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A broader look at today’s business

Thursday, November 10, 2016 Vol. 12 No. 29

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Donald Trump turns to face the United States flag at a campaign rally in Sterling Heights, Michigan, on Sunday. Voters eager to shake up the nation’s political establishment picked the celebrity businessman to become the US’s 45th president. Read the Broader Look on A6-A7. AP Photo/Paul Sancya

Trump win brings smiles to PHL business leaders F ilipino and American businessmen gave mixed views on the effects of the Donald Trump US elections victory to the Philippine economy. The irony is local business leaders assumed a bullish tone, while their American counterparts painted a gloomy picture, as they looked back at the pronouncements of Trump during the campaign.

“We expect reduced trade and investment in Asia if Mr. Trump implements the policies he espoused in his campaign, such as opposing the TPP [Trans-Pacific Partnership] and imposing high tariffs against China,” said David Hincheliffe, executive director of the Amer ican Chamber of Commerce

(AmCham) of the Philippines. Senior Adviser John D. Forbes said private-sector jobs in the Philippines might experience a drop, owing to Trump’s earlier pronouncements of stopping the immigration of American jobs overseas. Forbes added: “I am concerned about a recession, that if he

[Trump] implements his proposal to put a 35-percent tariff on imports in the US from China, that China will retaliate, and that will have an effect on the growth of Asia and the US.” China and the US are among the top trading partners of the Philippines. But Filipino businessmen like the Philippines’s chances with Trump in Washington. Their main case is the apparent congruence in the personality and policy stance of Trump and President Duterte. “They [Trump and Duterte] seem to have the same policy, so, eventually, they will be in agreement,” Philippine Exporters Confederation Inc. [PhilExport] President Sergio R. Ortiz-Luis Jr. said. “I think a Trump win will be good for US-Philippines relations, because Trump is more concerned

WALLACE: They will actually get along quite well, because, I think, President Duterte will understand the kind of person Mr. Trump is and be able to work with him.”

about internal America. He will focus more on his domestic policies, like taxes, immigration, health care and other social concerns. International policies will be relegated in the background,” Management Association of the Philippines President Perry L. Pe said. He added: “I think there might, perhaps, be no more US humanrights or extrajudicial killings criticisms against President Duterte.” Continued on A2

Forex steady, PSEi down as Trump wins By Bianca Cuaresma @BcuaresmaBM

& VG Cabuag @villygc

layers in the foreign-exchange market remain unfazed by political developments in the world’s largest economy, as the local currency traded sideways on Wednesday. While international markets responded with caution to the

victory of Republican presidential bet Donald Trump in the US, the Philippines is seen bucking the trend anew. On Wednesday the peso remained steady to end the day’s trading at 48.59 to a dollar, only a centavo weaker from the previous day’s 48.58 to a dollar. The peso, however, showed some weakness and traded as high as 48.85 on Tuesday, prior to settling down to a sideways close at a trading volume of $691.9 million.

PESO exchange rates n US 48.6260

Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. told reporters this miniscule weakness was due to global developments affecting the entire region. “Regional currencies, including the peso, fell on renewed risk aversion surrounding market surprise in poll results showing a Trump victory,” he said. “Market cautiousness on possible retreat of the Fed from a December hike because of this market

Emerging assets tumble with Mexican peso as Trump wins presidency

reaction is weighing on regional currencies,” he added, while promising to continue to closely monitor developments and provide liquidity to the market, as needed, to address market price action on renewed global political risk. The local stock market, along with the global markets, however, depicted a different story as boards showed bleeding reds across indices. Continued on A2

Trump supporters react as Fox News predicts Republican presidential candidate Donald Trump will carry Florida, at the Republican Party of Seminole County, Florida, election watch event on Tuesday. Joe Burbank/Orlando Sentinel via AP

merging-market stocks and currencies slumped amid a global selloff, after Donald Trump won the US presidency in a stunning upset. The Mexican peso, a barometer of Trump’s fortunes, tumbled the most in eight years to its weakest level on record, while the Turkish lira sank to an all-time low and the South African rand fell the most in four weeks, as traders dumped all but the safest assets. A gauge of developing-nation equities fell the most since September, as exporters and banks provided the biggest drag on the measure. Shares in Hong Kong, Taiwan, India and South Africa paced losses. Markets around the world were thrown into disarray after Trump pulled off a huge electoral upset to become the 45th president of the United States. Trump has put forward protectionist pledges that analysts say are likely to affect trade, including ties with Mexico and China. See “Peso,” A2

n japan 0.4627 n UK 60.1504 n HK 6.2709 n CHINA 7.1680 n singapore 35.0711 n australia 37.7727 n EU 53.5761 n SAUDI arabia 12.9690

Source: BSP (9 November 2016 )

A2 Thursday, November 10, 2016

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Trump win brings smiles to PHL business leaders Continued from A1

George T. Barcelon, president of the Philippine Chamber of Commerce and Industry (PCCI), agreed, saying “our relationship could be neutral or better.” “Trump projects himself as an isolationist in both foreign diplomacy and economic issues. As of now, the stock market responded negatively, but as promised, he wants to ‘Make America Great Again.’ We don’t know how that will be done, but if he can, a strong US economy is good for the world,” he said. PCCI Chairman Emeritus Dr. Francis C. Chua said the alarming rhetoric from the US presidentelect on immigration and minorities may just be “sound bites for

campaign pur poses.He might realize that it is to the interest of the US to support her allies, like the Philippines.” They also dismissed the alarmists’ view that the business-process outsourcing (BPO) industry will suffer under a Trump presidency. “The BPOs will stay here. Trump is a businessman and he knows what it is to make money and he is supportive of US companies making money, which is the reason he won in the first place. He even wants to reduce US corporate taxes,” Pe noted. Ortiz-Luis Jr. said that, as long as the Philippines remains a costeffective outsourcing destination for American firms, the sector will survive. Hincheliffe also believes the

BPO sector will continue to grow. “American companies are committed to continuing to invest in the Philippines, whose economy we expect will continue to grow strongly. BPOs have a strong business case to expand in the Philippines, as recently explained in the industry’s new road map. We hope the new US president will quickly become better aware of the importance of the USPhilippines relationship.” Makati Business Club Executive Director Peter Angelo V. Perfecto said there would be better cooperation between the Philippines and the US if the two countries focus on “mutual interests,” which may mean shifting discussions on economic relations. “The final results of the US elections need not have any adverse im-

pact if we can just focus on pursuing mutual interests with the US and its new administration, especially in the area of doing business, while, at the same time, prio-ritizing our own national agenda for inclusive growth and sustainable development,” Perfecto said. “Like the Philippines, the people of the US are exercising their democratic rights and are apparently voicing out some real concerns through their ballots.” Australian analyst Peter Wallace also said Trump and Duterte will foster better relations between the two countries. “I think, in fact, that despite the differences in the two, they [Duterte and Trump] will actually get along quite well, because I think Duterte will understand the kind

Forex steady, PSEi down as Trump wins Continued from A1

The Philippine Stock Exchange index (PSEi), in particular, shed 2.58 percent on Wednesday’s trade to close at 7.119.04 points. Mea nwh i le, t he benc m a rk PSEi gave up 2.6 percent, or 188.76 points, to close at 7,119.0 4,a f ter m a rket s were rattled with the win of Republican presidential bet Donald Trump in the US elections. Trading at the PSE, and also elsewhere in the Asian region, started just as elections in the US ended and votes were counted. The main index opened at 7,300 point but fell as the day progressed. The PSEi went as low as 7,038.19 points, but recovered later in the day on bargain hunting. “Election-related jitters in the US caused market sell-off,” said Jonathan L. Ravelas, chief market strategist at BDO Unibank Inc. Total value of trade reached

P8.57 billion as losers edged out gainers 154 to 43. Foreign investors were net sellers at P213.22 million. All other subindices were down with the exception of the Mining and Oil index, which gained 18.06 to 11,772.05. The broader All Shares index shed 81.87 points to 4,282.35, the Industrial index plunged 345.44 to 11,323.03 and the Holding Firms index fell 174.10 to 7,255.10. Most of the day’s actively traded were down. Property developer Ayala Land Inc. shed almost 5 percent, or P1.70 to P34; Metropolitan Bank and Trust Co. fell P2.75 to P77.50; Ayala Corp. declined P41 to P790; SM Prime Holdings Inc. gave up P0.80 to P26.10; and parent firm SM Investments Corp. was down P1.90 to P110.10.

‘God help us all’

Trump’s sweeping victory in the US presidential elections will cause direct disruptions in the Philippine

economy—particularly in the crucial areas of trade and remittance flows toward the local scene. Emerging-market economies, including the Philippines—which has a particularly high level of bilateral relations with the US— could potentially suffer under the Trump presidency, with his anti-immigration and external trade position spelled out in his campaign trail. “Trump has been very outspoken against trade and immigration, emerging markets are seen suffering under his presidency,” Bank of the Philippine Islands (BPI) associate economist Nicholas Antonio T. Mapa said. Remittances, however, continue to be one of the pillars of the domestic economy, adding about $24 billion worth of fresh capital per year. Trump’s victory has rattled international markets, particularly in the US and in Mexico, causing

economists to compare the fallout to the recent vote of Britain to leave the European Union. “Unlike the Brexit decision, a Trump presidency would be more scathing in the sense that the US is more integrated in the world economy than the UK,” Mapa said. “This may be here for some time. God help us all,” he added. In terms of near-term market reaction, Mapa said a Trump win will eventually cause investor sentiment shifts worldwide. “Also, expectations of impaired remittance flows due to immigration issues as an even wider trade gap due to slower global trade will pressure the peso,” he added. The BPI economist also said the PSEi will sufffer from the political development. “A Trump win hurts the PSEi, as well, given the general risk off tone and the possible implications on earnings of corporates due to slower remittances,” he said.

of person Mr. Trump is and be able to work with him. I think it may be good,” Wallace added. Senate Minority Leader Ralph G. Recto recommended that Malacañang tap Vice President Maria Leonor G. Robredo as the Philippine government’s representative at the inaugural of Trump, among other steps the Duterte administration should take “in the opening days of the Trump era.” “First, send a nice congratulatory letter,” the senator suggested, adding Duterte should also declare a moratorium on cursing. “He should stop dropping ‘F-bombs’ on the White House occupant. Those intercontinental expletives he fires do no good.” Recto added: “Second, tap VP Leni as the Republic’s representative to his inaugural.

Peso. . .

Continued from A1

“Markets were clearly unprepared for this. I think what we have seen today is only the knee-jerk reaction,” said Divya Devesh, a foreignexchange strategist at Standard Chartered Plc. in Singapore. “It’s entirely possible that risk ave r s i o n d e e p e n s i n t h e co m i n g we e k s, l e a d i n g t o f u r t h e r selling pressure for emergingmarket currencies.” Trump, 70, was projected to be the victor early on Wednesday by The Associated Press and television networks, after Wisconsin pushed him over the 270 Electoral College vote threshold needed to become president-elect. When sworn in on January 20, Trump will preside over a government he’s called corrupt and unworthy of trust. “Volatility will be very high and it will be difficult for people to position themselves,” said Indra Mawira, an investment manager at Panin Asset Management in Jakarta. “It is exciting, but not the kind of excite-

If the No. 1 can’t make it, then it should be the No. 2. Anyone with a lower rank will convey the message that we are stuck in the Chinese orbit and have downgraded our Washington, D.C., presence.” Moreover, Recto recommended that Duterte also consult his Palace advisers on “how to reboot Philippine-US relations, taking two new factors into consideration: The ascendancy of Trump and our assumption of an independent foreign policy,” noting that Trump’s victory opens a new chapter in PhilippineUnited States relations, which we should shape to our advantage.” Recto predicted that Trump’s victory will only “open an uncharted territory in Philippine-US relations if we do not plan ahead.” Catherine N. Pillas, Rea Cu, Butch Fernandez

ment that we are looking for. The risk that Trump’s victory may slow down the pace of a Fed rate hike might be positive for emerging markets.”

Top movers

■ The peso slumped 9.3 percent to halt a four-day gain. The Mexican currency became one of the world’s most volatile ever over the past month, as traders weighed the prospects that Trump could score an upset win in the presidential race and make good on pledges to renegotiate the free-trade agreement that’s transformed Mexico into an export powerhouse. ■ The Hang Seng China Enterprises Index fell 3.2 percent. South Korea’s Kospi dropped 2.2 percent and Taiwan’s Taiex lost 3 percent. ■ Indonesian miners, which rallied earlier this week on rising metal and coal prices spurred by bets for a Clinton win, reversed those gains. The Jakarta Mining Index slid as much as 3.9 percent. PT Adaro Energy dropped 6.4 percent and PT Indo Tambangraya Megah retreated 4.9 percent, while PT Vale Indonesia fell 2.7 percent. ■ Gold stocks jumped as bullion soared by the most since Britain’s Brexit vote in June. Gold Fields Ltd. surged 9.5 percent in Johannesburg, while AngloGold Ashanti Ltd. rallied 8.8 percent.

Currencies

The MSCI Emerging Markets Currency dropped 0.5 percent at 3:27 p.m. in Hong Kong, halting a twoday gain, as 10-day historical volatility jumped to the highest level in seven weeks. The rand tumbled 2.3 percent and the lira weakened 1.1 percent, while declines in Asia were more sedate with the exception of South Korea’s won, which lost 1.3 percent. Malaysia’s ringgit and Indonesia’s rupiah dropped at least 0.5 percent, while the Philippine peso slipped 0.3 percent. Russia’s ruble retreated 0.3 percent, as Trump’s victory helped drive down crude prices on concern his protectionist policies will sap global growth.

