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BusinessMirror A broader look at today’s business

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n Tuesday, May 15, 2018 Vol. 13 No. 213

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@alyasjah

he investing public, both onshore and offshore, was seen to brush aside the ouster of the Chief Justice as just one more irritant in the investment space, according to the Department of Trade and Industry (DTI).

₧616.7B The amount of investment pledges approved by the Board of Investments in 2017

In a text message to the BusinessMirror, Trade Undersecret a r y Nora K . Ter rado sa id the obser vable dissonance at the Supreme Court (SC) should n o t d i s r u p t t h e c o u n t r y ’s investment momentum.

“The investors we talked to have not raised any issue on the political side. They do not mind the political noise,” Terrado said. This developed even as the Judicial Reform Initiative (JRI), a five-year-old organization that counts as members some of the l argest and most inf luent ia l business entities in the country, issued a statement telling the court magistrates they “welcome any and all efforts to safeguard the integrity and sanctity of our constitutional process.” Continued on A8

Senators divided over proposals to amend, repeal TRAIN law By Butch Fernandez

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@butchfBM

enators are split on calls to repeal or suspend the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) law amid warnings aired by Trade Secretary Ramon M. Lopez that it could derail the Duterte administration’s “Build, Build, Build” program. Asked on Monday if he sees the Senate voting in favor of remedial legislation to scrap or amend the TRAIN law, Majority Leader Vicente C. Sotto III replied with a terse “no.” Reacting to reports that fellow lawmakers from the Senate and the House of Representatives are poised to push legislation amending the TRAIN law soon after Congress reconvenes regular sessions this week, Sotto suggested critics should take a second look at the plus side of the revenue measure.

SOTTO: “Those against it should consider the good portions of TRAIN.”

“Those against it should consider the good portions of TRAIN,” Sotto told the BusinessMirror. For instance, Sotto pointed out that estate taxes used to be pegged at 40 percent, “now it is 6 percent. Do we want to remove that?” “How about the tax on vanity? Should we take it out?” he asked. Senate President Pro Tempore Ralph G. Recto, in a text message to the BusinessMirror, also indicated he does not see the Senate majority bloc backing legislation repealing the TRAIN law. See “Train,” A8

PESO exchange rates n US 51.8870

ELECTION EBB AND FLOW Voters surge in and out of the Commonwealth Elementary School premises in Quezon City on Monday’s barangay and Sangguniang Kabataan elections. NONOY LACZA

3 oil firms hike gasoline, diesel prices By Lenie Lectura

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@llectura

il firms said on Monday that they will raise the prices of petroleum

products to reflect movements in the international petroleum market. Prices of gasoline will go up by P1.10 per liter, diesel by P1.20 per liter and kerosene by P0.95 per li-

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‘Businesses continue to trust govt despite Sereno ouster’ By Elijah Felice E. Rosales

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ter. The increase will take effect on Tuesday. Seaoil, PTT Philippines and Pilipinas Shell said they would implement the price adjustment at 6

CON-COM TO KEEP BAN VS. FOREIGNERS OWNING LAND AGUILAR: “If you free up land here, the prices of real estate would go up, and locals won’t be able to afford anymore.”

By Bernadette D. Nicolas @BNicolasBM

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ONSULTATIVE committee (Con-com) member Arthur N. Aguilar said the Subcommittee on Economic Reforms (SER) is eyeing to retain the existing provision on foreign ownership restriction on land. Aguilar noted that opening up the country to land ownership by foreigners may lead to uncontrolled increase in land prices, which could result in land becoming unaffordable to most Filipinos. Article XII, Section 7, of the 1987 Constitution states that: “Save in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals, corporations or associations qualified to acquire or hold lands of the public domain.”  Only Filipino citizens and corporations with at least 60 percent of the capital owned by Filipinos are allowed to acquire or hold lands of the public domain.  “There was a lot of debate on that because our neighbors in [the] Association of Southeast Asian Nations [are] more liberal in ownership of land,” Aguilar said in a radio interview over the weekend.  But in a separate interview with the BusinessMirror, Aguilar said the reason behind the “consensus” to retain the provision is because the country See “Con-com,” A8

Continued on A8

n japan 0.4744 n UK 70.1408 n HK 6.6101 n CHINA 8.1764 n singapore 38.8027 n australia 39.0813 n EU 61.8337 n SAUDI arabia 13.8354

Source: BSP (11 May 2018 )


A4 Tuesday, May 15, 2018 • Editor: Vittorio V. Vitug A2

The Nation BusinessMirror

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DOJ to start probe on charges vs execs in Sanofi drug scandal

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By Joel R. San Juan

@jrsanjuan1573

HE Department of Justice (DOJ) is set to start its preliminary investigation on May 15 on criminal charges filed against former Health Secretary Janette Garin and health officials filed by families of children who may have died due to a vaccine sold to the government by Sanofi Pasteur Ltd.

Garin and her corespondents have been summoned to appear before the investigating panel chairman, Senior Assistant State Prosecutor Rossane Balauag, and answer the complaints filed by the families

of the alleged victims forced to take the vaccine Dengvaxia. Also directed to show up in today’s hearing was incumbent Department of Health (DOH) Secretary Francisco T. Duque III who is

also a respondent in the case. They were specifically required to submit their counter-affidavits on charges of reckless imprudence resulting in homicide and obstruction of justice under the Revised Penal Code. The case stemmed from the nine separate complaints were filed by parents of Aejay Bautista, Angelica Pestilos, Lenard Baldonado, Zandro Colite, Abbie Hedia, Jansyn Bataan, Mark Axel Ebonia, Rey Justin Almagno and Alexander Jaime—all schoolchildren who died allegedly due to multiple organ failure after getting Dengvaxia shots. The complainants sought Garin and 34 others—including executives and officers of manufacturer Sanofi Pasteur and distributor Zuellig Pharma Corp. Duque was named by respondents in the cases of Bataan and Hedia because it was during his tenure in the DOH when the two

victims died. Bataan died in January, while Hedia died in February. The complainants are being represented by the Public Attorney’s Office (PAO) headed by lawyer Persida Acosta. Separate charge of obstruction of justice was also filed against the incumbent DOH chief for his supposed refusal to share the master list of children inoculated with Dengvaxia and also for issuing orders that further prevented PAO from effectively investigating the cases of deaths. Named respondents along with Garin are other DOH officials, including physicians Vicente Belizario Jr., Kenneth Hartigan-Go, Gerardo Bayugo, Lyndon Lee Suy, Irma Asuncion, Julius Lecciones and Joyce Ducusin. Other respondents named were Rosalind Vianzon and Mario Baquilod, along with physicians Socorro Lupisan and Maria Rosario Capeding of the Research Institute for Tropical Medicine.

The executives of Sanofi named in the complaints are Carlito Realuyo, Sanislas Camart, Jean Louis Grunwald, Jean-Francois Vacherand, Conchita Santos, Jazel Anne Calvo, Pearl Grace Cabali and Marie Esther de Antoni. The officers of Zuellig in the charge sheet, on the other hand, are Kasigod Jamias, Michael Becker, Ricardo Romulo, Imran Babar Chugtai, Raymund Azurin, Nilo Badiola, John Stokes Davison, Marc Franck, Ashley Gerard Antonio, Ana Liza Peralta, Rosa Maria Chua, Danilo Cahoy, Manuel Concio III, Roland Goco and Ma. Visitacion Barreiro. Apart from the criminal complaints, the PAO has already filed several civil suits before the Regional Trial Court in Quezon City. The PAO, which was tapped by the DOJ to conduct fact-finding investigation and build cases against those liable for the Dengvaxia

Teachers to get tax refund for service in May 14 polls By Samuel P. Medenilla @sam_medenilla

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EACHERS who served in the barangay and Sangguniang Kabataan elections (BSKE) on Monday  would receive reduction in tax from their electionrelated income in the form of refund. This after the Commission on Election (Comelec) issued its resolution 10332, providing the teachers with tax reduction as these professionals’ poll honoraria and allowance are still included in their income tax. In authorizing the new policy, the poll body cited provisions of the Tax Reform for Acceleration and Inclusion law, which exempted people with an annual taxable compensation of P250,000 from paying income tax. To qualify for the refund, a teacher must file a Sworn Declaration in a form from the Bureau of Internal Revenue, saying their net taxable compensation for the year will not exceed P250,000. “Those serving in the Electoral Boards, DESOs [Department of Education Supervisor Official] and support staff, who are exempted

from withholding tax on compensation, shall be able to execute the prescribed Sworn Declaration and to submit the same to the Commission on Elections for the processing and refund of the tax previously withheld,” the Comelec said in its three-page resolution. The Comelec said its Finance Service Department (FSD), Project Management Office-BSKE and the Department of Education (DepEd) will lead in the validation of the application. The FSD will need to secure the necessary cash for the refund from the Department of Budget and Management. “The FSD shall also ensure that sufficient funds are made available to enable the officials concerned to draw the appropriate cash advances for the reproduction, distribution, retrieval and submission of the Sworn Declaration. The Comelec issued the resolution in response to the appeal of lobby group Teachers’ Dignity Coalition and the DepEd to make honorarium of teachers, who volunteered in the May 14 elections, tax-free.

