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A broader look at today’s business n Friday, May 25, 2018 Vol. 13 No. 223

Espenilladelivers2nd deposit reservecut T By Bianca Cuaresma

@BcuaresmaBM

HE Bangko Sentral ng Pilipinas (BSP) announced on Thursday yet another cut in the deposit reserve requirement ratio (RRR), further bringing down the banks’ vaulted cash.

The Monetary Board’s decision to bring down the deposit requirement—or the portion of depositors’ balances that banks are asked to keep idle in the BSP’s vaults as reserves—effectively puts the Philippine banking industry’s RRR to 18 percent. This RRR cut is the second

slash since BSP Governor Nestor A. Espenilla Jr. took office in July 2017. A statement from the BSP on T hu r s d a y s a i d t h e m o v e i s still part of their “gradual and phased ” reduction in reser ve requirement ratios.

P70B for 4Ps should go to farms–Piñol

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HE Department of A g r i c u lt u r e ( DA ) wants to convert the P70-billion Pantawid Pamilyang Pilipino Program (4Ps) into a livelihood funding assistance instead of a cash dole-out to help improve the farm sector. Agriculture Secretar y Emmanuel F. Piñol said the 4Ps is a “questionable” social program as it “reduces” poor families to “a level of Continued on A2

Continued on A2

As PHL trails rivals, experts pitch faster infra rollout

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By Elijah Felice E. Rosales

@alyasjah

HE government must accelerate the rollout of its infrastructure program if it wants to see its competitiveness ranking improve in the next years, as rival economies continue to develop their business environment at the Philippines’s expense. In the IMD World Competitiveness Ranking 2018, the Philippines scored a dismal 64.66 points, and slipped to the 50th spot from 41st last year in a list of 63 economies. Among the 15 Asia-Pacific countries in the survey, Manila also dropped to 13th from 11th in the previous year. The country lost grip in all four major indicators of the rankings, and suffered the worst drop in the economic performance factor to 50th from 26th last year. The survey took note of the surging GDP growth of the Philippines, but this was overpowered by the doubled current-account deficit, slow expansion of foreign direct investment inflows and the depreciation of the peso against most major currencies in the previous year. Manila’s government efficiency also slid to 44th from 37th last year, as investors reported they were uncertain of the country’s public finance, The Asian Institute of Management (AIM) Policy Center organized a forum to discuss the 2018 World Competitiveness Yearbook institutional framework, business legislation and results, where the Philippines ranked 50th out of 63 countries, down nine notches from last year’s 41st. Present to give their reactions societal framework. are (from left) Management Association of the Philippines President Ramoncito Fernandez, Philippine Chamber of Commerce and Continued on a9

PESO exchange rates n US 52.3730

Industry President Ma. Alegria Limjoco and National Competitiveness Council Private Sector Cochairman Guillermo Luz. ALYSA SALEN

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PHL EYEING OIL FROM NON-OPEC COUNTRIES By Bernadette D. Nicolas

@BNicolasBM

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HE government is looking to get oil from countries outside the Organization of Petroleum Exporting Countries (Opec) in order to cushion the impact of rising oil prices, Malacañan Palace said on Thursday. Presidential Spokesman Harry L. Roque Jr. noted that the same tack is being done by China. “I have talked to people in government, and there is a possibility of importing cheaper oil from non-Opec members like Russia and America. China is also getting its oil from the stockpile of America,” Roque said, and the Philippines is studying if “we can also do the same move like what China did.” The government, however, is still exploring its options and See “Non-Opec countries,” A2

Despite inflation, growth goal doable–think tank By Cai U. Ordinario

D

@cuo_bm

ESPITE high inflation, the national government can hit its economic growth target for the year on the back of strong consumption spending, according to a local think tank. In its latest Market Call report, First Metro Investment Corp. (FMIC) and University of Asia and the Pacific (UA&P) Capital Markets Research said the strong first-quarter growth of 6.8 percent and the recovery in consumption spending in the second quarter will provide the economy with a much-needed boost to counter rising commodity prices. The think tank estimates the

7.0-7.5% The FMIC-UA&P’s estimate for GDP growth by year-end country’s GDP growth to reach 7 percent to 7.5 percent by year-end. Inflation, meanwhile, is expected to average 4 percent to 4.3 percent, slightly above the Central Bank’s target of 2 percent to 4 percent. “We think that the NG’s [national government’s] 7 percent-to8 percent economic expansion target in FY 2018 will be hit, anchored See “Inflation,” A2

Marketing veteran will head TPB as OIC By Ma. Stella F. Arnaldo

@akosistellaBM Special to the BusinessMirror

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ARKETING veteran Arnold T. Gonzales has been selected officer in charge (OIC) of the Tourism Promotions Board (TPB), following the

resignation of the agency’s COO Cesar Montano. In a news statement, the Department of Tourism (DOT) said “Gonzales was unanimously chosen” by the board of directors, chaired by Tourism Secretarydesig nate Ber nadette Fatima Continued on A2

n japan 0.4758 n UK 69.9232 n HK 6.6723 n CHINA 8.1983 n singapore 38.9883 n australia 39.5888 n EU 61.2659 n SAUDI arabia 13.9654

Source: BSP (24 May 2018 )

News

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A2 Friday, May 25, 2018

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US relays SCS militarization concern with China

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S Secretary of State Mike Pompeo on Thursday relayed to his counterpart in Beijing Washington’s “consistent concerns” on the alleged militarization in the South China Sea (SCS) amid latest developments in the disputed waters in the region. Pompeo, who met Chinese Foreign Minister Wang Yi for the first time, did not elaborate on the talks

about the disputed sea lane, but said they had a “good discussion” on the subject.

“We had a chance to talk about that. And I will leave to our militaries to talk about their efforts together,” he said during the joint presser with Wang in Washington. Wang, in Washington for a stopover after attending the G20 Foreign Ministers meeting in Argentina, confirmed that concerns on Chinese activities in the area were raised, but denied there is militarization. Last week Beijing reportedly landed Chinese bombers, including a long-range H-6K, in one of its reclaimed islands in the SCS.

“On the so-called militarization in the South China Sea, we talked about this issue. China is only building civilian and some necessary defense facilities on our own islands. That is the right to selfdefense and preservation of every sovereign state,” Wang said. “It is a normal deployment and has nothing to do with militarization, just like the US has military presence in Hawaii, in Guam. And China’s deployment is at a much smaller scale than the US. It’s just out of necessary defense

₧70B for 4Ps should go to farms–Piñol Continued from A1

waiting for money from the government” instead of making them productive. “I’m the most vocal critic of this program of the government. [It] is spending P70 billion annually [for 4Ps], which is bigger than the budget of the DA,” Pinol told the Agriculture Trade and Investment Forum at a hotel on Thursday. “In fact, what I am saying is the 4Ps could actually be another program that could contribute to agricultural productivity if used properly. Instead of giving in forms dole-out every month, why don’t we start a livelihood program using that money?” Pinol added.

Marketing veteran will head TPB as OIC Continued from A1

Romulo Puyat, in a meeting on Thursday, at an undisclosed location at the Bonifacio Global City. “The 56-year old career executive has been with the TPB/DOT for 30 years, assigned at various posts abroad. Prior to his designation, Gonzales has been serving as OIC of Domestic Promotions Department of the TPB,” the news statement said. A civil servant for most of his career, Gonzales spent two years in the private sector, as a tour coordinator, then assistant operations manager at Rajah Tours Philippines Inc. Gonzales holds a master’s degree in Business Administration from De La Salle University. He majored in tourism at the University of the Philippines.

Pinol said he has received reports that the 4Ps had resulted in the declining number of workers in the rural areas, particularly in the agriculture sector. “People are not working anymore, and they are just waiting for their allowances,” he said in an interview with reporters on the sidelines of the forum. “In fact, for years the 4Ps did not result in anything. Worse, the work force in the agriculture sector has been reduced because of it,” he added. The DA chief has pitched his proposal many times in previous Cabinet meetings, and claimed “a lot” of Cabinet members back his idea, but did not disclose their names. He plans to submit a memorandum to the

President with his proposal, at the next Cabinet meeting in June. “The gist of my proposal is that we should make use of the 4Ps fund for livelihood activities to increase greater food productivity,” he said. He has in mind “food production like vegetable growing or backyard poultry growing.” However, the mechanisms and guidelines for the proposal shall be determined once it is approved. Labor employment in the farm sector declined for the sixth straight year in 2017, sinking to a seven-year low of 10.257 million, data from the Philippine Statistics Authority showed. This was also the first time in 15 years that employment in agriculture fell below 11 million. Jasper Emmanuel Y. Arcalas

Espenilla delivers 2nd deposit reserve cut Continued from A1

The first cut in the requirement ratio of banks was announced in mid-February, just a few days after the BSP’s first monetary-policy meeting for the year. 

 The BSP also made clear that the reductions, past or future, in banks’ RRR are “calibrated” and “are not intended to signal any change in the prevailing monetary-policy stance,” all the while assuring that the BSP has the scope to offset their potential liquidity impact via an expansion in auction-based monetary operations.

 “Shifts in the monetary-policy stance will continue to be signaled through adjustments in the policy rate, which will in turn continue to depend primarily on the BSP’s outlook for inflation as informed by economic data,” the BSP said. Just two weeks ago, the BSP decided to hike its main policy rate by 25 basis points after about four years of keeping a neutral policy stance. The decision came in an effort

to curb inflationary pressures down to the target range of 2 percent to 4 percent for the year and for 2019. 

 Since the BSP’s shift to the auction-based monetary operations under the interest-rate corridor framework in 2016, Espenilla—who was then deputy governor of the supervision and examination sector—was vocal on the need to bring down the banks’ RRR.

 But even at 18 percent, the Philippine banking industry’s RRR is still one of the highest in the region. “These operational adjustments are part of the BSP’s shift toward a more market-based implementation of monetary policy that aims to gradually reduce the BSP’s reliance on reserve requirements for managing liquidity in the financial system,” the BSP said in its statement. 

 “The reduction in reserve requirements is also part of the BSP’s broad financial sector reform agenda to promote a more efficient financial system by lowering intermediation costs,” it added.

purposes. We don’t hope to see any exaggeration or hype-up of this matter,” he added. The strategic waterway, where a trillion-dollar worth of trade passes annually, is contested by the Philippines, China, Vietnam, Malaysia, Brunei Darussalam and Taiwan. While not a claimant state, the United States sees itself as an interested party in the South China Sea. It has repeatedly stressed it will continue to conduct regular freedom of navigation operations in the region. Joyce Ann L. Rocamora, PNA

Inflation. . . Continued from A1

on the strong domestic demand, various infrastructures projects and the rebound in some industries (i.e., Mining and Quarrying, Construction), as well as in exports,” FMIC and UA&P Capital Markets Research said. The think tank also said the government’s “Build, Build, Build” centerpiece program is expected to accelerate on the back of efforts by the Department of Public Works and Highways (DPWH) to scale up civil works. FMIC and UA&P Capital Markets Research said that, in the past 12 quarters, the DPWH was able to increase the expansion of civil works to 25.1 percent in the first quarter of 2018, from 12 percent in the second quarter of 2017. Based on the latest status report of DPWH, the think tank said, projects were, on average, 67 percent complete, which suggests being on track to finish as scheduled. It added that even public-private partnership projects were moving faster in this administration. Apart from this, the think tank said the new Right-of-Way Act (Republic Act 10752) and implementing regulations appear to convince landowners that the Rowa system is more fair and, thus, less resort to expropriation would be needed. The law provides that the government agency only needs to put 50 percent of the expropriation money in escrow, which is a last resort, and the project can proceed, the think tank pointed out. “W hile Metro Manila commuters and car owners suffer daily from the worsening traffic congestion, relief may be in sight as the government’s infrastructure program appears to go ‘full steam ahead,’” the think tank said. “We think that the NG is moving fast enough to enable it to accomplish a substantial part of its Build, Build, Build program,” it added. Earlier, Socioeconomic Planning Secretary Ernesto M. Pernia said inflation was the “spoiler” of the country’s economic performance in the first quarter of the year. He said, if it weren’t for high inflation, which averaged 3.83 percent using the 2012 rebased data, the country would have registered a growth of above 7 percent. Despite this, Pernia said the Philippines remains one of the best-performing economies in the region, next only to Vietnam’s 7.4-percent growth, same as China’s and higher than Indonesia’s 5.1 percent. He added the country’s GDP targets remain within reach. In order to attain the government’s growth targets, Pernia said the economy must post a growth of around 7 percent or higher in the next three quarters. The country’s economic growth is expected to increase on the back of strong domestic demand due to the reduction of personal-income tax under the Tax Reform for Acceleration and Inclusion law. Pernia said the government’s cash transfers, such as the conditional-cash transfers and unconditional-cash transfers, and even the Pantawid-Pasada subsidy for jeepney drivers will help ease the burden of higher commodity prices by poor households.

