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Friday, May 19, 2017 Vol. 12 No. 218
6.4-PERCENT EXPANSION IN GDP LOWER THAN EXPECTED
‘PHL resilient despite slower GDP growth’ T
he 6.4-percent GDP growth in the first quarter may have fallen below expectations, but the Philippine economy showed signs of resiliency in expanding by more than 6 percent for seven straight quarters.
The government on Thursday released the official GDP data, which showed that growth in the first quarter of 2017 slowed from 6.9 percent recorded a year ago and
the previous quarter’s 6.6 percent. “Our first-quarter performance bodes well for the economy, as it is broadly in line with our 6.5-percent to 7.5-percent growth target for the
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Pernia: “We are somehow downcast because we were expecting something like around midpoint of 6.5 percent to 7.5 percent.”
year,” National Economic and Development Authority (Neda) Secretary Ernesto M. Pernia told reporters in a news briefing on Thursday. Continued on A2
Manila could kiss duty-free export privilege to EU good-bye soon By Butch Fernandez
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@butchfBM
he decision of President Duterte to reject grants from the European Union (EU) also put at risk the future of Philippine companies that depend on the tariff-free privilege they are enjoying in exporting to Europe. Senate sources familiar with the issue told the BusinessMirror that the danger from Manila’s abrupt decision to tell the EU it was declining further development aid from the bloc, which has been critical of the administration’s humanrights record, does not arise just from the loss of billions of pesos in development aid for the poor.
TRILLANES: ”Another reckless and whimsical decision of the Duterte administration.”
One senator noted the bigger challenge to the Philippines could arise from a subsequent decision by the EU—assuming it is piqued by relentless verbal attacks from the Executive branch—to cancel the EU’s Generalized Scheme of Preferences Plus (GSP+) incentives for developing countries. This
PESO exchange rates n US 49.7420
preferential trade scheme benefits exporters of some 6,000 products to Europe. The Philippines’s dutyfree exports to the EU was worth around €1.6 billion ($1.78 million) in 2016, according to EU delegation data. GSP, which was given to Manila after years of lobbying in European capitals, has benefited thousands of medium and small enterprises that export their goods at zero or minimal tariffs to Europe, the source, who asked not to be named, pointed out. Another Senate source confided they were validating reports that periodic review of the Philippines’s GSP privileges was scheduled this year, and some sectors had earlier expressed concern that
certain quarters in the EU might lobby to cancel the GSP on account of the Duterte administration’s relentless attacks on EU critics of how its war on drugs had caused so many deaths and alleged humanrights violations. To date, the EU has not signaled that it would tie the GSP to the rights issue, but the BusinessMirror source said this latest move —to “snub” further development aid, mostly grants—might deepen the souring of relations with the influential bloc and fuel the calls in Europe to scuttle the GSP trade privileges. Sen. Antonio F. Trillanes IV, a known critic of the President, See “Manila,” A2
SWING IN Peter Stojanovski of Macedonia groped for form at the ICTSI Manila Southwoods Championship at the Legends course in Carmona, Cavite. Stojanovski finished with a twounder 70, dropping to joint third at 132. It was Nilo Salahog who zoomed to the top of the $60,000 event, rattling off eight birdies against two bogeys for a 66 and a one-stroke lead. Story on C2. Nonoy Lacza
n japan 0.4489 n UK 64.5452 n HK 6.3892 n CHINA 7.2250 n singapore 35.7908 n australia 36.9633 n EU 55.5121 n SAUDI arabia 13.2649
Source: BSP (18 May 2017 )
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A2 Friday, May 19, 2017
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‘PHL resilient despite slower GDP growth’ Continued from A1
“It is, however, below than desiredly expected, and for this, we are somehow downcast because we were expecting something like around midpoint of 6.5 percent to 7.5 percent,” Pernia added. Data from the Philippine Statistics Authority (PSA) showed the services and industry sectors boosted GDP growth in the first quarter, expanding by 6.8 percent and 6.1 percent, respectively.
PSA data also showed that manufacturing buoyed the Industry sector by posting a year-on-year hike of 7.5 percent. The 20-percent decline in mining and quarrying activities, according to PSA data, tempered manufacturing’s performance during the period. Construction activity, which is under the industry sector, also decelerated to 8.2 percent, from last year’s 14.2 percent expansion. The agriculture, fishery and forestry sector recovered in the first
quarter, growing by 4.9 percent from last year’s -4.9 percent. Per nia cred ited Phi lippine economy’s performance during the per iod to the “reca libration” of government programs and a “changing of the guards”, coupled with healthy electionrelated spending. “Last year was high due to base effects, because of election spending the impact of which has already dissipated,” Pernia said. “ We’ve benefited from the
reforms put in place by the previous administration, and demonstrates the strategy of the Duterte administration to sustain good practices,” he added. On the demand side, Pernia said improving global demand allowed shipments of Philippine goods to expand by 32.3 percent in the first quarter, the fastest since the first quarter of 2010, when exports grew 14.3 percent. T he Ned a chief noted t he Philippines remains one of the
Duterte bans smoking in public areas By Elijah Felice E. Rosales
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@alyasjah
fter months of delay, Malacañang on T hursday announced President Duterte has signed an executive order (EO) outlawing smoking in public areas, transforming a former Davao City ordinance into a national policy. Presidential Spokesman Ernesto C. Abella said Duterte signed EO 26, which prohibits smoking in public places and public vehicles, whether stationary or in motion. It disallows minors to smoke, sell, or buy cigarettes or any other tobacco products. Also, vendors may not sell cigarettes in schools, public playgrounds, youth hostels
Europe. . .
Continued from A12
that the US is no longer able to communicate an established policy line, with diplomats attending presummit meetings with little or no guidance for talks. The result is little in the way of agreement, and a real risk the G-7 concluding statement will be “empty” with nothing substantial to say on climate or the economy, the official said. The European officials spoke on condition of anonymity because they are not authorized to speak publicly. “Even in areas where the Europeans have differences with the Trump administration, they would prefer a stable and predictable US counterpart with whom they can engage constructively to a
and recreational facilities, including those frequented by minors. Under EO 26, each building must have a designated smoking area (DSA) where smoking may be allowed. This may be in an open space, or a separate area with proper ventilation. Also, the DSAs should have no opening that will allow air to escape to the smoke-free area of the building or vehicle, except for a single door equipped with an automatic door closer. “The DSA shall not be located in or within 10 meters from entrances, exits, or any place where people pass or congregate, or in front of air intake ducts,” the EO read. In January Health Secretary Paulyn Jean B. Rosell-Ubial said
the President had asked her to draft the EO prohibiting smoking in public areas for a “100-percent smoke-free environment”. “The EO will actually mandate all agencies of the government, including local government, to implement a 100-percent smoking ban in all public places. It’s not just Metro Manila,” Rosell-Ubial said in an earlier interview. “It’s an order to the Executive branch. It’s up to the local government units to draft their, shall we call, ordinances to implement this EO,” Rosell-Ubial said. In 2015 a report by the World Hea lt h Orga ni zat ion ( W HO) revealed 22.7 percent, or 15.9 million of Filipino adults, are reported to be in tobacco use, with 40.3 per-
cent among men and 5.1 percent among women. The prevalence of tobacco use was more widespread in rural areas (25.3 percent) than in urban areas (22.1 percent). Overall, 18.7 percent, or 13.1 million of Filipino adults, smoke tobacco on a daily basis. The report, titled “Global Adult Tobacco Survey”, estimated 21.5 percent, or 3.6 million of Filipino adults, were exposed to tobacco smoke in enclosed areas at the workplace and 34.7 percent,or 24 million of Filipino adults, in enclosed areas at home. In spite of the positive outcome of the WHO report, the health department vowed to search for more ways to lower the number of smokers among Filipinos.
disorganized and crisis-ridden White House,” said Erik Brattberg, director of the Europe program at t he Ca r neg ie Endow ment based in Washington. White House officials are trying to shift the focus back to the president’s agenda, particularly the trip. On May 16, a day after reports emerged that Trump shared classified information with Russian diplomats, National Security Adviser H.R. McMaster briefed reporters on the president’s itinerary, yet the session was dominated by questions about the disclosures.
surrounding Trump’s alleged ties to Russia, wrecking efforts to foster a new era of partnership between their two countries. Allegations that Trump passed highly classified intelligence to Russian Foreign Minister Sergei Lavrov are intended to incite “anti-Russian sentiment”, he said, and those making such claims “either don’t understand that they are harming their own country, which means they are just dumb, or they understand everything and then they are dangerous and unscrupulous people”. While the Europeans are deeply unsettled by news that Trump shared secret information with the Russians—and without the consent of the ally that provided it—they are too dependent on cooperation built up over decades to even think of cutting off intelligence. “We continue to work together
and we have confidence in that relationship between us and the US, that it helps to keep us all safe.” Prime Minister Theresa May told reporters in London on Wednesday. France, Germany, Israel and Australia echoed that view. Other European officials said that relations with the US are going better than they thought they would when Trump was elected. One security official said he’s relieved that Trump has toned down his negative rhetoric on Nato. An EU official said next week’s summits should go fine even though underlying differences and tensions are unlikely to be overcome. The sheer unpredictability of Trump in the foreign-policy arena has become “a geopolitical wildcard”, according to Arun Pillai-Essex, an analyst at Verisk Maplecroft, a London-based political risk firm. Bloomberg News
Political schizophrenia
In Russia Vladimir Putin is also becoming frustrated, albeit for different reasons. Speaking to reporters in Sochi, the Russian president said that the US has become engulfed by “political schizophrenia”
strongest performers among the major emerging economies in Asia. Pernia said the country overtook Vietnam and Indonesia, which grew by 5.1 percent, and Thailand by 3.3 percent. “We are only second to China’s growth of 6.9 percent, while India’s number hasn’t come out yet,” he said. Per nia made an assurance that the government is on guard for e x ter na l dow nside r isk s, wh ic h cou ld i nc lude m a rket
Dominguez. . . Continued from A12
According to Bautista, Dominguez has shares in Philex Mining as indicated in his statement of assets, liabilities and net worth, which, the official explained, was a gift of his wife to his son when he was still a minor. He added that Dominguez is still declared as the president of the Lafayette Philippines Inc., which operates a gold mine on Rapu-Rapu Island, Albay. “He is also still an independent director of United Paragon Mining Corp., which owns the Longos Mine in Paracale, Camarines Norte,” Bautista said. Dominguez recently released public statements that opposed Lopez’s confirmation as DENR secretary. The official convened the MICC to review the DENR’s mine closure, suspension and mining contract cancellation orders, which undermined the crackdown on irresponsible mining launched by Lopez, Bautista lamented. Meanwhile, Bautista also said the “business as usual” tone in Dominguez’s pronouncements and actions conflicts with the
Manila. . .
Continued from A1
slammed the Palace rejection of EU aid as “another reckless and whimsical decision of the Duterte administration”. “Instead of being arrogant and hateful, as President of a developing country, Duterte ought to be grateful there are donor countries that are concerned about the plight of our countrymen and are willing to help us,” the senator added. But the Chairman of the Senate Committee on Economic Affairs, Sen. Sherwin T. Gatchalian asserts that the loss of P13 billion in foreign aid from the EU is “a price the Philippines can afford to pay in pursuit of truly independent foreign and economic policies”. However, Gatchalian clarified
BSP. . .
