“This latest atrocity may be the deadliest attack on a school since the war began more than five years ago. When will the world’s revulsion at such barbarity be matched by insistence that this must stop?”—UNICEF Executive Director Anthony Lake, after the group said air strikes in Syria’s rebel-held northern Idlib province killed 22 children and six of their teachers.AP
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“It's going to be a very tall order for Trump to win.”—Michael McDonald, a University of Florida professor who specializes in election turnout, as millions of votes that have been cast already in the US presidential election point to an advantage for Hillary Clinton in critical battleground states, as well as signs of strength in traditionally Republican territory. AP
“Many houses collapsed. The façade of the church collapsed. By now I have felt many earthquakes. This is the strongest of my life. It was something terrible.”—Marco Rinaldi, mayor of hard-hit Ussita, Italy, to Sky TG24 as officials began to assess the damage caused by a pair of strong earthquakes in the same region hit by a deadly temblor in August. AP
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Tuesday, November 1, 2016 Vol. 12 No. 20
Solons back farmers’ plea to extend rice QR By Jovee Marie N. dela Cruz
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@joveemarie
awmakers and farmers’ groups appealed to President Duterte to reconsider the apparent consensus among his economic managers to lift the quantitative restriction (QR) on rice imports, as Filipino farmers are still not ready to compete with their counterparts in the region.
RA 8178 The law that needs to be amended to scrap the import restrictions on rice by 2017, as required by the WTO
Party-list Rep. Tom S. Villarin of Akbayan said the lower chamber’s independent minority bloc, the Pambansang See “Solons,” A2
INSIDE
THE THREAT FROM RUSSIA
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The Threat from Russia
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ouR years ago Mitt Romney, then a Republican candidate for president, said that Russia was America’s “No. 1 geopolitical foe.” His opponents mocked this hilarious gaffe. “The 1980s are now calling to ask for their foreign policy back,” President Barack obama scoffed, “because the cold war’s been over for 20 years.” How times change. With Russia attempting to hack the American election, presiding over mass slaughter in Syria, annexing Crimea and talking casually about using nuclear weapons, Romney’s view has become conventional wisdom. Almost the only American to dissent from it is today’s Republican nominee, Donald Trump. Every week President Vladimir Putin finds new ways to scare the world. Recently he moved nuclear-capable missiles close to Lithuania and Poland. This week he sent an aircraft-carrier group down the North Sea and the English Channel. He has threatened to shoot down any American plane that attacks the forces of the despotic President Bashar al-Assad of Syria. Russia’s united Nations envoy has said that relations with America are at their tensest in 40 years. Russian television news is full of ballistic missiles and bomb shelters. “Impudent behavior” might have “nuclear consequences,” warned Dmitry Kiselev, Putin’s propagandist-in-chief, who went on to cite Putin’s words that, “If a fight is inevitable, you have to strike first.” In reality Russia is not about to go to war with America. Much of its language is no more than bluster. It does pose a threat to stability and order, however, and the first step to answering that threat is to understand that Russian belligerence is not a sign of resurgence, but of a chronic, debilitating weakness. Russia confronts grave problems in its economy, politics and society. Its population is aging and is expected to shrink by 10 percent by 2050. An attempt to use the windfall from the commodity boom to modernize the state and its economy fell flat. Instead Putin has presided over a huge increase in government: Between 2005 and 2015, the share of Russian GDP that comes from public spending and state-controlled companies rose from 35 percent to 70 percent. Having grown by 7 percent a year at the start of Putin’s reign, the economy is now shrinking. Sanctions are partly to blame, but corruption and a fall in the price of oil matter more. The Kremlin decides who gets rich and stays that way. Vladimir Yevtushenkov, a Russian tycoon, was detained for three months in 2014. When he emerged, he had surrendered his oil company. For much of his time in office, obama has assumed that, because Russia is a declining power, he need not pay it much heed. However, a weak, insecure, unpredictable country with nuclear weapons is dangerous—more so, in some ways, even than the Soviet union was. obama increasingly says the right things about Putinism, but Putin has learned that he can defy America and come out on top. Mild Western sanctions make ordinary Russians worse off, but they also give the people an enemy to unite against, and give Putin something to blame for the economic damage caused by his own policies. Because the danger is of miscalculation and unchecked escalation, America must continue to engage in direct talks with Putin even, as today, when the experience is dispiriting. Success is not measured by breakthroughs and cease-fires—welcome as those would be in a country as benighted as Syria—but by lowering the chances of a Russian blunder. Nuclear miscalculation would be the worst kind of all. Hence the talks need to include nuclear-arms control as well as improved military-to-military relations, in the hope that nuclear weapons can be kept separate from other issues, as they were in Soviet times. That will be hard because, as Russia declines, it will see its nuclear arsenal as an enduring advantage. Another area of dispute will be Russia’s “near abroad.” ukraine shows how Putin seeks to destabilize countries as a way to stop them from drifting out of Russia’s orbit. America’s next president must declare that, contrary to what Trump has said, if Russia uses such tactics against a Nato member, such as Latvia or Estonia, the alliance will treat it as an attack on them all. Separately the West needs to make it clear that, if Russia engages in large-scale aggression against non-Nato allies such as Georgia and ukraine, it reserves the right to arm them. © 2016 Economist Newspaper Ltd., London (October 22). All rights reserved. Reprinted with permission.
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A strong statement from China trip
The Entrepreneur
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Manny B. Villar
he Philippines, which is already expected to be the fastest-growing economy in Southeast Asia this year, is receiving a windfall of benefits from Duterte’s recent state visit to China. The President said the objective of his first visit to Beijing was to establish “an alliance of trade and commerce” with China. The results of his trip show that he achieved his objective, for the benefit of the Philippine economy and of Filipinos.
BusinessMirror
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E1 Tuesday, November 1, 2016
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Continued on A10
BUSINESS SENSE
EL NIñO EFFECTS CUT COCONUT-OIL EXPORTS BY 27.9%
e1
Russian President Vladimir Putin looks on as he delivers a statement on his departure at Tegel airport in Berlin on October 20, 2016. Odd Andersen/Agence FrAnce-Presse/getty ImAges
‘BRANCHINI MADONNA’, WONDERFULLY WEIRD
MEMORY LANE An elderly woman lights a candle and offers flowers on the grave of her beloved husband at the Libingan ng mga Bayani. NONIE REYES
Senate eyes scrutiny of $24-B deals signed during China trip By Butch Fernandez
ART
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Stayin’ alive!
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@butchfBM
he Senate is likely to review the $24-billion megadeals signed during the recent visit of President Duterte to China, amid reports some of the Chinese firms involved have been linked to anomalous projects. The chairman of the Senate Committee on Economic Affairs signalled on Monday senators may opt to exercise their legislative-oversight “prerogative” to look into the multibillion-dollar funding arrangements for various projects expected to be sourced from private Chinese
PESO exchange rates n US 48.5150
investors and state corporations. “Yes. The Senate can review all the agreements, the potential partners and the impact of those agreements to our economy,” Sen. Sherwin T. Gatchalian told the BusinessMirror, adding: “This is the prerogative of the Senate.” In a separate interview, however, Senate Majority Leader Vicente C. Sotto III pointed out that the legislative inquiry will still require the filing of a resolution, as provided in their rules. Asked if the Senate can readily review Duterte’s multibillion-dollar megadeals with Chinese firms, Sotto, who chairs the Rules Committee,
replied: “Not necessarily.” But Sotto quickly clarified that “a Senate resolution, if filed by a member, could result in a review.” He, however, added a caveat: “That is if the Executive department is willing to cooperate.” Among the projects listed for funding from Chinese sources are the SubicClark railway system, a project to be undertaken by the Bases Conversion and Development Authority (BCDA) and China Harbour Engineering Co., and the Bonifacio Global City-Ninoy Aquino International Airport Segment of Metro Manila Bus Rapid Transit-Edsa project
By Jasper Emmanuel Y. Arcalas
@jearcalas
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He country’s coconut-oil (CNO) exports in the first three quarters plunged by more than a quarter due to the lingering effects of the prolonged dry spell in the country, according to United Coconut Associations of the Philippines Inc. (Ucap). Ucap Executive Director Yvonne T.V. Agustin said preliminary data showed that outbound shipments of CNO from January to September declined by 27.89 percent to 472,353 metric tons (MT) from 655,049 MT recorded in the same period a year ago. “This is due to the lingering effects of El Niño,” Agustin said over the weekend. For September, CNO exports reached mere 77,766 MT, 3.28 percent lower than the 80,406 MT recorded in the same period last year, Agustin said. Agustin added that the current price of CNO in the foreign market is pegged at $1,527 per MT, compared to only $1,402 per MT of palm kernel oil. Agustin said she cannot project yet if the country will reach the 750,000-MT target set by Ucap. “As of the moment, we only have the preliminary data. The official data [for CNO exports] is only up to June,” Agustin said. The Philippine CNO exports receipts from January to June declined by 29.8 percent to $419.93 million, from $597.89 million in the same period last year, according to data from the Philippine Statistics Authority. Ucap has earlier cut its CNO export target for the year to 750,000 MT, 11 percent lower than the 840,000-MT target in 2015, due to the impact of El Niño to the coconut industry. In 2015 total CNO exports reached 843,710 MT valued at $1.12 billion, exceeding the full-year target last year.
