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Thursday, May 17, 2018 Vol. 13 No. 215

TRAIN, forex swings won’t swell ‘BBB’ cost I By Cai U. Ordinario @cuo_bm & Jovee Marie N. dela Cruz @joveemarie

MPLEMENTATION of the Tax Reform for Acceleration and Inclusion (TRAIN) law and the peso depreciation will not increase the cost of “Build, Build, Build” (BBB) and flagship projects, according to the National Economic and Development Authority (Neda).

Socioeconomic Planning Secretar y Ernesto M. Pernia acknowledged that prices of const r uct ion mater i a ls, suc h as

cement, may go up due to the increase in demand for the infrastructure projects. However, Pernia pointed out

₧39.1 billion

Continued on A2

Reviving and industrializing agriculture:

An opportunity for DTI, DA and DOST to work together Rene E. Ofreneo

laborem exercens

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ncreased participation in the global value chains (GVCs) of multinationals is one of the development thrusts being pursued by the Department of Trade and Industry (DTI). As we argued in previous columns, there is a danger that the country might get trapped in low value-adding activities associated with the GVCs if the government industrial strategy is simply focused on rolling the red carpet to GVC investors. China has demonstrated that a country participating in the GVCs need not adopt a passive policy of simply embracing these GVC investors through a policy of investment and trade liberalization. Continued on A7

GLOBAL TRADE JITTERS, CONTRACTUALIZATION E.O. TO IMPACT EXPORTS

DOT to stick to the law in filling posts in agencies

By Elijah Felice E. Rosales @alyasjah

ORTIZ-LUIS: “Right now I cannot really say if we can rebound because lawmakers are still discussing what to make of the endo EO of the President.”

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NCERTAINTIES in global trade and a stiffer national policy on contractualization may prevent export performance this year from following the usual trend of starting slow but rebounding in the latter months, an export industry leader said on Wednesday. He explained that exporters will try to curb the impact of the brewing trade tension between the world’s largest economies—China and the United States—threatening to raise tariffs on dozens of products. They are also in the phase of adjusting to President Duterte’s recently issued executive order (EO) on contractual employment. Sergio R. Ortiz-Luis Jr., president of the Philippine Exporters Confederation Inc. (Philexport), said these are the major factors to the 6-percent slowdown in the country’s commodity exports in the first quarter. Merchandise goods traded outbound dropped by 6 percent in the January-toMarch stretch to $15.75 billion, from $16.76 billion during the same period last year. “Well, exports went down because of many reasons. Among them is that agriculture went down because they had a supply

problem. Second, and [from what] I understand, a lot of our exporters, especially in handicrafts, held off from hiring people and expanding [operations] because of the issue on contractualization,” Ortiz-Luis, in English and Filipino, told the BusinessMirror. He said firms had to temper plans to employ more workers because the President was signaling he will issue an EO prohibiting fixed-term employment. The EO was subsequently signed, with the President announcing this on Labor Day itself. “Rather than be saddled with permanent employees that they might not need, what happened is that they waited for a resolution, a policy. That is why you will notice employment significantly went down,” Ortiz-Luis added. The recent Labor Force Survey (LFS) by the Philippine Statistics Authority (PSA) reported an Continued on A8

PESO exchange rates n US 52.4010

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The revenue gain from the implementation of TRAIN 1, according to the BIR

that any adjustments in costs for projects under the BBB, as well as the 75 flagship projects, had already been factored in when these were crafted. “That has been taken into account. We expect that when there’s a big demand for something, prices will go up but when you purchase things in bulk, prices can go down, especially for government suppliers,” Pernia told the BusinessMirror in an interview.

2016 ejap journalism awards

By Ma. Stella F. Arnaldo

@akosistellaBM Special to the BusinessMirror

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In this file photo, an exhibitor rests at his area during a break at the Manila FAME, a lifestyle and design event that aims to open doors for local and international trade buyers of the country’s premium home, fashion, holiday, architectural and interior products. The handicrafts subsector was among the export areas where businessmen held off from expanding, owing to uncertainties over the government crackdown on contractualization, according to a PhilExport leader. ALYSA SALEN

Land conversion, lack of irrigation blamed for Q2 palay output decline By Jasper Emmanuel Y. Arcalas

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@jearcalas

hilippine palay production in the second quarter may decline by 2.43 percent to 4.049 million metric tons (MMT) due to shrinkage of farm area and

inadequate water supply, according to the Philippine Statistics Authority (PSA). In its quarterly forecast, the PSA said rice harvest figures in the April-to-June period could go down by 1.54 percent to 933,000 hectares, from 947,000 hectares

in the same period of 2017. Likewise, the PSA projects that the average yield in the threemonth period would drop slightly to 4.34 metric tons per hectare, from the 4.38 MT-per-hectare level last year. Continued on A8

HE new leadership at the Department of Tourism (DOT) is looking to strictly implement the Tourism Act of 2009, when vacancies occur at the various government-owned and -controlled corporations (GOCCs) the agency oversees. I n a n i nter v ie w w it h t he BusinessMirror, Tourism Secretary-designate Bernadette Fatima Romulo Puyat said the Tourism Congress of the Philippines (TCP) “has to go through the process already of choosing its representatives,” to the Tourism Promotions Board (TPB), Tourism Infrastructure and Enterprise Zone Authority (Tieza) and Duty Free Philippines Corp., “because it’s in the law [Tourism Act].” TCP has five representatives to the boards of TPB and Tieza, and three for Duty Free. All three are GOCCs, which the tourism secretary chairs. She met with tourism stakeholders on Wednesday, where she listened to their concerns and discussed various issues in the industry.

n japan 0.4749 n UK 70.7885 n HK 6.6754 n CHINA 8.2230 n singapore 38.9715 n australia 39.1488 n EU 62.0323 n SAUDI arabia 13.9725

See “DOT,” A2

Source: BSP (16 May 2018 )


A2 Thursday, May 17, 2018

BMReports BusinessMirror

www.businessmirror.com.ph

TRAIN, forex swings won’t swell ‘BBB’ cost Continued from A1

Neda Undersecretary for Investment Programming Rolando G. Tung pa lan ex plained that when projects are designed, the government includes cost and physical contingencies. Tungpalan said cost contingencies pertain to financial room for price increases, while physical contingencies refer to the duration of project implementation. He added that in the case of projects financed by dollardenominated loans, which form the bulk of BBB and flagship projects, foreign-exchange adjustments are not that significant. The Neda official explained that dollar-denominated loans can finance payments needed for imported construction materials and, thus, will not be affected by foreign-exchange adjustments. “The rule is when they are within the approved total project cost, including contingencies, they need not come back for reevaluation except when there is scaling down as a result of changes in the ICC [Investment Coordination Committee]

DOT. . .

Continued from A1

TCP President Jose Clemente III said “we discussed the nominating process of TPB, Tieza and Duty-Free to go through the right process of nominating the directors from the private sector, because they play an important part in the programs for the next four years. We need to fix the institutions already.” He added the TCP board will have to draw up “new procedures as to how we will choose the people we will nomi-

pa ra meters,” Tu ng pa l a n told the BusinessMirror. “If the project is financed by a loan, so the imported components, in terms of financing, will not be affected because your dollar loan will pay for your dollar goods. It may impact on the peso equivalent but it doesn’t necessarily result in financing shortfall,” he added.

value-added tax; and P225.22 million from estate tax. Revenues from TRAIN will finance the BBB program of the Duterte administration, which aims to modernize the country’s infrastructure backbone and create 1.7 million jobs by 2022.

The Philippine Statistics Authority (PSA) earlier disclosed that the wholesale and retail prices of construction materials in Metro Manila went up in the first three months of the year. Data from the PSA showed the Construction Materials Retail Price Index (CMRPI) posted a growth of 2.1 percent in the first quarter, while the Construction Materials Wholesale Price Index (CMWPI) grew by 6.2 percent. In March the CMRPI expanded by 2.3 percent, higher than the 2.1 percent recorded in February and 1.7 percent in March last year. The CMWPI posted a growth of 6.7 percent in March, higher than

Data from the Bureau of Internal Revenue (BIR) presented at the hearing of the Congressional Oversight Committee on the Comprehensive Tax Reform Program law on Wednesday revealed that the revenue gain from TR AIN implementation in the first quarter of 2018 reached P39.1 billion, offsetting the foregone revenue of P26.5 billion. Of the total revenue gain, P14.9 billion came from tobacco excise tax; P8.7 billion, documentary tax stamp; P7.7 billion, sugarsweetened beverages; P4.7 billion, petroleum; P1.1 billion, stocks transaction of traded stocks; P 1 bi l l ion , c apit a l g a i n s of nontrade stocks; P363.7 million, automobiles; P264.9 mil lion, mining; P159.7 million, foreign currency deposit unit; P61 million, donors; P305,000, coal; and P7,000 from cosmetics. The BIR also recorded losses of P23.344 billion from foregone personal-income tax; P3 billion from

The follow-up reforms to TRAIN may not be quickly forthcoming, a House leader said on Wednesday. Rep. Dakila Carlo E. Cua of the Lone District of Quirino, chairman of the House Comm it t e o n Way s a nd Me a n s , warned that it will be difficult for the lower chamber to approve another tax-reform law being pushed by the Duterte administration if the social benefits included in TR AIN 1 won’t be fully implemented. This, after the Department of Finance (DOF) and the BIR admitted at the hearing that there’s still no revenue regulation for the implementation of some social benefits measures that will mitigate the impact of the new tax-reform law.

