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the broader look
IPOPHL wants 2-yr cap in litigation of IP cases
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By Catherine N. Pillas
@c_pillas29
he Intellectual Property Office of the Philippines (IPOPHL) said it is eyeing to revise the implementing rules and regulations (IRR) covering violations of intellectual-property (IP) rights to cut the time it takes to resolve cases.
3,016
The number of intellectualproperty cases received by the IPOPHL from 2011 to 2015 The IPOPHL said it is keen on capping the litigation period of disputes to just two years. Given the Continued on A2
Pinoys with intellectual disability swim against tide of prejudices »B4-B5
TRUMP, DUTERTE CAN’T STOP PHL’S GROWTH SURGE
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CHRISTMAS SPECTACLE The Festival of Lights opened on Wednesday in Makati City. Gracing the event are (from left) Rep. Luis Campos of the Second District of Makati; Bobby Dy, president and CEO of Ayala Land Inc. (ALI); Makati City Mayor Abigail Binay; Makati City Vice Mayor Monique Lagdameo; and Meean Dy, ALI senior vice president. Ayala Triangle Gardens’s Festival of Lights is the signature lights-and-sound show that continues to attract thousands of Filipinos during the Yuletide season. NONIE REYES
Singapore, Malaysia edge PHL in English-proficiency ranking
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H E Ph i l i p p i n e s j o i n s Malaysia in the top 15 countries worldwide with the best nonnative English speakers in the world, an international education company’s ranking revealed. Of 72 countries, the Philippines was ranked 13th in the English Proficiency Index (EPI) released on November 15 by Education First (EF) Ltd. Among 19 countries in Asia, the Philippines was ranked third. Malaysia, to note, was 12th in the sixth edition of the EF EPI ranking. EF said its EPI ranking was based on test data from more than 950,000 adults who took the Lu-
60.33 The English-proficiency index of the Philippines, 13th highest globally
cerne, Switzerland-based firm’s online English tests in 2015. Both the Philippines and Malaysia were tagged with a high English-proficiency level. The Philippines has an EF EPI score of 60.33, while Malaysia has an
PESO exchange rates n US 49.1800
EF EPI score of 60.70. Of the 19 countries in Asia, only Singapore was included in the top 10, at No. 6 worldwide. Singapore has a very high proficiency level, with an EF EPI score of 63.52. “For the first time, an Asian country, Singapore, is in the highest proficiency band,” said EF, a privately held firm founded in 1965 by Bertil Hult and family. Worldw ide, adu lt s i n t he Netherlands are the best nonnative English speakers. Lao PDR, Libya and Iraq occupy the bottom of the rankings. Singapore tops the countries
in Asia, followed by Malaysia and the Philippines. India is the fourth in Asia, with an EF EPI score of 57.30, while Laos is in the bottom rung among 19 countries in the region, with an EF EPI score of 38.45. The EF EPI average in the region—composed of nearly 4 billion people—is 55.94. “In the first group of countries, English is both a class marker and an institutional standard,” EF said in its explanation of the regional result. “In the second group of countries, policies and attitudes toward English are in flux, as the language’s role evolves.”
either US President-elect Donald Trump’s protectionist ambitions nor President Duterte’s rants against the US are proving to be enough to derail the Philippine economy’s momentum as one of the fastest growing in the world. That’s according to economists surveyed by Bloomberg News, who see growth exceeding 6 percent until 2018. Gifted with a burgeoning middle class and backed by $50 billion of revenue from remittances and outsourcing, the Southeast Asian economy is getting an additional boost from President Duterte’s $160-billion infrastructure plan. Political risks “haven’t transpired into concrete policies,” said Gundy Cahyadi, an economist at DBS Group Holdings Ltd. in Singapore. “We should pay more attention to hard data, which point to very robust growth prospects for the Philippines, given strong domestic demand.” While the Philippines hasn’t been immune to the financialmarket rout since Trump’s shock win in the US election, strong domestic growth drivers have made it more resilient to global shocks, compared to export-dependent Asian nations from Singapore to South Korea. Consumer spending
makes up about 70 percent of the economy. A government report on Thursday will probably show GDP expanded 6.7 percent in the third quarter from a year ago, after climbing 7 percent in the previous three months, according to the median estimate of 15 economists surveyed by Bloomberg. Polled after Trump’s victory, economists forecast the economy will grow 6.6 percent this year, 6.3 percent in 2017 and 6.5 percent in 2018. Investors have dumped Asian emerging-market assets after Trump’s victory, concerned that a rise in protectionism will curb global growth and trade. Indonesia and the Philippines have been among the worst hit in Southeast Asia, with the peso falling near levels last seen during the 2009 global financial crisis. Philippine stocks and the currency rose on Wednesday, as a global-bond market rout eased. The main stock index climbed 1.5 percent as of 11:29 a.m. in Manila, after tumbling to an eight-month low this week. The peso was little changed at 49.14 per dollar. Even before the US elections, financial markets were under pressure, as investors worried about See “Trump,” A2
See “Ranking,” A2
n japan 0.4506 n UK 61.3029 n HK 6.3394 n CHINA 7.1728 n singapore 34.7931 n australia 37.1752 n EU 52.7800 n SAUDI arabia 13.1175
Source: BSP (16 November 2016 )
BMReports BusinessMirror
A2 Thursday, November 17, 2016
news@businessmirror.com.ph
Alvarez asks Duterte to sack 3 DOTr officials
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By Jovee Marie N. dela Cruz
@joveemarie
HE leadership of the House of Representatives on Wednesday urged President Duterte to remove from office three undersecretaries of the Department of Transportation (DOTr). In a statement, Speaker Pantaleon D. Alvarez said Undersecretary for Railway Noel B. Kintanar, Undersecretary for Air Operations Bobby Lim, and Undersecretary for Legal Affairs Raoul C. Creencia should be removed for incompetence. A lv a re z s a id t he s e D O Tr
officials have apparently been withholding the conduct of the bidding of multibillion-peso priority projects so as to include these in the emergency powers package pending before Congress. Alvarez also accused Kintanar, Lim and Creencia of having conflict
ALVAREZ: “We cannot just grant them emergency powers if we are not sure where they will use these.”
of interest as they have previously served in private companies that have direct stake in infrastructure projects for the transportation sector. He said, “This makes the situation of delayed bidding all the more anomalous since under the proposed emergency powers package, DOTr officials will now be free to enter into negotiated contracts, and potentially with companies where they were formerly employed.” “With all these people at the
DOTr…these undersecretaries who have their own vested interest, I am sure they will negotiate these contracts,” he said. Kintanar was a former assistant vice president at Ayala Corp. and was instrumental in Ayala’s acquisition of rail projects under the previous administration, while Lim was the former country manager of the International Air Transport Association. Alvarez said Transportation Secretary Arthur P. Tugade is still to blame ultimately for the actions of his people, saying, “At the end of the day, he is still accountable for the inefficiencies of these people whom he appointed as undersecretaries.” He added t h at t he DO Tr was “dribbling” the projects that could have been implemented
immediately without the proposed emergency powers. “Among the projects that can be bid out through normal procurement processes are the supply of drivers licenses and the mass rail transit supplies and services,” he said. Alvarez said the DOTr cannot blame Congress for the delay in the passage of the emergency powers package since Tugade and his team failed to provide concrete solutions and a specific list of projects. “The problem is not with Congress. We have asked the DOTr to show to us what they have accomplished, so far, and what their concrete plans are but they have not complied,” he said. “We cannot just grant them emergency powers if we are not sure where they will use these,” Alvarez added.
IPOPHL wants 2-yr cap in litigation of IP cases Continued from A1
drawn-out and often expensive litigation process of IP cases in the courts, the agency said it aims to offer another venue for dispute resolution that is much quicker. “I was asked before if there was a period where IPOPHL litigates a case, and I don’t remember seeing any provision limiting it to two or five years,” IPOPHL Director General Josephine RimaSantiago said in a news briefing on Wednesday. “So when we underwent planning, I said why not limit [the litigation period]? We’ll be coming up with a revised IRR limiting the litigation part to two years. Once a decision has been reached at the bureau level, hopefully, it would take the courts faster to decide on cases,” Santiago added.
She said the revised IRR of the Rules and Regulations on Administrative Complaints for Violation of Law Involving Intellectual Property Rights will still undergo public consultation. IPOPHL said it hopes to start the implementation of the revised process by next year. The alternative dispute resolution services of the IPOPHL is lodged under its Bureau of Legal Affairs, which this office handles inter partes cases (IPC) and intellectual-property violation (IPV) cases. IPCs comprise of oppositions to application for the registration of trademarks or service marks; petitions to cancel the registration or service marks; petitions to cancel registrations of patent, utility model, industrial design and topography; and petitions for compulsory licensing.
IPV cases consist of resolution of unfair competition and administrative complaints, which includes infringement of trademarks, patents, utility models, industrial designs, copyrights and related rights; false designation of origin; and false or fraudulent declaration. Historically, the bulk of disputes received by IPOPHL are IPCs related to trademark, with IPV disputes reaching only 14 in 2015. Most IP-related cases are still often brought to courts for dispute resolution as this system provides for criminal liabilities. The office received a total of 3,016 cases from 2011 to 2015, and resolved 2,329 during the same period.
Mindanao office
Santiago said the agency will set up a branch office in Luzon, the Visayas and Mindanao in a
bid to attract more IP filings from micro, small and medium enterprises (MSMEs). She said this is in keeping with the directive of Trade Secretary Ramon M. Lopez to spread awareness of and enforce intellectual-property rights in areas outside of Metro Manila. IPOPHL will begin a “structural rationalization” next year to augment its manpower and deploy human resources to the branch offices. “We will push to increase the human resources in light of the goals we’ve identified. We’ll push this very strongly in the first quarter of 2017,” Santiago added. Currently, the presence of IPOPHL in the provinces consists of 10 intellectual-property satellite offices (IPSOs) nationwide, which offer limited services and are housed in the offices of the Department of Trade and Industry.
T hese 10 IPSOs link w ith Innovation Technology and Support Offices, which are academic institutions doing the patent search and filing. There are around 35 of these centers nationwide. The plan of the IPOPHL is to let the branch offices supervise these centers in its bid to encourage more IP filings from smaller enterprises. In recent years, IP filings through the satellite offices have been steadily increasing: from 1,374 in 2011 to 2,603 in 2015. These figures do not include those filed with the national headquarters of the IPOPHL. “We want to increase the utilization of higher education institutions and MSMEs of IP systems, for innovation and competitiveness,” Santiago said, adding that the goal is a key strategy indicated in the IPOPHL Strategy Map for 2020.
Alvarez, PDP-Laban Reps. Rodolfo C. Fariñas Jr. of Ilocos Norte and Cesar V. Sarmiento of Catanduanes recently filed the House version of the proposed Traffic Crisis Act 2016, which provides the transport chief and Duterte special powers to address traffic woes in Metro Manila, Metro Cebu and Davao City. Sarmiento said the House Bill (HB) 4334, or the Traffic Crisis Act of 2016 Makiisa. Makisama. Magkaisa, will be the government urgent, immediate and comprehensive response to the traffic crisis. “It will, hopefully, be approved by the committee by next week,” Sarmiento said. Meanwhile, the HB 4334 identifies and limits the scope of the bill to the land-traffic crisis in Metro Manila, Metro Cebu and Davao City.
Trump. . .
