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A broader look at today’s business n Monday, May 21, 2018 Vol. 13 No. 219
Tax reform, Part 2 gets ex-DOF chiefs’ backing F
By Rea Cu
@ReaCuBM
ORMER secretaries and undersecretaries of the Department of Finance (DOF) have expressed thair support for the Duterte administration’s Comprehensive Tax Reform Program (CTRP) Package 2, which aims to lower corporate income-tax (CIT) rates and modernize investment incentives as effective tools in ensuring a “fair, competitive and growing” business sector in one of Asia’s fastest-expanding economies.
Corporate taxation, investment perks encourage equitable and inclusive growth, a competitive business environment, strong countryside development.—Ex-DOF chiefs to Dominguez
The show of support comes amid calls by some lawmakers to suspend implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) law and
PRA’s own JV Guidelines Alberto C. Agra
ead
L AlbertoPPP C. Agra
Y
esterday, May 20, 2018, the Joint Venture Guidelines of the Philippine Reclamation Authority (PRA JV Guidelines) took effect. The issuance of the PRA JV Guidelines is a testament to PRA’s commitment to advance public-private partnership (PPP) as a pro-people development strategy and to aggressively contribute to the current Administration’s “Build, Build, Build” program. Continued on A11
By Samuel P. Medenilla @sam_medenilla
F
@butchfBM
See “Not a coup,” A2
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AFTER LABOR DEAL, GOVT FOCUSES ON VIOLATORS
By Butch Fernandez
S
business news source of the year
Continued on A2
‘Not a coup.’ Caucus to settle Senate turnover enators were called to a caucus on Mond ay to formalize the leadership change earlier agreed upon by the majority of senators, that will see Senate President Aquilino L. “Koko” Pimentel III voluntarily relinquishing the coveted post to Senate Majority Leader Vicente C. Sotto III well in advance of the filing of certificates of candidacy for the 2019 Senatorial derby where Pimentel is seeking reelection. T he top -le ve l t u r nover i s seen to trigger an inevitable but minor revamp as Sen. Miguel F. Zubiri, who is taking over Sotto’s majority leader post, is expected to vacate chairmanships of the Committees on Trade, Commerce and Entrepreneurship and on Cooperatives.
2016 ejap journalism awards
ALIW BROADCASTING CORP. TURNS 27 Aliw Broadcasting Corp. marked its 27th founding anniversary on May 18 at
the Citystate Center Building on Shaw Boulevard in Pasig City. Leading the celebration were Aliw Media Group Chairman D. Edgard A. Cabangon (standing, third from right), VP and General Manager D. Adrian C. Cabangon (seated, second from right), Home Radio 97.9 station manager Braggy Braganza, Aliw Broadcasting Human Resources Manager Ana Margarita Cansino and Executive Vice President Ely Aligora (seated, leftmost, second and third from left, respectively). Executives of the ALC Group of Cos., to which Aliw Broadcasting belongs, also graced the event: ALC Realty Corp. and ALC Industrial and Commercial Development Corp. President D. Edward A. Cabangon, Eternal Plans Inc. Vice Chairman and CEO D. Antoinette C. Cabangon-Jacinto (seated, third and fourth from right, respectively) and BusinessMirror and Citystate Savings Bank Inc. President Benjamin V. Ramos (seated, right). Among the guests were Roni Merk, Robert Rivera, Richard Merk, (standing second, third and fourth from left respectively), Freddie Aguilar and Jun del Rosario (standing, second from right and rightmost, respectively).
PESO exchange rates n US 52.2540
OLLOWING the lifting of the total deployment ban in Kuwait, the Department of Labor and Employment (DOLE) said it will now crack down on erring agencies, which still deploy overseas Filipino workers (OFW) to the Gulf state in violation of Philippine government policies. The crackdown is part of the key conditions set under the new PhilippineKuwait Memorandum of Understanding (MOU) for the protection of Filipino household service workers (HSW), which was signed on May 11, 2018, according to Undersecretary Jacinto V. Paras. Paras is the newly appointed cluster head of DOLE overseeing the Philippine Overseas Employment Administration (POEA) and the Overseas Workers Welfare Administration (OWWA). “There must...be a review of the licenses of manpower agencies and ...only those who are not notoriously and constantly violating the law and POEA rules and regulations to deploy workers [to Kuwait will be allowed],” Paras said. Sources said some 200 licenses are up for review.
200+
The number of licenses of manpower agencies expected to be reviewed by authorities Also part of Manila’s commitment in the MOU to Kuwait is to make sure all deployed Filipino HSWs in Kuwait have undergone the necessary housework skills training. In exchange for the Philippines’s guarantee of the qualifications of Filipino HSWs in Kuwait, the Kuwaiti government must guarantee the workers enjoy a minimum of seven hours of sleep daily; work only for six days and get one rest day; are allowed to cook or buy their own food; and can retain and use their cell phones, among others. Paras said the implementation of these provisions will be contained in the guidelines that will be crafted by their technical working group and their counterpar t from the Kuwaiti government.
n japan 0.4718 n UK 70.6422 n HK 6.6568 n CHINA 8.2103 n singapore 38.9374 n australia 39.2375 n EU 61.6440 n SAUDI arabia 13.9336
See “Govt,” A2
Source: BSP (18 May 2018 )
News
BusinessMirror
A2 Monday, May 21, 2018
Con-com eyes 3 high courts
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By Bernadette D. Nicolas
@BNicolasBM
HE consultative committee (Con-com) tasked to review the 1987 Constitution is eyeing three “high courts” under the proposed federal system to speed up the final resolution of cases.
This is different from the current set up in the Judiciary where there is only one high court—the Supreme Court. Con-com Spokesman Conrado I. Generoso told the BusinessMirror that the subcommittee on the structure of the federal government
took up for almost three days last week proposals to establish two more high courts, whose jurisdiction will be different from that of the Supreme Court. He did not elaborate, as the details of the proposals and the results of the subcommittee de-
liberations will be the subject of a Con-com media briefing on May 21. T he Busin essMir ror h a s learned, however, that in the proposals being considered by the Con-com, the Supreme Court will continue to have jurisdiction over most cases, including criminal cases in which penalty is life imprisonment or death, and decisions of lower courts under appeal or review except those which will be transferred to the two new high courts. One of the two high courts will have exclusive jurisdiction over all matters and issues relating to constitutionality, while the other will tackle appeals on administrative cases and those decided by
government agencies performing quasi-judicial functions. The creation of three high courts is also meant to “ease the caseloads of the Court of Appeals and the Supreme Court and make the wheels of justice grind faster,” Generoso said. The judicial system in the Philippines has been criticized for being too slow. Last week’s deliberations of the subcommittee chaired by former SC Justice Antonio Nachura focused on the composition, qualifications of members and the manner of their appointment and the jurisdiction of each high court. The subcommittee is expected to finalize the Article on the Judiciary this week.
Tax reform, Part 2 gets ex-DOF chiefs’ backing Continued from A1
undertake a more critical assessment of Phase 2 of the CTRP, as concern recently mounted over whether the government and Congress underestimated the impact of the law on the poor, with inflation hitting a fiveyear high in April. Support for Package 2 was given to Finance Secretary Carlos G. Dominguez III by former Finance Secretaries Roberto F. de Ocampo, Salvador M. Enriquez, Margarito B. Teves, and Alberto G. Romulo, along with former DOF Undersecretaries Romeo L. Bernardo, Lily
Govt. . .
Continued from A1
“I will immediately convene a meeting with POEA officials to tackle the formulation of new guidelines that will be used for processing of permits for the resumption of deployment of all workers to Kuwait,” Paras said.
K. Gruba, and Cornelio C. Gison, during a lunch meeting at the Bureau of the Treasury (BTr) in Intramuros, Manila. Although not present, Former Finance Chiefs Cesar V. Purisima and Jose T. Pardo also relayed their support for Package 2, while ex-DOF Secretary Jose Isidro N. Camacho also joined the show of solidarity for the tax reform proposal via a teleconference call during the meeting. In their joint statement of support, the former DOF officials said they deem the reforms in corporate taxation and investment incentives
as a fair and well-crafted proposal because it encourages equitable and inclusive growth, a competitive business environment, and strong countryside development. “ We therefore ex press our strong support for Package 2 and urge members of Congress to ensure its timely passage,” the joint statement said. They also pointed out that while corporate-tax rates must be reasonable, investment incentives, in turn, must ensure that their economic benefits outweigh the costs of foregone revenues and should be aligned with the government’s
socioeconomic priorities. The proposed reforms under Package 2 are now pending in Congress under House Bill 7458, which was filed in March. The finance chief thanked the former DOF officials for their second show of solidarity in favor of Package 2 of the CTRP. He said Package 2 will help strengthen the gains that the government has earned in terms of helping fund its aggressive “Build, Build, Build” infrastructure program, further improving its sovereign credit ratings, ensuring fiscal stability and attracting investments.
OWWA Deputy Administrator Arnel Ignacio clarified during the weekend that new hires, particularly HSWs, will still not be allowed to head to Kuwait just yet, until the new guidelines for the MOUs is completed. The DOLE has yet to announce the timeline for the crafting of the new guidelines. Paras, however, said the guidelines “will provide maximum guarantee for the
safeguards and security” to OFWs once it is completed. The MOU—and the assurance of justice for the slain Filipino HSW Joanna Demafelis by the Kuwaiti government —were the two key conditions set by President Duterte before he ordered the lifting of the three-month deployment ban Kuwait last week. Labor Secretary Silvestre H. Bello III
issued Administrative Order. (AO) 254 and 254-A to allow the deployment of newly hired professionals, skilled and semi-skilled workers, as well as domestic workers to Kuwait, respectively. In February Duterte ordered the DOLE to impose the deployment ban after Demafelis’s remains was found stuffed in a freezer at her employers’ home in Kuwait.
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Senate told: Protest China’s ‘creeping invasion.’ Duterte says won’t oppose sea activity
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ENATORS were prodded at the weekend to manifest their strong objection to China’s “creeping invasion” of Philippine territories. Minority Leader Franklin M. Drilon pressed the Senate leadership Sunday to take a firm stand deploring the West Philippine Sea occupation by China as he “condemned the continuous violation of the arbitration award [and] of the international rules” in favor of the Phiilippines. Also at the weekend, President Rodrigo Duterte reiterated he would not provoke China into a war following reports that the Chinese military landed longrange bombers on an airport in the South China Sea. “You know they have the planes, not stationed in Spratly but near the provinces facing—Chinese provinces facing the Spratly and the China Sea. And with their hypersonic, they can reach Manila within seven to 10 minutes,” Duterte said in a speech on Saturday in Cebu, according to a transcript e-mailed by his office last Sunday. Drilon, in a radio interview last Sunday, asserted the matter will be “a challenge to the new leadership of the Senate,” referring to incoming Senate President Vicente C. Sotto III, who is reported poised to replace outgoing Senate President Aquilino L. Pimentel III, as the latter prepares to run for reelection in the 2019 midterm senatorial race. The Minority Leader stressed that senators should “assert our sovereignty, not by waging a war against China—we cannot do that —but in other fora, we should be able to continue our campaign in order that we can retrieve those islands that have been occupied by China.” “We must condemn this creeping invasion of our territory and
sovereignty,” said Drilon, reacting to recent reports citing Chinese bomber planes landing on a Philippine claimed territory in the West Philippine Sea. If concerned Philippine authorities do not step up the campaign to assert Philippine sovereignty over its remote territories, “the time will come that China may meddle even in the 2019 elections at the rate things are going,” Drilon warned. He recalled reports “only a few weeks ago...about the deployment by China of missiles on some parts of Spratly islands.” Drilon said Majority Leader Sotto, who is touted as uncontested successor of Senate President Pimentel III, should be able to “assert the Senate’s role as a foreign policy partner of the President.” Facing criticism over his apparent inaction on China’s increasing military activity in the South China Sea, Duterte wondered aloud where his country would end up should war erupt in the region. “What will we arm ourselves with if there’s a war? Will we resort to slapping each other? I couldn’t even buy myself a rifle. It was given to me. So how will we even fight with the Chinese?” Duterte said there was no assurance the United States would remain on the side of the Southeast Asian nation if war broke out. A more feasible solution would be to forge a joint exploration pact with China to harness the disputed sea’s potential, he said. Sen. Panfilo M. Lacson called the Philippine government last Saturday to act on China’s militarization of the disputed waters. He said the Philippines could seek the help of its ally countries to pressure China to stop its military activities. It could also insist on the UN arbitration ruling won by the Philippines in July 2016. Butch Fernandez with Ditas Lopez, Bloomberg
Not a coup. . . Continued from A1
However, Senate Minority Leader Franklin M. Drilon suggested in a radio interview over the weekend that outgoing Senate President Pimentel and Majority Leader Sotto “should just talk and settle” the issues arising from the leadership reshuffle. “This is not a coup,” said Drilon, even as he added that a “committee revamp depends on the new leadership.” The senator said that the matter of committee reassignments may not have been discussed but likely to be settled in subsequent talks between Pimentel III and Sotto III. This developed as Senator Joseph Victor Ejercito, in a separate interview, said senators were not keen on “taking out” the Senate President and, in fact, welcomed reports that Pimentel and Sotto talked and settled the matter between the two leaders. “We can’t say anything about Koko’s [Pimentel] leadership. His integrity is beyond question,”Ejercito added, noting that Pimentel III committed“no grievous fault”to warrant forcing his ouster from the Senate leadership post. He said it was good that the leadership change has been settled since Pimentel was already set on filing his reelection bid. “It was only a question of when. So it was good that they settled the matter so that [no one would be hurt],” Ejercito said, confirming that “the sentiment of the majority of senators was for Sotto to replace Pimentel and “it was just a matter of time.” Asked why the rush to replace Pimentel when the period for filing candidacies in the 2019 midterm elections is still months ahead, Ejercito surmised it was “probably to ensure continuity of succession so as not to derail passage of bills.” “We will settle pending matters at the [Monday] caucus,” Ejercito said. At the same time, Ejercito ruled out talk that he and other senators are joining the bandwagon of other lawmakers jumping to join the ruling PDP-Laban now headed by President Duterte. “There is no need to join the PDP because we have our own party,” Ejercito said, adding, “so, let us just put up a coalition.”
