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Thursday, May 25, 2017 Vol. 12 No. 224

Duterte’s decisive move seen good for economy W hile economic activity in Mindanao will surely be affected, experts believe that the decisive action of President Duterte to end terrorist activities in Mindanao through the declaration of martial law will yield positive results in the long run. In an e-mail to the BusinessMirror, Mindanao Development Authority (MinDa) Deputy Executive Director Romeo M. Montenegro said Mindanao will go about its

Ending the ‘endo’ system by greening the economy Rene E. Ofreneo

laborem exercens

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n the recent forum of the Green Convergence on “green jobs”, one question arose: Can greening the economy stop the endo phenomenon, or what the trade unions call as “contractualization”? The answer is yes, it can. At the very least, greening can reduce the tendency of employers to resort to the 5-5-5 and other short-term hiring arrangements. First, it should be pointed out that the widespread casualization of paid labor is rooted in the realities in the economy and the labor market. The unemployed and underemployed lowskilled workers are just too many, while the enterprises able to create regular or stable positions for them are not that many. The predictable outcome from this situation is that employers simply opt for the cheapest route in the hiring of workers, that is, relying on the services of workers they deem as “easily replaceable” and can be matched with low-skilled jobs that can be mastered by the workers in a week or so. As it is, we have three economic sectors—a stagnant industrial sector, a declining agricultural sector and a growing services sector. However, except for some “green shoots”, such as the solar and other renewable industries, ecotourism, recycling and so on, all these sectors are generally brown or brownish. Continued on A2

PESO exchange rates n US 49.7850

usual business in the wake of terror attacks in Marawi City, Lanao del Sur, but its economic activity is expected to slow down due to tight security under martial law.

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ICTSI PHILIPPINE MASTERS

The President certainly made a decisive move and this sends a good signal to the business community.”—MAP

“The movement of people and goods would be expected to go through enhanced security checks, as local authorities, through Regional Peace and Order Councils, had activated mechanisms for heightened alert and vigilance,” Montenegro said. Continued on A2

Proposed ₧184 wage hike for NCR crippling–Ecop By Catherine N. Pillas

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@c_pillas29

he Employers Confederation of the Philippines (Ecop) is thumbing down the labor sector’s proposal for a P184 wage hike for Metro Manila, saying this will dissuade potential investors. Ecop President Donald Dee said the Associated Labor Unions-Trade Union Congress of the Philippines’s (ALUTUCP) petition for an across-the-board wage hike will only cripple the country in terms of competitiveness. “The labor sector is not competitive, but we have no choice. We can’t keep passing off the inefficiencies of the economy to labor; what we have to do is bring down the cost of living,” Dee said in a phone interview. The Ecop president said hiking the wages in the National Capital Region (NCR) will stand in the way of job creation, as companies will likely look at other countries with more competitive wages. Sought for comment on how the Duterte administration, which showed a propensity to be pro-labor, will take this petition, Dee said: “I’m confident that this administration will make sure the country is competitive. They will not just immediately approve this, or give in. They showed they can take a firm stand on the

I’m confident that this administration will make sure the country is competitive. They will not just immediately approve this, or give in.”—Dee

contractualization issue”. ALU-TUCP Spokesman Alan A. Tanjusay told the BusinessMirror earlier that the petition for the salary hike—scheduled to be filed on Wednesday before the regional wage board—is meant to restore the purchasing power of the daily pay being received by NCR-based workers. “The P491 minimum wage is not enough already, as it lost purchasing power due to rising prices of basic commodities. Along the way, since the last wage hike, an estimated P367 was depleted because goods and services increased prices, too,” Tanjusay added.

Jobim Carlos cushions the impact of a shaky windup to card a four-under 68 and wrest a one-stroke lead at the start of the International Container Terminal Services Inc. Philippine Masters at the Villamor Golf Club on Wednesday. NONOY LACZA

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TYCOON HOPEFUL OF XI-DUTERTE ENERGY DEAL IN SOUTH CHINA SEA

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ne of the most prominent tycoons in the Philippines is increasingly optimistic that President Duterte can strike a deal with China to share oil and gas deposits in a disputed part of the South China Sea. “At some point, a commercial deal will be made that will enable us to develop the prospect,” Roberto Ongpin, whose company Atok-Big Wedge Co. Inc. holds a minority

stake in a gas field in the South China Sea, said in an interview on Thursday. “It will be astronomical.” Since taking power last year, Duterte has sought to improve ties with China, which deteriorated under predecessor Benigno S. Aquino III. The two countries agreed to work out “mutually acceptable approaches” to the South China Sea at formal talks that Continued on A12

n japan 0.4454 n UK 64.5512 n HK 6.3929 n CHINA 7.2267 n singapore 35.8114 n australia 37.2093 n EU 55.6845 n SAUDI arabia 13.2764

Source: BSP (24 May 2017 )

BMReports BusinessMirror

A2 Thursday, May 25, 2017

Duterte’s decisive move seen good for economy Continued from A1

He added business travels in major cities are proceeded with caution, given Islamic militant threat is high all over Mindanao. Montenegro said tourism might be affected, too, although MinD has yet to project figures reflecting the damage to the industry. “Suffice it to say, travel advisories and heightened security would weigh in on tourists’ decisions to either postpone or move ahead with planned events or trips,” he said. On the other hand, the roll-on, roll-off (Roro) ferry service connecting the Philippines to Indonesia will remain in full operation. Montenegro said the cargo vessel is still at its initial voyages, which are nonrevenue generating.” Several traders are still in the process of securing necessary export and import permits, while some are working to consolidate volumes,” he added. In a phone call interview with the BusinessMirror, political analyst Eric C. Batalla said Mindanao will still be business as usual under martial law, and only those areas infested with Islamic militants will suffer from economic drawbacks. “I believe the administration will not repeat the same mistakes of the previous martial law under former President Ferdinand E. Marcos,” Batalla said. Batalla, who sits as member of the government negotiating panel to the communists, said the administration is dead set at consolidating power in Mindanao to gain full control of the situation. He added that it is at the President’s prerogative to implement a one-man rule to assure the public and the international community that the government can take down enemies of the State. “That assertion of security is very important, especially in the demonstrations of Islamic Statelinked groups. Kailangan hindi na palakihin. We have seen what happened in the Middle East,” Batalla said. Duterte on Tuesday decided to place Mindanao under his full control, following the clash between soldiers and Islamic militants in Marawi City. The Chief Executive, who was in Moscow, Russia, at the time of the skirmish, was forced to cut short his four-day official visit to Russia to return to the Philippines and face the crisis head on. In his arrival statement on Wednesday at the Ninoy Aquino International Airport, Duterte said he is agitated to crush the Islamic militants the soonest time possible. But if worst comes to worst, he is open to implementing martial law in Mindanao up to a year. “These things the government cannot allow. It is an open defiance and the violence and atrocities continue,” he said. “The government must put an end to this. I cannot gamble with Isis [Islamic State of Iraq and Syria] because they are everywhere. And you know what is happening in the Middle East,” he added. Duterte has tapped Armed Forces of the Philippines (AFP) Chief of Staff Eduardo M. Año as martial-law administrator for military. The privilege of the writ of habeas corpus in Mindanao was suspended and Duterte is considering suspending the writ and declaring martial law in the Visayas, as well. He said the martial rule could be expanded to the whole country if the terror threat is found to be present in other parts of the Philippines.

Decisive

Duterte admitted that the martial rule could affect business confidence if prolonged, which is why he wants to end the terror threat immediately. He, however, said he will not hesitate to ask Congress to extend the 60-day validity of his declaration.

“The President certainly made a decisive move and this sends a good signal to the business community. He acted quickly and went back,” according to the Management Association of the Philippines. Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. said there may be some “transitory or temporary cautiousness” in the market due to the developments in Mindanao. But the central bank chief stressed it will lead to a “positive impact on sentiment” in the end. “I think it’s a very decisive move on the part of the government, and the main objective is really to improve the security and peace-and-order situation, which should lead to even greater confidence in the law,” Tetangco said. “We have been monitoring the situation because we have branches in Mindanao. And the reports are it’s business as usual so far,” he added. The BSP has a regional office in Davao City and six branches in Mindanao, particularly in Butuan, Cagayan de Oro, Cotabato, General Santos, Ozamiz and Zamboanga. “Financial markets’ reaction will be limited, and calm will likely return after the initial reaction,”ING Bank Manila economist Joey Cuyegkeng said in a recent assessment of the situation.

Markets not affected

The peso on Wednesday showed bouts of weakness, hitting 49.995 to a dollar—weaker than the 49.82 to a dollar rate on Tuesday. The total traded volume hit $582.4 billion. This weakness, however, cannot be attributed solely to the clash in Mindanao, as markets are also affected by the surprise Moody’s credit rating downgrade of China by one notch on Wednesday. The Philippine Stock Exchange index, meanwhile, remained unscathed, as it ended the day’s trade 0.03 points, or 2.28 percent higher from the previous day’s trade to hit 7,814.42 points on Wednesday. Cuyegkeng, however, said the declaration of martial law in Mindanao is an “overkill”, and that a declaration of state of emergency could have been more appropriate. “The declaration implies that the government has lost control of the situation in Mindanao when, in fact, the incident is isolated. But the President has threatened in the past weeks to impose martial law as a result of movements of terrorist groups, as well as military activities of the military arm of the communist party,” Cuyegkeng said. “His intentions are likely to give him more leeway to address the overall peace-and-order situation on the island, including activities of not only extremist groups but likely also to address the activity of the armed wings of the communist party,” he added.

Price freeze

The Department of Trade and Industry’s (DTI) Consumer Protection Group on Wednesday reminded businesses in the conflict-ridden region of Mindanao that a price freeze is in effect, attendant to the Chief Executive’s imposition of martial law. Trade Undersecretary Teodoro Pascua said under the Price Act (Republic Act 7581), an automatic price freeze or price control of basic necessities at current prices is in effect due to the suspension of the writ of habeas corpus. The price freeze is in effect for 60 days for basic goods, and 15 days for liquefied petroleum gas and kerosene from the day martial law was declared or until sooner lifted by the President, Pascua added. The DTI monitors the prices of basic commodities, like canned fish and other marine products, processed milk, coffee, laundry soap, detergent, candles, bread, salt,

potable water in bottles and containers, and locally manufactured instant noodles.

Teo: Keep tourists safe

TOURISM Secretary Wanda Corazon T. Teo has instructed all regional directors of the Department of Tourism (DOT) in Mindanao to keep tourists safe. She said this on the heels of the declaration of martial law by Duterte. This was disclosed by DOT Assistant Secretary Frederick M. Alegre in an interview with the BusinessM irror. “We support the aim of Malacañang to keep the peace in Mindanao by declaring martial law. Secretary Teo has instructed all DOT regional offices to keep tourists out of harm’s way.” “Let me point out that the military has already issued a statement that things are under control. Marawi is beautiful; I’ve been there,” said Alegre, but he confirmed “there are no tourists there”. As of press time, Teo was still in Russia pitching the Philippines to tour operators and travel agencies. For her part, Aileen Clemente, executive vice president of the Tourism Congress of the Philippines, expects visitor arrivals in Mindanao to decline because of the declaration of martial law. “A big yes,” she asserted, when asked if she sees any impact on tourist arrivals with the declartion of martial law for 60 days. Last year DOT officials predicted a 20-percent increase in visitor arrivals in Mindanao for 2017. No data was available for 2016, but in 2015, Mindanao saw visitor arrivals rising to 8.5 million. Davao region (Davao City, Davao del Norte and Davao del Sur) attracts the most number of tourists in Mindanao, and is among the top destinations being marketed by the DOT to foreign tourists. In 2016, arrivals in the Davao region alone grew by 12 percent to 3.6 million, according to data from DOT Region 11. (See “Duterte Phenomenon Seen Lifting Tourist Arrivals In Davao,” in the BusinessMirror, April 30, 2017.)