Stocks

The MSCI Emerging Markets Index fell 2.5 percent, set for the steepest decline since June 24. Indonesian shares sank 1.5 percent, while stocks in the Philippines, Thailand and Vietnam lost at least 0.9 percent. India’s S&P BSE Sensex tumbled 2.5 percent after Prime Minister Narendra Modi’s government unexpectedly withdrew high-denomination banknotes. Indian sovereign bonds rallied, with the yield on Indian 10-year falling 13 basis points to 6.67 percent. “It’s been a bloodbath in the markets over the last few hours, with the Mexican peso suffering particularly badly, as Donald Trump edges ever closer to the White House,” Craig Erlam, London-based analyst at Oanda Corp., wrote in a note to clients. “The way markets have traded over the last couple of days and positioned ahead of the vote, you would think the election was going to be a routine victory for Clinton.” Bloomberg News

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PHL got $5.39-billion FDI from Japan in last 5 years By Cai U. Ordinario @cuo_bm

he Philippines has received a total of $5.39 billion worth of foreign direct investments (FDI) from Japan in the past five years, according to the Japan External Trade Organization (Jetro). Data released by Jetro’s Overseas Research Department showed this was only 5.55 percent of Japan’s total FDI to the Asean region between 2011 and 2015. “In Asia, Japan’s FDI toward Asean has been in the $20 billion [range] for three consecutive years. Meanwhile, its FDI toward China ending at $8.9 billion, which makes the disparity in FDI value between Asean and China roughly twofold for the past three years,” Jetro said. Data also showed that the Philippines’s share in Japan’s FDI in the Asean has been declining in the past five years. Jetro said Japan’s FDI to the Philippines was at 8.8 percent in 2005, but this was higher than the annual share recorded between 2011 and 2015. The country’s highest share in Japan FDI in the past five years was at 7.2 percent in 2015. The smallest share, on the other hand, was 4 percent in 2014. Meanwhile, in terms of actual value, the highest amount of FDI

received by the Philippines from Japan was in 2015, at $1.46 billion, followed by 2013 at $1.25 billion and $1.02 billion in 2011. The least amount of Japan FDI received by the country was in 2012 at $731.8 million, and in 2014 at $925.36 million. Overall, Jetro said Japan’s outward FDI in 2015 declined by 4.1 percent from the previous year to $130.8 billion. While the figure did not reach that of 2014, Jetro sad it has surpassed $100 billion for five consecutive years since 2011. By major country and region, the US has been the largest investment destination for six years in a row since 2010, with $44.9 billion in 2015. This was a 7.1 percent decrease from the previous year. Total foreign investments (FI) approved in the first quarter of 2016 by the seven investment-promotion agencies amounted to P26 billion, up by 19.2 percent compared to the P21.8 billion approved in the same period last year. The Netherlands was the top investing country during the quarter at P8.1 billion, as it shared 31 percent of the total FI commitments. Japan and the United States occupied the second and third posts, pledging P4.4 billion, or 16.8 percent, and P3.7 billion, or 14.3 percent, respectively, of the total FI approved in the first quarter of 2016.

Editors: Vittorio V. Vitug and Max V. de Leon • Thursday, November 10, 2016 A3

BOI approved P76.19 billion worth of investments in Yolanda-hit areas

By Catherine N. Pillas

@c_pillas29

he Board of Investments (BOI) has approved P76.19 billion worth of projects for the socioeconomic rehabilitation of Yolanda-hit areas, and has also approved the grant of development incentives in these calamity-affected areas, the agency said on Wednesday. T he investment-promotion agency said a total of 27 projects were given the green light to proceed, since Supertyphoon Yolanda caused massive devastation in the Visayas three years ago. Employment generated by these projects number to 3,674 new jobs, the agency added. Ninety-five percent of the registered investment projects are energy

27 projects The total number of projects which that the Board of Investments approved following the Yolanda devastation in the Visayas

and power projects, of which, 12 are renewable-energy projects, one bunker-fired power plant and one energy source-exploration project. The remaining 5 percent of the registered investment activities, meanwhile, are shared by the sectors of manufacturing (3 percent); agriculture, forestry and fishing (1 percent); and accommodation and food service (1 percent). Trade Undersecretary for Industry Development and BOI Managing Head Ceferino S. Rodolfo Jr. said the energy and power projects will jump-start social and economic development in the areas devastated by the super typhoon. Complementary to this, the BOI Board, through Resolution 19-02, Series of 2016, and adopted by Memorandum Circular 2016-003, has also approved the inclusion of 134 calamity-stricken cities and municipalities, including those devastated by Yolanda on the list of the less developed areas (LDAs) in the current Investment Priorities Plan (IPP). “The move is intended to encour-

DOTr eyes revival of PNR’s ‘Bicol Express’

briefs

phase 2 of angat dam rehab begins NORZAGARAY, Bulacan—The strengthening and rehabilitation of the aging Angat Dam in the mountain village of San Lorenzo here has started, an engineering project that seeks to strengthen the 49-year-old rock-filled structure to withstand a powerful earthquake. Engr. Russel Rigor, dam engineer of Angat Hydro Corp. (AHC), said new instruments and modern technology will be installed, including strong motion sensors to monitor seismic developments. “We don’t want any earthquake to happen, but we are confident that the fortification of Angat Dam will extend its life span for another 50 years,” Rigor said, adding that the rock-filled earth dam, which became operational in October 1967, has a life span of 50 years. He said the preconstruction works have been completed as of July 2016. This included the conduct of survey and soil investigation, repair of access roads, construction of temporary bridge, installation of engineering facilities, and actual site verification and detailed engineering design. Rigor also said the environment compliance certificate needed to start Phase II (construction works) was issued by the Department of Environment and Natural Resources-Environmental and Management Bureau on October 3. He said tree-cutting permit was also issued on August 23 and the quarrying permit is still under process. The San Miguel Foundation has also put up a resettlement area of the Dumagat tribesmen and has also provided them with livelihood programs. Likewise, Rigor said the main works that will be under Phase 2 include the flattening of the downstream slopes of the main dam, main dike and secondary dike to improve stability of said structures; raising of the impervious core of the main dam by about 1.2 meters to prevent overtopping of the main dam during seismic events and installation of new dam instruments, such as strong motion sensors and standpipe piezometers for better monitoring. PNA

chinese arrivals to dumaguete hit 400 to 600 a week

DUMAGUETE CITY—Chinese tourist arrivals in Dumaguete City, the capital of Negros Oriental, continues to climb to as many as 400 to 600 a week, according to Provincial Tourism Officer Myla Mae Abellana-Bromo. Because of this, some Chinese tour operators are mulling over the possibility of a direct charter flight from Dumaguete to Shanghai, China, she said on Tuesday. The tour operators from China came here last month, as they wanted to check the facilities at the Dumaguete airport for a direct charter flight from here to Shanghai and vice versa, Bromo said. “We do not know their assessment as we only assisted them,” Bromo added. According the provincial tourism officer, there are two Chinese tour operators based here in Dumaguete City, and they bring in no less than 400 Chinese tourists a week. These Chinese tourists love the beach, the food and the freedom in Dumaguete and nearby areas, Bromo noted. Topping the list for their tour destinations are the world-renowned dive destination Apo Island in Dauin, Negros Oriental, the whale-shark encounters at Oslob, Cebu (which is just across the Tañon Strait from here), and the dolphinand whale-watching tours and the white-sand bar in Bais City and Manjuyod, Bromo said. Also, the Chinese tourists feel free and safe to roam around Dumaguete City and they love the food, as well, she added. For many years until 2015, tourists from the United States topped the list of foreigners coming to Dumaguete and Negros Oriental. Today, China ranks first, followed by the US, and coming in at third place are Korean nationals. The provincial tourism office, however, is still collating data on tourist arrivals for the month of October 2016. PNA

age more businesses to set up investment activities in calamity-stricken areas [and] is aligned with the government’s strategy to move into the medium- to long-term recovery and rehabilitation of areas highly affected by calamities,” Rodolfo said. Registered projects in the identified LDAs are entitled to pioneer incentives and additional deduction from taxable income equivalent to 100 percent of expenses incurred in the development of necessary and major infrastructure facilities, unless specified in the IPP guidelines. The BOI, in partnership with various government agencies and the local government of Leyte, a Yolanda-affected area, is also leading the implementation of the proposed Leyte Ecological Industrial Zone. The project is part of the strategies under the copper industry road map, which aims to promote the integrated development and competitiveness of copper and other industries in the context of the ongoing rehabilitation efforts in the region and, thus, promote sustainable local employment.

‘Sister’ act Two nuns take a brief pause from their regular religious activities to move around the grounds of the Tutuban Shopping Mall in Manila. Assorted Christmas decorations have gone on sale at the downtown shopping mall with the approach of the Yuletide season. Roy Domingo

Foreign shoemaker Tourism attaché sees over 200K puts up $10-M plant Taiwanese tourists by year-end in Subic Free port By Azer N. Parrocha

UBIC BAY FREEPORT—The construction of a $10-million manufacturing facility that will produce branded shoes for export is now in progress in this free port. Datian Subic Shoes Inc. is building its own plant in a 42,800-squaremeter area at Phase II of the Subic Bay Gateway Park here. The firm will produce branded vulcanized shoes for export and is expected to generate additional jobs for communities around the free port. The company has committed to initially employ about 400 workers. The shoe plant’s full operations, which is expected after three to five years of steady growth, will generate about 2,500 employees. Datian Subic President Vincent Chen said like its parent company, D&T Shoes, the Subic company will be producing shoes under global brands such as Keds, Converse, Sperry and Vans for the American market, as well as Hugo Boss and Dr. Martens for the European market. Chen said that Datian Subic Shoes “is actually patterned after its parent company with plenty of lines for stitching, and has its own rubber compounding, outsoles molding, insoles and arches sponging, rubber gluing and foxing operations.” PNA

Philippines News Agency

UERTO PRINCESA—A tourism attaché expects over 200,000 Taiwanese tourist arrivals to the Philippines by yearend, as scheduled familiarization tours this month are expected to pique their interest, particularly in the country’s well-known beaches. “We have around 180,000 tourists as of September. Our targets for the year-end are between 200,000 and 220,000,” Tourism Attaché to Taiwan Hazel Habito-Javier said in an interview. The Department of Tourism (DOT) has yet to release arrivals for September, but the most recent data showed that, as of August, Taiwanese tourist arrivals have reached 157,517. Taiwan is currently the country’s sixth top visitor market. Javier has brought in a 23-member delegation composed of Taiwanese tour operators and media to Puerto Princesa, Palawan, for a weeklong media familiarization tour in the province. The 23-member delegation arrived in Puerto Princesa on Tuesday and attended a business-tobusiness meeting the same day, in hopes of convincing them to charter more flights between the Philippines and Taiwan. “We’re promoting different products, ESL [English as a second language], dive tourism, general leisure,

but one of the reasons we brought agents here is to bring in more charter flights,” Javier said. The Philippines also participated in the recently concluded Taipei International Travel Fair from November 4 to 7 in the World Trade Center in Taipei. Javier expressed hope that the familiarization tour would bring triple or quadruple returns and would eventually create more business opportunities for the Mimaropa region, particularly Palawan and Mindoro. Mimaropa or Region 4B is composed of five provinces, namely, Mindoro Occidental, Mindoro Oriental, Marinduque, Romblon and Palawan. “There will be hotel inspections and we will also be visiting destinations,” Javier said, stressing the importance of hotels being accredited under the DOT. She also expressed hope that there would be more programs to train Mandarin-speaking tour guides, as she believed it would benefit the tourism industry greatly. “There should be more transportation, there should be more Mandarin-speaking tour guides,” Javier said. “Tourism is everybody’s business, the public and private sector should work together, especially with the opening of the new Palawan airport next year,” she added.

fter almost two years of literally being “off track,” the Philippine National Railways (PNR) is set to resume operations of the ManilaNaga railway line, as part of the Duterte administration’s efforts to provide another means of transportation for commuters. The PNR management will conduct an ocular inspection on November 18 to determine if the track is feasible to resume operations. “If we find it safe for the conduct of regular trips, we will resume its operations on November 24,” transportation public information officer Goddess Hope Libiran said in a text message. PNR officials have earlier said ongoing stationdevelopment projects, such as lengthening of platforms and provision of additional waiting areas, are being conducted to ensure convenience of passengers. The PNR has been working for some years in restoring the Manila-Naga railway line, otherwise known as the Bicol Express. As of September 2013, operations to the Bicol region have been suspended because of Typhoon damages to bridges. The railway management hoped to reopen the Bicol Express service by about September 2014. However, it was announced that its resumption of services would be further delayed until October and November 2014 due to the damages brought about by typhoon Glenda. The Bicol Express provides commuters an alternative mode of transportation that is very competitive in price and comfort with provincial buses. PNR currently operates the Metro South Commuter line that runs daily from Tutuban to Santa Rosa in Laguna, as well as the Bicol Commuter that caters to passengers between Naga and Sipocot. PNA

The Nation BusinessMirror

A4 Thursday, November 10, 2016 • Editor: Dionisio L. Pelayo

Gordon seeks investigation of series of illegal drugs-related killings

By Butch Fernandez

@butchfBM

EN. Richard J. Gordon is seeking a Senate inquiry “on the recent series of deaths of persons that are mainly illegal drugsrelated killings by the police during police operations, under police custody and detention, and outside legitimate police duty to make the police more accountable and responsible to the people.” In a resolution, Gordon cited National Police reports from July 1 to October 11, 2016, that recorded 4,248 illegal drugs-related killings by the police, of which 2,682 cases have been identified as the result of police operations and 1,566 as deaths under investigation. “The most common reason cited for these deaths involves a situation wherein the person being arrested is able to disarm the police officer, which thereafter results in a shootout with the police…more popularly known as resisting ar-

rest,” Gordon said. He recalled that President Duterte earlier released “his narcolist,” naming five police generals as protectors of drug syndicates and subsequently revealed the names of sitting and retired local government officials, policemen and law enforcers allegedly involved in the drug trade. Gordon added that among the local officials named on the list were Mayor Samsudin Dimaukom of Datu Saudi Ampatuan, Maguindanao, and the late Mayor Rolando Es-

pinosa of Albuera, Leyte. Sen. Panfilo M. Lacson is keen on recovering the hard -drive containing the closed-circuit television (CCTV) recording of the police raid that resulted in the killing of Espinosa, a suspected drug lord, and another detainee at the Baybay City Jail. Lacson indicated that Senate investigators are banking on witnesses to pinpoint who took the hard drive when the Senate reopens the inquiry into the so-called extrajudicial killings (EJK) of drug suspects allegedly by law enforcers. “Palagay ko naman may nakawitness sa pagtatanggal ng hard drive. Unless talagang nakatalikod at nakaharap sa pader ang mga guardia para hindi makita kung sino nagtanggal,” Lacson said. He added: “The fact of the matter is, it cannot be denied the CCTV hard drive was taken away” but investigators have yet to establish who took it. Lacson suggested that the CCTV recording could even help in the legal defense of the raiding team from the National Police Criminal Investigation and Detection Group (CIDG), who are being linked to the alleged summary execution of Espinosa and another detainee who was held in another cell. “Makakatulong sana, magandang

depensa sana ng CIDG na nag-raid na pabulaanan na EJK ang nangyari o summary execution ang nangyari kay Mayor Espinosa,” Lacson said. Lacson added that among those expected to be summoned to testify at the resumption of the Senate inquiry on Thursday are Supt. Marvin Marcos, CIDG Eastern Visayas commander, and Chief Insp. Leo Laraga, leader of the raiders who killed Espinosa. Lacson added that Gov. Leopoldo Dominico Petilla is also expected to testify at the hearing, as the provincial jail is under his jurisdiction. “Alam natin na ang provincial jail ay under sa provincial governor. Ito ang isang aspeto ng legislation na magulo: Ang control ng ating mga jail... ang mga local jail under BJMP [Bureau of Jail Management and Penology], under ng DILG. At ang provincial jail under sa provincial government. So, gusto natin malaman ano ang ile-legislate natin para maiayos natin, para ma-integrate natin ang pag-supervise over lahat na jail sa Pilipinas.” He admitted that as far as he is concerned, “EJK, at least, in the death of Mayor Espinosa, appears to be evident. But, of course, we have to hear the side of the police, specifically those involved in the raid.”