Continued from A1
Duterte’s inflammatory attacks against the US— including his call for a “separation” from America—and his violent antidrugs crusade that’s killed more than 3,000 people. The American Chamber of Commerce, and businesses in the outsourcing and electronics industries, are among those that have raised concern that Duterte’s comments may harm the investment outlook. At the same time, Duterte has pledged to ramp up spending on roads, airports, seaports and railways to lure investors and create jobs. The Philippines has one of the lowest government debt ratios in Southeast Asia, at 40 percent of GDP, giving it room to boost spending. “With foreign investors favoring emerging markets less, the Philippines is one of the better positioned to withstand the selloff,” said Joseph Incalcaterra, a Hong Kong-based economist with HSBC Holdings Plc. “The government has increasing scope to pursue fiscal stimulus and infrastructure build-up, while private consumption will power growth.”
Bloomberg News
BNPP. . .
Continued from A12
The 620-megawatt (MW) BNPP is the country’s first and only attempt at nuclear-power development. It was supposed to be the first of two nuclear plants to be built in the northern province of Bataan. It was also the first nuclear-power plant in Southeast Asia, and the vaunted solution to the 1973 oil crisis that had adversely affected the global economy, including the Philippines. Unfortunately, however, the project was mothballed in the wake of the Chernobyl disaster in 1986. But then, clamor for the reopening of the BNPP was revived during the power crisis in the 1990s and the skyrocketing of oil prices in 2007. During these periods, Cusi said the DOE actually came close to reconsidering nuclear power as a potential energy source for the country. But then the Fukushima nuclear-plant incident happened in 2011, creating global panic and concerns about the safety and integrity of nuclear plants.
Ranking. . .
Continued from A1
The Philippines, which is in the first group, was added to the EF EPI index for the first time this year along with Laos and Macau. “With the addition of Laos, Macau and the Philippines to the index for the first time this year, a clearer picture is emerging of the wide-ranging role that English plays in Asia,” EF said. The company concluded that “every country in Asia, no matter how skilled, would benefit economically from higher English proficiency across a broader swath of the work force.” “In order to achieve that goal, however, these countries must learn from one another, measure their efforts and adjust their strategies according to what has been proven to work,” the firm added.
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news@businessmirror.com.ph
Thursday, November 17, 2016 A3
Japan clears sending of tour groups to Davao
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By Ma. Stella F. Arnaldo
@akosistellaBM Special to the BusinessMirror
HE recent state visit of President Duterte to Tokyo, Japan, already bore its first fruit, according to the Department of Tourism (DOT), which welcomed a 12-man group from the Japan capital and from Osaka to Davao City.
In a news statement, Tourism Assistant Secretary for Mindanao Eden L. David said the arrival of the Japan tour group coincided with the lowering of Japan’s travel advisory to Level 1 for Davao City, which allows Japanese tour and travel operators to offer tour packages to Davao City. Japan’s Ministry of Foreign Affairs (Mofa) raised the travel advisory to Level 2 in the wake of the tragic bomb explosion at the Roxas night market on September 2. A Level 2 travel warning advises Japanese citizens to postpone any planned trips to certain destinations. “This is quite an eye-opener
128,620
The number of foreign tourists that visited Davao last year for these first-time visitors amid a misconception that Davao City is part of a conflict area [Eastern Mindanao], even as West Mindanao authorities here have beefed up security measures,” David said. A day after the bombing, a Davao tourism officer told the BusinessMirror that the city
still projects a 15-percent increase in tourist arrivals this year, hitting almost 2 million visitor arrivals. (See, “Davao: 15% hike in tourist arrivals despite bombing,” in the BusinessMirror, September 3, 2016.) Tourism Secretary Wanda Corazon T. Teo said the familiarization tour from November 10 to 13 was organized by DOT-Mindanao and the Philippine Airlines, and included trips to the lush Garden of Eden, the Philippine Eagle Center, the Malagos Garden and Davao Marina Tuna, where guests could savor 10 different styles of preparing and cooking tuna. The fam-tour also included visits to the Duterte residence in Matina district, the Museo de Dabaw and the city’s Rescue 911 command center. These culminated in an overnight stay at Pearl Farm, a favorite resort of honeymooners on Samal island, and Malipano island, where cultural dances were performed, and local cuisine and exotic fruits were served the Japanese guests. DOT Tokyo Attaché Gwen S. Batoon, who led the fam-tour group, which included representatives from major travel and tour operators, media editors and
Nature at its best at Eden Nature Park.
dot-mindanao
travel bloggers, credited the recent state visit of Duterte for the Japanese’ strong interest in travel to the Philippines. “President Duterte, along with Secretary Teo, clearly won Mofa’s approval and favorable action during their state visit,” said Batoon, as she informed the DOT Mindanao office of the lowering of Japan’s
travel advisory to Davao. This was confirmed by Japan’s Consul to Davao City Tomoko Dodo. “Ultimately, the proud people of Davao City is its real charm. They are so hospitable and, despite what had happened, I feel safe here more than any place,” he said. Dodo has served as Tokyo’s envoy to Davao City for more than one year.
“President Duterte, who was treated like a rock star during his visit in Tokyo, personifies the pride and charismatic charm of Davaoeños,” Dodo added. Last year Davao attracted 1.73 million visitor arrivals, of which 1.58 million were domestic travelers, while some 128,620 were foreign tourists.
Asean
BusinessMirror
A4 Thursday, November 17, 2016 • Editor: Max V. de Leon
www.businessmirror.com.ph
Singapore working on interbank payments via blockchain with R3
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ingapore’s central bank is working with the city’s banks and the R3 group of global financial firms to develop a system for interbank payments underpinned by blockchain technology.
The trial project is also exploring cross-border transactions, Ravi Menon, managing director of the Monetary Authority of Singapore (MAS), said in a speech on Wednesday. The city’s stock exchange, its largest bank DBS Group Holdings Ltd., its two local rivals, and global firms, including HSBC Holdings Plc. and Bank of America Corp., are involved in the overall program, according to a slide presentation for the speech. “Today banks have to go through correspondent banks to intermediate
these payments. It takes time and adds to cost,” Menon said. “This project marks the first step in MAS’s exploration of ways to harness the potential of central bank-issued digital currency.” The initiative comes a week after the MAS said it’s partnering with R3 on a Singapore-based center to develop blockchain, the much-hyped distributed-ledger technology that banks around the world are researching to help them cut expenses. The group of more than 50 global
This project marks the first step in MAS’s exploration of ways to harness the potential of central bank-issued digital currency.”—Menon
financial institutions, including Bank of America and HSBC, is developing blockchain applications for use in financial services.
Fintech festival
Singapore will also create a national “know-your-customer” platform that will help banks avoid redundancy in customer-data collection and
reduce compliance costs, Menon said. The “basic building block” of that system will be the government’s MyInfo service, which collects personal details of Singaporean residents, he said during an event at the Singapore Fintech Festival. The weeklong festival, organized by the MAS, is part of Singapore’s broader effort to position itself as a financial technology center, as it competes with other global hubs, like London, Hong Kong and New York, to attract business from established financial firms to startup ventures. The fintech festival had lured more than 11,000 participants from over 50 countries, Menon said. Speakers during the week include blockchain cheerleader Blythe Masters, the CEO of Digital Asset Holdings who once ran JPMorgan & Chase Co.’s commodities business, and Peter Sands, former CEO of Standard Chartered Plc. Bloomberg News
Trial of Bangkok bomb suspects starts after translator row
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estimony began on Tuesday in the trial of two men accused of carrying out a bombing at a Bangkok landmark last year that killed 20 people, after a dispute over the defendants’ translators had delayed the proceedings. Mieraili Yusufu and Bilal Mohammad, Chinese nationals from the Muslim Uighur minority, have pleaded not guilty in the August 17, 2015, bombing of the Erawan shrine, which is popular among Chinese and other tourists. Fourteen of the dead were tourists, and many Chinese were among the 120 people injured. The first witness, a police officer, began testifying after the court overruled defense objections that two translators provided by the Chinese Embassy might be prejudiced against the defendants. The defense argued that China does not respect Uighurs (pronounced WEE-gurs), but the court said there was no evidence that the translators would be biased. Three observers from the Chinese Embassy attended the trial, which is being held in a military court. Since a May 2014 army coup toppled Thailand’s government, military courts have handled criminal cases deemed to involve national security. The charges against the defendants include conspiracy to explode bombs and commit premeditated murder. “I saw many people with serious injuries and many dead. The shrine itself was damaged,” testified Lt. Col. Somkiat Ploytubtim, who was part of the police investigation team. Thai authorities say a peoplesmuggling gang whose activities were disrupted by a crackdown
In this November 24, 2015, file photo, police officers escort the suspects in the August 17 blast at Erawan Shrine—Bilal Mohammad (front) and Mieraili Yusufu (rear)—as they arrive at a military court in Bangkok, Thailand. AP
carried out the bombing as revenge. However, some analysts suspected it might have been the work of Uighur separatists angry that in July 2015, Thailand forcibly repatriated scores of Uighurs to China, where they may be persecuted. The start of the trial had been aborted several times, largely because of a failure to find capable translators. The court said it would accept the defense attorney’s letter of objection and consider it separately, but noted that the defendants failed to object earlier when the court notified
them of their intention to contact the Chinese Embassy for a translator. It characterized their objections on Tuesday as an effort to stall the proceedings. The defendants are the only two suspects in custody out of the 17 people that authorities say were responsible for the bombing, one of the deadliest acts of violence in Bangkok in decades. Some of the 15 other suspects are Turks, with whom Uighurs share ethnic bonds. Beijing charges that some Uighurs are Islamist terrorists and that some have been smuggled out of
China to join Islamic State fighters in Syria via Turkey. The police say the case against the two men is supported by closed-circuit television footage, witnesses, DNA matching and physical evidence, in addition to their confessions. Police believe Yusufu detonated the bomb minutes after a backpack containing the device was left at the shrine by Bilal, also known as Adem Karadag. However, the two defendants have said they were tortured in custody to confess, a charge rejected by the court. AP
Police widen blasphemy probe into Jakarta Christian governor
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he police in Indonesia have broadened their blasphemy investigation into the capital’s Christian governor, naming him a suspect in a case that has fueled political tensions over religious intolerance in the world’s most populous Muslim nation. Jakarta Governor Basuki Tjahaja Purnama, a political ally of President Joko Widodo, better known as Jokowi, has been accused of insulting the Koran over comments he made in September that Muslim groups have alleged amounted to blasphemy, which in Indonesia can carry a penalty of up to five years in jail. The governor has previously denied wrongdoing. Police Chief Tito Karnavian con-
firmed the case was now a criminal matter, although he said Purnama would not be detained because of dissenting opinions among the 21 people investigating the case. “There were some who said this should be a criminal investigation and others who disagreed. But the majority says that this is a criminal investigation,” he said. “I’m confident that the public wants this legal process to be conducted openly and we will respect whatever the result of this open court process,” Karnavian said. He said he was also confident the Indonesian people did not want “any acts of violence and acts of anarchy” or others to use the “momentum of this case” to support their own agenda.
Ari Dono Sukmanto, chief of the Indonesia Police Criminal Investigation Agency, said Purnama would be banned from leaving the country. “The decision is dominated by the opinion that the case must be resolved in an open court,” Sukmanto said.