See “Senate,” A2
n japan 0.4608 n UK 59.0136 n HK 6.2560 n CHINA 7.1546 n singapore 34.7903 n australia 36.8132 n EU 52.8814 n SAUDI arabia 12.9366
Source: BSP (28 October 2016 )
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A2 Tuesday, November 1, 2016
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House members: Extra powers seek to keep out old vehicles, reckless drivers off the road
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By Jovee Marie N. dela Cruz
@joveemarie
he House Committee on Transportation admitted that there will be a job displacement of transport workers once the 17th Congress approves the proposed Traffic Crisis Act. Committee Chairman Rep. Cesar V. Sarmiento of Catanduanes said the lower chamber is now coordinating with other government agencies to make sure that they will provide a support mechanism for the workers bound to lose their jobs, as the proposed Traffic Crisis Act will take out “old and dilapidated” vehicles and “unqualified” drivers off the road. “We are already coordinating with the DSWD [Department of Social Welfare and Development], Tesda [Technical Education and Skills Development Authority] and DOLE [Department of Labor and Employment], as well the Development Bank of the Philippines
[DBP], to create programs for all workers who will be affected,” the PDP-Laban lawmaker said. “Affected workers may also be included in the government’s Conditional Cash Transfer while the DBP can provide them a financial assistance,” he added. Sarmiento said the proposed Traffic Crisis Act, which seeks to implement route rationalization, will grant President Duterte special powers to address traffic woes in Metro Manila and nearby cities, Metro Cebu and Davao City. “One of the provisions under the measure is directing the traffic chief in coordination with the LTFRB [Land Transportation
Fra nc h i si ng a nd R eg u l ator y Board] and other agencies to conduct within six months route rationalization. They are also directed to study scientifically, objectively and statistically how many public transportation is needed in one route. In the process, of course, small transport workers will be affected to give way to a bigger one,” the lawmaker added. However, Sarmiento said the committee is still awaiting a report from the LTFRB on how many workers will be affected. Deputy Speaker and Nacionalista Party Rep. Raneo E. Abu of Batangas and Liberal Party Rep. Winston Castelo of Quezon City said undisciplined drivers and road accidents are the major causes of traffic congestion in Metro Manila and other parts of the country. The lawmakers said it is high time to address concerns on public safety by subjecting professional drivers to undergo mandatory written and practical examinations for free and mandate the Land Transportation Office (LTO) to test the roadworthiness of all public-utility vehicles (PUVs). “The issue of public safety is
[evidently] being taken lightly… by the continued presence of old and dilapidated vehicles on the road. We have to guarantee that roadworthy vehicles will have the privilege to ply the roads and only qualified drivers are permitted to drive,” Abu said. Castelo, chairman of the House Committee on Metro Manila Development, said “the traffic aggravated the people’s daily economic activity.” Earlier, the Department of Transportation, citing a Japan International Cooperation Agency (Jica) report, said the country loses P2.4 billion per day, or the equivalent of $51 million per day in potential income, as a result of traffic-congestion problems and lost productivity. Sarmiento also said he is eyeing the approval of the proposed Traffic Crisis Act in November as the panel already ended its consultation process. “When we resume in November, we plan to hold one Technical Working Group to finalize the bill, and after that, the mother committee can already tackle the bill for its approval. With all the hearings we have conducted, our
goal is to present to the committee for its approval a bill that is complete, constitutionally sound and responsive to our actual needs,” he said. Sa r m iento added t h at t he scope of the proposed Traffic Crisis Act is not nationwide as the traffic crisis exists only in metropolitan areas, like Metro Manila and its nearby cities, Metro Cebu and Davao City. “We went to Cebu and Davao and have seen the traffic there with our own eyes. The traffic situation is bad in Davao City, worse in Metro Cebu and the worst
The issue of public safety is [evidently] being taken lightly by the continued presence of old and dilapidated vehicles on the road. We have to guarantee that roadworthy vehicles will have the privilege to ply the roads and only qualified drivers are permitted to drive.”—Abu
Solons back farmers’ plea to extend rice QR… Katipunan ng mga Samahan sa Kanayunan (PKSK) and the Pambansang Kilusan ng Samahang Magsasaka (Pakisama) will write a letter to Duterte asking him not to lift the QR on rice. “Lifting the QR on rice would be a big blow to our small farmers and with just eight more months [before the QR expiration], our small farmers are still not yet prepared for the impact of [imported] cheap rice. They cannot prepare overnight,” he said in an interview with the BusinessMirror. While lifting the restrictions may entail lower prices for imported rice, Villarin said it would be an enormous challenge for local farmers to compete in the domes-
tic market. “The farmers’ groups, PKSK and Pakisama, will write an appeal to President Durterte asking him not to lift the QR because of its adverse effects to them,” he added. “We would support that appeal and the independent minority bloc would support the farmers. We will get the letter and send it to the Palace onNovember 7, or when session resumes,” he said. Earlier, Agriculture Secretary Emmanuel F. Piñol said the QR must be extended for two more years to ready rice farmers and make them competent enough against their counterparts in Asean countries. Piñol also said that, if the QR is eventually lifted and more rice imports would enter the rice market, Filipino farmers would
be discouraged to plant rice, as neighboring countries produce the staple cheaper. But Socioeconomic Planning Secretary Ernesto M. Pernia said the removal of the QR by next year may be considered a “done deal” as the economic managers have already agreed on the scrapping of the riceimport quota.
Help farmers
Meanwhile, Nacionalista Party Rep. Luis Raymond F. Villafuerte Jr. of Camarines Sur said a government plan to finally end the QR, or quota on rice imports, and let private traders buy the staple from the world market should prompt the Duterte administration to first help farmers to boost
is in Metro Manila and its nearby cities. While we have limited the scope of the bill, these three metropolitan areas, we do not imply that other cities and municipalities do not have transport problems. They may not be under a traffic crisis now, but still, their transport system needs to be improved,” he said. Sarmiento added the bill will only cover land transportations. “There is no maritime or aviation crisis to speak of. The crisis is not in our ports and airports but on the roads supporting such ports and airports,” he added.
their yields and cut their production and postharvest costs. Villafuerte issued the statement in response to reports that the Duterte administration is in favor of finally removing the QR on rice imports beginning next year, in line with the Philippines’s commitment as a member of the World Trade Organization (WTO). The WTO had allowed the Philippines to extend its QRs on rice several times since 1995. The latest extension will expire on June 30, 2017. But Congress has to either repeal or amend provisions of Republic Act 8178, or the Agricultural Tariffication Act, to open the domestic rice market.
Continued from a1
Moreover, Villafuerte said that, if such a plan pushes through, “palay farmers will be at the losing end” because their produce cannot compete with cheaper rice imports. “Is there any guarantee that the entry of cheap rice imports would lower the price of rice in the market? The government should provide safety nets to our farmers by, among others, helping them cut production, as well as distribution, costs and other postharvest expenses,” Villafuerte added. The lawmaker also said the Samahang Industriya ng Agrikultura (Sinag), the umbrella organization of farmers, agribusiness operators and party-list groups, has warned the government, for instance, that the removal of QRs for milled rice would not cut prices of the grain. According to Villafuerte, Sinag has called on the government to support palay growers by, among others, providing them with farm inputs, including seeds, irrigation, credit and insurance coverage, as well as support in the postharvest and marketing stages. One way to help the farmers, Villafuerte said, is to abolish irrigation fees and restructure the unpaid ones to make it easier for farmers to settle their debts, while keeping the high tariffs on rice imports.
Senate. . .
Continued from A1
by the BCDA and China Road and Bridge Corp. Also on the list are joint-venture agreements to fund various infrastructure projects at Sangley Point in Cavite; biomass projects in Negros; telecom projects; joint development of renewable-energy sources; steel manufacturing plants; port development; cable manufacturing facilities; Edsa bus-transport expansion; hybrid rice production and banana plantation projects; hydropower projects; and railway projects among others. Other lawmakers from the House of Representatives, however, cautioned Duterte administration officials to make sure that safeguards installed in bidding procedures are followed, amid reports that some of the firms that signed the memorandum of understanding with the Philippine government have been “blacklisted by the World Bank for fraudulent practices.” Gatchalian asserted there should be “no shortcuts” in the established procedures for carrying out public-works projects under Philippine laws. Senate President Aquilino Koko Pimentel III, for his part, left the door open, saying “should there be a resolution to that effect then the Senate will do so.”
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Oversupply of chicken hurts poultry growers By Jasper Emmanuel Y. Arcalas
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@jearcalas
OULTRY growers are now incurring losses due to the oversupply of chicken in the country that has caused steep decline in farm-gate prices, according to the United Broilers Raisers Association (Ubra).
“There’s a lot of [chicken] supply right now,” Ubra President Elias Jose Inciong told the BusinessMirror over the weekend. “There is currently an oversupply in the country and, in fact, we are already selling at a loss.” Inciong said the farm-gate price for chicken has went down to as much as P55 kilogram, which is P20 lower than the average P75 cost of production of poultry growers. “The farm-gate price of chicken has collapsed below P60, there are already some areas where the farm-gate price of chicken is at P55 per kilogram,” Inciong said. “Farm-gate price for chicken is currently ranging at P55 to P65 per kilogram and growers are losing around P10 to P20 per kilogram depending on their inputs [cost of production],” Inciong added. Inciong said the current inventory of dressed chicken in cold storages has reached 37 million kg, or 37,000 metric tons (MT), enough to supply two months’ worth of demand from Metro Manila. “Frozen-chicken inventory is at record-high of 37 million kilograms. To give an idea about 85 percent to 90 percent of the total are in the Regions 3, 4 and NCR [National Capital Region],” Ubra President Jose Elias Inciong told the BusinessMirror over the weekend. “The demand for Metro Manila is 20 million kilograms a month, therefore, you have in cold storage a two-month supply for Metro Manila,” Inciong added. Inciong said the low farm-gate prices of chicken meat could per-
sist until the end year on the back of soft demand despite the start of the Yuletide season. “Most of September the farmgate price went down but in October it went up. We are currently experiencing soft demand [for chicken meat],” Inciong said. “We really thought that the farm-gate price would increase at the start of holiday season. The prices will continue to remain soft at the farm level,” Inciong added. In May Ubra has expressed concern over the possibility that there will be an oversupply of chicken, which could lead to a steep decline in farm-gate prices. Inciong said then that even importers became “cautious” about deciding the volume of their shipments, lest there be an oversupply. The average farm-gate price for broiler meat from January to June was pegged at P86.31 per kg, 13.18 percent higher than the P76.26 per kg recorded on the same period last year, according to latest data from the Philippine Statistics Authority (PSA). The PSA latest data also showed that broiler meat at the farm level cost the highest in August at P87.79 per kg. Meanwhile, latest data from the National Meat Inspection Service (NMIS), an attached agency of the Department of Agriculture, showed that as of October 17, the total dressed chicken in cold storages reached 32,181.54 MT more than double of the 13,504.56 MT, recorded on the same period last year. Of t he Oc tober 17 i nventory, 24,727.05 MT were locally produced, while the remaining
Exporters cut target on wage-hike specter
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HILIPPINE goods exports may post negative growth this year if the proposed wage increase is implemented, industry players said. Philippine Exporters Confederation Inc. (Philexport) President Sergio Ortiz-Luis Jr. said industry stakeholders have already revised export target to 3 percent this year and in 2017, down from the original forecast of 6.6 to 8.8 percent and 7.7 percent to 10.6 percent, respectively. Government data indicated that exports weakened for the 17th consecutive month by 4.4 percent to $4.9 billion in August this year. “By the looks of it, we will be lucky to end up with a flat export performance, not factoring in the negative effects of recent wages and hiring proposals,” OrtizLuis was quoted in a statement as saying. Exporters have been strongly opposing the proposed P125 minimum wage increase nationwide, noting this will reduce job and economic growth, and affect trade competitiveness. Philexport Food Trustee Roberto Amores said industry players are waiting for government action on the recently proposed
labor policies, including the wage adjustments and the termination of the so-called end-of-contract (endo) work arrangement. “Among us private sector, there is no doubt that both policies are sure to create devastating effects on enterprises and industries at a time when we have yet to address our poverty and unemployment problems,” he added in the statement. Amores, also a member of Employers Confederation of the Philippines (Ecop) Board of Advisers, was thankful that the Department of Labor and Employment has been initiating consultations to gather information and thresh out issues to come up policies that are “biased toward job creation”. “The jobs that the government wants to keep may be the same jobs that we will lose if we do not balance the interests of all stakeholders involved,” he said. Amores further said the policies and laws protecting the rights of workers are already in place. “It is just a matter of implementation,” Amores said. The cut in Philexport’s forecast also came at a time as growth is already stunted amid weak dem a nd a nd slug g i sh g loba l growth. Catherine N. Pillas
7,454.49 MT were imported chicken meat, according to NMIS data. NMIS data also showed that the country’s dressed-chicken inventory in cold storages on the second week of October this year reached 37,864.27 MT, the highest recorded chicken stock from 2010 to 2016. Inciong added the increase in
volume of chicken in the country is attributed to the continuous entry of businesses into the poultry sector. Inciong said the potentia l chicken production for 2016 could be at maximum around 1.284 billion heads. “ That [1.284 billion heads] would decrease due to mortality,
for example, diseases, and if there would be typhoons that could directly affect the production,” Inciong said. “ T here shou ld be a rou nd 13.8-percent increase in terms of potential production, but I’m projecting that there would be only around 10-percent production increase for the year,” Inciong added.
Inciong noted that there should be no shortage of chicken supply in the country unless there would be a typhoon that could greatly affect poultry production or there is an unusual take up in demand. Inciong added that 300 million heads of chicken is expected to be produced during the fourth quarter.
