Businessmirror may 18, 2018

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n Friday, May 18, 2018 Vol. 13 No. 216

BSP: Amend agri-agra law to boost bank compliance

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By Jasper Emmanuel Y. Arcalas

@jearcalas

HE Bangko Sentral ng Pilipinas (BSP) is backing the amendment of the agriagra law that would allow merging the banks’ loan allocation for the farm sector as a measure to improve banks’ compliance rate, according to a high-ranking official.

₧460B

The level of banks’ noncompliance with the law Citing BSP data, Land Bank of the Philippines (LandBank) President Alex V. Buenaventura had said the noncompliance of the total banking system with the agri-agra law has reached P460 billion as of end-2017.

BSP Deputy Governor Chuchi

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How secure are security guards?

Dr. Jesus Lim Arranza

Make Sense

H

ow sure are you that the security guard you hired to secure your properties is financially and emotionally secure? Chances are, if he is one of those underpaid, overworked and exploited guards of security agencies that offer below standard rates just to get contracts, your security guard could be prone to be involved in shady deals or, at the least, be sleeping on post.

Continued on A11

See “BSP,” A2

It’s complicated: ‘halting TRAIN hurts poor more’ TOURISM CHIEF ORDERS

By Cai U. Ordinario

I

BIDDING FOR ALL PROJECTS

@cuo_bm

F lawmakers stop the implementation of the Tax Reform for Acceleration and Inclusion (TR AIN), as some of them have threatened to do so, the poor, taxpayers and the government’s infrastructure program will suffer the most, according to the National Economic and Development Authority (Neda) and local economists.

Speaking to reporters on Thursday, Socioeconomic Planning Secretary Ernesto M. Pernia cited the administrative problems that could arise should lawmakers suspend implementation of TRAIN. One complication is that the government has already partially distributed the unconditional-cash transfer (UCT) to mostly conditional-cash transfer (CCT) beneficiaries and the Pantawid Pasada for jeepney drivers.

See “Train,” A2

By Ma. Stella F. Arnaldo

@akosistellaBM Special to the BusinessMirror

‘I

Workers are seen at a segment of the Light Rail Transit Line-2 extension at Masinag junction, one of the infrastructure projects being pushed by government. NONOY LACZA

DOJ insists on keeping PCGG, OGCC as Palace backs abolition bid

By Joel R. San Juan @jrsanjuan1573

& Bernadette D. Nicolas

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@BNicolasBM

HE move in the House of R e present at ives to abolish the Presidential

Commission on Good Government (PCGG) will not lead to h i stor ic a l re v i sion i sm si nce none of the functions of the agency, created in 1986 to run after ill-gotten wealth during the Marcos dictatorship, will be abandoned, Malacañan Palace

PESO exchange rates n US 52.2860

asserted on Thursday.

However, the Department of Justice (DOJ) served notice that it is sticking to its position that the PCGG and Office of the Government Corporate Counsel (OGCC) should remain under the DOJ’s control and supervision.

Voting 162-10, members of the House of Representatives earlier approved on third and final reading a measure to abolish the commission, the first to be created by the government of former President Corazon C. Aquino.

See “DOJ,” A2

T’S the people’s money.”

T h i s w a s re p e at e d l y stressed by Tourism Secretary-designate Bernadette Fatima Romulo Puyat at a news conference on Thursday, as she ordered the conduct of bidding for all tourism projects, even those implemented by government-owned and -controlled corporations (GOCCs) under the Department of Tourism (DOT).

She said she was “uncomfortable” that large sums of money were released by the Tourism Promotions Board, for the Buhay Carinderia project, which didn’t undergo any bidding. The first phase of the project, which should have started in June and ended in December, cost the TPB P80 million. The TPB is the marketing arm of the DOT. Documents obtained by the BusinessMirror showed three separate checks for said project were issued on March 19, 2018 (P13.44 million); March 20, 2018 (P31.36 million); and April 17,

Photocopies of the checks paid by the Tourism Promotions Board (TPB) to Marylindbert International Inc. for its sponsorship of the P80-million Buhay Carinderia Redefined project. Two checks were released before the project was launched, and the rest, six days after the event launch. The checks were signed by former Tourism Secretary Wanda Corazon T. Teo and TPB COO Cesar Montano.

Contributed photos

2018 (P35.84 million), to Marylindbert International Inc., an event organizer that supposedly owns See “Tourism,” A2

n japan 0.4737 n UK 70.5390 n HK 6.6607 n CHINA 8.2075 n singapore 39.0136 n australia 39.2877 n EU 61.7393 n SAUDI arabia 13.9422

Source: BSP (17 May 2018 )

BMReports BusinessMirror

A2 Friday, May 18, 2018

www.businessmirror.com.ph

Probers: Govt men part of Naia smuggling

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By Bernadette D. Nicolas

employees of the Departments of Transportation, Finance and of Justice, and Bureau of Customs.

“We have long been watching

them. Last December we were already monitoring them and our findings say that around 2012, 2014, they were smuggling drugs, but not this one which we particularly caught, but the group which also uses the same systems. Then we also have information that the smuggled jewelry changed into smuggled drugs,” he said.

These smugglers were already caught three times and the last incident happened on May 5.

“We went [to the location] and we investigated the case. And there we found and we saw P6 million worth of jewelry that was, again, caught,” he said. “Prior to that, they were

also caught; the same group was caught last December.”

Belgica recalled that it was last December that Justice Assistant Secretary Moslemen T. Macarambon “intervened,” noting that the tax and duties went down from P6 million to P1.3 million.

However, Belg ica c lar if ied that what their asset caught was smuggled jewelry, which was undeclared. “Instead of being confiscated and charged at Customs, the price is being arranged. Then Asec [referring to Macarambon] came and he asked to lower the tax and duties to P1.3 million,” he said.

Belgica further noted that what

response, Romulo Puyat wrote him on Thursday, telling him to submit a list of projects for the year.

“I will wait for the COA to reply, but for now, definitely we won’t proceed with Buhay Carinderia,” the DOT chief said. “I will ask them [COA] to determine if it’s the right process [that no bidding was conducted, and checks were released for the project that hadn’t even started].”

Montano didn’t submit his resignation letter, Romulo Puyat said, “but we discussed it [his resignation]. Anyway, he’s already on a holdover capacity. I leave it up to the Tourism Congress to submit names for consideration for the TPB Board, and for the new COO.” Montano was appointed in December 2016, and his term of office expired in June 2017.

Romulo Puyat said, “I’ve been doing food events also at the DA [Department of Agriculture]. I don’t think Ms. Linda Legaspi [owner of Marylindbert] is the only one who can do street-food events. There are other organizers who can do the same project. I am just not comfortable with projects that didn’t undergo bidding.”

Montano explained, however, that the project was a “sponsorship,” and as such didn’t have to go through the bidding process.

“He said this was being done even before. And he consulted with his lawyer at the TPB, who assured him the check payments to Marylindbert were aboveboard,” Romulo Puyat said.

The TPB formally launched Buhay Carinderia on April 11, at the Rizal Park Hotel (formerly the Army Navy Club), with the aim of raising the profile of carinderia (street cafés) and street food in the eyes of Filipinos and the world. (See, “TPB to bring lowly ‘carinderia’ food to the world,” in the BusinessMirror, April 12, 2018.)

Romulo Puyat said she met Montano for about two hours, and described him as “very, very cooperative. I found him very humble... very earnest, and truthful. He was open to the DOT reviewing the TPB projects.”

Meanwhile, she said she was getting Arturo P. Boncato Jr. as undersecretary for Tourism Regulation Coordination and Resource Generation, a post recently held by Alma Rita C. Jimenez. The latter was among

those who submitted their courtesy resignations to the DOT chief. “I only met him [Boncato] last Friday, but his credentials are impressive.

He was regional director [of Davao], then became assistant secretary under [former Tourism Secretary Ramon] Jimenez,” Romulo Puyat said. She also announced that Undersecretary for Tourism Development Planning Benito C. Bengzon Jr. will be the DOT’s new spokesman. A career executive service officer, Bengzon has been with the DOT for some 33 years, she said.

“I believe the spokesman should be someone with experience, and Bong has been with the department forever.” She stressed, “even if he was not a career official, I would have retained him.” Both men, she said, were held in high regard by most people she spoke with.

Under the Tourism Act of 2009, the DOT is allowed to have three undersecretaries, with each undersecretary assigned an assistant secretary. The only remaining post is Undersecretary for Special Concerns and Administration, currently held by Marco M. Bautista who has also tendered his courtesy resignation.

effective. Why not?” Fonacier told reporters in an interview on the sidelines of an agriculture-finance forum at the University of Asia and the Pacific on May 17.

“We need to address some points in the law that would make it effective. We are aiming for a 100-percent compliance [by banks on the law],” Fonacier added.

However, Fonacier is cognizant that amending the law itself would not guarantee an instant 100-percent compliance from the banks but would still pave the way for “improvements.”

She said it “may be a good chance of attaining the 100 percent, but it is not a guarantee.” Nonetheless, she added, “it [will] definitely improve [the] compliance profile.”

At present there are no bills

filed in Congress that seek to amend Republic Act 10000 or the agri-agra law. However, the BSP official said, a study funded by the Asian Development Bank (ADB) has been completed on the possibilities of merging the 10-percent to 15-percent requirement under the agri-agra law.

The study was conducted by an interagency committee spearheaded by the BSP, together with the departments of Agriculture and of Ag rar ian Refor m and the ADB. Fonacier said they expect the results of the study to be finalized and released within the next two to six months.

Fonacier added that the results of the study may kick-start the crafting of a bill that would

pave the way for the amendment of the law.

“It will depend on the results but that will open the door for amendment and consultation.

There is no draft bill yet, [as] we are waiting for the results [of the study],” she said.

Fonacier added some senators, including Sen. Cynthia A. Villar, who chairs the Senate Committee on Agriculture and Food, are supporting the amendment of the agri-agra law, “because they are not happy with the compliance.

Even legislators like Senator Villar knows that there is a study.

And she is also just waiting for the result,” she said.

Fonacier said the banks’ compliance rate in 2017 for their 15-percent loan allocation mandate for agriculture is only 12 percent, while they only reported a mere 1- percent compliance rate for the 10-percent loan distribution for ARBs. Fonacier said banks posted a 12-percent compliance rate for their 15-percent mandated loan allocation for agriculture in 2017.

As for the 10-percent loan portfolio distribution for ARBs, banks were only achieved a mere 1-percent compliance rate, according to Fonacier.

Citing BSP data, Buenaventura said LandBank is reviving their “direct marketing by supervised credit technicians” program to “ensure all small farmers gain access to financing.”

Through this program, Buenaventura added, the LandBank would be the one reaching out to farmers, instead of them going to the financial institution.

“So what we will do now is that the LandBank will go to the farmers. So access is our first strategy,” he said. “Farmers will no longer have to face difficulties finding LandBank. LandBank will go to the farmers and not farmers going to LandBank.”

@BNicolasBM

IGHT groups that include government workers allegedly involved in smuggling at the Ninoy Aquino International Airport (Naia) have raised about P10 billion, Presidential AntiCorruption Commissioner (PACC) Greco Antonious B. Belgica disclosed on Thursday.

At a Palace briefing, Belgica said they have long been investigating the matter, especially the alleged involvement of

Tourism. . .

Continued from A1

the rights and trademark for Buhay Carinderia (formerly Carinderia Fiesta). The event supposedly has been in existence since 2011. The checks were signed by former Tourism Secretary Wanda Corazon T. Teo and TPB COO Cesar Montano.

The new tourism chief also stressed that all TPB projects for the year are effectively put on hold as she has asked the Commission on Audit (COA) to step in and examine all TPB projects. She met with Montano on Wednesday evening at her friend’s house, and asked him to explain the Buhay Carinderia project, as well as his reported twominute speech at a governmentsponsored tourism event in New York, before attending the Broadway musical, Hamilton. (See, “COA asked to scrutinize TPB projects,” in the BusinessMirror online, May 17, 2018.)

At that meeting, Montano submitted a letter, “requesting your good office for a joint review of all the TPB’s projects and events lined up for the year 2018 and 2019.” In

BSP. . .

Continued from A1

Fonacier said the Central Bank is in favor of consolidating the 25-percent loan allocation requirement for agriculture and fisheries sector as mandated by Republic Act 10000, or the Agri-Agra Reform Credit Act of 2009.

Und e r t he a g r i - a g r a l aw, government and private banks should allocate 25 percent of their total loanable funds to the agri-fisheries sector with 10 percent being distributed to agrarian-reform beneficiaries (ARBs) and the remaining 15 percent to the farm sector.

“We would of course support the amendment, for the law to be

they caught on May 5 is the work of just one of eight syndicates that they have been investigating under the same modus.

“So we have reason to believe t hat t hey a re one orga ni zed group doing this, connected to many different offices and taking advantage of the complex systems and using government officers. And it’s very clear that their syndicate already reached u p t o P r o s e c ut o r ’s O f f i c e ,” he said.

Belgica said they will be conducting further investigation and will then forward the criminal information for a criminal complaint with the Ombudsman.

DOJ. . .

Continued from A1

“There is no revisionism there because all of the duties of the PCGG will be performed by the Office of the Solicitor General [OSG]” Presidential Spokesman Harry L. Roque Jr. said.

