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BusinessMirror A broader look at today’s business

Wednesday, May 16, 2018 Vol. 13 No. 214


Despite weak peso, March remittances hit 15-year low


By Bianca Cuaresma


ash sent by Filipino migrant workers declined sharply in March, posting the largest monthly contraction in overseas Filipino workers’ (OFWs) remittances in about 15 years, the Bangko Sentral ng Pilipinas (BSP) reported on Tuesday.  Continued on A8

Overseas remittance growth is set to remain steady in 2018, averaging at 4 [percent] to 8 percent year-on-year. Monthly remittances are likely to remain volatile, as they tend to be timed with moves in the currency market.” —Narayanan



N old adage practiced by market players—“Don’t put all your eggs in one basket”—is now being raised by the Department of Trade and Industry to woo foreign investors. After tapping Denmark to join the “Build, Build, Build” program, the is now looking at soliciting the support of other European countries to invest on the government’s infrastructure binge. Trade Secretary Ramon M. Lopez said his office plans to work with trade officials from Germany and Hungary in a bid to list the two European Union member-states under the Build, Build, Build program. This came after Denmark expressed intent to bring in construction firms in support of the Duterte administration’s flagship campaign. Lopez said the DTI is determined to attract “construction and technology solutions” firms from Berlin and Budapest that will provide the Manila government a boost in completing its big-ticket public infrastructure. He added that the thousands of projects under the Build, Build, Build program will certainly sound enticing to German and Hungarian firms. “[There are] a lot of opportunities considering the numerous projects [we are trying complete]. But European companies we have talked to have been interested in providing technology and systems services, such as for smart cities, transportation, water management and efficient energy,” Lopez told the BusinessMirror. Lopez discussed with his Danish counterpart Brian Mikkelsen the trade and investment opportunities that the Philippines and Denmark could explore. The Danish trade chief also brought the news that a number of Copenhagen-based construction firms are interested to take part in the country’s infrastructure drive. See “DTI,” A8

PESO exchange rates n US 52.0980

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Constitutionalizing competition Arsenio M. Balisacan, PhD

Competition Matters


he proposal of the consultative committee’s (Con-com) subpanel on economic reforms to create a federal competition body brings to the fore a long-standing debate about the role of competition regimes. Basic economic theory suggests that competition is crucial to the proper functioning of markets. Insufficient competition allows some market participants to dominate and, in turn, enable them to set prices independently and inhibit efficient resource allocation. This fundamental principle has gained wide acceptance that many national economies have established competition regimes to go after abusive monopolies and cartels. Continued on A6

Neda draws up strategies to help Boracay retain status as top tourist spot

DTI woos Germany, Hungary to invest in PHL’s infra binge By Elijah Felice E. Rosales

2016 ejap journalism awards

By Cai U. Ordinario


‘BEST DEVELOPER’ Property firm Megaworld Corp. emerged as the country’s “Best Developer” for the third straight year. Receiving the award last Friday in Makati City from The RGV Group of Cos. Vice Chairman Jaime A. Cura (left) were Megaworld Senior Vice President Kevin L. Tan and Chief Operating Officer Lourdes Gutierrez-Alfonso. The Megaworld Group received awards for various categories.


he National Economic and Development Authority (Neda) expects to complete a medium-term plan to rehabilitate Boracay Island by October, an official of the agency said on Tuesday. Neda Undersecretary for the Regional Development Office (RDO) Adoracion M. Navarro told the BusinessMirror the Boracay Comprehensive Ecosystem Rehabilitation and Recovery Program (CERRP) will be ready by October after the six-month closure of the island. “It’s for the medium term and meant to continue, sustain and add to the ongoing rehabilitation activities of various government agencies. We will take off from the 2008 Boracay Master Plan prepared by the DENR [Department of Environment and Natural Resources],” Navarro said. Navarro’s initial recommendations for the thematic areas of the

NAVARRO: “The medium-term plan is meant to continue, sustain and add to the ongoing rehabilitation activities of various government agencies.”

plan include a long-term societal goal and medium- to long-term outcome for Boracay. The thematic outcomes for the plan, Navarro added, could also include the enforcement of laws and regulations; pollution control and prevention; rehabilitation and recovery of ecosystems; and sustainability of island activities. The discussions for the 20182022 medium-term plan commenced when the presidential proclamation on the state of emergency was issued last month. “The Neda will conduct planning-programming sessions

n japan 0.4751 n UK 70.6345 n HK 6.6370 n CHINA 8.2214 n singapore 38.9984 n australia 39.2037 n EU 62.1477 n SAUDI arabia 13.8920

See “Neda,” A8

Source: BSP (15 May 2018 )

A4 Wednesday, May 16, 2018 • Editor: Vittorio V. Vitug A2

The Nation BusinessMirror

House sees approval of BBL on May 30 By Jovee Marie N. dela Cruz



he House of Representatives is expected to approve this month the proposed measure providing for the Bangsamoro basic law (BBL), which seeks to abolish the Autonomous Region in Muslim Mindanao (ARMM). In an interview with media, Majority Leader Rodolfo C. Fariñas Sr. of Ilocos Norte said the lower chamber will approve the BBL before Congress adjourns sine die on May 30. “We are targeting to approve

the BBL on May 30, we have also created a small committee to hear more from the pro- and anti-BBL,” the legislator said. On Tuesday the House Committee on Muslim Affairs (voting 27

affirmative and three negative), House Committee on Local Government (32-3) and House Special Committee on Peace, Unity and Reconciliation (27-3) endorsed for plenary approval the House Bill (HB) 6475 or the BBL. The HB 6475, principally authored by Speaker Pantaleon D. Alvarez, is the same as the BBL version submitted by the Bangsamoro Transition Commission (BTC) to Congress. HB 6475 is among the four BBL proposals filed in the House. For her part, Party-list Rep. Amihilda J. Sangcopan of Anak Mindanao  urged President Duterte to certify as urgent the BBL and have this signed into law before Congress adjourns sine die on May 30.  “We are hoping that the President will certify the BBL as an urgent mea-

ATF-North casts first buoy, lays flag marker in PHL Rise on Wednesday By Rene Acosta @reneacostaBM


N interagency coordinating body will sail on Wednesday to the Philippine Rise to cast the first buoy and lay the country’s tricolor marker in what military officials called as a “historical event” in the country’s continental shelf. The Philippine flag will be planted at the shallowest portion of the Benham Bank by the Area Task Force North (ATF-North), according to Armed Forces Northern Luzon Command (Nolcom) Spokesman Col. Isagani Nato. The ATF-North is an interagency coordinating body that plans and executes programs of the government in relation to maritime domain awareness, maritime security patrols and maritime presence over the Bajo de Masinloc in the West Philippine Sea, Luzon Strait in Batanes and the Philippine Rise east of Aurora province. The casting of the buoy and

the laying of the country’s flag followed the send off on Tuesday by President Duterte of about 50 Filipino marine scientists to conduct underwater research in the Philippine Rise. “A flotilla from the ATF-North, which is headed by Lt. Gen. Emmanuel Salamat [Commander of Nolcom], will sail to Philippine Rise after President Duterte has sent off the all-Filipino marine researchers to the unexploited maritime area a day before,” Nato said. “A flag-raising ceremony will be conducted onboard BRP Tarlac [LD601] with all the stakeholders, local government units [LGUs] and Nolcom personnel, simultaneous with the laying of a flag marker by volunteer Filipino divers at the shallowest point of Benham… ,while waving their Philippine flags underwater,” he added. A fly-by of aircraft from different agencies conducting the maritime air patrol (Marapat) will be done twice in timing with the sing-

ing of national anthem and after the program proper. Defense Secretary Delfin N. Lorenzana, who will be joined by other participants, will deliver the inspiring message to the sailor, soldiers and airmen of the Nolcom for the activity. The program will be concluded with the casting of the buoy above the flag marker lay previously by divers. The buoy was designed based on international standards and fabricated by the Bureau of Fisheries and Aquatic Resources (BFAR), headed by Director Eduardo Gongona. “This undertaking simply reveals to our fellowmen that in unity, we are strong, and that we are passionate in defense and protection of our sovereignty,” Salamat said. Nato said that the activities form part of commemorating the awarding of the Philippine Rise by the UN Tribunal to the Philippines, recognizing it as part of the country’s exclusive economic zone and extended continental shelf.

