Businessmirror may 30, 2017

What drives bad behavior?

By Greg Navarro Part Two

(In this second installment, the writer discusses the four remaining drivers of misconduct that the Deloitte Center for Regulatory Strategy identified based on its study of the findings of various conduct-related enforcement actions, regulatory reviews, and firm remediation programs in the financial services sector.)

Complex, disconnected, or “growth at all costs” business models

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In large, complex organizations, there is a risk that branches or offices will develop their own cultures and behaviors that may not necessarily align with the values that are espoused by headquarters.

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One US-based financial services firm was recently subjected to a congressional grilling after it was revealed that thousands of its employees opened millions of accounts without the consent of customers. Now allegations have surfaced that in some branches, that practice took on a particulary sinister shape: in states where there is high incidence of illegal immigration, employees are claiming

that management ordered them to round up highly vulnerable undocumented workers, drive them to the bank’s nearest branch, and then open accounts for them. Not surprisingly, the bank’s official spokesman denied the allegations on the basis that this kind of behavior is inconsistent with the institution’s values.

Continued on A2

BusinessMirror A broader look at today’s business

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Tuesday, May 30, 2017 Vol. 12 No. 229

Tourism industry hit by martial-law declaration

By Ma. Stella F. Arnaldo

@akosistellaBM Special to the BusinessMirror

F

OREIGN travelers, especially from South Korea and Japan, have been canceling their trips to Manila and Cebu because of the declaration of martial law in Mindanao.

As this developed, the Department of Tourism (DOT) said it continues to monitor the situation and safety of tourists nationwide, as a team prepares to leave for Seoul on

Thursday to clarify the issues concerning martial law with Korean tour operators and travel agencies.

Flag carriers Philippine Airlines (PAL) and Cebu Pacific Airways (CEB),

BAUTISTA: “Advisory of assurance from the DOT and the government is much appreciated, so we hope to have this.”

also confirmed canceled bookings on scheduled flights from South Korea and Japan to Manila and Cebu.

President Duterte declared martial law in Mindanao on May 23, after government troops clashed See “Tourism,” A2

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THE ENTREPRENEUR

he terrorist attack in Marawi City, which prompted President Duterte to declare martial law in the whole of Mindanao and compelled him to cut short his official visit to Russia, was a very unfortunate event as it happened amid the President’s latest effort to open new markets and sources of investments for the Philippines.

Businessmen generally reacted positively to the declaration of martial law, recognizing the need for quick action to stop terrorism before it establishes a foothold in the country. I hope the President will succeed in resolving the problem so as not to derail economic growth, particularly in Mindanao.

Continued on A10

DUTERTE ASKS HOUSE BMReports TO RUSH PASSAGE OF Technology, economy boost pawnshops in PHL TAX-REFORM PACKAGE P A

By Rea Cu

resident Duterte, acting on the Department of Finance’s (DOF) request, on Monday certified as urgent the Tax Reform for Acceleration and Inclusion Act (TRAIN), giving the House of Representatives the mandate to approve the measure by Wednesday.

Finance Secretary Carlos G. Dominguez III made the appeal in a memorandum to the Chief Executive, in the hope that the House could pass the TRAIN before Congress goes on its adjournment sine die on June 2. Its last scheduled session day is on Wednesday.

“We are transmitting this letter of President Duterte certifying to the necessity of the immediate enactment of House Bill [HB] 5636 [the proposed Tax Reform for Acceleration and Inclusion Act],” Executive Secretary Salvador C. Medialdea said in his letter to Speaker Pantaleon D. Alvarez dated May 29.

The head of the Presidential Legislative Liaison Office, Adelino B. Sitoy, was also furnished copies of the letter, according to the DOF. The TRAIN contains the first package of the DOF-proposed comprehensive tax-reform program, which aims to lower personal income-tax rates and implement offsetting measures, like broadening the taxpayer base, limiting value-added tax (VAT) exemptions, and

increasing excise taxes on oil and fuel products, among others.

“The benefits to be derived from this tax-reform measure will sustainably finance the government’s envisioned massive investments in infrastructure, thereby encouraging economic activity and job creation; as well as fund the desired increase in the public budget for health, education and social programs to alleviate poverty,”said Duterte in a separate letter to Senate President Aquilino L. Pimentel III. Both the House and the Senate will reopen for the Second Regular Session of the 17th Congress on July 24, when the President is to deliver his second State of the Nation Address.

@ReaCuBM

Part Two

The House can only vote on third and final reading on any bill that it has already passed on second reading after copies of this measure are given to lawmakers at least three days before the date of final voting. This rule can be dispensed with, however, for bills certified as urgent by the President.

“We believe that the President’s certification of the tax-reform bill as an urgent legislative measure that can help ensure timely and full

report by Ken Research Pr ivate Ltd. published in April last year asserted pawnshops primarily serve the interest of the lower-income and middle-income classes of Filipino society. “ Their remittance and easy credit requirements [especially, are addressed] since this population cluster constitutes the unbanked members of the population,” said the report, titled “Philippines Pawnshop Market Outlook to 2020—Convenience with Pawning and Remittance Services to Stimulate Growth.”

The report added that unbanked Filipinos also use pawnshops to pay various kinds of bills. Although pawnshops are not much preferred for payment of bills, its market presence will help boost the growth of bills-payment services through pawnshops, the report said.

Another report, this time by the National Tax Research Center (NTRC), noted that pawnshops play a vital role in terms of contributing to the growth and development of the economy.

See “Duterte,” A2

Continued on A2

Shortcut

PESO exchange rates n US 49.8390

Pedestrians pass by three pawnshops in Cubao, Quezon City, on May 28. The National Tax Research Center has said the pawnshop industry dominated the financial system of the Philippines in terms of number of branches in 2014. It posted around 17,422 branches for the year, while the banking sector only had 10,361 branches. NONOY LACZA

n japan 0.4481 n UK 63.8487 n HK 6.3961 n CHINA 7.2541 n singapore 36.0812 n australia 37.0304 n EU 55.7001 n SAUDI arabia 13.2897

Source: BSP (29 May 2017 )

BMReports BusinessMirror

A2 Tuesday, May 30, 2017

Duterte. . .

Continued from A1

passage of the tax-reform package before the close of the session on June 2, so that the benefits of the reform can be felt sooner,” Dominguez said in his memo to the President.

House Committee on Ways and Means Chairman and PDP-Laban Rep. Dakila Carlo E. Cua of Quirino said that, with the certification from Malacañang, the lower chamber may approve the bill on second and third readings in a day before Congress goes on adjournment sine die on May 31. “It is possible [to approve the bill before the break on Wednesday due to] the urgent certification from the Palace.”

The DOF submitted CTRP’s first package to Congress last September 26 and was filed as HB 4774 in January 2017 by Cua. He said there were still four remaining interpellators for the tax bill as of 6:20 p.m. on Monday.

The House, Cua added, will also consider the individual amendments submitted by the lawmakers after the period of interpellations.

“It’s continuing deliberation and debates.

There is also a period of amendments, where all the amendments will be voted upon [by House members].”

The lower chamber, he said, will most likely adopt an amendment that will retain the VAT exemption for cooperatives that where initially lifted in the DOF-backed bill.

TRAIN badly needed

Dominguez stressed in his memo the dire consequences of Congress’s failure to pass the TRAIN bill, given its design to help generate more revenues for the Duterte administration’s public investments over the next half-decade to support its envisioned Golden Age of Infrastructure, among others.

“To achieve these objectives, the administration plans to increase the budget for infrastructure from P795 billion in 2016 to P1.832 billion in 2022 to support the Golden Age of Infrastructure, the budget for education from P551 billion to P1.269 billion, the budget for health from P133 billion to P272 billion, and the budget for social-protection, welfare and employment from P240 billion to P509 billion,” he said. The finance chief added that, for the government to sustainably finance massive investments in infrastructure and in the people, tax-policy reform will be crucial alongside tax administration and budget reforms. Following 13 public hearings in the course of four months, the House Ways and Means Committee approved on May 8 a substitute measure, or HB 5636, that consolidated HB 4774 with 54 other tax-related bills. HB 5636 has moderate changes from the original measure endorsed last year by the DOF to Congress.

Pimentel filed the Senate version of the measure, Senate Bill 1408, in March, and the chamber’s Committee on Ways and Means, chaired by Juan Edgardo M. Angara, has thus, far conducted six public hearings on the bill.

Under the 1987 Constitution, all revenue measures must originate from the House, which means that the Senate can start plenary discussions on tax and appropriations or budget bills only after the House has passed its versions of these measures.

Rea Cu, Jovee Marie dela Cruz

Technology, economy boost pawnshops in PHL Continued from a1

The report, titled “Taxation of Pawnshops in the Philippines and in the Asean Region”, said the industry widens the sources of microcredit for Filipinos, which help address their short-term financial needs when banks cannot.

Insurance offers

PAWNSHOPS now provide low-cost insurance services, specifically microinsurance.

“The insurances provided by the pawnshops usually come in combination with different kinds of services, such as accident, death, burial assistance and others,” the report said. “These policies vary from three to 12 months.”

In March the Insurance Commission (IC) said the number of Filipinos covered by a microinsurance product totaled 28.4 million in the fourth quarter of last year. The figure reveals an 8-percent increase in the number of people covered by a microinsurance product at the end of December.

Insurance Commissioner Dennis B. Funa pointed out the growth can be attributed to the increase in members and dependents of Microinsurance Mutual Benefit Associations (Mi-MBAs). And with the government’s thrust to further enhance financial inclusion in the country, a number of pawnshops are seen to start providing auxiliary services alongside with pawning services.

Still, the NTRC report stated that jewelry remains to still be the most pawned item.

“It has been observed that as of 2015, jewelry stood as the most pawned item in the pawnshops. This is majorly due to the fact that jewelry is usually the most valuable thing that a person owns and it is always fashionable,” the report said.

Growth rates

UNDER the Pawnshop Regulatory Act, or Presidential Decree 114, pawnshops can either be established by single proprietorship, partnership, or corporations.

The Act requires those who want to enter the pawnshop business to register with the Department of Trade and Industry (DTI) for single proprietorship or the Securities and Exchange Commission (SEC) for partnerships and corporations. They also need to secure a permit from the local government unit of

Govt. . .

Continued from A12

They, however, asserted that in compliance with this constitutional provision, “Congress has the sacred duty and peremptory obligation to seek information surrounding the proclamation, assess its factual basis and, if warranted, revoke the same.”

the area where they wish to operate.

The NTRC has said the pawnshop industry dominated the financial system of the Philippines in terms of number of branches in 2014. It posted around 17,422 branches for the year, while the banking sector only had 10,361 branches. The pawnshop branches for the same year comprised 62 percent of the 28,135 total institution in the financial system for the year.

Of the 17,422 pawnshops operating for the year, 5,847, or 34 percent, were head offices while 11,575, or 66 percent, were branch offices. The number of pawnshops increased from 14,333 in 2008 to 17,652 in 2013, the NTRC said in its April report.

However, in 2014, the number went down to 17,422 as some were delisted from the Bangko Sentral ng Pilipinas registry of pawnshops pursuant to BSP Circular Letter 2014-043. “[This was] due to the voluntary closures and failure to submit necessary reports and pay the required fees to the BSP,” the report said. Total pledge loans for the pawnbroking industry from 2008 to 2014 amounted to P24.20 billion, with the highest being recorded in 2012 amounting to P22.27 billion, and the lowest being P14.22 billion during 2009.

Tax tiers

THE government taxes pawnshop operators several ways.

Operators are levied with a 5-percent annual gross receipts tax (GRT). Sole proprietors are imposed a minimum corporate income tax of 5 percent to 32 percent, while partnerships and corporations are required to pay a regular corporate income tax (RCIT) of 30 percent.

A documentary stamp tax (DST) is also imposed at P20 for transactions not exceeding P5,000 and an additional P10 in excess of P5,000. Business tax and real property tax are also imposed on the pawnshop operators.

A different tax scheme is implemented for pawnshops that operate with other corollary businesses, like remittances, foreign-currency exchange and bills-payment operations.

“It is worthy to note that a pawn ticket is not considered as either a commercial invoice or an official receipt for which an authority to print [ATP] must be secured from the Bureau of Internal Revenue [BIR] for printing,” the NTRC said in its report.

Justice Secretary Vitaliano N. Aguirre II said he has urged House Speaker Pantaleon D. Alvarez and Senate President Aquilino Pimentel III to convene Congress and give its approval to the martial-law declaration and not leave the matter to the Supreme Court (SC).

Aguirre said the SC would be rendered “powerless” once Congress affirmed the validity of Duterte’s declaration of martial law in the entire Mindanao, amid the

What drives bad behavior?

Disparate subcultures or a problematic prevailing culture

Naturally, an organization that already has various subcultures or a prevailing culture that gives more weight to short-term financial success than the sustainability and integrity of the business puts itself in

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a position where poor conduct may develop.

An investigation into the financial services firm I cited above revealed that employees opened the fake bank accounts because they were under immense pressure to meet sales quotas, at times even being threatened with termination if they failed

The taxes collected by the BIR from the industry for 2012 reached P1.36 billion, from the P635 million, registered in 2010. On average, P554 million, or 45 percent, were paid as percentage tax; P391 million, or 32 percent, as income tax; and P287 million, or 23 percent, as DST tax annually from 2010 to 2013.

“The number of pawnshop operators belonging to the BIR top 500 nonindividual taxpayers started with two companies in 2010,” the report added. “Consistently included in the list from 2010 to 2012 were P.J. Lhuillier Inc. and Michel Lhuillier Financial SVCS Inc.”

Incorrect payments

ACCORDING to the BIR, one in every 20 BIR-registered pawnshop in the country did not pay the correct taxes for the year 2011.

Of the 5,248 pawnshops registered with the BIR, only 5,003 paid proper taxes, the BIR said.

The BIR added that despite the growth in the gross income of pawnshops in the country, the BIR’s revenue collections from the industry decreased by 9.25 percent. The BIR said the industry posted a year-on-year gross income growth of 1.66 percent.

In 2013, when the BSP issued Circular 799, it mandated that interest rates for loans transacted through pawnshops was at 6 percent per annum. At present, most pawnshops in the country impose a rate of 3 percent to 4 percent per month. This was explained to be payable during the month and can be renewed for a maximum of three months.

“As observed, the interest rates imposed by pawnshops are high compared to those imposed by other financial institutions, pursuant to BSP Circular 799. They also collect a service charge equivalent to 1 percent of the principal loan but not to exceed P5,” the NTRC report said.

To reduce risks of fraudulent actions, the BSP has mandated that pawnshops are required to bond with employees and officers from reputable insurance companies accredited by the Insurance Commission. The BSP has the power to impose sanctions for the pawnshops that fail to operate according to the rules set forth by the government.

To be concluded

ongoing clashes between gover nment troops and Maute Group terrorists in Marawi City.

While he acknowledged the provision in Article 7, Section 18 of the Constitution that gives the SC 30 days within which to decide on a petition questioning the factual basis for martial-law declaration, Aguirre said the Court would still have to defer to the position of the President and Congress. Butch Fernandez, Joel San Juan, Elijah Felice E. Rosales, AP

Continued from a1

to meet their targets. That bank has since gotten rid of its sales goals for select products and the scandal has prompted other banks to take a closer look at their own sales practices.

