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Thursday, October 12, 2017 Vol. 13 No. 1

PHL has highest incidence of part-time work in Asean 16.4%

By Cai U. Ordinario

If federalism is the solution, what is the main problem? By Alladin S. Diega | Correspondent

Part Four

NSTITUTE for Autonomy and Governance Executive Director Benedicto Bacani said that, if the Philippines is going to change its form of government, “at least we should change for the better and not just for the sake of it”. Speaking in a forum on federalism in Zamboanga in September, Bacani added the Philippines must consider that in a federal system, under the shared rule, “the cen-

tral government must necessarily contract while regional governments should expand”. “And now the regional governments will decentralize administrations to local government units [LGUs], then you have regional state governments, which are coherent political structures, composed of the regional government, the state government and the LGUs,” he said. When you federalize, according to Bacani, “the key there is for the Continued on A2

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he Philippines has the highest percentage of part-time workers in Asean, again putting a spotlight on the need to improve labor rights and security in the country, just like the campaign promise of President Duterte to end contractualization, according to the International Labour Organization (ILO).

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Data obtained by the BusinessMirror from the ILO showed that 16.4 percent of workers in Philippine small and medium enterprises (SMEs) render less than 30 manhours a week. The ILO noted that the practice of hiring part-time workers is common among firms

he 2007-2010 global financial crisis has generated endless debates in economic circles on how to save the capitalist economic system. The debates are unresolved. And so are the problems that the financial crisis has spawned, such as Brexit and the rise of right-wing populist politicians and demagogues. The crisis is also an aggravating factor in the spread of terror and Islamic fundamentalism. No major reforms in the global capitalist order have also been introduced. To avoid a repeat of the global banking crisis, the G20 countries simply pushed, through the Basel 3 agreement, for higher capitalization and liquidity ratio in the banking system. However, global financial speculators have remained free to do their vulture-like business. As to the World Trade Organization, the Doha

Continued on A21

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The percentage of Filipino employees working on a parttime basis, according to ILO data

Despite sustained growth, PHL still lacks basics to hit upper middle-income status

espite t he cou nt r y ’s sustained growth of over 6 percent that made it a regional outlier for several years now, reaching upper midd leincome status still requires the basics, such as efficient public transportation and better quality of education, according to an economist from the Asian Development Bank (ADB). In an e-mail to the BusinessMirror on Wednesday, Donghyun Park, ADB Economic Research and Regional Cooperation Department principal economist, said this highlights the fact the Philippines is “still a long way” from achieving high-income status. “The Philippines is still a long way from high-income status, so the more immediate and relevant

₧6B The projected economic cost of heavy vehicular traffic a day in Metro Manila by 2030, if transport infrastructure does not improve, according to Jica

challenge for the Philippines is to make it to upper middleincome status,” Park told the BusinessMirror. “The recent burst of sustained rapid growth certainly increases the likelihood of the Philippines catching up with Asean tigers,

such as Malaysia and Thailand,” he added. Park said improving the quality of education in the country will result in a more skilled work force, while improving transportation infrastructure will cut logistics costs and raise worker productivity. If the country will have a more skilled work force, Park added, the Philippines will have a better chance of capitalizing on the manufactur ing oppor tunities left in the wake of China’s deindustrialization. In 2014 the Japan International Cooperation Agency (Jica) said if the country does not improve transport infrastructure or take measures to ease congestion, Metro Manila’s traffic costs could balloon to P6 billion a day by 2030.

Jica added this is almost three times the current estimate of P2.4 billion a day. The study also stated that sans intervention, traffic demand could increase by 13 percent in less than two decades. This means that households need to spend no less than 20 percent of their monthly income for transport. “There is no timetable, but the Philippines wants to be more like South Korea than Brazil, that is, make the jump relatively quickly rather than be middle income forever,” Park said. “Good public transport will t r u ly be a t ra nsfor m at ion a l change, which will vastly speed up the Philippines’s move to upper middle-income, and on to highincome status,” he added. See “Growth,” A21

n japan 0.4563 n UK 67.7573 n HK 6.5746 n CHINA 7.7954 n singapore 37.8406 n australia 39.8971 n EU 60.5794 n SAUDI arabia 13.6818

Source: BSP (11 October 2017 )

A2 Thursday, October 12, 2017

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If federalism is the solution, Saving capitalism what is the main problem? Continued from A1

Continued from A1

dents of the local states should go directly to those local states.

regional states to really function as one coherent coordinated body with its local government units.” He said, “This is where the problem lies, because our LGUs and local politicians would never agree, I think, because of their entrenched political interests.”

Power

Political economy

BACANI explained, if politicians move to federalize but with the central government still maintaining a direct relationship with LGUs—just what is happening with the Autonomous Region in Muslim Mindanao, “the political economies of LGUs would remain.” This, he said, is because LGUs would still invoke the national Local Government Code (LGC) and the internal revenue allotment (IRA). “They would not accept a structure where the IRA is coursed through the regional governments,” Bacani said. Under the Local Government Code of the Philippines (Republic Act 7160), the IRA is an LGU’s share of revenues from the Philippine national government. Provinces, independent cities, component cities, municipalities and barangays each get a separate a l lot me nt . S e c t ion 28 4 of the LGC provides the formula for the distribution of the allotment—who gets how much. The IRA is automatically released to each LGU and may not be held back by the national government for any reason, except in the extreme case of an “unmanageable public sector deficit”. In such a case the allotment may be adjusted but provided it not be set to “be less than 30 percent of the collection of national internal-revenue taxes of the third fiscal year preceding the current fiscal year”.

Resistance

ACCORDING to Bacani, “The current local government heads would resist any adjustment in the IRA. Because that’s where their power lies.” Rosario Manasan, Philippine Institute for Development Studies senior research fellow, noted this as one of several fiscal prob-

Muslim women pose for a photo outside a tent at the Tent City of Balo-i, Lanao del Norte, one of the provinces of Mindanao. Experts are cautioning politicians’ move to apply a federal form of government, saying such system does not guarantee equitable development. NONIE REYES

lems being experienced in the current unitary system that should be resolved should the country decided to shift to federal system. For one, “There is inadequate equalization,” she said. “There are LGUs that get too much fund transfers relative to what they need while others have very limited,” Manasan said. “Take note that Metro Manila has the biggest collection of tax revenues because many companies are based here, yet, they still receive IRA.” She added there is “too much reliance on block grants for different objectives” and “too much reliance on procedural routes”. These, for her, are counterproductive methods. “Let us think of other designs of revenue transfers [that are] more appropriate for other objectives,” Manasan said. “Under federalism, it’s important to focus on subnational government credit finance because we note of the many experiences of South American federal countries. The bankruptcies in many of these governments paved way for them having fiscal crises, hyperinflation [and] low growth.” She cited the cases of Brazil and Argentina in the past years.