sure for Congress to expedite its passage into law before we adjourn sine die. This will be a best gift for us as we celebrate the Holy Muslim month of Ramadan,” Sangcopan said. The proposed BBL measure seeks to establish a political entity, provide for its basic structure of the government in recognition of the justness and legitimacy of the cause of the Bangsamoro people and their aspiration to chart their political future through a democratic process that will secure their identity and posterity and allow for a meaningful self-governance. Under the bill, the Bangsamoro territory shall remain a part of the Philippines.   The measure delineates the core territory of the Bangsamoro to be composed of: 1) the present geo-

graphical area of the ARMM; 2) the municipalities of Baloi, Munai, Nunungan, Pantar, Tagolan and Tangkal in the province of Lanao del Norte and all other barangays in the municipalities of Kabacan, Carmen, Aleosan, Pigkawayan, Pikit and Midsayap that voted for inclusion in the ARMM during the 2001 plebiscite; 3) the cities of Cotabatao and Isabela; and 4) all other contiguous areas where there is resolution of the local government unit or a petition of at least 10 percent of the registered voters in the area asking for their inclusion at least two months prior to the conduct of the ratification of the Basic Law and the process of delimitation of the Bangsamoro. To ensure the widest acceptability of the BBL in the core areas, a popu-

lar ratification shall be conducted among all the Bangsamoro within the areas for their adoption. HB 6475 retains the central government’s power and control over defense and external security.    It provides that the defense of the Bangsamoro shall be the responsibility of the central government. The central government shall create a Bangsamoro Military Command of the Armed Forces of the Philippines for the Bangsamoro, which shall be organized, maintained and utilized in accordance with national laws.   The measure also calls for the creation of a Bangsamoro Police for law enforcement and maintenance of peace and order in the Bangsamoro but it shall be part of the Philippine National Police. 

All set for deployment of 20K OFWs to Kuwait–Palace By Bernadette D. Nicolas @BNicolasBM


alaca ñ ang a n nounced on Tuesday  the “partial lifting” of overseas Filipino workers’ (OFWs) deployment ban to Kuwait covering skilled and semiskilled workers.  The President ordered a deployment ban in February following the reports on the deaths and ill treatment of OFWs.  “By now, it should have been lifted already, according to the plan of [Labor] Secretary [Silvestre H.] Bello [III]. So there are 20,000 skilled and semiskilled workers expected to be deployed today [Tuesday] to Kuwait,” Presidential Spokesman Harry L. Roque Jr. said in a media briefing.  Meanwhile, the deployment ban on domestic helpers is yet to be lifted, but Roque said this will also be lifted “eventually.”

“I just don’t know when and what reforms will be done by [the] DOLE [Department of Labor and Employment],” he said. “We were accompanied [during] the trip also by former [Labor] Secretary Marianito D.  Roque, and it was former Secretary Roque who had recommendations for Secretary Bello. I do not know if Secretary Bello will adopt them, but he is a recognized consultant of Secretary Bello.” The presidential spokesman said in an earlier briefing shortly after his arrival in Manila over the weekend that Philippines and Kuwait ties are “back to normal,” following the signing of memorandum of agreement (MOA).  Along with Philippine officials, 89 undocumented Filipino workers came home with them. These workers were just the first batch out of around 600 workers who were allowed to return to the Philippines at the expense of the Kuwaiti government. 

According to the signed MOA, the Kuwaiti government will be required to ensure that workers are provided with decent meals, housing, clothing, communication lines, eight to 12 hours of sleep and an eight-hour work schedule, among others. The Kuwaiti government will also pursue legal action against employers who have records of contract violations or abuse of workers. It also required the creation of a joint committee, composed of officials from both governments to meet regularly to address Filipino workers’ problem. The MOA will be in force for four years and renewed automatically, unless either party informs the other, through diplomatic channels of its desire to terminate it six months prior to the end of its validity. The diplomatic spat between two countries started with the murder of Joanna Demafelis, a Filipino domestic worker in Kuwait whose body was found dead in a freezer. 

Comelec to poll candidates: Start postelection cleanup


DAY after the barangay and Sangguniang Kabataan elections (BSKE), the Commission on Elections (Comelec) urged candidates to start removing their campaign materials. At a news conference, Comelec Commissioner Tito F. Guia said they will hold all BSKE candidates accountable for the materials they used for their campaign.  “Since they were the ones who posted it, they should be the ones who should be responsible in taking them down,” Guia said.  While the poll official admitted there is no law empowering the Comelec to go after those who will refuse to remove their campaign materials and do a cleanup, Guia said the commission could cite ordinances of local government units (LGU) to compel them to do so.  “If they don’t remove the illegal [campaign materials]...we will look into the ordinances of local government and barangays that prohibits the act. Since violation of ordinances is a criminal act, they could be arrested because of it,” Guia said.  In a related development, Comelec Acting Chairman Al A. Parreño said they will provide legal aid for teachers, who may be named respondents in election-related cases. “We have partnered with the Integrated Bar of the Philippines to provide legal support for those who will be charged,” Parreño said.   On Monday the Teachers’ Dignity Coalition (TDC) reported it received several complaints of harassment from teacher who served as Board of Election Tellers in the BSKE.  Despite the said reports, the Comelec and its partner government agencies said the 2018 BSKE was generally peaceful and successful, with minimal incidents of election violence. Samuel P. Medenilla


A4 Wednesday, May 16, 2018 • Editors: Vittorio V. Vitug and Max V. de Leon


Group slams land-reclamation projects under Duterte admin By Jonathan L. Mayuga



ASSIVE land-reclamation projects continue to threaten the destruction of coastal ecosystems in the country under the Duterte administration.

This was according to the environmental group Kalikasan-People’s Network for the Environment (Kalikasan-PNE), which listed at least 15 development projects in coastal areas that will require land reclamation. Land reclamation, also called dump-and-fill, often leads to the destruction of mangrove forests, seagrass beds and corals, where they still exist. Kalikasan-PNE, a vocal critic of the Duterte administration, alleged that at least 38,000 hectares of reclamation projects are still underway despite President Duterte’s recent pronouncement that he does not want reclamation. “We need definitive action and not just another empty Cabinet banter against runaway reclamation expansion across the Philippines,” Leon Dulce, national coordinator of Kalikasan-PNE, said in a news statement.

“In the Bulacan Aerotropolis project alone, a long stretch of mangroves were already cut, possibly without environmental clearance. What more with the rest of at least 19,000 hectares of reclamation projects nationwide currently in the pipeline?” Dulce stated. Last week the group joined environmental scientists in a rapid appraisal of the site for the 2,500-hectare Aerotropolis project owned by San Miguel Corp. (SMC). The survey revealed the numerous Indian mangrove trees that the residents reported to have been cut down by SMC personnel almost a month ago. The exact number of trees that were cut down is yet to be determined. Kalikasan-PNE noted that the proposed airport and metropolitan complex in Barangay Taliptip, Bulakan town, Bulacan province, likely

overlaps with the 25-hectare Bulakan Mangrove Eco-Park established by the Department of Environment and Natural Resources in the area. “Taliptip’s mangroves are part of the remaining mangrove corridor in Northern Manila Bay that could potentially be listed as part of the Ramsar wetlands of international importance. Migratory birds come here to feed and breed. Thousands of families are dependent on the bay for their food, livelihood and resiliency. With what we’re seeing here, the birds’ habitat, the people’s source of livelihood and protection from storm surges are being turned into just another concrete jungle for the profit of the very few,” Dulce said. Wetlands that are part of the “Ramsar list” are considered internationally significant in terms of ecology, botany, zoology, limnology or hydrology. Governments acceding to the 1971 Ramsar Convention, which provides for the international conservation and promotion of the sustainable use of wetlands, are required to enact and implement measures for the protection of the wetlands found in each respective country that are among those included in the global list of important wetlands. The Philippines itself is a signatory to the Ramsar treaty. Among the Philippines’s wetlands that are in the Ramsar list include the 14,836-hect-