Manual and complicated processes and procedures

Compliance procedures that involve reading voluminous policy documents, accomplishing repetitive risk-approval processes, filing multiple forms on a single issue, and that constantly change can often drive people to cut corners. Unwieldy and tedious controls that are set in place to prevent misconduct may actually be the very things that cause people to evade such controls or else to comply with them but with a “tick-box”, rather than a scrupulous, attitude.

Worse, this lack of respect for systems of governance and controls may extend to those who are seen as reponsible for designing and administering such controls. When this kind of mind-set sets in, it will be difficult to reorient employees toward good governance principles, since any directives or guidance from compliance officers will likely be challenged or ignored.

Weak systems for monitoring and surveillance

In 2014 the Bank of England led an effort to establish the Fair and Effective Mar-

kets Review (FEMR) to conduct a comprehensive assessment of the way wholesale financial markets in the United Kingdom operate. The final report of that review body noted that firms “must ensure they have the means to detect wrongdoing [since they are closest to the actions of their own staff and counterparties] and act decisively when it is detected [since they stand to lose the most, financially and reputationally].”

If an organization does not have adequate internal monitoring and surveillance as part of its compliance process, then it follows that management does not have a comprehensive picture of employee conduct. It will then be unable to identify and manage important risks, and misconduct may go undetected.

Along with this monitoring system, an organization must also have in place a process for addressing problems once they surface and, of course, a management team that has the determination to take the right action, regardless of how difficult or unpopular it may be. To conclude this series, I will talk about the ways organizations can restore stakeholder trust—with a focus on embedding a principled culture and cultivating good conduct—in my next article.

To be continued

The author is the chairman of the Integrity Initiative Inc.

Tourism. . .

Continued from A1

with a local rebel group, called the Maute, in Marawi City. The joint military and police operation was to capture Isnilon Hapilon, head of the Abu Sayyaf Group, which has ties to ISIS. “It [cancellation of bookings by foreigners] was expected to happen,” Tourism Assistant Secretary and Spokesman Frederick M. Alegre told the BusinessMirror. “But we continue to monitor the situation and have asked our regional directors to keep tourists safe,” he said.

The agency received reports of the cancellations when its officials, led by Tourism Secretary Wanda Corazon T. Teo, met with industry stakeholders on Monday at the DOT office in Makati City. The stakeholders included representatives from the local airlines, hotels and tour operators in Cebu and Manila, among others.

He declined to say, however, how much losses the local industry stakeholders had reported from this new crisis. Many of these establishments are just starting to recover after travel advisories, issued by foreign governments against Central Visayas right before Holy Week, led to booking cancellations by many foreign tour groups. (See, “DOT still confident of meeting 8 million arrivals target despite Bohol cancellations,” in the BusinessMirror, April 22, 2017.)

In a text message, PAL President Jaime Bautista confirmed “the drop in bookings…mostly from Japan, Korea, and the local market as a knee-jerk reaction [to the declaration of martial law in Mindanao]. But we expect this to stabilize as more updates from the government are coming in.”

He added: “Advisory of assurance from the DOT and the government is much appreciated, so we hope to have this from the government.” He also said the drop in flight bookings are from foreign passengers flying in to Manila and Cebu.

Two hotels in Cebu, Crimson Resort and Spa Mactan and Quest Cebu, received requests “mostly from Koreans, and a little of Japanese” for cancellation of P1.5 million worth of bookings, a hotel source said. “But when we explain to them how far Mindanao is from Cebu, they no longer insist on canceling their bookings. Only 5 percent to 10 percent of those who requested cancellations opted to postpone their trips to a later date, which we have allowed them to do.”

Both hotels are owned by the Gotianun-led Filinvest Development Corp.

The source said no reports of cancellations have been received in its Alabang property, Crimson Hotel. Korean tourists usually stay about three to four days in the Philippines.

Cebu Pacific, meanwhile, said only 5 percent of its clients who have confirmed bookings to Mindanao have decided to rebook their flights to Mindanao to a later date or to another destination.

Charo Logarta-Lagamon, CEB director of Communications, said, “When we’re asked if the flights to Mindanao are pushing through, we say yes, and they usually push through with their flights. Those who ask if it’s safe to fly there, however, we have to just tell them to take the usual precautions as advised by the government, like bringing a valid ID and such.” CEB flies to 14 destinations in Mindanao, but not to Marawi nor Iligan City.

She declined to disclose cancellations by foreign passengers, but said, “any cancellations are expected [owing to the martial-law declaration]. But we expect to make up for these during other peak periods.” Aviation sources said the airline received canceled bookings “from Korean group tours” going on its scheduled flights to Manila and Cebu.

Alegre, meanwhile, said he will be heading a delegation to Seoul that will meet with Korean tour operators and travel agencies, in a bid to reassure them that it is safe to travel in other parts of the Philippines not covered by martial law.

The Philippines is targeting 6.5 million foreign visitor arrivals in 2017, although unofficially, it is eyeing 8 million due to the commitment of the Beijing government to send 1 million tourists to the Philippines this year.

In the first two months of the year, 1.2 million foreign visitors arrived in the Philippines, up 10.88 percent from the same period last year. Koreans continue to be the top visitor market, accounting for 25.2 percent of the total arrivals for the period, while the Japanese accounted for 8.7 percent of the total volume.

The Nation BusinessMirror

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Editor: Dionisio L. Pelayo • Tuesday, May 30, 2017 A3

GOVT FIRM ON BOYCOTTING 5TH ROUND OF TALKS WITH NDF

Peace negotiations with reds hang T

By Priam F. Nepomuceno | Philippines News Agency

HE government panel negotiating peace with the Communist Party of the Philippines-New People’s Army-National Democratic Front (CPPNPA-NDF) has maintained its decision not to participate in the fifth round of talks supposed to start last Saturday in Noordwijk aan Zee, the Netherlands.

“There are no compelling reasons for us to change that decision that have been arrived at and which we announced yesterday [Saturday],” Presidential Adviser on the Peace Jesus G. Dureza said in a news briefing last Sunday at 9 p.m. Dutch time (around 3 a.m.

Monday Philippine time).

He was referring to the government demand that it will not proceed to participate in the negotiations until “there are clear indications that an enabling environment conducive to achieving just and sustainable peace in the land through peace negotiations across this table shall prevail”.

Dureza, however, stressed the government is “not terminating the peace process. The decision is not to participate [in the fifth round of talks]...we will see how this will impact on the whole gamut of the peace process.”

He explained that informal talks with stakeholders will still take place. “We will continue engaging with the stakeholders.”

He added that the order to withdraw from the May 27 talks came

directly from President Duterte.

“Any decision we make here is, of course, vetted with the President,” he said. Earlier, Dureza said the government is withdrawing from the peace talks owing to the “blatant and serious challenge” being posed by the CPP-NPA-NDF to the government.

The challenges Dureza was referring to are the following:

The noticeable upscale of incidents of offensive attacks by the NPA throughout the country; The seeming perception of the bigger public that these NPA operations are in open and public defiance of Duterte who has constantly accommodated them in unprecendented ways; The renewed surfacing of public apprehension questioning the sincerity of the CPP-NPA-NDF in the peace talks; Public admission of some panel members of the CPP-NPA-NDF leaders that they have no control over their forces in the ground; The sudden and perceptible erosion of public support to the peace talks with strong messages received

Senator cautions Duterte: Don't cross the line on ML

By Butch Fernandez @butchfBM

A

SENATOR on Monday cautioned President Duterte, his Cabinet officials and the Armed Forces against “defying the Supreme Court and the Congress: in enforcing martial law in Mindanao”.

Sen. Francis N. Pangilinan, who currently heads the opposition Liberal Party, reminded Duterte that “no one is above the law, not even the President.”

“The President swore to uphold and defend the Constitution, not willfully defile it and do only as he wants,” Pangilinan said.

In a statement, Pangilinan called on “all patriotic and sober Cabinet members, as well as Armed Forces leaders, to assert themselves, to speak truth to the President, to caution and urge him not to violate the Constitution and his oath of office”.

At the same time, he exhorted Cabinet members and the Armed Forces to “be true to their own respective oaths of office” adding: “Do not allow yourselves to be used as instruments in acts of reckless disregard of our constitutional democracy.”

Pangilinan, likewise, warned the people to remain vigilant against potential abuses under Duterte’s martial-law edict.

“We oppose any violation of the Constitution on matters pertaining to the martial-law declaration,” Pangilinan added.

He also voiced concerns that “to allow the President to disregard the Constitution is to open the gates to dictatorship”. He added: “This, we vigorously oppose. Might is not right. We call on all citizens to come together and unite to defend the Constitution, our democ-

racy and the rule of law. We call for courage, for bearers of light to stand against the looming tide of darkness upon our land.”

Legislators asked: Support martial law

WITH so many criticisms coming Duterte’s way over his imposition of martial law in the whole of Mindanao, especially those who are seeking for Congress to declare Duterte’s martial unconstitutional, a friend and political ally came out not only defend his act, but even to rally his colleagues in the House of Representatives.

In a statement, PDP-Laban Rep. Antonio D. Floirendo Jr. of Davao del Norte justified Duterte’s declaration of martial law, saying “it was what the situation necessitated”.

“I stand firm behind President Duterte in his decision to impose martial law in Mindanao in order to stop the violence and growing threat of terrorism in the region,” said Floirendo, who was with Duterte during the President’s state visit to Russia when the latter proclaimed martial law.

“As a Mindanaoan, I believe that President Duterte’s leadership is what is needed to bring peace and security in the region,” he added.

“I believe that his declaration is compliant with the requirements of the Constitution and his adoption of such constitutional remedy is the appropriate and effective response in crushing the rebellion staged by the Maute Group, in conspiracy with other terrorist groups, that not only imperils the territorial integrity of the Republic in Mindanao but endangers the public safety of the Mindanaons,” Floirendo said.

With Jovee Marie N. dela Cruz

from the public to altogether stop peace negotiations; The clamor now to pursue instead localized peace talks; and The recent President’s public

statements that he will no longer sign agreements with the CPP-NPANDF if all of these will continue and not addressed.

But most disturbing of all, Dureza

said, is the blatant public announcement of the CPP ordering its forces on the ground to accelerate and intensify attacks against the government in the wake of the declaration

of martial law in Mindanao, which was principally directed against the extremists and terrorists who are challenging government forces in Marawi City, Lanao del Sur.

Economy

A4 Tuesday, May 30, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

DA’s Piñol eyes to raise garlic production in next three years

By Jasper Emmanuel Y. Arcalas

T

@jearcalas

he government is targeting to hike the share of local garlic production to the country’s total supply from the current 8 percent to as much as 40 percent over the next three years, according to the chief of Department of Agriculture (DA).

“Today I have ordered the start of a National Garlic Development Program (NGDP), wherein we will plant garlic and will make sure prices of garlic produced locally—to be assisted by the Department of Agriculture—will be competitive with those imported and we will produce enough to stabilize the price in the market,” Agriculture Secretary Emmanuel F. Piñol said in an interview with reporters on May 29.

“Our target easily is if we currently produce only 8 percent of the total supply, then our initial target would be to [increase it to] 30 [percent] to 40 percent within two to three years time,” Piñol added.

Piñol made the pronouncement following the P50 increase in the retail price of both native and imported garlic in the market and after the DA conducted series of inspection on warehouses to determine if there were hoarding of the commodity.

The DA chief blamed the importers for the hike in the retail price of the garlic, saying they “manipulated” the price for the sake of profitability.

“How can I say that we are being played by importers? Here’s the latest price survey in the market: P180 in supermarket, P200 in Pasig, P240 in Balintawak and I just talked to the governor of Batanes and he said garlic there is being sold at P60,” Piñol said.

“This means if the farmers in Batanes could produce at P60 and make money, we can also produce garlic in Mindoro, in Ilocos, in Mindanao and even in the Visayas.

I don’t see any reason we can’t plant garlic,” he added.

Piñol also said it is a wrong policy for the country to be dependent on imports to supply its garlic requirement, as importers could have the upper hand in controlling price of the commodity in the local market.

“We were made to believe with what they’ve been saying for so long that we shouldn’t anymore plant garlic [and] we [cannot] compete against China and India. It was foolish of me to believe this, and look what happened now,” he said.

“Importers are playing with us.

Now, our attitude is to start a National Garlic Developt Program, which will produce sizable volume of garlic to make sure that in times like this, when importers are manipulating prices, the government can come in and stabilize the price in the market,” he added.

The Philippines’s local garlic production only supplies 8 percent of the total demand, with the bulk being filled up by imports, which are mostly sourced from China and India.

The Bureau of Plant Industry (BPI), an attached agency of the DA, approved 1,143 sanitary phytosanitary-import clearances covering the importation of 57,150 metric tons (MT) of garlic from January to May. However, as of May 25, only 12,440.34 MT have been brought in by private garlic importers to the country, BPI data showed. Of the 12,440.37 MT imported from January to May this year, 12,206.86 MT were bought from China, according

to BPI data. The remaining volume was purchased from India.

Under the NGDP, Piñol said the DA will embark on a massive garlic planting across identified areas in the country and even considering military camps as viable lands for expansion.

“There is Fort Magsaysay which has 40,000 hectares in Nueva Ecija. We can plant onion and garlic in all military camps. Besides, the planting of garlic is just fast, in a year time we can already harvest,” he said.

“So if we can start doing this now, by next year we will no longer suffer the problems we’re suffering right now,” he added.

Under the NGDP, the DA will also provide modern garlic planting technologies to local farmers to improve their productivity, according to Piñol.

In 2016 the Philippines’s garlic production declined by 28.31 percent to 7,470 MT, from 10,419.52 MT recorded output in 2015, according to the Philippine Statistics Authority.

Importers are playing with us. Now, our attitude is to start a National Garlic Development Program, which will produce sizable volume of garlic to make sure that in times like this, when importers are manipulating prices, the government can come in and stabilize the price in the market.”—Piñol

FPI outflow sees brief relief in mid-May, BSP data show

By Bianca Cuaresma @BcuaresmaBM

S

hort-term foreign investments to the Philippines felt a short relief in the second week of May this year, but the Bangko Sentral ng Pilipinas (BSP) expects more volatilities in the financial markets in the near-term.

In the Central Bank’s latest weekly data, foreign portfolio investments (FPIs) were seen to climb to the positive territory in the second week of May this year, hitting a net inflow of $62.40 million in the week ending on May 12.

In the central bank’s record of 21 weeks for the year, the country’s FPI registered net inflows in only five of those 21 weeks—three of them in January, one in April and the latest in mid-May. Most of the year has been bleak for these short-term foreign investments to the country, as the total net outflows until mid-May amounted to $581.9 million. This is more than twice the net outflows seen in the same period last year, which was then at $200.93 million.

FPIs are more popularly known as “hot” or “speculative” money because they are easily pulled in and out of the local platforms in the slight change of global and local sentiment.

In a recent speaking engagement, Central Bank Governor Amando M. Tetangco Jr. said financial markets are to expect volatilities in the nearterm, due largely to developments in the global environment.

“In the near-term, we will continue to face market volatilities from asynchronous monetary-policy responses to the uneven global recovery and the resulting reflationary pressures,” the governor said.