Deficiencies

MANASAN also pointed out the deficiency in the country’s political economy. This, she said,

LOW PRESSURE AREAS (365 KM EAST OF INFANTA, QUEZON) (900 KM NORTHEAST OF BORONGAN CITY, EASTERN SAMAR) (As of 4:00 PM - October 11, 2017)

is expressed in the long overdue legislative overhaul of the LGC. That, according to her, is fairly difficult. Citing a study, Manasan explained the difficulty is because “Congress, as an institution, is cautious in expanding the resource-base of the LGUs.” “System-strong LGUs depend less on national legislators for financial assistance and, hence, would result in loss of political leverage of the members of Congress.” Manasan added this situation is what others call as symbiotic relationship between the congressman and the local politician. Congress like that they control the money in order to control local politicians, she said. A f isca l decentra l ization framework, Manasan said, “would also mean independent monetary policy, currency planning— which would mean independent banks for subnational governments—while exclusive with federal are the national defense, foreign policy, international trade and others.” With tax assignment, Manasan said there should be local autonomy. “They [federal states] should be able to raise money on their own and not be dependent on IRA,” she said. “What we are looking for are taxes that should fall with local states.” She cited as example the residence-based surtax of the personal income tax from the resi-

“OVER and above that, we should allow state governments the power to impose an additional 1 percent from taxable income of the residents,” she said. Manasan said the PIDS estimates undertaking such move would give P19-billion collection to local states. “We will transfer the power for motor vehicle-user charge; that would produce P13 billion,” she explained. “We need to come up with additional similar measures to assure a certain degree of financial autonomy to the federal states.” Still, Manasan admitted “these are not enough”. “Because when we computed an aggregate of these, the amount would not be enough and they would still require fund transfer from the federal government, say P80 percent, which still is a huge dependence.” Manasan also said, as a rule of thumb, “state’s borrowing should be within their capacity to manage.” She discourages bailout for a bankrupted state. “We should think about these seriously because these are the problems faced by many South American countries.”

Costs

MANASAN said the move to a federal form of government is not free. “Because we are adding a new layer, this would entail overhead cost.” She said the PIDS estimated that “each state, for instance, would have a governor, vice governor, staff and operating expenses.” “[There would be] additional senators at the national [level] because of the need for representation in the second chamber,” Manasan said. “There would [also] be legislative body for every state—13 in all as currently proposed.” She said the PIDS’s estimated cost for this is anywhere from P33 billion to 63 billion per year depending on the version of federalism. “And this is only for running the government, and not including anything for programs or project intended for the people.” To be concluded

Development Agenda of 2000 is still an unsettled agenda 17 years after, with the trade liberalizers in a standoff with those seeking development and trade flexibility. At the national level, many countries adopted fiscal stimuli, studiously avoiding the austerity nonsolution that the IMF prescribed to the hard-hit countries during the 1997-1998 Asian financial crisis. The United States had a huge $1-trillion Troubled-Asset Relief Program, a big percentage of which helped bail out banks and firms that were considered “too big to fail”. The widespread use of fiscal stimuli elicited the cryptic observation by thenWorld Bank Chief Economist Justin Yifun Lin that the crisis revealed the “best-kept economic secrets” of developed countries: they all pursue “Industrial Policy” despite their endless avowals of allegiance to free trade. The secret was fully exposed with the election of the outspoken Donald J. Trump. His “America First” agenda means every country must take care of its own national development priorities despite economic globalization and the proliferation of free-trade agreements. However, not all countries pursued stimuli. The heavily indebted European countries embraced fiscal austerity. Paul Krugman, in his book End This Depression Now (2012), berated these countries as “Austerians”, countries which reduced national budgetary expenditures while raising taxes at the same time. He labeled the austerity policy as “wrongheaded” and “destructive”. Indeed, it was, because unemployment and underemployment doubled, even trebled, in the PIIGS (Portugal, Italy, Ireland, Greece and Spain) while the fiscal crisis remained uncorrected. The austerity program that impoverished Greece and its people shall hound Europe and its EU masters for decades to come. In the meantime, Europe, America and many in the developing world have been experiencing slow growth, stagnating industrial capacity, and high unemployment and underemployment. On top of these is the painful realization among economists and policy-makers that social and economic inequality has been deepening within and across capitalist societies around the globe. The long-term economic decline has been accompanied by growing inequality. This has been dramatically illustrated in the publication of Capital in the Twenty-First Century (2013), written by the French economist Thomas Piketty. Piketty argued that, in the past three centuries of capitalism, the rate of capital return in Europe and America is persistently greater than the rate of economic growth. In the study of Piketty, the top 10 percent of wealth holders in the US for the years 2010-2011 owned 72 percent of America’s wealth, while the bottom half accounted for only 2 percent. Growth and inequality in surging Asia happen to be also the themes in major economic publications of the Asian Development Bank and UN agencies. For example, the focus of the 2012 Asian Development Outlook is “Confronting Rising Inequality in Asia”. Countries with comparable data, the Philippines included, have been registering higher inequality as measured by the Gini coefficient. China, the economic growth champion, has been transformed from a state of relatively equal income distribution to one that is very unequal. The social and political ramifications of deepening inequality amid growth are not difficult to fathom. They give birth to revolts, social divides, ghettoes, sectoral violence, drugs, crimes and so on. So what is the way forward? Piketty’s remedy: a tax on capital. Ironically, in the early draft of the tax-reform package of the Duterte administration, tax on capital is proposed to be reduced, which is somewhat in line with the thinking of the tax adviser of Ronald Reagan, Arthur Laffer, who proposed lowering taxes for the rich to stimulate growth in the American economy.