DOJ orders Garin, Duque to attend PI on Dengvaxia By Joel R. San Juan @jrsanjuan1573

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HE Depar tment of Justice (DOJ) on Thursday compelled former health secretaries Francisco Duque III and Janette Garin and 38 others to show up in the preliminary investigation of the criminal complaints filed against them in connection with the death of several children who were given the controversial Dengvaxia vaccine. Assistant State Prosecutor Maria Emilia Victorio, who chairs the panel of prosecutors tasked to conduct the probe, ordered the respondents to personally appear before the panel on June 25, 208 through subpoenas issued at the continuation of the preliminary hearing on the complaints filed by the families of the children through the Public Attorney’s Office (PAO). The respondents were also directed to submit their respective counteraffidavits before the panel. Besides Duque, Garin and other former health officials, the complaints also named as respondents executives of pharmaceutical company Sanofi Pasteur and its local distributor Zuellig Pharma. A separate panel of prosecutors is investigating the complaint filed by anti-corruption groups Volunteers Against Crime and Corruption (VACC) and Vanguard of the Philippine Constitution Inc. (VPCI) against former President Benigno Aquino III over the Dengvaxia vaccine controversy. Aquino and 43 other respondents were earlier ordered to appear in the next hearing set for June 4 to answer the charges of multiple homicide and physical injuries under the Revised Penal Code, malversation of public funds, and violations of Republic Act 3019 (Anti-Graft and Corrupt Practices ct) and R.A. 9184 (Government Procurement Reform Act). Victorio’s panel is conducting the preliminary investigation over the criminal complaints filed separately by the families of nine children who perished due to complications believed to be related to the Dengvaxia vaccine. The complainants accused the respondents of reckless imprudence resulting in homicide under Article 365 of the Revised Penal Code (RPC); for torture resulting in the death of a person and the torture of a child under Republic Act (RA) No. 9745, also known as the Act Penalizing Torture and Other Cruel, Inhuman and Degrading Treatment; obstruction of justice under Section 1(b) of Presidential Decree No. 1829; and violation of Section 3 of RA 3019, the Anti-Graft and Corrupt Practices Act. The DOJ has authorized PAO to conduct autopsies and gather evidence in relation to the Dengvaxia mess. At Thursday’s hearing, Chief public attorney Persida Rueda-Acosta presented evidence allegedly proving that Garin pushed through with the Dengvaxia vaccination despite being aware of its repercussions on the health of recipients. Acosta showed the panel a March 27, 2016 letter of health and medical experts from various organizations received by Garin, which strongly warned against and opposed the implementation of the program.

Non-Opec countries. . . Continued from A1

has asked for the public’s understanding of the fact that rising oil prices are something the government cannot control. Nonetheless, he reiterated the built-in mechanism that the government can resort to if global oil prices reach $80 per barrel. Roque said, at this point the government may suspend collection of higher fuel excise tax.

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13 DENR lawyers lauded

Environment Secretary Roy A. Cimatu congratulates DENR employees who passed the 2017 Bar examinations. In photo are (from left) lawyers Cesar Wendel Caoagas, Andrea Victoria Amog, Jiana Joselle de Guzman, Fatima Angeli Tan and Lovely Grazette Quiben. Jun Mestica

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hirteen lawyers of the Department of Environment and Natural Resources (DENR) were honored on Monday, four of them for outstanding academic achievement and the other nine for passing the 2017 bar examinations. Environment Secretary Roy A. Cimatu led the recognition rites during the flag-raising ceremony at the DENR Central Office in Visayas Avenue, Quezon City. “We have a very high batting average. Imagine 9 out of 13 passed the bar,” Cimatu said, noting that 13 fresh law-school graduates were hired by the DENR as legal researchers. “It only means that we have the best people here in DENR,” Cimatu said. The success of his program of accelerating the resolution of cases currently clogging up the DENR’s legal office is more assured now that the nine law graduates have become full-fledged lawyers. The nine are lawyers Wendell Caoagas, Andrea Victoria Amog, Jiana Joselle de Guzman, Fatima Angeli Tan, Lovely Grazette Quiben, Minette Sioson, Edna Francisco, Joseph Chrispher Torralba and Kris Rajiani Nagera. All nine are working at the Legal Affairs Service of the DENR Central Office. Cimatu, likewise cited four other lawyers for outstanding academic achievement in their postgraduate programs, stressing their achievements are widely regarded by the Department as “a significant push” to raise the quality of professionalism and competence being cultivated by the DENR management for its 16,000-strong work force. The four are lawyers Amiel Ian Valdez (summa cum laude), Ronnel Sopsop (class valedictorian), Arlyn Buduhan (best paper) and Ismael Manaligod (with honors).

Valdez, who is with the Claims and Conflicts Division of Legal Affairs Service at the DENR-Central Office, finished his Master of Environmental Law with “First Class Honors” (equivalent to summa cum laude) at University of Melbourne in Melbourne, Australia. Pa r t of Va ldez’s academic achievement was a paper he wrote, “Examining the extent and limits of the Philippine Writ of Kalikasan as tool to compel the government to fulfill its Nationally Determined Contributions under the Paris Agreement,” which garnered the gold award during the 23rd Conference of the Parties at United Nations Framework Convention on Climate Change” in Bonn, Germany. Sopsop came out as the “class valedictorian” from this year’s batch of DENR scholars under the Environment and Natural Resources Management Course at the DENR’s Environment and Natural Resources Academy in Carranglan, Nueva Ecija. He was also given the “Leadership Award” by the EBR Academy. Buduhan, chief of Enforcement Office in DENR Region 1, finished her Masters Degree in Development Management at the Development Academy of the Philippines (DAP) with a paper she authored, “System of Monitoring and Regulating Sources of Raw Materials of Small-Scale Wood Processing Industries,” which received the “Best Smart Regulation Re-Entry Project” prize. Meanwhile, Manaligod, head of the Legal Office, DENR-Region 2 in Tuguegarao City, Cagayan finished his Senior Executive Class in Public Management Development Program also at DAP with a special award, “Outstanding Capstone Paper,” for his paper “Grill or No Grill: Exploring Policy Alternatives on Wood Charcoal Value Chain in the Philippines.”

We have a very high batting average. Imagine 9 out of 13 passed the bar, considering that the 13 fresh law-school graduates were hired by the DENR as legal researchers.” —Cimatu

Editor: Vittorio V. Vitug • Friday, May 25, 2018 A3

AFP chief confirms ongoing ISIS recruitment in Mindanao

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By Rene Acosta

@reneacostaBM

rmed Forces Chief of Staff Gen. Carlito Galvez Jr. on Thursday confirmed that Mindanaobased terrorist groups, particularly the combined ISIS (an acronym for the Islamic State of Iraq and Syria) and Maute Group, are on a recruitment binge, but assured the public that support for these groups is waning.

“They were recruiting, but we believe that our counter narrative is being strengthened, and we saw that there are lots of people, really even with the other groups of the BIFF and the Abu Sayyaf Group [ASG], the surrenderees are snowballing,” he said. The BIFF is the terrorist group Bangsamoro Islamic Freedom Fighters, whose three factions have already ceded to form their own iden-

tity after pledging their allegiances or aligning themselves with the ISIS, which has formed its East Asia Division by way of Mindanao. Galvez, who has been visible for the past days in Mindanao attending activities relating to the marking of the first year anniversary of the Marawi rebellion that devastated the Islamic capital, said that members of the terrorist groups, especially

the ISIS and the Maute, are continuously yielding despite reports of recruitment. “I believe that support for the Maute-ISIS is waning because we have 42 surrenderees already. Previously, we had 10 but after the President talked to them, the number went up to 42 surrenderees,” the chief of staff said. He added the ongoing rehabilitation of Marawi and the close coordination between the military and the local officials in Lanao de Sur helped convince terrorists to surrender. Reports said while the hardcore leaders of the ISIS and the Maute Group, including Isnilon Hapilon, the ISIS le ader in Southeast Asia, have been killed during the five-month Marawi battle last year, the leadership has been taken over by Abu Dar, who survived the government operation. Galvez, however, would not confirm the reports. “Our intelligence unit in the general headquarters has yet to get a definite answer, so we have to still validate it. But as of now, we have no definite conclusion yet if he is already

[the leader],” he said. Galvez added Dar was the only survivor out of the 10 original planners of the Marawi siege. Meanwhile, Galvez shrugged off criticisms about the continued implementation of martial law in Mindanao, saying the people in the area welcomes it. Galvez said Mindanao needs martial rule as the government still has to collect thousands of loose firearms in the hands of civilians, which are being used to commit crimes and other illegal acts in the region. “We still need to get 80 percent of the firearms. If we collected 6,000, that’s only, I believe, 10 percent…we need to get all the 80 percent of the firearms so that we will remove the possibility of these being used for lawlessness and criminalities,” he said. But Karapatan Secretary-General Cristina Palabay said the government’s defense in continuously implementing martial law in Mindanao “speaks of its militarist and ineffective approach in addressing the root causes of the social problems that spawned the armed conflicts in Mindanao and elsewhere.”

Duterte urged to certify BBL measure as urgent By Jovee Marie N. Dela Cruz @joveemarie

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o ensure the approval of the proposed Bangsamoro basic law (BBL) this month, the House of Representatives has asked President Duterte to certify the measure as urgent. In a letter dated May 23, House Speaker Pantaleon D. Alvarez and Majority Leader Rodolfo C. Fariñas Sr. of the First District of Ilocos Norte said the urgent certification will guarantee the approval of the proposed BBL next week. “We are once again respectfully requesting that House Bill [HB] 6457 be certified as urgent by your administration,” the House leaders said, referring to the BBL. With the urgent certification, a bill need not undergo the three-day rule between the second and third reading, with approval on both levels done within the same day. “We aim to pass the bill on third reading before Congress adjourns on June 2. Thus, we are hoping for your usual support as we work for the prompt passage of this law,” the House leaders said in the letter. Earlier, the Senate had requested the President to certify the BBL as urgent. Duterte has appealed to Congress to pass the BBL by May 30, as he stressed the crucial role of the proposed law in maintaining peace in Mindanao amid threats posed by radical Islamic groups. However, the Bangsamoro Transition Commission (BTC) has asked Congress for more time to study the proposed amendments to the bill. The proposed BBL will abolish the Autonomous Region in Muslim Mindanao (ARMM). The measure seeks to establish a political entity, provide for its basic structure of the government in recognition of the justness and legitimacy of the cause

of the Bangsamoro people and their aspiration to chart their political future through a democratic process that will secure their identity and posterity and allow for a meaningful self-governance. Under the bill, the Bangsamoro territory will remain part of the Philippines. The measure delineates the core territory of the Bangsamoro to be composed of: 1) the present geographical area of the ARMM; 2) the municipalities of Baloi, Munai, Nunungan, Pantar, Tagolan and Tangkal in the province of Lanao del Norte and all other barangays in the municipalities of Kabacan, Carmen, Aleosan, Pigkawayan, Pikit and Midsayap that voted for inclusion in the ARMM during the 2001 plebiscite; 3) the cities of Cotabato and Isabela; and 4) all other contiguous areas where there is resolution of the local government unit or a petition of at least 10 percent of the registered voters in the area asking for their inclusion at least two months prior to the conduct of the ratification of the basic law and the process of delimitation of the Bangsamoro. To ensure the widest acceptability of the BBL in the core areas, a popular ratification shall be conducted among all the Bangsamoro within the areas for their adoption. HB 6475 retains the central government’s power and control over defense and external security. It provides that the defense of the Bangsamoro shall be the responsibility of the central government. The central government shall create a Bangsamoro Military Command of the Armed Forces of the Philippines for the Bangsamoro, which shall be organized, maintained and utilized in accordance with national laws. The measure also calls for the creation of a Bangsamoro Police for law enforcement and maintenance of peace and order in the Bangsamoro, but it shall

be part of the Philippine National Police.

Constitutional issues

Meanwhile, House Deputy Speaker Rolando G. Andaya Jr. of the First District of Camarines Sur urged the lower chamber to seriously look into the constitutional issues on some provisions of the BBL. In particular, Andaya expressed concerns that Section 1 of Article XII of HB 6475, which talks about Fiscal Autonomy of the Bangsamoro, is unconstitutional according to existing jurisprudence. It states: “The Bangsamoro enjoys the maximum form of fiscal autonomy with the end view of attaining economic selfsufficiency and genuine development. It shall be entitled to all fund sources enumerated herein, and shall have the power to create its sources of revenues as provided in this law.” It continues: “It shall prepare its budget and shall allocate funds in accordance with an annual appropriations law passed by the Bangsamoro Parliament. The form, content and manner of preparation of the budget shall be prescribed by law enacted by the Bangsamoro Parliament.” According to Andaya, fiscal autonomy is granted by the Constitution and cannot be superseded by a law passed even by Congress. “It is a constitutional grant and cannot be attained by membership. This is the ruling of the Supreme Court on the power of fiscal autonomy,” he said. “Congress cannot, by law, grant such power. Congress’s own power of fiscal autonomy is merely implied by a resolution, while only those which are expressly granted by the Constitution like the Judiciary and the Ombudsman enjoy full benefits of autonomy. The spring cannot rise above the source. Even the President does not have the same powers,” he added.

Andaya said the committees that consolidated the BBL bills should pay attention to this and rectify the errors in the provisions during plenary debates to conform to the Constitution. Meanwhile, Malacañang said it expects Congress to meet the end-of-May deadline for passage of the BBL despite some Congress leaders saying they might not meet the deadline. “Well, we’re holding them to their promise because they have no reason not to meet the deadline. I understand that they had an all-member caucus in the House and it was agreed that it will be passed before they go on break,” Presidential Spokesman Harry L. Roque Jr. said in a briefing on Thursday. The Palace statement came amid reports that Alvarez and Fariñas have asked the President to certify the BBL as urgent. The House request was made two days after the Senate also made a formal request to the President since it also aims to pass on third reading their proposed BBL before Congress adjourns on June 2. The measure is still pending on second reading at the Senate. Roque said there is no reason for the bill not to be certified as urgent. On Tuesday Roque said it will be done “anytime soon.” Asked what was taking so long for the President to certify the bill as urgent, Roque said it is because the Office of the President is still checking if the two versions of the proposed BBL in the House and Senate are the same. “It is needed that the versions are the same and once it is certified as urgent, it can be approved on second and third reading in just a day,” he said. Last month Duterte assured the public that Congress will pass the proposed measure before the end of May. With reports from Bernadette D. Nicolas

Economy BusinessMirror

A4 Friday, May 25, 2018 • Editor: Vittorio V. Vitug

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‘More workers to get TRAIN cash subsidy’

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By Butch Fernandez & Samuel P. Medenilla

@butchfBM @sam_medenilla

he Department of Labor and Employment (DOLE) is keen on expanding the coverage of the government’s cash-subsidy program, which seeks to help the poor cope with the impact of the Tax Reform for Acceleration and Inclusion (TRAIN) law.