Rice stock sufficient

The National Food Authority (NFA) assured Filipinos in the Maute-conflicted Marawi City that the agency has sufficient rice stock to distribute in the area. NFA Assistant Administrator for Marketing Operations Maria Mercedes G. Yacapin said the NFA has already delivered additional rice stock of 900 50-kilogram bags to augment about 32,000 bags in the agency’s warehouse in Marawi City. “We have contacted our director and personnel in Marawi branch. They said they have sufficient stocks, in fact, we have delivered supplements from Cagayan de Oro and Iligan City of 900 bags to augment their total stock,” Yacapin said. “In fact, we told the DSWD [Department of Social Welfare and Development] that if they need rice supply they just have to call the NFA. We have sufficient stocks in Marawi,” Yacapin added. Yacapin said the NFA warehouse in Marawi has been padlocked and they have requested for security reinforcement to protect the government’s rice stock against terrorist attacks. “Now, if they need rice the LGU [local government unit] should be alerted because they are the government custodian of rice. We do not manage the release of the rice to victims, so that the LGU should be alerted,” Yacapin said. “We are in control of the rice-supply situation in Marawi. If the LGUs will request for supply we can give them immediately, because it is the priority of the NFA during calamities or emergencies like this,” Yacapin added.

No need for joint session for now

Leaders of the Senate and the House of Representatives on Wednesday moved to abort

calls for a joint session of Congress to review Duterte’s declaration placing the entire Mindanao islands under martial law. Senate Majority Leader Vicente C. Sotto III, emerging from a closed-door caucus on Wednesday, said there may be “no need” for a SenateHouse session to tackle the martial law declaration. “We might not need a joint session if we will not revoke [it],” Sotto told BusinessMirror. Earlier, Sotto indicated many of the senators would “most probably” give their concurrence, even as the members of the administrationdominated House of Representatives are expected to ensure congressional concurrence to the presidential edict. Senate President Pro Tempore Ralph G. Recto said the imposition of martial law in Mindanao is “a drastic and dramatic move of the President”. “The solution needed to suppress the Abu Sayaf and Maute Group may need a drastic and dramatic move. I don’t have all the facts now but the President will have to explain his move to Congress and get our support,” Recto added. “The President is from Mindanao and has more information than any of us. I will respect his judgment on the issue and will give him the benefit of the doubt.” This, even as Recto voiced hopes that the Armed Forces and the Philippine National Police “will not abuse their authority on ordinary civilians”. Sen. Francis G. Escudero, however, clarified that imposition of martial law can be carried out by President Duterte even without congressional concurrence. “The power of Congress is to revoke or extend only. President Duterte’s declaration does not need to be affirmed by Congress to be effective,” Escudero said. For his part, Senate President Aquilino L. Pimentel III said Congress will await a report from Malacañang detailing events that led to the martial-law declaration in Mindanao. “As provided by the Constitution, we, in Congress, will wait for the report of the President,” Pimentel said. “There is no question that the violence perpetrated by the Maute gang of terrorists allegedly in connivance with Abu Sayyaf has to be met by the corresponding force of the government to ensure public safety of the residents of Mindanao and tourists visiting the island,” he added. Under the Palace order, Duterte placed the entire Mindanao under martial law for 60 days following the siege by the Maute Group in Marawi City. In a statement, Pimentel said Duterte needs to report to Congress within 48 hours from proclamation of martial law after which Congress will convene senators and congressmen in joint session to uphold or revoke the proclamation. Pimentel added the senators and congressmen, by majority vote, may also extend such proclamation or suspension for a determined period of time if public safety requires it “upon the initiative of the President”. Senate Minority Leader Franklin M. Drilon, in a separate interview, pointed out that Duterte, under the Constitution, is required to submit a report to Congress within 48 hours. “ We will await a copy of the report, which should be coming to us not later than Thursday, to find out the factual basis of such declaration,” he said. Drilon added he will request that senators be given a separate briefing on what are the circumstances that led to Duterte’s declaration. “I think that would be useful so that we could fully understand the premises or the basis, because we get conflicting reports, like I heard the AFP spokesman that everything is under control. If it’s under control, why was martial law declared? We don’t want to come to any conclusion until, at the very least, we get a report as required by the Constitution.” Drilon asserted that martial law does not suspend the Constitution and does not substitute the civil courts with military courts, adding that “civil courts will continue to function; the bill of rights will continue to be enforced; there’s no warrantless arrest with the declaration of martial law unless the writ of habeas corpus is suspended and the suspension will only cover those who are charged with rebellion.” Drilon said under the Constitution, Congress has the power to revoke Duterte’s martial-law declaration. “But the power to revoke should be based on factual basis in the same manner that the declaration should have factual basis. But the power to revoke should be based on factual basis in the same manner that the declaration should have factual basis.” The Human Rights Watch (HRW), meanwhile, warned against the possible impact of the President’s declaration of martial law in Mindanao after pandemonium broke out in Marawi City on Tuesday afternoon. “The lawlessness of President Duterte’s ‘war on drugs’ heightens grave concerns that his declaration of martial law in Mindanao will bring further rampant abuses. We urge the Philippine government to ensure that the rights of all Filipinos are respected as it addresses violence and crime in southern Philippines. Martial law is no excuse to trample on civil liberties,” said Phil Robertson, deputy director, Asia Division at HRW. Butch Fernandez,

Estella Arnaldo, Jonathan L. Mayuga, Catherine Pillas, Jasper Emmanuel Y. Arcalas, Elijah Felice Rosales

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Ending the ‘endo’ system by greening the economy Continued from A1

The majority of the paid jobs in these sectors are also casual or contractual. Greening provides the country an opportunity not only to reverse “stagnant industrialization” and restore “industrial dynamism”, as suggested by ADB’s Norio Usui (2012), but also to promote better or decent jobs. Going up the higher rungs of industrialization involves the employment of workers with higher skills and higher training. There is no incentive here to let go of workers who are given three to six months of training or longer. In fact, the problem of certain firms, such as those doing engineering work, is how to retain talents and skilled workers, who have become “poachable” in the domestic and global markets. To retain these workers, HR managers often come up with various “employee care” programs, such as better compensation, good working conditions, fair treatment at work and, yes, job security, including career pathing program. On the other hand, going higher value-added and green is a good solution to the existing but uncompetitive low-end manufacturing. The export-led electronics and auto assembly plants should evolve into producers of higher value-added products, such as original equipment manufactures (OEM) and new industrial products. Likewise, there should be value-adding and job-creating industrialization of minerals, which should be extracted under strict environmental standards. The point is that the Philippines should get out of the rut of the failed labor-intensive, low-technology, low-skill and uncompetitive industrial production, which is also generally environmentally degrading. As to services, greening the sector means the adoption of more eco-friendly and eco-oriented business practices, including better treatment of workers through the culture of social partnership and respect for the rights of both workers and employers. Some of the premier tourist destinations in the country today are those espousing the principles of ecotourism, such as Subic, Bohol and Palawan. In the case of agriculture, some policy issues need to be fleshed out and debated. The decline of the sector is due to a number of reasons, such as the vision-less deregulation and liberalization of the sector, poor implementation of the 25-year-old agrarian-reform program, corruption in the bureaucracy and so on. However, one clear factor for the deterioration of agriculture is the poor status of grossly underpaid farm workers, who usually receive a fraction of the mandated minimum wage in various regions and who do not get fair working conditions, such as the sacadas in the sugar and other plantations. This explains why young workers have been shying away from agriculture and why some government planners are worrying about the perilous “aging” of the farming population. Clearly, greening agriculture requires an integrated and decisive resolution of the foregoing problems, as well as linking this integrated agricultural development program to the challenge of making the organic farming law of 2010 really work and empowering the small farmers and agricultural workers to become modernization leaders through asset reforms and capability building programs. Similarly, the success of other job-creating greening initiatives, such as the establishment of carbon-mitigating industries, reforestation, community renewal and environmental rebuilding, requires coherent set of reforms at the policy and implementation levels. For this purpose, a country needs “just transition” measures. In her think paper “From Jobs to Green Jobs”, former Institute of Labor Studies Director Cynthia Cruz wrote that managing the transition requires the following: ■ Building and sharing environmental knowledge, especially pro-poor studies; ■ Coordinated government-private sectorcivil society targeting of green sectors; ■ Setting standards on greening processes (e.g., certification on health, safety and environment); ■ Maximizing community benefits by focusing public policy on the grassroots; ■ Linking green job creation to job training; ■ Partnership building among all stakeholders toward building up adaptive capacity; and ■ Emphasizing “pathways out of poverty” as key focus in addressing greening. In summary, greening the economy requires mainstreaming the “green vision” in the country’s development blueprint. Greening should be part of the macroeconomic development framework. In turn, the green vision should be translated into a “just transition” program for the economy as a whole and for the different sectors. This would entail a program of “transformation” for each sector, in particular, transformation of the “brown” sectors into green or greener sectors. Ultimately, greening should result to the creation of more and better jobs, or decent jobs for all. No more endo.

BusinessMirror Special Feature

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Thursday, May 25, 2017 A3

NSJBI ALL SET FOR TOPPING-OFF CEREMONY OF THE

FIRST EVER SPORTS CONDO IN THE PHILIPPINES

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EADING Filipino developer New San Jose Builders, Inc. (NSJBI) is pleased to announce the topping-off ceremony on May 25 of its newest and first of its kind project– the Victoria Sports Tower—the condominium sports complex in the heart of Quezon City. Victoria Sports Tower is a high-rise residential condominium situated right beside the GMA Kamuning MRT station along EDSA. Committed to providing Filipinos with affordable homes to call their own while enjoying the fast pace of urban life in Metro Manila, NSJBI through Victoria Sports Tower offers high-class residential units with convenient access to some of the city's most popular spots as well as state-of-the-art sports facilities for the fitness-minded and indoor sports enthusiasts. Victoria Sports Tower has dedicated four entire floors to an upscale, state-of-the-art Sports Center. With a 50-meter indoor lap pool and a kiddie pool, six private gyms and complete wellness facilities, Victoria Sports is set to become the world’s largest indoor sports club in a residential setting. There are also two indoor tennis courts, three indoor badminton courts, and a squash court; rockclimbing and rappelling facilities are also available for the adventurous mountaineering enthusiasts. There is also a billiards and darts hall, a bowling alley, a shooting range, and a jogging trail. There is an in-house spa, and an indoor basketball court with special laminated hardwood floors. Victoria Sports also aims to be a one-stop wellness hub as it will soon feature a day spa, sports medicine clinic, oral medicine, derma center and cosmetic surgery, clinical laboratory and radiology, and regenerative medicine. A 51-storey twin-tower residential condominium, the newest sports community in this side of Quezon City, is one of the NSJBI’s offerings as it celebrates 30 years in the industry. With more Filipinos becoming health and fitness buffs nowadays, the sports complex is designed to encourage as many people as possible to maintain or start a regular fitness regimen. Unit owners will appreciate the convenience of having the sports center only an elevator ride away, and even non-owners can use the facilities once they sign up for membership. Victoria Sports is a membership club requiring flexible annual fees instead of club shares. The first project of its kind in the Philippines, the sport club membership aims to be a one-stop training facility for enthusiasts to athletes. The offering is so extensive that they will have every feature they need in one building. “The closer and easier it is to get to a sports facility, the less likely it is for people to come up with an excuse for not going regularly. Being in close proximity to a gym is a motivation factor. It’s much easier to keep a healthy and active lifestyle when you are motivated, and this is what we offer with Victoria Sports Tower,” says Victoria Sports Tower sales head Hazel de Dios. There is a video arcade, a KTV lounge, and a mini-theater for the whole family's enjoyment. There are also function rooms, pilates rooms, a multipurpose area, and even commercial space for shops. Completing the facilities is the Business Club with several meeting and function rooms plus a coworking station for professionals looking for a collaborative space. Co-workers will get a free pass at the gym as the club promotes health and wellness for its guests to better achieve work-life balance. On top of the sports membership club features, residential ame-

nities are also available for unit owners to use. Residents will find that Victoria Sports Tower's convenient location places it only a few minutes' walk or drive away from major TV networks, schools, hospitals, shopping malls, bars and restaurants. Being right beside GMA Kamuning MRT station as well as jeepney and bus terminals also means that residents can go even further afield as they please.

