Businessmirror may 11, 2017

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Thursday, May 11, 2017 Vol. 12 No. 210

Business groups join call to use CCT as entrep fund

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By Catherine N. Pillas

@c_pillas29

ose Ma. A. Concepcion III, President Duterte’s adviser on entrepreneurship, has asked some of the country’s big business groups to help him formulate a scheme that will convince the government to rechannel a big chunk of the Conditional Cash-Transfer (CCT) Program to initiatives that will boost microentrepreneurship.

LABOR GROUPS SUBMIT ‘ENDO’ E.O.TO DUTERTE, BUT MEETING MOVED

By Elijah Felice E. Rosales

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@alyasjah

or the labor groups tasked

by President Duterte to draft the executive order (EO) outlawing contractualization, or the so-called endo, they have done their part, and the ball is now in the hands of the Chief Executive.

The representatives of big labor unions were supposed to meet with Duterte on Wednesday to present the draft EO, but the meeting was canceled.

In a text message to the BusinessMirror, Labor Undersecretary Joel B. Maglunsod said the President’s meeting with the labor groups was postponed, citing the Chief Executive’s tight schedule. The President had to fly to Cambodia to attend the

TANJUSAY: “The issue of when and how the President will end contractualization is all now in his hands.

The ball is in Duterte’s hands.”

₧78.2B The budget allocated for the CCT scheme this year

Concepcion said the CCT, which got a budget of P78.2 billion this year for distribution to some 4.4 million poor households, will unlock the solution to two of the biggest problems of microenterprises in obtaining financing—interest rate and collateral.

“More than interest rate, my concern is collateral. Most micro and Continued on A2

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Trapped in the middle for over four decades!

Rene E. Ofreneo

laborem exercens

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he Asian Development Bank economists have been debating on how can the Philippines and other developing Asian countries get out of the so-called middle-income trap. This is defined as a situation where the country is unable to break out of its “developing” status, so that it can join the elite group of “developed countries”, like the US, Japan and the Western European countries. Number-wise, a middle-income country is classified by the World Bank as one that has attained a per-capita GDP that oscillates roughly from $1,000 to $12,000.

According to Arangkada Philippines 2010 of the Joint Foreign Chambers, the Philippines was classified by the World Bank as a “lower-middle-income” country as far back as 1975. That was 42 years ago!

Continued on A11

Young workers herald rise of Asean as growth leader A

World Economic Forum.

He will then proceed to Hong Kong to meet the large Filipino community there, before heading to China to participate in the Belt and Road Forum.

Asked if a new date was set for the deferred appointment, Maglunsod said the two parties have yet to discuss it.

Labor groups Associated Labor Unions-Trade Union Congress of

fter decades of living under the shadow of neighbors in the North, Southeast Asia is taking over as the region’s growth leader.

Expansion in the Asean-5—Indonesia, Malaysia, the Philippines, Thailand and Vietnam—will exceed 5 percent through 2022, while growth in North Asia will average just 3 percent, according to International Monetary Fund data.

“There’s a confluence of positive tailwinds, like favorable demographics”, for Southeast Asia, which would spur lower labor costs and greater domestic consumption, said Weiwen Ng, an economist at Australia & New Zealand Banking Group Ltd. in Singapore. “North Asia is at a more mature stage of development, so you expect a more modest growth from them.”

While the likes of China, Japan and Hong Kong have all seen a contraction in their work forces since 2015, Southeast Asia will see its working-age population expand through 2020, Nomura Holdings Inc. estimates show. The Philippines, for example, is projected to see a 1.9-percent expansion of its 15- to 65-yearold population this year, with Malaysia’s due to rise 1.6 percent, Nomura economists said in a report.

See “Labor groups,” A2

See “Young workers,” A2

PESO exchange rates n US 49.9140

2016 ejap journalism awards

n japan 0.4379 n UK 64.5737 n HK 6.4127 n CHINA 7.2260 n singapore 35.3724 n australia 36.6568 n EU 54.2815 n SAUDI arabia 13.3111

Source: BSP (10 May 2017 )

BMReports BusinessMirror

A2 Thursday, May 11, 2017

Business groups join call to use CCT as entrep fund Continued from A1

small entrepreneurs (MSEs) don’t have collateral as pledge to borrow money. The government has to find a way to make it collateral-free,” Concepcion said at the launch of the Alliance Towards Prosperity for All campaign. “That’s where the issue of CCT comes in.”

He said CCT, in a way, “helps the poorest of the poor by giving them checks every month. But maybe we’re not measuring the impact if we slowly shift some of that money to MSEs; gradually let’s shift it to poor entrepreneurs.”

Concepcion said, through the Alliance Towards Prosperity for All, the biggest Philippine business

Rise to power. . . park being built in China by the company. Chinese group tours to South Korea have also been canceled, while anti-Korean sentiment has proliferated online. Beijing may also be heartened by renewed South Korean outreach to North Korea, because that could divert attention from China’s own role as the North’s most important diplomatic and economic partner.

JAPAN

After the obligatory congratulations,

groups will not just help in convincing the Duterte administration to effect the transfer of CCT funds to entrepreneurship programs, they will also get to chip in their resources and expertise to make the initiative work under the “Mentorship, Money and Market” program of GoNegosyo.

“The Alliance here will consolidate all the ideas. Once we have consensus, we will work with the government to submit our ideas in the area of mentorship, money and market. We all have to agree [in the alliance], and we will share this to the government and convince them to agree,” Concepcion said.

This, he said, will transform the dole-out system into a program

Continued from A12

Japan is cautiously watching to see how relations with South Korea evolve under Moon, known for his tough stance on wartime history and territorial issues.

Moon’s more conciliatory approach to Nor th Korea adds to uncertainty in bilateral and trilateral cooperation with the US, given Prime Minister Shinzo Abe’s vocal support for Trump’s increased pressure on the North.

Japan is particularly concerned

that encourages self-sufficiency.

The CCT scheme was started in the Arroyo administration. In 2016 the Aquino administration budgeted P64 billion for the program.

While details are scarce, Concepcion said it’s possible funds may be rechanneled to the Department of Trade and Industry’s Pondo sa Pagbabago at Pag-asenso Program. Some of the funds may also be given to the Department of Agriculture for farmers’ cooperatives.

“Structurally, how to do it, we still have to discuss it; but let’s help those who help themselves,” Concepcion stressed.

The official said only a chunk of the CCT could be given, not the entire amount.

The Alliance Towards Prosperity for All campaign is supported by the Philippine Chamber of Commerce and Industry, Federation of Indian Chambers of Commerce and Industry, Federation of Filipino-Chinese Chambers of Commerce and Industry, Management Association of the Philippines, Makati Business Club and Financial Executives of the Philippine, among others.

The Pantawid Pamilyang Pilipino Program, now the formal name of CCT, is a human-development measure of the national government that provides conditional cash grants to the poorest, specifically targeting indigent households with pregnant women and children aged 0-14.

about the “comfort women” issue, a legacy of Japanese atrocities during the war that still haunts relations between the two sides. Moon opposes a 2015 agreement signed by Park that was heralded as a final settlement for Korean women who were among many sexually enslaved in Japanese military brothels before and during World War II. Moon has called for a renegotiation of the pact. The two countries are also at odds over a “comfort woman” statue that was built outside the Japanese consulate in the southern South Korean city of Busan after the agreement was signed.

Moon has also raised skepticism over closer security cooperation with Japan, such as a bilateral military information sharing agreement, and emphasized Seoul’s territorial claim on a disputed island between the two countries.

“Will Mr. Moon pursue a ‘pro-North, anti-Japan’ stance?” the conservative Yomiuri newspaper said in an editorial on Wednesday. South Korea plays a crucial role in regional stability, it said. “We hope the new administration values cooperation with Japan and the US and develops realistic security and foreign policies.” AP

Labor groups. . .

www.businessmirror.com.ph

Continued from A1

the Philippines (ALU-TUCP) and Nagkaisa Labor Coalition submitted on Tuesday the draft EO, which the administration is bent on using as framework for scrapping the practice of endo.

ALU-TUCP Spokesman Alan A. Tanjusay told the BusinessMirror labor groups are now expecting the Chief Executive to act on the issue, given his campaign promise of outlawing the controversial mode of employment.

“The ALU-TUCP and Nagkaisa [Labor Coalition] have done its part in drafting the EO that the President has asked us to do as our suggestion of helping him fulfill his

Young workers. . .

The region’s strong growth outlook is luring companies, such as Coca-Cola Co., which is expanding in Vietnam and in Myanmar. Apple Inc. is building research centers in Indonesia, while Heineken NV is competing with Anheuser-Busch InBev NV, Asahi Group Holdings Ltd. and Kirin Holdings Co. for a stake in Vietnam’s largest brewer.

The differing demographic outlook is a contributor to each of the region’s growth trajectories, according to Nomura. Aging will clip the potential growth rates of all major North Asian economies in coming years, while those of Southeast Asian economies may accelerate, with the exception of Singapore’s, the bank said.

Countries in Southeast Asia are also ramping up on ambitious largescale infrastructure projects. Infrastructure spending by the 10-member Asean will average $110 billion a year

promise to end contractualization,” Tanjusay said in a text message.

He added: “The issue of when and how the President will end contractualization is all now in his hands.

The ball is in Duterte’s hands.”

On May 1 Duterte asked labor groups to draft the EO on endo, a decision reached after he held a dialogue with labor leaders in Davao City. The EO was demanded by workers as a replacement for Department Order (DO) 174 issued in March by the Department of Labor and Employment. Labor groups strongly protested against DO 174, saying it does not fully scrap contractualization.

Continued from A1

through 2025, according to Ernst & Young Llp. These projects will improve the delivery of goods, services and people across Asean. But given their scale, hiccups are bound to occur, said Max Loh, Asean and Singapore Managing Partner at Ernst & Young.

“Unfortunately, there will always be roadblocks as you try to do this,” Loh said. “Some of these infrastructure projects are across countries, so you have to navigate the political and social and economic environment.”

As economies grow rapidly, Southeast Asia needs to stay the course, Loh added.

“With rising nationalism or populism in various countries, that could be an impediment if countries move backward in terms of globalization,” Loh said. “But at the end of the day, if all the countries come together and have one vision, it can be done.”

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Editor: Dionisio L. Pelayo • Thursday, May 11, 2017 A3

DOJ to consolidate 2 tax-evasion cases vs Mighty Corp.

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By Joel R. San Juan

@jrsanjuan1573

HE Department of Justice (DOJ) on Wednesday said it would consolidate the two multibillion-peso tax-evasion cases that have been filed by the Bureau of Internal Revenue (BIR) against tobacco firm Mighty Corp. and its executives.

Justice Secretary Vitaliano N. Aguirre II said the latest tax-evasion complaint filed by the BIR on Tuesday, involving P26.93 billion in alleged unpaid excise tax, will be handled by the same panel of prosecutors conducting a prelimi-

nary investigation on the bureau’s earlier P9.56-billion tax-evasion complaint against Mighty Corp.

“I’m inclined to assign the new complaint to the same panel, since the two cases involve similar facts and issues. We will consolidate them,” he

told reporters during a weekly forum in Manila on Wednesday.

The Department of Justice (DOJ) chief said the issue on compromise settlement with Mighty Corp. was again discussed in Monday’s Cabinet meeting.

Aguirre said that, while President Duterte is open to a settlement, Finance Secretary Carlos G. Dominguez III said a settlement must be a reasonable amount, considering the tax liabilities of Mighty Corp. from its use of fake tax stamps have now reached P36 billion.

Until a settlement is reached, Aguirre said the DOJ has no other option but to proceed with the preliminary investigation of the cases.

In the latest complaint, the BIR accused Mighty Corp. executives, led by owner Alexander Wongchuking, of violations of the National Internal Revenue Code for unlawful posses-

sion of articles subject to the excise tax without payment of the tax and for possessing false, counterfeit, restored or altered stamps.

The tax bureau again named former Armed Forces Deputy Chief of Staff and retired Lt. Gen. Edilberto Adan, Might Corp. president; retired Judge Oscar Barrientos, company EVP; and company treasurer Ernesto Victa as corespondents of Wongchuking in the second tax-evasion case.

The new complaint stemmed from the raid conducted by the BIR and the Bureau of Customs on March 24 on the tobacco firm’s warehouses in Barangay Matimbubong, San Ildefonso, Bulacan, which resulted in the discovery of 536,000 cigarette packs in 1,072 master cases with fake stamps.

“Internal-revenue stamps affixed on the cigarette packs were tested using the Taggant reader, a BIR-

registered equipment used to test the authenticity of stamps affixed on cigarette packs. Based on the 24-day validation activity conducted from March 27, 2017 to May 5, 2017, 100 percent of the total stamps tested on 536,000 cigarette packs are fake.

The master cases containing the said cigarettes with fake stamps were marked and seized,” the BIR said.

The 536,000 cigarette packs were part of the 81,591,500 packs contained in 163,183 master cases found in the warehouses.

The bureau alleged the stamps were fake since they did not contain the multilayered security features of a valid internal-revenue stamp and were not affixed at the production plant of Mighty Corp. in Bulacan as required by law, which means the seized master cases came from another manufacturing plant.

The BIR further cited the lack of

Davao Norte capital excited with MICE prospects

By Manuel T. Cayon Mindanao Bureau Chief

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AVAO CITY—This city’s neighbor, Tagum City of Davao del Norte, is getting the attention lately as another convention destination.