briefs more water from angat seen to augment supply to metro WATER consumers in Metro Manila need not worry about the low level of water at the La Mesa Dam, as an additional water allocation of 172 million liters per day has been approved by the National Water Resources Board to augment the 4,000 MLD for Metro Manila. This was according to Metropolitan Waterworks and Sewerage System Administrator Rey Velasco as he assured the public there is adequate water supply at the Angat dam to last until the onset of the rainy season. Angat Dam’s water level remained high at 194.3 meters above sea level last Saturday.  This is 14-meter higher than the 180 meter ASL, which is considered the critical for Angat. Angat supplies 97 percent of Metro Manila’s water requirement.  It also supplies water for irrigation of farms in the Bulacan and Pampanga provinces. Jonathan L. Mayuga

Educator Vladmir Cayabas has been dressing up in his native attire for the past elections to show his patriotism and ethnicity in exercising his right of suffrage. Cayabas cast his vote for the Sangguniang Kabataan elections in the morning of May 14 at the New Lucban Elementary School along Magsaysay Avenue in Baguio City. MAU VICTA

DENR, DOT to test ‘tracking tool’ in 32 ecotourism sites

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he Department of Environment and Natural Resources (DENR) is partnering with the Department of Tourism (DOT) to test its newly developed Ecotourism Tracking Tool (ETT). Through the ETT, the two government agencies will put under quality audit 32 ecotourism sites in

various parts of the country. The ETT is the main tool developed by the Ecosystems Research and Development Bureau (ERDB) for a certification system to promote not only tourism but the sustainable development and the economic benefits of tourism to indigenous peoples.

anomaly, has documented 47 deaths allegedly caused by the antidengue vaccine so far. Apart from the complaints filed by PAO, the same DOJ panel will also hear today the complaint filed anticorruption groups Volunteers Against Crime and Corruption (VACC) and Vanguard of the Philippine Constitution Inc. in February that included former President Benigno S. Aquino III and former Budget Secretary Florencio Abad as respondents. Aquino and Abad were also required to appear in today’s hearing and submit their counter-affidavits. The VACC complaint involved charges of multiple homicide and physical injuries under the Revised Penal Code, malversation of public funds and violations of Republic Act 3019 (Anti-Graft and Corrupt Practices Act) and RA 9184 (Government Procurement Reform Act).

The sites to be assessed will be sampled from the priority ecotourism sites identified by the tourism department’s Regional Ecotourism Council under a National Ecotourism Strategy and Action Plan, according to Ma. Lourdes DC. Reyes, forester of the DENR’s ERDB. T he c e r t i f ic at ion s y s t e m

through the ETT was developed by ERDB as part of an accreditation system so that sites claimed to be an ecotourism site will really have ecological value for tourists and the environment. “This tool will help concerned authorities monitor and evaluate the real activities of resorts, recreational and tourism sites in relation to their friendliness to the environment and adherence to the principles of ecotourism,” ERDB Director Dr. Henry A. Adornado said in a statement. Adornado said the ETT has been devised to also evaluate tourist sites’ impact on the economy and on their economic benefits to indigenous people. Indigenous peoples and host communities of ecotourism sites, which are often found in biodiversity-rich areas, are bound to have the most interest in protecting natural resources, Adornado added. The ETT evaluates if a site benefits indigenous peoples economically. ERDB is also partnering with both the Biodiversity Management Bureau in relation to preserving biodiversity. The ERDB-DENR ecotourism certification system will label sites under four classifications: Platinum (91-percent to 100-percent adherence to the ETT standard); Gold (81 percent to 90 percent); Silver (71 percent to 80 percent); and Bronze (61 percent to 70 percent). Jonathan L. Mayuga

Police chief notes BSK elections marred by vote buying, threats

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HILIPPINE National Police (PNP) chief Director General Oscar D. Albayalde noted massive reports of vote-buying while policemen acted as board of election inspectors in some barangays in Mindanao during the elections on Monday. While Albayalde noted in detail all the reports of vote-buying, he said the PNP was swamped with reports of barangay and Sangguniang Kabataan (BSK) candidates buying votes. He cited the case of some people in Lucena, Quezon, who were charged with vote-buying by the local police. “There are really massive reports of vote-buying. We cannot deny that; there are complaints left and right,” Albayalde said. “This is really perennial, every time there is [an] election, there are reports of vote buying.” In Mindanao the PNP chief said policemen were forced to sit as election inspectors after teachers failed to report for election duties due to fear or even intimidation by candidates or their followers. These areas were in Maguindanao, Sulu and Basilan, according to Albayalde. Still, he said the number of election-related incidents for this year was comparably lower when compared with the figures during the 2013 elections. Rene Acosta

passing important bills eyed after house resumes session

THE House of Representatives is expected to resume its session on Tuesday with a target to pass several important bills. Majority Leader Rodolfo C. Fariñas Sr. of Ilocos Norte said the House Committee on Rules will conduct a meeting on May 15 to set its agenda for the remaining session days before Congress takes another break—the sine die adjournment on May 30. The rules committee will meet on Tuesday at 2 p.m., according to Fariñas. He added that all matters relating to the rules of the House, rules of procedure governing inquiries, impeachment, Order of Business, Calendar of Business, the referral of bills, resolutions, speeches and committee reports would be discussed. Fariñas said the committee report of the House Committee on Justice on the pending impeachment complaint filed before the lower chamber against Chief Justice Maria Lourdes A. Sereno is included in the agenda. Jovee Marie N. dela Cruz

manila water suspends partner firm after deaths

MANILA Water Inc. has suspended the operation of a partner firm following the death of three residents, including a 5-year-old boy, on May 2. Manila Water executive Daisy Theresa L. Galang said the company ordered Link Energie Industries Inc. to “suspend activities in the area after the incident pending the completion of our investigation.” On May 2 a 12-wheeler truck loaded with sand fell on a hole and squashed a tricycle in the victims were riding in. The hole was part of an excavation by Link Energie in contract with Manila Water. Galang said Manila Water’s investigation is not intended to find the liability of Link Energie in the accident. She added such investigation is a standard operating procedure. Nelson S. Badilla


Economy

A4 Tuesday, May 15, 2018 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

Mothers quit jobs due to lack of benefits–study

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By Cai U. Ordinario

of the Philippines’s working population and many either choose or need to work to support their families. If companies make an effort to build an inclusive culture which supports women and working mothers, they will see a marked improvement in their retention rates,” Mukherjee added. A lack of flexible working arrangements (32 percent) and struggling to balance demands from clients and colleagues, as well as family life (58 percent) were some of the answers provided by working women and new mothers when asked about challenges faced at work. Data showed that working from home for Pinays is only an option for 37 percent of the respondents. Nearly half, or 47 percent, of working mothers in the Philippines even feel obligated to work overtime. This makes it difficult for many women to balance the demands of their work and family. Around 58 percent of Filipina respondents identified this as the primary obstacle to becoming a suc-

Govt keen on transforming Batanes into agritourism site By Jasper Emmanuel Y. Arcalas

@cuo_bm

@jearcalas

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AVING children and the lack of benefits for working mothers caused many Pinays to miss out on career breaks and quit the work force altogether, according to a study conducted by Monster.com. In a study conducted in Singapore, Malaysia and the Philippines, data showed 59 percent of Filipina women feel they have missed out on career opportunities because of their decision to have children. Fur ther, around 49 percent of Filipinas said employee compensation/ benefits for mothers are below ex pectations. A round 55 percent of women said their employers do not prov ide more parenta l leave than is required. “Although respondents in the Philippines had the highest number of respondents able to utilize flexible working options in Southeast Asia, there is still room for improvement to better support and manage the workloads for working mothers. This is reflected by the fact that over 50 percent of working Filipinas surveyed feel that they miss out on crucial career milestones after having children,” said Abhijeet Mukherjee, CEO, Monster.com-APAC & Gulf. “Women are an integral component

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THIS file photo shows women working at a semiconductor factory in Laguna Techno Park. A study conducted by Monster.com revealed that Filipinas are forced to quit their jobs after having children. NONIE REYES

cessful working mother. “To combat this, respondents suggested solutions such as flexible work arrangements tailored to the mothers’ needs [37 percent], efficient communication with mothers about leave policies [17 percent], and a transition period consisting of reduced workload [16 percent],” Monster.com said. The study, which surveyed over 2,600 respondents across the Philippines, Singapore and Malaysia aimed to identify challenges women and mothers face in

the workplace, in line with Mother’s Day. It also aimed to raise attention to these issues for employers, who might want to consider more family-friendly arrangements to aid in increasing retention and lowering overall attrition of the female work force. For more than 20 years, Monster has been a leading online career and recruitment resource. Currently, it has more than 200 million people registered on the Monster Worldwide network.

