot people sharing exploitive images. Deakin said he grew up in Peoria, Illinois, in a splintered family. He was licensed as a roofing contractor in his 30s, seasonal work that left winters free; he used the time to study computers. He moved to the Philippines in 2000 for a job setting up Internet service providers and installing Blackmagic livestreaming production programs. In recent years, Deakin said, he earned $30 an hour as a systems administrator. But his home was filled with junk, his refrigerator See “Pampanga,” A2

PHL launches new campaign to boost Taiwanese arrivals By Ma. Stella F. Arnaldo

T

@akosistellaBM Special to the BusinessMirror

HE Department of Tourism (DOT) is seeking to increase the number of Taiwanese visitors to the Philippines by 20 percent this year, and has embarked on a unique advertising campaign to promote the country. In an interview with the BusinessMirror, Tourism Promotions Board (TPB) Project Officer for Taiwan Monina Valdez said the TPB and the DOT-Taiwan “launched a bus ad campaign featuring Philippine destinations through an art gallery on May 1, which will run for one month.” She said a total of 225 buses plying the roads of Taipei from May 1 to 30 “showcase Philippine-themed artworks and was a spin-off of the MRT Art Gallery Competition held in November 2016”. A total of 191 entries were gathered by the DOTTaiwan, through the online platform Bounty Hunter, she added. Valdez said the TPB spent $96,000 for the bus ad campaign. In an e-mail, Philippine Tourism Attaché Hazel V. Habito Javier further explained that the bus ad campaign is “a tactical promotion aimed at enhancing the Philippine brand, as many are still unaware of the ‘It’s More Fun in the Philippines’ ad campaign. This is a grand project where I’m very much interested

225 The number of Taipei buses that display Philippinethemed artworks from May 1 to 30

in capturing the wider market and making the Taiwanese participate/ engage in our promotions.” Aside from the said campaign in Taipei, she said the DOT also has an ongoing bus ad-wrap campaign plying the Kaohsiung area involving 50 buses, promoting the Star Virgo Cruise from Manila to Hong Kong. This particular campaign, she said, “is a joint venture between the DOT and Star CruisesTaiwan, and will end next week. We featured the destinations in Manila and Ilocos.” The recently

The DOT-Taiwan launches a monthlong bus ad-wrap campaign in Taipei to raise awareness on how fun it is to visit the Philippines. Photo courtesy TPB

launched Star Virgo Cruise package brought tourists from Manila to Hong Kong, with stopovers in Laoag and Taipei. Javier said the DOT is targeting visitor arrivals from Taiwan “to grow by 20 percent based on our 2016 achievement”, or 278,161 arrivals this year. In 2106 Taiwanese arrivals jumped by 28.71 percent to 231,801, surpassing the 200,000 target of the agency for the year. “We are very aggressive in our

marketing and promotions, and nonstop in our efforts in inviting Taiwanese tourists to have fun in the Philippines.” However, she admitted that the current advisories and warnings on travel to the Philippines, “as well as [its] ongoing security issues, which are easily captured by Taiwan media, might affect our target this year.” Javier said Taiwanese tourists “generally consider” such factors as well-developed facilities, safe-

ty and security, and accessibility, “preferring direct flights”, when traveling to holiday destinations. Taiwanese tourists also like “stress-free destinations, such as island holidays”, which makes Boracay an attractive choice for them, Javier added. But the Taiwanese also like destinations that are “affordable; this is a major consideration for the majority of Taiwanese See “New campaign,” A2

₧26.93-B tax-evasion case filed vs Mighty

the correct excise tax and is liable to pay an estimated aggregate deficiency excise tax liability in the total amount of P26.93 billion, inclusive of increments,” the BIR said in a statement. As an offshoot of the surveillance and seizure activities conducted by the Bureau of Customs (BOC) in March 2017, BIR Commissioner Caesar R. Dulay issued a mission order directing revenue officers of the Large Taxpayers Service to conduct an inventory of the cigarettes stored in Mighty Corp.’s warehouses at Kilometer 64, Barangay Matimbubong, San Ildefonso, Bulacan.