Continued from A12
consumption to have slipped in Q1, given that government spending was, indeed, slower in the period, partly distorted by the high base effects,” Singapore-based DBS Bank economist Gundy Cahaydi said. ING Bank economist Joey Cuyegkeng in Manila similarly cited weak government spending as one of the key moderating factors in the first-quarter slowdown. But even then, the potential for greater output acceleration down the line remains, he quickly added. “Government spending and infrastructure activity was very slow, a disappointment after all the hype. High base effects and likely some difficulty to get things moving accounted for the slowdown,” Cuyegkeng said. “Monthly data of government budget spending were already showing the marked slowdown in January and carried over in Q1 2017. We anticipate that government spending would recover especially in the second half as infrastructure spending is ramped up,” the economist said. Cuyegkeng forecasts GDP to hit 6.3 percent, with room for possible upward revision. Cahaydi, meanwhile, projects GDP hitting 6.4
volatility with continued US market rate normalization, geopolitical tensions and the possible rise of protectionism sentiments in Western countries. He also said he’s confident that the growth momentum can accelerate as the country embarks on an ambitious infrastructure blueprint—the Build Build Build prog ram—which is expected to boost construction and public spending. With a report from Bloomberg News
marching orders of President Duterte to ban irresponsible big mines. “Dominguez pitched for mining investments during the recently held Philippine Extractive Industry Transparency Initiative National Conference, where he said we should ‘encourage and not suppress extractive industries’,” Bautista said. According to Bautista, Dominguez recused himself from using his office’s recommendatory powers to help push reforms in mining policies and programs, saying “if certain quarters think the law is unfair, they should work to change the law, as violation of the laws is not an option for any government official or any good citizen for that matter”. “Dominguez is intent on pursuing a ‘business as usual’ mining policy. His indifference to the urgent need to reverse the unbridled liberalization of the mining industry toward a stronger public orientation and regulatory regime indicates his preference for the destructive and plunderous characteristic of the mining industry. Only transnational corporations and local mining oligarchs benefit from this export-oriented and foreign-dominated orientation of the industry,” Bautista said. this decision “does not mean that we are forsaking the economic ties we have built over the years with the EU.” The Philippines, he said, will “always be willing to build meaningful trade relations with any state or regional organization that is willing to deal with us in good faith, as peers and equals.” Sen. Ralph G. Recto said he was not inclined to advise the Chief Executive on the issue. “No need to give unsolicited advice,” Recto said in reply to a text query from the BusinessMirror. “They already made a decision. It’s unfortunate those benefiting from [EU] aid will no longer receive them.” But Recto noted that trade with EU member-countries is “another story”. “I don’t think our rejecting aid will result to diminished trade,” he added. percent for the full year, with risks to the forecasts now neutral after earlier tilting to the upside. The revision in risks came because of lower than expected growth numbers in the first quarter. Both forecasts are below the official 6.5-percent to 7.5-percent target growth for 2017. “Strong export growth is likely to maintain support for the economy. But more important, we still regard current domestic momentum as being strong despite the moderation in Q1,” Cahyadi said. BSP chief Tetangco vowed to continue monitoring the country’s growth dynamics and their impact on monetary policy, saying: “As in the past, we will continue to calibrate our policy levers so these provide the appropriate incentive structure for businesses to plan with risk-adjusted returns in mind.” Cuyegkeng anticipates a steady BSP hand on monetary policy given liquidity and interest rate levels considered supportive of continued growth. “Monetary policy is likely to remain steady in the near term as private-sector growth remains strong despite the high base effects. Monetary indicators of M3 and loan growth are still supportive of growth. We continue to review our base case of two rate hikes of 25 basis points each for this year,” Cuyegkeng said.
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Editor: Dionisio L. Pelayo • Friday, May 19, 2017 A3
Include enforcement provision, dispute mechanism in WPS code of conduct–retired envoy
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sean members and China need to put in place an enforcement provision and dispute mechanism in the code of conduct for managing the dispute in the West Philippine Sea to ensure its effectiveness, a retired senior diplomat said.
This suggestion was made by the former Foreign Affairs Undersecretary for Policy and Ambassador to the United Nations Lauro Baja Jr. on the sidelines of a forum and launching of the book The Asean Drama: Half a Century and Still Unfolding. “If the code of conduct will not touch on new occupation, militarization or reclamation, it will be a step back from the Declaration on the Conduct,” Baja said.
Asean members and China signed the Declaration on the Conduct of Parties in the South China Sea in 2002 to resolve territorial dispute peacefully. Baja believed that without the so-called enforcement provision and dispute mechanism in the code of conduct for the disputed West Philippine Sea, such code “will again be in the nature by political declaration”. “If the framework agreement
will not refer to the arbitral panel decision, it won’t be an advance for Philippines,” he said. The Permanent Court of Arbitration in The Hague in July last year invalidated China’s “ninedash line” entitlement over the entire West Philippine Sea because it overlapped with the Philippines 200-nautical mile exclusive economic zone (EEZ). Meanwhile, a bilateral consultation mechanism between China and the Philippines on the West Philippine Sea will be held on Friday in Guiyang, Guizhou province, in Southwest China. Philippine Ambassador to China Jose Santiago Santa Romana and Vice Foreign Minister of China Liu Zhenmin will lead delegations to the meeting. Other countries have also made competing claims over parts or all of the West Philippine Sea, including Brunei Darussalam, Malaysia, Vietnam and Taiwan. PNA
Minding the weather
Japanese and Filipino experts agreed to collaborate on improving forecast, including extreme weather conditions, during the launch of the Development of Extreme Weather Monitoring and Information Sharing System. The Department of Science and Technology, Japan International Cooperation Agency (Jica), Japan Science and Technology Agency, Hokkaido University and the University of the Philippines are partnering on the project. “We’re increasingly giving importance to extreme weather events,” Jica Philippines senior representative Ayumu Oshima (in rostrum) said. PNA
Battle-tested military commanders Kin of summary execution victims, rights score against Abu Sayyaf bandits advocates launch ‘Stop the Killing’ drive By Marvyn N. Benaning Correspondent
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UNDREDS of relatives of victims of summary executions and human-rights advocates have called on President Duterte to stop the bloodshed that has sullied his administration since he assumed office on June 30 last year. “With renewed strength and courage, and the truest sense of justice, we, families of victims of political killings and drug-related killings, urge the Duterte administration to put a stop to the killings in the Philippines,” they declared in a gathering held to launch the “Stop the Killings in the Philippines” campaign at the Iglesia Filipina Independiente (IFI) National Cathedral on William Howard Taft Avenue, Manila. “Under past administrations, we fought for justice and sought audience here and abroad to stop the political killings. My husband was one of those who defended the rights of the poor and marginalized. He was a human-rights defender. Why should he become a victim himself?” said Hadji Nurhidaya, husband of Bayan Muna Basilan Coordinator Hadji Billamin Hassan, who was killed. Hustisya called for justice for the 55 victims of political killings under the Duterte administration, including that of Hassan, who was killed on March 8 in an alleged raid in pursuit of Abu Sayyaf bandits in Lasa, Basilan.
There should be an overhaul in the country’s judicial system. As long as the perpetrators are the men in uniform, the police and the military, the killings will not stop. As long as the butchers remain in power, they will use all their might to suppress the people who thirst for genuine change.”—Nurhidaya
“President Duterte should order the AFP [Armed Forces] to stop its all-out war against the people. People who fight for the rights of their communities should not be killed,” Nurhidaya argued. Hustisya believes both political murders and drug-related killings are done with impunity and they violate the basic right of people to life and due process. For Nurhidaya, the poor and marginalized should be salvaged from extreme poverty, exploitation and drug abuse, and not “salvaged” by the police and the military, in the name of the war on drugs. “There should be an overhaul in the country’s judicial system. As long as the perpetrators are the men in uniform, the police and the military, the killings will not stop. As long as the butchers remain in power, they will use all their might to suppress the people who thirst for genuine
change,” Nurhidaya said. Evangeline Hernandez, chairman of Hustisya, also argued that the real criminals are those who trample upon the rights of the people. “Spare the poor! We stand with the rest of the Filipino people that illegal drugs in the country should be eradicated. It is a grave socioeconomic problem that victimizes the people. However, it should be addressed by effecting genuine socioeconomic reforms, by ensuring their rights and human dignity are respected,” Hernandez said. Hustisya called on all peace and justice-loving people to support the call to stop the killings. “Please join us in putting an end to impunity. We invite everyone to join the June 12 rally to Stop the Killings, and urge President Duterte to stay true to his promises of change,” Nurhidaya said.
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HE deployment of battle-tested military commanders in the ongoing campaign against the Abu Sayyaf Group is reaping good results as the bandits are now being driven away from their traditional hunting grounds. This was revealed by the Armed Forces Public Affairs Office chief, Col. Edgard Arevalo, when asked what other factors have, so far, contributed to the Abu Sayyaf’s decline in Basilan, Sulu, and Tawi-Tawi. Arevalo cited the case of Joint Task Force Sulu and Tawi-Tawi, the military units engaged in the campaign against the Abu Sayyaf, which are now being commanded by battle-hardened commanders—Brig. Gens. Cirilito Sobejana and Custodio Parcon, respectively. Both men are known for competence and bravery in the field. Both are recipients of the country’s highest military decoration, the Medal of Valor, which is equivalent to the US Congressional Medal of Honor and United Kingdom’s Victoria Cross. Owing to the leadership exhibited by the two men, Abu Sayyaf bandits in Sulu and TawiTawi are now having a hard time operating in their former hideouts, as military units in the areas are always conducting tracking and pursuit operations against the lawless elements. Arevalo said the brilliance of these officers and the bravery of their men are backed up by
We also invited tribal leaders so they [newly deployed troops] can be familiar with their customs and traditions.”—Valencia
the whole-hearted support of the Armed Forces Chief of Staff Gen. Eduardo M. Año, who has committed all available military assets and resources to eliminating the terror group. Armed Forces Western Mindanao Command data indicate that from January 1 up to May 17, a total of 81 Abu Sayyaf bandits were killed, 50 surrendered and 18 were captured. In addition, military forces seized 70 high- and lowpowered weapons from the bandit group’s members. Arevalo said the number of surrendered bandits is unprecedent, as this is the first time the terrorists have opted to surrender en masse. The Armed Forces Public Affairs Office chief said the surrendered bandits are also claiming that their finances are going low owing to their inability to kidnap new victims and ransom them, crimping on their ability to acquire weapons, food and other supplies. This lack has caused the morale of the bandits to plummet making them prone to surrenders. Meanwhile, another infantry battalion has been deployed to Davao City to secure the locality from the threat of insurgency.
Maj. Gen. Rafael Valencia, Army 10th Infantry “Agila” Division commander, said the 16th Infantry Battalion was pulled out from Sulu to help the Third Infantry Battalion in securing Davao City. These military units will be under the 1003rd Infantry Brigade, he added. A typical Army battalion consists of around 300 to 500 officers and enlisted personnel. Valencia said the 16th Infantry Battalion arrived in Davao City last week and its troops are now undergoing acclimatization and familiarization, as well as cultural sensitivity training. “We also invited tribal leaders so they [newly deployed troops] can be familiar with their customs and traditions,” he added. Valencia said there is a need for another battalion to secure Davao City owing to its huge size and large population. Making this more pressing is the fact that Davao City is constantly expanding with new subdivisions and industrial plants, which needs more units for security. “We need to address the [security] gaps by bringing in an additional unit,” Valencia said. PNA
Economy BusinessMirror
House bloc seeks oil price spike safeguard in tax bill By Jovee Marie N. dela Cruz
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@joveemarie
he House of Representatives’ 42-man Visayan bloc wants to include a provision in the Duterte administration’s tax-reform package suspending automatically the excise taxes on petroleum once crude oil hover around the $80-per-barrel mark. In an interview with reporters, PDP-Laban Rep. Alfredo Benitez of Negros Occidental, head of the Visayan bloc, said automatic suspension of excise taxes on petroleum is needed to safeguard Filipino consumers. “Protecting the consumers should be the foremost consideration, as oil-price increases have domino effects to the prices of basic commodities,” he said. “We feel that this is an effective way to protect consumers from erratic prices of petroleum products. There should be a provision for automatic suspension in the implementation of the proposed tax on petroleum products,” Benitez said. Lawmakers were given until 12 noon on Monday to submit their individual amendments to the Department of Finance-backed Tax Reform for Acceleration and Inclusion (Train). He said the bloc will include the provision on automatic suspension in the list of amendments it want to be included in the tax package. The main intention of House
Bill 5636 is to exempt workers earning P250,000 from paying personal income taxes (PIT). To recover the government revenue losses from lower PIT, the bill also expands the value-added tax (VAT) base, adjusts excise taxes on petroleum and automobiles, and eases the rates of estate and donor’s taxes. The measure imposes the following tax rates: Leaded premium gasoline, per liter of volume capacity, from P5.35 to P7 in 2017, P9 in 2018; and P10 in 2019; unleaded premium gasoline, per liter of volume capacity, from P4.35 to P7 in 2017, P9 in 2018 and P10 in 2019; aviation turbo jet fuel, per liter of volume capacity, from P3.67 to P7 in 2017, P9 in 2018 and P10 in 2019, kerosene, per liter of volume capacity, from P0.00 to P3 in 2017, P5 in 2018 and P6 in 2019. Diesel fuel oil, and on similar fuel oils having more or less the same generating power, per liter of volume capacity, from P0.00 to P3 in 2017, P5 in 2018 and P6 in 2019; liquefied petroleum gas, per liter, from P0.00
to P3 in 2017, P5 in 2018 and P6 in 2019; asphalts, per kilogram, from P0.56 to P3 in 2017, P5 in 2018 and P6 in 2019; bunker fuel oil, and on similar fuel oils having more or less the same generating power, per liter of volume capacity, from P0.00 to P3 in 2017, P5 in 2018 and P6 in 2019. The bill, however, said that for three years, not more than 40 percent of the yearly incremental revenues generated from the proposed petroleum excise tax shall be allocated to fund social benefits programs and granting of fuel vouchers to qualified transport franchise holders. The measure also said that, for the same period, the remaining yearly incremental revenues shall be allocated for infrastructure, health, education and social-protection expenditures.