Legislators urge Palace: Fast-track release of help for housing repair of Yolanda victims By Marvyn N. Benaning Correspondent

WO members of t he Mak abayan Bloc in the House of Representatives on Wednesday assailed the failure of the Presidential Management Staff (PMS) and the Department of Education (DepEd) to reimburse the money spent by DepEd employees to repair their houses three years after Typhoon Yolanda (international code name Haiyan) struck. “We take these agencies to task for failing to deliver on their promise that they will extend financial assistance to survivors who had to repair or rebuild their homes,” said

Party-list Rep. Antonio L. Tinio of ACT Teachers. Tinio added that the survivors are still waiting the second tranche of the aid. Party-list Rep. France Castro of ACT Teachers, on the other hand, said many of those who had to secure loans to make their homes habitable again are now deep in debt. Sourced from the President’s Social Fund (PSF), the PMS assistance is either P100,000 for the repair of totally or heavily damaged houses or P30,000 for partially damaged. It covers government employees who are victims of Yolanda, as well as the Bohol earthquake, around half of whom are DepEd employees in 27

divisions in Regions 4A, 4B, 5, 6, 7, 8, 10 and 11. Upon the legislators’ inquiry, the Office for Special Projects under the PMS confirmed that only the first tranche of the assistance was released to DepEd in June 2015—only half of the amount per beneficiary—and that the second tranche will not be released until the completion of the liquidation and the physical and performance evaluation by the DepEd Regional Offices and the PMS, respectively. Tinio and Castro reported receiving complaints from teachers and other DepEd employees that they have already submitted complete liquidation documents three

New tourist attractions set to open in Southern Tagalog

HE scheduled opening of new scenic attraction in Southern Tagalog has prompted the Department of Tourism (DOT) to strengthen its engagement with the region’s local officials. Tourism Undersecretary Alma Rita D. Jimenez said the revised National Tourism Development Plan (NTDP) aims to strengthen closer cooperation between the DOT and local governments to improve the promotion of tourist attractions. Jimenez led the third Calabarzon Tourism Summit in Tagaytay City that gathered key tourism stakeholders and local government officials from Southern Tagalog to map out campaigns. Calabarzon stands for Cavite, Laguna, Batangas, Rizal and Quezon. Jimenez said the new tourism- development plan seeks to promote the country’s scenic attractions in a clustered manner. DOT Calabarzon Director Rebecca V. Labit said the region’s tourism campaigns will focus on diversification and innovation of tourism products such as culinary experience, as well as promoting cultural and historical heritage of each town. Mayor Gaudioso R. Manalo of Lobo, Batangas, said one of the unexplored tourist attractions, in his town is the Verde island, one of the country’s best diving sites. Cavite Gov. Jesus Crispin C. Remulla said

the province is rich in various attractions, such as Tagaytay and Corregidor, but there are still many undiscovered scenic spots. Remulla said the provincial government is developing the Mount Palay-Palay National Park in Maragondon, Cavite. He said the local government of Cavite is just awaiting the formal turnover of the property by the Department of Environment and Natural Resources (DENR) so it can start development of the 4,000-hectare national park for tourism. Remulla also raised the need to tap Sangley Point as alternative airport to decongest the Ninoy Aquino International Airport (Naia). “The Naia is not sustainable, we need to tap Sangley Point as the new airport,” said Remulla at the press briefing of the Calabarzon Tourism Summit held at Taal Vista Hotel in Tagaytay City. He said Sangley Point is one of the oldest ports of Manila where Chinese and Filipinos converge for trade. “The country flourished a lot when it was using the Sangley Point, we need to go back to basics.” During the summit, Mario Mamon, chairman and president of Enchanted Kingdom in Santa Rosa, Laguna, announced that the theme park will be opening new attractions as well as hotels and waterparks to bring in more tourists.

months after they received the first tranche, as required by the PMS guidelines, or by the end of 2014 for the earliest recipients. “We believe that the lag is with the liquidation in the regional office level and the PMS evaluation. Adding to the delay is the very late release by the PMS and DepEd of the aid to some of the beneficiaries, some of whom report receiving their first half only this year,” they explained. “We, therefore, urge the PMS and DepEd to speed up the liquidation, evaluation and release of the entire assistance to our teachers, non-teaching personnel and other DepEd employees. Three years is too long to keep survivors of major disasters hanging.”

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Air Force probes helicopter’s emergency landing in Palawan

By Rene Acosta

@reneacostaBM

HE Air Force is investigating the “emergency landing” of a Sokol W-3A multipurpose helicopter on Tuesday in Palawan, which military officials initially said was due to mechanical failure. Col. Antonio Francisco, Air Force spokesman, said the incident is undergoing investigation as a standard operating procedure, adding that he could not comment until the probe is concluded. Francisco did not say if a l l the seven other Sokol helicop ters, which were acquired under the modernization program of the A r med Forces, w il l be grounded as par t of the standard operating procedure when things like the Pa lawan emergenc y landing happen. The Air Force said the helicopter, with tail number 926, was conducting a “probing flight” on Tuesday for the Asean Air Chief Justice Summit that will be held in Palawan, when it encountered “one engine inoperative malfunction.” This prompted its pilot in command 1Lt. Gino Glenn Solano to perform an emergency landing at around 2:45 p.m. at Sitio Sabang, Barangay Cabayugan, Puerto Princesa City, Palawan. Sitio Sabang is is about 28 nautical miles north of downtown Puerto Princesa City. Solano said the pilot landed the helicopter on a rice field since it was the nearest and safest area that is away from the population. “However, the rice field ’s uneven surface led the aircraft to tilt to the right as it touched dow n, causing damage to its main rotor blades.” At the time of the incident, the Sokol was carrying five Air Force personnel, including the pilot and copilot and seven Na-

tional Police officials. Among the officials onboard were Chief Supt. Wilben Mayor, Mimaropa (Mindoro, Marinduque, Romblon, Palawan) police commander; Chief Supt. Camilo Cascolan, National Police operations directorate chief, and Chief Supt. Nestor Bergonia, chief of the force’s National Operations Center. The Armed Forces Western Command through its spokesman, Lt. Cherry Tindog, said some of the helicopter’s passengers suffered minor injuries, although the Air Force said none was injured. This is the second time that a Sokol helicopter figured in such incident. On August 7, 2014, just a few seconds after it lifted off from the grounds of the Army’s 103rd Infantry Brigade headquarters in Marawi City, Lanao del Sur. The chopper was carrying the then Army Fourth Infantry “Diamond” Division Commander and now Armed Forces Chief of Staff Gen. Ricardo Visaya; the then 4ID inspector general, Col. Alexander Macario and five staff members of former Defense Secretary Voltaire T. Gazmin. The helicopter was escorting another Sokol that was carrying Gazmin and then-Interior Secretary Manuel A. Roxas II, who lost to President Duterte in the May 2016 elections. The eight Sokol helicopters that were delivered from 2012 to 2013, were the first big-ticket item procured for the military by the Aquino administration. The acquisition of the helicopters got Gazmin in trouble with then-President Benigno S. Aquino III kowing to the choppers’ entry and exit problems as their weapons, particularly machineguns have to be dismounted before passengers can board them.

Palafox urges ‘patriotic’ urban planners: Help stop corruption By Jonathan L. Mayuga @jonlmayuga

RCHITECT Felino Palafox Jr. urged members of the Philippine Institute of Environmental Planners (PIEP) to find the courage to be patriotic and expose corruption. “The reason we are not developing as a country is primarily because of corruption and criminality. That is probably why majority of the Filipinos supported President Duterte. His promise is to fight corruption and crimnality,” says Palafox, a worldrenown urban planner. Speaking during the 25th PIEP National Convention at a hotel in Makati City, Palafox said poor urban planning is often the result of not only poor planning, but corruption in the government. In his speech in the convention, with the theme “Politics, Policy & Planning,” Palafox said urban planners know what to do, but many do not have the courage to tell the truth and fight corruption. The convention was attended by registered environmental and urban planners from all over the country, national and local government officials, allied professionals, partners in the environment, real estate, construction and

socioeconomic development. The Philippines has the potential to become one of the top economies in the world. This, he said, but graft and corruption, he said, failed the country. “There are other issues, of course, such as poverty, agriculture, health care, selective justice and social justice.… It seems President Duterte has heart to do it and he is not afraid to do it for the good of the majority of the Filipinos.” Palafox said not a single city in the Philippines “has it to make it to the top 10 cities in the world.” There are several Asian countries, he said, that made it to the Top 10 Smart Cities and Top 10 Sustainable Cities. Seoul and Singapore made it to both categories, with Hong Kong joining the two cities in the last category. The Philippines, Palafox said, has the potential with urban planning being given attention by national and local governments.

Makati not the way to do it

Makati City, he said, was a good model for planning in the early 1970s, when the price of oil was cheap. The rest of the world, he said, started mixed-use development and vertical buildings were constructed. In Makati City, at that time, the same

planning took shape and gated villages were opened. Today gated villages were closed to traffic, aggravating the traffic congestion, because of over population. He noted that Makati City’s population at day time is 11 times bigger than its population during night time. This means that every morning, the number of people going to Makati is 11 times bigger. “At night, the number of people trying to get out of Makati is also 11 times bigger,” he said. He urged Makati’s village owners to open their gates to traffic and allow motorists to pass by, to decongest Edsa, which, he said, is overflowing with public and private vehicles, because many people are drawn to malls on top of those going to work, whether in private companies or government offices. Palafox is working with the Duterte administration to help address traffic problem in Metro Manila by providing expert opinion on urban planning and design. Among his suggestion was to maximize the use of rivers and lakes for transportation to help decongest traffic, open-gated villages, including cemeteries, to traffic particularly during rush hour.

Asean

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Thailand, PHL central banks calming nerves of investors

Smart cities Asean-EU Perspective

HENRY J. SCHUMACHER

he 21st century is considered the century of cities. Never before have so many people lived in urban centers, and the shift from countryside to cities is—unfortunately—continuing, unless we succeed to decentralize and regionalize, create smart local government units and invest outside the investment centers. Cities in their present form are huge consumers of resources that offer no chance of ecological sustainability. Many cities are threatened by infrastructure collapse. However, the decentralized production of renewable energy, the closed-loop economy based on recycling and also the digital economy are making it possible to reduce the density of cities. Let’s look at components of smart-city digitalization in all sectors: Smart health—Remote examinations are made possible by smart health-care solutions like telemedicine. They can save patients several visits to the doctor and increase the quality of life. Smart living—Many smart-living concepts involve imaginative ideas. The waste bin calls the waste-collection service, the refrigerator orders dinner and the lamps and TV set turn themselves on when needed. Smart government—Making political decisions with a mouse click —smart government could lead to a revolution in public administration, increase citizen participation and make many visits to municipal offices superfluous. This is the avenue to achieve “ease of doing business.” The “Single Window” that we are suggesting to the Bureau of Customs is part of it and a commitment to the Asean integration. Smart energy and environment—Many organizations are working on an “Internet of energy.” It aims to open the door for local and renewable-energy production and supply. Smart meters are part of this agenda. Smart learning—Tablet replaces blackboard, smartphone replaces pen: digital learning will radically change education. The new learning world is not only about technological innovation, but also personalized tuition. For smart learning we need electricity for every household and a broadband infrastructure that is fast and less expensive. Smart mobility—Transport in the city of the future bears the promise of no traffic jams (hard to imagine if you are stuck in Manila traffic day after day) and less air pollution. Networked transport systems, sharing services and smart traffic lights could soon make this dream come true. Smart economy—So-called fintech firms are stirring up the business world with creative ideas. Their innovation jazz up financial transactions and make them simpler or cheaper. Shopping will be even more fun in the future. E-commerce will hopefully create much more competition. The technological transformation of metropolitan regions into smart cities will not happen of its own accord. If a further 700 million people worldwide do actually move to the cities in the next 10 years, there is a danger of infrastructure collapse in many places. Megacities of the Future Possible growth of the world’s 10 largest metropolitan areas (population in millions) Rank Metropolitan Area 2015 2030 1 Tokyo 2 Dehli 3 Shanghai 4 Sao Paulo 5 Mumbai 6 Mexico City 7 Beijing 8 Osaka 9 Cairo 10 New York City Source: UN World Urbanization Prospects

38.0 25.7 23.7 21.1 21.0 21.0 20.4 20.2 18.8 18.6

37.2 36.1 30.8 23.4 27.8 23.9 27.7 20.0 24.5 19.9

Cambodian opposition chief found guilty over Facebook claim

Cambodian court found the country’s exiled opposition leader guilty of defamation for alleging that a senior government official sought to inflate Prime Minister Hun Sen’s online popularity by buying “likes” for his Facebook page. The Phnom Penh Municipal Court found Sam Rainsy, president of the Cambodia National Rescue Party, guilty and ordered him to pay a fine of 10 million riel ($2,500) in addition to 15 million riel ($3,750) in compensation to Sam Soeun, a senior official assigned to oversee Hun Sen’s Facebook page. Hun Sen has a very active online presence, and his opponents, likewise, use the Internet to mobilize supporters. The rivalry between Hun Sen and Sam Rainsy evolved into a “Facebook war,” with each seeking to claim a greater number of “likes”. At the height of their battling in March, the Phnom Penh Post published its finding that most of Hun Sen’s “likes” originated from abroad, raising suspicions about their legitimacy. Currently, Hun Sen’s page has 6.1 million “likes”, and Sam Rainsy’s has 3.3 million. Cambodia’s courts are widely seen as being under the influence of Hun Sen’s

Editor: Max V. de Leon • Thursday, November 10, 2016 A5

government and his ruling Cambodian People’s Party. The conviction is the latest in a series of cases against opposition leaders in what is generally seen as an attempt to disrupt their organizing efforts ahead of local elections next June. The next general election is not until the middle of 2018, but holding power at the local level is an advantage when national polls are held. Sam Rainsy is the most prominent target of these prosecutions, and has been in exile since last November to avoid a jail term on a conviction that he had thought was covered by a royal pardon. There are several other cases pending against him, at least two involving online postings. The government this month banned his reentry from abroad, making it more difficult for him to fight the charges even if he chooses to return. Deputy party leader Kem Sokha has also been tied up in legal knots after a well-orchestrated scandal involving his alleged mistress, and was sentenced to a five-month jail term for refusing to appear in court to testify in a related case. He has been holed up at party headquarters in the Cambodian capital for several months. AP

N Southeast Asian nations facing the biggest political risks, at least one thing investors don’t need to worry about are central-bank surprises.