The truth, however, is that stabilizing a crisis-ridden and unequal capitalist system requires more than a tax-reform package. To tame the Great Depression of 1929-1933, US President Franklin Delano Roosevelt, ahead of the economic thesis for an activist macroeconomic governance propounded by John Maynard Keynes in his book The General Theory of Employment, Interest and Money (1936), launched a “New Deal” program, which involved a series of big public-work projects to create millions of jobs and the enactment of strict laws regulating the financial system to avoid a repeat of the bank crash. These were complemented with various social assistance programs for the poor. But the most radical policy initiative under the New Deal is the one giving American workers better protection in organizing unions and securing better terms in their collective negotiation efforts—at a time when America was still in crisis and had not yet recovered! After World War II, Western Europe, facing the threat from Communist Eastern Europe, expanded the Roosevelt-Keynesian socialeconomic program into a full-blown welfare state system where the jobless are given the means to live and find jobs, the sick and elderly ample care, the unionized workers a voice in the bargaining table and even in the corporate board (via codetermination law in Germany), and the gap between the rich and the poor narrowed by a progressive taxation system and a corporate culture limiting the wage differences between managers, supervisors and rankand-file workers. The trouble is that the welfare state system has been eroding. Economic globalization and the shift in economic thinking favoring freewheeling neo-liberal economics are the culprits. The welfare state system is even on the brink of collapse in some European countries due to the global financial crisis, with the Austerians managing to control the levers of policy-making. This, in brief, is the reason the debates on the future of the capitalist system have been intensifying, not easing. One of those engaged in the global debates is Prof. Robert Reich, US labor secretary under President Bill Clinton. In Saving Capitalism (2016), Reich argued for the need to reform America’s corporate system in order to save capitalism “for the many, not the few”. He demolished the old argument of “free traders” seeking less government role in business and in shaping the economic directions of society, stating that no “free market” is possible without government. Further, he pointed out that the “invisible hand” in the market is not really that invisible; it “is connected to a wealthy and muscular arm” of the corporations. Those who argue for free market are the ones trying to influence the market for themselves. Reich went on to outline how the American big corporations and their CEOs are able to manipulate the market and the politicians, monopolize products ranging from agriculture seeds to ICT data, hollow out manufacturing by outsourcing everything, organize business to maximize returns to shareholders, and minimize taxes for the rich. An ex-Cabinet man, Reich concluded that the so-called free market system is really an alliance between Wall Street and Washington. So what is Reich’s proposed alternative? A return to Keynesian model of development where the government leads in designing, organizing and enforcing the market to meet the needs of the many, not the few. He also argues for a fairer sharing of present and future wealth, not through a simple higher taxation for the rich but through an assurance that every citizen shall have a basic decent income. Is this vision of economic governance possible in America? In Europe? In the Philippines? The answer lies in the collective hands of the millennials and the next generation.

Thursday, October 12, 2017

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Expanding the bounty of OFW remittances By Jeremiah M. Opiniano | Special to the BusinessMirror

hief Mate William Gaspay’s commercial ship and his ninemonth contract dock annually. But his three-year-old venture, WilNor Seaweed Farm, hasn’t docked yet.

Why should it? The 59-year-old Gaspay is in the middle of expanding his seaweed farm in Masinloc town, Zambales. He assured, though, that it won’t reach an area near the West Philippine Sea. He established his seaweed farm using a P50,000 prize he won in a government-sponsored business-plan competition for seafarers two years ago. Of course, some of Gaspay’s savings were also used as start-up capital. His 1-hectare farm near the shore of Barangay Bamban in Masinloc eventually expanded to some 4 hectares. Fueling the Gaspay family’s agri-enterprise venture is a migrant worker-breadwinner’s hope that the next phase of his life will be spent harvesting seaweeds and realizing his economic dreams from the sea. The chief mate’s leap of faith into seaweed farming is also something migrant-sending Philippines is grappling with: How can billions of dollar remittances from compatriots in more than 200 countries and territories multiply into investments and businesses in their homeland? Are opportunities now ripe for overseas Filipino entrepreneurs after their homeland notched nearly 10 years of steady economic growth? Since the turn of the new millennium until 2016, the Philippines’s formal financial system had received $194.183 billion in remittances from overseas Filipinos. The Philippines was among those leading recipientcountries of remittances, behind India, China and Mexico. When globally remittances became a policy discussion worldwide in 2000, Philippine policy-makers, migrant civil-society advocates and businesspeople had been thinking of ways to get a slice of migrants’ remittances.

₧127,000 The average start-up capital needed by migrant entrepreneurs, according to a 2014 study But as migrant civil-society advocates had been saying in recent years, the homeland ’s economic and investment environments must be “so conducive” if remittances were to channeled to “productive uses” (entrepreneurship, savings, some property acquisition and other forms of investment). There’s more to the investment environment, though: Earmarking overseas remittance incomes for investment is a behavioral response. But quarterly survey findings of the Bangko Sentral ng Pilipinas’s (BSP) Consumer Expectations Survey (CES) since 2007 had not seen a significant allocation of remittance uses by overseas Filipino households for “investments”. Out of the 10 uses of remittances (including savings), incomes for “investment” is ranked either eighth or ninth. The 11.2 percent of migrant households allotting remittances for investment, according to the CES in the fourth quarter of 2013, is the highest in 10 years. Some migration analysts argued that turning as many current and returning overseas Filipinos (both migrant workers and permanent settlers abroad) into entrepreneurs is “problematic”. Not all of them are cut out for entrepreneurship, they contend. But continued stay abroad, especially for Filipino migrants and returnees still within the