Sugar
Besides amendments to the excise tax on petroleum products, Benitez said the Visayan bloc will ask the leadership to cut the imposition of P10-per-liter tax on sugar-sweetened beverages (SSBs) to P5. “We fear that the P10 proposal is too high and may kill the local sugar industry. We will propose this to [be]
slash[ed] by half,” Benitez said. A P10-per-liter tax, he added, is a big burden to tens of thousands of sugar farmers. Under the bill, SSBs shall be levied an excise tax of P10 per liter of volume capacity, subject to yearly 4 percent rate increase after the effectivity date of January 1, 2018. The bill refers to SSBs to a nonalcoholic beverage that contains caloric sweeteners or added sugar or artificial/noncaloric sweetener. It may be in liquid form, syrup or concentrates, or a solid mixture, that is added to water or other liquids to make a drink. SSBs include soft drinks, soda, pop, soda pop; nonalcoholic flavored carbonated or noncarbonated beverages, fruit drinks, sports drink, sweetened tea and coffee drinks and energy drinks. The bill, meanwhile, said there shall, likewise, be allocation from sugar-sweetened beverage excise tax revenue where 85 percent of the tax collection shall be allocated for government priority programs, while the remaining shall fund for the welfare and benefit of sugar planters/farmers.
We feel that this is an effective way to protect consumers from erratic prices of petroleum products. There should be a provision for automatic suspension in the implementation of the proposed tax on petroleum products.”—Benitez
‘Real game changer in education, nation-building’
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lbay Rep. Joey S. Salceda hailed Congress’s approval of the Universal Access to Tertiary Education Act as a “real game changer that will provide lasting effects on the country’s growth and genuine contribution to nation-building”.
The House of Representatives unanimously approved on Tuesday the Universal Access to Tertiary Education Act, a consolidated measure that provides free tuition in state universities and colleges (SUCs), Technical Education and Skills Development Authority
(Tesda)-run, technical-vocational institutions (TVIs), private colleges and technical-vocational schools. The measure also provides subsidies for those in deciles 1 to 5, and student loans for those in deciles 1 to 8. Salceda said the consolidated bill, based on his House Bill 2771 filed last year, was approved by the House on second reading. It is expected to be enacted into law shortly, since the Senate has already passed its own version of the measure. HB 2771 was consolidated with two other measures filed by Partylist Reps. Antonio L. Tinio and Sarah Jane Elago. Delighted over the speedy action by his colleagues on the measure, Salceda called the development as “another Albay Model becoming law soon”. “Education can’t wait,” he said in another social-media post. As Albay governor for nine years, Sa lced a instituted free t u it ion i n a l l community colleges in the province, prov ided scholarship grants and loans in SUCs and priv ate col le ge s, which amounted to 24 percent of total provincial budget and he lped g raduate some 88,000 st udents. He con s ide r s t he House approval of the bill as “a major victory —a legacy borne out of A lbay’s commitment to higher education for all”, since it
absorbed the major elements of his original bill with his “higher education contribution scheme”, having now become the National Student Loan Program (NSLP). “No more tuition and misce l l a ne ou s e x p e n s e s c a n b e charged by SUCs in the next semester SY 2017/2018. No tuition in Tesda’s T VIs. Nonrepayable subsidy for those belonging to lower 50 percent. And student loans to those belonging to decile 1 to 8 and repayable based on incomes/employment,” Sa lceda posted on his socia l media account. The measure’s highlights include full funding of SUCs with its proposed P38-billion budget, and another P21.6 billion for other expenses. Among others, the bill calls for sufficient funding for technical-vocational education and training (TVET) in TVIs run by Tesda with P6.7 billion, which was adopted from Salceda’s original HB 4771 version. It also offers a tertiary education subsidy of P15 billion, limited to decile 1 to 5 students, for tuition and other expenses in accredited private universities and colleges, SUCs and Tesda-accredited TVIs, which were from the bills filed by Reps. Dakila Carlo E. Cua of Quirino and Carlo Alexei B. Nograles of Davao City. The measure aims to provide other mechanisms to increase the participation rate in tertiary education from all socio-economic classes; provide Filipinos with equal opportunities to quality education in both private and public educational institutions; give priority to academically able students from poor families; ensure optimized utilization of government resources in education and recognize the complementary roles of public and private institutions in the tertiary educational system. PNA
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Alvarez assures implementation of revenue law to support Train
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N support of the tax-reform package dubbed as Tax Reform for Acceleration and Inclusion (Train), Speaker Pantaleon D. Alvarez said the lower chamber and the Department of Finance (DOF) will strictly and fully implement the lateral attrition law. Alvarez said the full implementation of the lateral attrition law will ensure better collection of government revenue-generating agencies, namely the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC). “With respect to the collections of [Bureau of] Customs and the BIR, we have understanding with the Department of Finance that we will truly implement the attrition law,” Alvarez said in a recent news conference. Alvarez also said Congress insisted that once the DOF has established its revenue-collection target for the year, the department would not be allowed to adjust the same. Several lawmakers are calling for the full implementation of the lateral attrition law before the passage of the DOF-backed tax-reform bill. The tax-reform package seeks to lower personal income-tax rates, expand the value-added tax (VAT) base, adjust excise taxes on petroleum and automobiles, and ease the rates of estate and donor’s taxes. They said the goals of the tax package would be vulnerable if the attrition law remains inactive. Under Republic Act 9335, or the lateral attrition law, revenue officials who fall short of their collection targets by at least 7.5 percent would be dismissed from service, while those who go beyond expec-
RA 9335
The Lateral Attrition Law states that revenue officials who fall short of their collection targets by at least 7.5 percent would be dismissed from service while those who go beyond expectations would be given incentives, which may include cash tations would be given incentives, which may include cash. The attrition law, which was enacted during the term of thenPresident Gloria Macapagal-Arroyo, seeks to improve the revenue-collection performance of the BIR and BOC through the creation of a rewards and incentives fund and of a revenue performance evaluation board. “To set the criteria and procedures for removing from service officials and employees whose revenue collection falls short of the target by at least 7.5 percent, with due consideration of all relevant factors affecting the level of collection as provided in the rules and regulations promulgated under this Act, subject to civil service laws, rules and regulations and compliances with substantive and procedural due process,” the law said. It said if revenue collections exceed the target by 30 percent or below, the law guarantees that 15 percent of the excess will form part of a rewards fund. Jovee Marie N. dela Cruz
‘Holistic approach’ to develop Clark, Naia airport link
FILE photo
A4 Friday, May 19, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon
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he Management Association of the Philippines (MAP) on Thursday called on the Duterte administration to implement a “holistic approach” in the development and management of the Ninoy Aquino International Airport (Naia) and Clark International Airport, in response to the growing number of aviation travelers. “We fully support the plan of the Department of Transportation (DOTr) to optimize, through upgrades the existing Naia, while redeveloping the Clark International Airport,” the business group said in a news statement. “We back the decision of the DOTr to maintain and upgrade the Naia, a valuable state asset,” the MAP statement added. The statement said decongesting the Naia will entail developing Clark as an alternate departure and arrival airport. The Tutuban to Clark railway to be undertaken by the Bases Conversion Development Authority (BCDA) as part of the administration’s “Build, Build, Build” program is also a welcome project, but may
improve connectivity by connecting the proposed railway project to the Naia, the MAP statement said. MAP suggested the establishment of in-city check-in stations to benefit travelers with luggage to avail themselves of remote check-in services. “These check-in stations should be easily accessible and are to be strategically located adjacent to the fast train and near either the Nlex-Slex or Edsa. One such facility could be located at the MPIC [Metro Pacific Investments Corp.]-proposed fast train terminal at the junction of Gil Puyat [Buendia] Avenue and PNR line in Makati. The MRT [Metro Rail Transit] 3 common station at the intersection of Edsa and North Avenue in Quezon City would be a good site for the second station, if such will, likewise, be served by or linked to the fast train,” it said. A centralized management of the entire aviation system under a single authority should be created, the statement added, to streamline the organizational structure of the aviation industry for efficient decision-making and coordination. Catherine N. Pillas
Agriculture/Commodities BusinessMirror
news@businessmirror.com.ph
Editor: Jennifer A. Ng • Friday, May 19, 2017
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NIA eyes more hydropower projects
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he National Irrigation Administration (NIA) said it is keen on developing and constructing more hydropower projects on its existing irrigation systems and future irrigation projects all over the country.
Citing the previous studies it conducted, the NIA said there are about 357 potential irrigation sites for hydropower in the country. “This means that the NIA, aside from providing sustainable and efficient irrigation services, can actually be an active partner for power generation,” NIA Administrator Ricardo R. Visaya said in a statement. Earlier this week, Visaya led signing of a memorandum of agreement (MOA), together with Nascent Technologies Corp., for the development and construction of the 40-megawatt (MW) Barit Irrigation Discharge Hydroelectric Power plant pegged at P27.6 million. The NIA chief cited Rizal Hydropower Project as one of the successful partnerships in hydropower development projects. The 1-MW hydropower started its commercial operation this year. It is near the main canal of Pampanga River Irrigation System (PRIS) in Nueva Ecija. “This is part of the continuous effort of the agency to support the administration in providing more
renewable-energy sources, that will not just only boost NIA’s income, but also will contribute to the provision of electricity in far-flung communities in the country,” Visaya said. Other ongoing hydropower projects include the 8.5 -MW Maris Main (South) Canal Hydroelectric Power in Isabela with target commercial operation in February 2018. The MOA for both Marbel No. 1 Mini Hydropower Project in South Cotabato and Butao Irrigation Drop Mini Hydropower Project in Pangasinan were approved and signed by the NIA, with the developers. Negotiations are still on the table for 630-kilowatt Muñoz Hydropower Project in Upper Pampanga River Integrated Irrigation System, Nueva Ecija; the 1 MW Bulanao Mini-Hydropower Plant in Chico River Irrigation System, Kalinga; 3.6-MW Addalam Hydroelectric Project in Addalam River Irrigation Project, Quirino, in which comprehensive study was conducted last year; and Agno RIS main canal in Agno River Integrated System, Pangasinan.
File photo
Visaya made an assurance to farmers that the mini hydros will not affect irrigation component as the water will just pass through the irrigation canal. “There is no conflict with power
Benguet gov slams Baguio’s truck ban, says it will ‘kill’ farmers T
Sial China features fresh, dried fruits from Mindanao
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AGUIO CI T Y—Beng uet Gov. Cresencio C. Pacalso on Thursday urged Baguio City officials to hold the implementation of an ordinance imposing a truck ban to avoid “killing” the livelihood of Benguet farmers. “I talked to Mayor [Mauricio] Domogan this week and he said he has ordered the city police to hold the implementation of the truck ban ordinance,” the governor said. The Baguio City council recently passed Ordinance 50 series of 2017 prohibiting heavy equipment, trailers, dump trucks and other freight trucks or sixwheeler trucks and above with gross weight of 4,500 kilograms or more from traversing various roads around the city from 6 a.m. to 9 a.m. and from 4 p.m. to 9 p.m. The truckers agreed to the implementation of the total truck ban in the city from 6 a.m. to 9 a.m., but questioned the enforcement of the truck ban from 4 p.m. to 9 p.m., which is the height of the transportation of vegetables from trading posts in Benguet province to Metro Manila and other low-land markets. According to the truckers, the height of their travel is from 2 p.m. to 6 p.m. to beat the 6 p.m. to 8 p.m. truck ban in La Trinidad, which is why they want the local government to exempt their trucks that transport perishable goods from the coverage of the new truck ban in the city. Pacalso explained that there should be coexistence between Baguio and Benguet, which are contiguous local government units. Baguio is bounded by Benguet towns where vegetables
and flowers brought to Metro Manila and other parts of the country are produced. It was earlier reported that “80 percent of the highland vegetable requirement of the country is produced in Benguet province.” The governor said their farmers will be greatly affected because vegetables will not be able to reach major trading areas in Metro Manila at the time when the traders are buying. This means the perishable vegetable products will have to wait for another day before the produce can be bought or can be brought to the ports leading to regions outside Metro Manila. “There are specific hours in Metro Manila when trucks are allowed to traverse the roads, they are catching up with the buyers and are also catching up with the cargo ships so they cannot delay their transport,” Pacalso said. He said delays will mean higher prices of vegetable commodities in Metro Manila and losses on the part of the farmers of Benguet, including the truckers. Pacalso relayed that Mayor Domogan tasked the police not to implement the ordinance pending the city council’s confirmation of his administrative order exempting truckers carrying necessary goods and services, and the city council’s approval of the amendatory ordinance filed by Vice Mayor Edison Bilog. Domogan, during the weekly press briefing late Wednesday afternoon, said the executive branch, which he heads, implements the laws created by the legislative body. PNA
he government said it is promoting fresh dried fruits, such as pineapples, mangoes, papaya and durian, from Mindanao at the Salon International de l’Alimentation (Sial) China in Shanghai, which kicked off on Wednesday. Agriculture Undersecretary Bernadette Romulo-Puyat said specific display counters at the 84-square meter Philippine pavilion at the Shanghai New International Expo Centre has been allocated for fresh fruits alone. “The Department of Agriculture [DA] has always looked at China as a profitable, yet, largely untapped market for our agricultural exports,” Puyat said in a statement. “We have to take advantage of our competitive edge over other suppliers in terms of product quality and lower logistical cost due to our proximity,” she added. The three-day event is touted as Asia’s largest food innovation exhibition with nearly 3,000 exhibitors from 67 countries. During last year’s edition, around 76,000 visitors from 95 countries visited the various pavilions. Sial China is being spearheaded by the same group that organizes Sial Paris. Puyat said Sial China is part of the DA’s intensified market linkage initiatives under the Duterte administration, both in domestic and global markets. Aside from fresh fruits, the DA also promoted processed and canned products, including fruit juices, banana chips, virgin coconut oil and other coco-based products, mushroom (dried), and dried fruits (jackfruit, durian and mango), coffee and fruit wines. Select fish products, such as bottled milkfish, deboned milkfish and canned Spanish-style sardines, were also featured. All Philippine products at Sial China were Good Agriculture Practices- and Hazard Analysis and Critical Control Point (HACCP)-certified, and producerexhibitors accredited by relevant local and international food certifying systems, such as the US Food and Drug Administration; International Federation of Organic Agriculture Movements; Islamic Da’wah Council of the Philippines Inc. for halal food; and Kosher for Jewish food compliance.
generation and irrigation it is just a matter of getting the most out of our water resource. We are optimistic that this endeavor will take off and will ensure smooth implementation and optimum results,” he said.