That’s the consensus from economists predicting policy-makers in Thailand and the Philippines will stick to their unchanged monetarypolicy stances this week in the face of heightened uncertainty following the death of Thai King Bhumibol Adulyadej and President Duterte’s foreign-policy shift away from the US toward China. “For these two central banks, there is, broadly speaking, enough market confidence in the central bank itself, not so much in the politics,” said Julian Wee, a Singapore-based senior market strategist at National Australia Bank Ltd. Philippines is in a good position with benign inflation, while Thailand is facing a “liquidity trap, so rate cuts wouldn’t do much for the economy,” he said. All but one of the 23 economists surveyed by Bloomberg expect the Bank of Thailand to keep its policy

rate stable at 1.5 percent on Wednesday, while for the Philippines, all 16 economists polled said the benchmark rate would remain at 3 percent on Thursday. In Thailand the central bank will need to steer the economy through rising market volatility following the death of the king, who was seen as a source of stability in the country. A yearlong mourning period threatens to curb growth on entertainment and other social spending in a country dependent on tourism. Foreign investors pulled out of Thailand stocks at the fastest pace this year in October.

‘Consistent’ policy

The Bank of Thailand has kept its key rate unchanged since June 2015, turning to fiscal policy to take the lead in spurring the economy. After more than a year of negative inflation rates, consumer prices have risen

We still think that the next [BSP] move will be a hike, but not just yet, rather in early 2017, more likely.” —DBS Group

steadily since April and gained 0.3 percent in October from a year earlier. “It’s good that our central bank is pretty consistent with their rate decision, amid uncertainties in the economy now,” said Thanomsri Fongarunrung, an economist at Phatra Securities Pcl. in Bangkok. “They have sent out clear signals that they want to save their bullets and use it when it’s really necessary.” The Philippines and Thailand have the lowest interest rates in Southeast Asia after adjusting for inflation, indicating reduced room to lower borrowing costs. Both central banks have also

avoided surprising the markets in the past. Bangko Sentral ng Pilipinas (BSP) generally communicates any potential change in monetary policy in advance and the last time the Bank of Thailand took unexpected action was in April 2015. In the Philippines risks have been rising because of Mr. Duterte’s violent crackdown on crime and his outbursts against the US, a military ally, raising concerns for investors in the $20-billion business-process outsourcing industry, which is dominated by American companies. The BSP has kept its key rate unchanged since lowering it in May as part of an overhaul of its policy framework. With the economy growing at 7 percent and the peso under pressure, the bank’s next move may be a rate increase. Inflation was unchanged at 2.3 percent in October, remaining inside the 2-percent to 4-percent target range. “We still think that the next move will be a hike, but not just yet, rather in early 2017, more likely,” said Gundy Cahyadi, an economist at DBS Group Holdings Ltd. in Singapore. “Growth momentum remains robust while inflation is likely to continue inching higher.” Bloomberg News

Island-hopping in Indonesia: Visiting a few from thousands

ith more than 13,000 islands, Indonesia is the world’s largest archipelago. Only about 6,000 of the islands are inhabited, but that still leaves a lot of options for island-hopping. Most travelers know about Bali, the surf-and-sand island of Eat, Pray, Love fame, and Java, home to Jakarta, the capital of Indonesia, and 60 percent of the country’s population. But I recently traveled with friends to two lesser-known— though still tourist-friendly—islands, and from there, a few even smaller islands, that gave glimpses of local culture while offering heartstirring views of serene aqua water, dazzling waterfalls and thrilling volcano peaks.

Lombok

Next door to world-famous Bali, Lombok offers many of the same attractions as its better-known neighbor: waterfalls, white-sand beaches, snorkeling and scuba diving, but with a fraction of the tourists. Here are some of its top destinations: n Senggigi. Located on the northwest part of Lombok, Senggigi is the main tourist area lined with hotels, restaurants, souvenir shops, massage parlors and more. The town of Senggigi is where visitors can set up tours or find guides to take them to different parts of the island. n Sendang Gile and Tiu Kelep waterfalls: Icy, cold and slippery, these waterfalls are probably some of the most awe-inspiring sights on the island. We hired a guide to lead us to them. n Authentic handicrafts: Banyumulek is a village known for its worldclass pottery. We visited a family of three generations creating pieces of various sizes. Farther inland, Sukarara is a community where visitors can learn about the process of traditional hand-weaving and attempt to give it a try themselves. Pottery is available for purchase at Banyumulek, and sarongs, wall hangings, blankets and scarves are available for purchase at Sukarara. n Gili islands: A string of three tiny islands off the northern coast of Lombok, the Gili islands are popular for their laid-back feel and

In this August 2016 photo, a woman cuts a fish at the local market in Maumere on the island of Flores in Indonesia. AP

6,000

The estimated number of inhabited islands in Indonesia, of the total 13,000 islands in the world’s biggest archipelago

lack of traffic. We headed to Gili Air because it was the closest, hiring a private speedboat and driver and spending a few hours walking around the island and jumping in and out of the water. Don’t forget to get your picture taken at one of the well-known water swings.

Flores

Known mainly for being the jumping-off point to Komodo National Park, a United Nations Educational, Scientific and Cultural Organization World Heritage Site, the island of Flores is much larger than you

may think. I made the mistake of thinking we could fly into the city of Maumere—the largest town on the island—and take local transport to the western side of the island and head on to the Komodo area. I was wrong. It turned out to be at least a 12-hour drive, and with just a few days on Flores, we decided to stick around Maumere instead of being rushed. But we were not disappointed. One interesting aspect of visiting Flores was the Christian influence here. Indonesia is the world’s largest majority-Muslim country, but here Christian churches and a large cross can be seen along the coast. Flores means flowers in Portuguese; it was a colonial outpost for Portugal in the 16th century. Other attractions here n Local market: An authentic slice of life here, with vendors selling fruit, livestock and chatting with each other and customers. n Pangabatang Island: We decided on the fly to try to visit Pangabatang Island, an uninhabited island about an hour off the coast of Flores. With the help of

some friendly locals, we flagged down a bemo, a public-transport van, found out one of the women onboard was married to a boat captain, and headed to meet him at the fishing village of Nangahale. He spoke no English, but I was able to communicate with my rudimentary Indonesian language skills, and we hopped on his rickety boat. We sat in stunned silence snapping photos of some of the most scenic water views we’d ever seen. Once at Pangabatang, we suntanned, jumped in and out of the sea, and, of course, took selfies. One note of warning: Ferry sinkings and boat accidents are not uncommon—including a glass-bottomed boat that capsized off Bali in early November, killing three people including a Japanese tourist. So use your judgment on boat rides, especially if traveling with kids. n Mount Egon: Hiking Mount Egon takes several hours and lots of stamina. It’s very steep with lots of loose gravel. We hired a guide to take us up to the summit, where a volcanic crater and outstanding views made the trek worth it. AP

TheBroa

Business

A6 Thursday, November 10, 2016

Trump claims astounding victo W

ASHINGTON—Donald Trump claimed his place on Wednesday as America’s 45th president, an astonishing victory for the celebrity businessman and political novice who capitalized on voters’ economic anxieties, took advantage of racial tensions and overcame a string of sexual-assault allegations on his way to the White House.

A man carries a cutout of Democratic presidential candidate Hillary Clinton following an Election Watch event hosted by the US Embassy in Seoul, South Korea, on Wednesday. AP/Lee Jin-man

His triumph over Hillary Clinton, not declared until well after midnight, will end eight years of Democratic dominance of the White House and threatens to undo major achievements of President Barack Obama. Trump has pledged to act quickly to repeal Obama’s landmark health-care law; revoke America’s nuclear agreement with Iran; and rewrite important trade deals with other countries, particularly Mexico and Canada. As he claimed victory, Trump urged Americans to “come together as one united people” after a deeply divisive campaign. He said he had spoken by phone with Clinton and they had exchanged congratulations on a hard-fought race. Trump, who spent much of the campaign urging his supporters on as they chanted “lock her up,” said the nation owed her “a major debt of gratitude” for her years of public service. The Republican blasted through Democrats’ long-standing firewall, carrying Pennsylvania and Wisconsin, states that hadn’t voted for a GOP presidential candidate since the 1980s. He needed to win nearly all of the competitive battleground states, and he did just that, claiming Florida, Ohio, North Carolina and others. Global stock markets and US stock futures plunged, reflecting investor concern over what a Trump presidency might mean for the economy and trade. A New York real-estate developer who lives in a sparking Manhattan high-rise, Trump forged a striking connection with white, working-class Americans who feel left behind in a changing economy and diversifying country. He cast immigration, both from Latin America and the Middle East, as the root of the problems plaguing many Americans and taped into fears of terrorism emanating at home and abroad. Trump will take office with Congress expected to be fully under Republican control. GOP Senate candidates fended off Democratic challengers in key states and appeared poised to keep the majority. Republicans also maintained their grip on the House.

Senate control means Trump will have great leeway in appointing Supreme Court justices, which could mean a shift to the right that would last for decades. Trump upended years of political convention on his way to the White House, leveling harshly personal insults on his rivals, deeming Mexican immigrants rapists and murderers, and vowing to temporarily suspend Muslim immigration to the US. He never released his tax returns, breaking with decades of campaign tradition, and eschewed the kind of robust data and field efforts that helped Obama win two terms in the White House, relying instead on his large, free-wheeling rallies to energize supporters. His campaign was frequently in chaos, and he cycled through three campaign managers this year. His final campaign manager, Kellyanne Conway, touted the team’s accomplishments as the final results rolled in, writing on Twitter that “rally crowds matter” and “we expanded the map.” Clinton spent months warning voters that Trump was unfit and unqualified to be president. But the former senator and secretary of state struggled to articulate a clear rationale for her own candidacy. The mood at Clinton’s party grew bleak as the night wore out, with some supporters leaving, others crying and hugging each other. Top campaign aides stopped returning calls and texts, as Clinton and her family hunkered down in a luxury hotel watching the returns. At 2 a.m., Clinton campaign chairman John Podesta told the crowd to head home for the night. “We’re still counting votes and every vote should count,” he said. But she later conceded. Trump will inherit an anxious nation, deeply divided by economic and educational opportunities, race and culture. Exit polls underscored the fractures: Women nationwide supported Clinton by a double-digit margin, while men were significantly more likely to back Trump. More than half of white voters backed the Republican, while nearly 9 in 10 blacks and two-thirds of

President-elect Donald Trump gives his acceptance speech during his election night rally as he is surrounded by his family and Vice President-elect Mike Pence and his family on Wednesday in New York. AP/John Locher

Hispanics voted for the Democrat. Doug Ratliff, a 67-year-old businessman from Richlands, Virginia, said Trump’s election was one of the happiest days of his life. “This county has had no hope,” said Ratliff, who owns strip malls in an area badly beaten by the collapse of the coal industry. “Things will change. I know he’s not going to be perfect. But he’s got a heart. And he gives people hope.” Trump has pledged to usher in a series of sweeping changes to US domestic and foreign policy: repealing Obama’s signature health care law, though he has been vague on what he could replace it with; building a wall along the US-Mexico border, and suspending immigration from countries with terrorism ties. He’s also praised Russian President Vladimir Putin and spoken of building a better relationship with Moscow, worrying some in his own party who fear he’ll go easy on Putin’s provocations. The Republican Party’s tortured relationship with its nominee was evident right up to the end. Former President George W. Bush and wife Laura Bush declined to back Trump, instead selecting “none of the above” when they voted for president, according to Spokesman Freddy Ford. House Speaker Paul Ryan, a re-

luctant Trump supporter, called the businessman earlier in the evening to congratulate him, according to a Ryan spokesman. Democrats, as well as some Republicans, expected Trump’s unconventional candidacy would damage down-ballot races and even flip some reliably red states in the presidential race. But Trump held on to Republican territory, including in Georgia and Utah, where Clinton’s campaign confidently invested resources. Clinton asked voters to keep the White House in her party’s hands for a third straight term. She cast herself as heir to President Obama’s legacy and pledged to make good on his unfinished agenda, including passing immigration legislation, tightening restrictions on guns and tweaking his healthcare law. But she struggled throughout the race with persistent questions about her honesty and trustworthiness. Those troubles flared anew late in the race, when FBI Director James Comey announced a review of new emails from her tenure at the State Department. On Sunday, just two days before Election Day, Comey said there was nothing in the material to warrant criminal charges against Clinton. AP

Sri Vasamsetti, 22, reacts to Republican presidential candidate Donald Trump’s progress in Florida, during an election viewing party at the Comet Tavern in Seattle, Washington, on Tuesday. Sy Bean/The Seattle Times via AP

aderLook

sMirror

www.businessmirror.com.ph | Thursday, November 10, 2016

ory as America’s 45th president

A man walks by an electronic stock board of a securities firm in Tokyo on Wednesday. The rising prospect of a Trump presidency shook financial markets around the world on Wednesday, sending Dow futures and Asian stock prices sharply lower as investors panicked over uncertainties on trade, immigration and geopolitical tensions. AP/Eugene Hoshiko

Dollar plunges as Trump success shocks global currency markets

he dollar plunged, as Republican Donald Trump pulled ahead in critical battleground states in the US presidential race, shocking foreignexchange traders who had all but priced in a Clinton victory.

