Businessmirror november 01, 2017

BMReports

Data-privacy law to boost PHL cybersecurity sector

By Oliver Samson | Correspondent

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SSUES in data privacy are more pronounced in the information-technology and business-process management (IT-BPM) industry.

The Philippines’s IT-BPM industry is currently the second-largest contributor to the country’s GDP t after the overseas remittances of migrant workers, according to the Information Technology and Business Process Association of the Philippines (Ibpap). The sector processes personal data on an industrial scale from English-speaking coun-

The ubiquity of electronic devices and their use has led to an appreciation of data privacy, which is governed by Republic Act 10173, or the Data Privacy Act (DPA). The DPA’s implementing rules and regulations state that entities that have more than 250 employees, or those that processes sensitive personal data of more than 1,000 individuals, are required to register their dataprocessing systems with the National Privacy Commission, beginning with the designation and registration of a data-privacy officer. NONIE REYES

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Conclusion

tries all over the world.

“Ibpap has consistently been at the forefront of industry efforts to protect the integrity of data being processed here in the country,” Ibpap President and CEO Rey Untal said, citing that the group has been actively involved in the legislative process for Republic Act (RA) 10173, or the Data Privacy Act; RA 10175, or the Cybercrime Prevention Act; and the Department of Information and Communications Technology law.

Untal added the Ibpap is now active in the implementation of said laws “by ensuring a high level of awareness and compliance among industry players.”

Continued on A2

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Wednesday, November 1, 2017 Vol. 13 No. 21

S. Korea to fund PHL’s big-ticket infra projects

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By Cai U. Ordinario

@cuo_bm

he Philippines and South Korea may sign their first multiyear financing arrangement at the sidelines of the Asean meeting happening in Manila this month, according to the National Economic and Development Authority (Neda).

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The number of flagship projects that South Korea wan­ts to finance, according to a Neda official

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International Day against nuclear testing Teddy Locsin Jr.

free fire Philippine statement delivered by Ambassador Teddy Locsin Jr. at the United Nations Trusteeship Council Chamber, UN Headquarters, New York, on August 30.

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ver a month ago 122 nations took the decisive step to bring the world closer to the shared aspiration of a nuclear weapons-free world. The Philippines, along with the other Asean members, was proud to be part of the historic moment that saw the adoption of the Treaty for the Prohibition of NuclearWeapons—a landmark agreement that strengthens the nuclear disarmament architecture, fulfills the goal set out in the Treaty on the Non-Proliferation of Nuclear Weapons, and delegitimizes once and for all the use of nuclear weapons.

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NATURAL-GAS POLICY REQUIRED BEFORE GOVT CAN SELL MALAYA–D.O.E.

By Lenie Lectura

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Balisacan: “The PCC also has an advisory role.”

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See “Transco,” A12

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In an inter v iew w ith the BusinessMirror, Neda Undersecretary Rolando G. Tungpalan said the multiyear financing arrangement will cover the entire duration of the President’s term, or until 2022.

Tungpalan said Seoul is keen on financing agriculture-related projects, as well as some flagship

Transco urged to tap PCC as adviser

he Philippine Competition Commission (PCC) said it could be approached by the National Transmission Corp. (Transco) for advice in relation to the latter’s plan to venture into telecommunications.

PCC Chairman Arsenio M. Balicasan said the potential entry of a joint venture between the government and a private corporation would have “to undergo the competition lens.” However, since no firm details have been divulged by Transco, the PCC official said his office can provide guidance.

“We also have an advisory role,” Balicasan said, referring to the PCC’s mandate that ensures businesses compete and consumers benefit. “In some cases, especially working with other government agencies, we don’t have to wait for the formation of the joint venture. We can contribute, discuss, we can give advice. That’s what we also do in Congress, when they craft laws, franchises, when it comes to improvement in efficiency of the sector,” he added.

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IN LIVING COLOR Tombs painted with different colors greet people entering Himlayang Palanyag cemetery in Parañaque City. Hundreds are expected to troop to cemeteries as Filipinos pay respect to the departed on November 1. NONIE REYES

IMF sees deficits of $320B for M. East oil exporters

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UBAI, United Arab Emirates (UAE)—The Middle East’s oil producers are bracing for continued pressure from lower oil prices, with the International Monetary Fund (IMF) projecting cumulative budget deficits of $320 billion over the next five years, according to a new report released on Tuesday.

Approximately half of that amount —or $160 billion—will be sustained by energy-rich Gulf Arab

PESO exchange rates n US 51.7990

nations between 2018 and 2022.

Still, the projection is significantly lower than the shortfall of $350 billion that Saudi Arabia, the UAE, Qatar, Kuwait, Oman and Bahrain racked up since 2015, when oil prices plunged to their lowest in years.

The IMF said economic growth in these countries bottomed out to around 0.5 percent in 2017.

A major diplomatic rift between four Arab countries and Qatar

underway over the past several months has, so far, had limited impact on economic growth, though the IMF said the impasse could have an impact on investors’ appetites in the region.

Meanwhile, Saudi Arabia, one of the world’s top oil producers and the Arab region’s biggest economy, is introducing economic and social reforms to wean the country off its reliance on oil for revenue. In a move Continued on A12

@llectura

HE issuance of a muchawaited natural gas-policy is essential to the sale of government-owned 650-megawatt (MW) Malaya Thermal Power Plant Complex (MTPP), an official of the Department of Energy (DOE) said.

“We are waiting for the Philippine natural-gas policy because one of the conditions of the Malaya auction is to convert it to natural gas,” Energy Undersecretary Felix B. William Fuentebella said.

The policy, once issued, will be included in the terms of reference (TOR). Previously, the TOR of the MTTP excluded the requirement to convert the asset to a liquefied natural gas (LNG) facility.

“Part of the condition is to convert Malaya into LNG,” Energy Secretary Alfonso G. Cusi had said. “We want power supply from Malaya to continue once privatized.”

A rebid of the MT TP w il l take place once the revised TOR is out, he said. “The Psalm [Power Sector Assets and Liabilities Management] Corp. will ask for

[a natural-gas policy],” Cusi explained. “It will be its [Psalm’s] basis to revise the TOR.” The MTTP currently runs on expensive diesel, the price of which could be a burden to consumers.

“When nat gas becomes available, Malaya should be converted to nat gas because it will not only improve its performance but will also be competitive.”

Situated in Pililia, Rizal Province, the MTTP was rehabilitated in 1995 by the Korea Electric Power Corp. under a 15-year rehabilitateoperate-manage-maintain agreement. It consists of a 300-MW unit with a once-through type boiler and a 350-MW unit fitted with a conventional boiler.

The MTTP currently serves as a security plant, as it was designated as a “must-run unit” (MRU) meant to address any instability or supply deficiency that may occur as a result of sudden unavailability of any operating power plants in the grid.

The Psalm earlier said the MTPP will continue operating as MRU until it is privatized. The DOE is expected to issue the policy soon.

We are waiting for the Philippine natural-gas policy because one of the conditions of the Malaya auction is to convert it to natural gas.”—Fuentebella

n japan 0.4555 n UK 68.0017 n HK 6.6380 n CHINA 7.7876 n singapore 37.9591 n australia 39.7350 n EU 60.1438 n SAUDI arabia 13.8127

Source: BSP (30 October 2017 )

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A2 Wednesday, November 1, 2017

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Data-privacy law to boost PHL cybersecurity sector Continued from A1

Untal said Ibpap members believe that the effective implementation of the Data Privacy Act will boost the competitiveness of the Philippines as a location for IT-BPM work “while helping sustain and enhance investors’confidence in the country’s capability to protect the integrity of data, specifically personal information and sensitive personal information that are being processed here.”

Pacts

THE IT-BPM industry is one of the data-privacy stakeholders that helped craft and pushed for the passage of the Data Privacy Act in August 2012.

“The signing into law of RA 10173 increased investors’ and clients’ confidence in the country’s IT-BPM industry,” Ibpap said.

Untal noted the importance of particular provisions in the law “stipulating the protection of personal information and sensitive personal information being transmitted to and processed in the Philippines.”

“This is significantly influenced by Directive 95/46/EC of the European Union and the Asia Pacific Economic Cooperation Information Privacy Framework [Apec-PF], thereby ensuring its consistency with global standards, the Act accomplishes both state policies of protecting data privacy and ensuring the free flow of information,” Untal added.

Directive 95/46/EC, a policy adopted in October 1995 by the European Union, regulates the processing of personal data within the EU. The directive takes into account about 74 considerations and principles including the cross-border flows of personal data that the EU believes “are necessary to the expansion of international trade.”

On the other hand, the Apec-PF was endorsed

by Apec Ministers in 2004. The Apec said the group did so because it recognizes that cooperation to balance and promote effective informationprivacy protection, and the free flow of information in the Asia-Pacific region is key to improving consumer confidence and ensuring the growth of electronic commerce.

The Apec-PF on information-privacy protection “was developed in recognition of the importance of developing appropriate privacy protections for personal information, particularly from the harmful consequences of unwanted intrusions and the misuse of personal information.”

Tough

ACCORDING to Ibpap, the Data Privacy Act is one of the toughest data-privacy legislations in the region in terms of sanctions imposed on offenders, since it criminalizes noncompliance, with fines and prison sentences being imposed even for first-time offenders.

Noncompliance with the Act can result in serious ramifications, since it offers no second chances and breaches of the Act are automatic offences, the Ibpap explains. Depending on the nature of the breach, controllers may be penalized by imprisonment for between three and six years and fines of between P500,000 and P4 million for individual breaches.

However, Ibpap noted there is also some ambiguity in the way Section 4 (f ) of the Act, which talks about foreign laws and regulations that already apply to personal data collected from foreign jurisdictions, is interpreted in Section 5 (g) of the “Implementing Guidelines.”

In accordance with Section 5 (g) of the implementing rules and regulations (IRR) of RA 10173, particularly in light of Section 4 (f) of the Data Privacy Act, it needs to be clarified if business-processing companies that are processing data from foreign jurisdictions are exempt from the requirements of RA 10173, provided that such processing is done in accordance with foreign privacy laws.

To note, Section 5 (g) of RA 10173 defines “personal information originally collected from residents of foreign jurisdiction, including any applicable data-privacy laws, which is being processed in the Philippines.

“The burden of proving the law of the foreign jurisdiction falls on the person or body seeking exemption,” the section said. “In the absence of proof, the applicable law shall be presumed to be the Act and these [IRR].”

Registration

ACCORDING to Untal, Ibpap has been taking steps to meet the Data Privacy Act’s compliance requirements since the start of the year.

“We’ve conducted thorough reviews of the RR [registration requirements] that, among other things, necessitated the appointment of a dataprotection officer [DPO], the registration of a dataprocessing system, as well as other organizational, physical and technical requirements,” Untal said. “ We’ve also worked closely with the National Privacy Commission [NPC] and participated in their public consultation concerning the Registration Requirements. And based on the IRR, we prepared illustrative baseline drafts of compliance documentation for guidance of members.”

He clarified that Ibpap members are also free

to consult their own counsel in drafting their own documentation.

The NPC is a regulatory and quasi-judicial agency constituted in March 2016 by virtue of RA 10173. The agency is mandated to uphold the right to data privacy and ensure the free flow of information, with a view to promoting economic growth and innovation.

Slow

ACCORDING to Raymund E. Liboro, head of the NPC, companies were able to register their respective DPOs before the September 9 deadline set by the Data Privacy Act. The NPC has warned in September that companies that failed to beat the deadline for the registration of their data-processing systems starting with the registration of their DPO could face compliance checks.

In case the NPC finds an organization wanting, Liboro said the privacy-compliance check could lead to the issuance of a compliance order, which enforces specific actions to be performed by the company within a time period. In case the organization did not follow through satisfactorily, it will trigger a formal investigation that could possibly result in prosecution, Liboro was quoted in a statement as saying. He, however, admitted the country is “still taking baby steps” in the implementation of the Data Privacy Act. “Fully grasping its mechanisms would take a little time and will not happen overnight,” he said.

“What is important is that our citizens, especially the media, are engaged and that the government remains steadfast in viewing privacy and transparency as important values to every Filipino.”

S. Korea to fund PHL’s big-ticket infra projects infrastructure projects of the Duterte administration.

“It’s a work in progress. We’re looking at big-ticket projects. But we are still discussing the list as of the moment,” Tungpalan said.

“South Korea wants to help in the areas of agriculture, rural development, ICT [information and communications technology], and they also want to come in infrastructure where they would want to be ‘in the league’ of [major partners],” he added.

Tung pa lan said the initia l list of projects to be financed by the Korean government in the next five years include two flagship projects, specifically the P9.2 billion worth New Cebu International Container Port and the P4.86-billion Panguil Bay Bridge Project.

The Neda executive said the list could include Korean-funded projects, such as the Jalaur River Multi-Purpose Project, Stage II, which is the biggest Korean-funded

project in the country.

The Jalaur project was part of the $335.78 million extended to the Philippines by Seoul between 2011 and 2013.

Apar t from financing certain projects, the government of South Korea also made available a $500-million credit line to the Philippines under the Economic Development Cooperation Fund between 2014 and 2017.

However, it is only under this administration when the two

governments agreed to craft a sixyear framework which will allow the Philippines to tap $100 million in concessional loans.