Roque disputed a claim by Sen. Paolo Benigno A. Aquino IV that the PCGG abolition “will institutionalize historical revisionism.”

Principally authored by House Speaker Pantaleon D. Alvarez, House Bill 7376, or the proposed “OSG charter” also seeks to strengthen the OSG to further enable it to fulfill its role of upholding the best interest of the government.

PCGG Commissioner John Agbayani said in a House Justice subcommittee hearing last October that he found it “not appropriate to abolish an existing agency which is very efficient.”

Although Roque agreed that the PCGG is “not inefficient,” he stressed that there is no need for it to be a separate agency since it is just performing “winding up” functions, which can be done by OSG. Former Commission on Human Rights Chairman Etta Rosales earlier also raised a concern over allowing the Solicitor General to assume the PCGG functions, since, she noted, current Solicitor General Jose C. Calida is a Marcos loyalist and had supported defeated vice presidential candidate Ferdinand “Bongbong” Marcos Jr. in 2016.

However, Roque said he is confident that the OSG can do its job. “There is no conflict because whoever political appointee [leads the OSG], governance still lies on the rank-andfile workers,” he said. “This measure seeks to promote the professionalism of the OSG.”

DOJ sticks to its guns

On Thursday the justice secretary said the DOJ is sticking with its position that the PCGG and OGCC should remain under its control

TRAIN. . .

Continued from A1

“We are going to lose some opportunities of getting higher revenue and instead of having people getting used to it. I think many people have already factored in the TRAIN, the short-term rise in prices into their equation, into their budget equation and so, if you stop it, then we will be back to square one. I’m sure the legislators will realize the importance of continuity. Continuity is always an important element in a program or a game,” Pernia said.

Apart from the transfers, the benefit gained by taxpayers from the reduction in personal-income taxes (PIT) will also stop, Former Finance Undersecretary Romeo L. Bernardo told the B usiness M irror. This will be difficult considering that the PIT has been in effect for almost half a year.

Ateneo Center for Economic Research and Development (ACERD) Director Alvin P. Ang shares the concern. He said it is impractical to stop TRAIN now as this could hamper the government’s infrastructure push.

The Duterte administration aims to spend P8.4 trillion for various infrastructure projects until 2022. Among these are 75 flagship projects— which will bear the imprint of the President in Philippine society—and over 5,000 projects in the Public Investment Program (PIP).

In July 2017 the Neda estimated that the Three Year Rolling Infrastructure Program (TRIP) 2018 to 2020 will cost P3.55 trillion. The numbers are still expected to increase.

Stopping TRAIN now will create a negative impression that the Duterte administration did not thoroughly examine its impact, according to University of Asia and the Pacific School of Economics Dean Cid Terosa said.

“Suspending the TRAIN law will give the impression that the consequences of its implementation were not comprehensively examined. It would appear to be less an economic decision and more a political move. We should stick

On Tuesday President Duterte asked Macarambon, along with another assistant secretary, to resign or be fired over corruption allegations. Macarambon has decried that he was not given due process on the matter.

Presidential Spokesman Harr y L . Roque Jr. said Duterte made this decision following the PACC investigation.

Justice Secretar y Menardo Guevarra confirmed to the BusinessMirror that Macarambon tendered his resignation before April 30 and that the President has appointed someone else to replace him, effectively terminating his services.

and supervision.

“We respect the action of the HoR [House of Representatives]. But we’ll maintain our position to keep PCGG and the OGCC under the wings of the DOJ,” Justice Secretary Menardo I. Guevarra said in a text message to reporters.

The DOJ chief also said he does not yet see the need to discuss the matter with President Duterte, saying that passage of the law is still far-fetched considering that it has to be tackled before the Senate.

“It is still a long shot. There is no counterpart bill in the Senate,” Guevarra explained.

The OGCC serves as the principal law office of all government-owned and -controlled corporations (GOCCs), their subsidiaries and other corporate offsprings and governmentacquired asset corporation.

In its position paper earlier submitted to the House, the DOJ warned of a possible conflict of interest of clients-agencies that may arise should the OSG represent the government exercising governmental and proprietary functions.

It noted that one of the functions of the OSG is to represent the government in the Supreme Court (SC) and the Court of Appeals (CA) in all criminal proceedings.

Likewise, the OSG is tasked to represent the government and its officers in the SC, the CA and other courts or tribunals in actions where government or any officer in his official capacity is a party.

On the other hand, the OGCC serves as the principal law office of all GOCCs , their subsidiaries and other corporate offspring and governmentacquired asset corporations.

The DOJ earlier noted that, at present, there are numerous cases wherein the OGCC and the OSG find themselves representing opposing sides with conflicting interest.

The OGCC represents GOCCs, while the OSG represents different agencies of the government such as the bureaus of Internal Revenue, and of Customs (BOC), the Department of Finance and the like. by the rules we have made, bear the brunt of its short-term effects, and hope that the future will bring more fortune,”Terosa told the BusinessMirror.

Pernia explained that the only reason the TRAIN looks too burdensome — than projected— at this time is the confluence of other dire factors: it was implemented at a time when international oil prices shot up by 40 percent and the country encountered rice supply issues.

He added that the government’s implementation of a closed fishing season also coincided with the TRAIN implementation.

Pernia said, however, that if the impact of TRAIN on the poor and taxpayers will be severe, the President’s economic managers are willing to reconsider the amount of the UCT. “That’s a possibility; if the impact is really that severe, then maybe it is justified. We [economic managers] would have to consider it,”Pernia said.

“We’re trying to play a balancing game with our budget deficit on the one hand and the revenue we need to implement our programs, human capital development, infra development, so it’s really a difficult balancing act,” he added.

In the first four months of the year, commodity prices increased 4.1 percent while March inflation was the highest in the 2012 base year series at 4.5 percent.

The Philippine Statistics Authority attributed the high inflation rate in March to more expensive alcoholic beverages and tobacco; clothing and footwear; and housing, water, electricity, gas and other fuels.

The annual inflation for food alone index at the national level eased to 5.5 percent in April 2018. Its annual rate in the previous month was registered at 5.7 percent and in April 2017, 3.6 percent.

Data showed the prices of rice, the country’s staple, increased 4.3 percent in March. Prices of this commodity were even higher in Metro Manila and registered an inflation rate of 5.9 percent.

Annual inflation in the National Capital Region during the month remained at its March rate of 5.2 percent, while inflation in Areas Outside NCR increased 4.3 percent in April 2018.

www.businessmirror.com.ph

Banking&Finance BusinessMirror

Funa tells insurers to look beyond bancassurance

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By Rea Cu

@ReaCuBM

here is a whole world beyond bancassurance just brimming with opportunities that the Insurance Commission (IC) encourages insurers to explore, expand and forge partnerships and arrangements with other industries to help boost the sector.

FUNA

At the 19th Asia Conference on Bancassurance and Alternative Distribution Channels held just last week, Insurance Commissioner Dennis B. Funa said the combined expertise and resources of both the banking and insurance institutions has proven not only profitable for these institutions but also enabled the public to achieve financial success and security.

“It cannot be doubted that bancassurance is a key chan-

hand, is a distribution channel which allows the presentation and sale of insurance products to bank customers within the premises of the bank.

“Bancassurance allows strategic alliance between pillars of the economy founded by financial strength and stability in order to afford the public an access to comprehensive financial protection,” Funa said.

As of end 2016, bancassurance contributed 31.31 percent, or P57.7 billion of the P184.40

nel to the increase in insurance penetration as banking institutions cater to a robust client from the mass market, the mass af f luent, t he high-net-wor t h and cor porate customers and the accessibility of insurance products,” he said.

So-called bank penetration in the Philippines still has a huge upside given latest data showing higher total premium sales as percent of local output or the GDP. Bancassurance, on the other

billion in premium earned by the life-insurance sector. Under the nonlife-insurance sector, the bancassurance channel of distribution contributed 12 percent or P5.04 billion of the total P42.1 billion total net premium written by the nonlife-insurance sector.

Funa, likewise, said that with the changes and advances in technological environment, the possibility for the expansion of bancassurance and of other alternative distribution channels is endless. He also emphasized the value and importance of advanced analytics which are now considered strategic assets. “ T he effective use of data within the parameters allowed by law will provide for solutions to improve underwriting, pricing, product innovation and claims settlement,” he added.

“By collaborating with innovators and by integrating new technologies, the growth of bancassurance will be sustained and would lead to its transformation.

With the dawn of virtual banking, we are expecting to see the digital transformation of bancassurance,” Funa said.

Editor: Jun B. Vallecera • Friday, May 18, 2018

A3

The two faces of North Korea’s Kim Jong Un

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n May 5 North Korea moved its official national time clock 30 minutes forward to reconcile with the time of estranged brother in South Korea. Recently, a Korean Summit was also held, where the roly-poly Pyongyang leader—the 34-year-old third-generation Swisseducated Kim Jong Un toasted around the tables with a wide-toothed smile.

Earlier, Kim sent his sister Kim Jo Yong to an unprecedented visit and participation of the North in the South Korean Winter Olympics and even reportedly upstaged US vice president with her unadulterated grace.

The new Kim Jong Un’s “charm offensive” has given the heir of a 68-yearold “war” with the south with a fresher face rather than that of a cruel despot.

At the recent summit, Kim, a known chain smoker, was no light-and-puff and acknowledged his failed povertyfor-nukes economy by advising his counterpart President Moon Jae-in to fly into Pyongyang because “our oads are bad.”

Kim showed his other face—that of a sophisticated, knowledgeable leader during the summit but with the usual security idiosyncracies. He reportedly brought his own pencil and pen.

Everything he touched was wiped off for fingerprints’ record and had his own toilet so that “the waste he left behind cannot be diagnosed for health prognosis.”

It seems the once irascible, saber rattling leader has shifted 360 degrees to a fine diplomat-statesman interested in bringing back his hermit state to a “normal one with foreign investments.”

Finex free enterprise Zoilo ‘Bingo’ Dejaresco III He probably realized that raising his nation’s nuclear capability at the expense of the people’s stomach and prosperity would eventually sow the seeds of its own destruction. He would have created his own national security risk.

Analysts claim Kim is studying the economic reforms of former straight jacketed economies like China and Vietnam which became GDP growth performers to suit his own designs.

North Korea’s recent liberalization of state-owned firms resulted in a respectable GDP growth of 3.9 percent.

Is the change for real?

Kim, who assumed leadership in 2011 after his father’s death, had proven his philosophy of byunging or “parallel advance” correct—having achieved both nuclear capability and a working economy go together. By posturing that North Korea can obliterate cities in South Korea, Japan and the United States with nuclear-armed ballistic missiles, the ploy resulted in bringing his foes to the negotiating table.

Now, Kim is toying with a “denuclearization gambit” in exchange for military security and lifting of economic sanctions, a subject that will likely be raised at the scheduled meeting with President Donald J. Trump.

The sudden turnabout from the heinous Mr. Hyde, however, has its share of skeptics.

Economy

A4 Friday, May 18, 2018 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

PSA needs ₧30.48B to fund six-year statistics program

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By Cai U. Ordinario

@cuo_bm

he national government needs to spend some P30.48 billion to implement existing and new statistical programs in the next six years, according to the Philippine Statistics Authority (PSA).

Under the Philippine Statistical Development Program (PSDP) 2018 to 2023, National Statistician Lisa Grace Bersales told the BusinessMirror on Thursday that the PSA has yet to identify where the funding will be sourced.

Bersales, however, said she believes only a portion of the amount, around P2 billion to P3 billion a year, will be financed by the national budget. The amount will cover core surveys, such as the Family Income and Expenditure Survey, Census of Population and Housing, and Labor Force Survey, among others.

“In my opinion, the core surveys should really come from GAA [General Appropriations Act] like the censuses and the surveys of the PSA, because in my personal opinion, we should be proudly saying that the government has funding for data for its policies,” Bersales said.

Bersales added that the PSA Board, chaired by Socioeconomic Planning Secretary Ernesto M. Per-

nia, instructed PSA to craft implementing rules and regulations to identify the funding mechanisms for the PSDP. Based on the presentation by PSA Assistant National Statistician Candido J. Astrologo Jr. on Thursday, the amount will cover over 900 statistical development programs.

Over a third or 30.3 percent will be used for population and housing statistics; some 20 percent will be used for agriculture and agrarian reform statistics; 14.5 percent will be spent on data for environment and natural resource statistics; 11.7 percent for other data; and 10.4 percent for industry, trade and investment statistics.

The data that will be created under PSDP 2018 to 2023 will help address 162 of the 232 data requirements for the Sustainable Development Goals (SDGs) and 394 of the 503 data needed to ensure the country’s meets its Philippine Development Plan (PDP) targets.

Further, the majority of the data, or 63.7 percent or 596 statistical development programs, are considered high priority, while 20.1 percent or 188 statistical development programs have no prioritization.

Around 14.6 percent or 137 statistical development programs have a medium priority, while 1.6 percent or 15 statistical development programs have low priority.

Bersales said that what can help keep PSDP costs down are efforts to innovate, particularly in the use of administrative data that are currently available.

These administrative data are readily available and provide information about Filipinos’ education levels, which can be obtained from school records or tourist arrivals, which can be obtained from immigration cards.