Making the Filipino dreams come true

SINCE its establishment in 1986, NSJBI has made it a mission to build the hardworking Filipino's dream home—an affordable home of quality where the Filipino family can feel comfortable and secure. As a triple-A construction company, NSJBI assures prospective unit owners of the durability and strength of the condominium units, as these are made by highlyskilled architects, engineers, and workers. Each unit also guarantees comfort with high ceilings for better ventilation and more windows for more natural light and better air circulation.
 As NSJBI is both the developer and the contractor, it can produce and sell units at a lower cost. The company offers affordable and accessible financing packages that would accommodate different types of budgets, as flexible and competitive financing are available through in-house and bank financing. This makes units in Victoria Sports Tower a sound investment. With its unique features, units at Victoria Sport are almost sold out. NSJBI has been thankful for the fast sales velocity of its newest project since its pre-selling activity in 2014. This newest sports community in Quezon City is one of the l NSJBI’s offerings as it celebrates 30 years in the industry. Then there’s more at Victoria Sports Tower: it is home to the Manuel L. Quezon University (MLQU) and other brands. In August 19 last year, coinciding with Quezon City Day celebrating the 138th birth anniversary of the city’s visionary and former Philippine Commonwealth president Manuel Luis Quezon, the university made its big move to the city. Just like the school, the city was named after the former president and it celebrates Quezon Day every August 19th in accordance with Republic Act 6741. Top Quezon City officials joined in the celebration led by MLQU and New San Jose Builders’ chairman, Dr. Jose Rizalino Acuzar, and university president Dr. Isagani Germar. Dubbed “Quezon Is Home”, the event featured MLQU’s symbolic move to continue its legacy from Quiapo, Manila, to QC with the unveiling of the late president’s portrait done by National Artist for Painting Fernando Amorsolo, which now adorned the MLQU School for Professional Advancement and Continuing Education (MLQU SPACE) at the ground floor of Victoria Sports. More brands, both local and international, will soon be joining MLQU as Victoria Sports Tower nears its completion. Sports condo has become the preference of many Filipinos in recent years according to NSJBI EVP Lorie Urcia. That’s why the company has pioneered and specialized in this industry. NSJBI's properties can be found all over key centers of Metro

ARTIST’S Perspective

Manila. NSJBI-built and -owned residential properties in different locations including Victoria Tower D, Victoria de Morato, Victoria de Manila II, Victoria de Makati and more. Aside from the said projects, NSJBI is all set to launch its new projects located all over the metro this 2017. NSJBI is also the contractor and developer of Las Casas Filipinas de Acuzar, a premiere historical tourism destination in Bagac, Bataan. It is a 400-hectare heritage resort park showcasing the Filipino craftsmanship. Victoria Sports Tower is located at 799 EDSA South Triangle in QC. For inquiries, call 442-7777 local 195 or check out www.newsanjosebuilders. com.ph or https://www.facebook.com/ newsanjoseofficial.

Economy

A4 Thursday, May 25, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

DENR places PHL ecosystem, biodiversity values at ₧2.309T

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By Jonathan L. Mayuga

@jonlmayuga

he Department of Environment and Natural Resources (DENR) has placed the country’s ecosystem and biodiversity values at P2.309 trillion, P1.416 trillion of which are from agricultural or crop production’s ecosystem service.

The Philippine ecosystem and biodiversity values take into account the ecosystem services that are not usually taken into consideration in the conduct of various development projects, often leading to their habitat destruction. Highlighting the country’s rich biodiversity, the DENR, the agency mandated to manage the country’s natural wealth, kicked off on Monday a three-day event, dubbed First National Biodiversity Congress, at the Crowne Plaza in Ortigas, Pasig City, with the theme “Swelling of Lessons, Sustaining Community Benefits in the Conservation of Landscapes and Seascapes”. Aside from crop production, other ecosystem services accounted for with their corresponding values are

timber and fuel wood production, P1.1 billion; water provision, P50.9 billion; ecotourism, P157 billion; carbon offset, P453 billion; flood prevention, P41 billion; soil erosion, P10 billion; fishery production, P111 billion; coral reef, P62.1 billion; and mangrove, P7.4 billion. These ecosystem and biodiversity values were a result of at least two years of studies initiated under the Bioidversity Financing Initiative (Biofin), a United Nations Development Programme (UNDP)-backed project in partnership with the DENR, Director Theresa Mundita S. Lim of the Biodiversity Management Bureau (BMB) said. The wealth accounting covers that of the country’s forest,

150,000 hectares The average loss of Philippine forest cover every year over the last century, according to study conducted in 2005

coastal and marine, and inland water ecosystems. The Philippines has 6.84 million hectares total forest cover as of 2010, or about 23 percent of the country’s total land area of 30 million hectares. A 2005 study revealed that the country has lost an average of about 150,000 hectares of forest cover every year over the last 100 years. Through the National Greening Program (NGP), the DENR’s Forest Management Bureau claimed to have increased the country’s forest cover by 1.7 million hectares by the end of 2016. In 2012 the country’s external trade in all forest goods was pegged at P114.23 billion. The forestry sector, meanwhile, employs at least 49,000 people. Forests help regulate the country’s water supply. Current groundwater deposits can supply up to 470 billion cubic meters to the country annually. This is 17 times the current volume of water being used in the entire country.

Forests provide ecosystem services estimated to have a total value of P15,115 per hectare. The country’s coastal and marine resources, meanwhile, provides valuable ecosystem, as well. A square kilometer of healthy coral reefs can yield up to 30 tons of fish and earn between $29,400 to $113,000 tourism revenue per year. Philippine reefs alone contribute approximately $1.35 billion to the national economy per year. Mangrove forests, which protect coastal communities, also shelter juvenile fish and other marine life. Currently, the Philippine seas are home to diverse species of wildlife, including five marine turtles, 28 marine mammals, 168 cartilaginous fishes, 648 mollusks, 1,755 reef-associated fishes, 1,062 seaseeds and 820 algae. The country’s inland waters and wetlands are home to 316 fish species, 121 of which are found only in the Philippines. More than 13 million people live in the basin of Laguna de Bay alone, benefiting from the lake’s bounty. Lake Lanao, the country’s second-largest freshwater lake, meanwhile, augments Mindanao’s power supply, through the Agus hydropower plants. There are a total of 216 lakes, 421 principal rivers and 22 marshes in the Philippines.

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Manila, Guangxi sign 6 cooperation, power generation, connectivity pacts

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he local business sector and Guangxi-based counterparts have inked six agreements consisting of cooperation frameworks, a power-generation project, and a connectivity agreement. These were signed at the occasion of a business-matching seminar on Wednesday, where local businesses engaged a business group from the Guangxi Zhuang Autonomous Region. State-owned Guangxi Beibu Gulf Port Group Co. Ltd. and the Philippine-based Carrascal Nickel Corp. (CNC) agreed on: Jointly build an international logistics network nodes; Maintain the long-term procurement relationship of laterite nickel-ore trade where CNC should supply no less than 1.5 million tons of laterite nickel ore. Preference to choose Beibu Gulf Shipping Co. Ltd., the subsidiary of the Port Group, as the carrier of the Lateritic Nickel Ore that CNC ships to China under the same conditions. Guangxi Hydroelectric Construction Bureau Co. Ltd. (also a state-owned enterprise) and Coheco Badeo Hydro Power Co. Ltd. concluded a contracting project for a hydropower station costing $550 million. Recent reports on the 500-megawatt pump storage hydropower project of Caheco Badeo indicated that the project has been halted by the Cordillera office of the National Commission of Indigenous Peoples late last year. The project, originally planned to

be built in Kibungan City, Benguet, was in the feasibility stage when it was ordered to stop. No details were provided if the project will resume in light of the agreement. A framework agreement on strategic cooperation on tourism, meanwhile, was agreed between by Guangxi Tourism Development Group and the JTKC Group of Cos. of Philippines. The cooperation agreement consists of resource sharing and joint organization of tourism products. A preliminary agreement on charter flights between Nanning, the capital of Guangxi, and Manila has been signed by the Nanning Xi Yangyang International Travel Agency and an unnamed Philippine enterprise owned by Philippine businessman Chen Xin. Specific details have not been disclosed. As early as 2006, Nanning, the capital city of Guangxi, have partnered with Davao as sister cities. From 2012 to 2016, the total import and export volume between the Philippines and Guangxi enjoyed an annual average growth of 16.5 percent. H.E. Peng Qinghua, secretary of Communist Party of Guangxi Zhuang Autonomous Region Committee, hailed Guangxi as China’s entry point to Asean countries. The province is constructing a great international passage targeted at Asean countries, developing itself as a new strategy pivot in southwest and middle-south China to form an important portal in line with the Belt and Road Initiative. Catherine N. Pillas

Telcos’ LTE cell sites boost ODA, GAA eyed local Internet speed–Akamai funding for 5 regional

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mproved mobile Internet speeds may be attributed to Globe and Smart’s continuing activation of Long-Term Evolution (LTE) cell sites in the 700-megahertz (MHz) spectrum. Telecommunications Commission Deputy Commissioner Edgardo Cabarios, when asked to comment on the latest Akamai report, said both telcos started co-using the frequency in May 2016. “Improvements in fixed-line Internet are also expected to happen, as the government, through the Department of Information and Communications Technology, finalizes its rollout plans for the country’s national broadband network,” he added. Akamai, a leading content-delivery network services provider for media and software delivery and cloud security solutions, recently came out with its State of the Internet Q4 2016 Report. T he Phi l ippines’s Inter net performance yielded marked improvements in several areas in the report, most notable of which was that the country’s average connection speed (IPv4) for mobile Internet topped the Asia-Pacific region for two consecutive quarters. For the past three quarters of 2016 the Akamai State of the Internet Report showed a consistent improvement in the Philippines’s average mobile-connection speed. In the second quarter of 2016 the country’s average mobileconnection speed was pegged

by Akamai at 8.5 megabits per second (Mbps). In the third quarter of the same year, the outfit reported the country’s average mobi le - connect ion speed increased to 13.9 Mbps. Akamai then reported the Philippines’s mobile Internet speed clocked at 14.3 Mbps in the fourth quarter of 2016. On the table presented in Akamai’s State of the Internet Q4 2016 Report, the Philippines’s average mobile speed of 14.3 Mbps came in fastest in the Asia-Pacific cluster—topping the speeds of Australia (13.8 Mbps), Japan (13.3 Mbps), South Korea (12.7 Mbps), New Zealand (12.5 Mbps), Taiwan (12.0 Mbps), Singapore (9.9 Mbps), Indonesia (9.8 Mbps), China (7.4 Mbps), Hong Kong (7.2 Mbps), Thailand (7.1 Mbps), Sri Lanka (5.8 Mbps), India (4.8 Mbps), Vietnam (4.3 Mbps) and Malaysia (3.9 Mbps). The report also cited the Philippines’s improvements in other categories. On the “above 4 Mbps broadband adoption” category, the Philippines’s adoption rate is now at 31 percent , representing a growth rate for the country of 7.4 percent quarter-on-quarter (QOQ ) and 126 percent year-on-year (YOY). On the “above 10 Mbps broadband adoption” category, the Philippines’s adoption rate is now at 7.5 percent, representing a growth rate for the country of 39 percent QOQ and 292 percent YoY. PNA

airport projects

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he development of five regional airports in the country will be pursued through the official development assistance (ODA) or General Appropriations Act (GAA), as the original plan for a public-private partnership (PPP) procurement process was earlier cancelled, the Department of Transportation (DOTr) said on Wednesday. The projects involve the development, operations and maintenance of Bacolod-Silay, Davao, Iloilo, Laguindingan and New Bohol (Panglao) airports. “The expansion and upgrading of the airports via the GAA make the projects cheaper as cost of money is lower, thus more beneficial to the public,” DOTr Officer in Charge Undersecretary for Aviation Manuel Antonio Tamayo said in a news statement. “Further, this would help avoid legal issues with concessionaires that may cause regrettable delays,” he added. The regional airport projects, estimated to cost around P108.9 billion, were originally approved under a bundled structure by the Investment Coordination Committee and the National Economic and Development Authority during the Aquino administration. The present administration decided to unbundle the project and bid out the airports individually to fast-track the PPP selection and awarding. PNA

‘US protectionism shift beneficial to Asean’