Overseas Filipino workers, who are returning from their respective work abroad, fall in line at the immigration counter of the Ninoy Aquino International Airport Terminal 1 in Parañaque City, on September 17. Remittances from overseas Filipinos grew 8.7 percent in July, the Central Bank reported. The Bangko Sentral ng Pilipinas (BSP) said remittances reached $2.56 billion in July, up from $2.35 billion in the same month last year. BSP Deputy Governor Diwa C. Guinigundo said, from January to July, personal remittances went up 5.9 percent to $17.92 billion, from $16.92 billion in the same period in 2016. NONIE REYES

work ing-age popu lation, is a risk-mitigation measure while venturing into entrepreneurship at home. “They [migrant entrepreneurs] will have a hard time sustaining the income levels they had abroad upon their return,” economist Dr. Alvin Ang of Ateneo de Manila University said during a policy forum on migrant reintegration. “Understand that when they return, ‘I need a regular income flow,’” Ang added. “That is something not easy for the government to handle.” Most of the migrant-run enterprises anecdotally recorded by migration researchers and civilsociety groups in various communities nationwide are in retail trade and services, and are microenterprises (the latter as part of the country’s nearly a million microenterprises). Migrant-entrepreneurship advocate Maria Angela Villalba of the Unlad Kabayan Migrant Services Foundation wishes that migrants’ enterprises would be “scalable business operations where government agencies play bigger roles” in enterprise development. But before reaching t hose dreams, aspiring migrant entrepreneurship requires ample

start-up capital. A 2014 study of migrant entrepreneurs in Carmona, Cavite and Mabini, Batangas found that the average start-up capital is P127,000 ($2,490.20), an amount that may take years for migrant workers who are in less-skilled occupations abroad to save. A l so, econom i st Dr. Ce l i a Reyes and her research team found that the entrepreneurs in Carmona and Mabini are “usually small ” in asset size and number of employees. “Their impact on their respective communities in terms of local development is limited,” Reyes and her team wrote in their Asian Development Bank-commissioned study. That community-level finding may have eluded the popular policy statements of the current and former president, Rodrigo R. Duterte and Benigno S. Aquino III. Both presidents, speaking before Filipinos in some of their overseas trips, said the Philippines will be economically better so that overseas Filipino workers (OFWs) will “come home” and make migrating abroad “an option” than a necessity. From the administration of former President Gloria Macapagal-Arroyo to this day, national

development plans had mapped out measures to maximize overseas Filipino compatriots’ investible resources. These include financial-literacy programs and economic reintegration services for returning OFWs, led by the National Reintegration Center on OFWs. Economic-assistance initiatives for distressed returning OFWs by the Overseas Worke r s We l f a re A d m i n i s t r at ion (OW WA) had endured, so are similar programs by nonmigration government agencies like the departments of Trade and Industry, Agriculture, Science and Technology and Social Welfare and Development. Local government units, in the past 15 years, are now being prodded by multilateral agencies and migrant civil-society organizations to include overseas migrants in local development plans. Ma k ing overseas Fi l ipinos and their households open at least basic sav ings accounts— included in the mainstream financial system—is among the targets of the BSP ’s financialinclusion strateg y. T hat way, aspiring migrant entrepreneurs can access credit, as wel l as business-development ser vices

from banks, cooperatives and microfinance institutions. T hese init iat ives cont inue while the remittance flows of Filipino migrants have been slowing down since the 2008 global financial and economic crisis. Regardless, scaled-up migrant-run enterprises come few and far between. Some ring a bell, like the country’s fastest-growing spa and massage parlor, Nuat Thai, run by former Thailand migrant worker Kenneth Carredo. The Cebu City-originated enterprise expanded nationwide through franchising and now has over 100 branches. If the Philippines wants to improve on its 6 percent to 7 percent annual GDP, or reach upper middle-income country status, there may be a need—for all Filipinos, not just those based abroad—to do “patriotic investing”, Ang said. T his entrepreneurship d r iven economic d rea m t hat spil ls over to nonmigrants and benef its overseas remittance ow ners “w ill require those who have t he capita l to put t hese into product ive and job - cre ating pursuits in lag g ing and left-behind sectors”, he added. What Gaspay did can be considered patriotic investing. He is approaching seniorhood but he’s “young” in an industry that raked in $3.4 million in domestic revenues and $200 million in overseas profits in 2015, according to the Seaweed Industry Association of the Philippines. He ’s not s e t t l i n g for t he 200,000 kilograms of seaweed he harvested in just two months. Gaspay made his farming area bigger by at least 3 hectares. WilNor even organized a community of seaweeds farmers in Barangay Bamban and linked the group to his growing venture. WilNor’s Novaliches, Quezon City, office is quietly on the prowl looking for more markets for seaweeds harvests. And when William is at sea, his wife Norma, and son Leyzam tend to the business. I am almost finished seafaring, Gaspay said. “But I am not yet done seaweed farming.”

Jeremaiah M. Opiniano teaches journalism at the University of Santo Tomas and is taking doctoral studies in geography at the University of Adelaide in Australia.

Duterte’s $17-B tax changes spell stimulus for retailers M

au Dizon, a marketing officer in one of the largest Philippine banks, is among millions of Filipino taxpayers who stand to benefit from President Duterte’s tax-reform plan that aims to return to consumers P860 billion ($17 billion) over five years. Dizon will pay lower taxes under the proposed reform and is likely to spend most of the savings on staples, which account for about a third of her family’s monthly budget. “The additional income will matter since we have one of the highest taxes and prices are rising,” she said. Not surprisingly, Philippine retailers have beaten the 23-percent advance in the benchmark stock index, Southeast Asia’s best performer this year. Metropolitan Bank & Trust Co., the nation’s third-largest money manager, says the rally still has steam because the favorable impact of the tax cuts on disposable incomes won’t be short-lived. “The story for retailers is far from over as the tax cuts will have a multiyear income effect,” said John Padilla, head of equities investment at Metropolitan Bank, which manages P440 billion in assets. “Consumer companies will gain, particularly those that

provide the basics, but retailers are the clear winners from the tax plan.” Puregold Price Club Inc., a grocery operator, and Robinsons Retail Holdings Inc., which runs supermarkets and drugstores, have risen 39 percent each this year, while Philippine Seven Corp., the largest convenience store operator, is up 24 percent. SSI Group Inc., a retailer of high-end brands, such as Prada and Gucci, has surged 62 percent. Depending on what lawmakers approve, taxpayers may get between P860 billion to P945 billion from 2018 through 2022, according to finance department estimates in August. Not all consumer stocks will gain from the plan, which is expected to be passed by year-end.

No fizz

Food and beverages makers are less appealing than pure retailers to investors, including ATR Asset Management. The reason: their margins are under threat from a weak peso and rising oil prices. Pepsi-Cola Products Philippines Inc. and Universal Robina Corp., a bottler of iced tea and snacks-food manufacturer, have seen shares drop more than 7 percent this year, amid a plan to tax sugary drinks. “The preferred play is more retail than consumer manufacturing companies, which potentially face higher input costs and a very competitive landscape,” said Julian Tarrobago, head of equities at ATR Asset, which manages P104 billion of assets.