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The Nation BusinessMirror
Errors in birth certificates to impair natl ID program By Cai U. Ordinario
B
@cuo_bm
irth certificate errors and nonregistration will slow down the implementation of the national ID program, according to the Philippine Statistics Authority (PSA). In an interview with BusinessMirror, National Statistician Lisa Grace S. Bersales said the birth certificate will be the base document for the national ID. Problems will arise in cases of name and gender errors, as well as birth dates. If there are name and gender errors, these can be rectified administratively, but changes in birth dates will have to be approved by the courts. “The seed document is the birth certificate, you have to bring your birth certificate to have the national ID. But we said nobody will be driven away because they don’t have a birth certificate,” Bersales said. She added the PSA will have three process lines to allow everyone to process the national ID. The first line will process people with correct birth certificates while the second will be for those who do not have birth certificates, and the third will be for those with errors in their birth certificates. The second and third lines of processing for the national ID will be slower than the first line mainly because people with no birth certificates or have errors in their registra-
tion will have to first register and/or correct errors in their documents. These errors are mainly clerical, Bersales said. She said one example is the name “Lisa” which can be erroneously spelled as “Lesa” according to regional tongue pronunciations. There are also errors that pertain to changes in the name of children after filing the registration. Bersales added some parents change the name of their children in the baptismal certificate. “Well, the only way to fix it is through advocacy to tell the ones who fill up the birth certificate of live birth to see to it that all the information is correct. So we are asking the solemnizing officers to help us teach the couples that when you have children, be careful about your certificate,” Bersales said. “[Only the] change in birth year [will require a] court case so all the other corrections can be made administratively. This means they only need to submit the requirements to the civil registrar and that’s it,” she added. Bersales said the implementation of national ID will also require changes in the structure of the PSA. Based on the Senate version of the bill, Bersales said, the PSA will need to separate the national ID from the agency’s statistics operations. She added this could mean combining Civil Registration and National ID implementation under a Deputy National Statistician.
Editor: Vittorio V. Vitug • Monday, May 21, 2018 A3
Solon urges NHA to file criminal charges vs contractors of substandard facilities By Jovee Marie N. dela Cruz
T
@joveemarie
he chairman of the House Committee on Housing and Urban Development last Sunday urged the National Housing Authority (NHA) to study the filing of criminal charges against all contractors involved in building substandard housing units and facilities for victims of natural and man-made disasters. Rep. Alfredo B. Benitez of the Third District of Negros Occidental, the panel chairman, said the housing agency should suspend immediately all questionable contractors of the government while preparing for the charges. The panel is currently looking into irregularities in the development of housing communities for victims of the Zamboanga City siege in 2013. Benitez, together with Zamboanga City Reps. Beng Climaco and Celso Lobregat, fell into a murky creek in Barangay Rio Hondo when a wooden bridge they were
crossing collapsed. The collapse of the wooden footbridge has prompted the House Committee on Housing and Urban Development to initiate an inquiry into the state of the NHA’s Zamboanga City Roadmap to Recovery and Reconstruction (Z3R) project in Barangay Mariki. According to the panel, the housing agency spent P12 million for the wooden bridge, which is covered by a five-year warranty before it has to undergo “regular maintenance.” However, Benitez said the NHA has the responsibility to guarantee the structural integrity of all hous-
ing projects financed by the government, whether these are meant for victims of natural or man-made disasters. The lawmaker added the housing project and facilities built for the Zamboanga siege victims were made of substandard materials.
Responsibility
During the recent hearing of the House Committee on Housing and Urban Development, Engineer Alhazen Sapie, technical consultant of Limestone Construction Development and Corp., has taken full responsibility for the collapse of a wooden footbridge at Rio Hondo village. Limestone Construction Development and Corp. is the contractor of the housing project for the Zamboanga siege victims. According to Sapie, the Zamboanga housing project is 95-percent complete and is still undergoing rectification. Meanwhile, the NHA said the structural components called “cross bracings” had been removed, thereby weakening a portion of the structure that was designed to hold a maximum of 12 adults. In a position paper submitted to the House panel, the NHA Zamboanga Office said the housing agency discovered that “the portion of the footbridge which collapsed was
without the structurally required cross bracings.” The agency said that “structural components of the wooden bridges like cross bracings” had been “regularly removed by unidentified inhabitants” so that residents could park their bancas in the NHA’s Z3R Housing Project. “Other cross bracings were removed by parents in order to discourage their children from jumping into the seawaters during high tide, and other inhabitants remove the cross bracings to allow access of their newly repaired and/or constructed bancas into open waters,” the NHA Zamboanga said. Former NHA General Manager Chito Cruz informed committee that the strength of the wooden footbr idge had been “drastically reduced ” when the cross bracings were removed. Cruz also revealed that the specific portion of the wooden footbridge that collapsed only had a “load capacity of seven to eight persons.” The NHA position paper said, “the number of people which converged on the two frame portion of the bridge numbered around 16 fully adult individuals,” which is more than the “maximum 12 persons for the subject two frames of footbridges.”
Economy
A4 Monday, May 21, 2018 • Editors: Vittorio V. Vitug and Max V. de Leon
BusinessMirror
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ERC okays Transco bid to hike FiT-All rate
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By Lenie Lectura
@llectura
onsumers should brace for an increase in their electricity bills starting June after the Energy Regulatory Commission (ERC) approved a higher feed-intariff allowance (FiT-All) rate of 25.63 centavos per kilowatt-hour (kWh). The amount is 7.33 centavos per kWh higher than the current FiT-All rate of 18.30 centavos per kWh. It is also higher than the 22.91 centavos per kWh rate applied by the National Transmission Corp. (Transco), the administrator of the FiT-All fund. FiT-All is billed to all on-grid electricity consumers, which appears as a separate line item in power distributors’ bills. The
amount is meant to cover payments to renewable-energy (RE) developers, who are assured of a fixed rate per kWh for electricity generated by their projects over a period of 20 years. In its 49-page decision, the commission said there is a need to raise the FiT-All rate to address the inability of the FiT-All fund to pay in full the claims of FITeligible generators.
PHL seen attracting investments from robotics software firms By Cai U. Ordinario
“ W hi le the Commission is granting a rate of P0.2563 per kWh, considering that there is an existing rate of P0.1830 per kWh, what is being added is only an increment of P0.0733 per kWh which represents the increase from the current FiT-All rate. The approved FiT-All rate is sufficient to cover the obligations,” the ERC said. As of February 5 this year, the total RE claim stood at P40.120 billion of which, only 82 percent has been paid, and P7.378 billion remains unpaid. Accrued interest has ballooned to P527 million. This is 195 percent higher than the January 2016 interest level when the Commission approved the 2016 FiT-All rate of 18.30 centavos per kWh. “The condition has exacerbated to the detriment of the consumers since interest is also charged in the FiT-All fund, thus, based on that and the fact that there is again an alternative prayer in this application, the commission believes that the grant of the adjustment is jus-
tified,” the ERC said. The newly approved rate represents the FiT-All rate for 2017. Transco has a separate application for a FiT-All rate for 2018 which is pending before the ERC. Transco President Melvin Matibag acknowledged the backlog in payments owed to RE developers. “Backlog was caused by a combination of a lot of things though not attributable to Transco because we are only the administrator. We are very much concerned and we are doing our best to resolve the issue. We are also looking for other options to address the backlog,” he said. “With the ERC approval, we can somehow address the backlog on the payment of FiT-All.” Matibag was referring to earlier proposals to ask financial assistance from the World Bank or the Asian Infrastructure Investment Bank to pay RE developers. “We are looking for funds so that we can cover the backlog without interests…30 to 40 years
of loan payment. The World Bank and AIIB have untouched energy funds for renewable that could be availed of,” he said. Also, the Transco chief said he looks forward to the immediate resolution of the 2018 FiT-All rate application. Distribution utilities, and not Transco, will collect the new FiT-All rate from consumers. When sought for comment, Manila Electric Co. (Meralco) said it has already been advised by Transco that the new FiT-All rate will take effect in June. “Therefore, we need to implement it,” Meralco utility economics Head Lawrence Fernandez said in a text message. Consumer advocacy group Laban Konsyumer Inc. (LKI) said it will appeal the decision. “As soon as we receive our copy as intervenor, we shall invoke again the same reason for the 2016 FiT-All. Eventually, we will bring the case to the Court of Appeals for gross abuse of judgment and
Fight IT asks government to remain on guard vs cigarette smuggling
@cuo_bm
Summons issued to Sereno’s staff not an act of harassment, DOJ chief says By Joel R. San Juan
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he English proficiency and technical know-how of Filipinos give the Philippines an edge over other Asia-Pacific countries in terms of attracting investments from robotic process automation (RPA) firms. In an interview with the BusinessMirror, UiPath Head of Asean Region Malina Platon said the country’s high GDP growth also makes the Philippines an attractive destination for RPA investments. Platon was in Manila recently for a series of RPA workshops. “Companies from the RPA industry [would rather] come and invest in the Philippines than other countries, for example Thailand or Indonesia, where it is more difficult from a language perspective,” Platon said. “Here, we don’t have this issue. Everyone speaks English, are friendly, and also there is a high level technology understanding. So I think these elements create a perfect spot for investment,” she added. Apart from creating new jobs in the country through investment, Platon said RPAs, or software robots, can help countries in different ways. In Japan RPAs help in improving work-life balance and are assisting senior citizens. In India RPAs reduce errors, particularly in call centers. This is similar to how RPAs can help companies in the Philippines, which also has a robust businessprocess outsourcing (BPO) industry. Software robots, Platon said, can also help both small and large companies in other industries because these can be used to improve processes like finance and human resources. “The Philippines can benefit a lot from the digital wave especially because people in this market have a high appetite for new technologies,” Platon added. Adjusting to these technologies is one aspect where workers or those about to enter the work force is key in surviving the fourth industrial revolution. Platon said it is important for workers to retool or for companies to invest in reskilling their work force to adapt to the needs of automation. She added a recent study showed 16 percent of jobs may be lost due to automation in the country but 32 percent of jobs can be created through automation. “On one side it will reduce the jobs that are mundane and repetitive but on the other side, it will create more jobs which are focused on creativity or on customer engagement, customer relationship, customer phasing so increasing the level of interaction in both front office and back office jobs,” Platon said. In an Asian Development Blog, Asian Development Bank Economic Research and Regional Cooperation Department Economist Sameer Khatiwada said “doomsday” predictions about the impact of the fourth industrial revolution on BPO jobs are “unrealistic.” Khatiwada added some estimates claim that anywhere between 50 percent to as much as 90 percent of all BPO jobs are at risk of automation. He said the Information Technology and Business Process Association of the Philippines (ITBPAP) had estimated that the share of low-skill BPO workers will decline to 27 percent in 2022, from 47 percent in 2016. Khatiwada added these positions, such as customer support clerks and data entry assistants, entail process-driven tasks that can be handled by automated processes with relative ease. Despite this, Khatiwada said the IT-BPAP expects the total number of workers directly employed in the industry to increase to 1.8 million by 2022, from 1.2 million in 2016.
lack of jurisdiction,” LKI President Victor Dimagiba said. The LKI earlier asked the ERC to render null and void its decision to increase FiT-All rates for 2016. Citing records, The LKI said Transco applied for a FiT-All for 2016 of 10.25 centavos per kWh. In February 2016 the ERC provisionally approved a FiT-All rate of 12.40 centavos per kWh. Three months later, the ERC granted an additional amount of 5.9 centavos per kWh, bringing the total FiTAll rate for 2016 to 18.30 centavos per kWh. Dimagiba argued that Transco did not file for an amendment of its 2016 FIT-All rate application. He asked the ERC then to render its May 2017 decision null and void for lack of jurisdiction. He also noted that Transco lawyers filed an urgent motion to issue the decision on its 2017 FiTAll rate application on April 11. “Yet, the decision of the ERC was dated February 27, but docketed and published on May 11.”
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IN this March 5 file photo, Customs Commissioner Isidro S. Lapeña presented to the media the misdeclared fireworks and cigarettes worth P8.98 million that were intercepted by the Bureau of Customs. The Fight Illicit Trade movement urged the government to step up its campaign against cigarette smuggling as some terrorist groups could use the proceeds to fund their illicit activities. NONIE REYES
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he Fight Illicit Trade (Fight IT) movement has lauded the efforts of the government to stamp out the proliferation of fake, nontax paid cigarettes, and reiterated that it should remain vigilant against cigarette smuggling. Fight IT Chairman Jesus L. Arranza has expressed concern over the growing incidence of illicit cigarette trade in the country, due to the increase in the price of cigarette packs following the implementation of higher excise tax rates for tobacco. “The trend following the recent cigarette excise tax hike in January is very alarming. With cigarette prices increasing, the market is opening up to cheap smuggled goods,” said Arranza, who also chairs the Federation of Philippine Industries. He also pointed out that the illegally generated funds from smuggled cigarettes may be financing criminal and terrorist activities. Arranza cited studies from different parts of the world depicting the possible linkage of funds generated from cigarette smuggling aiding terrorist activities. A report published by the Union des Fabricants in France for 2017 titled, “Counterfeiting and Terrorism 2017,” British police noted that many paramilitary and terrorist groups have sought to increase their funding methods by turning to counterfeiting since 2000. In a report of the United States Depart-
ment of State titled, “The global illicit trade in tobacco: A threat to national security,” it said that cigarette smuggling “is a lucrative crime for some terrorist groups and a potential revenue source to finance acts of terror; and it expands black markets and encourages a convergence between organized crime, terrorist groups and other threat networks.” Arranza applauded the Department of Finance (DOF) and the revenue-collection agencies of the country namely, the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC), as well as the Philippine National Police-Criminal Investigation Detection Group (CIDG), for its series of raids in different parts of the country which yielded thousands of smuggled and locally-manufactured fake cigarettes with counterfeit or no tax stamps. He said the government would have lost hundreds of million pesos in tax revenues, had the illicit cigarettes found its way into the local market. “Through our members in the industry, we have to remain vigilant in not only going after illicit cigarettes in the market but in tracking down its source and where the proceeds are going,” Arranza added. He commended the initiative of the DOF to forge an agreement with cigarette manufacturers for joint and sustained efforts to go after illicit cigarette traders.