“We just have to do a quality assessment, enforce a quality framework to make sure that all of these admin forms are appropriately filled up with exactly the same time frame, because we noted [that] sometimes, the administrative data, you cannot have the same timeframe,” Bersales said.

Meanwhile, Pernia said the PSDP will also address data requirements internationally, such as the Core Regional Indicators, Big Data, the SDGs and various statistical commitments, including the Cape Town Global Action Plan for Sustainable Development Data and the Asian and Pacific Civil Registration and Vital Statistics Decade.

Pernia said the biggest challenge for the PSDP is in meeting the data requirements to monitor the PDP. This has mandated the PSA to release an annual report in keeping with the results matrixes of the PDP. With this, Pernia and Bersales disclosed that the PSDP’s release is accompanied by a draft Executive Order that will mandate all agencies to implement the plans and programs in the PSDP. “With the challenges faced by the Philippine Statistical System brought about by rapid change in technology, emerging demands for various indicators, compliance to the country’s international commitments and the dynamics in the international statistics community, it is crucial that each sector understands its roles in the production, dissemination and use of statistics,” Pernia said.

“As the chairman of the PSA Board, I commit to ensure that the PSDP will achieve its vision of having a solid, responsive and innovative Statistical System for an empowered Philippines by 2023.

I will see to it that the statistical development programs are implemented on schedule, within the budgets, and that these programs produce better statistics needed for better policy-making and making lives better,” he added.

The PSDP contains statistical programs and activities in the Philippine Statistical System (PSS) to inform the PDP, SDGs and Asean Integration, among others.

www.businessmirror.com.ph

Enabling law needed to add nuke power in energy mix

By Butch Fernandez @butchfBM

& Lenie Lectura

C

ongress needs to fast-track the passage of an enabling legislation for the country to develop nuclear technology as an “alternative energy” source, Sen. Sherwin T. Gatchalian said on Thursday, citing the lack of legal framework to add nuclear power in the energy mix.

Currently, the Department of Energy (DOE) is studying the possibility of adding nuclear power to the country’s energy mix.

Gatchalian, who chairs the Senate Committee on Energy, however, noted there is “a wide range of issues we need to explore and thresh out before we can accurately measure the true potential of nuclear technology” as an alternative energy source in the Philippines.

Should the Philippines decide to pursue adding nuclear power to the energy mix, the senator suggested that a comprehensive legal framework on the use of nuclear power would first need to be crafted to tackle issues, such as: (a) the structure and powers of the regulatory body; (b) licensing, inspection and enforcement; (c) radiation protection; (d) sources of radiation and radioactive material; (e) safety of nuclear facilities; (f) emergency preparedness and response; (g) transport of radioactive material; (h) radioactive waste and spent fuel; (i) nuclear liability and coverage; (j) nonproliferation and physical protection; (k) export and import controls; and (l) physical protection.

In a news statement, Gatchalian acknowledged that the Philippines still “has a lot to learn from more advanced countries with respect to the development of nuclear technology as

Philippines renews push for Asean DRRM database

By Rea Cu

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@llectura

@ReaCuBM

he Philippines is urging its Association of Southeast Asian Nations peers to build a region-wide database on disaster-risk reduction management (DRRM) to facilitate the sharing of information on mitigating the effects of climate change, and ensure timely cooperation among them in the face of calamities.

Finance Secretary Carlos G. Dominguez III said that, despite “existing capacity constraints,” the Philippines is now spearheading this initiative by sharing information with its private-sector counterparts to enable better coordination in times of disasters and other emergencies.

The finance chief issued the call to action after he and his fellow finance ministers and the central bank governors in the Asean underscored the importance of strengthening their respective countries’ resilience against natural disasters during their recent joint meeting in Singapore.

In a joint statement issued after their meeting, the participants stated that the resilience of the Asean memberstates against natural disasters “is important for sustaining growth, as well as protecting our people’s well-being.”

Dominguez added that, as stated in the Joint Statement of the Fourth Asean Finance Ministers’ and Central Bank Governors’ Meeting, the regional bloc has launched a program to coordinate the sharing of disaster-risk financing, with its first phase completed in June last year.

This region-wide disaster-risk insurance facility, with funding support from the German development institutions GIZ and KfW, is “a pioneering Asean project that could be adopted in other parts of the world,” Dominguez said.

He added that the Philippine government is carrying out its disaster-risk management measures with a sense of urgency to best safeguard the country’s vulnerable communities against climate change.

“Within the existing capacity constraints, we are building databases and constantly improving on the quality and amount of data available to identify vulnerabilities and manage risks, Dominguez said.

He added: “This is a continuing effort. Down the road, we are encouraging our partners in the Asean to participate in building a region-wide database for disaster-risk management and possibly institutional structures that will enable timely cooperation in the face of calamities.”

Aside from setting up a disaster-risk management database that involves digitizing government assets and infrastructure, the Philippines is also pushing legislation that will institutionalize disaster-risk financing strategies, such as reinsurance and government-sponsored risk pools to enable communities to swiftly get back on their feet in the event of calamities, Dominguez said.

According to the Department of Finance, pilot studies for a parametric insurance scheme covering the country’s most vulnerable local government units are now being undertaken, among others.

a national power resource.”

He noted that, at present, the country’s only existing nuclear energy body is the Philippine Nuclear Research Institute (PNRI) under the Department of Science and Technology, whose functions center around radiation and nuclear research and development.

“All of the gaps in our nuclear energy legal framework would first need to be addressed by passing comprehensive legislation,” Gatchalian said.

The Philippines, he added, has yet to ratify three key international nuclear conventions, namely the Convention on Nuclear Safety, the Joint Convention on the Safety of Spent Fuel Management and the Safety of Radioactive Waste Management, and the amendment to the Convention on Physical Protection of Nuclear Material.

M o r e o v e r, t h e l a w m a k e r said a strong national framework on nuclear power “must be compliant with international standards on safety, security, safeguards and liability.”

Gatchalian participated in a study tour earlier this month to learn about the current nuclear technologies of certain European countries. He was part of the delegation led by Senate President Aquilino L. Pimentel III and joined by DOE Undersecretary Donato Marcos, chairman of the Philippines Nuclear Energy Program Implementing Organization, and Dr. Carlo Arcilla, director of the PNRI. Among the sites the delegation visited were the International Atomic Energy Agency (IAEA) Office of Legal Affairs and the IAEA Seidersdorf Laborary—both in the Vienna, Austria—and the Slovenia Nuclear Safety Administration and the Krsko Nuclear Power Plant, which are both found in Slovenia.

House bloc wants 2nd round of SSS pension hike to push through in 2019

By Jovee Marie N. dela Cruz

T

@joveemarie

he Makabayan bloc in the House of Representatives on Thursday filed a resolution mandating the distribution of the second tranche of Social Security System (SSS) pension increase effective January 1, 2019.

In House Joint Resolution 22, the bloc said the increase is needed to cushion the impact of the Tax Reform for Acceleration and Inclusion (TRAIN) law and to provide social protection to pensioners.

“Whatever benefit the P1,000 pension increase might have provided to the pensioners was already easily wiped out by the higher cost of food and other commodities with the implementation of TRAIN law in January 2018,” the House bloc said.

On January 16, 2017, the lower chamber approved House Joint Resolution 10 to increase the monthly pension of the SSS pensioners by P2,000 under the Social Security Act of 1997 to be given in two tranches: the first tranche amounting to P1,000 to be starting January 2017 and the second tranche amounting to P1,000 to be given to the pensioners in January 2019.

The resolution remains pending in the Senate Committee on Government Corporations and Public Enterprises since January 18, 2017.

However, in February 2017, President Duterte approved P2,000 increase in the SSS pension, with the initial P1,000 increase effective retroactively in January 2017, but, the second tranche or the additional P1,000 to be implemented in year 2022 or earlier.

“There is an increasing clamor among the SSS pensioners and their families to immediately implement the second tranche of the pension increase,” it said.

As of October 2017, there are 36 million members of SSS and 2.3 million pensioners.

For his part, Party-list Rep. Carlos Isagani T. Zarate of Bayan Muna said it is “insensitive” for the SSS leadership to claim that it will not release the P1,000 second tranche without a corresponding increase in the members’ contribution.

“Without appropriate and immediate intervention, the SSS will fail in its role to provide basic economic security for the people, curb poverty, provide economic stability, redistribute income and preserve important social and individual values. Delaying the release of the second tranche SSS pension increase will mean further suffering among many SSS pensioners, so the pension increase must be implemented this coming January,” Zarate said.

Agriculture/Commodities BusinessMirror

www.businessmirror.com.ph

Editor: Jennifer A. Ng • Friday, May 18, 2018

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Earnings from coco-oil exports to drop by 20%

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By Jasper Emmanuel Y. Arcalas @jearcalas

evenues from coconutoil exports could decline by at least a fifth to $1.2 billion due to lower international prices, according to the Philippine Coconut Authority (PCA).

In terms of volume, however, PCA Administrator Romulo J. de la Rosa said coconut oil shipments for 2018 could rise by 8.46 percent to 1 million metric tons (MMT).

“We can hit 1 MMT of coconut oil exports this year. But if prices will remain at their current levels, then we can expect lower receipts, even if we ship 1 MMT,” de la Rosa told the BusinessMirror.

Receipts from coconut oil shipments expanded by 30.56 percent to $1.504 billion last year, from $1.152 billion in 2016. Coconut output in 2017 rose by nearly 17 percent year-on-year.

The United Coconut Association of the Philippines (Ucap) told the BusinessMirror that the industry is targeting to ship 1 MMT of coconut oil this year as local production is expected to sustain its recovery and rise further.

The Ucap said coconut output would expand by 8.6 percent to 2.607 MMT in copra terms this year, from the previous year’s 2.4 MMT. De la Rosa said total production may surpass the 14.06 billion nuts recorded in 2017 due to better weather conditions.

“Weather conditions are better

this year compared to last year.

We experienced more rainfall this year which could help boost coconut productivity. We will have a better harvest this year,” the PCA chief said.

The price of coconut oil in the world market declined for the 28th straight month in March on higher Philippine output as well as the global vegetable oil glut.

P r ice mon itor i n g re p or t s from the PCA showed that the international price of coconut oil sank and remained below the $1,100 per metric ton (MT) quotation at the start of May. As of May 10, the coconut oil quotation in Rotterdam was pegged at $1,085 per MT. The World Bank has already slashed its forecast for the average price of coconut oil this year by 20 percent to $1,275 per MT, from its earlier projection of $1,593 per MT due to higher than expected production.

The latest report from the World Bank showed that the average price of coconut oil in the first quarter fell by 25.51 percent to $1,258 per MT, from $1,689 per MT recorded in the same period last year.

On a monthly basis, the average quotation of coconut oil in April reached $1,138 per MT, recover ing f rom a 28 -mont h low of $1,124 per MT recorded in March.

However, the April average price of coconut oil is nearly 28 percent lower than the $1,580 per MT quotation recorded in the same month of 2017.

The average price of coconut oil in 2017 reached $1,603 per MT, 8.67 percent higher than the previous year’s average of $1,475 per MT in 2016, according to the World Bank.

Coconut fa r mers a re now reeling from the drop in copra prices in the first quarter. During the period, local production recovered and rose by 8.45 percent on an annual basis.

Coconut output in the first quarter reached 3.333 MMT, higher t han t he 3.073 MMT recorded in the same per iod last year, data from the Phili p p i n e St at i s t i c s A ut ho r it y (PSA) showed.

“This was a recovery from the effects of the dry spell in 2016 and the increased application of salt fertilizer provided by the PCA in the Davao region,” the PSA said in a report.

“More nuts were harvested due to adequate rains during the fruit development stage in Soccsksargen and the recovery from Typhoon Nina that occurred in 2016 in Bicol region,” it added.

The PSA said coconut “was pr ic e d 1 5. 8 8 p e rc e nt lo w e r this year as a result of higher production.”

The average price of coconut in the January-to-March period was pegged at P7.46 per kilogram, lower than the P8.86 per kg recorded a year ago.

Alaska dive fishermen plead for relief from sea otters

PHL eyeing to export more agri A goods to Papua New Guinea

By Elijah Felice E. Rosales @alyasjah

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he Philippines is targeting to ship more farm goods to Papua New Guinea in a bid to revive its dormant trade activities with the tiny Pacific country.

In a roundtable with Papua New Guinea Prime Minister Peter O’Neill and Ministry of Finance James Marape on Wednesday, some of the country’s top business executives inquired on the trade and investment opportunities that could be utilized between the two economies. For one, Manila is seeking to bring in more processed food to Papua New Guinea in a bid to activate their underdeveloped trade relations.

Total value of traded goods between the Philippines and Papua New Guinea improved by 10.02 percent in February to $18.56 million, from $16.87 million during the same month last year. In January it was significantly higher at $61.2 million, up by 1.83 percent from the previous year’s $60.11 million.

However, Philippine exports to Papua New Guinea was only at $1.63 million in February, and even lower at $1.44 million in January, in spite of better trade activity during that month. This was why Trade Secretary Ramon M. Lopez is keen on exporting

not only processed food to Port Moresby, but also electronics, machineries and equipment, and packaging materials and appliances.

“We are committed in having Papua New Guinea as a strategic economic partner through greater bilateral trade and investment ties, as well as substantive engagements in the Apec [Asia-Pacific Economic Cooperation]. We are optimistic that even as we develop broader links of friendship between our two countries, we can expand opportunities for trade and investment,” Lopez said.