Restaurant operators, such as Jollibee Foods Cor p., Ma x’s Group Inc. and Shakey’s Pizza Asia Ventures Inc., are better bets than food and drinks companies, according to April LeeTan, head of research at COL Financial Group Inc. After all, eating out was the third-largest expense for the average Philippine family in 2015, while food, clothing, medicine and spending on consumer durables cornered 40 percent of the budget, government data show. Still, not all investors are betting on one-way gain in retailers’ shares, given their elevated valuations. Puregold, Robinsons and SSI trade at 22 times to 25 times 12-month for ward estimated earnings, versus a multiple of 19 for the benchmark index. “Investors who don’t have a position might want to wait for a correction as valuations of these stocks aren’t cheap,” said Jonathan Ravelas, chief market strategist at BDO Unibank Inc. The market has “already tucked in the potential benefit of the tax cuts”. Metropolitan’s Padilla is happy holding on to shares of Puregold and Robinsons he’s been buying over the past year. “We haven’t seen the last of the rally,” he said. “We want to enjoy the ride.” Bloomberg News

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Thursday, October 12, 2017

Senate panel wants Faeldon, other ex-BOC men charged in drug mess

By Butch Fernandez

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enate probers moved to prosecute erring Bureau of Customs officials and proposed major reforms following the Blue Ribbon Committee’s exhaustive inquiry into the BOC mess, triggered by the May 2017 smuggling through the BOC of P6.4 billion worth of shabu from China.

In a 52-page report released by the panel after 11 hearings, the Blue Ribbon Committee also “strongly recommended ” that the BOC be “totally overhauled ”. The committee, chaired by Sen. Richard J. Gordon, likewise, suggested a study on the feasibility of requiring “Pre-Shipment Inspection Reports from the point of origin to be furnished to the port of destination prior to its embarkation, to include the BOC’s daily monitoring of total containers and collections per day in relation to its annual target”. At the same time, the committee pitched for a “continuous relationship with China on the problem of proliferation of drugs”, as it noted in the course of the hearings that most of the illegal-drug shipments had come from the Philippines’s giant neighbor. “In fact, the chair has written a letter to implement the Mutual Legal Assistance on Criminal Matters Treaty”, and one formal meeting on the matter has been conducted by the Philippine Department of Justice, said the report. In seeking to unravel the setup at the BOC that allowed such a huge shabu shipment to go through the Customs’s green lane—which guaranteed absolutely no inspection—the Senate probers zeroed in on the “Command Center [ComCen]” set up by resigned Customs Commissioner Nicanor E. Faeldon. The committee said the ComCen had succeeded “to a certain extent” in its mandate to “monitor, coordinate and supervise different aspects of customs administration so that operational data critical for informed decisionmaking will be easily available”. However, added the report, the over-centra lization of power and control in a team of predominantly ex-military men, like Faeldon, with little or no knowledge and expertise in Customs administration had made it even easier for the corruptors at Customs to smuggle contraband, including the drugs shipped in May. The entrenched tara system—the systematic giving of bribes to facilitate release of shipments—had “made possible easy access of drug importations into the country”, noted the panel. It

The number of hearings conducted by the Senate Blue Ribbon Committee on the P6.4-billion shabu smuggling said Faledon’s men were either incompetent to plug this, or had themselves been corrupted. The committee said Faeldon’s act of creating ComCen was “unlawful and illegal”, and recommended his prosecution for, among others, violation of the Customs and Tariff Modernization Act (CMTA) and the Anti-Graft and Corrupt Practices Act. Other key recommendations of the committee include further investigation by law enforcement agencies and the Bureau of Internal Revenue—and their eventual prosecution—of the following people who played key roles in the drug-smuggling mess: Eirene Mae Tatad, dubbed the “disposable consignee” whose EMT Trading had been listed as recipient; Mark Taguba II, whistleblower on the tara system whom the Blue Ribbon Committee dubbed the “quintessential corruptor”; licensed customs broker Teejay Marcellana; Richard Chen Ju Long, alias Richard Chen and Richard Tan, whose Hong Fei Logistics handled the shipment of goods where the shabu was concealed; Li Guang Feng, a.k.a. Manny Li; Dong Yi Shen alias Kenneth Dong; Davao Councilor Small Abellera; Jojo Bacud, lawyer Christopher Bolastig and Mike Sabban; and several John and Jane Does. The panel also recommended the conduct of lifestyle checks on Davao City Vice Mayor Paolo Duterte and lawyer Maneses Carpio, the President’s son-in-law. The committee invited them

Duterte calls for alliance vs. NoKor’s nuke program

resident Duterte said the Philippines is ready to join a multicountry alliance—to be led by feuding superpowers China and the United States—against the nuclear program of North Korean leader Kim Jong Un. In a speech last Tuesday, the President said it is high time for China and the US to “stay together”, as the world faces a looming exchange of firepower. “It’s good to raise our awareness actually now [and] it would be also to our advantage if you just go around showing solidarity with the rest of the world.” “[This is] not only because we face so many challenges and threats, but the small guy there in North Korea is playing with dangerous weapons. I hope it would not deteriorate into something violent; but you can never know what’s in the criminal mind,” the President added. North Korea tested a number of its missiles in the previous months in what appears to be an assertion of military might against US. The missile tests have prompted US President Donald J. Trump to issue warnings of military action against the hermit kingdom. However, North Korea did not back down and even went as far as threatening to strike Guam,

which hosts a big Filipino community. With the purported aggression of North Korea, Duterte urged China and the US to set aside their hegemonic rivalry and focus on neutralizing the nuclear program. “I hope that in the coming days, we should stay together, especially the alliance between [Australia], the Philippines, America and even China because they are also put in jeopardy,” the Chief Executive said. “China, to be sure, is also worried [of ] any fallout [because] it’s neighbors of [North Korea]. Any destruction using nuclear bombs, nuclear arms, would destroy the Southeast Asia immediately, and the Philippines is no exception,” the President added. Duterte said leaders of democratic countries need not worry about the Philippines, as it will always back its allies in efforts to stop North Korea from further developing nuclear weapons. “Just to make sure, we stand ready to help each other and you can come always come over here to seek cover, but [I will] see to it that we also send some of ours,” the President declared. Duterte has lambasted North Korea in previous speeches, including in a news briefing in April at the 30th Asean Summit. Elijah Felice E. Rosales