A broker reacts as President-elect Donald Trump shows up on a television screen at the stock market in Frankfurt, Germany, on Wednesday. AP/Michael Probst

Canada immigration site crashes as momentum builds for Trump

he government of Canada immigration and citizenship web site crashed on Tuesday night, presumably under the weight of anxious Americans worried about their status under a Trump presidency. A spokesman for that office did not immediately return a request for comment. Moving to Canada is not quite as simple as some Americans— including celebrities like Barbra Streisand, Bryan Cranston and Keegan-Michael Key—might hope. There are various working visa paths available to applicants with post-secondary education or at least one year of skilled work experience. If you have a job offer in Canada, that’s a big help. If you have relatives in Canada, you might be able to obtain Canadian permanent residence under a Family Class program. If you own your business, that’s a path to Canadian immigration. And if you have a high net-worth (alert: celebrities) there are a number of options available to you, so long as you promise to spend that capital in Canada. In order to be eligible for Canadian citizenship, applicants must have lived in Canada for at least four out of the last six years and be fluent in at least one of the country’s two official languages— French and English. If you marry a Canadian—and Canada has legalized same-sex marriage—then you immediately gain all rights to Canadian citizenship. But be warned: Immigration is well aware of marriage fraud and the penalties are stiff. (The page that describes what the penalties are, however, had also crashed on the night of the election.) Good luck, eh? Bloomberg News

A Trump win would be the second major jolt to foreign-exchange markets in less than five months, after Britons voted in June to exit the European Union. The greenback fell as much as 3.8 percent against the yen, the biggest intraday decline since the Brexit referendum, 2.4 percent against the euro and 2.3 percent against the Swiss franc. Mexico’s peso plunged to a record. A victory for Trump, 70, would spur a sea change in US policies that directly impact the greenback. The real-estate magnate has promised to tear up US trade agreements, called China the “grand master” of currency devaluation and argued that a strong dollar damages American competitiveness. He’s also accused Federal Reserve Chairman Janet Yellen of playing politics, saying she’s kept rates too low during Obama’s tenure, and suggested that he will nominate someone else to lead the central bank once her term expires in 2018. “‘It’s unexpected and financial markets don’t like unexpected events,” said Steven Englander, global head of Group-of-10 currency strategy in New York at Citigroup Inc., the world’s biggest foreign-exchange trader. “We’re really, for a while, going to be in

uncharted territory because we don’t know how much additional volatility asset markets and economic outcomes are going to attain because of this event.” The dollar fell to ¥101.43 and sank to $1.1285 per euro as of 12:17 p.m. in New York. Overnight implied volatility on the dollar-yen exchange rate climbed to the highest since November 2008. Tuesday’s price moves are in line with what strategists predicted in the case of a Trump victory in a Bloomberg survey of the world’s top 10 foreign-exchange forecasters earlier this month. In that poll, most saw the dollar falling to about ¥100.28 should he win. Markets are now reassessing the likelihood of a Fed interest-rate increase next month, once a near certainty, as volatility intensifies. The market-implied chance of a December rate hike plunged to 51 percent, based on US overnight indexed swaps (OIS) that trade 24 hours a day, compared to 82 percent at 5 p.m. The OIS-derived probability tends to be a few percentage points lower compared to calculations based on fed funds futures. The US currency has risen since mid-August as signs of faster economic growth and accelerating inflation fueled bets for Fed hikes. The

gains follow a two-year, 20 percent rally that abruptly came to a halt this year as policy-makers repeatedly scaled back the pace of rate increases amid inconsistent data. Tighter monetary policy in the US bolsters the allure of American assets—and in turn the greenback—relative to Europe and Japan, where central banks continue to undertake unprecedented stimulus to boost flagging growth and inflation. The Mexican peso plunged as much as 12 percent to 20.76 per dollar. The move was expected by market analysts who saw the currency as a barometer for the election, rallying when Clinton advanced in the polls and falling when Trump gained ground. Trump’s rhetoric has weighed on the peso in recent months as traders saw the country’s economy as particularly vulnerable to proposals such as building a wall on America’s southern border, seizing Mexican workers’ remittances and renegotiating the North American Free Trade Agreement. Canada’s dollar tumbled. The nation’s two-way trade in goods and services with the US has surged since the accord between Canada, the US and Mexico came into force in 1994. The US is Canada’s largest foreign market, buying about C$400 billion, or about 73 percent, of the country’s exports last year, data compiled by Bloomberg show. “The Bank of Canada [BOC] is monitoring the US election as an event risk considering the uncertainty it would bring to business investment in Canada and in the US,” Bipan Rai, a senior foreignexchange and macrostrategist at Canadian Imperial Bank of Commerce in Toronto, said before the election. “We can’t rule out the potential for further action from the BOC in the next couple of months,” he said, referring to a potential rate cut. South Korea’s won and South Africa’s rand also tumbled. Trump has locked up key battleground states Florida, Ohio and North Carolina. The aggregator RealClearPolitics deemed all three states “toss ups”. “Trump is not a politician, he hasn’t been in the political arena making laws—he’s more of an unknown quantity,” said Sinead Colton, San Francisco-based head of investment strategy at Mellon Capital Management Corp., before the election. His victory “certainly hasn’t been priced in by markets.” Bloomberg News

The World

Thursday, November 10, 2016 • Editor: Lyn Resurreccion

BusinessMirror

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Prince Harry condemns media ‘abuse’ of American girlfriend

Volunteers from the Kheir Zaman local supermarket sell a kilogram of sugar for 7.50 L.E. (0.84 US cents) in the Sayeda Zeinab neighborhood of Cairo, Egypt, on October 26. AP/Nariman El-Mofty

IMF chief hails Egypt austerity, urges approval of $12-B loan

AIRO—The head of the International Monetary Fund (IMF) praised Egypt’s recent austerity measures on Tuesday and called on the world lender’s Executive Board to finalize a $12-billion loan package to help rebuild the economy of the Arab world’s most populous country. Egypt’s long-running financial woes have worsened in recent weeks amid a dispute with Saudi Arabia, which provided billions of dollars in aid after the military ousted an elected Islamist leader in 2013, but cut off fuel shipments last month over a dispute related to the Syrian conflict. IMF chief Christine Lagarde praised Eg y pt’s decision last week to float its currency and slash fuel subsidies, measures that have hiked the price of basic goods, but which, she said, would shore up its reserves, attract foreign investment and reduce its budget deficits. “The Egyptian authorities have embarked on an ambitious reform program to put the country’s economy on a sustainable path and

achieve job-rich growth,” she said. She said she would recommend that the IMF Executive Board approve Egypt’s request for $12 billion in loans when it meets this Friday. Egypt is struggling to recover from years of turmoil following the 2011 uprising that toppled Hosni Mubarak. Some fear the sharp rise in prices caused by the austerity measures could ignite further unrest, but, in the short term, they seem to have restored some investor confidence. Egypt’s shares have risen for a fourth successive business day, with the benchmark EGX 30 index closing up 2.48 percent on Tuesday. The Egyptian pound traded at banks on Tuesday at around 17.75 to the dollar, nearly twice the dollar’s official, prefloat exchange

rate. The pound was trading at an all-time low of 18.50 to the dollar in the parallel black market prior to the float. A n Eg y ptian cour t, meanwhile, upheld a ruling by a lower tribunal that annulled President Abdel Fattah el-Sissi’s decision to transfer two strategic Red Sea islands to Saudi Arabia, a move that could further escalate tensions between the two formerly close allies. Saudi Arabia had agreed in April to provide Egypt with 700,000 tons of fuel a month for five years on easy repayment terms, but Egypt said on Monday the fuel shipments have been suspended indefinitely. Saudi Arabia has not commented on the matter. Cairo angered the Saudis last month by voting for a Russianbacked UN Security Council resolution on Syria that was opposed by Riyadh. Saudi Arabia is a leading supporter of the rebels fighting to topple President Bashar al-Assad, while Egypt fears the rise of Islamic militants and has pushed for a negotiated solution that might keep him in power. Egypt has also been working to shore up relations with Russia, which is a key ally of Assad. The halt of the fuel shipments led Egypt to sign a memorandum of understanding on imports from

Iraq, which is closely allied with Saudi Arabia’s main regional rival, Iran. Egypt had announced the transfer of the two islands, Tiran and Sanafir, to Saudi Arabia during a high-profile visit to Cairo by King Salman in April. Egypt said the islands had always been part of Saudi Arabia, but were placed under Cairo’s protection from Israel in the 1950s. But the decision infuriated many Egyptians, who saw it as a sell-off to a wealthy patron, and the move ignited the largest protests since el-Sissi was elected in 2014. A lower court has already ruled against the transfer of the islands, saying it was unconstitutional. The government has appealed that decision before three separate courts, one of which upheld the earlier decision on Tuesday. The other two have yet to rule on the case. Both Saudi Arabia’s apparent reprimand over the Syrian vote and the dispute over the islands have angered many Egyptians. “These are like adolescents’ policies!” said veteran political commentator and journalist Makram Mohammed Ahmed, who is known to be close to el-Sissi. “Saudis are dealing with the rest of the world as if they are the masters who must be obeyed.” AP

5 Islamic State suspects arrested in Germany

ERLIN—German authorities on Tuesday arrested five men who alleged ly aided the Islamic State (IS) group in Germany by recruiting members and providing financial and logistical help. The federal prosecutor’s office said in a statement that the men were arrested on suspicion of supporting a terrorist organization. The arrests were made in a series of raids in the western state of North Rhine-Westphalia and the northern state of Lower Saxony. The country’s justice minister, Heiko Maas, called the arrests “an important blow to the extremist scene in Germany.” Interior Minister Thomas de Maiziere said it was critical to prevent people from becoming “so radicalized that they are in danger of becoming terrorists.” “We don’t want terrorism to take place in Germany,” he said. “We don’t want terrorism to be

exported from Germany.” One of the raids was in the Lower Saxony city of Hildesheim, which is a known center for ultraconservative Muslims known as Salafists and where a mosque was raided during the summer. The prosecutor’s office, which handles all terrorism cases, said the suspects weren’t known to have links to IS suspect Jaber Albakr, who killed himself in prison in October two days after being arrested on suspicion of plotting to attack a Berlin airport with homemade explosives. T he f ive men a r rested on Tuesday are suspected of recruiting young Muslims in Germany, and raising funds to send them to Syria to join IS, prosecutors said. T hey’re also accused of providing logistical support for the trips. One of the suspects, a 32-yearold Iraqi citizen identified as Ahmad Abdulaziz Abdullah A.,

who also goes by the alias of Abu Walaa, is accused of being the ringleader of the group. He openly supported the IS group, attended several extremist events as a speaker and approved the departure of those willing to go to Syria, prosecutors said. His last name wasn’t provided in line with German privacy laws. Two other suspects, identified as 50-year-old Turkish citizen Hasan C. and 36-year-old GermanSerbian citizen Boban S., were allegedly in charge of teaching Arabic and “radical Islamic content” to recruits. The state interior minister of North Rhine-Westphalia, Ralf Jaeger, said the profile of the suspects’ targets for recruitment was almost always the same. “He’s young, male, he’s experienced failure, and has the problem of not feeling accepted by society and feeling excluded,” Jaeger said. A 27-year-old German citizen,

Mahmoud O., and a 26-year-old from Cameroon, identified as A hmed F.Y., are suspected of helping to organize the recruits’ departure to Syria. “The network verifiably trafficked one young man and his family to the IS in Syria,” the statement says. The suspects will be brought before a judge later on Tuesday and on Wednesday, the prosecutor’s office said. Also on Tuesday, a higher regional court in Frankfurt sentenced a 30-year-old German citizen to eight-and-a-half years in prison for membership in the IS and war crimes. The court said the man, who was identified only as Abdelkarim E., fought with IS in Syria in 2013 and 2014, and participated in disfiguring the body of a Syrian soldier. He recorded footage of the combat operations and also of how the dead man’s ears and nose were cut off, the court heard. AP

ONDON—It’s the British royals versus the press— aga in—and Pr ince Harry thinks enough is enough. In a highly unusual statement, the prince on Tuesday lashed out at the media for intruding on the privacy of his new girlfriend, American actress Meghan Markle. The 32-year-old royal said the press had crossed a line with articles that had “racial undertones,” and pleaded: “This is not a game.” The condemnation was the latest in an often-uneasy dance between Britain’s royals and an international press hungry for any tidbit about royal scandal or courtship. Both Harry and his brother, Prince William, have spoken candidly about their distrust of the media: Their mother, Princess Diana, died in a 1997 car accident while being pursued by paparazzi, and William’s wife, Kate, was relentlessly scrutinized for years before the couple married in 2011. It look s l i ke not h i ng h a s changed. Kensington Palace described how journalists tried to break into Markle’s home, how newspapers offered “substantial bribes” to her ex-boyfriend, and said nearly everyone she knows has been bombarded for information. Markle’s mother couldn’t even get to her front door without jostling reporters. “What is extraordinary about this letter is the level of ethical conduct breaches it details,” said Steven Barnett, a communications professor at the University of Westminster. “You have to feel something for Harry, who is presumably thinking of his mother and what she had to put up with.” Markle, 35, is best known for her role as a feisty paralegal in the US television drama Suits. Many tabloids alluded to her mixed-race heritage—she has an African-American mother and a white father. One Daily Mail headline described her ancestors as “a tailor, a teacher and a cleaner in racially divided Jim Crow South.” Another dubbed her a “saucy divorcee.” The Daily Mirror linked Markle with an online pornography site, saying clips of her from Suits featured on the adult site. Markle has so far not responded, but has in the past written about how she came to terms with being a “biracial woman.” “While my mixed heritage may have created a gray area surrounding my self-identification, keeping me with a foot on both sides of

the fence, I have come to embrace that,” she wrote in an essay for Elle magazine in 2015. Royal officials said the harassment has “ been very public,” citing “the smear on the front page of a national newspaper; the racial undertones of comment pieces; and the outright sexism and racism of social-media trolls and Web article comments.” Harry said the commentators would say this is “the price she has to pay” and “this is all part of the game.” But, the palace said, Harry “strongly disagrees.” “This is not a game—it is her life and his,” the statement said. Officials had initially declined comment on widespread media speculation that Harry and Markle were dating, as per its usual policy of silence in regard to the personal lives of the royal family. But, increasingly, the palace has been going on the offensive because the world of blogs and social media can do more reputational damage, and do it more quickly, than traditional media. “As time goes on, the royal family has sometimes been really puzzled about how to respond to press coverage—should they ignore or seek to engage them?” said James Rodger, a journalism lecturer at City University London. “ This is a ref lection of an evolving problem, especially with changing social attitudes and media.” Harry has been linked to a number of women in the past, including another actress, Cressida Bonas. Media intrusion was also seen as having hurt that relationship. In 2012 he spoke of the difficulties of finding a partner willing to take on the responsibilities of being a royal. Harry said Tuesday’s statement was issued in hopes that the media “can pause and reflect before any further damage is done.” But in confirming his romance with the American actress, the royal also made a very personal relationship public—and there’s no turning back now. Barnett, at Westminster University, said there wasn’t much the royals could do in the face of a rambunctious press. Despite recent inquiries into media ethics triggered by tabloid phonehacking allegations, Barnett said. British news outlets remain as aggressive as ever. “All you can do is throw yourself at their mercy,” he said. AP