Economy
A4 Tuesday, November 1, 2016 • Editors: Vittorio V. Vitug and Max V. de Leon
Lawmaker lists five ways to fund SSS pension hike By Marvyn N. Benaning Correspondent
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arty-list Rep. Carlos Isagani T. Zarate of Bayan Muna has enumerated five ways to ensure that the Social Security System (SSS) can finance the P2,000 increase for pensioners, while lengthening its fund life. These, he added, are the following: improve its collection efficiency from employers covering 29 million members from the current 38 percent to between 76 percent and 80 percent; collect the billions of pesos in contributions that delinquent employers failed to remit in the last 10 years; cut down in bonuses and perks given to board members and collect the more than P200 million from the retirement package given to SSS board members in 2009; collect the fines imposed by the courts against employers who violated the SSS law; if these were not enough, Congress can always provide for subsidies as provided under Section 20 of Republic Act (RA) 8282, as amended. “Furthermore, the SSS has P428 billion in its investment fund, which generates an investment income of an average of P32 billion per year. With this, the net revenue of the SSS in 2014 was a huge P44.47 billion and its assets amounted to nearly P500 billion. As it is, there is no way that the SSS will go bankrupt, as the SSS wants people to believe. In fact, under Section 21 of RA 8282, the Philippine government guarantees the benefits and solvency of the SSS,” the Bayan Muna lawmaker argued. “The SSS also admitted several times that it has the funds for the pension increase. The increase, it added, will only shorten its fund life to 2029. Now, the system is saying it is 2025, instead of the current 2042. Assuming this were true, nine to 14
years is more than enough time for the government and the SSS to find ways to increase its fund life. In 2001 the SSS declared that it has a fund life of only five years and, yet, it was able to increase this to 2042 in just 14 years. If it previously survived a five-year fund life, then surely it can also survive a 14-year fund life. In truth, we are in a better shape than the United Kingdom, which has a fund life of only up to 2027, and Canada, which has a fund life of 2022, or merely seven years,” he said. The inadequacy of the minimum pension to the actual needs of the pensioners could never be overemphasized. The minimum monthly pension, ranging from P1,000 to P1,200, or even P2,400 for those who contributed for 20 years, would not buy our pensioners decent food, much more provide for their maintenance medicines, which would cost thousands of pesos a month. Ibon Databank said a member of a family of six in the National Capital Region (NCR) needs at least P5,033 a month for basic needs. Pitting the need for pension increase versus the alleged decreased fund life of the SSS as the former leadership of the SSS had done, is not only outright insensitive, but a violation of the SSS mandate ‘to manage a sound and viable Social Security System, which shall promote social justice and provide meaningful protection to members and their families against the hazards of disability, sickness, maternity, old age, death and other contingencies,’” Zarate said. “Kitang-kita naman po na kulang na kulang ang pension ng mga seniors natin. Wag na po itong baratin at utayutayin, dahil ngayon na nila kailangan ang P2,000 para sa kanilang mga gamot at pagkain. Mas mahalaga po ang buhay kesa sa pera,” he said.
BusinessMirror
Total gross revenue of local industries up by 8.4% in Q2
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By Cai U. Ordinario
@cuo_bm
ross revenues of industries nationwide grew 8.4 percent in the second quarter of 2016, according to the Philippine Statistics Authority (PSA). Based on data from the Total Gross Revenue Index, the growth in the second quarter this year was higher than the 5.7-percent growth posted in 2015. “This performance was led by private services, trade, and transportation and communication,” the PSA said. Private services exhibited the fastest growth across industries at 15.3 percent, as compared to 5.7-
15.3%
The growth of private service compared to 5.7 percent last year
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‘uncoordinated demolition’ caused naia 3 traffic chaos Heavy traffic congestion at the Ninoy Aquino International Airport’s (Naia) Terminal 3 on Friday was caused by the demolition of the existing Skyway ramp of the Naia Expressway (Naiax) without due coordination with the Inter-Agency Council on Traffic (I-ACT). Transportation Secretary Arthur P. Tugade directed the I-ACT to call the attention of the Somco/Skyway management and asked to immediately suspend the works in the ramp, which has been causing congestion due to the influx of passengers in the Naia. Contractor DMCI immediately stopped the demolition works, but one lane has already become unpassable. Engr. Alec Cruz, head of Skyway Tollways Operation, went to the site and verified the situation and checked whether it was possible to open another ramp to alleviate traffic. Manny Bonoan, president of Somco/Skyway, announced later that Naiax Ramp 1 was temporarily opened to relieve the Terminal 3 and Andrews Avenue of traffic congestion, providing additional access to the elevated section toward Makati and southbound areas, like Alabang. PNA
TACLOBAN CITY—At least 400 workers in Eastern Visayas have been regularized after the Department of Labor and Employment (DOLE) launched a campaign to stop the practice of endo. DOLE Regional Director Elias Cayanong said the region is on track in addressing endo (short for end of contract) in the region, since the DOLE stepped up efforts last month. Cayanong said the labor department got the report through monitoring from labor laws compliance officers deployed to inspect establishments. Among the firms who responded to the call to end the endo practice are hardwares, retail shops, hotels and restaurants. “There are more reports of voluntary regularization, but we have to validate it first,” Cayanong said. The labor department aims to regularize 50 percent of contractual workers by the end of 2016 and completely eliminate the practice next year. “I believe the target is realistic since we are just talking about endo. There are contractors that comply with the law, such as those implementing project-based activities,” he added. PNA
cebu capitol sets rebidding of p252.68-m purchase CEBU CITY—The Cebu provincial government is set to conduct a prebidding conference on Wednesday on the province’s purchase of some P252.68 million worth of heavy equipment. A bidding conducted four months ago was declared a failure, prompting the provincial government to conduct a second bidding. Cebu Capitol Bids and Awards Committee Chairman Mark Tolentino said among the equipment to be purchased are hydraulic excavators, crawler tractors, wheel loaders, motor graders, vibratory rollers, forklifts, self-loaders, dump trucks, water trucks and boom trucks. These will be used for road construction and maintenance. The bidding for the purchase of the heavy equipment started in 2015. ConEquip was declared the winning bidder, even if it had submitted a higher bid price than three other bidders. PNA
percent growth last year. It was followed by trade at 9 percent; transportation and communication, 8.3 percent; manufacturing, 5.8 percent; real estate, 5.3 percent; and finance, 3.6 percent. Meanwhile, the Total Employment Index registered a 1.1-percent growth, lower than the 2.8-percent growth in the previous year. Real estate continued to be the top gainer with 6 percent, albeit slower than last year’s 12.9 percent. Transportation and communication, and trade also grew by 3 percent and 1.8 percent, respectively. On the other hand, mining and quarrying suffered a decline of 4.9 percent, a downturn from the previous year’s growth of 3.8 percent. The country’s Total Compensation Index decelerated to 5.1 percent, as compared to the 5.9-per-
cent growth in the previous year. Real estate and private services grew by 11.1 percent and 9.8 percent, respectively, while mining and quarrying declined further by 6.7 percent. With this, Total Compensation per Employee Index accelerated by 3.9 percent, higher than the 3-percent growth a year ago. This was attributed to the upswing of private services, with 9.5 percent; real estate, with 4.8 percent; manufacturing, with 4.3 percent; and electricity and water. with 2.2 percent. Both transportation and communication, and mining and quarrying suffered a setback with declines of 8 percent and 1.9 percent, respectively. The Gross Revenue Index is part of the Quarterly Economic Indices. It is a compilation of quarterly indices on production, gross revenue and employment.
Albay’s poverty incidence down 17.6% in 2015–PSA
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400 eastern visayas workers benefit from ‘endo’ drive
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Death pose A saleswoman in the business of selling life plans to cemetery goers performs the macabre task of posing inside a pink-colored mock-up coffin for a photo opportunity at the Manila South Cemetery on Monday. Nonie Reyes
EGAZPI CITY—Albay’s poverty incidence has dipped to 17.6 percent in 2015, a significant 16.3-percent drop, from 33.9 percent in 2012, the Philippine Statistics Authority (PSA) reported recently. The 16.3-percent reduction, as shown in PSA’s annual per-capita family threshold, makes Albay the least poor among Bicol’s six provinces Rep. Joey S. Salceda of the Second District of Albay said the unprecedented unity of purpose among Albayanos accounted for the substantial poverty reduction and will “sustain the record, now only 1.1 percent below the national average of 16.5 percent, but while the national poverty fell by 3.2 percent, Albay posted a 16.3-percent drop.” In population terms, the PSA report shows Albay poverty fell by 15.8 percent, from 41 percent in 2012 to 25.2 percent in 2015. The national average for the same period was just 3.6 percent, from 25.2 percent to 21.6 percent.” T hus, Salceda noted, large family size among poor people remains a challenge. The PSA report placed Albay among five provinces of the country with best 2012 to 2015 poverty-reduction performance, along with Apayao, Batanes, Eastern Samar and Davao Oriental. Trailing Albay’s 17.6-percent record in Bicol are Camarines Sur, with 27.15 percent; Masbate, 40.6 percent to 35.5 percent, down by 5.0 percent; Sorsogon, 31.3 percent to 31.7 percent, +0.4 percent; Catandu-
anes, 27.1 percent to 33.6 percent, up by 6.5 percent; and Camarines Norte, from 21.7 percent to 29.3 percent, up by 7.6 percent. Salceda, who was Albay governor for nine years before rejoining Congress where he is now currently senior vice chairman of the House Ways and Means Committee and vice chairman of three other committees —Appropriations, Economic Affairs and Local Government—pushed hard to elevate the local economy, particularly through tourism, its most potent and promising industry. He expressed confidence Albay’s tourism will continue to prosper and hit its goal of 5 million tourists, $1 billion in investments and 235,000 jobs created in 10 years, after the completion of the Bicol International Airport in 2019, and faster modern train system to Legazpi by 2023. Tourism is decidedly Albay’s economic development driver. Under his stewardship as governor, Salceda pushed the industry’s steady growth. From 8,700 foreign-tourist arrivals in 2006, the number surged to 374,949 in 2015. The figures become even more impressive with domestic tourists accounted for. From a mere 124,675 in 2006, it exponentially increased to 1,042,646 in 2015, for a total of 1,417,646 arrivals. What these figures don’t expressly show, he noted, “is how the huge increase in the influx of tourist arrivals contribute significantly to the growth of Albay’s local economy.” PNA
ERC lauds Meralco’s compliance with RCOA policy By Lenie Lectura
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@llectura
he Energy Regulatory Commission (ERC) hailed the recent pronouncement by the Manila Electric Co. (Meralco) that it would apply for the registration of an affiliated company as a retail electricity supplier (RES) in accordance with the government’s retail competition and open access (RCOA) policy in the power sector. ERC Chairman Jose Vicente B. Salazar said Meralco’s move “underscores the power firm’s unwavering commitment to its customers and to the transformation of the electricity market, in line with the spirit of the Electric Power Industry Reform Act [Epira].” The registration of an affiliate distribution utility is a feature of the RCOA implementing rules issued earlier by the ERC. According to the rules, no entity may supply power to the so-called contestable market, without an RES license issued by the ERC. The rules
also provide that existing local distribution utilities, like Meralco, may no longer supply electricity to end-users in this market unless this is done in their capacity as “suppliers of last resort” or by creating an affiliate with a duly issued RES license. The “contestable market” consists of customers within a certain level of electricity consumption and which are allowed to select their own power supplier. The ERC has also directed the inclusion of customers with average monthly peak demand of 1 megawatt (MW) into the contestable market by December 26 this year. Meanwhi le, customers w it h monthly peak demand of 750 kilowatts will be included in this category by June 16, 2017. Salazar said the ERC is now reviewing the timeline to give existing power distributors enough window to conform to the requirement. The ERC policy in effect further expands the number of power customers
who will benefit from the freedom to choose their RES. This also boosts the competition among RES in the power sector and which is seen as favorable to lowering the prices of electricity. The Supreme Court (SC) had earlier backed ERC’s RCOA guidelines. On October 10 the Court slapped a temporary restraining order against an earlier injunction issued by the Regional Trial Court (RTC) in Pasig City. The RTC in Pasig City order halted the implementation of the RCOA guidelines by the ERC. According to Salazar, Meralco has “once again displayed its tradition as a trailblazer in the country’s power industry when it took the step to back the implementation of this particular feature of RCOA.” The ERC head had earlier expressed confidence that the power distribution sector will give its full support to the SC resolution backing the RCOA rules. Salazar said the ERC has already approved a total of 23 applications for RES license.