The development and construction of hydropower projects is consistent with Presidential Decree 552, which allows the NIA to use and control water resources primarily for irrigation and
for hydropower. Visaya said the NIA has issued Memorandum Circular 55 that defines the guidelines on mini hydropower plants in its irrigation canals and systems.
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BusinessMirror
Friday, May 19, 2017
China’s demographic woes worsen as women opt for work over kids
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The World
hina’s demographic time bomb continues to tick. Even after the government cleared the way for couples to have a second child, working women are reluctant to expand their family—or have any children at all. That’s according to a new survey by Zhaopin.com, one of the nation’s biggest online recruitment web sites, which found about 40 percent of working women without children don’t want to have any and roughly two thirds of those with a child don’t want a second. In big cities, such as Beijing or Shanghai, hefty living costs, long work hours and surging expenses linked to raising children have deterred more females from becoming moms. The phenomenon isn’t unique to China, given the pressures that working women face around the globe. But it’s particularly acute for the world’s secondbiggest economy given its rapidly aging population. More than three decades of a onechild policy has left the nation with too few young people to support an expanding elderly population, which is eroding competitiveness and weighing on the social welfare system. After announcing a two-child rule in October 2015, officials estimated an increase of four million additional births a year through 2020—but last year births increased by just 1.31 million from a year earlier to 17.86 million. That prompted the government to consider measures such as “birth rewards and subsidies” to help encourage more people to have another child. Yet, China remains far from providing incentive packages as seen in Singapore or Germany and a porous safety network offers little help to families who can’t afford children’s education or health care. Bloomberg News
Editor: Lyn Resurreccion • www.businessmirror.com.ph
Japan econ expands at 2.2% annual pace in January-March
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OKYO—Japan reports that its economy grew at a faster-thanexpected 2.2-percent annual pace from January to March. Economists had forecast a strong expansion in the first quarter for the world’s third-largest economy, helped by a recovery in exports and consumer spending. But most estimates had not topped 2 percent. The figures released on Thursday are preliminary and likely to be revised. The economy grew at a 1.2-percent pace in the last quarter of 2016. Recent data suggest a weakening of corporate spending on factory equipment that may pull growth lower in the current quarter. “Japan’s economy is on its longest streak of expansion in more than a decade,” Marcel Thieliant of Capital Economics said in a commentary. “However we expect a slowdown in the second half of the year,” he said. On a quarterly basis, the economy expanded 0.5 percent from January to March. Japan’s central bank is pumping trillions of yen (tens of billions of dollars) into the economy each month through asset purchases
1.2% The percentage of growth of Japan’s economy in the last quarter of 2016
to counter deflation and boost growth. That has kept the economy growing, but generally at a slower pace than hoped for. Economists say that lagging growth in wages is hindering the recovery. Unemployment has dipped to levels not seen since the early 1990s, but instead of boosting salaries, companies have tended to hire more part-time or temporary workers at lower wages to save on costs. Major corporations are investing more heavily abroad, in markets that promise faster growth than in aging Japan, where the
Newly opened shopping mall Ginza Six is crowded with shoppers in Tokyo on April 28. AP/Shuji Kajiyama
population is shrinking. Construction in preparation for the 2020 games is expected to pick up in the coming year, though the Bank of Japan has estimated it will contribute only a fraction of a percentage to GDP growth in 2018. The last time Japan strung together this many quarters of growth was in 2006, during the government of then-Prime Minister Junichiro Koizumi. Under the nation’s current leader, Shinzo Abe, the economy is again benefiting from a competitive currency and exporters are leading growth. The first-quarter rebound in private consumption, which accounts for about 60 percent of GDP, comes after weakness the previous quarter. There is concern that spending may falter again,
with stronger wage gains needed to support households and to allow retailers to raise prices. “Exports have taken the lead in the recovery, and domestic demand wasn’t bad, showing resilience with household spending turning positive,” said Masaki Kuwahara, senior economist at Nomura Securities Co., which correctly forecast the 2.2-percent expansion. “Looking ahead, the growth rate will slow a bit, if not turn negative, toward the second half of this year as China’s economic indicators are weakening a bit. I’m expecting exports to slow down, weighing on the overall growth rate,” Kuwahara said. “It’s a pretty impressive number but I don’t think this can continue
for a while,” said Takashi Shiono, an economist at Credit Suisse Group AG. “Uncertainties are increasing rapidly with the chaos at the White House and a pickup cycle in global production could end soon,” Shiono said. “The risk-off sentiment in the market will put pressure on the yen to strengthen and that will weigh on Japan’s economy.” Measured quarter-on-quarter, GDP rose 0.5 percent (estimate +0.5 percent). Domestic demand contr ibuted 0.4 percentage point to GDP in the first qu a r ter. P r iv ate i nventor ies added 0.1 percentage point to GDP. The GDP def lator, a broad measure of price changes, fell 0.8 percent from a year earlier. AP and Bloomberg News
‘Chaebol sniper’ named as S. Korea antitrust chief
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EOU L , S out h K ore a— S out h Korea’s new president named a longtime shareholder-rights advocate to lead the country’s antitrust regulator, as the new administration took a step on Wednesday toward reining in big businesses. Kim Sang-jo, an economist who has advocated for shareholder rights and reforming chaebol, the familycontrolled big businesses that dominate South Korea, was appointed as chief of the Fair Trade Commission. T he ap p oi nt me nt i s i n k e e p ing with President Moon Jae-in’s pledges to reform the chaebol. Moon said in his inauguration speech that creating jobs and unraveling cozy ties between the government and big businesses would be his policy priorities. K im’s position was announced before Moon named other top policymakers to oversee Asia’s fourth-largest economy.
Kim, dubbed the “chaebol sniper” for his activism, has said he will seek to restore fairness that is lacking in South Korea, sapping the dynamism of its once vibrant economy. He helped draft Moon’s chaebol reform agenda during his campaign. His appointment requires parliamentary approval. He is known as one of the sharpest critics of chaebol founding families who exert huge influence over their mostly publicly listed companies. In 2011 K i m led a successf u l shareholder lawsuit holding Samsung Chairman Lee Kun-hee responsible for causing losses to shareholders while tr ying to pass down managerial leadership to his son. Moon was elected president on May 9, succeeding former President Park Geun-hye. Park was impeached over a massive corruption and influencepeddling scandal that implicated a number of chaebol executives. AP
Oil stuck in Trump slump O
il is getting ensnared in the turmoil surrounding Donald J. Trump just as signs emerge that US crude production, which has undercut Organization of the Petroleum Exporting Countries’ (Opec) output curbs is finally easing. Futures decreased as much as 0.6 percent in New York, as investors across financial markets fled risky assets while Trump faces the biggest crisis of his presidency over a series of damaging revelations. That’s countering optimism after government data showed US stockpiles last week fell for a sixth straight week and crude production declined for the first time in 13 weeks, ending the longest stretch of gains since 2012. Investors are rattled by the political uncertainty amid increasing concern over the health of the global economy. In the oil market, Russia and Saudi Arabia said this week they’re in favor of extending output curbs by the Opec and its partners until March to shrink global stockpiles. Prices have slipped since reaching a 19-month closing high in February on speculation US supply will undercut their efforts. “Trump turmoil may take its toll on the oil market,” said Min Byungkyu, a global market
strategist at Yuanta Securities Korea Co. in Seoul. “Although Opec’s extension of production cuts should hold oil’s gain, the political risks we are seeing in the US may discourage investments and that certainly won’t be a good sign for an oil rally.” West Texas Intermediate (WTI) for June delivery dropped as much as 29 cents to $48.78 a barrel and was at $48.96 on the New York Mercantile Exchange at 7:50 a.m. in London. Prices gained 41 cents to settle at $49.07 on Wednesday, the highest level since April 28. Total volume traded was about 17 percent above the 100-day average. Brent for July settlement fell 13 cents to $52.08 a barrel on the London-based ICE Futures Europe exchange. The contract gained 56 cents, or 1.1 percent, to close at $52.21 on Wednesday. The global benchmark crude traded at a $2.79 premium to July WTI. US crude stockpiles fell 1.75 million to 520.8 million barrels last week, down from a record 535.5 million at the end of March, according to the Energy Information Administration (EIA). The nation’s oil production dropped to 9.3 million barrels a day, EIA data released on Wednesday show. Bloomberg News
www.businessmirror.com.ph • Editor: Lyn Resurreccion
The World BusinessMirror
Friday, May 19, 2017
A7
Special counsel to probe into Russia, Trump ties
Guadalupe García de Rayos (second from right) reunites with her children, Angel, 16, and Jacqueline, 14, who are US citizens, at a soup kitchen for the deported in Nogales, Mexico, on February 9. Immigration arrests rose 38 percent in the first three months of the Trump administration compared with the same period last year, according to figures released by Immigration and Customs Enforcement. Caitlin O’Hara/The New York Times
Immigration arrests rise sharply as a Trump mandate is carried out
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mmigration arrests shot up 38 percent in the first three months of the Trump administration compared with the same period last year, according to figures released on Wednesday, one of the first clear indications that the president’s hard-line policies are being carried out on a grand scale. W hile President Donald J. Trump’s more attention-grabbing ideas have been blocked or stalled, like building a border wall and temporarily stopping travel from some Muslim-majority countries, the statistics released by federal Immigration and Customs Enforcement (ICE) suggested that the more streetlevel aspects of his immigration agenda have achieved significant results, and quickly. From January 22 to April 29, ICE officers arrested 41,318 people, at a rate of more than 400 people per day, compared with 30,028 over roughly the same period in 2016, the data showed. “These statistics reflect President Trump’s commitment to enforce our immigration laws fairly and across the board,” said Thomas Homan, the acting director of ICE, on a phone call with reporters. Many of the arrests took place at immigrants’ homes, as teams of agents spread out in the early hours of the morning to catch people before they left for work, a common tactic designed to avoid a public scene. But agents also have been moving more aggressively, taking into custody people who arrived for routine check-ins, and even apprehending people arriving at courthouses on nonimmigration matters. The rapid increase in arrests was primarily the result of one of Trump’s first significant immigration moves, rescinding rules laid down by former President Barack Obama that prioritized the arrest of the most serious criminals and largely left other unauthorized immigrants alone. More than half of the increase in arrests were of immigrants who had committed no crime other than being in the country without permission. Obama’s policy was rooted in
both humanitarian and budgetary reasons, but to Trump and his supporters, and many ICE agents, it represented a failure to enforce the law and a de facto amnesty for millions of people in the US illegally. Trump’s supporters welcomed the news. “I feel that’s one step in the right direction, I definitely feel that way,” said J.D. Ma, a lawyer in Clarksville, Maryland. “The reality is that if you don’t do that, that’s going to encourage wave after wave and disrupt the order of the society.” At the same time, the wider net has frustrated some local law-enforcement officials who have pointed to evidence that a r re s t s , e s p e c i a l l y t ho s e at courthouses, were discouraging unauthorized immigrants from reporting crimes. Since Trump was elected, reports by Latinos of sexual assaults and domestic violence have declined sharply. “What it tells me is that the department is willing to put enforcement numbers ahead of any kind of strategy that would actually try to keep us all safer going forward,” said Omar Jadwat, the director of the Immigrants’ Rights Project at the American Civil Liberties Union. Aware of the criticism, the federal authorities have frequently noted that a majority of those arrested—75 percent in Trump’s first three months—were still people with criminal records. Those swept up have committed a broad range of offenses. Guadalupe García de Rayos, a mother in Arizona, had used a false Social Security number to work at a water park. Juan Antonio Melchor Molina, a fugitive from Mexico, is wanted on a murder charge. Although agents are no longer limited in whom they can pick up, Homan said that more than 2,700 of those arrested had been convicted of serious crimes like assault, rape or murder. “If you look at the numbers, the men and women of ICE are still prioritizing these arrests in a way that makes sense,” he said. New York Times News Service
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ASHINGTON—The Justice Department appointed Robert S. Mueller III, a former Federal Bureau of Investigation (FBI) director, as special counsel on Wednesday to oversee the investigation into ties between President Donald J. Trump’s campaign and Russian officials, dramatically raising the legal and political stakes in an affair that has threatened to engulf Trump’s fourmonth-old presidency. The decision, by the deputy attorney general, Rod J. Rosenstein, came after a cascade of damaging developments for Trump in recent days, including his abrupt dismissal of the FBI director, James B. Comey, and the subsequent disclosure that Trump asked Comey to drop the investigation of his former national security adviser, Michael T. Flynn. Rosenstein had been under escalating pressure from Democrats, and even some Republicans, to appoint a special counsel after he wrote a memo that the White House initially cited as the rationale for Comey’s dismissal. By appointing Mueller, a former federal prosecutor with an unblemished reputation, Rosenstein could alleviate questions about the government’s ability to investigate the questions surrounding the Trump campaign and the Russians. Rosenstein said in a statement that he concluded that “it is in the public interest for me to exercise my authorities and appoint a special counsel to assume responsibility for this matter.” “My decision is not a finding that crimes have been committed or that any prosecution is warranted,” Rosenstein added. “I have made no such determination.” In a statement, Trump said, “As I have stated many times, a thorough investigation will confirm what we already know—there was no collusion between my campaign and any foreign entity. I look forward to this matter concluding quickly. In the meantime, I will never stop fighting for the people and the issues that matter most to the future of our country.” Mueller’s appointment capped a day in which a sense of deepening crisis swept over Republicans in Washington. Republican congressional leaders, normally reluctant to publicly discuss White