Erdogan reminds Turks of old empire

NKARA, Turkey—President Recep Tayyip Erdogan has started talking about Turkey’s borders, hinting they should be shifted outward a bit. In Syria and Iraq his army is involved in wars over territory once ruled from Istanbul. Maps of a Greater Turkey have circulated. That has led to speculation that Erdogan, fresh from surviving an attempted coup, wants to crown his 14-year rule in Turkey by annexing chunks of its neighbors. But analysts see a more mundane domestic calculation behind the rhetoric: They say the president is really trying to expand his own powers, not his country’s frontiers. Erdogan still hankers after making his office the focus of all power in Turkey, instead of the largely ceremonial post it was before he took over—and, on paper, still is. But he doesn’t have support in parliament to make that constitutional change—and maybe not in the country, either, if it went to a referendum. In both cases, the likeliest bloc of voters to be won over is nationalists who aren’t at all averse to talk of Turkey’s historic claims on nearby lands, or military attacks on Kurdish groups who live there. “Erdogan is seeking to expand his support base among nationalists by talking tough over regional matters,” said Nihat Ali Ozcan, an analyst at the Economic Policy Research Foundation in Ankara. It’s “part of his political calculations for a presidential system,” Ozcan said. Last week’s domestic crackdown on Kurdish politicians, which triggered sharp falls on financial markets, may be part of

the same calculus. Likewise Erdogan’s recent support for reinstating the death penalty, which could be applied to Kurdish militants, as well as members of the Islamist secret society said to be behind the failed putsch in July. That idea won backing from the Nationalist Movement Party, or MHP, whose lawmakers would be swing voters when plans for constitutional change reach parliament. Requests for comment for this story to the Turkish presidency’s press office went unanswered. Ilnur Cevik, a chief adviser to Erdogan, also didn’t respond to calls seeking comment. Erdogan’s foreign policy has become more assertive since the coup attempt. In August he sent troops into Syria, where they’re pursuing Islamic State but also clashing with fighters linked to the separatist Kurdish PKK—the group that’s a main target of Erdogan’s crackdown at home. Its Syrian affiliates have established control over much of that country’s north during five years of civil war, and in doing so, emerged as a favored US fighting force in the ground war against Islamic State. In recent days, Turkey has been sending tanks and troops to its Iraqi border, too, ready to bolster a 2,000-strong force that’s already inside the country—despite loud protests from Baghdad. Erdogan insists that Turkey will join in the ongoing liberation of Mosul, the biggest Iraqi city in Islamic State’s self-proclaimed Caliphate. Justifying that stance, which has dismayed many allies, he’s repeatedly referred to Turkey’s past rule over the region. Bloomberg News/TNS

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Thursday, November 10, 2016

Japan OKs more reactors for restart amid opposition

apan’s nuclear regulator cleared another pair of reactors on the southernmost island of Kyushu for restart despite a growing chorus of opponents who object to any resumption of nuclear operations. The Nuclear Regulation Authority (NRA) approved a preliminary report on Wednesday that says Kyushu Electric Power Co.’s Genkai No. 3 and 4 reactors meet post-Fukushima safety rules, one of the biggest hurdles an operator must clear. A 30-day comment period must be held before any final approval. Genkai’s approval is another small step for Prime Minister Shinzo Abe, who has backed a policy of restarting the nation’s reactors in order to lower electricity rates, shore up the economy and boost global competitiveness. However, the looming threat of legal action and local opposition has put the fate of the entire restart process in doubt. Japan aims to have nuclear-power account for as much as 22 percent of its energy mix by 2030, compared with more than a quarter before Fukushima and a little more than 1 percent now. “This news will provide a boost for Japan’s nuclear industry, but progress to restart reactors still lags behind the initial hopes of incumbent utilities,” James Taverner, an energy analyst at IHS Markit Ltd., said by e-mail. “Japan’s policy-makers and regulators continue to have a challenge to carefully balance industry needs and public safety concerns.” Last year Kyushu Electric restarted the No. 1 and 2 reactors at its Sendai station, becoming the first utility to bring a reactor back online since new safety rules were brought in following the Fukushima disaster. Almost 51 percent of the citizens of Saga prefecture, where the Genkai plant is located, oppose its restart, while 39.3 percent approve, according to a regional newspaper poll conducted between September 30 and October 2.

The same poll last year showed that 45.3 percent of respondents were against the restart, while 46.8 percent approved. Restarting both units would boost net income by ¥12 billion ($117 million) a month, Naoko Iguchi, Tokyo-based spokesman for the utility, said by phone. The Sendai No. 1 and 2 reactors provided a ¥33 billion boost to net income for the six months ended on September 30, Masakatsu Tanaka, an official in Kyushu Electric’s Tokyo office, said last month.

Local approval needed

The Genkai reactors, with a combined capacity of 2.36 gigawatts, are expected to restart in the fiscal year ending March 2018, the Nikkei reported last month, citing President Michiaki Uriu. The company would consider lowering power rates once four units are online, Tokyo-based Kenji Kawabata, the company’s deputy regional director, said last year. Almost all the country’s reactors remain shut because of the new safety regulations and public opposition following the 2011 Fukushima disaster. Only two of Japan’s 42 operable reactors are producing power commercially as of October 6, when Kyushu Electric shut its Sendai No. 1 unit for maintenance. Sendai’s return to service may be delayed due to the recent election of a new governor in Kagoshima who strongly opposes its operation. Local government approval—including endorsement from the governor—is traditionally sought by Japanese utilities before returning plants to service. Tokyo Electric Power Co. Holdings Inc. fell the most in almost four months on October 17 after Ryuichi Yoneyama was elected governor of Niigata the previous day. Yoneyama opposes Tokyo Electric’s plan to restart its Kashiwazaki-Kariwa nuclear facility in his prefecture. Bloomberg News

Total, China join Iran’s first gas deal since sanctions eased

r an signed a $4.8-billion n at u r a l - g a s d e v e lo p me nt project with energy giants Total SA and China National Petroleum Corp. (CNPC), marking the first joint venture with international partners since sanctions on the Persian Gulf nation were eased in January. Paris-based Total will control 50.1 percent in the project, with CNPC taking 30 percent and Iran’s Petropars the rest. The deal, for the 11th phase of the offshore South Pars gas field, is still preliminary, with both sides signing a “heads of agreement,” according to Gholam-Reza Manouchehri, deputy director of National Iranian Oil Co. (NIOC). Total put the cost of the first phase of the project at $2 billion, with Total’s share at $1 billion, CEO Patrick Pouyanne said on a call on Tuesday. “It’s definitely in the interests of the country and now the partners to finalize the contract production, said at a signing ceremony in Tehran on Tuesday. Iran has the world’s biggest natural-gas reserves, estimated by BP Plc. at 1,201.4 trillion cubic feet (34 trillion cubic meters). The offshore South Pars gas field is Iran’s section of the world’s biggest deposit, also shared with Qatar. Iran is seeking to revive an energy industry crippled by international sanctions. The agreement signals that the country is trying to fast-track projects to boost oil-and-gas production amid low prices, analysts said. “Iran wants to go very quickly, and they are looking to sign agreements as soon as possible,” said Homayoun Falakshahi, a

specia list on the Iranian oi l industr y at consultant Wood Mackenzie Ltd. in London. The project is the first to be signed with an international oil company since Iran developed new oil contracts to attract foreign investment. Tehran earlier signed an agreement with a domestic company, Persia Oil and Gas Co., using the new contracts.

‘Attractive’ deal

Al astair Syme, an oil analyst at Citigroup Inc. in London, described the South Pars deal as “attractive,” estimating it would deliver returns of 19 percent for Total. In Iran’s previous buyback deals, which foreign groups disliked and which were used in the late 1990s and early 2000s, companies often achieved single-digit returns. Still, companies are likely to be wary about investing in Iran too quickly, or too much. “While the project terms look attractive, the political history clearly warrants limiting exposure,” Syme said. Total was working on developing the South Pars gas project until sanctions designed to halt the nation’s nuclear program forced the company to pull out in 2009. “I thank Total for returning,” Iran’s Oil Minister Bijan Namdar Zanganeh said. “The timing of this transaction has surprised us, coming as it does on US Election Day,” Jon Rigby, an oil analyst at UBS Group AG in London, said in a note. “Our working assumption has been that no deals would be signed with Iran until visibility on who the new US president was.” Bloomberg News

Gold sales at Zaveri Bazaar during the auspicious day of Akshaya Tritiya. Bloomberg News

Jewelers in demand as Indians seek to dispose banned bills

ndian jeweler Bachhraj Bamalwa’s phone hasn’t stopped ringing since Prime Minister Narendra Modi announced on national television that high-denomination bills will be withdrawn from Wednesday as the government cracks down on corruption. Five hundred rupee ($7.5) and 1,000 rupee notes will cease to be legal tender from Wednesday, Modi said in an unscheduled address to the nation. With bullion usually purchased in cash in India, the announcement led to a frenzy among people wanting to convert their cash hoard into gold. That spurred some wholesalers to boost prices by as much as 23 percent, said Kumar Jain, owner of U.T. Zaveri jewelry store in Mumbai. Demand in the world’s secondlargest bullion consumer will dry up soon as cash supply dwindles, said Bamalwa, who’s also a director with the All India Gems and Jewellery Trade Federation. Modi ’s move will hit jewelry purchases, which were poised to fall even before Tuesday’s announcement. Elevated gold prices and India’s push for more transparency on purchases and income disclosure will cut the nation’s demand for bullion in 2016 to its lowest in seven years,

500 & 1,000 rupees The denomination of rupees the government announced that have to be withdrawn from circulation before consumption recovers in 2017, the World Gold Council said on Tuesday. T he immediate effect may be a ver y short-term splurge of spend ing on gold jewel r y and other high-value articles as individuals seek to off load the soon-to-be obsolete notes, said Tom Kendall, head of precious metals strateg y at ICBC Standard Bank Plc., in a report on Tuesday. “ This latest effort to crack down on the informal sector may be helpful in squeezing out undeclared gold f lows.”

Cash transactions

Some shops were open until midnight in Mumbai ’s big gest bu l lion market, Zaver i Bazaar, seek ing to tap demand, said Ketan Shroff, spokesman for the India Bu l lion and Jewellers A s so c i at ion Ltd . “A f ter that jewelers might have to go on a holiday as no cash sa les w il l happen.” The government should have circulated the new notes before discontinuing the old ones as it will be tough for jewelers in the coming months until liquidity improves, Shroff said. India’s mainly unorganized jewelr y market under ta kes transactions mostly in cash as rural India, which makes up nearly 60 percent of the total demand, has limited access to the banking system and rarely uses credit and debit cards for purchases. “I have been getting calls from customers to open our store so that they can buy gold and pay by cash but we have refused and we will only accept legal tenders,” Bamalwa said. Shares of jewelers plunged the most in over three years in Mumbai on Wednesday. Titan Co. Ltd. dropped as much as 15 percent, Gitanja li Gems Ltd. plunged as much as 20 percent, and Tribhovandas Bhimji Zaveri Ltd. slumped as much as 18 percent. Gold futures in Mumbai declined as much as 1.2 percent to 29,731 rupees on Tuesday, the lowest in more than a week.

Panic and chaos

The step by Modi, who is approaching the half-way mark of his term, is an attempt to fulfill his election promise of curbing tax evasion and recovering illegal income, locally known as black money. The move led to chaos across Indian cities as people lined up outside cash dispensing machines and fuel pumps. “People are here because of the government’s decision—there is definitely panic,” said Anil Prasad, a supervisor at the Batra fuel pump in New Delhi. In Thane, near Mumbai, a fuel pump stopped selling diesel to avoid further chaos, said Mukesh Manik, a pump attendant. The notes in circulation will have to be deposited in banks by the end of December, Modi said in a late evening speech. This is the first time since 1978 the government has withdrawn money from circulation, according to the central bank ’s web site. “Misuse of cash has led to artificial increase in property, land prices,” Modi said. “ This step will strengthen the fight against corruption.” The S&P BSE Sensex tumbled as much as 6.1 percent before trading 2.6 percent lower at 9:58 a.m. in Mumbai. The rupee dropped 0.2 percent to 66.75 per dollar, prices from local banks compiled by Bloomberg show. A gauge of real-estate shares sank as much as 14 percent amid India’s biggest crackdown against corruption in almost four decades. Bloomberg News

Japan lawmakers to review $6.7-B Russia gas pipe ahead of Putin visit

apanese lawmakers are revisiting a plan to build a $6.7-billion natural-gas pipeline from Russia ahead of a visit by President Vladimir Putin to the Asian country next month. A group of about 80 lawmakers from ruling parties will ask the government by the end of this month to carry out a feasibility study on the project, Naokazu Takemoto, the secretary-general of the group, said in an interview. The proposed pipeline linking Sakhalin island with Tokyo is estimated to be as long as 1,500 kilometers and cost about ¥700 billion, a study by the group shows. Prime Minister Shinzo Abe is seeking to deepen economic ties with Russia in an effort to resolve a 70-year-old row over four disputed islands off Hokkaido. Expanding energy cooperation can help Japan diversify

supply sou rces a s t he cou ntry imports almost all its fuel needs, while Russia, struggling to climb out of a recession amid western sanctions and low oil prices, can gain a market share in Asia’s second-biggest economy. “As we want the return of all four islands of the Northern Territories, we should offer something that makes Russia happy,” Takemoto said on November 4 in Tokyo. “To that end, the Japan-Russia naturalgas pipeline plan is one of options. Russia’s economy has recovered a bit, but is still in great difficulty. They want to sell natural resources, particularly natural gas.”

Biggest buyer

The pipeline may transport about 25 billion cubic meters a year of gas to Japan and generate annual revenue of about ¥200 billion, according to the study. Japan,

the world’s biggest buyer of liquefied natural gas (LNG), paid ¥5.5 trillion ($53 billion) to import 85 million tons of LNG last year, Ministry of Finance data show. Russia accounted for about 8.9 percent of the total, the fourthbiggest supplier after Australia, Malaysia and Qatar. An official of Jera Co., a joint venture between Tokyo Electric Power Co. Holdings Inc., Japan’s biggest power utility, and Chubu Electric Power Co., indicated interest in the project in a recent meeting with Takemoto, the lawmaker said, without identifying the official. Takemoto wants to hear from other utilities whether they are into pipeline gas, he said. “ Sec u r i ng energ y sec u r it y and competitiveness is a major premise for construction of an inter nat iona l pipel ine,” Jera spokesman Atsuo Sawaki said

on November 7 in an e-mail response to questions from Bloomberg News. “If those two points can be ensured, we would like to carefully consider the use” of the pipeline, Sawaki said. To gas importers, sees Russia as a “potential source of pipeline gas to Japan,” Hiroyuki Sagawa, manager of the company’s gas resources department, said in September. Russia’s Gazprom PJSC, the world’s biggest natural-gas exporter, will revisit the possibility of building the pipeline, the Nikkei newspaper reported in September, citing Deputy Chief E xec ut ive Of f icer A le x a nder Medvedev. It received “strong, repeated requests” from Japanese business and political leaders to reconsider the project, according to the report. Gazprom’s press service declined to comment on the pipeline. Bloomberg News

A10 Thursday, November 10, 2016 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

A stupid story

he deaths of Albuera Mayor Rolando Espinosa and inmate Raul Yap inside their cell in Baybay Sub-Provincial Jail in Leyte early Saturday morning is a slap on the face of the rule of law. The incident cows our sensibility. No idiot can believe the Philippine National Police’s (PNP) explanation that the mayor was killed inside his cell while fighting back with a gun as he was about to be served a warrant.