In an interview, Labor Undersecretary Joel B. Maglunsod said the DOLE is looking into the possibility of endorsing to the Department of Budget and Management (DBM) and Malacañang the inclusion of “near-poor” workers in the subsidy program. Near-poor workers are those who have a monthly salary above the prevailing minimum wage up to P18,000. “Currently, P200 is being given to the 10 million CCT [conditionalcash transfer] beneficiaries, who are mostly in the informal sectors. However, even those in the formal sector are also affected,” Maglunsod said. The P200 monthly cash assistance to the 10 million poorest households affected by the Comprehensive Tax Reform Program (CTRP) will be raised to P300 by 2019. The Trade Union Congress of the Philippines said the near-poor must also get cash aid from the government to cope with the increase in consumer prices. TUCP Vice President Luis Manuel Corral said the cash aid would provide workers “much-needed relief” from rising inflation, which reached 4.5 percent in April. “They are not looking at the near-poor...who should be part of the target beneficiaries of that P200 monthly subsidy,” Corral said in a previous interview.

Other labor groups, such as the Associated Labor Union-TUCP (ALU-TUCP), had urged President Duterte to provide a P500 monthly subsidy to minimum-wage earners. Both the TUCP and the ALU, however, said the cash subsidy is just a “stop-gap measure” and that the government must implement reforms to address inflation. These reforms, the groups said, must lower the prices of rice and electricity. They also said the government must consider raising the minimum wage. ALU agreed with TUCP and also pushed for an increase in the minimum wage. The group urged the regional wage boards to start deliberations for emergency wage hikes to help workers cope with the “extraordinary” rise in inflation due to the CTRP.

IN this April 19, 2016, file photo, workers assemble vehicle metal parts at the Roberts Automotive and Industrial Parts Manufacturing Corp. in Industrial Park, Canlubang, Laguna. The Department of Labor and Employment on Thursday proposed the inclusion of “near-poor” workers in the government’s cash-subsidy program. NONOY LACZA

gas tax freeze provision, which is automatically activated “when the benchmark price of crude oil reaches $80 a barrel.” Recto recalled that Republic Act (RA) 10963, signed into law by the President, “explicitly provides for this price triggered collection moratorium,” adding that this provision was reiterated in the Bureau of Internal Revenue’s Regulation (RR) 2-2018, the law’s implementing rules and regulations (IRR) on petroleum products pursuant to RA 10963. According to Recto, “the tripwire is $80 per barrel, based on Dubai crude as reflected in MOPS,” or Mean of Platts Singapore. He described it as the “circuit breaker [in the] TRAIN law. When

Automatic gas tax freeze

The TRAIN law includes an automatic “tax freeze” provision when imported crude oil hits $80 a barrel, according to Senate President Pro Tempore Ralph G. Recto. Recto issued the reminder on Thursday in the wake of earlier projections that skyrocketing oil prices could even reach $100 per barrel. In a statement, the senator reminded that the TRAIN law enacted under the Duterte administration included a self-executory

oil touches this price, the excisetax increase on gas is automatically suspended.” He added that for this to take effect, the Department of Finance (DOF) must first issue a separate IRR. The senator asserted, however, that the language of the law is clear. “So it must be self-executory and automatically implemented.” According to Recto, Section 5 of RR 2-2018 states that “for the period covering 2018 to 2020, the scheduled increase in the excise tax on fuel as imposed in this section shall be suspended when the average Dubai crude oil based on Mean of Platts Singapore for three months prior to the scheduled increase of the month reaches, or exceeds $80 per barrel.”

He, however, noted that “a separate revenue regulation shall be issued for this purpose,” as stated in the implementing rules. The senator suggested that the speed in collecting TRAIN’s tax imposition “should be matched by quickly stepping on the brakes when oil prices are skyrocketing.”

‘Deadly combination’

PARTY-LIST Rep. Carlos Isagani T. Zarate of Bayan Muna on Thursday questioned the additional P1.55per-kilowatt-hour (kWh) rate hike from Manila Electric Co. (Meralco), amid price increases due to the implementation of the TRAIN law. In a news briefing, Zarate described the power rate hike and

the price increases triggered by the new tax-reform law as a “deadly combination.” “Definitely, it’s a deadly combination to common Filipinos if the Energy Regulatory Commission approves it,” Zarate said. The lawmaker said the P1.55per-kWh power hike will cost millions of Meralco customers P54.54 billion in additional charges annually. Zarate reiterated his call to Congress to act immediately on several bills and resolutions that seek to review and repeal the TRAIN law. “There is a need to repeal or, at the minimum, amend the regressive and anti-people provisions of TRAIN,” he said. With Jovee Marie N. dela Cruz

Manila, Washington keen on fast-tracking FTA talks

‘BBB’ to hike productivity, boost growth of poor provinces–Neda

By Elijah Felice E. Rosales

he government’s “Build, Build, Build” (BBB) program gives the country’s 17 regions hope that they will be able to boost their economic growth and development in the medium term, according to the National Economic and Development Authority (Neda). In a statement, Socioeconomic Planning Secretary Ernesto M. Pernia said that, despite the increase in the Gross Regional Domestic Product (GRDP) of many regions last year, the National Capital Region (NCR) remains as the top contributor to the country’s GDP. “The government is now waging its biggest campaign yet—the Build, Build, Build—and it gives regions hope. They are getting a big share in

@alyasjah

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anila and Washington agreed to facilitate negotiations on a freetrade agreement (FTA) in a bid to bolster trade relations between the two countries, following a high-level dialogue involving a top United States trade official and the Duterte administration’s economic team. Deputy US Trade Representative Jeffrey D. Gerrish visited the country on Wednesday to discuss with Philippine economic managers strategies to bolster trade relations between the two economies. Talks of a Philippine-US FTA are still in the pipeline, following the agreement between President Duterte and US President Donald J. Trump to begin negotiations for a free-trade deal last November. “[The visit was] very fruitful in the sense that there’s open discussions to strengthen further the trade and investment ties between the Philippines and the US, and explore a possible FTA. There are low-hanging opportunities to facilitate trade, so these will be worked out by our respective teams,” Trade Secretary Ramon M. Lopez told the BusinessMirror. “For now, we will also work on maximizing the utilization of our GSP [Generalized System of Preferences] privileges in the US, which has recently included more sectors, like travel

goods. Our GSP also was recently renewed, now good for three years instead of annual review,” Lopez added. He also said Gerrish had some optimistic words for the Philippines in terms of investment conduciveness, as the US trade official reportedly pointed to the country’s fast-growing economy as an advantage in attracting investors. “He acknowledged the fast growth we are having and various reforms and demographics attractive to investors,” Lopez added. The Philippines continues to enjoy duty-free export privilege in the US under the GSP. In 2017 GSP exports accounted for 17.6 percent of the country’s exports to the US, valued at $1.49 billion. Tariff-free perks from Washington has allowed Manila to freely export mostly tires, sugar, electronics and fruit and vegetable juices. With the renewal of the GSP, travel goods, such as suitcases, vanity and attaché cases, handbags and backpacks, were included in the country’s list of export products that can freely enter the US. The government is looking to take advantage of the renewal and add footwear to the GSP list. Lopez said this will give Philippine-made shoes a spotlight in US stores while, at the same time, enticing international footwear manufacturers to look into the archipelago as a possible location for business expansion.

By Cai U. Ordinario @cuo_bm

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the government’s infrastructure projects and programs,” Pernia said. The Neda said the end goal of the government’s massive infrastructure program is to make the regions better connected, address socioeconomic inequities by linking lagging regions with leading ones. Through the BBB, the Neda hopes to improve efficiency and productivity for further growth in regions and reduce their disaster vulnerability, as stated in the National Spatial Strategy under the Philippine Development Plan (PDP) 2017-2022. “These projects are well aligned with the National Spatial Strategy under the PDP 2017-2022. The strategy anticipates future growth based on trends in population, economic activities and services. It emphasizes that Metro Manila should be decongested and that growth must be directed to

other regional centers,” Pernia said. He noted that Cordillera’s actual GRDP more than doubled its target of 4 percent to 5 percent in 2017, with the recovery of its industry and agriculture sectors. Pernia added this was made possible by the government’s increased spending on public infrastructure and social protection. Increased investments in private construction also improved connectivity within the region and its neighbors, Pernia said. Davao’s growth, which has surpassed its targets for six consecutive years, was boosted by its construction, mining and quarrying industries. “In Davao there is a continuous boom in private construction, particularly for mass housing and property development, and in government infrastructure projects,” Neda Undersecretary for Regional Development Adoracion M. Navarro said. The

mining sector in the region also grew by 18.2 percent partly due to the increase in gold production. Navarro said Davaoeños are setting their sights on several BBB projects, including the Davao City Coastal Road, Davao Food Exchange Complex, Tagum-Davao-Digos line of the Mindanao Railway System, Davao-Samal Bridge, improvement of the Davao International Airport, modernization of Sasa Port, Davao Fish Port Complex, and the construction of the New Agdao Public Market. “The implementation of these projects will help spur economic growth and generate employment in the region,” she added. Similarly, planned major infrastructure projects in Central Luzon include the development of the New Clark City, Clark International Airport Terminal Building and the ManilaClark Railway.

DOE eyes use of Malampaya Fund for exploration vessel By Lenie Lectura @llectura

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he Department of Energy (DOE) has created a technical working group (TWG) to put together the legal and technical aspects of a plan that involves tapping the Malampaya Fund for the purchase of an exploration vessel. “We created a TWG, which will be doing the specs on our decision to acquire an exploration vessel,” Energy Secretary Alfonso G. Cusi said. “We have asked the President to use the Malampaya Fund. We’re just waiting for the President’s approval.” If the plan secures the green light, Cusi said, “the vessel will conduct

exploration activities on the West Philippines Sea and Philippine Rise.” “We have to determine what is underneath. If we don’t have the vessel, then we can’t conduct a detailed exploration. If we won’t have the data, then we will be dependent on third-party arrangement to procure that data. We want it as our own,” he said. While the plan awaits the green light of Duterte, Cusi said the TWG would closely work on the terms of reference for the purchase of the vessel. He added that if this pushes through, the DOE would have to seek assistance from other government agencies to help carry out the exploration activities. “It’s going to be a collaboration with the Department of Science and Technology

and the Navy, among others. We can’t do it alone,” Cusi said. He added the plan needs the green light of the President because the Malampaya Fund could only be utilized for energy development projects. The government’s share from the energy resource development fund, commonly known as the Malampaya Fund, reached P16.25 billion in 2017, 21 percent higher than the previous year’s collection. The DOE, which collects Malampaya royalties, recorded a collection of P16,250,694,944.30 in 2017. This brings the total royalties to P251,893,422,351.68 since 20 02. T he highest col lect ion— P37,458,390,948.09—was recorded in 2009, records show.

The DOE’s collection is turned over to the Bureau of the Treasury. During a Senate hearing in March, Energy Assistant Secretary Gerardo Erquiza said the proposed seismic vessels will be used for oil and gas exploration. Sen. Sherwin T. Gatchalian supports the proposal. “One of these vessels will cost P1.2 billion, which can be covered by the Malampaya Fund…. These ships can also do marine research, but primary role is seismic research,” the senator said. The DOE earlier called on lawmakers to pass a legislation that will allow the government to tap the Malampaya Fund to pay for the P53 billion worth of debts incurred by the National Power Corp. over the years.

Banking&Finance BusinessMirror

www.businessmirror.com.ph

Editor: Jun B. Vallecera • Friday, May 25, 2018

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S&P dangles ‘A’ credit status for Manila

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By Bianca Cuaresma @BcuaresmaBM

he government is under pressure to deliver the second package of the Comprehensive Tax Reform Program (CTRP) if only to win the good graces of the various sovereign credit watchers, who made it very clear that an upgrade is possible, only if the second round of tax reforms is successfully pursued and implemented. In the case of Standard & Poor’s (S&P), such an upgrade would lift the country’s credit standing to the ranks of the “A”-rated countries, such as China or Saudi Arabia at the moment.