The BIR Strike Team recently raided several warehouses of fake cigarettes valued at P80 million in the areas of Manila and Malabon, and an illegal factory and warehouse in San Simon Industrial Park in Pampanga with fake cigarettes worth P55 million. The BOC earlier intercepted at the Manila International Container Port a 40-foot container van from China that carried P18.5 million worth of smuggled imported cigarettes. He added that the Fight IT movement will hold its first-ever Anti-illicit Trade Summit on May 29 at the Fairmont Hotel in Makati with members of civil society, government officials and industry leaders expected to attend. The gathering is expected to launch a wider advocacy with the creation of the Anti-Crime Council of the Philippines. Earlier, the BIR told the DOF that it is moving forward with the signing a memorandum of agreement (MOA) with the BOC on information sharing regarding smuggled excisable products entering the country. “We are planning to have our MOA with BOC on information sharing and coordination linkages regarding these smuggled excisable imported articles,” BIR Deputy Commissioner Arnel S.D. Guballa said in his report to Finance Secretary Carlos G. Dominguez III. Rea Cu
@jrsanjuan1573
USTICE Secretary Menardo I. Guevarra last Sunday defended the issuance of subpoenas against members of Chief Justice Maria Lourdes A. Sereno’s staff who are facing a complaint for graft and violation of the Government Procurement Reform Act. Gueverra in a text message to reporters said the issuance of subpoena to respondents in a complaint lodged with the Department of Justice (DOJ) is part of the investigation process which is intended to “accord due course to all parties in the case.” “Our investigating prosecutors routinely issue subpoenas to any and all persons named as respondents in complaints filed before the DOJ that’s part of procedural due process and should not be viewed as an act of harassment,” Guevarra said. Lawyer Larry Gadon, the complainant in the impeachment case against Sereno, was also the one who filed the graft complaint against Sereno’s staff. He accused Sereno’s staff head Ma. Lourdes Oliveros and staff member, lawyer Michael Ocampo of violating Republic Act 3019, (Anti-Graft and Corrupt Practices Act), and R A 9184 (Government Procurement Reform Act). Gadon filed the complaint in connection with the “anomalous” hiring of former IT consultant Helen Macasaet by Sereno’s office—one of the grounds in the impeachment case against the Chief Justice. He specifically accused Oliveros and Ocampo of “manifest partiality, evident bad faith or gross inexcusable negligence” in the performance of their administrative duties. The complainant alleged that only two of the eight contracts of service of Macasaet to the Supreme Court passed the Bids and Awards Committee while the six others were renewed by Sereno without the knowledge and approval of the Bids and Awards Committee. Gadon also questioned Macasaet’s compensation, pegged at P100,000 a month under the first contract and P250,000 a month in the succeeding contracts, saying it was “way beyond” the compensation ceiling set by a circular letter from the Department of Budget and Management. Oliveros and Ocampo had already submitted their counteraffidavits before Assistant State Prosecutor Gilmari Fe Pacamara, who was assigned to conduct a preliminary hearing on the case. Macasaet was also named respondent in the complaint and had separately submitted her counter affidavit before the investigating prosecutor.
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The Regions BusinessMirror
Editor: Dennis D. Estopace • Monday, May 21, 2018
A5
Govt to comb Boracay beaches for ‘illegal’ pipes, sewer lines LEAF OF FATE
A woman shows a tobacco leaf ready for drying on her farm in Naracan, Ilocos Sur. The municipal government of Naracan, Ilocos Sur, which has the largest agricultural output in the IIocos region, still encourages farmers to continue planting tobacco and hopefully benefit further from the excise tax share paid by manufacturers. LAILA D. AUSTRIA
ComVal Penro opens Kopiat Island for commercial lease
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AVAO CITY—The provincial environment office of Compostela Valley (ComVal) announced it was opening the resort island of Kopiat off Mabini town to investors as it disclosed that the island is government property. The Kopiat Island is regularly visited by local and foreign tourists. Philip B. Sayong Jr., the provincial environment officer (Penro), said investors should only go to the provincial office of the Department of the Environment and Natural Resources to apply for rent or lease on portions of the island to operate a resort. Any application to operate a re-
sort there would fall under the foreshore lease category, Sayong added. He issued the announcement of opening the island for commercial operation of resorts during a meeting of provincial and municipal information officers of Compostela Valley on May 3 at the Office of the Provincial Governor. His briefing of the information officers included a report on the forest management and rehabilitation of 2,120 hectares with the planting of various species of agroforestry trees along the southern coasts of the province. He sa id t he prov i nce h a s a lso d istr ibuted 375 patents on residential lads and another
125 patents on agricultural lands. The web site of the Province of ComVal said Kopiat is an 87-hectare island “of powdery white sands some 1 kilometer off the Mabini coastline of the province of Compostela Valley on the northernmost tip of Davao Gulf.” “A nesting site of two of the world’s most endangered marine turtle species—the hawksbill and leatherback—it is one of the staging points of the Kopiat Swimming Challenge of the province’s national award-winning summer beach sports festival,” it added. “The island is the jewel of the Mabini Protected Seascape and Landscape.” Manuel T. Cayon
DBP ramps up support to Cavite
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tate-run Development Bank of the Phi lippines (DBP) is bolstering its development initiatives in Cavite to meet the burgeoning demand for lending programs, deposit products and cash services from both the public and private sector in the province, a top official said yesterday. DBP President and CEO Cecilia C. Borromeo said the bank has partnered with the City Government of Bacoor in Cavite for the distribution of 1,900 prepaid cards to the local government’s job order workers to facilitate payment of their salaries. “The DBP Prepaid Cards ensure that workers will not only be able to receive their salaries safely and conveniently, but also use it to pay for goods and services via Point-
of-Sale terminals and online facilities through BancNet and Visa networks,” Borromeo was quoted in a statement as saying. Bacoor City is classified as a first-class municipality in the province of Cavite with a population of over 600,000 residents and is the second most populous city in the province. It is divided into 73 barangays with retail, manufacturing, banking, and services as the city’s primary income earners. Borromeo said DBP also granted a P25-million loan to a husband and wife entrepreneur to finance the construction of a three-story commercial building along the main thoroughfare in the Bacoor and Imus areas that will house shopping centers, restaurants, school supplies stores, arcade
centers, and a sky garden and bar. She added the project is expected to provide up to 100 additional jobs that would be generated by the 35 commercial establishments and stalls that will locate in the establishment. Borromeo said the Carmona Water District availed of DBP’s Cash Management Solutions to facilitate CWD’s daily collection servicing requirements and promote efficiency in managing operating funds, increase productivity and realize cost savings for the agency. “[T he] DBP sha l l continue working with LGUs not just in Cavite to provide effective and responsive solutions, programs and services that would further spur the growth of provinces nationwide,” she added.
After six years, 6 Lanao coastal towns get power
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A R AW I C I T Y, L a n ao del Sur—Energ y Secretary Alfonso G. Cusi led on May 17 the ceremonial switching of electrical service to six coastal municipalities of Lanao del Sur that had been w it hout power for t he last six years. Almost a year since the Marawi siege started on May 23, 2017, Cusi came to this city with a message of hope for the people of Lanao del Sur on behalf of President Duterte. “ T he P resident wa nted to ensure first that basic ser vices to L a n ao prov i nces w i l l not stop, and one of which is the continuous provision of electricity ser vices, kaya po tinutukan nating mabuti,” Cusi said.
[That’s why we concentrated on accomplishing this.] Cusi was referring to Duterte’s order after the latter cut short a trip to Russia to deal with the Marawi siege. “We have to ascertain that the hydroelectric dams, the transmission and distribution lines are protected, because it’s not just Lanao that will be affected, but the entire Mindanao,” he added. Now energized are the towns of Balabagan, Calanogan, Kapat a g a n , M a l aba ng , M a rogong and Picong, which covers a total of 139 barangays and 6,045 households. T he s e to w n s t hu s j oi ne d t he consumer base of L anao del Su r Elect r ic Cooperat ive
( L a s u r e c o), w h i c h no w h a s 17,769 customers. The Department of Energ y (DOE) also handed over 50 units of solar streetlights to Lasureco. These lights were donated by the United States Agency for International Development for the benefit of the residents in the Sagonsongan Temporar y Shelter in Marawi City. The DOE also secured donations from Pepsi-Cola Products Phi lippines Inc. and Phinma Energy Corp. of 131 units of solar streetlights. These were also turned over to Lasureco for installation to areas most affected by the Marawi siege l a s t y e a r. T h e i n s t a l l at i o n for these street lights is still ongoing.
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By Jonathan L. Mayuga @jonlmayuga
HE interagency Task Force Boracay will trace the sources of several illegal pipes that were recently uncovered near the White Beach on Boracay Island, an official of the Department of Environment and Natural Resources (DENR) said.
DENR Undersec ret a r y Jo nas R. Leones, the designated spokesman of Secretary Roy A. Cimatu, said in a text message that the DENR will file appropriate charges against homeowners or business establishments that discharge untreated wastewater through illegal sewer or pipe lines. Leones, the DENR’s undersecretary for policy, planning, international affairs and foreignassisted projects, said there could be more of such. He added the DENR is determined to uncover all the illegal pipes, cut the illegal connection, remove the pipes and file appropriate charges against the culprits. “We will later trace the source, file charges and cut the connection,” he said. “We will conduct water quality sampling.” According to Leones, the DENR will comb all the beaches on Boracay beginning with Bulabog Beach next week. There are a total of 17 beaches around Boracay Island, which is famous for its whitesand beaches and pristine waters. During the Task Force Boracay meeting last Saturday, Cimatu reported the discovery by Mines and Geosciences Bureau (MGB) personnel of a total 33 pipes within the vicinity of the White Beach, the largest and most popular beach
on the island. Leones said the discovery of the illegal pipes bolstered his suspicion that other businesses already connected to sewer lines may be guilty of discharging untreated wastewater using hidden pipes. This, he said, justifies his earlier pronouncement to recommend a review of the implementing rules and regulation of the Clean Water Act, that exempts a business establishment from securing discharge permits once they are already connected—in the case of Boracay—to either the Boracay Island Water Co. (BIWC) or Lucio Tan’s Boracay Tubi Systems Inc. (BTSI). During the Task Force Boracay meeting on May 18, Cimatu reported an improved cooperation between and among Boracay’s stakeholders, noting the “positive response of the locals in the rehabilitation efforts” on the island, the country’s top tourist destination in the municipality of Malay, Aklan province. The BIWC has committed to diverting the drainage outfall before it goes to the sea and to clean up identified areas of the drainage system. The company also vowed to rechannel the “ black pipeline”
DepEd activates unit to address concerns in reopening of classes
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HE Department of Education (DepEd) on Monday activated its Information and Action Center (IAC) as part of the overall preparation it calls “Oplan Balik Eskwela,” or OBE, for the opening of classes on June 4. “The conduct of the OBE will ensure that all our learners are properly enrolled and able to attend school on the first day of classes by addressing problems, queries, and other concerns commonly encountered by our stakeholders at the start of the school year,” Education Secretary Leonor M. Briones said adding the IAC will start to receive complaints from May 21 to June 8 at the DepEd-Central Office. Briones explained the IAC shall serve as the information and complaints processing and routing zone for the duration of the project. Likewise, regional and division offices are encouraged to set up a command center to receive and respond to concerns directly from the ground. Regional information officers and other OBE personnel attended the 2018 OBE National Orientation on May 10 and 11 “to capacitate them on how to properly handle and answer questions from the public.” Claudeth C. Mocon
to the BIWC Balabag sewagetreatment plant (STP) for treatment. As for the “blue pipeline” wastewater discharge, it will be diverted to the Tieza Pumping Station, which will be rechanneled to the BIWC Balabag and Manoc-Manoc STP, where it will be treated before discharge. The BTSI, on the other hand, vowed to work on the treatment of the drainage outfalls as well as rehabilitate Wetland No. 6. Cimatu also reported that the rehabilitation of all drainage lines being undertaken by the Office of the Provincial Engineering Office is almost complete. Also, the DENR chief said the demolition of structures from Cagban to Rotondo Road had been completed as part of the clearing of the road easement on the island. The demolition of illegal structures along the main road, he added, is still ongoing, while other structures have been voluntarily dismantled by concerned residents and businessmen. In removing illegal structures that violate the 25+5 meter nobuild zone easement, Cimatu said 206 establishments were already issued show-cause orders. More show-cause orders will be issued to cover all 308 establishments that were found to have constructed illegally within the no-build zone. Meanwhile, a total of 341 of the 842 illegal forest occupants have been issued a notice to vacate while all the 195 establishments not connected to sewer lines have been issued with notices of violation by the DENR’s Environmental Management Bureau. Last week Cimatu had issued an order stopping all construction activities on the island in response to reports that a property developer had shaved a portion of a forest and flattened a mountain to pave the way for the construction of a multimillion-peso condominium project.