The Department of Trade and Industry is also inviting its Papua New Guinea counterpart to engage in a bilateral economic dialogue through the Joint Economic Commission.

As for the Pacific country, it is looking closely into investment opportunities in agricultural products, as well as oil and gas exploration in the Philippines.

O’Neill said Manila and Port Moresby can agree on an agricultural cooperation, in which the latter was invited to produce rice in the former’s vast farm lands that are not utilized well due to its small population.

“We want to promote rice in Papua New Guinea, and we want it be a Filipino partnership rather than anyone else,” the Prime Minister said.

Agriculture Secretary Emmanuel F. Piñol welcomed

the idea, and simplified the process by which the agricultural cooperation can be carried out. “Our relationship with Papua New Guinea in terms of agriculture will be simple. We will train their people, help them develop their areas and, in return, they will assure that we will have enough rice for our people,” he said.

That way, Piñol believes there will be mutual benefit for the two Apec membereconomies. “We can help them produce their requirements and export to us the surplus.

We can be assured of a steady rice supply. Philippine land resources are finite, but the population is growing too rapidly [that] the offer to use Papua New Guinea land for our rice makes sense,” he added.

Top business executives from International Container Terminal Services, First Pacific Co., LT Group of Co., SL Agritech, Jollibee Food Corp., Double Dragon, DMCI, Frabelle and SM Holdings Inc. were in attendance at the roundtable.

A couple of Philippine firms engaged in fishing, such as RD Fishing Ltd. and Frabelle, have business establishments in Papua New Guinea.

The Pacific country will be hosting this year’s Apec Summit.

President Duterte, along with a group of business delegates, is also scheduled to visit Papua New Guinea in November.

NC HOR AGE , A l a s k a — Northern sea otters, once hunted to the brink of extinction along Alaska’s Panhandle, have made a spectacular comeback by gobbling some of the state’s finest seafood—and fishermen are not happy about the competition.

Sea otters dive for red sea urchins, geoduck clams, sea cucumbers—delicacies in Asia markets—plus prized Dungeness crab.

They then carry their meals to the surface and float on their backs as they eat, sometimes using rocks to crack open clams and crab. The furry marine mammals, which grow as large as 100 pounds (45 kilograms), eat the equivalent of a quarter of their weight each day.

Phi l Doher t y, head of t he Southeast Alaska Regional Dive Fisheries Association, is working to save the livelihood of 200 southeast Alaska fishermen and a $10-million industry but faces an uphill struggle against an opponent that looks like a cuddly plush toy.

Fishermen have watched their har vest shr ink as sea otters spread and colonize, Doherty said.

Divers once annually harvested 6 million pounds (2.7 million kilograms) of red sea urchins. The recent quota has been less than 1 million pounds (454,000 kilograms).

“We’ve seen a multimilliondollar fishery in sea urchins pretty much go away,” he said.

Jeremy Leighton of Ketchikan dives for sea urchins from his boat.

He looks for plump specimens 3.5 to 4.5 inches (9-11.4 centimeters) in diameter, making sure they’re not too big.

“If it’s like a cow tongue, it just doesn’t fit on a sushi roll,” Leighton said. In a bed holding

In this May 21, 2016, file photo, a pair of northern sea otters float on their backs in the small boat harbor at Seward, Alaska. AP Photo/Dan Joling, File

50,000 pounds (22,680 kilograms) of the spiny shellfish, he might harvest 10 percent.

Sea otters are not as discriminating. If sea otters have discovered the bed, Leighton finds broken shells on the ocean floor and a handful of sea urchins hidden in rock crannies.

“That’s when you know you’re in trouble,” he said.

Patrick Lemons, Alaska chief of marine mammals management for the United States Fish and Wildlife Service, said the federal Marine Mammal Protection Act limits the agency’s response. Sea otters in southeast Alaska are not listed as threatened or endangered, but the agency cannot intervene to protect commercial fisheries until a species is at “optimum sustainable population.”

“Sea otters are still colonizing southeast [Alaska] and are significantly below ‘carrying capacity’ down there,” Lemons said.

Carrying capacity is the number of animals a region can support without environmental degradation.

The agency could develop local management plans within the region with Alaska Natives to protect the catch of subsistence

shellfish, which traditionally has included crab, clams, abalone and other species.

Sea otters are the largest members of the weasel family. To stay warm, they rely on the densest fur on the planet.

Their luxurious pelts made them a target for hunters, starting with Vitus Bering as he explored the North Pacific in the 1700s.

Russian and US hunters over 150 years virtually wiped out sea otters until the signing of an international treaty to protect northern fur seals and sea otters in 1911.

In the 1960s Alaska’s wildlife agency moved more than 400 sea otters from the Aleutian Islands to southeast Alaska to reintroduce them to their historic range.

A count in 2000 estimated 12,000 animals. The last count in 2012 estimated 27,500 animals, a growth rate of 12 percent to 14 percent annually. Fishermen fear the population will double again in six years.

Hunting is one of the only checks on sea otters, but under federal law, only coastal Alaska Natives can kill them. There’s no season or bag limit, but federal rules severely restrict how pelts may be used. AP

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The World BusinessMirror

Friday, May 18, 2018

Mideast conflicts connected by competing power brokers

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he modern Middle East has been plagued by ruinous wars: country versus country, civil wars with internecine and sectarian bloodletting, and numerous eruptions centered on the Israeli-Palestinian conflict.

But never in the last 70 years have they seemed as interconnected as now with Iran and Saudi Arabia vying for regional control, while Israel also seeks to maintain a military supremacy of its own.

Russia, the United States and Turkey make up the other power brokers in a region, where not only wars but proxy battlefields within those wars are on a feverish and hostile footing.

The ongoing wars in Syria, Yemen, this week’s mass killing of Palestinians by Israel in Gaza, Turkish-Kurdish hostilities, and the potential for an all-encompassing war sparked by an Iranian-Israeli conflagration in Syria or Lebanon, all have tentacles that reach across borders and back again.

Suggestion in recent years of a Sunni/Shiite schism across the Middle East and Persian Gulf appears much less a factor than the jockeying of the key actors with the most military, financial and diplomatic muscle who are trying to shape the region in their image, or at least to the satisfaction of their national security and various leaders’ hubris.

Here’s a look at each of the main power players, whom they are aligned with, and what their ultimate goals are.

Israel

What’s at stake: Direct conflict with Iran has been simmering and briefly looked like it might burst into full-blown conflagration after Israel launched a blistering bombardment of Iranian positions in Syria, killing Iranian fighters after an alleged Iranian rocket barrage toward its positions on the annexed Golan Heights.

The exchange followed several earlier suspected Israeli strikes on Iranian positions in Syria.

Israel sees Iran as its mortal enemy and “existential” threat.

Conflict with Iran would likely drag in Tehran’s ally, Hezbollah.

A n Israeli-Hezbollah conf lict could play out in southern Lebanon and northern Israel, with each side warning it will strike across the opponent’s country.

Israel is bolstered by unprecedented support from US President Donald J. Trump. Israel is determined to suffocate the Iran nuclear deal; Trump withdrew from the accord and days later sent his daughter and son-in-law to preside over the US Embassy

move to disputed Jerusalem, a move that angered the Arab and Muslim worlds.

Bloodshed at the Gaza border may have revived global opprobrium against Israel for use of disproportionate live fire against unarmed protesters, killing dozens; but Trump’s backing gives it reason to feel emboldened.

Behind the scenes, Israel is building relations with Gulf nations also opposed to Iran.

What it wants: A much-weakened Iran, the continuation of the Gaza blockade—which is also imposed by Egypt—with a ferociously controlled border, and no concessions to the Palestinians with regards to land for peace.

Iran

What’s at stake: The rapprochement with America under President Barack Obama is now ashes.

Sanctions relief, running to hundreds of billions of dollars, is at risk, as Washington targets Tehran again, though a nuclear deal may be salvaged with European Union nations, Russia and China.

Iran has built up alliances to counter Israel and Saudi Arabia.

In Syria the presence of its troops and allied Shiite militias has been critical to President Bashar alAssad’s survival.

In Yemen it is allied to Shiite Houthi rebels battling Saudibacked forces. Tehran strongly supports the Palestinian cause, though its ties with Hamas have weakened.

What it wants: Iran has pretty much accomplished a goal its officials have often trumpeted, building a corridor of power from Iran across Iraq, Syria and Lebanon to the Mediterranean.

In all those countries, it funds and arms powerful Shiite militias and has enormous political inf luence. It seeks a continuation of the nuclear deal with the other global signatories, hoping to bolster its financial coffers.

There has already been discontent in Iran that sanctions relief was not f lowing to the people.

Russia

W h at ’s at sta ke: P resident Vladimir Putin has ruthlessly filled the US vacuum in Syria, waging an air campaign that has left a trail of dead in Aleppo and Ghouta among other locations.

Moscow’s support of Assad turned the tide of war in his favor when defeat seemed imminent

An elderly Palestinian man falls on the ground after being shot by Israeli troops during a deadly protest at the Gaza Strip’s border with Israel, east of Khan Younis, Gaza Strip, on May 14. AP/Khalil Hamra

several years ago. Russia is also allied to Iran. But it also hosted Israeli Prime Minister Benjamin Netanyahu for its Victory Day celebrations hours before Israel’s attack on Iranian positions in Syria, raising speculation the two were quietly coordinating so that Israel kept well away from Moscow’s forces and planes in Syria.

What it wants: Russia’s regional goal is to sustain and build on the major foothold it now has in the Middle East, beyond Syria, notably where the US might have once before.

United States

What’s at stake: “ Traditionally we’ve tried to play a role of fireman in the Middle East.

Now we’re playing the role of arsonist,” says Ilan Goldenberg, a former State Department and Pentagon official who runs the Mideast program at the Center for a New American Security.

That seems to have plenty of currency in the region now. The Palestinians have essentially cut off contacts and say the US cannot be an honest broker. So Trump’s promised “deal of the century” doesn’t seem to be in the cards for now. Trump withdrew from the Iran deal.

He has by his side hawks like National Security Adviser John Bolton, who has advocated for attacking Iran and regime change.

Trump can’t decide on Syria—to keep the US presence or not? He doesn’t seem intent on ruffling Putin over Syria unless chemical weapons rear their head again, which prompted US-led air strikes last month.

The administration is ver y closely allied to Saudi Arabia and Crown Prince Mohammed bin Salman and seems set to continue following Riyadh’s lead on Yemen.

Washington may get an unpleasant surprise if a heavily pro-Iran government emerges in Iraq after last week’s elections.

What it wants: The administration is in complete synch with Israel and Saudi Arabia. Saber-rattling with Iran could escalate, and it shows no urgency in pushing for Israel-Palestinian negotiations.

Saudi Arabia

What’s at stake: Also emboldened by Trump, the Saudi crown

prince is determined to make his mark. Riyadh is spending billions of dollars in the Yemen war, leading a Gulf Arab coalition aga inst Ira ni a n-a l l ied Sh i ite Houthi rebels. Thousands of civilians have been killed by Saudi air strikes and starvation in the world ’s worst humanitarian crisis. Prince Mohammed has made vague threats that the kingdom will build a nuclear bomb if Iran starts its program again.

Saudi Arabia sees Iran as the single greatest threat to the region and its competition for the dominant role it wants for itself.

The kingdom is closely tied to Trump, who chose it as the destination for his first overseas trip as president, and it has been backchanneling with Israel. At the same time, it has lost influence in Syria, Iraq and Lebanon after placing bets on losing partners or failed gambits.

What it wants: Emasculation regionally of Iran and to be the dominant power in the region.

Turkey

What’s at stake: For President Recep Tayyip Erdogan, it’s almost exclusively about the Kurds, who in an alliance with the US helped defeat the Islamic State group in Syria and in the process captured a quarter of the country.

This has infuriated Turkey to the point it launched a military campaign seizing a pocket of northern Syria, and it threatens to attack Kurds all the way to the Iraqi border.

T he presence of US forces among the Kurds is perhaps the only thing that’s held Turkey back this long. Ankara views Kurdish fighters in Syria as an extension of the Turkish Kurdish PKK, which it considers a terrorist group.

Turkey also gives vocal support to the Palestinians, while relations are at a nadir with Israel.

Turkey has also offered to take in wounded Palestinians from Gaza for treatment.

What it wants: To break Kurdish strength and, above all, prevent a Kurdish autonomous ministate in Syria along its border. It also wants some say in postwar Syria where it has supported opposition fighters and Islamist groups opposed to Assad. AP

Ex-Sec. of State Tillerson warns democracy at risk

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ASHINGTON—Former Secretary of State Rex Tillerson took a veiled shot at President Donald J. Trump on Wednesday, warning that a growing national crisis of ethics and integrity has put American democracy at risk.

I n re m a r k s to g ra d u ate s o f t h e Virginia Military Institute (VMI), Tillerson lamented assaults on facts that he said would lead to a loss of freedom if not countered. And he said that only societies able to pursue the truth and challenge alternate realities could be truly free.

“When we as people, a free people, go

wobbly on the truth, even on what may seem to be the most trivial of matters, we go wobbly on America,” Tillerson said. “If we do not, as Americans, confront the crisis of ethics and integrity in our society among our leaders in both public and private sector, and regrettably at times in the nonprofit sector, then American democracy as we know it is entering its twilight years.”