Association Edu-Day

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was in Frankfurt last week attending Imex 2018, one of the largest B2B trade shows for meetings, incentives, conventions and ex hibitions (MICE). The show had more than 3,500 suppliers/exhibitors and 2,500 buyers/decision-makers from 150 countries and included 250 education sessions. I was invited as a hosted buyer because of my affiliation with Adfiap, an international association that organizes conferences in various countries. My motivation for participating at IMEX is the business networking that I get that is useful in my job as an association executive. I met with representatives of national and reg iona l tour ist of f ices a nd convention bureaus, major hotel companies, conference and exhibition venues, cruise lines, airlines, spa resorts, technology providers, event management specialists and many more, for collaboration and sponsorship opportunities. Another reason to attend is the lineup of diverse educational sessions exclusively for association professionals like myself. There is the “Association Day,” which is part of “Edu Monday” that provides innovative ideas and solutions to the challenges facing associations across the world and which are led by expert global speakers. I took part in the leadership education stream organized by the American Society of Association Executives, which presented practical ideas and best practices on social media and other digital tools, volunteer

Association World Octavio Peralta management, member engagement and strategic governance. Let me share with you the few takeaways I got from attending these sessions. On utilizing socia l media and other digital tools, Lakisha A nn Woods, senior v ice president and chief marketing officer of the National Association of Homebuilders in the US, recommends: n Selecting the right platform where your members are; n Hiring the right talent to do the job; n Standing out in a crowd; n Crafting the perfect image and engaging with users; and n Connecting with influencers who will be your social-media ambassadors. In developing a successful member-engagement strategy, Sue Kellie, deputy CEO of the Br itish Dietetic A ssociation, broadly presented BDA’s threepronged approach: supporting members’ a ims, lead ing t he profession a nd bu i ld ing for the future. For a strong volunteer management and training program, Ma rsha Tu r ner, CEO of t he Inter nationa l A ssociation of Lighting Designers, emphasized the importance of starting the early involvement and empowerment of the association staff in training and clarifying the

This was intimated by experts at S&P Global Ratings, the financial information and analytics unit of S&P who said a successful pursuit of the so-called Package Two of the CTRP would provide a tremendous boost to the country’s bid to transit to the A-rated list of sovereign debt issuers. The experts said that with Package Two in place, the boost in the credit standing of the Philippines should happen within 12 months from implementation. S&P and colleagues in the sovereign credit space are on the lookout for sustained economic growth and real achievements in the fiscal space, such as ontarget revenue generation and reduction in debt burden. A credit boost from existing category as a “BBB”-rated economy to an A-rated issuer would mean prospectively lower credit costs for the Philippines when it borrows overseas, for instance. Such an upgrade should also extend tremendous publicity advantage for President Duterte, w ho s e u n ap olo ge t ic w a r on against drugs and corruption in the civil service has set the global community on edge. Under the Duterte adminis-

volunteers’ roles and responsibilities, as well as in praising them with recognition and appreciation. In establishing a strategic governance and board management process, Matthew D’Uva, executive director at the International A ssociation for the Study of Pain, stressed four key areas in board governance: strategic direction through a well-documented and communicated strategic plan; a budgeting process that is aligned with strategy; a clear decisionmaking structure and succession planning; and proper documentation, with clear policies and procedures. I encourage my peers in the association community in the country to continuously update their skills in association governance and management by participating in educational events that are available here and abroad. The column contributor, Octavio “Bobby” Peralta, is concurrently the secretar y-general of the Association of Development Financing Institutions in Asia and the Pacific (Adfiap) and the CEO and founder of the Philippine Council of Associations and Association Executives (PCA AE). PCA AE is holding a mini-conference on Branding, Public Relations and Communications on July 4, 2018, at the Philippine International Convention Center (PICC). The event is supported by Adfiap, the Tourism Promotions Board, the PICC, Springtime Design, International PR Association and Writers Edge. E-mail inquiries: @adfiap.org.

tration, the Department of Finance successfully implemented Package One of the CTRP that brought down the income-tax burden of the low- and middleincome segments while also hiking the excise petroleum and sugary drinks. Package Two, although still in the draft stage, looks to reduce the income tax of the corporate sector and recalibrate the system of fiscal incentives given them. While still in its infancy, the package has already attracted

a fair amount of controversy, particularly from those keen on preserving the country’s reputation as an attractive investment destination. The S&P unit said the uncertainty surrounding the second tax-reform package could further dilute investor interest in the Philippines as indicated by the amount of foreign direct investments (FDI) poured into the $297-billion economy. At the moment, S&P Global Ratings said the long-haul foreign investor has adopted a basically wait-andsee stance on the Philippines as investment destination. Ne ver t he less, S & P Globa l c lea rly i nd ic ated t h at wh i le Package Two of the CTRP could prove init ia l ly pa inf u l, suc h

was required to help sustain the countr y’s g row th momentum seen averaging higher or in the vicinity of 7 percent or 8 percent in terms of the GDP over the medium horizon. T he S&P unit a lso l auded the government for ensuring the adoption of Package One of the CTRP, whose revenue gains were to provide the financial wherewithal to underwrite the very ambitious and multiyear “Build, Build, Build” program of the government. The S&P unit acknowledged Package One contains “painful measures” based on the gathering volume and resistance displayed against it by sector,s such as ordinary consumers, and even the legislators themselves.

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The World BusinessMirror

Friday, May 25, 2018

N. Korea hits Pence as summit with Trump grows shakier I

www.businessmirror.com.ph

Ex-Nato chief : Trump’s Iran policy is scary

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OKYO—North Korea has lobbed another verbal salvo at Washington ahead of an increasingly embattled plan for its leader, Kim Jong Un, and President Donald J. Trump to meet next month, calling Vice President Mike Pence a “political dummy” and saying it is just as ready to meet in a nuclear confrontation as at the negotiating table. The outburst at Pence, issued in the name of a top Foreign Ministry official, comes on the heels of another sharp rebuke of Trump’s newly appointed national security adviser, John Bolton, and has raised concerns a major gap has opened between the two sides just weeks before the June 12 summit in Singapore. In bot h c a ses, P yong ya ng was trying to push back against hard-line comments suggesting North Korea may end up like Libya if it doesn’t move forward quick ly and irreversibly with concrete measures to get rid of its nuclear weapons. Choe Son Hui, a vice minister of foreign affairs, was quoted on Thursday by the North’s state-run news agency, slamming as “ignorant” and “stupid” comments Pence made in an interview with Fox News that compared the nuclear-capable North to Libya. Libya gave up its program at an early stage only to see its longtime dictator overthrown and brutally killed years later. She questioned whether the summit would be worthwhile if the remarks reflect Washington’s position. “We will neither beg the US for dialogue nor take the trouble to persuade them if they do not want to sit together with us,” KCNA quoted her as saying. “W hether the US will meet us at a meeting room or encounter us at nuclear-to-nuclear showdown is entirely dependent upon the decision and behav ior of the United States.” The summit plan has hit a number of speed bumps recently, as both sides have begun trading barbs and taking tougher positions. Trump met with South Korean President Moon Jae-in on Tuesday at the White House for consultations and suggested the summit could be delayed or even called off entirely.

Even so, both sides still seem to want to hold the meeting, which would be unprecedented. Success in talks would be a huge accomplishment for Trump. Meeting with the US president as an equal on the world stage would be a major coup for Kim. Despite its insults to Pence and defiant rhetorical flourishes, Choe’s statement did not directly criticize Trump and carefully

noted that she would only recommend the North Korean leader withdraw from the meeting if Washington “clings to unlawful and outrageous acts.” Meanwhile, officials from the two sides are reportedly planning to meet in Singapore this weekend to further discuss the agenda and logistics. And North Korea was moving forward with a major gesture of goodwill ahead of the summit by dismantling its nuclear test site. The North, which has vowed to stop all underground nuclear testing and intercontinental ballistic missile launches, has invited foreign media to the remote site to observe a ceremony to mark the closing. The ceremony was expected to be held Thursday or Friday, depending on the weather. Choe, a veteran diplomat and former head of the North America desk at the North’s Foreign Ministry, was responding to comments Pence made to Fox News this week that it would be a “mistake” for the North Koreans to think they can “play” Trump. Pence said both the Clinton and

We will neither beg the US for dialogue nor take the trouble to persuade them if they do not want to sit together with us.”—Kcna

Bush administrations had been “played ” by the North Korean government. “We offered concessions to the North Korean regime in exchange for promises to end their nuclear weapons program, only to see them break those promises and abandon them,” Pence said, adding that if Pyongyang does not go along with talks to give up its nuclear weapons, Washington could return to the “Libya model.” That suggestion—which Trump had earlier seemed to distance himself from—is especially inflammatory to Pyongyang. The Libya model refers to negotiations in 2004 that led to the shipping of nuclear components to the US from Libya under Muammar Qaddafi. But in Pyongyang’s mind, the most important part of the story is what came after that. Qaddafi was deposed after a 42year reign and killed in 2011—the year Kim assumed power in North Korea—while his country spiraled into chaos. “In view of the remarks of the US high-ranking politicians who have not yet woken up to this stark reality and compare the DPRK [Democratic People’s Republic of Korea] to Libya that met a tragic fate, I come to think that they know too little about us,” Choe said, using the acronym for North Korea’s official name. She added: “To borrow their words, we can also make the US taste an appalling tragedy it has neither experienced nor even imagined up to now.” AP

Women protesters stage a rally for peace on the Korea Peninsula near the US Embassy in Seoul on May 23. AP/Ahn Young-joon

UAE’s 100% foreign-ownership law may be limited to some firms

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landmark law that will allow foreign investors to own 100 percent of companies in the United Arab Emirates (UAE) will be limited to specific industries deemed essential to the second-biggest Arab economy, a government official said. Authorities are still weighing what industries are to be included in the law, and the decision will be based on factors, such as the ability to create jobs and transfer technology, according to Abdulla Al Saleh, undersecretary for foreign trade and industry at the Economy Ministry. Presently, foreigners can fully own a company if it’s located in a free zone. The changes, which also include offering some foreigners long-term residency permits, will take effect by the end of this year, the government said that Sunday.

T he announcement is an attempt by the UA E to bolster a slow ing economy a nd stay ahead of other Gulf neighbors racing to emulate Dubai ’s success in finding sources of revenue beyond oil. Sto c k s i n A bu Dh a bi a nd Dubai, the UAE’s richest emirates, gained the day after the announcement, helped by bets the changes would end a model that forced foreign investors to seek local partners to set up businesses outside free zones. Al Saleh’s comments, however, suggest the law may be more limited than some investors and analysts had initially thought. The law aims to “give investment in the UAE a strong push,” Al Saleh said in a phone interview on Wednesday. “Its goal is to attract quality investments

and expertise and isn’t necessarily about the size or number of investments.” Al Saleh also said a committee will be formed to decide on the industries to be fully opened to foreigners. The committee will be headed by the economy minister. It will include representatives from the UAE’s seven emirates and refer its recommendations to the Cabinet. The group will also recommend industries and companies that could be added to the list. The UAE and other Gulf Arab monarchies have long resisted giving foreigners, who make up the majority of the population in the region, too much clout in the economy, forcing companies to find local partners who must hold a 51-percent stake. Expatriate workers are expected to leave once their employment ends and

many send earnings abroad. In 2017 alone, foreigners living in the UAE remitted 164 billion dirhams ($45 billion), according to the state-run WAM news agency. L a s t S u n d a y ’s a n n o u n c e ment by Sheikh Mohammed Bin Rashid Al Maktoum, the UAE’s prime minister and the ruler of Dubai, also said that specialists in medical, scientific, research and technical fields, as well as top students, would be offered residencies of up to 10 years. Other countries in the sixnation Gulf Cooperation Council are also making changes. Saudi Arabia is allowing foreigners to own up to 100 percent of businesses in cer tain industr ies. Qatar announced plans to give some foreigners the right to remain indefinitely as it adapts to a Saudi-led embargo. Bloomberg News

n a world where North Korea has the bomb, Syria may be using chemical weapons on its own people and failed states across Africa and the Middle East have created a flood of refugees, the most frightening development of all is the US decision to pull out of the Iran nuclear deal, according to a former head of the North Atlantic Treaty Organization (Nato). The latest demands that President Donald J. Trump has issued to Iran back the Tehran government into a corner and risk a conflict involving the Middle East’s major powers, said Javier Solana, former secretary-general of Nato. “Iran scares me,” Solana said in an interview in Madrid this week. “It’s very tough what the US is asking for. Iran will never accept that. It’s practically regime change.” US Secretary of State Mike Pompeo on Monday set out a 12-point list of conditions that essentially demand Iran’s total submission, further complicating European efforts to rescue the 2015 deal Trump walked away from this month.

Years of talks

The US is demanding Iran halt all uranium enrichment, stop its ballistic-missile program and grant full access to nuclear inspectors across the entire country.

Iran, a majority-Shiite country, must also stop funding rebels in Yemen and withdraw its forces from Syria. Funding of Hezbollah and Hamas must end, Pompeo said. “Nowadays we should already know that a change of regime doesn’t work,” said Solana, who is chairman of the Center for Global Economy and Geopolitics at Esade in Madrid. He said the US decision was “regrettable.” Solana started negotiations with Iranian President Hassan Rouhani in 2003, when he was the European Union’s foreign policy chief and Rouhani was chief nuclear negotiator under reformist President Mohammad Khatami. The process stalled when hardliner Mahmoud A hmadinejad came to power in 2005 and was resuscitated when Rouhani himself became president in 2013. There is ample scope for the situation in the Middle East to deteriorate further, Solana said, after Shiite cleric Moqtada al-Sadr, a former militia commander who has led attacks on American forces, emerged as winner in Iraq’s elections earlier this month. “If there’s a conflict with Iran, what happens to Iraq?” Solana said. “Because Iran is effectively in control there.” Bloomberg News