HE Department of Agriculture (DA) is eyeing to partner with the Department of Tourism (DOT) to develop the Batanes islands as an agritourism site this year. Agriculture Secretary Emmanuel F. Piñol said he has identified Batanes islands as an “agrotourism destination” during his recent visit in the area last week. “In fact, right after I learned that [Agriculture] Undersecretary Bernadette [Romulo-Puyat] was appointed as tourism secretary, the future of Batanes became brighter because we can now tipe up our programs,” Piñol told reporters in a recent interview. Romulo-Puyat has been chosen by President Duterte last week to replace former Tourism chief Wanda Corazon T. Teo. The agriculture chief said the partnership with the DOT is “vital” to fast-track the roll out of key projects, including public infrastructure in Batanes. “It is hard to handle Batanes from a purely agriculture and fisheries stand point,” Piñol added. “For example, they need a lot of roads. Not because they have a lot of vehicles running around but because even motorcycles cannot go around whenever it rains due to the bad roads.” Piñol said aside from roads, Batanes also needs better ports to properly facilitate the movement of tourists and fisheries products inside and outside the province. “If you look at it from the stand point of agriculture and fisheries alone, you cannot justify it. You cannot justify the projects because the projects would be more expensive than the products that will be shipped,” he said. “But if you will say it is a tourism destination, then we can justify the projects.” Piñol said the DA is also planning to improve an island that contains at least 2,000 goats and Vushu island, which is home to thousands of free-range cows. “One of their requests is to have a rain catcher for the goat island.” The DA chief added he has designated MCS 3010, a monitoring, control and surveillance vessel of the Bureau of Fisheries and Aquatic Resources to patrol in the area to drive away Taiwanese poachers.

Tesda to hire teachers, trainers for language institute By Claudeth Mocon-Ciriaco | Correspondent

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HE Technical Education and Skills Development Authority (Tesda) Language Skills Institutes (LSIs) said it is currently looking for teachers and trainers for its LSIs. Tesda said it will tap teachers for the following languages: Arabic, Korean, English, Mandarin Chinese, German, Mandarin Taiwanese, Italian, Spanish, Japanese and Bahasa Indonesia. In a memo, Tesda Director General, Secretary Guiling A. Mamondiong instructed all regional directors, executive director of the National Institute for Technical Education and Skills Development and National/Regional Language Skills Institutes (N/ RLSIs) to revive the LSIs of the agency. Mamondiong cited the importance of the work-based language and culture programs which serve as a conduit between students and job-ready workers to enhance their competitiveness in addition to the qualifications they possess as required by the industry/employer in local and international markets. The N/RLSIs is tasked to offer language and culture programs based on the most frequented countries of destination of overseas Filipino workers in their areas, as well as countries with existing “government-to-government” agreement to the Philippines. “In this regard, all the Regional Directors and TTI [Tesda Technology Institution] administrators where the N/RLSIs are located shall determine the appropriate foreign language and culture offerings

in their respective areas based on geographical needs and demands, available resources, capabilities and facilities,” Mamondiong said. At present, Tesda has 37 N/RLSIs nationwide. Qualifications for interested applicants: bachelor’s degree holder; one-year experience in teaching language; Tesda Trainers Methodology Level 1 Certification; computer literate with background in Microsoft application like PowerPoint Word and Excel; with good oral and written communication skills; good coaching/facilitation skills; fluent in English and in their native/local dialect; with A1 (Common European Framework of Reference for Languages) or equivalent of language proficiency; and expats with work visa status. Tesda will also create a pool of qualified language trainers for its 37 LSI through the Language and Cultural Training of Trainers. The requirements for the trainees: Filipino citizen; bachelor’s degree holder; one-year experience in teaching language; commits to become a trainer in one of 10 languages; must commit to complete the Tesda Training of Trainers program; good moral character; and fluent in English and native/local dialect. Interested applicants may contact and submit the requirements to the Tesda administrator in areas where they are most convenient. Tesda w il l a lso prov ide scholarship for the lang uage proficienc y exam after they have completed their training.

Firms told: Incorporate SDGs in business strategies

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O achieve the Sustainable Development Goals (SDGs) of the United Nations, companies were urged to integrate the goals in their core business strategies. In a report, titled “ Transformational Business,” integrating the SDGs in core businesses means transforming corporate social responsibility (CSR) efforts into programs that can also create value for shareholders. “This will entail developing new business concepts and transforming philanthropic and CSR programs into actual business models that deliver value both for society and the company,” the report stated. If firms also form partnership with the government, they can significantly address regional disparities and inequities through target-based solutions that also bring in profit for shareholders. This means reallocating resources to underserved municipalities and grow them into stronger markets, thereby enabling them to deliver substantial returns on investment later on. Further, it said firms need to collaborate at the same time invest in monitoring and reporting. “This could also unclog urban centers and allow the smoother and equitable flow into other locales,” the report stated. “Companies can reach a wider market base and achieve value at scale by partnering with other com-

panies, as well as the government and civil-society groups,” it added. According to the World Business Council for Sustainable Development, achieving the SDGs would unlock $12 trillion a year globally in business value across four economic systems alone. These are energy and materials, food and agriculture, cities and urban mobility and health and well-being. The SDGs or Global Goals is a set of 17 socioeconomic goals that 193 United Nations member-countries like the Philippines committed to meet by 2030. The goals are composed of around 169 targets and over 300 global indicators. The SDGs were adopted in September 2015. The Global Goals aim to end poverty and hunger, promote universal health, education for all and lifelong learning, achieve gender equality, sustainable water management, ensure sustainable energy for all, decent work for all, resilient infrastructure, and reduce income inequality between and among countries. The goals also include create sustainable cities, ensure sustainable consumption and production, take action against climate change, conserve and sustainably use oceans and marine resources, reduce biodiversity loss, achieve peaceful and inclusive societies, and revitalize global partnership for development. Cai U. Ordinario


The World BusinessMirror

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Why Asia will come out on top as emerging markets get shaken

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he turbulence seen across emerging markets is following a similar pattern to a crisis that rocked global trading more than two decades ago—it involved tequila. In the mid-1990s US interestrate increases helped spark a Mexican peso devaluation that fueled capital flight and caused the socalled Tequila crisis. Within a few years, the sell-off had spread to Asia, which became the center stage of the emergingmarket crisis, during which currencies were devalued as the region was sent into an economic tailspin. Fast forward to 2018, and history is repeating itself, with a crisis brewing in Latin America as Argentina seeks emergency funding just as the dollar and US bond yields spike. But this time around, Asia is less vulnerable to contagion, Macquarie Bank Ltd.’s Nizam Idris says. While the current fears emerging out of Latin America remind him of the so-called Tequila crisis, today “Asian economies are a lot stronger,” said Nizam, the bank’s head of strategy for fixed income and currencies in Singapore. “Current-account deficits are actually smaller, foreign reserves are much larger than before and currencies are unpegged. The situation today is not entirely the same as compared to 1995.” He’s not alone. Commonwealth Bank of Australia also sees Asian currencies faring better than their peers elsewhere in the developing world if the crisis emanating out of Latin America intensifies. While there are exceptions— the Indonesian rupiah is more vulnerable than others since it’s one of the few Asian emerging markets that run current-account deficits—the crises that’s exacerbated the sell-off this time around in Argentina and Turkey are signaling that they are more idiosyncratic in nature with less

contagion risks. After erasing almost all of their gains for the year because of a pick-up in US inflation and global trade tensions, emerging market assets made a comeback last week. Asian currencies have been the winners, with seven out of the 10 best performers in emerging markets this quarter coming out of the region. “The one-two punch of rising US rates and dollar appreciation is leading to a rising market risk premium in EM countries whose balance of payments is vulnerable,” analysts at Nomura Holdings Inc., led by Singapore-based Rob Subbaraman, w rote in a May 11 report. A s i a n n at ion s — i nc lud i n g Thailand, China and South Korea—were among those least exposed to balance-of-payment risks in a Nomura study of 20 emerging markets. Here are the reasons Asia may fare better after all:

Current account

Six out of nine major economies in Asia outside of Japan enjoy surpluses in their current accounts—led by Singapore, Taiwan and Thailand with excesses of more than 10 percent of gross domestic products. I ndones i a , I nd i a a nd t he Philippines have shortfalls. Better current-account balances mean that Asia is better equipped to meet their dollardenominated payment obligations to their bond holders, according to Andy Ji, a currency st rateg ist at Commonwea lt h Bank of Australia.

Economic drivers

A two-year rally that drove emerg ing-market stocks and

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President Vladimir Putin set for the end of the week in Sochi. T he f lu r r y of act iv it y be tween the European signatories of the 2015 accord with Iran reflects the lack of an alternative to the deal. It also points to a refusal to accept that Tr ump’s decision on Iran, fulfilling a campaign pledge to US voters, should be allowed to upend a global agreement negotiated over years and which international observers say is working. “At all levels, we are underlining the importance of preserving this agreement,” Yuri Ushakov, a Kremlin foreign-policy aide, told reporters in Moscow last Friday. “It has crucial significance not only for ensuring regional security, but also for stability in the world, and it’s extraordinarily important in the regime of nuclear nonproliferation.”