Tillerson did not mention his former boss by name on Wednesday but alluded to some policies of the Trump administration by decrying those who neglect or ignore long-standing allies or deny that free trade

is an engine of global growth.

“We must never take these long-held allies for granted,” he said, in apparent reference to Trump overruling the advice of his former top diplomat and others, and withdrawing from some international agreements, threatening import tariffs.

O n free trade, which Trump has questioned, Tillerson noted that much of the developed world saw it as a net positive.

“But many here at home still have a way to go to fully embrace the global economy and to recognize that with these changes

come both challenges and opportunities,” he said.

Tillerson was asked to be VMI’s commencement speaker before Trump fired him by tweet in mid-March after months of tension between the men over policies, including climate change, trade, the Middle East and North Korea.

Trump later explained that he didn’t see eye to eye with Tillerson, the former ExxonMobil CEO, and had more in common with Central Intelligence Agency chief Mike Pompeo, who took over as secretary of state. AP

www.businessmirror.com.ph

Lawyer: Malaysia police seize items from ex-premier Najib

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alaysian police seized personal items from former leader Najib Razak’s house in an overnight search, his lawyer said, as Prime Minister Mahathir Mohamad’s week-old government seeks evidence into wrongdoing at state fund 1Malaysia Development Berhad (1MDB).

Authorities took several boxes of “negligible” items like handbags, clothes and personal belongings as evidence but not any documents, Harpal Singh Grewal, Najib’s lawyer, said by phone.

Pol ice ment ioned possible money-laundering offenses but didn’t mention 1MDB, he said. “ T hey sea rc hed t he whole house, possibly looking for documents and things like that, but there was nothing there, to be honest,” Grewal said. He added the police took items “to show they did something.”

Grewal said there’s “no indication at all” that Najib would be arrested. “We just wait and see,” he added.

Najib’s shock election loss last week to Mahathir saw the Barisan Nasional coalition evicted from power after six decades, and he was subsequently barred from leaving the country.

It comes as Mahathir accelerates efforts to revive a probe into 1MDB, which was set up in 2009 under Najib’s watch to support domestic infrastructure projects.

The premier said on Wednesday he will seek to recover funds diverted from 1MDB by reaching out to authorities in Switzerland, the United States, Singapore and other jurisdictions. A parliamentary committee in 2016 identified

at least $4.2 billion in irregular transactions by the fund.

“The main issue is of corruption, particularly 1MDB, as well as the money that was embezzled by the previous government,” Mahathir told reporters on Wednesday.

“I have been briefed by the police and the auditor general and it is very clear that there were more wrongdoings committed than what was known by the public and me.”

Mahathir, who was Najib’s longterm ally and who is back in power after a prior stint as premier from 1981 to 2003, accused him on the campaign trail of being a “thief ” over alleged graft at 1MDB. Najib has denied any wrongdoing and was cleared by the attorney general at the time, while the fund has repeatedly denied any misconduct.

The 1MDB scandal spawned global probes as investigators tracked a money trail stretching from Switzerland to Singapore and the US. The Department of Justice alleges that $3.5 billion from the fund went missing.

Swiss prosecutors said on Tuesday they wanted to start talks with investigators in Malaysia as soon as possible to better coordinate various criminal probes into the sprawling case.

Singapore aut hor ities a lso weighed in. The city-state has cooperated extensively with their Malaysian counterparts on past requests on the matter and is ready to extend further assistance, the Monetary Authority of Singapore and the Commercial Affairs Department said in an e-mail early on Wednesday. Bloomberg News

Unapologetic Trump Jr.: Not troubled I met with Russian

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ASHINGTON—Questioned intently by a Senate comm ittee, President Dona ld J. Tr ump’s son struck a firmly unapologetic tone, def lected many queries and said he didn’t think there was anything wrong with meeting a Russian law yer at Trump Tower in hopes of election-season dirt on Hillary Clinton, according to transcripts released on Wednesday.

Donald J. Trump Jr., speaking in a closed-door interview last year with the Senate Judiciary Committee, said he did not give much thought to the idea that the June 9, 2016, meeting was part of a Russian government effort to help his father in the presidential race.

“I don’t know that it alarmed me, but like I said, I don’t know and I don’t know that I was all that focused on it at the time,” Trump Jr. said in response to a question about whether he was troubled by the prospect of Russian support, the transcripts show.

The committee on Wednesday released about 2,500 pages of inter v iew transcr ipts and other documents tied to the New York meeting, which Trump Jr. attended with the expectation of receiving compromising information about his father’s Democratic opponent.

The transcripts reveal some new details about how the meeting—a key point of interest in special counsel Robert Mueller’s investigation into potential coordination between Russia and the Trump campaign—came to be arranged and efforts afterward to mitigate the political damage arising from its disclosure.

They also show the disappointment of Trump Jr. and other campaign figures, including brotherin-law Jared Kushner and campaign chairman Paul Manafort, when the meeting failed to yield the harmful Clinton information

they thought they’d get—as well as the increasing panic of one of the meeting participants who feared his reputation would be ruined by his role in setting it up.

The transcripts also ref lect an aggressive Russian outreach to Trump before and after the New York meeting, including an effort to arrange a follow-up gettogether that November with a member of the transition team.

The follow-up never happened.

T hough Trump Jr. may have been dissatisfied w ith how the meeting turned out, the interv iew and his ow n e-mails make clear that he had high hopes going in.

A f ter music publ ic ist Rob Goldstone promised him “very interesting” information from a well-connected Russian lawyer, including documents “that would incriminate Hillary,” the president’s oldest son responded via e-mail, “if it’s what you say I love it.”

Throughout the private Senate interview, Trump Jr. appeared unapologetic about having taken the meeting, saying at one point, “I didn’t think that listening to someone with information relevant to the fitness and character of a presidential candidate would be an issue, no.”

Trump Jr. issued a statement on Wednesday pronouncing himself candid and forthright with the committee, but the transcripts show that he responded time and again to questions by saying he could not recall or had no idea.

He answered “No, I don’t recall ” when asked if he had spoken w ith his father about the Russia investigation. He also did not remember the attendance at the meeting of a Russian-A merican lobby ist who— in a quirky sartorial detail revealed in the transcripts—was wearing pink jeans and a pink t-shirt that day. AP

The World BusinessMirror

www.businessmirror.com.ph

Growth risks mount E in Malaysia with economic policy in flux

Friday, May 18, 2018

A7

Europe hardens vs Trump with US on trade and Iran

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alaysia’s economy grew at its slowest pace since 2016, underscoring risks that will only heighten this year as the newly installed government of Mahathir Mohamad overhauls policy.

Expansion eased to 5.4 percent in the first quarter, lower than the 5.6-percent median estimate in a Bloomberg survey, according to central bank data released on Thursday.

Governor Muhammad Ibrahim said the outlook remains “ favorable” even though the number came in lower than the bank ’s 2018 forecast range of 5.5 percent to 6 percent.

Key details of the GDP report:

n GDP rose 1.4 percent from previous three months; n Private consumption rose 6.9 percent from year ago, supported by rising wages; n Exports climbed 5.8 percent; and n Current-account surplus widened to 4.5 percent of GDP. Mahathir, 92, moved swiftly to fulfill campaign promises after last week’s election win, effectively scrapping a goodsand-services tax (GST) without

announcing specific measures to recoup revenue losses.

M a l ay s i a w a s r i d i n g a n economic boom and financial markets haven’t suffered the losses of emerg i ng- m a rket peers recently, underpinned by strong domestic spending, an improving budget deficit and a current-account surplus.

“Going forward, second-half growth will be weighed by a high base effect, pending clarity on some of the domestic reform measures by the new government,” said Julia Goh, an economist at United Overseas Bank Ltd. in Kuala Lumpur.

The government must still outline how it will raise enough revenue to fill the GST gap in order to keep the budget deficit under control.

The Finance Ministry said on Thursday the move will be “cushioned by specific revenue and expenditures that shall be announced soon,” with plans

also to reintroduce a salesand-services tax. GDP could get a boost of 0.2 to 0.4 percentage points as government policies—such as the GST move, reintroducing fuel subsidies and raising minimum wages—spur consumer spending, according to Oxford Economics.

The tax change will also affect inflation and the central bank may change its forecasts later this year, the governor said.

“The slowdown in growth will likely be temporary. Household spending remained robust and is poised to strengthen further with the scrapping of GST. Investment, which stalled a head of e lec t ion s, shou ld pickup—buoyed by sustained strength in oil prices, less tolerance for corruption and strong onshore sentiment,” said Tamara Henderson of Bloomberg Economics.

A re ve nue sque e z e m ay prompt the government to cut back on spending, while a review of infrastructure projects could put a halt on construction, curbing growth in the economy.

“It’s encouraging to see that the new government is already taking action to try and rationalize unnecessary and unproductive government expenditure,” Goh said. “We think that would actually help in keeping the fiscal balance in check.”

Bloomberg News

Trump shows flexibility on N. Korea talks after Kim’s threat

T

he White House distanced itself from the hard-line North Korea stance of President Donald J. Trump’s top security adviser, indicating his administration is committed to keeping next month’s summit with Kim Jong Un on track.

Press Secretar y Sarah Huckabee Sanders told reporters on Wednesday that she was “not aware” of the administration advocating a so-called Libya model, in which North Korea would quickly ship his nuclear weapons program to the United States.

North Korea had earlier attacked National Security Adviser John Bolton for tr ying “to force our unilateral nuclear abandonment” and threatened to walk away from the June 12 summit in Singapore. “I haven’t seen that as a specific thing,” Sanders said. “This is the President Trump model. He is going to run this the way he sees fit.”

The decades-old debate over how a n d w h e n No r t h Ko re a g i ve s u p its nuclear-weapons program has reemerged in the run-up to Trump’s firstof-its-kind meeting with Kim. While Kim

has agreed to discuss “denuclearization,” he wants a phased approach and an end to Trump’s “maximum-pressure” campaign of international sanctions and military threats. “ T h e f a c t t h a t t h e Tr u m p administration seems to be showing some flexibility is a welcome development because its posture on denuclearization thus far has been too inflexible to lead to a meaningful deal with North Korea,” said Mintaro Oba, a former US State Department official who worked on North Korean issues.

“The worst thing the White House could have done was to escalate the situation.”

Markets shrug

F inan c ial m a r ke t s s h ru g g e d o f f concern that talks between the US and Nor th Korea would be derailed.

South Korea’s benchmark Kospi index was 0.4 percent lower as 2 p.m. in Seoul. Asked later on Wednesday if the summit would go ahead, Trump said, “We’ll have to see.”

He said that the administration was still pursuing denuclearization and that

US officials hadn’t yet been notified of North Korea’s concerns, which were expressed in a statement by First Vice Foreign Minister Kim Kye Gwan.

“We haven’t been notified at all,”Trump said. The Libya approach described by Bolton is particularly controversial in North Korea because leader Muammar Qaddafi was killed by North Atlantic Treaty Organization-backed rebels two years after the last remnants of the program were delivered.

“World knows too well that our country is neither Libya nor Iraq, which have met miserable fate,” Kim Kye Gwan said.

Both Bolton and US Secretary of State Mike Pompeo have said the US wants North Korea’s “complete, verifiable, irreversible denuclearization.”

Pompeo, who has traveled to Pyongyang and met with Kim twice in the past few months, has also indicated the US may initially accept a deal that puts the American homeland out of danger.

Still, Bolton cautioned on Wednesday that the summit could end quickly if Kim wasn’t committed to abandoning his arsenal. Bloomberg News

uropean Union (EU) leaders presented a determined front to stand up to United States President Donald J. Trump’s threats to penalize EU businesses and scupper the Iran nuclear deal. At a dinner in the Bulgarian capital Sofia, the bloc’s 28 leaders were united in the face of what EU President Donald Tusk called the “capricious assertiveness” of the Trump administration.

On trade, all agreed to back the European Commission’s insistence that it won’t negotiate unless the United States grants a permanent exemption from tariffs on steel and aluminum, according to an EU official present.

Tusk told leaders that the EU would continue fighting for the rules-based international system, despite recent US decisions on climate change, tariffs and on Iran, the official said.

Europe’s mood is shifting from shock at Trump’s “America First” agenda to a resolve to close ranks and assert its own position. TransAtlantic tensions came to a head with the US president’s decision announced last week to

pull out of the landmark Iran nuclear accord which the remaining signatories—Russia, China, France, Germany and the United Kingdom, along with the EU—all say is working. “Europe must do everything in its power to protect, in spite of today’s mood, the transatlantic bond,” Tusk told reporters on Wednesday in Sofia. “But at the same time we must be prepared for scenarios where we’ll have to act on our own.”

Energy ties

Leaders, including German Chancellor Angela Merkel and French President Emmanuel Macron, agreed that the commission, the EU’s executive, is prepared to discuss trade concerns with the US including deepening energy ties and reform of the World Trade Organization (WTO) once a permanent waiver is in place, the official said.

The bloc would also discuss WTOcompatible ways to improve reciprocal market access for industrial products including cars to avoid a trade war. Merkel, Macron and

British Prime Minister Theresa May were due to brief fellow leaders on Iran, after failing to persuade Trump to stick with the accord. The EU agreed to begin work to protect European companies negatively affected by the US decision to withdraw and reimpose sanctions, while also addressing concerns about Iran’s ballistic-missile program and wider role in the Middle East.