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he US’s reported shift to protectionism against trading partners with whom it has a gaping trade deficit can be an opening to divert trade and investments to the likes of the Philippines with an untapped trade potential. Board of Investments and Trade Undersecretary Ceferino S. Rodolfo Jr. said with the US President Donald J. Trump’s America First policy, there may be corresponding

shift to Asean regional production that can benefit the Philippines “Asean is always being highlighted as a market, but seldom is it recognized as a production hub. American companies for example, have Vietnam as the ‘last touch point’ in their production, before exporting back to the US,” Rodolfo said. “With them being identified for trade-remedy measures, we can be

in the position to be the last touch point,” he added. Trump issued Executive Order 13786 at the end of March, directing key economic agencies, such as the the Secretary of Commerce and the US Trade Representative to draw up an omnibus report on foreign trade partners with which it has a “significant” goods trade deficit. This trade-deficit threshold was placed at $10 billion. Catherine N. Pillas

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Trump and Pope Francis meet

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Mourners light candles at a vigil for the victims of the Manchester Arena bombing, at Albert Square in Manchester, England, on May 23. The Islamic State group on Tuesday claimed responsibility for Britain’s deadliest terrorist attack since 2005, which tore through a public concourse as a concert by Ariana Grande was ending, killing 22 and injuring at least 59 others. Andrew Testa/The New York Times

Britain raises terror alert as IS claims concert attack

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ANCHESTER, England— Britain’s prime minister put the nation on its highest level of alert on Tuesday and deployed the military to work with the police over fears that another terrorist attack was imminent. The announcement came as the police continued to investigate whether the Monday night bombing at a pop-music concert in Manchester that killed 22 people, including children, was part of a broader conspiracy. “It is a possibility we cannot ignore that there is a wider group of individuals linked to this attack,” Prime Minister Theresa May said in Manchester after a meeting of her top security officials. Earlier in the day, the police raided the home of Salman Abedi, the man they identified as the bomber; he died in the blast. Chief Constable Ian Hopkins of the Greater Manchester Police said the investigation was focusing on determining “whether Mr. Abedi was acting alone or as part of a network”. A senior US official said on Tuesday night that Abedi had traveled multiple times to Libya, where his parents immigrated from, but did not know the timing of his last trip. The official was not authorized to discuss the information publicly and spoke on the condition of anonymity. By raising the national threat level from severe to critical, May suggested “not only that an attack remains highly likely, but that a further attack may be imminent”. The government’s actions on Tuesday night came hours after the authorities began the gruesome task of identifying the dead. An 8-year-old girl who had attended the Ariana Grande concert with her mother and older sister, and a college student who chronicled on Instagram her encounters with her pop-music idols like

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The number of times that Britain had raised the threat level to critical Grande were among those killed. As the authorities bolstered the nation’s defenses, investigators set out to learn as much as they could about Abedi, 22, who lived with his family only a few miles from where he detonated a homemade bomb on a public concourse crowded with Grande’s adoring teenage fans leaving the arena. Rescue workers sifting through the carnage outside the arena on Monday night discovered Abedi’s identification card. That clue led the police to the home he shared with his family on Elsmore Road, in the Fallowfield district. The police blew the house’s door off its frame, to safeguard against booby traps, as shocked neighbors watched. “We’ve been watching this kind of attack happen in Paris,” said a neighbor, Thomas Coull, 17. “We didn’t expect it to happen on our doorstep, literally.” Abedi was born in 1994 in Britain, according to a law-enforcement official speaking on condition of anonymity, because the investigation was still underway. The Islamic State (IS) claimed responsibility for the attack, saying in one post on

social media that “one of the soldiers of the caliphate was able to place an explosive device within a gathering of the crusaders in the city of Manchester”. It was one of several IS statements, some contradictory, posted on different social-media accounts. A neighbor of the Abedi family in the Fallowfield district, southwest of the Manchester city center, said the family “didn’t really speak to anyone”. The neighbor, Lina Ahmed, added, “They were nice people if you walked past.” She said the family occasionally displayed a Libyan flag outside the home. A nother neighbor, Farzana Kosur, said the mother, who taught t he Qura n, had been abroad for about two months. A trustee of the Manchester Islam ic Center said Abedi’s father and his brother Ismael attended the mosque, but the trustee, Fawzi Haffar, did not know if Abedi worshipped there. A senior member of the Muslim community in Manchester and a law-enforcement official who requested anonymity said Abedi had been barred from the mosque in 2015 for expressing his support for IS, and he came to the attention of intelligence agencies at the time as “a person of interest”. In raising the threat level, May cited information gathered on Tuesday in the investigation into the Manchester bombing, and said the Joint Terrorism Analysis Center, the body responsible for setting the level, would continue to review the situation. “The change in the threat level means that there will be additional resources and support made available to the police as they work to keep us all safe,” May said. “I do not want the public to feel unduly alarmed,” she said. “We have faced a serious terrorist threat in our country for many years, and the operational response I have just outlined is a proportionate and sensible response to the threat that our security experts judge we face.”

It was only the third time that Britain had raised the threat level to critical. The first was on August 10, 2006, after the government foiled a plot to blow up transAtlantic airliners with liquid bombs. The second was on June 30, 2007, after two men slammed an sports-utility vehicles into entrance doors at Glasgow Airport, and turned the vehicle into a potentially lethal fireball. A fter the prime minister’s announcement, Assistant Commissioner Mark Rowley, the head of National Counter Terrorism Policing, said in a statement that “we are f lexing our resources to increase police presence at key sites, such as transport and other crowded places, and we are reviewing key events over the coming weeks”. “I have asked for support from the military to be deployed along side the police,” Rowley added. “This will free up armed officers from certain guarding duties to release our officers to support the wider response.” As part of their investigation into the Manchester bombing, the police arrested a 23-year-old man outside a supermarket near Abedi’s home, but it was not immediately clear if that man was connected in some way to the attack. The terrorist attack was the worst in the history of Manchester, a city of a half-million people, and the worst in Britain since July 7, 2005, when 52 people died, along with four assailants, in coordinated attacks on London’s transit system. Security experts suggested the use of an improvised explosive device in Manchester displays a level of sophistication that implied collaborators—and the possibility that other bombs had been made at the same time. Chris Phillips, a former leader of the National Counter Terrorism Security Office in Britain, told the BBC: “It has involved a lot of planning—it’s a bit of a step up. This is a much more professional-style attack.” New York Times News Service

AT I C A N C I T Y— Co n c l u d i n g h i s tour of the ancestral homes of the world’s three largest monotheistic religions, President Donald J. Trump met with Pope Francis, the famously humble pontiff with whom he has publicly clashed. Trump, midway through his grueling nine-day maiden international journey, called upon the pontiff at the Vatican early on Wednesday where the two will have a private audience laden with religious symbolism and ancient protocol. The meeting will last scarcely more than an hour, yet could provide powerful imagery to Catholic voters back in the US as well as the possibility for conflict between a president and a pope who have not often seen eye-to-eye. The president, accompanied by his wife and several aides, arrived at the Vatican just after 8 a.m. local time. The president greeted Francis in Sala del Tronetto, the room of the little throne, on the second floor of the Apostolic Palace on Wednesday morning. The men shook hands, and Trump could be heard thanking the pope, and saying it was “a great honor” to be there. They then posed for photographs before a private meeting. The two men’s often opposite worldviews collided head-on early last year, when Francis was sharply critical of Trump’s campaign pledge to build an impenetrable wall on the Mexican border and his declaration that the US should turn away Muslim immigrants and refugees. “A person who thinks only about building walls, wherever they may be, and not building bridges, is not Christian,” Francis said then. The pontiff has been a vocal advocate for aiding refugees, particularly those fleeing the violence in Syria, deeming it both a “moral imperative” and “Christian duty” to help. Trump has never been one to let an insult, perceived or real, go by without a response, and he made no exception for the world’s best-known religious leader. He called Francis “disgraceful” for doubting his faith. And even the pontiff ’s congratulatory message sent to mark Trump’s inauguration co nt a i n e d a s l y re fe re n ce to t h e i r disagreement, as the pope wrote that he hoped the US’s international stature would “continue to be measured above all by its concern for the poor, the outcast and those in need.” Trump arrived in Rome on Tuesday evening, his motorcade closing a busy Italian

highway just after rush hour and prompting hundreds of onlookers to briefly step out of their gridlocked cars to gawk at the fleet of armored vehicles. He spent the night at the US ambassador to Italy’s residence. Though both Trump and Francis are known for their unpredictability, papal visits with heads of state are carefully arranged bits of political and religious theater that follow a specific program, with little room for deviation or unwanted surprises. Trump was expected to be given a tour of the Vatican after he arrived, and then meet with the pontiff in his library. The two men were to be left alone with a translator to hold a private discussion before emerging again to exchange gifts and farewells. Trump is the 13th president to visit the Vatican and, as part of his tour, he will view the Sistine Chapel. In recent days, Francis and Trump have been in agreement on a need for Muslim leaders to do more against extremists in their own communities. But there are few other areas where their views align. The president’s prior anti-Muslim rhetoric—including his musing that Islam “hates” the West—is the antithesis of what the pope has been preaching about a need for dialogue with Muslims. Francis also differs sharply with Trump on the need to combat climate change and economic inequality. And he could react to events this week, including the release of Trump’s budget, which would dramatically cut funding to programs that help the poor, and the president’s agreement to sell military equipment to Saudi Arabia,. Still, experts believe it unlikely the outspoken pope will do anything but be welcoming during his first meeting with Trump. The pontiff said last week he would “never make a judgment about a person without hearing him out”, and some Vatican observers suspect he will hold his tongue, at least for now. “I think that the climate [of the meeting] will be quite good. Because I think there is a mutual interest to close all the polemics of the past and to start working together,” said Massimo Franco, author and political analyst for leading daily Corriere della Sera. He also said the thought a successful staging of the visit could provide Trump with a good news storyline to briefly overshadow the tumult back home over the firing of his Federal Bureau of Investigation director and the ongoing Russia probe. AP

Moon-bama’ captivates Korea with everyman style

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hey call him “Moon-bama”. Two weeks after his election win, South Korean President Moon Jae-in is captivating a nation shaken by scandal and economic struggles. He’s even drawn comparisons to Barack Obama for his cool demeanor and the pop-star status both attained during their first days in office. While honeymoon periods are normal for new leaders, Moon’s focus on relating with average citizens shows that he’s learned from the impeached predecessor Park Geun-hye, who was seen as aloof and corrupt. Whether he can convert the popularity bump into legislative wins—particularly on reforming family-run conglomerates known as chaebol—remains to be seen. “The high support rate now may help Moon push through some of his agenda, but that support is likely to wane as time passes,” said Lee Jae-mook, who teaches political science at Hankuk University of Foreign Studies in Seoul. “There are issues liberal and conservative voters disagree on, such as whether it is good to pursue dialogue with North Korea.”

Man of the people

A former civil-rights lawyer, Moon is South Korea’s first liberal president in about a decade. Unlike Park, the daughter of a dictator who ruled the country for almost two decades, Moon came from a family of North Korean refugees. Images of Moon as a man of the people have played over and over on Korean television since the election. He has been shown hugging the families of victims at a memorial for a prodemocracy uprising; carrying his own lunch tray at a cafeteria; and sitting under a tree on the grounds of the presidential Blue House with senior aides, jacket off and coffee cup in hand. Choi Byoung-hwa, a manager at a construction company in Seoul, is among those who see similarities between Moon and Obama.

“I used to be frustrated looking at media repor ts, learning about Park and the people who committed wrongdoings, but watching television news is really enjoyable these days,” said Choi, who said she didn’t vote for Moon. “Korean society is very hierarchical, and to see the No. 1 person in power avoiding formality was refreshing.”