No plan B

Trump ’s announcement last week that he was withdrawing the US from the landmark Iran deal inflamed regional tensions and

briefs

Trump: U.S. will help penalized Chinese firm

WASHINGTON—In a surprising overture to China, President Donald J. Trump said last Sunday he would help a Chinese telecommunications company get “back into business,” saying too many jobs in China are at stake after the United States government cut off access to its American suppliers. At issue is the Commerce Department’s move last month to block the ZTE Corp., a major supplier of telecom networks and smartphones based in southern China, from importing American components for seven years. The US accused ZTE of misleading American regulators after it settled charges of violating sanctions against North Korea and Iran. Trump’s unexpected announcement came as the two countries prepared to continue trade talks in Washington this week. Given his past vows to stop the flow of US jobs to China and crack down on what he says are unfair trade practices, Trump’s tweet of concern about Chinese jobs was something of a backflip. AP

Malaysia’s markets show no post-election panic currencies to the highest level since at least 2007 was supported by economic fundamentals. And Asia still stands out. Asia’s developing economies are poised to expand an average of 6.5 percent in 2018 compared with 4.9 percent for all emerging markets, according to forecasts from the International Monetary Fund. Inflation in Asia, excluding Japan, will accelerate to 2.3 percent in 2018 compared with a world average of 3.3 percent, according to surveys of economists by Bloomberg. And that’s despite the headwinds of tighter monetary policy by the Federal Reserve and rising US yields. While the Philippines became the latest emerging market to raise interest rates to rein in price gains in a booming economy, both Bank of Korea and the Reserve Bank of India lowered their own inflation projections last month. China has already cut its reserve requirement ratio twice this year. “The fundamentals in Asia are

Asian economies are a lot stronger. Current-account deficits are actually smaller, foreign reserves are much larger than before and currencies are unpegged. The situation today is not entirely the same as compared to 1995.”—Nizam better than other regions, while political and geopolitical risks are smaller, too,” said Koji Fukaya, CEO in Tokyo at FPG Securities Co. “Gains in US yields are a reflection of strong economic condition there, and Asia benefits from the strong US economy more than other regions.”

Politics

To be sure, like other emerging markets, Asia also faces political risks with a slew of elections in the next two years, including in Indonesia and India. A case in point is Malaysia,

where voters last week elected Ma hat hir Mohamad, t he nation’s longest-serving premier, as leader in a stunning upset to end the six-decade rule of Najib Razak’s party. “At a time of growing pressure on emerging-market currencies and bonds, the situation in Malaysia bears careful watching for potential knock-on effects, particularly as rising rates and geopolitical uncertainties remain live in the backdrop,” Eli Lee, head of investment strategy at Bank of Singapore Ltd., wrote in a note. Bloomberg News

Europe steps up efforts to salvage Iran accord ditched by Trump uropean powers alarmed by Donald J. Trump’s withdrawal from the Iran nuclear accord set out this week on an urgent search for ways to hold the deal together and avoid a further escalation of violence in the Middle East. With Chancellor Angela Merkel warning that faith in the international order is at stake, Germany, France and the United Kingdom are embarking on a diplomatic mission to salvage what they can of the accord, both to keep Iran on side and to shield European companies from US sanctions that threaten billions of dollars of investment. Foreign ministers from the UK, France and Germany are due to sit down with their Iranian counterpart, Javad Zarif, in Brussels on Tuesday to discuss how to move forward. European Union (EU) leaders will then take up Iran at an informal dinner in Sofia the following day. German Economy Minister Peter Altmaier, meanwhile, heads to Russia on Monday to help prepare a meeting between Merkel and

Tuesday, May 15, 2018 A5

threw European investments from oil to aerospace into jeopardy. France insists that while EU nations are willing to discuss issues—including Iran’s ballistic missile program and its destabilizing role in the Middle East—the nuclear deal must stand. “At the moment, it’s the only diplomatic proposition on the table,” French Foreign Minister Jean-Yves Le Drian told Le Parisien newspaper in an interview. “There is no plan B,” he said. “Plan B is war.” The question is whether the remaining signatories—the socalled EU-3, Russia and China— can deliver the benefits of the accord, including access to global oil markets, trade and investment, that enticed the Iranians to join the agreement. Iran’s Foreign Minister Zarif failed to win any concrete assurances to help tackle the US threat of economic sanctions during talks in Beijing last Sunday. China is the biggest buyer of Iranian oil. In the US National Security Adviser John Bolton raised the pressure on Europe, saying that

countries and companies that continue to do business with Iran could face sanctions. “Why would any business, why would the shareholders of any business, want to do business with the world’s central banker of international terrorism?” Bolton said last Sunday on ABC’s This Week.

Calls to Tehran

Merkel and French President Emmanuel Macron reached out to Iran last week to urge it stick to its commitments under the accord. Prime Minister Theresa May added the UK’s voice to the push in a call with Rouhani last Sunday. Concern—and anger—is growing among European governments at the uncertainty facing companies with investments in Iran. Paris-based Total SA, for example, the only Western energy major investing in Iran, has pledged $1 billion in investment in the South Pars natural gas field, and has already spent $90 million helping to develop it. France as a “matter of princi-

ple” can’t accept that “the US act like the world’s economic policeman,” Finance Minister Minister Bruno Le Maire told reporters last Friday. He said he spoke to US Treasury Secretary Steven Mnuchin to request exceptions for French companies, a delay in implementing sanctions, and a so-called grandfather clause for companies that invested in Iran while the treaty was in place. “The only way to avoid pain from these sanctions is negotiating with the US, but the instruments are not easy to find,” Volker Treier, deputy managing director of Germany’s Association of Chambers of Commerce and Industry, said in an interview. Merkel, speaking in the western German city of Muenster last Friday, said Trump’s latest blow to transAtlantic relations, on top of his withdrawal from the Paris climate accord and trade disputes, made clear that the world’s multilateral institutions are “in real crisis.” If “everybody simply does what they want, then that’s bad news for the world,” she said. Bloomberg News

Malaysia’s markets showed few signs of investor panic as trading reopened after Mahathir Mohamad swept to power in a surprise election outcome. Stocks in Kuala Lumpur recovered from an early slump to fluctuate between gains and losses. While the ringgit weakened, its move was smaller than what was implied from forwards in the aftermath of last week’s result. Bonds fell. “The knee-jerk sell-off is an expected market impulse,” said Winson Phoon, head of fixedincome research at Maybank Kim Eng Securities in Singapore. “Uncertainties in the markets may fade quickly.” Mahathir has sought to reassure the markets by appointing a finance minister seen as a safe pair of hands, while saying he would lead a business-friendly administration. CIMB Group Chairman Nazir Razak, brother of ousted prime minister Najib Razak, expressed optimism last week that financial markets can weather the political transition. Still, Moody’s Investors Service and Fitch Ratings have warned of risks to the budget if a consumption tax is abolished and not offset by other revenue-raising measures. Bloomberg News

Police: Members of a family bombed 3 Indonesian churches SURABAYA, Indonesia—Coordinated suicide bombings carried out by members of the same family struck three churches in Indonesia’s second-largest city last Sunday, police said, as the world’s most populous Muslim nation recoiled in horror at one of its worst attacks since the 2002 Bali bombings. At least seven people died at the churches in Surabaya along with the six family members, the youngest of whom were girls aged 9 and 12, according to police. Another 41 people were injured. Indonesia’s president condemned the attacks as “barbaric.” National police chief Tito Karnavian said that the father detonated a car bomb, two sons aged 18 and 16 used a motorcycle for their attack, and the mother and her two daughters wore explosives.

Karnavian said the family had returned to Indonesia from Syria, where until recently the Islamic State group controlled significant territory. AP


A6 Tuesday, May 15, 2018 • Editor: Angel R. Calso

Opinion BusinessMirror

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editorial

On the frontlines

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The Commission on Elections said there were exactly 1,070,991 candidates in the polls—684,785 for barangay chairman and kagawad, while 386,206 for SK positions. We wish all the newly elected punong barangays, sangguniang barangay members and SK members all the best in their new terms. You are the public servants closest to our citizens so please be ready to do your jobs well. When voters elect a public official, they are essentially hired for the job. Barangay officials are no different.  They are expected to show up and do their jobs starting today and every day from here on until the end of their terms, perhaps more than any other politician or public servant. If they are serious in doing their jobs, barangay officials and SK members generally work longer hours than what they’re paid to do, attending to and responding to all sorts of community and constituent concerns, day and night. They get calls even on Saturdays and Sundays, late at night, in the wee hours of the morning, despite the fact that they also have personal and family needs to attend to themselves. They have to be always available and cannot afford to be dormant in their jobs. The importance of barangay constituent service is often overlooked but it is, indeed, the most essential in the government. If barangay officials are attentive, work very hard and do their duties well, they could do a lot of good for their constituents and communities. For instance, barangay officials are the very first responders and must cope with the initial impact of disasters and emergencies like strong typhoons and earthquakes, hence they must be best prepared and be provided with all the necessary facilities and resources. Waiting for help to come from the national government could cost lives, given the nature of such emergencies and the time and other constraints involved, even if such help is dispatched promptly. So barangay officials must not only have the basic resources but also a coordinated list of responses to deal with emergencies. They are the ones closest to the action, the best informed and the most likely and immediately able to help.  They are the ones most engaged and involved. Another example is the government’s campaign against illegal drugs, which cannot be successful without the cooperation of barangay officials. Unfortunately, close to 90 percent of our barangays are still drug infested, according to the Philippine Drug Enforcement Agency. Department of the Interior and Local Governments (DILG) Undersecretary for Barangay Affairs Martin B. Diño also recently said some 9,000 barangay officials were on President Duterte’s “narco-list.” Every barangay should have an antidrug abuse council, following a memorandum issued by the DILG. Defeating the drug menace starts at the grassroots.  Drug abuse and drug pushing begins in the streets, in barangays where officials are either sleeping on the job or conniving with drug dealers (or perhaps are themselves into trafficking). The problem of illegal drugs is just one of so many difficult and pervasive problems our barangay officials face every day. This is why we need good people in our barangays. A barangay may be the smallest administrative unit in the Philippines under our political system, and so much of the political power may seem to reside with the mayor, but much of the actual good work is done outside of City Hall, in and by the barangays themselves with the cooperation of constituents. May our new barangay officials successfully meet the daily challenges of their very difficult and complex jobs. May they be responsive and accountable to the needs of their constituents and provide a positive impact on governance. So many honest and hardworking people dedicate their lives to the public good by choosing to run in barangay elections. We hope many of them won on Monday.