And its officials are excited.

In just a week leading to the commemoration of Labor Day on May 1, the city hosted three national conventions and a conference on the river basin in the area, which would be an adjunct to a crafting of a national river-basin development plan.

Organizers of the First National Assembly for Electric Consumers selected Tagum City, 53 kilometers from here, as the venue of the April 26 activity attended by 6,000 electric consumers.

The assembly was organized by the National Center of Electric Cooperatives Consumers.

The venue was the atrium of the City Hall, whose design often get the awe and admiration of visitors over its futuristic concept.

The event wanted “to inform the participants with the latest updates in the electric-cooperative consumers sector and to empower such sector in charting a strategic position in the socioeconomic-political development of the countryside through rural electrification,” an Internet posting by Tagum City Information Office said.

The information office said the national assembly was the prelude to the National Electrification Administration’s Electric Cooperatives Consultative Conference and Recognition of Outstanding Electric Cooperatives held two days after at Big 8 Corporate Hotel, still in Tagum City.

On the same day, April 28, the first interagency summit on the Tagum-Liboganon River Basin (TLRB) was conducted to discuss the Tagum section of the Agusan River, which is one of the major river

basins to be developed again.

The river-basin summit wanted to craft an interlocal government unit alliance “to ensure the coordinated and rounded management of the river basin”. It also addressed issues hounding rivers across the country, including flooding, siltation and the construction of slum communities along its riverbanks.

The summit was attended by more than 600 participants, including representatives from national government agencies, local government officials, members of academe, farmers, fishers and civil-society organizations. The summit formalized the TLRB Management Council, with the task to implement conservation and development strategies for the river basin.

On Labor Day its the Philippine Association of Court Employees also opted to hold its second National Sportsfest and General Assembly in Tagum City. It also chose the atrium of the City Hall as the venue.

Tagum City Mayor Allan Rellon said the slew of conventions in the city jibed well with his projection to make the city “the country’s next big center for MICE, or meetings, investments, conferences and events”.

He said the city has finalized the preparation to host the sixth Asean Scout Jamboree from November 27 to December 2 to be participated in by the 10 Asean member-countries.

Meanwhile, Compostela Valley hosted that same week the Regional 4H Youth Camp in Compostela town.

This event was attended by 150 delegates, representing the provinces, cities and towns across the Davao region. It was held at the Compostela Central Elementary School from April 26 to 28.

The camp training included capability-building on farming and management as the component of the Youth Development Program of the Department of Agriculture, through its Agriculture Institute.

official delivery receipts for the San Ildefonso warehouses.

“Such failure to present the official delivery receipts showed the cigarette packs in the subject warehouses did not come from the manufacturing plant in Barangay Tikay, where such stamps should have been affixed to confirm that the proper taxes are paid before articles subject to excise tax are removed from the production plant,” the complaint said.

The first tax-evasion case filed by the BIR against Mighty Corp. in March involved the master cases of cigarettes worth P2.3 billion, bearing fake tax stamps seized from the firm’s warehouse in San Simon Industrial Park in Pampanga.

The DOJ panel of prosecutors, led

by Senior Assistant State Prosecutor Sebastian Caponong, has already started the preliminary investigation on the first case.

Casanova, former BCDA directors ordered arrested for libel indictment

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Alsons Power drums up interest at Asean-Japan innovation meetup

Mindanao’s first and most experienced independent power producer, Alsons Power Group, was invited to a business-matching event, dubbed as the Asean-Japan Innovation Meetup, held in Tokyo recently. Trade Secretary Ramon M. Lopez (right) and Alsons Power Plant Manager Ruben Ramilo discuss the various energy projects showcased at the power firm’s booth during the one-day event designed to help investors from Southeast Asia identify potential partners and discover new business and investment opportunities in Japan. The event, organized by the Japanese Ministry of Economy, Trade and Industry and the Japan External Trade Organization, brought together 54 Asean and Japanese companies, as well as venture capital firms from various industries.

Construction boom to sustain economic gains of E. Visayas

By Elmer V. Recuerdo Correspondent

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ACLOBAN CITY—Economic planners are expecting the economic gains in Eastern Visayas that started in 2015 to continue in the next few years due to many big-ticket infrastructure projects implemented under the Duterte administration.

Eastern Visayas saw a growth rate of 12.4 percent in 2016, the highest among all regions in the country, and higher than the 4.6-percent growth recorded in 2015.

“We take cognizance of the fact that our administration puts priority on regional development as a means of spreading out economic growth and in reducing spatial inequalities in development pace,” National Economic Development Authority Regional Director Bonifacio Uy said.

A total of 1,313 region-specific infrastructure projects amounting to P157.44 billion included in the ThreeYear Rolling Infrastructure Program

(TRIP) 2018-2020 will be rolling out in the next three years in the five regions that have the highest poverty rates.

Eastern Visayas, being the third poorest region in the country, will have 147 projects amounting to P19.8 billion, equivalent to 12.58 percent of the total amount of projects listed in the TRIP. Aside from the region-specific projects, Eastern Visayas will also benefit from the interregional and nationwide infrastructure, including the plan to build bridges that will connect Bicol to Northern Samar in the northern part of the region, and from Southern Leyte to Surigao in the south.

“We see bright prospects in the massive infrastructure-development agenda of this administration in enhancing intra and interregion connectivity,” Uy said.

Tacloban City Mayor Cristina Romualdez, who also chairs the Regional Development Council in Eastern Visayas, said the interconnection

project will benefit the region, being at the center of island connectivity.

“This will not only generate more jobs, but will also lower prices of the commodity because of the easier transport of goods from Luzon to Mindanao when the project is finished. And since we are right in the middle, this will definitely benefit the whole of Eastern Visayas,” she said.

O ut of t he 4 , 8 9 5 pro j e c t s amounting to P3.6 trillion included in TRIP 2018-2020, 4,498 are region-specific (P935.55 billion), 158 are interregional (P1,848.02 billion) and 239 are nationwide in scale (P824.47 billion).

The construction sector recorded the fastest growth in the region’s economy last year with its 44.5-percent increase, contributing a 13.5-percent share to the region’s economy. The construction boom is largely attributed to massive infrastructure activities related to Yolanda reconstruction and road-widening projects of the Department of Public Works and Highways.

PASIG City Regional Trial Court judge ordered on Monday the arrests of the former CEO and six other former and current directors of the Bases Conversion and Development Authority (BCDA) of the previous administration pursuant to a January 2013 libel indictment.

T he i nd i c t m e nt s t e m m e d from a complaint seeking P100 mi l l ion in d amages, f i led in Ju ly 201 2 b y t he c h a i r m a n of Camp John Hay (CJH) Dev e l o p m e nt C o r p. , e r s t w h i l e developer of the long-stalled a nd since -resc inded mu lt ibi l l ion- peso C J H publ ic- pr ivate partnership development project.

Ordered arrested by Judge Maria Paz Reyes-Yson were BCDA’s former President and CEO Arnel Casanova, former Chairman Felicito Payumo, former directors Zorayda Amelia Alonzo, Ma. Aurora Geotina Garcia, Elmar Gomez and Maximo Sangil and holdover director Ferdinand Golez, who were all appointed during the previous administration.

The indictment resulted from the “malicious” nationally circulated, two-page newspaper ad placed in April 2012 by Casanova and company, alleging that CJHDevCo was involved in “questionable business practices”, primarily over the so-called “double sale” of an alleged previouslysold P20-million log cabin.

The log cabin was one parcel in a lot of five property sites worth P180 million remitted to and accepted in 2008 by BCDA as rent payment in kind. CJHDevCo Chairman Robert Sobrepeña said a prospective buyer, Wilson Sy, backed out in 1999, and the unencumbered title to the log cabin remained in CJHDevCo’s name.

PNP, AFP take steps to avert terrorism threat in Palawan

By Rene Acosta @reneacostaBM

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HE Philippine National Police (PNP) and the Armed Forces of the Philippines (AFP) have taken steps to avert any act of terrorism in Palawan in the aftermath of an advisory issued by the US State Department cautioning Americans from going to the province due to the threats of kidnapping and bombings.

The PNP and the military, in separate statements, issued on Wednesday that while they continue to validate the reported threats that spawned the issuance of the US travel advisory, actions, including the deployment of

more security personnel and the tightening of security, have been taken.

“Stricter security measures will be undertaken while we are verifying the information,” PNP Spokesman Chief Supt. Dionardo Carlos said. “Their release of a travel advisory is correct, that’s for the benefit of their nationals.

When such happen, we respect that.”

Carlos said the police is continuing its coordination with the US Embassy and other representatives of countries in Manila regarding the supposed threat in Palawan and its validation.

“We also share with them what we have on the ground, and information that we have from our intelligence units. So, that is ongoing; we have an

exchange of information,” he said.

AFP Western Command Commander Lt. Gen. Raul Guerrero said security in Palawan has been tightened, not only after the issuance of the latest US advisory, but even right after the incident in Bohol on April 11, when security forces killed Abu Sayyaf Group (ASG) subleader Muamar Askali and three of his men.

“After the Bohol incident, what we did was, we really went into heightened alert. We created interagency task groups, we deployed ships and personnel for target hardening and ensure they could not enter here, but still there was an advisory,” Guerrero said.

Askali and about 10 of his men en-

tered Bohol, supposedly for kidnapping and other terrorism activities, but their plan was thwarted with the killing of the dreaded ASG subleader and three of his men. The other members of the group were later killed in subsequent operations.

Before the incident in Bohol, the US Embassy in Manila and other countries issued travel advisories for their citizens against travelling to Western Visayas, including Bohol and Cebu, due to threats of kidnapping and terrorism, but the government treated such warnings with a caution, saying the issuance of travel advisories were normal for foreign governments as part of their efforts to protect their citizens.

GRANNY’S BACKYARD Nemesia Pablo, 82, plants vegetables in her backyard in Jaen, Nueva Ecija. Her son who was visiting with family found a big squash among the vegetables. FAYE PABLO

Economy

A4 Thursday, May 11, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

Production output and value posted double-digit growth in March–PSA

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By Cai U. Ordinario

@cuo_bm

he growth of the country’s manufacturing output is expected to continue to increase on the back of the government’s planned infrastructure spending, according to the National Economic and Development Authority (Neda).

In a news statement released on Wednesday, Neda Officer in Charge Undersecretary Rolando G. Tungpalan said the manufacturing sector can also benefit from the country’s good credit rating.

In March the volume of production index (VoPI) for manufacturing grew by 11.1 percent, according to the Philippine Statistics Authority’s (PSA) Monthly Integrated Survey of Selected Industries (MISSI). This, however, was slower than the 11.6- percent growth posted in February 2017 but faster than the 8.2 percent posted in March 2016.

“We must continue to foster a competitive and innovative environment to help the manufacturing sector realize its full potential

as a growth driver,” Tungpalan said.

“It can also benefit from the country’s ‘BBB-’ or “good quality rating”, with a positive outlook for both foreign and local currency-denominated obligations,” he added.

Tungpalan, however, warned of the upward risks to inflation, as well as possible external risks that could cut manufacturing-sector growth in the country.

“We must keep diversifying our market and increase our attractiveness to investors by addressing legal impediments that restrict foreign participation, minimizing regulatory burden, and reducing the cost of doing business in the country,” Tungpalan added.

11.1% The VoPi growth for manufacturing in March, from 8.2 percent in the same period last year. Vapi, on the other hand, grew by 12.2 percent, from 0.8 percent during the same period the previous year.

The PSA said the growth in March 2017 was brought about by the expansion in VoPI for the eight major sectors, led by fabricated metal products, with an increase of 74.4 percent.

The other seven sectors with significant increase in VoPI were petroleum products, at 61.5 percent; transport equipment, 54.5 percent; leather products, 39.2 percent; food manufacturing, 23.4 percent; machinery except electrical, 17.9 percent; nonmetallic mineral products, 15.7 percent; and footwear and wearing apparel, 10.3 percent.

Meanwhile, the value of production ( VaPI) g rew by 12.2 percent in March 2017, from 0.8 percent during the same period

in the previous year.

For consumer goods, food manufactures posted a growth of 23.4 percent in volume and 20.0 percent in value of production.

Tungpalan said this is due to the sustained domestic demand for basic goods, particularly for food and beverages.

For intermediate goods, petroleum products soared in both volume and value of production, registering a growth of 61.5 percent and 94.9 percent, recovering from its contraction in the same period last year.

For capital goods, fabricated metal products boomed by 74.4 percent in volume and 15.1 percent in value of production, while transport equipment sustained its momentum.

“This momentum signals the desire of the sector to support the government’s ambitious infrastructure-development program. As such, we must push for the adoption of innovative technological advancements to increase the productivity of local producers and enterprises,” Tungpalan said.

Tungpalan is Neda’s OIC while Socioeconomic Planning Secretary Ernesto M. Pernia is on official travel for the World Economic Forum in Cambodia.

BCDA remits ₧4.5 billion to National Treasury

By Catherine N. Pillas @c_pillas29

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he Bases Conversion and Development Authority (BCDA) and its subsidiary, the Clark Development Corp.

(CDC), remitted P4.5 billion to the National Treasury for the fiscal year 2016.

The BCDA’s share of the total amount was not disclosed.

In a news statement released on Wednesday, the BCDA

said that of the P4.5 billion, P3.6 billion will be turned over to the Armed Forces of the Philippines (AFP) for its modernization program.