‘Clear indication’
The fallout over the case has already forced the president, who has accused “political actors” of inflaming tensions, to postpone a state visit to Australia. More than 100,000 people protested on November 4, calling for the governor to be jailed, with some holding signs saying “Ahok is an Enemy of Islam,” referring
to Purnama’s nickname. The rally, although largely peaceful for much of the day, turned violent in the evening as demonstrators refused to disperse after marching on the presidential palace. “This is a clear indication that Jokowi wants to distance himself from Ahok. He fears that continued support for him could damage his presidency,” said Marcus Mietzner, an associate professor at the Australian National University in Canberra. “The decisive question is now how voters will react. If Ahok experiences a serious drop in the polls—which I suspect he will—this constitutes a significant political victory for Islamists and their political sponsors.” Bloomberg News
Exports–drivers of growth Asean-EU Perspective
HENRY J. SCHUMACHER
M
any developing countries, including the Philippines, believe that export-led growth is an essential pillar of economic development; however, it is becoming obvious that the sort of export matter, based on industrialization and diversification. Accordingly, these economies need prudent policies, as well as access to foreign markets. In the 21st century, global value chains are considered crucial for international trade. They figure prominently in recent studies undertaken by the United Nations Conference on Trade and Development and the World Bank. Global supply and value chains offer big opportunities, especially for developing countries; they enable a national economy to use intermediate products from abroad and take over the part of the production process that suits it best without having to build an entire industry. Integration in international production networks is, thus, regarded a promising growth strategy. However, global value chains are highly competitive, and there is no guarantee that the benefits that accrue to developing countries will always be sustained. In global value chains, goods are imported, processed or assembled and then reexported. This is the success story of the Philippine Economic Zone Authority (Peza) vision that has attracted so many international companies to the Philippines. It is essential that the focus is on adding value locally because added value boosts a country’s GDP. For a long time, the importance of export volumes for economic growth was overestimated; today, moving deeper into the production process is essential. Within the Peza vision, raising the value added in the country has always been a priority, realizing the risk of competition becoming tougher in the low-wage/low-technology segment. There is a broad consensus that developing countries must not only participate in global value chains: they must also endeavor to upgrade their economies and engaging in higher value-added production activities or services. Major factors for successful integration in international production networks include: n foreign direct investment n a reliable investment climate n open trade n good infrastructure, and n low trade barriers Economic upgrading and profitable connections with multinational companies depend on things, such as: n skill labor n compliance with international standards n administrative and financial resources for creating new production sectors n progressive and business-oriented local government units n complimentary services, and n capacities for innovation and research International trade can still be considered a driver of growth; however, exporting in itself does not guarantee long-term economic development. The empirical evidence is growing, that the nature of what is exported and its domestic value-added content are what matters. In this context, the debate is focusing on opportunities for developing countries and how to improve their position in value chains. The export-led growth paradigm, thus, basically remains valid—but it has changed over time and become more nuanced. In this context, it is also essential that we focus in the Philippines on supply and value chains in the farm to table vision. As the Duterte Administration promises to support the revival of agriculture, reducing the average of the farmer from 57 to 35, it is essential that best practices in the agri-food supply and value chain are studied and then implemented.
Prince William arrives in Vietnam for wildlife meeting
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ritain’s Prince William has arrived on his first visit to Vietnam, where he will take part in an international conference on illegal wildlife trade in the fight to protect elephants, rhinos and other endangered species from extinction. The Duke of Cambridge, who is president of United for Wildlife, will meet Vietnamese Prime Minister Nguyen Xuan Phuc and Vice President Dang Thi Ngoc Thinh on Wednesday before attending the two-day conference starting on Thursday in Hanoi. “He knows the people of Vietnam will share his concern that we have less than 25 years to save some of our most iconic species from extinction. He believes Vietnam has a real opportunity to be leaders in wildlife conservation,”
the Prince’s office said in a statement on Tuesday. On Saturday Vietnamese authorities destroyed 2,253 kilograms (4,956 pounds) of seized elephant ivory and rhino horns, sending a message that the government wants illegal wildlife trafficking stopped. Vietnam is one of the world’s major transit points and consumers of trafficked ivory and rhino horns. The Hanoi conference on illegal wildlife trade will bring together leaders and senior officials from more than 40 countries, as well as experts from international wildlife-conservation groups. The conference is the third of its kind after the one held in London in 2014 and another in Botswana last year. AP
The World BusinessMirror
www.businessmirror.com.ph
Editor: Lyn Resurreccion • Thursday, November 17, 2016
A5
Modi’s money crackdown threatens India’s corporate profit recovery
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rime Minister Narendra Modi’s crackdown on “black money” may have an unintended consequence: a slump in consumer spending that hits India’s corporate earnings recovery. Investors are trying to gauge the impact on company profits after Modi’s surprise recall of highvalue currency notes last week. At risk is a strengthening earnings picture that has seen three quarters of gains, after operating profit fell in every quarter of 2015. Finance Minister Arun Jaitley said on November 9 the move will damp consumption in the short term, a belief that’s helped send an index of consumer discretionary goods to a four-month low. “The earnings revival will get delayed as the liquidity crunch will hit consumer-facing industries,” said Nilesh Shah, CEO of Mumbai-based Kotak Mahindra Asset Management Co., which has $9.5 billion in assets. The measure will “lead to a temporary squeeze in small-ticket consumption and discretionary spending,” he said. Economic expansion of above 7 percent, the $13-billion salary boost for government staff and a good monsoon after two years of drought had led investors to bet on company profit growth accelerating. Goldman Sachs Group Inc. in October forecast corporate earnings growth in India to outpace its regional peers in the year to March. The sudden decline in money supply has muddied the picture. Modi’s decision to withdraw 500- and 1,000-rupee notes, which accounted for 86 percent of the money in circulation, has virtually stalled the economy. While no one is predicting the antigraft measures to push Sensex earnings into negative territory just yet, the move will disrupt segments of the economy, such as property and gold, where cash transactions play a vital role, analysts say. “This move has multiple longterm benefits, but in the near term it will lead to material transitionrelated uncertainty and can potentially disrupt several economic activities that have traditionally relied on unaccounted cash transactions,” Deutsche Bank AG analysts Abhay Laijawala and Abhishek Saraf wrote in a note. There will be an “adverse” impact on shares of developers, cement
producers and infrastr ucture companies, they said. An index of real-estate companies tumbled to a seven-month low on Tuesday, while the S&P BSE Auto Index capped its biggest fourday loss since August 2009. The S&P BSE Consumer Discretionary Goods & Services tumbled the most in 14 months, extending last week’s 6.4 percent retreat that was the steepest in five years. The benchmark S&P BSE Sensex gained 0.4 percent at 9:27 a.m. on Wednesday, rebounding from a five-month low. The gauge is still up 15 percent from its February low.
Deposits surge
Even so, money managers, including ICICI Prudential Asset Management Co., India’s biggest and SBI Funds Management Ltd., say the crackdown on illegal wealth will boost liquidity and open up room for more interest-rate cuts. Banks deposits have risen by $48 billion after last Tuesday’s ban as customers rushed to deposit the old bills. Slowing inf lation allowed a panel led by Reserve Bank of India Governor Urjit Patel to lower the benchmark rate to the lowest in more than five years last month. A further reduction would help revive stalled infrastructure projects, according to S. Naren, executive director and chief investment officer at ICICI Prudential, which has $29 billion in assets. “There may be temporary setbacks in the immediate term but investors should use such opportunities to increase their equity allocations,” Naren said. Operating profit for the Sensex companies has risen 12 percent in the September-quarter reporting season currently under way, after increasing 4 percent and 6 percent each in the previous two quarters, according to data compiled by Bloomberg. Net incomes at companies in the index may rise 20 percent over the next 12 months, the data show. “The magnitude of the earnings recovery will not be as robust as expected earlier,” Gopal Agrawal, chief investment officer at Mumbaibased Mirae Asset Global Investments (India) Pvt., said by phone. “The cash crunch will curtail consumer spending for the next three to six months.” Bloomberg News
Awash in gasoline, US refiners export fuel at record pace
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he US has more gasoline than it knows what to do with. Exports have risen above imports for three consecutive weeks as recurring pipeline outages and higher production levels by refiners caused Gulf Coast inventories to grow. Typically a net importer of gasoline, the US has shipped a record amount of the motor fuel abroad and doesn’t show signs of stopping. “Exports will have to be high to keep stocks under control,” Robert Campbell, head of oil products research at market consultant Energy Aspects Ltd. in New York, said in an e-mail. “Runs should be quite high on the US Gulf Coast in the coming weeks.” The abundance of gasoline pushed Gulf Coast gasoline prices to an eight-month low last week and spurred the longest losing streak since 2012 in futures, making US gasoline an affordable buy. That has triggered some unusual moves by refiners and traders.
Out to sea
Independent refiner Valero Energy Corp. shipped excess supplies to Canada instead of Colombia and Phillips 66 sent the first gasoline shipment in 16 months to Egypt, according to shipping data and people familiar with the transactions. Oil trader Mercuria Energy Group is said to be storing a 60,000-ton parcel of gasoline blending components produced in India at an offshore site in the Bahamas. More cargoes are sailing to typical destinations, like Mexico and Brazil, George Los, senior tanker markets analyst at Charles R. Weber Co. in Greenwich, Connecticut, said in an e-mail. “Lower refinery utilizations in Latin America, combined with abundant
export capacity on the US Gulf, have made these trades attractive,”he said. “We have been seeing this for much of the year, where Latin America is absorbing the excess US gasoline.”
Record shipments
Waterborne gasoline exports surged after Colonial Pipeline Co., the main system that moves Gulf Coast gasoline to the Eastern Seaboard, shut for six days following an October 31 explosion. The outage, which backed up almost 8 million barrels of the motor fuel that would normally flow to states in the Southeast and along the Atlantic coast, came less than two months after a pipeline leak triggered a 12-day one in September. US gasoline exports reached 1.07 million barrels a day in the week ended November 4, the first time the figure has topped 1 million in US Energy Information Administration data going back to 2010. ClipperData Llc., which tracks crude and products globally, also counted exports above 1 million barrels a day after the Colonial blast. “We expected them to be strong in the aftermath of the Colonial Pipeline outage as gasoline inventories swell,” Matt Smith, ClipperData’s director of commodity research, said via e-mail from New York. Shipments rose 35 percent in the week ended on November 4 and have almost doubled since the September 9 Colonial outage. But the latter move corresponds with a late-August adjustment in how the Energy Information Administration calculates its export data. The agency shifted to using near-real-time Customs data rather than extrapolating from monthly estimates. Bloomberg News
Maersk Triple E Ship arrives in Hong Kong. Bloomberg news
Trump trade snub set to boost China’s bid for own Asia pact
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hina’s bid to assert its economic leadership is gaining traction in its push for an Asia-wide trade pact in the wake of Donald Trump’s election victory, which dashed hopes for a US-led deal that would have taken in about 40 percent of the global economy. President Xi Jinping is expected to use this week’s Asia-Pacific Economic Cooperation (Apec) summit in Lima to gain momentum for the Regional Comprehensive Economic Partnership (RCEP), which China has championed in recent years. Moving ahead on the pact, long designed as a counterweight to the Trans-Pacific Partnership (TPP) from which China is left out, would give it greater economic prestige in a region where it is seeking to displace US influence. Japanese Prime Minister Shinzo Abe on Tuesday confirmed his nation is turning attention toward RCEP—which would, in turn, omit the US. That’s even as he plans to stop off in New York on Thursday en route to Lima to meet Trump and make a last-ditch sales pitch for the TPP. With President-elect Trump saying the Barack Obama-championed TPP would be “catastrophic” for the US economy and Congress, and the chance of it passing in a lame duck session looking increasingly remote, its looming demise gives China an opportunity. Frustrated by a more protectionist US backing away from its own pact, Asian nations may fall back on Xi’s plan. A China-led pact would be “a good option for those countries that rely heavily on free trade, including Australia, Singapore and Japan,” according to Song Hong, a senior fellow at the Chinese Academy
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The number of countries involved in China-led Regional Comprehensive Economic Partnership of Social Sciences, which advises the government on policy. “Facing Trump’s protectionist stance and lukewarm global trade, the RCEP could be a new option.” The potential benefits from what the TPP or RCEP would offer countries, like Japan, are comparable, according to Capital Economics. While the RCEP would focus mainly on lowering tariffs, the TPP would seek to lower nontariff barriers, such as state support for government-backed companies and improving labor and environmental standards. China is eager to get RCEP agreed to this year, but recognizes it is unlikely, according to a senior ministry official who has been involved in talks for the pact. Some countries would prefer to wait and see if TPP can somehow regain traction once Trump is in office, the official said. A num-
ber of nations are cautious about the discussions around lowering tariffs on agricultural products, with others potentially opposed to changing negative lists on foreign investment, the official added. China will push Australia and Japan, in particular, to take the lead in moving forward, the person said.