13 The number of years Robert S. Mueller III has served as Federal Bureau of Investigation director when then-President Barack Obama asked him to stay on two years beyond the 10year term
House political drama or the Russia investigation, joined calls for Comey to share more about his encounters with Trump. The Republican chairmen of the Senate Judiciary and Intelligence committees and the House Oversight Committee all asked Comey to testify before their panels. They also requested that the FBI turn over documentation of Comey’s interactions with his superiors in both the Obama and Trump administrations, including a memo Comey is said to have written about Trump’s request that he quash the investigation into Flynn. W hile Mueller remains answerable to Rosenstein—and by extension, the president—he will have greater autonomy to run an investigation than other federal prosecutors. As a special counsel, Mueller can choose whether to consult with or inform the Justice Department about his investigation. He is authorized to investigate “any links
and/or coordination between the Russian government and individuals associated with the campaign of President Donald J. Trump,” according to Rosenstein’s order naming him to the post, as well as other matters that “may arise directly from the investigation.” He is empowered to press criminal charges, and he can request additional resources, subject to the review of an assistant attorney general. Trump was notified only after Rosenstein signed the order, when the White House counsel, Donald F. McGahn II, walked into the Oval Office around 5:35 p.m. to tell him. Trump reacted calmly but defiantly, according to two people familiar with the situation, saying he wanted to “fight back”. He quickly summoned his top advisers, most of whom recommended that he adopt a conciliatory stance. But his son-in-law, Jared Kushner, who had pushed Trump to fire Comey, urged the president to counterattack, according to two senior administration officials. After a brief discussion, however, the majority prevailed. Aides huddled over a computer just outside the Oval Office to draft the statement accepting Rosenstein’s decision and asserting the president’s innocence. By the end, Trump was uncharacteristically noncombative, according to people close to him. Rosenstein, who until recently was US attorney in Maryland, took control of the investigation because Attorney General Jeff Sessions recused himself after acknowledging he had failed to disclose meetings he had with the Russian ambassador to Washington, Sergey I. Kislyak, when Sessions was an adviser to the Trump campaign. A s the announcement was being made, Rosenstein and the acting director of the FBI, Andrew G. McCabe, were briefing the leaders of the Senate and the House and the heads of the congressional intelligence committees. T he law ma kers said nothing after ward. It was only the second time that the Justice Department has named a special counsel. The first was in 1999, the year the law creating the position took effect. Attorney General Janet Reno appointed John Danforth, a former Republican senator from Missouri, to investigate the botched federal raid on the Branch Davidian compound near Waco, Texas, in 1993 that killed 76 people. Mueller’s appointment was hailed by Democrats and Republicans on Capitol Hill, who view him as one of the most credible law-enforcement officials
in the countr y. Sen. Ben Sasse, Republican-Nebraska, a member of the Judiciary Committee, said Mueller’s “record, character and trustworthiness have been lauded for decades by Republicans and Democrats alike.” Sen. Ben Cardin, DemocratMaryland, the ranking member of the Foreign Relations Committee, said Rosenstein “has taken an important step toward restoring the credibility of the DOJ [Department of Justice] and FBI in this most serious matter.” Mueller served both Democratic and Republican presidents. President Barack Obama asked him to stay on two years beyond the 10-year term until he appointed Comey in 2013, the only time a modern-day FBI director’s tenure has been extended. Mueller and Comey are close—a relationship forged while standing up to President George W, Bush’s use of executive power. Mueller backed up Comey, then the deputy attorney general, in March 2004 after he threatened to resign when the White House overruled the Justice Department finding that domestic wiretapping without a court order was unconstitutional. Mueller is expected to announce his resignation from the law firm WilmerHale. The firm employs lawyers for Kushner and Trump’s former campaign chairman, Paul Manafort. The appointment is certain to soothe ner ves at the FBI, where agents have felt under siege since Comey’s firing and amid Trump’s repeated criticism of the Russia investigation. Mueller is known for his gruff, exacting management style—and for saving the FBI after the Septemter 11 attacks, when there were calls to break it up and create a separate domestic intelligence agency. Mueller, who came to the agency just one week before the attacks, beat back those efforts and is credited with building the modern FBI. He led inquiries into al-Qaeda while transforming the bureau into a key part of the national security infrastructure. Mueller is renowned inside the Justice Department for being a senior prosecutor under the elder President George Bush, and then returning years later as a workinglevel prosecutor in Washington. “He came in as a line assistant and he was legendary. He was the first guy there every single day,” said Preston Burton, a Washington defense lawyer who served in the US attorney’s office with Mueller. “All of a sudden he’s doing street crime? Literal street crime. He’s inexhaustible. He’s the embodiment of integrity.” New York Times News Service
Putin offers ‘record’ of Trump’s disclosures to Russian envoys M OSCOW—Asserting himself abroad with his customary disruptive panache, President Vladimir Putin on Wednesday jumped into the furor over President Donald J. Trump’s disclosure of classified information to Russian diplomats, declaring that nothing secret had been revealed and that he could prove it. Putin, who has a long record of seizing on foreign crises to make Russia’s voice heard, announced during a news conference in Sochi, Russia, the Black Sea resort that has become his equivalent of Trump’s Mar-a-Lago, that he had a “record” of the US president’s meeting at the White House with two senior Russian officials and was ready to give it to Congress—so long as Trump did not object. Referring to reports that Trump had revealed highly classified intelligence, Putin
said, “It’s hard to imagine what else these people who generate such nonsense and rubbish can dream up next.” Putin’s offer to release a record of what was said, made after a meeting with the visiting prime minister of Italy, Paolo Gentiloni, suggested less an effort to create clarity over what Trump actually said in the Oval Office last Wednesday than a headlinegrabbing assertion of his own authority and a reminder that he should not be ignored. To that end, the Russian government has been angling for months for a meeting between Putin and Trump, who has met a host of foreign leaders since he took office in January but has only spoken with the Russian president by telephone. They are expected to get together during a summit meeting of the Group of 20 nations in Germany in July. As with many of Putin’s maneuvers,
his offer to release a record of the White House meeting with Russia’s foreign minister, Sergey Lavrov and its Washington ambassador, Sergey I. Kislyak, seemed designed to unnerve and confuse. For a start, the offer left everyone guessing about what kind of “record” Putin had of his diplomats’ meeting with Trump. Intentionally or otherwise, Putin muddied the waters by using a Russian word that can mean both audio recording and a written account. A Kremlin aide, Yury Ushakov, later clarified that Moscow had in its possession a written transcript, not a tape. “I think Putin gets personal pleasure from exploiting the vulnerable position Trump has found himself in,” said Valeriy Solovey, a professor at the Moscow State Institute of International Relations. “Putin feels superior and this flatters him.”
But, he added, the main target of Putin’s intervention was domestic opinion, as has been the case with most moves by the Russian president that baffle and dismay foreigners. “This was a well-prepared impromptu move,” Solovey said. “The goal is to demonstrate the superiority of the Russian political system, in which major decisions can be made swiftly and effectively. From the Russian point of view, what happens in Washington these days demonstrates the total inability of the US president to make any decisions that are needed in this situation.” Putin’s remarks were unlikely to please the White House, which has given conflicting accounts of what Trump told the Russians and has resisted giving details of their conversation. Aleksei V. Makarkin, deputy head of the Center for Political Technologies, a
Moscow research group, said he doubted Putin had set out to offend Trump and questioned whether the Russian record would ever see the light of day. “On the personal level, Trump clearly wants to improve relations with Russia. The problem is that he is also president of the US, head of the state apparatus. This makes it much more difficult to make deals with Russia,” Makarkin said. Putin’s offer, he added, was “pure rhetoric because the condition is that Trump should sign up to the idea. The American side should give its permission and this is a big problem. How can it give its permission if secret matters were discussed?” And even if the White House does assent to the release of the Russian record, making it public is unlikely to clear the air, Makarkin said. “If Russia published a transcript, people
wouldn’t believe it anyway,” he added. “The media can say that not everything was published and that this document cannot be trusted.” US officials have said that Trump revealed secret information provided by Israel about a planned terrorist operation by the Islamic State militant group. In the process, they say, he named the city in Syria where the information was collected, potentially jeopardizing the source. Trump has acknowledged discussing terrorism but has not specified what he told the Russian envoys. Putin dismissed the claim that Trump had revealed any information that could be considered highly sensitive, returning to a favorite Kremlin theme: that the US is gripped by an anti-Russian fever. New York Times News Service
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The World BusinessMirror
Friday, May 19, 2017
Editor: Lyn Resurreccion • www.businessmirror.com.ph
May unnerves UK business as Tories redefine capitalism
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An armored police vehicle catches fires from molotov bombs thrown by antigovernment protesters in Caracas, Venezuela, on April 26. Security forces Opponents of President Nicolas Maduro that attempted to march to the Ombudsman’s office in downtown in another day of protests that have already claimed dozens lives since the start of April. AP/Fernando Llano
Venezuela crisis worsening, US wants to prevent new Syria
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NITED NATIONS—The US called Wednesday’s firstever UN Security Council consultations on Venezuela, because the crisis is getting worse, and the Trump administration wants to prevent another conflict like Syria, North Korea or South Sudan, US Ambassador Nikki Haley said.
Venezuelan Ambassador Rafael Ramirez strongly rejected the US bringing his country’s political dispute to the UN’s most powerful body and accused Washington of again trying “to interfere in our domestic issues”. Haley said the US intention wasn’t to be “intrusive” or “heavyhanded”, but to support regional efforts to find a political solution and “show respect for the Venezuelan people”, who want free and fair elections, the release of political prisoners and the worsening humanitarian situation addressed. “We think if that doesn’t happen, we will certainly be hearing this in the Security Council, because it will be a real problem— not just in the region, but internationally,” Haley told reporters after the closed-door briefing and discussions that lasted over oneand-a-half hours. Nearly two months of political unrest were set off by the attempt by President Nicolas Maduro’s socialist government to nullify the opposition-controlled Congress in late March. But demonstrations have escalated into a vehicle for airing grievances against
150 The number of political prisoners in Venezuela
the government for triple-digit inflation, food shortages and a rise in crime. The opposition blames the bloodshed on state security forces using excessive force and on groups of armed, progovernment civilians known as “colectivos”. Maduro says far-right extremists are working with criminal gangs to foment the violence. Haley said the meeting was aimed at conf lict prevention, not council action, and sought to put light on what is happening in Venezuela. “We’ve seen 150 political prisoners, over 1,500 arrests and clearly we’re starting to see serious instability in Venezuela,” she said.
“We’ve been down this road with Syria, North Korea, South Sudan, Burundi, with Burma,” which is now known as Myanmar. Haley said rather than waiting for the Venezuela situation to become so serious that there has to be a Security Council meeting, “Why not try and stop a problem before it starts?” Venezuela’s Ramirez accused the US of pushing to “intervene in our country”, as his government alleges Washington has tried to do in the past. He called Venezuela’s problems a domestic matter, and said Maduro’s government is trying to resolve them and will not allow any outside interference. “We will never be a threat against the peace and security in international or the regional level,” he insisted. Ramirez stressed that Venezuela is not on the Security Council agenda, and said many council members “disagree with the US” and back his government’s position that it shouldn’t be there. International pressure on the troubled South American nation has been increasing, with the Organization of American States (OAS) voting on Monday to hold a rare foreign ministers’ meeting later this month to discuss the crisis. Venezuela officially notified the OAS on April 28 that it intends to quit the regional group. Britain’s UN ambassador, Matthew Rycroft, said it is “absolutely right” that the OAS and the 33-nation Community of Latin American and Caribbean States (Celac) are taking the lead, “ but it is also right that the Security Council, charged as we are on the maintenance of security and peace...keep a very close eye on the situation”.