In 2016 FPIs ended the year on a positive territory—with a net inflow of $404.43 million as the $17.62 billion total inflows were more than enough to cover the $17.22 billion total outflows for the year.

news@businessmirror.com.ph

DAR amends rules on adjudication of agrarian law implementation

By Jonathan L. Mayuga @jonlmayuga

T

O ensure a just, inexpensive and expeditious determination of agrarian cases, the Department of Agrarian Reform (DAR) has amended its rules on adjudication of cases involving agrarian law implementation (ALI).

Agrarian Reform Secretary Rafael V. Mariano signed the 2017 Rules of Procedure for ALI cases, which, in effect, amended DAR Order 03, Series of 2003.

In a news statement released on Monday, Mariano said the rules shall govern, among others, all cases arising from or involving classification and identification of landholdings for coverage under the Agrarian Reform Program and the initial issuance of certificates of land ownership awards (CLOAs) and emancipation patents (EPs), including protests or oppositions and petitions for lifting of such coverage.

He also added the classification, identification, inclusion, exclusion, qualification or disqualification of potential or farmerbeneficiaries, subdivision surveys of land under the Comprehensive Agrarian Reform Program and other agrarian cases, disputes, matters or concerns referred by the secretary to the regional director, other DAR officials, or in other cases where the secretary assumes jurisdiction.

Under the new rules, the DAR regional director shall exercise primary jurisdiction over all ALI cases, except when a separate special rule vest primary jurisdiction in a different DAR office.

However, the secretary shall ex-

ercise appellate jurisdiction over all ALI cases, and may delegate the resolution of appeals to any undersecretary.

Mariano disclosed that when an ALI case raises a prejudicial issue, such issue being adjudication board case, the secretary or regional director shall dismiss without prejudice the case pending resolution of the prejudicial question.

“Appeals to the secretary shall be given due course on the decision of the regional director on serious errors in the findings of facts or conclusion of law, which may cause grave and irreparable damage or injury to the appellant or coercion, fraud or clear graft and corruption in the issuance of a decision,” Mariano said.

He added that a party may file only one motion for reconsideration of the decision of the secretary or deciding authority within a nonextendible period of 15 days from receipt of the secretary’s decision.

Mariano said appeals from the decision of the secretary may be taken to the Office of the President within fifteen days from receipt thereof.

He said orders/decisions/resolution shall become final and executory after the lapse of 15 days from the receipt by the last recipient of an official copy thereof and no motion for reconsideration nor appeal therefrom.

“Execution shall issue automatically as a matter of course upon finality of the case. The regional director shall issue the necessar y certificate of finality within five days from date of finality of a case,” Mariano added.

briefs peza okays manufacturing investment in laguna The Philippine Economic Zone Authority (Peza) has approved the investment project of YN Products Philippine Corp. as a new economic zone export enterprise at the Greenfield Automotive Park-Special Economic Zone in Santa Rosa, Laguna.

The YN Products project involves putting up of a manufacturing facility in Laguna.

Peza has yet to announce the investment value of the company.

YN Products is engaged in the production of turbocharger parts, such as sand inner mold and center block for exports.

In the first quarter of 2017, investment approvals in Peza jumped by 50 percent to P51.34 billion, from P34.12 billion in the same period last year. PNA

free tuition a signature away from becoming law

Las Piñas cookfest

Sen. Cynthia A. Villar (second from left), director of the Villar Social Institute for Poverty Alleviation and Governance, or Villar Sipag, joins participants of a cooking competition participated in by all 20 barangays of Las Piñas City for the Fourth Las Piñas Food Festival.

Villar said the food festival has emerged as an annual celebration where local communities get together for a friendly contest. The festival is also a venue for foodies from nearby cities and provinces, where they could sample delicacies creatively and expertly prepared by residents. ROY DOMINGO

DOTr leads groundbreaking of LRT 2 Masinag, Emerald stations today

By Lorenz S. Marasigan @lorenzmarasigan

T

he east extension of the Light Rail Transit (LRT) Line 2 will be commercially available by the second half of 2018, the transportation department said in an advisory.

Such a target, which falls a year short of the original third quarter of 2017 goal, was set as the government breaks ground for the new stations of the railway line today, Tuesday.

“On Tuesday, May 30, the Department of Transportation and Light Rail Transit Authority will

lead the groundbreaking ceremony of the LRT Line 2 East Extension that will signal the start of construction of its two stations,” the advisory read.

The two new stations, Masinag and Emerald, will be built by construction company DMCI. “The project will be completed in August 2018,” the advisory read.

The extension of the country’s youngest overhead railway system is expected to cater to an additional 75,000 daily passengers living in densely populated areas of Rizal.

The train line has a daily ridership

of about 217,000 passengers, below its designed capacity of between 570,000 passengers per day.

The government also plans to extend the railway line all the way to the port area through the PublicPrivate Partnership (PPP) Program.

It was approved by the previous government’s National Economic and Development Authority Board, but was not included in the pipeline of projects to be implemented under the PPP Program.

The project will extend the line from its current end-station in Recto up to Pier 4 in the port area in Manila.

Free higher education for state universities and colleges (SUCs) is only a signature away from becoming a law, Sen. Paolo Benigno Aquino IV said on Monday.

Aquino issued the statement after the bill that seeks to provide free tuition to SUCs, or the Universal Access to Quality Tertiary Education Act, passed the bicameral process, which consolidated both Senate and House versions of the measure.

After the final version is ratified by both Houses, it will be transmitted to Malacañang for the President’s approval.

“We are happy to report some good news during these challenging times in our country,” said Aquino, who sponsored and coauthored the measure.

“This will make tuition and other fees in our SUCs free. It will provide billions of scholarships and loans to students in private higher-education institutions,” he added.

Aquino, former chairman of the Senate Committee on Education, Arts and Culture, said he became a legislator to spearhead reforms that will help Filipinos “reach their hopes and dreams”.

“I am very proud to have pushed for this major reform as the main sponsor and coauthor in the Senate,” Aquino said. “Let’s give every Filipino access to quality education—from kinder to college.”

He, meanwhile, expressed gratitude to all legislators, stakeholders and supporters that contributed to the measure. PNA

senator to scrutinize expenses of duterte foreign trips Sen. Grace Poe on Monday said she plans to look into government expenses on foreign trips amid reports that some Cabinet members were traveling with their family members.

“I haven’t seen their expense reports, perhaps, when we have our budget hearing, I can look into that, we will look into that,” Poe said in a TV interview on Monday.

“We just want to find out, that the expenses for their companions were separate. I understand that they want to spend some quality time with their family, even on an official trip. But who paid for them?”, she added in Filipino.

Poe said she was aware that officials could easily say they paid for themselves but reminded the government that it has to send out the message to public that they are “prudent” enough when it come to expenses.

“Now, they can always say that ‘we paid for it ourselves’, that‘s fine. But I think that also the message that comes out, that government has to be very conservative when it comes to expenses,” Poe said. PNA

AseanTuesday BusinessMirror

news@businessmirror.com.ph

Thailand to take on Singapore with $5.7-billion airport overhaul

T

hailand is seeking to take on Singapore’s dominance in aircraft maintenance, repair and overhaul (MRO) with a $5.7-billion upgrade of a Vietnam War-era airport.

Lockheed Martin Corp.’s Sikorsky Aircraft is the latest company to study a possible increase in MRO spending in Thailand in the wake of the planned revamp of UTapao International Airport, said Ajarin Pattanapanchai, deputy secretary-general of the nation’s Board of Investment. In March Airbus SE signed an agreement with Thai Airways International Pcl. to evaluate the development of MRO facilities at the civil-military airport near Bangkok.

$44B

Thailand’s budget in developing its eastern seaboard between 2017 and 2021

“Singapore is quite tight right now,” Ajarin said in an interview at Bloomberg’s Toronto office on May 25, during a visit to Canada to woo investment. “To catch up with the demand of airlines in the region—especially new demand from Myanmar, Vietnam, Cambodia—and given that we have existing strengths with automotives and engineering, Thailand will be the second choice to be the MRO hub.”

The airport project is part of junta leader Prime Minister Prayuth Chan-Ocha’s goal of boosting the economy, whose expansion has lagged behind neighbors since the military seized power three years ago. It’s also a key component of a plan to invest 1.5 trillion baht ($44 billion) between 2017 and 2021 to develop the country’s eastern seaboard.

Apart from the airport in the Eastern Economic Corridor, the plan calls for $4.5-billion investment in high-speed rail, $11.5 billion for new cities and $14 billion for industry.

The government will control and maintain the airport and a port.

Other projects will be public-private partnerships or privately held.

“I am confident we can make it,” Ajarin said, referring to raising the funds. The government has already allocated its budget for 2017, she said, declining to provide a figure for the administration’s outlay on the corridor or an estimate of the MRO business Thailand is targeting.

Foreign direct investment (FDI) has revived after sliding following the coup, especially in digital and high-technology sectors, Ajarin said.

She gave as an example Torontobased Canadian Solar Inc., which applied for a license in 2015 and opened its Thai factory two years later. Among electric vehicles, a “big player—but not Tesla—is waiting to come in”, Ajarin said.

FDI increased to $8.6 billion in 2016, from $2.7 billion in 2015, according to data provided by the Board of Investment.

While the board offers incentives to foreign companies, such as tax sops, it remains unclear how quickly the Thai government can implement its ambitious vision for the eastern seaboard given the scale of the project.

Challenges include a shortage of skilled workers, as well as concern that Thailand is prone to harmful episodes of political volatility.

Ajarin acknowledged that the risk of political turmoil is a worry for new investors, but argued that companies have weathered past such bouts. Bloomberg News

Editor: Max V. de Leon • Tuesday, May 30, 2017 A5

Vietnam’s premier confident of 6.7% growth without inflation

V

ietnamese Prime Minister Nguyen Xuan Phuc said he is confident economic growth this year will meet a government goal of 6.7 percent without adding to inflation, despite weak expansion last quarter.

Vietnam is taking steps to bolster the economy, as the nation seeks to retain its status as one of the world’s fastest-growing economies, the premier said in an interview at the Government Office in Hanoi on May 27.

“Main economic indicators in May are all very good with a strong pickup in exports, foreign investment and agriculture production, laying ground for faster growth in the third and fourth quarters,” Phuc said in an interview with Bloomberg Television’s Haslinda Amin. The growth target “is difficult but it is possible”, he added.

The government must balance efforts to spur the economy with ensuring inflation doesn’t exceed its 2017 target of 4 percent, according

to Phuc. “We must curb inflation at the mandate number as we have committed to the National Assembly,” he said.

Inflation eased to a nine-month low of 3.19 percent in May, the statistics office reported on Monday.

Exports rose 17.4 percent in the first five months from a year earlier, while pledged foreign direct investment increased 10.4 percent.

Phuc said tourism is expected to grow 30 percent this year, agricultural exports will beat the $32 billion shipped last year, and electronics exports are going to surge—counter forces to the economic headwinds the nation faced in the first quarter. Growth eased to 5.1 percent in the three-month period after Samsung Electronics

more favorable business climate to support companies.” In April, the premier called the first-quarter growth “very worrisome” and ordered ministries to find solutions.

‘Doi moi’

Co. cut production, underscoring the nation’s reliance on exports.

Faulty phone

“The first quarter growth slowed due to a few reasons. Firstly it’s because of a big drop in our crude oil” output, Phuc said. “The second reason is because of the electronics industry—we suffered a loss of about $1 billion worth of exports from Galaxy Note 7” when Samsung recalled its faulty smartphone last year, he said.

Samsung helped to turn Vietnam into an electronics manufacturing hub almost single-handedly with $15 billion in investments from the

technology giant and its affiliates, including battery-maker Samsung SDI Co. The South Korean company is Vietnam’s biggest exporter. Mobile phones and components accounted for 27 percent of Vietnam’s exports last year, or almost $40 billion, according to Samsung.

The government is preparing strategies to increase exports of its two key products—electronics and agriculture, the prime minister said.

“We have made detailed plans to bolster each industry, down to the product level with thorough studies of different markets to boost exports,” he said. “More important, we are taking steps to create a

Vietnam, which has completed about 16 free-trade agreements, began tethering itself to global trade after introducing market-oriented “doi moi” reforms in the 1980s.

Exports surged to a record $177 billion last year, with US customers accounting for about $42 billion of that—more than double compared with five years ago.

The government is also speeding up the restructuring of its banking sector with stronger reforms in underperforming lenders, according to Phuc. He reiterated Vietnam’s plans to sell out from the more troubled banks.

“We will allow foreign investors to take over those banks if there is anyone interested to buy,” Phuc said.

Vietnam’s economy grew 6.21 percent in 2016, the second consecutive year of more than 6-percent expansion, defying a regional slowdown.

“I’m quite optimistic about the economic outlook of Vietnam this year,” the premier said. Bloomberg News

Bank Indonesia says 5.4-percent growth this year too optimistic

I

ndonesia’s central bank said economic growth of 5.4 percent this year is too optimistic and the nation should aspire for higher credit ratings to catch up with Southeast Asian peers.

“In our view, the 2017 growth rate should be higher than 2016,” Bank Indonesia Senior Deputy Governor Mirza Adityaswara said in an interview in Jakarta last Friday. “Maybe 5.4 percent is still a bit too aggressive, but we think 5.1 percent to 5.2 percent is still a possible number to achieve in 2017.”

While Southeast Asia’s biggest economy is gradually recovering, it

faces risks from a slowdown in China and weaker prices of coal and palm oil, the nation’s main commodity exports. President Joko Widodo, known as Jokowi, has pledged to boost growth to 7 percent during his term in office, but economists surveyed by Bloomberg predict expansion of under 5.5 percent until 2019.

Jokowi’s government has made inroads on some economic reforms, helping it win an investment-grade score from S&P Global Ratings this month. Despite its economic size, smaller neighbors, including the

Philippines, Thailand and Malaysia, all enjoy higher ratings from S&P. “We have to use the improvement in the credit rating to challenge ourselves to get further improvement,” Adityaswara said. Keeping the current account deficit under control is key, which means the nation needs to diversify into noncommodity exports and push for stronger tourism, he said.

Global funds poured a record $6 billion into rupiah securities this year, helping to drive Indonesia’s 10-year yield down by the most in Asia. Fitch Ratings and Moody’s Investors Service

already rates the nation at investment grade and Goldman Sachs Group Inc. said in March an S&P upgrade may help attract as much as $5 billion in funds from Japan alone.

“Considering that the global situation is quite stable, what we can expect is funds from Japan, and also funds from maybe European and American pension funds that are purposely not in Indonesia yet to come,” the deputy governor said.

Bank Indonesia has kept its benchmark interest rate unchanged at 4.75 percent for seven months, refraining

VietJet Aviation seeks first overseas listing

by Vietnamese firm to fund expansion

V

ietJet Aviation Joint Stock Co. is in talks to become the first company in Vietnam to list its shares on a stock exchange overseas as the carrier, which controls more than 40 percent of the domestic airline market, seeks more funds after plans for billions of dollars in aircraft purchases.

“We’ve been approached by some foreign stock exchanges, including London, Hong Kong and Singapore, which expressed their interest in our stock,” Nguyen Thi Phuong Thao, VietJet’s founder and CEO, said in an interview in Hanoi last Sunday. Thao said she will meet exchange officials in New York later this week.

The plan for the 41-trillion dong ($1.8-billion) low-cost carrier comes amid the government’s easing of rules to allow more foreign investment in one of the fastest-growing aviation markets.

Hanoi-based VietJet, known for a marketing stunt featuring bikini-clad service crew, received shareholder approval in April to boost its foreign ownership limit to 49 percent, from 30 percent.