The EU’s proposals are its most assertive yet in dealing with the US, whose withdrawal from the 2015 agreement threatens to scupper the treaty and has worried leaders it could put Iran back on a path to developing nuclear weapons.

EU discussions on how to keep the deal— and economic relations with Iran—alive, have focused on: keeping Iran’s oil and gas industry viable; the creation of special purpose vehicles to allow for transactions between the regions; developing more contracts between European companies and their Iranian counterparts; and how to protect European firms that continue to work with Iran. Bloomberg News

A8

Friday, May 18, 2018 • Editor: Dennis D. Estopace

The Regions BusinessMirror

www.businessmirror.com.ph

HUDCC Chief: Marawi City reconstruction needs P77B

H

By Rea Cu

@ReaCuBM

ousing and Urban Development Coordinating Council (HUDCC) Chairman Eduardo D. del Rosario announced on Thursday that the reconstruction of war-torn Marawi City may entail a budgetary requirement of P77 billion, about P7 billion more than what the HUDCC chief cited in April.

Del Rosario, who also leads Task Force Bangon (rise) Marawi told reporters it will take around P55 billion to rehabilitate the most a f fec ted a rea s out side ground zero. About P22 billion is estimated for the reconstruction of ground zero itself, he added.

“I think the highest will fall to P80 billion, but by this month we will know for sure,” del Rosario said.

Earlier in the week, the Philippine government with officials from Japan signed a ¥2-billion (about P472.47 million at current exchange rates) grant agreement

to support ongoing efforts for the reconstruction and rehabilitation of the war-torn capital of the province of Lanao del Sur. That agreement was signed on Tuesday by Finance Secretary Carlos G. Dominguez III, on behalf of the Philippines, and Yoshio Wada, chief representative in the Philippines of the Japan International Cooperation Agency, on behalf of Japan.

Del Rosario said that, aside from grants and loans from other countries, the pending issuance of the Marawi bonds will also fund the reconstruction of the war-torn city.

“I think the funding source will be the Marawi bonds that was mentioned by Dominguez,” he added. News reports quoted Del Rosario as saying in April that the four-year rehabilitation plan for the city requires only P72 billion.

The first phase for the rehabilitation of Marawi City is expected to break ground on June 16 with the bidding for the development plan for the rehabilitation to happen by next week. The bidding process will be through a Swiss challenge, according to del Rosario.

Dominguez earlier said the Philippine government has, so far, identified 902 priority projects and activities for the rehabilitation and recovery of Marawi City and its surrounding areas with close to half of the funding to be drawn from the National Disaster Risk Reduction and Management Project Fund.

The other sources of financing for these priority projects under the Bangon Marawi Comprehensive Rehabilitation and Recovery Plan will come from the various government agencies, the regional government of the Autonomous Region in Muslim Mindanao, the city government of Marawi, non-governmental organizations, development partners and the private sector.

The BMCRRP was approved early-April.

Govt to beef up military presence against Abu Sayyaf Group in Sulu

T

HE military will beef up its forces in Sulu by another battalion of soldiers as it pushed its deadline of beating the Abu Sayyaf Group (ASG) by the end of this year.

The decision to deploy a battalion of elite Army Scout Rangers followed the order of Armed Forces Chief of Staff Gen. Carlito Galvez Jr. to Brig. Gen. Cirilito Sobejana for the Joint Task Force Sulu to finish off the ASG until December.

Sobejana said an advance party from the Ranger battalion is already in the province with the main body coming from Marawi City in Lanao del Sur arriving within the next couple of days.

With the planned deployment of the Rangers, Sobejana will be commanding 11 battalions, all with the single mission of ending the notoriety of the ASG until the end of this year.

“I already have 10 battalions, so it will already be 11 battalions, plus I have specialized units here,” Sobejana said, declining to mention the specialized units.

Early this week, Galvez visited Sulu wherein he prodded the soldiers there to remain focused in their operations, while giving premium to the rescue of all the victims still held by the ASG in the province.

The terrorists in Sulu are still holding at least 10 kidnap victims.

During a command conference, Galvez also ordered Sobejana to work for the defeat of the terrorist group until December.

“Best effort. We are doing everything. We are using all available war materiel, our resources, ground mobility, air and sea,” Sobejana said. “It is hard to make a timeline because sometimes it leads to hasty actions. We will do our best effort but very deliberate.”

He added that, with Galvez’s instructions, they were already reassessing their battle plan against the ASG and will “probably make some adjustment” in their strategy.

According to him, the terrorists still number about 300 in Sulu. Rene Acosta

Bill to make Central Luzon PHL’s BIMP-Eaga tax new job generator–Villanueva travel exemption

S

EN. Emmanuel Joel J. Villanueva sought on Thursday the immediate passage of a bill creating the Regional Investment and Infrastructure Corp. (RIIC) of Central Luzon.

In a statement, Villanueva said he joined the Senate Committee on Government Corporations and Public Enterprises hearing on the said measure chaired by Sen. Dick Gordon held at Hiyas ng Bulacan Convention Center in Malolos, Bulacan, on Thursday.

Under Senate Bill (SB) 1325 filed

by Gordon, the creation of the Central Luzon investment firm will decongest Metro Manila by dispersing industries to the Clark Freeport Zone, Freeport Area of Bataan, Subic Bay Freeport Zone and other Special Economic Zones, and promote foreign investment and infrastructure development in the region.

“This measure will significantly impact governance, way of doing business and, ultimately, the life of every Filipino here in Central Luzon, in all its seven provinces, most especially here in our beloved province of Bulacan,” said Villanueva who hails from Bulacan.

The solon also underscored that SB 1325 is an importance piece of legislation because it will create an investment and infrastructure corridor in

Central Luzon to encourage investors to put up their businesses and attract entrepreneurs to open up business opportunities.

Central Luzon, particularly Bulacan, has lots of assets, let’s use them, Villanueva said in Tagalog. It would be a waste if we don’t benefit from our aim of easing the life of our compatriots, he added.

“Kailangan lang po ng mangangasiwa, itong RIIC [It only needs a manager, this RIIC],” Villanueva said. “Iyan po ang magiging daan para ma-maximize po natin ang ating mga imprastruktura” [The RIIC would be our vehicle so we can maximize our infrastructure].”

He believes the RIIC will revitalize the tempo of economic activities and reduce regional inequalities and usher socioeconomic development in Central Luzon.

“Pauusbungin po natin dito ang mga negosyo at trabaho para hindi na kailangang pumunta ng Metro Manila o mag-abroad pa ang ating mga kababayan para lang humanap ng trabaho [We will witness the birth of businesses and jobs so our compatriots wouldn’t need to go to Metro Manila or overseas].

He believes SB 1325, if passed, would make Central Luzon the country’s new job generator.

renewed

D

AVAO C I T Y—Ma l ac a ñ a ng extended for another five years the tax exemption granted to travelers going to any focus areas of BIMP-Eaga using Mindanao and Palawan gateways.

Bimp-Eaga refers to the Brunei Darussalam-Indonesia-Malaysia Philippines East Asean (Association of Southeast Asian Nations) Growth Area, “a cooperation initiative by the four BIMP-Eaga nations to accelerate economic development in areas that are geographically distant from their national capitals, yet in strategic proximity to each other,” according to the Asian Development Bank.

Groups immediately welcomed the move, coming seven months later when the previous five-year exemption expired in October last year.

T he Mi nd a n ao Development Authority (MinDA), government’s socioeconomic planning unit for Mindanao, said it reaffirmed government commitment to the subregional cooperation.

The MinDA said President Duterte signed this week the memorandum order exempting all passengers originating from Mindanao and Palawan, “by air and/ or sea, originating from all international ports in Mindanao and Palawan to any destination within the BIMP-Eaga, from paying an exit travel tax in the next five years.” Manuel T. Cayon

CURTAIN OF COLOR Local and foreign tourists take photos of a house during the annual Pahiyas Festival in Lucban, Quezon,

on May 15. The festival is a yearly ritual offering to honor San Isidro Labrador, the patron saint of farmers. Locals believe that prayers to San Isidro will bring bountiful harvest. The festival got its name from the Tagalog word hiyas, which means “jewel.” Pahiyas connotes a precious offering. Bernard Testa

DND to form part of PHL Rise ‘management board’

By Jonathan L. Mayuga @jonlmayuga

A

representative from the Department of National Defense (DND) will have a seat in the soon-to-be-formed Protec ted A rea Ma n agement Board (PAMB) for the portion of the Philippine Rise that is now a marine protected area (MPA).

Crisanta Marlene Rodriguez of the Department of Environment and Natural Resources (DENR) told the BusinessMirror that the agency will immediately work for the creation of the PAMB that will craft a Protected Area Management Plan for the portion of the Philippine Rise.

Rodriguez, Director of the DENR’s Biodiversity Management Bureau, explained that portion is now a Protected Area by virtue of a Presidential Proclamation signed

by President Duterte while on board the BRP Davao del Sur off the coasts of Aurora province on Tuesday.

The Presidential Proclamation declares as a no-take zone t he 17,0 0 0 - he c t a re B e n h a m Bank, the shallowest portion of the underwater plateau. Another 300,000 hectares is also now a f isher ies-management area where fishing activities will be highly regulated.

Being a Protected Area under Republic Act 7586 (National Integrated Protected Areas System, or Nipas Act), the Philippine Rise MPA will undergo a “stronger management regime.”

“Because of the geographical location and security requirement involved, we will need the DND as a member of PAMB,” Rodriguez said. She added the DENR will immediately initiate “inception meetings” to formalize the creation of the PAMB for the Philippine Rise MPA.

Pamb

THE PAMB is the highest policymaking body of a protected area.

A PAMB is, under normal circumstances, composed of the DENR and other government

agencies like the Department of the Interior and Local Government, Department of Tourism and National Commission on Indigenous People, concerned local government units, academe, people’s organizations and non-governmental organizations (NGOs) and representatives of academe or community organization.

In the case of the Philippine Rise, Rodriguez said the membership of the DND or any of the concerned Armed Forces of the Philippines unit is necessary. It takes a Philippine Navy ship to ensure safe passage to the Philippine Rise every time there is a scheduled scientific expedition.

According to Rodriguez, the DENR will also move for the crafting of a management plant that will involve various stakeholders, including the scientific community, and other development partners, such as NGOs and people’s organizations.

Lauded

THE ocean-conservation advocacy group Oceana Philippines lauded the proclamation of the Philippine Rise MPA, the country’s newest territory 250 kilometers off Aurora province.

There are reports that foreign fishing vessels have been sighted to catch commercially viable fish like tuna in the Philippine Rise.

Declaring portions of the Philippine Rise as an MPA, which designates a certain area strictly as a no-take zone and another area as a fisheries-management area, is a big boost to the protection and conservation of the ocean and the country’s seafood security in the face of climate change a nd t he i mpac t of over f ishing, Oceana Philippines said in a statement.

“This is a remarkable event, especially for the protection of our oceans and ensuring seafood security for future generations, amid the growing threats of climate change and overfishing,” Marianne Pan Saniano, a marine scientist for Oceana Philippines,

was quoted in the statement as saying.

Saniano said that the protection of the Philippine Rise was achieved through the pooled efforts of government agencies and advocates, who supported the urgent call to protect the Philippine Rise and especially declare the Benham Bank as a strict protection zone.

“When we went to Benham Bank in 2016 with our government scientists, navy and coast guards, we saw terraces of corals, as far as the eye could see,” Saniano said.

“We still have such a vast and pristine coral-reef ecosystem within the Philippine territory, which we still need to protect.”

Spawn

IN 2016 government scientists reported 100-percent coral cover in several sampling sites during an expedition in Benham Bank and documented diverse species of reef fishes. Scientists said that the Philippine Rise is also the spawning site of the Pacific Bluefin tuna, one of the most expensive fish in the world.

Lawyer Gloria E. Ramos, Vice President of Oceana in the Philippines, commended Duterte and the government officials and partners from the civil society and private sectors who worked tirelessly to protect the Philippine Rise.

“The presidential proclamation is much awaited, as it paves the way for the conservation, management and protection of corals, fisheries and the rich biodiversity in the iconic place. It is now subject to the governance structure and requirements under the [Nipas],” Ramos said. “This is much needed to protect fragile marine habitats, address food security and increase the resiliency of our marine ecosystems to the impacts of climate change.”

She emphasized that the proclamation is a highly significant event, as 2018 is the International Year of the Reef, and the month of May, the Month of the Ocean.

The Nation BusinessMirror Friday, May 18, 2018

Editor: Vittorio V. Vitug

A9

After deployment ban lifting, 5,000 OFWs set to fly to Kuwait

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By Samuel P. Medenilla

@sam_medenilla

N initial batch of 5,000 overseas Filipinos workers (OFWs) is expected to fly to Kuwait soon, a day after the Department of Labor and Employment (DOLE) officially lifted its total deployment ban to the Arab country on Thursday.

In an ambush interview, Labor Secretary Silvestre H. Bello III said the 5,000 OFWs were supposed to be bound for Kuwait before the Philippines imposed a total deployment ban there in February.