He warned that if things go wrong, Venezuela could “descend into conflict” and threaten international peace and security. “And so we need to act, in whatever way we can, starting with our discussion today,” he said. Ramirez dismissed Britain, saying it was following the US. He said Venezuela prefers the regional approach, noting that Pope Francis has offered help, and the former presidents of the Dominican Republic, Spain and Panama are talking to both sides. He said Maduro’s government also believes in Celac and Union of South American Nations, which comprises 12 South American nations. UN Ambassador Sacha Llorentty Soliz of Bolivia, whose government is an ally of Venezuela, said Wednesday’s council meeting interfered with regional efforts to resolve the political dispute. “It doesn’t help at all because the United States is not a mediator,” he said. He said the US supports the Ve n e z u e l a n o p p o s it i o n a n d “that’s why this meeting, instead of helping solving the problem— it will really be an obstacle”. There was no statement from the council after the meeting, ref lecting the division among members. Ur ug uay’s UN ambassador, Elbio Rosselli, this month ’s council president, said h is gover nment favors a re gional approach, and is working with many other countries to help the political factions in Venezuela resolve the crisis. “If the Colombians could overcome 50 years of war in a peaceful manner, I’m pretty sure our brothers in Venezuela can take the lesson and do likewise,” Rosselli said. AP
Saudi sets up defense firm to meet military needs
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audi Arabia’s sovereign wealth fund set up a defense company to help reduce the kingdom’s reliance on foreign purchases and to diversify the economy away from oil. The Saudi Arabian Militar y Industr ies, w i l l manufacture products and provide mainten a nce ser v ices ac ross u n its, including air and land systems,
weapons and missiles and defense electronics, t he Public Investment Fund (PIF) said in a statement on Wednesday. The company is wholly owned by the government. “W hile the Kingdom is one of the world ’s top five spenders on security and defense overall, only around 2 percent of our military procurement is domestic,”
Deputy Crown Prince Mohammed bin Salman, who is also the country’s defense minister, said in the statement. The company is part of Prince Mohammed ’s plan to wean the Saudi economy off its reliance on revenue from oil exports by 2030. The wealth fund said Sami will directly contribute around 14 billion riyals ($3.7 billion) to
t he Saud i GDP by 2030, invest more than 6 billion riyals in resea rc h a nd development “a nd create over 40,0 0 0 jobs, ma ny of wh ic h w i l l be in t he eng ineer ing a nd tec hnica l f ield s”. Under Prince Mohammed ’s Vision 2030, 50 percent of Saudi Arabia’s militar y “procurement spending will be localized ”, the PIF said. AP
o one of Britain’s best-known privateequity veterans, Theresa May is the least business-friendly Conservative prime minister in decades. S o m e o f w h at M ay h a s a l re a d y pledged tramples on territory normally occupied by the opposition Labour Party, such as lower energy bills and measures appealing to low-income workers at the expense of employers. Other ideas, such as reining in the salaries of chief executives, might not make the final cut when the election manifesto is finally unveiled on Thursday, but have sounded the alarm in the City of London. “Theresa May knows she’s got the rightwing vote sewn up, so she’s been trying to take as many votes as she can from Labour,” said Jon Moulton, founder of the privateequity group Better Capital and chairman of broker FinnCap. “But some of her policies will leave things very hard for business. If she puts too many employee-friendly policies in place, the UK market will just become a less competitive place.” May read into last year ’s Brexit referendum result that voters were angry with inequality and business as usual, and saw an opportunity for her Conservatives to channel that frustration. At stake is whether she can find a middle path that addresses voters’ objections to capitalism without undermining UK business and the economy.
Populism prevention?
“Real wages are falling, and trust in business is sliding, so it’s just sensible politics to address voters’ unease about the way the economy is working for them by trying to make markets fair,” said James Kirkup, director of the Social Market Foundation. “It’s also a way to stop Britain succumbing to real antimarket populism.” Average real earnings in Britain fell for six straight years after the crash of 2007 and are still below their precrisis levels. Data published on Wednesday showed that after two-and-a-half years, they’re falling again. And incomes will be under more pressure in the coming years, with welfare cuts as the government continues its austerity program, and rising inflation as a result of the pound’s decline. May, who came to lead the party of Margaret Thatcher as a result of the Brexit referendum, says she is determined to address voters’ hardships. On the day she became prime minister last July, she pledged to fight the “injustices” of inequality in Britain, saying “we won’t entrench the advantages of the fortunate few”. At the Tory party conference in October, she attacked “elites” and business leaders who failed to pay their taxes, putting them “on warning: this can’t go on anymore”. May, who is leading in the polls by as much as 20 percentage points, has advocated measures including giving
workers representation on company boards, intervening in foreign takeovers if they’re deemed contrary to the national interest and altering rules governing shareholder votes on corporate pay. Some of this may be rhetoric— Thursday’s manifesto will offer clues as to how much will actually become policy. The opposition Labour Party, which moved deeper into socialist territory under its leader Jeremy Corbyn, has made concrete pledges to fight inequality, such as levies on companies that pay employees more than €330,000 ($430,000) a year. Businesses need to get used to it, according to Stephen Martin, directorgeneral of the Institute of Directors. “Whoever wins the next election, the City should expect the focus on corporate governance reform to continue,” he said, citing the erosion of public trust in business caused by the financial crisis and highprofile governance issues at companies such as Sports Direct International Plc and BHS. “Boards may not like political tinkering, which can be counterproductive, but the time for opposing sensible reform is over.”
Energy cap
Companies are already bracing for the effects of May’s brand of Conservatism. SSE Plc, one of the Big Six energy suppliers targeted by her energy cap, said on Wednesday it is preparing for “significant challenges” this financial year. The policy, which is similar to a Labour proposal made in 2015, will make for a “very different market”, CEO Alistair Phillips-Davies said. A clue to May’s thinking comes from an article written by her joint chief of staff, Nick Timothy, four months before they took office. “The most serious weakness that the Conservatives have,” he wrote, “is the perception that we simply do not give a toss about ordinary people.” Timothy said there was “a small minority of people in our party who, frankly, do not care very much about others”. To combat that, he urged “a relentless focus on governing in the interests of ordinary, working people”. That thinking has implications for post-Brexit Britain. While some advocate deregulation and tax cuts as a way for Britain to remain competitive after Brexit, such policies would run counter to May’s understanding of what the referendum result was all about. According to Kirkup, she will continue to defend those she defines as ordinary to prevent a worse backlash against business and elites. “For some voters, the Brexit vote was a chance to let off steam about the way the country was going,” he said. “Taking that vote as a mandate to cut the economic and social protections those voters value—to the benefit of businesses that many of them distrust— would invite another backlash. She’s too cautious for that.” Bloomberg News
Japan’s Mako no longer a princess after she marries a commoner
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OKYO—Princess Mako, the granddaughter of Japan’s emperor, will marry an ocean-loving legal assistant who can ski, play the violin and cook. Japanese nuptials tend to be highly ritualized, especially for a royal family member, and the buildup to the wedding is likely to take time. A public announcement would come first, then a wedding date would be set and then the couple will make a formal report to the emperor and empress. Quasi-public NHK TV reported the news late on Tuesday, and the Imperial Household Agency confirmed the report to Japanese media who belong to an exclusive “press club” system. But the agency declined comment to The Associated Press. The man who won the princess’ heart spoke to reporters on Wednesday, and his comments dominated national TV coverage, though he gave few details. Kei Komuro said he works as a legal assistant, and had just spoken over the phone with Mako, who had been a fellow student at International Christian University in Tokyo. “When the right time comes, I’d like to talk about it,” he told reporters, bowing repeatedly, wearing a suit and tie. The couple, who are both 25, met at a restaurant in Tokyo’s Shibuya about five years ago at a party to talk about studying abroad, and they have been dating several
times a month recently, NHK said. Komuro was once tapped as “Prince of the Sea” to promote tourism to the beaches of Shonan in Kanagawa prefecture, a facet of his profile highlighted by local media. Women can’t succeed to the Chrysanthemum Throne. Mako’s father and her younger brother are in line to succeed Emperor Akihito, but after her uncle Crown Prince Naruhito, who is first in line. Once she marries, Mako will no longer be a princess and will become a commoner. NHK said Mako has already introduced Komuro to her parents, and they approve. A formal announcement could come as soon as next month, Japanese media said. Unlike royalty in Great Britain and other European countries, the emperor and his family tend to be cloistered, although they travel abroad asnd appear at cultural events. Akihito, 83, is the son of Hirohito, Japan’s emperor during World War II. Akihito expressed his desire to abdicate last year, and Japan has been preparing legislation especially for him so he can. Until Japan’s defeat at the end of World War II, Hirohito was viewed as divine, and no one had even heard his voice. But the times are changing, and the Japanese public harbors a feeling of openness and familiarity toward the emperor and his family. People are likely to see Mako’s marriage as a celebration, although the rituals will continue to be tightly orchestrated. AP
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BusinessMirror
Friday, May 19, 2017 A9
A10 Friday, May 19, 2017 • Editor: Angel R. Calso
Opinion BusinessMirror
editorial
Business and politics: They are different
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ssume this wild and entirely hypothetical situation. San Miguel Corp. completes a successful, but bitter and unfriendly, majorityownership takeover of property developer Megaworld Corp. We would expect that San Miguel Vice Chairman, President and COO Ramon S. Ang would then meet with Megaworld executives and, perhaps, other employees. It is likely that Ang’s remarks would speak of a brighter future working together, and almost certainly the phrase “one big happy family”. Disgruntled employees in this situation can affect making money and profits. That’s business. Crime boss Al Capone in the movie The Untouchables says this: “I want you to find this nancy-boy Eliot Ness, I want him dead! I want his family dead! I want his house burned to the ground! I wanna go there in the middle of the night, and I wanna piss on his ashes!” Federal law-enforcement agent Ness is a threat to the power—and money-making ability—of Capone. That’s politics. The discussion that we enjoy having is whether a career businessman or a career politician is most qualified and suitable to be the leader of a nation. This is a false argument. The most important quality is experience in executive management, whether in a corporation or government. That is why in business, people move up the chain of command. You don’t go from best “Sales in Company History” to CEO in one jump. The difference between politics and business is that business success is based on money. However, there are two things about this. Wealth, even as it is being accumulated, must be protected. Business worries first about sliding backward, and then concerns itself with moving forward. The other aspect is that a business can grow and prosper, even as its competitors are also growing and prospering. It is not a zero-sum game. Politics is exclusively about power, with any financial rewards coming only after the power is gained. And it is not a zero-sum game. There is always a winner and a loser, and that is what elections are about. Political power must always be taken from someone else who loses the power. While in our example of San Miguel and Megaworld, a top Megaworld executive who aspires to be the president may still be able to compete equally against a San Miguel executive for the top spot. Decisions will likely be made on what is in the best interest of the company. Unfortunately, political decisions are often, if not usually, made for what is in the best interests of the individual players. Of course, both the company and country president must be able to follow the advice of the Godfather, Vito Corleone: “‘I’m gonna make him an offer he can’t refuse”. The absolute political chaos in the US—which will soon deteriorate into increasing waves of social unrest—proves the point. Any person who enters the presidency with a “business attitude” either quickly learns and adjusts to the fact the politics is a hundred times more cutthroat and ruthless than business. Or crashes and burns in a sea of flames.
Attorney James Jimenez
spox
T
he thing with overnight sensations is that they rarely happen overnight. Take lawyer Ramil Comendador, for instance. He held a job as a utility worker in the office of then-Commissioner Rene V. Sarmiento—who was one of the framers of the 1987 Constitution, by the way—while also toiling the nights away at the University of Manila. For years, he did that, pursuing his dream in relative obscurity, until he graduated with a Bachelor of Laws in 2016. Where our determination flickers like a candle flame in high wind, his blazed like a forest fire. And now he’s a member of the Philippine Bar, an exemplar for everyone, and—on social media—an emerging meme for anyone ever tempted to wallow in self-pity.
Interviewed just after he found out that he had passed the Bar, Comendador said: “Gusto ko lang pong sabihin sa kanila na kaya po nating putulin ang cycle ng kahirapan, magsumikap lang. Huwag isiping mahirap,
sige lang at kumapit sa Panginoon [All I want to say to everyone is that we can break the cycle of poverty. No matter how difficult it might be; keep on and have faith in the Lord].” Returning to the same theme
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I personally met Comendador earlier this week, and just as I was getting up from being bowled over by the surprise visit from the man I admired for his work ethic and dedication to education, I was then floored all over again by the same man’s humility. As can be expected—although apparently not by him, as he still seemed genuinely surprised at all the attention he was getting—Comendador has been approached by various quarters seeking to (not to put too fine a point on it) “promote” him. His concern, and this really cast my admiration for him in bronze, was how these offers would impact his current employer, the Commission on Elections (Comelec). As he put it, “Ayokong
malagay sa alanganin ang Comelec [I don’t want to put the Comelec in an awkward position].” In other words, in the face of significant personal gain, his first thought was as to how his action would impact the commission’s service to the public. To say that this kind of selfless devotion is uncommon in the age of self-promotion we find ourselves floundering in would be an understatement. That he made the effort to consult with me, only confirmed the rightness of my invitation to him to join the Education and Information Department of the Comelec. If he accepts, this gentleman— and gentle man—will be an invaluable #KnowElectionsBetter (the Education and Information Department’s main voter-education platform) speaker. Apart from delivering voter education to the general public, Comendador will be able to share his inspiring life experience to a generation of prevoters who would greatly benefit from being presented with such a positive role model.