In June, the Neda said in a statement that the Export-Import Bank of Korea (Kexim) met with select agencies of the Philippine government to discuss possible projects that may form part of the Kexim pipeline in the medium term.

Aside from concessional loans, the Kexim is also offering its sup-

Continued from a1

port through its knowledge- sharing program facility, a knowledgedr iven economic-cooperation program that will enable Korea to share its successes and failures and propose applicable policy recommendations.

Kexim also expressed willingness to assist in the Philippines’s pre-investment activities, including project preparation, and feasibility studies and plans formulation, through the Bank’s project preparation facility.

Star Cruises. . .

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Star Cruises earlier offered a fivenight, six-day cruise from Manila to Laoag, Kaoshiung in Taiwan, Hong Kong and back to Manila, aboard the SuperStar Virgo, from March 19 to May 23 this year.

The company has also been offering a seven-night cruise aboard the SuperStar Virgo that would sail from Shanghai to Laoag in Ilocos Norte, Manila, Naha, then back to Shanghai.

The first departure is on November 30, and the last sailing will be on February 24, 2018.

This developed as the Asian Cruise Cooperation (ACC) group was further strengthened with the recent addition of South Korea as its newest member.

In a news statement, DOT Undersecretary for Tourism Development Benito C. Bengzon Jr. said: “The Philippines welcomes the Ministry of Ocean and Fisheries [MOF] of Korea as the sixth member of the Asia Cruise Cooperation (ACC) group. The continued expansion of this regional alliance comes as a collective effort to enjoin more players that will widen our market and offer more compelling cruise products to the cruise lines.”

He added: “It further strengthens our efforts to maximize the full potential of Asia as the world’s next important cruising region.”

South Korea is the sixth member of the group, and the first in Northeast Asia, Bengzon noted. The ACC group was launched by Taiwan and Hong Kong in 2014 to bring major Asian cruise destinations together in a common effort to expand the regional cruise market. The other members are Hainan, the Philippines, and Xiamen.

“The entry of the Republic of Korea will expand the space available for the continued development of the Asian cruise market, and it means that more harbors belonging to ACC members will be available to provide stronger support for international cruise companies operating in Asia,” he stressed.

The entry of South Korea is an important step for the ACC, and marks an important milestone for said country’s cooperation in the Asian cruise market.

Under the ACC, each member is allowed to use the group in its advertising collaterals, provided that the featured cruise involves at least two of its members/destinations.

The participation of South Korea in ACC was welcomed by the Hainan Provincial Tourism Development Commission, the Hong Kong Tourism Board, the Philippines DOT, the Taiwan Tourism Bureau and the Xiamen Municipal Tourism Development Commission, in a recent celebration in Busan, the port city of South Korea.

Interest rates. . .

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relationship between Britain and the EU, its main export market, will look like. Businesses are fretting about the lack of certainty and have urged the British government to swiftly conclude a transition agreement with the EU that will see the economic relationship remain in place for at least two years after Brexit. Goldman Sachs Chief Executive Lloyd Blankfein is one prominent business leader to have warned in recent days that his firm may relocate chunks of his business out of London to Germany’s financial center in Frankfurt.

As a result, few economists think the BOE will embark on a quick sequence of rate hikes. ING economist James Smith expects Thursday’s vote to be 7-2 in favor of an increase, and says that anything less could expose divisions among the rate-setting panel that would rein in expectations of any further hikes next year.

“We expect the bank to continue talking up the possibility of further tightening this week, but with uncertainty elevated, demand sluggish and few signs of domestic inflation, we think the bank will tread carefully,” Smith said. AP

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Duterte, Abe condemn Nokor’s nuclear program

By Elijah Felice E. Rosales @alyasjah

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anila and Tokyo on Monday night condemned the nuclear activities of North Korea in the Korean Peninsula, urging the hermit kingdom to return to the negotiating table to resolve its virtual standoff with the United States.

President Duterte said there is a need for the international community to confront North Korea.

“We need to address many issues confronting the region and threats to the stability and security [in the] Asia Pacific,” the President said in a joint news briefing with Japanese Prime Minister Shinzo Abe.

I would like to work hand in hand with my close friend President Duterte to further deepen the bonds of friendship between our two countries, and we’ll cooperate toward peace and prosperity of the region and international community.”—Abe Over the past months, North Korea issued warnings of missile launches against the US and its territories, including Guam, which it threatened to strike in August. This prompted US President Donald J. Trump to respond, saying any further aggression from North Korea will be met with “fire and fury.”

This developed into North Korea firing a missile that flew over the Japanese town of Hokkaido, thus, earning the ire of Abe. “Foremost among our shared concern are developments in the Korean Peninsula and the continuing missile-launch tests of North Korea,” Duterte reported.

To this, the President said there is no other way to achieve peace and order in the region but to open the doors for dialogue. “We condemn these tests and call on all concerned stakeholders to return to the negotiating table to peacefully resolve the situation,” Duterte said.

For his part, Abe said Japan will continue to cooperate with Manila in “common issues, such as North Korean nuclear and missile issue.” He also vowed to back Duterte in his measures against illegal drugs, transnational crimes and terrorism.

“Inclusive of these issues, we will cooperate to address common issues in the region,” Abe said.

“I would like to work hand in hand with my close friend President Duterte to further deepen the bonds of friendship between our two countries, and we’ll cooperate toward peace and prosperity of the region and international community,” the Japanese leader added.

Lawmaker eyes charges vs GOCCs with ‘unconscionable’ fat bonuses

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@jonlmayuga

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nvironmental advocates under the Clean Air Philippines Movement Inc. (Campi) has filed a complaint against several industrial factories and steel mills before the Department of Environment and Natural Resources (DENR) for alleged violation of Republic Act

By Butch Fernandez

@butchfBM

en. Grace Poe has proposed the filing of charges against liable officials behind the move to grant an “unconscionable” P620-million bonus for government-owned and -controlled corporations (GOCCs), while the Duterte administration scrounge for funds to bankroll vital public services.

A boy lights candles in front of the grave of a departed loved one at the Manila South Cemetery in Makati City. Thousands of Filipinos will flock at the cemeteries until November 2 to mark this year’s All Souls’ and All Saints’ Days. ALYSA SALEN

Security forces in south, north Metro beefed up for ‘Undas’

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O augment security forces in south of Metro Manila, around 130 additional police officers from the Regional Public Safety Battalion-National Capital Region Police Office have been deployed to monitor further all bus stations, airport commercial centers and some segments of the Light Rail Transit (LRT) and Metro Rail Transit (MRT) to ensure peace and order during the annual tradition of paying respects and veneration to the departed ones.

As part of their preparations for Undas 2017, Southern Police District (SPD) Office District Director Police Chief Supt. Tomas Colet Apolinario Jr. said that forces have been posted early this week, together with 1,312 police personnel from the SPD, thus, bringing a total of 1,442 police across 29 cemeteries and different transport stations, including business establishments and other public places to prevent entries of persons carrying liquor, bladed weapons, illegal drugs and other prohibited items.

Their deployment in various sites across southern metropolis will be until November 2—in time for the All Saints’ and All Souls’ Days.

The SPD covers the areas of Makati, Pasay, Taguig, Parañaque, Las Piñas and Muntinlupa, as well as the municipality of Pateros.

The district director, likewise, ordered all chiefs of police of the seven police stations under the SPD to increase police visibility, roundthe-clock foot and mobile patrols on the streets to prevent criminals from doing illegal activities during the height of the commemoration for the dead.

Some cemeteries, nevertheless, may already have their skeletal

deployment as early as October 28 to provide police assistance, considering that there were some who opted to pay their respects to their departed relatives and loved ones while the cemeteries were not yet crowded.

Complementing security provisions of the SPD are the 5,798 force multipliers, Bantay Bayan, barangay tanods, Barangay Peacekeeping Action Teams and security guards; and 446 non-governmental organizations.

Combined with SPD forces, they aggregated to 7,686. Apolinario also reminded the public to take precautionary measures in observing All Saints’ and All Souls’ Days, while ensuring the safety of their properties and travel.

He reminded all those who are leaving for the provinces to lock their houses properly, with their doors and windows properly closed.

To avoid fire and/or explosions, they must unplug all appliances, check their cooking stoves, leaking/ open faucets; and see to it that no candles are lighted.

Do not leave valuable items or things outside the residence that might be subjected for theft, he added.

For smooth travel, the SPD director suggested motorists to check if their vehicles are in good running condition to avoid hassle, with focus on the following: battery, light, oil, water, brakes, air, gas, engine and tires, among others.

They also ought to bring the necessary documents of the car, including its insurance certificate, Apolinario said.

W hen r iding public transportation, they should refrain from using or displaying expen-

sive jewelry and bringing huge amount of money, he added.

Commuters need to go to the terminal as early as possible and report immediately to the management, guard or police forces present in the area if they notice something or someone who is acting so unusual, Apolinario said.

Meanwhile, Acting Quezon City Mayor Joy Belmonte said she has directed city government departments, as well as the Quezon City Police District and the Red Cross, to work closely to ensure a peaceful and safe observance citywide.

A public address system in those cemeteries has been set up in each of the said cemeteries, according to Belmonte, to ensure safety and security, and provide a mechanism for proper coordination and information to the public.

Volunteers from the Armed Forces of the Philippines (AFP), Philippine Red Cross, and other civic organizations will also be mobilized.

Earlier in the week, the city enforced traffic rerouting, designated teams of enforcers to assist in various transportation terminals and enforcement of strict security measures that are to be observed inside private and public cemeteries and emergency assistance within the jurisdiction of Quezon City.

The Quezon City Police Department has organized “Task Force Undas” consisting of three components: Task Group Alpha for anticriminality, Task Group Bravo for security deployment in cemeteries and columbarium, and Task Group Charlie for security deployment in bus terminals, MRT and LRT stations and vital installations. The barangays are also instructed to provide assistance.

Group says steel mills, factory use ‘bad’ smelting technology

By Jonathan L. Mayuga

Editor: Vittorio V. Vitug • Wednesday, November 1, 2017 A3

8749, or the Clean Air Act. The group trooped recently to the DENR to lodge a complaint against Melter Steel Corp., Real Steel Corp. and Wan Chiong Steel Corp., which operates in Pampanga; Davao Mighty Steel Corp. in Davao City and the Metrodragon Steel Corp., which operates in Caloocan City.

T hey are asking President Duterte, through the DENR, to or-

der an investigation into the companies’ operation, which they say, brings adverse impact to human health and the environment.

According to Campi, the said companies also allegedly violated their environmental compliance certificate issued by the DENR for their operations.

The Campi, together with the Philippine Associations of Free

Labor Unions, also filed a separate complaint with the Department of Labor and Employment for alleged violations of the law on occupational safety and health hazards, and other labor laws.

In a statement, Campi President Manuel Galvez said most of these industrial smelting plants and factories use “bad technology” from China in melting scrap metals.

Based on the National Expenditure Program (NEP), the total budget allocated for all GOCCs add up to P170 billion. This is on top of a separate P4-billion outlay for GOCCs under the so-called unprogrammed fund.

“It’s unconscionable that these GOCCs have granted bonuses, allowances and other benefits to employees without legal basis,” Poe said in a news statement issued on Tuesday.

She added that the amount, totaling around P620 million, “could have been used to supplement worthwhile government programs and projects, like additional capital outlay for 60 public hospitals, additional subsidy for the public-utility vehicle modernization project or additional funding for the feeding program for schoolchildren.”

The senator added that aggregate bonuses of these GOCCs is already “three times larger” than the Duterte administration’s First 1,000 Days program which, she lamented, was given “a measly P269 million.”

Poe wondered what the Philippine Charity Sweepstakes Office (PCSO), Small Business Corp. or National Electrification Administration “have done to merit these allowances.”

She noted, for instance, that “the PCSO, the biggest culprit in this

₧620M The amount of bonus allotted to GOCCs reflected from the NEP

scam against the use of government funds, would allow hazard pay for nonpublic-health workers, and even issue a weekly draw allowance, both of which have no basis in law and are unjustifiable by common sense.”

Poe warned that those responsible “should be held accountable for acting with impertinence, hubris or even plain ignorance of the law.”

In the meantime, the senator vowed to pursue further scrutiny of GOCC budgets when Congress resumes regular sessions in midNovember to craft and approve the final version of the 2018 budget, among other pending bills, before lawmakers adjourn anew for their traditional Christmas recess.

“Although the deadline of our written submission for amendments to the national budget has already passed, I will suggest to my colleagues to review the budget of these GOCCs and have their budget realigned, if necessary,” Poe said.

Sereno insists ‘no show’ on impeach proceedings

By Joel R. San Juan @jrsanjuan1573

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HE camp of Chief Justice Maria Lourdes A. Sereno has insisted there is no need for her to appear before the House of Representatives to personally grill witnesses in the impeachment case against her.

Lawyer Josa Deinla, one of Sereno’s spokemen, said Sereno’s lawyers are allowed under the Constitution to cross-examine the witnesses in the impeachment case.

T h i s i s i n cont r a d ic t ion to the pronouncement of House Speaker Pantaleon D. Alvarez that Sereno should personally appear before the House so she can be given the opportunity to cross-examine the witnesses against her.

“Under the Constitution, the Chief Justice has the right to be defended by her lawyers as an accused,” Deinla said in an interview.