Trump makes Putin vital again as world leaders flock to Russia

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he more US President Donald J. Trump strains the alliances that have sustained the post-Cold War order, the more indispensable Russian President Vladimir Putin seems to become. By the end of Putin’s annual investment showcase that kicks off in his native Saint Petersburg on Thursday, the leaders of four of the world’s 10 largest economies— Japan, Germany, France and India—will have flown into Russia for separate talks with the Kremlin boss within the course of a week. Putin will also host a new point man for foreign policy in China, Vice President Wang Qishan, and International Monetary Fund (IMF) Director Christine Lagarde. The highlight of the summits, Russian officials say, will be Putin’s meeting with French President Emmanuel Macron, the forum’s guest of honor along with Shinzo Abe of Japan. After years of sanctions over Ukraine, which Macron backs, and escalating US penalties over alleged election meddling, Trump provided Putin an opportunity for rapprochement with Europe this month by pulling out of the Iran nuclear deal, angering other world powers. “Russia is one of the main beneficiaries of Trump’s decision on Iran,” said Cliff Kupchan, chairman of Eurasia Group, a New York-based research firm. “Putin senses an opportunity to split the West and escape from pariah status.” Putin, reelected by a landslide in March, can boast of modest growth again after collapsing oil prices and sanctions imposed after the annexation of Crimea in 2014 triggered the longest recession of his 18-year rule. But converting geopolitical clout into badly needed foreign investment is a tough sell after the US slapped unprecedented penalties on one of Russia’s largest employers, Rusal, severing billionaire Oleg Deripaska’s aluminum giant from global markets and hammering local stocks. Gone are the days when growth prospects for the world’s largest energy supplier lured corporate titans like Rex Tillerson, Jamie Dimon and Lloyd Blankfein to the Saint Petersburg International Economic Forum. This year’s program features only a couple of heads of publicly traded US companies despite Trump’s newly arrived ambassador to Russia, Jon Huntsman, breaking with his predecessor by encouraging attendance. While Russia’s economy expanded 1.3 percent in the first three months from a year earlier, the reading missed projections for the third straight quarter. The World Bank

expects output to rise less than 2 percent a year until at least 2020, far below the level Putin needs to meet his goal of turning Russia into a top 5 economy by the middle of the next decade and bolstering stagnant living standards. “Russia presents an interesting philosophical dilemma for investors,” said Tim Ash, senior emerging-market strategist at BlueBay Asset Management Llp. in London. “The macro ratios—low debt, low deficit, current-account surplus—scream ‘buy,’ but nobody knows who or what will be sanctioned next.” The Kremlin was relieved that Macron, a 40-year-old former investment banker who was born just as Putin, 65, was starting his KGB career, resisted pressure from allies to cancel his trip after Britain blamed Russia for the nerve-gas attack on a turncoat spy in England in March. The accusation led to tit-for-tat diplomatic expulsions across Europe and beyond, but those concerns have been overtaken by the Iran deal, which France, Germany, Russia and China are trying to salvage in the face of US threats to ratchet up sanctions on Tehran and any companies that defy them. Macron and Chancellor Angela Merkel, who flew to Putin’s summer residence on the Black Sea for talks last Friday, appear to be in lockstep on Russia. Macron told a French newspaper he wants “a strategic and historic dialogue” with Putin to tie Russia to Europe, while a senior German official said detente with Russia is now a core policy objective. The two countries are the largest sources of direct investment in Russia, excluding tax-friendly havens like Cyprus. Even as the European leaders remain at odds with Putin over Ukraine, Syria and other issues, the Iran crisis is pushing them closer together. At the same time, Merkel’s ties with Trump are deteriorating, with the US now threatening to punish German companies involved in building a new pipeline for Russian gas under the Baltic Sea. “In spite of everything that Russia does, Merkel has an interest in keeping that dialogue open,” said Josef Janning, head of the Berlin office of the European Council on Foreign Relations. And the more the transAtlantic relationship frays, the stronger her reaction will be, he said. Putin, who hosted Narenda Modi of India, a major buyer of Russian arms, in Sochi on Monday, will anchor the forum’s plenary session on Friday, flanked by Japan’s Abe, Macron, China’s Wang and the IMF’s Lagarde. Bloomberg News

www.businessmirror.com.ph | Editor: Lyn Ressureccion

The World BusinessMirror

Friday, May 25, 2018

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Congress ZTE bills pressure Trump not to lift sanctions

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ongress is increasing pressure on President Donald J. Trump not to weaken sanctions on ZTE Corp., the Chinese telecommunications equipment maker accused of violating tradesanction agreements and posing a threat to United States national security.

Employees are reflected in a ZTE Corp. sign at the company’s headquarters in the Nanshan district of Shenzhen, China, on August 7, 2014. Brent Lewin/Bloomberg

The most expansive measure under consideration is a House appropriations bill with language aimed at blocking Trump from lifting sanctions. Other proposals under consideration would require the president to certify that lifting sanctions wouldn’t hurt US security and would bar the Defense Department from renewing contracts with vendors that work with the Chinese company. ZTE became a flash point in US-China relations after the administration crippled the company by cutting it off from US suppliers for allegedly violating terms of a 2017 sanctions settlement and then lying about it. The United States alleges that the state-linked enterprise is abetting the transfer of US technology to China’s military. The proposed legislation illustrates growing congressional opposition to Trump’s reconsideration of penalties against ZTE as a favor to the country’s president, Xi Jinping, after the company estimated losses of at least $3.1 billion from a US technology ban. Trump has said he would “envision” a revised penalty for the company over sanctions violations, including a requirement that it appoint a new board of directors and a “very large fine” of perhaps $1.3 billion.

‘Get this right’

On Wednesday Secretary of State Mike Pompeo told the House Foreign Affairs Committee that the administration would devise a plan that would reduce the risks to the US posed by ZTE. “We’re going to get this right,” he said. The president’s moves to void the export controls prompted 27 senators, led by John Cornyn of Texas, the Senate’s No. 2 Republican, and Minority Leader Chuck Schumer of New York, to write to the Trump administration on Tuesday imploring the president “to reject any proposal to soften restrictions on the transfer to China of USmade military technologies and advanced dual-use technologies, including semiconductors.” House Homeland Security

Chair man Michael McCau l, a Texas Republican, followed up with a similar letter on Wednesday. A group of GOP senators met privately early on Wednesday evening with Treasury Secretary Steven Mnuchin and Commerce Secretary Wilbur Ross. Afterward Cornyn said he was “reassured” that the administration is keeping national security concerns about ZTE separate from trade negotiations. Cornyn said he still expects an amendment restricting the administration’s options on ZTE to be part of a Senate defense bill unless senators remove it. Senate Foreign Relations Chairman Bob Corker of Tennessee said after the meeting he’s “more comfortable” with the administration’s actions on ZTE. Mnuchin and Ross declined to comment. Earlier on Wednesday Sen. Marco Rubio, a Florida Republican, took to the chamber’s floor to excoriate Trump’s new deal. “China is not a developing country. It is the second-largest economy in the world,” Rubio said. “It will soon be the largest economy in the world, and yet we continue to let them cheat and steal.” The legislative efforts against ZTE are backed by powerful Republicans and are being attached to legislation needed to keep government departments running, increasing their chances of being enacted. The Senate language is softer than the House because it requires a report rather then expressly blocking Trump from lifting penalties against the company. Final House-Senate versions

of the bills won’t be ready for Trump’s signature until later this year and lawmakers could withdraw the language if administration action preempts it.

Commerce Department bill

Language aimed at blocking ZTE sanctions from being lifted is part of an annual Commerce Department spending bill, needed to keep the department open after October 1, that was approved by the House Appropriations Committee last week. That bill is expected on the House floor before August. “It has a shot,” GOP Rep. Tom Cole of Oklahoma said when asked about the Commerce spending bill language becoming law. “Just like with Russia sanctions, I think Congress is a little more hawkish than the president.” In the Senate, the Banking Committee approved a bill with language that would require Trump to certify to Congress that US security isn’t jeopardized before lifting civil penalties against ZTE. Cornyn wants that bill added to the Senate’s annual defense policy bill being considered this week in the Armed Services Committee, making it very likely to become law. “The president can’t just run off and trade away important national security protections to provide China with more jobs,” said Sen. Chris Van Hollen, a Maryland Democrat, who drafted the ZTE language in the bill. The House defense bill would ban government agencies from using technology made by ZTE. House Armed Services Committee Chairman Mac Thornberry said last week that he didn’t see any “growing movement” in the House to remove that ban.

‘Question of security’

“It is not a question to me of economics, it is a question of security,” Thornberry said. The bill would also prohibit the Defense Department from renewing contracts with vendors that work with the Chinese company. The House amended the bill on Wednesday to ban the government use of Chinese-made video surveillance equipment. In addition to ZTE, the ban would apply to several other Chinese companies, including Hytera Communications Corp., Hangzhou Hikvision Digital Technology Co. and Zhejiang Dahua Technology Co. A separate, much-broader amendment that would have blocked all imports of technology by ZTE and China’s largest mobile and telecommunications company, Huawei Technologies Co., was blocked by House leadership and won’t get a floor vote. Bloomberg News

China is not a developing country. It is the secondlargest economy in the world. It will soon be the largest economy in the world, and yet we continue to let them cheat and steal.”—Rubio

China, Japan protest US probe into need for auto tariffs

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EI J ING — C h i n a a n d J a p a n b o t h condemned on Thursday the Trump administration’s decision to launch an investigation into whether tariffs are needed on imports of vehicles and automotive parts into the United States. China’s Commerce Ministry said Beijing would “firmly defend” its rights and interests against what it called the Trump administration’s abuse of national security provisions in trade. Japan’s minister of Economy, Trade and Industry, Hiroshige Seko, warned that additional tariffs would put the global market into turmoil. If such a measure is taken, “it would be an extremely far-reaching trade sanction that would put the global market into turmoil,” Seko said. “We are extremely concerned.” Seko said Japan, which accounts for about 40 percent of US vehicle imports, will continue

to remind US trade officials that any trade measures must be in line with the rules of World Trade Organization. President Donald J. Trump invoked a provision authorizing the president to restrict imports and impose unlimited tariffs on national security grounds, known as Section 232 of the Trade Expansion Act of 1962. The move comes as talks with Canada and Mexico over the North American Free Trade Agreement have stalled. In Beijing Commerce Ministry Spokesman Gao Feng told reporters that abusing national security provisions would “undermine the multilateral trade system and disrupt the order of international trade.” “China will pay close attention to the progress of the US investigation, conduct a comprehensive assessment of the possible impact and firmly defend our legitimate

rights and interests,” Gao told reporters at a news conference. China is a relatively minor player in the US auto import market, ranked 10th in dollar terms, but its massive car industry is eager to expand abroad. Mexico is the top exporter of passenger vehicles and light trucks to the US followed by Japan, Canada, Germany and South Korea, according to the Department of Commerce. However, in auto parts exports to the US, China was ranked second last year. A person familiar with the discussions said the president has suggested seeking new tariffs of 20 percent to 25 percent on automobile imports. Critics fear other countries will retaliate with trade sanctions of their own and question whether the move would ever be effective given the lengthy review required and legal challenges ahead. AP

Singapore posts solid growth to start 2018 amid global risks

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ingapore’s economy remained on solid footing in the first quarter, with the government expressing more certainty of a steady pace in 2018 as global trade risks and tightening financial conditions allow for a patient monetary policy. Gross domestic product rose at a seasonally adjusted, annualized rate of 1.7 percent from the prior three months, trade ministry said on Thursday. Bloomberg survey median was 1.6 percent, while the government’s previous projection was 1.4 percent. GDP expanded 4.4 percent in the first quarter from the same period in 2017, in line with median estimate The rate of expansion from a year earlier gave the trade ministry enough confidence to narrow its growth forecast for 2018 to 2.5 percent to 3.5 percent, from a prior range of 1.5 percent to 3.5 percent. Manufacturing showed particular strength, while construction expanded on an annual basis for the first time in a year. Ste a d y g row t h t h at ’s w i t h i n t h e government’s forecast range, coupled with

data earlier this week showing inflation comfortably within target, should support the central bank’s plans to gradually tighten monetary policy this year. The government remains on guard for negative effects stemming from US-China trade tensions and a global trend of rising interest rates. “They already got their first tightening in, in April. I don’t think they’re going to be in a rush,” Selena Ling, an economist at OverseaChinese Banking Corp. in Singapore, said of the MAS officials. She sees the chance of further tightening at the October MAS meeting versus a hold in the policy stance as around 50-50, with signs now that Japan and some key economies in Europe could be slowing down. A surge in electronics demand underpinned the city state’s 3.6-percent expansion last year, but as the export boom starts to moderate, GDP growth is set to ease to a more sustainable pace. The trade ministry expects growth to broaden out to other sectors of the economy this year, even as construction continues to lag.

“On balance, the pace of growth in the Singapore economy is expected to remain firm in 2018, with growth supported primarily by outward-oriented sectors,” the trade ministry said in its statement. Solid growth in electronics and precision engineering clusters, although more moderate this year, will help sustain manufacturing, it said. While growth has been concentrated in export-related industries, it’s expected to broaden out to domestic-focused sectors this year, such as retail and food services, as the labor market improves, the ministry said. Construc tion will probably remain lackluster, it said, “as the earlier weakness in construction demand, particularly from the private sector, is expected to continue to weigh on construction activities this year.” Compared with a year ago, construction fell 5 percent in the first quarter, after contracting 8.4 percent for the whole of 2017. Manufacturing climbed 9.8 percent in the first quarter, while the financial services industry surged 9.1 percent. Bloomberg News

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Friday, May 25, 2018 • Editor: Dennis D. Estopace

The Regions BusinessMirror

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Govt orders Boracay service providers to enhance water-treatment capacity By Jonathan L. Mayuga

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@jonlmayuga

HE Department of Environment and Natural Resources (DENR) told Boracay Island’s two private water service providers to enhance their wastewater-treatment capacity to accommodate consumers willing to connect to their sewer lines.

DENR Undersecretary Jonas R. Leones said Boracay Island Water Co. (BIWC) and Boracay Tubi System Inc. (BTSI) should ensure that the existing wastewatertreatment facilities are capable of treating the huge volume of wastewater coming from their respective customers to be able to treat the water and meet the standards set by law for wastewater discharge. According to the DENR, effluents or the coliform bacteria level should not exceed 400 most probable number/100 milliliters (MPN/100ml) upon discharge to the environment. The same goes for all business establishments with their own sewage-treatment plant or STP. “That is the beauty of having an STP for business establishments,” Leones, the designated spokesman

of Secretary Roy A. Cimatu, said. “We can easily monitor if the effluents are within standards for wastewater discharge.” Leones is pushing to amend the implementing rules and regulations of the Clean Water Act to require all business establishments to secure a water-discharge permit, regardless whether they are already connected to sewer lines of water service providers.

Old tanks

BEGINNING on April 26, the world-renowned Boracay Island in the municipality of Malay, Aklan province, was closed to tourist for six months. A week into its one-month closure, however, the interagency Task Force Boracay, led by the DENR, is still scanning the beaches for hidden sewer lines

that directly discharge untreated wastewater unto the beach. Last week, using ground penetrating radar, DENR personnel were able to detect 33 pipes that illegally discharge untreated wastewater near the beach. The DENR also discovered an old septic tank. It also discovered an old sewer line built by the then-Philippine Tour ism Author it y in one of the beaches, which the DENR, chief wants to condemn and dismantle. Leones, the DENR’s undersecretary for policy, planning, international affairs and foreignassisted projects, told the BusinessMirror that enhancing their capacity to treat wastewater is the only way to sustain whatever will be gained in the ongoing rehabilitation in the pollution-challenged island resort. Since many business establishment and residential areas would soon be connected to proper sewer lines, Leones said it is imperative for the BIWC and BTSI to enhance their capacity to treat the expected increase in the volume of wastewater flowing into their wastewater-treatment facilities.