This brings to a total of P34.2 billion remitted by the BCDA to the AFP, and another P100 billion to other government agencies from the proceeds generated from existing jointventure and lease agreements.

Total dividends actually turned over by the BCDA and CDC to the

National Treasury amounted to P582 million.

The remaining amount represented the Department of Finance guarantee fees and return of initial capital contribution to the national government.

In compliance with Republic Act 7917 and Executive 309, proceeds from the disposition by the BCDA of former military camps, such as Fort Bonifacio, now developed into Bonifacio

Global City, and the former Villamor Air Base, now Newport City, are to be shared by the BCDA with the AFP and several government beneficiaries.

Every first quarter of the year, the BCDA remits to the National Treasury the proceeds generated during the preceding year from the sale, joint venture and lease of the former military camps, as well as dividends declared out of its net income.

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EU allots €300 million for ‘high impact’ devt projects in Mindanao

The European Union more than doubles its development assistance to the Philippines to €300 million, or roughly P16.36 billion, over the next four years. In a news briefing on Tuesday EU Ambassador to the Philippines Franz Jessen stressed that the country’s humanrights situation will not affect the amount of aid the EU is providing to the Philippines.

PNA/Jess M. Escaros Jr.

By Recto Mercene @rectomercene

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he European Union (EU) has set aside €300 million for the development of Mindanao, and expects to employ about half- a-million residents to uplift their standard of living.

Asked what other projects would be benefited by the €300-million fund, EU Ambassador to the Philippines Franz Jessen said: “We’re trying to have a limited number of projects, so that their impact would be very substantial.”

Theenvoymadethestatementbeforeaselect group of reporters during a news briefing at his residence in Forbes Park, where he said the EU has been trying to align their projects with the priorities of the government. “And that means we’re seeking to shift our ideas toward Mindanao and to focus on job creation, peace building, and also development of the justice sector.”

Jessen clarified that in terms of overall objectives, “it’s a job creation, energy, justice sector; although in term of geography, the EU is trying to focus in Mindanao, because that’s where the government has the priority.”

Seeing the Philippine statistics, Jessen said there’s very low level of development in Mindanao compared to the rest of the country, “and we’re happy to work with the government to try to improve that situation.”

“As a diplomat, what had struck me for the last 10 months or more is the amount of energy that has been put forward to drive the country as a nation, and I think in many of these issues—while sitting on the sideline and watching it—I think I see a great amount of sympathy, for clearly the eyes will see what is needed for this to be addressed and still need to be addressed. President Duterte is doing that

in a very forceful way,” he said.

Jessen said first-time European visitors who come to the country are often struck by the rate of poverty. “When I came [it was] 25 percent, but it’s now going down; but 25 percent is a lot of people living under the poverty line.”

Jessen has been in the country for the last 18 months. Harping on European values and propoor agenda, Jessen said he thinks Duterte’s propoor development is good.

He, likewise, underscored the correlation between lasting peace being worked out by the government and development in the region.

“Without lasting peace in Mindanao, it’s very limited what you can do with development assistance. But if there’s peace agreement, the development assistance can underpin that accelerated growth in Mindanao.”

Jessen said the EU is collecting the funds to support their projects in Southern Philippines.

“We’re collecting funds, and we are then putting them on Mindanao, and that process in ongoing. We have a technical process and mission going to Mindanao this year to look at job creation; we look at the local communities and make sure job creation is done as effectively as possible.”

He added that a new team from the EU is coming over in two weeks, saying the last time an EU team came over, it spent two-and-a-half weeks going around Mindanao and speaking to the local and regional leaders to find out how they would fit in to support the local objectives of the region and of the government.

“We have a specific target, and also, have a monitoring system to monitor the projects to see if, in fact, these objectives have been achieved,” Jenssen said, adding the EU had one health project for the indigenous peoples of the South that was completed in 2016.

Cimatu vows to learn ropes, earn respect as DENR chief

By Jonathan L. Mayuga

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@jonlmayuga

nvironment Secretary Roy A. Cimatu on Thursday vowed to learn the ropes and earn the people’s respect as the country’s chief steward of the environment and natural resources.

In a speech during the turnover ceremony at the Department of Environment and Natural Resources (DENR), Cimatu vowed to listen to all voices and make full use of the power and resources of his office to ensure that various concerns will be properly and judiciously addressed.

Cimatu, who became the DENR’s 16th secretary, received the DENR flag from outgoing Secretary Regina Paz L. Lopez, whose term was abruptly ended by the rejection of the powerful Commission on Appointments on May 3.

A former chief of staff of the Armed Forces of the Philippines (AFP), Cimatu admitted that being a soldier for over 30 years, he may have likely found himself in an unfamiliar territory.

He said his appointment by President Duterte days after Lopez’s rejection caught him by surprise.

“I was in Malacañang with some friends to file my request to fly to South Korea to address the on-going tension there, but instead, I was told by [Special Assistant to the President] Bong Go that the President wants to talk to me,” he told a crowd that witnessed the turnover ceremony at the DENR Social Hall.

According to Cimatu, he tried to persuade the President to reconsider his decision to give him the top DENR post, citing his age, but the President, who

was older than him, simply retorted.

“Anong matanda? Mas matanda ako sa iyo ng isang taon,” soliciting laughter from the crowd.

“Here I am, wading in into a field far removed from soldiery. That is why you will please excuse me if I ask that I be given time to scan and study the terrain in an agency which impacts considerably on our very life as a people and the future of our beloved Philippines,” Cimatu said.

According to Cimatu, he will “try to do his best as Duterte’s point man in the daunting task of protecting our environment in all its forms—from the mines to the lakes and rivers, to the forests to the plains, to our waters, to our sewers, to the very air we breath, you name it—while promoting the wise and proper use of these God-given resources for the public good”.

He said he will always be guided by the “3Ps. As a soldier, Cimatu said he will protect the people and the land against all enemies of the state, as special envoy for OFWs, protect the OFWs and put them out of harm’s way now and lastly, now as DENR secretary, protect environmental safeguards and laws.

In an ambush interview, Cimatu reiterated that he will ensure mining is done responsibly, as he vowed to enforce the environmental safeguards as mandated by existing law.

He also dispelled allegations that he will take a promining stance, saying he will strike a balance between protecting the environment and exploiting the natural wealth.

Cimatu said he is passionate for the environment, contrary to allegations

Here I am, wading in into a field far removed from soldiery. That is why you will please excuse me if I ask that I be given time to scan and study the terrain in an agency which impacts considerably on our very life as a people and the future of our beloved Philippines.”—

Cimatu

by some quarters. “I also planted trees when I was a young lieutenant,” he said.

Cimatu, having been a solider, is accused of various human-rights violations, and was once linked to the alleged pabaon scandal that rocked the AFP. Sought to comment, he simply said: “Those are only allegations.”

In her farewell speech, Lopez tried told Cimatu and Undersecretary for Mining Mario Luis Jacinto not to allow destructive mining and ensure social justice.

“I will have you shot if you don’t,” Lopez said in jest.

Agriculture/Commodities BusinessMirror

news@businessmirror.com.ph

Editor: Jennifer A. Ng • Thursday, May 11, 2017

A5

Govt eyeing to hike hog output by 10%

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By Jasper Emmanuel Y. Arcalas

@jearcalas

he Duterte administration will spend some P2.47 billion to bankroll various interventions aimed at increasing local hog production by 10 percent, according to a road map prepared by the Bureau of Animal Industry (BAI).

The BAI, an attached agency of the Department of Agriculture, said there is a need to boost output to keep pace with the continuous increase in demand for pork.

Citing data from the Organisation for Economic Co-operation and Development (OECD), the road map noted that per capita consumption of pork in the Philippines is increasing at 5 percent annually. Annual per capita consumption is projected to reach 15.6 kilograms by 2022, from the 2015 baseline of 14.9 kg.

“The Hog Road Map has the following missions: modernize and restructure the production and postproduction and marketing system to provide safe, nutritious, affordable and accessible products to consumers,” it read. “[Also], lift small producers from poverty and increase resiliency to climate change and provide opportunities for all segments in the value chain to modernize and be globally competitive,” the road map added.

Citing OECD data, the BAI said the country’s pork consumption of 15.6 kg per capita by 2022 would translate into a hog requirement of 25 million heads, or 3 million more than the estimated 22-million hog requirement in 2015.

The road map said the country’s total hog population in 2016 was only at 12.47 million heads of which 64 percent

came from commercial farms.

“The hog stakeholders targeted that the population of hogs in the Philippines should increase by at least 10 percent, from the present inventory of 12.47 million to 13.72 million in 2027,” it read.

The government also aims to help the hog industry increase its sow productivity by 6.2 pigs sold per sow per year to 25 pigs per sow per year by 2020.

To sustain the increase in output, the BAI said it is targeting to cut hog mortality rate and help hog raisers bring down the cost of production by P10 per kg to P80 per kg by 2022.

The road map indicated that the bulk of the P2.47 billion the government will set aside for the industry will be spent for upgrading BAI’s laboratories and the training of its personnel.

“Diagnostic laboratories and feed laboratories in the BAI and in the regions must be upgraded. This is to elevate the level of animal disease diagnostics and feed testing, to protect the producers and consumers,” it read.

“Foot and mouth disease, among other epidemic/epizootic diseases, can be controlled easier if diagnosis is early. Laboratories must comply with international standards, so whatever results will be produced here will also be acknowledged in other countries,” the road map added.

NFA to intensify campaign vs rice hoarders, profiteers

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he National Food Authority (NFA) vowed to step up its campaign against illegal activities in the rice industry, especially during the lean months of July to September.

NFA Administrator Jason Laureano Y. Aquino said he has directed the food agency’s personnel to “intensify” their farm and market-monitoring activities.

Aquino said this is in line with the NFA’s mandate under Presidential Decree (PD) 4, which created the food agency. The NFA is tasked to ensure the food security of the country and stabilize the supply and price of staple grains.

“While it is already a regular activity of NFA field offices to monitor and inspect not only NFA rice retailers, but also commercial rice traders for monitoring commercial stocks, NFA enforcers have

been alerted,” he said.

“The NFA management is wary that unscrupulous traders might take advantage of the situation to create artificial rice shortage by hoarding stocks during the lean months,” Aquino added.

Under Section 6 of PD 4, it is the function of the NFA “to inspect palay, rice and other grains stored by any person, partnership, corporation or association, for purposes of taking inventory and record of such commodities.”

The NFA is also authorized by law “to order the seizure, whenever there is hoarding of rice and other grains products, including facilities and equipment used in said hoarding, or whenever there is a scarcity of supply of such commodity in the consumer market and/or an unwarranted increase in the price”. Jasper Emmanuel Y. Arcalas

Vietnam puts pork on menus as farmers face glut, low prices

X

UAN SON, Vietnam—Pork may be hogging menus in Vietnam’s factories and army canteens for some time to come, as the country tries to keep pig farmers stricken by a glut in supply from going under.

Millions of farmers are struggling after China began blocking imports from Vietnam last November. The crisis has highlighted the risks of depending on a single foreign market, especially such a big one: half of all pork the world eats is consumed in China.

Pork prices fell to as low as $1 per kilogram in early May, less than half the price a year earlier. So far, a surplus of 300,000 tons to 400,000 tons has accumulated, according to state media.

To help farmers weather the crisis, the military, the police and trade unions are boosting pork portions in meals served in their canteens.

At a recent Cabinet meeting, Prime Minister Nguyen Xuan Phuc told officials to review planning of farm production and distribution to prevent future gluts in pork supplies.

The agriculture ministry, meanwhile, is lobbying to increase exports to China and other markets. The rescue effort may

have come too late for farmers like Do Huu Thuyen, who lost all his savings when pork prices recently crashed to record lows.

“The price of pork has never been cheaper,” said Thuyen, after feeding his herd at his farm in Xuan Son, a village about 55 kilometers (34 miles) northwest of Hanoi.

Vietnam is the world’s sixth-largest pork producer with about 3 million households raising pigs, mostly in small, backyard farms.

Such small-scale farming usually earns them badly needed cash income, but it’s relatively inefficient and difficult to regulate.

“If farmers see a chance for profits they will do as they like, as they have done many times before despite cautions from the government,” said Nguyen Anh Dung, another pig farmer.

China’s crackdown on the border trade was a harsh blow: Vietnamese sold 600,000 tons of pork to Chinese buyers in 2016 through such channels.

It also came at an especially bad time, since many farmers had expanded their herds two years earlier when prices spiked. Pork output in 2016 was 3.9 million tons, triple the output of 15 years earlier, according to the Agriculture Ministry. AP

The BAI said P611.40 million will be set aside for the government’s intensified nationwide hog disease programs to eradicate hog diseases, such as classical swine fever, pseudo-rabies virus and porcine epidemic diarrhea.

The government will also spend P300 million for the construction of two “AAA” abattoirs and P150 million to put up

six meat laboratories.

“To date, only 123 slaughterhouses were accredited by the National Meat Inspection Service. Only five slaughterhouses have proper facilities and operational procedures for export production,” the road map read.

The BAI noted the government will need the help of the private sector to achieve its targets for the hog industry. Under the road

map, the BAI said the private sector will be “encouraged” to invest P5.48 billion.

“The private producers must handle the investment for the modernization of farms; upgrading/modernization of the abattoirs; provision of refrigerated transport; provision of cold storage in the public market; and provision of the refrigerated display cabinet in the public markets,” the road map read.