“And only she can decide if she will exercise this right or not. Because she is the respondent or accused, she cannot be treated as an ordinary resource person to be invited by Congress,” the lawyer further explained in Filipino.

Among the witnesses being eyed against Sereno are two of her colleagues in the High Court.

Deinla stressed that as an ordinary respondent or accused, Sereno has the right to crossexamine the witnesses against

her through her lawyers as part of “due process of law” enshrined in the Constitution.

Not allowing her lawyers to cross examine the witnesses, according to Deinla, would deprive Sereno of her constitutional right to due process in the impeachment proceedings.

“We would like to call on the public to be vigilant in this impeachment process because we all have a stake here,” she said.

The lawyer revealed that Sereno’s legal team will insist on their motion to recognize her “constitutionally guaranteed rights” when the House Committee on Justice resumes the hearing on the impeachment case on November 20.

Deinla warned that the impeachment proceedings in the House will turn out to be one-sided if Sereno’s lawyers will not be allowed to participate.

“What will happen is that the determination of probable cause will be one-sided, and the public and members of the committee will not see the entire picture,” she claimed.

In a motion filed with the House Justice Panel on October 23, Sereno’s lawyers, led by Alex Poblador, sought confirmation from the committee that persons testifying as witnesses or as “resource persons” against the Chief Justice may be “cross-examined by her counsel on her behalf.”

Economy

A4 Wednesday, November 1, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

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DOF assures faster implementation of BBB projects under hybrid PPP

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By Rea Cu

@ReaCuBM

he Department of Finance (DOF) will impose an 18-month benchmark for private companies in starting infrastructure projects, notably those being undertaken through the Public-Private Partnership (PPP) Program.

Finance Secretary Carlos G. Dominguez III said that, since the government could be able to start an infrastructure project within an 18-month period, or a year and a half, why should it settle for the PPP that takes around 30 months before the actual start.

“We have no time, we are very far behind in infrastructure and we have to move faster. We [the government] have proven we can start a project in 18 months, so that is the benchmark the private sector has to meet. We have to start it; the country needs the infrastructure. So you want us to punish the public and wait around for some guys to do the PPP for 50 months, I think that is not fair to the public,” Dominguez told financial reporters.

According to the finance chief, the Duterte administration’s “hybrid” PPP Program will help speed up the rollout of the government’s big-ticket infrastructure projects under its “Build, Build, Build” program, as this modified strategy will avoid the protracted negotiations and disputes that often result in the delayed implementation

18 months The benchmark period imposed by the DOF to private contractors to start the actual construction of PPP projects. of previous PPP initiatives.

“How many PPP projects were actually started by the last administration?

Half a dozen. They have six years to do it. Half a dozen in six years, and the average took 30 months, and one of them took 50 months. Fifty months from the conception to the start. I am not talking about completion,” he added.

The Cavite-Laguna Expressway project, which took all of 50 months to conceptualize and begin implementation, is one prime example of why the government decided to modify the traditional PPP formula and fasttrack the process.

He said that, rather than resort to

the traditional PPP mode, and encounter the same problems in the private sector, the Duterte administration decided to take the initiative and put in place a hybrid PPP in which the government will build and finance the infrastructure projects, and later auction off the operation and maintenance aspects to the private sector.

“We are not willing to wait for the private sector to settle their differences. While private companies quarrel among themselves as to who will make the profit, the public suffers from lack of infrastructure.

The Duterte administration is willing to take the construction risks and spend budgeted funds to start projects early,” he said.

Dominguez added the proposed New Clark City in Pampanga is concrete proof that the hybrid PPP mode is faster and is more efficient considering that it took the government only 18 months to break ground on the project.

“We took over in July of 2016. In December [this year], we will break ground already for the Clark project,” he added.

Dominguez said the Plaridel Bypass Road that will link the North Luzon Expressway with the Philippine-Japan Friendship Highway in Bulacan, which was supposed to be implemented via the traditional PPP mode, will already be finished next year under the hybrid PPP. “Had we done that with PPP, would still be negotiating with them [the private sector] now. But [Public Works Secretary Mark A. Villar] has started it, and we’ll finish it by next year,” Dominguez added.

Solon proposes mini-Marshall Plan for Marawi rehabilitation

By Jovee Marie N. dela Cruz @joveemarie

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vice chairman of the House Committee on Appropriations on Tuesday urged the government’s economic team to lead the crafting of a “mini-Marshall Plan” for economic development of Marawi City.

Rep. Luis Raymund F. Villafuerte of the Second District of Camarines Sur issued the statement, amid initial estimates that rebuilding the war-torn city may exceed P92 billion.

Villafuerte said consultations should be made with the affected stakeholders by the economic managers under Task Force Bangon Marawi.

“Physical rehabilitation is only one aspect of the plan. Economic rehabilitation is an equally important component that would address one of the root causes of the conflict in Marawi and the Autonomous Region in Muslim Mindanao, which is generational poverty,” he added.

According to Villafuerte, a plan similar to the massive reconstruction

Wildlife protection to foster regional cooperation pushed

By Jonathan L. Mayuga @jonlmayuga

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laimant-countries in disputed territories like the South China Sea can find a common purpose in the protection and conservation of migratory species and their habitats, organizers of the 12th Conference of Parties (COP) in the Convention for the Conservation of Migratory Species of Wild Animals (CMS) said.

At the closing news conference of the recently concluded CMS COP 12, Bradneee Chambers, executive secretary of the CMS, said with the country’s successful hosting of the international wildlife meeting and leadership and hosting of the Asean, the Philippines can hopefully help bring on board China and other members of the Asean to the CMS. Also called the Bonn Convention, the CMS is an international treaty focused on migratory species and their habitats. It currently has 124 signatories, with the Philippines being the only party in the Asean region.

“One thing we are working on is to bring China on board [the CMS] to protect migratory species in disputed territories,” Chambers said.

Environment Undersecretary Rodolfo C. Garcia, Environment Secretary Roy A. Cimatu, said the South China Sea is one area, with several claimant countries, where cooperation can be fostered for a common purpose.

Garcia said the protection and conservation of migratory species in the South China Sea (West Phillippine Sea) is one area where the Philippines and China, and other claimants can explore, and possibly to help reduce tension in the region.

“We are looking for formulas that could foster a common understanding between claimant states in this contested area in the region. A common cause could be the basis of understanding and be able to somehow reduce the tension in the area is cooperation in this field among countries in a contest in that area. That is one good area to explore,” he said.

Director Theresa Mundita S. Lim said the Department of Environment and Natural Resources looks forward to bring up one of its proposals that was approved by the CMS—the establishment of a network of marine protected areas. She said migratory species know no boundaries.

effort initiated by the United States to help Europe after World War II would supercharge growth and development, not only in Marawi City but in the entire Mindanao as well.

“The original Marshall Plan was effective in propelling the growth of European economies because the nations who took part decided for themselves how to put the funding to best use. The same should be done in coming up with a miniMarshall Plan for Marawi,” the lawmaker added.

The Marshall Plan, launched

by Washington after World War II, was named after its architect, thenSecretary of State George Marshall.

Villafuerte said that, given the massive reconstruction requirement, the economic team must be able to cash in on positive investor sentiment by launching a marketing blitz to entice the business community to support 100 percent the planned issuance of Marawi bonds.

“This planned bond float is crucial to raising enough cash for the needed massive and long-term rehabilitation to put Marawi back on its feet,” he said.

Marawi Mayor Majul Gandamra

has said the city would require an initial P92 billion to reconstruct and rehabilitate it. The estimate covers Marawi and other areas in Lanao del Sur, where the city is situated.

Livelihood

Villafuerte said the modernization of the agriculture should be prioritized under the plan, as the majority of the population in the Autonomous Region in Muslim Mindanao (ARMM) rely on agriculture and fisheries as their means of livelihood.

“Given this fact, the modernization of agriculture should obviously be one of the priorities that this mini-Marshall Plan should take into account,” he added.

“Government intervention to boost production, reduce postharvest costs, widen farmers’ access to markets and introduce them to the concept of agribusiness ventures are among the measures that the President’s economic managers can consider to aid in the economic recovery not only of Marawi, but of the entire ARMM as well,” Villafuerte said.

Unescap: PHL merchandise export growth may not extend beyond 2017

By Cai U. Ordinario

W

@cuo_bm

hile Philippine merchandise exports are expected to end 2017 with a growth of over 20 percent, the United Nations Economic and Social Commission for Asia and the Pacific (Unescap) said this strong growth may not spill over to 2018.

In the Asia-Pacific Trade and Investment Report 2017, Unescap said the country’s merchandise exports in terms of value is expected to post an average growth of 22.5 percent this year and 7.1 percent next year.

The value of the country’s merchandise imports, meanwhile, is projected to post an average growth of 16.6 percent in 2017 and 5.5 percent in 2018.

“To countries previously affected by the slowdown of GVCs [global value chains], such as the Republic of Korea and the Philippines, the demand recovery is encouraging,” Unescap said.

“Although the improved performance of global and regional trade during the recent period is not negligible, several factors point to the moderation of trade growth in 2018,” it added.

In terms of volume, merchandise exports is seen averaging 13.1 percent this year and 6.2 percent next year. Imports, meanwhile, are forecasted to post an average growth of 14.9 percent in 2017 and 6.5 percent in 2018.

Compared to some members of the Asean, the Philippines is either the highest or among the highest in export and import growth.

The country leads in the value of merchandise export growth this year and next year followed by Malaysia with 13.9-percent growth in 2017 and 6.9 percent in 2018.

In terms of the value of merchandise-impor t g row th, the Philippines is second to Thailand, which is expected to post a growth of 16.9 percent in 2017.

The country comes in third in terms of import growth in 2018 after Malaysia at 7.2 percent, and Vietnam, 5.7 percent.

Unescap estimates also showed the country leading in terms of the volume of export and import growth this year. However, the country comes in second to Malaysia’s 6.9 percent in terms of import volume

growth next year.

“First, the robust trade growth in 2017 was measured against the weak performance in 2016. Second, risks threatening the world economy remain in place and could undermine the process of trade recovery,” Unescap said.

“Structural factors that have contributed to weak trade performance since the 2009 economic crisis persist,” it added.

The Unescap said export growth is forecast at 4.5 percent for 2017 and foreign direct investment is also expected to rebound this year, building upon fast growth in greenfield investment in 2016 and continued investment liberalization.

The report stated that the expected growth of exports by developing Asia-Pacific economies is 4.8 percent, while that by developed countries in the region is 3.3 percent.

In terms of export volume, Unescap said the Asia-Pacific region in 2018 will grow more modestly than in 2017 at 3.5 percent, while the import volume will increase by less than 3 percent.

“Export and import prices, especially commodity prices, are not likely to increase and, in fact, may trend downward due to the potential slowdown of investment and consumption precipitated by rising uncertainties. The sluggish prices will cause trade value in 2018 to grow much slower than in 2017,” Unescap said in a news statement.

“At the same time, deepening uncertainties may also affect extent of investment liberalization, which is found to increase GDP by $19.5 billion annually while decreasing inequality in the region by 0.02 percent per year,” it added.

The Asia-Pacific Trade and Investment Report is the flagship publication of the Unescap, which is prepared by its Trade, Investment and Innovation Division.

It provides information on and independent analyses of regional trends and policy developments in trade in goods and commercial services, as well as foreign direct investment.

It also provides insights into the impacts of these recent and emerging developments on countries’ abilities to meet the challenges of achieving sustainable development.

Agriculture/Commodities BusinessMirror

www.businessmirror.com.ph

Editor: Jennifer A. Ng • Wednesday, November 1, 2017

A5

Farm-gate price of rice continues slide

By Jasper Emmanuel Y. Arcalas

T

@jearcalas

he average farm-gate price of unmilled rice fell for the fifth consecutive week in October and settled at P18.73 per kilogram, according to the latest report of the Philippine Statistics Authority (PSA).

As of the second week of October, data from the PSA showed that the farm-gate price of unmilled rice declined by nearly 1 percent, from the previous week’s P18.91 per kg.

However, on a yearly basis, the farm-gate price was 7.41 percent higher than the P17.44 per kg recorded in the second week of October 2016, according to the PSA’s report, titled “Updates on Palay Price and Corn Prices.”

Data from the PSA also showed that the average retail price of regular milled rice during the period inched up by 2.14 percent to P38.03 per kg, from P37.23 per kg a year ago.

“The average wholesale price of regular-milled rice at P35.54 per kg dropped by 0.1 percent from previous week’s quotation,” the report read. “However, it climbed by 2.7

percent from the same week in the previous year.”

The PSA report noted that on a weekly basis, the wholesale price of well-milled rice dropped to a four-week low.

“The average wholesale price of well-milled rice at P39.15 per kg recorded a 0.26-percent decline from previous week’s level of P39.25 per kg,” the report read. “During the week, the average retail price of well-milled rice retained its previous week’s level of P42.24 per kg.”

However, on a yearly basis, both the wholesale and retail prices of well-milled rice during the period grew by 2.2 percent and 1.66 percent, respectively.

Data from the PSA also showed that the average farm-gate price of yellow corn during the period rose by 4.4 percent to P11.49 per kg,

from P11.01 per kg a year ago. It was also slightly higher than the previous week’s price of P11.46 per kg.

