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“Those groups clearly see something and hear something that causes them to believe he is one who sympathizes with their voice and their view.... Donald Trump has to take responsibility for that.”—Rep. Elijah Cummings of Maryland, a black Democrat. He was among 169 members of Congress who signed a letter opposing Bannon’s White House appointment. AP

Fidel Castro: “Condemn me. It does not matter. History will absolve me.” —October 16, 1953, at his trial for rebel attack that launched the Cuban Revolution. AP

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Tuesday, November 29, 2016 Vol. 12 No. 48

‘Inspection of shipments to fight agri smuggling’ T By Jasper Emmanuel Y. Arcalas

@jearcalas

he Department of Agriculture (DA) said it will inspect all inbound shipments of agricultural goods and food before the Bureau of Customs (BOC) evaluates the tariffs for these imports, Agriculture Secretary Emmanuel F. Piñol said on Monday. Continued on A5

INSIDE

The team created by the DA to handle the inspection of all shipments of imported farm products

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reversal of fortune

Cow, sheep and goat raisers ruminate future as govt stops importation tack

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E1 Tuesday, November 29, 2016

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ReveRsal of

foRtune

Signs of stability could be identified even in the economies that most worried investors in recent years — the so-called “fragile five” of Brazil, India, Indonesia, South Africa and Turkey. All had seen their current account deficits shrink in the past three years, making them less dependent on foreign inflows of capital. Confidence in emerging markets had also revived among international investors. Before the American presi-

dential election both the MSCI emerging stock market index and JPMorgan’s emerging market bond index had outperformed their developed world equivalents this year. But President-elect Donald Trump’s victory seems, at least temporarily, to have changed minds. on Nov. 11 emerging market currencies suffered their second biggest daily sell-off in the past five years, dropping by 1.7% against the dollar. The dollar-denominated bonds of developing

country governments fell by more than 6% in the four trading days after the election, while their local currency bonds (exposing foreign investors to the risk of depreciation) dropped by 7.4%, according to Bloomberg. And the MSCI emerging market equity index fell by 7% in dollar terms. The Institute of International Finance, a trade group, reports that foreigners have pulled some $7 billion out of emerging markets since the election. The episode has been dubbed the “Trump tantrum” in tribute to 2013’s similar “taper tantrum” when the Federal reserve signaled it would reduce the pace of its bond-buying program, known as quantitative easing. Some of the market movements say more about America than about emerging market fundamentals. Trump’s victory has led to expectations that the republicans, who control both the executive branch and the legislature, will push through tax cuts, higher spending on infrastructure and defense, and rules designed to encourage multinationals to repatriate overseas profits. That program is likely to lead to bigger budget deficits, higher Treasury bond yields and a stronger dollar, espe-

cially if the Federal reserve responds to the fiscal stimulus by pushing up interest rates. These moves would have a knock-on effect in emerging markets; their currencies fall as the dollar rises, while their bond yields rise (and prices fall) in line with the Treasury bond market. A new paper from Hyun Song Shin of the Bank for International Settlements suggests that a stronger dollar may have significant financial, as well as trade, effects in emerging markets. Many companies have borrowed in dollars, so the cost of repaying their debt rises when the greenback gains ground against their domestic currencies. Much of this borrowing is conducted through the banking system, leaving the banks exposed to the risk of a rising dollar. Accordingly Shin finds that “dollar appreciation is associated with a slowing of cross-border dollar lending” — in other words, a tightening of credit conditions in emerging markets. The dollar may be a better indicator of risk appetite than the VIX index of equity volatility, the paper argues. But investors are also worried that the election of Trump signals a turning point in globalization. on the cam-

paign trail, he pledged to renegotiate the North American Free Trade Agreement, to declare China a currency manipulator and to impose protectionist tariffs. It is not yet clear how many of these proposals Trump will try (or be able) to implement. To use a Brexit analogy, the outlook for emerging markets may depend on whether the new government represents “soft Trump” or “hard Trump.” If the main economic impact of Trump comes in the form of a fiscal stimulus, the result could be a boost to global as well as American growth. That would be good for emerging market exports, which have been sluggish. They fell by 3.5% in the year to September in dollar terms, according to Capital Economics, while in volume terms they were flat. Industrial metal prices, which are especially sensitive to the economic outlook, have bounced since the election result. But if the main focus of the Trump presidency is on trade protectionism, then emerging markets are bound to suffer. The German IFo economic institute estimates that, in a trade war, Mexico’s gross domestic product could shrink between 3.7% and 5%, for ex-

ample. That explains why the Mexican peso has been the currency hit hardest by Trump’s election. It is possible that both elements of the Trump agenda might be pursued. A fiscal stimulus would suck in imports and thus cause the trade deficit to widen. A strong dollar would have the same effect, by making imports cheaper and American exporters less competitive. Since Trump has vowed to eliminate the deficit, this might cause a lurch to protectionism at a later stage of his term of office. The other unknown is security policy; a retreat from America’s defense commitments would cause investors to take fright and reduce their exposure to emerging markets. Volatility is par for the course in emerging markets. Investors are attracted by the prospects of rapid economic growth and the possibilities of structural reform in the good times, but then take fright and withdraw their capital when the going gets rough. Trump’s election just adds another dollop of uncertainty to the mix.

BUSINESS SENSE

Duterte beats third-quarter economic ‘jinx’ The Entrepreneur

Manny B. Villar

raditionally, economic growth slows down in the third quarter of an election year because the economy benefits from political spending in the first two quarters.

In effect, the third quarter of an election year poses a challenge to the incumbent administration. This is particularly significant during a presidential election, for two reasons: campaign spending during a presidential election is much bigger than during midterm elections; and the third quarter is the new president’s first quarter of economic management. Continued on A10

@davecaga @c_pillas29

This undated photo downloaded from the Department of Agriculture and Food of the Government of Western Australia web site, shows livestock in that country. Australia is the source of 1,342 heads of cattle imported into the Philippines through the “Expanded Breeder Cattle Lease Ownership Program” of the Philippines’s Department of Agriculture. By Jasper Emmanuel Y. Arcalas @jearcalas

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‘ENDO’ MIDDLE GROUND MUST BE REACHED–GOVT

DonalD Trump addresses supporters at a rally in manchester, new Hampshire, november 7, 2016. as Trump assembles his national security team, he also needs to decide on an approach to foreign policy for world crises, finally giving meaning to his slogan “america First.” Stephen Crowley/the new york timeS

or much of 2016, things seemed to be going well in emerging markets. A pickup in commodity prices signaled that the global economy (and China’s, in particular) was more robust than feared as the year began. In the manufacturing sector, the average level of the purchasing managers’ index in developing countries ticked up from 49 at the start of the year (indicating contraction) to 51 (expansion) by october, according to Goldman Sachs.

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Part Two

ILIPINOS love to eat meat. And with a growing economy comes an increasing purchasing power—meaning, there would be more chicharon, bulalo, sinigang, lechon and, maybe, even kebab on a Filipino’s plate today. In fact, Filipinos’ annual consumption of meat has almost doubled in the past two decades. The Philippines’s current meat consumption is at 28.7 kilograms per capita (kg/capita), nowhere near than the

PESO exchange rates n US 49.9230

1993-recorded 15.47 kg/capita, data from the Organisation for Economic Co-operation and Development (OECD) show. The 1993 annual meat consumption reflects the current poultry-meat consumption per year of Filipinos. The Filipinos’ palate for other sources of protein, such as beef and mutton, has been continuously growing. Filipinos’ annual consumption of beef has remained in the 3 kg/capita area since breaching that level in 1999. The OECD data show that the Philippines has a 3.02 kg/capita, way higher than the 1.69 kg/capita recorded in 1994. The same is observed with the relationship of Filipino taste buds and mut-

ton. From a 0.378 kg/capita of mutton registered in 1993, the Philippines’s annual consumption of mutton has played in the 0.50+ kg/capita zone since 2008, OECD data show. Today, an average Filipino eats 0.504 kg of mutton a year. The country’s annual consumption of beef and mutton translates to a yearly requirement of 440,000 metric tons (MT) of beef and 58,600 MT of mutton, OECD data shows. In order to meet the growing demand of Filipinos for protein sources, such as the meat of ruminant animals (cattle, goat and sheep), the Department of Agriculture (DA) started a series of

h e g ove r n ment is inBello: “We recognize tensifying that there are legitimate its efforts to conforms of contracting vince all stakeholdand, thus, may be ers to accept the allowed, particularly proposed “middle in seasonal and project ground” in stopemployment.” ping illegal hiring practices, highlighting that ending all forms of contractualization will drive away investors and lead to the displacement of at least 100,000 employees. Labor Secretary Silvestre H. Bello III reiterated his appeal made in the three Labor Summits in Luzon, the Visayas and Mindanao in the past two months for the supposed middle ground, reminding labor groups to recognize the importance of legitimate forms of contracting to help employers sustain the profitability of their businesses. “While the department [of Labor and employment] is keen on curbing illegitimate contractualization, or endo, practices as directed by the President, we recognize that there are legitimate forms of contracting and, thus, may be allowed particularly in seasonal and project employment,” Bello said in a statement. He added that endo practices, or the illegal schemes used by employers to skirt the constitutional right of workers to security of tenure, are different from legitimate contractual arrangements, which businesses use to save on costs and make their businesses sustainable. Continued on A2

Continued on A2

n japan 0.4420 n UK 62.3638 n HK 6.4369 n CHINA 7.2174 n singapore 34.9699 n australia 37.1527 n EU 53.0182 n SAUDI arabia 13.3107

Source: BSP (28 November 2016 )

BMReports BusinessMirror

A2 Tuesday, November 29, 2016

Cow, sheep and goat raisers ruminate future as govt stops importation tack Continued from A1

importation program in a bid to develop local ruminant animal industries in the Philippines eight years ago.

Breeding

NEARLY a decade ago, the Bureau of Animal Industry (BAI), an attached agency of the Department of Agriculture (DA), moved to develop ruminants. Called Animal Genetic Infusion Projects (Agip), the program has facilitated four importation projects to develop local ruminant industries by infusing new bloodlines from America and Australia. “The overall direction for the ruminant industry is to build the population base [through importation and use of technologies], increase anima l productiv it y [through introduction of quality genetic materials], and lay the groundwork for sustainable development,” the BAI said. The first importation program was called “Accelerating the Genetic Resource Improvement Program for Beef Cattle and Small Ruminants”, or Agripbes. The program was launched in 2008 through a P399.90-million assistance funding from the United States through its US Public Law 480. Agripbes aims to ensure the continuous breeding of purebreds and genetically superior animals in the country by infusing new bloodlines to existing breeding farms under a repayment scheme. The BAI would be selecting certain breeds of ruminant animals from the US to be procured and imported to the Philippines. The BAI expects a domino effect of breeding through Agripbes. Once the proper animals were selected, they will undergo a week or two of quarantine period in the US. Afterward, they will be imported to the Philippines after a successful bidder has been awarded the contract for the said importation by the BAI. The imported animals would stay in government quarantine areas for 30 days, with the winning bidder shouldering the costs. After which, they are distributed to identified qualified farmers.

Repayment

UPON receiving the imported breed of ruminant, the recipientfarmer must repay outright at least two ruminant animals for one imported buck (either goat or sheep) he or she received. The recipient can pay from existing stock or an offspring of the imported breed throughout the program duration. In principle, the ruminant animals that served as “repayment”— especially the offspring of the imported breed animal—were then given to the next line of Agripbes recipients. Recipient-farmers are selected by regional BAI coordinators, some of whom are also owners of a multiplier farm, from

academe, local government unit or an interested livestock grower with capabilities. The first tranche of 1,800 imported ruminant animals were delivered from 2010 to 2013 in seven batches and were later on distributed to 16 regions. This tranche was composed of 1,200 heads of goat (351 boer, 308 Anglo Nubian, 59 Toggenburg, 131 Saanen, 346 Alpine and five La Mancha breeds) and 600 heads of sheep (145 Katahdin, 371 Dorper and 84 Saint Croix breeds). Since the first tranche in 2010, the program has reached a third line of recipients. There were 249 Agripbes first line recipients or the ones who directly received the first wave of imported ruminant animals, according to BAI data.

Importation

BAI data show that as of December 31, 2015, a total of 1,690 repayment animals from the first-line recipients were given already to 565 second-line recipients in 17 regions. So far, 142 repayment ruminant animals from the second-line recipients were distributed to 66 third-line recipients. All in all, these bring the total Agripbes-beneficiaries to 880, with total count of 3,632 ruminant animals distributed. In 2014 Agripbes ventured into the second phase of the animal importation program for cattle. The BAI earlier targeted an importation of 1,200 breeder heifers. But due to expensive cost of the cattle from the US, the number was reconfigured to 1,000 heads. Another reconfiguration was done—still due to expensiveness of cattle—in mid2014 before the importation was green-lighted by then-Agriculture Secretary Proceso J. Alcala. A total of 78 heads of beef cattle (70 heifers and eight bulls) and 910 heads of sheep (258 rams and 652 ewes) of various breeds were procured. A contract was awarded to General Mercantile Corp. in a jointventure agreement with Ebenezer Goat Farm. The said ruminant animals were selected in November 2015 and successfully arrived in the Philippines mid-December last year.

Insemination

AFTER a quarantine period in January, the procured animals for the second phase of Agripbes were distributed to various farms in the country. Sixteen of 17 farm recipients of the second sheep importation were delivered to 13 government stock farms and three were sent to the Central Luzon State University. Meanwhile, recipients of 78 heads of cattle were all from government stock farms (GSFs). On top of the live animal importation, Agripbes also procured 10,000 semen doses of cattle of different breeds from the US, which could be tapped through the Unified National Artificial Insemination Program (Unaip).

According to the implementing guidelines approved on March 17, 2015, about 4,000 doses of the total imported semen should have been used for the breeding season this year. The BAI said GSFs were supposed to have been given 1,720 doses, while the rest should have been provided to private farms. The BAI also said another 833 doses will be utilized by the participating farms in the succeeding breeding seasons until 2020. A thousand doses will be used for sire linkage, while the remaining 2,145 doses will serve as on-stock for the continuity of the BAI’s flagship project, the Genetic Improvement Program (GIP).

Goats

THROUGH another P475 million worth of funding assistance from USPL480, the BAI started in 2010 another ruminant animal-infusion project called the “Goat Production Project for An Accelerated Hunger Mitigation Program”, or the GPP-AHMP. The GPP-AHMP sourced 1,430 heads of breeder goats (1,300 head does and 130 head bucks) from America and another 2,115 heads of breeder goats locally (2,115 head does and 500 head bucks). The importation component of the GPP-AHMP earlier aimed to procure 6,480 heads of breeder goats (6,000 head does and 480 head bucks) but it was reconfigured due to high cost to the current goat count of 1,430 heads. The repayment scheme of the GPP-AHMP is the same with that applied for Agripbes. The locally sourced breeder goats were already distributed in 2014 with a total number of beneficiaries reaching 711 farmer-recipients (433 for breeder does and 278 for breeder bucks). The collection and distribution of repayment animals of the locally purchased goats to prospective farmer recipients started in the third quarter of 2016.

Poverty

AS for the imported goats, the BAI Bids and Awards Committee is currently on postevaluation of the winning bid in December 2015. The imported goats composed of Anglo Nubian, Alpine and Boer Breeds is proposed to be distributed to different nucleus farms of the government and academe. According to BAI data, the estimated number of recipients of the GPP-AHMP is 378. The GPP-AHMP was the materialization of the DA’s commitment to the government’s program of mitigating hunger and reducing poverty incidence in the country back in 2007. “The project helped in increasing the number of goat raises. An increase in number of raisers [with the assumption of more animals being raised] will be also increase the supply of goat and sheep meat in the market,” the BAI said in its

2015 Accomplishment Report. “This, in turn, will help them out of constant hunger and poverty.” To date, the country’s goat population has reached 3.71 million heads, according to latest data from the Philippine Statistics Authority (PSA). PSA data also show that goat production in 2015 increased to 77,480 (MT) live weight, from 76,100 in 2014.