‘Less hierarchical’

Park appeared in court on Tuesday for the first time since she was jailed on bribery charges in March, and denied all 18 charges against her. When she left office, her approval rating was in the single digits. By contrast, Moon is at astronomical heights. A Gallup poll released on May 19 found 87 percent of respondents were positive about the outlook for his performance, the most since Gallup started asking the question in 1993. Seventy-one percent said that of Park at the start of her term. The front pages of Korea’s three major newspapers on Wednesday carried starkly different images of Moon and Park from the previous day. Moon was pictured attending a memorial service for former President Roh Moo-hyun, while Park was shown sitting in court next to her confidante and codefendant Choi Soon-sil. “The photo of Moon having coffee with staffers doesn’t just show his personality, but suggests the new government would be less hierarchical and more open to diverse views,” said You Hye-young, an assistant professor of political science at Vanderbilt University. Moon has also earned points with his personnel appointments. He has chosen some candidates with no previous relationship to him in contrast to Park, who was impeached over a confidante wielding inappropriate influence on state affairs. He has also named women to key posts. Bloomberg News

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Thursday, May 25 2017

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Republicans hostile to Trump’s budget

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ASHINGTON— Congressional Republicans greeted President Donald J. Trump’s first full budget on Tuesday with open hesitation or outright hostility. But it was not clear that they could come up with an alternative that could win over conservatives and moderates while clearing a path for the tax cuts and policies they have promised for years.

The budget battle ahead mirrors the continuing health-care fight, in which concessions to Republican moderates alienate conservatives, while overtures to conservatives lose moderate votes. But with Republicans in full charge of the government, the onus is on their leaders to reach a budget agreement in a matter of weeks that would ease passage of the president’s promised tax cuts, as well as a new spending plan, that would reshape the government in a Republican mold. “It is now up to Congress to act,” Trump said in his budget message. “I pledge my full cooperation in ending the economic malaise that has, for too long, crippled the dreams of our people. The time for small thinking is over.” Trump’s $4.1-trillion budget, with its deep cuts to poverty programs, biomedical research, student loans and foreign aid, will not pass, as Republicans on Capitol Hill have freely acknowledged and even the White House is aware. Republicans on Capitol Hill parted ways with the president not only on many of his deepest cuts, but also on some of his smaller proposals, like resurrecting a

$4.1T

The amount of the Trump administration’s budget proposal, which has deep cuts to poverty programs, biomedical research, student loans and foreign aid

national nuclear-waste repository in Nevada and ending the Great Lakes cleanup program. Rep. Harold Rogers, Republican-Kentuck y and a for mer chairman of the House Appropriations Committee, called the cuts “very harmful ”. Sen. Dean Heller of Nevada, perhaps the most endangered Senate Republican up for reelection next year, labeled the budget “anti-Nevada”. But the drastic reordering of government that Trump has embraced includes many measures long sought by conservatives on Capitol Hill, including adding work requirements for food-

Eric Ueland (right) of the Senate Budget Committee, hands out copies of President Donald J. Trump’s fiscal year 2018 budget, on Capitol Hill in Washington on May 23. The package calls for spending more than $2.6 billion for border security—including $1.6 billion to begin work on a border wall—and slashing more than $800 billion from Medicaid. Doug Mills/The New York Times

stamp eligibility and opening the Arctic National Wildlife Refuge to oil drilling. It also would eliminate whole programs, including AmeriCorps, the Corporation for Public Broadcasting, the National Endowment for the Arts and the Low Income Home Energy Assistance Program. The budget would increase military spending by 10 percent and calls for spending $2.6 billion on border security, including $1.6 billion to begin funding a wall on the border with Mexico. Some of the president’s proposals are likely to survive. For Republicans, the stakes of the coming budget season go beyond the intricacies of budgetary minutiae: Republicans want to use their budget to pave the way for an overhaul of the tax code that could skirt a Senate filibuster. If they cannot agree on a budget, Trump’s promised “biggest tax cut” in history would be doomed.

A protracted fight over the budget would also further delay the orderly appropriations process that Republicans have promised to follow after years of neglect. If congressional Republicans fail to pass spending bills this summer, they again run the risk of funding the government through stopgap resolutions that keep programs on autopilot—and in the shape that President Barack Obama left them in. “It’ll be very difficult in both bodies to pass a budget proposal,” Rogers said. The next step for Republicans in Congress is to agree on a budget blueprint, which sets spending levels and provides a road map for spending and revenue in the coming years. But first, they must find a way to overcome their diverse views on fiscal policy. Trump’s budget, drafted by a budget director, Mick Mulvaney, who came from the most conservative corners of the House,

s t a r t s t h e c o n v e r s at i o n o n friendly House Republican turf. Rep. Mark Meadows, Republican-North Carolina and the chairman of the conservative House Freedom Caucus, said that was the right starting point. The budget negotiation “goes from conservative to moderate, and that’s the way that it should go”, Meadows said. “If you start in the middle, you make everybody mad when you move one way or another.” Sen. Chris van Hollen of Maryland, who was the lead Democrat on the House Budget Committee for years, was not so sanguine. “There’s always been a divide between the House and Senate Republicans on a lot of these issues, but this looks like it was written by House Republicans on steroids, and I think it will be difficult for them to get it through the Senate,” he said. Republican lawmakers already face a time crunch, given that

Trump offered his budget three months past the statutory deadline in February. While new presidents routinely take more time to submit their inaugural budgets, Trump unveiled his unusually late, and in an uncommonly low-key fashion, dispatching his budget director to unveil the plan while he was overseas. That raised questions about whether he would take a leadership role in the coming spending debates. The House and Senate budget com m it tees bot h e x pec t to introduce t heir proposa ls in June, according to congressional aides. The House plan is expected to incorporate the significant changes that House Speaker Paul D. Ryan, a former budget committee chairman, has long championed for Medicare, a major break with Trump, who has promised to leave Medicare alone. New York Times News Service

Moody’s downgrades China over debt worries Opec fails to cut global oil glut

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oody’s Investors Service cut its rating on China’s debt for the first time since 1989, challenging the view that the nation’s leadership will be able to rein in leverage while maintaining the pace of economic growth. Stocks in Shanghai fell to a seven-month low, the yuan and Australian dollar retreated, and default risks increased after Moody’s reduced the rating to “A1” from “Aa3” on Wednesday. It cited the likelihood of a “material rise” in economy-wide debt and the burden that will place on the state’s finances, while also changing the outlook to stable from negative. It’s “absolutely groundless” for Moody’s to argue that local government financing vehicles a nd s t ate - o w ne d e nte r pr i s e debt will swell the government’s contingent liabilities, according to a statement released by the Ministr y of Finance. T he r at i n g s compa ny h a s underestimated the capability of the government to deepen reform and boost demand, the ministry said. C h i n a’s sove re i g n debt i s mostly held by domestic investors, shielding the nation somewhat from the impact of ratings changes. Still, the move underscored doubts President Xi Jinping’s government can simultaneously cut excessive leverage in the financial system while keeping economic growth above the target of at least 6.5 percent. “It is a psychological blow that China will not take kindly to and absolutely speaks to the rising financial pressures,” said Christo-

pher Balding, an associate professor at the HSBC School of Business at Peking University in Shenzhen. That said, “ it doesn’t matter much in the grand scheme of things because so much of Chinese debt is held by state or quasi-state actors and minimal amounts are international investors”.

Debt holdings

T otal o u t s t a n d i n g c r e d i t climbed to about 260 percent of GDP by the end of 2016, up from 160 percent in 2008, according to Bloomberg Intelligence. At the same time, China’s external debt is low by international standards, at around 12 percent of GDP, according to the International Monetary Fund, meaning that a downgrade isn’t likely to be as disruptive as it would be for nations more reliant on international funding. Overseas institutions’ holdings of onshore bonds dropped to 830 billion yuan ($121 billion) as of the end of March, from 853 billion yuan three months earlier, People’s Bank of China data show. That’s less than 1.5 percent of 63.7 trillion yuan of outstanding notes, according to Bloomberg calculations based on the central bank data. Moody’s last cut China’s sovereign rating in 1989, when it downgraded the sovereign to Baa2 from “Baa1”, according to Spokesman, Manvela Yeung.

Rating warnings

M ood y ’ s l o w e r e d C h i n a ’s credit-rating out look to negative from stable in March 2016, citing r ising debt, fa l ling currency reser ves and uncertainty

over authorities’ ability to carry out reforms. About a month later, S&P Global Ratings also warned that rising local debt was pressuring the nation’s rating. S&P currently rates China’s foreign and local-currency longterm debt at “AA-” with a negative outlook, and Fitch places an “A+” rating on both foreign and local currency long-term debt with a stable outlook. Moody’s move puts China parallel in their rankings with countries including Japan, Saudi Arabia and Estonia. Those ratings contrast with home-grown Dagong Global Credit Rating Co.’s “AA+” on China’s sovereign debt in local currency terms and “AAA” in foreign-currency terms, the highest level. By contrast, Dagong rates the US as “A-” in both currency terms, below Russia and France.

Risks balanced

Still, Moody’s isn’t hitting the panic button. “The stable outlook reflects our assessment that, at the “A1” rating level, risks are balanced,” Moody’s said in the statement on Wednesday. “The erosion in China’s credit profile will be gradual and, we expect, eventually contained as reforms deepen. The strengths of its credit profile will allow the sovereign to remain resilient to negative shocks, with GDP growth likely to stay strong compared to other sovereigns, still considerable scope for policy to adapt to support the economy, and a largely closed capital account.”

Not grounded

While China’s debt risks have been swelling for years, the cut

by Moody’s comes as some of those pressures ease. Nominal economic growth in the first quarter rose at the fastest pace si nce 2012—11. 8 percent i n cur rent-pr ice ter ms—mak ing the problem of excess leverage a little more manageable, while the return of factory price inflation is beefing up profits for indebted smokestack industries, helping them service and repay loans. With the economic structure improving and government debt under control, the economy will continue to expand at a mediumto-fast pace, helping prevent debt risks, the finance ministry said in its statement on Wednesday. “ T his cut is not solid ly grounded,” said Wen Bin, chief analyst at Minsheng Securities in Beijing. “Policy-makers have been well aware of the debt and leverage issues, and actions have been taken. It is a smart move if no one sees the problem and you are the first to f lag it. But less so if it has already been noticed and addressed.” The move may still discomfort China investors in that it highlights the risks to the economy rather than the ability of the government to control them. “The downgrade comes at a bad time,” said Tom Orlik, chief Asia economist at Bloomberg Intelligence in Beijing, adding it will make it more expensive to open the country’s bond market. “China’s leaders from President Xi Jinping down have said that structural reform and financial stabilit y are pr ior ities. Stil l, progress remains faltering and in some respects movement is in the wrong direction.” Bloomberg News

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t first glance, Organization of the Petroleum Expor ting Countries’ (Opec) cuts haven’t worked—global oil inventories remain well-above normal levels. But the policy’s made a difference where it really counts: juicing the coffers of finance ministries from Baghdad to Caracas. The resurgent flow of petrodollars explains why Saudi Arabia and Russia have largely convinced everyone else in the deal to extend the production cuts another nine months to the end of March 2018. “Make no mistake, it is all about oil revenues,” said Bhushan Bahree, a senior director at consultant IHS Markit. “The bottom line for oil producers begins, unsurprisingly, with a dollar sign and ends in billions.” The International Energy Agency (IEA), which advises rich countries on oil policy, said earlier this month that Opec has a “financial motivation to extend the supply cuts”. The IEA calculates the cartel earned almost $75 million extra a day in the first quarter of this year than in the last quarter of 2016, despite collectively cutting output to 31.9 million barrels a day, from 33.3 million. Consultant IHS Markit said Russia, the largest country outside the cartel to join the cuts, also earned more. Opec and its allies believe they can continue earning more while pumping less. Even those countries that question whether an extension can rebalance the market and bring down elevated stockpiles don’t oppose an extension. While oil ministers have a sense of defeat in their battle against high inventories, finance ministers are happy, one Opec delegate said. Brent crude, the global benchmark, has risen from about $46 to $54 a barrel since the agreement to curb output by a total of 1.8 million barrels a day was first decided in the final weeks of last year. But oil prices have dipped below $50 a barrel a couple of times as investors sold the commodity amid signs the global glut isn’t notably easing. Brent rose 0.3 percent to $54.30 a barrel as of 1:42 p.m. in Singapore on Wednesday.