‘Beacon of hope’
While the RCEP falls short of the lofty goals set for TPP, which was presented as a centerpiece of Obama’s economic and military rebalancing to Asia, it may still represent a significant milestone, Hong Kong-based HSBC Holdings Plc. economist Joseph Incalcaterra wrote in a research note. “The TPP was a beacon of hope in an environment of subdued trade activity and weak global growth,” Incalcaterra said. “Despite drawbacks, the RCEP should help boost trade volumes across Asia and spur investment in new supply chains.” The RCEP, which would be the first pan-Asian trade deal ever, was launched by the Association of Southeast Asian Nations (Asean) in 2012, and has gone through 15 rounds of negotiations. These have been looking to accommodate India’s fears of a widening trade deficit with China, as well Japan’s reluctance to open its agricultural sector. The 16 countries involved in RCEP include all 10 members of Asean, as well as China, Japan, India, South Korea, Australia and New Zealand. They represent about 30 percent of global GDP and almost half the world’s population. Some had already signed up for the TPP. As for the five TPP signatories in the Americas, they would be left out.
Apec talks
“It’s safe to say we will shift focus to RCEP should the TPP not go ahead,” Abe told lawmakers in Tokyo on Tuesday. He will convey his
thoughts on free trade to Trump, having previously said it was “unfortunate” that protectionism was on the rise in the US. As well as RCEP, China is backing a broader Free Trade Area of the Asia Pacific (FTAAP), which, according to Australian Trade Minister Steven Ciobo, will be on the agenda at Apec this week. “It looks at the existing barriers to trade and investment flows between Apec economies and sets out the next steps as we work to bring this ambitious undertaking to life,” Ciobo said in an e-mailed statement on Tuesday. “A high-quality FTAAP would facilitate greater market access, through a more level playing field for Australia’s exporters and suppliers.” China commissioned a strategic study by Apec countries into the FTAAP at the Beijing summit in 2014, which it’s due to release this year. But with a Trump administration eschewing TPP, FTAAP would also appear to be a long shot. HSBC’s Incalcaterra estimates RCEP could be a solid consolation plan for Vietnam, which was widely seen as most likely to get an immediate economic boost from TPP. It stands to gain from increased sourcing of production from Japan, South Korea and China. Singapore may be the country that gets the least benefit from RCEP, as it already has free-trade agreements with other membernations, according to HSBC. The prospect of trade tensions between China and the US has caused unease, especially with Trump’s campaign threat to hit Chinese imports with tariffs. Such a move would be bad for the global economy, according to Australian central bank Governor Philip Lowe. Anything that endangers free trade is “a huge threat to our economy,” Lowe said after a speech in Melbourne on Tuesday evening, adding, “I hope wiser heads will prevail here.” Bloomberg News
Beijing sure to meet full-year econ targets, premier says
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t’s mission accomplished for China’s economy. China is confident it will achieve its major full-year targets and tasks, Premier Li Keqiang said at a seminar in Beijing, according to state media reports late on Tuesday. China should stabilize and improve macropolicies and will expand aggregate demand moderately, Li said. He called for steadying employment and promoting innovation. The economy’s stabilization this year has come on the back of
easy monetary policy and a ramp up in fiscal support, ensuring the government’s full-year growth target of 6.5 percent to 7 percent will be met. Policy-makers are now turning attention to reining in excesses spurred by such stimulus, including debt risks and surging home prices in major cities. “With real economic activity now better stabilized in general and the government still concerned about the need for financial and macro-risk controls,
October’s property strength may induce a further tightening of property policies,” economists led by Wang Tao at UBS Group AG in Hong Kong wrote in a recent note. “We see no change to benc hm a rk i nterest rates through 2018.” Donald Trump’s election victor y has complicated China’s policy outlook, with threats to slap tariffs of up to 45 percent on imports from the nation and label China as a currency manipulator. “Both pose relatively
big challenges to the economy,” Li was quoted as saying. Authorities may allow slightly more yuan depreciation as the US dollar strengthens postelection, Wang at UBS and her team wrote. A weakening yuan, while offering no sustained boost to exporters in the face of tepid global demand, has at least cushioned the blow on their local currency earnings. Meantime, four years of factory deflation has also abated, boosting industrial profits. Bloomberg News
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Thursday, November 17, 2016 • Editor: Lyn Resurreccion
House OKs bills to renew Iran sanctions, Syria crackdown
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ASHINGTON—The House on Tuesday overwhelmingly approved bipartisan bills to crack down on supporters of Syrian President Bashar al-Assad’s government and renew a decades-old Iran-sanctions law.
Sw ift passage underscored broad support on Capitol Hill for punishing financial backers of the Syrian government and maintaining economic pressure on Tehran. Both bills had the firm backing of Rep. Ed Royce, Republican-California, chairman of the Foreign Affairs Committee, and Rep. Eliot Engel of New York, the panel’s top Democrat. The Senate must now act on the legislation before the bills can be sent to the president. Lawmakers have accused the Assad government of war crimes, as the number of people killed during the violence in Syria continues to mount. The war, now in its sixth year, has killed as many as half a million people, contributed to Europe’s worst refugee crisis since World War II and given the Islamic State (IS) group room to grow into a global terror threat. “What we have now is a grim lesson in human suffering,” Royce said. “We can see the ethnic cleansing going on. Even the United Nations calls this ‘crimes of historic proportions’. Enough’s enough.” The Syria legislation targets key backers of Assad—such as Russia and Iran—according to Royce, by requiring the president to sanction countries or companies that do business with or provide financing to the Syrian government or
419-1 The number of votes in the US House of Representatives in favor of Iran Sanctions Extensions Act
the Central Bank of Syria. Anyone that provides aircraft to Syria’s commercial airlines, does business with the transportation and telecom sectors controlled by the Syrian government, or supports the country’s energy industry also would be subject to sanctions, according to the legislation. “If you’re acting as a lifeline to the Assad regime, you risk getting caught up in the net of our sanctions,” Engel said. Sanctions could be suspended if internationally recognized negotiations to resolve the war in Syria are making progress and the violence against civilians has ended, according the legislation. The White House and State Department had previously argued to Congress that new sanctions legislation could undermine efforts with Russia to forge a cease-fire between Assad and rebel groups.
Iranian Foreign Minister Mohammad Javad Zarif (center) arrives to a meeting with representatives of Palestinian groups in Beirut, Lebanon, on November 8. AP/Hassan Ammar
While the Russia talks have collapsed, the administration maintained concerns that the sanctions might hurt Iran, another Assad supporter, giving Tehran an excuse to renege on the US-brokered nuclear deal. The House bill would authorize the State Department to assist in the collection and preservation of evidence for war crimes trials. Secretary of State John Kerry last month called for a war crimes investigation of Russia and Syria, a move that escalated already heated rhetoric against Moscow for its part in a deadly military offensive in Aleppo, Syria’s largest city, and its longstanding support of Assad. The Syria legislation, formally titled the Caesar Syria Civilian Protection Act, is named after a crime-scene photographer for the Syrian military, who was reassigned to photograph the bodies of imprisoned Syrian rebels and dissidents after the conflict began. He later defected, and his archive of images of more than 10,000 bodies was smuggled out of the country. He went by the pseudonym Caesar, and he testified in disguise in July 2014 year before Foreign Affairs Committee, saying he had
witnessed a “genocidal massacre.” The Iran Sanctions Extensions Act cleared the House by a 419-1 vote. The lone “no” vote came from Rep. Thomas Massie, RepublicanKentucky, who is often an unconventional vote. The bill’s backers say extending the law allows the US to punish Tehran should the country fail to live up the terms of the landmark nuclear deal reached last year. In exchange for Tehran rolling back its nuclear program, the US and other world powers agreed to suspend wide-ranging oil, trade and financial sanctions that had choked the Iranian economy. “Now is not the time to ease up on the world’s leading state sponsor of terrorism,” said Rep. Leonard Lance, Republican-New Jersey. “Sanctions work.” The act, first passed by Congress in 1996 and renewed several times since then, expires at the end of the year. The bill approved by the House extends the law by 10 years, to 2026. There is widespread support in the Senate for passing the extension. Kerry signaled earlier this year President Barack Obama would sign the renewal bill. AP
Iraqi kids return to school in village freed of IS group
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W S A J A , I r a q —T h e i r smiles and eyes wide with anticipation say it all— for the first time in two years, Iraqi children in a village south of Mosul that was freed from the Islamic State (IS) group are back in school. Awsaja, about 48 kilometers from the IS-held city and the ferocious battles under way there between Iraqi forces and IS militants, was reclaimed by the Iraqi military just a few months ago. The village of about 3,000 people had been under IS control for two years. Its 700 children have already all registered to attend school. But resources are limited and there are only three teachers on staff. The struggle ahead will be a long and hard one, the assistant principal said, but the school’s primary goal is to help erase two years of damage inflicted by the IS group. “ We w a nte d to op e n t h i s school to let the students study again and to try to fix the brainwashing of Daesh and start anew so they don’t lose another year like the ones they lost before,” said Natheer Nimr Mohammed, referring to IS by the group’s Arabic acronym. “The only way to do that is through school, God willing,” he added. While under IS control, the school was taken over by the militants and because of the curriculum they chose to teach, all parents removed their children from the school. For 10-year-old Sager Saddam, that was a relief. He remembers IS militants hoisting their black banner over the school. “Daesh brought us books that
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UN committee condemns N. Korea’s rights violations
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NITED NATIONS—A key UN committee approved a resolution on Tuesday condemning North Korea’s “systematic, widespread and gross violations of human rights” and encouraging the Security Council to refer the country to the International Criminal Court. In an unusual move, the General Assembly’s human-rights committee approved the measure sponsored by Japan and the European Union without a vote despite North Korea’s vehement opposition. North Korean Counselor Ri Song Chol told the committee before the vote that his government totally rejects the resolution as “full of lies, fabrications,” calling it “an illegal and unlawful document, a plot, which is not worth...consideration.” “In this way, we do not even fear the need to call for a vote,” Ri said. “Even if this draft resolution is railroaded, it is crystal clear to everyone that this cannot be considered as a consensus.” He then urged UN members to oppose the adoption by dissociating their countries from the consensus, and a number d id , i nc lud i ng Sy r i a , C h i n a , Egypt, Singapore, Iran and Venezuela, who said they oppose the “politicization” of human rights and resolutions singling out specific countries. T he com m it tee’s adopt ion of the resolution by consensus, nonetheless, virtually assures its approval by the 193-member General Assembly when it is put to a vote next month. The draft resolution expresses “very serious concern” at continuing reports of North Korean human-rights violations, including torture, rape, public executions, arbitrary executions, severe restrictions on freedom of religion, expression and peaceful assembly, and the absence of due process and the rule of law. It “strongly urges” the government to end all these abuses and immediately release all political prisoners “unconditionally.” The draft resolution expresses concern at North Korea’s failure to prosecute those responsible for
human-rights abuses, including violations which a UN commission of inquiry has said may account to crimes against humanity. It urges the Security Council to consider referring the situation in North Korea to the International Criminal Court and to consider sanctions against those most responsible for rights abuses. “With this resolution the international community will again send a clear message to the DPRK [Democratic People’s Republic of Korea] regime that humanrights violations must stop and that those most responsible will be held accountable,” US Deputy Ambassador Sarah Mendelson told the committee. Japan’s UN Ambassador Koro Bessho said North Korea continues to divert its limited resources to develop weapons of mass destruction, in spite of the “dire humanitarian situation” in the country, where a UN report said 18 million of the country’s 24.9 million people need assistance. This government decision “itself is a human-rights violation,” he said.