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y the time this editorial comes, out some 600,000 positions in more than 42,000 barangays in the country (including those in the Sangguniang Kabataan [SK]) would have already been decided by voters in Monday’s elections.

The SSMG stock market prediction John Mangun

OUTSIDE THE BOX

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his month we saw three potentially critical events that should significantly impact local stock prices. The Philippine Statistics Authority announced that the inflation rate was 4.5 percent in April. Then the data for the first quarter of 2018 was released with the Philippine economy growing by 6.8 percent from a year earlier. Last, the Bangko Sentral ng Pilipinas raised interest rates by 25 basis points to 3.25 percent for the first time since 2014. Official members—like me—of the “Society of Stock Market Geniuses” (SSMG) can certainly analyze what that all means. Over several bottles of fine wine—far too costly that ordinary investors could never hope to afford—we have the answers. However, as with every secret group of experts, there is a blood oath that this information can never be revealed under penalty of lots of bad things happening. Perhaps then the only thing that mere stock market mortals can do

is Google the phrase Stock Market Prediction Methods. Granted there are about 500,000 results, but think of how educated you will be once you read all the links. One I found that caught my interest was an article on one of the Kings of financial news, CNBC. The title was “An indicator with a nearly perfect track record is predicting a stock market pullback.” This was written on August 28, 2017. It said: “The S&P 500 is set for about a 4-percent to 5-percent decline,” Fundstrat analyst Tom Lee

says. Fundstrat is “an independent research boutique, providing market strategy and sector research.” Mr. Lee wrote in a note to clients: “If historical precedent applies, the S&P 500 is set for about a 4-percent to 5-percent decline in the next month toward 2,300 or so.” As of the close on the date of publication, the S&P 500 index was at 2,444. Last September 28 the index closed at 2,510 (up 2.7 percent). Thirty days later  the index was up 5.6 percent and by the end of 2017, the S&P had moved to 2,687 for a total increase of 10 percent. So much for the “Indicator with a nearly perfect track record.” In fairness to Mr. Lee, in his interview he did give three reasons to be optimistic about the markets. And he did reveal “The Indicator.” “Last Friday the number of stocks trading above their 200-day moving averages fell to exactly 50 percent. This is the tipping point where Lee says the S&P 500 will begin to fall. Lee says that in 23 of the 24 instances of stocks slipping below their 200-day moving average, the S&P 500 index fell 4 percent or more.” That is why we at SSMG are really, really careful about sharing our

secret analysis because the average investor might think that since something happened 23 out of the last 24 times, it should happen again. We know that is not necessarily true. In fact, that is why we are geniuses. Strangely, there are no Google links for the phrase “Bad Stock Market Prediction Methods” maybe because even the “best” can make you lose plenty of money. The Vanguard Group with over $5.1 trillion in assets under management tested 16 different fundamental analysis methods for predicting stock price. They used one-yearahead and 10-year-ahead horizons with data going back to 1926. Their conclusion was that most of the variables were about as helpful as asking your dog for one bark or two to tell you whether the market was headed up or down. I always knew my official SSMG crystal ball and a bottle of rum made more sense. But I do consult my pure-bred-fromFrance toy poodle Jessie. 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.

Breaking up power monopolies, empowering the poor Speech delivered by Chief Justice Reynato S. Puno (Ret.), chairman, Consultative Committee to Review the 1987 Constitution, before the 46th General Assembly of the Association of Foundations, May 8, 2018, Diamond Residences, Makati Part One

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et me start with a fact: We are a rich country. The richness of the waters surrounding our islands extends from Benham Rise in the East to the Philippine Sea in the West.

The Philippines has the highest concentration of marine biodiversity in the world. The entire planet’s center of marine biodiversity is, in fact, found within the waters of the Verde Island Passage—1.14 million hectares of sea connecting the island of Mindoro to mainland Luzon, and linking the West Philippine Sea with Tayabas Bay and Sibuyan Sea. The Philippines holds the world’s third-largest reserve of minerals. According to reliable estimates, our known reserves—not yet extracted—are worth almost $900 billion— or the equivalent of P45 trillion. With our vast resources, there is no reason for the Filipino to be poor. But again, the fact is 26 million Filipinos are poor. They live below the poverty line—the threshold of income that a family needs for daily sustenance and survival. The Philippine Statistics Authority Annual Poverty Indicators Survey reveal that: n Two out of three heads of

poor Filipino families finished only elementary; n Two out of five households do not have electricity; n Three out of 10 families have no clean drinking water; n One out of four families does not have a sanitary toilet; and n And almost half of them live in a house 10 to 29 square meters in size. This brings us to a cruel reality— the reality that, when many Filipinos dream of a better life, they are either at the airport waiting to board a flight that will take them to a foreign land or is already a “slave” in some part of the world. There is no accurate number of how many Filipinos have become overseas workers since the government started sending what were then called overseas contract workers (OCWs) to Saudi Arabia in 1978. It has been more than a generation since—and today, estimates place the number of overseas Filipinos at

anywhere from 7 million to 10 million at any given time. Many of them are already the children of the original OCWs in the late1970s and early-1980s—and sooner than later their grandchildren will be the next to board the next plane out of the Philippines. This is the challenge of poverty. Our challenge. To confront this challenge of poverty, we must know its root causes—causes in the plural, for poverty has many causes. It is our submission that to a large extent, poverty in the Philippines is caused by our unitary system. This unitary system has been our system of government for more than 80 years now or nearly a century. It was imposed upon us by our 1935 Constitution, our 1973 Constitution and our 1987 Constitution. The main characteristic of a unitary system is the concentration of the powers of government in the national government. The local governments—the provinces, cities and municipalities—do not enjoy any power unless power is delegated to them by the national government. This concentration of power and resources in the government is not only an ineffective and inefficient way of governance. Worse, it breeds inequalities and inequities, injustice and iniquities—the most potent of which is poverty. It will shock you to know that it takes years to build just even one classroom in a town away from Metro Manila because the

system requires for any plan to build a classroom to go through a process that starts from the principal and goes all the way to Malacañang for approval and Congress for budgetary allocation and back to the town for implementation. Nearly every government plan, program or project is crafted, approved and budgeted within the airconditioned offices of the agencies of the national government—with little regard for the peculiar needs of the regions, the provinces, municipalities and barangays. Due to this unitary system of government where power is concentrated in the national government, we have not been able to unleash the vast economic potential of the 17 different regions of our country. Only three regions—Metro Manila, Central Luzon and Calabarzon—enjoy economic progress and development. These three regions combine for 62 percent of the country’s gross domestic product, leaving the other 14 regions scrambling for the remaining 38 percent. In plain language, poverty reigns in 14 of our regions. The incidence of poverty is lower in the three premier regions and higher in the other regions not as economically blessed. And the farther you are from Metro Manila, the higher is the poverty incidence. In the case of the Autonomous Region in Muslim Mindanao, for instance, See “Puno,” A7


Opinion BusinessMirror

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For new graduates, an honor code for life

Rocks weathering can help suck CO2 out of the air

By Michael R. Bloomberg | Bloomberg View

Cecilio T. Arillo

database

Conclusion The following is an adaptation of an address to Rice University’s class of 2018.