DOF Assistance Secretary Teresa S. Habitan said the finance depar tment and t he BIR are still preparing the groundwork for the implementation of the “Pantaw id Pasada” and other mitigating measures. Under the TRAIN law, the government shall implement the Pantawid Pasada Program, or a social assistance project for commuters and public transport, and the jeepney-modernization program, to ease the impact of the oil excise tax increases on commuters and the land transport sector. Besides the Pantawid Pasada, the TR AIN provides for additional unconditional-cash transfers (UCTs) to low-income earners amounting: at P 2,400 for 2018 and P3,600 for 2019 and 2020. The DOF said P4.3 billion has been released in the first quarter, which forms part of the total of P 25.7 billion allocated for UCTs for 2018. The law also provides for a Pantawid Kuryente to help small power consumers in missionary electrification areas. Quirino said the DOF and the

nate to the board [of these GOCCs]. So he will have to come up with the vetting process, with the criteria of the people we will be nominating to the boards.” He said for the TPB specifically, the terms of office of the board will end in June 30, so we will have to have our nominations in before that day.” Romulo Puyat said she wants the TCP to give ratings for each nominee to the boards, and “those who get the highest marks will be the ones I choose. I don’t even have to look. They would know best who should be on those boards.” In a separate interview, Philippine

Tour Operators Association (Philtoa) President Cesar Cruz expressed satisfaction with their meeting with Romulo Puyat, whose tourism products “seem aligned to our own. She appreciated what we presented to her, it’s actually a wish list of the stakeholders, and discussed with her the state of the industry because of what happened under the past secretary. And so far, we are of the same view, for example, retaining the ‘It’s More Fun in the Philippines’ [brand campaign], implementing products like the culinary, faith tourism and heritage tourism. Our ideas matched.”

He added that many of the projects Romulo Puyat had worked on at the DA can “easily be converted to tourism products. Her coming from the DA is very timely, she can use her experience there and apply it to tourism.” Christine U. Ibarreta, president of the Hotel Sales and Marketing International Inc., and Marlene Dado Jante, president of the Philippine Travel Agencies Association, appeared elated with their meeting with the new DOT chief. “She’s very knowledgable, grounded, no airs, super humble and intelligent,” Ibarreta said. “This meeting just proves that she’s

really interested in working with the private sector,” said Jante, for her part. In its wish list, Philtoa urged the “proper implementation of the Tourism Act of 2009. It was never given a chance.” When the Duterte administration came in, the TPB was forced to accept the appointment of Cesar Montano as its COO, which went against said law. Also, the group pushed for the “strategic and comprehensive marketing and promotion plan” that the industry can follow. The group also asked that the fashion shows be removed in DOT’s travel and trade shows abroad, saying these

Construction items’ prices up

the 6.3 percent in February and 3.8 percent in March 2017.

TRAIN for ‘BBB’

Warning from House panel

BIR are mandated to issue immediately revenue regulations for the implementation of the provisions of the TRAIN 1. “Let’s prioritize this [Pantawid Pasada and other mitigating measures]...quicker action on these will address the matter. Actually, you are mandated to do it right away. We should do our best to implement it as soon as possible,” Cua told the DOF and BIR. He also directed the DOF to submit a report next week to the ways and means committee on how it will implement the Pantawid Pasada Program and other mitigating measures. “Make this happen faster and sooner, as we go to TRAIN 2 we cannot avoid the discussion on the effects of Train 1. It would not be easy to pass TRAIN 2 if we are still indebted to the public,” Cua said, adding, “If the people feel like the TRAIN 1 is beneficial, [the passage of] train 2 will be much easier.” The TRAIN 2 aims to lower corporate-income tax from 30 percent to 25 percent, as well as harmonize the fiscal incentives. “had generated very little impact, and instead have more relevant marketing; more defined and cohesive tour offerings in line with the promotional campaign theme,” among others. Romulo Puyat described her meeting with the private sector as “fantastic. I enjoyed talking with [them]. It’s funny that many of their concerns were already what I mentioned that I wanted to address, like keeping the ‘It’s More Fun’ campaign, etc.” She said she looked forward to more interactions with the industry stakeholders as she treats them as partners in achieving DOT’s goals.


The Nation BusinessMirror

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Editor: Vittorio V. Vitug • Thursday, May 17, 2018 A3

may prompt SC junks Trillanes’s petition Polls Senate ‘changing for parliamentary immunity of the guard’ over ‘Hacienda Binay’ remark E By Butch Fernandez @butchfBM

Ramadan month

A mother prays while her daughter minds her school lessons in their makeshift shelter in Marawi City. The Philippine Army, in a message, said the entire Army corps joins the Muslim world in prayers, with the start of the monthlong celebration of the holy month of Ramadan from May 15 to June 14. “May this religious monthlong observance of fasting, prayer, meditation and repentance lead to profound acts of charity, humility and noble works for the glory and love of Allah. Have a blessed Ramadan,” the Army said in a statement. nonie reyes

DPWH’s Jimeno gets new PMS appointment

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resident Duterte has appointed Karen Y. Jimeno as undersecretary for disaster resiliency of the Presidential Management Staff (PMS). Before her new appointment, Jimeno served as undersecretary for Legal Affairs and Priority Projects the Department of Public Works and Highways (DPWH). A copy of Jimeno’s new appointment paper dated May 15 was released to the media on May 16.  It will be recalled that Jimeno was a defense lawyer and spokesman for the impeachment trial of the late Chief Justice Renato S. Corona in 2012.  In 2017 she was also appointed as legal counsel for the Senate Ethics

Committee for the 17th Congress. Jimeno also served as head for External Affairs and Communications for the Presidential Assistant for Rehabilitation and Recovery, alongside Sen. Panfilo M. Lacson Sr. from 2014 to 2015, under former President Benigno S. Aquino III. Aside from Jimeno, Malacañang also released the appointment papers of Benjamin Palmero as board member of Philippine National Oil Co. Renewables Corp., Secretary Bernadette Fatima Romulo-Puyat as ad interim secretary of Department of Tourism and Abdullah D. Mama-o as Special Envoy of the President to Kuwait.  

Bernadette D. Nicolas

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By Joel R. San Juan

@jrsanjuan1573

HE Supreme Court (SC) has given the regional trial court (RTC) in Quezon City the go-signal to hear and resolve the P5-million damage suit filed by a businessman against Sen. Antonio F. Trillanes IV for accusing him as “dummy” of former Vice President Jejomar C. Binay in the purchase of a 150-hectare property in Rosario, Batangas, which has been tagged as “Hacienda Binay.”

In a 22-page decision penned by Associate Justice Noel Tijam, the SC’s First Division junked the petition filed by Trillanes seeking the reversal of the resolutions issued by Judge Evangeline CastilloMarigomen, presiding judge of the QC RTC Branch 1010, on May 19, 2015, and December 16, 2015. The trial court, in the said reso-

lutions, denied Trillanes’s motion to dismiss the civil suit filed by Antonio Tiu, who claimed ownership of the property through his company Sunchamp Real Estate Corp. (Sunchamp), and his motion for reconsideration. The SC held that Trillanes cannot invoke parliamentary immunity to escape prosecution for

damages over the statements he gave to the media in October 2014, accusing Tiu as a mere dummy of the former vice president. In his complaint, Tiu insisted that he is a legitimate businessman engaged in various businesses in the agricultural sector and that he has substantial shareholdings in numerous corporations and companies The complainant claimed that because of Trillanes’s claim his reputation was tarnished, which affected his businesses as shown by the steep drop in the stock prices of his publicly listed companies, Tiu also vehemently denied being a dummy of Binay, saying that he has financial capacity to fund the development, operation and maintenance of the “Sunchamp Agri-Tourism Park.” In seeking the dismissal of the civil suit, Trillanes asserted that Tiu was not able to prove his supposed ownership of the said estate. He pointed out that former Makati Vice Mayor Ernesto Mercado testified on how he helped the former vice president acquire and expand the property.

arly preparations for the 2019 senatorial derby prompted a midterm change of leadership with Senate President Aquilino L. Pimentel III, who is eyeing reelection, agreeing to relinquish his post to Majority Leader Vicente C. Sotto III by next week. “It is the voice of the majority,” Sotto told the BusinessMirror when asked to confirm the so-called changing of the guards paving the way for his assumption to the Senate Presidency.   Sotto said Sen. Juan Miguel F. Zubiri, in turn, is being eyed to take over as the next Senate Majority Leader. Sen. Joseph Victor G. Ejercito, in a brief interview, said Sotto was “acceptable” to most senators being the “most senior member” of the Senate. Ejercito indicated that talks leading to a smooth leadership change in the Senate, which will be formally carried out at next week’s session, did not encounter difficulties because there was “unity among members” of the majority bloc, which control 17 seats in the 24-member chamber. “The choice of leaders depends on the majority,” he added. This developed after ruling PDP-Laban leaders bared an initial list of senatorial bets that President Duterte’s party will likely field in the upcoming senatorial derby, led by Pimentel, which also include Duterte’s close aide, Special Assistant to the President Christoper Lawrence T. Go and Presidential Spokesman Harry L. Roque Jr.