TheBroad

Business

A6 Thursday, May 11, 2017

PHL rising to challen

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Story & photos by Manuel T. Cayon

ENHAM RISE—The second expedition of the MV DA-BFAR over this controversial extinct volcanic ridge east of Luzon is more than the historic repeat of a scientific expedition three years ago.

Crewmen unload the sinker, the cemented drums and the buoy, the orange marker, which consist the payao, or the fish-aggregating device to attract the big fishes, at the Benham Rise. The research ship MV DA-BFAR dropped one payao during its May 5 to 7 expedition, and would drop 14 more at designated points at the Benham Bank to aid fishermen in getting the bigger fishes.

The expedition of the research ship has another import to establish. It wants to project Philippine presence and ownership signal to whoever would still venture and covet this part of one of the country’s richest fishing grounds.

This was expressed in bold strokes by Agriculture Secretary Emmanuel F. Piñol. Piñol mounted the expedition and announced he received the imprimatur from President Duterte to evaluate all options to take to protect Benham Rise from further incursions.

The Benham Rise has been regularly poached by Taiwanese fishermen who periodically figured in violent fishing maneuvers with Filipino fishermen over much of the region.

Located in the Philippine Sea approximately 250 kilometers east of the northern coastline of Dinapigue, Isabela, it has a total area of 25.9 million hectares. Its size down to the extended continental shelf is more than two-thirds the size of the Philippine archipelago.

It was the presence of a Chinese ship at the Benham Rise early this year that sent critics asking for more aggressive posture from the Philippines to protect islets, shoals and fishing grounds within its exclusive economic zone (EEZ).

The Philippines has recently become agitated as a nation over the incursions in the western side of the country and within its 200-nauticalmile exclusive economic zone. A big part of these territories and the much richer fishing grounds have been lost to China’s bullying and, to a smaller degree, to the incursion of countries like Vietnam and Taiwan in the Spratlys and the nearer Scarborough Shoal.

The research expedition from May 5 to 7 would have far greater implications in the country’s protection of its fishing grounds.

These fishing grounds are well within the world’s richest marine and biologically diverse Coral Triangle, to which the Philippines has joined the continuing multination preservation effort.

Exclusive production

WHILE there are discussions as to which extent the country would want to go to preserve the fishing grounds east of Luzon, Piñol would rather push for the inclusion of the entire Benham Region, which includes the Benham Rise, as the country’s exclusive food-

production area.

With such declaration, other nonfood exploration and actual exploitation for natural resources, such as minerals, oil and natural gas, would be off-limits.

Some fisheries officials were thinking of declaring the Benham Rise only as a fish sanctuary or marine-protected area.

A presentation by retired Coast Guard Commodore Eduardo E. Gongona has recommended to the national government to declare the Benham Rise as a special fisheries-management area to help small fishermen in the eastern coastal Luzon provinces.

The Benham Rise is the seabed protrusion rising to about 3,200 meters from the Benham region seabed. The seabed bottom itself has an average depth of 5,000 meters from the sea level. The Benham Rise is described as an underwater plateau, with the top measuring 15,000 hectares, and its base, 128,600 hectares.

The entire region, including the extended continental shelf, would measure 25.9 million hectares, 5 million short of the country’s total land area.

Of this area, 11.4 million hectares are within the country’s EEZ, a concept adapted during the third UN Conference on the Law of the Sea in 1982. This grants coastal nations the right to explore and exploit the marine resources within its adjacent coasts extending 200 nautical miles to the continental shelf.

Resource management

RAFAEL Ramiscal of the Bureau of Fisheries and Aquatic Resources (BFAR) said the absence of another country east of the extended continental shelf would practically allow the country to extend a management program beyond the exclusive zone.

The Benham Rise, about 203 nautical miles east of the coastal town of Infanta, Quezon, is so small compared to the entire Benham region that it appears like a dot, or post, to the map, according to Ramiscal, BFAR’s fisheries researcher.

The protrusion, most likely believed to be that of an extinct volcanic formation, is named after US Navy officer Admiral Andrew Ellicot Kennedy Benham, who led a team of American surveyors in the early 20th century to discover the underwater plateau.

Piñol said the entire Benham

A Coast Guard boat tugs the buoy to its designated point above the Benham Rise, as the bigger and newly acquired Coast Guard patrol ship from Japan pulls alongside. Three Coast Guard ships provide security escort to the research ship, MV DA-BFAR.

derLook

sMirror

www.businessmirror.com.ph | Thursday, May 11, 2017

A7

nge in Benham Rise BENHAM RISE (quick facts)

n Also known as Benham Plateau n Named after American admiral and geologist Andrew Benham who discovered it n A 13-million hectare underwater plateau n Around 5,000 meters deep from the sea surface n Situated at 250 kilometers east of the Northern coastline of Dinapigue, Isabela

n It is wider than Luzon, Samar and Leyte combined, is now officially part of the Philippines because it is the only country within 200 nautical miles of the plateau

n A rich source of natural gas, minerals and other natural resources, such as heavy metal

n First mapped in 1993, but its connection to Philippine shelf was validated only recently to justify the country’s economic claim

n Solidified methane was found during mapping

n Up to approximately 300 nautical miles in the Pacific Ocean

n Stretches from the coast of Cagayan and Bicol

n First major expansion of the country’s maritime boundaries since the late 1970s when it was declared an exclusive economic zone (EEZ)

n People of the ancient Catanduanes called the plateau ‘’Kalipungawan’’ or a ‘’forlorn place’’

n The Philippines has exclusive sovereign rights to explore and exploit living and nonliving natural resources of both the EEZ and the seabed underneath

A fishing boat at sea for six days unloads some of its catch, including a 40-kilo yellowfin tuna, to the MV DA-BFAR research ship, which made its second expedition to Benham Rise from May 5 to 7.

area should be best declared as fish-production area, and to put a research structure in the middle of the ocean from which the Benham Rise is located.

“This would allow a better management of the resources in the Benham region.”

Ramiscal said he would personally confer with Duterte on this plan, noting that the plan would no longer require Congressional action. An executive order or proclamation would suffice, he added.

With him in this first highlevel expedition, involving a Cabinet member onboard, were Gongona, also designated Agriculture Undersecretary for Fisheries. Six scientists were also onboard to do a hydrographic survey, status of planktons and microscopic nutrients and oceanographic profile.

Four technical divers were also part of the expedition.

Alfeo Peloton, the BFAR acting assistant director for law enforcement and regulation cluster, noted this second expedition of the MV DA-BFAR repeats the scientific expedition made on the same day on May 5 and 6, 2014.

Two Monitoring, Control and Surveillance (MCS) boats and the Coast Guard patrol ship recently given by Japan accompanied the expedition team aboard the research ship the Philippines acquired from Spain in 1999.

Rare species

THE region has been largely understudied yet, with the MV DA-BFAR conducting the study of the Pacific Ocean side of the Philippines beginning 2006. The lone Philippine fisheries research ship has also conducted fisheries and oceanography studies in the Celebes Sea south of Mindanao and the West Philippine Sea.

The technical divers who explored its depths were amazed with what they discovered.

A Kidapawan City diver trained in Davao City said he went down as deep as 191 feet and said he was surprised to still see the sun’s illumination up to that depth.

“It tells us of the healthy condition of the waters in that area.”

However, the part of the bank, or the plateau of the Benham Rise, has only patches of corals and most are only rocks, the divers reported.

The shallowest part of the Benham Rise is 40 meters (about 131 feet).

Ramiscal said previous explorations, including the first expedition done on the same day three years ago, have also shown the healthy surface of the bank, especially along the ridges.

“It’s because the bank’s 15,000 hectares is too big to be entirely covered by the few explorations we have so far,” he explained.

Members of the expedition dropped a payao, a fish-aggregating device, consisting of five drums filled with cement and tied together to serve as the sinker. The rope connects to a long orange cylinder that serves as the buoy. A Philippine flag was tied to the buoy.

Another rope allowed to float is tied with dried coconut leaves.

The leaves would attract the formation of algae and other decomposers, which, in turn, would attract small fishes looking for food. The school of small fishes would also attract the big fishes. The process would take more than one week before fishermen would put to sea.

Fourteen other payao would be dropped at designated points in the bank within the week.

First evidence

IN 2006 the Philippine research presented the first evidence of the

presence of the rare Pacific bluefin tuna (Thunnus orientalis).

Fishermen, especially in Quezon province, have reportedly been catching tuna—as heavy as 200 to 300 kilos—in the area.

Local leader Rafaela Santa Iglesia said some fishermen who caught a bluefin tuna “never thought their catch could fetch a few hundred thousand pesos”.

“Our neighbor sold it for just P15,000 but he was surprised, and regretful that he had no idea that it was worth much more than the prevailing market price of tuna,” Santa Iglesia, an officer of the association of fishermen’s spouses in Barangay Dinahican, Infanta, Quezon, told the BusinessMirror.

“It’s a rare species of tuna that could only be found in the northern waters,” Ramiscal said.

Riczyneth Ampoyos-Arinque, in charge of the oceanographic researches onboard the research ship, said the tuna catch in the area is not surprising, despite the dominant perception of tuna being caught only in the southern seas and farther due to the tuna fish landing in General Santos City and Davao City fishports.

Ampoyos-Arinque said the presence of the bluefin tuna and other fish and marine species found in other Pacific Ocean fishing grounds is likely influenced by the North Equatorial current moving to the east coast of the Philippines.

This current splits into two directions upon entering the Philippine waters, one moving south to Surigao and the other moving north at the Bicol Shelf up further northward. Also referred to as the Kurushu current, this current is the one that carries the migratory path of tuna, Ramiscal said. He added the current begins at the east coast of Japan, to the coast of Taiwan and south of Japan and back to east of Japan going north to the Pacific near Alaska, and going down to California and to central Pacific.

Migratory path

Part of the migratory path via the Kurushu current is the so-called High Packet 1, in central Pacific, more than 1,200 nautical miles east of Davao region.

Ampoyos-Arinque said a study beginning in 2006 has confirmed a 2001-2016 Pelagic Longline Fishing Survey that the Benham Rise “does not lie only along the migratory path of tuna, but it has been a spawning area”.

She said the larvae collection study has shown consistency in this claim. And, in the last few years, “tuna larvae collection has been increasing,” she added.

“The nature of tuna is not static.

They migrate to warmer waters during winter and along this migratory pattern is the spawning,” AmpoyosArinque said. “They spawn and leave, explaining why the adult tuna could not be found in large numbers in a particular area.”

She added this is the same pattern in the Philippine South where fishermen have to venture long outside the country’s territorial waters to catch tuna. Many of them end up caught by the maritime and coastal police of other countries.

Aside from the rare bluefin tuna, other species found in the area include the rare big-eye tuna, yellowfin tuna (common in the southern edges of the tuna migratory region) and the albacore tuna.

There are also the four species of the bill fish, a BFAR survey said.

Wait, see

AURELIO Saja, 60, a fisherman from Barangay Dinahican, Infanta, said he and his fellow fishermen from many coastal towns would catch the locally called pipikat (Giant Trevally), talakitok (cavalla), malasugui (swordfish) or the blue

marlin, salmon, bigho and the bariles (long-tail tuna).

Ten years ago, he could fill two tons with a catch of assorted fishes in a few days’ fishing.

“Now, families have to wait for two weeks for their husbands to return from fishing, or sometimes a month if a fisherman would land his catch in other coastal town markets where prices fetch higher,” Saja told the BusinessMirror on May 5.

Some places, though, have imposed control on fishing in their areas, such as on Polilio Island off Quezon province.

A wife of a fisherman said in a town gathering Piñol should look into the stringent protection law of local governments prohibiting entry to the fishing areas of Polilio.

Bantay Dagat guards of Polilio would often block residents’ path while fishermen from the mainland would chase schools of fishes going to Polilio.

Piñol said a fisheries management plan would soon be issued after consultations in many coastal communities.

Illegal fishing

THE waters at the Benham Region have become attractive to other fishermen outside of eastern Luzon.

The bigger problem hounding all fishing grounds in the country is foreign poaching and illegal fishing, according to locals from the barangay of Dinahican, where the expedition took off. Some said non-Luzon residents, some coming from Leyte in eastern Visayas and Surigao del Sur are said to have become active in the region.

“We just heard from other fishermen that the fishes are still abundant here,” said Leonida Gudoy, 51. “That’s why we left our hometown Baybay, Leyte, along with our family.”

In the eastern side, it is usually the Taiwanese fishermen who venture far into the Philippine territorial seas, according to fisherman Romeo Sarco, who is also from Barangay Dinahican.

Vietnamese and mainland Chinese fishermen are also a problem in the western side, from the contested Spratlys and the Scarborough, but even as near as Palawan.

“We need more ships to manage our seas, and to discourage poaching,” Gongona said.

Boats, men

ON May 5 the Department of Agriculture gave eight 38-footer fiberglass fishing boats. Piñol also promised to give 200 30-footer fiberglass fishing boats. The bigger fishing boats are fitted with twinengines and ice boxes.

Piñol urged that each boat be shared by two fishermen to inculcate responsibility. He also made the beneficiaries promise not to engage in illegal fishing, or lose their right to the boats. He cited the possibility of prosecution if the boats were used for illegal activities.

The distribution of fiberglass fishing boats was started last year to prevent running afoul with a prohibition by the Department of Environment and Natural Resources against wooden-hulled fishing boats.

Piñol also promised the Polilio local governments to give additional two patrol boats. He warned that Malacañang has already agreed to suspend all local government executives, the mayors and governors, in areas where illegal fishing has not been stopped by authorities.