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hen people see the world as a battle between left and right, they become more loyal to their tribe than to our country. When power—not progress—becomes the object of the battle, truth and honesty become the first casualties. You learned here at Rice that honesty leads to trust and trust leads to freedom (like the freedom to take tests outside the classroom). In democracy, it’s no different. If we aren’t honest with one another, we don’t trust one another. And if we don’t trust one another, we place limits on what we ourselves can do, and what we can do together as a country. It’s a formula for gridlock and national decline—but here’s the thing: It doesn’t have to be that way. When I was in city government, I didn’t care which party proposed an idea. I never once asked someone his or her party affiliation during a job interview, or who they voted for. As a result, we had a dream team of Democrats, Republicans and independents. That diversity made our debates sharper, our policies smarter and our government better. Arguments were won and lost on facts and data — not parties and polls. That was why we had success. And it’s been great to see other mayors around the country taking that same kind of approach. But at the national level, in Washington today, partisanship is everything, and I think the dishonesty it produces is one of the greatest challenges that your generation will have to confront. Of course, partisanship is not a new problem. George Washington warned against it in his Farewell Address. He referred to the “dangers of parties,” and called the passion that people have for them the, quote, “worst enemy” of democracy—a precursor to tyranny. Washington urged Americans to, quote, “discourage and restrain” partisanship. Sadly, in recent years, the opposite has happened. There is now unrestrained, rabid partisanship everywhere we look. It’s not just on social media and cable news. It’s in the communities where we live, which are becoming more deeply red or more deeply blue. It’s in the groups and associations and churches we join, which increasingly attract like-minded people. It’s even in the people we marry. Fifty years ago, most parents didn’t care whether their children married a member of another political party, but they didn’t want them marrying outside their race or religion, or inside their gender. Today, thankfully, polls show strong majority support for interracial, interreligious and same-sex marriage. That’s progress. But, unfortunately, the percentage of parents who don’t want their children marrying outside of their political party has doubled. The more people segregate themselves by party, the harder it becomes to understand the other side and the more extreme each party grows. Studies show that people become more extreme in their views when they are grouped together with likeminded people. That’s now happening in both parties. And as a result, it’s fair to say the country is more

Puno. . .

Continued from A6

poverty is more than double the national average. It is our submission that if you break the overconcentration of power in the national government and give power to our regions, these regions will attain economic progress and as aftermath reduce poverty in their area. We can break this concentration of power only by adopting a

Tuesday, May 15, 2018 A7

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EATHERING of huge amounts of tiny rocks could be a means to reduce the greenhouse gases in the atmosphere. While this is normally a slow natural process during which minerals chemically bind carbon dioxide (CO2), technological upscaling could make this relevant for so-called negative emissions to help limit climate risks.

divided by party than it has been since the Civil War. Bringing the country back together won’t be easy. But I believe it can be done—and if we are to continue as a true democracy, it must be done, and it will be up to your generation to help lead it. Graduates: You’re ready for this challenge. Because bringing the country back together starts with the first lesson you learned here: Honesty matters. And everyone must be held accountable for being honest. So as you go out into the world, I urge you to do what honesty requires: Recognize that no one, nor either party, has a monopoly on good ideas. Judge events based on what happened, not who did it. Hold yourself and our leaders to the highest standards of ethics and morality. Respect the knowledge of scientists. Follow the data, wherever it leads. Listen to people you disagree with—without trying to censor them or shout over them. And have the courage to say things that your own side does not want to hear. I just came yesterday from visiting an old friend in Arizona, who has displayed that kind of courage throughout his life: Sen. John McCain. We often don’t see eye to eye on issues. But I have always admired his willingness to reach across the aisle, when others wouldn’t dare. He bucked party leaders, when his conscience demanded it. He defended the honor of his opponents, even if it cost him votes. And he owned up to his mistakes—just like that young kid with the cherry tree. Imagine what our country would be like if more of our elected officials had the courage to serve with the honor that John has always shown. Graduates: After today, you will no longer be bound by the Rice honor code. It will be up to you to decide how to live your life—and to follow your own honor code. This university has given you a special opportunity to learn the true meaning of honor to base that code on, and now, I believe, you have a special obligation to carry it forward. The greatest threat to American democracy isn’t communism, jihadism or any other external force or foreign power. It’s our own willingness to tolerate dishonesty in service of party, and in pursuit of power. Let me leave you with one final thought: We can all recite the words of the Declaration of Independence: “We hold these truths to be selfevident…” But remember that the Founding Fathers were able to bring those truths to life only because of the Declaration’s final words: “We mutually pledge to each other, our lives, our fortunes and our sacred honor.” That pledge of honor—and that commitment to truth—is why we are here today. And in order to preserve those truths, and the rights they guarantee us, every generation must take that same pledge. Now it’s your turn.

Despite stout denials by Solicitor General Jose C. Calida that President Duterte had anything to do with the quo warranto petition, the fact that Duterte had categorically described Sereno as his “enemy” would show that Malacañang had a direct hand in Sereno’s ouster. If the declaration of nationwide martial law in September 1972 and with it the arrest and detention of thousands of political dissenters, the abolition of Congress and the concentration of power in the hands of one man is the template for dictatorial rule, circa 2018, then we cannot say that former town mayor turned Chief Executive Rodrigo Duterte is already a dictator. But there are deeply disturbing signs that he is well on the way to usurping all power and turning himself into a strongman that Time magazine said he already is despite Malacañang’s protestations to the contrary. First, the rising number of casualties in the brutal war on drugs.

The Philippine National Police admits to the killing of more than 4,000 suspected drug traffickers who it said fought back rather than surrendered to police operatives. But human-rights groups here and abroad cite figures of as many as 12,000 to 20,000 may have already died throughout the country since Duterte launched his war on illegal drugs. The police classifies all other killings, quite possibly by vigilante groups, as “deaths under investigation,” but since two years ago they have not released their findings, giving rise to widespread suspicion that these are extrajudicial killings or summary executions by state security forces. Second, the arrest and detention of Sen. Leila M. de Lima on what appears to be a trumped-up charge of conspiracy to traffic in illegal drugs based on testimonies of convicted drug lords in the New Bilibid Prison is evidence of her political persecution after she raised a hue and cry

federal form of government. Let me go through another cause of poverty in the Philippines: the proliferation of political dynasties. The majority of the members of our Congress belong to political dynasties. Political dynasties control 90 percent of our provinces; they dominate towns and cities; they rule our barangays. Political dynasties, like the kings and queens of the Dark Ages, believe that political power comes from the bloodline, that political power is in-

herited and that political power does not come from the ballot box. What is the evil of political dynasties? Dynastic politics has occluded if not closed the opportunities of the greater number of Filipinos to run for public office to serve our people. The great many of our people have been denied the right to get elected to public office simply because they have the wrong blood in their bodies. By making elections a family affair, dynasties have mocked de-

mocracy’s definition as a government “of the people, by the people and for the people.” Undeniably, the predatory politics of dynasties has bred corruption in the government. Auditors tell us that as a rule, relatives lose their smell of the stench of the wrongdoings of their relatives, and hence lose all their sense of accountability. And listen: Where political dynasties rule, poverty reigns. Political dynasties monopolize the resources in their constituency and deny them

Yet, the CO2 -reduction potential is limited and would require strong CO2 pricing to become economically feasible, according to the first comprehensive assessment of costs and possibilities by the Potsdam Institute for Climate Impact Research (PIK) in a new study shared to Database and now published in the journal Environmental Research Letters. “The Paris Agreement calls for a balance between anthropogenic greenhouse-gas emissions by sources and removals by sinks in the second half of our century to keep global warming well below 2 degrees Celsius,” PIK lead author Jessica Strefler said. “More than anything else, this requires rapid and strong reductions of burning fossil fuels, such as coal; but some emissions, for instance from industrial processes, will be difficult to reduce—therefore, getting CO2 out of the air and storing it safely is a rather hot topic. The weathering of rocks, as dull as it might seem at first glance, is a scientifically exciting part of this,” Strefler pointed out. Mining and grinding, as well as

transport and distribution, were factored in. “Our calculations show that enhanced weathering could be competitive already at $60 per ton of CO2 removed for dunite, but only at $200 per ton of CO2 removed for basalt,” Strefler said. “This is roughly double of the carbon prices discussed in the current political debate, and substantially more than cost estimates for afforestation, which are at €24 per ton of CO2 removed. This is, of course, an important obstacle for any future implementation of enhanced weathering,” she explained

Best suited locations

Strategies of CO2 removal come with trade-offs. Planting huge numbers of trees to suck CO2 out of the air and store it in their trunks and branches, for instance, can come at the expense of land needed for food production. Also, carbon capture and underground storage on an industrial scale is not accepted as safe by large parts of the population. Enhanced weather ing, the spreading of rock material on land, may be easier to realize. However,

Strategies of CO2 removal come with trade-offs. Planting huge numbers of trees to suck CO2 out of the air and store it in their trunks and branches, for instance, can come at the expense of land needed for food production. Also, carbon capture and underground storage on an industrial scale is not accepted as safe by large parts of the population.

dunite—the rock type most discussed among experts—contains harmful substances, such as chromium or nickel, which could get released during the process. This is why, for the present study, dunite is an important benchmark, but the researchers focus on basalt as a more sustainable option. Current CO 2 emissions are around 40 billion tons a year; natural weathering absorbs roughly 1.1 billion tons. Enhanced weathering could remove up to 4.9 billion tons per year if basalt is used, and up to 95 billion tons for dunite, according to the scientists’ calculations. It is likely, however, that in practice and considering all trade-offs, only a fraction of this potential could be realized. The best-suited locations are warm and humid regions, particularly in India, Brazil, Southeast Asia and China, where almost three quarters of the global potential could be realized. This is substantial, yet the uncertainties involved are also substantial, the PIK scientists stress.