Dangerous times for Trump and the nation
Since 2005
✝ Ambassador Antonio L. Cabangon Chua
in another interview, Comendador added: “Edukasyon lang po talaga ang susi sa pagputol ng cycle ng kahirapan [Education is the only key to breaking the cycle of poverty].” And now we all know that the man knows whereof he speaks.
Nicholas Kristof
new york times
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he Trump presidency may now be disintegrating, tumbling toward entropy. By firing James Comey as Federal Bureau of Investigation (FBI) director, President Donald J. Trump set in motion the appointment on Wednesday evening with Robert Mueller as special counsel. Mueller is a Trump nightmare: a pro who ran the FBI for 12 years and is broadly respected by both parties in Washington for his competence and integrity. If Trump thought he was removing a thorn by firing Comey, he now faces a grove of thistles.
One crucial lesson here: Pressure matters. It was public opinion that stalled the Republican effort to repeal Obamacare, and it is public opinion, in part, that will ensure the integrity of this investigation. While the Justice Department didn’t precisely cave in to polls, it truly does matter that a majority of Americans want this cloud over our presidency investigated and removed; legal decisions unfold in a political context. Keep up that pressure, for the coming months may be particularly dangerous. We don’t, of course, know what Mueller will find, and Trump has reiterated his denial of collusion with the Kremlin. Some Democrats seem to assume an investigation will prove a secret deal between Trump and Vladimir Putin, but many smart people I speak to wonder if it will end up more gray. They foresee evidence of collusion by Trump’s aides, and of
financial pathways linking Moscow to Trump and his campaign, but perhaps no proof of a quid pro quo involving Trump himself. The aides most at risk may be Paul Manafort and Mike Flynn, and NBC is reporting that multiple subpoenas have been issued for records involving them. In addition, The Washington Post reported on Wednesday a remarkable recording in which House Majority Leader Kevin McCarthy declared last June that he believed that Putin finances Trump. Talking with House Speaker Paul Ryan and other leaders, McCarthy said, “I think Putin pays” Trump. When people laughed, McCarthy quickly added, “Swear to God!” Ryan swore those present to secrecy. “No leaks,” Ryan said. “This is how we know we’re a real family here.” When The Post asked Ryan and McCarthy about the statements,
their offices flatly denied them. Informed that The Post had a recording, they backtracked and suggested it was a joke. If it’s not humor, this is extraordinary: The Republican House leadership suggested that Putin was keeping Trump on his payroll and that this must be kept secret—even as they thundered about Hillary Clinton’s e-mails! (An aside: Thank God for the battle unfolding between The Washington Post and The New York Times. This is the best kind of newspaper war, keeping America straight. I’ve been very critical of media coverage of the presidential campaign, but the rigorous coverage of Trump since he took office has made me proud to be a journalist. And thanks to all those citizens who have subscribed to news outlets in recent months, recognizing that subscriptions are the price for a democracy.) Yet, there are dangers ahead. One is that America will be incapacitated and paralyzed by Mueller’s investigation, and the suspicions—this partly explains the stock market’s big fall on Wednesday—and foreign powers may take advantage of this to undertake their own mischief. I would worry about Russia in both Ukraine and the Baltic countries, and we must make clear that we will work with allies to respond in kind. Another danger is the risk of an erratic, embattled, paranoid leader at home who feels that he may be going down the tubes anyway. In domestic policy, presidents are constrained by Congress and the courts about what damage they can cause, but in foreign policy, a president has a largely free hand—and the ability to launch nu-
clear strikes that would pretty much destroy the world. In 1974 as Richard Nixon’s presidency was collapsing, he was drinking heavily and aides worried that he was becoming unstable. Fearing what might go wrong, Nixon’s defense secretary, James Schlesinger, secretly instructed the military not to carry out any White House order to use nuclear weapons unless confirmed by him or Henry Kissinger. This was unconstitutional. And wise. Schlesinger also prepared secret plans to deploy troops in Washington in the event of problems with the presidential succession. We don’t know how Trump will respond in the coming months, and let’s all hope for smooth sailing. But as with Schlesinger’s steps, it’s wise to be prepared. There have been calls for Trump aides to step down rather than ruin their reputations, but I hope that the grown-ups— H.R. McMaster, Jim Mattis, Dina Powell, John Kelly, Rex Tillerson— grit their teeth and stick it out. The White House has never needed more adult supervision. The Cabinet has the constitutional power to remove a president by majority vote under the 25th Amendment (if the president protests, this must be confirmed by two-thirds of each chamber of Congress). Such a vote is unlikely, but in the event of a crisis like the one Schlesinger envisioned, it would be essential. I hope that Cabinet members are keeping one another’s cell phone numbers handy in case an emergency meeting becomes necessary for our nation.
Opinion BusinessMirror
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Friday, May 19, 2017 A11
Financing Dutertenomics The visitors Alvin Ang
Tito Genova Valiente
EAGLE WATCH
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he Forbes article about the potential foreign debt of the Philippines warns about a debt crisis in the future (New Philippine Debt of $167 Billion Could Balloon To $452 Billion: China Will Benefit—May 13). It assumes that China will be the main lender of the $167-billion infrastructure program under the Duterte administration. It concludes that this “will put the Philippines into a virtual debt bondage if allowed to proceed”. Do we agree with this prognosis? This article seems to miss two interrelated critical points, the Philippine external debt experience and the investment grade rating of the country. First, the Philippines had a difficult external debt condition that was experienced severely in the 1980s through the mid-1990s. With low levels of dollar revenues and falling foreign exchange reserves, the peso has to be devalued a number of times leading to spiraling price increases. Furthermore, the questionable nature of the use of the foreign debt proceeds all the more created political and economic instability. That debt crisis limited the ability of government to deliver basic services, leading, for instance, to massive brownouts in the 1990s. These painful lessons of our overborrowing in the past are in our databases and written in our history. A significant number of people experienced these crises, and many of them would not want a repeat of these. This is why data would show that previous administrations have done their best to steer the country away from incurring more external debts and restructuring them toward the long term. The chart below would show that from highs of close to 100 percent of Gross National Income (GNI) in 1986, the external debt ratio has fallen to its lowest level of about 20 percent of GNI in 2013. It is also important to note that the Philippines has the lowest external debt to GDP ratio among the Asean countries at 24.5 percent of GDP. Malaysia has 71 percent, Indonesia has 34 percent and Thailand has 32 percent. With this backdrop, it is our view that the current administration will be prudent not to go into a borrowing spree without carefully considering our capacity to pay. As for borrowing capacity, the current administration had capped government deficit to GDP ratio to 3 percent. At present, there is enough room to borrow, because the last six years have seen the deficit hover from -0.6 percent to -2.4 percent, which allows for accommodating another 0.5 percent of deficit. Second, because of improved government financials, the Philippines was able to achieve investment-grade status in 2013. Investment grade essentially refers to the quality of a country’s credit capacity based on its financial strength, future prospects and history. With investment grade also comes better terms for borrowing and wider acceptance. Thus, while the Philippine government has expressed its preference for Chinese funding, it is unlikely that the rates agreed upon will be higher than the investment-grade rates the Philippines should be getting from the financial
The article assumes interest rates not based on investment-grade rating of the Philippines. We do not agree with the analysis of the article about a looming debt trap. Nonetheless, the article raises a point in regard to the country’s choice of its possible approach in accessing the international market to fund its infrastructure program. markets. Currently, comparable 3-year sovereign bonds issued by the Philippine Government is yielding at 1.894 as against Indonesia’s 3.198. The Philippine bond has a spread of 40 basis points, or 0.4 percent higher than the comparable US Treasury Bond of 1.489. The comparable Indonesian bond has a spread of 171 basis points, or 1.71 percent higher. The article assumes interest rates not based on investment-grade rating of the Philippines. Based on these, we do not agree with the analysis of the article about a looming debt trap. Nonetheless, the article raises a point in regard to the country’s choice of its possible approach in accessing the international market to fund its infrastructure program. The latest government pronouncement about nonacceptance of aid from the European Union may limit market reach from broader sources. It is possible that it could result to a slowing down of new investments from EU, or for EU lenders and investors to ask for a higher rate of return. Hence, it could lead to an increase in interest rates spread notwithstanding the country’s credit rating, making it expensive to access foreign funds. This move should lead to the government ensuring a better internal financial-generation capacity. This means that the tax-reform package currently being deliberated in Congress had to be passed soonest, and that it will not be significantly watered down. The huge financing requirements of this infrastructure program should be supported internally and externally without unduly passing on the burden to the future generation. With still good GDP numbers (first quarter 2017 at 6.4 percent), the growth momentum is expected to draw more interest into the country in terms of foreign investments and better trade. An interesting development in this first-quarter growth is the strong rebound of the agriculture sector. Its sustained growth could lead to broader and more inclusive development that could support the needed resources for infrastructure investments without need for heavy borrowing.
annotations
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F there is one achievement for my mother in her age of 91 years, as she gets a bit closer to our furtive sense of eternity, it is her visitors. She has many of them in the early morning. They come in clans, even when the clock strikes midnight. At first, I thought, they come without invitation. But constantly listening to my mother has convinced me that she calls them, and invites them to be with her.
They are all dead people. Most of the time, she talks with them about events of the past. My mother’s memory of names is fascinating. She recognizes them instantly, calling them by their nicknames. One evening, my mother was talking as if she was looking at a list of names. The visitors that night all belonged to one family line. As I listened, I started making a headcount of those people I had not seen for a long time. By my mother’s reckoning, I concluded that they must be all dead by now. One night, my mother was calling a man by his honorific “Mr.” He must be one of the principals or supervisors she worked for as a public school teacher. With some visitors, she speaks
about going for a walk. With other callers, she stretches out her old, thin arms as if handing out a tiny parcel or box. My mother likes asking all of her visitors to carry a letter for her. I get this sense the visitors refuse to get this letter because the next morning, when she wakes up, my mother looks agitated. She would then talk of letters and documents. I believe—we believe—one of these visitors, or two of them, will finally take that letter she has been asking people to deliver somewhere, or guide her out her room forever. We do not know who it will be. They say, the parents who have long passed on renew their duties and come back to take a son or daughter away from this valley of tears.
Several times, my mother has called on the names of her “Mama” and “Papa”. During these times, I would enter her room and look at her in deep dialogue with someone. My eyes move from her and to those points in space where I feel my grandparents are. This visit would end with my mother asking where her “Mama” and “Papa” are going. A rare visit from my father happened this week. Upon hearing my mother say “Joe” and, later “Joker’ (a term of endearment she uses for my father), I went surging into her room. Instead of just being a mere witness to the visit, I stated talking to my father. “Papa, are you taking Mama with you, now?” But as usual, the visit ended with my mother calling out as if someone had just turned his back and started leaving.
Caritas Manila wins complaint against health provider with similar name Rev. Fr. Antonio Cecilio T. Pascual
SERVANT LEADER
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he Securities and Exchange Commission (SEC) decided in favor of Caritas Manila against Caritas Health Shield Inc. due to the latter’s deceptively similar name.
This came about after Caritas Manila Inc., the lead social services and development ministry of the Archdiocese of Manila, filed a complaint against Caritas Health Shield Inc., a health care-services provider, and asked the SEC to order the latter to change or modify its corporate name by deleting the word “Caritas”. The SEC’s Office of the General Counsel, in its decision, acknowl-
edged that Caritas Manila has the prior right over the name “Caritas” because it was incorporated on May 3, 1977, which is 18 years earlier than the incorporation of Caritas Health Shield Inc. on April 25, 1995. Also, it has been proven that the latter is confusingly similar with the corporate name of the complainant, based on the evidence presented by Caritas Manila. The SEC Office of the General
Counsel then ordered Caritas Health Shield Inc. to change its corporate name by omitting the word “Caritas”. Part of the SEC order reads: “WHEREFORE, premises considered, Respondent CARITAS HEALTH SHIELD INC. is hereby ordered to CHANGE its corporate name by removing the word “CARITAS”, or otherwise adopt another name through an amendment of its Articles of Incorporation, and filing the same with this Commission within thirty (30) days from date of receipt hereof. It is further directed to submit a compliance report within the same period, enclosing therein a certified copy of the approved Articles of Incorporation.” Caritas Manila argued that the similarity of their dominant name, which is “Caritas”, has led to public confusion that they are in anyway connected to the healthcare provider. For instance, the
There is never sadness or a hint of regret when the visitors leave my mother. I think, my mother knows a different protocol rules these visits. I wonder who will guide my mother out of her sleeplessness and weakening. I have stopped giving her medicine to calm her down, let her have a good sleep, and when she wakes up, make her feel good. Mama, from now on, will take care of her body and soul. She has the power to summon other souls, and she does not need those pills meant for the body. One morning, she was trying to summon me to her room. “I am not going there,” I shouted from the living room, “Your room is already crowded with visitors.”