Gongona told the BusinessMirror that 90 percent of all fishing vessels entering the Philippines are into illegal fishing.

Piñol said the country loses $30 billion annually to foreign poaching and illegal fishing, and Gongona said Region 1, or the Ilocos region, alone loses $37 million. The region, along

with the Cagayan Valley region, is adjacent to Taiwan.

Gongona said the Philippines and Taiwan have been meeting on this problem and the latter has admitted to difficulty in running after its own erring nationals poaching on Philippine waters.

“It’s not only in northern Philippines that they are poaching,” he said. “They’re all over the place.”

The Philippines would be acquiring more ships, including donations from countries sympathetic to its woes in the South China Sea.

The country’s lone research ship needs to be refurbished, too.

Built by Astilleros, Gondan in Asturias, Spain, in July 1999, it was delivered two months later. It is 60 meters long with 1,186 gross tonnage. The ship can accommodate 50 officers, researches and crew, and another 40 trainees.

On its recent expedition, its air-conditioning system has to be reconditioned, so that cool air could reach the lower cabins. In some sections of the ship, floor boards need replacing.

Projecting sovereignty

ALONG with scientists, Piñol also brought government engineers to assess the possibility of putting up a structure atop the Benham Rise.

The engineers were also tasked to evaluate where in the underwater plateau foundations for the structure could be placed.

“We would also like our engineers and marine biologists to evaluate the kind of construction activities that would minimize destruction of the marine environment,” he said.

“The main intention of this expedition is actually to construct that structure,” he added, indicating government posture to address incursions of foreign fishermen on Philippine fishing territories.

“I have asked the President about putting out an expedition and assess the possibility of constructing a structure here, and he approved it,” Piñol said.

The structure would have multiple uses, he said.

“It would be a research facility for management [of the Benham Rise] as a fish-production area,” Piñol said, adding he would recommend the hiring of additional scientists to be assigned in the facility.

With a fixed research center, the Benham Rise would get the advantage of having its own baseline information and management center.

Sending signals

THE structure would also be designed to have its own dock, where only Filipino fishermen could rest from several days of fishing. Piñol said he also wants something that could accommodate three helicopters.

“It would have its own icemaking facility that would tap the sea water, adequate enough to provide refrigeration and ice-storage facility for the fish catch,” he said.

With as big as 15 hectares, Piñol added “we can build even that large a structure.”

“What we would like to have is a structure that is as prominent as the oil rigs in the North Sea, something that is visually dominant from afar,” he said.

The cost does not matter, he said.

“If we are losing $30 billion every year to foreign poaching and illegal fishing, and allowing other countries to enjoy our rich fishing grounds, then it would not matter if we spend $5 billion on that structure that would keep them off our territories,” Piñol said. “It would be a forward base, an advance command post against illegal fishing and foreign poaching.”

According to Piñol, the structure “should send a signal to those who covet Benham Rise that this is ours.”

A8

The World BusinessMirror

Thursday, May 11, 2017

Apple is first US firm to top $800-B value A pple Inc. became the first US company with a market value of more than $800 billion, as investors bet the next iPhone will spur a resurgence in sales.

The stock rose 1 percent on Tuesday to close at $153.99 in New York, giving it a market capitalization of about $803 billion.

The shares have gained 33 percent since the start of the year, helped by a buyback program that CEO Tim Cook extended to total $210 billion last week, from $175 billion last year.

Apple’s rise to the top of the world’s largest equity market highlights the emergence of mobile technology and the relative decline of the oil industry in recent years.

Exxon Mobil Corp.’s value peaked

in the fall of 2007, when oil prices climbed toward $100 a barrel.

In November of that year, PetroChina Co. briefly became the first global company with a market capitalization of more than $1 trillion.

Apple’s revenue grew in the most recent fiscal quarter, even as iPhone unit sales fell. Cook has sought to diversify the Cupertino, California-based company away from the smartphone, emphasizing higher-margin services, such as the App Store and iCloud, and introducing new products, such

Apple store in Ginza, Tokyo Bloomberg News

as the Apple Watch and AirPod wireless headphones.

After a modest upgrade to the iPhone last year, Apple will unveil three new iPhones later this year to coincide with the 10-year anniversary of the first model.

The updated range will include

a new top-of-the-line handset with an overhauled look, people familiar with the plan told Bloomberg News in April. Apple is testing a new type of screen, curved glass and stainless-steel materials, and more advanced cameras for that redesigned device. Bloomberg News

S. Korea’s Moon vows to seek peace with N. Korea, gets tough on firms M

oon Jae-in pledged to push for peace with North Korea and get tough on South Korea’s biggest companies in his first remarks as president after a resounding election win.

Moon, 64, was officially sworn in on Wednesday after an easy victory in a vote called after his predecessor Park Geun-hye was ousted on corruption charges in March.

The left-leaning candidate has promised a shift in direction after about a decade of conservative rule ended with South Korea’s biggest street protests since the 1980s and an acceleration of North Korea’s nuclear program.

Moon repeated a campaign pledge to visit North Korea under the right conditions, mirroring US President Donald J. Trump’s recent comment that he’d be open to meeting dictator Kim Jong Un. Moon also said he’d fly to the US, China and Japan to help broker a breakthrough.

“I will do whatever I can to bring peace to the Korean Peninsula,” Moon said on Wednesday.

Moon also pledged to be a “clean” president and end the close ties between politicians and family-run conglomerates known as chaebol. He also offered to share presidential powers during his five-year term, a key criticism of Park, who is in jail while on trial for corruption charges. She has denied wrongdoing.

“I come in with empty hands and will leave with empty hands,” Moon said. “Today we open a new era for the Republic of Korea.”

Moon faces c h a l lenges to achieve his goals at home and abroad. Lacking a majority in the National Assembly, he’ll have to work with other parties to gain traction on key economic initiatives such as chaebol reform. On North Korea, his desire for engagement is at odds with the Trump administration’s openness to use force against Kim’s regime, which hasn’t shown any intention to stop conducting nuclear and ballistic missile tests.

‘Clear limit’

“There’s a clear limit for him to achieve his policy goals because

Newly elected South Korean President Moon Jae-in takes an oath during his inauguration ceremony at the National Assembly in Seoul, South Korea, on May 10. Moon said on Wednesday he was open to visiting rival North Korea under the right conditions to talk about Pyongyang’s aggressive pursuit of nuclear-tipped missiles. The signs read “The 19th President.” AP/Ahn Young-joon

actually North Korea has changed substantially” in the past nine years, Choi Kang, vice president for research at the Asan Institute for Policy Studies in Seoul, told Bloomberg Telev ision’s Sher y Ahn. “It’s not going to cooperate with South Korea, doesn’t want dialogue with South Korea.”

Underscoring Moon’s challenge, Sky News on Tuesday reported North Korea’s UK Ambassador Choe Il as saying the country will proceed with a further nuclear test at a time of Kim’s choosing— repeating a common threat from the country’s diplomats.

Moon will also need to address potential conflicts stemming from the US missile shield that was installed on South Korean soil days before the election, after saying during the campaign that it was a matter for the new president to review. China has opposed the deployment of the Terminal High Altitude Area Defense (THAAD).

Thaad issue

“I’ll sincerely negotiate with the

US and China to solve the THAAD issue,” Moon said in his speech.

The White House congratulated Moon, w ith Spokesman Sean Spicer saying the Trump administration looks forward to strengthening the alliance between the US and South Korea.

Jap a ne s e P r i me M i n i s te r Shinzo Abe wants to meet Moon as soon as possible, his office said in a statement.

Coordination is crucial among the US, Japan and South Korea to stop Kim from developing more powerful nuclear weapons and missiles that threaten all three countries, according to Duyeon Kim, a visiting senior fellow at the Seoul-based Korean Peninsula Future Forum.

“The Washington-Seoul alliance may get dicey because of their fundamentally divergent approaches toward North Korea, but it will depend heavily on the two leaders’ initial contact and how they manage their differences,” Kim said. “It is imperative that Washington and Seoul coor-

dinate their North Korea policy so that there is no daylight for Pyongyang to exploit.”

Moon nominated Lee Nak-yon, governor of South Jeolla province, as prime minister, the presidential Blue House said in a text message.

Lee, a former journalist who has been a lawmaker for 14 years, will focus on job creation.

In his speech, Moon pledged to address unemployment that’s been hampering an export-driven recovery. Asia’s fourth-largest economy is forecast to expand this year at the slowest pace since 2012.

South Korea’s Kospi index of shares fell 0.6 percent from a record on Wednesday afternoon, after gaining earlier. The won slid 0.5 percent against the dollar.

Moon is planning to stimulate the economy with fiscal spending and create hundreds of thousands of public-sector jobs. His first order to administration staff was to convene a meeting to discuss the establishment and operation of a job-creation committee later on Wednesday. Bloomberg News

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

Macron’s win buoys small businesses’ hopes in France

T

ROYES, France—As the results of France’s presidential election rolled in last Sunday, Françoise Horiot watched with relief, optimistic about the prospects for her small aviation business.

The victory of Emmanuel Macron, an economic centrist, gave her hope that the mechanics in her factory could be more productive if he followed through on promises to ease regulations.

And it erased fears that her ties with suppliers and clients in Europe, Turkey and China might founder if his opponent, Marine Le Pen, could have made good on promises to pull France out of the European Union.

“Macron has so much to do, both at the national and European level,” said Horiot, 69, who runs Entreprise Troyes Aviation, which employs 15 people in this industrial and agricultural region in central France. “I hope he’ll have the power to improve the economy.”

He may not.

During the campaign, Macron promised to swiftly pass measures to lower France’s high unemployment rate and revive g row th, which has remained stagnant in the wake of Europe’s financial crisis.

A priority for the more than 3 million small and medium businesses that for m the backbone of the economy is a rev ision of the nation’s 3,300 -page labor code, which they say ma kes it difficu lt to lay off employees a nd d i s cou r a ge s t he m f rom hir ing new workers.

But Macron, like many of his predecessors, will face political and social hurdles to change.

His new party, La République en Marche—Republic on the Move— must secure a parliamentary majority in legislative elections next month, or face years of possible political gridlock.

French trade unions have also vowed nationwide protests to stop him from pushing France toward a less protected labor market, which they warn would fuel precariousness and nourish the populism that lifted Le Pen. At least half of the battle may be simply persuading the French people—and French businesses, investors and workers—to feel more optimistic about the future after a long malaise.

“The best case is it takes some time, but he manages to implement at least half of what’s needed to stop decreasing competitiveness and change the trajectory of France,” said Olivier Marchal, the chairman of Bain and Co. France, a business consultancy.

“If he accomplishes that, then employment picks up, confidence is rebuilt, new investment comes in, and we shift from a vicious cycle to a virtuous one,” he added. If not, “then the economic situation is going to be a major issue, both for France and for Europe.”

The Aube region of central France, of which Troyes is the de facto capital, has grappled with economic uncertainty for years.

Unemploy ment h a s l i ngered around 13 percent, higher than

the national average, as jobs were lost over the decades.

Layoffs recently swept through a nearby Michelin tire factory.

Textile manufacturers once implanted in the region closed amid cheap global competition. The breakdown of the votes belied the economic weakness. Macron won 54 percent of votes in the region in last Sunday’s election. But Le Pen, who campaigned hard among disaffected workers, had 46 percent of the vote, more than 11 points above the national average.

Macron’s platform plays well to businesses around Troyes, a town of 60,000 lined with 16th-century timbered houses and a phalanx of cafes and small shops. A handful of factories that have weathered global competition and the downturn dot the lush landscape on Troyes’ outskirts.

Macron says he wants to lower the taxes employers pay to fund France’s social welfare system, and to cut employee taxes to increase take-home pay.

He proposes investing more than €15 million in retraining laid-off workers, and allowing company-level agreements on issues that are now decided by industrywide labor negotiations, such as working hours. And he vows to reduce the administrative burden on small businesses, which must negotiate a thicket of regulations.

“He acted like a businessman in his campaign,” said Didier Duchene, the president of the Medef employers association for Aube and founder of CMD2, a metalworking company on the outskirts of Troyes that specializes in making ornate iron grills and industrial doors. “He understands business, and he’s got a strategic plan.”

Duchene employs about 30 workers on full-time contracts in his iron workshop—many of them longtime employees with artisanal experience. W hen a big order comes in, he may need to hire 20 more, but only until the job is done.

Because it is costly and complex to downsize, he must negotiate an expensive exit for employees, or consider taking additional people on short-term contracts.

“I’m always having to calculate: If I hire more people for a job, how much would it cost to downsize?” he said.

For workers who think they might be caught at the wrong end of Macron’s policies, a sense of wariness lingers.

Antoine Dion, 23, said he had little hope that Macron would improve conditions for people like him who have had trouble finding a steady job. He moved to Troyes two months ago from Paris, where he could not find regular work, and was looking for jobs as a plumber, a salesman or anything that would bring a secure paycheck.

“Macron is going to set up harmful policies for employment, and he wants to move jobs offshore, to cheaper countries,” Dion said.

“With Macron, everybody will be able to hire and fire easily—those are the ultraliberal values we are forced to adopt.”

New York Times News Service

Trump delaying decision on Paris climate deal

W

ASHINGTON—President Donald J. Trump is delaying a decision on whether to withdraw from a landmark climate deal until after an international summit later this month.