1 billion tons of CO2

“The annual potential of CO2 consumption is defined by the grain size and the weathering rate of the rocks

Another step closer to dictatorship Ernesto M. Hilario

ABOUT TOWN

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T may not be entirely accurate to describe it as sounding the death knell for Philippine democracy, but the ouster of Chief Justice Maria Lourdes A. Sereno by the Supreme Court through a quo warranto petition filed by the Office of the Solicitor General, instead of through an impeachment trial, in the Senate shows very clearly that we’re lurching dangerously close to authoritarianism.

The latest survey also shows that Filipinos want the government to address rising prices as a result of the implementation of tax reform. Workers are also demanding higher wages to cope with rising inflation. If these immediate concerns remain unaddressed, then we may yet see various sectors taking to the streets to ventilate their grievances and to demand that the administration should uphold the Constitution and the rule of law and strengthen rather than weaken our democratic system. over the killings in the current war on drugs and during Duterte’s stint as Davao City mayor. Third, the clampdown on legitimate media, such as the online news site Rappler, whose Malacañang reporter has been banned from covering the beat after writing reports critical of the Duterte administration. Rappler also faced investigation by the Securities and Exchange Commission for having received foreign funding in violation of the constitutional ban on any form of foreign ownership of mass media. Fourth, the virtual abolition of the checks and balances crucial to the working of a vibrant democracy by using the Legislative and the Executive branches to run after perceived enemies of the Duterte administration, as in the case of Sereno, who faced an impeachment complaint in the House of Representatives where five to the people, for the strength of dynasties is directly proportional to the poverty of the people. Lifting the poor from the quagmire of poverty is the least of their interest. Let me then tell you what the Concom is doing to help the poor. One: we are changing our form of government from unitary to federal. The reason is evident. We have to break the overconcentration of power in the national government. We have to empower our local governments—the provinces, cities

used,” said Thorben Amann from Universität Hamburg’s Institute for Geology, Center for Earth System Research and Sustainability. He is also lead author of the study. To sequester 1 billion tons of CO2, more than 3 billion tons of basalt would have to be spread, a mind-boggling amount equal to almost half of the current global coal production. Grinding the rocks and spreading the powder over roughly one-fifth of global cropland would be necessary, which is believed to be feasible, but—due to the gigantic amount of rocks involved—the costs eventually add up. “We can say that enhanced weathering is not just a crazy idea but could actually help climate policy, yet it is still a challenge to get a precise understanding of the involved processes,” Amann said. “After all, there will be impacts on the agricultural soils, their properties will change, but this can also be beneficial. Basalt, for example, can actually supply certain nutrients to soils, acting as a natural fertilizer,” Amann added. The assessment showed that enhanced weathering, especially of basalt rocks, could be an attractive option to support climate-change mitigation, especially for tropical and subtropical regions, where the CO2 uptake potential is the highest. Yet, given the costs and the mass of rocks that would need to be moved, it can likely provide only a small additional contribution. Aside from Strefler and Amann, other scientists involved in the PIK study are Nicolas Bauer, Elmar Kriegler and Jens Hartmann. To reach the writer, e-mail cecilio.arillo@ gmail.com.

Associate Justices testified against her. Sereno incurred the ire of Duterte when she began to speak out against what she felt were orchestrated moves to remove her from office. All this points to a breakdown of the rule of law in the country that can lead to political instability. Surveys show that the majority of Filipinos still support the Duterte administration. The economy grew 6.8 percent in the first quarter of this year, with the economic team expecting GDP growth of 7 percent to 8 percent for the whole year, which economists say makes it the third fastest-growing in Asia after Vietnam and China. The other side of the economic equation, however, is not so bright. The latest survey also shows that Filipinos want the government to address rising prices as a result of the implementation of tax reform that would raise more revenues for the administration’s aggressive infrastructure-development program. Workers are also demanding higher wages to cope with rising inflation rather than the Charter change and the proposed shift to a federal system of government that the administration wants to fast-track. If these immediate concrens remain unaddressed, then we may yet see various sectors taking to the streets to ventilate their grievances and to demand that the administration should uphold the Constitution and the rule of law and strengthen rather than weaken our democratic system.

E-mail: ernhil@yahoo.com.

and municipalities. Unless we do so, economic progress will always elude them. Poverty will be their perpetual destiny. Poverty will always impress on them. They need to be liberated from the prison house of poverty. No people can forever stay in the prison house of poverty. Sooner or later, they will break out from this prison house. Woe to us if they use force and violence. To be continued


2nd Front Page BusinessMirror

A8 Tuesday, May 15, 2018

www.businessmirror.com.ph

New tourism chief faces huge challenges By Ma. Stella F. Arnaldo

N

@akosistellaBM Special to the BusinessMirror

UMEROUS challenges are afoot for Secretary-designate Bernadette Fatima Romulo Puyat, as she formally takes over the Department of Tourism (DOT) this week. For one, she faces employees demoralized by the recent P60million scandal that rocked the agency, which led to the resignation of their former boss, Wanda Corazon T. Teo. Along with it, industry sources warned, are perpetrators of the alleged illicit deal still working at the DOT. “She needs to clean it up,” an industry veteran said about Romulo Puyat’s immediate task at the department. “The people who made that deal possible are still there, and who

knows, may have already destroyed other documents that would implicate them,” the source underscored. In a recent interview with reporters, Romulo Puyat did not say what she would do with the current officials at the DOT, but expressed excitement about working with its career officials. (See, “New DOT chief vows to be tough on corruption; will keep ‘It’s More Fun in the PHL’ brand campaign,” in the BusinessMirror, May 3, 2018.) The DOT chief is also expected

₧650 million The Department of Tourism’s budget for its “When with Filipinos” advertising campaign in 2017

to look into other projects with questionable provenance like the P80-million Buhay Carinderia, the first phase of which is being implemented by the Tourism Promotions Board (TPB), along DOT biddings for the “Procurement of Reversible Jackets for the DOT Birthday Celebrators” (P1.29 million) and “Services of a Production House for the DOT’s 45th Anniversary Celebration—A Night to Remember” (P2.5 million), to name a few. Boracay-based designer PJ Arañador, in a Facebook post on May 4, called the bidding for the reversible jackets as “insensitive. More of our taxes [going] to wrong use,” even as thousands of island workers have lost their jobs. Romulo Puyat also faces a mar-

keting nightmare with Boracay Island’s closure, a stalled international advertising campaign and various political appointees who have no background in tourism nor marketing, among others. President Duterte ordered Boracay Island closed for six months starting on April 26, which led to the DOT issuing a statement to its central and foreign officers abroad “to exclude the island destination from all ongoing promotional campaign.” Jojo Clemente, president of Rajah Tours Corp., said “we continued to promote Boracay,” at the Arabian Travel Market in Dubai from April 28 to May 1. “We told [prospective clients] that the island will be closed until the end of October for rehabilitation. Honest answer. They accept it, because their programs are about six months to one year away anyway, so it works. That’s why I didn’t understand why the DOT has to say to stop promoting it.” About a million foreign tourists traveled to Boracay last year, contributing to the P56 billion in

tourism receipts generated by the island for the period. The onslaught of tourists over the years, however, along with the commercialization of the island with unrestricted construction of more resorts, have created environmental stresses leading to polluted waters at Bulabog Beach, and easement violations on the main white beach. On the promotions side, the DOT has yet to come up with a new set of TV commercials or advertising collaterals after last year’s plagiarism charges leveled against an advertising agency. It would be recalled that the DOT had to cancel its contract with McCann Worldgroup Philippines in June last year, after it found an ad the latter created was allegedly copied from a 2014 South African tourism ad. (See, “DOT stops airing of McCann’s ‘Sights’ as unofficial tourism ad reaps praises,” in the BusinessMirror, June 15, 2017.) The “Sights” ad was second in a series for what should have been DOT’s yearlong advertising cam-

‘Businesses continue to trust govt despite Sereno ouster’ Continued from A1

“The JRI reiterates its stand for the rule of law, the balance of power in government and constitutional processes. “We respect the power and prerogative of the Supreme Court to hear and decide on petitions brought before its chambers. “However, we are concerned that the quo warranto petition against Chief Justice Maria Lourdes A. Sereno was given precedence over the constitutionally mandated impeachment proceedings that had already progressed to a substantial extent in Congress at the time the petition was filed. “We take particular note of the Court’s statement in the decision that the Chief Justice ‘chronically failed to file her SALNs [Statements of Assets Liabilities and Net Worth] and thus violated the Constitution, the law and the Code of Judicial Conduct.’ “Without passing judgment on the conclusion, this can qualify as grounds for impeachment for being ‘culpable violation of the Constitution’ or ‘betrayal of public trust,‘ the determination of which is left by the Constitution exclusively to Congress through the impeachment process. “We are nonetheless encouraged that the Supreme Court was closely divided in deciding the case and that it has not declared its decision to be ‘final.’ ‘We are hopeful, therefore, that due process will be preserved and any motion for reconsideration given utmost respect and attention. And we welcome any and all efforts to safeguard the integrity and sanctity of our constitutional processes. In the meantime, we appeal for calmness and sobriety and urge the public to keep the faith in the Supreme Court as the last bastion of democracy.” Businessmen said investors would rather that the government keep its hands off the selection of a new Chief Justice to help restore the now-impaired independence of the Judiciary. This was backed by George T. Barcelon, chairman of the Philippine Chamber of Commerce and Industry, who said the government can depend on the business sector for support. “I don’t see much impact in the immediate term. The business community’s trust in the government is still strong. I take the SC decision on quo warranto [as] sound and no further debate [is needed] on the matter,” he told the BusinessMirror.