Salazar added that Meralco’s move “hastens the journey of RCOA, which is designed to eventually reach the household level.” “The goal here is to keep expanding the segment of the total market where retail electricity suppliers compete,” Salazar explained. “The 1-megawatt market is just our starting point, and we aim to eventually include even the large residential customers in the near future,” he added. As of September 30 there are a total of 395 customers who have opted for contestability with total consumption of over 5,000 gigawatt hours. MPower, Meralco’s RES arm, serves over 50 percent of the total contestable market with competitive product and pricing offers, which suit the needs of the customers. The semiconductor industry continues to occupy the largest share in the contestable space, followed by the food and beverage and the nonmetallic industries.
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Computer firm gets lion’s share of income in PSA deal By Marvyn N. Benaning Correspondent
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HE Philippine Statistics Authority (PSA) is fast proving to be astute in handling numbers, but not cash, and long-term revenues as its latest deal with Unisys for the computerization of the civil-registry system (CRS) shows. Unisys is a United Statesbased company that also services the information system of the global banking system for quick financial transactions and has contracts with various US armed services and federal agencies. PSA Director General Lisa Grace S. Bersales and Unisys Executive Juan Ingersol Castro signed the P1.59-billion contract for the CRSInformation Technology Project 2 (CRS-ITP2) about a month ago, despite nagging questions about an agreement that gives Unisys full control of all civil-registry documents nationwide, with the government getting only 45.5 percent of the revenues. Curiously, the PSA signed the contract despite the fact that the agency had a cap of 57.87 percent for the state in the original sharing provision, a source privy to the transaction said. In the 2015 audit conducted by the Commission on Audit (COA) on the PSA, it said “the income realized from this project was shared by the service provider and the government, with the latter having a lower share than the former.” However, the COA admitted “the
government shared more than the amount received by the service provider if we include the documentary, expanded and percentage taxes from the CRS-IT project.” The COA also wondered why Unisys was still maintaining control of the CRS-ITP using governmentowned facilities and earning a hefty income for a function that could well be taken over by the PSA. “For current year 2015, revenue of P2,262,512,860 was generated from the system. The allocation from the General Appropriations Act was P158,178,000 and the expenses incurred from the trust funds of P82,383,337.90, or a total of P240,561,337.90. This total expenditure is only 10.6 percent of the revenues generated,” the COA said on pages 90 and 91 of the 2015 audit report. In the same year, Unisys earned P949,888,398.42. PSA’s using the trust fund was also questioned by the COA since no authority for its use was secured. “Had this system been managed solely by the PSA, revenues for the government would have increased. Considering that there is a revenue sharing by the government and the service provider, the service provider realized a huge income annually,” the state auditors argued. In sum, the COA maintained that the agreement with Unisys, which had taken over the CRSITP since 2000, had been highly skewed in favor of the US-based company, and need not have been rolled over twice since the contract ended in 2012.
‘Con-con is path of least resistance’ By Jovee Marie N. dela Cruz
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@joveemarie
ALLING for a constitutional convention (Con-con) is the best way to achieve Charter reforms, as it is “clearly the path of least resistance,” House Senior Deputy Minority Leader Lito Atienza said on Monday. “If we want Charter reforms to succeed, we have to do it right. We have to learn the lessons of the past,” said Atienza, author of a bill calling for a Con-con. “There is definitely less resistance to, and more support for a constitutional convention in the House, as well as in the Senate,” he said. Atienza said previous administrations had tried, without suc-
cess, to sell to the people the idea of Congress converting itself into a constituent assembly (Con-ass) for the purpose of revising the 1987 Constitution. In the past, those strongly opposed to a Con-ass were mostly wary that members of Congress might introduce self-serving amendments, including the lifting of restrictions to the number of terms they and
their family members may serve in elected offices. The House Committee on Constitutional Amendments, voting 32-7 with three abstentions, earlier approved a concurrent resolution calling for Congress to convene itself into a Con-ass. Atienza, who was among those who forcefully argued and voted against the concurrent resolution during the committee meeting, said he expects a heated debate once the measure is sent to the floor. “The people are entitled to elect a new set of representatives to propose improvements to the Constitution,” Atienza said. “We, in Congress, were not specifically selected by the people to tamper with and mess around with the Constitution. We were chosen as district and party-list representatives mainly to pass laws,” he pointed out. Atienza also stressed the need for Congress to directly involve
A good man for a taxing job
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RIDAY mornings at his office in the Bureau of Internal Revenue (BIR) headquarters in Quezon City are just about as hectic as Monday mornings for newly appointed Internal Revenue Deputy Commissioner Jesus Clint Aranas. As early as 9 a.m., a group of ranking executives from another BIR department is already waiting at the reception room. They had no appointment but they managed to have an audience with the youthful lawyer. When the group leaves, Aranas starts presiding over a staff meeting, and by the time it ends it’s almost his lunch hour.
He had spent much of the morning in the conference room and he takes refuge in his own office, which looks like any well-maintained executive office designed in the 1970s. Aranas takes a much-needed break so he may take his favorite meal consisting of a slice of pizza and a small plate of fried bananas. As head of the BIR’s legal division, Aranas is tasked to oversee the cases being filed against erring taxpayers and BIR employees. He also assists Internal Commissioner Cesar R. Dulay in implementing new tax policies. Aranas obtained his law degree from Silliman University in Dumaguete City, and
had trouble passing the bar exams. It was in taxation that he almost flunked the bar. “My father advised me to face and focus on my weakness...to challenge myself and become an expert at what you have been weak in. So when I passed the bar, I became a tax lawyer,” he said. Although he has no interest in politics, he became one of the legal assistants of the late Sen. Raul S. Roco as one of his first jobs. After the stint with Roco, he joined various law firms, and in 2002 he founded his own, the Aranas Law Office.
the people, especially the younger generation, in the process of renewing the country’s 29-yearold Constitution. “And one sure way to engage them from the start is via a constitutional convention, where they will have the chance to expressly elect their representatives,” he said. “This way, the proposed modifications will also be easily ratified once these are submitted to the people in a plebiscite,” he added. In a Con-ass, Congress itself sits down to recommend revisions to the Constitution. In a Con-con, the people will elect representatives who will suggest alterations to the Constitution. In both cases, the proposed changes will require final direct approval by the people in a referendum. President Duterte wants the Constitution reformed so that the country can shift to a federal-parliamentary form of government.
Not much later, he met then-Davao City Mayor Rodrigo R. Duterte, whom he helped in his advocacy for federalism. His proximity to Duterte helped him land the BIR position. While taxes are his game, he had some huge adjustments to make when he started working in the government agency just three months ago. “For one, the schedule is really hectic. We’re at this point weeding out the corrupt BIR officials and prepare cases against them. The hours are longer and pay much lower. But I enjoy it because we’re looking forward to establishing a new BIR,” he said. Ayunan G. Gunting
Group holds vigil for missing activists
Freelancers, online businesses can now get funds more conveniently
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AYMAYA, a Philippine financial services provider, and PayPal, a global leader in digital payments, over the weekend announced their collaboration to provide freelancers and online businesses in the Philippines with a more convenient way to withdraw their PayPal funds. Filipinos who have conducted their business transactions through their PayPal accounts are now able to quickly withdraw the available balance in their PayPal account by linking it directly to their PayMaya accounts. With PayPal ’s global reach in more than 200 countr ies, many freelancers and online businesses in the Philippines rely on PayPal as a means to receive payment from overseas transactions. This is especially so for freelancers and microbusinesses, where setting up a business bank account may be difficult. Traditionally, funds from a PayPal account are withdrawn through a bank account, but now, it is made easier and more convenient with PayMaya. Using PayMaya to withdraw PayPal funds, instead of bank accounts, is more efficient. With PayMaya, there is no need to travel to financial institutions, fall in long lines, answer forms and secure a minimum initial deposit. All they need to do is download the PayMaya app from the Google Play or the App Store to have an instant virtual Visa card, which they can immediately use for transactions, including PayPal transfers. Linking a PayMaya account to PayPal is easy. Users just need to go to “Banks and Cards” on the PayPal web site and choose “Link a Card”. They will then need to enter their PayMaya virtual or physical card information and ensure that their PayPal address matches that of their PayMaya account.
Editor: Dionisio L. Pelayo • Tuesday, November 1, 2016 A5
PHOTO WINS AWARD
Liter of Light, one of the corporate social responsibility (CSR) programs of Pepsi Philippines, won the top photo prize for Environment category conferred recently by the American Chamber (AmCham) Foundation. Tessa Sevilla (second from left), director of Liter of Light Philippines, and Jika Dalupan (third from left), Pepsi-Cola Products Philippines Inc. (PCPPI) vice president for corporate affairs and communication, pose beside the winning photo with Cindy Eugenio (left), also of PCPPI, and AmCham Executive Director Ebb Hinchcliff following the awards rites.
Troops, cops secure cemeteries
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HE Armed Forces also deployed troops in some cemeteries in Metro Manila, together with the National Police, to provide security with the expected influx of people who will visit their departed love ones starting on Monday. Among others, these cemeteries with strict security in place are the 54-hectare Manila North Cemetery, the Manila South Cemetery, 25 hectares; La Loma Cemetery, Chinese Cemetery and the Manila Memorial Park in Parañaque City. People entering these cemeteries will be subjected to inspection by authorities. At the entrance of the cemetery, visitors, through posters, are advised about the ban on bladed weapons inside as these will be confiscated by authorities.