Own STPs

LEONES reiterated that all business establishments along the shores of Boracay are now required to have their own sewage-treatment plant. Also, he said big hotels and resorts with at least 50 rooms are also required to have their own STP.

“We are hoping that all business establishments will put up their own STPs as what was agreed upon in the last meeting with Cimatu.” The official added that these establishments are financially capable to put up their own STPs. Leones also said the DENR expects these establishments to comply as the Task Force Boracay races against time to accomplish and hit action plan targets before the closure period ends in October. “These businesses have the resources to invest in STPs,” he said. “There is also portable STPs now, which they can use.” Cimatu earlier said that existing sewer lines near the shores should be condemned or dismantled, while new ones should be constructed at least 50 meters away from the mean shorelines. This is to ensure that in case of a leak, the sludge or untreated wastewater will not reach the beach and contaminate the water. From now on, Leones said such policy applies not only in Boracay but to all other areas, particularly tourism destinations frequented by local and foreign tourists.

BIWC networks

Meanwhile, the Tourism Infrastructure and Enterprise Zone Authority (Tieza) clarified that the government-built sewerage system discovered by the DENR at the beachfront last weekend was built decades ago and had government approval. In a statement, representatives

from Tieza and BIWC claims the sewer system is operating and “capacitized” to prevent overflows to the beach waters. Tieza said the major cause of manhole overflows and water pollution in Boracay is the refusal of many establishments to connect to the proper sewerage system or have illegally tapped into the drainage line, the statement released through BIWC said. The company also added it plans to upgrade and expand the sewer network along Balabag Main Road, which will accommodate higher f lows coming from the beachfront area. The BIWC also vows to complete the Balabag Sewer Network Rehabilitation Project in four months. “This is a faster and more feasible alternative to relocating the sewer network which may affect more establishments and require the acquisition of rights-of-way that may take a longer time to complete beyond the closure period,” the statement read. The newly issued Executive Order 53, creating the Boracay interagency task force, directs Tieza to

undertake the completion of the drainage-system program, for one. It also commands Tieza to work with the Department of Public Works and Highways (DPWH) in the establishment of flood-control infrastructures and to ensure the completion of the expansion programs of water and sewerage system in the three barangays of Boracay Island.

Tieza’s part

FOR its part, Tieza said it has mobilized the construction of the temporary discharge pipeline to fast-track the rehabilitation activities in Boracay at the onset of the rainy season starting in June. The temporar y outfall will prevent flooding on various underground utilities and road construction projects while Tieza and the DPWH augment their declogging activities in the drainage systems and sewerage facilities of Boracay. The outfall will have a discharge pipe extended up to 800 meters off the shore of Balabag beach. It will carry drainage water from the central Boracay section.

These businesses have the resources to invest in STPs [sewage-treatment plants]. There are also portable STPs now, which they can use.”—Leones

PCCI-Aklan wants review PARC orders performance audit of cancellation of flights of CARP implementing agencies K

A LIBO, A k lan—T he lo cal chapter of the Philippine Chamber of Commerce and Industry (PCCI-Aklan) urges government, especially the Civil Aviation Authority of the Philippines, to review the cancellation of several plane flights at the Kalibo International Airport (KIA). PCCI-Aklan Secretary-General Guidon de la Cruz said several flights to and from Metro Manila and Cebu have been canceled after nearby Boracay Island was ordered closed for six months starting on April 26.

The closure also saw airline companies doubling ticket prices bound for the KIA. “Because of this, businessmen, students and balikbayans have to travel to other nearby airports, such as the Caticlan Airport and the Roxas City Airport, to go to Manila. Direct flights to Cebu have also been canceled,” de la Cruz said. “The reduction of commercial flights at the KIA created economic difficulties for both passengers and cargo traffic,” he added. Meanwhile, the roll-on, roll-off service from Caticlan to Batangas port is also full, brought about by summer

travel and strong basic trade between Luzon and the Visayas region, he added. The PCCI-Aklan board has filed a resolution to engage airline firms in consultation, thereby encouraging them to provide additional flight for Manila-Kalibo and restore the Kalibo-Cebu route even on limited basis. “The reduction of plane flights also does not help promote local tourism, trade and commerce, which are supposed to be increasing due to expansion of e-commerce, resulting into convenience in the movement of people and goods across our islands,” de la Cruz further said. Jun N. Aguirre

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HE Presidential Agrarian Reform Council (PARC) Secretariat is set to conclude a four-day National Exit Conference being held in Bolinao, Pangasinan, to audit the performance of agencies implementing the Comprehensive Agrarian Reform Program (Carp) for the period covering 2009 to 2015. The 2017 Carp Audit National Exit Conference kicked off on May 22 and will be concluded on May 25. The meeting comes on the heels of recent public pronouncements made by President Duterte to implement another round of agrarian-reform program beyond what is currently covered by the Carp and the Carp Extension with Reform. The new round is expected to include unclassified lands of public domain (by virtue of a presidential proclamation), governmentowned titled agricultural lands (to

be transferred to the DAR by virtue of an executive order) and private agricultural lands that can still be covered by the program (through an Act of Congress extending the CARP for third time). Undersecretary Luis Meinrado C. Pangulayan, who serves as PARC council secretary, said the audit of the implementing agencies aims to rate the performance of concerned government agencies in the implementation of the CARP, particularly the distribution of land to landless farmers. “The goal of the CARP audit is to ensure the proper utilization of the agrarian-reform fund as it relates to the physical performance of the agencies,” a statement by the Department of Agrarian Reform (DAR) said. “This audit would also help us evaluate the efficiency and effectiveness of CARP implemen-

tation in the countryside,” Pañgulayan was quoted in the statement as saying. The CARP audit is an activity of the Audit Management and Investigation Committee (Amic), a body formed by the PARC to ensure the transparency and accountability of the agrarian-reform program. “This is being conducted as a response to the call for an assessment of CARP implementation roused by both the Houses of Congress and other stakeholders of the program,” Pañgulayan noted. Prior to the National Exit Conference, field audit teams (FAT) were formed in nine selected regions in the country, PARC Secretariat Director James Arsenio Ponce said. Each FAT conducted field audits based on the audit plan and methodologies approved by the Amic. The FATs completed the audit in two months. Jonathan L. Mayuga

Malasakit Center to go nationwide

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WATER OF LIFE Colorful for-rent bancas are lined up at a park in a portion of Bulusan Lake in Sorsogon. According to a bill filed

by Rep. Deogracias B. Ramos Jr. of the Second District of Sorsogon in the 16th Congress, the natural vegetation surrounding Bulusan Lake serves as a watershed, providing water to the underground reservoir and lowland communities. NONOY LACZA

ALACAÑANG is eyeing to establish in other parts of the country the Malasakit Center being piloted in the Vicente Sotto Memorial Medical Center in Cebu City. Special Assistant to the President Christopher Lawrence T. Go made this statement during his recent visit in Cebu, two days before they launched the facility in the Eastern Visayas Regional Medical Center in Tacloban City (EVRMC). The EVRMC, the premier health and wellness facility in the region, has a new imposing six-story structure enhanced with a Malasakit (compassion) Center. On Tuesday Cielito S. Avanceña and Presidential Assistant for Visayas Michael Lloyd Lee Dino unveiled the marker of the new main

building as part of the inauguration ceremony while Go stood by as witness. The move signified the formal opening of the health and medical services of the hospital to the public. The Office of the Presidential Assistant for the Visayas is the lead agency behind the Malasakit Center, which is funded by the socio-civic funds of the Office of the President. Go said they are also considering the setting up of the same “one-stop shop” center in Bacolod City and Iloilo City. The possibility of setting up the center in provincial hospitals was also brought up during a news conference last Sunday in Cebu City. Go told reporters he will talk to Health Secretary Francisco T. Duque III first, considering the number of

provincial hospitals nationwide. Dino said that as of in Saturday, around 13,000 patients have already been assisted by the Malasakit Center since its launching in February. The Malasakit Center at VSMMC gets P50 million every month from Duterte, Dino added. The sociocivic funds of the president primarily come from sin taxes, according to Foreign Secretary Alan Peter S. Cayetano. The center is a one-stop shop comprised of different agencies that help families of patients who wish to settle medical expenses such as the Department of Social Welfare and Development, Philippine Health Insurance Corp., the Philippine Amusement and Gaming Corp. and the Philippine Charity Sweepstakes Office. Charles R. Pepito

Agriculture/Commodities BusinessMirror

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Editor: Jennifer A. Ng • Friday, May 25, 2018

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Import 100,000 MT of sugar, SRA told By Jasper Emmanuel Y. Arcalas

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@jearcalas

he government must allow the importation of 100,000 metric tons (MT) of refined sugar to immediately fill up the demand of industrial users for the sweetener and halt the surge in local sugar prices.

In this August 12, 2017, file photo, various brands of refined sugar are displayed in a Makati supermarket. Local industry groups on Thursday disclosed that they have urged the Sugar Regulatory Administration to allow the importation of sugar to halt the increase in the price of the sweetener. NONIE REYES

The Philippine Sugar Millers Association (PSMA) said this was the recommendation of the Philippine Sugar Refiners Institute (PSRI) to the Sugar Regulatory Administration (SRA). PSMA Executive Director Francisco D. Varua said the PSRI submitted its recommendation to SRA Administrator Hermenigildo R. Serafica on May 24, a day after the agency ordered the conversion of unshipped “D” sugar into “B” sugar to boost domestic supply. “The recommendation of the PSRI to the SRA is to allow the immediate importation of a minimum of 100,000 MT of refined sugar. This was with the backing of the whole sugar industry,” Varua told the BusinessMirror on Thursday.

“[That volume] will put [enough] supply in the market and make it available to industrial users,” he added. Varua said the Philippines could source from Thailand, where sugar is cheaper. The PSMA official is optimistic that the SRA will support the PSRI’s recommendation as it has the backing of the local sugar industry. “Admin Serafica will see that the industry is in support [of the importation] to address the problems of industrial users,” he said. Varua added that the local sugar industry is hopeful that their recommendation would immediately reach Agriculture Secretary Emmanuel F. Pinol’s table. Piñol disclosed on Thursday

that Coca-Cola Femsa Philippines had complained to Socioeconomic Planning Secretary Ernesto M. Pernia that sugar farmers are not supplying them with the volume they have committed. “Coke is complaining to the Neda [National Economic and Development Authority] because the problem right now is that farmers cannot supply Coke,” he told reporters in an interview on the sidelines of the Agriculture Trade and Investment Forum at AG New World Hotel in Manila on May 24. “Pernia called me asking if there is a sugar shortage. I said, none,” Piñol added. Pernia confirmed to the BusinessMirror that executives of the beverage giant had approached him to tell him about their sugar supply challenges. He said Coca-Cola Femsa executives lamented the failure of local sugar suppliers to meet their demands. “It appears to be [an] artificial shortage as suppliers, traders, millers speculate on rising sugar price. Secretary Piñol is convening a meeting of millers, suppliers, traders, stakeholders to iron out the issue,” Pernia said. Coca-Cola Femsa Philippines Director for Corporate and Regulatory Affairs Juan Lorenzo Tañada confirmed to the BusinessMirror that the company is experiencing supply issues. “We’ve expressed some concerns about our supply chain to relevant government agencies, such as the SRA,” Tañada said via SMS. “As sugar is our main sweetener, we cannot help but emphasize the necessity of its stable supply in order to ensure our continued unhampered operations,” he added.

Tight supply

While the supply of refined sugar is tight, Varua assured that there is enough raw sugar to meet domestic demand. “There are a lot of [sugar] stocks but in raw form.”

“Refining was delayed and refiners lacked bagasse to sustain their operations as a result of lower sugarcane output, coupled with the delay in harvesting due to the lack of sugarcane cutters,” he added. SRA Board Member Roland B. Beltran told the BusinessMirror that sugar refiners are facing a tightness in supply of raw sugar due to unreasonable high prices. To arrest the increasing prices of raw sugar, the SRA issued Sugar Order (SO) 9 on May 23, which authorized the conversion of D sugar (for export) to B sugar (for the domestic market), to boost the supply of raw sugar. “It is in the national interest to institute measures that will bring about stabilized prices of B domestic sugar, which are reasonably profitable to the producers and fair to the consumers,” the SRA said in SO 9, a copy of which was obtained by the BusinessMirror. “Following the directive of the President to prioritize the needs of the domestic market, the secretary of agriculture directed the SRA to manage the domestic sugar supply to ensure ample and stable supply of sugar for the domestic market, particularly during the off-milling season and early months of the incoming million season,” the SRA added. Beltran said as of May 24 the SRA has verified 59,189.42 MT of D sugar, while about 14,120.39 MT

remained unverified. Under SO 9, the SRA said the volume that will be allowed to be converted to B sugar are only those D sugar quedans which would be verified until May 31. However, Varua said the volume of unshipped D sugar to be converted to B sugar is insufficient to meet the demand of industrial users, prompting local industry groups to recommend importation. He said the importation of refined sugar would allow domestic prices to go back to a “reasonable” level of P1,800 per 50-kilogram bag, from its current average of P2,500. The attached agency of the Department of Agriculture said that “market forces are driving domestic prices of sugar up due to a drop in the estimated production for crop year 2017-2018.” Piñol said the tightness in sugar supply was due to traders who resorted to speculation following the rise in the price of the sweetener. “Local sugar producers speculated because the prices of sugar right now are high. They do not want to sell their committed sugar volume to Coke anymore,” he said. “I will have to meet with them on Monday. I have called a meeting with the stakeholders and I will ask them if they are reneging on their commitment to supply Coke,” Piñol added. With Cai U. Ordinario

Bird flu slashed duck production in Q1–PSA T he country’s duck output in the first quarter declined by 2.67 percent to 9,793 metric tons (MT), from last year’s 9,779 MT due to the avian-influenza (AI) outbreak in Luzon last year, according to the Philippine Statistics Authority (PSA). “Contributing to this decline was the reduction in inventory of laying flocks in Ilocos region, Cagayan Valley, Central Luzon, Eastern Visayas and Caraga,” the PSA said in a report. However, despite the 6.3-percent decline in output, Central Luzon

remained the country’s top duckproducing province. The region’s output of 4,013 MT was 270 MT lower than the 4,283 MT produced in the same period last year. Central Luzon was followed by Soccsksargen and Western Visayas with 1,140 MT and 750 MT, respectively. On an annual basis, the production of the two regions expanded by 2.52 percent and 3.6 percent, respectively. “These regions contributed about 62 percent to the country’s total duck production,” the PSA said.