“Listing overseas on big markets will help increase our access to more fund sources, boost the trading of our stock and expand the list of our investors,” said Thao, a self-made billionaire. “We don’t want to hide our hope to become the first Vietnamese company to list shares overseas.”

Shares of VietJet rose 0.5 percent to 127,400 dong as of 1:03 p.m. in Ho Chi Minh City. The stock has surged about 51 percent since it started trading three months ago, compared with a 6.6 percent gain in the Bloomberg Asia Pacific Airlines Index. The overseas listing plan

airport crew unloading baggages from a Vietjet plane. BLOOMBERG

would make VietJet the first Vietnamese company to officially trade overseas, according to Tran Anh Dao, deputy chief executive of the Ho Chi Minh City Stock Exchange. While VietJet has done well in Vietnam, it faces tougher competition against entrenched players, such as low-cost carrier AirAsia Bhd., as well as Cathay Pacific’s regional unit, Cathay Dragon, as it expands in Asia, said Tyler Cheung, director of institutional clients at ACB Securities Co. in Ho Chi Minh City.

“They have been able to accomplish something impressive in a relatively small period of time,” Cheung said.

“The question is whether their business model and corporate strategy can transfer to a regional play.”

Hong Kong Exchanges and Clearing Ltd. doesn’t comment on individual

companies, a spokesman said in an e-mail. Singapore Exchange Ltd. declined in an e-mail to comment.

VietJet, which began operating six years ago, has 136 foreign investors who own 26 percent of the company, Thao, 46, said in April. She owns more than 60 percent of the airline directly and through holding companies and other entities, according to filings.

The increase in foreign ownership will need to be approved by Prime Minister Nguyen Xuan Phuc because aviation is considered a restricted industry, with the limit currently capped at 30 percent.

The airline has filed paperwork requesting the increase, Thao said.

Raising the limit isn’t aimed at attracting a strategic investor, although the company is open to one, she said.

Bloomberg News

from providing more stimulus to the economy after six rate cuts last year.

Inflation accelerated to the highest in more than a year in April at 4.17 percent, above the midpoint of the bank’s 3 percent to 5-percent target band.

“The key for us is to maintain prudentiality in managing the macro,” Adityaswara said. “The government manages the fiscal prudentiality, while Bank Indonesia maintains prudentiality in the monetary policy, basically to make sure inflation is under control and the current account deficit is under control.”

Bloomberg News

A6

Tuesday, May 30, 2017

The World BusinessMirror

www.businessmirror.com.ph

US planning expanded airplane laptop ban

W

Nancy Vasquez, a Salvadoran citizen with a short-term and renewable legal immigration status in the US called Temporary Protected Status, cleans up her food truck at a construction site in Rockville, Maryland.

Vasquez said she’s now thinking about how she would sell her property and move back home. She also wonders what she would do with her 11-year-old daughter, a US citizen by birth. AP/Luis Alonso Lugo

End to ‘temporary’ status for US migrants feared

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ASHINGTON—Nancy Vasquez left the turmoil in her native El Salvador behind and moved to the US, where she was able to support her family, buy a house and start a food-truck business catering to workers on the outskirts of Washington, thanks to a “temporary” residency permit that has lasted for nearly 20 years.

But the seemingly stable life that Vasquez and several hundred thousand others have built under that legal residency program now appears to be on shaky ground.

Immigrants and their supporters fear President Donald J. Trump’s skepticism about immigration means he will take a harder line than his predecessors on a program that began as a humanitarian gesture to temporarily defer deportations of people from countries that were considered too fragile to take them back—especially Central American nations devastated by war or natural disasters.

Vasquez said she is thinking about how she would sell her property and move back home. She also wonders what she would do with her 11-year-old daughter, a US citizen by birth.

“Imagine what would happen,” she said in an interview in Rockville, Maryland, after a day of driving her food truck to construction sites. “We would be left with no protection. We would be totally defenseless.”

Noe Duarte, a 40-year-old Salvadoran landscaper in the Washington area, said he recently canceled a trip home for a family reunion because he wasn’t sure he would be able to get back to the US and worries he would have to be a subsistence farmer back home.

“If they don’t renew it, everything will come crashing down,” he said.

Many see an ominous sign in the Department of Homeland Se-

435K The number of people from 10 nations with Temporary Protected Status

curity’s (DHS) May 22 decision to grant only a six-month extension of “temporary protected status” for nearly 60,000 Haitians instead of the standard 18 months.

The administration said it needed more time to decide whether Haiti had sufficiently recovered from its devastating 2010 earthquake. But officials suggested Haitians in the program should get their affairs in order so they would be ready to return home.

As for Central Americans, the department said, Homeland Security Secretary John F. Kelly would review conditions and consult with appropriate agencies as the expiration date approaches next year. “Each country is considered individually, on a case-by case basis,” it said in a written statement.

Critics argue that renewal has come to seem automatic, encouraging illegal immigration and violating the spirit of what was originally a temporary program to protect people fleeing Central America’s civil wars of past decades. After some interruptions, it was renewed and extended

to cover natural disasters.

Immigrants from Honduras and Nicaragua were covered in 1999 due to the destruction from Hurricane Mitch a year earlier. El Salvador was added in 2001 after a series of earthquakes.

Citizens of those three countries now make up 80 percent of the 435,000 people from 10 nations with Temporary Protected Status (TPS). Their status has been renewed every 18 months as other countries, including Rwanda, Kuwait and Lebanon, have come and gone from the list.

The program covers only people who were in the US, legally or otherwise, at the time their countries were included by presidential decree.

That’s about 10 percent of the Central American-born population in the US now. Those who arrived after the TPS decrees aren’t protected.

A bill introduced in Congress would require the Senate and House of Representatives to approve any extensions of TPS, meaning it would no longer be a unilateral decision by the executive branch.

As it stands now, the system is haphazard and has created the expectation that people will be allowed to stay, said Mark Krikorian, executive director of the Center for Immigration Studies.

“This idea that they should be indefinitely strung along is absurd,” Krikorian said. “It’s no way to run an immigration system.”

Governments of nations covered by the plan devote much of their relationship with Washington lobbying to extend it. Both they and previous policymakers in Washington have feared that a mass return of citizens would cause economic and social chaos by hitting a crucial source of foreign income, remittances from workers abroad, while flooding impoverished countries with jobless people.

“The biggest negative impact would be for our countries because of those remittances,” said Vasquez, a 47-year-old who originally came to the US on a tourist visa in 1999 and stayed when she got TPS. “They are going to miss that money.” Advocates of extending the program say

it would be cruel to disrupt families that are now firmly established in the US while conditions in their homelands remain troubled.

“We are talking about people who have created new lives and have done everything within the legal system to stay here,” said Julio Calderon, an immigration activist from Honduras who lives in South Florida and whose parents have TPS. Taking the status away from Haitians, even as conditions there remain difficult, would set a precedent, he said. “This is why I’m scared.”

Immigrant advocates also say those sent back to Honduras and El Salvador could be exposed to horrific gang violence, which has driven recent waves of migrants who aren’t covered by TPS. “The head of DHS recently commented on the fact that the gangs are like terrorist organizations,” said Anne Pilsbury, director of Central American Legal Assistance in New York. “So one would hope that they wouldn’t want to send people back to a country with terrorists.”

Cecilia Menjvar, a University of Kansas sociology professor who has conducted of surveys of people with the status, said 90 percent of people on TPS are in the labor force and many have started businesses.

“They will do whatever they can to pay taxes because that shows the government that they are good people,” she said. “They will find ways to pay taxes even if they are self-employed. They want to show that they are contributing.”

People in TPS aren’t eligible for public benefits, must pay taxes and undergo background checks when they submit renewal applications.

Duarte, a stocky man who came to the US through the Arizona desert in 2000, said the program has enabled him to earn as much as $39 an hour. “Back home, there is nothing for me. I would have to go back to farming,” he said at a McDonald’s in Silver Spring, Maryland, after a day planting trees. Vasquez said that if sent home, she would find a way to make it, but thinks the US would be better off to let her family stay.

“There are many of us here and we do a lot for this country.” AP

ASHINGTON—Homeland Security Secretary John Kelly said last Sunday he’s considering banning laptops from the passenger cabins of all international flights to and from the United States.

That would dramatically expand a ban announced in March that affects about 50 flights per day from 10 cities, mostly in the Middle East. The current ban was put in place because of concerns about terrorist attacks.

The ban prevents travelers from bringing laptops, tablets and certain other devices on board with them in their carry-on bags. All electronics bigger than a smartphone must be checked in.

Kelly was asked on Fox News Sunday whether he would expand the ban to cover laptops on all international flights into and out of the US. His answer: “I might.”

The current US ban applies to nonstop US -bound f lights from 10 international airports in Amman, Jordan; Kuwait City, Kuwait; Cairo; Istanbul; Jeddah and Riyadh, Saudi Arabia; Casablanca, Morocco; Doha, Qatar; and Dubai and Abu Dhabi in the United Arab Emirates.

About 50 flights a day, all on

foreign airlines, are affected.

Earlier this month, there were reports that the Trump administration would broaden the ban to include planes from the European Union, affecting trans-Atlantic routes that carry as many as 65 million people a year.

US officials have said that initial ban was not based on any specific threat but on longstanding concerns about extremists targeting jetliners.

“There’s a real threat,” Kelly said, adding that terrorists are “obsessed” with the idea of downing a plane in flight, “particularly if it’s a US carrier, particularly if it’s full of mostly US folks.

It’s real”.

Kelly said that the US is going “to raise the bar for, generally speaking, aviation security much higher than it is now, and there’s new technologies down the road, not too far down the road, that we’ll rely on. But it is a real sophisticated threat, and I’ll reserve making that decision until we see where it’s going.”

While Kelly referred to “a real sophisticated threat”, the Trump administration’s spending plan for the budget year that begins October 1 would make significant cuts to airport security programs. AP

Cash levels rise in Japan as investors wait and see

J

apanese investors’ wait-andsee approach this year is leading to a growing problem: cash.

Having sold a record amount of overseas bonds in April, as well as domestic debt, investors have mostly held off reinvesting the proceeds.

Excess reserves at the Bank of Japan (BOJ) from the country’s financial institutions, subject to a 0.1-percent charge, reached the highest in 13 months in April. A redemption of government bonds in June is likely to add to this cash pile, as quarter-ending months typically see four-to-five times more money returned.

Yet, despite the abundance of cash at hand, there is no sense of urgency among Japan’s investors to put the money to work. A lack of decisive direction in both currency and bond markets, and lingering concerns of geopolitical risks and US political turmoil have led to a wait-and-hold stance.

“It’s true cash at hand is abundant,” said Eiji Dohke, chief bond strategist at SBI Securities in Tokyo. “Investors have been selling yen bonds and foreign bonds and have shed risk exposures considerably to leave quite a capacity for investment. But they have become very cautious, after experiencing a surge in yields since last fall accompanying the Trump rally.”

Financial institutions boosted reserves held at the BOJ subject to a 0.1-percent charge to ¥28.6 trillion ($256 billion) in April, the highest since reaching ¥29.7 trillion in March 2016, according to central bank data. Reserves rose from ¥21.6 trillion in the previous month.

When investors do return to the market, it is more likely to be to Japanese government bonds, than foreign equivalents, according to Shinji Kunibe, general manager and head of a fixed-income management department at Daiwa SB Investments in Tokyo.“Super-long” JGBs of 15 years or 20 years maturity may be the “choice by default”, given the BOJ remains committed to its policy of keeping the 10-year yield around zero percent, he said.

Japan’s 20-year government bond yielded 0.56 percent on Monday, compared to a 0.04 percent yield for the country’s 10year debt.

Stable yen

Should the yen stabilize, the BOJ would also be less inclined to expand its bond buying program, which would halt a steady decline in JGB yields, according to Souichi Takeyama, a rates strategist at SMBC Nikko Securities Inc. This could tempt Japanese investors to increase purchases, albeit slowly, he said.

“Everybody wants to buy, but passively,” Takeyama said. “Nobody wants to chase down yields.

They may wait until the BOJ reduces bond purchases to lift yields, when markets come to a level where yields fall too low.”

The lack of direction in the yen, currently stuck in a 110 to 113 yen-to-the-dollar trading range, is slowing a return to overseas debt.

Investors, such as insurers, prefer to invest without currency hedges, so are waiting to better time their purchases, according to Takeyama.

And while hedge costs may have stabilized, it is still difficult for Japanese investors to shift money into overseas bonds, Daiwa’s Kunibe added. US Treasury yields haven’t rebounded and receding political risk in France mean they have probably missed the best opportunity to buy French bonds.

“There may be opportunities to buy French bonds on expectations parliamentary elections will be a nonevent, although the spread will be much smaller than in April,” according to Kunibe.

“US political risks this time look quite serious, so investors might want to jump on the opportunity when Treasuries dip, as it may not happen so often.”

For now, it seems the wait-andsee approach will continue. Even if domestic bonds do become the default purchase-of-choice, the cash-rich, risk-averse Japanese are unlikely to rush. The presence of foreign investors, net buyers of super-long JGBs for a fifth consecutive month in April, may also provoke caution, according to Yusuke Ikawa, Japan strategist at BNP Paribas Securities Ltd. in Tokyo.

April was when geopolitical risks were heightening, so if foreigners decide to sell, there is an incentive for Japanese investors to wait, Ikawa said. “They will stick to buying more when yields rise and less when yields fall.” Bloomberg News

www.businessmirror.com.ph • Editor: Lyn Resurreccion

The World BusinessMirror

Tuesday, May 30, 2017

A7

Merkel looking past Trump after discordant G7 meeting

German Chancellor Angela Merkel lifts a glass of beer during an election campaign of her Christian Democratic Union and the Christian Social Union in Munich, southern Germany, on May 28. A poll of German voters shows Merkel’s conservative bloc’s lead widening as the main challenger Social Democrats continue to lose support. Matthias Balk/dpa via AP

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ER LIN— Chancel lor A ngela Merkel of Germany, Europe’s most influential leader, has concluded, after three days of trans-Atlantic meetings, that the United States of President Donald J. Trump is not the reliable partner her country and the Continent have automatically depended on in the past.

C lea rly d isappointed w it h Trump’s positions on North Atlantic Treaty Organization (Nato), Russia, climate change and trade, Merkel said in Munich on Sunday that traditional alliances were no longer as steadfast as they once were and that Europe should pay more attention to its own interests “and really take our fate into our own hands”.

“The times in which we could rely fully on others—they are somewhat over,” Merkel added, speaking on the campaign trail after a contentious Nato summit meeting in Brussels and a Groupof-Seven (G7) meeting in Italy.

“This is what I experienced in the last few days.”

Merkel’s strong comments were a potentially seismic shift in transAtlantic relations. With the US less willing to intervene overseas, Germany is becoming an increasingly dominant power in a partnership with France.

The new French president, Emmanuel Macron, has shown a willingness to work with Germany and to help lead the bloc out of its troubles. And Merkel sees Germany’s future more and more with the European Union (EU) of 27 nations, without Britain after its vote to leave the bloc.

“This seems to be the end of an era, one in which the United States led and Europe followed,” said Ivo H. Daalder, a former US envoy to Nato who is now director of the Chicago Council on Global Affairs. “Today the United States is heading into a direction on key issues that seems diametrically opposite of where Europe is heading. Merkel’s comments are an acknowledgment of that new reality.”