The World
A6 Monday, May 21, 2018 • Editor: Lyn Resurreccion
BusinessMirror
BEIJING DECLARES TRADE WAR AVERTED
China to ‘significantly’ hike purchases of US products
Shipping containers stand at the Qingdao Qianwan Container Terminal in this aerial photograph taken in Qingdao, China, on May 7. China’s overseas shipments exceeded estimates while imports surged, as the global economy continued to support demand. Qilai Shen/Bloomberg
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hina will “significantly increase purchases” of United States goods, the White House said as Beijing’s special envoy at talks in Washington declared a trade war has been averted between the world’s two largest economies.
A joint statement released by the White House following the talks didn’t place a dollar figure on the increased purchases by China, or address a comment by President Donald J. Trump’s top economic adviser, suggesting Beijing had agreed to slash its annual trade surplus with the US by $200 billion. Vice Premier Liu He, a special envoy of China’s President Xi Jinping, told reporters in Washington that talks with United States officials— including Treasury Secretary Steven Mnuchin, Secretary of Commerce Wilbur Ross and US Trade Representative Robert Lighthizer—ended with a pledge not to engage in a trade war, according to a Xinhua news agency report. Liu said the two sides agreed to stop “slapping tariffs” on each other, Xinhua reported. Liu said his trip to the US had been positive, pragmatic, constructive and productive. Trade cooperation would
be enhanced in such areas as energy, agriculture, health care, high-tech products and finance, a “win-win” choice for both nations. China agreed to “meaningful increases in US agriculture and energy exports,” the White House said, adding that the United States will send a team to China to work out the details.
Trade deficit
“There was a consensus on taking effective measures to substantially reduce the United States trade deficit in goods with China,” the White House said. The delegations also discussed expanding trade in manufactured goods, and each side agreed to strengthen cooperation on intellectual property. China will “advance relevant amendments” to its laws and regulations in that area, including its patent law, the White House said. The White House joint statement didn’t mention additional US
demands, including a halt to subsidies and other government support for the Made in China 2025 plan that targets strategic industries from robotics to new-energy vehicles. C h ina had made its ow n demands—including giving equal treatment to its investment—and warned US companies may be excluded from measures to open its economy. Last Friday morning Larry Kudlow, director of the National Economic Council, told reporters that China had offered to reduce its annual trade surplus with the US by “at least $200 billion.” “The number’s a good number,” Kudlow said outside the White House.
Conciliatory stance
Earlier, two posts on Chinese state social media disputed a report that China planned to slash its trade surplus by the extent demanded by Washington though increased imports of US products. A foreign ministry official also played down the suggestion. In a sign that the Chinese government is seeking a
conciliatory stance, it announced last Friday it was ending an antidumping and anti-subsidy investigation into imports of US sorghum, citing “public interest.” That move came days after it restarted a review of Qualcomm Inc.’s application to acquire NXP Semiconductors NV. A $200-billion reduction in the US trade gap with China by 2020 was on a list of demands the US made earlier this month as Mnuchin led a delegation to Beijing. That mission left with little common ground with China and reports emerging of infighting among the United States officials. The US merchandise trade deficit with China hit a record $375 billion last year. Mnuchin and Kudlow appeared on United States political talk shows last Sunday. Trump’s administration has threatened to impose tariffs on as much as $150 billion of Chinese imports to the US as tensions over trade have escalated. Trump expressed doubt before his meeting with Liu that China and the United States would come to an agreement to avoid a damaging trade war.
ZTE silence
Top Senate Democrat Chuck Schumer criticized a lack of specific measures in the joint statement to protect US intellectual property and stop China “from keeping our best goods until we hand over our trade secrets.” Schumer noted that the statement also didn’t mention ZTE Corp., the Chinese telecom company that Trump a week ago ordered the United States Commerce Department to get help back into business after “too many jobs in China lost” because of recent US action. “If the administration capitulates on ZTE and allows it to continue to exist,” Schumer said, “that will signal to President Xi that we are weak negotiators.” Kudlow said last Friday that ZTE may need to change its management to win a reprieve from US sanctions that shut it off from key parts suppliers. Bloomberg News
There was a consensus on taking effective measures to substantially reduce the United States trade deficit in goods with China.”—White House
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briefs
Merkel to seek China as ally on free trade on Beijing trip German Chancellor Angela Merkel said she’ll renew efforts to enlist China as an ally on free trade when she visits leaders, including President Xi Jinping in Beijing next week. It’ll be Merkel’s first trip to the world’s second-biggest economy since she began her fourth term in March. While Europe and China have points of friction from investment reciprocity to human rights, they’re finding common cause in rebuffing US President Donald J. Trump’s tariff threats against both. “China and Germany are committed to the rules of the World Trade Organization, yet we will also talk about reciprocal access in trade and intellectual-property issues,” Merkel said in her weekly podcast published last Saturday. “And we want to strengthen multilateralism.” Merkel plans to meet Xi and other Chinese leaders on May 24, followed by a stop in Shenzhen to tour sites, including a Siemens AG facility. She may strike a more reserved tone than French President Emmanuel Macron, who visited China in January and said European nations must stand up to China’s global reach. Bloomberg News
Iraq’s al-Sadr constrained by Iran in his reform plan BAGHDAD—Iraq’s Muqtada al-Sadr, the maverick Shiite cleric whose political coalition beat out Iran’s favored candidates to come in first in national elections, says he wants to form a government that puts Iraqis first. The electoral commission announced early last Saturday that the militantturned-populist preacher, who has long spoken out against both Iranian and United States influence in Iraq, had defeated his establishment rivals. Al-Sadr—who is remembered for leading an insurgency against US forces after the 2003 invasion—did not run for a seat himself and is unlikely to become prime minister, but will command a significant number of seats and has already begun informal talks about government formation. Salah al-Obeidi, a spokesman for al-Sadr’s Sa’eroun political bloc, told The Associated Press that Iraq’s sovereignty was going to be the new government’s “guiding principle.” AP
Police search for motive in Texas school shooting SANTA FE, Texas—The mother of one of the 10 people killed at a Texas high school said her daughter recently rejected the romantic advances of the 17-year-old charged in the shootings, a possible motive for the violent tragedy. Sadie Rodriguez said her daughter, Shana Fisher, had made clear that she was not interested in Dimitrios Pagourtzis. “He continued to get more aggressive,” Rodriguez told The Associated Press in an interview conducted last Saturday via Facebook. “She finally stood up to him and embarrassed him.” The incident took place one week before the shooting, Rodriguez said. Police have not yet said what might have motivated the attack. AP
Hawaii lava flow ramps up as new magma mixes with old PAHOA, Hawaii—Lava oozing out of cracks for two weeks in rural Hawaii neighborhoods took on new characteristics as fresher magma mixed with decades-old magma, sending a flow toward the ocean last Saturday. Since a first fissure opened in a community on May 3, lava was mostly spattering up and collecting at the edges of the cracks in the ground. Two neighborhoods with nearly 2,000 people were forced to evacuate as lava claimed 40 structures. Last Friday afternoon, the lava changed dramatically with one fissure ramping up and sending a flow across a road, destroying four more homes and isolating residents, some of whom had to be air-lifted to safety. The change is attributed to new magma mixing with 1955-era magma in the ground, creating hotter and more fluid flows, scientists said. AP
Company in Cuba plane crash had received safety complaints HAVANA—The Mexican charter company whose 39-year-old plane crashed in Havana had been the subject of two serious complaints about its crews’ performance over the last decade, according to authorities in Guyana and a retired pilot for Cuba’s national airline. Mexico’s government said late last Saturday that its National Civil Aviation Authority will carry out an operational audit of Damojh airlines to see if its “current operating conditions continue meeting regulations” and to help collect information for the investigation into last Friday’s crash in Cuba that left 110 dead. The plane that crashed, a Boeing 737, was barred from Guyanese airspace last year after authorities discovered that its crew had been allowing dangerous overloading of luggage on flights to Cuba, Guyanese Civil Aviation Director Capt. Egbert Field told The Associated Press on Saturday. The plane and crew were being rented from Mexico City-based Damojh by EasySky, a Honduras-based low-cost airline. Cuba’s national carrier, Cubana de Aviacion, was also renting the plane and crew in a similar arrangement known as a “wet lease” before the aircraft veered on takeoff to the eastern Cuban city of Holguin and crashed into a field just after noon last Friday, according to Mexican aviation authorities. AP
N. Korean pushback undercuts US exuberance over Kim meeting
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he dizzying pace of North Korean-United States diplomac y t his year had President Donald J. Trump fielding questions about whether he might win the Nobel Peace Prize. Now, North Korea has threatened to scrap Trump’s June 12 summit with Kim Jong Un, bringing lofty expectations about what may be achieved at the summit down to earth. Like Trump’s predecessors, this White House is getting a reality check on the pitfalls of negotiating with the isolated and mercurial regime in Pyongyang. Ahead of next month’s summit in Singapore, which the White House insists is going forward, skepticism has replaced the confidence that North Korea is ready to reverse decades of intransigence and give up its nuclear weapons for good. “That rosy outcome was very unlikely to come to fruition,” said Melissa Hanham, a senior researcher at the Middlebury Institute of International Studies in Monterey, California.
“I never put in a lot of stock in the US-North Korea summit because the US and North Korea have never had a successful negotiation that ended up in preventing nuclear weapons.” Up until this week, some administration officials were all but declaring success in their bid to use heightened United Nations sanctions and diplomatic isolation to get North Korea to commit to “complete denuclearization,” without acknowledging that Pyongyang’s definition of the term might be different than Washington’s. To bolster their optimism, the American officials cited moves North Korea made without much prompting: a promise to freeze nuclear and missile tests, the announcement of plans to destroy a nuclear test site and the decision to release three American prisoners when Secretary of State Mike Pompeo visited. With the momentum appearing to build, Pompeo extolled the possible economic benefits North Korea might receive from the US once it gave up its weapons.
“I think he appreciates the fact that this is going to have to be different and big and special, and something that has never been undertaken before,” Pompeo said of Kim when he spoke to Fox News Sunday. “Our eyes are wide open with respect to the risks. But it is our fervent hope that Chairman Kim wants to make a strategic change.” But US hopes began to darken after North Korea issued statements last week withdrawing from a planned meeting with South Korean leaders and threatening to scrap the summit with Trump. North Korean officials also lambasted National Security Adviser John Bolton, who had gone on television last Sunday to praise the “Libya model” of arms control, under which the late dictator Muammar Qaddafi surrendered his nuclear program in exchange for an easing of economic sanctions. Two years later, Qaddafi was overthrown by rebels who hunted down and killed him in the streets, providing an alternative definition
of the “Libya model” that Kim would rather not be associated with. In a bid to keep plans for the summit on track, Trump on Thursday contradicted Bolton, saying his administration isn’t using Libya as a example for North Korea “at all” and that the US would probably need to provide assurances to the regime to get a grand bargain. Under such an accord, Trump said of Kim, “He’d be there, be in his country, he’d be running his country. His country would be very rich.”
Conflicting messages
North Korea also reacted vehemently against Pompeo’s suggestion that North Korea would be eager for US trade and infrastructure investment that would flow if North Korea gave up its nuclear weapons. What the regime probably wants, analysts say, is just an easing of UN sanctions so that it can conduct whatever business it wants. “The US is trumpeting as if it would offer economic compensation and benefit in case we
abandon nukes,” said North Korea’s official news agency, KCNA. “But we have never had any expectation of US support in carrying out our economic construction and will not at all make such a deal in future, either.” The back-and-forth on the US messaging underscored new skepticism and confusion about the administration’s strategy, and what exactly it wants out of the meeting. “It’s not clear, what is the purpose of the summit, I’m really wondering,” said Srinivasan Sitaraman, a professor of political science at Clark University. “What are the North Koreans willing to give up, what are the compromises the US is willing to make? They are at opposite extremes. I really don’t see where they can come to an agreement.”
‘Big down payment’
US officials say their goal remains clear, using an acronym that has quickly entered the Washington lexicon: CVID, or “complete, verifiable, irreversible denuclearization.”
Susan Thornton, the acting assistant secretary for East Asia and the Pacific, spelled out that approach to Kim during a Wall Street Journal event in Tokyo on May 15. “There’s an expectation as he’s already committed to complete denuclearization and in his conversations with the South Koreans that there will be a big down payment, a big upfront demonstration of his intention, to do that,” Thornton said. “Not just words and statements but also actions.” Whether North Korea is willing to go that far remains an open quest ion—but ma ny obser vers think not, and there lies the danger for Trump. He needs to be able to show something concrete from the summit, while for Kim, just having the meeting will be a victory, according to said Daniel Russel, former assistant secretary of state for East Asia and the Pacific, who’s now vice president at the Asia Society Policy Institute. Bloomberg News
Banking&Finance BusinessMirror
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Editor: Jun B. Vallecera • Monday, May 21, 2018
A7
Cash transfers, free medical care form bulk of Q1 subsidies By Rea Cu
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sented a contraction by 24.7 percent, from P11.083 billion in the same period last year. In March alone the national government disbursed a total P15.086 billion to benefit PhilHealth recipients. Data show the government disbursing a total P35.240 billion in March alone, an increase by 319.1 percent from subsidies made in 2017 amounting to P8.407 billion. Of the total, PhilHealth received bulk of the subsidies to government-owned and -controlled corporations amounting to P15.086 billion, from zero subsidies in the same month the previous year. LandBank was provided the second highest amount with P12.334 billion for March. The NIA came in third with P3.446 billion for the month, expanding by 149.5 percent, from the P1.381 billion recorded in March 2017. Other agencies provided with subsidies in March include the National Food Authority with P1.800 billion, the Subic Bay Metropolitan Authority with P1.454 billion and the National Electrification Administration with P653 million, among others. Then presidential candidate Duterte vowed to provide free irrigation and improve or provide universal health care for Filipinos when he ran for the highest office in the land.