He said another 15,000 would follow suit once the processing of their documentation with the Philippine Overseas Employment Administration is completed.

“But this time we will be stricter with their deployment.... We will be strict in requiring them to take the necessary training from their agencies before they are deployed,” Bello said.

In anticipation of illegal recruiters who might take advantage of the resumption of the deployment to Kuwait, Bello said, he created a task force who would go after them.

Bello issued the lifting of the total ban in compliance with the order of President Duterte on Wednesday for the DOLE to resume the deployment for all categories of OFWs to Kuwait.

“I just signed the order lifting the ban

on the deployment of skilled workers and professionals, as well as the deployment of household service workers [HSWs],” Bello told reporters in an ambush interview on Thursday.

The labor chief said the Kuwaiti government already expressed its gratitude for the normalization of the deployment in Kuwait.

Initially, Bello said, he was considering of only allowing the deployment of skilled and professional Filipinos to Kuwait until they could assess the implementation of their newly signed memorandum of understanding (MOU) with the Kuwaiti government to boost the protection of Filipino HSWs. However, he decided to end the fourmonth deployment ban in Kuwait upon President Duterte’s instructions.

“The President was impressed by the goodwill gesture of the Kuwaiti government, when they agreed to sign the MOU, and they also complied with the condition that justice should be given to Joanna Demafelis,” Bello said.

No budget for guns, bulletproof vehicles for prosecutors–DOJ

By Joel R. San Juan

@jrsanjuan1573

J

US T IC E Sec ret a r y Men a rdo I .

Gueverra said on Thursday that he would support prosecutors who would decide to arm themselves for selfdefense following last Friday’s ambushslay of Quezon City Deputy Prosecutor Rogelio Velasco.

Guevarra issued the remark when sought for comment on whether arming the prosecutors would somehow discourage such killings, many of which have remained unresolved.

“Yes, I will support prosecutors getting firearms for self-defense,” Guevarra said.

However, the Department of Justice (DOJ) chief stated that the agency has no funds to shoulder the procurement of firearms for prosecutors.

“I wish we could with bulletproof vehicles to boot, but we have to live within our means, and just do our job well,’’ he added.

Guevarra noted that carrying firearms for self-defense may be necessary for those who are handling high-profile and sensitive cases and have been receiving death threats.

On Tuesday former Integrated Bar of the

Philippines commissioner and now Partylist Rep. Salvador B. Belaro Jr. of 1-Ang Edukasyon called on the DOJ to procure and issue bulletproof vests and other protective gears to prosecutors who are handling sensitive cases.

Velasco was the sixth prosecutor to be summarily executed under the Duterte administration.

In September 2017 Quezon Province Assistant Prosecutor Reymund Luna was shot dead while he was on his way home after attending a court hearing.

Rizal Provincial Prosecutor Maria Ronatay was gunned down in a similar attack on July 18, 2017, while driving along Ortigas Avenue Extension in Taytay, Rizal.

Other prosecutors who were also killed by still unidentified assailants were Caloocan Assistant State Prosecutor Diosdado Azarcon, Assistant Quezon City Prosecutor Noel Mingoa, who was ambushed on January 11, 2017, and City Prosecutor Rolando Acido.

Surigao City Prosecutor Manuel Tesiorna Jr., on the other hand, survived an attack by a motorcycle-riding gunman outside his house in Canlanipa Homes, Surigao City, on February 6.

Cimatu stops construction activities on Boracay Island

By Jonathan L. Mayuga @jonlmayuga

E

nvironment Secretary Roy A. Cimatu has ordered a stop to all construction activities on Boracay Island, following reports that a property firm has flattened a mountain near the Eco-Village Multipurpose Gym on Boracay Island despite ongoing rehabilitation effort on the pollution-challenged resort island.

Cimatu’s order came after a Facebook post on the illegal activity went viral, criticizing the Duterte administration for allowing the further destruction of the forest, while causing the eviction of informal settlers and establishments owned by local businessmen on the beachfront.

Boracay is currently closed to tourism activities for six months, which started on April 26, to fast-track the rehabilitation and allow Boracay Island’s degraded environment to recover.

An island on Malay, Aklan province, Boracay is faced with various environmental problems, including water pollution and degradation of its forests and wetlands that cause massive flooding. The island is also facing a looming garbage crisis because of poor solid-waste management in excess of its capacity to dispose the garbage outside the island.

In rehabilitating Boracay, the Task Force Boracay is bent on dismantling illegal forest occupants and have started the dismantling of illegal structures on some of the island resort’s wetlands.

A10 Friday, May 18, 2018 • Editor: Angel R. Calso

Opinion BusinessMirror

www.businessmirror.com.ph

editorial

Transparency at DOT

A

fter getting her marching orders from President Duterte to review all Department of Tourism (DOT) contracts and check whether everything had gone through the proper bidding process, Tourism Secretary-designate Bernadette Fatima Romulo Puyat wasted no time in ordering the suspension of the “Buhay Carinderia” program of actor and Tourism Promotions Board (TPB) COO Cesar Montano. The TPB is the marketing arm of the tourism department.

The tourism chief said she already informed Montano that she is stopping the government food tourism program, after hearing his explanation about the controversial P80-million Buhay Carinderia project. In an interview with the BusinessMirror, Romulo Puyat said: “I will be writing our resident auditor at the DOT and the Commission on Audit [COA] central office to audit the Buhay Carinderia project and other projects of the TPB.” Montano was appointed to his post via presidential directive, instead of being nominated by the Tourism Congress as provided by law. His appointment in December 2016 had been questioned by industry stakeholders, especially in the wake of allegations of financial irregularities and charges of nepotism. Montano didn’t submit his resignation letter, but the tourism chief said “he’s already on a holdover capacity. I leave it up to the Tourism Congress to submit names for consideration for the TPB Board, and for them to elect the new COO.” The Buhay Carinderia project was formally launched at the Rizal Park Hotel (formerly the Army Navy Club) last April 11, with the aim of raising the profile of carinderia (street cafés) and street food in the Philippines and in other countries. The project got congtroversial after published reports (not in the BusinessMirror) alleged that the TPB has released checks, signed by Montano and former Tourism Secretary Wanda Corazon T. Teo, amounting to P80 million, in full payment for the Buhay Carinderia project in March and April, before the project actually started.

In an earlier interview, Romulo Puyat asked “why was Montano issuing checks when the project hasn’t even started yet? And did the project go through proper bidding?” The tourism chief said she wanted to know the details of the budget and objectives of the program and make sure that it went through the proper process. She said: “I cannot implement a project that was not transparent or did not go through the proper process.”

Sen. Nancy S. Binay earlier filed Senate Resolution 326, calling for a probe into the allegations of TPB employees against Montano. In her resolution, the senator noted the 24 irregularities and indiscretions allegedly committed by the TPB chief: P11.2-million concert in January, where Montano performed with his nieces; the hiring of his own staff including a stuntman, personal assistant, family friend and relatives with salaries ranging from P14,000 to P48,000; misuse of DOT funds by demanding reimbursements of expenses; vacations during supposed official business trips.

Montano has denied the allegations made by TPB employees in a complaint submitted to the Presidential Action Center. “The allegations made against the Office of the COO, through a complaint filed anonymously, are baseless and untrue,” he said.

Montano also said the controversial Buhay Carinderia project is above board. However, in line with the President’s desire to wipe out the curse of corruption in the government, and following his “one whiff of corruption and you’re out” warning to government employees, the DOT and the COA must make public the audit of the P80-million Buhay Carinderia and other projects of the TPB. Romulo Puyat also needs to show her resolve to stamp out corruption at the DOT. Since 2005

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spox

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ver the past three months, nearly all of the Commission on Elections (Comelec) resources and efforts have been directed at ensuring the success of the 2018 synchronized barangay and Sangguniang Kabataan elections. It gives me great satisfaction to say now that all the work bore good fruit.

On election day itself, all but less than a handful of the 177,565 polling precincts, distributed over 36,794 voting centers nationwide, opened on time. Those that did experience some last-minute hiccups—like poll watchers showing up with no identification cards—managed to get back on track quickly.

Overall, not a single failure of elections was declared, ensuring that in all the 41,943 barangays where elections were held—elections were suspended in the city of Marawi, in the aftermath of the fighting there—voters were able to make their choices known. In contrast, the 2013 barangay elections had 130 failures of elections.

Very significantly, while the occasional scuffle did break out in a few places, election day was not marred

by any significant violence. Throughout the election period, only seven violent incidents were confirmed to have been election-related; seven confirmed election-related violent incidents—or Ervis—which gave rise to a total of 13 confirmed deaths.

While, of course, one would be one death too many, it is still noteworthy that in the 2013 barangay elections, there were a total of 33 confirmed election-related fatalities.

Vote buying remained a problem very much in evidence, as it is in every election. The significant difference this time around was the fact that many vote-buying operations were nipped in the bud as a result of cooperation between concerned citizens and local authorities, particularly the Philippine National Police.

It seems to me that ever since the

Comelec successfully unseated some high government officials for vote buying a few years back, the model for successful anti-vote buying operations has been steadily improving, thanks in no small part to the increase in the number of mobile video-recording devices, a.k.a. cellphone cameras, and to heightened levels of voter vigilance and participatory zeal. At this point, it is difficult not to be optimistic about our chances at curbing vote buying significantly by 2019.

Of course, all this isn’t to say that the 2018 barangay and Sangguniang Kabataan (BSKE) elections were all roses. Two very significant areas of concern stood out. The first has to do with voters claiming to be unable to find their names on the lists of voters.

As in every electoral exercise, the 2018 BSKE saw some people complaining that their names had vanished from the lists. Needless to say, many of these complaints made the news, but sadly with very little context. For context therefore: There are several reasons people might claim to not find their names on the lists—by far the most frequent reason is that they had been “deactivated”—election jargon for people whose voting records have been rendered dormant by their failure to vote in two successive elections—and were simply unaware of the fact.

The second most common reason

is that the complainers might have simply not looked for their names in the proper places. In many instances, the people who complain do so after checking the list posted outside the precincts where they voted in the last elections. And then they give up, missing the chance to find out that maybe they’d been merely reassigned to a different voting precinct—which isn’t an uncommon occurrence.

And then, of course, there are the voter-denial operations launched by political operators. It is a documented fact that on election day, some unscrupulous characters loiter around the voting centers with fake lists of voters, waiting to ambush voters who haven’t declared allegiance to their patrons. Inevitably, these fake lists are populated with known supporters; everyone else is left off the list. In this way, some voters are mislead into believing that they are not going to be allowed to vote, thus increasing the chances of victory of some candidates.

Vote-buying and voter-denial operations notwithstanding, the 2018 barangay and Sangguniang Kabataan elections still went off largely without a hitch, and I’m going to enter this one in the books under the “Win” column. We, as a democratic society, needed this win. And, as a grunt in the Commission on Elections, I am very humbled for having played a small part in getting it.

Biggest fear for world growth is fear itself as markets fret

By Anchalee Worrachate & David Goodman | Bloomberg View

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inancial markets risk becoming the tail that wags the dog.

While policy-makers insist the global economy’s lowinflation expansion looks intact despite a first-quarter slowdown, investors are presenting challenges. Rising bond yields, a jump in the price of oil beyond $70 a barrel, skittish stocks and cracks in credit could all end up undermining growth.

The worry is that unless markets start buying into the more optimistic outlook, their pessimism will become self-fulfilling by causing consumers and companies to lose confidence and slow spending. The Bank for International Settlements warned last year that the next recession will, perhaps, be triggered by a financial cycle bust, mirroring the events of 2001 and 2008.

The threat is all the more pressing given the value of financial assets keeps getting bigger. The ratio of assets to gross domestic product is now 10 times, compared to six times in early-1990s, according to Stephen Jen, the CEO at Eurizon SLJ Capital.

“Central banks intentionally fueled the asset prices in the current cycle, through financial repression, to stimulate the real economy,” London-based Jen said. “Given the inflated global asset prices including equities, bonds and real estate, it would not at all be

surprising that a synchronized correction in the global financial markets triggers a global slowdown this time around.”

Less rosy

Morgan Stanley strategist Andrew Sheets this week highlighted a disconnect between the firm’s expectation of an economic “cycle that is maturing, but not ending,” and the “decidedly less rosy” view of markets.

Sheets attributed the divergence to talk of synchronized global growth already being priced in, and an expectation among investors that they need to brace for the end of ultra-loose central bank policies, which have helped to deliver above-average asset returns despite below-average growth. The credit market already troughed earlier this year and the next asset to top out will probably be stocks, he said.

“By the third quarter this year, that’s when we think the forward earnings

for the S&P 500 stop going up,” Sheets told Bloomberg TV this week. “It will be difficult for the market to rally beyond that.”

While a recent Bank of America Merrill Lynch survey of fund managers showed the majority still favor risky assets, respondents demonstrated the lowest faith that the global economy will strengthen over the next 12 months since February 2016. Forty-one percent predicted a recession in 2019.

Investors should probably pay more attention to signs of stress in the financial markets than economic data. After all, the global recession of 2008 was preceded by six years of global expansion until the subprime crisis hit. The 2001 economic slump was triggered by the dotcom bubble burst and followed nearly eight years of synchronized global growth.

What our economists say...