Heifers

THE third importation program of the BAI was the “Expanded Breeder Cattle Lease Ownership Program”, or E-BClop. This program aimed to revitalize and sustain local cattle production by introducing highgrade and purebred animals with quality genetic materials at both small hold farmers and multiplier cattle raisers to ensure their continued access to genetics. Like the GPP-AHMP, E-Bclop had local and imported components. The program started in 2014 and ends this year. It resulted to the procurement of 1,342 heads of cattle from Australia.Of the figure, 760 head of purebred commercial Brahman-breed heifers were distributed to the Federation of Cattle Raisers Association of the Philippines (FCRAP), a local cattle organization. The remaining heads were distributed to GSFs. As for the local component of the project, 800 heifers were purchased and equally distributed across 16 regions. The BAI estimates at least 449 E-Bclop recipients. About 286 of them received locally purchased cattle, while the remaining 163 are recipients of the imported ones. The E-Bclop project is currently on its final phase, which is the collection and distribution of repayment animals. This phase is expected to start next year, according to documents provided by the BAI.

Mutton

THE last importation program that the BAI conceptualized was the Mutton Development Project (MDP). The MDP, which was conceived and approved in 2015, aimed to procure 3,409 heads of commercial meat-type sheep to develop the mutton industry and sheep production in the country. The E-Bclop and MDP were Philippine government-funded projects through the DA’s National Livestock Program (NLP). Under the NLP, the DA allotted P200 million for E-Bclop (P40 million for the local component and P160 million for the foreign component) and P124.48 million for the MDP. “Even if there’s only around 6 percent of commercial ruminant animal growers in the country and the rest, of which more than 93 percent are backyard farmers, we closely work hard with the industry,” Agip Overall Project Manager Paul Limson told the BusinessMirror. To be concluded

UNWTO. . .

Continued from A12

of the DOT’s web site.” These will also include the translations of said ads and creative materials into other languages. She added that the P650-million brand campaign and the $3-million placements with the CNN, BBC and Beautiful Destinations will be sourced from the 2016 budget of the agency. The P650-million brand campaign fund will be sourced directly from the P1-billion “It’s More Fun” budget allocated by the previous DOT administration headed by Ramon R. Jimenez Jr. She assured the public, particularly the tourism stakeholders, that an improved country branding shall result in “optimal media exposure” and shall establish a stronger brand-consumer relationship across geographical markets worldwide in the digital age. Meanwhile, Nina Terol, corporate affairs director of McCann, stressed that they are working hand in hand with the DOT to finalize the list of timetables and deliverables. “We know they have been studying the matter and are considering various data points in order to make the best decision moving forward.” The upscaled and much improved campaign, which will showcase the total Philippine tourism experience, will be launched in January 2017, in time for the Philippine-hosting of the Miss Universe Pageant in Manila, Teo said.

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‘ENDO’ MIDDLE GROUND MUST BE REACHED–GOVT Continued from A1

Coexist

“Workers and employers are bound to coexist. One could not be without the other,” Bello said, adding that the Constitution provides not only for the protection of the rights of workers but also recognizes the right of employers to reasonable returns on their investments. “I urge labor groups to work hand in hand with the current administration in identifying plans, policies and platform of engagement in the next medium term that are anchored on principles of decent work and social justice,” he said. However, Bello’s new appeal for labor groups and employers to reach a “middle ground” is seen by workers as a full turn-around from President Duterte’s campaign promise to stop contractualization. During the first 100 days of the Duterte administration, officials of the ruling PDP-Laban party had adopted a hardline stance against contractualization and other violations of labor laws, even threatening to legislate more laws penalizing violators with imprisonment and steep fines.

Empty promises

But militant group Anakbayan, in its statement before the scheduled Bonifacio Day protest on Wednesday, said Duterte’s campaign promises in favor of workers are quickly turning out to be empty promises, resulting in a “business-as-usual” situation, wherein oligarchs are able to exploit workers. “Rather than decisively junking neoliberal policies legitimizing this antiworker scheme, the Duterte regime, through Labor Secretary Silvestre H. Bello III, has made one excuse after another to justify the continuation of contractualization,”Anakbayan National Chairman Vencer Crisostomo said. “There is no genuine change under the Duterte regime. It’s business as usual for big comprador oligarchs, while Filipino workers continue to suffer from contractualization, low wages, high prices and inaccessible services,” he added.

Infra. . .

Continued from A12

He said if government line agencies fail to meet their commitments to spend their budgets, there will always be that threat that underspending could again occur. Diokno said he earlier estimated that underspending in the previous administration reached as much as P1 trillion. This caused the economy to suffer greatly because of the lack of government spending. Key agencies handling bigticket infrastructure projects that are particularly expected to perform include the departments of Transportation, Public Works and Highways, Energy, and Agriculture, among others. “That’s my greatest fear; if the other Cabinet secretaries do not work, we will underspend. But like I said, there are marching orders by the President to ‘use it or lose it’ [referring to their jobs],” Diokno said.

Manufacturing

Meanwhile, the Department of Trade and Industry (DTI) is targeting manufacturing growth to average between 8 percent to 10 percent in the next six years, with micro and small enterprises (MSEs) contributing further to the economic expansion through a credit facility for smaller businesses that can go up to as much as P18 billion. “We’re trying to remove the ‘five to six’ industry; we are replacing this with an alternative micro and small fund and we’ve managed to set aside P1 billion under the Office of the President. This is for the very

No blanket end to contractualization

But Trade Secretary Ramon M. Lopez continues to bat for the continuation of legal contractualization, resisting the move of militant labor groups for a blanket end to contractual work. “We know that this affects the operations of businesses. This is one flexibility that we will not remove, definitely we will argue to keep this because removing this will discourage a lot of investors, even those here may leave the country,” Lopez told manufacturing stakeholders during the first day of the Manufacturing Summit: Trabaho at Negosyo held on Monday. “If there’s one thing really posing a threat to job generation and investment attraction, it’s the issue with contractualization and not the rhetoric of our President,” he added. Lopez said three companies with existing operations in the Philippines, employing among them some 90,000 workers, have indicated they want to shut down or downgrade their operations. Another Japanese company that the DTI chief spoke with during Duterte’s visit to Japan also expressed his hesitance to setting up operations in the country if the labor policy remains unclear. “Tatlong malaking kumpanya na kumausap sa akin, ’yung isa naman, na Japanese na nag-air ng views,” he said.

Win-win solution

Lopez remained firm that legal contractualization, as opposed to the illegal endo scheme, should continue, advising that his alternative “ win-win solution” will strike a balance between maintaining contractual work but providing security of tenure to employees. Under the proposal, principal companies can still farm out work via thirdparty service providers (SP), which will then ensure their workers are both regular and permanent employees with mandatory retirement benefits. “These are regular employees with the SP, but their principal still has the choice to hire directly or get an SP,” he clarified.

micro businesses. We’ll provide flexibility and no collateral needed,” Lopez said during the DTI’s Manufacturing Summit: Trabaho and Negosyo held on Monday. The P 18-billion credit facility, to be called “Pondo sa Pagbabago at Pag-Asenso,” (3P) will be released through conduit-partners of micro-finance institutions. The 3P Program will start with an initial amount of P1 billion in 2017. The DTI will make the funding available through six or seven microfinance institutions that will retail the funds to beneficiaries. The interest rate will be on a par with SME market rates of at least 7 percent annually, way below the “5 to 6” rate, or 20 percent, offered by informal financiers. H a v i n g a n S M E Mo d e r n Policy also forms part of the DTI’s Comprehensive National Industrial Strategy (CNIS), the agency’s “mother program that charts the Philippines’s industrial policy to develop local industries. Five priority subsectors were outlined as the key priorities under the CNIS: manufacturing, tourism, information technologybusiness process management (knowledge-process outsourcing), agribusiness, and infrastructure and logistics. Manufacturing has grown by 8.1 percent in the last four years. According to Lopez, with these programs, manufacturing growth can reach 8 percent to 10 percent during the Duterte administration. Manufacturing has been a major growth driver in the last decade, contributing 12 percent to the GDP as of July 2016. Its contribution to total employment is estimated at 8 percent of the total work force.

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The Nation BusinessMirror

Editor: Dionisio L. Pelayo • Tuesday, November 29, 2016 A3

Legislator appeals SC’s Anti-pork groups warn: ’17 budget ruling on Marcos burial has room for fund waste, abuses By Joel R. San Juan @jrsanjuan1573

CONGR ESSM AN whose brother disappeared during the imposition of martial law on Monday formally filed a motion for reconsideration before the Supreme Court (SC) on behalf of desaparecidos and other humanrights violation victims during the Marcos administration, seeking the reversal of its decision allowing the burial of strongman Ferdinand E. Marcos at the Libingan ng mga Bayani (LNMB). In his 42-page motion, Liberal Party Rep. Edcel Lagman of Albay insisted that Marcos’s burial at the LNMB on November 18 was a “gross distortion, a malevolent revision and a wanton derogation of Philippine history.” Contrary to the Court’s ruling and President Duterte’s claim, Lagman said the former President’s burial at the LNMB would not lead to closure and national healing. “The burial of a condemned dictator, confirmed plunderer and censured violator of human rights in the cemetery of heroes will not lead to closure because it sanctifies evil and installs a despot and oppressor in the venerable memorial for good men,” Lagman said. He added that the speed and stealth by which the Marcos burial was carried out by the immediate members of the Marcos family shows their incorrigible addiction to deception, underhandedness and abuse, which the Supreme Court must never condone. Lagman also argued that the Court erred in solely basing the burial of Marcos in the LMNB on Armed Forces Regulation G 161375, because the said issuance by the Department of National Defense is not effective and enforceable for absence of registration with the Office of the National Administrative Registrar (Onar) of the University of the Philippine Law Center as required by the Ad-

ministrative Code of 1987. Under Armed Forces Regulation G 161-375, the chief of staff shall be responsible for the issuance of the interment directive for all active military personnel, authorized personnel, and retirees, veterans and reservists enumerated in the rule. Lagman renewed his plea for the exhumation of “whatever was interred as Marcos mortal remains” at the LMNB despite the lack of finality of the Court’s ruling issued on November 8. Lagman also prayed for the forensic examination on whatever is exhumed to determine what actually was buried at the LMNB. Furthermore, Lagman argued that the when the totality of Marcos as a man is weighed in the balance, whatever achievements he has done for the country are completely nullified by his sins against the nation, thus, making him ineligible to be buried in the LNMB. Aside from Lagman, former Party-list Rep. Satur Ocampo of Bayan Muna and several other human-rights violation victims during the Marcos administration also filed a motion for reconsideration before the SC. Ocampo and his copetitioners argued that the hasty burial of Marcos at the LNMB has not rendered their motion for reconsideration moot and academic. “The act of the respondents that violated the Rules of Court and the authority of this Court cannot be rewarded by rendering the main issue moot,” Ocampo said. He added that mootness is not a valid ground for the refusal of the Court to exercise its power of judicial review in cases where it involves serious violation of the Constitution, when the issues raised are of transcendental importance, or in instances where there is danger that the acts sought to be reviewed, or the violation complained of will be repeated like in the present case.

By Marvyn N. Benaning | Correspondent

OCIAL Watch Philippines (SWP) and Scrap Pork Network (SPN) have asked the Senate to scrutinize the 2017 national budget thoroughly, particularly the lumpsum appropriations, and prevent the return of the Disbursement Acceleration Program (DAP).

SWP and SPN also warned that pork barrel and DAP might still be embedded on the proposed P3.35trillion budget, thus spurring fears that what has been dubbed as a “budget for change” may be a budget for graft, waste and fund abuses. “The 2017 budget is still far from being the budget for real change that we expect from this administration, as lump sums and other contestable appropriations are still embedded in it,” SWP coconvenor Prof. Marivic Raquiza said on Monday. The convenor of SWP, Prof. Leonor Magtolis Briones, is now the secretary of the Department of Education (DepEd). The Senate Committee on Finance has finished plenary deliberations on House Bill 3408, or the 2017 General Appropriations bill (GAB), on November 22. SWP found a little more than P930 billion in automatic appropriations out of the P3.350-trillion budget. The Special Purpose Funds (SPFs) amount to P484.030 billion and the Unprogrammed Funds (UFs) total P67.5 billion. “These leave only 57 percent, or P1.948 trillion, of agency budgets open to public discussion, because automatic appropriations, unprogrammed funds and SPFs are not usually debated in great detail,” SWP fellow Jocelyn Cuaresma explained.

SPN campaigner Peachy Tan added that lump sums are open to abuse, since they are largely opaque and not subject to accountability. Moreover, they lack the details and the specific work plans as in the budget proposals of regular agencies. “Once these are approved, these are vulnerable to reductions, transfers and ‘adjustments,’” she added. “The pork-barrel issue may still be alive, despite the Supreme Court ruling on the unconstitutionality of the Priority Development Assistance Fund [Pdaf] or pork barrel,” SWP and SDPN said in a statement. Earlier the Department of Budget and Management (DBM) announced it would allow legislators to propose programs, activities and projects (PAPs) for their respective constituents, which many antipork groups question. “The DBM’s announcement, in essence, may resurrect the practice of pork-barrel politics. We further question how the legislators can examine the budget submitted by the Executive from an impartial and disinterested perspective, when their pet projects are embedded in the agency budgets,” the groups stressed. They warned that this may constitute conflict of interest. SWP and SPN called on citizens to be vigilant during the implementation of local projects identified by

legislators for inclusion in the national budget during the preparation and legislation phases. “We recognize the Legislative’s power of the purse, but the insistence of some legislators to identify the beneficiaries for government programs is an indication that the pork-barrel system is alive, even as postenactment intervention was rendered unconstitutional by the SC,” they noted. The anti-pork groups support the lawmakers desire to provide benefits for their constituents but believe the most appropriate way for legislators to do this is by actively participating in the Local Development Councils (LDCs) that are mandated to formulate development plans and public investment programs, in accordance with Sections 107 and 109 of Republic Act 7160, or the Local Government Code. “Identifying and solving the concerns of local people can best be addressed through the collective wisdom of local leaders, including civil-society organizations, who are members of the LDCs, and of which the legislators in the House of Representatives are also members of,” the budget watchdogs said. “This way, the projects of legislators can better be rationalized within a development framework formulated by local leaders and local citizens’

groups, and which there can be consultations on with local citizens.” It is widely reported that the agencies from which the PAPs will be drawn from are the following: the departments of Health, Social Welfare and Development, and of Labor and Employment; Technical Education and Skills Development Authority; Department of Public Works and Highways; and Commission on Higher Education. Bringing up the issue on DAPlike budget transfers, Cuaresma expressed concern over the return of the erroneous definition on savings, as stipulated in General Provisions, Section 59, paragraphs (a), (b), and (d) of the Third Reading version of the 2017 GAB. Unobligated allotments may be taken away from the agency and be declared as savings at any time of the year (Paragraphs a and b). In paragraph (d), “savings” may be determined even though a PAP has yet to be implemented. “Before we know it, we may see the revival of the Disbursement Acceleration Program legitimized in the national budget,” she said. To avert this, SWP and SPN urged the Senate to restore the definition of savings under Section 56, General Provisions of 2017 National Expenditure Program during the period of amendments to the 2017 GAB.