to one hearing at the behest of Sen. Antonio F. Trillanes IV, who linked them to a so-called Davao Group of customs wheeler-dealers. Besides recommending prosecution of Faeldon for the disastrous effect of his ComCen scheme that abetted tara and made drug smuggling possible right under the very noses of Customs officials, the committee also recommended charges be filed against key men of Faeldon. They are: 1) Director Neil Anthony Estrella, director for Customs intelligence whom senators had grilled for failing to coordinate with the Philippine Drug Enforcement Agency (PDEA)—required by law—in the conduct of what should have been a “controlled delivery” at a warehouse in Valenzuela. That failure possibly compromised the physical

evidence, it was noted during hearings, because when the PDEA arrived the cylinders containing shabu had been opened. Referring to Estrella, the report said: “He has been so grossly negligent and cavalier in conducting the raid that the ineptitude portrayed here was so consistent and so pervading, raising the suspicion that all these mistakes were committed deliberately in order to shield the main principals from liability.” 2) Deputy Commissioner Gerardo Gambala, a retired Army officer who was placed in charge of ComCen. Though he was on leave when the mess erupted, his failure to institute safeguards at ComCen made the shabu smuggling possible, said the report. It “is an indication of gross incompetence tantamount to misfeasance, due to his lack of

knowledge of customs law and administration”. 3) D i r e c t o r M i l o M a e strecampo of the BOC’s Import Assessment Service, whom the panel said “did not exercise due diligence in not immediately acting on the Value Verification requested by lawyer Larribert Hilario of the Risk Management Office. Because of his inaction, a shipping container found to have been loaded with drugs passed through customs without inspection.” He was also the source of the Harmonized Systems codes used by Tag uba and Marcellana that ultimately allowed their shipment to be tagged for the green lane, thus evading inspection. 4) Customs intelligence officer Joel Pinawin, whom the panel said was equally at fault as Estrella in handling the

“controlled delivery” of shabu. The Blue Ribbon Committee also made these recommendations: establish a Customs and Tax Academy to give premium to honesty and competence of all Customs personnel; full and faithful implementation of the attrition law, which the panel found had not been enforced since 2008; periodic review of the performance of licensed brokers; and decentralization of the issuance of alert orders. “The power may be given to specific officials but there must be an immediate report if there is an increase of collection or not due to the execution of the alert orders; regular report of alert orders issued, and its status, must be submitted to the secretary of finance and a proposed congressional oversight committee,” the Senate panel report added.

Thursday, October 12, 2017

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House votes to impeach Comelec chief F

or v iol at ing t he Const it ution and betraying the public’s trust, the House of Representatives on Wednesday voted to impeach Commission on Elections (Comelec)

Chairman Andres D. Bautista. Voting 137-75, lawmakers overturned the House Committee on Justice’s House Resolution 1397 dismissing the impeachment complaint

against Bautista filed by former congressman Jacinto Paras and lawyer Ferdinand Topacio. With the override votes, impeachment proceedings against Bautista

will be elevated to the Senate. Hours before the House decided to pursue the impeachment of the Comelec chief, Bautista had announced his plan to resign by year-end.

Under the House rules, the committee report can be “overturned” via vote of one-third of all the House members. The justice penal was directed to draft the articles of impeachment, which will be transmitted to the Senate impeachment court. House Speaker Pantaleon D. Alvarez objected to the adoption of the resolution, saying, “I believe that the charges against the chairman of the Commission on Elections are very serious. Therefore, I vote ‘no’ to the committee report.” Last week the House Committee on Justice approved a report and a resolution declaring the impeachment complaint filed as insufficient in form. Complainants Paras and Topacio accused Bautista of betrayal of public trust and culpable violation of the Constitution amid allegations of amassing P1 billion in ill-gotten wealth made by his wife, Patricia Paz Bautista. In the complaint, Paras and Topacio said, “Bautista culpably violated the Constitution and/or betrayed the public trust when he failed to truthfully, accurately or completely disclose to public his statement of assets, liabilities, and net worth as required under Section 17, Article XI of the 1987 Constitution Anti-Graft and Corrupt Practices Act, and Code of Conduct and Ethical Standards Act.” The complainants alleged that Bautista neglected his duties and responsibilities as head of the agency, particularly collecting and further processing of personal data, which led to the unnecessary exposure of personal and sensitive information of millions of Filipinos. They also said Bautista obstructed justice when he cleared Smartmatic and Comelec information-technology specialists of any wrongdoing for the so-called script tweak during the consolidation/canvassing of results in the May 2016 elections, among others. According to the complainants, Bautista betrayed public trust for failing to adopt safeguards under the Data Privacy Act, or Republic Act 10173, which could have prevented the data breach, or hacking of the Comelec web site. “He [Bautista] failed to promptly act on the hacking of the Comelec web site, as well as declined to assume direct control and supervision of the task force created after the incident,” the complaint read. “For obstructing justice having said pending investigation that the script tweak was merely cosmetic, which was, in effect, an exoneration of those responsible for it,” it added. Also, the complaint noted that Bautista, by his own admission, had received referral fees from the Smartmatic, the largest technology provider of the Comelec through the Divina Law Office.

‘No rush’

The Senate is not inclined to immediately convene as an impeachment court to try the embattled Comelec chief, even as members of the House of Representatives, after convening their Wednesday’s plenary session, opted to overrule the House Justice Committee and voted to impeach Bautista. Senate Majority Leader Vicente C. Sotto III said senators have a full agenda to tackle pending major bills the rest of the week, as both chambers of Congress are set to adjourn for a scheduled recess (October 14 to November 12) starting this weekend. Sotto told reporters that the senators are scheduled to continue plenary deliberations to fast-track approval of the proposed P3.7-trillion 2018 budget bill, as well as the Palace-endorsed Tax Reform for Acceleration and Inclusion bill intended to raise revenues for the Duterte administration’s various infrastructure projects, among others. The Senate leader told reporters that convening the Senate as an impeachment court to try Bautista’s case is “a third priority” in the Senate agenda. Sotto suggested it would be better if Bautista opts to resign voluntarily, rather than go through the rigor of an impeachment process, the earliest of which, the senator said, can start “in November at the earliest”.