Merkel’s emphasis on the need of Europe to stand up for its own interests comes after Trump declined to publicly endorse Nato’s doctrine of collective defense or to agree to common European positions on global trade, dealing with Russian aggression or mitigating the effects of climate change.

“We have to know that we must fight for our future on our own, for our destiny as Europeans,” Merkel said.

Merkel, who did not mention Trump by name, also spoke of Britain’s decision to leave the EU, which means the bloc will

lose its second-largest economy and one of its two nuclear powers.

Britain’s departure will also weaken trans-Atlantic ties and leave the Continent more exposed than before.

Given this new context for international relations, she said, “I can only say that we Europeans must really take our fate into our own hands—of course in friendship with the United States of America, in friendship with Great Britain and as good neighbors wherever that is possible also with other countries, even with Russia.”

With her statement, she seemed to be calling for German voters to get accustomed to a more active European role—and to more involvement by Berlin in crises on the Continent, as well as global ones affecting Europe’s future.

Merkel is seeking a fourth term as chancellor ahead of parliamentary elections in September.

Merkel was known to have been unsettled by her meetings with Trump in Washington in March, and she had been concerned that if Marine Le Pen won the French presidency this month, Germany would be isolated and the EU badly damaged.

But Macron, who was meeting Trump for the first time, appeared to have a less negative impression of the outcome of the talks than Merkel. In a news conference at the end of the G7 conference, Macron took a glass-half-full approach, saying he believed, overall, that despite Trump’s earlier hostile language toward Nato, multilateralism was intact and there was a shared vision in a number of areas.

Trump campaigned on a platform of trade protectionism, nationalism and skepticism about mu lt i l atera l i sm a nd c l i m ate c ha nge—a l l issues on whic h most European leaders disagree with him.

Europeans also depend on Nato for their ultimate defense and are more concerned about an increasingly aggressive Russia than Trump seems to be, although his defense secretary and national security adviser, both senior military officers, insist that the president is fully behind Nato’s Article 5, which requires all members to come to the defense of any country in the alliance that is attacked.

Daalder said, “This is ‘America First’—a policy focused on narrow self-interest—and abandons the idea that the best way to enhance our security and prosperity is by having strong allies and leading globally in pursuit of common values and interests.”

New York Times News Service

Jared Kushner, President Donald J. Trump’s son-in-law and senior adviser, in the East Room of the White House in Washington on May 19. Kushner is facing new scrutiny in a federal investigation into secret negotiations with Russian officials during the presidential transition period. Doug Mills/The New York Times

Kushner’s relationship with Trump frays as Russia accusations swirl

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ASHINGTON—The most successful deal of Jared Kushner’s short and consequential career in real estate and politics involves one highly leveraged acquisition: a pair of adjoining offices a few penny-loafer paces from his fatherin-law’s desk in the White House.

Over the past week, Kushner, who at age 36 occupies an illdefined role somewhere between princeling and President Donald J. Trump’s shadow chief of staff, has seen his foothold on that invaluable real estate shrink amid revelations he is under scrutiny in a federal investigation into whether there was collusion with Russian officials during the presidential campaign.

Kushner, an observant Jew, spent the Sabbath in fretful seclusion with his wife, Ivanka Trump, at his father-in-law’s resort in Bedminster, New Jersey, unplugged, per religious custom, from electronics. But he emerged defiant and eager to defend his reputation in congressional hearings, according to two of his associates.

What is less clear is how Kushner’s high-profile woes will affect his hard-won influence on a mercurial father-in-law who is eager to put distance between himself and a scandal that is swamping his agenda and, he believes, threatening his family.

Some Democ rat s a re c a l ling on the president to revoke Kushner’s security clearances.

Rep. Adam B. Schiff, DemocratCalifornia, senior Democrat on the House committee investigating Russian efforts to sway the 2016 election, suggested in an

36

The age of Jared Kushner, US President Donald J. Trump’s son-in-law and senior adviser

interview last Sunday that the recent news reports about Kushner have brought the investigation from the periphery of the Trump campaign and transition teams into the Oval Office.

“If these stories are accurate” in their description of Kushner and Michael Flynn, Trump’s ousted national security adviser, “were they acting at the behest of Trump, then-candidate or president-elect Trump? But whether they were or not, they’re still significant.”

In a statement last Sunday night, Trump praised his son-inlaw and the work he has done in the White House. “Jared is doing a great job for the country,” he said.

“I have total confidence in him. He is respected by virtually everyone and is working on programs that will save our country billions of dollars. In addition to that, and perhaps more important, he is a very good person.”

But in recent weeks the TrumpKushner relationship, the most stable partnership in an often unstable West Wing, is showing unmistakable signs of strain.

That relationship had already begun to fray a bit after Trump’s dismissal of the Federal Bureau of Investigation director, James Comey, which Kushner had strongly advocated, and because of his repeated attempts to oust Steve Bannon, Trump’s chief strategist, as well as the president’s overburdened communications team, especially Sean Spicer, the press secretary.

It has been duly noted in the White House that Trump, who feels that he has been ill served by his staff, has increasingly included Kushner when he dresses down aides and officials, a rarity earlier in his administration and during the campaign.

The most serious point of contention between the president and his son-in-law, two people familiar with the interactions said, was a video clip this month of Kushner’s sister, Nicole Meyer, pitching potential investors in Beijing on a Kushner Cos. condominium project in Jersey City, New Jersey.

At one point, Meyer—who remains close to Kushner—dangled the availability of EB-5 visas to the United States as an enticement for Chinese financiers willing to shell out $500,000 or more.

For Trump, Meyer’s performance violated two major rules.

Politically, it undercut his immigration crackdown, and in a personal sense, it smacked of profiteering off Trump—one of the sins that warrants expulsion from his orbit.

In the following days during routine West Wing meetings, the president made several snarky, d isparag ing comments about Kushner’s family and the visas that were clearly intended to express his annoyance, two aides said. Kushner did not respond, at least not in earshot.

His preppy aesthetic, sotto vocestyle and preference for backstage maneuvering seemingly sets him apart from his father-in-law— but the similarities outweigh the differences. Both men were reared in the freewheeling, ruthless world of real estate, and both possess an unshakable self-assurance that is both their greatest attribute and direst vulnerability.

Kushner’s reported feeler to the Russians even as President Barack Obama remained in charge of US foreign policy was a trademark move by someone with a deep confidence in his abilities that critics say borders on conceit, people close to him said. And it echoes his history of sailing forth into unknown territory, including buying a newspaper at age 25 and developing a data-analytics program that he has said helped deliver the presidency to his father-in-law.

He is intensely proud of his accomplishments in the private sector and has repeatedly suggested his tenure in Washington will hurt, not help, his brand and bottom line.

That unfailing self-regard has not endeared him to the rest of the staff. Resentful Trump staff members have long talked about “Jared Island”, to describe the special status occupied by Kushner, who, in their view, is given license to exercise power and take on a vague portfolio—“Middle East peace” and “innovation” are its central components—without suffering the consequences of failure visited by the president on mere hirelings.

New York Times News Service

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Tuesday, May 30, 2017

The World BusinessMirror

North Korean missile launch testing rivals, not technology

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EOUL, South Korea—North Korea’s latest missile test may have less to do with perfecting its weapons technology than with showing US and South Korean forces in the region that it can strike them at will.

South Korean and Japanese officials said the suspected Scud-type short-range missile flew about 450 kilometers before landing in Japan’s maritime economic zone on Monday, setting off the usual round of condemnation from Washington and the North’s neighbors.

It’s the latest in a string of test launches as the North seeks to build nuclear-tipped ICBMs that can reach the US mainland, a drive that puts North Korea high on the list of foreign policy worries for Japan, Washington and Seoul. Nor th Korea, however, already has a strong arsenal of reliable short-range missiles. It doesn’t usually need to test more to improve its technology, as it does with its less dependable, longer range missiles.

This sets up the potential that Pyongyang is looking to use the test to show it can hit US targets near and far and to emphasize its defiance of US-led pressure on its missile and nuclear programs, which has included vague threats from President Donald J. Trump and the arrival in Korean waters of powerful US military hardware.

Scuds are capable of striking US troops in South Korea, for instance, and the two newly developed missiles tested earlier this month have potential ranges that include Japan, Guam and even, according to some South Korean analysts, Alaska.

The missile was launched from the coastal town of Wonsan, the South’s Joint Chiefs of Staff said in a statement. It landed in Japan’s exclusive maritime economic zone, which is set about 200 nautical miles off

the Japanese coast, Japanese Chief Cabinet Secretary Yoshihide Suga said. He said there was no report of damage to planes or vessels in the area.

North Korea is still thought to be several years from its goal of being able to target US mainland cities with a nuclear intercontinental ballistic missile. It has a strong arsenal of short- and medium-range missiles and is working to perfect its longer-range missiles.

South Korea says North Korea has conducted nine ballistic missile tests this year, but Seoul counts four launches of what’s believed to be the same kind of missile that were done on the same day as a single launch.

North Korea’s state-controlled media had no immediate comment. But last Sunday, the North said leader Kim Jong Un had watched a separate, successful test of a new type of anti-aircraft guided weapon system. The report didn’t say when the test happened.

The official Korean Central News Agency cited Kim as ordering officials to massproduce and deploy the system all over the country so as to “completely spoil the enemy’s wild dream to command the air”.

In Washington Trump has alternated between bellicosity and flattery in his public statements about North Korea, but his administration is still working to solidify a policy to handle its nuclear ambitions.

Monday’s launch was the third ballistic missile launch by Nor th Korea since South Korean President Moon Jae-in was inaugurated on May 10. He has signaled an interest in expanding civilian exchange with North Korea, but it’s unclear if he’ll be able to push anytime soon for major rapprochement because P yongyang continues to make serious advances in its nuclear and missile program. AP

Editor: Lyn Resurreccion • www.businessmirror.com.ph

BA schedule normalizing as cost cuts scrutinized

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ritish Airways’s (BA) flight schedule is slowly recovering as the carrier digs out of a massive computer failure that stranded thousands of passengers worldwide over the weekend, and cast doubts on CEO Alex Cruz’s aggressive costcutting strategy.

The UK carrier canceled 50 flights, or about 6 percent of the total 852 scheduled, to and from its main London Heathrow hub on Monday, according to BA web site.

An additional 66 routes were delayed. That brings the total of f lights scrapped at Heathrow and Gatwick airports since Saturday to 583, according to Bloomberg calculations. BA has declined to specify figures for f lights or customers affected.

“We continue to make good progress in rebuilding our operation, following Saturday’s major IT [information-technology] systems failure which severely affected our operations worldwide,” the company said in a statement on Monday. Last

Sunday a visibly concerned CEO Cruz apologized to customers in a video, saying “I know this has been a horrible time”.

British Airways canceled all Saturday afternoon and evening departures from Heathrow and Gatwick following what it called a “very severe disruption” worldwide to computer systems handling check-in, baggage sorting and reservations.

The disruption coincides with the start of the annual end-of-May Bank Holiday weekend in the UK, as well as the three-day Memorial Day weekend regarded as the unofficial start of summer in the US. The airline’s shares fell as much as 3.8 percent and were down 2.9 percent at €6.81 at 9:40 a.m. in Madrid trading.

The operational collapse comes a year after Cruz was appointed CEO of British Airways, a unit of International Consolidated Airlines Group SA, with a mission to slash costs and improve profitability.

Measures in his four-year program to boost margins include cutting almost 700 back-office jobs, as well as maintenance posts, outsourcing some technology operations and switching to paid-for food on short-haul flights.

Cr uz said BA believed the cause of the computer disruption was a power-supply issue and that there was “no evidence of any cyber attack ”.

Last September a computer network failure brought down BA’s

check-in system, causing worldwide service delays, while earlier this month, London Gatwick airport reported problems with its baggagesorting system.

£2,500 rooms

The breakdown, which also affected call centers, prevented passengers from rebooking or from retrieving luggage that had already been loaded onto their planes, and some travelers reported having to wait on grounded aircraft for several hours before they could go back into the terminals.

Stranded passengers who were waiting at gates were eventually ordered to leave the airports, and faced massive lines at passport desks before they could reenter the UK. Customers who were sent away from Heathrow and Gatwick on Saturday were told to find hotels on their own for reimbursement later

by British Airways.

Payments will include £200 ($260) per night for lodging, £50 round trip between the airport and the hotel, and as much as £25 for refreshments, according to leaflets from the company.

The airline said it will return the “significant” number of bags stranded at Heathrow to customers via courier, free of charge, as soon as possible.

Hotels surrounding the airports were charging as much as £1,000 to £2,500 for rooms for a night, according to the Sunday Telegraph.

“Considering the reimbursements for canceled flights and the costs of lodging stranded passengers, this will have an impact on revenue and the magnitude of the cost will depend on how long the outage lasts and how long it takes to resolve,” said John Strickland, director of aviation at analysts JLS Consulting.

Honeymoon ruined

Passengers faced hours-long lines to check in, reclaim lost luggage or rebook flights at Terminal 5, BA’s hub at Heathrow. Cruz said that to reduce overcrowding travelers will

only be let into the terminal 90 minutes before their flights.

Passengers—some of whom had spent the night at the airport— faced frustrating waits to learn if and when they could fly out.

“Everyone is upset. There’s people in tears,” said Melanie Ware, who flew in from Los Angeles and was trying to get to Venice on her honeymoon.

“We rebooked for Venice for tonight, which they also have canceled now,” she told Sky News. “So we have no way of getting out of Heathrow and they haven’t compensated us for anything, and we’re stuck and this is the worst honeymoon ever.

“British Airways has ruined our honeymoon.” Tonda Sallee, who was trying to fly to Frankfurt, said she has been in line for five hours, “and we have no idea how long we’ll be in line. The rest of the day I’m sure, and we probably won’t fly out today either”.

Many passengers complained about a lack of information from the airline.

“Some 80-year-old lady was standing around waiting for announcements, et cetera, and she fell over,” said Londoner Terry Page, who managed to get on one of the last flights from Heathrow to Dallas-Fort Worth last Saturday.

He and other passengers arrived, but their luggage did not.

“We helped her up and she said ‘I’m just so tired,’” Page said. “It’s been a terrible, terrible day.”

While not that frequent, when airline outages do happen, the effects are widespread, high-profile and can hit travelers across the globe. BA passengers were hit with severe delays in July and September 2016 because of problems with the airline’s online check-in systems.

In August 2016 Delta planes around the world were grounded when an electrical component failed and led to a shutdown of the transformer that provides power to the airline’s data center. Delta said it lost $100 million in revenue as a result of the outage. Bloomberg News and AP

Travel ban to test SC view of presidential power

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ASHINGTON—The Supreme Court (SC) may soon decide how courts are supposed to view presidential power in the age of Donald J. Trump. The administration has promised a high court appeal of a ruling blocking the president’s ban on visitors from six majority Muslim countries. The case could be a major test for the young administration and for a court that has its 5-4 conservative majority restored with the confirmation of Trump nominee Neil Gorsuch as the ninth justice.

First, the justices must agree to intervene—something they’ll probably do considering the importance of the issue. If so, then they will be dealing with an area of the law, immigration, where courts have given presidents a lot of leeway. But the president’s power over immigration is not absolute, and several lower courts have prevented Trump from putting in place a temporary ban on travel to the US by residents of Iran, Libya, Somalia, Sudan, Syria and Yemen.