Salceda seeks amendments to Public Service Act Homemade bomb found near US embassy By Johnny C. Nuñez Philippines News Agency

DP-Laban Rep. Joey S. Salceda of Albay has filed House Bill (HB) 446 seeking to amend the statutory definitions of “public service” and “public utility” under the 80-year-old Public Service Act, or Commonwealth Act 146. When enacted, the measure will open the telecommunications, transport and power industries to 100 percent capitalization by foreign players. HB 4468, titled “An Act Further Amending Commonwealth Act 146, or the Public Service Act, as Amended,” aims to solve the country’s debilitating woes over these three vital industries, which have stalled economic growth for so long. Salceda said his proposed amendments will clarify the “ambiguities” surrounding the statutory definitions of public service and public utility, which had enabled oligarchs to monopolize telecoms, transport and power industries, among others, for decades to the detriment of consumers and the country. The bill, he added, also seeks to address the “changes in the economic framework brought about by globalization and rapid technological innovations by adjusting the provisions of the law… and enable it to fulfill its purpose of truly serving the public.” “Consumers often experience high prices and poor quality of basic services in the country because only a few local players or oligarchs effectively control the market. Competition and foreign investments are inhibited, because limitations that should only apply to the operation of public utilities are also

often applied to all public services,” he pointed out. Salceda, senior vice chairman of the House Committee on Economic Affairs, said this situation “is caused by the ambiguity in the definition of public utility that is often used interchangeably with public service under Commonwealth Act 146,” and the key to fixing the problem is to develop a clear statutory definition of a public utility by amending the Public Service Act. The proposed amendments redefine public utility as “public service that regularly supplies the public and directly transmits and distributes… through a network, its commodity or service of public consequence.” The bill also states that a public utility is “necessary to the public and a natural monopoly that needs to be regulated when public interest so requires as determined by Congress.” Included in the public-utilities categpry under existing laws are electric- power transmission, electric-power distribution, water pipeline distribution, sewerage pipeline system and similar services. He noted that Commonwealth Act 146, which has already gone through several amendments through the decades, is “still a good law in terms of protecting public interest, albeit outdated in certain aspects.” He pointed out, however, that this law is outmoded, most particularly, in 1) the transfer of the functions of the Public Service Commission to various administrative agencies; 2) the definition of public service, which is often used as a proxy for public utility in reference to the 1987 Constitution; and 3) the applicable penalties and fees for public services. Salceda said HB 4468 “proposes to

further amend the Public Service Act to effect the necessary changes in the antiquated provisions of the law to increase its relevance to contemporary concerns, in the interest of providing the general public with more choices, better services and lower prices.” The bill also “prescribes a 12-percent cap on rate of return and prohibits income tax as operating expense for rate-determination purposes for public services, including public utilities, consistent with administrative and judicial pronouncements.” The legislative reform will significantly contribute to increasing competition, as well as protecting the public interest, he said. “More competitions among providers would result to lower prices, improved quality of basic services in the Philippines, and help create a more competitive economy toward a better quality of life for all,” Salceda explained. The proposed amendments include the transfer of certain functions, powers and duties of the Public Service Commission to various administrative agencies of the government, according to their respective jurisdictions. These agencies include the Department of Transportation, Land Transportation Franchising and Regulatory Board, Land Transportation Office, Civil Aviation Authority, Civil Aeronautics Board, Coast Guard, Maritime Industry Authority, Philippine Ports Authority, Department of Information and Communications Technology, National Telecommunications Commission, Department of Energy, Energy Regulatory Commission, Department of Environment and Natural Resources, National Water Resources Board, Local Water Utilities Administration,PhilippineCompetition Commission and others.

By Rene Acosta

@reneacostaBM

HOMEMADE bomb similar to what was used in the Davao City bombing in September was found near the US Embassy in Manila on Monday, prompting the National Police chief, Director General Ronald M. dela Rosa, to initially declare that the failed bombing could have been the handiwork of Mindanao-based terrorists. The bomb, fashioned out of an 81mm mortar shell with a cellular telephone as the trig gering device, was found inside a trash can about 25 meters away from the embassy building on Roxas Boulevard in Manila.

It was later detonated safely by ordnance experts. Dela Rosa said the bomb, with a detonating cord, was almost similar to what the Maute Group, a foreignallied local terrorist gang based in Lanao del Sur, used in the bombing of the night market in Davao City in September, which killed 14 people and injured at least 70 others. The group was tagged behind the bombing following the arrest later in Cotabato City in joint police and military operations of its members who actually carried out the bombing, which prompted President Duterte to place the country under a state of emergency. The Maute Group, headed by the

Maute siblings, is currently the subject of an ongoing operation in Butig, Lanao del Sur, by the military following the group’s occupation of the town and its old municipal building wherein it also raised the flag of the Islamic State of Iraq and Syria. The military said it has already killed at least 20 members of the group in the ongoing operations. Dela Rosa said that, with the recovery of the Maute Group’s signature bomb, it is not far-fetched that the failed bombing could have been carried out by the Lanao del Sur-based terrorist group, which has pledged its allegiance to the Islamic State in Iraq and the Levant as early as last year.

EARLY CHRISTMAS CELEBRATION The first Philippine Christmas Festival was held recently at Darling Harbor in Sydney, as part of the

celebration marking 70 years of Philippines-Australia diplomatic ties. The Filipino Chaplaincy Chatswood Parish (FCCP) Vocal Ensemble performed during the two-day event, organized by the Philippine Community Council of New South Wales Inc., in cooperation with the Philippine Consulate General. The choir is composed of engineers, nurses and other professionals. They are sopranos Mary Alarcio, Charisse Arpafo, Jean Dimanarig, Mariz Espinosa, Lynne Moncada, Caroline Sosito and Olivia Villanueva; altos Rhea Mae Bulquerin, Giselle Goloy, Sheila Arellano-Macaraeg and Mae Annabelle Magtibay; tenors Mark Alarcio, Anton Piccio, Bobby Quiñones and Lester Salcedo; and basses Ryan Balboa, Kristian Garcia, Ricardo Mariano and Jerome Rodriguez.

Economy

A4 Tuesday, November 29, 2016 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

news@businessmirror.com.ph

Naia air-traffic congestion seen easing by Q1 2017

By Recto Mercene

@rectomercene

he air congestion now bedeviling the Ninoy Aquino International Airport (Naia) will to be greatly reduced within the first quarter of next year, according to aviation authorities, with the completion of several projects for a more efficient management of air traffic. Civil Aviation Authority of the Philippines (Caap) Deputy Director General Manuel Antonio L. Tamayo said the much-delayed communication navigation system (CNS) and its adjunct project, the air-traffic management (ATM), would have been in place by early 2017. “The government had constructed 12 radar stations across the Philippines as adjunct to the CNS/ATM to monitor each arriving and departing flights, and these would greatly speed up the landing and takeoff, contributing to the efficiency of the Naia,” Tamayo said at the Kapihan sa Manila Hotel media forum. He said air-traffic controllers and other technical experts have been sufficiently trained as part of the CNS/ ATM package. “Right now, they are doing ‘shadow’ training, comparing the airplanes they see on the current radar system with this next generation system that is also linked to satellite in space,” Tamayo said. He added that the Caap has set aside P50 million to improve the

₧700M

The DOTr’s contribution for the facility upgrade of Sangley Point in Cavite

runway at Sangely Point, Cavite, to speed up the transfer of turbo proptype airplanes belonging to the general aviation sector. “Our target for Sangley’s completion is next year because the Department of Transportation [DOTr] had also contributed P700 million to upgrade the facilities at Sangley,” Tamayo said. C a ap Director Genera l Jim Sydiongco, on the other hand, said that as a prelude to the full operation of the CNS/ATM, the agency has just installed near the Naia runway an important component of the CNS/ ATM technology. “When this system is in full operation, we could be able to claim that the

The CNS/ATM complex located at the Civil Aviation Authority of the Philippines compound in Pasay City. Recto Mercene

Naia is now on a par with the rest of the world with a sophisticated system that is in accordance with the standard of the International Civil Aviation Organization,” Sydiongco said. “The CNS/ATM system is comprised of a computer-based flight data-processing system that will enable aircraft operators to meet their scheduled departure and arrival and stick to their preferred flight plans with minimum constraints and without compromising agreed levels of safety. It would also extend surveillance of aircraft and improve navigational accuracy,” a flyer of the system stated. Sydiongco said the whole apparatus is situated at the Caap compound in Pasay City, which has been under construction for the last five years. He added that in 1983, the Icao has determined that the system and procedures supporting civil aviation had reached their limits, and established the Special Committee on Future Air Navigation Systems (FANS) to develop new system that would overcome the limitations of conventional system

and allow air traffic management to develop on a global scale. “In July 1991 the 10th Air Navigation Conference endorsed the concept for a future air navigation system as developed by the FANS Committee,” he said, adding that the concept was eventually known as the CNS/ATM system. This is a complex and interrelated set of technologies, dependent largely on satellites and could be adjusted to quickly adopt to the changing air-traffic requirements, Sydiongco added. Meanwhile, Manila International Airport Authority (Miaa) General Manager Ed Monreal, who is also one of the forum’s guest, said landing and takeoff at the Naia would speed-up when the next two sets of the P330million rapid exit taxiways (RET) are in place. He said the two previous RET’s are for smaller aircrafts, while the new set of two RETS are for widebody jetliners. “Wide-body aircraft landing on runway 06-24 would be able to exit at a fast clip by simply slipping into the

RET without reducing speed or completely stopping before clearing the runway,” Monreal said. “That way, those waiting in line for takeoff would be able to take off as soon as the landing aircraft had cleared the runway in a jiffy,” he added. He said among other improvements, the Miaa had also set aside P180 million to put in place “stop bars,” which are a set of lighting on the ground that pilots would follow shortly after landing to direct them to their parking slots on the airport ramp. The Miaa has also set aside some P400 million to retrofit the Naia Terminal 2 and increase its passenger capacity in preparation for the expected influx of passengers and as part of Philippine Airlines (PAL) expansion plans. Naia Terminal 2 is the terminal for all PAL’s international and domestic flights. At the same Kapihan forum, Monreal also said starting March 2017, overseas Filipino workers (OFW) would be exempted from paying the P500 airport terminal fee purchased online or from any ticket offices abroad. “Starting late March, OFW’s would no longer pay the oppressive airport fee imposed by former [the] airport administration,”he said. Former Miaa chief General (ret.) Jose Angel Honrado crafted the edict that would compel OFW’s to pay the international passenger service charge (IPSC), which requires departing OFWs to pay the additional P550 fee on top of the cost of the airline tickets bought online or from airline ticket offices.

Recruitment consultant Emmanuel Geslani said Monreal is about to finish the technical details, along with the international airlines, to eliminate the IPSC, which he said was opposed by millions of OFW’s across the world.

Exemption

AT the same Kapihan forum, Monreal also said starting March 2017, overseas Filipino workers (OFWs) would be exempted from paying the P500 airport terminal fee purchased online or from any ticket offices abroad. “Starting late March, OFWs would no longer pay the oppressive airport fee imposed by [the] former airport administration,”he said. Honrado crafted the edict that would compel OFWs to pay the IPSC, which requires departing OFWs to pay the additional P550 fee on top of the cost of the airline tickets bought online or from airline ticket offices. Recruitment consultant Emmanuel Geslani said Monreal is about to finish the technical details, along with the international airlines, to eliminate the IPSC, which he said was opposed by millions of OFWs across the world. The airport fee, which was opposed by both Houses of Congress, passed a resolutions urging the Miaa to stop the collection of the fee. Honrado, a retired air force general and relative of former President Benigno S. Aquino III, disregarded the congressional resolution. Honrado believed that paying the fee in advance, to be reimbursed later at the Naia, would reduce passenger congestion at the premier airport.

briefs phl improving eodb to encourage influx of fdi DAVAO CITY—The Philippines is improving the ease of doing business (EODB) to encourage increased investments from Spanish and other foreign business groups that want a foothold in the highly lucrative and emerging integrated Southeast Asian market, Finance Secretary Carlos G. Dominguez III said. Speaking at the opening of the Eighth Tribuna Espana-Filipinas held here, Dominguez also said the Duterte administration is committed to keep the robust pace of domestic growth that expanded 7.1 percent in the third quarter and has begun taking initiatives to sustain this momentum that has made the Philippines among Asia’s fastest-growing economies. These steps include moving rapidly in modernizing the country’s infrastructure, bringing down production costs to competitive levels and opening public-private partnership (PPP) projects to clear traffic congestion and improve the flow of commerce throughout the country. “There should be ample opportunities for Spanish firms to participate in these projects,” Dominguez said at the symposium held at the Marco Polo Hotel, pointing out that the Philippine government is set to invest $180 billion in infrastructure over the next six years. Rea Cu with PNA

GOVT TO ROLL OUT P1-B FUNDING FOR MICRO ENTERPRISES NEXT YEAR The government has allotted P1 billion for next year as a new source of funding for start-ups and microenterprises, Trade Secretary Ramon M. Lopez said on Monday. During the Manufacturing Summit 2016 in Makati City, Lopez said the funding next year will come from the Office of the President, but will be tucked under the budget of the Department of Trade and Industry (DTI) in the coming years. On the sidelines of the event, he added that the P1-billion fund next year is only an initial amount for a program to be called “Pondo para sa Pagbabago at Pag-asenso,” or P3. The program aims to improve microenterprises’ access to finance. Under P3, the DTI targets to allot P1 billion per region, or a total of P18 billion, as a source of financial products and services for start-ups and microenterprises. PNA

Economic gains push Albay poverty down to 17.6%

EGAZPI CITY—Tourism and significant economic gains in related fields have substantially decimated poverty in Albay. The Philippine Statistics Authority (PSA), in a recent report, said Albay’s poverty incidence rate was substantially downgraded by 16.3 percent, from a high 33.9 percent in 2012, to a more manageable 17.6 percent in 2015. The national downgrade average for the same period was just 3.6 percent, from 25.2 percent in 2012 to 21.6 percent last year. The Bicol region’s average was 4.5 percent, from 32.2 percent in 2002 to 27.5 percent in 2005. Albay’s 16.3-percent reduction makes it the least poor among Bicol’s six provinces. Trailing its 17.6-percent poverty threshold are Camarines Sur, with 27.15 percent; Camarines Norte, 29.3 percent, from 21.7 percent; Sorsogon, 31.7 percent, from 31.3; Masbate, 35.5 percent, from 40.6 percent; and Catanduanes, 33.6 percent, from 27.1 percent, as shown in the following table: Albay Rep. Joey S. Salceda, who was governor of his province for nine years until his recent return to

Congress, attributed to their blooming Albay Green Economy program, tourism gains and “unprecedented unity of purpose among Albayanos.” As governor, Salceda stewarded Albay’s tourism growth from 8,700 foreign tourist arrivals in 2006 to 374,949 in 2015. The number becomes even more impressive with domestic tourists counted in. From 124,675 in 2006, it exponentially increased to 1,042,646 in 2015, for a total of 1,417,646 arrivals, which helped pushed down Albay’s poverty level.

Salceda, who is now currently senior vice chairman of the House Ways and Means Committee, and vice chair of three other committees—Appropriations, Economic Affairs and Local Government—has expressed confidence Albay’s tourism, supported by related programs in place, will continue to prosper and hit its goal of 5 million tourists, $1 billion investments and 235,000 jobs created in 10 years, after the completion of the Bicol International Airport in 2019, and faster modern train system to Legazpi by 2023.

Agriculture/Commodities BusinessMirror

news@businessmirror.com.ph

Editor: Jennifer A. Ng • Tuesday, November 29, 2016 A5

Release ₧4-B interest from coco-levy fund–PCA

By Jasper Emmanuel Y. Arcalas @jearcalas

he Philippine Coconut Authority (PCA) urged lawmakers on Monday to release at least P4 billion worth of interest from the P75-billion coconutlevy fund by the end of the year.

“Our request to them is that if the passage of law for the handling of the total coconut-levy fund would take longer, then we hope that they could release even the P4-billion interest,” said newly installed PCA Administrator Avelino Andal in a news briefing in Quezon City. “We want the interest to be released so that in the interim, while waiting for the release of the principal money, we can start the ball rolling. Besides, the principal money is earning a lot per year so let’s use that [interest],” Andal added. He said he plans to use the interest in reviving the local coconut industry and help farmers boost their incomes. A ndal added that the PC A should handle and keep the coconut-lev y fund, and not the Bureau of the Treasury, as the

agency attached to the Office of the President is directly responsible for developing the c oconut industry. “That should be the ideal situation. There should be only one body handling the coco-levy fund in order to avoid differences and obstacles to the releases and the disposition of the fund,” Andal said. “The coco levy kept by the Bureau of the Treasury should be given to the PCA because it is the principal agency involved in addressing and helping coconut farmers,” he added. In September Ma l aca ña ng ordered the Department of Agriculture (DA) to file a bill that would expedite the release of the P75-billion coco-levy fund to help farmers fight cocolisap or coconut scale insect infestation. A g r icu lture Secretar y Em-

Bloomberg Photo

manuel F. Piñol said President Duterte instructed him and presidential liaison officer Adelino B. Sitoy to work with Congress

to fast-t rac k t he passage of the measure. As the President wants the coco-levy fund released before the

year ends, Piñol said the bill would be certified as urgent. The Presidential Commission on Good Government disclosed

that the coco-levy fund that was collected from coconut farmers from 1973 to 1982 has increased to P75 billion from P73 billion.