TheBroa

Business

A4 Thursday, May 17, 2018

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By Jonathan L. Mayuga

@jonlmayuga

T’S nearing half-a-century and another administration, that of President Duterte, must still distribute hundreds of thousands of hectares of land to farmers.

The Duterte administration is eyeing to extend the coverage of the Comprehensive Agrarian Reform Program (Carp) to cover more private and public agricultural lands for distribution to landless Filipino farmers. David Erro of the Department of Agrarian Reform said the DAR will now endeavor to cover more private and public agricultural lands and go beyond what were already distributed by the government through previous agrarianreform programs. Erro issued this statement following Duterte’s pronouncement during the distribution of certificate of land ownership awards (CLOAs) in Mulanay, Quezon, on May 2, nearly 30 years after the late President Corazon Aquino signed the CARP law on June 10, 1988. According to Agrar ian Reform Secretary John R. Castriciones, Duterte is keen on land distribution. He cited two pronouncements by the country’s highest official: inclusion of Boracay Island and the remaining government-owned agricultural land in Mindanao under C ARP coverage. The DAR chief said a stakeholder summit in Davao to kick-start Duterte’s marching orders would be held soon. While the DAR claims many farmers benefited from three decades of agrarian reform, many also believe that CARP and its successor the Comprehensive Agrarian Reform Program Extension with Reforms (CARPer), like Presidential Decree (PD) 27, are failures. According to Marife M. Ballesteros of the government think tank Philippine Institute for Development Studies, “the framers of the law under Aquino combined both liberal and conservative policies on land reform.” She was referring to Republic Act (R A) 6657, or the Comprehensive Agrarian Reform Law (Carl), legal basis for CARP. Still, the DAR points to a compilation of successful rags-to-riches stories and documented improved liv ing conditions of formerly landless farmers who have become businessmen over the years through various support services provided by the agency. Other sectors, however, say the agrarian-reform laws were and are flawed; meant only to protect landlords’ right more than providing social justice through the distribution of land to the landless farmers. For them, CARP is dead and should no longer be resurrected.

Taking roots

BEFORE CARP was implemented by virtue of R A 6657, there was PD 27 signed by then-President Ferdinand E. Marcos on October 21, 1972. Land covered under PD 27 are tenanted rice and corn farms wherein landowners are allowed to retain 7 hectares. Under CARP, the centerpiece of the first Aquino administration’s social justice program, private and public lands that are suited for agriculture are covered. These include areas dedicated to sugarcane, banana, pineapple and other agricultural plantations. A mong C A R P ’s in it i a l ob jectives was to help agrarianrefor m benef ic i a r ies ( A R B s) sur v ive and make their C AR Pawarded lands productive. Private l a ndow ners whose va st tracts of land were covered by C ARP were entitled to just compensation under the program.  The Carl also allowed ben-

eficiaries of the program to be coowners of the land through a stock distribution option (SDO) or to enter into a joint-venture agreement (JVA) with agricultural companies through ARB organizations or Arbos. It is through Arbos that government agencies like the DAR course through support services. To d ate, t here a re a tot a l 5,4 51 A rbos n at ionw ide. O f t hese, 4,923 or 9 0. 3 percent a re operat ion a l. CARP’s many f laws were revealed during its implementation, as shown by the failure to meet the government’s own yearly distribution targets. Eventually, CARP was extended in 1998 for another 10 years or until 2008, during which the land acquisition and distribution processes have finally started to gain momentum. Still, because of many loopholes of RA 6657 and the strong resistance of big landowners, CARP fell short of covering around 1.2 million hectares of mostly private agricultural land at the end year of its first extension period.

Carp extension

IN 2009 CARP was extended anew for another five years, or until June 30, 2014, through R A 9700 or CARPer. Beneficiaries of the CARPer are landless farmers, including agricultural lessees, tenants, as well as regular, seasonal and other farmworkers. The distribution of CARP-covered lands or lands that have been issued with a notice of coverage (NOC) is still an ongoing endeavor. Data from the DAR show that as of 2018, there are still 561,131 hectares of public, but mostly private, agricultural lands that remain undistributed. A bulk of these (520,674 hectares) are private agricultural land while 40,457 hectares are land that the government owns. Erro, DAR undersecretary for policy, planning and research, admitted it will take at least a decade to distribute these lands given that the agency only targets an annual distribution of 50,000 hectares. Distributing what remains to be distributed is easier said than done, Erro explained. Landowners resisting CARP hire lawyers or use legal remedies so that they can dodge the program, he added. These moves derail the process of land acquisition and distribution. In many cases, it takes a decade or more before an issue is resolved—either by the DAR Adjudication Board or the courts—which often, worse of all scenarios, end up being archived at the Supreme Court. T he region w ith the highest land acquisition and distribution (L A D) balance is Region 6 ( Western Visayas) w ith 134,621 hectares, Autonomous Reg ion in Muslim Mind anao w ith 111,100 hectares, Region 5 (Bicol) w ith 78,558 hectares; and Region 2 (Cagayan Valley) w ith 43,367 hectares. The distribution will continue since most of the private agricultural landholdings have been issued with an NOC as mandated by RA 9700.

LAD accomplishment

THROUGH the years, from PD 27 to C ARP and C ARPer, a total of 4,857,604 hectares of private and public agricultural lands have been distributed by the government.

Giving land ‘Quousque The bulk of this (4,769,983 hectares) represents lands dist r ibuted t h rou g h C A R P a nd CARPer, while only 87,621 hectares were non-CARP. Non-CARP refers to a portion of landholdings covered and determined to be non-CARP-able during the conduct of the survey only. This comprises area retained by the landowner, rightof-way and easement and road networks. Unde r M a rcos, a tot a l of 70,178 hectares were distributed through PD 27. By administration, the highest accomplishment in terms of land acquisition and distribution belongs to the administration of Fidel V. Ramos, having distributed a total of 1,900,039 hectares. President Gloria Macapagal-Arroyo’s administration followed with L AD accomplishment of 1,031,169 hectares.  The government of Corazon Aquino, herself belonging to landed families, distributed 848,515 hectares. The administration of her son Benigno cites a LAD accomplishment of 541,430 hectares. While in office for two years, former President now Manila Mayor Joseph Estrada was able to distribute 33,389 hectares. Since assuming power two years ago, Duterte was able to distribute 45,264 hectares.

In her paper, titled “The Cost of Redistributive Land Reform in the Philippines: Assessment of PD 27 and R A 6657 (CARL),” Ballesteros concluded that government expenditure for land reform remained at less than 0.5 percent of the country’s gross domestic product.

CARP Phase 2

UNDER the Duterte administration, the DAR, being the lead implementing agency of CARP, will implement a two-pronged approach to separately cover more private and public agricultural lands for distribution to landless farmers. For government-owned agricultural lands, Erro said the DAR is looking at identifying unclassified public lands or lands of the public domain with still no classification that may be converted into agricultural land. T his w ill be possible through t he st re ng t h of a preside nt i a l proc l a m at ion (PP) to be d ra f ted by t he DA R a nd w it h D uter te’s f i n a l approva l. According to the Department of Environment and Natural Resources (DENR), the official total land area of the Philippines is 30 million hectares, which are legally classified as 15.8 million hectares, or 52.7 percent, forestland and 14.2 million hectares,

or 47.3 percent, alienable and disposable land. Of the 30 million hectares, only 50.2 percent are classified as forestland and 2.5 percent, or 750,000 hectares, are unclassified forestland. The 50.2 percent classified as forestland include established timberland, national parks, game refuges/bird sanctuaries and wilderness areas; military and naval reservations (0.4 percent) and fishponds (0.3 percent). Also for distribution are government-owned agricultural lands assigned to or under the name of various government-owned andcontrolled corporations, agencies or institutions, including civil and military reservations.