are Agusan Marsh in Mindanao, 14,568-hectare Naujan Lake National Park in Mindoro and the 175-hectare Las Piñas-Parañaque Critical Habitat and Ecotourism Area (LPPCHEA). The LPPCHEA itself is among those other ecologically critical coastal areas that are being threatened by reclamation in Manila Bay. Other affected coasts include that of northern Bataan, Pampanga, the rest of Metro Manila and northern Cavite. Kalikasan-PNE noted that the Duterte administration entered into a partnership with the Dutch government earlier this year to develop the Manila Bay Sustainable Development master plan supposedly to provide an ecologically sustainable while economically viable development framework for the bay. “Why are reclamation projects being awarded deals when the supposed master plan that will govern it is still nonexistent? Do these projects even have feasibility studies and environmental-impact statements that will justify the clearing of mangroves and coast-filling already undertaken by the reclamation companies?” Dulce asked. A moratorium on land reclamation, he added, must be imposed unless a scientifically robust, environmentally friendly and democratically consulted bay-development plan is developed or put in place.

Expert: Inefficient spending to cripple 4Ps and CCT By Cai U. Ordinario



ducation and cash transfers are pro-poor programs that can help lift millions from poverty, but inefficient spending may cripple these programs, according to an expert. In a news statement released by state-owned think tank Philippine Institute for Development Studies (PIDS), Nanak Kakwani, a poverty expert from the University of New South Wales, said the country has many programs that can help poor Filipinos escape poverty. This includes the conditionalcash transfers (CCTs), which aim to improve enrolment rates and address health issues of young Filipinos and mothers. These include the efforts to improve the education system, the most recent of which is the free tuition in state universities and colleges.  “He also suggested investing in safety-net programs, but warned against inefficient spending, saying that the government should be able to utilize its budget to fund other social-welfare programs and make them more beneficial, especially to the poor,” PIDS said. In the past years, the Philippines launched attempts to improve the educational system in the country.  In 2014 the government expanded the age coverage of its CCT program, the Pantawid Pamilyang Pilipino Program (4Ps) to 18 years old to give poor children a better chance at finishing high school. Under the 4Ps, children who are part of the program should be enrolled in school.   In 2016 the government, under the Department of Education, fully implemented the K to 12 program to make the Philippine basic education system on a par with international standards as it increased the number of years for basic education to 12.   Furthermore, in 2017 President Duterte signed a law that provides free tuition for students of SUCs in the country, despite the opposition of some economists.   “Government transfers are ‘highly pro-poor’ and are very effective in reducing poverty,” Kawani said.

DOTr, Jica set P16.98-B price tag for MRT 3 rehab, upkeep By Lorenz S. Marasigan @lorenzmarasigan


APAN has finalized the cost, scope and schedule of the rehabilitation and maintenance of the Metro Rail Transit (MRT) Line 3, setting a P16.98-billion price tag for the said project. According to a media advisory, the minutes of discussion for the appraisal mission for the deal was attended by representatives of the Department of Transportation (DOTr) and the Japan International Cooperation Agency (Jica) last Friday.  The appraisal initiative has set the cost of the project to P16.98 billion, and will cover the railway line’s trains, power-supply system, overhead catenary system, radio system, closed-circuit television system, public address system, signaling system, rail tracks, road-rail vehicles, depot equipment, elevators and escalators, and other station building equipment. Tentatively, the whole deal will take about three and a half years, 31 months for the simultaneous rehabilitation and maintenance works to restore train system to its original design condition and capacity, and a year for the defect liability period. Transportation Undersecretary Timothy John R. Batan said that the appraisal mission forms part of process for official development assistance (ODA) deals with Japan.  Talks for the said assistance started last year. January saw the exchange of note verbale between the two governments.  A month after Jica representatives started the on-site inspection of the MRT 3’s condition and noted the works needed to rehabilitate the system.   From March to April, Japanese engineers stated preparing the system’s inspection report, which includes both the scope of works and cost estimates.  It was finalized last Friday, when the appraisal mission was concluded.  By June, Batan said, the Philippines expect to finalize the following: “pledge by the government of Japan, exchange of notes and the loan agreement signing.” Likewise, the two government agreed to commit to best environmental management practices and social considerations through the procurement of a supervision consultant who will facilitate the implementation of an Environmental Management Plan and an Environmental Monitoring Plan. To ensure the project’s sustainability, the supervision consultant shall also draft and institutionalize new MRT 3 manuals, which will update methodologies on appropriate asset management, project monitoring and supervision, and operations and maintenance activities.  The Japan ODA-financed rehabilitation and maintenance project is intended to “fix everything that needs to be fixed” in the MRT 3 through a well-qualified, experienced and

single-point-of-responsibility rehabilitation and maintenance service provider, Batan stated. The government is currently directly engaging Sumitomo Corp. and its technical partner Mitsubishi Heavy Industries for the upkeep of the MRT 3. The two companies designed, built and maintained the MRT 3 in its first 12 years of operations. Sumitomo’s maintenance contract was terminated in 2012, after the previous Aquino administration decided to take over the said component despite contrary provisions in the build-lease-transfer contract with MRT Corp. The new rehabilitation and maintenance service provider will be mobilized after securing the loan agreement from Japan. The Jica-financed initiative is part of the government’s program to rehabilitate, expand and modernize the train system.  Another option being considered is the acceptance of the unsolicited proposal of Metro Pacific Investments Corp. for the rehab and modernization of the railway line.  Metro Pacific submitted in 2017 an unsolicited proposal that involves the expansion of the capacity of the railway system by adding more coaches to each train, allowing it to carry more cars at faster intervals. It will double the capacity of the line to 700,000 passengers a day from the current 350,000 passengers daily. The multimillion-dollar expansion is deemed as an all-encompassing deal, including the improvement of the reliability of rolling stock, the upgrading of power supply, the upgrading of stations and the replacement of rails, which will allow the company to operate the new trains purchased by the government from Chinese train manufacturer Dalian. Unsolicited proposals are required, under the law, to be subjected to a Swiss challenge, wherein other groups can offer a similar proposal, and the original proponent can present a counter offer. The government awarded the original-proponent status to Metro Pacific last year. Metro Pacific has nominated Light Rail Manila Corp. as its corporate vehicle for the MRT 3 deal. The said company, a partnership between Metro Pacific and Ayala Corp., operates the Light Rail Transit (LRT) Line 1. Its proposal for the MRT mimicked the same provisions under its concession agreement for the LRT 1 operations and modernization deal, which it bagged in 2014 via the Public-Private Partnership Program. It means that, instead of having a different operator and maintenance provider, the group will be the one to do both, something that Robert John Sobrepeña has been pushing for since the government forcibly took over the upkeep of the facility in 2012. Currently, the MRT 3 operates with 16 working trains daily, serving roughly 350,000 passengers per day. 