BusinessMirror leads Jose G. Burgos Jr. biotech awards winners Solon files bill seeking

to impose ₧1 ‘salt tax’

he Jose G. Burgos Jr. awards for biotechnology journalism celebrated its 10th year with the awarding of this year’s winners on Thursday night at the Sulo Riviera Hotel in Quezon City. “Genetically modified corn allowed farmers to earn $560 million—study” written by Mary Grace Padin for the BusinessMirror, bagged the first prize in the Best News Story category. InterAksyon’s Diego Mora won second prize for his article “Dutch experts boost security to prevent loss of UPLB pathogenic microbes” and “Cheaper, healthier animal feed from UPLB” by Maricar Cinco of the Philippine Daily Inquirer took the third prize. For the Best Feature category, James Konstantin Galvez from The Manila Times won first prize for his article “Corn growers urged govt to approve new GMO rules.” The second prize went to Ray Eñano of Manila Standard with his article “Academe hurting from GMO ruling.” Henrylito Tacio of EDGE Davao finished third for his article “Golden Rice fights hidden hunger.” In the institutional category, the BusinessMirror bagged first place. Philippine Star won

By Jovee Marie N. dela Cruz @joveemarie

The BusinessMirror led the winners in the 2016 Jose G. Burgos Awards for Biotech Journalism as it bagged first place in the Institutional and News Story categories. Jennifer A. Ng (second from left), associate editor of BusinessMirror received the award for the Institutional category during the awarding ceremony held in Quezon City last Thursday. Joining her are (from left) Dr. Virginia N. Enriquez of the Department of Science and Technology; Dr. Vivencio R. Mamaril, director of the Department of Agriculture’s Biotechnology Program Office; Dr. Edita Burgos of the J. Burgos Media Services; and Dr. Nina Gloriani, president of the Biotechnology Coalition of the Philippines. ROY DOMINGO

second place. InterAksyon.com and The Manila Times tied in third place. Winning articles were chosen by this year’s judges Dr. Virginia Enriquez, Rev. Fr. Emmanuel Alparce and Melo Acuña, who reviewed bio-

technology stories from August 2015 to July 2016. The Awards was organized by the J. Burgos Media Services and the Joe Burgos Pen with the support of the Department of Agriculture-

Biotechnology Program Office, Biotechnology Coalition of the Philippines and Southeast Asian Regional Center for Graduate Study and Research in Agriculture-Biotechnology Information Center.

lawmaker wants to impose an excise tax of P1 on every milligram of sodium in excess of one-third of the allowable daily intake of sodium chloride prescribed by the Department of Health (DOH). In House Bill 3719, Rep. Scott Davies S. Lanete of Masbate said his proposal seeks to amend Republic Act 8424 to insert a new provision that will impose the P1 salt tax. The provision will cover manufactured goods that contain sodium chloride, such as canned goods. “In ancient times, salt was heavily taxed due to its importance in various cuisines and rarity. However, as civilization improved, salt became more and more available. Its ready availability placed it outside of states’ interest as subject of ‘sin’ taxes,” Lanete said. “But, nowadays, salt has acquired a new image. It is now treated as a silent killer as its consumption has a correlation

‘Inspection of shipments to fight agri smuggling’ “The DA is doing this because, as practiced now, the inspection activity of the department happens only after the BOC’s inspection. That’s why a lot are being smuggled,” Piñol told reporters in an interview. “So we will invoke this provision of the law that we should inspect shipments. The DA will determine first whether this shipment complied with sanitary and phytosanitary [SPS] regulations,” he added. The mandatory inspection is the second measure imposed by the DA in two weeks as part of efforts to curb technical smuggling. Last week Piñol ordered the “revalidation” of all import permits for agricultural goods, except for rice and corn, after receiving reports that many permits were being recycled and that smugglers are misdeclaring imported goods, such as meat. Piñol said the DA will create the Agriculture and Fisheries Trade Facilitation

Unit (AFTFU), which would handle the inspection of all inbound shipments of agricultural goods in the country. He said the creation of the AFTFU is based on Section 12b of the Food Safety Act of 2013, which states that imported foods should undergo cargo inspection and clearance procedures by the DA and the Department of Health (DOH) at the first port of entry to determine compliance with national regulations. “On Monday I will sign a department order creating the AFTFU, which will effectively be stationed in the different ports of entry of the country to make sure that agricultural and fisheries exports entering the country are first examined by our people before Customs,” Piñol said. “This inspection by the DA and DOH shall always take place prior to assessment for tariff and other charges by the BOC,” he added. Piñol said the DA has no “ulterior motive” imposing the mandatory

inspection of shipments and assured importers that the department would be “fair” in implementing the measure. “If they are legitimate and law-abiding importers, I think they should be happy with this because we are finally cleansing their ranks of fictitious importers,” Piñol said. “We have to do this to protect the interest of government which is being deprived of the appropriate tariffs from smugglers,” he added.

Mixed reactions

The DA chief’s decision to undertake mandatory inspection of all shipments of farm goods and food imports drew mixed reactions from agriculture industry groups and stakeholders. “This has always been the Sinag’s [Samahang Industriya ng Agrikultura] position even before the Food Safety Act of 2013 was passed,” Sinag Chairman Rosendo So said. “The global standard is ‘quarantine

first policy’. The food safety and publichealth security is more important than the tariffs and duties being imposed,” So added. He said smuggled goods never pass through proper quarantine and food inspection. Hog raisers belonging to the Pork Producers Federation of the Philippines Inc. (ProPork) also lauded the measure as this would hinder smugglers from misdeclaring their goods to skirt the payment of higher tariffs. “The DA really should be the first one to inspect as they would confirm and identify the specific product in the containers. Beause BOC officials usually don’t know what’s inside the containers, they cannot distinguish one part from another,” ProPork President Edwin G. Chen told the BusinessMirror. “Because of our multitier tariffication on pork it may create some confusion which smugglers can take advantage. For example, importers would put five percent but our BOC officials are not

with high blood pressure, which consequently leads to increased risks of having a heart attack and stroke,” he added. Lanete said a significant number of countries have imposed sin taxes on salt to deter people from consuming it, saying it is also a way for these states to pressure their citizens into adopting a healthier diet. Among the countries that impose heavy taxes on salt are Vietnam, Uganda, Tanzania, Suriname, Sri Lanka, Panama, Morocco, Kenya, Jordan and Cambodia. The lawmaker, citing the 1987 Constitution, said the state will protect and promote the right of hea lt h of t he people a nd inst i l l hea lt h consciousness, among them. “Thus, it is high time for the Philippines to adopt strict measures in ensuring the safety and well-being of Filipinos. Imposing a tax on the production, sale and consumption more that the prescribed daily intake but will also generate additional funds for the government,” he said.

continued from A1

good in scrutinizing the product being imported,” Chen added. The Meat Importers and Traders Assocation (Mita), however, said the mandatory inspection of shipments would only cause delays and would result in additional costs, port congestion and deterioration of product quality. “This is best done at the second border which is at the cold storage. Such system has been in place for several years,” Mita President Jesus Cham told the BusinessMirror. Cham also said the additional inspection measure at ports is “redundant” and “a waste of resources”. “All imports come only from accredited establishments that have been preapproved by DA,” Cham said. “They are certified fit for human consumption and free from animal disease by the exporting government,” he added. For United Broilers Raisers Association President Jose Elias Inciong, the lack of a trading data system capable of

monitoring trade flow, such as the specificities of a particular inbound shipment in the country would render government efforts to stop smuggling ineffective. “Any efforts at antismuggling and addressing unfair trade will be more effective if there is a trade data system which any decent respectable state should have especially after joining the WTO [World Trade Organization],” Inciong told the BusinessMirror. “How do you know that the valuation is correct, how do you know if the good is subsidized? How do you know if it’s dumping? These are all unfair trading practices which enable smuggling,” he added. Sans a trade data system, Inciong said the DA’s efforts “would not be partial and fair.” “So, you have to inspect even the ones which are not risky or relatively safe from smuggling. There’s no confidence [that there’s a smuggling situation] because there’s no system,” Inciong said.

Monday, November 29, 2016

The World BusinessMirror

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

Trump aide steps up bid to block possible Romney nomination

ASHINGTON—A top Donald Trump adviser warned on Sunday that the president-elect’s supporters would feel “betrayed” if he tapped former Massachusetts Gov. Mitt Romney as secretary of state, a move that would put a once-fierce Trump critic in a powerful Cabinet post. The comments from Kellyanne Conway deepened a highly unusual push by some Trump allies to stop the president-elect from nominating Romney. The extraordinary public nature of the effort has also stirred speculation that it could be a Trump-approved attempt to humiliate a prominent Republican who staunchly opposed him throughout the presidential campaign. Conway, who served as Trump’s campaign manager and is part of his transition team, said her opposition to Romney reflected what she’s been hearing from Trump voters.

“People feel betrayed to think that Governor Romney, who went out of his way to question the character and the intellect and the integrity of Donald Trump, now our president-elect, would be given the most significant cabinet post of all,” Conway said in one of several television interviews on Sunday. She said Romney was “nothing but awful” to Trump for a year. Conway’s opposition to Romney is also said to be supported by Steve Bannon, the controversial conservative media executive who will serve as Trump’s

President-elect Donald Trump and Mitt Romney shake hands, as Romney leaves Trump National Golf Club Bedminster in Bedminster, New Jersey, on November 19. AP/Carolyn Kaster

W hite House senior adv iser. Trump is an avid consumer of television news and his advisers and allies often use their appearances to send messages to Tr ump or t he Republ ica n establishment. Still, it’s rare for Conw ay a nd ot her c lose a ide s w ho s p e a k f re que nt ly with Trump in private to be so ex plicit about their persona l opinions in public.

Romney, the 2012 GOP nominee, vigorously challenged Trump’s fitness for the presidency, including his foreign-policy credentials. In a wide-ranging condemnation of Trump in March, Romney said the businessman’s bombast was “alarming the allies and fueling the enmity of our enemies.” Trump responded by mocking Romney, calling him a “choker” and saying he “walks like a penguin.” The freeze between two men appeared to thaw after they spoke by phone following the election. Romney then traveled to Trump’s New Jersey golf club for a private meeting to discuss the possibility of joining the administration. After the meeting, Trump was said to be taken by the way Romney “looks the part” of a globe-trotting diplomat, according to people close to the transition process. In nominating Romney, Trump would be signaling his willingness to heal campaign wounds and reach out to traditional Republicans who were deeply skeptical of his experience and temperament. Romney is well-liked by GOP lawmakers and was supported by

numerous Republican nationalsecurity experts during his failed White House bid. But Conway suggested those weren’t reasons enough to nominate Romney as the nation’s top diplomat. “I’m all for party unity, but I’m not sure that we have to pay for that with the secretary of state position,” Conway said. Despite the effort to discredit him, Romney is said to remain interested in serving in Trump’s Cabinet, though those close to him acknowledge his opposition to Trump during the campaign hurt his chances.Former New York City Mayor Rudy Giuliani, who was fiercely loyal to Trump throughout the campaign, quickly emerged as a front-runner for the secretary of state post and is still in contention. However, questions about his overseas business ties—as well as his own public campaigning for the job—are said to have given Trump pause. Giuliani is said to be frustrated by the way the process has unfolded, having originally been led to believe he would have his pick of jobs, according to those close to the transition. They insisted on anonymity because they were not authorized to publicly discuss the private deliberations. Trump’s decision on his secretary of state did not appear to be imminent. And the wrangling over Romney and Giuliani has raised the possibility that Trump may go with a third option. His transition team has also considered Tennessee Sen. Bob Corker and former US Ambassador to the UN John Bolton for the job. People with knowledge of the transition process say Trump is also considering retired Marine Gen. John Kelly for the post. Kelly met with the president-elect last week. Conway appeared on Sunday on NBC’s Meet the Press, ABC’s This Week, and CNN’s State of the Union. AP

China detains 9 managers after plant collapse kills 74

EIJING—Nine executives are being held responsible by the Chinese government for a power-plant accident, where 74 workers were killed when an under construction cooling tower collapsed, state media reported on Monday. Those under detention included the board chairman of engineering firm Hebei Yineng, a major builder of power plants that has a record of workplace deaths, state media reported. The chief manager, deputy manager and director of engineering for the project were also detained. Laborers were building a circular cooling tower in the southern province of Jiangxi when the interior scaffolding collapsed last Wednesday, releasing a cascade of steel, concrete and wooden planks. It was one of China’s deadliest workplace accidents in recent years and prompted calls from government officials for stepped-up inspections and a renewed emphasis on worker safety. Chinese President Xi Jinping said local governments should learn from the accident and hold accountable anyone responsible. No formal charges were announced against the detained executives, who also included safety managers and supervisors from a Shanghai consulting firm. But China typically responds to high-profile workplace deaths by arresting and prosecuting company executives and local

officials, with their confessions often broadcast on state television, as part of a long-standing effort to convince the public that the government is fighting widespread corruption and poor enforcement of safety standards. After last year’s explosion at a warehouse in Tianjin that killed 165 people, a court handed down sentences to 49 people, including a suspended death sentence earlier this month for the head of a company implicated in the blast. And a 2014 explosion at an auto-parts factory in the eastern city of Kunshan that killed 146 people was followed by prison terms for 14 people, including the owner and top managers of the factory, local firefighters and work safety officials. Investigators previously announced the detentions of 13 people after Wednesday’s accident. It wasn’t immediately clear if the suspects identified on Monday were included in that total. Workers had been toiling in three shifts to try to finish the project ahead of the arrival of winter, according to local media interviews with surviving employees. The project had been designated a priority project by the province, likely adding to the pressure to complete it. A person who answered the phone at Hebei Yineng said he wasn’t aware of the situation, and declined to comment further or give his name. AP

Elian Gonzalez returns to public eye, praises Castro

Elian Gonzalez, the young Cuban rafter who was at the center of a bitter custody battle in 2000 between relatives in Miami and his father in Cuba, attends a gala for the 90th birthday of Cuban Leader Fidel Castro at the Karl Marx theater in Havana, Cuba, on August 13. AP

AVANA—Elian Gonzalez, the center of an international custody battle waged by Fidel Castro nearly two decades ago, returned to the public eye on Sunday to praise the leader who fought to return him to Cuba. Ec hoi ng t he rou nd-t he clock adulation on state media, Gonzalez said on government-run television the Cuban leader’s legacy would long outlive him. It’s “not right to talk about Fidel in the past tense...but rather that Fidel will be,” Gonzalez said. “Today more than ever, make him omnipresent.” Gonzalez was 5 when he, his mother and others attempted a sea crossing between Cuba and the US in 1999. His mother died on the voyage, but he survived and was taken to Florida. A bitter dispute broke out between his relatives in the US, who wanted him to stay there, and his father back home. Castro, who died on Friday night at 90, made the issue a national cause celebre and led huge demonstrations demanding Elian be returned to his father. US authorities eventually sent him back. “Fidel was a friend who, at a difficult moment, was with my family, with my father, and made it possible for me to return to my father, to return to Cuba,” Gonzalez said. He spoke as workers spruced up the Cuban capital’s sprawling Revolution Plaza in preparation for two days of tributes. Hundreds of thousands are expected to visit to pay their respects starting on Monday in the shadow of Havana’s towering monument to independence hero Jose Marti and a huge sculpture of revolution leader Ernesto Guevara. A mass public ceremony is planned at the square on Tuesday. “It is a great sorrow. Everyone is feeling it,” said Orlando Alvarez, a jeweler who was fishing on the seaside Malecon boulevard in the morning. “Everyone will be there.” C u b a’s go v e r n me nt d e clared nine days of national mourning after Castro died and this normally vibrant city has been notably subdued. On Saturday night the Malecon, Havana’s social center, was all but deserted, with dozens of people, instead of the thousands who normally go to party there on weekends. “I have never seen t his square so quiet,” Spanish tourist Miguel Gonzalez said, as he took pictures of Revolution Plaza. AP

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

The World

All eyes on Trump as 2-year US-Cuba thaw may be in limbo

onald J. Trump started to put his stamp on a more muscular foreign policy on Saturday with a toughly worded statement following the death of Cuba’s Fidel Castro that begged the question of where USCuba policy is headed under the new administration. The president-elect eschewed the diplomat-speak of President Barack Obama, who offered his condolences to the Castro family in an anodyne statement. Instead, Trump tore into the newly deceased dictator in perhaps the clearest example since this month’s election of the two men’s sharply different world views. Castro, who established a communist regime in Cuba that survived the collapse of the Soviet Union, inspired revolutionary movements and brought two superpowers close to nuclear war before stepping down after 49 years in power, died late on Friday night local time. He was 90. His funeral will be held on December 4. Crowds of exiled Cubans and their supporters gathered on the streets of Miami to celebrate the passing of a sometimes unyielding ruler who divided families and ruled with an iron fist. Havana, meanwhile, remained quiet, and in both countries it was unclear how Castro’s death will impact the detente that has developed in the past two years. Trump said weeks before the November 8 presidential election that Obama has propped up Cuba economically and politically “in exchange for nothing,” and said that, if elected, he wanted to cut a better deal both for the Cuban people and the US. Trump’s reaction started early on Saturday with a seemingly celebratory tweet—“Fidel Castro is dead!”—to his 16 million Twitter followers. A formal statement followed, blasting Castro. “Fidel Castro’s legacy is one of firing squads, theft, unimaginable suffering, poverty and the denial of fundamental human rights,” Trump said. Still, Trump didn’t repeat a vow made during the campaign to reverse Obama’s normalization process, saying that his administration will “do all it can to ensure the Cuban people can finally begin their journey toward prosperity and liberty.” It’s unclear what that means in terms of potential policy. Reince Priebus, the incoming White House chief of staff, would not say, in an interview on Sunday, whether Trump would reverse Obama’s executive orders on Cuba. “In order for any sort of deal to take place, President-elect Trump is going to be looking for some movement in the right direction in order to have any sort of deal with Cuba,” Preibus said on Fox News Sunday. “It can’t just be nothing and then you get total and complete cooperation from the United States.” “While Cuba remains a totalitarian island, it is my hope that today marks a move away from the horrors endured for too long, and toward a future in which the wonderful Cuban people finally live in the freedom they so richly deserve,” Trump said. Sen. Marco Rubio of Florida, who advocates a continued tough anti-Cuba policy, said Obama’s statement was “pathetic”. “No mention of thousands he killed and imprisoned,” Rubio said on Saturday on Twitter. Rubio left the door open for Obama’s thaw to stay in place, under certain conditions. “I have never said that I’m against all changes to Cuba policy,” he said on Sunday on NBC’s Meet the Press. “I’m just against unilateral changes from which we get nothing in return for our country or for the freedom or liberty of the Cuban people.”