@ReaCuBM
he national government disbursed subsidies amounting to P45.228 billion in the first quarter this year, an expansion by 129.9 percent, from subsidies in the same quarter in 2017 of only P19.666 billion, data from the Bureau of the Treasury (BTr) showed.
Based on BTr data, the bulk of subsidies was poured on the Philippine Health Insurance Corp. (PhilHealth) amounting to P15.205 billion. The national government allocated none of the subsidy funds to the agency in the same period last year. The Land Bank of the Philippines, a government financial institution, was provided the second-highest subsidy worth P12.334 billion for the quarter, with the funds disbursed solely in March. Based on the data from the BTr, the last time LandBank was provided with subsidies was in October 2011 amounting to P7.932 billion. These developments made good the
government’s pledge last year to soften the blow of higher excise tax on items, such as imported oil, whose price at the pumps have been blamed for the rash of increases that has dampened consumption. Analysts have since pointed out that slower consumer activities come at a time when inflation, or the rate of change in prices, have proven well above target in recent months and likely to remain there for some months more. The National Irrigation Administration (NIA) came in third highest in subsidies during the quarter, totaling P8.344 billion. But this actually repre-
Blockchain-enabled transaction done in just hours By VG Cabuag
@villygc
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tart-up Acudeen Technologies Inc., together with Hong Kong-based digital logistics provider Openport, said it facilitated the financing of the first ever movable asset from a small logistics firm using blockchain technology in the Philippines. Acudeen CEO Mario Jordan Fetalino III said the first blockchain-powered invoice in the Philippines was sold through the company’s AssetChain Ecosystem. The platform allows users to place non-invoice based movable assets, such as inventor y, trademark, warehouse receipts, physical products and the like in the market. “The combination of the two businesses and the way they both adopted blockchain have proven with this transaction that inclusivity is possible given openness of stakeholders to new ideas and new technology,” he said. After the partnership, one of OpenPort’s users uploaded a blockchain-enabled invoice amounting to P377,384 on the Acudeen platform and was purchased at a competitive price within two hours, it said. Fetalino said the invoice was successfully verified without the need to interact with the sellers’s payor, showing the potential for ways to provide financing to various small and medium enterprises much faster than most solutions now available in the market.
“It usually takes 21 hours on average to validate an invoice and verify a transaction and much longer for invoices with big amounts, such as the one with an OpenPort client. With blockchain as the catalyst, within two hours, the invoice was sold and the seller was successfully funded. This proves that there is a pressing need for transparency and visibility in order for both financial institutions and individuals to provide more flexible financing options for SMEs,” he said. “We are quickly building up cases until the second half of the year, so we are very optimistic that massive adoption of our joint services will be inevitable once
we make this available to the public,” Fetalino said. The partnership between Acudeen and OpenPort aims to produce cheaper and more accessible financing for small logistics businesses all over Asia. Acudeen also hopes to leverage OpenPort’s technological capabilities to have the delivery progress of various goods and services from point to point and vice versa for their invoice factoring services. The tie-up also mitigates high risk for financial institutions as the transparency and visibility of the blockchain platform helps them come up with more informed decisions.
Case clippings
By Justice S J Ranada Jr. CRIMINAL LAW–effect of death of accused Upon the death of an accused pending appeal of his conviction, the criminal action is extinguished inasmuch as there is no longer a defendant; the civil action instituted therein for civil liability ex delicto is ipso facto extinguished, being grounded on the civil action. However, the civil liability of the accused to the rape victim may be the subject of a separate action against the estate of the accused as warranted by law. People v. Antido 14 Mar. 2018
GR 208651 Perlas-Bernabe, J
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Nurturing a privacy-conscious culture Put customers and employees at the heart of your privacy strategy
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n the words of Elizabeth Denham, CEO of the UK Information Commissioner’s Office, “The biggest threat to organizations from the GDPR is not massive fines. It’s about putting the consumer and citizen first.” Much of what’s been written about the GDPR, or General Data Protection Regulation of the European Union, centers on penalties. Although these have the potential to be severe (noncompliant firms can be fined up to 4 percent of turnover or €20 million, whichever is greater), they should not be the driving force behind change. It’s more important to begin to instill the right habits and behaviors, so that everyone in your organization appreciates customers’ rights to privacy and choice. In order to help build and cement trust, your business should make customers aware of what kinds of personal information you hold and how you use it, with transparency accountability as your guiding principles. Customers are entitled to know what is being done with their personal information—and expect you to tell them. This means understanding the customer journey, and making privacy an essential feature of that journey—and an integral part of your wider business strategy. And as you map the customer journey, it’s
the touchpoints that should receive the highest priority. These are the public-facing aspects of your business, like handling customer complaints and queries, or targeting individuals with personalized offers. In an omnichannel world, where customers interact via phone, apps, online chats, e-mail and post, these touchpoints need to offer a consistent experience. Touchpoints offer an ideal opportunity to showcase transparency, and to explain how you’re using customers’ personal data responsibly. By paying close attention to the quality and integrity of such interactions, you can present a positive picture of how your organization manages privacy, in the process enhancing your reputation with customers and employees, and reassuring regulators. You may want to introduce incentives that encourage appropriate values and behavior. And you’ll certainly want to nurture an environment where any risks and issues can be discussed openly, and processes challenged where necessary. Training and communications can help spread the word and equip employees with the skills and awareness of privacy issues
Understand that data is an asset and a liability. AS we’ve mentioned, the GDPR is not simply a static deadline. It’s part of a journey toward better management and use of that most valuable resource: personal data.
The potential liability of data derives not just from the clearly articulated GDPR penalties but also from any loss of customer trust and brand and reputational damage resulting from a breach and/or unacceptable behavior. On the flip side, viewing data as an asset opens the door to exciting investments that can create value: transforming the operational infrastructure and accelerating a wider and longer-term shift to simpler, less costly and more powerful data systems. All of which should help enable your organization to not only gain more confidence in its privacy capabilities; but to also enhance other functions that depend heavily on customer data, like fraud detection, marketing and customer analytics. The article “Nurturing a privacy conscious culture” by Mark Thompson, KPMG International, was taken from the publication entitled GDPR: Privacy as a way of life. © 2018 R.G. Manabat & Co., a Philippine partnership and a member-firm of the KPMG network of independent member-firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. Printed in the Philippines For more information on KPMG in the Philippines, you may visit www.kpmg.com.ph.
Green Monday BusinessMirror
A8 Monday, May 21, 2018
www.businessmirror.com.ph • Editor: Lyn Resurreccion
‘Belt and Road’ initiative vows green infra with connectivity ‘M
y son in primary school did not attend a birthday celebration because it was canceled due to bad air—and we live in Seoul, a great place to live in,” said Dr. Frank Rijsberman, director general of the Global Green Growth Institute (GGGI).
He was speaking to delegates of a forum that discussed creating environmental policies while enabling economic and regional cooperation among countries in the “Belt and Road” route during the 51st annual meeting of the Asian Development Bank (ADB) early this month in Manila. The forum took cues from Rijsberman’s story of living in Seoul, the capital city of South Korea, one of the poorest countries that in 50 years became an example for many developing countries to demonstrate the importance of economic growth while being mindful of air quality and the overall livability of the environment. The “Green Growth and Regional Cooperation” forum was a side event hosted by GGGI with an expert panel that discussed China’s proposed Belt and Road initiative (BRI) and, with many references to “green growth,” “green policies” and “green investments,” looked at putting in place policies to accelerate green investments and green technology while exploring ways to create opportunities that address poverty across countries. “Climate change is already exacting its toll, particularly in the Asian region, so rapidly that technological and economic growth [that may have worsened issues like air quality] should also be our most immediate driver of action to do something,” Rijsberman said. He added there is a need for countries to have green growth, a new development approach that delivers environmentally sustainable and socially inclusive economic growth that is low-carbon and climate resilient; prevents or remediates pollution; maintains healthy and productive ecosystems and creates green jobs, reduce poverty and enhance social inclusion. Rijsberman said the GGGI will join the Green Belt and Road Coalition and currently cooperates with the China Ministry of
Ecology and Environment and the Asean Center for Environmental Cooperation on regional cooperation and integration that facilitates sustainable urban development and supports high-level policies and impactful knowledge sharing on the adoption of sustainable growth in the Belt and Road countries. Prof. Dongmei Guo, China state council expert of the ChinaAsean Environmental Cooperation Center, said the BRI brings together two regional trade corridors: the Silk Road Economic Belt that will link China with the Persian Gulf and the Mediterranean Sea through Central Asia and West Asia. It will have three routes: China-Central Asia-Russia-Europe through the Baltic Sea; ChinaCentral Asia-West Asia-Persian Gu lf through the Med iter ranean Sea and China-Southeast A sia-South A sia through the Indian Ocean. The other trade corridor is the 21st Century Maritime Silk Road that stretches from the South Pacific Sea to Europe with two roads—Coastal China-South China Sea-Indian Ocean-Europe and Coastal China-South China Sea and South Pacific. The initiative covers more than 65 countries—or more than 60 percent of the world’s population. It inc ludes A f r ica and Euro p e a nd pl a n s to mobi l i z e $150 bi l l ion i n i nvest ment s over t he ne x t f ive years. Initiated in 2013, the BRI aims to create the world’s largest platform for economic cooperation, including policy coordination, trade and financing collaboration, and social and cultural cooperation. “The BRI provides great opportunities for promoting green transformation and achieving the Sustainable Development Goals [SDGs] in 2030,” said Guo, mentioning environmental-related SGDs 6, 12, 13, 14 and 15 as the same targets envisioned in the
A panel at the Green Growth and Regional Cooperation forum of the 51st annual meeting of the Asian Development Bank in Manila early this month Diana Mendoza/IPS
initiative. “The global sustainable development process has entered a new stage through the BRI and it must be green.” Goals 6, 12, 13, 14 and 15 enjoin countries to ensure availability and sustainable management of water and sanitation and sustainable consumption and production patterns, to take urgent action to combat climate change and its impacts, conserve and sustainably use the oceans, seas and marine resources for sustainable development and to protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss. Guo said among some of the concerns in the countries along the route are water shortages, water pol lution, ag r icu ltura l pollution, tailings, industrial wastes, and nuclear waste for Central Asia, biodiversity loss, water pollution and urbanization-led pollution in South Asia, and biodiversity, forest fire and haze brought by conventional pollution in Southeast Asia. Winston Chow, GGGI country representative for China, said the program is still in its initial phase but is seeing an estimated investment of $500 billion through 2030, that will be invested in the
developing world along the BRI route, with 300 billion of that being carbon-related. “What that means is that we have to consider the impacts of these economies in the long term and a major opportunity to decarbonize, which is a big step as we enhance global development,” he said. “We have to look at 2030 development goals and align our efforts at helping member countries contribute as they implement development projects.” Organized under five guiding tasks of policy coordination, unimpeded trade, facilities connectivity financial integration, and people-to-people bond, Chow said the BRI aims to utilize Chinese government policy, financing and technology in enhancing strong projects in the developing world. “The GGGI will facilitate the work with member states on how to deploy green projects and we have talked to a number of governments, such as those in Mongolia, Jordan, Indonesia, Ethiopia, Vietnam and the Philippines.” He cited the strong collaboration with Mongolia after its policy-makers were introduced to energy efficiency with air-quality restrictions and environmental impact reductions through the introduction of the electric-vehicles tariff in the capital Ulaanbaatar that successfully reduced bad air
Climate change is already exacting its toll, particularly in the Asian region, so rapidly that technological and economic growth [that may have worsened issues like air quality] should also be our most immediate driver of action to do something.”—Rijsberman
from 2016 to 2017. Jordan, Indonesia and Ethiopia are also under way in their ecological restoration and water treatment practices. Transformative projects among Chinese technologies in solar energy use, e-transportation and e-mobility technology, land restoration, water and solid waste treatment and solar, wind and energy building efficiency projects will also be shared as well with participating countries. But with BRI being recently introduced, Chow mentioned a few challenges in financing schemes—such as gaps between what China wants to invest in and what developing countries are ready to do but have financial needs that are complex to underwrite. For instance, he said “the debate is still out on countries that have electricity grids not quite ready for global energ y integration that may not necessarily yield benefits financially or socially.” The gap is also shown in Chinese investments in green projects that can be worth $100 million, but some countries can only do projects in the $20 million or $30 million. He cited BRI’s large-scale projects, such as airports in Cambodia or Vietnam’s hydropower plants and dams. In his news conference prior to the GGGI side event, ADB President Takehiko Nakao lauded China’s BRI as a key program to connect countries and regions and to broaden integration and cooperation across Asia, and that the ADB will participate in this initiative when needed. He enjoined countries along the route to be careful not to take out excessive loans when they get involved in the initiative to finance their projects and to look closely at the benefits the projects can give to their citizens. “If countries borrow too much for certain projects without seriously looking at the feasibility,
Study: China-backed dam would destroy Mekong
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ANGKOK—A Chinese-backed plan for Cambodia to build the Mekong River’s biggest dam would destroy fisheries that feed millions and worsen tensions with Vietnam, the downstream country with most to lose from dams on the waterway, according to a three-year study commissioned by the Cambodian government. The report, posted this month on the web site of the United States-based organization that conducted the study, said the Sambor dam would “generate large power benefits to Cambodia, but at the probable cost of the destruction of the Mekong fishery, and the certain enmity of Vietnam.” It said the dam designed by China Southern Power Grid Co. would have a 620-square kilometer reservoir and dwarf the biggest dam currently being built on the Mekong—the Xayaburi dam in Lao