BTr awards ₧9B in T-bills


he Bureau of the Treasury (BTr) has fully awarded P9 billion in its latest auction for Treasury bills (T-bills) on Tuesday, with market investors leaning toward shorterdated securities. National Treasurer Rosalia V. de Leon told financial reporters that the auction committee decided to fully award the 91-day IOU with P5 billion and the 182-day tenor bucket with P4 billion with bids for the government security being oversubscribed reaching a total of P25.578 billion. “We see again the preference for the shorter-dated [securities], for the 91and 182-day [tenor buckets]. The 364day continues to be undersubscribed, but we also see that, more or less, rates have tempered,” de Leon said. The tenders for the 91-day T-bill reached P15.086 billion with the auc-

tion committee rejecting P10.086 billion in the end. An average annual rate of 3.451 percent was set for the IOU, which saw an increase of 1.2 basis points from the previous auction rate of 3.439 percent. “We still see for the 364-day undersubscription given that they are leaning more toward the shorter-dated bills, for the investors, coming from the BSP [Bangko Sentral ng Pilipinas] action last Thursday. But still, rates continue to trend upward given the expectations from some that there will still be additional rate hikes coming from the BSP,” she added. For the 182-day tenor, bids reached P10.492 billion with the auction committee rejecting P6.492 billion. The average annual rate for the security settled at 3.934 percent, which also saw an expansion of 2.4 basis points from the previous rate of 3.958 percent. Rea Cu

A6 Wednesday, May 16, 2018 • Editor: Angel R. Calso

Opinion BusinessMirror


MOA promotes mutual respect, understanding


diplomatic discord erupted between the Philippines and Kuwait early this year when President Duterte ordered a total deployment ban on new workers to the Gulf state, after Kuwaiti authorities discovered the body of Joanna Demafelis in the freezer of an abandoned apartment belonging to a couple who had hired her. The dispute intensified when the Kuwaiti government slammed the action taken by the Philippine Embassy staff that conducted rescue operations for distressed Filipino workers in said country and declared the Philippine ambassador a persona non grata. Before things got worse, however, the Philippine and Kuwaiti governments managed to iron out differences and bring diplomatic ties back to normal. This came about last week following the signing by Foreign Secretary Alan Peter S. Cayetano and Kuwaiti Deputy Prime Minister and Foreign Minister Sheikh Sabah Khalid Al Hamad Al Sabah of the “Memorandum of Agreement [MOA] on the Employment of Domestic Workers” at the Kuwait Ministry of Foreign Affairs. Witnessing the signing were Labor Secretary Silvestre H. Bello III, Special Envoy Abdullah Mama-o, Presidential Spokesman Harry L. Roque Jr., Charges d’affaires Noordin Lomondot, other Philippine government officials and their Kuwaiti counterparts. The MOA contains contract of employment provisions that the President strongly pushed. These include an arrangement where workers’ passports will be deposited at the Philippine Embassy and not to the employers; the allotment of at least one day off for workers every week; an eight-hour work schedule; giving workers eight to 12 hours of sleep a day; and providing them with communication lines, decent meals and sleeping quarters, among others. Bello described the MOA as a document that will provide optimum and maximum protection for Filipino workers in Kuwait. The MOA will be in force for four years and renewed automatically, unless either party informs the other —through diplomatic channels—of its desire to terminate the agreement six months prior to the end of its validity. The MOA also requires the creation of a joint committee, composed of officials from both governments, to meet regularly to address Filipino workers’ problems. Moreover, the MOA requires the Kuwait government to pursue legal action against employers who have records of contract violations or abuse of workers. With the signing of the MOA, Bello sees the partial lifting of deployment ban on overseas Filipino workers (OFWs) to Kuwait, which will allow the deployment of skilled workers and professionals to the Gulf state. The partial lifting of deployment ban will allow the government to see the implementation and immediate effect of the MOA. Roque said: “The MOA will strengthen our friendship and ties with Kuwait. Philippine and Kuwait ties are back to normal, what we were waiting for was the signing of the memorandum of agreement and the signing is a sign that we have both agreed to move on with our relationship.” Bishop Ruperto Santos of the Diocese of Balanga, chairman of the Catholic Bishops Conference of the Philippines-Episcopal Commission for the Protection of Migrants and Itinerant People, hailed the MOA signing between the governments of the Philippines and Kuwait to protect OFWs in the Gulf state. The Bishop said: “We are very thankful to the government officials of the Philippines and Kuwait for signing the MOA. We appreciate the good efforts, good intentions and hard works of those who made the signing a reality. Let this MOA be the cornerstone of protecting and promoting the rights and welfare of our OFWs. It is also the testament of common collaboration, mutual respect and understanding of both countries.”

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Constitutionalizing competition Arsenio M. Balisacan, PhD

Competition Matters Continued from A1


espite this economic rationale, the question persists: what should be the ultimate objective of competition regimes? One view holds that their main aim is to promote the welfare of different groups in the economy. This view limits the function of competition agencies to prevent unreasonable restraints of trade, thereby achieving efficiency in resource allocation. For consumers, the goal is to receive better goods and services at the lowest cost. Another view, however, suggests that competition agencies do not have an exclusively economic rationale. While agreeing on the economic objective of competition law, scholars of this second view also try to establish a link between competition and democracy. According to this theory, concentrated economic power can lead to centralized political power. By dispersing it, economic power becomes shared by many rather than a select few who could exert undue influence over political decision-making. Put simply, the dispersal of economic power translates to the diffusion of political power. This is not a novel view. The American Revolution was said to be as much about escaping from monarchy and dispersing political power as it was about avoiding monopoly and diffusing economic power. The rise of the Nazis in Germany had been attributed to the role played by business cartels. After World War II, the

Germans were compelled to adopt an effective antitrust regime. In his introduction to what came to be known as the Sherman Antitrust Act, Sen. John Sherman argued before the United States Congress: “If we will not endure a king as a political power, we should not endure a king over the production, transportation and sale of any of the necessities of life. If we would not submit to an emperor, we should not submit to an autocrat of trade, with power to prevent competition and to fix the price of any commodity.” Competition law and policy favors a plurality of economic actors and interests. This bias is consistent with the Philippine Constitution’s social-justice provision, mandating the State to reduce economic inequality and diffuse wealth for the common good. The overconcentration of wealth is such a huge concern that the framers deemed State intervention necessary to temper economic inequality.

Before the passage of the Philippine Competition Act in 2015, competition laws were largely fragmented and uncoordinated, despite an economy dominated by businesses with substantial market power. Studies found that regulatory conflicts often arose because several agencies with competition mandates enact conflicting policies. This preference for economic pluralism is mirrored in the constitutional doctrine of ensuring a diversity of political interests, as expressed in the separation of powers, term limits and ban on political dynasties. The need to level the economic and political playing fields may well explain the Con-com’s move to include self-executing provisions against political dynasties in the new Charter and create a stronger competition authority with federal powers. The twin objectives are crucial in a federal setup. As our past experience painfully demonstrates, the oligopolistic structure of the economy is paralleled by the political dominance of the few. While the Constitution already prohibits political dynasties, the constitutional prohibition remains ineffective without an enabling law. Similarly, while it bans unfair competition, the Charter did not create a central authority to oversee the implementation of competition law and policy. Before the passage of the Philippine Competition Act (PCA) in 2015, competition laws were largely fragmented and uncoordinated, despite an economy dominated by businesses with substantial market

power. Studies found that regulatory conflicts often arose because several agencies with competition mandates enact conflicting policies. The danger of regulatory capture was more likely, as regulators beholden to the incumbent firms issue protectionist regulations. There was also a lack of expertise in the appreciation and implementation of competition principles, resulting in failure to enforce competition laws. The enactment of the PCA was meant to bring order to the chaos. Among its salient provisions is the creation of the Philippine Competition Commission (PCC), a quasi-judicial body with original and primary jurisdiction over all competition-related issues. The law eliminated the prevailing sectorspecific approach to competition, which was insufficient and ineffective. Congress meant the PCC to be independent, guaranteeing its members a fixed term and security of tenure. This independence clothes the Commission with authority to challenge both private and public acts that harm competition. We therefore welcome the proposal of the Con-com subpanel to elevate the PCC to a federal constitutional body. If it is to be effective in leveling the economic playing field, PCC has to be insulated from political pressure, owing accountability only to the Constitution and the public. Dr. Arsenio M. Balisacan is the chairman of the Philippine Competition Commission and professor of economics (on secondment) at the University of the Philippines in Diliman. Prior to his appointment to the Commission, he served as socioeconomic planning secretary and, concurrently, director general of the National Economic and Development Authority.