Banks renew interest in BSP’s term deposits By Bianca Cuaresma @BcuaresmaBM

enders in the Bangko Sentral ng Pilipinas’s (BSP) longer-term deposit facility surged in the week’s auction after about seven months of being undersubscribed. Data from the BSP showed bids in the monetary authority’s 28-day term deposit facility (TDF) exceeded the amount offered for the first time since March this year. In particular, bids on Wednesday in the BSP’s 28-day TDF hit P102.88 billion—exceeding the P100 billion offered for the week. Also, bids in the shorter TDF were also oversubscribed for the week. Tenders for the 7-day TDF hit P64.08 billion on Wednesday, more than the P40 billion offered during the week. This effectively covers 160 percent of the total offered for the week. Rates of both TDFs went down during the week. The 7-day TDF registered a rate of 3.3554 percent on Wednesday’s auction, lower than the 3.664 percent in the October 4 auction.The 28-day TDF hit a rate of 3.4925 percent, down from the 3.4939 percent seen in the previous week’s auction. The BSP also retained the current volume offered in its TDF at P40 billion for the seven-day tenor and P100 billion for the 28-day tenor. Just last month the BSP cut its volume of offering in the 28-day TDF to P100 billion, from the previous P110 billion, starting the first Wednesday of October. This was the second cut on volume this year, as the BSP also reduced the volume of offering in the 28-day TDF to P110 billion, from the previous P140 billion in August to address the persistent undersubscription in the facility. The volume offered for the seven-day TDF remained unchanged at P40 billion.

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Thursday, October 12, 2017

House OKs mental-health bill on 2nd reading

By Jovee Marie N. dela Cruz

@joveemarie

measure focusing on the mental health of Filipinos is inching its way into becoming a law, as the House of Representatives already approved the proposed Comprehensive Mental Health Act of 2017 on second reading. Through viva voce voting on Tuesday, law ma kers approved the passage of the measure that will establish a national mentalhealth policy to enhance the delivery of mental-health services in the country. T he lo we r c h a mb e r i s e xpected to approve the bill when session resumes in November. The Congress will take a break starting today (Thursday). T he measure aims to ensure a communit y of Filipinos who are menta l ly hea lthy, able to contr ibute to the development of the countr y and attain a better quality of life through access to an integ rated, wel l-planned, effectively organized and efficiently delivered mental healthcare system that responds to the people’s ment a l-hea lt h need s in equit y w ith their physica lhea lth needs.

In 2015 Assistant Majority Leader Ron P. Salo of K abayan Party-list said the Department of Hea lt h (DOH) has repor ted more t han 8,000 cases of mental-health disorders, w ith schizophrenia compr ising a large percentage at 3,457. “ There were more than 2,000 cases of bipolar affective disorder, followed by psychotic disorder and depression. As early as 2004…[a] survey found that almost one per 100 households has a family member who has a mental disorder. [The] WHO [World Health Organization]reported 2,558 cases of suicide in the country in 2012,” he said. T he bi l l refers to “ment a l health” as a state of well-being in which every individual realizes his or her own potential, can cope with the normal stresses of life, can work productively and fruitfully

and is able to make a contribution to his or her community. The bill also refers to “mentalhealth services” as psychosocial, psychiatric or neurologic activities and programs, along with the whole range of mental-health support spectrum, including promotion, prevention, treatment and aftercare, which are provided by mental-health facilities and mental-health professionals. The bill also seeks to integrate mental-health care in the general health-delivery system, especially the programs of the DOH and the Department of the Interior and Local Government for the mentally disabled persons. Moreover, it intends to integrate, introduce and promote the study of mental health in both elementary and secondary educational systems to prevent depression, obesity and teenage pregnancy among students of this age group, among other things. T he bi l l prov ides t h at ever y p e r s o n s h a l l h av e t he r i g ht to t he best ava i l able ment a lhea lth care, which sha l l be par t of t he hea lt h a nd soc i a l c a re a nd protect ion system.

As such, every person with a mental illness, or who is being treated for a mental illness, shall have the right to receive humane treatment and respect for the inherent dignity of the human person, as well as the right to protection from economic, sexual and other forms of exploitation, physical or other abuse and degrading treatment. Such person has also the right against discrimination on the ground of mental illness, including the right to receive treatment in the least restrictive environment and in the least restrictive manner. The bill said the person with mental illness has the right to exercise all civil, political, economic, social and cultural rights respecting individual qualities, abilities and diverse backgrounds and without any discrimination on grounds of physical disability, age, gender, sexual orientation, race, color, language, civil status, religion or national or ethnic or social origin of the service user concerned as recognized in the Universal Declaration of Human Rights; the International Covenant on Economic, Social and Cultural Rights; the International Covenant on Civil Declaration on

As early as 2004…[a] survey found that almost one per 100 households has a family member who has a mental disorder.”—Salo

the Rights of Disabled Persons; and the Body of Principles for the Protection of All Persons under Any Form of Detention or Imprisonment, among others. T he menta l-hea lth ser v ices prov ided pursuant to the Act shall be based, when feasible on research findings; individual clinical needs, cultural and ethnic needs and other special needs of individuals being served; and most appropriate and least restrictive setting available to the local mental-health authority, accessible to all age groups and provided by qualified individuals and delivered in a manner that provides accountability. The bill said the DOH shall, among others, for mu late, develop and implement a national mental-health program in close coordination with, and active involvement of, persons with disabi l ities and t heir respective organizations, and other users of mental-health facilities and services, including their careers and mental-health professionals. Other responsibilities of the DOH are: ensure that a safe, therapeutic and hygienic environment with sufficient privacy exists in all mental-health facilities; reg u lation, licensing, monitoring and assessment of all mental-health facilities; and coordinate with the Philippine Health Insurance Cor p. to ensure that insurance pack ages equ iva lent to t hose cover i ng

physical disorders of comparable impact to the patient, as measu red by D i sabi l it y- A dju sted Life Year or other methodologies, are available to patients affected by mental disorders. The bill also provides that the Philippine Mental Health Council, which was established under Executive Order 470, shall be reconstituted and strengthened as an attached agency under the DOH to provide for a coherent, rational and unified response to mentalhealth problems, concerns and efforts through the formulation of the National Mental Health Care Delivery Services. The secretary of the health, in consultation with concerned public and private stakeholders, shall determine the composition, functions and support staff of the Council within 90 days after the effectivity of the Act. T he bi l l sa id t he Nat iona l Ment a l Hea lt h C a re Ser v ices Deliver y System shall also include and institute a nationwide mental health information and education program. It also proposes that each local government unit, upon its determination of the necessity based on well-supported data provided by its local health office, shall establish or upgrade hospitals and facilities with adequate and qualified personnel, equipment and supplies to be able to provide mental-health services and to address psychiatric emergencies.