Cuban cigars

Trump, meanwhile, said during the presidential campaign that he disagreed with Obama’s strategy,

which, so far, has included the two nations reopening their respective embassies after more than 50 years. Obama last month lifted restrictions on importing Cuban cigars to the US for personal use, part of the sixth round of eased sanctions since December 2014. US cruise ships can now dock in Cuba, and US airlines can fly to the island. The president visited Havana in March, the first sitting US president to visit since Calvin Coolidge in 1928. “I have come here to bury the last remnant of the Cold War in the Americas,” Obama said. “The United States should not prop up the Cuban regime economically and politically, as President Obama has done and Hillary Clinton would continue to do, in exchange for nothing,” Trump said in Miami on October 25.

‘Reasonably sane deal’

He told CBS’s Miami reporter Jim DeFede last month that he would wait before appointing an ambassador, but was willing to negotiate with Cuba in the meantime. “We can wait a little bit longer and get the kind of agreement we want,” Trump said. But the property developerturned-politician has said repeatedly that he’d like to cut a deal. “I’m all for Cuba opening it up,” he told Fox News in January. “But I do think—I do think, if it’s gonna open up, we should make at least a reasonably sane deal, not the deal that we’re making right now.” Some, however, hope Castro’s death could build momentum for lifting the embargo, something that has bipartisan support in Congress, particularly from lawmakers who represent export-heavy states keen to sell goods to the island nation’s 11 million people.

‘New chapter’

“We need a new chapter here,” Sen. Amy Klobuchar of Minnesota, a Democrat who has introduced bipartisan legislation to lift the embargo, said in an interview. Klobuchar said she hopes Trump now takes a new look at the issue. “For a long time US-Cuban policy hasn’t been based on reason, it’s been based on the ghosts of the past,” Klobuchar said. “It’s been 50-some years of a failed policy on both sides. It’s time to change it.” But while the administration has talked up its efforts to open up Cuba, the country remains under the control of President Raul Castro, 85, Fidel’s brother, with sharply limited freedoms for its people.

Progress uneven

Jorge Perez, a billionaire realestate developer, said the elder Castro hasn’t had real power in the last couple of years and that his brother has seemed more willing to promote relations with the US. “But it seems that every time a forward step is taken, more restrictions seem to be applied,” Perez said. “The high hopes from Obama’s visit have not materialized in either increased freedoms or trade. With the collapse of the Venezuelan economy, I would have thought that Cuba would have moved to open the economy to foreign investments, particularly from the US. This has not happened in any meaningful way.”

‘An iron fist’

Sen. Robert Menendez of New Jersey, standing with Cuban exiles on Saturday in Union City, New Jersey, said Cuba is still ruled “with an iron fist” by Raul Castro. Menendez, a Democrat, has been a leading critic of Obama’s policy, saying repression has soared and more are seeking to leave Cuba. Like Menendez, Rubio has been a key part of the opposition among lawmakers to lifting the embargo. He won reelection to the Senate this month after being one of more than a dozen Republicans beaten by Trump in the party’s primary. Bloomberg News

BusinessMirror

Tuesday, November 29, 2016

China big-data gurus use 6B searches to track economy

u Haishan was at Princeton University studying how schools of fish swim together when the crowd behavior of a much bigger group grabbed his attention: 1.35 billion fellow Chinese.

It was Lunar New Year back home in 2014 and Baidu Inc., operator of the country’s biggest search engine, had created an animation of all the trips people in China make during the holiday—the largest annual human migration. He soon joined the company as a data scientist in Beijing, where he’s tracking user location information to produce economic gauges, such as which urban areas are ghost cities and how many people are buying cars. Big-data gurus like Wu are bringing the nation’s colossal economy into sharper focus in a more potent way than in other major economies because, unlike most developed nations, China’s official stats are often suspect or incomplete and private gauges can disappear. “We were running around pointing a flashlight at various things like labor or ports,” said Jeffrey Towson, a professor of investment at Guanghua School of Management at Peking University. “This new information is supposed to improve existing information. That’s like turning on the lights and suddenly you see everything.”

$485B

The volume of online shopping in the last fiscal year that was reported by Alibaba Group Holding Ltd., which was nearly equal to Sweden’s GDP

For now, the explosion of data sources gives global investors a fresh look inside the world’s largest trading nation. China UnionPay Co., the dominant card processor, can handle hundreds of millions of swipes per week. Alibaba Group Holding Ltd. reported 3.1 trillion yuan ($485 billion) of online shopping in the last fiscal year, nearly equal to Sweden’s GDP. Baidu serves 6 billion searches a day and dominates mobile mapping, which gives location data for its mobile users, as well as those of apps built on its map data. That shows, for example, how many people visit Apple stores, and can signal interest in the next iPhone.

Wu used the search and map data to find so-called ghost cities, betrayed by buildings that show little mobile-phone activity. He and his team of 10 used the technology to make a suite of gauges for mall traffic, tourism visits, and industrial and high-tech employment. “We didn’t know if there was any commercial value,” Wu said in an interview at Baidu’s campus in northwest Beijing. Institutional investors did, and they quickly found Wu after his gauges were released in June. Official data in China still lack key metrics, such as a regular survey-based unemployment rate. A private manufacturing indicator by Minxin was suspended indefinitely this year, and a preliminary factory gauge reading by Markit Economics and Caixin Media stopped last year. Big data is allowing alternatives to spring up. Cheng Xin, a former McKinsey and Co. analyst now at Alibaba’s research arm, is developing a GDP-type gauge compiled from the company’s trade data. It will take readings from the Taobao e-commerce platform and other data such as transaction figures from Soufun.com, China’s biggest real-estate Web portal. “The question is, will the government allow this type of thing to flourish?” said Andrew Polk, head of China research at Medley Global Advisors in Beijing. “If they start showing things starkly at odds with official data, that’ll be a real test of whether the regulatory environment is

going to be supportive of these types of gauges.”

Movies, karaoke

Wang Zhanwei, a data analyst at Didi Chuxing, China’s answer to Uber, says information companies glean from users can benefit the government. His team plans to mine its ride-hailing data to gauge consumer spending by tracking how often people visit places like malls, cinemas and karaoke bars. “We’re trying to use data to ser ve the public,” Wang said. “Governments may plan cities better when they know more about how people commute.” Officials are paying attention. “We welcome and are open to big data,” said Sheng Laiyun, a National Bureau of Statistics (NBS) spokesman, adding that the agency includes some of the data in indicators, such as retail sales, consumer inf lation and home prices. But private providers should be more transparent with their methodologies to earn trust, he said. Still, processing, sorting and making sense of all the new sources of data isn’t easy, and even the world’s biggest hedge funds can struggle to find a signal in the deep oceans of noise. As the array of new gauges offer an increasingly complete alternative view on China’s economy, they are mostly verifying official statistics, according to a report by Bloomberg Intelligence economists Tom Orlik and Justin Jimenez, who compared NBS numbers with big data counterparts. Bloomberg News

Analysis: Life in Cuba, after Fidel Castro’s death

ASHINGTON—Few Cubans alive today can remember a time without Fidel Castro. In his day, he was one of the most influential, most provocative figures in the Western Hemisphere. Yet, the Cuba in which Castro died on Friday night at age 90 is a very different Cuba from the one he ruled for nearly half a century, and the impact of his death will also be very different. New diplomatic and commercial relations with the United States, unimaginable during much of Castro’s reign, are now in place, thanks to the pragmatism of his successor, brother Raul, and of President Barack Obama. Castro, who stepped down as head of the government in 2008 had largely faded from the spotlight in recent years, making occasional appearances at a university, on the dais of a Communist Party meeting or in photographs showing him greeting a visiting dignitary. He looked frail and gaunt, almost always in an exercise suit. It was probably by government design, easing Castro from view as a way to ease the transition and solidify his brother’s grip on power. Castro today represents a bygone era. Cuba’s “new chapter” opened before Castro’s death. In terms of governance, little is likely to change. The uncertainty that would have accompanied a handover of power is greatly lessened. Raul Castro is in charge. Yoani Sanchez, a world-known Cuban blogger, was touring Havana’s picturesque Malecon, or seafront boulevard, in the early morning Saturday to gauge the reaction of the mostly young people gathered there. “Some are saying good-bye with pain, others with relief,” Sanchez said via Twitter. “The great majority with a certain touch of indifference.” As Fidel Castro faded, Raul consolidated and shifted. He slightly loosened socialist restrictions on the economy, while budging hardly at all on political freedoms. He allowed, for the first time, a measure of private enterprise, where ordinary Cubans could run small businesses, from restaurants to beauty salons to mechanics’ shops. It made a big difference for many Cubans. Even more significant, Raul Castro lifted a requirement that Cubans obtain a special permit to travel off the island. Suddenly even dissidents, like Sanchez, could get passports,

Men hang a giant banner with a picture of Cuba’s late leader Fidel Castro as a young revolutionary, from the Cuban National Library building in Havana, Cuba, on Sunday. Cuba’s government declared nine days of national mourning after Castro died on Friday and this normally vibrant city has been notably subdued. AP/Desmond Boylan

travel abroad and return home. I noticed remarkable change between my first and second visits to Cuba. On my first trip to Havana in 2009, I was pursued by Cubans begging me to buy them food or diapers. Not two years later, they were selling food and diapers, handcrafted knickknacks and just about anything else an imagination could scrape together. At the same time, other forces were at work. A young Cuban generation was growing increasingly savvy about voicing dissent, even though generally denied access to the Internet. They could complain, grouse and disagree with the government, but cloak it in music, painting, dance and other artistic expression. As Cuba’s famous novelist Leonardo Padura put it: “Risks and censorship can also be a challenge to the imagination.” Somehow, the dissent of artists and youth was less of a threat to the government. Overt dissent—such as the Ladies in White, the wives and mothers of imprisoned political activists—continued to be dealt with harshly, with pro-government demonstrators

harassing their weekly marches, and state security agents routinely beating or arresting them, however briefly. Omar Sayut is one of the artists, proud and open in his criticism of the government, effusive in his posting of hip-hop videos on YouTube. And willing to do the occasional quick stint in jail. “This is how I speak out,” Sayut, in his early 30s, told me last year on my most recent trip to Cuba. Separately, and secretly, another force was at work. Judging that 50 years of embargo and isolation had failed to substantially weaken Castro’s rule, the Obama administration embarked on behind-thescene talks, with the help of, among others, Pope Francis. It took about two years, but in December 2014, Obama and Raul Castro made dramatic, simultaneous televised announcements to their respective nations. Diplomatic ties were being renewed after half a century. Over the year that followed, embassies were reopened, airlines were flying and, slowly, trade deals were being made. It culminated with the remarkable trip by

Obama to Havana in March, the first sitting US president to visit in about 90 years. Other changes are slowly transforming the island. Dollar-spending tourists are flooding Cuba, with the pros and cons that influx suggests. Many, though not all, of the dilapidated homes and buildings that populated most Havana neighborhoods have gotten a coat of paint. On occasion, more food is available at markets. Would this progress, however, tempered and limited it might be, have taken place if it were still Fidel, not Raul Castro, running things the last few years? It’s hard to say, but not likely. Raul certainly was more realistic and willing to acknowledge failings than Fidel, the ideologue, ever was. By acknowledging something was not working, Raul could allow at least a few tweaks, though he insists that socialism remains Cuba’s system. Ultimately, more than a single policy or politician’s good will, it was the weight of time that brought change to the island. It changed Cuba’s system. It took Fidel Castro’s body. And now the new chapter continues. TNS

The World

Tuesday, November 29, 2016 • Editor: Lyn Resurreccion

BusinessMirror

www.businessmirror.com.ph

Opec pushes for oil deal as Saudis nix output cut

A Chinese woman checks a handbag at an American fashion boutique at an up-scale shopping mall in Beijing. US Presidentelect Donald J. Trump’s announcement that he plans to quit the Trans-Pacific Partnership is drawing vows from other Pacific Rim countries to push ahead with the trade pact, while they also pursue free-trade deals with China. AP/Andy Wong

China turns to ‘The Art of War’ as Trump signals battle on trade

here’s a Chinese saying that stems from the philosophy in Sun Tzu’s ancient text The Art of War: You can kill 1,000 enemies, but you would also lose 800 soldiers. Centuries later, the proverb is suddenly apt again, being mentioned frequently in discussions around Beijing. Now, it highlights the potential damage US President-elect Donald J. Trump could inflict if he makes good on his threat to start a trade war with China, the world’s secondbiggest economy. Having backed off some other campaign pledges, it’s unclear if Trump will end up slapping punitive tariffs on China—and Beijing has signaled some optimism he will be more pragmatic in office. Still, the message from China is that any move to tax Chinese imports would bring retaliation: The US economy would take a hit and America would damage its longstanding ties with Asia. “China wouldn’t like to see that happen,” Fu Ying, who chairs the Foreign Affairs Committee of the legislature and was a vice foreign minister until 2013, said of the US imposing punitive tariffs. “But if so happens, it won’t be one-way traffic,” she said last week in Beijing. While China has warned the US against picking a fight, the prospect of a more protectionist America creates an opportunity for President Xi Jinping in Asia, where trade-dependent nations are nervous about the potential fallout. Xi has rushed to portray his country as a champion of free trade, and Trump’s actions could give him an avenue to build his clout. Xi has spoken of his desire for the same

great-power status enjoyed by the US, pushing back against American hegemony since World War II.

Carrot, stick

“The US has been using the approach of carrot and stick, and that is on the rocks,” said Wang Wen, executive dean of the Chongyang Institute for Financial Studies at Renmin University in Beijing. “China’s ‘trade first’ or ‘economic first’ foreign-affairs policy in Asia is more advanced compared to the US,” he said. “Asian countries need a peaceful international environment.” Any dimming of American influence in Asia also presents China with the challenge of managing a regional order that has produced spectacular economic gains under the US’s watch. Does it impose its agenda not only through economic power but by shaping geopolitics beyond its borders? Or does it stick to its favored stance of “noninterference,” focused on issues in its self-interest, like trade and climate change? “China still lacks the experience in engaging global affairs, and still has a lot to learn in the international arena,” said Yan Xuetong, a member of the Consultation Committee of China’s Ministry of Commerce. “There will be challenges in the future for China along with its growing influence, and there could be sensitive international issues that force China to make choices,” he said.

‘Bottom line’

“China holds a clear bottom line

$20.3B The value of US agricultural products China bought last year

that it disapproves of the use of force in handling international disagreements,” said Yan, who is also director of the Institute of International Studies at Tsinghua University in Beijing. “China should work very hard to take a different approach from the US in international affairs.” For now, China has a two-pronged response to Trump’s elevation: Warn him of the consequences of unilateral action and accelerate efforts to secure an Asia-wide trade pact that does not include the US. Beijing wants to seal the Regional Comprehensive Economic Partnership (RCEP)—a 16-nation trade pact with Southeast Asian nations plus countries, such as Japan and Australia—“as soon as possible,” according to the Ministry of Commerce. It’s one way to pointedly differentiate China from a more inward-looking America. The next round of talks is scheduled in Indonesia from December 2. “Globalization is still the trend in the world,” Fu said. The “US started it, you benefited from it and now you don’t like it. So what’s next? Do you have a substitute? Do you have a better option? The trend is not going to wait,” she said. “Maybe we can better manage it.” In terms of a direct response, China—the US’s biggest creditor and trading partner—could potentially raise taxes on American imports and shift to alternate nations, she said. Indeed, she couched Trump’s threats in part as an opportunity.