Legal instruments

ERRO said distributing unclassified forestland through CARP will be through the strength of a presidential proclamation that will categorize unclassified forest-

land into agricultural land. Meanwhile, distribution of government-owned agricultural lands, including civil and military reservations, will be based on the strength of an existing executive order—EO 407—signed by former President Benigno S. Aquino III, as amended by EO 448 and EO 506.  The BusinessMirror learned that under Aquino’s EO, there is no need to issue a notice of coverage and the government will just turn over the land and document ownership for distribution to farmers in case of government lands. EO 407, as amended, was issued while RA 6657 was still in effect, while RA 9700 (CARPer) is just an amendatory law and did not totally repeal RA 6657. Government-owned agricultural land, alienable and disposable untitled public agricultural land, titled agricultural land foreclosed by government financial institutions, land reserved for public purposes cov-

4,857,604 ha.

The total land area of private and public agricultural lands distributed by the government since 1972


aderLook

sMirror

www.businessmirror.com.ph | Thursday, May 17, 2018

A5

“After 30 years—it will turn 30 years on June 10—CARP [and] CARPer [are] not the solution,” Ramos said. “The monopoly over CARP-covered lands of big landlords and now by agricultural corporations continues.” He added the KMP considers CARP and CARPer as marketassisted land-reform programs. “W hat the farmers want is ‘land to the tillers.’ The solution is already filed in the 17th  Congress through Garb [Genuine Agrarian Reform Bill] or House Bill 555,” Ramos said. “Not CARP, not another extension.” According to him, the problem with CARP is not simply the implementation “but the law itself.” He cited for an example the retention limit, wherein landowners are allowed to retain at least 5 hectares of land.  “ T he landow ners’ sons and d aughters are a lso entit led to t he same pr iv i lege, which reduces t he land area to be cove re d for l a nd d i st r ibut ion ,” R amos e x pla ined. C it i ng t he stoc k- d i st r ibution option implemented at the Aquino clan’s Hacienda Luisita, he said C ARP allowed landowners to maintain control over lands that are supposed to be distributed to beneficiaries of agrarian reform. Besides, in other cases of land distribution under CARP, farmers will be made to sign a piece of document which will bind them to “buying” the land to be distributed to them by the government instead of giving it free, according to Ramos.

Grab Garb

d to farmers: tandem’? ered by proclamation but no longer alienable and disposable for the purpose of reservation, may be covered under EO 407, as amended, and there will be no need for CARP or CARPer. Erro said the DAR w ill closely coord inate w it h t he DENR regard ing t he issue.

Power to classify

THE DENR’s Jonas R. Leones said Duterte has the power to classify previously unclassified lands as agricultural land. This, Leones said, happened in Boracay when Arroyo signed PP 1064 in 2006 and which classified Boracay Island into both forestland and agricultural land. PP 1064 declared 628.96 hectares of Boracay Island ’s total 1,006.64-hectare land area as agricultural land, hence, alienable and disposable, and the remaining 377.68 hectares as forestland for protection purposes. “W hen a land is unclassified, we treat it as forestland. But, of course, t he President has the power to issue a proclamation that w ill classif y it,” said Leones, DENR undersecretar y for policy, planning, international affairs and foreign-assisted projects. “If he w ill, the unclassified land w ill become agr icultural land and can be covered by C AR P.”

Leones, who is also DENR Secretary Roy A. Cimatu’s spokesman, said the DENR is ready to work with the DAR in identifying areas that can be covered by the Duterte administration’s agrarian-reform program. “What we need to do is identify these areas and make sure that they are suited for agriculture,” he said, although even land that is classified as a forest can be distributed by the DENR itself through CARP, after all, it is also one of the implementing agencies of the program. As far as the DENR is concerned, “we have already completed [a] forest- de l i neat ion project covering the entire country.” Doing so made the identification of potential CARP-able area somehow easier and faster, Leones explained.

House help

A S for privately ow ned titled agricultural land, the C AR Per deadline of June 30, 2014, for the issuance of NOC applies. Hence, there is a need for C ARP e x tension law simi lar to R A 9700, he added. “We will need the help of Congress to pass a law that will extend CARP,” Erro said. He added that a draft bill will be prepared by the DAR to be coauthored by a legislator who will

file it before the Committee on Agrarian Reform of the House of Representatives. Asked as to how vast the DAR is looking into to add to the remaining LAD balance, Erro said it will be difficult for the agency to tell unless an inventory is conducted. But as for the private lands, it will take only a month for the DAR to identify these potentially private agricultural lands that are CARP-able or could be covered by the Carp. He explained that the DAR will coordinate with the DENR to study how much of the country’s land of the public domain, including unclassified land or go ve r n me nt - o w ne d u nt it le d public agricultural land, can still be distributed. However, Erro was quick to say that it will be “thousands of hectares” more. At the onset, he said at least 100,000 hectares of private agricultural land may be covered by the government under the new round of CARP implementation under the Duterte administration, but was quick to say that it will be up to the members of Congress who will deliberate the proposed CARP extension bill.

Cleansing process

DUR ING t he d ist r ibut ion of CLOAs in Mulanay, Erro said

the President expressed anxiety about implementing CARP because graft and corruption still exists in the bureaucracy. He pointed to graft and corruption as one of the reasons C A R P ’s i mplement at ion w a s derailed. The agency lost the trust and confidence of farmers and landowners needed by the program because of graft and corruption, Erro said. Hence, he noted the need to cleanse the ranks of the DAR. To do so, Castriciones tapped Greco Antonious B. Belgica of the Presidential Anti-Corruption Commission (PACC), Erro said. The DAR has already submitted 800 cases of personnel-related complaints to the PACC that Belgica said will be reviewed.  “We will conduct the review and, as far as the PACC is concerned, we will make a recommendation and submit it to the President,” Belgica said.

No to CARP

HOWEVER, farmers under the umbrella organization Kilusang Magbubukid ng Pilipinas (movement of Philippine peasants or KMP) said resurrecting a dead prog ra m— C A R P— i s not t he way to go. KMP has been and still is a vocal critic of CARP. The militant group insists that the program is

a sham agrarian-reform program as it burdens the beneficiaries of paying for the land that the government projects to the media as being distributed for free. KMP Secretary-General Danilo Ramos said that even with the distribution of land titles, whether through emancipation patent (under the late dictator’s PD 27) or CLOA (under RA 6657 and RA 9700), “many of these so-called proofs of ownership are the subject of cancellation, withdrawal or reversals.” Ramos noted that every one of the CLOA recipients in Mulanay will pay around P600,000 per hectare to P700,000 per hectare of land to be awarded to them under CARP. Worse, he added, failure to pay for the monthly amortization means the cancellation of the CLOAs. Even those with CLOA may not, in fact, become owners of the land awarded to them until they are physically installed on the CARP-awarded land, Ramos explained. In many instances, he said installation is delayed by the strong resistance of landowners.

Market-assisted

ACCOR DING to R a mos, 30 yea rs of C A R P e x per ience i s enough to prove t h at “ it is the longest, most e x pensive and bloodiest land-reform program in the world.”

R AMOS told the BusinessMirror that the Duterte administration is better off certifying the Garb as urgent and support the free distribution of land. Moreover, Ramos said Duterte should keep its current track of pursuing peace talks with the National Democratic Front of the Philippines that he believes will resolve the armed conflict in the rural areas. He added the KMP supports the implementation of the Comprehensive Agreement on Social Economic Reforms (Caser), which “encompasses historical and structural inequities in Philippine society and pave the way for genuine agrarian reform or the free distribution of land to landless farmers.” Under Caser are pr ior ities that revolve around asset reform and improvement of the human-resource base, including agrarian, fishery and urban land reform, agricultural development and private sector-led industrialization. “What we need right now is to address the root cause of the armed conflict and the poverty through the peace process, through genuine agrarian reform and national industrialization,” Ramos said.

‘Quousque tandem’

DUTERTE is known for exercising what many of his supporters describe as “political will.” In the case of implementi ng C A R P, whet her t h rou g h presidential proclamation, executive order or through a law that will extend C ARP or by any other name, agrarian reform, by any other means, to him, is a necessity and it means giv ing land to the landless, helping the poor and ensuring that these l a nd less f a r mers h ave some form of security of tenure over a piece of land, which they have been tilling most of their life. T he President is determined to issue the order and he might, sooner or later, do it regardless of what others believe. The question is, in a throwback to the Roman Senate, quousque tandem. For how much longer would farmers wait for another round of CARP?