The travel policy was first issued a week after Trump took office on January 20 and then revised following initial unfavorable court rulings. The dispute is unusual because Trump himself has supplied much of the evidence that opponents said demonstrated that anti-Muslim prejudice lay behind the policy.

At issue in the case are statements Trump made during the

campaign, in interviews and in his actions as president.

“We’ve never really had, at least in recent decades, a case like this which involves blatant evidence of pretextual discrimination by the president himself and also in the immigration sphere,” said Ilya Somin, a professor at George Mason University’s Antonin Scalia Law School. The 4th US Circuit Court of Appeals ruled against the travel policy last Thursday, saying Trump’s comments helped show that the policy was “steeped in animus and directed at a single religious group”.

One key issue may be whether statements from candidate Trump should carry any weight. Three dissenting judges on the 4th Circuit said the statements shouldn’t be considered because candidates say many things while campaigning and shouldn’t necessarily be held to them.

Josh Blackman, a professor at the South Texas College of Law in Houston, said he thinks the Trump factor that was central to the 4th Circuit’s ruling could be less pronounced at the Supreme Court.

The court could pay more attention to declarations from Attorney General Jeff Sessions and Homeland Security Secretary John Kelly in support of the policy. “The justices recognize their decisions will long outlive Donald J. Trump.

They’ll be a little more careful to recognize that this isn’t only for or about Trump,” Blackman said.

Yet, it may not be possible for the justices to separate the issue from Trump himself, said Richard Primus, a University of Michigan law professor.

“If a different president had issued this order, would it be unconstitutional? The question falsely assumes that another president could have issued this order. This order only makes sense from an administration that wants to demonstrate to its constituency that it doesn’t like Muslims,” Primus said. “Neither Obama nor Clinton, or either President Bush, would have issued this order.”

It’s hardly clear how the Supreme Court might eventually rule in the case, but Justice Anthony Kennedy probably will be in the majority whatever the outcome.

That’s because Kennedy, closer to the ideological center of the court than any of his colleagues, often casts the decisive vote when the court is otherwise split between conservatives and liberals.

Both sides in the dispute have pointed to an opinion Kennedy wrote in 2015 in Kerry v. Din, a case in which an American citizen sought to challenge the denial of a visa for her Afghan husband.

Kennedy sided with the other conservative justices in favor of the Obama administration and against US citizen Fauzia Din. But 4th Circuit Chief Judge Roger Gregory used Kennedy’s opinion to buttress his majority opinion against the Trump travel ban. AP

The Regions BusinessMirror

news@businessmirror.com.ph

Editor: Efleda P. Campos • Tuesday, May 30, 2017

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PNP warned of possible deployment to Marawi

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By Rene Acosta

@reneacostaBM

HE National Police chief Director General Ronald M. dela Rosa alerted on Monday all members of the Philippine National Police (PNP) public-safety battalions for possible deployment to Mindanao and Marawi City as augmentation forces against the Maute Group.

T he PN P c h ie f s a id t h at while there are already “sizable” troops now tracking down Isnilon Hapilon and his followers from the Abu Sayyaf and Maute groups in Lanao del Sur, public-safety personnel should be ready for possible deployment to Marawi City.

“I just advised all the regions in the Philippines to prepare their public-safety forces to reinforce Marawi when needed. Right now, they are preparing, waiting for my instructions to reinforce Marawi,” dela Rosa said.

“We have a sizeable force there right now, but just in case there is a need, we have to pull out from other regions,” he added.

De l a R osa sa id c u r rent ly, public-safety forces from the Autonomous Region in Muslim Mindanao, Police Regional Office (PRO)-10 and PRO-12 and most Special Action Force battalions are operating in Marawi City side by side with the Armed Forces of the Philippines.

Dela Rosa expressed his full support to all PNP personnel now battling Hapilon and his followers right in the heart of Marawi City, risking their lives for the sake of peace.

He said these sacrifices of policemen increased his frustrations on police scalawags who do nothing for the service and the country and are only after money.

Only last week, several members of the Malabon City Police Station-Drug Enforcement Unit were charged with kidnapping and extortion by a female complainant.

“While police scalawags are enjoying their air-conditioned offices and the fruits of their criminal labor, our true policemen are fighting a war—they are mixing sweat and tears just to survive. A big difference really. That’s why I am very frustrated about police scalawags who continue to destroy our ranks,” he said.

Two policemen have already been killed in the ongoing operations against the Maute Group in Marawi City.

Church launches fund drive for Marawi City

By Elmer V. Recuerdo Correspondent

T LIVELIHOOD SHIFT The erstwhile sea gypsies, the Badjaos of Tawi-Tawi, are gradually adapting to their environment in the cities in

Mindanao. Here in Davao City, many have turned to vending used shoes, bags and dresses although many are still in the middle of the streets or in the sidewalks to beg. MANUEL CAYON​

Red Cross helps evacuees from Marawi

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HE Philippine Red Cross (PRC) has stepped up its relief efforts in Mindanao, feeding and providing medical checkups to people displaced by the ongoing armed clashes in Marawi City.

To date, PRC has provided hot meals and clean water, as well as other humanitarian aid, such as psychosocial support, first aid, blood supply and tracing services.

Eight evacuation centers in Lanao del Norte and Iligan City are currently occupied by more than 2,000 families from Marawi City.

“During this time of crisis, our Red Cross staff and volunteers on the ground never waver in their humanitarian mission to deliver aid and assistance to affected families and individuals. PRC volunteers from Day One setup welfare desks for Marawi folks displaced in evacuation centers and along the highways. We have

provided first aid, psychosocial support and restoring family links services, distributed safe and clean water and hot meals.

We are one in helping the most vulnerable, banking on our fundamental principle of humanity,” PRC Chairman Richard J. Gordon said.

Seven welfare desks were set up in Iligan School of Fisheries, Maria Cristina Barangay Hall, Mindanao

State University-Iligan Institute of Technology (MSU-IIT), Baloi Gym, Adventist Medical Center, Saguiaran Evacuation Center and Kinasanghan Hi-Way 2. Some 700 individuals were given hot mea ls, 394 ind iv idu a ls were provided with pyschosocial support, and 16 individuals received restoring family links services by the PRC. To ensure health and safety, the PRC assisted 17 individuals suffering from high blood pressure and asthma. Five individuals were also provided with first aid in MSU-IIT and Buru-un School of Fisheries.

To augment blood supply, PRC Blood Services has provided blood units to injured individuals in Adventist Hospital.

PRC-Cagayan de Oro Chapter also sent blood units to Iligan City. Claudeth Mocon-Ciriaco

Baliwag to celebrate Pakwan Fest, earns ₧6 million in one harvest

By Catherine Joy L. Maglalang Correspondent

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ALIWAG, Bulacan—This municipa lit y celebrated Pakwan Festival last Friday, showcasing its fruitful and profitable harvest. Farmers of this town earned P6 million in one harvest season in 100 hectares of land containing watermelons.

Ariel Cabingao, the barangay captain of Barangay Tarcan and head of the organizers of Pakwan Festival, told the BusinessMirror the desire of the farmers to have three harvest seasons resulted in planting watermelons and eventually having a festival for pakwan farmers. At first, they were just planting corn and vegetables and

eventually planted watermelons as an alternate to the said farm products. February is for planting and May is harvesting season.

He said the record showed planting watermelon is beneficial because of the bigger profit it provides for the farmers. He said four years ago it was launched when they gave seeds to 150 farmers. He said the farmers wanted to promote it and formed a group, which he leads, handled Pakwan Festival. He said carts filled with watermelon were paraded in the entire barangay.

Cabingao said the festiva l showcased the sweetest, biggest, heaviest and the most abundant harvester and were given prizes.

Watermelon seeds will be given away as prices.

The barangay captain said the dapog system is helpful in planting and producing better harvest.

Mayor Ferdie Estrella said his administration provided pakwan seeds to the farmers. The Pakwan Festival is now incorporated with the Buntal Festival, an exhibit of the products made from woven buntal fibers. This festival also helps the local community preserve the weaving of buntal into various products like hats.

The mayor also invited the public to join them in the celebration. He said local tourists were expected to go to Barangay Tarcan to participate in the festival. He said the festival serves as a venue to promote Barangay Tarcan as a pakwan center.

HE Catholic Church has l au nc hed a n at ionw ide fund drive to help families displaced by the ongoing clashes between the government and the Maute rebel group in Marawi City.

The National Secretariat for Social Action (Nassa)/Caritas Philippines, the social-action ar m of the Catholic Church, launched a “solidarity appeal ” to all the 85 dioceses nationwide to support relief operations for the families who fled their homes.

Nassa/Caritas Philippines National Director Archbishop Rolando J. Tria Tirona sent a letter to all bishops and social-action directors to appeal for assistance for those affected by the armed conflict in Marawi City.

“The national Caritas is now appealing to your generosity for any assistance to augment the needs of the internally displaced persons affected by the Marawi siege,” Tria Tirona said.

The Nassa/Caritas Philippines

initially released P300,000 to support the relief operations of the social-action center of the Diocese of Iligan.

Other Mindanao dioceses also started helping the Prelature of Marawi in assisting displaced families.

Tirona said an assessment team from Nassa/Caritas Philippines has been deployed in Mindanao this week to check the needs of those affected.

Data from the Department of Social Welfare and Development showed more than 55,000 families have already fled their ho me s f o l l o w i n g t he c r i s i s in Marawi.

There are no updates yet on the status of Prelature of Marawi Vicar General Fr. Chiro Suganob and 15 other civilians, who were abducted by the Maute Group last week from the Saint Mary’s Cathedral in Marawi City.

I n t he f ace of t he c r i si s, the Catholic bishops in Mindanao prayed and encouraged everyone to pursue peace, citing the martial rule recently declared in the whole of Mindanao “must be temporary”.

DA to plant trees in 1M hectares of critical watersheds

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HE Department of Agriculture (DA) said it is planning to plant trees over a million hectares across identified critical watersheds across the country in the next five years to sustain agricultural productivity nationwide.

“We would like to get involved with agroforestry because we feel threatened by the continued depredation in watershed areas.

You have to understand agriculture depends on water. Without water, there will be no agriculture,” Agriculture Secretary Emmanuel F. Piñol told reporters in an interview on May 29.

“We are afraid there will come a time when our agricultural productivity will be affected if we do not protect the critical watersheds.”

Piñol said he would coordinate with the Department of Environment and Natural Resources for the implementation of the agroforestry program he crafted, dubbed as “Bantay Kagubatan”.

“Our targets are the watershed areas and the critical watersheds. We will coordinate with the Department of Environment and Natural Resources and ask them to allow us to plant trees under an agroforestry program, which will be considered as an agriculture activity and not a reforestation [program],” he said.

“If we target a million hectares over the next five years to be replanted, that sounds ambitious, but we have to be very ambitious and aggressive. I’ve been flying all over the country using a helicoper and when I looked down and saw the denuded mountains, I knew that if this problem is not addressed, this will have an adverse effect on agriculture,” he added.

The Agriculture chief said they are now eyeing six areas to be covered by the Bantay Kagubatan program: Cagayan watershed, Sierra Madre watershed, Pampanga wate shed, Agusan, Panay and Mindanao River basin. Jasper Emmanuel Y. Arcalas

DOE to launch spot market in Mindanao

By Lenie Lectura

T

@llectura

HE Department of Energy (DOE) has issued a circular declaring the launch of a spot market in Mindanao next month.

“It has been signed and published. The launch is on June 26,” Energy Secretary Alfonso G. Cusi said in a text message.

“The DOE hereby declares the launch of WESM [Wholesale Electricity Spot Market] in the Mindanao Grid effective June 26 to provide sufficient time for the Market Operator [MO], System Operator and WESM participants to prepare and familiarize themselves in WESM operations,” DOE Department Circular 2017-005-0009 stated.

“Activities for WESM Mindanao will push through. The launching on June 26 triggers the start of the trial operations period. This will aid us in determining the readiness of the trading participants including the system operator and the market operator,” DOE Undersecretary Felix William B. Fuentebella said.

Upon effectivity of the circular, all electric-power industry participants in the Mindanao grid shall be considered WESM participants and shall submit and comply with the registration requirements as prescribed in the WESM rules and Market Manuals, no later than the launch date.

Fuentebella said the launch date is not yet the state of the commercial operations.

The agency said the start of WESM Mindanao’s commercial operations will be declared by the DOE when the following criteria are met: n All systems and procedures needed in operating the spot market must be put in place; n The trial operations program should be completed; n The forecasting, scheduling, dispatch, pricing, metering and settlement processes of the WESM should be fully operational in the Mindanao grid; n Training programs shall have been conducted for the WESM Mindanao trading participants; n Energy Regulatory Commission approval must be secured for the price determination methodology; and n The Market Dispatch Optimization Model must be certified by an independent auditor.

The DOE has tasked the Philippine Electricity Market Corp., the country’s power spot- market operator, to submit a certification on the compliance to the criteria within three months from the launch date.

A10 Tuesday, May 30, 2017 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Bringing back the rule of law

‘W

here the law is subject to some other authority and has none of its own, the collapse of the state, in my view, is not far off; but if law is the master of the government and the government is its slave, then the situation is full of promise, and men enjoy all the blessings that the gods shower on a state.”

Thus wrote the Greek philosopher Plato in Laws, his last book.

The rule of law should be the foundation for both our liberties and for social order. Many Filipinos before us have fought in great struggles and even died to reestablish the rule of law in our country.

The rule of law means the law is above everyone and it applies to everyone.

Whether you are the President of the country or the street sweeper who just wears a T-shirt with the President’s face printed on it. Ruler or ruled, no one is above the law, and no one is exempted from the law.

It is said that the rule of law was developed by Islamic jurists before the 12th century so that no official could claim to be above the Islamic religious law or Sharia, not even the caliph. Perhaps now they weep in their graves for the violence sweeping Marawi, the capital city of the province of Lanao del Sur, a traditional homeland of Muslims.

Rebels belonging to the Maute Group, the homegrown terror organization claiming affiliation with the Islamic State of Iraq and Syria (Isis), have torn through the streets of Marawi since last week, torching buildings, taking a priest and his Catholic faithful hostage, and sealing off much of the city.

The violence forced thousands to flee, raised fears of growing extremism in the country and forced President Duterte to impose 60 days of martial law on Mindanao, our second-largest island after Luzon and home to 22 million Filipinos.

All government officials in the Philippines pledged first and foremost to uphold the Constitution, affirming that the rule of law is superior to their offices and provides the basis of their mandate. This, indeed, is the most important commitment of the President of the Philippine Republic.

When terrorists attack a town and hoist the emblem of the Isis in dwellings and in the town’s municipal building, there is no rule of law.

When they take church workers, including a priest, as hostages, seize government vehicles, occupy establishments and burn down buildings, including a cathedral, there is no rule of law.

When they mow down civilians and force the exodus of residents, there is no rule of law.

When these terrorists continue to enjoy impunity for their actions, there is no rule of law.

We have to apply the full force and might of our state against these terrorists and bring back the rule of law in Marawi and other affected areas in Mindanao, or else the toll of victims would just pile up. There will be more atrocities like what is happening in Marawi.

Bringing back the rule of law in our country would not be the work of one person alone, but the President certainly has to take the lead. If martial rule needs to be enforced in Mindanao, then so be it.