T he Me t ro M a n i l a p ol ic e command has deployed almost 10,000 policemen in 99 cemeteries in the metropolis. Aside from uniformed personnel, the police also deployed policemen in plain clothes. K-9 (bomb-sniffing dogs) units and medical teams were also deployed, as well as police-assistance centers were installed. Authorities are not only securing cemeteries now, but also public places, such as bus terminals and malls. According to Chief Insp. Kimberly Molitas, spokesman for the Metro Manila police command, said military personnel will also secure the piers and some cemeteries. Presidential Communications Secretary Martin M. Andanar has called on the public to observe a
clean, orderly and crime-free All Saints’ Day break. “As we remember our departed loved ones, we ask everyone to observe the solemnity of the occasion. Let us not bring bladed tools, liquors, loud speakers and even gaming cards and see to it that cemeteries before, during and after the observance of Undas are clean, orderly and crime-free,” Andanar added. “As our people enjoy this rare four-day break, there are many who would opt to go to their provinces. We remind them to secure their houses and make sure they are locked with all appliances unplugged before leaving. And for motorists with private vehicles, do not forget to check their proper operating condition and roadworthiness,” Andanar said. PNA
ELATIVES of the victims of enforced disappearances will gather at Plaza Miranda, Manila, at 10 a.m. on All Souls’ Day, November 2, to seek justice for those who were abducted and continue to be missing, their fates unknown. Led by Lorena Santos, secretary-general of the Families of Desaparecidos for Justice (Desaparecidos), the relatives and friends of the abducted activists and National Democratic Front (NDF) consultants, workers and farmers and religious workers will light candles, offer flowers and demand that justice be served for the disappeared. Santos said the gathering will be supported by officers and members of the human-rights watchdog Karapatan, Hustisya, an organization of relatives and friends of the thousands of victims of extrajudicial killings during the Arroyo, Aquino and Duterte administrations. She said NDF peace consultants will also join the gathering. For Santos, the gathering will be significant since it comes nearly five months after she wrote to then presumptive President Duterte on June 8 to do whatever he can to find his father. She said it was within Duterte’s power to find her father Leo Velasco, an NDF consultant, who was snatched in February 2007 in Cagayan de Oro City. “My father was abducted in February 2007 in Cagayan de Oro City, by several men in black jackets with ‘CIDG [Criminal Investigation and Detection Group]’ markings at the back. They were onboard a gray Mitsubishi L-300 van, where they forcefully threw my father inside like a pig. I never saw him since then,” Santos said. “Nine months after his disappearance, my mother Elizabeth Principe was abducted and detained for one-and-a-half years on charges she didn’t commit. She was
released after she won all her court cases but is still in hiding because of continuing threats to her life,” she told Duterte. “I have searched for my father in military and police camps and sought remedies in court. But all I got was a response from an officer of the Intelligence Service of the Armed Forces who said: ‘We have been after your father for a long time. He is No. 2 in the NPA [New People’s Army]. But, unfortunately, he is not with us.’ This reply only confirmed the government’s motive to get my father,” Santos added. “The past two presidents, Gloria Macapagal-Arroyo and Benigno S. Aquino III, were so determined not to let the truth out about the Desaparecidos, even to their families. Aside from my father, there are 12 other peace consultants and staff members who disappeared under the Arroyo administration and 30 more under the incumbency of Aquino,” she added. “The attempt to cover up the crime and unwillingness of the Aquino administration to talk peace with the NDF made it hard for us to seek for our loved ones. I have lost hope of finding him,” Santos also said. She praised Duterte for talking peace with the NDF and added that she would be elated if the President could find his father, a former medical student at the University of the Philippines (UP). For the past nine years, Santos sought his father in various prisons, police camps and military detention facilities, only to be told that he was not in custody. “This is why I am asking you, Mr. President, to help me find him and the other Desaparecidos who worked for change in our country. I am prepared to know his fate no matter how tragic it is—how he may have suffered and died and where his remains are. I just want to know the truth,” Santos said. Marvyn N. Benaning
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Tuesday, November 1, 2016 • Editor: Lyn Resurreccion
The World BusinessMirror
www.businessmirror.com.ph This two-picture combo shows the 14th-century Cathedral of Saint Benedict (San Benedetto) with its bell tower in the background on August 21 (left) and collapsed after an earthquake on Sunday. Another powerful earthquake shook central Italy on Sunday, sending panicked residents running into piazzas, raining boulders onto highways and toppling a Benedictine cathedral and other historic edifices that had withstood several recent quakes. AP
Powerful quake spares lives, B but strikes at Italy’s identity
Syria rebels keep up offensive on western Aleppo
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ORCIA, Italy—The third powerful earthquake to hit Italy in two months spared human life on Sunday but struck at the nation’s identity, destroying a Benedictine cathedral, a medieval tower and other beloved landmarks that had survived the earlier jolts across a mountainous region of small historic towns. Lost or severely damaged in the shaking were ancient Roman walls, Gothic and Baroque churches and centuries-old paintings crushed beneath tons of brick, sandstone and marble. Italian Premier Matteo Renzi said the nation’s “soul is disturbed” by the series of quakes, starting with the deadly August 24 event that killed nearly 300 people, two back-to-back temblors on October 26, and the biggest of them all, a 6.6-magnitude quake that shook people out of bed on Sunday morning. It was the strongest quake to hit Italy in 36 years. T here were no re por t s of fatalities—a fact attributed to the evacuation of sensitive areas and fragile city centers. Nearly 8,000 people have been moved to shelters or hotels following the quakes last week and on Sunday, and Italy’s Civil Protection agency was expecting that number to reach 11,000 by Monday morning. Many who stayed behind were sleeping in campers or other vehicles, out of harm’s way.
36 The number of years past when the last strong earthquake hit Italy
Renzi vowed to rebuild houses, churches and business, saying, “a piece of Italian identity is at stake at this moment.” “Feeling the Earth collapse beneath your feet is not a metaphorical expression but is what happened this morning, and half of Italy felt this,” Renzi said. T he qua ke str uc k anot her painful blow to the rich artistic heritage of villages that dot the Apennine Mountains. The worst damage was reported in Norcia,
a town in Umbria closest to the epicenter. Two churches were destroyed—the 14th-century Basilica of Saint Benedict, built on the traditional birthplace of Saint Benedict, founder of the Benedictine monastic order; and the Cathedral of Saint Mary Argentea, known for its 15th-century frescoes. Only the cracked façades were still standing, with most of the structures disintegrating into piles of rubble and dust. Te le v i sion i m ages showed nuns r ushing into the main piazza as the bell tower appeared on the verge of col lapse. Later, nuns and monks knelt in prayer in the main piazza. A firefighter appea led to a pr iest to help keep residents calm in an effort to prevent them from look ing for loved ones. W hen the quake stuck, nuns from the Saint Mary of Peace monastery in Norcia were praying and sing ing hy mns. T he shaking caused their building to collapse and badly damaged their sleeping quarters. Later, firefighters escorted them back inside to retrieve holy books. Then an aftershock hit. “But we had courage, because we were in our house and the Lord protects us,” one nun told The Associated Press. Large sections of Norcia’s ancient Roman city walls—which suffered damage and cracks in the previous quakes—crumbled, along with towers. Amatrice, the town that bore the brunt of destruction on August 24, sustained blows to treasures that had withstood the quakes of the past weeks. The community’s medieval bell tower stood tall amid the rubble
after the August quake, becoming a symbol of hope and resilience for the stricken population. During a visit to the quake zone earlier this month, the pope prayed alone amid the rubble, the brick tower still standing in the background. But the latest shaking partially collapsed it. The 15th-century Church of Sant’Agostino also fell down. “The monster is still there,” Amatrice Mayor Sergio Pirozzi told Sky TG24. The quake was felt as far north as Salzburg, Austria, and all the way down the Italian peninsula to the Puglia region, the heel of the boot. In Rome, some 150 kilometers away, people rushed into the streets in pajamas. The basilica of Saint Paul Outside the Walls, a site of Christian worship in Rome since the 4th century, had to be closed for inspections after sustaining cracks and damage to some molding. There were also cracks in the cupola of Sant’Ivo alla Sapienza church in Rome, a baroque master piece by Francesco Borromini, an architectural giant of the 17th centur y. The quake forced the temporary closure of some of Rome’s most important tourist sites, including the presidential palace, so authorities could check for damage. The crowds in Saint Peter’s Square interrupted Pope Francis with applause when he mentioned t he qua ke dur ing his weekly Sunday blessing. “I’m praying for the injured and the families who have suffered the most damage, as well as for rescue and first-aid workers,” he said. Ansa reported that the quake damaged the church of Saint Joseph in Jesi, a town encircled by
medieval walls southwest of the coastal city of Ancona. The roof caved in partially and cracks appeared near the altar. In Tolentino, there was visible damage to the Cathedral of San Catervo and the Basilica of Saint Nicolas, which contains artwork and architectural elements dating from the 14th to the 17th centuries. With a preliminary magnitude of 6.6, it was the strongest earthquake since a 6.9 temblor near Naples killed some 3,000 people on November 23, 1980. Some 20 people suffered mostly minor injuries. Authorities responded with helicopters to help the injured and monitor collapses, as many roads were blocked by landslides. The Salaria highway, one of the main highways in the region, was closed at certain points. Some local rail lines in Umbria and Le Marche were also closed as a precaution. Seismologists said the shaking came from a series of faults in the Apennines, and they could not rule out more, possibly stronger quakes in the near future. “It is normal for the Apennines,” said the president of Italy’s National Institute for Geophysics and Vulcanology, Carlo Doglioni. He cited a similar sequence of three events within a period of months in 1703 in the region. Natural law dictates that after such an event there will be more quakes, “which means we can expect some 5 magnitude quakes and many of 4 magnitude,” Doglioni said. Already on Sunday, more than 200 other seismic events were recorded by the institute, including 15 temblors between magnitude 4 and 5. AP
EIRUT—Syrian insurgents on Sunday kept up their shelling of government-controlled areas of Aleppo, killing at least seven people, including three children, state TV reported, and pushing their way with car bombs and tanks into new territory in the western part of the city. The Syrian government claimed the opposition fighters used toxic gas. The attacks raised the death toll in the three-day old offensive to at least 41 civilians, including 16 children, according to the Britain-based Syrian Observatory for Human Rights, an opposition monitoring group that has a network of activists in rebel and government-controlled areas in Syria. The Observatory said hundreds of mortars were lobbed. United Nations Envoy for Syria Staffan de Mistura said he was “appalled and shocked by the high number of rockets indiscriminately launched” on civilian suburbs of government-held Aleppo. “Those who argue that this is meant to relieve the siege of eastern Aleppo should be reminded that nothing justifies the use of disproportionate and indiscriminate weapons, including heavy ones, on civilian areas and it could amount to war crimes,” De Mistura said. Sunday’s shelling came on the third day of the insurgent offensive that aims to breach a government siege on Aleppo’s rebel-held eastern districts, apparently aiming to push out government troops from frontline areas. A tight siege has been in place since July, trapping nearly 275,000 civilians in eastern rebel-held Aleppo. The dividing lines between governmentheld and rebel-controlled Aleppo are often streets lined with deser ted buildings or extended plastic sheets to mark rival turfs. Imad al-Khal, a 63-year old resident of western Aleppo, said there was fierce shelling over the past three days. “We are hearing now strong shelling by military jets and the artillery,” he said. A state TV presenter, Shadi Halwi, said in a video post on his Facebook page that for the first time in governmentheld Aleppo, “the sound of clashes is strong, very loud.” AP
Iraq’s Shiite militias join Mosul push; bombs rock Baghdad, 17 killed I RBIL, Iraq—Thousands of fighters flocked to join Iraq’s state-sanctioned, Iran-backed Shiite militias on Sunday, advancing to cut off Islamic State (IS) ex tremists holed up near Mosul in northern Iraq, while bombers killed at least 17 people in Shiite neighborhoods of Baghdad. Militia spokesmen said some 5,000 fighters had joined their push to encircle from the west the country’s second-largest city of Mosul, the IS militants’ last bastion in Iraq, which is linked by road to territory it holds in
Syria. Karim al-Nuri of the militias’ umbrella group, known as the Popular Mobilization Units, and Jaafar al-Husseini, a spokesman for unit member the Hezbollah Brigades, said a total of some 15,000 Shiite fighters were now participating in the battle. The Iraqi military confirmed the figures, which, including army units, militarized police, special forces and Kurdish fighters, would bring the total number of anti-IS forces in the offensive to over 40,000. The two-week-old offensive to drive IS
from Mosul had been long-anticipated, since the Sunni extremists stormed into the city in 2014 and drove out a much larger Iraqi force, albeit one that was demoralized from neglect and corruption. Troops are now converging on the city from all directions, although most fighting is still taking place in towns and villages on Mosul’s outskirts. The operation is expected to take weeks, if not months. The Popular Mobilization Units say they will not enter Mosul itself and will instead focus on retaking Tal Afar, a town to the west
that had a Shiite majority before it fell to IS in 2014. They acknowledge having help from Iranian military advisers. Iraqi forces moving toward the city have made uneven progress since the offensive began on October 17. They are 6 kilometers from the edge of Mosul on the eastern front, where Iraq’s special forces are leading the charge. But advances have been slower in the south, with government forces still 35 km from the city. The US military estimates IS has 3,000 to 5,000 fighters inside Mosul and another
1,500 to 2,500 in the city’s outer defensive belt. The total number includes around 1,000 foreign fighters. In the hours following the announcement of Shiite reinforcements, five explosions rocked predominantly Shiite neighborhoods of the capital, Baghdad, killing at least 17 people and wounding over 60, the police said. Police officials said the deadliest of the bombings, a parked car bomb, hit a popular fruit and vegetable market near a school in the northwestern Hurriyah area, killing at
least 10 and wounding 34. Other attacks hit the northern Shaab neighborhood, as well as traders’ markets in the Topchi and Zataria areas, as well as the poorer Sadr City district. The officials spoke on condition of anonymity because they weren’t authorized to brief reporters. There was no immediate claim of responsibility for the blasts. But IS has stepped up its attacks in response to the offensive in Mosul, and it was possible the group was targeting Shiite areas in retaliation for the Mosul offensive. AP
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Tuesday, November 1, 2016
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Top Senate Dem: FBI chief may have broken the law
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illary Clinton’s allies dramatically escalated attacks on FBI Director James Comey in a bid to stem political damage from his disclosure the agency is reviewing a new batch of files that may be related to an investigation of the former secretary of state’s e-mail practices. Harry Reid, the Senate’s top Democrat, delivered an unusual rebuke to the FBI chief in a letter on Sunday that said Comey may have broken the law by revealing the review so close to the election, and suggesting the agency is sitting on potentially damaging information about Republican presidential nominee Donald Trump. Reid’s scorching letter—typical of the combative Nevadan’s style— was one of the most confrontational messages being delivered by Clinton supporters, who took to talk shows, newspaper opinion pages and social media to question the propriety of Comey’s disclosure. Late on Sunday, one Democratic member of the House Judiciary Committee, Steve Cohen of Tennessee, called for Comey’s resignation. Judiciary is among congressional committees that oversee the FBI, and Cohen is the top Democrat on a subcommittee with jurisdiction over matters involving ethics in government. The new probe led to a weekend of scrambling by both Clinton and Trump and put the US presidential race in uncharted territory. The two campaigns responded, for now, by falling back on the familiar. After hitting back at Comey on Friday and Saturday, Clinton moved on by Sunday to reiterating her campaign’s themes, leaving the attacks on the FBI director to her proxies. Trump reinvigorated his assault on Clinton’s trustworthiness and found a new cue for his crowds to chant “Lock her up,” as he ramped up his pace of campaigning.