N. Korea does not care who is US president
Meanwhile, a North Korean diplomat said on Tuesday his country doesn’t care who is president of the United States, but rather whether the US will end its “hostile policies.” Kim Yong Ho, the North Korean Foreign Ministry’s director of the division of human rights and humanitarian issues, made his comments at a rare news conference on Tuesday after a UN committee voted to condemn his country over human-rights abuses. Kim said he had been asked by several reporters to comment on North Korea’s stance on US President-elect Donald Trump. “Frankly speaking, it is not the question that I can answer in my capacity but what is apparent here is that we do not care about whoever becomes the president of the US. The fundamental issue here is whether the United States has the political will to withdraw its hostile policies toward the DPRK,” Kim said. AP
Russia launches major strikes vs rebels in Syria
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Sagar Saddam (front row, third from right) sits in class after his school reopened in Awsaja, Iraq, on Tuesday. For the first time in two years, children in this small village about 30 miles south of Mosul are finally going back to school. Awsaja was reclaimed by the Iraqi military just a few months ago after being under Islamic State control for two years. AP/Fay Abuelgasim
were bad. We couldn’t even understand what it was saying and we had to stop. In this school, they put up a bad flag and we were scared that air strikes could hit us because of it,” he continued. So for two years, he didn’t leave his house. “We were scared,” he said. Awsaja lies close to Qayara, a town that is home to an Iraqi air base and a large oil field that has been burning since June. And until three days ago, an oil well in Awsaja
was burning covering the village in an oil cloud. Ox fa m has suppl ied c lea n water and materials to the children to help them understand the importance of hygiene—and the timing was just right, said R ay Offenheiser, president of Ox fam A mer ica, who v isited the school on Tuesday. “So actua l ly, it is tur ning out that the hygiene training, along with the basic provision of goods that we are providing,
soap and water and shampoos and so forth, are actually helping people remove the residue from the oil deposits that are com i ng dow n on t hem f rom the fires nearby,” he said. As he washed his hands, Sager said he thought he was going to die from the oil smoke. “My dad asked me, ‘What is up with you today, you look happy,’” he said. “I told him: ‘Dad, school is finally back!’” AP
EIRUT—Russia launched a broad new offensive on Tuesday against rebels seeking to topple Syrian President Bashar al-Assad, an onslaught that included Moscow’s first use of fighter jets launched from an aircraft carrier in the Mediterranean. At the same time, a three-week lull in fighting in the northern city of Aleppo was shattered, as Syrian aircraft bombarded neighborhoods in the city’s rebel-held east. Opposition activists reported that at least five people were killed and scores more wounded. The expanded Russian military push to prop up its ally Assad came a day after President-elect Donald Trump spoke by telephone with Russian President Vladimir Putin, a conversation that the Kremlin said centered on their common resolve to fight “international terrorism and extremism.” Trump said during his campaign that he would welcome Russian cooperation in fighting the Sunni Muslim militants of Islamic State (IS). The Obama administration for months has denounced the punishing bombardment of opposition-held parts of Aleppo, in which Russia has played a key role, although Russia’s defense minister said its military did not take part in Tuesday’s strikes on the city. Russia has said it is targeting only hard-line jihadist groups, including the former al-Qaeda affiliate the Front for the Conquest of Syria, but some other opposition fighters in the city are from US-backed factions. Syrian officials declared that the Aleppo air strikes heralded a final battle to reassert government control over what once was Syria’s most populous city and its industrial center. Russia, in concert with the Syrian government, recently declared a truce in
Aleppo, opening humanitarian corridors it said would allow safe passage for civilians in rebel-held areas blockaded by progovernment forces since July. Tuesday’s casualty count in rebel-controlled areas came from the Syrian Observatory for Human Rights, a proopposition monitoring group. Other antigovernment activists uploaded images of helicopters dropping what they claimed were naval mines and barrel bombs on the eastern Aleppo neighborhoods of Masaken Hanano, Sakhour and Firdos. The reports could not be independently verified. “It’s more violent than before,” said Mahmoud Raslan, a pro- opposition photographer and activist, in an interview via a mobile messaging app on Tuesday. “The bombs have parachutes and...have more destructive power than the ones used before.” The Aleppo attacks coincided with a “large-scale operation”by the Russian military targeting opposition-controlled areas of the central province of Homs and the northern province of Idlib, according to a statement by Russian Defense Minister Sergei Shoigu. He said those strikes were aimed at militants affiliated with al-Qaeda and Islamic State. Ministry-provided video showed a Russian frigate off the Syrian coast launching missiles aimed at rebel positions. Shoigu said the offensive marked the first time the aircraft carrier Admiral Kuznetsov had taken part in combat operations. The escalation of military operations followed weeks of preparation by the Syrian government and Russia. In recent weeks, Moscow dispatched additional naval units and bolstered its air force and defenses in the coastal airbase of Hemeimeem. Los Angeles Times/TNS
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Editor: Lyn Resurreccion • Thursday, November 17, 2016
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Trump’s transition team squabbles, loses key figure
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A S H I N G T O N —T h e sho ot - f rom - t he - h ip style that helped Donald Trump win the presidency is now playing out in his transition to governing. An insular group of loyalists and family members are at the helm, giving the public little information. A top establishment figure abruptly departed the transition team. And officials from across the federal government say they have heard nothing from the people who are supposed to take their place two months from now. By Tuesday, a week after his election, Trump’s team had yet to discuss even basic elements of the government handoff with key players at the Pentagon, the State Department and other vital agencies, in large part because of a delay in signing the paperwork dictating the nuts and bolts of the process. “We are standing by ready to assist,” said Navy Capt. Jeff Davis, a Pentagon spokesman. “We stand ready,” said State Department Spokesman Elizabeth Trudeau. The Trump campaign kept mum throughout the day as confidants and family members streamed in and out of Trump Tower in New York, occasionally stopping to speak with reporters cordoned behind a red velvet rope in the lobby, but giving up little before riding the elevator to Trump’s office. Leaks about internal squabbles and personnel moves, many involving close campaign allies competing for top posts, were left to fill the information void. “No. No,” retired Army Lt. Gen. Keith Kellogg, a Trump adviser, said when asked about rumors of infighting on the Trump team. “It’s all been good.” But one of Trump’s most respected links to the Republican foreign-policy community, former Rep. Mike Rogers of Michigan, abruptly announced he was leaving the transition team. Rogers, a former chairman of the House Intelligence Committee, had been an important bridge between Trump and skeptics in his party. He had been a holdover from the transition team assembled by New Jersey Gov. Chris Christie, who was replaced as the team’s leader last week by Indiana Gov. Mike Pence, the vice president-elect. A person close to Rogers called his departure part of an effort to distance the team from Christie. “Anyone close to Chris Christie got dumped,” said the Rogers ally, who would not be named discussing internal transition team dynamics. “All the level-headed people are stepping aside.” Another potential bridge was also cut off when Eliot Cohen, a prominent conservative critic of Trump, portrayed himself as walking away angrily from an attempt at reconciliation. Cohen, a supporter of the war in Iraq who served in President George W. Bush’s State Department, had organized a letter signed by dozens of former officials denouncing Trump during the campaign. “After exchange [with] Trump transition team, changed my recommendation,” Cohen wrote on Twitter. “Stay away. They’re angry, arrogant, screaming ‘you LOST!’ Will be ugly.” Trump had insisted during the campaign, contrary to evidence, that he had always opposed the Iraq war. Another potential player in the administration, retired neurosurgeon Ben Carson, also took himself out of the running for an administration job, according to Terry M. Giles, finance chairman during Carson’s presidential campaign. Christie’s departure was also responsible for the delay in setting up meetings between Trump’s team and the leaders of federal government agencies. Christie had signed an agreement with the Obama administration prior to
Election Day that set parameters for interactions between White House officials and designated representatives of the presidentelect’s team. That agreement, which is required by federal law and sets the conditions for access to documents, staff and facilities of federal agencies, no longer applied once Christie was removed from his position. The White House said it received a new agreement signed by Pence late on Tuesday. “The government is ready for the Trump folks, and the Trump folks need to get moving,” said Max Stier, president of the Partnership for Public Service, a nonpartisan group that focuses on good governance. Stier said Trump seems to be figuring out how to move from campaigning to governing, one of the stiffest challenges that any president-elect faces, particularly one who campaigned as an outsider. The task is enormous, he noted: hiring 4,000 people, implementing policy, learning enough to avoid national-security risks, preparing a budget a month after inauguration and preparing for “things you can’t expect, the asteroids that come in.” “With two houses of Congress now held by the Republicans, they have to produce” quickly, said Martha Kumar, an expert in presidential transitions. Those most affected by Trump’s agenda are also anxious about the lack of clarity. Hospital groups, health insurers, consumer advocates and others have been scrambling since the election to learn how the Trump administration and it allies on Capitol Hill will fulfill their pledge to repeal and replace the Affordable Care Act, also known as Obamacare. Industry officials and others say it has been almost impossible to find out what the new administration is planning. Even identifying who is making decisions on what was a signature issue for Trump during the campaign has been a challenge, health-sector leaders said. In 2008 President-elect Barack Obama’s team moved faster, signing an agreement to meet with top officials in Bush’s White House four days after he was elected. Eight years earlier Bush’s transition team could not begin meeting with agency officials for weeks because the result of the 2000 election was in doubt. Kumar and Stier both said that Trump has time to regain his footing. Kumar believes Pence, who served in Congress, was a wise choice to lead the effort, given his ties to top lawmakers. House Speaker Paul D. Ryan, Republican-Wisconsin, tried to reassure the public that the effort remained on track and that he was in touch with Trump almost daily. “We’re going to do everything we can to help make him be as successful as he’s going to be,” Ryan said. Tr ump’s team tapped Rep. Chris Collins of New York—the first in the House to support him—as a liaison to House Republicans, and sent an aide to Tuesday’s meeting of the House GOP as a legislative emissary. Yet, even as the process moves forward, all new administrations face hurdles in getting their Cabinet choices approved by the Senate, even if their party has control. Kentucky Sen. Rand Paul, a leading libertarian voice who briefly mounted his own presidential run, told CNN on Tuesday that he would not support John Bolton, once Bush’s ambassador to the United Nations, as a potential secretary of state, and would also have trouble supporting Rudolph W. Giuliani, the former New York mayor, for the job because of their support for the war in Iraq. “Giuliani and Bolton are very similar,” Paul said. “Bolton just has a more extensive cheerleading background with regard to the Middle East.” TNS
Tourists are evacuated on Tuesday by helicopter from Kaikoura following Monday’s earthquake in New Zealand. Royal New Zealand Defense Force via AP
N. Zealand completes evacuation from town cut off by earthquake
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ELLINGTON, New Zealand—New Zealand military leaders said on Wednesday they had almost completed the evacuation of more than 700 tourists and residents from a small coastal town, two days after a powerful earthquake cut off train and vehicle access. The 7.8-magnitude quake left two people dead, triggered a small tsunami, and brought down rocks and mud that swept across highways. Air Commo. Darryn Webb, the acting commander of New Zealand’s Joint Forces, told The Associated Press (AP) that crews were loading about 380 people and three dogs onto a navy ship. He said the ship was due to leave on Wednesday evening for a six-hour trip to a port near Christchurch. Webb said it had evacuated another 340 people by helicopter since Tuesday. Other tourists have left by chartering their own helicopters or having air transport provided by their embassy. Some have chosen to stay until an inland road reopens.