“Charitably, one would argue that things have not quite worked out, yet,”said Jan Stuart, chief energy economist at Credit Suisse Group AG in New York. Opec and non-Opec countries meet on Thursday in Vienna to approve the rollover as delegates say the nine-month extension has broad support. The extension is the latest attempt by oil producers to prop up prices and revive their economies. The talks in Vienna are closely followed elsewhere as they can affect everything from the share price of Exxon Mobil Corp. to the Brazilian real and Nigerian sovereign bonds. “The trend now regarding the output deal is to extend for nine months,” Saudi Minster of Energy and Industry Khalid Al-Falih said on Monday. “All I talked to from inside Opec are supporting the nine months of cuts.” Al-Falih won the backing of Iraq to extend the cuts after he flew into Baghdad for rare face-to-face talks in the Iraqi capital. Opec and 11 nonmembers agreed late last year to cut output by as much as 1.8 million barrels a day. The supply reductions were initially intended to run for six months from January, but the slower-than-expected decline in surplus inventories prompted the group to consider an extension. Data from the US Energy Information Administration indicate that maintaining the curbs into the first quarter of 2018 would bring stockpiles back in line with the five-year average—Opec’s stated goal. The risk for Opec is that they haven’t been the only producer to win from the cuts. The US shale industry, which became leaner and fitter during the oil-price slump, has increased output 500,000 barrels a day since Opec started to discussing the cuts to 9.3 million and American-based companies all reported stronger revenues year-to-date. “Opec faces a tough job: it has now learned how fast shale can come up back,” said Giovanni Serio, head of research at oil trading house Vitol Group BV. Bloomberg News

A10 Thursday, May 25, 2017 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Govt must ensure Internet access to every community

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he Internet has forever changed the way we do things and how we create wealth. With the advent of e-commerce, online connectivity has become the driving force behind the world’s economic growth. In advanced countries, high-speed Internet has democratized innovation and transformed the delivery of public service in unprecedented ways. With the so-called Fourth Industrial Revolution, a digital revolution that requires universal and reliable Internet access, developing countries, like the Philippines, must have reliable Internet access to participate in the global digital-based economy.

Since access to the Internet has become a vital development tool, the government must prioritize the deployment of a national broadband infrastructure. Unfortunately, for more than 100 million Filipinos, Internet connectivity in the Philippines remains the slowest among Asia-Pacific countries. This means Filipinos cannot avail themselves of the myriad opportunities online that could help make their lives better. This is unfortunate because previous administrations have already prepared a National Broadband Plan (NBP), which was envisioned to provide detailed targets and strategies to effect a nationwide broadband deployment. The NBP spelled out a road map for initiatives to stimulate economic growth, spur job creation and boost the country’s capabilities in education, civic engagement and other online services. According to the NBP, rural areas where commercial telecommunications services are absent will get priority connection to the national broadband infrastructure to give them Internet access. The plan also included strategies to promote new media, local content and applications; the development of a rural technology road map; and optimization of spectrum usage. We recall that former President Gloria Macapagal-Arroyo tried to establish a national broadband network that would link all government agencies via the Internet. The Arroyo administration tried to implement a $329-million broadband deal with Chinese firm ZTE Corp., but canceled it in the wake of allegations of corruption and overpricing. However, it seems that green shoots of recovery are starting to bud, as the Duterte administration is intent to make faster Internet speeds a national priority. All indications show that the President is taking the issue on Internet access and speed more seriously than his predecessors. For example, upon hearing the complaints of telecommunication companies that it took anywhere from one to six months to secure dozens of permits to construct a single cell site, the Chief Executive promised to cut red tape for cell-tower building permits, a problem that the two telcos have been complaining about for many years now. Under the Duterte administration, telcos are seen investing in network upgrades to keep pace with exploding demand for mobile-data services. Sadly, these investments are only being made in urban areas. While such network upgrades may help bring faster speeds to those who are already served, they will not decrease the number of Filipinos waiting for Internet connection. This inequality threatens to widen the existing digital divide in the country, which can be a roadblock to economic development and social inclusion. Given the current realities, the government must focus on the development of Internet infrastructure in the countryside, particularly in areas with no Internet access or where Web access is scarce or limited. It must have a national broadband plan to accelerate the deployment of fiber-optic cables and wireless technologies to improve Internet speed throughout the country. As most everyone knows, the Internet has brought progress to our world in immeasurable ways. Let’s make social inclusion a virtual reality in this country by ensuring that no Filipino is denied access to the Internet.

Since 2005

BusinessMirror A broader look at today’s business

Will the Philippines be the next Venezuela? John Mangun

OUTSIDE THE BOX

F

ound hidden deep within a “for your eyes only-doublesecret” web site is an article that probably was supposed to have been published during the “One Belt, One Road” forum in Beijing two weeks ago. The author and intended publication are unknown. “The greatest calamity to ever strike the human race started in October 1347, when trading ships docked in Sicily. These vessels were carrying cargo that had traveled from China on the Silk Road.” The goods from China carried a deadly secret; the oriental rat flea infected with the Yersinia pestis bacterium that causes Bubonic plague. The science is settled in that 97 percent of all scientists agree that this deadly bacteria probably first developed in or around China. The “Black Death”, caused by a Chinese bacterium in the rat fleas from China, collapsed the European economies, not to mention also killing tens of millions. Note that the

Chinese economy flourished during this period with massive infrastructure projects, including the Grand Canal connecting the Yellow and Yangtze rivers to Beijing. Had the Europeans avoided buying and instead rejected Chinese silk, porcelain and totally unnecessary Chinese umbrellas, how much better would the world be today? In 2010 Venezuela borrowed billions of dollars from China. Today Venezuela cannot afford food, medicines, even toilet paper. For two months the people have been protesting with dozens killed by the government, which has been trying to reasonably explain why it is not their fault that people

The Fourth Industrial Revolution

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have had to eat their household pets to survive. The 14th-century Silk Road from China was the Highway of Death for Europe. Now we have another “Road” from China. Venezuela borrowed money from China and looked what has happened since then. The recent hysteria—and that is the only word to describe it—that the Philippines will become the next Venezuela is inexcusable. To call it “black propaganda” is an insult to genuine black propaganda. While everyone might be entitled to his or her own opinion, sound opinion should be based on fact. We can excuse the ignorant, but not those who deliberately distort the truth. Venezuela and China cut a lending program in 2010 for $10 billion immediately, and $10 billion later that might have made economic sense. Venezuela borrowed money to upgrade its failing oil industry by monetizing future production. China was to be paid in Venezuelan oil, a necessary commodity and with interest. Venezuelan oil was selling for $70 per barrel in 2010, and the country owed China 200,000 barrels per day in 2010, moving to 300,000 in 2012 out of a 2009 production of about 3 million per day. In 2012 96 percent

Conclusion

No computer has been created that could not be hacked...

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ATIONAL security may be defined as the concept that a state and its society are protected from various domestic and foreign threats arising from politics, sociology, economics, energy, military, environment and natural resources. Simply put, national security is all-embracing, affecting every man, woman and child from all walks of life. Klaus Schwab of the World Economic Forum (WEF) explained this particularly true in the realm of regulation. Current systems of public policy and decisionmaking evolved alongside the Second Industrial Revolution, when decisionmakers had time to study a specific issue and develop the necessary response or appropriate regulatory framework. The whole process was designed to be linear and mechanistic, following a strict “top down” approach. The big question Schwab asked is, how can legislators and regulators preserve the interest of the consumers and the public at large, while continuing to support innovation and technological development? The WEF leader said agile governance is the key, like those in the private sector who easily adopted quick-witted re-

sponses to software development and business operations more generally. “This means legislators and regulators must continuously adapt to a new, fast-changing environment, reinventing themselves so they can truly understand what it is they are regulating. To do so, governments and regulatory agencies will need to collaborate closely with business and civil society,” Schwab said. Many of the issues, such as the inability to cope with the fast-changing world, have far-reaching implications to national security, which has a correlation to the life of a nation and its inhabitants. Schwab said the Fourth Industrial Revolution (4IR) has a profound impact on national and international security, affecting both the probability and the nature of conflict.

“The history of warfare and international security is the history of technological innovation, and today is no exception. Modern conflicts involving states are increasingly ‘hybrid’ in nature, combining traditional battlefield techniques with elements previously associated with nonstate actors. The distinction between war and peace, combatant and noncombatant, and even violence and nonviolence [think cyber warfare] is becoming uncomfortably blurry,” Schwab added. We now live in an age where “wars” may be waged with the press of a few buttons. In fact, people eat, sleep, work and live their lives without knowing that they’ve already been victimized by this war. Wars and crimes have essentially become borderless, thanks to the conveniences accorded by technological developments over the past few years and the role of technology has been taken to new heights. One would think that something as seemingly mundane as the recently exposed credit-card skimming syndicates (skimmers) end up only using your financial information to make purchases for themselves. But these skimmers are part of cyber gangs who sell “stolen” creditcard information to larger syndicates or, worse, terrorists. Example, cyber gang FIN6 that attacked point-of-sale systems with malware, mostly in the hospitality and retail industry in the US, was able to acquire 20 million credit-card information from people who “simply made a purchase”. The cyber gang then sold them for an average of $21, according to a FireEye Threat Intelligence Report in the “deep

of the country’s exports and 50 percent of government revenue were from oil sales. But the borrowed funds were not spent on improving PDVSA (Petróleos de Venezuela SA, the stateowned oil company). By 2016 daily production dropped by 27 percent to 2.15 million barrels. The oil price fell to $35 per barrel. As recently as 2015, Venezuela was shipping 23 percent of its production to pay China. In 2017 PDVSA is so broke that it cannot even afford to export oil through international waters, which requires safety inspections and clearing under maritime law. The loan terms were never disclosed, the spending was never part of the national budget, and Congress never approved the loan. There were railways that were announced but abandoned and manufacturing plants that never went beyond the ribbon-cutting ceremony. But it is China’s fault that Venezuela’s economy is dead. So, tell me, how exactly is the Philippines going to become the next Venezuela?

E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stockmarket information and technical analysis tools provided by the COL Financial Group Inc.

web”, an area in cyberspace beyond the reach of regular Internet users and where many cyber criminals and other unscrupulous cyber-entities thrive. The deep web usually contains “articles” that are illegal in nature, such as dangerous drugs, child pornography, various counterfeit items or other materials enticing to terrorists, such as explosive components, dangerous chemicals and high-powered weaponry. That means, some of the components in the explosive devices used to cause public harm may have been easily bought online and it indirectly originated from an innocent buyer’s purchase through an infected point-of-sale system. A global security advisor and consultant of the Interpol (International Police Organization) and the Federal Bureau of Investigation with extensive knowledge and experience in next-generation security threats, such as cyber crime, cyber terrorism and information warfare perfectly put one of the downsides of the 4IR into perspective. “To date, no computer has been created that could not be hacked—a sobering fact given mankind’s radical dependence on these machines for everything from our nation’s power grid to air-traffic control to financial services,” Marc Goodman said in his best-selling book, Future Crimes-Inside the Digital Underground and the Battle for Our Connected World, (Amazon, paperback, and Doubleday, hardbound, 2015). “Technological advances”, the book said, “have benefited our world in immeasurable ways, but there is an

See “Arillo”, A11

Opinion BusinessMirror

opinion@businessmirror.com.ph

Lawyering for the rule of law

I am with you always

Ariel Nepomuceno

Msgr. Sabino A. Vengco Jr.

DECISION TIME

Alálaong Bagá

n May 22 about 3,747 individuals who passed the 2016 Bar exams took their oaths as new lawyers. A total of 6,924 applied for the examinations, but after vetting by the Supreme Court, only 6,831 were allowed to take it. The passing rate last year was actually the second highest at 59.06 percent, compared to the 1954 exams, which delivered 75.17 percent.

o enable the faithful to participate in the celebration of Jesus’ Ascension to heaven, the solemnity is held in the Philippines on Sunday instead of exactly on the 40th day after Easter. The departure of the Lord from the company of his followers does not mean separation or abandonment. He remains with His own even to the end of the world with all power in heaven and on earth (Matthew 28:16-20).