Tighter race
With millions of Americans already casting ballots for an election that concludes eight days from now, and polls showing the race had already been tightening, Clinton looked to the FBI review as a way to rally her Democratic base, while Trump sought to sway undecided voters and Republicans who’ve been reluctant to back him. Clinton didn’t mention the investigation directly while campaigning in the battleground state of Florida on Sunday. Rather, she continued her attack on Trump being unfit and unqualified to be president, combined with a push for supporters to vote early. Still, in a veiled reference to events of recent days, she told her audience not to let “all the noise in the political environment” distract from the important issues that will be decided on election day. “No matter what is thrown our way, we are not going to back down, we are not going to give up, we’re going to reject anyone who tries to drag us backwards,” Clinton said in remarks at New Mount Olive Baptist Church in Fort Lauderdale.
Resetting campaign
For Trump, Comey’s revelation served as a reset for a campaign that had been beset by the candidate’s own stumbles, his lewd comments from 2005 that were captured on videotape and came to light this month and falling poll numbers. A Trump adviser, who discussed strategy on condition of anonymity, said the Republican will try to let the e-mail story consume Clinton in the final days of the campaign and avoid statements or gaffes that will make him the center of any story. His aides, who are getting regular updates on the FBI probe from allies on Capitol Hill, are urging Trump to simply “be presidential” as they look to capitalize on an unexpected chance to get a second look from independent
and undecided voters. “Haven’t we had enough drama with the Clintons?” Trump asked the crowd at a rally in Phoenix on Saturday. The candidates are stuffing their schedules in battleground states between now and November 8. Trump is increasing the number of rallies he holds to four or five a day. Clinton is hitting the major swing states she needs to block Trump, including Ohio and Florida, and is trying to expand her campaign into Arizona, which has been a Republican stronghold in presidential elections. Arizona voters last opted for a Democrat in 1996, Clinton’s husband, Bill.
Comey’s disclosure
But both of their closing campaign messages were overshadowed, at least temporarily, by Comey’s revelation of the e-mail review and the questions about it being raised by members of both parties in Washington. Comey briefed the top Republican and Democrat on the House Judiciary Committee on Saturday and was pressed to clarify a number of questions, including whether the bureau is certain the newly discovered e-mails contained classified information. To most of the questions, “he did not give us any response in terms of what more he could say,” Bob Goodlatte, the Virginia Republican who chairs the committee, said on Sunday on ABC’s This Week. Goodlatte said Comey told him agents don’t know if there’s any classified information contained in the e-mails. Comey’s brief letter to congressional committee heads on Friday only said the files “appear to be pertinent” to its investigation.
Anonymous leaks
The information void was filled during the weekend by anonymous leaks regarding the e-mails found on a computer belonging to Anthony Weiner, the estranged husband of close Clinton aide Huma Abedin, and which prompted the FBI to renew its probe. The FBI on Sunday obtained a new warrant to review the material on Weiner’s computer, which will allow it to determine if any e-mails belonging to Abedin were unknown to the team investigating Clinton and whether they contain classified information, according to a person familiar with the matter. As that process played out, Clinton’s allies piled on Comey. In his letter, Reid accused Comey of a “disturbing double standard’’ that appears to be “a clear intent to aid one political party over another.” “My office has determined that these actions may violate the Hatch Act,” Reid wrote, referring to the statute that bars government officials from using their position to influence an election.
‘Upon reflection’
“If Director Comey cares about the Bureau and the rule of law, as I have felt he has in the past, I’m sure upon reflection of this action, he will submit his letter of resignation for the nation’s good,” Cohen said in his letter. Separately, Richard Painter, who was chief W hite House ethics lawyer in the Bush administration from 2005 to 2007 and is now supporting Clinton, wrote in the New York Times on Sunday that he’d filed a complaint against the FBI for a possible violation of the Hatch Act. Even Clinton’s campaign lawyer, Marc Elias, took to Twitter to question the FBI director’s motives. “Isn’t the most likely explanation for Comey’s letter that DOJ/FBI can’t obtain a warrant because there isn’t probable cause?” Elias posted, and said Comey went public to “head off ” any suggestion by Republicans he wasn’t being “aggressive” about Clinton. Bloomberg News
Choi Soon-sil (center), a cult leader’s daughter with a decades-long connection to President Park Geun-hye, is surrounded by prosecutor’s officers and media upon her arrival at the Seoul Central District Prosecutors’ Office in Seoul, South Korea, on Monday. South Korea is hoping for answers Monday about its biggest scandal in years. AP/Lee Jin-man
Woman in S. Korea scandal says she ‘deserves death’
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EOUL, South Korea—The woman at the center of a scandal roiling South Korea met on Monday with prosecutors examining whether she used her close ties to President Park Geun-hye to pull government strings from the shadows and amass an illicit fortune.
“Please, forgive me. I’m sorry,” Choi Soon-sil, a cult leader’s daughter with a decades-long connection to Park, said inside the Seoul prosecutor’s building, according to Yonhap news agency, as she wept. “I committed a sin that deserves death.” Choi, wearing a bucket hat and scarf, her hand pressed to her mouth, was nearly knocked off her feet several times as she tried to walk through a massive crowd of media, protesters and security surrounding the building’s entrance. YTN TV station reported that Choi lost her shoe as the throng converged on her. Protesters screamed: “Arrest Choi Soon-sil” and “Park Geun-hye should resign.” The scandal exploded last week, when, after weeks of speculation, Park acknowledged that Choi had edited some of her speeches and provided public relations help. Widespread media reports say that Choi, who has no official ties to the administration, may
have had a major role in government affairs. Investigators are trying to determine the scope of access Choi had and whether she was given sensitive presidential documents. They have raided the homes of some officials in the presidential Blue House as part of the investigation. Park has fired some of her top aides to try to contain the fallout, as thousands of people have protested in the streets and some lawmakers and the public have called for her resignation or impeachment. It’s not clear how much influence Choi had. But many South Koreans believe there is much more to the story than Park has acknowledged, and the frenzy surrounding the scandal threatens her presidency. Choi, 60, returned home on Sunday from seclusion in Germany. It is unclear if there will be any details revealed from her meeting with prosecutors. Choi has previously said she
helped Park, but didn’t know if she was seeing confidential information. Choi’s attorney, Lee Kyungjae, told reporters earlier that Choi “apologizes deeply for causing the people humiliation and despair.” Choi has been close to Park since Choi’s father, the leader of a religious cult, attached himself to Park by reportedly convincing her that he could communicate with her assassinated mother. The man who later murdered Park’s dictator father, President Park Chung-hee, is said to have claimed that he staged his attack in part because Park Chung-hee wouldn’t keep Choi’s father away from the young Park Geun-hye. Media reports said the younger Choi used her connection to Park to pressure businesses to give money to two nonprofit organizations she controlled, the Mir and K-Sports foundations; she then allegedly used some of the organizations’ official funds for personal purposes. South Korean media speculated that the two foundations collected about 80 billion won ($70 million) in donations from South Korea’s largest business groups in just a few months. The president of Ewha Womans University has also resigned amid protests over allegations that Choi used her connections to Park to get her daughter into the elite school and then secure special academic treatment. Political and business corruption remains widespread in South Korea, which has only had full democracy since the late 1980s, when it shook off decades of
military dictatorship. But this scandal has struck a chord in a way that previous ones have not. Part of it has to do with Park Geun-hye and her past, which is deeply entwined with South Korea’s recent, tumultuous history. The legacy of her father is still divisive. Supporters see him as saving South Korea from poverty and irrelevance by building up the economy from the rubble of the Korean War. Opponents say the economic development came at the expense of massive human-rights abuse, including the torture and death of dissidents. Elected in 2012, Park has been accused by critics of governing in an imperial manner, relying only on a few longtime confidantes and limiting her interaction with the press, the public and even parts of the government. Even so, Park’s close confidantes were assumed by most South Koreans to be in the government. That she may have been outsourcing decisions to someone outside of government, and someone connected with a murky, lurid backstory, has incensed many. Nearly 10,000 people took to the streets in protest over the weekend. To try to contain public anger, Park has reshuffled her aides, appointing a new senior secretary for civil affairs and new chief secretary for public affairs. She also accepted resignations from several officials in her inner circle; one of those, an aide of Park for nearly two decades, allegedly has links to the scandal. AP
Canada, EU sign free-trade deal; overcome Belgian objections
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anadian Prime Minister Justin Trudeau signed a free-trade pact with the European Union (EU), finally overcoming objections from a small region in Belgium that threatened to derail the entire accord. The Comprehensive Economic and Trade Agreement (Ceta), which has been on the negotiation table since 2009, will cut tariffs for EU manufacturers by €500 million ($549 million) a year and facilitate trade between the two markets. It was signed on Sunday in Brussels. The Francophone region of Wallonia, which accounts for less than 1 percent of the population of the EU, nearly scuppered the pact when it prevented Belgium, the sole holdout, from endorsing the agreement earlier this month. The complications compelled Canada’s trade minister to walk out of the talks a week ago and Trudeau to scrap a planned October 27 visit to Brussels. Negotiators finally overcame their differences before the weekend.
“This agreement reaches far beyond trade context,” European Council President Donald Tusk told reporters after signing the accord. “Today’s decisions demonstrate that disintegration of the Western community does not need to become a lasting trend, that we still possess enough strength and determination—at least some of us—to counter the fatalism of the decay of our political world.”
Dispute settlement
Belgium’s federal government had been unable to persuade Wallonia’s regional parliament in the country’s south to sign up to the proposed pact, known as Ceta. The delay in concluding the agreement raised concern that the bloc would have difficulty concluding other deals now under negotiation between the EU and the United States and Japan, as well as an accord with the United Kingdom over its future relationship with the bloc. “The credibility of the EU has been restored,” EU Trade Com-
missioner Cecilia Malmstrom said on her way into the meeting.