PDR—which was bitterly opposed by environmentalists for years. The experts at the Natural Heritage Institute who authored the repor t, submitted to the Cambodian government late last year, recommended it defer the projec t while studying “better ” alternatives, such as using solar power to augment existing hydroelectric dams. Alternative sites upstream where the Mekong separates into several channels a re p o s s i b l e b u t e i t h e r f i n a n c i a l l y u n fe a s i b l e o r o n l y m a rg i n a l l y l e s s destruc tive than the site c urrently envisaged for the 2,600 megawatt dam, the study said. Possible mitigation measures are either unproven or have a poor track record, it said. The dam would block fish migration from the giant Tonle Sap lake in Cambodia
which is crucial for reproduction and replenishing what scientists say is the world’s most productive fresh-water fisher y. It would also prevent riverbed sediment that fer tilizes the Mekong Delta rice bowl from moving down river, a particular problem for Vietnam where delta farmlands are being destroyed by saltwater incursion from the sea. “The dam and the reservoir would create a barrier that would be d e va s t at i n g fo r t h e m i g rato r y f i s h stocks,” the study said. It also warned that a population of about 80 critically endangered Irrawaddy river dolphins would likely be wiped out because the deep river pools they use as a dry season refuge would become filled with sediment blocked by the dam. Cambodia’s government, closely allied
with China, its northern neighbor, and the recipient of substantial Chinese aid and investment, has not publicly commented on the report. Seven dams that China built on the Mekong headwaters in its territor y are already a headache for Southeast Asian countries, reducing the amount of sediment floating downstream by as much as half, according to researchers. The Chinese dams were blamed for exacerbating a Southeast Asian drought in 2016, but countries in the region are pressing ahead with plans for Chinese companies to build a slew of other Mekong dams to meet growing demand for energy. Laos, one of the poorest countries in Asia, is pinning development hopes on becoming a source of power for its neighbors. AP
Villagers ride a dugout up the Mekong River near Sambor, Cambodia, where a major dam has been proposed. AP/Richard Vogel
it might bring more trouble in repayment,” he said, stressing the need to “look at debt sustainability issues very seriously.” Ayumi Konishi, special senior adviser to the president of ADB, told the side event “the ADB intends to cooperate with BRI because of its strong preference for green projects, such as renewable energy or sustaining transport projects.” Since the BRI initiative was announced in September 2013 advocating for improved connectivity for shared prosperity and after China signed an agreement with six multilateral development banks, he said the ADB is in agreement as “we share the same vision; we need the entire portfolio of cooperation projects to make them greener and make them less vulnerable to potential bad impacts of climate change.” Rijsberman, GGGI’s director general, said the GGGI, a treatybased international organization headquartered in Seoul, South Korea, is seeing good examples of green efforts—such as the Pacific greening in Vanuatu, the eco-towns in the Philippines, the business models in Indonesia that prevent fires and rehabilitate forests, the efforts in Rwanda to eradicate plastics and the biodiversity protection efforts in the Greater Mekong area. “Efforts go beyond protecting environment but more on promoting it,” he said, stressing that such initiatives are all anchored on landmark agreements such as the UN SDGs and the Paris Climate Agreement. The 2018 ADB Annual Meeting, themed “Linking People and Economies for Inclusive Development,” gathered more than 4,000 delegates and brought together experts of different disciplines who discussed framing global economic shifts, reexamined governance structures, explored governments and development institutions’ adapting new opportunities while addressing challenges presented by an increasingly digital future. The ADB estimates Asia’s infrastructure needs could reach $22.6 trillion through 2030, or $1.5 trillion annually. If climate-change adaptation measures are adopted, the cost would rise to over $26 trillion. Established in 1966, it is owned by 67 members—48 from the region. In 2017 ADB operations totaled $32.2 billion, including $11.9 billion in cofinancing. Diana G. Mendoza/IPS
Biodiversity Monday BusinessMirror
Asean Champions of Biodiversity Media Category 2014
Monday, May 21, 2018
Editor: Lyn Resurreccion • www.businessmirror.com.ph
A9
SPECIAL-USE AGREEMENT IN PROTECTED AREAS
Managing protected areas through PPP
T
By Jonathan L. Mayuga
@jonlmayuga
on the enormous economic potential of adjusting the “user fees” under Sapa. Lim said protected-area management depends largely on the political will to enforce environmental laws and the policies that are put in place to enhance its protection and conservation.
he Department of Environment and Natural Resources (DENR) is ready to accept applications for Special-Use Agreement in Protected Areas (Sapa) after Environment Secretary Roy A. Cimatu recently announced the lifting of the moratorium that stopped the awarding of tenurial instruments in protected areas.
The scheme was suspended in 2011 by then-Environment Secretary Ramon J. P. Paje, according to DENR officials, because it failed to generate revenue and improve protected area management. Essentially, Sapa promotes public-pr ivate par tnership (PPP) t hrough env ironmentfriendly business ventures like ecotourism to boost the protection and conser vation of the countr y’s rich biodiversity.
Revised guideline
The lifting of the moratorium came after Cimatu signed an order last month that will ensure the proper determination, assessment and collection of fees for Sapa starting this year. Department Administrative Order (DAO) 2018-05, an addendum to the rules and regulations for the special uses in protected areas under DAO 2007-17, provides a standard for computation for development fees. Under the new guidelines, development fees will be imposed based on the fixed percentage of the zonal value of the land and improvements on the area. The fees will be equivalent to 5 percent of the most recent zonal value of the commercial zone in the nearest municipality where the project is located, multiplied by the area to be developed plus 1 percent of the value of improvement as a premium to the protected area.
Protests
Cimatu’s decision, however, triggered howls of protests. Environmental groups expressed concern over its potential adverse impact within protected areas. The Pambansang Lakas ng Kilusang Mamamalakaya ng Pilipinas (Pamalakaya) said it will open the floodgates to investments that may eventually lead to destructive development projects within a protected area or areas set aside for conservation. Similarly, Greenpeace Southeast Asia-Philippines issued a statement warning against the opening of protected areas to exploitation. A protected area, under Republic Act 7586, or the National Integrated Protected Areas System (Nipas) Act, is defined as “identified portions of land and water set aside by reason of their unique physical and biological significance, managed to enhance biological diversity and protected against destructive human exploitation.”
What is Sapa?
On July 26, 2007, then-Environment Secretary Angelo T. Reyes signed DAO 2007-17, providing for the guidelines for special uses within protected areas. It is a tenurial instrument awarded by the DENR to a development partner allowing special uses
of portions of a protected area. Through Sapa, the DENR is able to impose “user’s fee” from which it generates much-needed revenues. Among Sapa’s objectives are to provide access and economic opportunities to indigenous peoples, tenured migrant communities and other stakeholders of protected areas in order to help reduce poverty incidence and earn revenues for the sustainability of protected areas management. Anchored on the state policy to promote biodiversity conservation and sustainable development in protected areas to maintain ecological processes and life support systems, Sapa aims to encourage their effective management by fostering cooperation between and among stakeholders to manage and develop appropriate zones within a protected area.
Scope and coverage
Under DAO 2007-17, a Sapa can only be issued in protected areas, except those categorized as strict nature reserve, or an area possessing some outstanding ecosystem, features and/or species of flora and fauna of national scientific importance. It shall be confined only to the management zones of the protected area appropriate for the purpose. Sapa, hence, requires that a protected area must first have identified and delineated management zones. Special uses within a protected area that may be allowed subject to an approved environmental compliance certificate are: ecotourism facilities, campsites, communication facilities, transmission lines, irrigation canals or waterways, right-of-way such for transmission lines and communication facilities, aquaculture, scientific monitoring stations, agroforestry and forest plantations. A Sapa may have a maximum term of 25 years and may be renewed subject to review and approval of the DENR secretary upon the recommendation of the Protected Area Management Board (PAMB).
Conservation measure
The Nipas Act promotes the establishment of a protected area as a measure to protect and conserve the country’s rich biodiversity against unbridled development and destructive human activities. Only limited development projects and human activities are allowed within protected areas to minimize, if not totally eliminate, the adverse impact on the area’s ecosystem and the plant and animal wildlife that thrive there. A declared protected area gets special protection from the DENR through regular monitoring of human activities. It may be categorized as a strict natural reserve, natural
Sustainable investment
The Wawa Dam within the Upper Marikina River Basin Protected Landscape in Rodriguez, Rizal, is frequented by local tourists during summer. Growth Publishing
park, natural monument, wildlife sanctuary, protected landscapes and seascapes, resource reserves, natural biotic area and other areas established by law, conventions or international agreements to which the Philippine government is a signatory.
Home to threatened species
Protected areas are established to protect and conserve certain areas because they are habitats of threatened plant and animal wildlife and are essential for their survival and of nearby ecosystems. Some of the country’s protected areas are known as key biodiversity areas and are home to threatened species of flora and fauna, unique species of plant and animals that can only be found in the Philippines and driven to the brink of extinction, or keystone species in which the ecosystem largely depend.
Rich biodiversity
According to the Convention on Biological Diversity, the Philippines is one of the 18 megadiverse countries in the world. It possesses two-thirds of the Earth’s biodiversity and between 70 percent and 80 percent of the world’s plant and animal species. The Philippines ranks fifth in the number of plant species and maintains 5 percent of the world’s flora, it added. The Philippines, however, is one of the world’s biodiversity hot spots because of the rapid rate of biodiversity loss caused by numerous factors. This includes habitat loss caused by massive destruction of forests, including logging, quarrying and mining; massive land conversion for food production and human settlement and human encroachment of wildlife habitats; illegal wildlife trade and hunting for trophy and sports in the case of critically endangered animal species; pollution; and proliferation of invasive alien species.
Protected-area management
There are currently 240 protected areas in the Philippines
covering over 5 million hectares of forestland. Of the 240 protected areas, however, only 13 are backed by legislation while the rest are covered by presidential proclamations, presidential decrees or executive orders. Protected areas are managed by represent at ives f rom t he DENR, other national government agencies like the departments of Tourism and of the Interior and Local Government, National Commission on Indigenous People, local government units, academe, people’s organizations or non-governmental organizations sitting as members of the PAMB. The PAMB acts as the highest policy-making body that governs the management of a protected area headed by the protected area superintendent, usually a designated official of the DENR.
Wanted: Development partners
Because of its limited financial resources and capacity to rehabilitate and develop protected areas, the DENR encourages investment to generate revenues to boost their operation. One way of encouraging investment is through Sapa. Other protected areas are used for the operation of agricultural and agro-industrial and tree plantations.
Increased revenue
A 2013 study commissioned by the DENR-Biodiversity Management Bureau (BMB) revealed that the income from Sapa could increase from a measly P300 million to as much as P500 billion a year. If properly used, this f und can boost the protection and conser vation of the countr y’s protected areas. Among the objectives of Sapa include putting a premium to ecos ystem ser v ices prov ided by protected areas, such as water supply, which is becoming a limited resource; and generating revenues that can be utilized for improved management and operations of protected areas,
We still have all the safety nets in place. The PAMB [Protected Area Management Board] will still screen the projects in protected areas.” —Rodriguez
thereby reducing the required national subsidy.
Not so fast
The decision to lift the suspension of Sapa, however, failed to generate the anticipated excitement. Pamalakaya National Chairman Fernando Hicap said lifting the suspension of the Sapa is, in fact, anti-environment as it will open the floodgates for the destruction of the country’s pristine protected areas. Hicap added certain corporate activities are known to cause an environmental disaster. For his part, Greenpeace political campaigner Vince Cinches, in an interview on May 16 and 17, said lifting the moratorium on the issuance of special permits will neither protect nor lift people from poverty, but rather expose indigenous peoples to further abuse and oppression. He lamented that there is no general management planning strategy for the use of the country’s protected areas, which is required by the DAO 2008-26(2). “If the budget is the problem [i n m a n ag i ng protec ted areas], I think it’s important for the DENR to request for a bigger budget allocation from the nationa l coffers, instead of opening protected areas to generate money, which is ver y unsustainable, as it will destroy and deplete resources. May they be reminded that the objective of Nipas is consistent with the Philippine Constitution to our r ight for a hea lt hy a nd ba lanced ecolog y, any action to the the contrar y, should not be allowed,” Hicap added.
In defense of Cimatu
Taking the cudgels for Cimatu up a former DENR official who pushed for the updating of the Sapa guideline said the strict implementation of the policy, including the new guideline that will impose higher fees on businesses operating within a protected area, would encourage serious pro-environment investors and will weed out businesses that are only after profit. Asean Centre for Biodiversity Executive Director Theresa Mundita S. Lim said Cimatu’s decision to lift the moratorium on Sapa would allow the government to generate the much-needed revenues, which can boost protected-area management in the country, citing a 2013 study
According to Lim, investment in protected area per se is not bad, as long as it can be considered as “a susta inable investment” and one that’s anchored on sustainability. “We are looking at sustainable investment. That is why the fees will be higher. In many protected areas, there are existing businesses already,” she said. She insisted that the businesses are not paying enough, especially because they are in an area that is supposed to have high premium being a protected area. “This [Sapa and the higher user fee] is a market-based deterrent. If the user fee is higher, only a few businesses with the capacity to invest and do the right thing will be able to cope with the challenge,” she said. She noted that the user’s fee generated from Sapa would go to the Integrated Protected Areas Fund, which will be used in the sustainable development, protection and conservation of protected areas.
Strict enforcement
“What is important is that we ensure enforcement. If a business establishment is not able to pay the premium under Sapa, we should have the political will to evict it. It should be a deterrent to those who only want to make a profit without setting aside investment for protection and conservation,” she said. According to Lim, compared to other tenurial instruments which large corporations are currently enjoying, Sapa imposes higher user fees. In fact, owners of business establishments within protected areas, such as in Davao, are complaining against the potential increase in user fees which is a lot bigger than the amount they are paying. Besides mountain resorts, many areas within Mount Apo Natural Park in Davao are being used as banana plantations. With the new Sapa user’s fee, these businesses will now have to pay higher fees. Other protected areas like the Bataan National Park and Northern Negros Natural Park also have numerous business establishments that will now be charged with higher user fees because of Sapa.