“There are people in China who would be happy to use that moment” if the US announced tariffs, Fu said. “There’re quite a few areas where some in China think our interest got hurt in trading, like soybeans—we have completely lost soybean plantation to imports. We have more than a decade of good harvests, but we are continuing to import American wheat. Why should we?” China is the largest importer of US soybeans and bought $20.3 billion of US agricultural products last year, according to the US Department of Agriculture.

‘More aggressive’

More broadly, if Trump keeps his promise to withdraw from the 12-nation Trans-Pacific Partnership, China could better cement its position in Asia through its advocacy of RCEP, according to Alicia Garcia Herrero, chief economist for Asia Pacific at Natixis SA in Hong Kong. “A US disengagement from trade with Asia would help, rather than harm, China, while a more aggressive approach to the bilateral relationship with China would risk undermining US interests,” she said in a note. America remains a powerful country but no longer has global hegemony, said Yan, also director of the Institute of International Studies at Tsinghua University in Beijing. “The Chinese leadership does not want to challenge the US dominance, but the US has to find a way to deal with China, which is a major power and needs cooperation but not confrontation.” Fu echoed that, describing the current relationship as complementary. “We can very well work with each other to find solutions to differences, instead of cutting down on each other,” she said. Bloomberg News

Swiss reject plan to speed up exit from nuclear energy

ERLIN—Swiss voters rejected a plan to accelerate the country’s exit from nuclear energy in a referendum on Sunday, turning down an initiative that would have forced their government to shut the last plant in 2029. The plan promoted by the Green party would have meant closing three of Switzerland’s five nuclear plants next year. Polls ahead of the referendum had shown a tight race, but voters shot down the initiative by 54.2 percent to 45.8 percent. Under Switzerland’s direct democracy system, proposals need support from both a majority of the country’s cantons (states) and of the national vote to pass. Only six of Switzerland’s 26 states backed the nuclear-

shutdown plan. After the Fukushima nuclear disaster in Japan, the Swiss government adopted a gradualist approach toward transitioning the country to renewable energy by 2050. It said nuclear plants should continue to operate as long as they are deemed safe, but didn’t set a precise timetable. The government said it needs time to switch to other sources, such as wind, solar and biomass energy. If successful, the initiative would have limited the lifespan of nuclear plants to 45 years and meant the closure next year of the Beznau 1, Beznau 2 and Muehleberg reactors. The newest of the plants, in Leibstadt near the German border, started operating in 1984 and would have had to close in 2029.

The nuclear plants currently generate around a third of Switzerland’s electricity. “We would have liked to win, that’s clear, but 45 percent for ‘yes’ is a good result,” Regula Rytz, the Greens’chairwoman, told SRF television. Her party isn’t part of Switzerland’s broad coalition government. “The problems haven’t been resolved with this referendum on Sunday,” Rytz said. “We will keep at it on safety, on financial security...and on expanding renewable energies.” A group representing Swiss business, economiesuisse, said in a statement that “a hasty exit from nuclear energy would only have brought disadvantages for Switzerland.” It welcomed what it described in a

statement as “voters’ clear signal for a secure electricity supply and strong domestic energy production.” Neighboring Germany took a sharper turn away from nuclear power after the Fukushima disaster in 2011. It plans to shut down its nuclear power plants by the end of 2022. The referendum result“is a disappointment for all who had hoped for clarity on when the last nuclear-power station in Switzerland will go offline,” Rita Schwarzeluehr-Sutter, a deputy German environment minister, said. Nuclea-power is “an outdated model in Switzerland, too,” she said, adding that the country has some of the world’s oldest reactors and “their days are numbered anyway.” AP

he Organization of Petroleum Exporting Countries (Opec) is embarking on a last-ditch diplomatic push to reach a production cut, with ministers flying to Russia for talks, as Saudi Arabia, for the first time, suggested the oil-club doesn’t necessarily need to curb output. Opec will meet on Wednesday in Vienna to try to finalize the terms of its first production decrease in eight years. Yet, the group remains divided about how to share the curbs internally and Khalid AlFalih, the Saudi oil minister, has opened the door to leave the group’s production unchanged. “We expect demand to recover in 2017, then prices will stabilize, and this will happen without an intervention from Opec,” Al-Falih said in Dhahran, eastern Saudi Arabia, on Sunday, according to the Saudi newspaper Asharq Alawsat. “We don’t have a single path, which is to cut production at the Opec meeting, we can also depend on recovery in consumption, especially from the US.” The comments came two days after Saudi Arabia decided not to attend a meeting with non-Opec producers, including Russia, scheduled for Monday because of internal divisions within the group. The meeting was later canceled and instead Opec officials will meet in Vienna to bridge their differences ahead of the ministerial gathering on Wednesday. “It’s not beneficial to attend the meeting with producers from outside Opec before holding meetings within Opec and deciding whether to cut or continue with current levels of production,” Al-Falih said, according to Asharq Al-awsat.

Russia help

As Opec tries to resolve it’s own differences, with Saudi Arabia, Iran and Iraq at odds, the group is also asking other big producers, such as Russia, to reduce output too. Russia has, so far, resisted Opec’s request that it joins the cut,

offering instead to freeze production at its current level. In an unexpected move, Algerian Energy Minister Noureddine Boutarfa, one of the architects of Opec’s September accord to reduce output, and Venezuela’s Eulogio del Pino, a regular intermediary in the group’s discussions, will meet in Algiers and then travel to Moscow on Monday, according to two delegates familiar with the matter. They asked not to be identified as the talks are private. O p e c i s a l so pro p o s i n g a 600,000 barrel a day output cut by non-Opec producers. Russian Energy Minister Alexander Novak has repeatedly said his country prefers to freeze rather than reduce output.

Internal differences

While efforts to secure the cooperation of nonmembers continue, Opec nations are still trying to agree among themselves about how much each should cut. The organization, which had planned to hold technical discussions with nonmembers on Monday, will instead hold an internal meeting to resolve the differences. Algeria’s Boutarfa presented Iranian Oil Minister Bijan Namdar Zanganeh with a proposal for a collective cut of 1.1 million barrels a day in Tehran on Saturday. Iran had previously said it should be allowed to continue increasing production as its exports recovered from nuclearrelated sanctions that were eased in January. Boutarfa will also meet with his Iraqi, Saudi and Qatari counterparts in Vienna ahead of the Opec ministers’ meeting on Wednesday, according to the state news agency Algerie Presse Service. Failure to reach a deal could lead oil prices to drop below $40 a barrel, APS reported, citing Boutarfa. Iraq has said it will participate in output curbs, having initially resisted joining in the effort. However, Iraq hasn’t clarified how big a production it’s willing to make. Bloomberg News

Syrian army Aleppo advance displaces thousands of residents

EIRUT—Simultaneous advances by Syrian government and Kurdish-led forces into eastern Aleppo on Sunday set off a tide of displacement inside the divided city, with thousands of residents evacuating their premises, and threatened to cleave the opposition’s enclave. Rebel defenses collapsed as government forces pushed into the city’s Sakhour neighborhood, coming within 1 kilometer of commanding a corridor in eastern Aleppo for the first time since rebels swept into the city in 2012, according to Syrian state media and the Syrian Observatory for Human Rights monitoring group. Kurdish-led forces operating autonomously of the rebels and the government, meanwhile, seized the Bustan al-Basha neighborhood, allowing thousands of civilians to flee the decimated district to the predominantly Kurdish Sheikh Maqsoud, in the city’s north, according to Ahmad Hiso Araj, an official with the Syrian Democratic Forces. The government’s push, backed by thousands of Shiite militia fighters from Lebanon, Iraq and Iran, and under the occasional cover of the Russian air force, has laid waste to Aleppo’s eastern neighborhoods. An estimated quarter-million people are trapped in wretched conditions in the city’s rebel-held eastern districts since the government sealed its siege of the enclave in late August. Food supplies are running perilously low, the UN warned on Thursday, and a relentless air assault by government forces has damaged or destroyed every hospital in the area. Residents in

east Aleppo said in distressed messages on social media that thousands of people were fleeing to the city’s government-controlled western neighborhoods, away from the government’s merciless assault, or deeper into oppositionheld eastern Aleppo. “The situation in besieged Aleppo [is] very very bad, thousands of eastern residents are moving to the western side of the city,” said Khaled Khatib, a photographer for the Syrian Civil Defense searchand-rescue group, also known as the White Helmets. “Aleppo is going to die,” he posted on Twitter. The Britain-based Observatory, which monitors the conflict through a network of local contacts, said around 1,700 civilians had escaped to government-controlled areas and another 2,500 to Kurdish authorities. More than 250 civilians have been killed in the government’s bombardment of eastern Aleppo over past 13 days, according to the Observatory. Locals reported thousands more were moving within the eastern neighborhoods, away from the front lines, but staying inside areas of opposition control. “The conditions are terrifying,” said 28-year-old Modar Sakho, a nurse in eastern Aleppo. Wissam Zarqa, an English teacher in eastern Aleppo and outspoken government opponent, said some families would stay put in the face of advancing government forces. Syrian state media reported government forces had seized the Jabal Badro neighborhood and entered Sakhour on Sunday after it took control of the Masaken Hanano neighborhood on Saturday. AP

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AseanTuesday BusinessMirror

Editor: Max V. de Leon • Tuesday, November 29, 2016 A9

Battle for Vietnam beer stake heating up

arlsberg A/S, the Danish brewer that wants to buy a majority stake in Hanoi Beer Alcohol Beverage Corp., said a surge in the Vietnamese company’s share price has been fueled by speculative buying, setting the stage for heated negotiations in Southeast Asia’s fastest-growing beer market.

Vietnam pays respect to ‘comrade’ Castro Vietnamese President Tran Dai Quang (right) shakes hands with Cuban Ambassador to Vietnam Herminio Lopez Diaz (center) at the Cuban Embassy in Hanoi, Vietnam, on Monday, after signing a book of condolences on the death of Cuban revolutionary leader Fidel Castro. Castro, who led his bearded rebels to victorious revolution in 1959, embraced Soviet-style communism and defied the power of 10 US presidents during his half-century of rule in Cuba, died on Friday at age 90. AP

Beijing complains US naval operations undermining China’s sovereignty

hina’s government-backed institute for the South China Sea has released a report detailing an increase in US military activities in the region, saying they threaten China’s national security and undermine trust between Washington and Beijing. According to the National Institute for South China Sea Studies, based on Hainan island-province, the US military has carried out more than 700 naval and aerial patrols in the region last year, deployed more advanced reconnaissance aircraft, drones, electronic surveillance ships and satellites, as well as nuclear submarines and aircraft carriers. “China has become the No. 1 targeted country of the US close reconnaissance in terms of frequency, scope and means,” the report said. It said the US made more than 260 close reconnaissance sorties against China in 2009, and the number increased to more than 1,200 in 2014. Such activities are “also very likely to lead to accidental collisions at sea or in the air, making it an important negative factor affecting Sino-US relations and also peace and stability in the region,” it said. The report also notes US military alliances and agreements with Japan, South Korea, the Philippines, Australia, Thailand and, most recently, Vietnam. The report said that, from the US perspective, China’s large-scale construction activities in the South China Sea confirmed the US suspicion that China intended to implement a strategy known as “anti-access/area denial,” or actions designed to prevent an opposing force from entering an operational area or limit its freedom of actions within that area.

Fishing ban at disputed shoal

Philippine President Duterte, who has considerably reduced tensions with China over contested South China Sea waters, says he plans to declare a marine sanctuary at the disputed Scarborough Shoal. Such a move would keep away both Filipino and Chinese fishermen and prevent China from constructing any facilities, like it did on seven other features farther south in the Spratly archipelago.

1,200

The alleged number of close reconnaissance sorties made by the US against China in 2014

Despite Duterte’s wishes, China has not yet committed to such a proposal. Without Beijing’s nod, it would be meaningless because since 2012, China has effective control of the tiny, uninhabited coral reef within the 200-mile Philippine exclusive economic zone. Duterte relayed his marine sanctuary plan to Chinese President Xi Jinping during a meeting last week on the sidelines of an Apec summit in Peru, National Security Adviser Hermogenes Esperon Jr. said. Xi did not say whether he agreed. C h i nese Foreig n Mi n ist r y Spokesman Geng Shuang said China had made “proper arrangement” for Filipinos to fish in nearby waters, and reiterated that “the sovereignty and jurisdiction over the Scarborough Shoal is not, and will not be, changed.” The Chinese coast guard continues to block the entrance to the horseshoe-shaped lagoon.

PHL to upgrade island facilities

China has embarked on massive island-building in recent years in the South China Sea, drawing US objections and protests from rival claimants, particularly the Philippines and Vietnam. But according to satellite images, Vietnam also has extended a runway on Spratly Island and constructed new hangars, apparently to accommodate surveillance aircraft. Now, the Philippines, too, is looking to construct a new port on Pagasa Island, internationally known as Thitu, its biggest prize in the disputed Spratlys. The Department of Transportation has earmarked $9 million for a seaport on the tiny island, which used to be a military installation in

the 1970s and, since then, home to about 200 civilians and 50 soldiers living in few dozen houses. It has a 1.3-kilometer (0.8-mile)-long runway, but sea access is difficult because it is surrounded by shallow coral base. In a report to the Philippine Congress, the transportation department said the new port would “vastly improve accessibility to the area and bolster the country’s claims” in the South China Sea. The Philippines had frozen all construction plans for the island until it won an international arbitration case against China in July that invalidated Beijing’s claims to the South China Sea.

A near tripling of Habeco’s price since its October 28 listing on Vietnam’s regulated over-thecounter exchange doesn’t accurately reflect the underlying value of the business, as it’s “mainly due to speculative buying on very thin volume,” Tayfun Uner, CEO of Carlsberg Vietnam, said in an interview in Hanoi. Habeco shares closed as high as 144,700 dong ($6.40) this month, after initially being listed at 39,000 dong, a price Uner described as fair. The government announced in August it wants to sell its 82-percent stake for $404 million, or about 48,000 dong a share, which, according to Uner, is a reasonable valuation. Vietnam is in the midst of restructuring state ownership of Habeco in the north and top brewer Saigon Beer Alcohol Beverage Corp., known as Sabeco, in the country’s south. The potential divestment is drawing interest from the world’s largest brewers, including Heineken NV, Anheuser-Busch InBev NV and Asahi Group Holdings Ltd., who are keen on Vietnam’s young population and rising middle class in one of the world’s fastest-growing economies.

‘Fair price’

“We want to support the Vietnamese

4.04B liters Vietnam’s expected beer consumption this year, the highest in Asean government to make a success out of this, which means obviously to get a fair price and to ensure their success of the privatization,” Uner said. Habeco’s selling price should also reflect that its market position has dropped to third from second since the brewer purchased stakes in 2008, he said. Carlsberg has been in talks with the Ministry of Industry and Trade to purchase a 61.79-percent holding and plans to also bid for another 20percent stake that the government will sell at an auction, Uner said. It currently owns 17.51 percent. The remaining 0.7 percent— currently traded on the country’s Unlisted Public Co. Market exchange—is owned by other minority shareholders. Those shares fell 2.1 percent to 105,000 dong on Thursday. Carlsberg shares fell 0.4 percent in Copenhagen.

“It is very possible the government will take the market price as reference for the stake sale,” said Marc Djandji, head of institutional sales at Rong Viet Securities Corp. “Considering the small amount of shares available, if the government relies on the market price, it’s just an artificial price. So the concern of Carlsberg is understandable.” Carlsberg, which has been waiting since last year for government permission to boost its stake in Habeco, has a first right of refusal for the sale, Uner said. The Danish brewer plans to compete with other bidders for the 20-percent stake being sold at an auction, and expects the government to sell the larger holding at the winning auction price, he said.