A6 Thursday, May 17, 2018 • Editor: Angel R. Calso

Opinion BusinessMirror

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editorial

Fast-track passage of rice tariff bill

I

n February the government assured the World Trade Organization (WTO) that the Philippines will have a new rice tariff law by June. The pronouncement was made nearly a year after Manila was supposed to have amended the law—Republic Act (RA) 8178—to finally scrap the quantitative restriction (QR) on rice. The assurance was given by Philippine officials who attended a meeting of the WTO’s Committee on Agriculture in Geneva, almost a year after the special waiver on the special treatment on rice lapsed on July 1, 2017. The QR is a nontariff measure that allowed the government to limit the entry of cheap rice imports. The WTO permitted the Philippines to impose the QR for more than two decades, or from 1995 until 2017. In seeking its extension in 2004, Manila argued that millions of rice farmers depend on the staple for their livelihood. Agriculture Secretary Emmanuel F. Piñol had wanted to seek another extension but the interagency Committee on Tariff and Related Matters (CTRM) shot down the idea. In a news briefing in January 2017, Piñol said the CTRM reasoned out that there was no longer enough time to negotiate for it. It would take about two years to set up and conclude the negotiations. Duterte’s economic managers were also against the QR extension, saying that the nontariff measure had effectively made milled rice more expensive. The WTO’s special waiver lapsed on June 30 last year but because RA 8178, which allowed the continued implementation of the rice import caps, had not been amended, the nontariff measure is still in place. Congress had targeted to approve a proposal that would amend the Agricultural Tariffication Act last year. But it was placed on the back burner because lawmakers had to prioritize the tax-reform package—dubbed as the Tax Reform for Acceleration and Inclusion—and the 2018 national budget. Lawmakers tried to have the proposal approved before they went on their Lenten break in March, but they ran out of time again. Now that sessions have resumed, lawmakers must make good on their promise. The government had committed to the WTO that Manila will have a rice tariff law in place by June. While other governments normally respect the internal processes of a sovereign nation, it would not look good if the Philippines continues to drag its foot on removing the nontariff measure. Aside from the commitment made by Philippine trade officials, the President himself wants to have the quota removed. This cannot be done if RA 8178 is not amended. Congress must focus on putting in place a new rice tariff law so lawmakers can move on to other things that also demand their attention such as reorganizing or reengineering the National Food Authority (NFA). The recent confusion over the government’s rice stocks stems from the fact that officials want one thing but the law prevents them from doing it. For instance, the NFA is mandated to maintain a buffer stock for emergency purposes, but the national government did not want to allow the food agency to import. A measure that would reorganize the NFA and redefine its role would certainly fix this. Since 2005

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John Mangun

OUTSIDE THE BOX

T

he Bangko Sentral ng Pilipinas raised “interest rates” last week covered by one newspaper headline with “BSP hikes rates, first in more than 3 years.” Another article went on to say that “The Central Bank’s Monetary Board on Thursday, May 10, decided to increase the interest rate on the BSP’s overnight reverse repurchase facility by 25 basis points to 3.25 percent”.

If you understand what that means you are in the top 1 percent, maybe not of wealth but certainly of those thousands that have commented about the “rate hike.” It could have been made easier by saying that the BSP loans money to the banks and the BSP also borrows money from the banks and the interest paid both ways on those transactions have been increased. This was all done because price inflation is maybe too high and also maybe this interest rate increase might do something to keep prices from increasing at the same rate. Or

not. We will know the answer to that in a few months. But the key to the deal on this whole interest rate thing is that for the past nine years, all sorts of weird things have been happening. But, this is what is important to remember: Global interest rates are at 5,000-year lows. In 2011 the United States government’s national debt was $20 trillion but was able to pay the same amount on interest payments on that debt as in 1998 when the national debt was $5 trillion. However, in 2017, official US interest rates started to go up from

0.5 percent to 1.5 percent, and while still basically at the lowest level in 50 years, the US paid the highest amount of interest payments in history. The point is that global debt is so large that even a small increase in interest rates is having and will have a huge impact on government finances. Despite the overacting from “certain quarters” about Philippine government debt—and the fear that the nation will become a debt slave of China—there is little to worry about. Government debt must be examined in total context including economic growth patterns, debt as a portion of total economic activity, and the amount of government spending for interest payments and repayment of that debt. All those are well contained. What we need to be concerned about is the US dollar exchange rate. While I hate to see the peso at current levels, it is the US rate against all the other currencies—not the peso—that is a major problem. Argentina just gave new meaning to “Third World Basket Case” with its currency losing about 20 percent against the dollar in the past two months. And it is not China’s fault.

The problems are many, including a 25-percent inflation rate and a government budget deficit equal to 4 percent of the total economy. Further, while Argentina’s economy is nearly five times larger than the Philippines’s, its international reserves are 30 percent lower. If a government’s finances are dismal then major economic problems cannot be avoided. That is not trouble for the Philippines. Argentina is not the only basket case out there and it is going to get worse as the dollar appreciates in value. Argentina increased interest rates from 27 percent to 40 percent to stop its currency depreciation. It just sold a guaranteed five-year bond at 20 percent. The local and foreign Philippine bashers are wrong but can be forgiven because it is all politics and has nothing to do with genuine economics. But I forecast this: Twelve months from now you will be saying TGIF— Thank God I’m Filipino. 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.

Where big business grows on pristine sand and virgin rainforest

INGED by a 7-kilometer eco-friendly white beach and tropical virgin rainforest off the Pacific Ocean and the east coast of the Philippines is the 500-hectare Balesin Island in Luzon, one of the world’s most fascinating resorts and the country’s multibillion-peso members only club.

Balesin is in every Filipino’s bucket list. The excellent Asian and European foods, its clean beaches, its virgin rainforest, the endless expanse of the Pacific Ocean and most of all, the hospitable and courteous staff of the island, marked the incomparable and wonderful experience me and my wife had in our brief stay.

Skillfully designed by EcoPlan of Miami, Florida, this flagship project of nature lover and Alphaland Corp. Chairman Roberto Ongpin, Balesin is just 20 minutes from Manila on one of the firm’s private fleet of fast airplanes, which are boarded at a private terminal at the airport in Pasay City. I and my wife, Mimi, got to the island on the personal invitation of Alphaland’s COO Mike Asperin, a longtime friend, and his equally hospitable and articulate wife, Charu, who toured us, despite their busy skeds, around the beautiful island. It’s the only sought-after, environment-friendly resort in the Philippines showing upon arrival

With distinctive settings, each village is designed, structured and executed authentically, from exteriors and interiors to landscaping and cuisine. “The emphasis of the design is more on privacy, exclusivity and durability. Many of the accommodations are standalone villas, while the suites are also very private with swimming pools and Jacuzzis overlooking the expanse of the ocean,” said Mike, himself a nature devotee. Like the other villas, the Balesin Royal Villa is a majestic, spotless structure of concrete and architectural designs for large family and social gatherings, weddings and corporate retreats. The Royal Villa’s upper floor offers four spacious Maharlika Suites, accessible

T. Anthony C. Cabangon

Editor in Chief

Senior Editors

‘Third World Basket Case’

Cecilio T. Arillo

database

R

the Asian and European luxury beach settings characterized by excellent service, clean environment, a comprehensive array of living facilities and restaurants where a sense of luxury, elegance and satisfaction present for a lifetime experience. The island consists, among others, of seven disaster-resistant and magnificently structured villages, each inspired by world-renowned first-class resorts in Balesin, Bali, Phuket, Costa del Sol, Mykonos, Saint Tropez and Toscana. These are the wonderful places Mike and Charu moved us around with pride along with some club members and their guests.

via private elevator, with their own open decks overlooking the sea. On the ground floor are 10 villatype suites with private entrances, as well as a luxuriously appointed salon opening out onto a sweeping veranda with a pool and a giant jacuzzi with a full view of the ocean. In addition to the villages are extensive central facilities, including a main clubhouse larger than most country clubs, a Sports Center, an Aquatic Sports Center, the Aegle Wellness Center, numerous restaurants and many others. Balesin is also home to the M/Y Obsessions super yacht for the use of its members and guests. The 38.5-meter aluminum-hulled yacht was built by the world-renowned Heesen Yachts in Holland and is the pride of their fleet. The yacht has four beautifully decorated staterooms, all with en suite bathrooms, and is often chartered for full-day trips to the surrounding Polillo Island group, as well as for sunset cruises around the island, dinners and photo shoots. “Beyond the material things though, Alphaland’s strength lies with the 500 eco-friendly employees who run the island with utmost efficiency and courtesy, serving club See “arillo,” A7


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Opinion

Sereno’s cross

In the power of the Holy Spirit

BusinessMirror

Life in the Holy Spirit

Msgr. Sabino A. Vengco Jr.