700 The number of tourists and residents evacuated from a coastal town
“I think it’s gone really well,” Webb said. “We were fortunate to have a reasonable break in the weather today.” Webb said warships from Australia, Canada and the US are due to arrive soon and would help restock the town with water, fuel and
other supplies, as well as transport needed equipment. A u st r a l i a n hone y mo one r s Kurt and Kailah Sapwell were among the tourists stuck in Kaikoura but they didn’t seem too bothered by their ordeal. They said they had all the essentials they needed: a place to stay, food and water. “It’s been a shaky experience, all good though,” Kurt Sapwell said when Prime Minister John Key paid a visit to the town. His wife added that their honeymoon had been “memorable”. Flying over a large landslide in a helicopter, Key expressed surprise at the amount of debris. “Look at this road here, this is really stuffed and there’s thousands of meters [yards] of it,” Key said. “I just don’t see how you can ever repair that bit of road. The whole mountain has moved over.” Home to about 2,000 residents, Kaikoura was a popular destination for travelers wanting to go on whale-watching expeditions before the quake hit. On Wednesday Key promised business owners the government would provide financial assistance for them through what was going to be a tough summer. President-elect Donald Trump called Key on Wednesday to pass on his sympathies over the quake.
Key’s office described the conversation as “very warm and cordial.” Trump had tried to get in touch earlier in the week but Key had missed the call in the confusion after the quake. Aut hor ities on Wednesd ay also managed to clear an emergency inland road to Kaikoura, although it was only open for military vehicles. Neil Wa lker, the highways manager for the New Zealand Transport Agency, said the road remains high-risk and unsuitable for cars, although crews were working to open it to the public by the weekend. In the capital, Wellington, several streets remained cordoned off after engineers determined that a nine-story office building was in danger of collapsing. Brendan Nally, the regional commander for the New Zealand Fire Service, said engineers were completing an inspection of the building on Tuesday when they found a major vertical beam had failed above the fifth floor. Wellington Mayor Justin Lester told the AP that the building would likely have to be demolished. He said he didn’t believe it posed a risk to public safety because of the precautions authorities had taken in evacuating the area around it. AP
No price tag, end date for FAA’s air-traffic plan
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A S H I N G T O N —T h e Federal Aviation Administration (FAA) has little to show for a decade of work on modernizing air -traffic control, and faces barriers and billions more in spending to realize its full benefits, says a report released on Tuesday by a government watchdog. The FAA estimates it will spend a total $5.7 billion to finish its current work on six “transformational” technology programs at the heart of its NextGen modernization effort, said the report by the Department of Transportation’s inspector general. But the agency’s current efforts don’t fully implement the programs, and there are no timetables or cost estimates for completion. The FAA has sold the six transformational programs to Congress and the public “as core efforts that would fundamentally change the way the agency would manage air traffic, communicate with pilots, and exchange data with airspace users,” Matthew Hampton, assistant inspector general for aviation, said in the report. “However, our
review has found that, at least until 2020, most of the transformational programs will not transform how air traffic is managed.” Moreover, there has been “significant ambiguity both within FAA and the aviation community about expectations for NextGen,” including the ability of core programs to deliver important new capabilities, the report said. Congress has provided $7.4 billion for NextGen overall, not just the core programs, since 2003, according to the inspector general. Rep. Bill Shuster, RepublicanPennsylvania, the House transportation committee chairman, seized upon the report to renew his call for taking air-traffic control operations away from the FAA and entrusting them to a private, non-profit corporation. The inspector general’s report shows “that the FA A’s original vision for NextGen is not what is being implemented today,” Shuster said. “Instead of fundamentally changing how air traffic is managed, the agency’s efforts have shifted to replacing and up-
dating decades-old equipment and systems.” Most of the airline industry has made privatizing air-traffic control their top legislative goal— with Shuster as their champion. They have the support of the National Air Traffic Controllers Association, the union that represents controllers. Paul Rinaldi, the union’s president, said controllers have lost faith in FAA’s modernization effort and want the new air-traffic tools they see in use in other countries like Canada, which has privatized airtraffic operations. Most Democrats, other FAA unions and segments of the aviation industry, like business aircraft operators, are opposed to privatization. “The inspector general’s report at most faults the FAA for describing NextGen programs as ‘transformational’ when they really just improve how the FAA manages air traffic,” said Rep. Peter DeFazio of Oregon, the senior Democrat on the transportation committee. It is far from clear that privatizing the air-traffic control system
would expedite NextGen and address the issues raised in the inspector general’s report, he said. The report questions whether airlines and private aircraft operators will equip their planes by 2020, as the FAA has mandated, with the first phase of the most important NextGen technology, known as “ADS-B out.” The technology enables an aircraft to determine its position through satellite navigation and periodically broadcast its position. The technology is more precise than radar and would replace radar as the primary method for tracking aircraft. Even if operators meet that deadline, the FAA has yet to set equipment standards and a timetable for the next phase, known as “ADS-B in,” which would enable pilots to receive altitude, heading, speed and distance information from other planes. Thus, pilots would know where other planes are relative to their own plane. Without FAA standards, manufacturers can’t produce the ADS-B in equipment for aircraft operators to purchase. AP
A10 Thursday, November 17, 2016 • Editor: Angel R. Calso
Opinion BusinessMirror
editorial
Figuring out President Trump
O
nce a relative cipher when it came to politics, Donald Trump surprised the world last week after he crushed Hillary Clinton at the US presidential polls. His campaign promise to “make America great again” convinced nearly 50 percent of the American electorate that he can deliver on his pledge. And they made him the 45th president of the United States of America. Political observers around the world didn’t see Trump getting elected on a platform of resentment. When he made xenophobic and nationalistic policies the centerpiece of his campaign, like closing America’s borders to illegal immigrants, adopting economic protectionism and pursuing an uncompromising foreign policy, pundits saw these as Trump’s Waterloo. But they were all wrong. Not one of them had the slightest hunch that popular hostility to liberal immigration and freetrade policies that took jobs away from the US ran deep among a critical mass of American voters. Like everybody else around the world, Filipinos also have huge concerns about what Trump’s election will mean for the country. What can we expect from the incoming administration of President Donald Trump? Will the mercurial President Trump be able to work closely with the equally mercurial President Duterte? Since both of them are populist and strong nationalists, could these be their possible points of convergence? Having President Trump at the Oval Office could have mixed implications for the Philippines. Since his administration will be more inward looking, he will give more attention to America’s domestic affairs over dealings with other countries. This could be good for us, given Duterte’s avowed independent foreign policy and pivot to China initiative. And, unlike Obama, Trump does not seem to have a significant concern about human-rights issues. In other words, he won’t give a hoot about Duterte’s war on drugs. If Trump makes it his policy to oblige allies to pay for US military presence or else he withdraws it, then the more Duterte will like him. However, if the Trump administration will adopt protectionist policies, the Philippines is seen experiencing zero growth in industries where US companies have significant investments. Trump’s America First Policy will close the US economy from foreign competitors and prevent US companies from moving their factories to developing countries, like the Philippines, with cheaper labor. There’s also the possibility that we may kiss our bullish business-process outsourcing (BPO) industry goodbye if Trump will ask these companies to go back to the US. This is an economic threat we can’t take lightly because the BPO industry employs over a million Filipinos and generates $22 billion in annual revenues. If Trump decides to tax remittances sent by immigrants to their home countries, going by his campaign rhetoric, this will affect the local economy. Reports say there are 3.5 million Filipinos in America right now, and about 360,000 of them are residing there as illegal immigrants. Collectively, US-based Filipinos remit more than $9 billion annually, which accounts for about 3.5 percent of the country’s GDP. There are interesting things waiting to unfold in the US as Trump, a Republican, is set to wear the hat of the most powerful person in the world. Along with the change in the party in power comes the change in US policies and priorities. If President Trump disengages from the world, we can’t figure out what will storm through the breach. Unfortunately, we can’t do anything but wait and see. Since 2005
BusinessMirror A broader look at today’s business
Nuclear power for the Philippines? John Mangun
OUTSIDE THE BOX
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f you tend to get your information and form opinion from Facebook, this is definitely not for you. The Philippines will, hopefully, with both a sense of necessity and urgency, enter into a fact-based discussion on generating electricity using nuclear energy.
The dialogue on nuclear as a power-generating source is emotional, contentious and propaganda-based. Unfortunately, what passes for “academic studies” seem to be written by people who often have the ethics of a methamphetamine addict trading sex for drugs. Dr. Kristin Shrader-Frechette is a professor in the Department of Biological Sciences and Department of Philosophy at the University of Notre Dame. Her credentials are impeccable, and her research work analyzes the ethical problems in risk assessment, public health and environmental justice, especially those related to radiological, ecological
‘Dili man ko love nimo, Daddy!’