The Terrado and Barcelon viewpoint is backed by investment pledges approved by the Board of Investments the past year amounting to P616.7 billion, the agency’s best performance in 50 years. The record-high figure comes at a time when the government is forced to account for its human-rights record against the backdrop of the war on drugs. The all-time high investment figure was 39.5 percent higher than the P442 billion worth of fresh projects in 2016. Investments also surged 13 percent in terms of approved ventures to 426 projects, from 378 projects, and generated employment opportunities numbering 76,065, or 12.5 percent more than previous. Determined to beat its own record, the DTI projects some P680 billion worth of investments pouring into the country this year. It looks to the manufacturing and infrastructure sectors to lead the surge and help boost the economic impact of the government’s “Build, Build, Build” program. “Political noise is not exclusive to our administration but is also true for other countries around the world. Despite this, we see generally a positive outlook in favor of the Philippines,” Terrado said. The trade official, who is in charge of the government’s investment missions abroad, said investors are attracted to the Philippines “mainly because of the strong macroeconomic fundamentals.” Its economy, for one, expanded by 6.8 percent in the first quarter—two ticks below the target 7 percent, but faster than the 6.5 percent recorded during the same quarter last year. Terrado also cited the Build, Build, Build program as one factor why the political fracas does not impact as much on the economic sphere. She said opportunities to participate in the infrastructure program and countryside development encourage investors to invest in the Philippines. But while political noise may be a nonfactor in the investment climate, Barcelon warned this might not be true for long if administration officials are perceived to have interfered in the selection of a new Chief Justice. He said it will be better if the SC is allowed to restore its questioned independence by choosing a new head magistrate in a transparent and autonomous manner. “The selection of [a] new Chief Justice must be independent and transparent. Otherwise,

POSTER OVERLOAD Various campaign posters are plastered on the wall along this stretch of the Baseco area in Tondo, Manila. The campaign posters are proving an eyesore at the barangay and Sangguniang Kabataan elections on Monday. NONIE REYES

there may be a credibility issue that prolongs uncertainty,” Barcelon said. But Ateneo School of Government Dean Ronald U. Mendoza said it is important for a country seeking more investors to keep a respectable record on human rights and the rule of law. He said institutions, such as the High Court are crucial in upholding contracts and property rights and in resolving disputes. “Strong institutions are critically important in order for the country to promote good governance, establish the rule of law and strengthen the credibility of contracts and property rights. Institutions help settle conflicts that arise in any of these areas,” Mendoza told the BusinessMirror. “This is why all our institutions are important in enticing investors and spurring business and job creation in the country. Few institutions are more important than the Constitution—the bedrock of all laws in the country,” he added. In a survey by the Japan External Trade Organization (Jetro) released in March, the Philippines ranked dead last in a group of

3 oil firms hike gasoline, diesel prices Continued from A1

a.m. on May 15. Other oil firms are expected to follow suit. Last week the Department of Energy (DOE) announced it will issue a policy for the stringent monitoring of the prices of petroleum products as part of its initiative to protect the interest of the consumers. Targeted to be issued by the end of June this year, the new policy enables the un-

bundling of the base prices of petroleum products—gasoline, automotive and industrial diesel, kerosene, jet fuel, bunker fuel oil and household and automotive liquefied petroleum gas. “Identification of the costing for the major components of these petroleum products that may affect the pump prices would provide a higher level of transparency for our consumers, particularly the motorists,” Energy Secretary Alfonso G. Cusi said.

six Southeast Asian countries as prospective investment destination for Japanese firms. Of 938 respondents, Japanese investors were more motivated to do business in Vietnam (37.5 percent), Thailand (36.7 percent) and Indonesia (24.8 percent) than in Singapore (17.1 percent), Malaysia (14 percent) and the Philippines (13.1 percent). Japanese firms said the political, social, as well as security, issues in the Philippines are the main restraints to expansion programs in the Philippines, the Jetro survey said. The survey also listed infrastructure, collection of bills, legal system and its enforcement and administrative procedures as issues affecting the country’s business environment. This was why Mendoza believes Sereno’s removal as head magistrate will extract a toll on the flow of investments to the country. “The recent Sereno ouster does not just represent political noise [because] the way it was done signals a fundamental weakening in the independence of the highest court in the land, and it seems to have bent the Constitution in ways that could trigger more uncertainty rather

Con-com. . .

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has shrinking land while there is an increase in population and demand from mainland Chinese investors. “If you free up land here, the prices of real estate would go up, and locals won’t be able to afford anymore,” he said.  This scenario of increase in land prices also happened in Vancouver, Sydney and London when they opened up their country to foreign ownership of land.

than mitigate this,” he said. Mendoza added some investors might now think twice on the ostensibly reformist of government given what happened to Sereno. Several reforms, he added, might be delayed, if not stalled, if the government loses the trust and confidence of the business community. “Even the Duterte administration’s efforts to promote deep institutional reforms, such as the move to federalism, will now ring hollow, particularly since allies of the administration played a key role in the Sereno ouster. They will struggle now to regain the credibility necessary as reformists and institutions builders,” the Ateneo dean warned. Justices last Friday voted 8-6 in favor of the quo warranto petition against Sereno filed by Solicitor General Jose C. Calida. The decision of the justices to nullify Sereno’s appointment as Chief Justice was seen to bring about a Constitutional crisis, as the highest law of the land prescribes the head magistrate can only be removed through an impeachment trial.

Mostly Japanese and Chinese investors were allowed to come in these countries, according to Aguilar. “Their investment appetite is so huge and the quantity of our land are so small so that’s why it’s possible that land prices will increase and with too high land prices, we will be neglecting low-cost housing, medium-cost housing for OFWs [overseas Filipino workers] and then it would distort our market,” he added. The SER will be submitting the new Article on National Economy to the committee en banc on May 22.

paign, pegged on the theme “When with Filipinos.” The agency’s budget last year for the advertising campaign was P650 million, but since the cancellation of the Sights ad, the agency has not been able to produce a new one. Meanwhile, Teo’s name was dragged into the scandal when the Commission on Audit tagged payments made by the People’s Television Network Inc. (PTNI) to Bitag Unlimited Media Inc., owned by the former secretary’s brother, Ben Tulfo. The funds apparently came from the DOT, which had a media placement contract last year with PTNI. Other documents showed, however, the agency had specified that its ads would be placed in Kilos Pronto, a blocktimer TV show produced by Bitag. Executive Secretary Salvador Medialdea is said to be investigating the deal to determine the culpability of other officials at the DOT, PTNI, and the Presidential Communications Operations Office. The Ombudsman has already said it is also investigating the transaction.

Train. . .

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“I do not expect that to happen,” Recto said. Sen. Gregor io B. Honasan II, however, did not completely rule out a scenario where senators would likely vote to amend the TRAIN law “if it is prioritized effectively and decided in the Ledac,” referring to the Legislative-Executive Development Advisory Council. Sen. Joseph Victor G. Ejercito shared the same view, saying lawmakers have a chance to correct the “amended” tax rates in the existing law. “That is a possibility because the Senate’s approved version of the TRAIN had much-lower excise taxes on petroleum and sugarsweetened beverages compared to the original version,” Ejercito told the BusinessMirror. He recalled that the bicameral panel tasked to reconcile the Senate-House versions of the original TRAIN law “increased all the rates.” “I was disappointed with the bicam version,” Ejercito added. This developed as Sen. Paulo Benigno A. Aquino IV confirmed to the BusinessMirror that three other senators have already spoken out about the “negative effects” of the TRAIN law. “I am hoping more will support the bill I filed, which suspends the excise taxes for petroleum in the TRAIN law,” Aquino said. He added the “safeguard” found in his bill, which is based on high inflation, was carried by the Senate in the TRAIN Senate version, “but was deleted in the bicam.” “So there is precedence for support from my fellow senators for this mechanism which can bring the prices of petroleum products down if inflation over shoots the specified target range set by the government,” Aquino said. But Senate President Aquilino L. Pimentel III promptly ruled out repealing the TRAIN law when asked if he sees such a move gaining a majority support of senators. “Malabo ’yan [That’s impossible].” Pimentel, however, left the door open to the possibility of amending perceived onerous provisions in the existing tax law. “Depends on the tenor of the amendment.” For instance, on Aquino’s bill suspending excise tax on petroleum, the Senate President said: “if the Department of Finance [DOF] objects to the bill, then it won’t pass.” “We need the DOF to project the revenue flow of the government,” Pimentel told the BusinessMirror on Monday.

Businessmirror may 15, 2018  
Businessmirror may 15, 2018  
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