Val A. Villanueva

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or someone who arrogantly boasts of executing a “truly independent foreign policy,” President Duterte’s statement that China will not allow any moves to oust him exposes him as a “Manchurian Candidate.” It is a clear expression that he has no qualms in allowing China to interfere in our country’s internal affairs just to save his neck once a move to kick him out of office gains traction. Perhaps, deep in his mind, Duterte is anticipating a backlash from the brazen manner in which Chief Justice Maria Lourdes A. Sereno was booted out of her esteemed position. From the very start, the odds had been stacked against Sereno: The House of Representatives accepted hook, line and sinker the impeachment complaint filed by lawyer Lorenzo Gadon (a known Marcos loyalist who has publicly declared war against what he called the “yellow forces”); denied her right to be represented by counsel and voted against allowing her lawyers to speak and cross-examine Gadon. The impeachment complaint against Sereno accused her of culpable violation of the Constitution, betrayal of public trust, corruption and other high crimes. In the end, Sereno was ousted based on the quo warranto petition filed by Solicitor General Jose C. Calida before the Supreme Court (SC). In his petition, Calida claimed that, by not filing some of her Statements of Assets, Liabilities and Net worth or SALNs, Sereno had violated the Constitution and the law. Since Sereno did not submit these SALNs to the Judicial and Bar Council (JBC) as required, Calida proclaimed, she was not qualified to be Chief Justice. The majority of the SC justices saw Sereno’s non-submission of her SALNs as lack of integrity on her part, which effectively invalidated her appointment. Even at the SC, Sereno did not have a fighting chance. Those who have openly showed their clear bias against her refused to inhibit themselves. They had arrogated to themselves the duties of both judge and executioner. But if the non-submission of her SALNs was their only beef against Sereno, these justices need to wipe the eggs off their faces. According to Sen. Francis G. Escudero, the SALN-related rule of the JBC had been relaxed even before Sereno applied for the post of Associate Justice at the SC. Escudero explained that the relaxation of the rules applied to all applicants then, and not only to the Chief Justice. Escudero, who was a JBC member from 2008 to 2013, recounted that the JBC had been discussing Associate Justice applicant Roberto Abad’s situation when the relaxation of the SALN rule was approved. “The minutes are there for everybody’s perusal anyway,” he said. Why the relaxation of SALN submission was overlooked is baffling, to say the least. Also, not to be glossed over is that Sereno paid taxes on all of the money she grossed. Her failure to declare certain SALNs during her university work was not to malevolently suppress them. These are SALNs dating more than 15 years ago and the documents could no longer be made available by the University of the Philippines. The reaction to Sereno’s ouster

Arillo . . .

continued from A6

members and their guests from all over the world,” Mike said, adding that “they are our most important assets and a small number of locals living on the almost self-sustaining island with extraordinary ability to make the three potable water reservoirs, power supply, communication facilities clean, secure and working 24 hours, seven days a week.” Balesin Island Club offers a num-

Thursday, May 17, 2018 A7

was met with uproar. More than 300 law deans and law professors declared that the Constitution clearly stipulates that impeachment is the only way to oust the Chief Justice. At the heart of the controversial decision is due process. Many in the law profession believe that Sereno’s case should have been deliberated and decided upon through an impeachment process as prescribed by the Constitution. Why Sereno had to be ousted in such a barefaced and hurried manner is a sad reflection of horrid, trivial egotistical politicking. She has, after all, been critical of Duterte’s brutal war on drugs. In Duterte’s own words, Sereno was his “enemy.” One of those who voted not to oust Sereno was Associate Justice Antonio Carpio, who pointed out that the repeated failure to file the SALN may constitute a culpable violation of the Constitution and betrayal of public trust, but it is immaterial if it was done before appointment to an impeachable office. It is up to Congress, Carpio noted, “to determine if the culpable violation of the Constitution or betrayal of public trust, committed before appointment as an impeachable officer, warrants removal from office.” A Manhattan-based lawyer, Lara Gregory, Esq., also chipped in her legal opinion on the issue: “At the heart of any judicial system, whether in the Philippines or in the United States, is fairness. The underlying principle that assures trust in the judicial process is that when one is facing the courts, the process will be fair. If the ones hearing and judging the case, which in this case are the Supreme Court justices, are the same individuals testifying against the person subject of the proceedings, it casts a doubt on the fairness of the proceedings. Indeed, the reason this strikes fear and stirs anger in the hearts of everyone, is the palpable lack of fairness and the seeming inability of the justices to ensure that for the purpose of ensuring the fairness of the proceedings to Chief Justice Sereno, those who testified against her should not take part in the decision to remove her.” Justice Benjamin Caguioa’s dissenting opinion regarding Sereno’s ouster says it all: “This case is nothing more than cheap trickery couched as some gaudy innovation.” What I admire about Sereno is her grace even under tremendous pressure. It’s reflective of how she’s been molded. Duterte’s supporters mocked her religious faith, but it is her steadfastness to her faith that has kept her poised, locked and loaded to take on greater challenges. She says she’s accepted that the Supreme Court may not be her platform anymore. She then bravely declared that her battle has just begun.

Alálaong Bagá

I

T is by the power of the Holy Spirit that the mission entrusted by Jesus to His followers is to be carried out. John’s account (20:19-23) of Jesus giving the Spirit to them presents a powerful introduction to the Christian life on mission.

The mission of mercy and reconciliation “Peace be with you” is more than just a wishful greeting by the risen Christ to His followers. It is a declaration of the new reality of the reconciliation in peace between God and humankind by virtue of the death and resurrection of Jesus. His task from the Father is accomplished; He has restored the communion broken by sin. Only Jesus brought this definitive harmony between the Creator and His creatures, and only from Jesus can it be received by anyone: “Peace I leave you, my peace I give you. Not as the world gives do I give it to you” (John 14:27).

Jesus wants all to share in His victory over sin and death; He wants His peace benefiting all humankind. And so His followers must give to others what they have received; what is good and necessary for them is good and vital also to others. It is now their turn to serve for the salvation of the world by representing Jesus and His Gospel of reconciliation. “As the Father has sent me, so I send you.” Their mandate is to vanquish evil and sin by means of divine mercy and forgiveness, to overcome what stands between God and humanity and refuses harmony (shalom) with God. “Whose sins you forgive are forgiven them.”

Such a mission empowered to forgive sins can be fulfilled only with the power from God. “Receive the Holy Spirit,” Jesus breathed on His followers, anointing them in an act that recalls the creative breath of God (Genesis 1:2). As the mighty wind swept over the nothingness of the beginning, so a transcendental force is needed by the frail and fearful humanity of Jesus’ followers to begin a new life on the divine mission of reconciliation. The breath of God imparted and sustained life; the Spirit/Breath of Jesus, as in a new creation or in a recreation of humankind in the Spirit, vitalizes the disciples and sustains them in the new life and mission of peace in Jesus’ continuing act of love. Life in the peace of Jesus and the lifelong mission of mercy and reconciliation must be a life in the Holy Spirit. And it is the life for all disciples, not just for the Twelve, for all believers any time are given the greatest Gift of the Holy Spirit and the mission of peace and mercy. Also, the account purposely refers to Jesus identifying Himself and being recognized by His disciples by showing them His hands and His side. Blood

and water flowed out from Jesus’ side on the cross (John 19:34), symbolic references to the Eucharist and Baptism. The continuing gift of the Holy Spirit and the life on mission in the Spirit begin for all believers in Baptism and is nourished in the Eucharist. The sacramental structure of our life in the Spirit for our mission of peace and reconciliation is divinely instituted. Alálaong bagá, in this world of interminable wars and conflicts, of self-destructing clashes and selfrighteousness, to be a true follower of Jesus means to be a missionary for peace and reconciliation. Not the superficial peace of merely suspended hostilities until the opportunity for a kill comes along, but the peace of solid harmony with everyone, manifest in the equal dignity and rights of all, and rooted on the fundamental reconciliation of humanity with God mediated by Jesus Christ. It is peace that is based on the victory over sin and evil, which is only conceivable in the power of the Holy Spirit. Join me in meditating on the Word of God every Sunday, from 5 to 6 a.m. on DWIZ 882, or by audio streaming on www.dwiz882.com.

Reviving and industrializing agriculture: An opportunity for DTI, DA and DOST to work together Dr. Rene E. Ofreneo

LABOREM EXERCENS Continued from A1

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developing country can pursue an active and forwardlooking program of industrial modernization and diversification by pressing GVC investors to focus on higher rungs of the technology and skills ladder, promoting its own homegrown GVCs, nurturing domestic industries side by side with the export industries, and developing a comprehensive and continuous program of R&D and technology development for Philippine industry. This, in brief, is what Industrial Policy, with capital “I” and “P”, means.

The value chain approach is not a new or novel idea. It has been part of the conversation piece among development workers in agriculture, within and outside the government, for a number of decades already. What is needed is a decisive push along this line from the government.