Those who speak out in condemnation of Duterte’s martial-law imposition must ask themselves what exactly they are opposing and what, instead, they are proposing to prevent further violence in Marawi from taking place.

The President must have the political will to uphold the rule of law. That Duterte has it must be commended. Duterte is not seeking to abolish the Constitution. Instead, he is trying to make sure it is followed.

The test of a constitution does not lie in its contents, but in what is done to assert the rights and laws it proclaims.

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Manny B. Villar

THE Entrepreneur Continued from A1

A

ctually, my topic in this week’s column is about President Duterte’s trip to Russia and what it means to us, now and in the long term, but I could not avoid mentioning the latest conflict in Mindanao because of its potential impact on the economy.

I believe the President’s trip to Russia, or even his earlier travel to China, does not mean that we are moving away from the US. We’re just establishing that the US is not the only source of investments for the Philippines or the only market for our products.

Besides, it is consistent with the protectionist policies announced by US President Donald J. Trump even before his election.

Mexico is only now finding, because of Trump’s pronouncements, that it is necessary to move away from too much dependence on its trade relations with the US. Trump’s repeated announcements that he would withdraw from the North American Free

Trade Agreement with Mexico and Canada, if he could not renegotiate for better terms, have encouraged Mexico to expand its economic ties.

News reports said the Mexican government was seeking to expand its trade and investment relations with China, and other countries in South America and the European Union.

Thus, Mexico is starting to do now what Duterte has been doing right after his election last year, when he declared an independent foreign policy for the Philippines.

The President’s trip was cut short because of the attack launched by the Maute terrorist group in Marawi City, but some members of

Spring will follow winter

Max V. de Leon Jennifer A. Ng Dionisio L. Pelayo Vittorio V. Vitug

Online Editor Social Media Editor

Chairman of the Board & Ombudsman President VP-Finance VP Advertising Sales Advertising Sales Manager Group Circulation Manager

True globalization

John Mangun

OUTSIDE THE BOX

H

umans have been discovering how the world works for thousands of years. But now, at the pinnacle of human development, we think that we should measure our knowledge based on the newest invention. The light bulb, the internal combustion engine and the transistor changed life on earth. How could the ancients possibly be considered intelligent without 24/7 Internet access?

The quest for knowledge was always about trying to understand the order of an apparent uncontrolled universe. In other words, we have always been looking for patterns and cycles.

The Stonehenge was built about 5,000 years before the Internet came into existence. The Mayan Calendar was created 2,500 years ago. We can include the Fibonacci numbers, the Golden Ratio and the Saros periods, which all demonstrated definite patterns and cycles.

The Saros cycle/series—named

by astronomer Edmond Halley in 1691—can predict solar and lunar eclipses and was known to the Chaldeans a thousand years before Christ. In 1503 Christopher Columbus was stranded in Jamaica. His sailors, following a Western tradition of stealing from the locals, had their food supply cut off. The story goes that Columbus convinced the indigenous Taíno to overlook the thievery by predicting a lunar eclipse, information found in the 16th century version of “Google”—his almanac.

Starting in early 2015 I wrote that

With the new relations between the Philippines and Russia and China, I think we can look at Duterte’s independent foreign policy approach as true globalization, which means establishing economic ties with other countries regardless of their ideologies or political systems. After all, the US and other western countries also do business with Russia and China. the Cabinet and business leaders who accompanied him remained in Russia to finish their mission to forge new agreements with the Russian government and with Russian companies.

The President instructed Foreign Affairs Secretary Alan Peter S. Cayetano and other officials to continue the scheduled meetings with Russian government officials and the meetings between business groups from the two countries. About 300 Filipino businessmen accompanied Duterte to Russia.

During the meetings, Russia agreed to open its market for Philippine agricultural products, including the importation of $2.5 billion worth of fruits and other farm produce over the next 12 months.

Trade between the two countries

the world was entering a transition phase that would lead to increasing political and economic turmoil. This is based on the cycle studies of Martin Armstrong. Elections in 2016 and again in 2017 show that this upheaval is increasing and will continue into 2018. The current period we are in is marked by a breakdown of the peoples’ trust in institutions.

The US data is representative of what is happening around the world.

Trust in organized religion has fallen from 60 percent in 2001 to 41 percent today. The judicial system has suffered with the Supreme Court trust rating falling to 36 percent from 50 percent. Press and media are well trusted by only 21 percent from a previous 36 percent. The US Congress gains trust from only 9 percent. In 2001 58 percent trusted the US president. It reached a low of 29 percent in 2014 and has edged back up to 36 percent. Big business’ trust rating dropped to 18 percent from 29 percent, with banks down to 27 percent from 46 percent.

Interestingly, trust in the military has increased from 66 percent to 73 percent. Trust in the police has been steady at 55 percent. Also higher is trust in small business up to 68 per-

has been described as modest: according to the Department of Foreign Affairs (DFA), bilateral trade totalled only $226 million in 2016, with Philippine exports amounting to $49 million, mainly carrageenan and seaweeds. Imports from Russia were mainly crude oil products.

The DFA did not provide numbers, but said Russian investments in the Philippines were minuscule.

So far, Russia has been a small market for the tourism industry, with only 28,000 tourists coming to the Philippines in 2016.

We are already seeing new deals on trade and investment between the Philippines and China as a result of Duterte’s independent foreign policy. His trip to Russia opens up huge opportunities for Philippine industries, including export-oriented manufacturing and agriculture, and investments.

With the new relations between the Philippines and Russia and China, I think we can look at Duterte’s independent foreign policy approach as true globalization, which means establishing economic ties with other countries regardless of their ideologies or political systems. After all, the US and other western countries also do business with Russia and China.

For comments, e-mail mbv.secretariat@gmail. com or visit www.mannyvillar.com.ph.

cent from 57 percent in 2001.

Even as the names in politics changed, the trust ratings continued to fall as the cycle came closer to the transition phase. Cycles are a reality in every country. In the Philippines, we think only of the rainy and dry seasons, but we also have winter, spring, summer and autumn based on the earth cycle around the sun.

As demographer and author of The Fourth Turning, Neil Howe, recently said, “History is seasonal, and winter is coming. Trust in democracies, media and politicians is dropping. When was the last time we saw these changes? In the 1930s.”

But after winter comes spring. In the next 12 months, that is what we in the Philippines should be concentrating on to take advantage of the seasonal change. Every period of “winter” was followed by “spring”.

After the Great Depression and World War II came an age of relative peace and great global prosperity. It is only a matter of time.

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

Opinion BusinessMirror

opinion@businessmirror.com.ph

Trump’s energy, low and dirty

Practical safeguards vs martial-rule abuse

Paul Krugman

new york times

D

onald J. Trump has two false beliefs about energy, one personal, one political. And the latter may send the world on a path to disaster.

On the personal side, Trump reportedly disdains exercise of any kind except golf.

He believes that raising a sweat depletes the finite reserves of precious bodily fluids, I mean energy, that a person is born with, and should therefore be avoided.

Many years of acting on this belief may or may not explain the weird and embarrassing scene at the G7 summit in Taormina, in which six of the advanced world’s leaders strolled together a few hundred yards through the historic city, but Trump followed behind, driven in an electric golf cart.

More consequential, however, is Trump’s false belief that lifting environmental restrictions—ending the supposed “war on coal”—will bring back the days when the coal-mining industry employed hundreds of thousands of bluecollar Americans.

How do we know that this belief is false? For one thing, coal employment began falling long before anyone was talking much about the environment, let alone global warming. In fact, coal jobs fell by two-thirds between 1948 and 1970, the year the Environmental Protection Agency was founded. This happened despite rising, not falling, coal production, mainly reflecting the replacement of old-fashioned pick-andshovel mining with strip-mining and mountaintop removal, which require many fewer workers. It’s true that in the past few years coal production has finally begun to fall, in part due to environmental rules. Mainly, however, coal is fading because of progress in other technologies. As one analyst put it last week, coal “doesn’t really make that much sense anymore as a feedstock”, given the rapidly falling costs of cleaner energy sources like natural gas, wind and solar power.

Who was that analyst? Gary Cohn, chairman of the National Economic Council—that is, Trump’s own chief economist. One wonders, however, whether he’s expressed those views— which pretty much represent the consensus among energy experts—to the president.

There was a time, not that long ago, when advocating clean energy was widely considered an impractical, counterculture sort of thing. Hippies on communes might talk about peace, love and solar energy; practical people knew that prosperity was all about digging stuff up and burning it. These days, however, those who take energy

policy seriously see a future that belongs largely to renewables—and definitely not a future in which we keep burning lots of coal, let alone employ a lot of people digging it up.

But that’s not what voters from what used to be coal country want to hear.

They enthusiastically backed Trump, who promised to bring those coal jobs back, even though his real agenda would punish those voters with savage cuts in programs they depend on. And Trump cares a lot more about public adulation than he does about serious policy advice.

Which brings me back to Trump’s European trip, which was remarkable not for what Trump did but for what he didn’t do.

First, in Brussels, he declined to endorse North Atlantic Treaty Organization’s (Nato) Article 5, which says that an attack on any Nato member is an attack on all. In effect, he repudiated the central plank of America’s most important alliance. Why, it was almost as if he’s more interested in appeasing Vladimir Putin than he is in defending democracy.

Then, in Taormina, he was the only leader who refused to endorse the Paris climate accord, a global agreement to limit greenhouse-gas emissions that may be our last good chance to avoid catastrophic climate change. Why? At this point, claims that trying to limit emissions would cause vast economic harm have lost all credibility: The same technological progress in alternative energy that is marginalizing coal would make the transition to a low-emissions economy far cheaper than anyone imagined a few years ago.

True, such a transition would accelerate the decline in coal. And that’s a reason to provide aid and new kinds of jobs for coal miners.

But Trump isn’t offering coal country real help, just a fantasy about turning back the clock. This fantasy won’t last for long: In a couple of years it will be obvious, whatever he does, that the coal jobs aren’t coming back. But the fantasy won’t even last that long if he goes along with the Paris accord.

So am I suggesting that the world’s most powerful leader might put the whole planet’s future at risk so that he can keep telling politically convenient lies, which will soon be exposed in any case? Yes. If you find this implausible, you must not have been reading the news the past few months.

Edgardo J. Angara

A

few days after President Duterte formally declared martial law and suspended the writ of habeas corpus over all of Mindanao, former President Fidel V. Ramos and Chief Justice Maria Lourdes A. Sereno promptly sounded the alarm over possible abuse of martial-law powers by their administrators.

Ramos even added a call on Duterte not to expand military rule to the Visayas and even the rest of the country, emphasizing that it could do

ABOUT TOWN Part Two

L

ast week we reported on the first leg of our trip, along with 19 other Asean journalists, to two provinces in central China as part of the ongoing effort of the State Council Information Office and the Asean-China Center to explain Chinese President Xi Jinping’s ambitious “One Belt, One Road” project to a broader audience.

It was a bright and sunny day in Hunan province when our chartered bus navigated its way to the Jingxia Economic Development Zone, a modern logistics industrial park spanning an area of 85 square kilometers (sq km). After a brief tour, we were brought to Xianjiang-Gaoling International Trade City, which uses modern technology and the Internet to facilitate logistics, domestic trade, manufacturing and services.

The Central China Import and Export Commodities Center offered us a glimpse of a comprehensive service

platform set up by the provincial government to stimulate foreign trade. We capped the day with a visit to Yestech, the largest photoelectric industrial park in central China that produces full-color light emitting diodes displays for big events, such as the Olympics and the World Cup. From Changsha, we traveled to Zhuzhou City, an important transportation junction in south China.

We visited the CRRC Electric Locomotive Co., China’s largest research and manufacturing base for electric locomotives. In Xiangtan, home-

the country more harm than good.

Referring to the 1972 martial law declared by President Ferdinand E. Marcos, he said, “We were all victims

Moral ascendancy Cecilio T. Arillo

database

D

OES former President Fidel V. Ramos have the moral ascendancy to frequently criticize President Duterte?

I asked this question because every time Ramos raves and rants on Duterte, he gives us the impression that he has the moral authority over him on issues of politics, economics, foreign policy, governance, national security, public safety, and graft and corruption, among others.

At his inaugural address on June 30, Duterte acknowledged the presence of Ramos, saying: “President Fidel Ramos, sir, salamat po sa tulong mo [thank you for your help] making me President…” Many political observers doubted this, though, because Duterte lost in Pangasinan, Ramos’s vote-rich home province, where Duterte got only 338,644 votes behind Poe’s 559,571 who was at No. 1.

Last Friday was the latest Ramos rant, when he slammed Duterte’s threat to impose martial law and warned him “against inevitable abuses under military rule”.

Former Senate President Juan Ponce Enrile, Ramos’s boss and mentor in the Marcos nine-year martial law (September 1972 to January 1981), promptly defended Duterte, thus: “The President has to be harsh in implementing martial law because he has the monopoly of legitimate, legal violence through the police and the military.”

“The current firefight in Marawi City is more than a rebellion because we are dealing with an ideological and, worst, a religious problem which

China’s ‘One Belt, One Road’ up close Ernesto M. Hilario

Tuesday, May 30, 2017 A11

town of Communist Party of China founding chairman Mao Zedong, we toured the headquarters of XEMC Windpower Co., one of the leading suppliers in China of direct-drive wind-power turbines. We also saw for ourselves the operations of Xunda Science and Technology Group, a high-tech enterprise integrating scientific research, production and sales of gas stoves, range hoods and water heaters. Toward late afternoon, we visited the sprawling complex of Tidfore Heavy Equipment Group, which specializes in state-of-theart equipment and general contracting services for the engineering and construction industries and is now among the top 500 private enterprises in China.

Another high-speed train ride brought us from Xiangtan to Nanchang, capital of Jiangxi province.

A guide explained to us the history and activities at Xiaolan EconomicTechnological Development Zone and the Xiaolan Exhibition Hall, where various industrial products were displayed. Later, we toured the manufacturing facility of Jiangling Motors Co. Group (JMC), which has a tie-up with Mitsubishi Motors of Japan. Then, we were escorted to the office of Jiangxi Just Numerical

is Washhabism, a kind of fanatical Islamism followed by Saudi Arabia that is being taught in madrassas in Mindanao,” Enrile revealed, adding, “the martial-law decision is based on strategic intelligence information in the President’s possession and that he was elected by the people to represent the general will”.

As the 12th president (19921998), Ramos was credited for a number of accomplishments but his term was also known for its legacy of perfidy, having been the only head of state in contemporary history to have been recommended by the powerful Senate Blue Ribbon Committee to be prosecuted along with his five Cabinet members in connection with the multibillionpeso Centennial scam.

As one senator commented then in the book, Power Grab, 2001: “The Ramos government may emerge as one with the most number of bigtime scams in the country’s history.”

The senator cited as an example the P30-billion PEA-Amari deal; the P9-billion Centennial scam; the P7.8-billion missing AFP trust modernization fund; the P42-

Looking back at the 2017 edition of the tour for Asean media for a close look at the “21st Century Maritime Silk Road”, I would say that it really opened our eyes to China’s high level of economic development at this point. We witnessed firsthand the dizzying pace of activity in the Chinese economy under what has been termed as “socialism with Chinese characteristics”.

Control Technology, a firm involved in precision parts manufacturing, aviation and aero space, and flexible automated production lines.