“The average farm-gate price of white-corn grain at P15.24 per kg went up further by 1.73 percent, from previous week’s level and by 34.39 percent from a-year-ago quotation of P11.34 per kg,” the report read.

The country’s rice supply is expected to get a boost, as harvest has started, and imports have started arriving. As of October 4 the National Food Authority (NFA) said a total of 178,392 metric tons (MT), or 82.16 percent, of the 250,000 MT contracted by the food agency, was already delivered to various ports in the country.

The remaining volume of about 65,600 MT, or 15.44 percent, is either in transit or at laycan, while 6,000 MT have yet to be shipped from Vietnam, according to the NFA. “While there is a slight delay in the arrival of part of the rice imports, the NFA has enough stocks to supply the needs of relief-giving agencies and local government units should such need arise,” NFA Administrator Jason Laureano Y. Aquino said in a statement.

As of October 25 the NFA said it has procured a total of 299,506 bags of palay as harvest begins to peak in some provinces across the country. This brought to 389,282 bags of palay already procured since January nationwide, according to the NFA.

50-hectare hybrid-rice model farm to help rehabilitate Marawi

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ocal hybr id-r ice seed s producer SL Agritech Corp.

(SL AC) a nd t he prov incial government of the Autonomous Region in Muslim Mindanao have partnered to put up a 50-hectare hybrid-rice model fa r m to help reh abi l it ate Marawi City.

Provincial agriculturists are now identifying contiguous irrigated lands for the model farm in Marawi—the biggest city in Lanao del Sur. The model farm is relatively big and production cost could reach around P30,000 per hectare. Traditionally, technology demonstration sites only cover 1 hectare to 2 hectares.

It appea rs, howe ver, t h at Marawi City needs a bigger model farm due to the destruction caused by the five-month war between government security forces and terrorists.

“We want to bring the message

to the people of Marawi that there’s hope. SL Agritech will put in the money for this techno-demo farm to inspire hope,” SLAC chairman Henry Lim Bon Liong said in a statement.

SLAC will implement the project in coordination with Go Negosyo, the city government and the Department of Agriculture.

“Go Negosyo has asked SL to participate in the economic rehabilitation of Marawi,” Lim said.

Marawi City is known as the summer capital of the South because of its cooler climate. It is not much of a rice-farming location, but there are farmers growing traditional rice varieties.

SL AC has earlier put up a model farm in conflict-affected Maguindanao.

On top of the technical assistance and financial assistance in the form of inputs (seeds, fertilizers) to be extended to Marawi City farmers, the project

will link them to markets that will buy the produce.

The project will ensure that irrigation is provided to the farm, despite the fact that uplands traditionally do not get enough water from national irrigation systems.

“We will educate farmers here on proper farm management because some rice fields in these areas are plagued by pests [weeds and disease]. We will be sending our technical experts to help them achieve a good yield,” said Dr. Frisco M. Malabanan, SLAC consultant.

Experts earlier estimated that rehabilitating Marawi City would require as much as P150 billion.

Budget Secretary Benjamin E. Diokno said earlier that rehabilitating Marawi could take three years.

The Department of Budget and Management said it would release P5 billion from the Northern Mindanao Regional Development Program to jump-start rehabilitation efforts in Marawi.

File photo

PHL sugar output hits 67,810 MT T he Philippines raw-sugar production as of October 15 has reached 67,810 metric tons (MT), nearly 17 percent lower than the 81,615 MT recorded in the same period last year, according to data from the Sugar Regulatory Administration (SRA).

The latest data on sugar production for crop year (CY) 20172018 showed that output in terms of 50-kilogram bags amounted to 1.356 million, lower than the 1.632 million recorded a year ago.

Raw-sugar demand during the period was pegged at 285,046 MT, 1.84 percent lower than last year’s 290,380 MT. The SRA data showed that the number of sugarcanes milled during the period reached 860,574 MT, 18.78 percent lower than the 1.059 million metric ton (MMT) recorded in the same period last year.

Data from the SRA also showed that only seven mills have started milling as of October 15. These are Biscom, First Farmers, Hawaiian, La Carlota, Sagay, URC-Sonedco and Victorias.

The bulk of the 67,810 MT, or about 45.47 percent, was produced

by Victorias Milling, which started milling since September 20.

As of October 15 data from the SRA showed that refined-sugar production more than tripled to

17,564.60 MT, from 5,468 MT recorded in the same period last year.

According to a Global Agricultural Information Network (GAIN) report published in September, Philippine sugar consu mpt ion wou ld increa se by 50,000 MT to 2.25 MMT next year, as prices remain soft due to ample supply.

The Gain report, prepared by the United States Department of Agriculture’s Foreign Agricultural Service in Manila said the increasing demand of a growing population for food and beverages would also boost sugar consumption in marketing year (MY) 2017-2018.

“Consumption of cane sugar should approach 2.2 MMT in MY 2016-2017, from 2.14 MMT in the previous marketing year, as restrictions on the importation of high-fructose corn syrup are implemented and industrial consumers react to the drop in domestic prices,” the report read.

T he a nt ic ipated su rge i n carryover stocks would also increase Philippine raw-sugar exports in MY 2017-2018, according to FAS. It revised upwards the projected shipments of raw sugar to 250,000 MT, from the USDA’s initial forecast of 100,000 MT. The Philippines received an additional tariff-rate quota (TRQ)

allocation of 63,830 MT raw value (MTRV) in fiscal year (FY) 2017, bringing its total allocation to 205,990 MTRV. “FY 2018 TRQ to the United States is set at 142,160 MTRV [136,201 MT commercial weight].

About 10 percent of the estimated 2.38 MMT of sugar produced has been initially earmarked for the world market,” the report read.

FAS said total raw-sugar production in MY 2017-2018, which would begin in December, would increase to 2.38 MMT on projected expansion in sugarcane areas.

“The Sugar Regulatory Administration is forecasting raw-sugar production at 2.38 MMT in crop year [CY] 2017-2018, although industry projects this figure to be higher based on anecdotal evidence that sugarcane areas planted will reach 424,000 hectares,” the report read.

On August 31 the SRA issued Sugar Order 1, which projected sugar production for CY 20172018 at 2.38 MMT and withdrawals at 2.17 MMT. About 80 percent of sugar production has been classified as “B,” or for the domestic market, while 10 percent has been classified as “A” for the US market and another 10 percent as “D” for the world market. Jasper Emmanuel Y. Arcalas

One metal will be transformed by the electric-car boom

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lencore Plc. and Trafigura Group Pte. are often at loggerheads, but one thing they agree on: the nickel market will be transformed by the rise of electric cars.

Nickel sulphate, a key ingredient in lithium-ion batteries, will see demand increase 50 percent to 3 million metric tons by 2030, Saad Rahim, chief economist at Trafigura, said in an interview. While other battery metals like cobalt and lithium have more than doubled since the start of last year, nickel prices have been subdued because of large inventories.

“When you look structurally, we should start to get bullish now,” Rahim said. “Are you going to be able to meet that demand when the time comes, given underinvestment in the supply side?”

His view echoes the outlook from Glencore, which told analysts recently that nickel production would need to increase 1.2 million tons

by 2030, equal to more than half of current global output, to keep up with demand from the battery industry. Prices are currently more than double what it costs Glencore to mine the metal.

It’s a surprising mood change for a market with a disastrous reputation. Nickel was long a thorn for Glencore, which was saddled with unprofitable operations following its takeover of Xstrata. It sold an Australian nickel mine, which Xstrata bought in 2007 for $2.4 billion, for just $19 million in 2015.

“The nickel industry’s been a bit of a dog since about 2007,” Oliver Ramsbottom, a partner at McKinsey & Co. in Tokyo, said by phone.

The battery industry could revive the fortunes of miners more than a decade after nickel collapsed from a peak of $51,600 a ton in 2007, when Indonesia and the Philippines started to flood the market with low-grade supply.

Nickel currently trades at $11,635,

Ron D’Raine/Bloomberg

up 16 percent for the year.

Future batteries will likely use more nickel and less cobalt, Rahim said. Cobalt prices have surged and the biggest source of supply is the Democratic Republic of Congo.

Still, some analysts are skeptical that the bullish scenarios will play out. Electric cars are still a

niche industry and nickel oversupply remains a threat, with current stockpiles four times bigger than since the start of 2012.

Indonesia has authorized its largest producer to export more nickel ore. The Philippines has also discussed ending a ban on open-pit mining, raising concerns

that supply will spike.

“For years, the market has completely dismissed the idea that something positive could happen in nickel,” Ingrid Sternby, senior research analyst at Blenheim Capital Management Llp., said in an interview in London. “With the recent announcements about Indonesia and the Philippines, it’s easy to see why the market is still scary enough for people not to want to be involved.”

About half of global nickel production is in the form of ferronickel, or nickel pig iron, which is nickel alloyed with iron, making it suitable for stainless steel. Battery makers, instead, use nickel sulphate, produced by dissolving pure nickel metal in sulphuric acid.

One hope is that the pricing of nickel pig iron and the high-grade nickel sulphate will diverge in the coming years, improving the fortunes of miners that can produce battery-quality material.

The global nickel market is heading for a deficit once above-ground stockpiles of battery-grade metal are consumed, according to Wood Mackenzie. The question for miners is how quickly the premium for topquality nickel will emerge.

“You can see the tightness ahead in the nickel market, but my concern is that we’re going to see a lot of value destroyed along the way,” said Colin Hamilton, managing director for commodities research at BMO Capital Markets Ltd. “If the miners really believe in the EV growth story, the thing to do would be to keep the nickel in the ground until the deficit arrives.”

Still, politicians and automakers are increasingly counting on a future of electric cars, attracting traders, such as Trafigura.

“Will we see a real breakout in next 12 months? That’s hard to see, but beyond that, structurally this looks to be going up,” Rahim said. Bloomberg News

A8

Wednesday, November 1, 2017 • Editor: Lyn Resurreccion

briefs S. Korea, China move to resolve disputes and hold summit talks

SEOUL, South Korea—South Korea and China will push to normalize their ties badly strained over the deployment of a contentious United States missile-defense system in the South, both countries announced on Tuesday, with Seoul saying their leaders are set to hold summit talks next week.

South Korea allowed the US to install the Terminal HighAltitude Area Defense (THAAD) system on its soil this year, triggering angry rhetoric and economic retaliation from China, which views THAAD’s powerful radar as a threat to its own security. South Korea and the US have repeatedly said the system is only aimed at defending against North Korea’s advancing nuclear threats, rather than peering into Chinese territory.

On Tuesday Seoul’s Foreign Ministry said there was recently diplomatic communication between the two countries, during which they agreed to put bilateral exchange and cooperation back on a normal track soon and boost cooperation for a peaceful, diplomatic resolution of the North Korean nuclear issue. AP

National security leaders say war authority sufficient

WASHINGTON—Top United States national security officials on Monday warned congressional Republicans and Democrats demanding a new war authorization that existing laws governing combat operations against terrorist groups are legally sufficient and that repealing them prematurely could signal the US is backing away from the fight.

During testimony before the Senate Foreign Relations Committee, Secretary of State Rex Tillerson and Defense Secretary Jim Mattis urged Congress to tread carefully. If lawmakers are compelled to replace the postSeptember 11, 2001, laws, the two secretaries cautioned them against imposing restrictions and conditions on American military forces that allow their enemies “to seize the initiative.”

Tillerson and Mattis said President Donald J. Trump doesn’t have permission from Congress to attack North Korea, but they indicated the US Constitution gives him that power in certain circumstances where US citizens and national security interests are being imminently threatened.

The response troubled several Democrats who have expressed concerns over Trump’s confrontational statements toward North Korea and its budding arsenal of nuclear weapons. AP

Tech companies find more signs of Russian election activity

WASHINGTON—Major tech companies plan to tell Congress on Tuesday that they have found additional evidence of Russian activity on their services surrounding the 2016 United States election.

Facebook, for instance, says a Russian group posted more than 80,000 times on its service during and after the election, potentially reaching as many as 126 million users. The company plans to disclose these numbers to the Senate Judiciary Committee on Tuesday, according to a person familiar with the testimony. The person declined to be named because the committee has not officially released the testimony.

Twitter plans to tell the same committee that it has uncovered and shut down 2,752 accounts linked to the same group, Russia’s Internet Research Agency, which is known for promoting proRussian government positions. AP

The World BusinessMirror

www.businessmirror.com.ph

Ex-Trump aides charged as prosecutors reveal new campaign ties with Russia

W

ASHINGTON—The special counsel, Robert Mueller, announced charges on Monday against three advisers to President Donald J. Trump’s campaign and laid out the most explicit evidence to date that his campaign was eager to coordinate with the Russian government to damage his rival, Hillary Clinton.

The former campaign chairman, Paul Manafort, surrendered to the FBI and pleaded not guilty to charges that he laundered millions of dollars through overseas shell companies—using the money to buy luxury cars, real estate, antique rugs and expensive clothes.

Rick Gates, Manafort’s longtime associate as well as a campaign adviser, was also charged and turned himself in.

But information that could prove most politically damaging to Trump came an hour later, when Mueller announced that George Papadopoulos, a former foreign policy adviser to the Trump campaign, had pleaded guilty to lying to the FBI and was cooperating with investigators.