The country’s duck inventory as of April 1 expanded by 3.49 percent to 11.22 million heads, from 10.841 million heads recorded in the same period last year. Central Luzon had the most number of ducks at 3.456 million heads, which accounted for 30.8 percent of the total inventory during the period. “Inventories in both backyard and commercial farms went up by 3.54 percent and 3.38 percent, respectively,” the PSA said. “Of the total duck population, about 69 per-

cent were raised in backyard farms.” The duck population in backyard farms grew by 11.83 percent to 7.731 million heads, from 6.913 million heads a year ago. The remaining duck inventory during the period, which reached 3.488 million heads, was with commercial raisers. The figure was 3.93 percent higher than the 3.356 million ducks commercial raisers held last year. Due to lower volume of production, the average farm-gate price of duck in the first quarter expanded

by nearly 4 percent to P51.77 per kilogram, from P49.79 per kg recorded in the same period last year. Jasper Emmanuel Y. Arcalas

As PHL trails rivals, experts pitch faster infra rollout Continued from A1 Only tax policy won the respondents’ nod, owing to the passage of the Tax Reform for Acceleration and Inclusion (TRAIN). Meanwhile, the efficiency of Philippine firms also slipped by 10 notches to 38th from 28th last year, according to the rankings. This was owed to the declines in financial performance, labor market, attitude and values, and management practices—all leading to the country’s near-bottom performance in overall productivity and in labor productivity. For the longest time, infrastructure has been the Philippines’s headache in the survey, and is down to 60th from 54th in the previous year. The country was among the three lowest scorers in basic infrastructure, scientific infrastructure and education infrastructure.

The survey had the United States returning as the most competitive economy in the rankings, followed by Hong Kong, Singapore, the Netherlands, Switzerland, Denmark, the United Arab Emirates, Norway, Sweden and Canada. Those in the bottom were mostly economies facing either political instability or economic upheavals, including Venezuela, Mongolia, Croatia and Brazil. The IMD rankings also monitored competitiveness in five member-states of the Association of Southeast Asian Nations. Singapore was the most competitive Asean economy, followed by Malaysia at 22nd, Thailand at 30th, Indonesia at 43rd and the Philippines at 50th. In a policy brief by the Rizalino S. Navarro Policy Center for Competitiveness, research arm of the Asian Institute of Management, the government is urged to fast-track the “Build, Build,

Build” program to address the competitiveness gap of the country. This should be done alongside the development of social infrastructure, mostly on labor improvement and education. “This [low placing in survey] reflects the need to address poor infrastructure in the Philippines, not just physical infrastructure that the current administration’s ‘Build, Build, Build’ program seeks to address, but also social infrastructure that promotes human capital formation, such as education and research and development. Good infrastructure promotes competitiveness by connecting markets and production sites, improving the flow of information and technology and reducing the costs of production,” the paper read. “Poor infrastructure limits many possibilities in the Philippines. As an example, airport congestion, poor condition of roads and inadequate public transportation prevent full maximi-

zation of the potential of tourism. It also hinders businesses from reaching potential markets and consumers from reaching all alternative suppliers of goods and services,” it added. The policy brief suggested that the government increase its investment in human capital, in order to improve labor productivity—one of the country’s drawbacks in the rankings. It also underlined the need for the government to retool the skill set of its workers to swim along the changes brought about by industrial reforms. Last, the policy brief told the government to strengthen its institutions that will allow Manila to compete with its Asean neighbors on ease and cost of doing business, quality of governance, implementation of the rule of law and fighting corruption. The paper also suggested boosting digital competitiveness and managing well the shortterm inflation.

This ex-BHP engineer is ready to supply camel milk

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arcel Steingiesser gave up a 14-year career at the world’s biggest mining company to stake his future on what he says is an even better opportunity—Australian camel milk. That’s because while demand is growing in the United States and Asia as camel milk’s purported health benefits attract drinkers outside the traditional markets in Africa and the Middle East, there simply aren’t enough camels available globally to supply the milk that retails for as much as $19 a liter ($72 a gallon) in parts of Asia. Australia can fill that gap because it’s home to the biggest herd of wild camels in the world, said Steingiesser, who joined Good Earth Dairy as CEO in 2016, without ever having tasted the slightly salty milk that camels produce. Now he drinks it regularly. “We have the opportunity to make the best camel milk,” Steingiesser said at Good Earth’s pilot dairy 100 miles north of Perth as Bob, a two-year-old male camel, nosed around his pockets for a handful of pellets. “Australia has an incredible reputation in food quality safety standards and that’s a great opportunity for all camel dairies in Australia.” Until now, camels have been a problem in Australia. Wild camels have wreaked havoc across the Outback since they were first introduced in the 1840s to help explorers navigate the vast nation. Bloomberg News

A10 Friday, May 25, 2018 • Editor: Angel R. Calso

Opinion BusinessMirror

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editorial

China-Philippines: It’s complicated

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ou have to start with the firm assumption that the other guy—whether a person or a nation—is going to operate and act on its own self-interest. To believe that anyone except maybe your mother would put your welfare before theirs is naïve and foolish—and often dangerous. You also have to try and understand whether action is being taken for short-term or long-term gains, or both. The current panic over China’s invasions, incursions and exploits in the South China Sea ignores the fact that this has been going on for decades. Woody Island, the largest of the Paracel Islands, where all the controversy over the landing of Chinese bombers is focused, is claimed by Vietnam, Taiwan and China. But China has occupied the island since 1956. In 1946, the Nationalist Chinese government established a permanent presence on Woody Island. In having effective control over much of the South China Sea, is this a matter of China wanting to protect itself from foreign naval forces in the event of an armed conflict? Or does China want to have a military platform to start a war? Does China want to protect its shipping interests of the Port of Shanghai, the biggest port in the world based on cargo? Or does China want to control shipping to South Korea and Japan? Good luck trying to figure all that out. However, the reality is that motive may never be known, and the actions are all that we can give attention to. Nonetheless, the Philippines must act in its own self-interest. To this end the government pursued the arbitration case, which was ruled in our favor. Yet, what was our own end game with the arbitration ruling? Was it expected that China would give in to the legal ruling? If so, whose brilliant idea was that, and why did they think so? More likely was the belief that the United States would take action that would, in some way, push China to be cooperative. Perhaps at some point the US government gave some assurances to the Aquino administration. Here again, if so, what happened? Further, why didn’t the United States take a much stronger stand with the Philippines even before the arbitration ruling came down? Assuming that we expected the US to take concrete steps to help the Philippines, what was the short- or long-term benefit to the United States that kept them at double-arms length from helping the Philippines enforce the claim? Theoretically with some foundation is that the area holds an immense amount of wealth in natural gas and crude oil. It would seem that the US would be interested in helping to keep at least some of that natural resource from being under the complete control of China, which, while not a military adversary at this point, is definitely economic competition. Do we assume that the United States was simply incompetent at protecting its own interests? Or was it in the interest of the US to back away? There are those that applaud Vietnam for being strong with China. But the reality is that Vietnam just caved in on oil exploration in its exclusive economic zone when China threatened it. Furthermore, China’s direct investment in Vietnam ($11.2 billion in 2017) is greater than the total Foreign direct investment from all sources to the Philippines. There are those that say Filipinos should boycott Chinese products. You can start today by throwing away your multivitamins and never using vitamin C or powdered juice mix again. China produces 90 percent of the global supply of vitamin C (ascorbic acid). Things are never as simple as we want them to be. Since 2005

BusinessMirror A broader look at today’s business

Too efficient James Jimenez

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t might be counterintuitive, but there are times when the government becomes too efficient. When that happens, it is usually not the fault of the government, but of people—both those who form the government and those who are a part of the undifferentiated mass of the governed. When an idea comes along that captures the imagination of the people, the focus tends to be on the outcome, rather than the process of achieving the outcome. The desired result assumes the character of an unquestionable good—the wisdom of which no one in their right mind would publicly doubt, lest their commitment to all things right and just be called into question and—let’s be honest—lest they look stupid. Getting to the desired result in the shortest possible time then quickly becomes more important than how you get there. The postponement of the scheduled 2013 Sangguniang Kabataan (SK) elections comes to mind. Back then, there was a general consensus that the SK had all but lost its way; there was a mounting

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call for its outright abolition, and the Commission on Elections uncharacteristically took a definitive stand to strike an electoral exercise from the books. As a consequence of this overwhelming confluence of circumstances, the postponement of the polls steamed through Congress with such efficiency that many who had planned to oppose it were left scratching their heads. To this day, I actually cannot recall any significant public debate—let alone Congressional hearings—that preceded the postponement, and I can only assume those were actually held. Luckily, things worked out eventually. The SK Reform Act that

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nternet has dominated the way we live since the early-1980s. Service accessibility is right at our fingertips. Since the late1990s, the Social Security System (SSS) has been working for an anytime, anywhere service for its members based here and abroad. These technological services are discussed here. Through the SSS web site and My.SSS online platforms, both employers and employees may access their SS information anytime, anywhere with just a computer, tablet or mobile phone with an Internet connection. They can browse and update their information, check and print their records, and download SSS forms. Employers, on the other hand, may also submit their collection lists and employment reports, certify employee salary-loan applications, submit employee maternity and sickness notification, and generate and print electronic collection list containing the Payment Reference Number (PRN) for contribution payment. For individual members, My.SSS facility also allows them to set an appointment at any SSS branch, submit their benefit applications

like salary-loan application, maternity notification for self-employed, voluntary, nonworking spouse and overseas Filipino workers. And just recently, the pension fund allowed the submission of technical retirement-claim application through this facility. Members who have reached their technical retirement age, or 65 years old, no longer need to go to any SSS branch to file for their retirement to claim their monthly pension. Also, for members who are earning more than the maximum salary credit of P16,000 and wish to save more, they may submit their Personal Equity and Savings Option Fund enrollment application through their My.SSS account. Another feature of the My.SSS facility is the simulated retirement benefit calculator. With this feature,

resulted from that remarkably red tape-free episode is actually better than the old version of the SK system, and—on paper at least— seems to have a better than even chance of actually doing some good for the youth. But, more and more, I’ve been asking myself—what if the same thing happens again, but this time, we’re not so fortunate with the outcome? Take the exit of the United Kingdom from the European Union, for example. Heeding the call of an activated population, Brexiteers—including those who were actually in government—thought nothing of putting themselves through all manner of intellectual—and even moral—contortions, all in the name of the “vox populi.” Well, the populi did get what they thought they wanted, but now all sorts of nasty implications are popping up that no one, not even the most vocal Brexiteers, can suggest solutions for. As a consequence of the efficiency with which the desired outcome was accomplished, it seems now that an entire nation might be in for some really rough times. Which brings me to federalism. Just to make it very clear, I’ve no opposition to the idea of breaking up the unitary Philippines into a handful of federal states. What I am concerned about is that, in all the

excitement over the proposed transformation, very little has actually been said about how elections will be handled in a Federal Philippines. And since I am assuming that even federal countries hold elections, that seems to be a significant omission. The most comprehensive set of recommendations I’ve read so far —and there have been quite a few— doesn’t even mention the fate of the Commission on Elections, let alone the treatment for the hundreds of other government agencies that currently exist and are—invisible though they may be—indispensable to the proper functioning of the government. And yet, the efficiency of the process, pushing the nation closer and closer to the point of decision, is staggering. With the 2018 barangay and Sangguniang Kabataan elections all over but for the shouting, perhaps it is time to return to this pressing topic. The drive toward federalism certainly hasn’t lost any steam in the two months that the nation has been preoccupied with the village polls; now seems to be the perfect time to slow the efficiency of the transformational engines and take some time to discuss exactly how elections in the envisioned Federal Philippines are going to be managed. I have some ideas.

an individual member can see their estimated pension with their current contributions. And last, an individual member can generate and print their Statement of Account containing the PRN for their contribution payment. Another way to access SSS information is through e-mail, member_relations@sss.gov.ph. All queries, concerns and suggestions may be sent to SSS in just a snap of your fingertips on your keyboard. Members just have to keep in mind that their SS numbers should be indicated in their e-mail for quicker evaluation of their response. For those without Internet access, members can call the SSS hot line at 920-64-46 to 55 or 917-7777, which answers members’ queries 24 hours, seven days a week. Should they have problem accessing the hot line, the interactive voice response system is also there to help them, an automated telephone-assistance service for members that responds to inquiries on contributions, benefit claims, salary-loans information and eligibility requirements. They just have to be ready with their basic information to verify and access their SSS basic data. A mobile phone is now considered as basic necessity for an individual. With such gadget, a member’s basic SSS information is just a text away with TextSSS. Members may inquire

through the TextSSS facility about the status of their contribution payments, loan status and balance, document requirements and the SSS branch nearest to them. Just like the TextSSS, basic SSS services are just a click away through the social-networking sites like Facebook (SSSph), Twitter (PHLSSS) and YouTube (MySSSPhilippines). The SSS “kiosk” allows access to SSS Application systems with the use of SS Card or Unified Multi-Purpose ID (UMID) Card. This kiosk distributed nationwide at SSS branches allows members to inquire about contributions, loan, benefits and ID information. At present, there are 280 kiosks distributed in all SSS branches nationwide. Members may also transact through this facility their salary loan, maternity notification, SSS Web registration, technical retirement application, Annual Confirmation of Pensioners and change of contact information. The kiosk, however, is usable for members with SSS ID or UMID card. Fingerprint matching is also required in this facility. The SSS will always make way to extend its services to its members in all possible ways. The abovementioned ways are just a few of its efforts to make sure that member are at peace that their contribution is intact and that they can always reach the SSS for their concerns.