According to the BIR, the raid resulted in the seizure of a total of 81,591,500 cigarette packs contained in 163,183 master cases. Internal-revenue stamps affixed on the cigarette packs were tested using the Taggant reader, a BIRregistered equipment used to test the authenticity of stamps affixed on cigarette packs. Based on the 24-day validation activity conducted from March 27 to May 5, 2017, 100 percent of the total stamps tested on 536,000 cigarette packs, or 1,072 master cases, in both warehouses were found to be fake, according to the BIR. The master cases containing the

cigarettes with fake stamps were marked and seized. The stamps were deemed fake, since they did not contain one of the multilayered security features of a valid internalrevenue stamp. Likewise, they were not affixed at the production plant of Mighty Corp. in Barangay Tikay, Malolos, Bulacan, as required by law, since no official delivery receipts for the two warehouses were presented by the respondent company per certification of revenue officers. Failure to present the official delivery receipts, according to the BIR, means the cigarette packs in the warehouses did not come

from the manufacturing plant in Barangay Tikay, where the stamps should have been affixed, and to confirm that the proper taxes are paid before the articles subject to excise tax are removed from the production plant. The BIR further stated the warehouses in Barangay Matimbubong, San Ildefonso, Bulacan, are not registered with the BIR, as certified by the Excise Large Taxpayer Regulatory Division, meaning Mighty Corp. cannot legally remove the packs of cigarettes from its only plant in Tikay, Bulacan, for delivery to the said unregistered warehouses.

“Mighty Corp.’s mere unexplained possession of the said packs of cigarettes with fake internalrevenue stamps is illegal and a violation of the Tax Code,” the BIR statement said. This is the second case filed against Mighty Corp., and is the 23rd filed under the Run After Tax Evaders program of the BIR. The first complaint filed by the BIR at the DOJ against the cigarette maker was a P9.56-billion tax-evasion case for the alleged use of fake tax stamps on its cigarette products found in five of its warehouses in San Simon, Pampanga. Finance Secretary Carlos G.

www.businessmirror.com.ph

Farm output likely grew 2% in Q1, Piñol says

T

he farm sector likely posted a 2-percent growth in the first quarter of the year on the back of better crop harvest and fisheries output, according to the chief of the Department of Agriculture (DA). Agriculture Secretary Emmanuel F. Piñol said he maintained his February projection of 2-percent growth, as he wanted to remain “conservative” with his forecast figures. “I would like to play conservative. I don’t want to be boastful,” Piñol told reporters in an interview on May 8. “I see positive growth in the agri-fisheries sector [in the first quarter], especially in the fisheries, because we see better production after the closed fishing season. I cannot definitively say the percentage of growth, but I would still maintain the projection of 2 percent,” Piñol added. In the first quarter of 2016, farm output declined by 4.53 percent, according to data from the Philippine Statistics Authority (PSA). The PSA attributed the drop in production to the prolonged dry spell and damages caused by typhoons. The DA chief said the crops subsector would still be the main driver of the farm sector’s growth during the January-toMarch period, particularly rice. “So far, there’s positive growth [in the crops subsector], as there has been no damage to crops over the past five months, or in the survey of PSA in the first three months,” Piñol said. “There has been no damage [to crops] except for a few isolated rat infestations in Mindanao.” Earlier, Piñol said, based on data from the Philippine Rice Information System, the local production of unmilled rice in the first quarter expanded by 5.34 percent to 4.14 million metric tons (MMT), from the 3.93 MMT recorded in the same period last year. The hike in output was attributed to favorable weather conditions and the use of high-yielding hybrid-rice seeds by farmers, Piñol added. As for the fisheries sector, which posted a 5.11-percent output reduction in the first quarter of 2016, Piñol said the subsector could post a slight increase in production on the back of the resumption of major fishing activities following a three-month closed season. “So far, [the production] is good. In fact, I don’t know if it will reflect in the report of the PSA, the big species of fish are now spawning back in the areas where we declared a closed fishing season. For example, tuna can now be found in the Davao Gulf after the closed fishing season,” he said. Jasper Emmanuel Y. Arcalas

Continued from a1

Dominguez III earlier said an estimated four to five more cases will be filed by the BIR against Mighty Corp. Dominguez, on the sidelines of the recent Asian Development Bank (ADB) Annual Meeting in Japan, said the government’s computation of Mighty’s tax liabilities could reach as much as P30 billion, pending the filing of new tax-evasion cases in the next two weeks. He said Mighty Corp. will be forced to pay what it owes the BIR, even if it would mean selling off its assets and the company, or having the government takeover the company and collect the proceeds. Rea Cu, Joel San Juan, Cai Ordinario