O

But what is the relevance of these figures? First, it is obvious that many choose to pursue the legal profession. The seeming fascination with the study and practice of law, especially in the Philippines, is an interesting subject matter. As we are all aware, the law shapes politics, economics and societal culture in many ways, and is generally perceived to be a refuge, a rock of support for anyone who feels unempowered, abused, disenfranchised or oppressed. The sheer drama of the practice of law is a potent magnet for people to take it up.

Opportunities for lawyers

On a practical level, the legal profession opens us countless opportunities. First, there is huge earning capability. Lawyers are one of the most highly paid professionals in the country. Typically, if they belong to good and reputable law firms, or act as in-house counsels in big businesses and companies or join the judiciary, income stability and growth are ensured. Second, there is immense intellectual rigor and challenge. From formulating a litigation or dispute strategy to leading a merger or acquisition, protecting a trademark or registering a patent or giving advice on a difficult question of law, the variety of issues is simply exciting. Third, even if one does not practice law, a lawyer can enter into other fields, like business, academe, management and government. This is because core skills associated with the legal profession straddles from analytical reasoning, logic and critical thinking. There are other possibilities, but there is one very significant role that they can play— the chance to help others. Armed with the knowledge of the law, lawyers can contribute to societal transformation by taking up public-interest causes, reaching out to the marginalized sectors,

Arillo. . .

continued from A10

ominous flip side: our technology can be turned against us. And just over the horizon is a tidal wave of scientific progress that will leave our heads spinning—from implantable medical devices to drones and 3D printers, all of which can be hacked, with disastrous consequences.” With his wide-ranging insights as an expert in lawenforcement, Goodman takes his readers “on a vivid journey through the darkest recesses of the Internet. He explores how bad actors

providing affordable legal advice and promoting the greater good of the country.

National role for development

For a country that needs to harness all its talents to energize investment and stimulate economic growth, the legal profession’s involvement in the propagation of the rule of law is extremely important. This is because foreign investors choose jurisdictions with a good rule of law index. This rule of law framework includes the Constitution, a clear and consistent legal framework and implementation, strong institutions of justice, governance, security and human rights, among others. Definitely, lawyers have a big role to play in maintaining, promoting and living the rule of law. Ethics, independence and competence should be the standards to live by. Integrity and strength of character are paramount if our judicial and legal system are to be reformed. Purely personal, political or financial interests should not be the fundamental drivers in a legal career if one is to review the lawyer’s oath, which, in a nutshell, requires allegiance to the country, support for the constitution, avoidance of falsehood, not to promote unlawful suits and not to delay processes for money or malice, among others. So never mind if the top Manila law schools did not top the bar. Never mind if the provinces eclipsed imperial Manila, or if the passing rate is higher now than past years. The obsession with these figures and statistics only confuses the discussion on what our country truly expects and needs from this honorable profession. This is breathing, living and acting consistent with the Oath that they have taken.

For comments and suggestions arielnepo.businessmirror@gmail.com are primed to hijack the technologies of tomorrow”. In the appendix of his highly instructive and informative book, Goodman provides his readers an “Update Protocol” on the dangers of cybercrime and tells us what to do after reminding us that: “Everything’s Connected, Everyone’s Vulnerable.” In essence, he shows us “how to take back control of our own devices and harness technology’s tremendous power for the betterment of humanity—before it’s too late”.

To reach the writer, e-mail cecilio.arillo@ gmail.com.

T

Last appearance Matthew does not speak explicitly of the ascension of the risen Jesus, but only of His last appearance, the end of His visible presence among His disciples. This final appearance is placed by the evangelist “in Galilee”, where Jesus began His ministry (4:13). “Galilee of the Gentiles” on the border to the pagan world, thus underlining the continuity between the ministry of Jesus and the mission of the apostles to the world. It took place on a mountain, just as He proclaimed the charter of the kingdom of heaven on a mountain (5:1ff) and taught the crowds from a mountain side on the shore of the Sea of Galilee. Recapitulating the resurrection appearances, our gospel scene on

Businesswise

T

hose who have lived to experience what martial law was like seem to be having a déjà vu of sorts as President Duterte trumpets his economic plans, echoing the way the late dictator Ferdinand Marcos went full throttle proclaiming his. In fact, this is how the deposed despot’s son and namesake parades his father’s alleged accomplishments, which earned him the “honor” of being the “greatest Philippine president” ever. Throughout his failed vice presidential campaign last year, Bongbong Jr. in his various social media postings, aided by his trolls, proudly extoled Marcos Sr.’s infrastructure projects as unprecedented and without rival. But, he expediently glosses over the fact that these same projects were what placed the Philippines in debt shackles, with repayment being

shouldered by the Filipino people until 2025, or a good 39 years after Marcos Sr. was forcibly kicked out of office in 1986 by multitudes of people angered by his abuse. Dutertenomics simply means ramping up public spending on infrastructure in the hope that such a move will bring about muchneeded economic growth. If the previous administration was unfairly labelled as a miserable miser, Duterte wants to be known as a wise spender. Parallel to Dutertenomics is the President’s so-called independent

Make disciples

Recognition and worship include mission. As Jesus was trans-

figured on a mountain witnessed by Peter, James and John with the glory that would be His at the end of his exodus (17:1ff ), He now declared on a mountain that all power in heaven and on earth has been given to Him by God. On the mountain in the desert the devil tempted Him to seize power for himself (4:8-10), which He refused to do adhering to His fundamental option that God alone should be worshipped and served. Faithful to God, cosmic dominion is now His as foretold of the Son of Man, a term Jesus used in referring to Himself (26:63-64, quoting Daniel 7:13). This absolute and universal sovereignty of Jesus demands that all nations be invited and given the opportunity to follow Him. Discipleship begins with baptism in the name of Jesus, i.e., belonging to Him and adhering to His gospel way. This act of faith in Jesus has at its heart believing in and entering into communion with the God He revealed: Father, Son and Holy Spirit. So, this kind of faith entails concretely, keeping His commandments. Faith translated into action and life is imitation of Jesus who wants only that God’s will be done (6:10; 26:39), and for whom fidelity to the will of his heavenly Father is the basis of true communion with Him (12:50), not merely spouting “Lord, Lord” (7:21).

Tax treaty relief application

tax treaties. Compliance with the filing of TTRA somehow slowed down negotiation of taxpayer’s business dealings with nonresidents, delaying economic activities in general. Truly, the BIR’s deletion with these requirements is a relief. Taxpayers are reminded though that RMC No. 8-2017 applies only to dividend, interest and royalty payments, and not to any other type of income payments, such as business profits, income from services, etc. Also, although the BIR no longer requires the filing of TTRA, RMC 8-2017 still requires the filing of a form called the Certificate of Resi-

recovery of conflict-affected communities in southern regions. On the economic side, the PhilippinesEU partnership has reaped us billions of pesos in trade, lifting the economy and creating job prospects for Filipinos. The Philippines benefits from Generalized System of Preferences Plus (GSP+), which licenses us to export 6,274 products to the EU at zero tariff, the biggest recipient of which is the renowned tuna of General Santos City. This makes EU one of the country’s biggest trading partners. Before the country’s acceptance in the GSP+ in 2014, Filipino exporters suffered heavily from the deteriorating trade with the EU, from 8.5 billion euros in 2002 to 5.1 billion euros in 2014. But Duterte will have none of this, believing that his new friend, Chinese President Xi Jinping, has his back. Dutertenomics will be propelled by around $290 billion (P14.4 trillion) of expensive loans from China, which some economists fear will put the Philippines in virtual debt bondage. But let us assume for a moment

that whatever debts we take will be well spent, graft-free (although this is highly doubtful) and will build badly needed infrastructure. Profiting from these endeavors isn’t a sure thing. How are we going to repay these debts? Raising taxes is the only way to fill the gap. This, again, will put a heavy burden on taxpayers who, until now, are hard up paying for the debts incurred during the Marcos regime. Duterte appears to have warmed up so well to China, and vice versa, that he is expected to get what he wants from the economic giant. But as Milton Friedman says, “There’s no such thing as a free lunch.” Aside from having to pay through the nose the stiff interests of commercial loans, our country has the sovereignty of our shoreline territories in the West Philippine Sea (South China Sea) at stake. Duterte has already taken the first step of giving up these territories to China. During the recent Asean Summit held in the country, he ignored the egging of other member-states to bring up the Philippines’s success

in the arbitral ruling of the United Nations Convention on the Law of the Sea, which nullified China’s socalled nine-dash line covering the entire South China Sea. In his talks with Xi in his recent China visit, Duterte claimed he brought up the maritime issue with the Chinese leader, but that the latter threatened war in which he, not in so many words, meekly replied, “what is there for me to say?” Duter te c l a ims t hat t here should be no strings attached when dealing with friends. In eschewing the support of the country’s traditional trading partners, however, it seems that it is China that is pulling the strings. (As of this writing, Marawi has been undersieged by Isis, while the President in on a state visit to Russia. I hate to say this, but it was really a bad idea to drop the US military as our security partner, which has sophisticated monitoring systems to swiftly aid us in foiling any terrorist threats.)

T

he recent issuance of Revenue Memorandum Circular (RMC) 8-2017 dispensing with the requirement for filing a tax treaty relief application (TTRA) with the Bureau of Internal Revenue (BIR) as a condition for availing preferential tax rates under existing tax treaties is certainly a great relief among taxpayers making dividend, royalty and interest payments to nonresidents.

foreign policy, where he has swiftly shifted reliance from the country’s traditional allies in favor of Russia and China. He is now courting the two communist states to increase bilateral ties in economics and security. The shift is brought about by what the president views as “interference” by the US and the European Union in the country’s internal affairs. Duterte scoffs at the unfavorable view of these democratic nations of his centerpiece war on drugs, which the US and the EU see as a desecration of due process and the rule of law. Peeved, Duterte rejected the $280-million EU aid, which he says has strings attached. He once again scoffed that the EU has no right to tell him how to conduct his war on drugs, never mind that it has been our reliable trading partner through the years. EU’s support to the peace process in Mindanao is vital, as it has provided around 80 percent of the total funds of the Mindanao Trust Fund, a facility set up by various donors to fund socioeconomic

Join me in meditating on the Word of God every Sunday, from 5 to 6 a.m. on dwIZ 882, or by audio-streaming on www.dwiz882.com.

effect starting June 26. Thus, taxpayers making interest, royalty and dividend payments to nonresidents during the interim period are left in quandary as to whether they should still file TTRA. As RMC 8-2017 is yet to take effect, RMO 72-2010 is, by law, still the prevailing rule. This means that there is still a need to file TTRA. However, with the BIR’s recognition under RMC 8-2017 that filing of TTRA is no longer required, and with recent court decisions disagreeing with the mandatory TTRA filing, it is seemingly absurd and illogical to still file one at the moment, even as we are still awaiting the effectivity of the new circular. Considering this vacuum left unfilled, a clarification is being called for, for the guidance of all concerned.