Reimbursement of hospital bills not allowed in PCSO Florante S. Solmerin



or the information of all, especially the patients who wish to avail themselves of the financial assistance for their hospitalization bills from the Philippine Charity Sweepstakes Office (PCSO), such bills are not included in the agency’s mandate to pay the bills paid by the patient for their hospitalization or reimbursement, and the doctor’s fee. Also, the room-accommodation expenses of the patient, such as the executive suite, are not in the PCSO mandate. Only the well-to-do can afford these rooms. If the patients avail themselves of a private room, it is not covered by the financial assistance from PCSO.

However, there are cases when less-fortunate patients and the indigents from the intensive care unit (ICU) who leave the hospital bearing tubes, oxygen and the like in order to aid their survival. Their doctors may also require them to stay in a private room, especially if it is to prevent

the spread of the contagious disease. These patients could not be placed in the charity ward as mandated by the PCSO to avoid the costly bills of availing themselves a private room. In the guidelines of PCSO as a government agency for charity, whether you are rich or poor, you may avail yourself of the Individual Medical Assistance Program (Imap) if you are in need of financial assistance. However, there is a category that must be observed, from A (the well-to-do individuals) to F (the impoverished). In simpler terms, the assistance given by PCSO depends on the financial capacity of the patient or the relative of the patient. If the patient belongs to category F, they may receive 70-percent to 100-percent financial assistance. In addition, PCSO does not give its assistance in cash but in the form of a guarantee letter (GL).

Before one may acquire a GL, a patient must submit their medical abstract, a handwritten request for financial assistance addressed to PCSO General Manager Alexander Balutan, or to PCSO Chairman Anselmo Simeon Pinili, and the final hospital bill before discharge from the said hospital. The GL only has a two-month effectivity. The PCSO has 63 branch offices in the country. The list of branch offices may be viewed on the agency’s official social-media page Mandirigma Kawanggawa (Facebook) and Mandirigma sa Kawanggawa (http://, a Facebook community page. They may also be viewed on the agency’s official web site, Every branch has a daily fund allocation for Imap. Usually, the mandate allows to give only P50,000 for See “Solmerin,” A7

Opinion BusinessMirror

Solvency capital regime of the Philippines

Only ‘Wesphalian principles’ can bring peace to Israel-Palestine Michael Makabenta Alunan

Dennis B. Funa

on the contrary

he primary goal of any insurance solvency regime is “to secure the interests of policyholders. One of the key elements to this end is the requirement for insurers to hold capital in order to be able to honor all future payouts to policyholders.”

he recent outbreak of conflicts between Israel and Palestine over President Donald J. Trump’s decision to move the US Embassy to Jerusalem can escalate and never be resolved, unless both camps recognize their respective histories and learn from the principles of the Treaty of Westphalia of 1648 that brought peace to Europe after almost 150 years of overlapping internecine wars.



From the point of view of the management of the company, the goal of solvency is the continuation of the function and existence of the company. While the universal objective of solvency regimes across the world is similar, the solvency regimes of each country have not been identical. The trend, though, is toward risk-based capital requirements. The solvency regime for insurance companies in the Philippines is spelled out in the first paragraph of Section 200 in relation to Section 194 of the Amended Insurance Code. Basically, our solvency regime adopts the networth method and the riskbased capital (RBC) method. The RBC method was adopted, via a circular letter, as an “internationally accepted solvency framework” (Section 200). A minimum paid-up capital is adopted for a “new domestic life or nonlife insurance company” (Section 194). Previously, a minimum paid-up capital was imposed by Department Order 27-06. But this should be deemed superseded by the Amended Insurance Code. A “contributed surplus fund of not less than P100 million” may also be required as a prelicensing requirement for new companies—but this is discretionary on the part of the insurance commissioner. Prior to the amendment of the Insurance Code by Republic Act 10607, the solvency regime (or requirement) was the Margin of Solvency (or solvency margin) as defined under Section 194 of Presidential Decree (PD 612 [as amended by PD 1455]). It became an international standard in the 1970s. The Margin of Solvency required that “the value of its admitted assets exclusive of its appraisal and revaluation surplus, and of its paidup capital, if a domestic company, or the value of its admitted assets in the Philippines exclusive of its appraisal and revaluation surplus, and of its security deposits, if a foreign company, exceeds the amount of its liabilities, unearned premium and reinsurance reserves in the Philippines by at least two per mille [i.e., P2 for every P1,000] of the total amount of its insurance in force as of the preceding calendar year on all policies, except term insurance, in the case of a life company, of by at least 10 per centum [i.e., P10 for every P100] of the total amount of its net premium written during the preceding calendar year, in the case of a nonlife company. In either case, however, such margin shall in no event be less than P500,000” (IMC 4-75). In other words, the solvency margin requires that the value of assets should exceed the value of liabilities by a certain margin. It is the margin by which the assets owned by the insurer must exceed its liabilities. The solvency margin is a minimum excess on an insurer’s assets over its liabilities set by regulators. Under this former rule, the margin for nonlife insurance is a percentage of premium income. For life insurance, it was a specific amount (P2 per thousand) imposed on the total insurance amount of all policies except term insurance. The determination of this margin necessitates the examination of mainly four aspects: 1) the evaluation of liabilities; 2) the evaluation of assets; 3) the level of the premiums of long-term policies; and 4) reinsurance.

The required solvency margin varies among jurisdictions. For example, in Brunei Darussalam the solvency margin must be equal to 20 percent of the net premium income for all classes written in the previous financial year. In Hong Kong the solvency margin for the general (nonlife) insurer is the greater of “one-fifth of the relevant premium income up to HK$200 million, plus onetenth of the amount by which the relevant premium income exceeds HK$200 million, or one-fifth of the relevant claims outstanding up to HK$200 million, plus onetenth of the amount by which the relevant claims outstanding exceeds HK$200 million, subject to a minimum of HK$10 million or HK$20 million in the case of insurers carrying on statutory classes of insurance business.” In India the solvency margin is the maximum of the following amounts: “500 million India rupee for direct nonlife insurers, or a sum equivalent to 20 percent of net premium income, or a sum equivalent to 30 percent of net incurred claims.” In Vietnam the solvency margin of a nonlife insurer is the greater of “25 percent of the total premiums actually retained at the time of determination of the solvency margin, or 12.5 percent of the total primary insurance premiums plus reinsurance premiums at the time of determination of the solvency margin.” The shift away from the Margin of Solvency method was propelled by the desire to conform with internationally accepted standards. Nevertheless, the solvency margin is still the solvency capital requirement in a number of Asian countries, such as Brunei Darussalam, Hong Kong, India, Macau, Malaysia (Labuan), Pakistan and Vietnam. The RBC method is adopted in Australia, New Zealand, China, Indonesia, Japan, South Korea, Papua New Guinea, Singapore, Sri Lanka, Taiwan and Thailand. The networth method is peculiar to the Philippines. There are other solvency regimes across the globe, such as the Solvency II regime in the European Union (EU), which entered into force on January 1, 2016. It is based on a three-pillar supervisory structure. Solvency II comprises quantitative requirements regarding riskbased capital (Pillar 1); supplemented by qualitative requirements concerning governance and the supervisory review process (Pillar 2); and requirements concerning public disclosure and supervisory reporting (Pillar 3). In Switzerland the Swiss Solvency Test (SST) was adopted in 2006. The EU has classified SST as fully equivalent to Solvency II. There are other risk-based solvency capital regimes which follows a threepillar approach and with different variations under different nomenclatures. Examples are: the China Risk Oriented Solvency System, which came into force on January 1, 2016, the Life and General Insurance Capital Standards of Australia, the Solvency Assessment and Management Framework of South Africa, and Singapore, of course, has its own RBC 2. Dennis B. Funa is the current insurance commissioner. Funa was appointed by President Duterte as the new insurance commissioner in December 2016. E-mail:

Wednesday, May 16, 2018 A7


No PEACE if all want a PIECE. Starting with the Spanish Inquisition by Tomas Torquemada, a Dominican friar, who persecuted Muslims and Jews, expelling them from Spain in 1492, the entire Europe was engulfed in wars. Moreover, every state taxed each other and wanted a slice of the pie for themselves, without realizing no one can own or control common natural ecosystems like rivers and old trade routes. As feudal systems then relied on backward extractions from the land, rather than investing back to increase productivity, all taxed each other increasingly, forcing many to go to war and conquer each other’s territories to avoid getting pernalized or pay tributes. As there were no international rules, there was no force of law, and on the contrary what dominated was the law of force. This triggered many overlapping wars, particularly the bloody Thirty Years’ War (1618-1648) involving the Holy Roman empire, or much of Europe, and the earlier Eighty Years’ War (1568-1648) between Spain and the Dutch, which were mostly religious wars and endless vindictive wars of “Retribution,” reviving the Old Testament’s “eye-for-an-eye, tooth-for-tooth” justice system that only escalated conflicts.