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

In this connection, one economic sector where Industrial Policy can be fully applied in is agriculture. Once a relatively vibrant sector in the 1950s to 1970s, agriculture has continuously stagnated, from the 1980s to the present. Agriculture accounts for less than 10 percent of the GDP today, although the sector still employs over 30 percent of the labor force. Poverty, inequality and backwardness are widespread in the countryside. These explain why rural insurgency, the longest running in Asia, has persisted. And yet, our agricultural decline can be reversed. According to agronomists from UP Los Baños, the solutions are twofold: first, strengthen and upgrade the value chains for various agricultural products; and, second, industrialize the sector by modernizing the sector and encouraging the development of agri-based industries. On value chains, Dr. Ted Mendoza, a trustee of the Philippine Rice Institute, wonders why the 19thcentury “supply chain” focus in agricultural production has remained predominant in 21st-century Philippines. In supply chain orientation, the farmer producer is asked to con-

centrate on increasing the output from the land—food and raw materials—based on improvements on land preparation, seed selection and so on. Mendoza argues that this supply chain focus has kept the farmer producer in a vicious cycle of low income, poverty and eventually, low investment on land productivity and low yields. Hence, to Mendoza, this “supply chain agriculture” should be buried and be replaced with the more progressive “value chain approach.” In an integrated value-chain approach, the farmer producer puts under his or her control and ownership the interrelated farm production and marketing processes, starting with the seed production and land preparation, and ending with the processing, packaging and trading of the product, either for export or for display in the store shelves. In each link of the integrated value chain, extra value is added and earned. If done consistently and sustainably, the integrated value-chain approach becomes a virtuous circle of higher income, higher investment on the upgrading of each phase of the chain and, yes, higher and sustained productivity in overall agricultural production.

The value-chain approach is not a new or novel idea. It has been part of the conversation piece among development workers in agriculture, within and outside the government, for a number of decades already. What is needed is a decisive push along this line from the government. In this context, the task of the Department of Agriculture (DA) is to provide assistance in the promotion, consolidation and sustained upgrading of the integrated value-chain approach. The DA should abandon the piecemeal or segmented type of extending technical and other forms of assistance. Agricultural extension service should be integrative and should adhere to the integrated value chain approach. This means the package of assistance should cover all phases of the production and marketing chain, e.g., seed selection and preparation, land plowing, irrigation, credit, processing, market development, etc. To be able to master and develop the chain, the small farmers need to band together, especially on activities where a group approach makes a lot of financial sense, such as farm input procurement, farm-level trading and so on. The integrated value-chain approach requires a strong and united farmer association at the community, regional and national levels. Here the Cooperative Development Authority (CDA) can play a critical role in information, education and communication. More important, the above

ber of complimentary villa nights a year depending on the type of membership. Members and their guests can choose to use these complimentary nights at any of the villages or at the clubhouse suites. Balesin’s E. L. Tordesillas Airport, named after the founder of the original resort, has a 1.5-kilometer concrete runway, built to international aviation standards that can accommodate regional aircraft and private jets. The club recently invested in runway lights with area navigation approach capability, so

it can now operate as a 24-hour aerodrome. The club regularly operates its own aircraft; charter aircraft with larger capacities are added during peak periods, and the club has operated a capacity of 1,000+ seats a day during these periods. A key aspect of the flight experience is their own private terminal at the Ninoy Aquino International Airport, which is much more convenient—and luxurious—than the crowded public domestic terminal.

Alphaland continued its steady growth and profitability during the year 2017. From a 2016 net income of P7.1 billion, the company’s audited financial statements for 2017 showed an increase of 15.4 percent to P8.2 billion. The company’s net worth went up 15.3 percent from P52.4 billion in 2016 to P60.4 billion in 2017. On a per-share basis, the company’s earnings were P6.43 in 2017 as compared to P5.56 in 2016, a net increase of 15.7 percent, and the net book value per share was P47.54

at the end of 2017 as compared to P41.14 in 2016, or an increase of 15.6 percent. In its annual report last year, Ms. Anna Betina Ongpin, Alphaland vice chairman and president, outlined the firm’s balance sheet showing its exceptionally debt/ equity ratio of 10.9 percent (P6.6 billion in debt as against P60.4 billion in equity). “This is the exact opposite of most property companies, where the equity is typically much smaller than the debt component. Thus, the borrowing

integrated value-chain framework can be the platform for rural industrialization. Which means the formation of agri-based industries, such as the processing and packaging industries and the revival of the old efforts to establish our own Philippine fertilizer industry, Philippine agri-chemical industry, Philippine tractor industry and Philippine agricultural machinery industry. This is where the assistance and services of the DTI and the Department of Science and Technology (DOST) are most needed. This is also where industry-agriculture-academe linkages can be developed. As it is, Philippine agriculture today is in a dismal state, as reflected in the official statistics on rising agricultural imports vis-àvis agricultural exports, declining production, weak job generation by the sector and grinding rural poverty. There is also a lot of policy confusion, as vividly shown in the intramurals within the Executive branch as to who should control or manage the National Food Authority, who should be given the authority to import rice or not and so on. The overall development framework that should guide and galvanize the country’s agricultural producers is missing. PDP 20172022 talks of “value chain access” for the farmers in a very limited way, that is, mainly through road development (infrastructures). It is high time that the government focused on reviving a stagnating agricultural sector and transforming it into a modern and productive one. The way forward is to formally pursue the integrated value-chain approach and use this approach as the platform for ruralbased industrialization and small farmer development. In this system, the DA, DTI, DOST and other agencies, such as the CDA and Department of Agrarian Reform, should be mobilized in support of a unified value-chain development in the agricultural sector. capacity of the company remains strong,” she said. No wonder, Balesin is in every Filipino’s bucket list. The excellent Asian and European foods, its clean beaches, its virgin rainforest, the endless expanse of the Pacific Ocean and most of all, the hospitable and courteous staff of the island, marked the incomparable and wonderful experience me and my wife had in our brief stay. To reach the writer, e-mail cecilio.arillo@ gmail.com.


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A8 Thursday, May 17, 2018

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Senator seeks probe into PCOO Asean Summit 2017 spending

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By Butch Fernandez

@butchfBM

enate probers were asked on Wednesday to look into an allegedly anomalous spending by the Presidential Communications Operations Office (PCOO) for a P647.11-million “information caravan” during the Philippines’s chairmanship of the Association of Southeast Asian Nations Summit (Asean) in 2017. In filing Resolution 733, Sen. Antonio F. Trillanes IV sought the Senate probe “with the end in view of ensuring that the budget allocated to the PCOO was “legally and properly disbursed and spent.” Trillanes asked the Senate leadership to direct the appropriate

committee to open an inquiry in aid of remedial legislation, citing reports that the Commission on Audit “found anomalous” disbursements made by the PCOO for the Asean information caravan. T he law ma ker asser ted in his resolution that, even as  the

₧647.11M The total PCOO spending during the Philippines’s chairmanship of the Asean Summit in 2017

controversial disbursement has yet to be validated by the COA, “there is still a need for the PCOO to explain publicly the disbursement of the said fund.” “There is an immediate need to look into the alleged irregularities in the disposition of PCOO’s budget and its irregular expenditures for the aforementioned information caravan in order to ensure that government funds are legally and properly allocated, directed and spent toward the purpose for which the funds were allocated,” he added. Trillanes cited Executive Order 4 issued in 2010 mandating the PCOO to act as lead communications arm of the government tasked

to engage and involve the citizenry and mass media “in order to enrich and expand the discourse relating to governance.” He recalled that, when the Ph i l ippines hosted t he 2017 Asean Summit, as its chairman, the PCOO was tasked to “spread awareness and educate Filipinos about the organization.” Trillanes’s Resolution quoted PCOO Secretary Martin Andanar as saying “some Filipinos lack knowledge and awareness about the Asean, so there is a need for a ‘reintroduction’ through n at ionw id e ro ad s ho w s a nd information caravans.” It adde d t h at t he PCO O, through its Committee on Media Affairs and Strategic Communications led by Undersecretary Noel Puyat, then launched the so-called One Asean, a Global Player information drive to promote greater awareness “and understanding necessary for the building of a regional community.”  