Beer guzzlers

IF the government fails to sell the entire 20-percent stake during the auction process, Carlsberg would be willing to buy the 61.79-percent holding at a price per share equivalent to its 2008 initial stake purchase, Uner said. “Carlsberg, with the expectation that the Vietnamese government will respect our first right of refusal, would want to keep and grow the Hanoi brand,” Uner said. “That does require, on top of the acquisition investment, a significant investment to keep and grow the brand.” Vietnamese guzzlers are expected to consume more than 4.04 billion liters of beer this year, the most in Southeast Asia and up from 3.88 billion liters in 2015, according to Euromonitor International. Both Habeco and Sabeco are planning to list shares on Ho Chi Minh City Stock Exchange before December 12, according to Phan Chi Dung, head of the light industry division at the industry and trade ministry which oversees Habeco. BloombergNews

Indonesia nabs 2 militants in Myanmar Embassy plot

China to open 1st South China Sea museum

China has long cited ancient history as the basis for its claim to virtually the entire South China Sea. Now, it plans to open the first South China Sea Museum to exhibit antiques from early Chinese dynasties that were retrieved from the disputed waters. Ten ceramic pieces, including dainty vases, incense holders, drinking vessels, dishes, cups and saucers from the Ming and Qing dynasties (1368-1911), were donated to the museum last week by two Chinese companies that purchased them at an auction in New York’s Metropolitan Museum of Art in September, staterun Xinhua News Agency reported. The museum, which is expected to open in March on south China’s Hainan island-province, also has received more than 800 pieces, including old compasses, logbooks and ceramics, that were found by fishermen, Xinhua said. Some date back to the 5th century and provide clues about trade along the maritime Silk Road, it said. An international arbitration tribunal in July said Beijing’s claims are inconsistent with international law. It said any historic rights were “extinguished” by the 1982 UN Convention on the Law of the Sea, which China ratified in 1996. The tribunal said that, while China had used islands in the past, it had never exercised exclusive authority over the waters. China has dismissed the ruling. AP

In this November 24 photo, Indonesian Muslim students shout slogans during a protest in front of the Myanmar Embassy in Jakarta, Indonesia, over the persecution of Muslim Rohingya in Myanmar. AP

ndonesia’s antiterror squad has arrested two militants who were planning to attack prominent places in the country’s capital, including the Myanmar Embassy, the police said on Sunday. An interrogation of suspected bomb maker Rio Priatna Wibawa, who was arrested this past week, led authorities to the men, National Police Spokesman Boy Rafli Amar said. All three claimed allegiance to the Islamic State (IS) group. Bahrain Agam was arrested in northern Aceh province late Saturday and Saiful Bahri was captured in Banten province on Sunday, Amar said. The police had said Wibawa had sufficient explosives at his home in West Java province to make bombs three times more powerful than those used in the 2002 Bali bombings that killed 202 people. Since the Bali bombings, which were carried out by the al-Qaedalinked Jemaah Islamiyah militant

group, a security crackdown has netted hundreds of radicals and reduced their capacity for large attacks. But a new threat has emerged from among the hundreds of Indonesians who have traveled abroad to fight with IS and the group’s supporters in Indonesia. Amar said the arrested militants told authorities they wanted to retaliate against Myanmar for recent attacks on Rohingya Muslims. They also planned to attack Indonesia’s parliament, police headquarters and television stations. An attack on the embassy could have been carried out this month or next, Amar said. The embassy in Jakarta was the scene of protests against the persecution of Rohingya on Thursday and Friday. Protests also occurred in Bangladesh, Malaysia and Thailand. Sectarian violence in Buddhistmajority Myanmar has killed scores of Muslims, and thousands have been driven from their homes. The Rohingya face severe discrimina-

tion and are considered illegal immigrants by Myanmar’s government despite many living in the country for generations. Indonesian extremists responded to sectarian violence in Myanmar in 2013 with a plot to bomb the Myanmar Embassy. More than a dozen militants were sentenced to prison for involvement in the plot. Amar said the three men arrested this past week were part of a network believed to be involved in a January attack in Jakarta that killed eight people. “We are still investigating and searching for other alleged group members,” he said. Agam provided some cash and purchased explosives, Amar said, while Bahri was helping Wibawa make bombs. The police had said Wibawa, a dropout from an agricultural university who was radicalized by the writings of firebrand cleric Aman Abdurahman, also received funds from radicalised Indonesians working in Saudi Arabia, Malaysia and Taiwan. AP

A10 Tuesday, November 29, 2016 • Editor: Angel R. Calso

Opinion BusinessMirror

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Concerted effort to fight agricultural smuggling

any traders and some officials of government agencies were taken aback when Agriculture Secretary Emmanuel F. Piñol announced the cancellation of import permits for animal and plant products last week. Piñol said the measure was meant to fight the outright and technical smuggling of agricultural goods. He said he reached a decision to scrap old permits after finding a “huge discrepancy” in the meat-importation data of the United Nations and the Bureau of Animal Industry (BAI). Piñol noted that traders tend to “misdeclare” the agricultural goods they bring into the country, a practice known as technical smuggling. Unscrupulous traders will declare the imported product as something else, usually one that is levied a lower tariff, to avoid paying higher duties. In the case of pork imports, the Department of Agriculture (DA) noted that some traders declare pork cuts as offal. Pork cuts are usually slapped a tariff of 35 percent, while the government imposes a 5-percent to 10-percent tariff on imported offal. In 2010 the Federation of Philippine Industries (FPI) complained that some companies undervalued the palm oil and palm olein they imported by as much as 90 percent. While the two commodities from Malaysia and Indonesia came in at zero duty pursuant to the Asean Free Trade Agreement, FPI said the companies dodged the payment of the 12-percent value-added tax. FPI charged that the traders were in cahoots with corrupt Bureau of Customs (BOC) officials. The DA had taken additional steps to eliminate this illegal practice by declaring that it would inspect all shipments of agricultural goods first prior to the assessment of tariffs. While it remains to be seen whether the DA could sustain this effort, it is a good step to help fight technical smuggling, as it appears that the BOC is not capable of preventing it. Piñol and hog raisers themselves said the technical smuggling of imported pork offal continues to this day, despite their appeal to the government to stop it. Domestic producers have been complaining for years of incurring losses due to the outright and technical smuggling of agricultural goods. For years, they have pleaded with the government to do something about agricultural smuggling, which makes it more difficult for them to become competitive. Their pleas, however, appear to have fallen on deaf ears. Now, one government agency has decided to do something about it. The BOC should follow its lead. It should rid its ranks of scalawags and work closely with the DA and other concerned government agencies to eliminate the scourge that is agricultural smuggling. Since 2005

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THE Entrepreneur Continued from A1

hus, the economy’s performance in the third quarter of a presidential election year shows whether the new Chief Executive hits the ground running. The challenge is to improve on, or at least sustain, the usually fast growth (because of political spending) posted by his predecessor in the first two quarters. In 2010, a presidential election year, the country’s GDP grew by 7.3 percent in the first quarter and by 7.9 percent in the second quarter (incidentally, the highest quarterly GDP growth under outgoing President Gloria Macapagal-Arroyo). In contrast, the third quarter was a poor start for newly elected President Benigno S. Aquino III, as GDP growth slowed down to 6.5 percent. It recovered to 7.1 percent in the fourth quarter, but failed to match the last two quarters under GMA. Economic histor y repeated itself in 2013, when the country held midterm elections. GDP grew by 7.7 percent in the first quarter and 7.9 percent in the second quarter, but decelerated to 7.0 percent in the third quarter and ended at 6.3 percent in

the fourth quarter. Actually, the third quarter had been mostly slow under the Aquino administration, except for 2012 (when GDP grew by 7.1 percent, up from 5.9 percent in the second quarter) and for 2015 (when GDP barely improved to 6.0 percent, from 5.9 percent in the preceding quarter). In 2011 Aquino’s first full-calendar year of administration, GDP grew by 4.9 percent in the first quarter and 3.6 percent in the second and further decelerated to 3.2 percent in the third quarter. In 2014 GDP grew by 5.7 percent in the first quarter and by 6.4 percent in the second quarter before slowing down to 5.3 percent in the third quarter. Under Aquino, the economy posted its slowest annual growth

rate in 2011, at 3.9 percent. However, the 5.8-percent growth in 2015 was considered a big disappointment, because it was way below expectations (the government was targeting GDP growth of 7 percent to 8 percent. The poor performance, which was blamed largely on government underspending, was the slowest in the last four full years under the Aquino administration, after the 6.6-percent growth in 2012, 7.2 percent in 2013 and 6.1 percent in 2014. President Duterte beat the thirdquarter jinx of a presidential election year by improving on the performance of his predecessor. GDP grew by 6.9 percent in the first quarter and by 7.0 percent in the second quarter. Instead of slowing down in the third quarter, when the impact of campaign spending was no longer counted, GDP growth even improved to 7.1 percent. Duterte also proved economic analysts wrong. After the release of the second-quarter economic results, CNBC posted an online report headlined “After impressive first half, Philippines GDP to slow for rest of the year.” The Philippines’s performance, which beat China’s 6.7-percent growth, according to the report, was bolstered by seasonal factors such as election-related spending and budget front-loading. The

Why the peso is going down John Mangun

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Duterte beats third-quarter economic ‘jinx’

he recent concerns about the depreciation of the Philippine peso to the US dollar are covered with misinformation and misanalysis as usual in this age of instant experts.

The discussion of the exchange rate for the peso focuses on the idea that: overseas remittances are worth more in peso terms and the cost of imported goods is more expensive, while Philippine exports are more attractive in the global market. However, while, in theory, it would seem that we are dealing with important issues, the empirical data says the peso rate is actually not all that significant in the big picture. Assuming that all remittances are valued in US dollars, the amount of increase in the peso value of these remittances in 2016 would be equal to about 1.2 percent of the total Philippine GDP. While an individual

overseas Filipino workers (OFW) family might benefit from an 11-percent increase in their “salary”, the overall economy is not going to boom from increased OFW family purchasing power in 2016. Theoretically once again, a weaker peso should increase price inflation and exporters should be able to sell more goods. However, the data does not support this reasoning. The facts show that the Philippine inflation not only tracks, but shows a statistical correlation between the inflation rate and the global oil price—not the peso exchange rate. Philippine inflation peaked near the same time that crude oil prices topped out in

2008. Meanwhile, the peso appreciated from 50 to 40 to the US dollar even as both oil prices and inflation were rising. The peso has been depreciating consistently since 2013 but inflation has gone both higher and lower. During that period, oil went from $80 to $100 and down to below $40, which was tracked by the inflation rate—2 percent to 4 percent to 0.4 percent. As far as exports are concerned, here again an individual company may benefit, but it is hard to measure an overall beneficial effect of a weaker peso. Merchandise exports account for about 30 percent of Philippine economic output, but that is relatively small compared to 70 percent in both Thailand and Malaysia. Further, the amount of growth of these exports tracks the performance of the global economy rather than the performance of the peso. The much more important concern should be, why is the US dollar appreciating against all currencies? The global economy is slowing. The political risk in many traditionally safe nations is growing daily. This is a time of globalization when

report quoted an economist from Oxford Economics, who said the Philippines could not maintain the growth rates posted in the first two quarters of 2016. I made the comparison between the economy’s performance under the Aquino and Duterte administrations to emphasize the importance of sustaining an upward trajectory, which is essential if we are to move up to consistent fast-pace growth instead of a boom-andbust cycle. A consistent upward trajectory means high GDP growth is no longer a glitch in economic performance. The third quarter has been a good start for the economy under Duterte. Among the major sectors, industry accelerated to 8.6 percent compared with 6.1 percent in the third quarter of 2015, while services grew by 6.9 percent, lower than the 7.2 percent posted a year ago. Agriculture, however, rebounded to a 2.9-percent growth, from a contraction of 0.1 percent last year. With the President’s high satisfaction rating (the highest among the post-martial-law presidents), the third quarter of 2016 is a good start for maintaining an upward trajectory, which is very important because it can sustain the momentum of the economy. For comments, e-mail mbv.secretariat@gmail. com or visit www.mannyvillar.com.ph.

money can move instantly to any spot on planet Earth. But you cannot pack a factory in a suitcase and move it on a moment’s notice. Suppose you had $10 billion cash. Would you rather invest in a resort complex in the Philippines or perhaps in building a manufacturing facility in China or Germany? Or would you rather buy US dollar-denominated paper assets, like the US stock market, that will gain as the dollar appreciates? The big money being made in China, the US, Japan and Europe is financial, not industrial. Since January 2001 over 190 months, the price of crude oil— denominated in US dollars—has moved on a month-to-month basis more than 5 percent higher, or lower 114 times. With that kind of return, why would you keep your money in any other currency than the dollar? With that kind of return, why would you invest in anything other than paper assets? E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stockmarket information and technical analysis tools provided by the COL Financial Group Inc.

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Tuesday, November 29, 2016 A11

How to reduce the global Sustaining agriculture’s growth food gap by half Cecilio T. Arillo

database

HE Potsdam Institute for Climate Impact Research (PIK) in a recent study shared to Database said better agricultural water management could halve the global food gap by 2050 and buffer some of the harmful climate-change effects on crop yields. For the first time, PIK scientists investigated systematically the worldwide potential to produce more food with the same amount of water by optimizing rain use and irrigation, arguing that investing in crop-water management could substantially reduce hunger, while at the same time making up for population growth. Putting the findings into practice would, however, require specific local solutions. “Smart water use can boost agricultural production; we’ve in fact been surprised to see such sizeable effects at the global level,” PIK lead author Jonas Jägermeyr said, pointing out that “in a water-management scenario the scientists described as ambitious, global kilocalorie production could rise by 40 percent, while roughly 80 percent, according to UN estimates, would be needed to eradicate hunger by the middle of this century.” Jägermeyr said that, even in less ambitious scenarios, results show that integrated crop-water management could make a crucial contribution to filling the plates of the poor. The PIK scientists have run comprehensive biophysical computer simulations, constraining these in such a way that croplands do not expand into forests and no additional water resources are needed. As it is a global study, it provides detailed vegetation dynamics and water use effects in river basins— certainly too coarse to simulate farmlevel conditions, but suited to identify regional hot spots. For example, the yield increase potential of crop-water management is found to be particularly large in water-scarce regions, such as in China, Australia, the western US, Mexico and South Africa. “Assessing the potential is tricky: If upstream farmers reroute otherwise wasted water to increase irrigation and production, less water returns to downstream users and consequently this can affect their production,” said PIK coauthor and team leader Dieter Gerten, adding that: “Below the line, we found that the overall production increases. Still, this, of course, poses quite some distributional challenges. Also, a lot of local government regulation and incentives, such as micro-credit schemes are needed to put crop-water management into large-scale practice.”

Mulching and drip systems to counter climate change impacts

The scientists took into account a number of very different concrete watermanagement options, from low-tech

solutions for smallholders to the industrial scale. Water harvesting by collecting excess rain run-off for instance in cisterns—for supplementary irrigation during dry spells—is a common traditional approach in some regions, such as the Sahel region in Africa, but is underused in many other semi-arid regions, such as Asia and North America. Mulching is another option—the soil gets covered either simply with crop residues left on the field, reducing evaporation, or with huge plastic sheets. Finally, a major contribution to the global potential is upgrading irrigation to drip systems. It is especially under ongoing climate change that water management becomes increasingly important to reduce food risks. The reason is that global warming is likely to increase droughts and change rainfall patterns, so water availability becomes even more critical than before. Assuming a moderate carbon-dioxide (CO2) fertilization effect—plants take up CO2 and could hence benefit from higher concentrations in the air, but the magnitude of this effect is still under debate—the study shows that in most climate policy scenarios, water management can counterbalance a large part of the regional warming impacts on farming. “Yet if greenhouse-gas emissions from burning fossil fuels are not reduced at all, in a business-as-usual scenario, water management will clearly not suffice to outweigh the negative climate effects,” the PIK study said.

Given the planetary boundaries, decision-makers should look into water use

“Water management is key for tackling the urgent global sustainability challenge,” said Johan Rockström, coauthor of the study and Director of the Stockholm Resilience Centre. “It has been an issue in many local and regional studies and its effects on farm level have been well demonstrated, but has not been thoroughly analyzed at the global scale. The recently adopted Sustainable Development Goals by all countries— while stipulating sustainable agriculture among all nations—need to be based on more evidence on how to achieve such large system changes, and water needs to be central here. Since we’re rapidly approaching planetary boundaries, our study should indeed draw the attention of decision-makers of all levels to the potential of integrated crop-water management.”