The move means the president will head the Group-of-Seven summit in Italy at the end of May, amid continued global uncertainty over whether the United States will remain in the emissions-cutting deal struck in Paris under the Obama administration.

White House Spokesman Sean Spicer said on Tuesday Trump wants to “continue to meet with his team”, seeking advice from both an economic and an environmental perspective as he works to make a decision.

A meeting for top advisers to discuss the deal had been set for Tuesday afternoon but was postponed.

Trump pledged during the presidential campaign to renegotiate the accord, but he has wavered on the issue since winning the presidency. His top officials have appeared divided about what to do about the deal, under which the US pledged to significantly reduce planet-warming carbon emissions in the coming decade.

Leading up to the expected Tuesday meeting, a number of high-profile businesses spoke out in favor of remaining part of the agreement. A group, including Apple, Google and Walmart, signed a letter sent to Trump last week. AP

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

The World BusinessMirror

Thursday, May 11 2017

A9

Trump fires Comey; many hear echoes of Watergate

W

ASHINGTON—In dramatically casting aside James B. Comey, President Donald J. Trump fired the man who may have helped make him president— and the man who potentially most threatened the future of his presidency.

Not since Watergate has a president dismissed the person leading an investigation bearing on him, and Trump’s decision late on Tuesday afternoon drew instant comparisons to the Saturday Night Massacre when President Richard M. Nixon ordered the firing of Archibald Cox, the special prosecutor looking into the so-called thirdrate burglary that would eventually bring Nixon down.

In his letter informing Comey that he was terminated as Federal Bureau of Investigation (FBI) director, Trump made a point of noting that Comey had three times told the president that he was not under investigation, Trump’s way of preemptively denying that his action was self-interested.

But in fact, he had plenty at stake, given that Comey had said publicly that the bureau was investigating Russia’s meddling in last year’s presidential election and whether any associates of Trump’s campaign were coordinating with Moscow.

The decision stunned members of both parties, who saw it as a brazen act sure to inflame an already politically explosive investigation.

For all his unconventional actions in his nearly four months as president, Trump still has the capacity to shock, and the notion of firing an FBI director in the midst of such an investigation crossed all the normal lines.

Trump may have assumed that Democrats so loathed Comey because of his actions last year in the investigation of Hillary Clinton’s private e-mail server that they would support or at least acquiesce to the dismissal. But if so, he miscalculated, as Democrats rushed to condemn the move and

demand that a special counsel be appointed to ensure that the Russia investigation be independent of the president.

The move exposed Trump to the suspicion that he has something to hide and could strain his relations with fellow Republicans who may be wary of defending him when they do not have all the facts.

Many Republicans issued cautious statements on Tuesday, but a few expressed misgivings about Comey’s dismissal and called for a special congressional investigation or independent commission to take over from the House and Senate Intelligence committees now looking into the Russia episode.

The appointment of a successor to Comey could touch off a furious fight since anyone he would choose would automatically come under suspicion. A confirmation fight could easily distract Trump’s White House at a time when it wants the Senate to focus on passing legislation to repeal former President Barack Obama’s health-care law.

Trump did little to help his case by arguing that he was dismissing Comey over his handling of the investigation into Clinton’s e-mail, given that he vowed as a candidate to throw her in prison if he won.

Few found it plausible that the president was truly bothered by Comey’s decision to publicly announce days before the election that he was reopening the case, a move Clinton and other Democrats have said tilted the election toward Trump.

“It’s beyond credulity to think that Donald J. Trump fired Jim Comey because of the way he

Federal Bureau of Investigation Director James Comey testifies before the Senate Judiciary Committee on Capitol Hill in Washington on May 3. President Donald J. Trump fired Comey on May 9. Gabriella Demczuk/The New York Times

ha nd led Hi l l a r y C l inton’s e mails,” John D. Podesta, who was Clinton’s campaign chairman, said in an interview. “Now more than ever, it’s time for an independent investigation.”

Podesta noted t hat Attorney General Jeff Sessions had recommended t he d ism issa l. “ The attorney general who said he recused himself on all the Russia matters recommended the firing of the FBI director in charge of investigating the Russia matters,” he said.

Defenders said Trump’s action would not circumvent the FBI investigation, which would go forward with career agents.

“This doesn’t stop anything,” Ken Cuccinelli, a former Virginia attorney general and ally of Trump, said on CNN. “The notion that this is going to stop the investigations going on is ludicrous.”

While Trump said he acted at the urging of Sessions, he had left little doubt about his personal feelings toward Comey or the Russia investigation in recent days. “The Russia-Trump collusion story is a total hoax, when will this taxpayer-funded charade end?” he wrote on Twitter on Monday.

T he Watergate compar ison was unavoidable. When Cox, the special prosecutor, subpoenaed Nixon for copies of White House tapes, the president ordered that he be fired.

Both Attor ney General Elliot Richardson and his deputy,

William Ruckelshaus, refused and resigned instead. The thirdranking Justice Department official, Solicitor General Robert H. Bork, complied with Nixon’s order and fired Cox. Democrats saw parallels.

“This is Nixonian,” Sen. Bob Casey, Democrat-Pennsylvania, said in a statement.

“Not since Watergate have our legal systems been so threatened and our faith in the independence and integrity of those systems so shaken,” added Sen. Richard Blumenthal, Democrat-Connecticut.

Even a long-stand ing a l ly of Tr ump’s, Roger Stone Jr., drew a connect ion as he defended t he president.

“Somewhere, Dick Nixon is smiling,” Stone, who worked for Nixon and is among the Trump associates facing FBI scrutiny, said in

an interview. “Comey’s credibility was shot. The irony is that Trump watched him talk about bumbling the Hillary investigation, not the Russia investigation—and decided it was time to get rid of him.”

At least one Twitter user made the argument that Trump had gone where even Nixon had not.

The Nixon presidential library posted a picture of Nixon on the telephone with the message: “FUN FACT: President Ni xon never fired the Director of the FBI #FBIDirector #notNixonian.”

Ever since Watergate, presidents have been reluctant to take on FBI directors, no matter how frustrated they were. The only e xception was President Bi l l Clinton, who fired William S. Sessions in 1993 after ethical issues were raised against him, and was accused of acting politically.

The successor he appointed, Louis J. Freeh, became even more of a headache for Clinton as he helped independent counsel Kenneth W. Starr investigate the president. But Clinton never risked the political backlash that would have come had he dismissed Freeh.

Robert S. Mueller III threatened to resign as FBI director during President George W. Bush’s administration if a secret surveillance program he considered illegal were continued, and Bush backed down rather than risk the scandal that would have ensued.

Joining Mueller in that threat, as it happened, was a deputy attorney general named James Comey.

Bush ultimately revised the legal justification in a way that passed muster with Mueller and Comey and allowed the surveillance to go forward.

Timothy Naftali, a former director of the Richard M. Nixon presidential library, said Trump’s dismissal of Comey was not a direct parallel to the Saturday Night Massacre because he was not appointed specifically to investigate the 2016 campaign.

“With or without Mr. Comey, the FBI will continue to investigate the 2016 campaign as it relates to Russian intervention,” Naftali said. “ This is another kind of mistake. Unless Attorney General Sessions can prove malfeasance or gross negligence

by Comey, the timing of this action further deepens suspicions that President Trump is covering up something.”

New York Times News Service

A10 Thursday, May 11, 2017 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Good choice, Mr. President

N

otwithstanding intense lobbying from allies and partymates, President Duterte on Monday appointed Nestor A. Espenilla Jr., current central bank deputy governor for the Supervision and Examination Sector, as the next Bangko Sentral ng Pilipinas (BSP) governor. He will take over from Amando M. Tetangco Jr., who will end his second term as BSP chief in July. Observers said Espenilla’s appointment validates official rhetoric from Malacañang that the President understands the importance of maintaining an independent and credible central bank.

Various sectors welcomed Espenilla’s appointment as the next BSP governor, noting the positive effects of continuity in ensuring that our nation’s coffers are in good hands. International financial services company Nomura said: “This is a positive appointment. It bodes well for a seamless transition and policy continuity. We think under Espenilla’s leadership, the BSP will continue to adhere to its inflationtargeting framework.”

In a news conference a day after his appointment, Espenilla highlighted continuity of reforms for his upcoming term as governor, saying drastic deviations should not be expected. He also spelled out his legislative agenda, which include the push for the pending amendments in the BSP charter, the relaxation of the bank-secrecy law, and the expansion of antimoney laundering provisions to other sectors in the economy.

To ensure continuity of Tetangco’s initiatives, Espenilla is expected to push for financial-market reforms, look out for opportunities for liberalization, and develop a more efficient capital markets. He said, “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.”

Described by friends as the unsung central bank workhorse, Espenilla has proven to be an adept regulator and an economist who helped strengthen the Philippine banking system such that the country’s banks today are seen being among the fittest in the Asean with robust capitalization.

Espenilla joined the BSP in 1981 as a working student, steadily rising through the ranks until he was appointed deputy governor in 2005.

Along the way, he was able to accumulate years of operational engagement in all key facets of modern Philippine central banking: Monetary policy, banking supervision and financial regulation, capital markets development, currency management and consumer protection, among others. As the chair of the bank supervision policy committee, the main platform for dialogue with various banking industry associations, he has established a culture of participation and feedback to aid in the crafting and communication of sound bank regulations initiatives.

The outgoing central bank governor 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. Tetangco said, “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.”

Kudos, Mr. President, for a good choice.

Since 2005

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OUTSIDE THE BOX

A

young man from a fairly wealthy New York family ventured on a “bird-watching” expedition to Venezuela in 1896.

And William Henry Phelps would later become a famous ornithologist and businessman in Venezuela.

Through his efforts, the forerunner of the “Caracas Country Club” was founded in 1918 as a recreational retreat for foreign oilmen. Still, today waiters serve guests grilled lobster at tables overlooking the clubhouse mansion and swimming pools.

Twice—in 2006 and 2010—the government wanted to close the club to build housing on the golf course.

But being the largest green area in Caracas, it is considered the city’s “plant lung”. At least that was the justification given to the poor for retaining the property as is.

In 2010 the New York Times published a story that the club’s days were numbered, as “the club stands for so much of what Mr. Chavez is against”. But Venezuelan writer Vanessa Neumann—whose grand-

father was a major industrialist— perfectly sums up the way the world actually works.

“You see the government apparatchiks paying private homage to the oligarchy they publicly ridicule, and vice versa. The former out of a desire to belong, the latter out of a desire to survive.”

The members of the club—as of similar establishments around the globe—have the gold and the government has guns. They both need each other until they don’t.

Why would these people at the top rungs of society and wealth sit by as Venezuela falls into chaos? They too depend on a functioning state for their well-being.

If some turn against the government—what scholars call an “elite

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We think that wealth brings power but that is true only to the extent that wealth is used to gain power from the genuine source—government. When a government falls, it can regain its power if it can get enough goons and guns. Venezuela is an example of that. Wealth, once lost, is more difficult to regain. fracture”—and do it too soon, they will be alone, facing terrible consequences. But if they stay loyal to a failing government too long, they risk going down with it.

The election of French President Emmanuel Macron is being heralded as a victory against the wave of “populism”. No matter what the two political parties that have governed France for decades did not even make to the second ballot.

The majority of the “elite” stay quiet until they see which way the political winds are blowing and those winds blow in the direction that the people decide. We have seen that happen in the Philippines, as well as in Thailand, Indonesia and elsewhere.

We think that wealth brings power but that is true only to the extent that wealth is used to gain power

from the genuine source—government. When a government falls, it can regain its power if it can get enough goons and guns. Venezuela is an example of that. Wealth, once lost, is more difficult to regain.

The difference is that the “elite” can, at any time, switch sides to “the people” against “the government” —the elite fracture. That is why we hear government constantly reminding the elite to “Keep calm and don’t worry”. The government cannot show any weakness. Further, to help keep the elite on its side, we have things in the West like booming stock markets.

W hile 2016 and 2017 have been filled with a growing “war” with government, forcing it to constantly retreat and then dig in, eventually—likely in 2018— government’s back will be against the wall. As I said to my friend, retired Philippine Navy Comm. Rex Robles, if you liked 2017, you are going to love 2018. The elite fracture may be on its way. Then things will get even more interesting... and dangerous.

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

Appointments that drew a thumbs-up and a question mark

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Watch for the ‘elite fracture’

Cecilio T. Arillo

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RESIDENT Duterte this week made two important appointments, one drew a thumbs-up and the other a question mark, thus, displaying a remarkable ability to strike a balance in a messy political, social and economic environment that require the exercise of flexibility, creativity, understanding and competitive intelligence.

The one that attracted an instant approval from bankers and businessmen was the appointment of Nestor A. Espenilla Jr., the soft-spoken deputy to governor of the Bangko Sentral ng Pilipinas (BSP), besting three other candidates—Central Bank Deputy Gov. Diwa C. Guinigundo, former Trade Secretary Peter Favila and East-West Bank President Antonio Moncupa Jr. Espenilla joined the BSP in 1981, after graduating magna cum laude from the University of the Philippines with a business economics degree and Masters in Business Administration (MBA) with hon-

ors, and then finished another masters in Policy Science at the Graduate Institute of Policy Science in Tokyo, Japan.