“Doing the advantage for others.” It had to take the diplomatic savvy, patience and organizational skills of Cardinal Jules Mazarin, an Italian diplomat, politician in robes and Finance Minister of France acting as de facto ruler, to end these wars with his series of treaties in Westphalia, Germany from May to October 1648, finally bringing peace and development to Europe. Mazarin gathered 109 delegations and 94 states and kingdoms from all over Europe. His simple formula was to debunk the selfish “this-is-mine attitude” or akin ito in Filipino, the core value of free market capitalism, to a paradigm shift emphasizing the common good or the general welfare or atin ito, which means this is ours together. Private property is respected, but for the contentious “commons,” Mazarin simply revived the “Golden Rule” of “Doing the Advantage for the Others” or “Do unto others what you want others to do unto you.” Mazarin’s Westphalian principles on state sovereignty, equality of states and nonintervention on each other’s internal affairs, but helping one another, became the precursor principles of what governs the United Nations today. Squeezing Jews out is no solution. There is no way Palestinians can kick out the Jews from Israel,

ever since Israel was created on May 14, 1948, which realized the “Balfour Declaration” of November 2, 1917, a request made by British Foreign Secretary Arthur Balfour on Jewish Baron Lionel Walter Rothschild to support a Jewish homeland in Palestine. For 70 years now, Palestinians protest yearly Israel’s May 15 creation, calling it “Nakba” or “Day of Catastrophe,” when 700,000 Palestinians were expelled from their homes in 1948. History cannot be undone so Palestinians must accept this fact. No one can neither blame the Jews in Israel as they are victims, too, of history. Roots of historical distortion? It is wise to learn from Jewish scholar Arnold Koestler’s book The Thirteenth Tribe, about the two types of Jews: 1)Shepardic Jews of Hebrew-Semitic stock and direct descendants of Abraham; and 2) Askenazims (Khazar Jews), who compose 99 percent of Jews in Israel, all tracing their roots to TurkoMongolian stock and to the Huns, Uigurs and the Magyar tribes of Eastern Europe. Koestler said many Sephardims settled in Spain until expelled by Torquemada’s Inquisition in the 15th century. In the 1960s Sephardims were only about 5,000, while Ashkenazims or Khazarian Jews in Israel numbered about 11 million. Des Griffin in his book on AntiSemitism also affirmed that the Khazar Jews were nomadic tribes driven by other tribes and their desire to plunder and take revenge. By the sixth century, they moved to southern Russia and established the Khazar empire (Chazar), hundreds of years before the Russian new Chazar, or Czarist empire was formed in Kiev in 855 AD. By seventh to eighth century, Khazars increasingly embraced Judaism. By the ninth century, King Obadiah, required all to become Jewish, learn the Hebrew culture and language, thus many generations later,

everyone believed they all came from Palestine (now Israel). From Chazar to new Czar, Russia? After the Khazar empire crumbled with the rise of a new Chazar (Czarist Russia), Khazarian Jews, who were naturally all over Russia and Eastern Europe (Poland, Hungary, Germany, etc.), became minorities, but still believed they all came from Palestine, thus their craving for their Promised Land and the birth of the Zionist movement. The original Jewish diaspora involved the Shepardims who moved to Europe, and never the Khazars as it was unthinkable for millions of original Hebrews migrating to Eastern Europe and Russia when mass transportation then was still inexistent. Having no lands or artisan skills, many Jews became traders and the first usurers, or the Shylocks of Shakespeare’s Merchant of Venice. Stop fueling “Clash of Civilizations.” Both Israelis and Palestinians are victims of history, so to achieve lasting peace, both must accept their respective pasts, adopt Westphalian doctrines, build on commonalities and launch jointdevelopment projects. Both sides must debunk ideas like Samuel Huntington’s book Clash of Civilizations, which is reviving and only fueling pre-Westphalian flames of hatred between Islam and Christendom or Judaism. Trump should neither give-in to his Jewish son-in-law Jared Kushner’s politics. Palestinians must also be aware on the likelihood that their own radical Hamas was a creation of Israel’s Mossad intelligence, to keep animosity and hatred burning that could prevent peaceful coexistence, keep the Palestinians divided, and provide unending arms markets for the industrial-military complex of the industrial countries. Right or wrong, we need to elevate the critical discourse toward peace. E-mail:

Breaking up power monopolies, empowering the poor

law prohibiting political dynasties. The Philippines now holds the most number of political dynasties—the world record. We are now the capital of political dynasties in the world. We have prohibited political dynasties. Under our ban: n No member of a political family may succeed in an elective post a relative within the second degree of consanguinity and affinity— whether at the national, regional or local level. n No two members of a family within the second degree of consanguinity or affinity may run for more than one position in the government. We will never attain true democracy until and unless we eliminate these political dynasties, for in a true democracy political power cannot be the monopoly of a few but should be in the hands of the many. The government must be run on the basis of merits and not by reason of genetics. More important, political dynasties must be prohibited because they cause the poverty of our people. This conclusion is backed up by fool-proof

studies of the experts. Fourth, we shall break up monopolies in business to help the poor. Like political power, economic power cannot be held by just a few. The wealth of the nation cannot be monopolized by a small elite. If we allow that monopoly, economic progress will not trickle down to the poor and the indecent gap between the rich and the poor will never be narrowed down to a decent degree. The Con-com agreed to: n Ensure free and fair competition in trade and industry and all commercial activities; n Establish and guarantee equal legal conditions for all economic activities; and n Prohibit agreements that are anticompetition, including anticompetitive mergers and acquisitions. Fifth, the Con-com is reconfiguring our party-list system of political representation. The party-list system is intended to assure representation of the marginalized sector in our legislature. We all know how our party-list was prostituted. This time around, you can be sure the poor, through the party-list system, will really have an effective voice in our halls of Congress. I started with the fact that we are a rich nation, and yet year in and year out for so many decades now, our nation has been rated as a failing democracy. There is only one explanation for these democracy deficits—our unitary government that has monopolized all governmental powers. The consequence is poverty to our people. In their best-selling book Why

Nations Fail, authors Acemoglu and Robinson, after an exhaustive scholarly study on the origins of power, prosperity and poverty, put forward the conclusion that nations fail due to wrong distribution of power. Let me conclude by quoting them: “The political institutions of a society are a key determinant of the outcome of this game…. They determine how the government is chosen and which part of the government has the right to do what. Political institutions determine who has power in society and to what ends that power can be used. If the distribution of power is narrow and unconstrained, then the political institutions are absolutists. Under absolutist political institutions, those who can wield this power will be able to set up economic institutions to enrich themselves and augment their power at the expense of society. In contrast, political institutions that distribute power broadly in society and subject to constraints are pluralistic…inclusive political institutions. Vesting power broadly would tend to uproot economic institutions that expropriate the resources of the many, erect entry barriers, and suppress the functioning of markets so that only a few benefit.” That, ladies and gentlemen, is the secret why nations fail: not because of geography, not because of resources, not because of people, not because of leaders—but because of wrong distribution of political and economic power. This is the reason for our shift to federalism. Thank you and God bless us.

forwarded to the Office of the General Manager for augmentation of the assistance. If the amount reaches P1 million and above, it shall require the decision of the board. Although the PCSO funds do not

come from the General Appropriations Act of Congress or the people’s taxes—but from the gaming public who patronize the agency’s lottery games, such as Lotto, Keno, Digit Games, Sweepstakes and Small Town Lottery—the agency’s fund may still

be considered a public fund. If one seeks financial assistance from agency, the presentation of legal documents will be required. PCSO does not leniently provide financial assistance to anyone who are sick and in need of help.