Adequate safeguard
According to Crisanta Marlene Rodriguez, the environmental safeguards under Nipas Act are not diminished by Sapa. “ The revised guidelines increased the fees dramatically. Sapa was suspended because the revenue being generated was not enough,” she said. According to Rodriguez, the strict guidelines on protected-area management remains the same, noting that strict protection zones are still “off-limits” to development projects. “We still have all the safety nets in place. The PAMB will still screen the projects in protected areas,” she said. She added the DENR-BMB maintains its administrative oversight over protected areas and will not allow their destruction in the name of profit.
A10 Monday, May 21, 2018 • Editor: Angel R. Calso
Opinion BusinessMirror
www.businessmirror.com.ph
editorial
In the matter of: Tiu vs Trillanes
W
e have all heard the famous quote by British Lord Acton that “power tends to corrupt, and absolute power corrupts absolutely.” There is a variation on that that has been attributed variously to the late musician John Lennon to former US Secretary of the Navy John Lehman. “Power corrupts. Absolute power is kind of neat [or cool]”.
While none of us wants to be the object of oppression, deep down we all probably would like the chance to wield that “absolute power” and have everyone do what we say. In a civilized society, power tends to come from position rather than brute force as in days past. Of course, power also radiates from wealth in that you can “buy” or at least “rent” the power to tell other people what to do. That also describes the employer/employee relationship. Your “boss” may demand that you wear shoes to work. There are instances when another person’s power over us is because of the position that they hold and the authority of that position. The security guard at the shopping mall entrance has the power to inspect our bags if we wish to enter. The schoolteacher has the power to tell the students to not speak during class. However, that power and authority is given to the position and not to the person. The security guard does not have the right to inspect our bag when he or she is off-duty. We might address someone as “doctor” even when that person is outside the medical environment as a courtesy. But the title does not give the “doctor” the authority to start examining us by right of a license to practice medicine. Further, we usually do not call someone “Bank Manager Cruz” or “Auto Mechanic Santos” except within the narrow confines of when they are actually performing that duty. Yet, it is interesting that an elected official seems to carry the title of “senator,” “congressman” or “mayor” long after they no longer hold that position. Further, the line between the “person” and the “position” becomes blurred. In 2014 there was controversy over what became to be called “Hacienda Binay” and the involvement of businessman Antonio Tiu. Specifically, there was speculation that Tiu acted as a “dummy” of Vice President Jejomar Binay. This claim was made by Sen. Antonio F. Trillanes IV. Tiu filed a civil case for defamation against Trillanes based on statements the senator gave to the media when he called Tiu “an ideal dummy” for Binay. In his defense against the defamation suit, the senator claimed that his statements were protected from suit under the concept of “parliamentary immunity” under Article VI, Section 2, of the 1987 Constitution. In a decision handed down in March, the Supreme Court did find that the media statements “were not covered by the parliamentary speech or debate privilege.” Further, the Constitution’s protection of lawmakers’ privilege of speech and debate “did not turn our senators and congressmen into ‘super citizens,’ whose spoken words or actions are rendered absolutely impervious to prosecution or civil action.” The purpose was “not to protect them against prosecutions for their benefit, but to enable them, as people’s representatives, to perform the functions of their office.” This ruling is an important affirmation that there is a clear and definable line between the “position” of public office and “person” who holds that position. There cannot be a separate definition of free speech—or any law—for ordinary citizens and elected officials.
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What vitamins can do for you Atty. Jose Ferdinand M. Rojas II
RISING SUN
Conclusion
T
o continue the conversation on vitamins and aging, I would like to move on to two specific vitamins that were given particular attention during the recent international conference attended by medical experts, including Dr. Thomas Levy and Prof. Andrew Saul. One of these is vitamin C, which, according to the experts, is one of the (if not the) most important vitamins that people should be taking on a daily basis. It addresses inflammation or infections in the body, which they say is the source of majority of our illness. Infections usually start in the mouth. Vitamin C can be obtained by eating fresh and raw foods like salads, fruits, sprouted greens like wheatgrass and raw milk, among others. According to Prof. Saul, vitamin C could help address arthritis (both rheumatoid and osteoarthritis), influenza, diabetes, Alzheimer’s disease and even cancer. The results of the studies supporting these claims have been with us for many years now, even as early as the 1900s. Unfortunately, people
were simply uninformed. The University of Pennsylvania Medical School conducted a study last year (2017) and found that a high dose of vitamin C could actually lower the risk of getting type 2 diabetes, even in those people who ingest a high level of nitrates, a chemical known to cause insulin resistance and cancer. Another study presented evidence that the right dose of vitamin C (and E) for senior citizens could lower by 80 percent their risk
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THE PATRIOT
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servant leader is never concerned with titles. He believes that every one in the organization can be a leader. Leadership guru and inspirational author John Maxwell said that leadership is influence. While our bosses have titles, they are not the only ones who can influence others. The job title may demand some respect to the point that bosses are addressed as Sir/Ma’am due to their positional authority. But, a few organizations in some countries have promoted a “no boss” atmosphere to encourage everyone to be leaders. Author Robin Sharma said this model promotes the idea that all stakeholders in the company can be and should be leaders in their respective spheres of influence. In Sharma’s words: “This is really all about distributed leadership.” Hence, some companies have encouraged their work force to refrain from addressing their superiors as sirs. Unfortunately, our culture in the Philippines requires superiors to be addressed as sirs. Especially in the Philippine Military Acad-
emy (PMA), regardless of rank or position, one who graduated earlier than the other will always be addressed as Sir/Ma’am. When I was in the Bureau of Immigration, I can vividly remember one meeting where my Commissioner Ricardo David Jr. (PMA 1977) and I met with Sen. Sonny Trillanes (PMA 1995). A colleague was amused as Trillanes, David and I, all academy graduates, were addressing each other as “sir” throughout the entire conversation. When I was working in the United States, I successfully eased out the “Sir/Ma’am” in my vocabulary, since the American culture was not as hierarchal than ours and, most important, I was made to pay a dollar every time I call my bosses as such. In Philippine Airlines (PAL), our
pulmonary disease, fatty liver and ALS, or amyotrophic lateral sclerosis (as prophylaxis). You could go on PubMed to obtain the actual results of these medical studies, or visit www.doctoryourself. com (Prof. Andrew Saul’s web site) to get more information on the other vitamins and their benefits.
of getting Alzheimer’s disease. Since 1975 we’ve also had the results of a study that proves that high dosage of vitamin C could decrease the pressure inside the eyes of glaucoma patients. These are just some of the positive, hopeful findings that for some reason have, unfortunately, not been talked about. Vitamin E is another good vitamin, but is sometimes referred to as the “cure in search of a disease.” The International Journal of Cancer published in 2011 the results of a study showing that natural vitamin E is effective against existing prostate tumors. The same journal published another study earlier in 2008 showing medical proof that dosing with 300 IU of natural vitamin E daily could reduce the risk of lung cancer by 61 percent. For the elderly, the same vitamin has been shown to reduce mortality by 24 percent in persons 71 years and older. It helps atherosclerosis, too, by decreasing the risk of heart attacks by 77 percent for a regular dose of 400 to 800 IU. For those with macular degeneration, natural D-alpha vitamin E (taken together with other supplements) has been shown to help with the disease. According to Prof. Saul, other diseases that may benefit from high doses of vitamin E would be: emphysema, chronic obstructive
Here are the results of the PCSO Trial Race (S0pecial Maiden Race) held on April 27 in San Lazaro. The top 10 finishers, in order, were: Ava’s Dream (JPA Guce), San Rafael (FM Raquel Jr.), The Best Ever (Pat R. Dilema), What an Offer (JB Guce), Shadow of the Sun (JB Hernandez), Oasis (CP Henson), Eli Brassous (OP Cortez), Silver Glow (JA Guce), Gray Yogurt (JL Paano) and California Garden (EG Guerra). Another race, the PCSO Special Maiden Race (3-Year-Old Open), was held on May 12 also in San Lazaro. The racehorses that made it to the top 9, in order, were: What an Offer (JB Guce), The Best Ever (Pat R. Dilema), Eli Brassous (OP Cortez), California Garden (EG Guerra), Ava’s Dream (JPA Guce), Oasis (CP Henson), Gray Yogurt (JL Paano), Silver Glow (JA Guce) and San Rafael (FM Raquel Jr.). I would like to extend my warm congratulations to all the winners.
Vice President for Flight Operations Chuck Aquino (PMA 82) narrated to me one program initiated many years ago where pilots were penalized for calling their superiors as sirs. Aptly called as “sir-beer,” whenever junior pilots address their seniors as sirs, they pay a bottle of beer! Sadly, the program lost traction, and the pilot complement of PAL, almost half of which served in the Air Force, returned to the old ways of using titles. Chuck will relaunch a similar program soon. In a workshop in Batangas a few weeks ago, Capt. Ed Diaz, the counterpart of Capt. Chuck in PAL Express, also started a program to get rid of these titles. Much to my pleasant surprise, most pilots eagerly embraced the idea and, hopefully, will sustain until it becomes part of the culture of PAL Express. Believing in this idea of no more sirs, PAL President Jaime Bautista, when asked how should we address him, reportedly replied, “call me Jimmy or JJB.” One of the most important attributes of a servant leader is listening. Some say that the Sir/Ma’am atmosphere impedes open and transparent communication between the leader and his followers. Out of fear, a subordinate will likely report only the good news and filter the bad news to the prejudice of the company.
Positive feedback is just as valuable as negative feedback, especially from subordinates. Listening to our employees is also one great way of knowing and serving their needs. But there are still “leaders” who simply cannot embrace this servant philosophy. After all, they worked long and hard to get to where they are. They think that getting rid of sirs and serving the needs of their subordinates are not congruent to the fact that they were exactly placed in that position of respect. In the Bible, Matthew 20:26-28 tells us, “Whoever wants to become great among you must be your servant, and whoever wants to be first must be your slave—just as the Son of Man did not come to be served, but to serve.” Chuck and Ed have provided the seeds to jump-start the servantleadership philosophy in all flight decks in the PAL group. The most effective way to cultivate and nurture this little gesture of getting rid of sirs, although countercultural, is to understand the reason we should do it. And that reason, as exemplified by many leaders such as Mahatma Gandhi, Nelson Mandela, Martin Luther King and Jesus Christ, is that leaders can get his followers to tow the line, not by barking orders but by influencing them by being a servant first.
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Giving due recognition PRA’s own JV Guidelines to the 4 Ps of the profession By Alberto Agra
PPP Lead
Dr. Gloria J. Tolentino-Baysa
DEBIT CREDIT
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he Professional Regulation Commission’s Board of Accountancy (BOA) is recognizing the contribution of the four Ps (prominent, posthumous, pillars and performers) of the Accountancy profession who have made a significant impact. The four Ps represent the Prominent Certified Public Accountants (CPAs) who are distinguished in the profession, those CPAs who have passed away (posthumous) but who during their time were equally prominent, the pioneer accounting schools that are considered pillars of the profession, and those higher education institutions (performers) that are recognized as consistent top performers in the CPA licensure examinations. This recognition initiative called the BOA 95 CPAs is one of the activities being undertaken to celebrate the 95th Anniversary of BOA creation and the establishment of the Accountancy profession in the Philippines, An individual or organization may nominate candidates for the awards. The CPAs who can be nominated for the prominent and posthumous awards are those individuals who have sufficiently demonstrated professional competence, meaningfully participated in professional activities, significantly contributed to the advancement of the profession, and significantly uplifted the effective discharge of the profession’s social responsibility. For the pillars and performers awards, institutions that served as pillars in Accountancy education and recognized as top performers in the licensure examinations can be nominated. All nominations must be received at the office of the Philippine Association of Professional Regulatory Boards (PAPRB), Attn: Board of Accountancy c/o Professional Regulation Commission, with address at 1008 P. Paredes Street, Sampaloc, Manila from May 15 to July 31, 2018. The nomination should also be e-mailed to boa95cpas@gmail. com and boa.secretariat@gmail.com. The guidelines and criteria can be downloaded from the BOA Facebook
and web site at https://www.facebook. com/Accountancy95years/ and https:// boa.com.ph/, respectively. The Board of Judges for the awards will do a document screening from August 1 to September 30. It will release of list of finalists on October 1. Interview of finalists will be done from October to November. The awarding ceremonies will be done sometime in December. The prominent and posthumous individual nominees will be judged based on their demonstration of professional competence of the highest degree and how they conducted themselves with integrity in the exercise of profession; their participation in professional activities through the accredited professional organization or any other professional organizations; their contribution to the advancement of the profession; and their accomplishments in the effective discharge of the profession’s social responsibility through meaningful contribution/ participation on socioeconomic related activities. The pillars and performers institutional awards can be any of the more than 500 higher education accounting institutions that are recognized as consistent top performers in the CPA licensure examinations having made a mark in the 95 years of the accountancy profession. Let us give due recognition and honor to our prominent, pillars and performers of the profession. Dr. Gloria T. Baysa is a university professor retiree of the Polytechnic University of the Philippines and is currently the vice chairman of the Professional Regulatory Board of Accountancy. This column accepts contributions from accountants, especially articles that are of interest to the accountancy profession, in particular, and to the business community, in general. These can be e-mailed to boa.secretariat.@gmail.com.