In court documents released on Monday, federal investigators said they suspected that Russian intelligence services had used intermediaries to contact Papadopoulos to gain influence with the campaign, offering “dirt” on Clinton in April 2016 in the form of “thousands of e-mails.”

Papadopoulos secretly pleaded guilty weeks ago to lying to the FBI about those contacts and has been cooperating with Mueller’s prosecutors for months.

Monday’s dramatic announcements capped months of speculation about which of Trump’s campaign advisers might be first to be charged by Mueller, and they seemed to be a sign that the special counsel’s investigation is nowhere close to complete. “There’s a

large-scale, ongoing investigation of which this case is a small part,” Aaron S.J. Zelinsky, a prosecutor on Mueller’s team, said at Papadopoulos’ plea hearing this month.

The transcript of the hearing was released on Monday.

It is now clear, from Papadopoulos’s admission and e-mails related to a meeting at Trump Tower in June 2016, that the Russian government offered help to Trump’s candidacy, and campaign officials were willing to take it.

The United States has concluded that President Vladimir Putin of Russia tried to tip the outcome of the 2016 election in favor of Trump. As part of that effort, Russian operatives hacked Democratic accounts and released a trove of embarrassing e-mails related to Clinton’s campaign.

Mue l ler a nd h is tea m a re investigating whether anyone close to Trump participated in that effort.

The announcements rippled across Washington, affecting both political parties. Powerful Democratic lobbyist Tony Podesta quit his lobbying firm last Monday. The firm, the Podesta Group, was hired to do lobbying work on behalf of Ukraine, work that is at the heart of Manafort’s indictment.

The tax and money-laundering case against Manafort describes a complicated scheme in which he lobbied for a pro-Russia party in Ukraine and its leader, Viktor F. Yanukovych, and hid proceeds in bank accounts in Cyprus, the

Stephen Miller (left), a campaign aide, covers the microphone while Donald J. Trump’s campaign chairman Paul Manafort checks the teleprompter before Trump spoke at the Trump SoHo Hotel in New York on June 22, 2016. The indictments of Manafort, and two other former advisers in late2017, raise the stakes in the special counsel investigation that has dogged his administration for months and could prompt Trump to consider actions intended to short-circuit the probe before it threatens him or others close to him. Damon Winter/The New York Times

Grenadines and elsewhere.

Prosecutors say he laundered more than $18 million, and spent the money extravagantly. A homeimprovement company in the Hamptons was paid nearly $5.5 million, according to the indictment. More than $1.3 million more went to clothing stores in New York and Beverly Hills, California.

Manafort bought a $3-million brownstone in Carroll Gardens in Brooklyn and a $2.8-million condominium in SoHo, prosecutors said. “Manafort used his hidden overseas wealth to enjoy a lavish lifestyle in the United States without paying taxes on that income,” the indictment reads.

He was also charged with failing to register as a foreign lobbyist.

The charges carry the potential for roughly 20 years in prison, putting pressure on Manafort to provide information on others in exchange for leniency.

Among other things, Manafort could shed light on how widely in the campaign it was known that

Russia had damaging information on Clinton.

A senior White House lawyer, Ty Cobb, said last week that the president was confident that Manafort had no damaging information about him.

In a court appearance on Monday, Manafort and Gates pleaded not guilty and were placed under house arrest on multimillion-dollar bonds. Papadopoulos is awaiting sentencing.

M a n a for t ’s l aw yer, K e v i n Downing, called the money-laundering charges “ridiculous” and noted that, in the past half-century, prosecutors have charged only a handful of people with flouting foreign lobbying rules. Such violations are normally handled as an administrative matter.

Manafort’s Ukraine lobbying “ended in 2014, two years before Mr. Manafort served in the Trump campaign,” Downing said.

Lawyers for Papadopoulos declined to comment.

While the indictment paints an

unflattering picture of the man Trump tapped to run his campaign, the allegations long predate his involvement in the presidential race. Trump seized on that fact, declaring on Twitter that “there is NO COLLUSION!” But as Trump typed out that message, Mueller’s team was unsealing documents related to Papadopoulos that directly undermined the president’s claim.

Trump called Papadopoulos an “excellent guy” when he announced his foreign policy team in March 2016. On Monday however, White House officials described him as someone who played an insignificant role in the campaign.

“Look, this individual was a member of a volunteer advisory council that met one time over the course of a year,” said Sarah Huckabee Sanders, White House press secretary. “I’m not here to speak on behalf of the thousands of people that may have volunteered on the campaign.”

New York Times News Service

Catalonia leader turns up in Belgium, where he may seek political asylum C B

Carbon pollution touched 800,000-year record in 2016–WMO

ARCELONA, Spain—Hours after the Spanish authorities announced that they would seek to prosecute Catalonia’s separatists for rebellion, Carles Puigdemont, the region’s dismissed leader, turned up on Monday in Belgium, where he may seek asylum.

Puigdemont’s reputation for unpredictability has grown with every turn of Catalonia’s secessionist drama. On Monday he all but disappeared as the Madrid central government began using emergency laws to take over direct administration of Catalonia after its declaration of independence last week. Speculation had mounted as to what he was up to over the course of the day, until a lawyer in Belgium finally ended the mystery surrounding Puigdemont’s whereabouts late Monday.

“I have been consu lted by Puigdemont, and he asked me to protect his interests in the future in Belgium,” said Paul Bekaert, a Flemish lawyer.

Bekaert said the two men had met in Belgium and that the conversation was “about what possibly could come, whatever the Spanish government has ready for him.”

Bekaert emphasized his “more than 30 years of experience with extradition and political asylum” cases, including with Basques who were fighting extradition to Spain to face trial on terrorism charges.

Belgium is virtually the only national government in Europe that has been even remotely sympathetic to Puigdemont’s pleas for mediation, not least perhaps because the country has faced separatist tensions of its own led

by Flemish hard-liners.

Awkwardly, Brussels is also the headquarters of a European Union bureaucracy that has held the Catalan secessionists at arms’ length, for fear of upsetting Spain, one of the bloc’s largest member-states, and stoking forces of fragmentation in other parts of the Continent.

On Monday, while there was no official confirmation that Puigdemont had gone to Brussels, the Belgian and Spanish news media variously suggested that he had arrived for consultations, to seek political asylum, or to even declare a Catalan “government in exile.”

The speculation kicked into high gear not long after Spain’s attorney general, José Manuel Maza,

called around noon in Madrid for the prosecution of Puigdemont and another 19 Catalan politicians, stopping short of ordering their immediate arrest.

Maza said he wanted the Catalan politicians to appear “urgently” in court in Madrid. A decision would be left to Spanish judges whether to charge or jail them. The politicians could face 30 years in prison for the most serious of the potential charges, which included rebellion and sedition.

Officially, the Belgian government said they had no knowledge of Puigdemont’s presence in their country. But the statements of some officials seemed to hint at an openness to accepting Puigdemont and other Catalan officials if they chose exile.

“It is not unrealistic, if you see the situation at this moment, and the repression from Madrid and the prison sentences with which they are threatening, that the question is whether such a person still has a chance to a fair trial of course,” Belgium’s migration minister, Theo Francken, told VTM News, a Belgian television station, over the weekend.

“That’s where we enter into

a difficult diplomatic situation with the Spanish government,” he added. Francken is a member of the New Flemish Alliance party, which favors Flemish independence from the rest of Belgium and has historically had strong links to the Catalan separatists as a kindred movement. This month, members of the alliance hung the Catalan independence flag—the Estelada—in the Belgian Parliament, in a gesture of support.

But Belgium’s prime minister, Charles Michel, has dismissed the possibility of granting asylum to Puigdemont, saying it “is absolutely not on the agenda” and called on Francken “not to fan the flames.”

Puigdemont’s arrival presents a direct challenge to Michel, a Federalist, who, as the leader of a delicate government coalition, will have to keep separatists in his own government in check while trying to maintain good diplomatic relations with Spain.

Spanish news media had reported that Puigdemont had left Catalonia with five other deposed members of his Cabinet, by car to the southern French city of Marseille, and then by plane to Brussels. New York Times News Service

arbon dioxide (CO 2) levels surged to their highest level in at least 800,000 years because of pollution caused by humans and a strong El Niño event, according to the World Meteorological Organization (WMO). Concentrations of the greenhouse gas increased at a record speed in 2016 to reach an average of 403.3 parts per million, up from 400 parts per million a year earlier, the WMO said in a statement on Monday warning of “severe ecological and economic disruptions.”

The WMO added that, the last time the Earth had a comparable concentration of CO 2 , the temperature of the planet was 2 degrees Celsius to 3˚C warmer and sea levels were 10 meters to 20 meters higher than now. “Without rapid cuts in CO 2 and other greenhouse-gas emissions, we will be heading for dangerous temperature increases by the end of this century,” WMO Secretary-General Petteri Taalas said in the statement. The record increase of 3.3 parts per million of CO2 was due partly to the strong El Niño in 2015 and 2016, which triggered droughts in tropical regions and curbed the ability of forests to absorb the gas, according to WMO. CO2 also comes from burning of fossil fuels for energy and from deforestation for farming and building.

CO 2 concentrations were lower than 280 parts per million for the last 800,000 years and have risen since the industrial revolution, according to the geological data that’s gathered from ice cores in Greenland and Antarctica. Bloomberg

ExportUnlimited BusinessMirror

Editor: Efleda P. Campos • Wednesday, November 1, 2017 A9

DTI-EMB to conduct trade mission to Israel

By Golda Kristy Tabid-Grospe | Market Innovation Division

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DTI-Export Marketing Bureau

HE Export Marketing Bureau (EMB) of the Department of Trade and Industry (DTI) is all set to conduct the Philippine Trade and Innovation Exploratory Mission to Israel from November 5 to 14.

The trade mission aims to explore prospects for Filipino exporters of food, electronics, semiconductors and information and communications technology, as well as learn from Israel’s innovation ecosystem.

Israel registered as the Philip-

pines’s 36th-largest-export partner with a total value of $57.14 million in 2016, according to Tradeline Philippines. It was a significant jump from its 45th rank in 2015 valued at $46.23 million.

The DTI-EMB is expecting more

business and investment opportunities for Filipino enterprises to open as a result of the trade mission, paving the way for further growth in Philippine exports to Israel and greater cooperation between the two countries.

The highlights of the travel itinerary are the country presentations and business-matching sessions with the Jerusalem Chamber of Commerce, Haifa Chamber of Commerce, Federation of Israeli Chambers of Commerce and Israel-Asia Chamber of Commerce.

At least 10 companies and business organizations are participating in the trade mission, including the Israel Chamber of Commerce in the Philippines and the Semiconductor and Electronics Industries in the Philippines Foundation Inc. Assistant Secretary Rafaelita M.

THE Philippine delegation with Ambassador of Israel to the Philippines Effie Ben Matityau.

Aldaba of the DTI Industry Development and Trade Policy Group, Assistant Director Agnes Perpertua R. Legaspi of DTI-EMB and Division

Chief Rafaelita C. Castro of DTIEMB Market Innovation Division will lead the Philippine delegation.

The Philippine Trade and Innova-

DTI exec: Invest in innovation to globalize MSMEs

DTI pushes for greater investment promotion with business sector

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R ADE Secretary Ramon M. Lopez emphasized the continuous cooperation and collaboration between the government and the private sector in promoting investments and achieving economic growth during the 43rd Philippine Business Conference and Expo held last October 19.

Speaking before officials and members of the Philippine Chamber of Commerce and Industry, the trade chief discussed the “Focused and Strategic [FAST] Action Agenda on Investment“ initiative, a project of the Department of Trade and Industry (DTI) and the Board of Investments (BOI) to link micro, small and medium enterprises (MSMEs) to the Asean and Global Multinational Enterprises.

“With our goal to lower the income gap and uplift the lives of those at the bottom of the pyramid, it is our priority to link our MSMEs to bigger value chains, provide them the necessary tools to compete in the international market, and even export their products abroad,” Lopez said.

With the Philippines as the current host of the Asean regional meet this year, the FAST Action Agenda on Investment is a key deliverable of the Philippines under the Asean economic pillar.

Lopez also underscored the potential of the country as an

investment destination for both local and foreign investors, citing its export turnaround, improving manufacturing and industry sectors, young population and market access to Asean and other trade partners.

The country’s foreign trade agreements with Asean provides it with a 620-million market share, while the Regional Comprehensive Economic Partnership gives the country a 2.2-billion market reach.

The trade chief was also optimistic of the expansion of the trade preferences arrangements via the Generalized System of Preferences Plus of the European Union and the Generalized System of Preferences of the United States.

Lopez also highlighted the 2017 Investment Priorities Program (IPP), a blueprint on the preferred sectors and investments entitled to incentives. The program includes the Inclusive Business model, which creates greater market access for MSMEs. The IPP, likewise, covers the expansion of incentives for manufacturing activities and supports the government’s Manufacturing Resurgence Program, which creates solid and stable jobs for Filipinos.

“The DTI and the BOI are committed to continue providing policy environment and programs that support.

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STARTUP World Cup Philippines Regional grand-prize winner Storm Technologies, with Trade Undersecretary Nora K. Terrado (second from right)

DTI cites winners of Startup World Cup 2018

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N the recently concluded Slingshot Asean led by the Department of Trade and Industry (DTI), winners for the Startup World Cup-Philippines Regional competition were announced to represent the Philippines and compete with the rest of the world in the upcoming Startup World Cup Grand Finale in Silicon Valley in May 2018.