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Opinion

Pension systems

Then I scorn to change my state with kings

BusinessMirror

Tito Genova Valiente

Ser Percival K. Peña-Reyes

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his month is graduation season, which formally marks the commencement of young Filipinos’ new lives in the world—in other words, the beginning of their professional or working lives. At the same time, news reports feature the Social Security System (SSS), whose fund life is projected to last for just seven more years (until 2026), if the second tranche of pension hike were to be implemented next year without a corresponding contribution hike. Understandably, retirement planning might not yet figure prominently in a fresh graduate’s list of priorities, but it pays to be aware of some basic concepts regarding pension systems as early as now. By definition, a pension is a financial product where one puts money to build up a fund to use upon retirement. This retirement pot is built up by investing over a number of years—say, 40 years, if one begins to save regularly from age 20 (graduation age) to age 60 (retirement age). The money saved into a pension gets a boost from tax relief such that people save out of untaxed earnings. It is useful to distinguish between a fully funded pension system and a pay-as-you-go pension system. In a fully funded system, one will get back whatever he paid into the fund. This simply means that the pension is based on one’s previous contributions and the interest rate. In a pay-as-you-go system, one still pays into the fund, but the income he will receive as a retiree will be based largely on the contributions and taxes from the young workers in the economy then. So, in principle, young people pay their contributions and taxes, while old people receive their pensions. In the Philippine context, the SSS operates as a pay-as-you-go pension system. Four criteria can be used to compare these two pension systems. First, there is fairness. Some argue that it is unfair to just let young people pay for old people. One should get exactly what he pays into the system, plus interest. In terms of intergenerational fairness, a fully funded system could be considered fair in an absolute sense. However, some argue that as the economy grows, it is only fair to let old people partake of that growth and enjoy a higher standard of living. After all, the economy would not have been able to grow without old people’s valuable contributions during their economically active years. So, as one gets richer, it is a small sacrifice to pay a little bit more so that old people get to benefit, as well. In a relative sense, a pay-as-you-go system could be considered fair because intergenerational transfers are based on a percentage of income. Second, there is sustainability. On the one hand, a fully funded system is more sustainable because people simply get back their contributions. On the other hand, a pay-as-you-go system might not be as sustainable due to a changing demographic profile where there are more elderly persons for every 100 working-age persons (an increasing elderly dependency ratio). Ageing economies like South Korea, for example, are in a situation where there are more elderly people and fewer young

It is useful to distinguish between a fully funded pension system and a pay-as-you-go pension system. In a fully funded system, one will get back whatever he paid into the fund. This simply means that the pension is based on one’s previous contributions and the interest rate. people. The sustainability problem can be addressed by reducing pensions, hiking contributions, or both. These solutions are obviously painful and politically unpalatable. Third, there is uncertainty. In a fully funded system, people know their payments and can predict future income receipts, although there is some risk with interest rate changes. In a pay-as-you-go system, payments and future income receipts might be harder to determine because of changes in government policies, although risks can be mitigated by clarifying rules regarding payments and receipts. In the Philippine context, such rules are spelled out in the Social Security Law of 1997 (Republic Act 8282). Last, there is macroeconomic impact in terms of savings and economic growth. In theory, both pension systems generate savings, which are channeled into investments, which, in turn, could lead to economic growth. Nevertheless, in a fully funded system, it will take about 40 years before people get to enjoy the fruits of their savings, while in a pay-as-you-go system, there is a first-generation advantage, implying that the pension system can be implemented immediately. The young people are taxed, and the old people receive pensions right away. So, which system is better? There is no straightforward answer to this question, although one can have a mixed system where part of one’s savings goes to a fully funded system, and another part goes to a payas-you-go system. One of the key features of the ongoing tax reform is the adjustment of tax rates that effectively puts more money in the hands of more people. This should be seen as a golden opportunity for Filipinos, especially fresh graduates, to save and invest more. After all, social security should be seen as not just a state obligation but also a personal responsibility. Ser Percival K. Peña-Reyes is a faculty member of the Ateneo de Manila Economics Department.

Friday, May 25, 2018 A11

“Not all the water in the rough rude sea Can wash the balm from an anointed King;” —William Shakespeare, Richard II

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BC was faithful to proceedings; CNN was rich in commentaries. Both BBC and CNN were devoted networks to the entire event. Even as people were just gathering around Windsor, the commentators and field journalists dressed as if they were to sit right at the pews fronting the Queen. These journalists toughened by leaders, dumb perhaps but powerful, they interview each day, became that day soft and sentimental about a prince and his princess, who, later on, we will be informed properly, would become the duke and his duchess.

We, in the Philippines, had waited for that wedding day. The same way we waited for a beauty pageant, where each year we latch our waning stars to beauty queens who practice how to answer the predictable questions with answers lengthened and stretched till the reply assume a heavy life of its own. The same way we looked forward to the first fights of Pacquiao, he who had assumed the title “National Fist,” before we voted him to the Senate to finally punch home the point that there is really no big difference between politics and boxing. That day we laundered world history, the way money is laundered each day from one bank to another, from one sordid country to another. That day we were all circumspect, perhaps to show those behind the big event, the socalled royalties, that we too, could be royal if not in blood and lineage, at least in behavior and demeanor. We forgot how royalties came about. We could not be bothered by the killings and the duplicities and compromises in the histories of those residing in castles. This was the New World twice over. An American actress was going to marry a prince who looked as if he was made for a theme park. We did not mind that in describing the bride two modifiers were held suspect—“American” and “actress.” It was as if the monarch had gone

down, as if a revolution had taken place only because a woman who was American and actress got accepted into the family of Windsor. The bride, we felt, belonged to us and were us and we were apologetic for the bride. But never mind. If indeed a revolution had ensued, the credit and the debit should not go to the monarchy or the royals. Everything should go to us. We staged the drama. We were starstruck. We were royalstruck. Over at CNN, commentators were all over the place: There were royal commentators and observers; there were stylists; there were biographers. But the best thing the network fielded was a culture commentator. She was Bonnie Greer. Since all of us that day were at the foot of that massive chapel, anticipating our walk through a church with a nave and a quire/ choir to remind us that not everyone is equal before the Queen’s eye, we needed a view from an observer sober enough to guide us through the trance of this fairy tale. In fact, it took a long time for us to notice how giddy the annotations were coming from biographers and observers who seemed to know the Castles and the Queens. We would never really know these people was how Greer put it. At that point, commentators were pouring insider’s account of the royalties, defining their charms and their cuteness, their pains and privileges. But

Gratitude through tithing Rev. Fr. Antonio Cecilio T. Pascual

SERVANT LEADER

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ach one of us is God’s beautiful masterpiece. Through His powerful hands He can do great things for the goodness of all. But there is one exemplary thing that everyone hardly finds out on how to be grateful. Most of us do not have any idea on how to express our gratitude except to help fellow brethren through tithing. This act of generosity will surely inspire more Christians to do the same way like Jesus did. Let us all remember that the “Lord our God, for it is He who gives us

power to get wealth, that He swore to our fathers, as it is this days.” (Deuteronomy 8:18) In tithing we learn how to put God first in all graces that He has

Greer, almost dousing the enthusiasm of the wedding party, continued how these royals would allow us to think we know them the way we know them. Her voice, however, almost sounded like the voice in the imperial wilderness, like this column perhaps in the days to come. But the days to come indeed came. Historical footnotes now are grazing the online fiefdoms recalling for us the connection between the colored America and Markle, that there were loyalists who fought on the side of Britain when the empire was at war with a rebel that is now the US of A. That it was no accident that a gospel song was sung by a gospel group, “Stand by Me,” because, as documented, the song was inspired by a gospel called “Stand By Me, Father,” composed by the great Sam Cooke with another composer. That it was significant to note how Oprah spent so much time looking for her name among the “Lesser” when, in fact, she was to be seated up there with the “Greater,” with her back against the name of Knights and colonizers. A breath of fresh air is what you hear or read about the wedding, the presumption being the royalty sits around air stale and heavy. At the end of the day, that stale air won. The American princess will no longer be a private individual. Poor princess and prince, the media announced the day after the wedding, they had to work instead of going on their honeymoon. Almost all of us swooned, some fainted at the heartbreak the couple had to face so soon. Of course, we should know better, they were not really working, they were displaying themselves, an act that is already a chore for these royalties who are

given, trust Him in time of darkness as much as we give in whatever He gives in us. Let us learn how to “store our treasures in heaven, where moths and rust cannot destroy, and thieves do not break in and steal. For where our treasure is, there your heart will also be.” (Matthew 6:2) “If one of our brothers should become poor, in any of our towns within our land that the Lord our God is giving us, we shall not harden our heart or shut our hand against our poor brother, but we shall open our hand to him and lend him sufficient for his need, whatever it may be.” (Deuteronomy 15:7-8) We should “not be anxious about anything, but in every situation, by prayer and petition, with thanksgiving, present our requests to God. And the peace of God, which transcends

Democrats urge Trump to ‘stand up to Opec’ amid rising oil price By Stephen Cunningham Bloomberg View

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enate Democrats are urging President Dona ld J. Trump to rein in Organization of the Petroleum Exporting Countries (Opec) with pump prices at a three-year high, and even send his energy secretary to the cartel’s June meeting to reinforce the message. The reality is that Trump has few tools at his disposal to make life more bearable for motorists as the summer driving season approaches,

other than reversing some major foreign policy efforts, such as sanctions on Venezuela or walking away from the Iran nuclear deal. Tweeting hasn’t worked: Crude has rallied 6 percent since the president tweeted last month that rising oil prices “will not be accepted.” Still, Senate Democratic Leader Chuck Schumer exhorted the president to “stand up to Opec” at a news conference in Washington on Wednesday. In a letter to the president, Democrats, including Rob Menendez and Ed Markey, called on Trump to send

Energy Secretary Rick Perry to next month’s Opec summit in Vienna to press the case for stable crude prices, a suggestion shrugged off by analysts. “The influence of the US on an Opec meeting is basically zero,” said Thomas Cape, senior analyst at Evercore ISI in New York. Still, the senators urged Trump to begin international dispute proceedings against countries that “artificially inflate” oil prices, as well as boost the use of biofuel alternatives and abandon plans to roll back fueleconomy standards.

Sell reserves

The simplest way for the president to influence oil prices, according to Cape, would be to sell off some of the nation’s emergency oil reserves, created decades ago to protect against supply disruptions. The stockpile currently stands at about 661 million barrels. Flooding the market with crude just as supply is tightening could weaken prices. “It’s the only viable option on the table,” said Cape. “The evidence suggests it can be an effective tool but it’s got to be deployed and structured properly to achieve that.”

Congress has already authorized several sales of reserve oil through 2027, but they’re staggered in such a way that they’re unlikely to move markets.

Gasoline climbing

Trump may be a hostage to a fortune of his own making, after blaming former President Barack Obama for high gasoline prices when his predecessor was in power. The price of gasoline has climbed 19 percent this year to $2.95 per gallon, the highest level since November 2014. High prices are

there because we put them there. But our politesse was relentless. We looked at the mother of Markle, seated so timidly and almost despondently, and concluded how regal she was. If the wedding ceremonies were in the good manners and right conduct of us good people, she should be seated right there beside her Compadre Charles and chatting with Camilla, who should be ruffling those pink feathers atop her dress. We should be complaining about how the grandmother of the bridegroom should have been there earlier because they are on the male side, the gallant side. But we let all this go. All because we bleed for the royal blood. Online now and being circulated are postings making fun of the dresses and costumes of the guests in the Royal wedding. See, the people who, just last week, worshipped at the altar of royalties and celebrities are now throwing stones and brickbats at them. That is my point. We made these princes and princesses and constructed the castles and bulwarks for them so we could be entertained. The fascinators had stopped fascinating us. We had been duped. And for that lady who had the time to take note how tacky practically all the clothes of the guests were that lovely day, well, she is being dismissed now as funny and also bitter. Lucky for her and this columnist as well, this is 2018; otherwise, we could have been scheduled already for execution near the castle of our choice. I choose, for budget and practical purposes and for bad or good, our very own Enchanted Kingdom.

E-mail: titovaliente@yahoo.com.

all understanding, will guard our hearts and our minds in Christ Jesus.” (Philippians 4:6-7) My dear brothers and sisters in Christ let us all remember that “whoever is generous to the poor lends to the Lord, and he will repay him for his deed and whoever closes his ear to the cry of the poor will himself call out and not be answered.” (Proverbs 19:17, 21:13) To know more about Caritas Manila, visit or follow us on Facebook: CaritasManilaInc. For your donations, please call our DonorCare lines 5639311, 564-0205, 0999-7943455, 09054285001, and 0929-8343857. Make a habit to listen to Radio Veritas 946 in the AM band, or through live streaming at www.veritas846.ph and follow its Twitter and Instagram accounts @veritasph and YouTube at veritas846.ph. For your comments, e-mail veritas846pr@gmail.com.

eroding the gains from Trump’s historic tax cuts. The average middleclass household saw annual tax-cut savings of around $930, and every $1 rise in gasoline prices will eat up about half of that, or $500, according to analysts at Height Securities Llc. “What they got in the tax break just got washed away in higher gas prices,” said Sen. Maria Cantwell, the top Democrat on the Energy and Natural Resources Committee. Given the global nature of the oil market, it’s hard to shelter anyone from the impact of higher prices.