Can the PNP prove their narrative that Espinosa and Yap were the ones who first fired their guns? Where did the inmates get their guns? And why serve a warrant in jail at 4 in the morning? Why not coordinate with the sheriff to serve the warrant since they were already detained? Why were the jail guards not present when the warrant was being served? As confirmed by Eastern Visayas Police Director Chief Supt. Elmer Beltejar, the Criminal Investigation and Detection Group (CIDG) Region 8 office that carried out the operation made no effort to coordinate with his office. Now, if this was a deliberate operation by the CIDG meant to kill Espinosa, who were the powerful people behind the killing? Are they politicians, policemen or high-ranking officials who were involved in drug trafficking and who want to protect their own scalp by eliminating Espinosa? If this involves the possibility of cover-up for certain personalities in the Espinosa father-and-son protection payola as the motive for the killing, it is the PNP’s job to find out. With Espinosa dead, however, will the public ever know who his accomplices are, and where his supplies come from? How will this double murder in a Leyte jail affect the PNP’s credibility at a time when human-rights groups are questioning police operations involving drug suspects killed under similarly suspicious circumstances? Here’s what smells murder: There are closed-circuit television (CCTV) cameras in that facility that recorded the incident, but why is the hard drive containing the footage inside the jail missing? A witness said there was a near shootout when guards at the Baybay jail refused to allow the CIDG agents inside because they supposedly did not have a copy of the search warrant with them. Is this a case of armed intrusion? Let’s hear from a senator who read the autopsy: “Why were the shots all downwards all through the stomach and through the chest, which means these are marks of somebody who is begging for his life?” Another solon believes the mayor’s death falls under extrajudicial killing and is a possible cover-up for certain personalities. Is the incident related to the ambush killing of Espinosa’s lawyer in August? Sen. Richard J. Gordon, head of the Senate Committee on Justice, said this incident “is a dagger in the heart of the criminal justice system, as it appears that even those who are in custody of the law are no longer safe.” He said: “How can we encourage suspects to surrender under the law in this situation? It signals a desperate system—a take-no-prisoners approach.” Has this incident created an atmosphere of intimidation and put everybody in danger as Gordon fears? Will the PNP be able to allay fear among our people that it is capable of protecting the citizens and delivering justice to them under the rule of law? The people are waiting for answers. Since 2005

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OUTSIDE THE BOX

‘I

dentity politics” is defined as a candidate taking positions and offering ideas/solutions for the interests and perspectives of the social groups with which people identify themselves.

Historically, that might have meant that if people in rural areas did not have electricity, the politician would go to them and tell the people that he or she would get that taken care of. Former US President Lyndon Johnson won his congressional seat, because rural farmers had huge electricity-distribution towers standing on their land, and yet used kerosene for lighting. Because it is easier to talk about gender, race, religion and other “social issues”, these have tended to be a large part of political-campaign rhetoric. Further, in the days before 24/7 media and the Internet, politicians spent much time with the people trying to get them to feel that the candidate was “one of them”. Every Philippine presidential candidate must be

photographed at the palengke looking at vegetables or at the carinderia eating rice and dried fish. However, in the 21st century, those social issues have become less and less a traditional “identity” thing as they were before, when these might have been taboo topics. Equal legal treatment based on religion, race and gender is more of a concern to everyone in or out of those categories than before. Only a miniscule minority is going to say that women or gays, for example, should not be treated equally. The detailed implementation of legal equality may vary, but the previous biases are not as critical to the average person as before. Further, in the current climate, no matter where you might stand

Presumptive US presidential election winner Donald Trump caused a huge uproar with his statements on illegal immigration, particularly from Mexico. And Hispanics went in overwhelming majority to vote for Hillary Clinton. Yet, it may turn out that Trump received a greater Hispanic vote than the experts predicted.

on the social-issues spectrum, better health care, better educational opportunities, crime and jobs are more defining “identities”. But those are the hard problems that politicians would actually like to avoid discussing, because there are no easy onesentence solutions. Presumptive US presidential election winner Donald Trump caused a huge uproar with his statements on illegal immigration, particularly from Mexico. And Hispanics went in overwhelming majority to vote for Hillary Clinton. Yet, it may turn out that Trump received a greater Hispanic vote than the experts predicted. Immigration is certainly a Hispanic identity issue but it is not the only concern. According to exit

Debilitating sports through politics

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

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Trump and the death of ‘identity politics’

Ariel F. Nepomuceno

DECISION TIME

ollowing his recent impressive world welterweight-title victory over Jessie Vargas, fighting Sen. Manny Pacquiao demonstrated he still has the mighty punch despite a dramatic loss to Mayweather in their 2015 fight. This win restored Pacquiao to the boxing world’s pound-for-pound rankings.

Several lawmakers and a sprinkle of showbiz personalities witnessed him fight. And upon coming back from Los Angeles, was accompanied by former Ilocos Sur Gov. Chavit C. Singson and National Police chief Ronald M. de la Rosa. Instead of going back to the province, Pacquiao went straight to the Senate to resume his public duties. Indeed, a literal but powerful demonstration of the interrelation of politics and sports, often regarded by sports critics and analysts as a pitfall rather than an advantage.

and Filipinos love their athletes passionately, win or lose. And with good reason. We have the likes of Leopoldo Serrantes, Onyok Velasco, Lydia de Vega, Paeng Nepomuceno, Akiko Thomson, Eugene Torre, Efren “Bata” Reyes, Nonito Donaire and the many others who we all ardently cheered and prayed for. But why do we fail miserably in international sports competition? Why are our athletes continuously demoralized and eternally complaining about their plight?

Individual excellence

Perennial challenges

The country adores sports heroes,

The ails of Philippine sports have

The ails of Philippine sports have been attributed to many factors—the great lack of funding, absence of a comprehensive sports- development program, gross mismanagement and corruption and, most of all, the nasty and divisive politics among the different government agencies that are mandated to take care of our athletes. been attributed to many factors— the great lack of funding, absence of a comprehensive sports-development program, gross mismanagement and corruption and, most of all, the nasty and divisive politics among the different government agencies that are mandated to take care of our athletes. The raw facts would show the constant conflicts between the national sports associations, Philippine Sports Commission (PSC) and the Philippine Olympic Committee (POC). Allegations of misuse of funds, unhealthy alliances with

polls, Obama received 71 percent of the Hispanic vote in 2012. In 2016 Clinton received 65 percent. In 2016 57 percent of Hispanic voters said they are dissatisfied with the way things are going in the US, up from 50 percent in 2012. The “friendliness” and “just like me” factor of identity politics may be gone also. Again, according to exit polls, 60 percent of the people saying they voted for Trump also said they do not like him. In this day, we know that the presidential candidate at the wet market will never be seen there again until the next campaign. And we do not care. What the people want is to hear sensible and even daring and courageous ideas to solve everyday concerns that will turn into great problems in the future. If your house is burning down, you don’t ask for a get-to-know-you chat from the firefighter. Traditional identity politics may be dead, as people across social and economic classes want solution-based answers to similar apprehensions.

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

private companies and personal animosities among our sports leaders have crippled our athletes, and deprived them of chances of bringing glory to the country. And it seems that our government has not made anyone accountable for these failures.

Big pool of talents

The Philippines is teeming with talent. From cities to the barrios, there are undiscovered terrains of potential stars in basketball, football, tennis, boxing, gymnastics and others. We have to harness these strengths, rigorously train, provide adequate funding and support them as they compete internationally. That sports is a unifying tool and a great purveyor of any country’s heritage and cultural identity is not a matter to be debated upon. It is a reality. Sports is an enabler, and should be tapped for binding us closer as a nation. And sports will always be an instrument in getting the respect of other countries. For comments and suggestions, arielnepo. businessmirror@gmail.com.

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Trump’s victory proves US is unexceptional

To rule earth with justice Msgr. Sabino A. Vengco Jr.

Alálaong Bagá

Leonid Bershidsky

BLOOMBERG VIEW

o need for tears and hand-wringing, US friends. What happened on Tuesday was not a collapse of your democracy —just a powerful blow to American exceptionalism and the misplaced arrogance of the US elite. Donald Trump won by using a mix that has been effective in Eastern Europe since the turn of the century: a combination of strong nationalism and an anticorruption agenda. At a hotel in an Orlando, Florida, suburb at 7 p.m. on Tuesday night, a dozen Osceola County Republicans gathered around a TV tuned to Fox News. They were early comers to an event billed as a victory party—the Osceola Republican Party was going to celebrate some modest down-ballot wins—but these people were more interested in the presidential race. They looked cocky and overconfident about Trump’s performance. “He’s going to run the table,” a gray-haired gentleman in an Air Force cap said as the first results came in. They toasted one another with beer. “To the wall,” said an olive-skinned woman who explained that she was herself an immigrant, from Romania. They didn’t really feel this confidence. As the numbers changed on the screen, faces grew tense and the body language betrayed anxiety. Mobile phones came out of pockets as the Trump fans perused the various online election maps and discussed their candidate’s paths to victory, still unlikely at that point. Three hours later, a woman in a cowboy hat climbed up on a chair and screamed: “They’ve just called Florida for Donald Trump!” And she brandished a rubber mask of Hillary Clinton as a witch as if it was the Democratic nominee’s severed head. A huge cheer went up. It did turn out to be a real victory party, after all. Many will say Trump’s victory was fueled by racism and xenophobia. It’s more complicated than that. The pro-Trump Orlando crowd wasn’t an all-white, all-male audience. The day before, when Orlando government relations consultant Bertica Cabrera Morris, a Trump surrogate, told me the Republicans hadn’t really botched Hispanic outreach and would deliver plenty of votes to their candidate, it was all I could do not to show disbelief. Yet she was right: Spanish was heard in that hotel ballroom. Women, too, were well-represented. Clearly, enough Latinos and enough women didn’t believe Trump’s words about them had been particularly offensive. This is just anecdotal evidence, of course, and so is the fact that, in my travels around the US this year, I met far more people who were enthusiastic about Trump than about Clinton. But then, do we have anything but anecdotal evidence to go on anymore? Clearly, most pollsters and pundits were so wrong that everything they said all year should have been disregarded. I am sorry I didn’t have the courage to do so, unlike some people I met—for example, Las Vegas lawyer Robert Barnes, who has, since the primaries, consistently predicted a Trump victory and who has now made hundreds of thousands of dollars for himself and the clients he advised to place bets on Trump with European bookmakers. The signs he and other gamblers saw—many of them rather unscientific—turned out to be more valid than the arrogant opinions and authoritative-looking calculations of pollsters, academics, political operatives and veteran commentators. I should have listened to Barnes, and to dozens of ordinary Americans who explained to me why they preferred Trump to Clinton. Only a small number of them indicated they were xenophobic. Most were unhappy about their economic situation, particularly rising Obamacare premiums and the precariousness of their incomes, and every one of them considered Clinton corrupt. As one Trump supporter in Orlando put it on Tuesday night, “I’d rather have the mafia run the US government than Hillary Clinton: They are less crooked.” That should have told me something

important—or, rather, confirmed something I’d known from another part of the world. Trump probably won because, by the end of his campaign, he wasn’t just a nationalist populist, like the kind that has recently achieved increasing success in Europe, without, however, winning commanding heights. He was also an anticorruption crusader. He was smart to pick up on the opportunity given to him by WikiLeaks, which tweeted on Tuesday night, “The American people don’t like corruption.” Anticorruption parties saw major electoral success in Central and Eastern Europe, joining or leading governing coalitions in a number of countries—Poland, Slovakia, Estonia, Latvia, Slovakia, Bulgaria—in the 2000s. Far from all of them, however, survived their second, not to mention their third election. The most successful of them—Poland’s Law and Justice (PiS)—runs the country today because it has artfully combined an anticorruption agenda with nationalist populism. This combination has tempted many post-Soviet politicians, too. Former Georgian President Mikheil Saakashvili honed it after his country’s 2003 “Rose Revolution,” and then, when he was swept out of power after significantly changing his country, he brought it with him to Ukraine. This week he resigned as governor of Ukraine’s Odessa region to build a strong party and fight for an early parliamentary election. He announced his resignation in a Trumplike self-pitying, vindictive speech. He blamed corruption in President Petro Poroshenko’s administration and cabinet for his failure to reform customs and public services in the region. He said the president personally supported corrupt “criminal clans” in Odessa, and he vowed to “begin a new stage of the struggle.” “I am the soldier who forges ahead while he can and then as long as he must,” Saakashvili said. “As long as he must until a total victory, until Ukraine is purged of this filth, of this corrupt dirt.” As I watched the speech, I half expected the audience to start chanting “Drain the swamp,” as crowds have done at recent Trump rallies. Ukrainians may yet learn the chant as Saakashvili’s campaign progresses. It’s highly ironic if it was Russia that provided Trump with his WikiLeaks ammunition. There, an anticorruption, nationalist populist, Alexei Navalny, is probably the strongest figure in the beleaguered opposition to Vladimir Putin regime. Putin, who is not a nativist and whose close circle is notoriously corrupt, is the sworn enemy of nationalist anticorruption movements in Russia’s immediate vicinity, and he is their number one target. PiS in Poland is strongly anti-Putin, too. By winning a presidential election with a distinctly Eastern European recipe, Trump has shown that there’s not that much difference between, say, Americans and Poles or Americans and Georgians. It’s as easy to appeal to their national pride, tying it in with their economic discomfort, and their understanding of official corruption is quite similar. In August Navalny published a post comparing Clinton’s increasingly expensive residences with the far grander palaces of Russian officials. He made an important point, but to the anticorruption voter in Eastern Europe, schooled by more than a decade of politics as investigation followed by invective, Clinton still looks corrupt. Her exorbitant speaking fees would have been decried in Ukraine or Georgia as a form of graft. The Clinton’s failure to draw clear lines between their charitable foundation and their private business—which looks suspiciously like influence peddling— would have tarnished their reputations in these countries, probably to a greater extent than they did in the US.

he Lord comes to rule the people with equity, sing joyfully (Psalm 98:5-6, 7-8, 9). His glorious coming means the fulfillment of his loving promise to give us salvation (Luke 21:5-19).