Storm Technologies topped the 10 finalists as it bagged the grand prize, which includes an all-expense paid trip to San Francisco and a chance to win $1 million by competing in the Startup World Cup Global Finale.

Storm Technologies is the larg-

est flexible benefits and incentives firm in the Philippines. It serves over 100,000 employees across different industries.

Other winners were Beam and Go as fourth runner-up; Zennya, third runner-up; Qwikwire, second runner-up; and Ayannah, first runner-up. All runners-up will be attending the Startup World Cup Finale in Silicon Valley.

Star tup World Cup-Phi lip pines Regional grand finals is a collaboration between the DTI, the Department of Science and Technology-Philippine Council for Industry, Energy and Emerg-

ing Technology Research and Development, Dentsu X Philippines, Fenox Venture Capital Southeast Asia and Brainsparks.

Startup World Cup is a global conference and competition that brings together the top start-ups, venture capitalists, entrepreneurs and worldclass technology executives.

Organized by the DTI, Slingshot Asean is one of the official events lined up by the Asean Committee on Business and Investment Promotion being chaired by DTI Undersecretary for Trade and Investments Promotion Group Nora K. Terrado.

DTI Calabarzon gathers leading automotive-industry players

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HE Department of Trade and Industry ‘s Calabarzon regional office recently gathered the leading automotive- industry players for the first Regional “Kapihan” for Automotive Industry in pushing for the agency’s Comprehensive Automotive Resurgence Strategy (CARS) program in Cabuyao City, Laguna.

DTI Calabarzon Director Marilou Toledo said the activities will start a collaboration between the government and private sector to integrate and push Calabarzon’s automotive industry towards an inclusive and prosperous Philippines.

“We in the DTI really want to uplift the capacity and competitiveness of our MSMEs [micro, small and medicum enterprises]. We want them to be part of the value chain of the industry. Hence, we are asking for the participation and commitment of the industry players, specifically the private sector, and government agencies to make it happen. The 7 Ms [mind-set, mastery, mentoring, market, machine, money and business model] of Trade Secretary Mon [Ramon M.] Lopez would be a good strategy to promote productivity and profitability,” Toledo said.

The CARS Program aims to jumpstart the Philippine automotive industry and make the country an auto- manufacturing hub

in the Asean region. The program also intends to raise the production level to a competitive scale by providing $1,000 per unit fiscal support for the production of three models with a 200,000-unit production requirement over six years and mandatory local production of body shell and large plastic parts. It is expected to amplify the Philippine work force, strengthen industrial linkages and attract additional investments.

Participating companies were the Federation of Automotive Industries of the Philippines, Chamber of Automotive Manufacturers of the Philippines, Philippine Parts Maker Association, Motorcycle Parts Producers and Exporters Association, Philippine Ecozones Association, Laguna Chamber of Commerce and Industry, some government agencies, such as the Board of Investments, University of the Philippines National Center for Transportation Studies, the Philippine Council for Industry, Energy, Emerging Technology Research and Development, the National Economic and Development Authority Calabarzon, the Department of Public Works and Highways-Calabarzon, the Department of Science and Technology-Calabarzon and the Japan International Cooperation AgencyNomura Research Institute.

tion Exploratory Mission to Israel is supported by the Embassy of the Philippines in Tel Aviv and the Embassy of Israel in Manila.

DEPARTMENT of Trade and Industry Calabarzon Director Marilou Toledo addresses the recently gathered leading automotive-industry players for the first Regional “Kapihan” for Automotive Industry in pushing for the agency’s Comprehensive Automotive Resurgence Strategy program. The meeting was held in Cabuyao City, Laguna.

While the Philippines moved up to become the second fastest-growing automotive market in the Southeast

Asia at the start of 2017, its market is smaller compared with other Asean countries. Furthermore, its manu-

facturing capabilities are mostly oriented toward the domestic market rather than regional chains.

HE Philippines recently co-hosted with Chinese Taipei the “Apec Policy D i a log ue on MSME M a rket place and O2O Forum” targeted at promoting the application of online-to-off line (O2O) business models.

Since the inception of AsiaPacific Economic Cooperation (Apec) O2O initiative in 2015, the forum has showcased more than 200 best practices in the Asia-Pacific region.

For the Philippines, three innovative start-ups have won the O2O best practice awards, namely: Medifi, revolutionizing health care with cloud-based healthprofile management, video consultations and medical-imaging support; SnipePH, a one-stop solutions partner for employment engagement and business needs; and BeamAndGo, specializing in consumer-related e-commerce products and the first in the Philippines to offer a digital SMSgifting solution delivered as a text message. “ Technological innovations have the capacity to reduce costs, allowing ease of doing business which enables small and medium enterprises [SMEs] to access resources they need to grow and expand their business and accelerate the onboarding of currently excluded markets into the global economy.” DTI Regional Operations Group Undersecretary Zenaida Maglaya said.

The United Nations Conference on Trade and Development said e-commerce helps local businesses access global value chains.

It enables them to have a presence in foreign markets through exports and imports. This process leads to higher productivity because of more efficient use of technology, heightened competition and greater consumer choice; and creates jobs as firms start to expand.

The Asia-Pacific region has the largest market share in the digital economy, accounting for 33 percent of total market scale, but only a few SMEs in Apec are currently taking full advantage of new digital opportunities.

The role of private and public sector in supporting more SMEs to turn these opportunities into business will be a key driving force for economic growth.

“Now more than ever, it is becoming increasingly important to call for closer cooperation and stronger collaboration as we work toward helping SMEs become our partners in promoting inclusive growth. And we do so by making them competitive and resilient as they embrace the opportunities and challenges globalization brings.”

Maglaya said.

A10 Wednesday, November 1, 2017 • Editor: Angel R. Calso

Opinion BusinessMirror

www.businessmirror.com.ph

editorial

Govt must increase NFA’s buying price

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rior to the start of the lean season this year, the National Food Authority (NFA) faced difficulties in propping up its rice stocks. Every year, the NFA is supposed to keep a buffer stock equivalent to 30 days of rice consumption before the start of the lean season in July. The NFA can do this by purchasing rice from local farmers and by importing from neighboring countries, such as Thailand and Vietnam.

This year President Duterte ordered the NFA to prioritize the procurement of rice from local farmers. Even if it was already apparent in April that the food agency would be hard pressed to come up with a 30-day buffer stock, the President was not keen on buying rice produced by farmers abroad.

Unfortunately, local farmers themselves were not keen on selling rice to the NFA because traders offered better prices. The NFA buys rice from farmers at P17 per kilogram, but traders paid farmers anywhere from P18 to P20 per kilogram. Even with the incentives offered by the NFA, the choice will always be obvious to a farmer who needs to recoup his production cost so he could plant rice again.

It was in May when the government had decided to finally import rice so the NFA could preposition rice stocks in calamity-prone areas before the lean season kicked in. The interagency NFA Council allowed the purchase of 250,000 metric tons (MT) of imported rice under the government to private-sector scheme.

On top of this, the council also gave its go signal to the importation of 805,000 MT of rice under the minimum access volume (MAV) scheme. During the lean months of July, August and September, Philippine rice harvest goes down significantly. The country is also visited by strong typhoons during the lean season. The NFA is supposed to ensure that the Philippines would have enough food supply during this critical period.

Ideally, the NFA should no longer import rice and just rely on local procurement, as this would benefit Filipino farmers. But its buying price, which has been raised to P17 per kg in 2008, is no longer competitive. The NFA has proposed a P5 per kg increase, but economic managers rejected the proposal as it could cause inflation to accelerate.

Agriculture Secretary Emmanuel F. Piñol had proposed a P3 per kg increase in the NFA’s buying price and this could be a good starting point. But the government must decide soon because 2017 would be over in two months. The NFA would again be faced with the dilemma of having to compete with local traders during harvest for the dry season crop next year.

The government must also increase the budget of the NFA for its palay-procurement program. For next year, the food agency has been given P7 billion to purchase some 390,000 MT of rice. If the government decides to increase the buying price, then the NFA would have to be given a bigger allocation in 2019 and beyond. The food agency should be allowed to buy more local unhusked rice so the Philippines would not be held hostage by global food-price crises.

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International Day against nuclear testing Teddy Locsin Jr.

Free fire Continued from A1

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he treaty represents the universalization of the Philippines’s fervent hope to put nuclear weapons firmly on the path of extinction, as set forth in its constitution and in the Treaty on the Southeast Asian Nuclear Weapons-Free Zone.

During the negotiations on the nuclear-weapons ban, the Philippines championed the inclusion of nuclear testing in the list of prohibited acts. It proposed language that would have committed States Parties to undertake not, and I quote, “to carry out any nuclear-weapon test explosion or any other form of nuclear-weapons testing.” However,

as treaty negotiations go, the language proposal was watered down.

Be that as it may, what is important is that, under the nuclearweapons-ban treaty, States Parties undertake not to conduct nuclearweapons tests. With this, the act of nuclear-weapons testing is effectively declared illegal under international law.

The Philippines looks forward to signing the Treaty on the Prohibition of Nuclear Weapons on September 20 and usher in this new phase in our collective goal for the complete, irreversible and verifiable elimination of nuclear weapons.

The Philippines’s long-standing position against nuclear testing was first articul ated on the international stage when it signed the Comprehensive Nuclear Test Ban Treaty in 1996. It lent its voice to the growing clamor that recognized the detrimental effect of nuclear testing to the environment and its horrific consequences to humankind, where the suffering of victims can span generations.

Today, as in the years past, we call upon the remaining eight fellow UN member-states to finally heed the humanitarian imperative against nuclear tests and exercise their role as responsible citizens of the global community by finally signing onto the Comprehensive

Nuclear-Test-Ban Treaty (CTBT), thereby ushering it into force. The forthcoming Conference on the CTBT is the most opportune time to do this. It happens to be on the same day when the Treaty on the Prohibition of Nuclear Weapons will be opened for signature.

The actions of the Democratic People’s Republic of Korea constitute a flagrant violation of Security Council resolutions and pose a clear and present danger to international peace and security. Its actions demonstrate the urgent need for the CTBT to enter into force. While the Philippines, along with its fellow Asean members, condemn DPRK’s missile tests, it underlines the need to establish the international legal landscape that expressly delegitimizes its actions—if only to clearly and unequivocally articulate the collective desire of the community of nations to put a stop to them once and for all.

Thank you, Mr. President.

The future of work might not be so bleak

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By Jean Tirole | Bloomberg View

hat’s the future of work? Will gigs replace salaried employment, and will robots eventually leave humans with nothing to do? I see reason for skepticism, but also for concern.

Technology, of course, is already making independent work a lot easier. It puts workers into contact with customers and helps them run a back office. More important, it allows individuals to build and promote their reputations at low cost. Customers used to rely on a taxi company’s reputation, or choose a washing machine by the manufacturer’s brand. Now, each worker has a brand: On Uber, customers can reject drivers based on their personal ratings. A firm’s collective reputation, with the concomitant control of its employees’ behavior, is becoming gradually less important.

That said, technology can also favor standard salaried employment. The economists George Baker and Thomas Hubbard, for example, have noted how onboard computers could change United States trucking. By monitoring behavior, they would solve a moral hazard problem: Drivers have little incentive to be as careful with company trucks as they would with their own. As a result, more drivers could become employees of companies that buy and maintain fleets, rather than going it alone. They wouldn’t have to invest in their own vehicles, which make them vulnerable to recessions by putting their savings in the same sector as their labor; and they wouldn’t be out of pocket and out of work when their trucks broke down.

More generally, conventional jobs have a lot of advantages. First, a single worker or group of workers might lack the capital needed to set up a business, or prefer to avoid the stress and risk of running one (consider doctors or dentists who choose to be employees of a medical clinic).

Second, business owners might not want their employees to have other bosses—particularly if the work involves confidential information or team projects that require undivided time and attention. Third, reputations based on ratings might not be reliable: The economist Diane Coyle has shown that the quality of individual consultants can be hard to monitor, at least immediately, whereas a traditional consultancy may be more efficient at “guaranteeing” quality.

In short, I believe that salaried employment will not disappear, although it might become less prevalent over time. But what about artificial intelligence? Not a day passes without the media fretting about the mass unemployment that will ensue as robots take over for humans. Many jobs involving routine (and thus codifiable) tasks have been eliminated: banking transactions are digitized, checks are processed by optical readers, call centers use software to shorten the length of conversations between customer and employee, or even replace humans with bots.

These changes have global repercussions. They threaten the low-salary, outsourced jobs that emerging and underdeveloped countries have counted on to escape poverty. In developed countries, as the economist David Autor and his coauthors have demonstrated, they tend to benefit those employees whose skills complement the new digital tools.

This “hollows out” the distribution of jobs into either high-paying skilled positions or low-paying basic service positions. In the US, the difference in salary between those who hold university degrees and those who left right after high school has grown enormously in the past 30 years.