€500M The value of tariffs that will be cut for European Union manufacturers
The Walloons’ list of concerns about the deal range from the possible impact on employment to its affect on regional values. They fear large multinational companies will have greater powers to sue EU governments in investment disputes, and that a deal could lead to a decline in labor rights and undermine standards in environmental protections and agriculture.
‘Cautious optimism’
“Canadians and Europeans share the understanding that in order for real and meaningful economic
growth, we need to create good, well-paying jobs for our citizens,” Trudeau said. “Progressive trade agreements, like the one signed today, will do just that.” The EU says the pact would boost its economic output by about €12 billion a year and expand EU-Canada trade by about a quarter. It ends 98 percent of tariffs on goods traded from the outset and 99 percent after seven years. Each side would dismantle all industrial tariffs and more than 90 percent of agricultural duties. But this may not be the last Canada has heard from the Walloons. While the deal will take on provisional effect once it’s passed by the European Parliament, EU law demands national ratification. That means Wallonia will have the power of veto again. “I have no doubt that the provisional implementation will be the best form of education,” Tusk said. “This is the main ground for our cautious optimism. Very cautious optimism.” Bloomberg News
A10 Tuesday, November 1, 2016 • Editor: Angel R. Calso
Opinion BusinessMirror
editorial
The Billionaire Rocket Boys Club
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or years, billionaire entrepreneur and SpaceX Founder Elon Musk has expressed his passion for colonizing Mars. With the recent explosion of a SpaceX Falcon 9 rocket at Cape Canaveral (not to mention the trouble with the Tesla, Musk’s other high-profile venture), we wondered if his Mars enthusiasm had waned. We’re glad to say that the answer is: apparently not.
In a recent speech to the International Astronautical Congress, Musk revealed engineering details and timelines (optimistic, to be sure) to make the mission happen. He has his sights set on sending humans to Mars by 2024 or so. That’s just around the corner, in space flight time. Musk figures it will cost about $10 billion to develop a Mars rocket that could ferry 100 passengers on the seven-month journey. Estimated ticket cost: $500,000 per. Not for everyone, but sure, we could see hundreds of people lining up for a once-in-a-lifetime adventure. (“What do you do after you’ve climbed Mount Everest? Conquer Mars!”) Musk wowed his audience. “The mood at the conference was almost as giddy as a rock concert or the launch of a new Apple product, with people lining up for Mr. Musk’s presentation a couple of hours in advance,” The New York Times reports. Good for him. If Musk wants to raise and risk billions to fulfill his dream (fantasy?), we say go for it. We expect those $500,000 tickets will go fast. And we’ll sure be rooting for those plucky space tourists to reach the Red Planet. Meanwhile, however, National Aeronautics and Space Administration (Nasa) says it is also on track to launch a Mars mission in the 2030s. But…why? Nasa has carved out a science-rich niche, sending probes to distant planets (and Mars), reaping tons of data, exploring reaches of the solar system. Just recently, Rosetta, the first spacecraft to orbit a comet, sent its last trove of data back to Earth before it spiraled to its death. From that mission, scientists have reaped major clues about how the solar system formed and evolved, how life came to flourish on Earth. That’s thrilling. But the gee-whiz, nation-on-the-edge-of-its-seat days of the 1960s space missions are long gone. A small Florida start-up named Moon Express just received permission from Nasa to send a robotic lander to the moon. If it succeeds, Moon Express will win a $20-million Google Lunar X Prize competition launched in 2007. Will anyone on Earth notice? Meanwhile, Blue Origin, Amazon zillionaire Jeff Bezos’s private spaceflight company, is racing Musk and others to transport people into space. Blue Origin just aced a crucial “in-flight escape test” of its New Shepard rocket. The system is named after Alan Shepard, one of the original Mercury 7 astronauts, and the first American to reach space. Mars is still a long way off. Musk says he won’t be among the first colonists because he wants to see his children grow up. The chances of dying on the initial voyage to Mars, he says, are “quite high.” Nasa, you want a piece of that action? Our advice is: Stick to those science-expanding probes. Why spend billions to—what?—beat Musk and Bezos and the others in the Billionaire Rocket Boys Club to Mars? Let them take the risks and sell the $500,000 tickets. You’ve got better things to do. TNS Editorial Since 2005
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THE Entrepreneur Continued from A1
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hinese and Philippine officials, including private-sector representatives from both countries, signed agreements for $15 billion worth of investments in different projects in the Philippines, such as infrastructure, transportation, telecommunications, agriculture and tourism. Trade Secretary Ramon M. Lopez estimates that the investment agreements will generate 2 million jobs over the next five years. These investment agreements, as well as future investments, will not only increase China’s investments in the Philippines, which amounted to only $32 million in 2015, but also boost the inflow of foreign direct investments (FDI) in the country. Data from the Bangko Sentral ng Pilipinas (BSP) show that during the first seven months of 2016, the Philippines received net FDI inflows totalling $4.7 billion, up 79.1 percent. The investments came mainly from Germany, the United States, Singapore, Japan and Korea. China
also extended a $15-billion credit line to support other projects by Philippine companies. The improved relations between the two countries, as a result of President Duterte’s visit, will also boost Philippine exports. In 2015 Philippine exports to China, which consisted mostly of electronic products and minerals, totalled $6 billion. The potential for larger exports is huge considering that China’s total imports in 2015 were about $2 trillion. China has also resumed giving permits to 27 Philippine companies to export fruits, including mangoes, to China. Chinese President Xi Jinping
The lesson Russia learned John Mangun
Jun B. Vallecera
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A strong statement from China trip
OUTSIDE THE BOX
T
he Soviet Union was the worlds’ best example of a government centrally planned and operated communist economy. China ran a poor second, as this economy started from a base of almost exclusively agricultural. The Soviet economy was all smoke and mirrors. Workers pretended to make things and government companies pretended to pay them. Sure, employees reported for work and did their eight-hour shifts, but there was no substantial output, especially in consumer goods. Companies handed out salaries every month, but there was nothing to spend the money on. It was all a deception of what an economy is supposed to be. On December 25, 1991, the Soviet Union died and Russia emerged from the ashes of the communist economy. From the collapse of the Soviet Union, Russian economic growth was flat until 2001, when growth started rising substantially as the economy opened up. The Russian economy grew from about $250
billion to $2.25 trillion from 2001 until 2014. However, because there had been so little production of consumer goods prior to the reemergence of “Russia”, the supply of these goods came primarily from Europe. The Russian consumer wanted and depended on importing all the nice things, from clothes to appliances that make up our modern life. The substantial imports included consumer items, such as dairy products, cars, furniture and cosmetics. Russia paid for all these goods by exporting oil, natural gas and minerals. Then in July of 2014 Europe and the US imposed economic and trade sanctions on Russia, severely limiting Russia’s imports from the West. Suddenly, all those consumer goods
The improved relations between the two countries, as a result of President Duterte’s visit, will also boost Philippine exports. In 2015 Philippine exports to China, which consisted mostly of electronic products and minerals, totalled $6 billion. The potential for larger exports is huge considering that China’s total imports in 2015 were about $2 trillion. China has also resumed giving permits to 27 Philippine companies to export fruits, including mangoes, to China. also announced the lifting of travel advisories, which were issued in 2014, to allow Chinese citizens to travel to the Philippines. In addition, the Philippines and China have signed an agreement to implement a memorandum of understanding on tourism cooperation that was forged as early as 2002. The new agreement will encourage investments in tourism projects and increase travel between the two countries. The Department of Tourism (DOT) expects these developments to help the Philippines achieve or exceed its target of 6 million foreign-
Suddenly, the Russian consumer was exposed to Russian designers they had never heard of before. Until 2015 there was little interest in local designers and almost no manufacturers. Because of the sanctions and the collapse of the Russian currency, imported fashion is no longer available and the market has started making Russian clothes designed by Russian couturiers for the Russian consumer. from food stuff to shoes stopped. The Russian Saint Petersburg Fashion Week has been a minor high-fashion event for a few years launched by the Fashion Syndicate Saint Petersburg. Nobody paid much attention. But since the trade sanctions, things have changed. The 2016 Fashion Week was huge by comparison. Suddenly, the Russian consumer was exposed to Russian designers they had never heard of before. Until 2015, there was little interest in local designers and almost no manufacturers. Because of the sanctions and the collapse of the Russian currency, imported fashion is no longer available and the market has started making Russian clothes designed by Russian couturiers for
tourist arrivals for this year. In 2015 less than 500,000 Chinese visited the Philippines. During the first seven months of 2016, Chinese visitors already reached 422,801. The DOT is targeting a total of 632,947 Chinese tourists by end-2016. As the results of his trip show, Duterte is doing the right thing about being close to China and Japan, and encouraging Filipino companies to tie up with their counterparts in the two countries. This is expected to increase optimism among local businessmen, especially the Filipino-Chinese community. Strained relations between two countries naturally make their businessmen uncomfortable in investing or operating in either country. Thus, the improved ties between the Philippines and China will make the Filipino-Chinese, who are among the biggest players in Philippine industries, more comfortable in doing business. Perhaps, more importantly, the results of his visit is a very strong statement that Duterte is not antibusiness, which is the kind of leader we need to continue growing the economy and improving the lives of Filipinos. For comments, e-mail mbv.secretariat@gmail. com or visit www.mannyvillar.com.ph.
the Russian consumer. After President Duterte’s trip to China, humorous concerns were circulating on social media that now Filipino consumers would be forced to buy Chinese-made “Ma Ling” instead of American-made “SPAM”. Over 1 million kilos of USA food company Hormel’s luncheon meat is sold every year in the Philippines. But the most important question is, why are Filipino consumers buying either one? At least three local Filipino companies make a comparable “Chinese Style” product if you can’t live without that star anise flavor. If you are more in tune with the basic highfat, high-salt SPAM, that’s available, too. And all the luncheon meat you want is from locally made Filipino pigs manufactured by locally made Filipino workers in local factories. Russian consumers learned that they can live without imported consumer goods and local manufacturers are rushing to fill that demand. That all creates jobs and prosperity without relying as much on other countries. 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.
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Tollway row should be resolved soon
Technology and aging Edgardo J. Angara
Ernesto M. Hilario
ABOUT TOWN
M
otorists taking the North Luzon Expressway (Nlex) and Subic-Clark-Tarlac Expressway (SCTEx) in the north and the Cavite Expressway (Cavitex) in the south experience smooth and comfortable rides as a result of regular maintenance work and road improvements done by the toll operators. They take these measures for granted and forget that the maintenance and upkeep of the expressways are done at big expense for the operators to ensure seamless travel on the road at all times.