Land conversion, lack of irrigation blamed for Q2 palay output decline Continued from a1

The country produced some 4.150 MMT of rice in the second quarter of 2017. “Probable reductions in output may come from Cagayan Valley, Western Visayas, Zamboanga Peninsula and Soccsksargen,” the PSA said in its report titled, “Rice and Corn and Situation Outlook,” published on May 16. “ These may be attributed to: 1) contraction in harvest area brought about by early planting and harvesting during the last two quarters [and] 2) conversion of some areas to commercial and industrial establishments,” the PSA added. The PSA also noted that the “inadequate water supply in some areas during the planting period” was also a factor in the expected decline in total palay output in second quarter. However, despite the anticipated decline in the second-quarter output, the country’s palay production in the first half would still increase by at least 1.20 percent due to higher volume produced in the first quarter. “Palay production for January to June 2018 may reach 8.67 million MT, 1.20 percent higher than the 8.57 million MT output in 2017,” the PSA said. “Harvest area may increase, from 2.10 million hectares to 2.12 million hectares. Yield per hectare may contract by 0.32 percent, from 4.09 MT per hectare in 2017 to 4.08 MT in 2018,” the PSA added. The country produced 4.62 MMT of palay in the first quarter, which was 4.61 percent higher than the 4.42 MMT recorded output in the January-to-March period of 2017. Harvest area and average yield during the quarter also grew by 3.48 percent and 0.54 percent, respectively. “Harvest area expanded, from 1.15 million hectares to 1.19 million hectares. This quarter’s yield increased by 0.54 percent, from 3.85 MT per hectare to 3.87 MT per hectare,” the PSA said. In the same report, the PSA projected that the country’s corn output in the second quarter would decline by 3.76 percent to 1.28 MMT due to farm-area contraction and lower yield. “Harvest area may contract, from 401,510 hectares to 391,260 hectares, or by 2.55 percent. Yield may decline from 3.31 MT per hectare to 3.27 MT per hectare,” it said. The PSA said the decline in production could be attributed to the “early planting in the previous quarter as a result of the availability of newly introduced hybrid and modern [open-pollinated variety] seeds.” Furthermore, some corn farmers in some areas have already shifted to other crops, while “others were left in fallow in Cagayan Valley,” according to PSA. However, the PSA said corn production in the first half would still grow by at least 1.63 percent to 3.76 MMT, from 3.7 MMT recorded output in the same period of 2017. The PSA attributed this to the 4.66-percent expansion of corn output in the first quarter. “Harvest area may increase, from 1.1 million hectares to 1.11 million hectares or by 1.5 percent,” the PSA said, adding that average corn yield in the second quarter would remain at 3.37 MT per hectare.

THE FUTURE BEHELD Light Rail Transit Authority (LRTA) has launched a state-of-the-art Train Driving Simulator, the first of its kind in the country, providing a pioneering type of training to existing and future train operators for the Line Rail Transit Line 2 System. The equipment is manufactured by LANDER Simulations and Training Solutions of Spain and delivered to the country by Kempal Construction and Supply Corp. In photo, an LRTA employee demonstrates the use of the equipment to the media. ALYSA SALEN

Spanish Government honors Dr. Andrew L. Tan The Spanish Ministry of Foreign Affairs and Cooperation, through the Embassy of Spain in Manila, recently conferred the Encomienda de Numero de la Orden del Merito Civil (Commander by Number Grade of the Spanish Order of the Civil Merit) on tycoon Dr. Andrew L. Tan for his contributions, achievements and support to Spain and its Embassy’s activities and programs.  The pinning of decoration was led by Spanish Ambassador Luis Calvo at the Spanish Ambassador’s Residence in North Forbes Park, Makati City. Witnessing the ceremonies were Spanish Embassy officials, Finance Secretary Carlos G. Dominguez III and Budget Secretary Benjamin E. Diokno (not in photo).

PALACE OKAYS GIVING AWAY OF SOLDIERS’ UNOCCUPIED HOUSING By Bernadette D. Nicolas @BNicolasBM

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RESIDENT Duterte has signed Joint Resolution 2 authorizing the National Housing Authority (NHA) to distribute unawarded and unoccupied housing units of uniformed personnel to other qualified beneficiaries. The resolution was approved by the President on May 9, but the copy was released to the media only on Wednesday. The joint resolution was passed by the Senate as Senate Joint Resolution 8 on December 11, 2017, and adopted by the House of Representatives as an amendment to the House Joint Resolution 15 on January 17. The housing units to be distributed include: ■ Those that are unawarded; ■ A w a r d e d h o u s i n g u n i t s that are not yet occupied and whose ownership and possession have been surrendered by their respective awardees in favor of another unit in another housing project; and ■ Housing units whose respective awards were cancelled by reason of default in the payment of amortization or for any violation of the terms and conditions of the individual loan agreement in accordance with the existing laws. NHA is also directed in the joint resolution to convene within 60 days from the approval of the joint resolution to formulate rules and regulations necessary

to ensure efficient award of the housing units. “Whereas, the housing need faced by the country is too huge to be ignored and it will, without doubt, ser ve public good and welfare if the aforestated housing units in the AFP/PNP/BFP/ BJMP/Bucor Housing Projects are awarded by the NHA other lowsalaried government employees and other qualified beneficiaries, giving priority to those belonging to the lowest 30 percent of the urban income -earners, consistent with its mandate,” the joint resolution stated. The joint resolution fur ther noted that the Philippine De velopment Plan 2017-2022 had pegged the housing needs from 2011 to 2016 at an estimated 5.55 million units, with some 16 percent living in unacceptable housing and anotther 8.83 percent living in doubled-up households in acceptable housing despite the effor ts of key shelter agencies. The housing need is expected to increase to 6.8 million units from 2017 to 2022—including an increase in inventory losses due to households affected by natural calamities and project-affected families due to expected accelerated infrastructure spending, the resolution read. Not withstanding the huge need, “the Philippine Development Plan 2017-2022 cites limited appropriations as one of the challenges faced by the housing sector,” the resolution pointed out.

GLOBAL TRADE JITTERS, CONTRACTUALIZATION E.O. TO IMPACT EXPORTS Continued from A1

increase in the country’s employment to 94.7 percent, from 93.4 percent, and a drop in unemployment to 5.3 percent, from 6.6 percent—both year-on-year. Underemployment rate, on the other hand, ballooned to 18 percent from 16.3 percent, according to the January LFS. The exports slowdown can be treated as normal, OrtizLuis explained, as firms usually refresh their inventory of raw materials in the January-to-March per iod a f ter de plet i ng t hei r resources from the previous year. This is usually followed by an upward trend in the latter quarters when exporters begin to pick up momentum. However, the Philexport chief admitted he doubts that export performance will follow this usual trend this year given the uncertainties on both the national and international level. “Right now I cannot really say if we can rebound because lawmakers are

still discussing what to make of the endo EO of the President,” he said. “And on the global level, there is an instability to a certain degree. We cannot really say if we will bounce back as usual, but we are hoping that our exports will rebound,” Ortiz-Luis added. He pressed legislators in both the Senate and House of Representatives to not “pass something that is not internationally practiced,” referring to a possible law prohibiting all forms of contractual arrangements. “In a world where outsourcing is the trend, those who do not do it are losers, and we don’t want to be the losers,” Ortiz-Luis said. Electronic products continue to carry the weight for the country’s exports, surging by 5.4 percent to $8.69 billion in the first quarter compared to last year’s $8.24 billion. The sector is seeking to grow by 6 percent this year, the Semiconductor and Electronics Industries Foundation Inc.

announced in February. The target growth is slightly moderate as compared to the industry’s 11-percent hike last year, when electronics exports expanded to an all-time high of $32.7 billion, from $29.4 billion in 2016. The sector also pumped more than half of the country’s commodity exports in the previous year at 52 percent. As a whole, the government aims to hike export receipts by 9 percent this year, following a 9.53-percent growth in the previous year. It is also looking to hit the lower end of at least a $122-billion export revenue in 2022. “It is a range target of $122 billion to $131 billion. We are cautiously optimistic that we can at least get to the lower end of that target depending upon the kind of assistance packages that we provide,” said Senen M. Perlada, director of the trade department’s exports marketing agency, in February. Ortiz-Luis also called on the

government to speed up trade arrangements in the pipeline with nontraditional markets, such as Russia, so that exporters can fully utilize them. The Philippines is eligible to apply for a General System of Preferences with the Eurasian Economic Union, of which Russia is a member, and is now working to apply more than a dozen of its farm goods in the trade privilege. The escalating trade conflict b et we e n C h i n a a nd t he US , which Ortiz-Luis cited also as a factor to exports slowdown, was sparked by Washington’s imposition of stiffer duties on steel products. US President Donald J. Trump authorized in March the additional tariffs on steel (25 percent) and aluminum (10 percent) in a move that further cemented the leader’s protectionist stance. As a retaliation, China’s Ministry of Commerce announced in April the country’s plan to slap heavier

duties on 106 US products amounting to about $50 billion yearly. China also filed a case against the United States at the WTO for allegedly violating the General Agreement on Tariffs and Trade 1994 and the Agreement on Safeguards. T he other factor that w il l make it difficult for exports to rebound, according to the Philexport chief, was EO 51, which is intended to implement Article 106 of the Labor Code aimed at protecting the security of tenure of all workers. “Contracting or subcontracting, when undertaken to circumvent the worker’s right to security of tenure, self-organ i z at ion a nd col lec t ive ba r gaining, and peaceful concerted activities pursuant to the 1987 Philippine Constitution, is hereby strictly prohibited,” the EO read. Putting an end to the practice of contractualization was one of Duterte’s campaign promises in the 2016 polls.

Businessmirror may 17, 2018  
Businessmirror may 17, 2018  
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