The question mark unfairly ascribed by a critic to former Armed Forces of the Philippines (AFP) chief and Ambassador Roy Cimatu, who was appointed the new secretary of the Department of Environment and Natural Resources (DENR), does not mean, according to the critic, that he’s not qualified to the position, but rather as an expression of doubt that he can match the passion, vision and tenacity of his predecessor, Regina Paz L. Lopez, to clean

the mining industry of corrupt and heartless people who destroyed the environment and displaced hundreds of communities in many parts of the country.

“It is imprudent, though,” said the critic, “if we don’t give Mr. Cimatu the benefit of the doubt. After all, he’s aware of the President’s position on the mining problem, thus: “When it comes to the preservation of my country, the land...I will do what is necessary.”

The choice of Cimatu, a military man with vast experience in destabilization, has obviously something to do with what Duterte said: “I know that some of you are giving funding to the other side to destabilize me,” referring to companies in the mining sector he did not name. He did not say how his administration was being destabilized, only that there could be efforts to make him unpopular.

“You think you can live with it [environmental degradation] because of the P70 billion or because they contributed to campaign funds? Not me,” Duterte said.

Duterte strongly backed Lopez’s order on February 2 to close down 23 of the country’s 41 mines, suspended another five for environmental infringements and also canceled 75

contracts for undeveloped mines.

Although former AFP budget officer and comptroller Army Colonel George Rabusa revealed in a Senate hearing in 2011 that Cimatu, along with former AFP chiefs of staff Angelo Reyes, who also became DENR secretary in President Gloria Macapagal-Arroyo’s administration and later committed suicide, and Diomedio Villanueva were beneficiaries of “converted cash” scandal, also known as the “Pabaon System”, no criminal or administrative cases were filed against him.

After the powerful Commission on Appointments rejected Lopez as DENR chief last May 3, the choice of her replacement became a guessing game until the President named Cimatu, which surprised everyone in the mining industry. Powerful people in the industry had already recommended Lopez’s replacement and were already floating their names in the media, hoping Duterte would listen to the lobbying.

Earlier, the President named Cimatu special envoy to the Middle East to dispel doubt that he would soon appoint him the DENR secretary.

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

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The unfortunate saga of Gina Lopez Val A. Villanueva

Businesswise

W

hile it is true that Regina Paz L. Lopez may feel zealous about protecting the environment, she was not suitable as head of the Department of Environment and Natural Resources (DENR). Hence, her short-lived foray into government service was an unfortunate one.

It was unfortunate because I honestly believe that her unwavering passion for environment protection could have had positive effects on an industry that has been unfairly demonized.

It was unfortunate, too, because the one who appointed her was not man enough to say she is simply not fit for the job. Like Pontius Pilate, President Duterte is washing his hands off the Commission on Appointment’s (CA) rejection of Gina as DENR chief. Worse, he virtually accuses his allies, without providing an iota of evidence, of being party to a wellfunded lobby against his appointee.

But what is most unfortunate is that Gina’s supporters (and they are many) believe that “greedy oligarchs” had a hand on the rebuff of their idol, conveniently forgetting that the family that brought her up is a member of that community.

Gina is unable to break free from the saber-rattling ways of her eco-warrior days, and this ultimately did her in.

While her heart is genuinely for the preservation of the environment, she fails to grasp the enormity of the job, which calls for the masterful balancing of the industry’s interest and that of the environment, which must be nurtured for the common good.

Gina fails to appreciate that the government, under the law and our constitution, is responsible—as a policy—to develop the mining industry. One of her functions as regulator is to observe due process to misbehaving mining contractors; and, if so warranted, mete out the maximum sanctions permissible under their respective contracts.

We don’t just shut down the operations of the tobacco industry just because smoking causes cancer. Similarly, the gas, car, cement, lumber and other industries that are found to be contributory to environment degradation must be allowed to thrive for as long as our modern existence relies on them. The job of the regulator is to see to it that no abuse takes place, and that the environment, through sustainable approaches, is cared for and brought back to the pink of health, after it has been mined out.

This has been done in other countries through hard-nosed regulations and vigilance from governments. It could certainly be done here without killing, as the saying goes, the goose that lays the golden eggs.

Gina should have ceased to be an ecowarrior, and began acting as a regulator.

By failing to evolve, she didn’t make the grade.

By adopting a hostile attitude toward the industry that she was tasked to oversee, she struck out. She should have worked on unifying various stakeholder—the indigenous people, the government and the industry—through consultations. Instead, she acted arbitrarily and on personal whim, beyond the ambit of the law, causing further dissonance, resulting in the loss of livelihood to thousands of people who rely on mining, and possibly billions of pesos in unpaid taxes for our country.

What is noteworthy is the so-called

oligarchs’ lobby, which is now being postulated by antimining advocates as the main cause of Gina’s CA rejection.

Lobbying is no stranger to the Lopez family. Remember the Electric Power Industry Reform Act (Epira) law? On June 8, 2001, then-President Gloria Macapagal-Arroyo signed into law Republic Act 9136, or the Epira of 2001. It was the finale of more than seven years of public hearings and floor discussions on numerous versions of the measures in Congress. Among others, the Epira law is intended to bring down the cost of electricity and expand the delivery of power supply to end-users by motivating competition and efficacy in the electricity industry. The spirit of these reforms is to empower stakeholders, most especially us consumers.

The initial drafts of the Epira law, called Omnibus Power Bill, had countless foreign consultants zealous to unpackage the power sector with no cross ownership among them. But powerful lobbyists, led by the Lopez family through the series of changes in Energy Committee Chairmen in the Senate and Congress from 1995 to 2001, prevailed.

In the final bill, only cross-ownership between the transmission company and the others was prohibited.

Section 45 provided that “to promote true market competition and prevent harmful monopoly and market power abuse, the ERC [Energy Regulatory Commission] shall enforce the following safeguards...[b]…. For the purpose of preventing market power abuse between associated firms engaged in generation and distribution, no distribution utility shall be allowed to source from bilateral power-supply contracts more than 50 percent of its total demand from associated firm engaged in generation”.

According to unimpeachable sources, in the finalization of the Epira law in the second week of June 2001, an intense clash erupted on the issue of cross-ownership between those battling to protect the consumers and Lopez lobbyists who were trying to water down the law.

Clearly, the Epira law is mindful of the consequence of a market power abuse between sister firms engaged in generation and distribution. The rest is, as the cliché goes, history, with the Lopezes emerging victorious. Did lobby money back then change hands? Your guess is as good as mine. nnn My heartfelt felicitations to my good friend, deputy governor of the Bangko Sentral ng Pilipinas (BSP) Nestor “Nesting” Espenilla Jr., for his appointment as the new BSP chief. Taking over the mantle from Amando M. Tetangco Jr. is a gargantuan task. As I have written in my previous columns, I believe in Nesting’s capability, both as an economist and a regulator. The hard work is about to begin, but I have no doubt that our nation’s coffers are in good hands.

God bless you, Nesting!

For comments and suggestions, e-mail me at mvala.v@gmail.com

Via, Veritas, Vita Msgr. Sabino A. Vengco Jr.

Alálaong Bagá

I

N the light of Easter, sayings of Jesus heard earlier become clear in their full meaning. For instance, things Jesus is narrated to have said just before His passion in the beginning of the so-called Last Discourse (John 14:1-12) reveal their real import to His followers when meditated upon in the context of the Paschal victory.

Where are you going?

TO pass from this world to the Father was something Jesus was sure of when “the hour” comes (John 13:1). And in His love for His friends in the world, He assured them, “Do not let your hearts be troubled. You have faith in God; have faith also in me”—that His departure would not mean abandonment or separation.

His going away is just preliminary to what is yet to come: the final and total communion with Him and His Father. That is why He spoke of the “many dwelling places” in His Father’s house. His departure is for the purpose of getting for them a place, so that they may also be where He is. He is coming back, to take them

to Himself. The fulfillment of everything for them and for Him is clearly spelled out; there is no room for hopelessness among his disciples in the world.

Vital in all is living faith in God who intends to share His life with His own. This must include faith in Jesus in whom and through whom everything will come to pass according to the divine plan. Hence, He tells His followers, “Where I am going you know the way.” The question of Thomas drives home the inadequacy of whatever we may know already: “Master, we do not know where you are going, how can we know the way?”

We know that raised from the dead Jesus is back in the glory of heaven

Bloomberg View

I

t’s not a constitutional crisis. Technically, President Donald J. Trump was within his constitutional rights on Tuesday when he fired Federal Bureau of Investigation (FBI) Director James Comey. The FBI is part of the executive branch, not an independent agency. But the firing did violate a powerful unwritten norm: that the director serves a 10year, nonrenewable term and is fired only for good cause.

Only one director has ever been removed from office involuntarily:

President Bill Clinton fired Director William Sessions in 1993 after an internal report found that he had committed significant ethics violations.

There is, therefore, reason to be deeply concerned about Comey’s firing, which has the effect of politicizing law enforcement—a risky precedent in a rule-of-law democracy. And the fact that the FBI is investigating the Trump administration makes that politicization look like pure presidential self-interest.

Practice regarding FBI directors doesn’t go back all that far, because J. Edgar Hoover ran the department from 1924 to 1972, ultimately dying in office.

at the right hand of the Father. But these words hardly exhaust the meaning of the transcendent reality we refer to as eternity with God.

I am the way

Jesus takes His disciples into the certainty of His hands when He assured them that He is “the way and the truth and the life”. Freeing us from all futile searches and imaginings, He revealed that He is personally the way to the Father and the truth about our salvation and the life of eternal communion we long for.

It is all uniquely wrapped up in His person; in Him everything hangs together. In Him humanity has already traveled the Paschal road from this world to the Father; in Him humankind has an infallible and always accessible way to God. Clearly, we need to have faith also in Him. Without explaining away the mystery of God’s unconditional love for us, we are reassured and light is cast upon our hopes. There is no other secret way; Jesus asserts, “If you know me, then you will also know my Father.” God’s love is a present favor, not merely a promise for a future communion. Philip wanted an immediate translation: “Master, show us the Father, and that will be enough for us.” No one has ever seen the

Father except the one who came from Him (John 1:18). Jesus is the answer to the psalmist’s prayer (Psalm 42:3): “My being thirsts for God, the living God. When can I go and see the face of God?” Jesus is the sign and face of God for us—“Whoever has seen me has seen the Father.”

Alálaong bagá, our life with God is now, not some day to come. In and through Jesus, the Father speaks to us and fulfills His saving plans for us; eternity for us begins in Jesus.

God dwells in Him and He in God; Jesus is the Paschal witness of God to all, making God available to us and humankind capable of God. And as the intimate union of Jesus with God makes Him God’s sacrament of life in the world, our faith-filled fellowship with Jesus makes us a blessing and a sacrament of communion to others. “Whoever believes in me will do the works that I do.” He entrusts to us the work of saving and sharing life He has begun: no dead ends, no lies, no to the culture of death. In us Christians, all peoples are to find “the way and the truth and the life”.

Join me in meditating on the Word of God every Sunday, from 5 to 6 a.m. on dwIZ 882, or by audio-streaming on www.dwiz882.com.

Trapped in the middle for over four decades!

Dr. Rene E. Ofreneo

LABOREM EXERCENS Continued from A1

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arlier, in 1957, the World Bank noted the Philippines’s industrial growth was rapid and ranked second only to Japan in Asia. The World Bank then wrote:

“…the Philippines has achieved a rapid rate of economic growth in the postwar period [since 1949].

Production has continued to grow at an annual rate of 7 percent, despite the disrupting effects of the Huk movement, which dampened economic activity until 1952…. By comparison with most underdeveloped countries, the basic economic position of the Philippines is favorable. It has a generous endowment of arable land, forest resources, minerals and normal potential. Through a comparatively high level of expenditure on education, transport, communications and industrial plant over the past 50 years, the Philippines has achieved a position in the Far East second only to Japan, both in respect to its level of literacy and to per capita production capacity. “…the prospects of the Philippine economy for sustained long-term growth are good.”

And yet, in the succeeding decades, or from the 1970s onward, the Philippines was left behind by its neighbors, specifically by the original four Asian “tigers”: Hong Kong, Singapore, South Korea and Taiwan.

Later, new Asian tigers came—Malaysia and China. Today, economic observers are asking: will Vietnam, with its growing industrial might, also leave the Philippines behind?

Why then has the Philippines got

stuck in middle-income trap for more than four decades? Why is it unable to achieve full industrial transformation in order to become a highincome developed country as what Japan and the above-named Asian tigers have accomplished? There are many reasons for this “frozen” development—historical, political, economic and even cultural.

However, for this column, there are at least three major economic explanations: first, the poor industrial visioning under various administrations, from the Marcos regime onward; second, the underdevelopment and coordination incoherence in the institutions needed for industrial growth, e.g., research and development, skills development in support of industrial upgrading and so on; and third, the weak government handling of the so-called structural adjustment policy conditionalities imposed by the International Monetary Fund-World Bank group.

On industrial visioning and industrial strategizing, this column wrote (February 8) that the “Filipino first” policy was never tried.

A nationalistic Congress passed in 1969 Joint Resolution 2, entitled “Magna Carta of Social Justice and Economic Freedom”. This Resolution, which was shepherded by Speaker Jose B. Laurel, sought for the fuller industrialization of the

Comey’s firing is a crisis of American rule of law

By Noah Feldman

Thursday, May 11, 2017 A11

Hoover was too powerful and knew too much to be fired.

In reaction, Congress adopted a law in 1976 that limited the director to a 10-year term. The law doesn’t place any limits on presidential power to fire the director. Arguably, law enforcement is so central to the core constitutional power of the executive that it would violate the separation of powers if Congress tried to take away the president’s authority to remove the chief federal law-enforcement officer.