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

Cuba after Castro

istory will absolve me, Fidel Castro said in 1953, shortly before he took the world stage. He was wrong. In power for nearly a halfcentury, he brought the US and Soviet Union to the brink of nuclear war, exported revolution and repression, and turned his island into a penurious police state. His death could open the door to a brighter future for Cuba—especially if its neighbors, beginning with the US, pursue the right policies. As ruthless as he was charismatic, Castro managed to hold off the superpower 90 miles from Cuba’s coast almost through force of will, becoming an icon for hemispheric anti-Americanism in the process. His cunning cultivation of patrons—first the Soviet Union, and then Venezuela—enabled the country to endure the US embargo and his own economic policies, which turned the Caribbean’s most advanced economy into a basket case. Any reckoning of his legacy must grant the Cuban revolution’s achievements: high rates of literacy and educational enrollment, low levels of crime and infant mortality, relatively low levels

of poverty and inequality, and universal health care. But the price was outrageous. Castro squandered the country’s enormous economic potential and was an exemplary human-rights abuser. For decades he made his island a prison, its people denied freedom of speech, with dissidents forbidden to travel and subject to arbitrary arrest. The question now is how best to transcend that legacy. As the standard bearer for “los historicos”—the revolutionary old guard—Castro was a bulwark of revolutionary fervor blocking political and economic reforms. After US President Barack Obama’s visit to Cuba in March, he sneered that “we do not need the empire to give us anything.” US-Cuba relations thawed despite him. Castro’s passing could pave the way for speedier progress, both in relations with the US and in setting the country free. For sure, his brother Raul, Cuba’s president since 2008, is no liberal in waiting. The reforms of recent years have been timid. Obama’s visit prompted party leaders to circle the wagons, and the elder Castro’s death could have the same short-run effect. Bloomberg Views

Edgardo J. Angara

uring the third quarter of this year, our economy proved again to be Asia’ fastest-growing at 7.1 percent—higher than China’s 6.7 percent, Vietnam’s 6.4 percent, Indonesia’s 5.0 percent and Malaysia’s 4.3 percent. This strong performance was mostly propped by sustained public spending in infrastructure and private construction, as the services and industry sectors continued their rise—6.9 percent and 8.6 percent, respectively. However, what is most noteworthy of this recent stellar economic performance is that our agricultural sector grew by close to 3 percent, fi-

nally reversing a decline that lasted five consecutive quarters. At current prices, agriculture’s gross value amounted to P360.9 billion, up 7.33 percent from last year. Recent Philippine Statistics Authority (PSA) data shows higher output in the crops, livestock and poultry subsectors, marking a recovery from the damage wrought by El Niño and typhoons in past years.

Dangerous fireworks Ernesto M. Hilario

ABOUT TOWN

he public is treated every January to a spectacular international fireworks festival held at the Mall of Asia Complex. For the whole competition, it is estimated that a single container is enough to bring in all the fireworks from abroad. But local fireworks manufacturers claim that around 150 40-footer container vans containing firecrackers have already entered the country. The Bureau of Customs should look into this because imported fireworks are said to be the same kind that leads to many injuries every New Year’s Eve celebration. Under Republic Act 7183, or the Fireworks Law, the importation of finished fireworks is strictly prohibited without exception. Considering the big number of participants expected in next year’s event, local fireworks makers believe that the volume of pyrotechnics shipment would also increase, giving smugglers a convenient opportunity to bring in contraband. Workers in the local fireworks industry have sounded the alarm over smuggled and excessively powerful firecrackers, which not only hurt licensed manufacturers, but pose a “grave, clear, present and verifiable” danger to life and limb of the consuming public. The Department of Health has pinpointed piccolo as the single biggest cause of injury during the

traditional Christmas and New Year’s Eve celebrations. This type of firecracker is not manufactured locally. Since there is an official ban on piccolo production, its proliferation in the domestic market means only one thing: these are smuggled into the country. Local fireworks manufacturers strictly adhere to product standards set by industry regulators. Despite the unrelenting efforts of Customs and law-enforcement agencies, the smuggling of firecrackers persists. The most glaring proof of the rampant illegal shipment of dangerous firecrackers is the seizure recently of P5 million worth of firecrackers made in China that entered the port of Misamis Oriental. These were labeled “Made in Bulacan”.

Hopefully, such an upward trend continues, considering improved Philippine-China relations have reopened the big Chinese market, particularly for Philippine bananas and pineapple. Mango exports could also rise as an amended agreement between the Philippines and Australia was recently signed, allowing the rest of the country—except Palawan— to export the prized fruit. Previously, only mangoes from Guimaras and Davao Del Sur were allowed in Australia. Meanwhile, a report from the United Nations’ Agricultural Market Information System (AMIS) said that weather conditions during the wet season (July-August) for the Philippines and for Southeast Asia in general have been generally good for ramping up rice production, bolstering further the hopes of our agriculture’s continuous rise—at least for next year. Shortages in key agricultural

We know that it is really difficult for Customs to monitor all the points of entry. Thus, the government should put more teeth in existing laws, rules and regulations governing the sale and distribution of fireworks. The legitimate fireworks industry players are pinning their hopes on the issuance of an executive order (EO) by President Duterte that would favor domestic industries and clamp down on smuggling of dangerous firecrackers. If the EO is signed by the President on December 5, it is expected that local jobs will be preserved, while public health and safety will be protected. Health Secretary Paulyn Jean B. Rosell-Ubial has given assurances that the proposed EO would not enforce a total ban on individual use of pyrotechnics, but simply tighten existing regulations to keep the public out of harm’s way.

Caveat emptor

Let the buyer beware. That’s always good to bear in mind, because we never know when what looks good on the outside might turn out to be a dud. Conversely, those who sell goods should disclose to their customers everything they ought to know about what they buy, so they will not be accused of maliciously trying to fleece customers of their hardearned money. The latter should be borne in mind by a certain telco said to be looking to expand its roster of investors in connection with its plans to compete with today’s telco giants.

Indian dreams, thwarted by Trump

By Mihir Sharma | BloombergView

iguring out which of his campaign promises Donald Trump is going to cheerily ignore once in office is a large and flourishing industry at the moment. But whatever the fate of climatechange negotiations or a special prosecutor for Hillary Clinton, one theme of his campaign appears to have carried through into his transition: opposition to the current US work-visa scheme. That’s bad news for innovation in Silicon Valley. It may be worse news for India. Among Trump’s early priorities, according to a video he released on YouTube, would be directing “the Department of Labor to investigate all abuses of visa programs that undercut the American worker.” That’s a pretty direct attack on the H-1B program, under which 65,000 temporary workers—and 20,000 with advanced degrees in tech-related fields from American universities— are allowed to work in the US each year. (Various renewals and countryspecific exemptions mean the total number of temporary workers is higher.) Even so, you could reasonably ask if those words mean what they appear to mean, since Trump has a history of flip-flopping on this

issue, sometimes within hours. Fortunately, a more explicit commitment from the presidentelect than his own words is available. And that’s his appointment of Sen. Jeff Sessions as the next US attorney general. Sessions is one of the most hardline voices on immigration you can find—and he has reserved particular ire for the H-1B program. Indeed, he tried to effectively gut it last year, in legislation he cosponsored with Sen. Ted Cruz. Sessions also cowrote a letter to then-AG Eric Holder—and two of his Cabinet colleagues— demanding an investigation into “abuse” of the program by “some large, well-known, publicly traded corporations.” (In another sign of how nativism unites the extreme right and the radical left in the US, the letter was cosigned by a certain Senator Sanders.) So it’s almost certain that the H-1B program won’t survive in its current form. What could replace it? Well, one idea floating around is to ensure that any temporary workers earn a pretty hefty wage—the figure in the Cruz-Sessions bill was $110,000 a year. Another is to replace the current lottery system with an auction, again keeping out lower-paid engineers. But it’s

entirely possible that the next administration will want to go even further. Trump’s chief strategist, Steve Bannon, for example, has lamented the fact that “two-thirds or three-quarters of the CEOs in Silicon Valley are from South Asia or from Asia.” It’s important to note that a good number of those executives began at the bottom—Google’s Sundar Pichai or Microsoft’s Satya Nadella are unlikely to have pulled in the big bucks when they first came out of graduate school. It’s near-impossible to design an immigration system that selects only the highest-paid and still protects the inventiveness and meritocracy that has made Silicon Valley the center of the tech world. Half of all technology start-ups in the US are founded by immigrants. Like all forms of protectionism, the Bannon-Sessions vision would lower standards and reduce productivity, eventually causing the US to lose the edge—and the income—that comes with being the undisputed champion of innovation. The other big loser, of course, will be India. The behemoths of the Indian information-technology (IT) industry—companies like Infosys and Tata Consultancy Services—are already struggling with

products, however, looms for 2017, as the Department of Agriculture (DA) recently cancelled all import permits for meat and plant products—except for rice and corn—to curb rampant technical smuggling. It appears that even with the enactment of the Customs Modernization and Tariff Act, sponsored by Sen. Juan Edgardo M. Angara, much more political will needs to be mustered to finally weed out agricultural smugglers and prevent them for wreaking any more havoc on our economy. Hopefully, the DA makes good on its assurances that legitimate importers will be able to get their new import permits quickly—and prosecute those engaged in illegitimate trade. Any delay not only dampens the agricultural sector’s growth; it will also lengthen the opportunity for corruption to once again rear its head.

E-mail: angara.ed@gmail.com.

According to a reliable source, it all sounds well and good, if not for some unfortunate circumstances, such as the investments for the said project being tainted by a pending fraud case against the company and its president. To make matters even more suspicious, according to sources, the company and its president have not spoken a word of this case to interested investors, concealing the possibility that their money can just be taken away without getting anything in return. Legal or not, this is bad business practice. Clearly, concealing troubling circumstances from your investors, the people who actually trust you enough to hand over their money to you, paints you in a very bad light. If proven in court, this company can be guilty of fraudulent business practices, ruining any investor confidence in the process. That the company’s position appears to be the result of a long, drawn-out process involving other companies chaired by said president should be even more cause for concern, given the elaborate workings of a corporate structure, and how easy it is to get entangled in such. The moral of this story? The end does not justify the means, if the ends are never reached in the first place. People need to be more wary than ever these days, where millions can simply disappear at the flick of a finger by a wily salesman.

E-mail: ernhil@yahoo.com.

a business model that technological change might have made obsolete. But they’re still dependent on H-1B visas: The list of top applicants under the program reads like the directory of a Bangalore office park. For these companies, getting temporary employees to directly service their clients in the US used to be crucial. It was the most efficient way to provide IT services, and drove growth and profitability for both vendor and client. Trump’s policies will accelerate their decline, unless they learn to adapt a lot quicker than they have in the past. And finally, what of that muchloved figure, the Indian software guy in the US? For years, getting an H-1B was the second-highest aspiration for a graduate of one of India’s many engineering schools —beaten in the hierarchy of needs only by the key to the Garden of Eden, the green card. It isn’t a simple matter of more money, incidentally—many H-1B hopefuls imagine that going to America will mean they can change tracks, and wind up doing more interesting and productive work than is typically available back home. The H-1B has been such a staple of Indian middle-class dreams for so long, I can’t even imagine what will replace it once it’s gone.

2nd Front Page BusinessMirror

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www.businessmirror.com.ph

Tuesday, November 29, 2016

Infra spending, FDI, manufacturing to fuel 2-digit growth

By Cai U. Ordinario & Catherine N. Pillas

@cuo_bm @c_pillas29

he government is confident of hitting double-digit growth before President Duterte ends his term in 2022, to be driven by the rejuvenated manufacturing sector, foreign direct investments (FDI) and heavy spending for infrastructure.

Budget Secretary Benjamin E. Diokno on Monday said the government’s infrastructure spending can exceed the initial P8.2-trillion target to reach around P9 trillion in six years. The amount of infrastructure spending can also increase the number of jobs, which augurs well for a consumption-driven economy and the need to create at least a million new decent jobs per year. “[The economy can grow] double digits, so at least 10 percent,” Diokno said. “[This will be driven by] infrastructure and investment. I’m sure FDI will come; there will be more jobs, more economic activity, tourism [and] manufacturing.” Diokno said the government aims to attain a GDP growth rate of 8 percent by 2022. But this, he said, is a conservative estimate, given the planned public infrastructure spending of the Duterte administration. He said the P8.2-trillion to P9trillion infrastructure spending does not include the public-private partnership (PPP) projects, which will continue under the Duterte administration. Diokno said the administration will tweak the PPP Program by accepting unsolicited project proposals and undertaking hybrid PPP projects, where the government constructs the infrastructure and the private sector operates and maintains it.

Longest bridge

The budget secretary remains confident that, despite the few number of projects in the government’s pipeline, they are confident they will be able to fill in the gaps and undertake more projects in the coming years. “That’s why we continue to look for good projects. These do not include half a million projects,” Diokno said. Among the planned government infrastructure projects is the construction of the longest bridge that will connect Luzon and Mindanao. Diokno said the National Economic and Development Authority (Neda) will be tasked to undertake the feasibility study for the project. This study will explore the ways by which such a herculean task can be undertaken. It can be done at grade by anchoring certain parts of the bridge on major islands in the country or underwater, which is what has been done in Europe. “We are trying to find out if that is feasible. If it is, we’ll do it. For the feasibility study, we will ask the Neda to do that,” Diokno said. “I think there’s a bridge now from China to Macau; its about 60 kilometers.”

Government center

Apart from connecting Luzon and Mindanao, the government plans to revive the government

DIOKNO: “That’s my greatest fear; if the other Cabinet secretaries do not work, we will underspend.”

center that was proposed under the Estrada administration, just before former President Joseph E. Estrada was ousted in a popular uprising. The initial government center plan was envisioned to be in the area where TriNoma Mall currently stands. The lot was initially owned by the National Housing Authority. However, given the current situation, Diokno said Arch. Felino Palafox, who designed the government center under the Estrada administration, said it might be better to locate the government center in Clark. But Diokno said if the government can find another location that can be similar to the Eastwood area in Libis, Quezon City, which can also operate 24 hours a day, it may work for the government. Diokno said this government center is being seen as cost saver since the government spends billions in rent to house all government offices. During the time of Estrada, Diokno said the government was already spending about P2 billion for government rent alone. “That will be at no cost to the government. A good concept for a government center is like Eastwood. It’s not only from 8 [p.m.] to 5 [p.m.]; it’s got to be 24 hours so we invite developers and divide the area among them. In this way, the development will pay for itself,” Diokno said.

Underspending fears

Diokno admitted that, while all these projects are very good, his “greatest fear” is for the government to again underspend. See “Infra,” A2

UNWTO chief convinces Teo to keep ‘It’s More Fun in the PHL’ slogan By Ma. Stella F. Arnaldo

@akosistellaBM Special to the BusinessMirror

HE Department of Tourism (DOT) will be spending at least $3 million (P150 million) for advertorials and media placements in foreign broadcasting and socialmedia networks to increase the awareness on the Philippines as a must-go destination for international travelers. This is on top of the P650 million the agency will be spending to further develop and implement the “It’s More Fun in the Philippines” brand campaign, disclosed Tourism Secretar y Wanda Corazon T. Teo. In an interview with the BusinessMirror on the sidelines of last Wednesday’s Tourism Summit, Teo said the agency recently signed agreements with CNN, BBC and Beautiful Destinations (BD) for promotion campaigns that will begin this December and will run the entire 2017. BD is an agency specializing in travel-based content creation,

₧650M The amount of the DOT’s oneyear budget for its countrybranding media campaign

posting photos and videos of various destinations on Facebook, Instagram and Snapchat. “These will be actual news stories and features about the Philippines and why it’s good to visit here,” she said. The tourism features, she explained, will be aired across the world, not just in Asia, and especially during major international events that will be held in the country, like the Asean Summit and its affiliate events, such as the regional group’s 50th anniversary launch in Davao on January 5; the Miss Universe beauty pageant on January 30; and the Madrid Fusión Manila in April, among others. Teo, likewise, confirmed that the agency will keep the “It’s More Fun in the Philippines” slogan, and just “enhance it by

telling tourists why exactly it’s fun to visit the Philippines.” She acknowledged that it was United Nations World Tourism Organization (UNWTO) Director General Taleb Rifai who convinced her to keep the slogan: “He said the slogan is good; just tell people why it’s more fun in the Philippines, such as the Filipino hospitality, and the character of Filipinos, among others.” The next phase of the Philippines’s brand campaign has been awarded to McCann Worldwide, she said, which also covers “media placements for one year,” costing P580 million, and production fees of P70 million, inclusive of all applicable taxes, commissions and production of creative materials for a yearlong campaign. In a separate news statement, Teo said the media placements, which will be seen in countries the agency classifies as emerging markets, “shall include at least eight audio-visual presentations, eight television commercials, eight radio commercials, 16 print advertisements and the upgrade See “UNWTO,” A2