As the world warms, not everyone stays cool By Nathaniel Bullard Bloomberg View
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he grid operator that delivers power to most of Texas set an all-time peak electricity demand record this week for the month of May. Hot weather, a healthy economy and a growing population have all given Electric Reliability Council of Texas Inc. reason to expect record-breaking summer usage. The main driver of warm-weather peaks is air conditioning. Joshua Rhodes of the University of Texas told me that half of all summer peak demand in Ercot’s territory is from air conditioning, with two-thirds of residential electricity demand coming from AC. All told, home air conditioning makes up a little less than one-third of all electricity demand in the biggest state electricity grid in the country. Providing the power to meet that need is one of the main generators of all new electrical infrastructure in Texas, Rhodes says. But a new report from the International Energy Agency (IEA) makes Texas’s demand look positively tiny as a growing, urbanizing world demands to cool itself. The IEA’s data shows not only how many air-conditioning units there are in service today (nearly 1.1 billion worldwide) but also how uneven the distribution of cooling is. Japan has 90 residential air-conditioning units for every 100 people; India has one per 100. South Korea has twice the number of residential air conditioners as Brazil,
which has more than four times as many people. And the United States has more than a thousand times as much cooling output per person as India does. Urbanization is also pushing demand for air conditioning higher. The United Nations recently published its updated population projections. In each of the following countries profiled by the IEA in its air-conditioning analysis, more than half of their populations are expected to be living in urban areas in 30 years. As the IEA notes, urbanization and air conditioning go hand in hand: Urban downtown areas can be as much as 7 degrees Fahrenheit (4 degrees Celsius) warmer than outside their cities, and dense settlement means that there is little free movement of air to naturally cool dwellings. At the same time that air conditioning is cooling interior spaces, it is heating the outside air via exhaust, which increases the work required for inside cooling, which increases exhaust and outside temperatures. It’s an urban vicious circle, to say nothing of its effects on climate change. The IEA expects the number of “cooling degree days” (when temperatures are above 65 degrees Fahrenheit/18 degrees Celsius) worldwide to increase by 25 percent from 2016 to 2050, making the circle even more vicious: Climate change is raising atmospheric temperatures, directly increasing the need for cooling, which is resulting in more burning of fossil fuels in power stations to meet the increased electricity load, which is contributing, in turn, to more climate change.
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RA is not just about reclamation. As a public estates authority, PRA, aside from carrying out and regulating reclamation projects, is mandated to develop, improve, acquire, administer, deal in, subdivide, dispose, lease and sell any and all kinds of lands, buildings, estates and other forms of real property, owned, managed, controlled and/or operated by the government.
PRA JV Guidelines is not for reclamation. Subject to relevant laws, regulations and jurisprudence, PRA can enter into PPPs under the BOT law, undertaken lease arrangements under the Public Land Act, and dispose and privatize its assets and properties. The PRA JV Guidelines only extends to development and disposition of PRA’s existing properties and projects, whether owned,
administered or controlled by PRA and the operations of PRA assets and facilities. PRA not covered under the 2013 Neda JV Guidelines. The JV Guidelines issued by the National Economic and Development Authority in 2013 (Neda JV Guidelines) does not cover all government agencies, corporations and instrumentalities. In the exclusion list, the Neda JV
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Guidelines does not extend to local governments and JV activities of government corporate entities in the exercise of their primary mandate to dispose government assets and properties, among others. PRA’s exemption was affirmed by Neda and the Office of the Government Corporate Counsel, which is PRA’s statutory counsel. The Bases Conversion and Development Authority (BCDA) also adopted its own. JV not explicitly defined. Although not expressly defined under the PRA JV Guidelines, a JV is a PPP modality whereby both parties, the government implementing agency and the private sector proponent (PSP), will proportionately share in the performance of all the components of the project, in the assumption of responsibilities and obligations, and allocation of revenues, profits, losses and risks. Possible JV Projects. PRA, together with the PSP, can codevelop and coimplement a building, monorail, waste-to-energy, fiber optic or port project, or any combination thereof, on PRA reclaimed land or
roads. The JV period shall be for a maximum of 50 years. PRA’s “Skin” in the Project. Like in any other JV, PRA can make cash or noncash contributions, subject to third party independent valuation, in the form of equipment, land, utility franchise, development rights, leasehold rights, intellectual property or anything of value. 2 PSP Selection Procedures. PRA, in selecting its private coventurer, may either pursue competitive selection (open bidding) or negotiated JVs, i.e., competitive challenge giving the Original Proponent the right to outbid if there are challengers, or limited negotiations when there is failure in the bidding. Last Say by PRA. Unlike the Neda JV Guidelines, and like the BCDA, PRA can award its JV project without the intervention of Neda (regardless of the value of PRA’s contribution), Governance Commission for GOCCs (even if PRA will enter into an incorporated JV) and Privatization Council (even if there is disposition). PRA is now open for JVs.
After Trump’s Iran decision, war or diplomacy? By Tobin Harshaw Bloomberg View
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emember when the only alternative to the Iran nuclear deal was war? In the summer of 2015, with Congress debating whether to vote on nixing the recently negotiated Joint Comprehensive Plan of Action (JCPOA), Barack Obama gave a speech at American University invoking that dire dilemma. Just “stating a fact,” he said: “The choice we face is ultimately between diplomacy or some form of war. Maybe not tomorrow, maybe not three months from now, but soon.” Well, I suppose it all depends on your definition of “soon”—and also maybe “fact”—but it’s been nearly two weeks since President Donald J. Trump walked away from the pact, and the battle hasn’t broken out yet. In fact, the immediate Iranian response was not to hurriedly restart its nuclear-weapons research, but to call on the European signatories to the deal to negotiate a plan to keep it in place. Here’s the thing: The United States and its allies face a serious threat from Iran, which continues to test ballistic missiles in violation of United Nations resolutions and to foment instability and terrorism in its struggle for regional supremacy against Saudi Arabia and the other Arab states. Of course, as former Secretary of State John Kerry and other Obama aides repeatedly pointed out, all that behavior fell far outside the scope of the deal. For many of the deal’s skeptics, the obvious yet damning retort was: Why not? In their minds, omission of Iran’s regional transgressions, more than the disagreements over centrifuge numbers and sunset provisions and anytime-anywhere inspections, was the crux of the problem. So, to discuss the immediate fallout from Trump’s announcement, I decided to talk to one of the leading critics: Kenneth M. Pollack. He is a resident scholar at the American Enterprise Institute in Washington. Before that, he snaked an interesting career path through the capital: As a CIA analyst in the 1990s, he put together the agency’s classified after-action study of the Gulf War; while a professor at the National Defense University, he also advised the Joint Chiefs of Staff on Middle Eastern politics; and he twice served in the National Security Council during the Bill Clinton administration. The big reason I wanted to talk to him at this moment is his 2004 book, The Persian Puzzle: Deciphering the 25Year Conflict Between the United States and Iran, which the New York Times Book Review said “reminds us again and again how often American assumptions about Iranian concerns were wrong.” So as we look to post-deal Iran, what assumptions most need rethinking? Here is a lightly edited transcript of our chat: Tobin Harshaw (TH): First, let’s hash out how the pro- and anti-deal sides in the US have established their narratives over the last two weeks. The Trump backers insist that the deal was
so flawed it had to be nuked, and that Obama can only blame himself for using an executive order rather than getting a better deal through Congress. Is that fair? Kenneth M. Pollack (KMP): Like everything in Washington these days, there’s no easy answer. From my perspective, the JCPOA was not a great deal: I felt it gave up more than it should and got less than it could. But it was still a very useful deal because it put the Iranian nuclear program on ice for 10 to 15 years, which would give us the time to address Iran’s aggressive expansion in the region and create the leverage to come back and convince the Russians, Chinese and Iranians to agree to a better, more permanent deal. Unfortunately, neither Obama nor Trump evinced any interest in dealing with Iranian actions in the Middle East, and Trump has now walked away from the deal for no good strategic reason and without any plan (let alone ability) to get a better one. As for the decision not to treat the JCPOA as a treaty, I think there is fault on both sides. I would have much preferred Obama to treat it as a treaty and get Senate approval. The fact that he didn’t made it all too easy for Trump to scuttle it despite the fact that Congress staunchly opposed his doing so. Of course, in Obama’s defense, back in 2015, Congress seemed so dead set against the deal (wrongly, in my view) that you could certainly understand why he was not going to trust his signature foreign-policy achievement in the Middle East to a Congress determined to hurt him any way it could. That said, I felt that the way that the Obama administration tried to sell the deal—“you are either for it or you are a warmonger”—was equally wrongheaded and made it that much less likely that the Republicans in Congress would be willing to vote for it. As always, there is plenty of blame to go around. TH: Those disappointed by Trump, particularly former Obama administration figures like John Kerry and Ben Rhodes, insist that not only does this increase the chances of war with Iran but it shows America cannot be trusted to keep its word, which among other things will doom any negotiations with North Korea. What’s your response? KMP: Again, I don’t particularly like how former Obama administration officials have been conducting their half of the debate, but on the substance I fear that they are right. It is one of the reasons that I see Trump’s decision as thoughtless, reckless and potentially harmful to the US. TH: The Iranian regime reacted in some expected ways, from burning American flags in parliament to launching some missiles into Israel from Syria, but the leadership also insisted that they were eager to work with the Europeans on saving the deal somehow. Was that a surprise? Is the deal salvageable without US involvement? KMP: I don’t think it was at all surprising. It was the smart response—
and while the Iranians certainly can be foolish, ignorant and obtuse, they have largely played the nuclear issue well all along. Iran benefits from the JCPOA, albeit not nearly as much as they hoped. Right now, their people are very unhappy at the state of their economy and I think the regime would love to see if they can use Trump’s decision to get additional economic benefits from the other signatories to the JCPOA. The Iranians will be able to rightly claim that Trump is now denying them the benefits they were promised under the JCPOA, and if the others want Tehran to continue to abide by it, they are going to have to make it worth Iran’s while to do so. TH: Many supporters of the deal argue that Trump’s killing it will only empower “hardliners” and hurt “moderates.” Do you really think that dichotomy exists? Whether or not, how do you think Trump’s action may affect Iranian politics? KMP: Iran has a hideously fragmented polity, and it is an overstatement to simply divide them up into two camps. Yet, many Iranian politicians line up more or less consistently with what we call the “hardline” and “moderate” positions, and it isn’t wrong to use those labels either. So, with that caveat in mind, I will say that I am pretty confident that it will affect Iranian internal politics, and I suspect mostly in an unhelpful way. Iranian President Hassan Rouhani is the critical moderate, and he hitched his star to the wagon of the JCPOA. His whole theory was that Iran needed to end the US sanctions to enable the economic transformation that the Iranian people desperately want. For two years Rouhani has had to defend that position in the face of evidence that Iran’s economy has not suddenly prospered after the deal. To some extent that was because some American sanctions remained, but to an even greater extent it was a result of the endemic corruption and mismanagement of the Iranian economy, which had nothing to do with the nuclear deal. Nevertheless, the hardliners tried to undermine Rouhani’s position by pointing out that the nuclear deal had not prompted a transformation of the Iranian economy, because in their telling, the US had deceived Iran and never lived up to its commitments. Trump scuttling the deal and reimposing sanctions is likely to reinforce that narrative and so further weaken Rouhani and other moderates. All that said, we need to be careful about ascribing too much of what happens in Iranian internal politics to American policy. Americans consistently overestimate the extent that our actions can and will affect Iranian politics. TH: The White House insists that the bite of its unilateral sanctions will bring Iran back to the table for an entirely new deal—an argument I expect to hear on Monday when Secretary of State Mike Pompeo lays out the admin-
istration’s new “comprehensive plan.” Do you think that’s plausible? KMP: It’s possible, but as an analyst, I would not rate it as likely. And as a former policy-maker, I would have assessed the probability as too low and the potential costs of being wrong as too high to justify the risk. The big unknowns that I think people are missing are China, Russia, India and other countries who either oppose the US or that used to be called “nonaligned.” All of the press pieces about the JCPOA have focused on what the Europeans are going to do. I think European-American trade ties are probably going to prove too strong, and so the Europeans will complain but won’t do very much. Moreover, European trade with Iran just isn’t very significant, so losing it probably won’t hurt Iran that much. But Russia is Iran’s most important strategic ally, and China and India are two of its most important oil buyers. All of them (and others) could choose to defy American sanctions and dare the White House to try to penalize them. If they follow that course of action, it will be very helpful to Tehran financially, diplomatically and psychologically, and make it much harder to convince Iran to come back to the bargaining table. Beyond that, the Iranian regime has repeatedly been willing to defy sanctions and accept hardship. Coercing Iran a second time around, after reneging on our own offer, is likely to be a lot harder and it could be impossible. TH: You and I both think the Iranian nuclear program is just one spoke on a bigger wheel—a desire to control vast swathes of the Middle East and surpass the Arab states as regional superpower. What are the current priorities for the US and its regional allies in thwarting Tehran’s master plan? KMP: For me the first priorities need to be Syria, Iraq and Yemen. Each deserves a much bigger conversation, but I know we don’t have hours to unpack each so let me just give you the broadest outlines. Syria is critical both because the Syrian civil war is destabilizing the entire Middle East and Europe beyond it, but also because it could either be a huge Iranian gain or a giant Iranian liability. The Iranians’ role in Syria has grown enormously. If they are allowed to consolidate their control, Syria becomes an overland link to Lebanon and a launch pad to operate against Israel, Jordan, Saudi Arabia, etc. But Iran is now stuck propping up a corrupt, incompetent and unpopular regime. It’s the same mistake the US made in Vietnam and Russia made in Afghanistan. What we all learned is that it is far, far more expensive and difficult to back the regime than it is to back the insurgents fighting them. Iran has set itself up for Syria to be its Vietnam. We should make sure it becomes just that by expanding our support to the Syrian rebels.