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and energy-related risks. In analyzing 30 papers on the economics of nuclear power for possible conflicts of interest, she found, of the 30, 18 had been funded either by the nuclear industry or pronuclear governments and were pronuclear; 11 were funded by universities or nonprofit nongovernmental organizations and were antinuclear. S h r ade r - Fre c he t te ’s 2011 book What Will Work says nuclear power is not an economic or practical technology. However, the examples are always in developed countries or nations with abundant energyproducing resources, such as natural
gas or raging rivers for hydropower. The pros and cons of nuclear energy are reasonably well defined, although the total economics of nuclear power are subject to intense debate. What we do know is that an energy-scarce nation, like France, has been generating 75 percent of its electricity from nuclear beginning in 1956. The scare tactics after insolated incidents, such as Japan’s Fukushima Daiichi nuclear disaster, keep the facts off the table. More people are killed in traffic accidents each day in Metro Manila than died at Fukushima. Not a single person died from exposure to radiation at Fukushima. In fact, the United Nations Scientific Committee on the Effects of Atomic Radiation—hardly a mouthpiece for the nuclear industry—released a report that their scientists have found no evidence to support the idea that the nuclear meltdown will lead to an increase in cancer rates or birth defects. The debate on rehabilitating or replacing the Bataan Nuclear Power Plant (BNPP) must go forward. While the developed countries really do not care if Filipinos live in mud
T
hose were not exactly the most endearing words of goodbye, but for a 5-year-old girl who would be left behind by her father who was departing for work in Maldives, oceans away from home, those six words succinctly painted the pain in her young heart. But, as a father myself, I believe, without a shadow of doubt, that the pain in the father’s heart was beyond what his young daughter’s mind would ever conceive—never even in a million years! The recent gut-wrenching farewell between father and daughter at the Davao International Airport is just one of the growing number of untold stories of separation of families due to a loved one’s employment overseas. In fact, the number and frequency of such departures have increased significantly over the years that absenteeism seemingly has become deeply ingrained in the Filipino psyche, so much that it has become commonplace—an ordinary effect of a normal cause.
Monetary gains
BY all means and measures, overseas employment has been a financial lifeline for millions of Filipinos. It
has provided for the most basic of human needs: food and shelter for family; education for children; hospitalization for sick loved ones; fund for start-up business; and allowances for little luxuries in life. Given the current global sociopolitical shifts and financial vulnerability, economic pundits also credit to the steady inflow of overseas Filipino workers (OFW) remittances the ability of the domestic economy to stay afloat despite the erratic ebb and flow of world economy. As of September 2016, overseas Filipinos’ cash remittances have reached $20.025 billion, up by 4.8 percent from 2015, according to the Bangko Sentral ng Pilipinas. But while family purses stay full and national coffers remain oiled, the cries of that heartbroken young girl reverberate in the immediate background…pleading to wake us from the stupor that only monetary
Social cost
All truths are parallel: Separation takes its emotional and psychological toll on both the one who leaves and the one who gets left behind. For the migrant worker, it has always been a battle against homesickness, lonesome and boredom in a faraway land. Add to this the bout against discrimination, aggression and insecurity in a foreign workplace. For the family left behind, it has always been separation anxiety, abandonment and disconnection. And none of these make for a healthy, nurturing relationship.
Bridge the gap
WE cannot change the fact that, for as long as there are not enough qualification-commensurate, highpaying jobs locally, there will always be well-intentioned loved ones who would seek better employment abroad. And I can bet my last cent that the main consideration behind this difficult decision is still the good of the whole family. How do we bridge the gap, then? How do we make it work? Families with members working abroad swear to the helpfulness of constant communication. The operative word here is constant. It doesn’t take a genius to know that even the world’s fastest Internet speed means nothing if family members
huts, we need to advance our own self-interest agenda, and nuclear power might be part of it. However, the first critical discussion must be whether the Morong, Bataan, location is suitable for any nuclear plant. The public must be assured that it is safe. The Department of Environment and Natural Resources (DENR) has both the initial resources and expertise to make that judgment. If the DENR would function as it is supposed to and not with the attitude of somewhere between the Spanish inquisition and the Russian mafia—as it has in the past— we might get something accomplished. The location of a nuclear-power facility is the first hurdle that must be crossed even if a brand-new power plant were to fall from the sky. We cannot ignore the reality that the Philippines is energy poor even with the substantial steps made in the direction of using alternative sources to fossil fuels. 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.
won’t exert effort to connect and communicate at all times. Technology has afforded us the means, it’s up to us to find ways to nurture our relationships—particularly longdistance ones. In an article, Dr. Gina Hechanova-Alampay, psychologist and founder of the online counseling site OFWOnline, was quoted giving the following advice to OFWs: Save your money. Build your dream or plan your future while you are still in your destination country. You will not be in that country forever; you have a family to come home to. Put your plan together early and realize it with your family before you become strangers. Put the money into good use. Save. Plan. Realize your plan with your family. Words of wisdom for all, not just for struggling OFW families. And, finally, the government must also go beyond the rhetoric of “Bagong Bayani” and finally put flesh and substance into the policies and action points that will guarantee the safety of OFWs in their foreign workplace and assure their valuable reintegration into local economy and society once their tour of duty abroad is done. Somehow, we owe that 5-year-old child the promise that the day would come when she would get to hear her daddy say, “I love you, Anak. Daddy is home to stay.” For comments and suggestions arielnepo.businessmirror@gmail.com
opinion@businessmirror.com.ph
Opinion
Structural adjustments
Divine mercy enthroned on the cross
BusinessMirror
Msgr. Sabino A. Vengco Jr.
Cecilio T. Arillo
database
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HIS is what President Duterte and his economic team must look into: structural adjustments, a set of economic policies created and imposed by narrow-minded neoclassicists of the World Bank and the International Monetary Fund (WB-IMF) on debtor-countries in order to access more concessional loans. These policies usually come in exchange for trade deregulation, privatization, tax reforms, deficit spending and floating rate exchange, among others. They are what the late Harvardtrained Filipino economist-lawyer Alejandro Lichauco described as policies imposed by the WB-IMF neocolonialists who have dehumanized Filipinos. “They are evils capable of planning the mass murder of peoples. They planned the mass enslavement of Africans and American Indians,” he said. The late President Corazon Cojuangco Aquino, her son Benigno and the three other presidents between them have failed in their time to examine these WB-IMF prescriptions for the Philippines, which were mostly prepared by neoclassicists whose macroeconomic fallacies largely resulted in economic hardship. For instance, they swallowed hook, line and sinker these elitist prescriptions that consequently caused the country to sink deeper in debt and further widened the gap between the poor and the rich. The country’s debts, both foreign and domestic, now stands at more than P6 trillion. Related to these policies is the March 2009 revealing report of distinguished American economist Joseph E. Stiglitz, a recipient of the Nobel Memorial Prize in Economic Sciences in 2001 and the John Bates Clark Medal in 1979, and 17 other UN economic experts that the policies of the WB-IMF and other financial institutions had pushed the very policies of deregulations and financial and capital market liberalization that led to the economic crisis in the US and its spread around the world. Indeed, the past administrations cannot escape responsibility for their failure to shape the future because they controlled the currency, contracted debts, shaped the national budget and decided the economic priorities with their hot shot technocrats, mostly IMF-WB disciples. Congress (the Senate and the House) cannot also escape responsibility for the country’s economic debacle, particularly on the issue of debt servicing, for deliberately abdicating its power over public funds in two specific instances. In fact, it is in this area of public responsibility and accountability that betrayal of public trust appeared to have been flagrantly committed by most of the country’s politicians over the past 30 years. Under the 1987 Aquino Constitution, Congress is the only government branch empowered to authorize and appropriate funds, two distinct congressional functions but inextricably linked with each other, to service debts and spur economic growth. The Constitution is very clear on this in Section 24, Article VI, which explicitly says: “All appropriation, revenue or tariff bills, bills authorizing increase of public debt, bills of local application, and private bills shall originate exclusively in the House of Representatives, but the Senate may propose or concur with amendments.” This happened because Congress failed to amend or repeal Presidential Decree (PD) 1177, the Marcos budget law, that automatically services the country’s foreign and domestic debts on the sole discretion of the finance secretary and the governor of the Central Bank. It also failed to abrogate the
The past administrations cannot escape responsibility for their failure to shape the future because they controlled the currency, contracted debts, shaped the national budget and decided the economic priorities with their hot shot technocrats, mostly IMF-WB disciples. Congress (the Senate and the House) cannot also escape responsibility for the country’s economic debacle, particularly on the issue of debt servicing, for deliberately abdicating its power over public funds in two specific instances. Cory Aquino-issued Proclamation 50 and 50-A that dovetailed PD 1177 and authorized President Aquino, without interference from Congress, to assume all the foreign and domestic liabilities incurred by the Marcos regime and unjustly dumped them on the shoulders of the Filipino people. Proclamation 50 and 50-A, signed respectively by President Aquino on December 15, 1986 and June 8, 1987, legitimized her economic policy of privatization, which mandated the rehabilitation of debt-ridden government financial institutions (GFIs), such as the Central Bank, Philippine National Bank and Development Bank of the Philippines. According to the Freedom from Debt Coalition, the idea of rehabilitating the GFIs was the brainchild of then-Finance Secretary Jaime Ongpin and Central Bank Governor Jose “Jobo” Fernandez (both deceased, the former committed suicide and the latter died of cancer), who reasoned that “it will not be a good picture for the government if the GFIs were closed due to unpaid debts.” In other words, they were more concerned of the country’s image abroad than the country’s povertystricken people. Later, Sen. Franklin M. Drilon, who was then the secretary of justice in Mrs. Aquino’s time, upheld the proclamations when some lawmakers questioned their use, stating that the “law vests upon the Chief Executive the discretion whether or not to undertake such assumption [of debts]”...even in a situation where the “value of assets transferred is less than the amount of liabilities assumed.” Curiously, Drilon issued this legal opinion after the Aquino Constitution took effect in 1987, explicitly mandating Congress to assume full control over the disposition of budgetary liabilities. Congress should have asserted on this mandate and called the attention of the Executive department or brought the issue to the Supreme Court for resolution or decision. But because of this inaction or culpable violation of the Constitution, the country has always been in a serious financial crisis, and thus remains until today the economic laggard of the five original members of the Association of Southeast Asian Nations: the Philippines, Singapore, Thailand, Malaysia and Indonesia. To reach the writer, e-mail cecilio.arillo@ gmail.com
Alálaong Bagá
J
erusalem symbolizes the loving and merciful presence of God in the midst of His people (Psalm 122:1-2, 3-4, 4-5). Jesus on the cross, jeered by His enemies and ridiculed by the public, for the believing convict is the presence of the mercy of God (Luke 23:35-43).
The house of divine mercy The responsorial psalm is a nostalgic ode of a pilgrim to Jerusalem, spelling out the significance of the holy city as where one finds the house of the Lord, the temple as God’s dwelling place on earth and the seat of divine mercy. This is a hymn of joy and gladness because of the opportunity and privilege to go to the temple, which makes the city glorious beyond compare. In entering the gates of the holy city, one is dominated already by the impressive strength and unity of its construction. And being in the holy city gives one the feeling of belonging to the people of God who observe the Lord’s decrees that in
Jerusalem’s holy space thanksgiving and praise to the name of the Lord be offered. In particular, one finds justice dispensed in Jerusalem, the center for the administration of justice. Inside its gates are the thrones of judgment where the people experience “just verdicts morning by morning” (Jeremiah 21:12), and where Solomon is remembered as a just king (1 Kings 3:16-28). For the solemnity of Christ the King, this psalm is used to underline that Jesus Christ reigns in the heavenly Jerusalem, though here on earth the Jerusalem of His time did not recognize Him, except for the repentant sinner. He lamented
Thursday, November 17, 2016 A11
that Jerusalem did not recognize the time of its visitation from God (Luke 19:44) and so failed to identify with the things that make for peace, the peace and justice that characterize the kingdom of God that Jesus came to establish.