At the same time, however, it’s anomalous in a rule-of-law system for law enforcement to be too responsive

to the political whims of the elected executive. It’s just very risky to allow a country’s most powerful elected official to control the appointment of key lawenforcement officers—in part because of conflicts of interest, like the one raised by the Comey firing. As a result, the vast majority of well-functioning democracies professionalize the investigative role, rather than politicizing it.

That’s been the unwritten norm in the US—one might almost say, a part of our unwritten, small-c constitution, though not of the written, big-C Constitution. Of the four Senate-confirmed directors before Comey, all served under

country as envisioned by nationalists, like Sen. Claro M. Recto. The idea was to curb the nation’s dependence on imported industrial raw materials and increase the country’s capacity not only to assemble semifinished goods, but also create basic and intermediate products.

The martial-law government of Ferdinand E. Marcos set aside this Resolution and instead embraced the program proposed by a rising group of Western-educated liberal economists: labor-intensive exportoriented industrialization, or Lieo.

But looking back, there should have been a twinning of the two programs just like what Japan did after World War II: sustained promotion of integrated industrialization at home and sustained promotion of export industries, both backed by a healthy dose of government protection.

On the development of institutions and the strengthening of policy coordination among agencies in support of industrialization, one easily sees the problem in the limited role that the Department of Science and Technology played in the development of the two leading export industries that grew on the back of the Lieo program: garments and electronics. The first, garments, expanded without utilizing local fibers or textiles; later, the excess imported raw materials of the export-led garments industry found their way in the domestic market and contributed to the demise of the local textile industry.

As to electronics, the Philippines was unable to climb the assembly ladder—meaning going up to the higher levels of testing and assembly work all the way to the production of finished electronicbased products—as what Taiwan and South Korea have done. Up to now, the aggregate value of Philippine electronic exports are just a fraction of the electronic exports of tiny Singapore, simply because

the latter is engaged in higher assembly and testing of electronic products. In short, the program of innovation was missing in the way these industries were promoted.

Filipino scientists, such as Dr. Cesar Saloma and Dr. Ted Mendoza, have been bewailing the very low level of Philippine gross expenditure on research and development (GERD) as a percentage of the GDP. Singapore’s GERD is over 2 percent, while that of the Philippines is a woeful 0.3 percent.

As to the government handling of the policy conditionalities imposed by the IMF-World Bank group in exchange for the series of structural adjustment loans (SALs) in the 1980s to 2000s, the Philippine experience was abominable. These SALs uniformly call for the liberalization, deregulation and privatization of the economy based on the general idea that a freer economy is liberating for all.

The reality, however, is that, in a very uneven and assymetrical domestic and global economy, trade liberalization measures should be done in a calibrated way. This is why it took China and Vietnam, in joining the World Trade Organization, one and a half decades of negotiation to implement tariff reduction for thousands of tariff lines. The reason: they had to inform and prepare the unprepared for trade liberalization. In the case of the Philippines, the liberalization was done virtually wholesale, by sector or subsector. This is why many local producers were caught with their pants down because they were neither informed or consulted on the schedule and scale of the liberalization measures. The Federation of Philippine Industries has a fairly long list of domestic industries that suffered as a result of the foregoing.

So can the Philippines get out of the middle-income trap? Can the government this time be more resolute in scaling up and diversifying industrialization?

presidents of both parties. Three served until their terms ended or they voluntarily retired. One, Robert Mueller, got a special two-year extension.

The exception was William Sessions. Sessions, initially appointed by President Ronald Reagan, was fired by Clinton after an investigation by the Office of Professional Responsibility of the Department of Justice found that he’d used FBI planes to visit friends and relatives. Clinton tried to get Sessions to resign in order not to have to break precedent and fire him. But Sessions refused, and Clinton pulled the trigger and fired him anyway.

Trump alluded indirectly to the Sessions firing in his message to Comey when he said “you are not able to effectively lead the bureau”. This echoed Clinton’s language when he said Sessions could “no longer effectively lead the bureau”.

By implication, Trump was saying that he has as much right to fire Comey as Clinton did to fire Sessions. In practice, there’s a big difference between Sessions’s ethics violations, which were documented by George H.W. Bush’s Department of Justice, and Comey’s admittedly highly problematic management of the investigation of Hillary Clinton.

2nd Front Page BusinessMirror

A12 Thursday, May 11, 2017

www.businessmirror.com.ph

E.R.C. TO RELEASE ORDER CONFIRMING RETURN OF P6.9B IN EXCESS CHARGES SOON

Meralco customers to get refund in June

By Lenie Lectura

T

@llectura

he Manila Electric Co. (Meralco) said on Wednesday it would most likely implement next month an impending regulatory order on its application to refund consumers nearly P7 billion worth of over-recoveries incurred from 2014 to 2016.

“We would have to wait for the order, but if it will be released anytime soon, then we can implement it already in June,” Meralco Utility Economics Head Lawrence

S. Fernandez said.

Energy Regulatory Commission (ERC) Commissioner Josefina Patricia Magpale-Asirit said an order is forthcoming.

“We brought back to the commission to reconfirm. We have to reconfirm the order,” Asirit said, referring to an ERC press statement uploaded on its web site that was abruptly taken down on the same day.

The ERC press statement directs Meralco to refund its customers P6.9 billion worth of overcharges collected over the past three years. Asirit said the commission will soon release a final order on Meralco’s application filed on March 31.

Meralco’s filing is meant to ref lect over-recoveries of the following pass-through costs: P4.91 billion in Generation Rate Over/Under Recovery (GOUR); P632.21 million in Transmission Rate Over/Under Recovery

We would have to wait for the order, but if it will be released anytime soon, then we can implement it already in June.”—Fernandez

(TOUR); P1.24 billion in System Loss Rate Over/Under Recovery (SLOUR); P130.62 million in Lifeline Subsidy Over/Under Recovery (LSOUR); and P2.32 million in Senior Citizen Discounts and Subsidy Over/Under Recovery (SrDSOUR) for the period January 2014 to December 2016.

Fernandez said the over-recoveries stemmed from “timing issues”. He explained that overrecoveries related to GOUR, for

instance, occurred due to lag in the recovery of generation costs from consumers.

Basically, the rate used to compute for the generation charge in a current billing moth is based on the generation cost incurred during the previous billing month, which is the supply month.

Given the recovery lag and the monthly changing generation costs, over/under recoveries are expected, as the genera-

tion cost for the current month is compared to the recoveries of the same month.

In the same application, Meralco asked the ERC to recover from consumers its real-property tax payments amounting P1.08 billion.

“Applicant proposed that GOR, TOR, SLOR and LSOR be refunded to the customers for a period of 36 months; SrDSOR be refunded to the customers for a period or one month; RPT payments be recovered from customers for a period of 36 months,” Meralco’s 11-page application read.

Based on ERC rules, distribution utilities in Luzon may file their respective consolidated applications every three years for the confirmation of passthrough charges.

Moon’s rise to power in South Korea causes worries, hopes abroad

S

EOUL, South Korea—Which of South Korea’s neighbors and allies stand to benefit most from liberal Moon Jae-in’s ascension to the presidency this week?

It might be North Korea, which sees Moon as an advocate of a softer approach to ridding the North of nuclear weapons. This, in turn, could set off alarms in a more conservative Washington. Beijing, meanwhile, likely hopes to win big concessions from Moon, and Tokyo worries he’ll upset a delicate arrangement meant to settle the two countries’ difficult past.

Here’s a look at how South Korea’s neighbors see Moon, Seoul’s first liberal leader in a decade, as he seeks to put an ambitious, possibly jarring foreign policy into play.

North Korea

HEALTH-INFO SERVICE Pilipino Mirror and the Fe del Mundo Medical Center (FDMMC) have finalized an agreement to relay important health-related information to the employees of Pilipino Mirror and their families. Signing for Pilipino Mirror is President and Publisher D. Edgard A. Cabangon (left) and for FMMDC is its general manager, Dr. Ma. Jacinta Victoria T. Lualhati (second from right).

Joining them are Noemi Angeline P. Chuidian (second from left), FDMMC business development and marketing manager; and T. Anthony Cabangon, publisher of the BusinessMirror. RUDY ESPERAS

Sugar production to hit 2.3 MMT on expansion in harvest area–SRA

By Jasper Emmanuel Y. Arcalas

P

@jearcalas

hilippine raw-sugar output in the current crop year (CY) could reach 2.3 million metric tons (MMT), 2.77 percent higher than the 2.238 MMT recorded in the previous crop year, according to the Sugar Regulatory Administration (SRA).

The SRA’s latest projection is also 500,000 metric tons (MT) higher than its previous estimate of 2.25 MMT. SR A Administrator A na Rosario V. Paner attributed the possible hike in output to the expansion of areas planted with sugarcane in the current crop year ending August 31. “I expect production to be at 2.3 [MMT]. I’m looking at that level,” SRA Administrator Ana Rosario V. Paner told the BusinessMirror.

74,464.99 MT

The volume of sugar exported by the Philippines to the US under the tariff-rate quota scheme “There are still a lot of standing crops at the moment. I just spoke with our extension personnel, and they reported that there are still a lot of standing canes.

That’s why I’m expecting that we will have an extended milling season, because we expect canes to be harvested later than last year,” Paner added.

She said the milling season, which usually runs from April to May, could extend to June.

SRA data showed that as of April 23, the Philippines has already produced 2.003 MMT of

raw sugar, or 89 percent of the projected output of 2.25 MMT. Based on the preliminary estimate of the SRA, the total sugarcane area in CY 2016-2017 reached 419,207 hectares, 1.87 percent higher than the 411,502 hectares recorded in the previous crop year.

SRA data also showed that the local sugar industry hectares milled 22.189 MMT of sugarcane as of April 23.

“It’s [sugarcane area] higher this year than previous years.

In the previous year the price of sugar was okay, so farmers planting other crops shifted to sugar,” Paner said.

The SRA pegged the domestic sugar demand for the current crop year at 2.15 MMT. SRA data also showed that as of April 23, the Philippines has already shipped 74,464.99 MT of sugar to the US, filling more than

half of the 136,201 MT allocated

by Washington. The SRA chief said she expects local sugar exporters to ship the remaining volume to the US by June.

Paner said she will try to get additional allocation from Washington for the next crop year, as the Philippines has already frontloaded its shipments to the US. “I will try to work on a higher quota for the coming cropping season. The early shipment of sugar signifies that our production is capable of filling the quota,” she said.

The Philippines exports sugar to the US under the tariff-rate quota (TRQ) scheme. The TRQ allows countries to export specified quantities of a product to the US at a relatively low tariff.

The Philippines has also exported some 407.16 MT of raw sugar to other markets aside from the US, according to data from the SRA.

North Korea, as of Wednesday afternoon, had yet to comment officially on Moon’s election, but experts say there’s no reason for it to dislike his win.

Even so, North Korea’s relations with Moon’s conservative predecessor, Park Geun-hye, were extremely bad, so it is almost certain to be cautious about any Moon proposals for increased engagement. It may welcome a controlled boost in economic ties—or even a bilateral summit in its capital under the right conditions, an idea Moon has already floated—but its primary worry is likely to remain national security.

On that front, Moon’s options to generate major change could be severely limited by South Korea’s alliance with the United States and whatever position toward North Korea that President Donald J. Trump decides to take.

Park’s decision to allow the US to base a state-of-the-art missile defense system, known by the acronym THAAD, in South Korea’s territory to cope with North Korean nuclear threats is a major irritant.

There’s widespread opposition in South Korea to the Thaad deployment and loud protests from China, which also sees the system as a security threat. But challenging Washington over THAAD might be difficult for Moon.

United States

Trump administration officials may worry about Moon’s softer approach to North Korea, but they also likely know he won’t push for any radical policies on the North or

any other issues that would hurt the decades-long alliance.

During his campaign, many conservatives worried that Moon’s election would cause problems with Washington, Seoul’s most important ally, because of his engagement policy on North Korea would clash with Trump’s push to maximize pressures on the country. Moon also said he would review the THAAD deployment.

But North Korea’s nuclear weapons program has made remarkable progress since Moon worked for a liberal government that engaged the North with big aid shipments and economic cooperation projects 10 years ago.

It’s highly unlikely that Moon will pursue the same level of rapprochement that past liberal governments took.

Earlier this month, South Korean officials said the THAAD system was already operating, and experts say it will be extremely difficult now for Moon to ask Washington to withdraw it.

Taking the oath of office in Seoul on Wednesday, Moon said he will further bolster the alliance and “immediately fly to Washington if necessary” for the sake of peace on the Korean Peninsula.

China

Beijing will be hoping for concessions from Moon to get relations back on track after months of Chinese fury over South Korea’s decision to deploy Thaad.

China maintained an unyielding stance even after the deployment went ahead, apparently hoping that Moon would either reverse that decision or be chastised sufficiently to eschew any similar steps in the future.

South Korean experts say Moon will try to show he’s making efforts to soothe Chinese anger but that it’s too late to call for Thaad’s withdrawal.

Beijing says the system threatens China’s own security because its radar system is able to peer deep into the country’s northeast and monitor its flights and missile launches.

Recent months have seen widening commercial retaliation against South Korean business interests in China, ranging from the cancellation of visits by popstars and actors to boycotts of the Lotte chain of department stores and the shutdown of work on an amusement See “Rise to power,” A2