The Manila North Tollways Corp. (MNTC) operates both Nlex and SCTEx, while Cavitex Infrastructure Corp. (CIC) handles Cavitex. Both firms have been investing billions of pesos on road improvements along the expressway, but no toll-rate adjustments were acted upon by the Toll Regulatory Board (TRB) in the previous administration. The two tollway operators claim that their foregone revenues had reached almost P3.9 billion by the end of the Aquino administration, and now accrued to a whopping P5 billion combined. Tollway operators have to constantly maintain, upgrade and expand the roads they operate and the only way for them to recover their investments is through toll collections, which should be regularly adjusted to help them cope with rising costs. In fact, the Supreme Court has supported a “reasonable” rate of return for operators via periodic adjustments. “While the interests of the public are ideally to be accorded primacy in considering government contracts, the reality on the ground is that the tollway projects may not at all be possible or would be difficult to realize without the involvement of the investing private sector, which expects its usual share of profit,” the Supreme Court said. With this SC declaration in mind, the MNTC filed early this year an arbitration case before the United Nations Commission on International Trade Law in Geneva, Switzerland, to compel the Aquino administration to compensate it for P3 billion in foregone revenues over its inaction on toll-hike petitions for the 84-kilometer Nlex and the 14-kilometer Cavitex. This compensation amount, which is inclusive of the valueadded tax plus interest, is intended to cover MNTC’s foregone revenues from January 2013 to December 2015 only. It does not include yet an additional P111.8 million for every month of delay in compensation starting in January 2016. In May MNTC President and Chief Executive Rodrigo Franco said he was open to an out-of-court settlement
on the arbitration case involving the firm’s P3-billion compensation claim. However the MNTC’s claim is settled, the government should honor the provisions of the contract it entered into with this toll operator. The longer the government delays the resolution of the MNTC case, the bigger its financial obligations get every day. According to Transportation Undersecretary for Toll Roads Noel Eli Kintanar, the government is now working to resolve these cases. “The arbitrations are in motion. These matters will be taken up under the framework of the existing concession agreements,” he said. The speedy resolution of this arbitration row is urgent because the government’s continued refusal to comply with the rules of its concession agreements with MNTC and CIC gives it a bad name in the investment community. The TRB’s refusal to grant the toll increases sends the wrong signals to prospective investors who see favorable prospects for the Philippine economy and support the Duter te administration’s business-friendly 10-point socioeconomic agenda. In his inaugural speech on June 30, President Duterte said: “I order all department secretaries and heads of agencies to refrain from changing and bending the rules of government contracts, transactions and projects already approved and awaiting implementation. Changing the rules when the game is ongoing is wrong.” The MNTC and CIC have the moral high ground to push their long-overdue toll-fee adjustments for two reasons. One, the periodic rate adjustments are provided for in the concession agreements that the national government signed with these toll-road operators. And, two, TRB’s failure to consider the adjustments are unfair to these O&M contractors, and underlines the kind of policy inconsistency or regulatory risks that keep investors from putting their money in big-ticket infrastructure projects in the country.
E-mail: ernhil@yahoo.com.
T
his is the fourth and final column in a series that discusses the societal impact of an aging population. Though the Philippines is still considered relatively young, the projected doubling of our senior citizen population by 2025 underscores the urgent need to prepare for the anticipated high financial costs of elderly health care, to reform our pension systems and to rethink our views on old-age work and retirement. Hopefully, our leaders pay heed and jump-start policy discussions right now. The upcoming challenges may be daunting, but technological advancements across the world today are demonstrating how societies could be transforming the future into truly nurturing environments where senior citizens remain healthy, independent and ultimately productive citizens. For instance, with the advent of the “Internet of things,” homes across the United States are now
being equipped with appliances that monitor in real time the activities of senior citizens and allow their loved ones to remotely check whether they’ve taken their medication, eaten their meals, or even suffered certain injuries from falling. Such applications are particularly suited for sufferers of Alzheimer’s or dementia. Wearable devices and smartphones can now transmit in real
Tuesday, November 1, 2016 A11
time a senior’s health data—from blood pressure to glucose levels— to their attending physicians. By eliminating the need for constant face-to-face checkups with doctors, such telehealth applications actually help bring down the cost of elderly health care. In fact, since 2013, Royal Philips and Banner Health have implemented in the United States an Intensive Ambulatory Care (IAC) Program, where the vital signs of patients— many of whom are seniors—suffering from complex chronic conditions are monitored by teams of medical specialists via Internet-enabled machines. Within six months of implementation, the program had reduced health-care costs by 27 percent— particularly by reducing hospitalization rates, shortening hospital stay lengths and scaling back on the need to pay for professional and outpatient services. Meanwhile, new flexible work arrangements, mostly enabled by the Internet, have already opened up job opportunities for young freelancers. There is no reason that stay-at-home old-timers can’t work in some of these
The need to understand economics Cecilio T. Arillo
database
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ECAUSE economics is a complex science with almost infinite variables affecting people from all walks of life and other organism, both tangible and intangible, there is an urgent need to understand it with an open mind to shun biases, prejudices, and fallacies, and avoid the danger of being called a pseudo economist, whom Oscar Wilde, the famous Irish writer-philosopher, described as: “...a man who knows the price of everything and the value of nothing.” For example, the late George Stigler, one of the respected neoclassical or classical economists and the 1982 Nobel laureate in economics for his research on deregulation and government control policies, called economics an “imperial science”. Another economist of the neoclassical variety, Francis Fukuyama, author of the best-selling book Trust, may have offended the sensibility of some pragmatic Americans and Filipinos who do not usually side with any doctrinaire political positions on economic issues. “We can think,” Fukuyama said, “of neoclassical economics as being, say, 80 percent correct: it has uncovered important truths about the nature of money and markets because its fundamental model of rational, self-interested human behavior is correct about 80 percent of the time.” “But there is a missing 20 percent of human behavior about which neoclassical economics can give only a poor account,” Fukuyama added, obviously referring to some mercantilists as the missing 20 percent
in human behavior. According to Fukuyama, believers of mercantilism (protectionism), like James Fallows, Chalmers Johnson, Clyde Prestowitz, John Zysman, Karl van Wolfersen, Alice Amsden, and Laura Tyson, then-President Clinton’s economic adviser, “have strongly argued that the dynamic and fast-growing economies of East Asia have succeeded not by following but by violating the rules of neoclassical economics.” The implication of his carefully crafted fallacy and prejudice, disguised as an objective analysis of cultural human behavior in economics, is that both the mercantilists and the classicists have the same economic rules and that the East Asian countries have become dynamic and fastgrowing economies because they had violated these rules. If we also follow Fukuyama’s 8020 percent ratio on economic human behavior in money and markets in favor of the classicists, the fastgrowing mercantilist countries in East Asia, particularly Japan, South
By calling economics an “imperial science”, Stigler may not have realized that he unnecessarily added another line to the leftist popular slogan “American Imperialism” and, thus, created his own bias against some of the far-right libertarians. Korea, Taiwan, Hong Kong and Singapore, would have remained today the world’s economic laggards and retardates. Besides, these classicists and mercantilists, although both capitalists, have different set of economic rules, lifestyles, work ethics, business policies and frame of mind, just to cite a few, in the production, distribution and consumption of their limited resources. Unlike the classicists, the mercantilists believed in government intervention on the behavior of money, market, inflation and taxes; have pursued a manufacturing and export-oriented economy; have put premium on research and technology; have ignored the free-trade economic policies of the International Monetary Fund-World Bank; and are highly nationalistic. By calling economics an “imperial science”, Stigler may not have realized that he unnecessarily added another line to the leftist popular slogan “American Imperialism” and, thus, created his own bias against some of the far-right libertarians. Stigler should have known better that history is replete with people from both extremes of the left and the right who have used pompous slogans to advance their ideological cause.
Central banks weigh different policies under similar constraints Mohamed A. El-Erian
BLOOMBERG VIEW
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he central banks of Japan, the UK and the US will hold policy meetings this week. These three systemically important institutions are inclined to implement new policy measures, albeit different ones. Yet, all three may end up keeping their policy stance as is. Their individual and collective dilemmas illustrate the current policy funk facing the global economy, as well as the urgent need for a macroeconomic policy pivot on three continents. With the release this week of the quarterly inflation report, the Bank of England is likely to reiterate its concern about the potential impact of the uncertainty surrounding Brexit on growth, trade and investment prospects. In keeping with
its previous signals, and given the government’s delay in spelling out a coherent strategy for exiting the European Union, the central bank would be inclined to put in place some additional policy “insurance” for the country’s well-being, including
by cutting interest rates and, possibly, considering new balance sheet operations. But the Bank of England also needs to acknowledge that the UK’s recent growth performance has been better than expected, even as inflation is increasing with the sharp depreciation of the pound. Together with growing—and highly unfortunate—political attacks on the central bank and its governor, particularly by members of the pro-Brexit camp, the rising risk of stagflation is likely to keep the bank on the policy sidelines for now. The Bank of Japan faces another, similarly challenging policy dilemma. After its surprising decision to venture deep into unconventional policy, including with negative policy rates, the Japanese central bank is committed to continuing to try to support growth and raise inflationary expectations. But its attempts
to do so have been ineffective, if not counter-productive. And while the government continues to lag on the implementation of structural reforms—the “third arrow”—there is little to suggest that additional policy intervention would be any more successful this time. The US Federal Reserve (the Fed) faces the least challenging policy predicament when it comes just to economic and financial considerations, at least on paper. But that doesn’t take into account the bizarre politics of a highly unusual election. US third-quarter gross domestic product growth came in last week at 2.9 percent, surpassing consensus expectations. Meanwhile, financialmarket measures of inflation have been rising and labor market indicators have remained relatively solid. Along with what seems to be a wider recognition among a growing number of Fed officials of the rising risk
of future financial instability, these factors would push the Federal Open Market Committee (FOMC) to be inclined to hike interest rates when it meets this week. But the FOMC will be announcing its policy conclusions just a few days ahead of a very contentious presidential election characterized by many twists and turns that has featured questions about the political autonomy of the Federal Reserve, as well as its traditionally apolitical stance and the continued tenure of its chair, Janet Yellen. In this context, the likelihood of policy misinterpretation is significant, placing the Fed in a potential “lose-lose” situation. That means the FOMC is likely to choose the less visible and less risky policy path: delaying actions until after the elections.. The events of this week are likely to highlight again the extent to which good policy-making on three
jobs, especially with some retraining and retooling of skills. On the other hand, breakthroughs with driverless cars are now reaching critical mass. Recently, the first self-driving truck, owned by tech company Uber, made its first commercial delivery in Colorado, United States—navigating 190 kilometers of open highways between Fort Collins and Colorado Springs, although with a trained driver monitoring from the back seat. It will probably take years, even decades, before the world’s streets start seeing entire fleets of selfdriving cars. But analysts have underscored that such autonomous mobility has far-reaching implications—especially for senior citizens who have difficulty getting around by themselves. To be sure, these technological advances may take some time before reaching the Philippines. But the fact that they are already taking place elsewhere ought to help us adopt a more positive and hopeful view when it comes to societal aging.
E-mail: angara.ed@gmail.com.
He was a bit luckier, though, because the Cold War had already ended and many people from the radical left may no longer have any use of his jargon. Prof. Paul A. Samuelson, another brilliant economist and the first American to receive the Nobel Prize in economics in 1970, described economics not an exact science but more of an art. This writer mentioned him because his creativity and unbiased approach to the teaching of the discipline in his best-selling book Economics, particularly the 15th International Edition with Prof. William D. Nordhaus, his coauthor, contrasted Stigler’s and Fukuyama’s line of thinking. For instance, Samuelson’s and Nordhaus’s excellent work was probably one of the few economic books that used the term market without the word free appended to it as an adjective or a qualifier to denote that the “free-market,” “free-enterprise,” and “free-trade” economic concepts are indeed those of the dogmatic neoclassicists. As Bill Lowe said in his Education for Life (Phoenix Books,1984): “Freedom is one of the qualities of life that is most valued, but nobody knows better than the money-conscious citizens of free economies that ‘free’ is something of a misnomer; everything has to be paid for, including the freedom. It is usually paid for by an absence of security and by the deprivation of those whose labor creates affluence for others. It is for the insecure majority that the affluence of their society is but an illusion.” To reach the writer, e-mail cecilio.arillo@ gmail.com.
continents is being undermined by “unusual uncertainty” caused by institutional and political factors. The outcome of the central bank meetings would show that these institutions, having been forced to carry too heavy a policy burden for too long, are now in an even more challenging phase. And all three cases would reinforce the notion of the urgency of the policy pivot that I have described many times this year in columns and in my recent book, The Only Game in Town. The shift would involve moving away from prolonged and excessive reliance on central banks and in favor of a more comprehensive policy response that includes progrowth structural reforms, more balanced demand management, lifting pockets of excessive indebtedness, improving global policy coordination and strengthening the regional economic architecture in Europe.
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