The King on the cross
ON the cross, Jesus was being ridiculed for who He really is: the king of all. The leaders of the Jewish people, the Roman soldiers and one of the criminals being executed with Him reviled Him in derision. Sarcastically, they called Him “the Messiah of God” —the chosen one sent to save God’s people. That is why they challenged Him to save Himself as He saved others. They referred to Him as “King of the Jews”—hence He would have the power to do something for Himself. And the inscription above His head read, “King of the Jews”—the crime for which He was condemned by the authorities, a claim so ridiculous the sight of Him hanging on the cross moved the public to mockery. These messianic titles tell exactly who Jesus is. But His enemies did not know it, or would not want to believe it. So they used these titles to mock Him, convinced that if these titles
Due process and the burden of proving receipt of mailed assessment notices Atty. Esther M. Weigand
Tax law for business
T
hough the power to tax is plenary, it is not without its limitations. Just as other governmental powers are subject to the limitations provided by the Philippine Constitution, the power to tax is subject to the provisions of the Bill of Rights. First and foremost of which is that “no person shall be deprived of life, liberty, or property without due process of law.” Due process serves as the cornerstone of the protection granted to taxpayers against unscrupulous tax agents. The 1997 Tax Code, as amended, requires that taxpayers be informed in writing of any tax being assessed against them. Such notice of tax assessment must contain not just the facts giving rise to such tax assessment, but also the legal basis thereof. And, to ensure compliance with the law, such notice must be sent to and received by the taxpayer, whether by personal service, substituted service, or by mail. But, what happens when an assessment was mailed, but not
received by the taxpayer? The Supreme Court has held that a taxpayer must actually receive an assessment for it to be valid. And so long as the assessment was mailed to the taxpayer, properly addressed, with postage thereon prepaid, there arises a presumption that such was received by the taxpayer. However, to comply with due process requirements, it is necessary that taxpayers actually receive tax assessments, and a direct denial of such receipt
Nuke or bust? Val A. Villanueva
Businesswise Part One
P
roponents of the reopening of the mothballed Bataan Nuclear Power Plant (BNPP) say that it is more likely that we’ll be hit by lightning than be a victim of a nuclear powerplant explosion.
Their position underscores the “scientific” defense of the safety and reliability of having a nuclearpower plant in any locality, emphasizing the slim probability of a nuclear disaster damaging nearby communities. Energy Secretary Alfonso G. Cusi has signified that the Duterte administration is keen on reviving the old and dormant BNPP as one of the options “to diversify the country’s energy mix in providing quality, reliable, adequate, secure and reasonably priced energy.” The Department of Energy, he says, is “looking at all possible resources that the country can utilize to
achieve our industrialization goals.” According to Cusi, “The country should have a clear position on nuclear power. A well-informed decision is key to a sustainable and comprehensive energy program. With all the new findings, technological advancements and successful experiences of countries around the world, nuclear energy holds much promise for longterm energy plans.” In the United States a nuclearpower reactor recently opened for the first time in two decades. But this reactor, called Watts Bar Unit 2—one of two near Spring City, Tennessee — isn’t new. Most of it was built in the 1970s and 1980s alongside Unit 1,
were true of Him, one way or another God would undertake something to liberate Him or Jesus Himself would somehow demonstrate His power. But their derision against Jesus actually became a proclamation of faith on the part of the other criminal at His side. This man recognized the innocence of Jesus and His kingship. He asked to be remembered by Jesus when He comes to His own power. And his faith was rewarded with the King’s promise of his immediate entrance into paradise, the life of eternal peace in the triumph of divine mercy. Alálaong bagá, as we end the Liturgical Year, we celebrate the power and authority of Jesus Christ, in whom all creation flawed by sin finds redemption and meaning and future fullness of life. He is the King who rules from the cross. From the cross He opens the gates of His kingdom to repentant sinners and to all who believe in Him. His outstretched arms embrace all humankind and all God’s creation in love and mercy. 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.
gives rise to the burden of the Bureau of Internal Revenue (BIR) to prove that the mailed assessment was indeed received by the taxpayer. In Court of Tax Appeals (CTA) Case 8617 and CTA EB 1353, the taxpayers denied receipt of the assessment notices sent by the BIR, which were allegedly mailed to them by the latter. In CTA Case 8617, the BIR presented the registry return cards corresponding to the assessment notices sent, but the court found that the signatures thereon were ineligible and unreadable. On the other hand, in CTA EB 1353, the registry return card presented in court did not contain the signature of the authorized representative of the taxpayer, the latter having denied knowledge of such signature. In both cases, no other evidence was presented by the BIR to prove the fact of receipt, and thus, the Court of Tax Appeals ruled that the assessments were void. It has been held that what is essential in proving the fact of mailing is the registry receipt issued by the Bureau of Posts or the Registry Return Card signed by the taxpayer or his authorized representative. If these cannot be
presented, it is as if no assessment has been made. Thus, the simple act of mailing assessments to taxpayers is not enough compliance with due process requirements. It is imperative that the BIR ensure receipt thereof by taxpayers, and that it has ample evidence to prove such, the best evidence being the registry receipt issued by the Bureau of Posts, or the registry return card signed by the taxpayer or his authorized representative. In case of failure to prove receipt when denied by the taxpayer, the assessment becomes void, depriving the BIR of its power to collect the assessed taxes.
Scientists, policy-makers and climate strategists have been figuring out what the future of renewable energy will look like. They came up with these options: find a way of cleaning up coal, build batteries capable of storing energy from capricious renewables, or go nuclear. Each option has its own benefits and drawbacks. But nuclear is a strong contender because it is the only technology that actually exists.
Scientists, policy-makers and climate strategists have been figuring out what the future of renewable energy will look like. They came up with these options: find a way of cleaning up coal, build batteries capable of storing energy from capricious renewables, or go nuclear. Each option has its own benefits and drawbacks. But nuclear is a strong contender because it is the only technology that actually exists. “We are supposed to be adding zero-carbon sources, not subtracting, or simply replacing, to just kind of tread water,” US Energy Secretary Ernest Moniz was recently quoted as saying. BusinessWise, however, believes that nuke plants are multifaceted systems ran by humans, a situation where errors are unavoidable. In the field of nuclear power, human error has often been cited as a cause or contributing factor for numerous accidents and catastrophes, such as flooding, earthquakes and extreme weather, fires, equipment failures and improper maintenance, among others.
which came online in 1996 and has performed flawlessly. The two reactors are essentially identical in terms of safety, technology and output. But there has been one major advancement in the 20 years separating their openings: widespread acceptance of fossil fuels’ role in climate change, and the urgent need to wean the economy from it. This development bolsters the government’s position that indeed going nuclear is a viable option— if not the only option—to fill in the projected energy gap in the near future. Nuke plants undoubtedly give out clean energy. Because of their zero-carbon emissions, they somehow ease the fears of climate change.
The author is a junior associate of Du-Baladad and Associates Law Offices (BDB Law), a memberfirm of World Tax Services (WTS). 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 esther.weigand@bdblaw.com.ph or call 4032001 local 340.
(To be concluded) For comments and suggestions, e-mail me at mvala.v@gmail.com
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Thursday, November 17, 2016
LTFRB to tighten screws on U-hop, Grab, Uber drivers By Lorenz S. Marasigan @lorenzmarasigan
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fter unearthing a sorry fact that transport network companies (TNCs) Grab, Uber and U-Hop are encouraging partner drivers to operate ride-hailing services even without provisional authority, the landtransport regulator is now planning to amend the current rules on tech-based transport options. Land Transportation, Franchising and Regulatory Board (LTFRB) Chairman Martin B. Delgra III said his group has apprehended a number of transport network vehicle services ( TNVS) that are operating without franchises. Without disclosing the number of apprehended individuals, Delgra said under current rules, they are required to pay P200,000 for operating transport services illegally. “We have already sent a letter to the transport network companies, advising them not to activate the accounts of those peer operators applying for accreditation until and unless they have secured a franchise for those units,” he said. According to a few drivers that the B usiness M irror interviewed, it was Uber, Grab and U-Hop that “encouraged” them to operate without provisional authority. And yet, these companies are shielded by the current rules, because, sadly, there are no provisions on fines
27,062 The number of pending applications for TNVS franchises
against TNCs for activating accounts even without a franchise. “We are reviewing the current rules, and we are seriously considering to include the level of accountability on the TNCs. Hopefully, before the end of the year, we can amend the rules,” Delgra said. The BusinessMirror tried to contact representatives of the TNCs, but none were responding to its queries. Currently, the application process for TNVS franchises is on hold, given the number of pending applications before the LTFRB. Data from the regulator showed that there are 27,062 applications received, involving 29,151 units. Broken down, there are 4,808 Grab franchise applications, involving 5,727 units; 22,126 Uber franchise applications, involving 23,293 units; and 128 U-Hop applicants with 131 units. About 12,000 to 13,000 applications have been rejected, according to Delgra, as of Tuesday afternoon. He could not readily provide the statistics for the remaining 16,000 applications.
www.businessmirror.com.ph
Foreign nuclear experts to study BNPP revival T By Lenie Lectura
@llectura
he Department of Energy (DOE) said it may hire nuclear experts from other countries to assist the Philippines in its plan to put into commercial operation a mothballed nuclear power plant in Bataan.
“We lack in competence. We have to have a nuclear body to look after it. We need knowledgeable people,” Energy Secretary Alfonso G. Cusi said after a coal business and policy forum in Makati City. Cusi cited China, South Korea, Japan and Slovenia as among the countries that already signified interest to help the agency execute a plan to revive the Bataan Nuclear Power Plant (BNPP). “We are inviting experts from different countries to submit up to January or February next year,” Cusi said, referring to the formal proposals. Within the agency, he said a comprehensive study is already being undertaken. This study could be
$1B The investment needed to revive the Bataan Nuclear Power Plant
finished within the year, in hopes to keep the BNPP up and running in two to four years. The timeframe, Cusi said, is similar to putting up a coal plant. “I think, by end of the year, we
should know already what steps to do and everything. BNPP is already there. Whatever it is, we have to put a closure to the BNPP issue. We are allocating fund for maintenance. Later on, BNPP will be full of informal settlers,” said Cusi, explaining the reasons he personally prefers to revive the BNPP. The government is spending roughly P40 million to P50 million in annual maintenance for the BNPP. Plans to revive the facility could cost $1 billion. A senator has questioned this, saying it is more practical to invest $1 billion in the exploration and development of untapped indigenous-energy sources rather than spend it in an asset that has been mothballed for many years. “We are in consultation, coordination, having discussions,” Cusi said. He said it is normal to have differences in opinion, but assured Sen. Sherwin T. Gatchalian that crafting a nuclear policy is included in the agency’s plans. Gatchalian, who is also the chairman of the Senate Committee on Energy, is opposed to the revival of the BNPP, in the absence of a
clear and intensively researched national nuclear policy. Gatchalian said the DOE should first commission a comprehensive feasibility study on the prospects of utilizing nuclear power in the Philippines before pushing ahead with the construction or refurbishment of any nuclear plant, including the BNPP. In the absence of compelling positive findings from the BNPP study, Gatchalian maintained that it would be more prudent to invest the $1 billion required to refurbish the plant in the exploration and development of untapped indigenousenergy sources, especially within the energy-rich waters of the West Philippine Sea. “One billion dollars is a lot of money. We have to make sure that we are investing this substantial sum in cost-efficient energy ventures, which are guaranteed to make significant contributions to the long-term stability of our energy supply,” Gatchalian said. Last week Cusi said he received President Duterte’s nod to proceed with plans to tap nuclear power, including reviving the BNPP.
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