It’s still not clear, however, which human tasks computers will be able to replace, and what the effects will be. Deductive problems, in which the particular is deduced from the general rule in a logical way, are the easiest. An automated teller machine (ATM) verifies a card number, the PIN code, and the bank-account balance before issuing money and debiting the account. Nonetheless, total employment in banking rose even as the ATM network spread, because demand grew and teller jobs were replaced by new tasks.

Computers have also made great advances in induction, which starts with specific facts and works toward a general law. For example, algorithms are capable of predicting the US Supreme Court’s decisions about patents, as well as any legal experts. Similar techniques are enabling automated facial recognition, voice recognition, medical diagnosis and other tasks that previously only humans could perform.

The most difficult tasks for

computers involve unforeseen problems that do not match any programmed routine. Rare events cannot be analyzed inductively to generate an empirical law. Frank Levy and Richard Murnane offer the example of a driverless car that sees a little ball pass in front of it. This ball poses no danger to the car, which therefore has no reason to slam on the brakes. A human being, on the other hand, will probably foresee that the ball may be followed by a young child, and will therefore have a different reaction. The driverless car will not have enough experience to react appropriately. Although machine learning might be able to solve this problem, it illustrates the obstacles that computers still encounter.

So humans and computers face different challenges. Computers are much faster and more reliable when processing logical and predictable tasks. Thanks to machine learning, they can increasingly cope with unforeseen situations, provided they have enough data to recognize the structure of the problem. On the other hand, the human brain is more flexible: A 5-year-old child can handle some problems better than any computer. So the people best equipped to succeed in the new world will be those who have acquired abstract knowledge that helps them adapt to their environment, while those with only simple knowledge preparing them for routine tasks are most in danger of being replaced.

This is why education is crucial.

If we don’t have a system that gives everyone a chance to gain the necessary skills, differences in education and family background will lead to even greater inequality.

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Opinion

Brilliance by accident

The Asean lawyers

BusinessMirror

Michael Makabenta Alunan

on the contrary

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any brilliant great leaders, artists and innovators in history were nobodies, who even had no drive to succeed and were even reluctant to step into the limelight, but were mostly forced into circumstances by accident. n Defining moments, carpe diem. However, despite their initial reluctance, fear and procrastination, they reached their defining moments and made crucial decisions that changed history and made them great.

All their negativities seem to have been erased from history, after all, what matters most are their historic decisions. Unfortunately, by playing them up as superheroes and superhumans, we make them larger than life, and their actions seemingly hard to follow.

However, author Adam Grant in his book Originals cited contrary insights about some of these great men.

He noted that, although these men had natural talent and latent leadership, it took the people around them, some their followers and peers, who cajoled and pushed them into those crucial actions.

The majority would ignore these little trivial details, but Grant took notice of them as significant, probably to highlight the fact our heroes are just ordinary people, like you and me. They simply seized the moment and seized the day (carpe diem), at their tipping points and defining moments. n American revolution’s reluctant trigger. Citing Pulitzerwinning historian Jack Rakove’s account, Grant noted that although it is said “the American revolution was inevitable, it nearly didn’t happen due to the reluctance of key revolutionaries.”

George Washington alone was contented with his life running his “wheat, flour, fishing and horsebreeding business,” but was forced to lead the revolution after John Adams pushed him to head the army. Washington later wrote: “I have used every endeavor in my power to avoid it.”

John Adams himself was reluctant to join the cause as he feared British retaliation on his budding law career, but he finally acceded after he was pushed and elected to the First Continental Congress. And when the army was created by Congress, which meant raising arms with Washington in command, there was no other choice but to trigger the start of the 1776 American revolution. n Earth revolves around sun for 22 years? Even when Nicolaus Copernicus discovered that the Earth actually revolves around the sun, contrary to the common belief then that the sun and other heavenly bodies revolved around us, he kept silent for 22 years, fearing rejection and ridicule.

Grant’s book noted that Copernicus only circulated his “controversial” magnum opus or findings to close friends, but eventually reached a cardinal, who encouraged him to publish his works. And yet, he still stalled for another four years. It took the initiative of a young mathematics professor, who unilaterally brought his works for publication, and

the rest is history.

So, for 22 years, while Copernicus and his few believers were already enlightened with this new knowledge, most people were still in the dark with their geocentric perception of the world. n King of black freedom.

Martin Luther King Jr. was also the reluctant civil-rights movement leader as all he dreamed of was be a pastor and college president. But King’s simple dreams led him to bigger, more noble dreams for humankind in his 1963 iconic powerful “I have a Dream” speech that changed American social history.

Early on, the Black movement was already building up ever since Rosa Parks refused to give up her bus front seat to the whites in 1955. King was elected president of an association to launch a bus boycott, and one led to the other. Three weeks before his powerful speech, King and his wife agreed to assume lesser roles, as he just finished his thesis and wanted to spend more time with church work.

King later admitted: “I became possessed by fear.” He was hesitant to lead the boycott, more so deliver a speech, but gave in when told he will only deliver the closing remarks in the march to Washington.

Almost instantly, he overcame his trepidation when he started delivering his powerful speech in a thundering voice. That speech united the country toward change for freedom and equal rights for all, regardless of skin color, class, culture, etc. n Leap of faith and fate of leap? There are many more examples of ordinary people doing extraordinary things that made them great, notwithstanding their hesitation, fear and procrastination, but there are some things common to them.

Despite being mere ordinary mortals, they did something extraordinary because they were the right people, at the right time, and the right place, when they finally embraced and made those right decisions, which were momentary leaps of faith and defining moments.

And equally significant probably is the fact that their historic leap was fate or destiny in the making. Internally, they probably did not have the resolve and conviction, but at the tipping point in history, there was nobody else but them and so they were pushed by other people and by historical circumstances.

Apart from faith and fate, it could be feet or the foot that forced people into action, which leads me to a tale of a cruel king, who at one-time challenged his subjects to swim across his pool of crocodiles and sharks with the promise to give half his kingdom and the princess as rewards. One fellow made it, but after getting through, he yelled, “Who kicked me in the butt?” Sadly, one can no longer make ifs or buts at those defining moments.

E-mail: mikealunan@yahoo.com.

Edgardo J. Angara

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resident Duterte hosted the Asean Law Association (ALA) commemorative session at Malacañan Palace last Wednesday, October 25. The President exhorted the Association of Southeast Asian Nation (Asean) community of lawyers to continue exchanging best practices among its members, and expressed the hope that ALA would help address the regional scourge of poverty, transnational crimes and terrorism.

While listening to Duterte, I couldn’t help but look back to ALA’s birth 37 years ago, and its inauguration in November 1980 in Manila. I tell myself, “ALA can rise to the President’s challenge!”

ALA has grown since then in stature and influence. A non-governmental agency, it is an influential opinion leader. Its distinctive composition and decision-making style match Asean values and sensibilities.

Group insurance Dennis B. Funa

INSURANCE FORUM

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he required provisions for group life-insurance policies are discussed in Section 234 of the Amended Insurance Code. It had certainly gone a long way since it was first issued in 1911, and since it was denounced in 1913 in a resolution by a group of life insurers, fearing that it will ruin individual insurance, as “a menace to legal reserve life insurance, a discrimination against regularly examined policyholders, unfair in principle and dangerous in practice.” In 1917, after gaining popularity, the life insurers would repeal this resolution.

Group insurance has been defined in various ways. Let us take a look at four definitions. First, group insurance has been defined as insurance “provided to members of a formal group, such as employees of a firm or members of an association.

Group insurance is distinguished from individual insurance in which single policies are sold to one person at a time and from social insurance [i.e., social security], which is sponsored by the government.” It is also defined as a “life insurance offered by an employer or large-scale entity [i.e. an association] to its workers or members. Group life insurance is typically offered as a piece of a larger employer or membership benefit package. By purchasing coverage through a provider on a ‘wholesale’ basis for its members, the coverage costs each individual worker/member much less than if they had to purchase an individual policy. People who elect coverage through the group policy receive a ‘certificate of credible coverage,’ which will be necessary to provide to a subsequent insurance company in the event that the individual leaves the company or organization and terminates their coverage.”

A third definition is that it “is a type of insurance in which a single contract covers an entire group of people. Typically, the policyowner is an employer or an entity, such as a labor organization, and the policy covers the employees or members of the group. Group [life] insurance is often provided as part of a complete employee benefit package. In most cases, the cost of group coverage is

far less than what the employees or members would pay for a similar amount of individual protection.

As the policyowner, the employer or other entity keeps the actual insurance policy, known as the master contract or Master Policy. All of those who are covered typically receive a certificate [Certificate of Coverage] of insurance that serves as proof of insurance but is not actually the insurance policy.”

Finally, a fourth definition was adopted during the 1918 National Convention of Insurance Commissioners: “Group life insurance is that form of life insurance covering not less than 50 employees with or without medical examination written under a policy issued to the employer, the premium on which is to be paid by the employer or by the employer and employees jointly, and insuring only all of his employees or all of any class or classes thereof determined by conditions pertaining to the employment, for amounts of insurance based upon some plan which will preclude individual selection, for the benefit of persons other than the employer; provided, however, that when the premium is to be paid by the employer and employees jointly and the benefits of the policy are offered to all eligible employees, not less than 75 percent of such employees may be so insured.”

History

The first group insurance was offered for the American retail company Montgomery Ward & Company, based in Chicago, in 1911. The company sought insurers that could

Wednesday, November 1, 2017 A11

On November 23, 1980, I wrote in the Manila Bulletin: “The ALA is unique in the composition of its membership and in the character of its collective leadership. Judges, lawyers from the government, members of academe and the practicing bar, from all the Asean states, are represented in the governing council, the highest policy-making body of the association. “…We predict that the ALA will become the most effective vehicle for regional friendship and cooperation of all the non-governmental bodies within the Asean. The laws of a country reflect the social structure, the traditions, the values and the moral consciousness of its people. The fastest way to achieve mutual understanding in this context is through the mutual study of each other’s legal systems.

“An association like the ALA, structured in its rules and objectives to fit Asean sensitivities and values, is better placed than any other organization to attain this goal.”

The subsequent admission of Brunei Darussalam, Vietnam, Cambodia, Lao PDR and Myanmar further enriched that uniqueness.

Asean leaders’ avowed goal in the next 50 years is deepening and broadening integration.

Much work still has to be done in eliminating nontariff barriers, ensuring labor mobility, “Aseanizing” university student body and faculty. In short, lifting a supermajority of the 630 million people to middle-class status by closing the inequality gap.

The first group insurance was offered for the American retail company Montgomery Ward & Company, based in Chicago, in 1911. The company sought insurers that could provide benefits without any physical examination.

plan. The premiums are generally lower than compared to individual policies because the administrative costs for groups of people would be much lower. After a group insurance has been in force for a period of time, the premiums can be based on the experience of that particular group.

The coverage is usually determined by the employer.

provide benefits without any physical examination. Montgomery Ward was the first to negotiate with an insurer for a disability-income coverage which was placed with the London Guarantee and Accident Company of New York in 1911. This insurance contract provided, after a three-day waiting period, loss-of-time benefits for employees under age 70 equal to one-half of an employee’s weekly wage, subject to a minimum benefit of $5 per week and a maximum benefit of $28.85 per week. There was no maximum time limit for payments.

This plan is generally regarded as the first group health-insurance plan.

While recognized as the first in group health insurance, the first group life insurance was actually issued by Equitable Life Assurance Society in 1911. It was issued for the employees of Pantasote Leather company in Passaic, New Jersey. This first group life insurance equalled a year’s salary for each worker. On July 1, 1912, Equitable insured Montgomery Ward’s 2,900 employees for almost $6 million in group life.

Group accidental death and dismemberment insurance, which was first written about in 1917, was the next group form to appear in the marketplace. However, group accident policy had been litigated upon as early as 1892 in Enright v. Standard Life & Accident Insurance Company (91 Mich. 238).

Premiums and coverage

The insured usually gets this insurance coverage as part of an employment package or some other arrangement. It becomes part of the compensation package for the employee. Other employers require some contributions from the employees, which is deducted from the wages. Some associations or employers require the employees or members to pay the premiums themselves. This is called a contributory

One misstep now would cost the Bank of England its credibility

By Daniel Moss Bloomberg View

T

here’s more than just interest rates on the line at the Bank of England (BOE) this week.

After a number of false alarms on borrowing costs, most recently in the middle of this year, economists appear confident the BOE will increase its benchmark rate by a quarter point to 0.5 percent. (That’s still very low.)

Failure to do so would be perilous. Policy-makers flagged a coming

increase when they last met in September, and it’s tough to argue that conditions have changed enough to justify backtracking. Inflation is well above the bank’s target of 2 percent, and unemployment is close to the lowest in four decades.

Growth isn’t fantastic, but it has not collapsed as some opponents of Brexit warned. The need for followthrough isn’t entirely about what the data says. It’s about a plank of central bank practice known as forward guidance.

The idea is that by being more

open and predictable about the direction of interest rates, officials can guide investors and companies about policy and thereby reduce volatility and the chances of an upset when rates go up or down. This, in turn, is supposed to minimize disruption to the economy. Many central banks do this, to varying degrees, including the Federal Reserve and the European Central Bank.

So the risk is not just about one economic shock if the Monetary Policy Committee (MPC) deviates on Thursday from its signaled path. The

risk is a return to the bad old days of continuous uncertainty.

The BOE, under Governor Mark Carney, has developed a reputation for stop-start, go-no. Some—not all—of this can be sheeted home to post-Brexit uncertainty.