The weather was pleasantly cool when we were in Jiujiang City. Officials of Xiankelai Biotechnology Co. briefed us on their research and production of edible mushrooms, particularly ganoderma lucidum, said to have disease prevention and curative effects. Later, we visited the production facility of Sinopec Jiujiang Co. that produces gasoline, diesel, kerosene, chemical naptha and liquedifed gas, among others, from crude oil. Then we were on the road again toward Jujiang CP (Charoen

of martial law. We would be much higher now in the ranking of nations, in the appreciation of other nations about the Philippines, if we did not have martial law.”

Sereno cited several Supreme Court and foreign court decisions, describing widespread humanrights violations during the 1972 martial rule.

In support of the legal safeguards, there are several practical ways the community can do to protect its members. Neighborhood watches can be organized.

Such groups are normally created by local government unit officials, like mayors and barangay captains.

But civic leaders can collaborate with them.

The Integrated Bar of the Philippines (IBP) can definitely assist community members on legal issues. Several civic-minded lawyers and paralegal groups are more than willing to lend a hand in protecting the civil rights of citizens.

Establish social-media networks.

And if possible, establish a hotline to the military and police spokesman.

Fears about martial law have deep historical roots. The nation already has experienced what abuses are possible under military rule. We have learned enough to do whatever we can to guard against any of these abuses.

billion housing scandal between 1997 and 1999; the P30-billion tax-credit certificates scam from 1995 to the first half of 1998; the mismanagement of the P3.5-billion soldiers’ trust funds; the nonremittance of P14-billion national government employees contributions to the Government Service and Insurance System (GSIS); and lately, the highly scandalous and irregular deals involving the National Steel Corp. and the National Power Corp., which then-Senator Enrile had unearthed.

The Senate committee found out that the multibillion-peso project was grossly overpriced and had used substandard materials and unaudited government and private funds.

Ramos, then, was apparently trying to make a lasting impression to the world of his term by windowdressing the country’s image during its first centennial.

The Centennial project housed the largest amphitheater in Asia, with a seating capacity of 35,000, and mini exhibits featuring the different regions of the country.

It includes a giant Freedom Ring and was intended as the centerpiece of the 60-hectare Philippine Centennial Exposition that cost the government P1.2 billion.

Documents submitted to the Blue Ribbon Committee showed that government funds and private donations that went into the whole project reached a whopping P9 billion.

The Ramos administration raised this mind-boggling amount from the special allotment release order or Saro of various state agencies for P4.7 billion; the general allotment release order or Garo for P350 million each from the GSIS, Social Security System, Land Bank of the Philippines

and the Development Bank of the Philippines; P75 million each from the Philippine Amusement and Gaming Corp. and the Philippine Charity Sweepstakes Office; and P2.1 billion through the government budget, funds of the Office of the President and the Department of Public Works and Highways.

The whole structure remains today as a monument to the excesses of the Ramos administration.

The Senate Blue Ribbon and Government-owned Corporations and Public Enterprises Committees that investigated the PEA-Amari deal found evidence pointing to the involvement of key officials of the Ramos administration in the scam.

The fraud involved the transfer of a government property to a private firm under highly questionable terms. Then-Blue Ribbon Committee Chairman Sen. Franklin M. Drilon said the conveyance of the piece of reclaimed land along Roxas Boulevard to the Amari group was “disadvantageous and injurious to the government”.

The state agency, Philippine Estate Authority (PEA), under a jointventure agreement with the Thailand-based Ital-Thai Development Corp. Ltd.-led consortium, obligated itself to convey the title and possession of the 1.578-million squaremeter property for P1.89 billion or a giveaway price of P1,200 per sq m.

According to the zonal valuation of the Bureau of Internal Revenue, the value of land in the area then should have been P7,800 per sq m. The Municipal Assessor of Parañaque City, where the property is located, pegged the market value of the property at P6,000 per sq m.

Porkpand Group) Feed Co., a producer of animal feeds using highly automated processes.

It was slightly chilly when we set foot the next day in Jingdezhen City, in the northeast of Jiangxi province.

We visited the Jingdezhen Ceramic Co., a producer of high-grade porcelain for which the city is well-known the world over. While in the city, we were also brought to the Jindezhen Kiln Folk Cultural Exhibition and Taoxichuan Ceramic Creative Industrial Park to see samples of porcelain products.

From Jingdezhen, we traveled by another chartered bus to Wuyuan County. Rain greeted us as we began our visit to Huangling Ridge Scenic Area, a 15-sq-km tourist spot featuring a cable-car ride to 500-year-old ancient villages, terraced fields and folk culture. We left Wuyuan County via another high-speed train ride to go to Shanghai, where we spent the night before leaving for our respective flights home after 11 days on the road.

Looking back at the 2017 edition of the tour for Asean media for a close look at the “21st Century Maritime Silk Road”, I would say that it really opened our eyes to China’s high level of economic

development at this point.

We witnessed firsthand the dizzying pace of activity in the Chinese economy under what has been termed as “socialism with Chinese characteristics”. It was the late Chinese leader Deng Xiaoping who said, in a radical departure from orthodoxy in the post-Mao era: “Poverty is not socialism. To be rich is glorious.”

What Chinese President Xi Jinping appears to be doing now with his One Belt, One Road project is to further strengthen the Chinese economy by linking it with the economies in Southeast Asia, South Asia, Middle East, Europe and Africa through enhanced trade and investments.

Our hectic 11-day trek through two provinces in central China may have been too short in duration and too limited in scope to really get us acquainted with what really makes the Chinese economy run the way it does now—at high speed, much like its homemade trains—but I think it was enough to recall what Deng also said many years ago: “A fundamental contradiction does not exist between socialism and a market economy.”

E-mail: angara.ed@gmail.com, Facebook and Twitter: @edangara

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

E-mail: ernhil@yahoo.com.

2nd Front Page BusinessMirror

A12 Tuesday, May 30, 2017

www.businessmirror.com.ph

Govt makes gains in restoring normalcy in restive Mindanao

P

hilippine forces control most of a southern city where militants linked to the Islamic State group launched a bloody siege nearly a week ago, authorities said on Monday, as the Army launched air strikes and went house-to-house to crush areas of resistance.

According to government figures on Monday, the death toll was 105 people—61 militants, 20 government forces and 24 civilians.

Only small areas of Marawi remain under militants’ control after six days of fighting, said Brig.

Gen. Restituto Padilla, the military

spokesman. In recent days, gunmen have managed to fend off attack helicopters, armored vehicles and scores of soldiers.

“We can control who comes in and who comes out, who moves around and who doesn’t, and we are trying to isolate these pockets

of resistance that have remained,” Padilla added.

The Armed Forces of the Philippines (AFP) said it is dead set at hastening efforts in restoring law and order and normalcy in the whole of Mindanao, especially in Marawi City.

“If the full cooperation of our citizens in the whole of Mindanao is obtained, then we can expedite the process of securing Mindanao on a daily basis,” Padilla said.

Padilla admitted the government does not have a timeline in clearing Marawi City of Islamist militants, but it is keen on finishing the violence the soonest time possible.

“Our ground commanders have assured that the end is almost there.”

Presidential Spokesman Ernesto C. Abella said the Department of Social Welfare and Development was able to provide P1.17 million worth of assistance to affected families in the Autonomous Region in Muslim Mindanao.

Around 12,509 families, or 59,665 individuals, have been displaced by the conf lict, of which 1,018 families, or 4,278 individuals, are still staying in 14 evacuation centers, Abella noted.

He also reminded locals of Mindanao that under martial law, the Department of Trade and Industry is enforcing a price freeze on basic necessities and prime commodities. The price freeze covers Regions 9, 10, 11, 12 and Caraga,

and will only expire 60 days after the declaration of martial law.

Joint session

Five senators filed on Monday Resolution 390, asking the Senate and the House to “convene Congress in joint session and deliberate on Proclamation 216” that President Duterte signed last week, imposing martial law and suspending the writ of habeas corpus in Mindanao.

Senators Francis N. Pangilinan, Franklin M. Drilon, Risa HontiverosBaraquel, Antonio F. Trillanes IV and Paulo Benigno A. Aquino signed up as coauthors of the three-page resolution expected to be taken up at the closed-door caucus called by Senate President Aquilino L. Pimentel III

soon after convening their plenary session yesterday.

After an earlier midsession caucus last week, senators affirmed that a joint session with congressmen is called only if Congress will vote to revoke or extend the President’s martial-law proclamation.

The senators’ Resolution 390 acknowledged that Section 18, Article VII of the 1987 Constitution gave Duterte “the prerogative to suspend the privilege of the writ of habeas corpus or place the Philippines or any part thereof under martial law in case of invasion or rebellion, when the public safety requires it, for a period not exceeding sixty days.”

See “Govt,” A2

CHED OKs TUITION, OTHER FEE HIKES OF 268 COLLEGES

By Claudeth Mocon-Ciriaco Correspondent

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EXODUS With white flags to indicate they are noncombatants, displaced residents continue to flee by a convoy of vehicles to safer areas, as government troops battle with Muslim militants on May 29, in Marawi City. Philippine forces say they now control most of the southern city, where militants linked to the Islamic State group launched a bloody siege nearly a week ago. Presidential Spokesman Ernesto C. Abella said on Monday that only small areas of Marawi are under militants’ control. AP/Bullit Marquez

Homegrown tire plant set for feasibility study

By Jasper Emmanuel Y. Arcalas

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@jearcalas

he countr y’s dream of having its first homegrown tire maker is moving closer to reality, as the Department of Agriculture (DA) announced that it will sign the memorandum of agreement (MOA) with Finnish tire-manufacturing company Black Donuts Engineering Inc. by September, formalizing the firm’s feasibility study for the construction of a $200-million rubbertire factory in Mindanao.

Agriculture Secretary Emmanuel F. Piñol made the pronouncement following his recent trip to Finland, where he met with the officials of Black Donuts for the establishment of Pilipinas Agila Tyre Manufacturing (PATM).

“We were able to finalize the agreement for Black Donuts Engineering to conduct a feasibility study for a tire factory in the Philippines. We expect to go back to Finland in September, and we expect that, by that time, we will sign the MOA between the Philip-

4M The target annual output of the proposed Pilipinas Agila Tyre Manufacturing plant in Mindanao

pine Rubber Farmers Association (PRFA) and Black Donuts for the start of the feasibility study,” Piñol said in an interview with reporters on Monday. Piñol added the feasibility study would only take about two months.

The DA chief said the establishment of PATM, the first homegrown tire-manufacturing company in the country, would help stabilize the price of local raw rubber by giving farmers an assured market for their produce.

“We expect the tire factory to stabilize the price because when your rubber is dependent on the world

market prices, then we will be really affected whenever the price drops.

But if we have a local demand for our raw rubber, then the price will be stabilized,” Piñol said.

“Look, even when the price of raw rubber declines, the price of tire doesn’t because rubber is a traded commodity. That’s why there’s instability in price. But if we have our own local factory, then the price of our raw rubber would be stable,” Piñol added.

In March a three-way memorandum of understanding (MOU) was inked by the DA, PRFA and Phoenix Petroleum Philippines Inc., agreeing to invest for the construction of PATM, the first homegrown tire-manufacturing company. The signing of the MOU was held in Malacañang and was witnessed by President Duterte and Trade Secretary Ramon M. Lopez Under the MOU, PATM would source its rubber requirement from members of the PRFA. In January Piñol invited the executives of Black Donuts to visit the Philippines for possible investments in the Davao and

Cotabato areas, which accounted for a combined 42 percent share in the country’s total rubber output in 2016.

In an interview in January, Rodolfo L. Galang, interim executive director of the Philippine Rubber Research Institute, an attached agency of the DA, said the proposed 50-hectare rubber-manufacturing plant could produce at least 4 million tires a year.

The tires are suitable for regular cars, pickup trucks and other smalltype trucks, Galang said.

He added 40 percent of the tire to be produced will be made of natural rubber, which averages around 10 kilograms per tire. The goal of producing 4 million tires per year would require at least 16 million kilograms of rubber, or 16,000 metric tons (MT) annually.

“We are producing enough yearly requirement, around 110,000 MT a year, but our consumption, according to our data, is only around 30,000 MT,” he said.

Mindanao accounts for 99 percent of the country’s rubber production, according to government data.

he Commission on Higher Education (CHED) on Monday announced that it has approved the applications filed by 268 private higher-education institutions (HEIs) in the country for increase in their tuition and other school fees for academic year 2017-2018.

In a statement, CHED Chairman Patricia B. Licuanan said those with approved petitions for increase represent 16 percent of the 1,652 total private HEIs in the Philippines. This is lower than the reported 304 HEIs that raised their tuition and other fees last academic year.

Of the 268 private HEIs, 31 will increase tuition only, 231 tuition and other school fees and six other fees only. The average increase in tuition is 6.96 percent, or equivalent to P86.68 per unit, while the average increase in other school fees is 6.9 percent, or P243. Affected students make up about 1 percent of the total population of private HEIs. The average per-unit increase in tuition is P119.55, or 4.75 percent, for the National Capital Region (NCR); P49.07, or 3.05 percent, for Region 4; and P49.50, or 8.64 percent, for Region 3. For other school fees, the increases are P49.82, or 5.28 percent, for NCR; P408.70, or 5.9 percent, for Region 4, and P974.26, or 10.73 percent, for Region 3.

In deciding on the reasonableness of hikes in tuition and other school fees, the CHED is guided by: ■ Section 42 of Batas Pambansa Blg. 232, or the “Education Act of 1982”, which provides that, “each private school shall determine its rate of tuition and other school fees or charges…subject to rules and regulations promulgated by the Ministry of Education, Culture and Sports” (now Department of Education, Technical Educationand Skills Development Authority and CHED); ■ Republic Act 6728, or the“Government Assistance to Students and Teachers in Private Education Act”, which requires HEIs, for every incremental tuition increase, to allocate 70 percent of the increase for the payment of salaries, wages, allowances and other benefits of teach-

₧86.68

The average tuition increase per unit to be implemented by private higher-education institutions for academic year 2017-2018 ing and nonteaching personnel; 20 percent for the improvement and/ or acquisition of facilities, or modernization of buildings, equipment, libraries, laboratories and other similar facilities and the payment of other costs of operation; and 10 percent for the return on investment if they are stock corporations, otherwise, the remainder is to be utilized for the operation of the institution; ■ CHED Memorandum Order (CMO) 3, Series of 2012, or the “Enhanced Policies, Guidelines and Procedures Governing Increases in Tuition and Other School Fees, Introduction of New Fees, and for Other Purposes”, which takes into account the following factors: regional inflation rate, financial standing of the institution, financial capacity of the general studentry, impact of force majeure or calamities, quality track record of the school, and the mission and vision of the institution; and ■ The “education deflator”, which measures the average cost of providing education services based on the regional inflation rate.

The education deflator, or the Regional Inflation Rate, is supplied by the Philippine Statistics Authority (PSA). The PSA carried out special computations for the implicit price index of education for the CHED in its evaluation of applications for tuition and other school fee increase.

“The CHED’s approach to the issue of tuition is holistic. In the light of contending concerns and interests in society, there is a need to balance access issues with sustainability of educational institutions,” Licuanan said.

Licuanan also stated that, for its part, the CHED ensures that HEIs meet the guidelines provided by law, especially the requirement of consultation, the proper allocation of tuition, and strict adherence with the processes that seek to make tuition and other school fee increases transparent, reasonable and affordable.