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 Conclusion


wo: The Con-com will enshrine the most basic of the socioeconomic rights of the poor in the Bill of Rights of our Constitution. The 1987 Constitution merely enumerates the socioeconomic rights of our people in its Declaration of Policies. It failed to make them enforceable or demandable against the State. They are mere paper rights. The solution, therefore, is to include these socioeconomic rights as parts of our Bill of Rights. By doing so, these socioeconomic rights can be demanded by the poor against the government just as civil and political rights can be demanded from the government. The most basic of these socioeconomic rights are the right to health, education and housing. Other countries have done this to help the poor of their people, like India, South Africa and states within the United States. We ought to do no less for our people. Third, the Con-com brought the axe down on political dynasties. One principal defect of the 1987 Constitution is it allowed political dynasties to bloom. Look at how the 1987 Constitution dealt with political dynasties. On one hand, it banned political dynasties. On the other, it said the ban will be made by Congress. By this act, the 1987 Constitution perpetuated political dynasties. Congress cannot be expected to prohibit dynasties because it is controlled by dynasties. From 1987, it is now 2018. We have no

Solmerin. . .

continued from A6

the hospitalization bills of patients who are in great need. If the amount exceeds the amount, the request is

2nd Front Page BusinessMirror

A8 Wednesday, May 16, 2018

DOT reorganization looms By Ma. Stella F. Arnaldo


@akosistellaBM Special to the BusinessMirror

FREE hand. This was what Tourism Secretary-designate Bernadette Fatima Romulo Puyat asked top-level officials of the Department of Tourism (DOT) to give her, as she took over the agency on Tuesday. At her first Management Committee meeting, Romulo Puyat asked DOT undersecretaries and assistant secretaries to tender their courtesy resignations, and give her time to study their backgrounds and qualifications to determine who gets to stay at their posts or reassigned to another task more suited to their skills. In an interview with the BusinessMirror, the new tourism chief said the official most likely to stay at his post is Benito C. Bengzon Jr., currently Undersecretary for Tourism Development Planning who is a Career Executive Service Officer. “I’ve heard good things about him; I think he will be able to help me carry out my tasks at


The number of years Romulo Puyat served as Department of Agriculture undersecretary

the DOT,” she said. She added she may bring in a tourism veteran to oversee “the regions,” but declined to say who it would be pending the person’s

Newly appointed Tourism Secretary Bernadette Fatima Romulo Puyat visits the Department of Tourism (DOT) office in Makati City for the first time. Romulo Puyat replaced Wanda Corazon T. Teo, who resigned on the heels of accusations of graft involving the former DoT chief. ALYSA SALEN

official appointment into office. Romulo Puyat refrained from revealing any more changes in the agency, but stressed that her marching orders from President Duterte were: “No corruption.” She sa id D uter te i nst r uc ted her to “review all the contracts, make sure everything has bidd ing , it ’s tra nspa rent, t here was a process followed. If these were not transparent, there was no process and no bidding conducted, it’s automatic, we won’t implement these.” In a news briefing, she later ad-

dressed questions regarding the “Buhay Carinderia” project and Tourism Promotions Board COO Cesar Montano, who was recently the topic of social-media reports, which alleged he spoke for only two minutes at a tourism event in New York because he had to attend the musicale, “Hamilton.” While saying she had yet to read the documents about the project, Romulo Puyat said, “I have arranged a meeting with Mr. Montano to ask if there is any truth to what I’d read about Buhay Carinderia [such as] if it’s true

Despite weak peso, March remittances hit 15-year low Continued from A1

Cash remittances in March contracted by 9.8 percent to hit $2.36 billion during the month. This is the sharpest decline in cash remittances since April 2013, when transfers that period contracted by about 10.3 percent. Economists have earlier expressed confidence that remittances will continue to be strong in average for the year, but will display months of volatility as migrant workers adjust their transfers based on the strength or weakness of the peso.  “Overseas remittance growth is set to remain steady in 2018, averaging at 4 [percent] to 8 percent year-on-year. Monthly remittances

Neda. . .

are likely to remain volatile, as they tend to be timed with moves in the currency market,” Standard Chartered economist Chidu Narayanan said. Data from the BSP showed the local currency averaged at 52.068 to a dollar in March, significantly weaker than the 50.395 to a dollar end year value of the peso in 2017. This gives the dollar more purchasing power in terms of peso, despite the low volume in absolute terms.  Both land-based and sea-based workers scrimped on their dollar remittances in March. Cash remittances from land-based workers, in particular, declined by 9.7 percent for the month, while sea-based workers sent 10.2 percent less than

Continued from A1

to help agencies identify the projects and activities and costs of each. Neda Region 6 will lead the sessions,” Navarro said. “Meetings, discussions, brainstorming sessions already ongoing.” In a statement last week, Neda Region 6 said it facilitated the gathering of key regional agencies in Western Visayas to discuss the data needed to determine the extent of the problem in Boracay. This included the initial list of proposed programs, projects and activities (PPAs) that will require funding requirements for rehabilitation work in the coming years. Under the Region 6 medium-term Regional Development Plan (RDP), Boracay is considered as one of the areas in the region that have the highest densities, along with Roxas City in Capiz. Boracay is considered the primary tourism destination of the region with millions of tourists visiting the island every year. In 2015 the RDP said as much as nine cruise ships with 11,040 passengers and 4,604 crew visited Boracay. The government intends to build a railway network for the Panay Expressway connecting Santa Barbara (Iloilo International Airport) to Dumangas Port and ecozone; Passi City and its sugarcane industry; Estancia and tourism and fishing industries in Northern Iloilo; Roxas City and Culasi Port and Capiz seafood industry; and Kalibo International Airport-Caticlan Airport, Caticlan Port and Boracay’s tourism industry. There are also plans to construct new ports in the region, such as the Pontevedra Municipal Wharf in Pontevedra, Capiz; Pilar Port in Pilar, Capiz; and ManocManoc Port in Boracay, Malay, Aklan.

DTI. . .

what they sent in the same month last year. The BSP, on the other hand, blamed the decline to the contributing base effects and the limited number of banking days during the month. “The negative growth during the month was primarily due to base effect following the sharp increase in remittances in March 2017 at 10.7 percent,” the BSP said. “Further contributing to the decline was the lesser number of banking days in March 2018 compared to the same month in 2017, since the celebration of the holy week happened during the last week of March as opposed to April in 2017,” the BSP added. 