Tax Law for Business

Compliance with the filing of TTRA as a condition for availment of tax treaty rates pursuant to the provisions of Revenue Memorandum Order (RMO) 2000, and later, under RMO 72-2010, has not been easy, as some of the required documents are even executed outside the country, making the compliance burdensome. Thus, taxpayers that are not able to produce the requirements on time usually ended up filing the TTRA late, in violation with the rules prescribed under these RMOs, resulting in the BIR’s denial for the application of preferential tax rates provided under existing

Alálaong bagá, as at the Transfiguration, the disciples must come down from the mountain of lifechanging encounter with the Lord. Now, they must get beyond the boundaries of Galilee and go to all nations. They are to teach all peoples the faith in Jesus, a way of life they must live first. Fidelity to the commandments is taught by, through and in the keeping—not just in repeating the words of Jesus. Spreading by example Jesus’ way of life calls for sensitivity and creativity whereby like “the scribe who has been instructed in the kingdom of heaven” the disciples know how to draw new and old things from the treasure they have received (13:52), according to the times and the needs of the recipients. This daunting task of making disciples of all nations and teaching by example is not left entirely to the ways and means of the disciples. The mission is on the premise of the promised presence of Jesus. “I am with you always, until the end of the age.” This last saying of Jesus in Matthew’s gospel fulfills all his other promises. It echoes the prophecy in the name given Him at the beginning: Emmanuel—God is with us (1:23).

dence for Tax Treaty Relief (CORTT) Form. This is a newly created BIR Form that basically contains disclosure of certain information, such as nature of the transaction involved, amount of payments to be made, information about the income recipient and the withholding agent, such as registered name, registered address, among others. Preferential treaty rates shall already be applied and used upon submission of a CORTT Form. In retrospect, the mandatory requirement of filing TTRA for dividend, royalty and interest payments was in fact lifted under RMO 27-2016, but its effectivity was subsequently suspended a week thereafter, upon the assumption of office by the present administration, by virtue of RMC 69-2016, which suspended the effectivity of all revenue issuances promulgated within the period covering June 1 to 30, 2016. The recent issuance of RMC 8-2017 effectively revived RMO 27-2016, albeit with some modifications. Per the effectivity clause of RMC 8-2017, the circular will take effect 90 days upon signing. As it was signed by the Commissioner only on March 28, the circular will take

Atty. Rodel C. Unciano

Where is ‘Dutertenomics’ taking us? Val A. Villanueva

Jesus’ initiative is intended to allow the disciples to see, recognize and worship him. More than the other evangelists, Matthew places much emphasis on the respect owed the Lord as he narrates 10 such instances of prostrations and acts of homage (2:2.8.11; 8:2; 9:18; 14:33; 15:25; 20:20; 28:9.17). Like other theophanies manifesting the divine, the appearance of Jesus resurrected was not so obvious as to exclude all doubts (Mark 16:8; Luke 24:11; John 20:25). For his followers, faith must also still overcome uncertainty and reservation.

Thursday, May 25, 2017 A11

The author is a senior associate of Du-Baladad and Associates Law Offices, a member-firm of WTS Global. The article is for general information only, and is not intended, nor should be construed, as a substitute for tax, legal or financial advice on any specific matter. Applicability of this article to any actual or particular tax or legal issue should be supported therefore by a professional study or advice. If you have any comments or questions concerning the article, you may e-mail the author at rodel.unciano@bdblaw.com. ph or call 403-2001 local 140.

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

2nd Front Page BusinessMirror

A12 Thursday, May 25, 2017

www.businessmirror.com.ph

D.A.’s Serrano warns Congress PHL on brink of breaching WTO commitment

‘Prioritize shift of rice QR to tariff scheme’

L

By Jasper Emmanuel Y. Arcalas

@jearcalas

awmakers should focus on converting the quantitative restriction (QR) on rice into a specific tariff rate to speed up the amendment of a law that provided for its implementation, according to an official of the Department of Agriculture (DA).

Agriculture Undersecretary for Policy and Planning Segfredo R. Serrano said moves to amend Republic Act (R A) 8178 should prioritize the scrapping of the

QR so t he Ph i l ippines cou ld avoid disputes due to “breach” of trade commitment. The Philippines has committed to the World Trade Organiza-

tion (WTO) to convert the rice QR into tariffs after June 30 this year when its request to extend its special treatment for the staple was approved in 2014. “There are a lot of bills filed [at the House of Representatives], and there are a lot of suggestions [on addressing the issue]. But for the DA, all we want is to focus on tariffication, and let’s just talk about other matters later on,” Serrano told reporters in an interview on the sidelines of an awarding ceremony in Quezon City on Tuesday. “There are a lot of ideas, like creating a fund from tariff revenues and reorganizing the National Food Authority. But as far as I’m

concerned, Congress should rush the tariffication of rice, because the longer we delay it, the higher the chances that the Philippines would be sued [by trading partners],” he added. Serrano said the President’s decision to maintain lower tariff rates on some agricultural imports, like mechanically deboned meat, which were made as concessions by the Philippines to extend the QR, is “a good move”. “The executive order [EO] of the President is good, because we will preserve the concessions so there would be no motivation for our negotiating partners to sue us,” he said. On July 24, 2014, the WTO General Council approved the

Philippines’s waiver on the special treatment for rice, allowing Manila to keep the nontariff barrier until June 30 this year. However, the WTO General Council approved the waiver on the condition that the Philippines will subject its rice imports to ordinary custom duties by July 1. The WTO General Council also noted that the concessions made by the Philippines in securing the waiver would cease to exist upon the expiration of the waiver. On May 22 Malacañang released EO 23 maintaining the rates of the concessions made by the Philippines in securing the waiver until 2020, or “until such time that a law amending certain provisions

relating to rice tariffication in RA 8178 is enacted”. However, Serrano is cognizant of the fact that maintaining the tariff rates on some agricultural imports could affect those in the livestock and poultry subsectors. “Of course, those in the livestock and poultry subsectors have a problem with [the low tariff rates]. Their problem would be addressed if Congress would be able to amend the law immediately,” he said. Serrrano reiterated that retaining the concessions is not a guarantee that the country will be able to avoid trade disputes while it is undertaking the necessary processes to convert the import caps into a specific tariff rate.

FPI TELLS GOVT P10 SSB TAX TOO HIGH ARRANZA: “If consumption declines, then production will go down, which, in turn, would lower demand for sugar. So both the sugar farmers and the labor force of manufacturing companies would suffer.”

Stars Galore The Commission on Appointments’s Committee on National Defense confirmed 26 flag and senior officers of the Armed Forces to the ranks of lieutenant general, rear admiral, major general and brigadier general during its recent plenary session. ROY DOMINGO

Who is the Philippines’s most wanted militant? $5 million S

ecurity forces in the southern Philippines are battling Muslim militants who have laid siege to a city in the volatile Mindanao region. The upheaval began after troops raided a hideout in search of a man at the heart of the crisis—Isnilon Hapilon, one of Asia’s top militant suspects. Here is some background on Hapilon:

A history of extremism

Hapilon was purportedly designated leader of the Islamic State (IS) group’s Southeast Asia branch last year, but his ties to extremist groups go way back. Born in 1966, the Arabic-speaking Islamic preacher with an engineering degree from the University of the

Philippines once served as a commander of the Moro National Liberation Front, an Islamic separatist group. He later ascended the ranks of Abu Sayyaf to become its second in command. Abu Sayyaf, a notoriously violent Muslim militant group founded in the 1990s, is known for carrying out kidnappings and beheadings of Filipinos and foreigners, as well as bombings, assassinations and armed attacks.

Most wanted militant

Hapilon first gained notoriety beyond the Philippines when he allegedly helped Abu Sayyaf kidnap 20 hostages from a Filipino resort in 2001. The victims included three US citizens, one of whom

The reward offered by the US Department of Justice for information leading to Hapilon’s capture

eventually was beheaded. In 2002 the US Department of Justice indicted Hapilon over his role in the attack. He is included on the department’s “Most Wanted Terrorist” list, with a $5-million reward for information leading to his capture.

Islamic State in Asia

In 2014 Hapilon appeared in a video

beside two masked men pledging allegiance to the IS group, which was then gaining ground in Iraq and Syria. He went on to organize an alliance in the Philippines called Dawlatul Islam Wilayatul Mashriq, which is now believed to include at least 10 small militant groups, including some Abu Sayyaf factions. Last year he was reportedly chosen to lead the IS group branch in Southeast Asia.

An elusive target

The Phi l ippine mi l itar y has targeted Hapilon repeatedly with large-scale military operations, and has come close to killing him. But the militant leader has repeatedly escaped and remains

elusive. In 2008 troops bombarded an Abu Sayyaf camp near Jolo island with artillery and mortar fire, reportedly wounding Hapilon in the hand. He was also reportedly wounded in another operation in 2013. The latest close call came in January, when the military attacked militants with ground troops and air strikes, dropping 500-pound (225-kilogram) bombs from military jets. The operation left 15 militants dead, and the army said Hapilon was seriously wounded in the arm. Losing blood, he was placed on a makeshift stretcher, escaping into a mountainous region of Butig in southern Lanao del Sur province. AP

Tycoon hopeful of Xi-Duterte energy deal in South China Sea Continued from A1

began last week, an early step toward reaching a deal to exploit what may be the Philippines’s largest gas field. Ongpin has a histor y with Duterte: He was forced to sell his Philippine gaming assets after the president targeted him in a crackdown on online gaming. Still, Ongpin said he believes the Philippine leader’s approach toward the world’s second-biggest economy is moving in right direction. “There’s no way you can bump heads with China,” he said by phone. Ongpin said his company now owns 20 percent of Forum Energy Ltd., which has a 70-percent stake in the Sampaguita gas field west of

Palawan province. The discovery is estimated to contain 11.4 trillion cubic feet of natural gas, according to a third-party assessment commissioned by PXP Energy Corp. PXP owns 80 percent of Forum. Atok-Big Wedge shares rose 3.2 percent as of the noon break in Manila, poised for its biggest gain since May 11. The stock has risen 29 percent this year against the benchmark Philippine stock index’s 14 percent advance.

Gas shortage

That’s more than four times the 2.7 trillion cubic feet of reserves in Malampaya gas field, the largest in the Philippines, which currently fuels several power plants and generated hundreds of

billions of pesos worth of royalties for the government. Supply from the Malampaya gas field will last only until 2024, prompting the Energy Department to consider importing liquefied natural gas to ensure stable supplies. In dealings with President Xi Jinping, Duterte has set aside an international court ruling last July that said China had no historic rights to the resources in waters claimed by the Philippines. The case was brought by Aquino’s administration, which had criticized a deal in the 2000s between the Philippines, China and Vietnam to cooperate on energy exploration across a large swath of disputed waters. Still, many obstacles remain.

War talk

In a speech on Friday, Duterte said Xi had threatened to go to war with the Philippines after he expressed an intention to unilaterally drill for oil in disputed areas of the South China Sea during an unspecified meeting. Duterte’s new Foreign Secretary Alan Peter S. Cayetano walked back the comments on Monday, telling reporters that Duterte made the statement in reaction to domestic critics. Duterte’s opponents say his overtures to China have undermined the Philippines’s territorial claims and left the country with little room to maneuver. China foreign ministry Spokesman Hua Chunying declined to

comment on Xi’s meeting with Duterte, and said disputes should be resolved through dialogue and negotiation. “Pending final settlement, we advocate shelving the dispute for common development,” Hua said. China has previously sought to disrupt Philippine attempts to exploit the resources. In 2011 a Chinese surveillance vessel chased away a survey ship doing work for Forum Energy. PXP Energy Chairman Manuel Pangilinan said on May 19 that his group is awaiting the outcome of the bilateral talks between the Philippines and China, adding that a code of conduct in the South China Sea would be key to proceeding with any development. Bloomberg News

T

he Federation of Philippine Industries (FPI) on Wednesday cautioned the government against imposing an excise tax on sugar sweetened beverages (SSBs) that is too high, as this would cut the sales of beverage manufacturers and affect local farmers. “My objection is that if the tax is too high, then it would decrease the sales of beverages. We are not against the tax if it’s minimal or negotiable, but not that high [P10] because it’s like you already killed the industry,” FPI Chairman Jesus L. Arranza said in a forum held in Quezon City on Wednesday. “Demand for soft drinks is elastic, meaning higher prices will reduce consumption. If consumption declines, then production will go down, which, in turn, would lower demand for sugar. So both the sugar farmers and the labor force of manufacturing companies would suffer,” he added. Under the proposed comprehensive tax-reform package of the Department of Finance, SSBs include soft drinks, soda, flavored-carbonated or noncarbonated beverages, fruit drinks, sports drinks, sweetened tea, coffee drinks and energy drinks, among others, would be taxed P10 per liter. Arranza said he would present his group’s position in government hearings and meetings on the tax reform and will try to seek an “alternative measure”. At present, the FPI is composed of 40 industry associations, including those in the beverage sector and sugar industry. “If you are going to ask me about my stand, there should be no tax. Because if I start bargaining now, then it’s like I accepted [the additional tax], that’s my negotiating stand,” he said. “We are hoping, praying, that those in government would understand our stand because this would affect sugar farmers,” Arranza added. Earlier, Sugar Alliance of the Philippines Spokesman Emilio Yulo said the P10 per liter excise tax could result in two scenarios for the sugar industry: first, lower demand for sugar due to lower sales of SSB products; and second, lower farm-gate price of the commodity due to absorbed costs by beverage companies. Jasper Emmanuel Y. Arcalas