“A raft of countries have reported GDP figures for 1Q in recent weeks and the picture for advanced economies is clear—growth hit the skids at the start of the year,” writes Jamie Murray, chief European economist for Bloomberg Economics in London. “But rather than a sign that the global expansion is running out of steam, the slowdown seems to be explained by bad weather and local idiosyncrasies. A rebound in 2Q looks likely.”

Signs in the market are currently

less positive than economic data. A BofA model, based on bond yields and the Standard & Poor’s 500 Index, suggests a 25-percent probability of a US recession in the next 10 months, up from 10 percent last year.

This week has also seen turbulence in markets in Argentina, Indonesia and Turkey. At least one economist is getting worried—Harvard’s Carmen Reinhart, coauthor with Kenneth Rogoff of This Time Is Different: Eight Centuries of Financial Folly, said on Wednesday that emerging markets are in worse shape now than during the global financial crisis in 2008.

A lot of investor attention is also focused on the Treasury yield curve for providing a recession warning, a signal that becomes more powerful when it’s combined with widening credit spreads.

Fed policy-makers must have watched these signs and wonder what it is the market is seeing that they don’t.

San Francisco Fed President John Williams said this week he’s “very positive” about the economic outlook both in the US and abroad.

Markets are often leading indicators of a broader downturn. Among all the 20-percent drops that have hit American stocks since the Great Depression, 10 preceded US recessions. Only four recessions occurred without a bear market warning, according to data compiled by Bloomberg.

Opinion BusinessMirror

www.businessmirror.com.ph

How secure are security guards?

Contesting the ‘Agua de Mayo’ Tito Genova Valiente

annotations Dr. Jesus Lim Arranza Continued from A1

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ven with the issuance of Department of Labor and Employment (DOLE) Order 174, the order ending contractualization, this illegal industry practice will continue to flourish, unless the government intervenes and punishes those who violate the law and exploit helpless security guards.

Security agencies are not covered by the order ending contractualization because these companies are considered contractors with substantial capital investments on tools and equipment to facilitate the performance and delivery of its contracts. In short, security agencies are not involved in labor, only contracting.

Cutthroat competition

But one major problem that is hounding the industr y is the prevalence of unfair competition from security agencies that offer cutthroat rates to corner certain contracts. Some security agencies offer very low rates and would not even charge administrative fees in their quotation to bring down their rates.

These agencies would, however, raise the funds for its administrative requirements from the funds allocated for the salaries and other benefits of its guards.

Thus, many guards posted on small business establishments, villages and warehouses, among others, are working 10- to 12-hour shifts without overtime pay. Many of them are also without social security protection, even if their security agencies are deducting Social Security System (SSS) and Pag-Ibig contributions from their salaries each payday.

With many Filipinos desperate to find jobs, these agencies practically have an unlimited supply of applicants who are willing to be exploited in exchange for a measly pay.

Moreover, there are security agencies that practically rob their guards of their hard-earned money.

Take for instance the retirement fund being paid by the principal (companies that engage the services of a security agency) to the security agency, supposedly to cover the retirement fund of their guards—are these funds being paid to their guards?

If a security agency, for instance, has a minimum number of years of service requirement for its guards to comply before they will be entitled to retirement benefits, what happens to their retirement fund if their guards resign before they can comply with the minimum number of years of service requirement?

Who keeps the fund?

The retirement fund is usually paid by the client to the security agency, especially among its big customers like banks, among others. And, depending on the turnover rate of agencies with their guards, security agencies are probably earning windfall profits even from their accumulated retirement fund alone.

Big customers are willing to pay all the benefits due to their guards, if only to be sure that the guards assigned to secure their properties are well trained and well equipped.

Unfortunately though, some security agencies are feasting on these funds, instead of their guards benefitting from them.

Some agencies don’t even conduct regular trainings for their guards, nor provide them with new and reliable firearms.

These illegal industry practices are affecting the operations of lawabiding security companies. The business reality is that the private security industry, like any other market sector, is competitiondriven.

And whoever offers the least rates for its services gets a better chance of getting contracts.

This is a given business norm, although there are also many customers who would not jeopardize quality of service to cost, like customers who are after value for their money.

Strong government intervention needed

And because of this industry reality, government intervention should be a must. It should closely monitor the industry and be watchful of security agencies that exploit their guards for their weaknesses and desperate need for money. The government should ensure that all security guards are covered by the social and retirement benefits provided by law. After all, the essence of EO 174 is to protect the interest of workers.

This is all a matter of determination on the part of the government. But for the law to have an impact on the industry, the DOLE should show its determination to weed out unscrupulous security agencies by punishing those that exploit their guards.

N

o one remembers when the rains during this month of May came. No one, now, bothers with those things. The weather has shifted: We have rains in summers and chilly mornings, as well. April is cruel only because of the memories of war and not the remembrance of temperature. August, which used to be dry, now is visited by typhoons. October does not have crispy air. December is not only cold but stormy as well, and when Christmas day comes, it becomes as hot as March.

May used to be the month when the first drops of rains were considered propitious. Grandparents would urge their grandchildren to run out and bathe in the rain. The old climate then made obvious the arrival of rains in May: March and April would be dry, hot. Then on the second or third day of May, dark clouds gathered above the horizons, and the observant in the community would assume the role of seer and forecast the coming of the rain. The first rain would come in shy droplets. As the children ran, the rain would cease, and bathers would be left with their arms sticky, their hair barely wet.

The timid ones would scamper back to their homes; the brave ones would stay on, kicking the tiny, muddy puddles that had formed on the ground.

In May of yesterdays, prayers answered: heavy drops of rain, almost without introduction, would start to fall, the sound of a sudden storm not enough to quiet the shrill screams of little boys and girls. Blessing from Heaven, the old ones intoned. God had, once more, fulfilled the cycle of seasons.

Ominous it was when the first rains remained on the level of gracious, small showers. That was not the water of May. The water of May had to be strong, persistent and without remorse.

We were told that the church in our town gathered the first rains of May to fill, each day, those fonts made of shells at the sacred entrances.

Tax Law for Business

A

S early as 1947, our Supreme Court had already characterized the gain or loss sustained by a stockholder of a corporation as a taxable income or a deductible loss. The same was reiterated in 2008 where the SC emphasized that any gain on the part of the stockholder is subject to income tax. On the part of a liquidating corporation, no tax shall be imposed, as the transfer in liquidation is not treated as a sale.

This pronouncement from the SC is actually anchored on the provision of our tax code. It is clearly

provided in Section 73(A) of the code that the gain realized or loss sustained by a stockholder is a tax-

That was how potent and divine the rains of May were.

This year the rains came. No one noticed at all it was already May, and the message from the divine above in the form of rains had come.

The month of May is not only known for the auspicious rains; it is also marked as the season of harvest.

In other parts of the world, May is springtime. In this part of the world, May is the time for fiesta and bounty, for young girls and old women to dress themselves for the pageants that memorialize the search for the Cross. May is when flowers are gathered and offered to the Virgin.

Rains are of nature, but what

Bring blessing to tithing

in gratitude a portion of everything God has given through tithing. “Every tithe of the herd and flock—every tenth animal that passes under the shepherd’s rod—will be holy to the LORD.” (Leviticus 27:32)

capital gains tax is a final tax on the presumed gain from the disposition of a property in exchange for shares of stock pursuant to Section 27 (D)(5) of our tax code.

In invoking this provision, one can assume that the BIR is looking from the viewpoint of the stockholder whereby it has all the characteristic of an outright sale.

At the CTA division level, however, the Court clarified that mere distribution of liquidating dividend on account of the dissolution of a corporation is not to be treated as sale for purposes of the imposition of capital gains tax. One of the reasons is that the conveyance of real property as a result of a valid dissolution is without any consideration. In sum, the CTA decision followed the

justification of the 2008 SC decision.

In view of the various justifications to exempt the liquidating dividends from tax on the part of the liquidating corporation, the CTA En Banc made a clear stand that the basis for liquidating dividends as not subject to tax is not because of the absence of income from or the absence of sale, disposition or conveyance of real property.

The main basis is that such transaction is subject to ordinary income tax on the part of the individual stockholders, or corporate-income tax for corporate stockholders. As the Court says, “the law is clear.

There is, therefore, no room for interpretation.”

Moving forward, while there may be various interpretations of the law

SERVANT LEADER

A

S we are about to commemorate that God is the very life through Pentecost Sunday, we should prepare ourselves and receive the Holy Spirit as a special gift. This special celebration reminds us that we all have the unifying Spirit and be with our Lord Jesus Christ.

It is truly indeed that such gift from the Almighty Father is the most precious gift that we have and that no one can take it out from us.

Having said that, it is now time for us to give back to the Lord

able income or a deductible loss. An expanded version of the same can also be found in Section 8 of Revenue Regulations 6-2008 whereby it is clarified that the capital gain or loss derived by stockholders in receiving liquidating dividends are subject to regular income-tax rates.

Viewed from the other perspective, however, the framing of the various statutory provisions in our tax code relating to taxation of sale of assets may provoke controversy as to the proper theory upon which to proceed in taxing stockholders on the receipt of liquidating distribution. For instance, in the recent Court of Tax Appeals (CTA) En Banc Case (1702), the Bureau of Internal Revenue (BIR) argued that the

about the politics and histories linked to May? What dates are significant to await in the month of May? Marx, Freud and Machiavelli were all born in May. That means we owe to this month of May a radical explanation of social change, the connection between biology and destiny and the shamelessly frank formula on how to manipulate power. Two pioneers in dance were born during this month: Isadora Duncan and Martha Graham. Duncan danced barefoot, and Graham reminded dancers that there was the ground to which they could always fall and not deny. Two popes belong to May: Pope Leo XIII and Pope John Paul II. Leo was the pontiff who witnessed the Church struggle against industrialization and modernization of the world; John Paul, the first non-Italian to be voted into power, struggled with the Church as it continued to define its role in a rapidly changing society.

In May Constantinople fell and was named Istanbul; The French in this month suffered a stunning defeat; and the French-Indochina war ended, a catastrophe that would hint at the fall of another empire, that of the Americans when they were defeated in the Vietnam War in the coming years.

The Renaissance ended during the month of May. It was also in May

“Therefore, I urge you, brothers and sisters, in view of God’s mercy, to offer your bodies as a living sacrifice, holy and pleasing to God—this is your true and proper worship.”

(Romans 12:1) It is now the opportunity that “each one must give as we had decided in our heart, not reluctantly or under compulsion, and bring our burnt offerings and sacrifices, our tithes and special gifts, what we have vowed to give and our freewill offerings, and the firstborn of our herds and flocks.” (2 Corinthians 9:7, Deuteronomy 12:6) Through Pentecost Sunday, we are all given an opportunity to be united with our risen Savior Jesus Christ. It is also our time to reflect all the gifts of God and that we are one with our Lord Jesus Christ, and are glorified with Him.

Rev. Fr. Antonio Cecilio T. Pascual

Tax treatment of liquidating dividends Atty. Ronald S. Cubero

Friday, May 18, 2018 A11

when Ho Chi Minh was born.

The Council of Nicaea met during the month of May. In this gathering, they finally declared Christ as divine and instituted the Nicene Creed, the prayer that we utter now: I believe in one God, the Father Almighty…”

The month of May, therefore, is the month of belief and disbelief, of creating versions and presenting subversions. If no one remembers the rains or any of these historical points and personages, then May will also be remembered when a country dropped all its rules, but made a population of nonreaders conversant enough to talk of supreme courts and to discuss “quo warranto” forever.

If we read the signages of the past as we read rains, it appears anything can happen in this country. The country and its people can either disappear without notice or raise itself up and be proud of itself with the new consciousness. It can also call everyone to action. It can reinvent integrity.

We cannot be timid before the rain, or we cannot even wait for the rain anymore. We can simply, like that council in Nicea, start to believe, believe in something that is powerful, unchanging, literate and less unpredictable as the rain, like the laws of lawyers. Like prayers.

E-mail: titovaliente@yahoo.com.

Let us all take this celebration as our opportunity to help our brothers and sisters in need and bring our blessings to tithing. Let us “honor the Lord with our wealth and with the first fruit of all our produce.”

(Proverbs 3:9) May the Almighty Father bless you and continue to prosper you with your generosity as “one who is faithful in a very little is also faithful in much.” (Luke 16:10) To know more about Caritas Manila, visit or follow us on Facebook: CaritasManilaInc. For your donations, please call our DonorCare lines 563-9311, 564-0205, 0999-7943455, 0905-4285001 and 0929-8343857. Make it a habit to listen to Radio Veritas 846 in the AM band, or through live streaming at www.veritas846.ph and follow its Twitter and Instragram accounts @veritasph and YouTube at veritas846.ph. For comments, e-mail veritas846pr@gmail.com.

if viewed from an interdisciplinary perspective, for taxation purposes, the term-liquidating dividend may only be viewed as not subject to tax on the point of view of the distributing corporation. But this is subject to tax on the part of the receiving stockholder.

The author is a senior associate of Du-Baladad and Associates Law Offices (BDB Law), a memberfirm of WTS Global.

The article is for general information only and is not intended, nor should be construed as a substitute for tax, legal or financial advice on any specific matter. Applicability of this article to any actual or particular tax or legal issue should be supported therefore by a professional study or advice. If you have any comments or questions concerning the article, you may e-mail the author at ronald.cubero@ bdblaw.com.ph or call 403-2001 local 350.