Continued from A1

In a statement last Thursday, Lopez pointed to the persistent growth of the Philippine economy as the main factor for Denmark’s keenness to participate in the “Build, Build, Build” (BBB) program. “The current economic growth momentum, rating upgrades and aggressive infrastructure programs offer a lot of business opportunities for foreign investors, particularly with technology-oriented services and systems,” the trade chief said. Mikkelsen himself praised the country for its steady economic growth in the past years, and this is the reason Denmark wants to play a part in the government’s development projects, according to the DTI. The Philippine economy grew by 6.8 percent in the first quarter—two ticks below the 7-percent target, but was faster than the 6.5 percent posted year-on-year. Apart from infrastructure, the EU member-state is also determined to invest on renewable energy and cheap pharmaceuticals. On the other hand, Lopez invited Denmark to share insights on how the Philippines can better its social services, adding unsolicited proposals on development projects are welcome. The BBB program is the administration’s main thrust in addressing the country’s infrastructure gap. The economic plan is aimed at completing 75 big-ticket public infrastructure, including six airports, nine railways, three bus rapid transits, 32 roads and bridges and four seaports, in a bid to speed up trade activity, lower the cost of mobility, generate job opportunities and encourage

Data from the BSP showed remittances also declined in April 2017 but at a lesser magnitude at 5.9 percent. The BSP also said the continued repatriation of OFWs from the Middle East countries could have affected the inflows of cash remittances.  Cash remittances coming from the United States, the United Arab Emirates, Japan, Singapore, the United Kingdom, Canada, Qatar, Germany and Hong Kong comprised 80.1 percent of total cash remittances in the first quarter of 2018.  In the first three months of the year, cash remittances totaled $7 billion and were 0.8 percent larger than the level in the first quarter of 2017. 

investments in the provinces. The administration intends to achieve this dream by accelerating the country’s infrastructure-to-GDP ratio to 7.4 percent, amounting to as much as P9 trillion by the end of President Duterte’s term in 2022. So far, it has allocated P3.6 trillion for its public infrastructure, most of which will be spent on transportation and connectivity projects in Metro Manila and other major cities. The ambitious infrastructure program had the eyes of foreign governments and investors prying at the Philippines and firms from different countries are interested to take part in the multitrillion-peso venture. One of the major projects under the infrastructure program, the Metro Manila Subway, is to be undertaken with the Japan International Cooperation Agency (Jica). In March the Philippine government and Jica signed the $934.75-million loan accord that will bankroll the first phase of the subway project. The underground railway that will extend for about 30 kilometers with 14 stations is expected to ease traffic congestion in Metro Manila, meet the growing transportation demand of the capital and reduce air pollution. Swedish firms, on the other hand, are eyeing to provide the government with sustainable solutions to complement modernization efforts on the country’s infrastructure. Swedish Ambassador to the Philippines Harald Fries in February said car manufacturer Volvo Group is looking at setting up a bus rapid transit, while defense specialist Saab is keen on beefing up airport security.

there was no bidding, and there was P80 million advanced [to the event organizer]. I want to ask Montano’s side.” She added she will also get his take on the Hamilton incident but, at the same time, inquire from “tourism attachés and Department of Foreign Affairs [officials] to ask if it really happened.” In a memorandum to all undersecretaries and assistant secretaries dated May 15, Romulo Puyat said: “In the exigency of service, and in order to give the undersigned a free hand to perform the mandate given to her by the President, all incumbent undersecretaries and assistant secretaries of this Department are hereby directed to tender their unqualified courtesy resignations to the President, through the undersigned, starting on May 15, 2018, to May 21, 2018, except career officials as defined by pertinent civil service laws, rules and regulations.” The officials, however, have been i nst r uc ted to cont i nue reporting for work and performing their duties “until any action is taken by the President on such courtesy resignations.” The memo added that the officials’ duties may also be modified if Romulo Puyat sees it fit. The new tourism chief said she would bring in a few close-in staff from the Department of Agriculture “to fill up the coterminus posi-

tions vacated by [resigned Secretary Wanda Corazon T. Teo’s] people.” Before she was appointed tourism secretary, Romulo Puyat was DA undersecretary for 12 years. The tourism secretary underscored the importance of consulting with the tourism stakeholders, especially those in Boracay Island, to see if there was anything missed or looked over in the course of its closure. “Definitely [I’m going to Boracay], although right now it’s closed.... I think the role now of the DOT is to listen to the stakeholders. Baka may pagkukulang [There could be deficiencies]. I definitely want to talk with the private stakeholders.” She said she had no information, however, regarding reports that government contractors had stopped demolishing the controversial Boracay West Cove Resort, ostensibly due to a letter from a Palace official received by owner, businessman Crisostomo Aquino. (See, “West Cove Resort demolition halted after owner uses letter from Palace,” in the BusinessMirror, May 14, 2018.”) Duterte administered the oath of office to Romulo Puyat on Monday evening at Malacañan Palace, with her parents—former Sen. and Foreign Secretary Alberto Romulo and the former Lovely Tecson—and daughter Maia, in attendance.



he House Committee on Ways and Means will review the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) Act, after lawmakers filed a resolution and a bill seeking to repeal it. In an interview, Rep. Dakila Carlo E. Cua of the Lone District of Quirino, the panel chairman and one of the principal authors of the TRAIN, said on Tuesday that the review of the law should be done first before considering its repeal or suspension. “I think there’s a need for a review, and we’re not discarding that possibility since we’re talking about the health of the economy. I am confident that our economic managers know what they’re doing,” Cua said. “We should be reviewing first, and not be drastic about suspending it. Anytime we suspend it, that has economic implications. Our coffers would have a problem,” he added. Cua reminded the public that there are safety mechanisms in the new taxreform law when the prices of basic goods and services hit a certain level. “If the Dubai price hits a certain level, that’s the time to suspend the increase on excise on petroleum products. We have installed safety mechanisms in the law so when a price hits a certain level, the excise tax imposition should be suspended,” he said. President Duterte has signed into law Republic Act (RA) 10963, or the TRAIN law, on December 19, 2017. It aims to create a “simple, fair and more efficient” system that will make the rich contribute more to fund the government’s services and programs for the benefit of the poor. The law is also expected to finance the “Build, Build, Build” (BBB) program of the Duterte administration, which will modernize the country’s infrastructure backbone and is expected to create 1.7 million jobs by 2022. Citing its detrimental effects to the people, the Makabayan bloc filed a bill repealing the TRAIN law. In House Bill 7653, the Makabayan bloc noted that in the first few months of the implementation of the new taxreform law, prices of petroleum products, basic goods and services rose. The lawmakers, citing the Philippine Statistics Authority, said the tax-reform law has both direct and indirect effects on the cost of goods, with price hikes “particularly felt by the poor during the start of the year.” In the same bill, the bloc has introduced new provisions which seek to: ■ Restore the old National Internal

4.5 percent The estimated inflation rate in April, according to the Philippine Statistics Authority

Revenue Code levels of excise tax on petroleum products and oil, specifically zero tax for liquefied petroleum gas, diesel, kerosene and bunker oil (Section 5); ■ Repeal the whole section on excise taxes on sugar-sweetened beverages (SSBs) (Section 7); ■ Repeal the whole section on distribution of incremental income from TRAIN (70 percent for the BBB program and 30 percent on social measures) (Section 7); ■ Restore the personal exemption worth P50,000 and P25,000 per dependent (Section 2); ■ Restore the value-added tax (VAT) exemption of sales of electricity by generation companies, transmission by any entity and distribution companies, including electric cooperatives (Section 2); ■ Restore the VAT exemption of lowcost housing (Section 3); and ■ Restore the 3-percent tax exemption of cooperatives, self-employed and professionals with gross receipts of P2 million and below (Section 4). Also, in House Resolution 1838, Party-list Rep. Gary C. Alejano of Magdalo urged the lower chamber to review the impact of RA 10963, particularly its effects on Filipino consumers. “Barely six months into the implementation of the TRAIN law, Filipinos contended with the hike on the rate of inflation, which, as of April, is pegged at 4.5 percent, higher than the government’s target range of 2 [percent] to 4 percent for 2018,” Alejano said. According to Alejano, he wants to find out if there is a need for the continued implementation of the tax law, or if Congress needs to suspend it due to its effects on the poor. He added he intends to find out if there are measures that can be out in place to cushion the effects of the TRAIN law. In passing the new tax law, Alejano said the government failed to consider that most of the Filipinos rely on mass transport, which will surely be affected by the increase in excise tax to fuel products. He added the prices of fuel have also increased significantly due to the implementation of the tax law. “Prices of diesel in Metro Manila increased from only P36.35 last December to P43.30 in April,” he said.

Businessmirror may 16, 2018  
Businessmirror may 16, 2018