Its signal in this case was not open to misinterpretation: “A majority of MPC members judge that...some withdrawal of monetary stimulus is likely to be appropriate over the coming months.” It committed, in effect, at least five of the nine people who vote on interest rates to a certain

outcome. It’s not just Carney making a speech or giving an interview.

Granted, the September statement said “coming months;” it didn’t say the next meeting. But with fewer MPC gatherings these days (they used to be each month), most observers reasonably concluded that odds favored the November meeting.

The BOE has said or done nothing to dissuade investors from this view. If the bank chokes this week, it will lose its credibility—no points for quibbles like “Hey, we said ‘months.’”

The sound execution of monetary

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

Underwriting and Master Policy

The risk is characterized by the group itself and not by the individual members. Thus, there is no extensive underwriting for each employee or member. However, any member of a group who leaves that group may switch to an individual policy. The Master Policy is given to the representative of the group or to the administrator, such as an employer.

Nature of employer’s role

In Elfstrom v. New York Life Insurance Company, the California Supreme Court ruled that in group insurance policies, the employer is the agent of the insurer, citing that “the employee has no knowledge of or control over the employer’s actions in handling the policy or its administration.” This was adopted in Pineda et al. v. Court of Appeals et al. [GR 105562, September 27, 1993] which held: “Although the employer may be the titular or named insured, the insurance is actually related to the life and health of the employee. Indeed, the employee is in the position of a real party to the master policy, and even in a noncontributory plan, the payment by the employer of the entire premium is a part of the total compensation paid for the services of the employee.”

Types of group insurance

Group insurance may offer life insurance, health insurance or other types of personal insurance, such as a group accidental death or dismemberment or a group travel-accident insurance. The most common form is the group life insurance. It is usually offered as a term insurance, in force only for a specified period of time. A group may range from a size of two to a minimum of 10, others require a minimum of 25.

Dennis B. Funa is the current insurance commissioner. Funa was appointed by President Duterte as the new insurance commissioner in December 2016.

E-mail: dennisfuna@yahoo.com.

policy depends on an institution’s credibility. When a central bank uses that kind of language, it better follow through reasonably quickly.

If the BOE passes this week, it will be about five seconds before one of Carney’s opponents in the House of Commons reaches for a mike and utters “unreliable boyfriend.”

Carney’s tarnished reputation would be the smallest casualty, though. What’s really at stake is whether forward guidance still has standing—whether markets can believe what central banks tell them.

2nd Front Page BusinessMirror

A12 Wednesday, November 1, 2017

Duterte visit to Japan yields $6 billion ininvestment pledges T

By Catherine N. Pillas @c_pillas29 & Butch Fernandez @butchfBM

he Philippines has secured $6 billion in investments following President Duterte’s official visit to Japan, according to chief of the Department of Trade and Industry.

Trade Secretar y R amon M. Lopez told reporters on Monday that the investments from Japan, the country’s top trading partner, will benefit various economic sectors. “ The President met several Japanese companies and witne s s e d s e ve r a l bu s i ne s s - to business memoranda of understanding, letters of intent on investment plans, joint ventures and expansion of operations in the Philippines,” said Lopez,

who joined the delegation of the President in Japan.

The amount, which would cover a total of 18 deals, will be channeled to shipbuilding and iron and steel, agribusiness, power, renewable energy, transportation, infrastructure and mineral processing.

Retail, information and commu n ic at ions tec h nolog y a nd i n for m at ion- tec h nolog y a nd business-process management are also areas of interest for the Japanese companies.

₧4.8B The amount of investment pledges obtained by the Philippines from Japan in the second quarter, according to the PSA

Japan is as the country’s top foreign investor, according to data from the Philippine Statistics Authority (PSA). In the second quarter, Japan was the top prospective investing country. Pledges from Japan amounted to P4.8 billion.

Data from the PSA showed that total foreign investments approved in the second quarter amounted to P18.2 billion, down from P40.4 billion recorded in the same period last year.

Data from the PSA also showed Japan was one of the top buyers of Philippine goods in August.

Exports during the period rose by 9.4 percent to $5.51 billion, from $5.04 billion last year.

The Japanese market, including Okinawa, accounted for 15 percent of total exports, with receipts amounting to $827.36 million in August. Japan was also one of the top sources of imports for the Philippines during the period.

Manila’s subway

Sen. Joseph Victor G. Ejercito on Tuesday welcomed Japan’s commitment to aid Marawi’s rehabilitation effort and bankroll Metro Manila’s subway system.

“I am very happy with Japan’s commitment to help Marawi,” Ejercito said, adding: “With their pledge to undertake subway project for Metro Manila, it is like a dream come true for me.”

The senator admitted being elated by Japan’s gesture of guaranteeing funding support for Metro Manila’s first subway system, saying, “I have been advocating this for the longest time.”

Transco. . .

Continued from A1

Transco said it will ask Congress to amend its charter so it could offer telco services and compete with the Philippine Long Distance Telephone Co. (PLDT ) group and Globe Telecom Inc. Transco President Melvin Matibag said his office has received strong interest from 10 firms willing to forge a partnership to pursue its plans.

“They are offering to partner with us. These are local and foreign firms, mostly from Japan, China, Indonesia and the United States,” Matibag said, adding that the government intends to retain a majority stake in the possible partnership.

“Right now, what I am thinking is the government will not be a minority in this. The operations and maintenance of the facilities could be given to the private firms,” he added.

Balicasan said he will wait for TransCo’s final direction on this, but pointed out that they need to work closely together since this involves a government project.

“We don’t know yet whether the government will actually do it or if they will bring in the private sector.

As you know, joint ventures are covered by law. Since this is a government project, PCC is a government agency, we need to work closely together,” he said.

Matibag is confident that majority of the lawmakers will sponsor a bill that would allow Transco to go into telecommunications. “Many have volunteered to sponsor it. I am hoping that after the recess this matter would be taken up.”

He said Transco’s plan to venture into telco is part of the government’s goal to provide consumers more choices as there are only two players in the sector.

“Some experts in telco are saying that only the government can compete with the two telco giants. No one else can come in. So, if it’s the government combined with somebody that has the technical and financial capabilities to do it, then we will have a third player,” he said. Lenie Lectura

BLOOM STREET Different kinds of flowers are displayed at a flower shop in Dangwa flower market in Manila. According to store owners, sales increased, but not as much as last year’s annual commemoration of All Saints’ Day. ALYSA SALEN

IMF sees deficits of $320B for M. East oil exporters Continued from A1

aimed in part at boosting women’s participation in the economy, Saudi Arabia lifted a longstanding ban on women driving that was seen as a damper on potential economic growth.

Jihad Azour, the IMF’s Mideast and Central Asia department director, said that for the Saudi economy to see a real boost, the decision to allow women to drive has to go hand in hand with creating more opportunities for women in the workplace.

“I think the real important element here is more on gradual recognition and taking gradual measures to allow women to participate more into the economy,” he said. “Allowing women to have better access to [the] market, to participate into the economy and create jobs.”

Azour, who spoke with The Associated Press for the launch of the report, said countries in the region must push ahead with structural reforms. The IMF cautions that across the Middle East, growth is below what is needed to “effectively tackle the unemployment challenges” of the region.

Conf licts in Yemen, Libya, Syria and Iraq are also having an impact on the region’s overall economic outlook. In Yemen, for example, inflation shot to nearly 40 percent in 2015 and is projected to be nearly 30 percent next year. Meanwhile, oil-importing countries are benefiting from lower oil prices, but Egypt, for example, is also battling inflation of close to 30 percent.

The IMF has encouraged Mideast oil importers and exporters to reduce spending and find new

sources of revenue by introducing new taxes and lifting subsidies.

In the outlook report, the IMF said progress on these efforts has been uneven. Oil exporters like Iran, the United Arab Emirates and Qatar have had lower budget deficits in comparison to their GDP than Saudi Arabia, Iraq and Oman. That’s in part because Iran, for example, is less dependent on oil revenues than Saudi Arabia.

The IMF’s figures are based on assumed oil prices of about $50 a barrel through the end of this year and next, up from last year’s average of $43. On Friday Brent crude, the international benchmark oil, rose above $60 for the first time since 2015 as Saudi Arabia signaled it would support extending an agreement by major oil producers to limit output beyond next March. AP

www.businessmirror.com.ph

STAR CRUISES RETURNS TO MANILA HOMEPORT IN MARCH NEXT YEAR

By Ma. Stella F. Arnaldo

@akosistellaBM Special to the BusinessMirror

S

TAR Cruises is returning to homeport in Manila in March 2018, offering new cruises, this time between the Philippines, Japan and Taiwan.

Heralded as the third-largest cruise line in the world, the Hong Kong-based Star Cruises has started offering a five-night cruise from Manila to Naha in Japan, Keelung in Taiwan and back to Manila. Another cruise offering is five-nights from Manila to Ishigaki in Japan, Keelung, then back to Manila.

Both cruises will be on the SuperStar Virgo and cost only $540 (P27,540) per person, according to the Star Cruises web site. The Naha cruise starts on March 5, 2018, with the last sailing on May 28, while the Ishigaki cruise will make its first departure on April 14 and end on May 29.

Assistant Secretary Frederick M. Alegre, spokesman of the Department of Tourism (DOT) told the BusinessMirror: “This is great news for the cruise tourism sector. The announcement that Star Cruises is including Manila in their offering

ALEGRE: “The announcement that Star Cruises is including Manila in their offering next year is proof of the growing confidence in the peace and order in the Philippines.”

next year is proof of the growing confidence in the peace and order in the Philippines.”

He added that once the new cruise port and terminal in Manila is completed, “more cruise companies will homeport in Manila, and make it a major cruise destination in Asia. This will certainly give our tourism industry a boost.”

The Duterte administration hopes to complete a new cruise port and terminal in Manila before its term ends in 2022. The construction of a dedicated cruise port and terminal in Manila is expected to help increase cruise arrivals in the Philippines to 456,164 via 402 ship calls by 2022, from a projected 117,000 visitors via 105 port calls in 2017. (See “Government seeks private partners to build Manila cruise terminal,” in the BusinessMirror, October 26, 2017.)

See “Star Cruises” A2

For the first time in decade, UK interest rates due to rise

L

ONDON—The Bank of England (BOE) is on Thursday set to raise interest rates for the first time in a decade in order to keep a lid on inflation, a move that has the potential to hurt the British economy just as it struggles with the uncertainties of Brexit.

The central bank is expected to lift its main interest rate by a quarter percentage point from the record low of 0.25 percent, taking back the cut it made in the aftermath of last year’s Brexit vote to support the economy through the market turmoil of the time.

If it delivers the cut, as bank Governor Mark Carney has indicated, it would be its first hike since July 2007, when world credit markets started to freeze up in what would prove to be an early phase of the global financial crisis.

The main motivation behind an increase is to bring down inflation, which is running above the bank’s target of 2 percent by a full percentage point and making life more expensive for households. Any further rise from the current annual rate of 3 percent would require Carney to write to Treasury chief Philip Hammond, explaining why inflation is running more than a percentage point above target and what he and his colleagues on the nine-member Monetary Policy Committee are planning to do about it.

The reason for the spike in inflation is simple: Brexit. The pound plunged following the vote in June last year to leave the European Union, and now trades about 15 percent lower against a range of currencies. That has caused a spike higher in the cost of imported goods, notably food and energy.

Under normal circumstances, that would be more than enough reason to raise the cost of borrowing; higher interest rates can push up a currency, thereby dampening inflation by lowering import costs, and can also help cool an overheating economy.

The dilemma for the BOE is that the British economy isn’t showing any signs of overheating.

Though unemployment stands at its lowest level since the mid1970s and the main stock market

in October hit a record high, the British economy is growing by less than any of the Group-of-Seven industrialized nations. “Higher rates will be an unhelpful influence at a time when the economy is still struggling,” said Samuel Tombs, chief United Kingdom economist at Pantheon Macroeconomics.

Though economic growth in the July-to-September period was slightly better than expected at a quarterly rate of 0.4 percent, the British economy has fared worse than the likes of Germany, Japan and the United States this year.

Wages are also not rising as much as prices, meaning household finances are getting stretched, while credit growth has eased back over the summer. And inflation, in any case, is forecast to fall back next year as the lower pound’s influence drops out of the annual comparison.

The worry is that by raising interest rates now, the BOE could further hobble an economy that’s trying to steer the choppy waters of Brexit. Higher interest rates should in theory act as a dampener on household spending, even though the proportion of mortgage debt in Britain on flexible interest rates has fallen over the past few years, with more people opting for the security of fixed rates.

According to Oliver Harvey, a strategist at Deutsche Bank, a rate hike will have a direct financial impact on “a relatively smaller amount” of households than before the financial crisis. However, those that will be affected by a rate hike would suffer noticeably due to the fact that rates are so low—even the anticipated quarter point increase would mean a doubling in the interest rate.

Harvey also notes that many households are already burdened by weak income growth, low savings and high debt.

As such, the decision to raise interest rates is not expected to be unanimous, with some ratesetters opting for a cautious approach in light of all the concerns surrounding Brexit.

The country is due to leave the EU in March 2019, and there’s no clarity on what the post-Brexit See “Interest rate,” A2