E-mail: titovaliente@yahoo.com.
charitable institution has been receiving complaints of spam text messages, mistaken e-mails and newspaper articles. Caritas Manila also claimed that Caritas Health Shield Inc. violated Section 18 of the Corporation Code, arguing that the use of the said name infringes its trade name. Furthermore, it emphasizes that the unlawful use of the word “Caritas” for medical health services has damaged its public image as a nonprofit charitable institution. Caritas Manila welcomes this development. The SEC decision clears the name and reputation of the charitable institution and, henceforth, the donors and most especially the people that it supports will no longer be confused. To know more about Caritas Manila, visit www. caritas.org.ph. For your donations, call our DonorCare lines 563-9311, 564-0205, 0999-7943455, 0905-4285001 and 0929-8343857.
Assessment based only on Letter Notice is void Atty. Esther M. Weigand
Tax Law for Business
D
ue to technological advances, taxpayers can actually find themselves under the scrutiny by the Bureau of Internal Revenue (BIR), even though no detailed examination of the books and records is conducted. This is possible through the BIR’s Reconciliation of Listing for Enforcement (Relief) System, which can detect possible tax leaks by matching the information available to the BIR from different sources. If the matching of data reveals discrepancies, the BIR may issue what is called a “Letter Notice (LN).”
Basically, LN is a notice that informs the taxpayer of discrepancies on their reported information, such as sales and purchases, a result of matching said information with the data received from other sources, such as the customers and suppliers. This is to be distinguished from the statutorily required a Letter of Authority (LOA), which is the authority given to a revenue officer, empowering him to examine the books of account and other accounting records of a taxpayer. Using the Relief System, there are numerous instances where the BIR has proceeded to issue a Preliminary Assessment Notice and then the
Final Assessment Notice. There are a number of instances where, even in the absence of a LOA, the BIR issued assessment notices simply on the basis of the discrepancies gathered through the Relief System and summarized through LN. And fortunately for the BIR, the Tax Court, in a number of decisions, agreed with the approach taken by the BIR. According to the Tax Court, the absence of a LOA does not invalidate the assessment if there is no examination of the taxpayer’s books of accounts. A finding of discrepancies with the aid of matching of computer data with other information or returns filed by the taxpayer or
by third parties is deemed sufficient to initiate the assessment process against the taxpayer. On April 5, however, the Supreme Court (SC), in GR 222743, ruled that LOA cannot be dispensed with just because none of the financial books or records being physically kept was examined. The SC opined that the statutory requirement of issuance of a LOA is not dependent on whether the taxpayer may be required to physically open his books or financial records, but only on whether a taxpayer is being subject to examination. A LN is issued only for the purpose of notifying the taxpayer that a discrepancy is found based on the BIR’s Relief System and nothing more. The Court also took note of Revenue Memorandum Order (RMO) 32-2005, which states that in case the discrepancies shown in the LN remained unresolved within 120 days from issuance of the LN, the revenue officer shall recommend the issuance of a LOA to replace the LN. Thus, following this RMO, due process requires that the revenue officer should secure first a LOA before proceeding with the further examination and assessment of a taxpayer. The Court cannot convert or treat the LN into the LOA required under the law. If no LOA is secured, the assessment on the basis of LN is void.
In essence, the discrepancies noted through the Relief System and communicated to the taxpayer through LN is only an indicator that a taxpayer could have possibly reported incorrect information. Thus, it should not result in the outright issuance of assessment. Instead, if the BIR so desires, it may issue a LOA to conduct further investigation on the possible tax leak. While technology should be adopted to strengthen the tax-enforcement capacity of the BIR, the use of such innovative methods of examining taxpayers should not compromise the taxpayer’s right to due process. With this SC ruling, it is hoped that assessments be made in accordance with and within the limits of the law, and in a manner that respects the rights of taxpayers. The author is a senior associate of Du-Baladad and Associates Law Offices, a member-firm 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 esther.weigand@bdblaw.com.ph or call 4032001 local 340.
2nd Front Page BusinessMirror
A12 Friday, May 19, 2017
Economic managers not consulted by Duterte in rejecting EU grants
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By Elijah Felice E. Rosales
@alyasjah
ome key economic managers were apparently not consulted by President Duterte when he decided to reject future grant amounting to about $278.8 million from the European Union (EU) for “interfering” with Philippine government affairs, particularly the bloody war against illegal drugs. Socioeconomic Planning Secretary Ernesto M. Pernia, for one, admitted that his advice on the matter was not sought by Duterte. “Not that I know of,” he said, responding to queries whether his opinion was solicited. Pernia said the President might have been infuriated by the relentless condemnation of the EU on the administration’s war against drugs, speculating he might had enough of its criticisms. But Presidential Spokesman Ernesto C. Abella said he is sure Duterte sought the opinion of his economic managers before making the decision.
$278.8M The amount of future grants that the Philippines is foregoing just to get the European Union off President Duterte’s back
“As far as I know, the recommendation came from the DOF [Department of Finance], so it’s not entirely accurate that they were not consulted,” he said. The EU delegation in Manila
said the Philippine government informed it about its decision on Wednesday, but it has yet to receive a written notice. EU Ambassador Franz Jessen said more than €250 million ($278.7 million) worth of grants could be at stake. “We are still awaiting more detailed clarification from the government,” Jessen said in an e-mail to The Associated Press (AP). “The amount possibly concerned by the new decision is €250-million plus. For this year the amount affected could be €100 million.” Development projects currently using EU assistance include a €35-million ($39-million) grant to support the peace process with Muslim rebels in southern Philippines. Abella clarified that humanitarian aid is not on the list of financial support that the Philippines will decline from the EU. “The President has approved the recommendation of the DOF not to accept grants, and this is not necessarily humanitarian aid from the EU that may allow it to interfere with the internal policies of the Philippines,” Abella said. He added these grants pertain to specific projects or programs that could affect the independence of the administration to advance its agenda.
“The Philippines reserves the right to accept loans and grants that help attain its objectives of promoting economic-development inclusiveness and reducing poverty; attaining peace within its borders and with its neighbors; and fostering a law-abiding society,” Abella stressed. “It also reserves the right to respectfully decline offers that do not achieve these goals and offers that allow foreigners to interfere with the conduct of its internal affairs,” he added. The EU is a vocal detractor of the administration’s war against drugs, repeatedly threatening the Philippines it would impose trade sanctions should Duterte carry on with his brutal crackdown. The EU is the largest foreign investor in the Philippines, the only member of the 10-member Asean to enjoy duty-free exports under the EU’s Generalized Scheme of Preferences Plus incentives for developing countries. The Philippines’s duty-free exports to the EU were worth around €1.6 billion ($1.78 million) in 2016, according to EU delegation data. In March the EU summoned a Philippine envoy to explain an expletive-laden tirade by Duterte, who threatened to hang EU officials for opposing his efforts to reimpose the death penalty.
The EU’s external action service, the equivalent of a foreign office, said it hauled Chargé d’Affaires Alan Deniega to its Brussels headquarters to provide “an explanation for the recent, unacceptable comments of President Duterte.” In a text message to reporters, Executive Secretary Salvador C. Medialdea said the decision to reject grants from the EU was to assert the country’s autonomy as an independent nation. “[The President did that] to enable them [EU] not to interfere with our internal affairs,” he explained. In the past years the EU’s support to the Philippines revolved around the health sector, governance and vulnerable populations, specifically in Mindanao, where droves of people are frequently displaced due to the communist and Islamic conflicts. According to the European Commission’s web site, the priority of the EU’s funding is improved delivery of health services with assistance provided, where possible, through budget support. “Other important sectors—though not priorities—are trade and investment, good governance, including migration, justice and public financial management, and support to the peace process in Mindanao,” the web site read.
ALMOST THERE This May 18 photo shows the 22 official candidates vying for the 2017 Miss Global Philippines crown. The grand coronation night will be on June 24 at the Newport Performing Arts Theater in Resorts World Manila in Pasay City. NONIE REYES
www.businessmirror.com.ph
BSP likely to retain key rates Tetangco: “The outlook for growth remains strong, even as the first-quarter outturn is slower than market anticipated.”
By Bianca Cuaresma
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@BcuaresmaBM
ubpar local output growth nu m b e r s o n T hu r s d a y strengthened the likelihood for the monetary authorities to keep the rate at which they borrow from or lend to banks steady when they next meet on June 22. This became more certain as local output measured as the GDP slowed to only 6.4 percent in the first three months from 6.9 percent, disappointing economists, analysts and observers. But even then, Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. said that despite the slowdown to 6.4 percent, the monetary authorities continue to be optimistic of growth prospects the rest of the year. “The outlook for growth remains strong, even as the first-quarter outturn is slower than market anticipated. BSP will continue to provide an operating environment that would support noninflationary domestic demand,” Tetangco said in a text message to reporters. In all likelihood, this means the BSP will continue to borrow at 3 percent from banks and financial institutions and lend to them at 3.5 percent when the rate-setting meeting of the Monetary Board convenes for the fourth time on June 22. Economists reacting to the GDP announcement said they remain bullish on the country’s ability to post stronger growth numbers in the second half despite falling short of market expectations early on in the year. “A somewhat disappointing number out of the [first quarter numbers], especially on the consumption end, with private consumption growth below 6 percent and the mere 0.2 percent print in government consumption. We have expected contribution from fiscal See “BSP,” A2
Groups want Dominguez’s EUROPE WATCHES TRUMP CRISIS WITH FRUSTRATION AND FATALISM link to mining investigated E F
uropean governments preparing for a looming round of major summits with Donald J. Trump are resigned to the fact that they will just have to learn to deal with a US president whom they see as increasingly erratic. As Trump’s W hite House struggles to extricate itself from an almost daily cycle of controversy, government officials in three European capitals recognized that they have no choice but to try and work with the administration. One official described the impossibility of trying to get the US to engage in preparations for the North Atlantic Treaty Organization (Nato) and Group-of-Seven (G-7) summit in Sicily next week. Another said US allies may have to prepare for the worst if
Trump’s predicament worsens. A third official said that, while the situation is very worrying, Britain is trusting its institutional relationship with the US is strong enough to endure any extended crisis in Washington. The upside for Europe is that a distracted Trump may struggle to get his way on increased defense spending, protectionist trade policies and climate change. The reality, however, is that progress is impossible on issues such as refugees or the global economy without the world’s superpower at the table. “It’s very difficult to know what to believe, what are the missiles, what are the decoys,” said Anthony Gardner, former US ambassador to the European Union. “There’s no point in being overly critical, it
would be counterproductive.” Gardner, who left his post in Brussels when Trump took office, advises Europeans to “wait until the dust settles.”
Seeking clarity
What European leaders crave from Washington right now— stability, predictability and clarity—they are unlikely to get when German Chancellor Angela Merkel and French President Emmanuel Macron face a leader whose ability to engage in global affairs is already being impaired. One of the officials said one wouldn’t even run a business the way Trump runs his government, while another cited preparatory talks for the G-7 as an example of the challenges they face. The main problem as they see it is See “Europe,” A2
By Jonathan L. Mayuga @jonlmayuga
inance Secretary Carlos G. Dominguez III may have benefited from his promining stance that undermines the crackdown on irresponsible mining operations launched by former Environment Secretary Regina Paz L. Lopez. This was stressed on Thursday by environmental group Kalikasan-People’s Network for the Env ironment (K alikasanPNE), as the group urged President Duterte to look into Dominguez’s mining interest. T he group added Congress should now prioritize the passage of House Bill 2715, or the people’s mining bill, a proposed law filed by the progressive Makabayan bloc in the House of Representatives, which aims to reorient the mining industry toward needs-based
extraction, national industrialization, and the protection of people’s rights and the environment. Dominguez, as the Department of Finance (DOF) secretary, is the cochairman of the Departnment of Environment and Natural Resources (DENR) chief in the Mining Industry Coordinating Council (MICC), which is currently reviewing Lopez’s controversial mine closure and suspension orders. Clemente Bautista, national coordinator of Kaliksan-PNE, accused Dominguez of using his position to intervene in governance matters that can benefit his family’s own mining interests. No less than Lopez herself accused the Department of Finance (DOF) chief of being biased for mining because of this. “Secretar y Dominguez and his clan’s mining interests were threatened by the bold mining
regulations implemented by now former DENR Secretary Regina Paz L. Lopez. Dominguez should be investigated, as it is unethical and even bordering on graft for a highly partisan mining oligarch, such as himself, to intervene in governance matters that can benefit his family’s own mining interests,” Bautista said in a statement. Dominguez and his family have stakes in mining companies, such as Alsons, Sagittarius Mines, Lafayette Philippines, United Paragon Mining and Philex, over the past two decades, Bautista alleged. “ These companies were adversely affected by the permit cancellation of companies located in functioning watersheds initiated by Lopez,” he said. Paul Dominguez, the brother of the DOF chief, is one of the executives of SMI. See “D0minguez,” A2