He comes to rule Celebrating the reign of God as King over all, the psalmist in imperative after imperative summons all creation to acclaim Him. Specifying first on the instruments used as in an enthronement ceremony, the harp or lyre is to accompany the melodious singing, and the trumpets and the ram’s horn like a clarion are to acknowledge Him joyfully in His coming in glory, as at the foot of Mount Sinai (Exodus 19:16). The cosmic scope of the divine rule includes both the entire world and the sea. All the nations, all peoples are invited to glorify the Lord, and along with humankind the inanimate world is called to praise His

rule over, all the earth, including the rivers and the mountains. The reference to the sea and all that fills it alludes to yam, the Hebrew word for “sea” and the name of the mythological god of watery chaos vanquished during the primordial battle and now reduced to a subdued body of water under God’s control. This cosmic throng is to sing praise to God, for He is coming to establish His reign of justice and equity over all. He will judge the world with righteousness and the peoples with equity. The eschatological character of the judgment, presumably the final judgment, means setting everything in order so that life can be fulfilled. Hope is in this reordering.

Thursday, November 10, 2016 A11

Saved by faithfulness The temple in Jerusalem was certainly something the Jewish people took pride in. It was the second temple rebuilt after the Babylonian exile, and the renovation by King Herod had made it truly resplendent. With some hyperbole, Jesus predicted to the admiring bystanders that not a stone of the temple would remain upon another stone: so complete would be its destruction. The text concentrates on the signs preceding the coming devastation that should alert the people. But signs, as they point to a deeper reality, need to be interpreted correctly. Jesus warned against those who might appear claiming even in His name to interpret the meaning of the horrendous events to take place. Upheaval and utter gloom would be ushered in by the signs, including political unrest and natural catastrophes, believed by people to precede the end of time. Before the end, Jesus warned, something more personal will happen. There will be persecutions of his followers at the hand of those in power, friends and even their own families. The point is not merely that of suffering, but that it will be in His name. Their very death will be in testimony to the name of

Jesus and in their fidelity to their commitment to Him. They will be saved, as they are faithful to the end. Alálaong bagá, Jesus is preparing people for the future, the time of eschatological fulfilment. We only have hints in Scripture about the end-time that need to be interpreted properly. But one thing is sure —the role God will play. The Lord will come in glory and power to set all things right. The distorted order of sin and injustice in the world will be overturned, humankind and the world will have to undergo upheaval to be transformed in the age to come. Not taking the metaphoric or symbolic descriptions literally, the coming of the Lord enkindles in us faith in God’s love and might and mercy. We acclaim and sing praise to God because we know that good will ultimately triumph and that God’s reign will be established over all. Of paramount importance is that we believers live here and now in fidelity to Christ and with patient endurance of the challenges along the way. Join me in meditating on the Word of God every Sunday, 5 to 6 a.m. on dwIZ 882, or by audio-streaming on www.dwiz882.com.

Clarifying local business taxes on holding companies Atty. Jared C. Vicencio

Tax law for business

he Court of Tax Appeals (CTA) has recently released several decisions involving different holding companies questioning the applicability of local business tax on dividend income. Most, if not all, raise a central question in their petitions: Are dividend income earned by holding companies subject to local business tax? Despite the singular question posed before the tax court, the companies were met with varying degrees of success. This seeming inconsistency embodied in several CTA decisions may be clarified by looking closely at an emerging trend in the decisions themselves. A closer inspection of the decisions will reveal that the outcome of the case largely depends on the Court’s finding if the corporation concerned is actually a financial intermediary or not. The Court actually seem settled on the legal issue that dividend income of holding companies are not subject to local business tax. However, the law does allow imposing local business

taxes on dividend income of financial intermediaries and holding companies on the receiving end of adverse decisions were found to be acting as such (i.e., as financial intermediaries). This paradigm shift has been clear in two recently decided cases by different divisions of the tax court. In the cases of CTA AC 161 and CTA AC 148, the differing divisions of

India goes cashless By Mihir Sharma Bloomberg View

T certainly took everyone in India by surprise. But then, Prime Minister Narendra Modi has a flair for the dramatic. In an unexpected prime-time address on Tuesday, he announced that in a few hours, millions of high-denomination currency notes would no longer be legal tender. It was the only way, he insisted, to deal with “the disease” of unaccounted-for income—or “black money”, as it’s called in India. “Your money will remain yours,” he assured a stunned citizenry—as long as you get around to depositing it in post offices sometime over the next several weeks. As with everything the Indian government does, there’s a complex system of exemptions and exceptions to this demonetization. If you’re in an accident, for example, you can still pay the emergency room in 1,000 rupee notes. Also, for some reason, if you want to buy milk. Meanwhile, withdrawals from ATMs have been limited to 2,000 rupees a day for the next few days; returning bills to banks will require some form of government ID; and so on and so forth. Typically for India, a simple enough policy—indeed, one perhaps too simplistic in conception—somehow had enough fine print to confuse people. Still, once India endures what could be a pretty chaotic transition,

will Modi’s big idea work? There are certainly big advantages to going cashless. And black money in India is certainly a huge problem. The Indian economy is as much “informal” as it is formal—meaning that most enterprises operate under the regulatory and legal radar. They don’t have to depend on bank accounts; cash payments are the norm. An unknown—but certainly significantly large—proportion of Indian national income is, thus, unaccounted for. It’s perhaps as much as a fifth of India’s GDP, or more than $450 billion. Some of Modi’s more eccentric ideological fellow-travelers have long argued for a measure like this one, to force the informal economy toward formal finance and into the tax net. The yoga teacher-turnedtycoon Baba Ramdev, for example, has been agitating against highdenomination currency notes for years. And the idea of cash as the villain has percolated into the mainstream. The ex-CEO of Standard Chartered Plc. wrote a paper this February urging the Group of 20 to ban €500, $100, and £50 notes, an idea backed by Larry Summers. Across Asia, countries are moving away from high-denomination notes: Korea plans to go cashless by 2020. Even a group of retired judges that the Indian government put in charge of examining the blackmoney problem recommended cutting down on cash transactions.

the Tax Court were unanimous in hinging their respective decisions on whether the respective holding companies may be considered as financial intermediaries. It becomes apparent that the legal issue on taxability of holding companies seem settled. Both cases relied heavily on the earlier en banc decision in CTA EB 1093, where the Court discussed why dividend income may not be subject to local business tax. Both divisions of the Tax Court also determined if the respective corporations were operating as financial intermediaries. The decisions diverge, however, in how the respective divisions appreciated the weight of a corporation’s primary purpose in arriving to their own conclusions. On the one hand, the First Division of the Tax Court in CTA AC 161 explicitly mentioned that a corporation may not be assumed to be engaged as a financial intermediary based solely on its primary purpose. The First Division seem to place due emphasis on actually proving that the corporation is, indeed, primarily engaged in activities of a financial

intermediary. On the other hand, the Second Division, in CTA AC 148 case placed more importance on an analysis of the primary purpose. Although the division did not make an extensive discussion, it may be inferred that the question of being a financial intermediary may be settled by an examination of the primary purpose. Given that the weight of a corporation’s primary purpose as stated in its Articles of Incorporation has not been clearly outlined, it is only prudent to ensure that the primary purpose of any holding company be stated in such a way as to clearly reflect its intended existence as such.

As with everything the Indian government does, there’s a complex system of exemptions and exceptions to this demonetization. If you’re in an accident, for example, you can still pay the emergency room in 1,000 rupee notes. Also, for some reason, if you want to buy milk.

ernment’s taken a big step against tax evasion. Within seconds of the speech, I got a message on WhatsApp from my personal banker, calling the move a “surgical strike” against black money; the phrase drew a parallel with a widely popular attack by Indian soldiers last month on terrorist staging camps across the Line of Control in Kashmir. Yet, while a shortage of currency —and remember, 500 rupees is only $7.50—might well make it harder to hide from the taxman, it will also make things much tougher for small businesses and for the poor. India’s a far-flung economy that lives in many centuries at once, and automated teller machine cards or mobile payments may not have percolated far enough. There will probably be a price to be paid in efficiency—and the poor will pay a disproportionate share of that price. So while, in the end, a demonetization of this kind may have been necessary, it’s likely that Modi pushed it through a few years too soon. I’ve argued before that India has what it takes to become the world’s first cashless economy. But that will need the private sector to create the cheap and easy mechanisms for cash transfers using smartphones that would make cash redundant. And while that process is ongoing and swift, it’s far from complete. India is closer to becoming a cashless economy, but the route there hasn’t been made any easier.

But nobody expected Modi to act quite so decisively or quite as fast. His famed organizational skills were certainly on display: His cabinet decided, the prime minister addressed the nation and the governor of the Reserve Bank of India—whose signature is on the notes, after all—followed him on TV with a message of calm. And all this, without even a hint of the plan leaking out in advance. In some ways, Modi’s hand was forced. One of his most potent promises when on the campaign trail in 2014 was to “bring back black money” from foreign tax havens. In spite of any number of news releases and a much-hyped amnesty scheme, he couldn’t live up to that promise. The amnesty, in particular, was a conspicuous failure, bringing in a tiny fraction of the money that Indonesia and Argentina have repatriated using similar amnesty windows. With this announcement, Modi’s turned a political liability into a political success; there isn’t a voter in India who won’t know that their gov-

The author is a junior associate of Du-Baladad and Associates Law Offices, a member firm of World Tax Services. The article is for general information only and is not intended, nor should be construed as a substitute for tax, legal or financial advice on any specific matter. Applicability of this article to any actual or particular tax or legal issue should be supported, therefore, by a professional study or advice. If you have any comments or questions concerning the article, you may e-mail the author at jared.vicencio@ bdblaw.com.ph or call 403-2001 local 370.

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House panel approves bill giving ‘better deal’ to squatter families

By Jovee Marie N. dela Cruz

@joveemarie

he House Committee on Housing and Urban Development has recently approved a measure establishing an on-site, in-city, or near-city resettlement program to squatter families. Committee Chairman Rep. Alfredo Benitez of Negros Occidental said House Bill 82, or the Onsite, In-City or Near-City Resettlement Act, is included in the package of measures that seek to address the country’s 5.5 million housing backlogs and squatter problem. There are about 1.5 million squatter residents in the country, of whom almost 600,000 are found in Metro Manila, he said. “More than a decade after the passage of the landmark legislation that is Republic Act 7279, or the Urban Development and Housing Act of 1992, the Philippines is still struggling to improve its housing indicators. The government is having a difficulty in catching up with the housing demands of the burgeoning population of the country,” Benitez of the PDPLaban said. Quoting figures from the Philippine Statistics Authority, he said Metro Manila is home to 11.9 million people, making it one of the world’s most densely populated cities. “Government programs before were focused on the relocation of

informal settlers to areas outside [of] Metro Manila, where they have no access to livelihood and other basic services.”

People plan

“The scenario is that the informalsettler families [ISFs] are pushed to go back to informal settlements in the urban centers again, because of their need to find a source of income for their family’s daily needs,” he added. According to Benitez, the committee report of the measure will be submitted next week for plenary consideration. The bill promotes a so-called People’s Plan as a tool that recognizes the need for adequate consultation and participation of the beneficiaries themselves in planning their resettlement. The measure said on-site development shall be implemented after adequate and genuine consultation with the affected squatter residents, and in accordance with the people’s plan formulated pursuant in his act in order to ensure minimum movement of

occupants of blighted lands and slum areas. “Should in-city resettlement not be feasible, near-city resettlement shall be considered. Off-city resettlement shall only be resorted to when directly requested by the affected ISFs themselves, and must satisfy the requirements of adequate and genuine consultation prior to relocation,” the measure added.

Other bills

Benitez also said his committee will tackle next the bill on urban renewal, which includes the transfer of government offices to the provinces, and a resolution standardizing the definitions of housing terminologies. These two measures are included in the package of measures addressing the housing backlogs and squatting. Benitez said the bill seeks to create the Administrative Capital City Planning Commission to lead the development of a comprehensive plan to relocate the government agencies and establish an administrative capital city outside Metro Manila. “There is a need to rethink and develop a master plan that will decongest Metro Manila. Relocation of capitals has already been done by several countries. Malaysia, for instance, built a new administrative capital to ease congestion in Kuala Lumpur. Brazil relocated its capital to a more central location, closer to other regions and carved a new city out of wilderness in the

Brazilian Highlands. South Korea is also in the process of transferring most of its government offices to a new administrative capital called Sejong City,” the lawmaker said. “Overpopulation, traffic congestion and high vulnerability to natural disasters have made Metropolitan Manila or the National Capital Region a pariah among world cities,” he added. Under the bill, the commission shall conduct a feasibility study of relocating most of the government agencies outside Metro Manila. The commission will be placed under the Office of the President. “The authority to call upon any department, bureau, office, agency, or instrumentality of the government, including governmentowned or -controlled corporations, government financial institutions, and request non-governmental organizations, the private sector and other entities for assistance as the circumstances and exigencies may require in carrying out his mandate,” the bill stated.

and foreign consultants and experts in the development of the master plan. According to the bill, the master plan for the establishment of an administrative city shall have as their general purposes to guide and accomplish a coordinated, adjusted, harmonious development of the capital of the Philippines, which will, in accordance with the present and future needs, best promote health, safety, morals, order, convenience and prosperity. The measure said the amount necessary to implement measure shall be included under the budget of the Office of the President in the annual General Appropriations Act.

New cities

The scenario is that the informalsettler families are pushed to go back to informal settlements in the urban centers again, because of their need to find a source of income for their family’s daily needs.”—Benitez

It added that the commission shall also submit to the President the mechanisms and oversee the initial phase of the transfer of the government agencies. The measure said the commission shall identify the suitable site for the administrative city and provide a master plan for the development of the site. The bill allows the commission to engage the assistance of local

Semantics

Benitez added his committee will also tackle a joint resolution standardizing the definitions of housing terminologies. According to the lawmaker, the lack of standard definitions of terminologies slowed down government and the private sectors’

housing programs. “Many housing terminologies have become technical gobbledygook that have sown confusion and slowed down the development of the housing industry in the country,” Benitez said. “There exist various housing programs enacted through different laws that are intended to address the need for affordable and decent housing, but the lack of a standardized definition of significant housing terminologies, characterized only by the ambiguous, if sometimes, conflicting definition of terms essential to housing, creates confusion among government agencies, the private sector and other housing stakeholders,” he added. The lawmaker said the joint resolution provides a standard definition to 379 housing terms. He added that the standard definitions were agreed upon by at least 15 agencies and organizations involved in the recent National Housing Summit.