The Nation

A4 Thursday, October 12, 2017 • Editor: Vittorio V. Vitug A8

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PNP lists accomplishment Comelec chief Bautista resigns in bloody anti-drugs war

he Philippine National Police (PNP) has recorded a total of 8,315 high value targets (HVTs) as it pushed on its relentless campaign against illegal drugs, data from the PNP Directorate for Operations (DO) showed. DO Director Camilo Pancratius Cascolan aid the data on high-value personalities covered from July 1, 2016, to September 19, 2017. He said that, of the number, 1,473 HVT personalities have already been arrested, while 145 others died during the conduct of police operations.

Cascolan said at least 3,489 HVTs have also surfaced and surrendered. They are still under the watch of the authorities. The remaining 3,103 HVTs were classified as either deceased, undergoing rehabilitation, monitored to be in other countries and mostly reported as “cannot be located in their respective areas.” Latest number on anti-illegal drugs campaign, on the other hand, showed there are 1,308,078 drug personalities who have appeared and surrendered, while 113,932 were arrested from the same period. Rene Acosta

Army installs new vice commander and COS T

he Philippine Army has installed a new vice commander and chief of staff (COS) in a minor movement at the headquarters, following the retirement of a senior officer. Maj. Gen. Robert Arevalo was designated as the new vice commander of the Army, replacing Maj. Gen. Harold N. Cabreros, who retired on October 7. Meanwhile, Brig. Gen. Gilbert I. Gapay replaced Arevalo as the Army chief of staff in a ceremony held on Monday Arevalo, an expert logistician, is a member of the Philippine Military Academy (PMA) “Sandiwa” Class of 1985. He has a master’s

degree in management. Before his stint as the Army chief of staff, Arevalo was the commander of the Headquarters and Headquarters Support Group, assistant chief of staff and assistant chief of staff for comptrollership. Gapay, a decorated officer, is topped the PMA “Sinagtala” Class of 1986. He has a master’s degree in management. Before his appointment as chief of staff, Gapay was the deputy commander of the Armed Forces Eastern Mindanao Command, commander of the Joint Task Force Haribon that secured Davao City and the rest of Davao region, and spokesman for the martial-law implementation in Mindanao. Rene Acosta

By Joel R. San Juan

@jrsanjuan1573

eleaguered Commission on Elections (Comelec) Chairman Andres D. Bautista has finally decided to resign from his post by the end of the year, amid accusations by his estranged wife, Patricia, that he had amassed ill-gotten and an undeclared wealth amounting to at least a billion pesos. Bautista said he has submitted his resignation to President Duterte and cited the need to attend to his family’s needs as the main reason for resigning. “It is with deep sadness that I am informing you about my decision to resign as the chairman of the Comelec by the end of the year,” Bautista told poll employees. Bautista said he thought that it is the opportune time to leave the post since the barangay and Sangguniang Kabataan (SK) elections would no longer push through this month until May next year. “After much prayer and discernment, I believe that it is the right time to step down given the postponement of the barangay and SK elections,” he said. Bautista admitted that his resignation would open up opportunities for his detractors to file criminal charges against him before the courts, but assured that he would be ready to face them. The poll chief is being probed by the Na-

tional Bureau of Investigation (NBI) and the Bureau of Internal Revenue (BIR) for possible tax-evasion case, as well as graft and violation of the Anti-Money Laundering Act. The investigation stemmed from Patricia’s affidavit disclosing that her estranged husband had money in banks, condominiums, and interest and shares in companies established overseas that the poll chief allegedly did not declare in his 2016 statement of assets, liabilities and net worth (SALN) with a total estimated value of almost P1 billion. Bautista has declared a P176.3-million total net worth in his 2016 SALN. She also alleged that the poll chief had pay slips and checks received from the Divina law firm “as commission for assisting the law firm clients with the Comelec.” Patricia, likewise, claimed that Bautista had 35 passbook accounts at the Luzon Development Bank with a total balance of P329,220,962. Bautista said he has no regrets serving as

poll chief for more than two years because of the harmonious relationship he had with the employees. Bautista believes that he was able to do his job well as Comelec chairman in the more than two years that he has held his post. “Amid the hurtful, baseless and malicious accusations hurled against me, most of you never left my side. From the bottom of my heart, thank you, my Comelec family,” Bautista said. Earlier, Bautista came under pressure from his fellow Comelec commissioners as various poll watchdogs to take a leave of absence or quit his post so he would be able to attend to his personal problems.

It is with deep sadness that I am informing you about my decision to resign as the chairman of the Comelec by the end of the year. After much prayer and discernment, I believe that it is the right time to step down given the postponement of the barangay and SK elections.”—Bautista

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WB cites Manila’s migrant workers’ support system By Leslie Gatpolintan Philippines News Agency

ther Asean members can adopt the Philippine support system for its migrant workers, the World Bank (WB) said, as it called on easing restrictions on labor migration to boost workers’ welfare and accelerate regional economic integration. “The highly developed support system for migrant labor in the Philippines can serve as a model for other countries. The country, however, should continue its focus on improving reintegration of returning migrants,” said a World Bank report, titled “Migrating to Opportunity”, released on Monday. It cited the Philippines as a good example of migration systems with “clearly defined institutional responsibilities”. The report said several migrantfocused agencies are housed mostly within the Department of Labor and Employment (DOLE). Their roles and responsibilities are well defined, with the Philippine Overseas Employment Administration responsible mainly for managing migration and the Overseas Workers Welfare Administration responsible mainly for protecting migrants. To build on this status, the World Bank said the Philippines should continue to evaluate and improve its migration management system, including oversight of recruitment

agencies, programs for returned migrants, and data sharing and interoperability. The World Bank report also underscored the need to relax migration procedures across the Asean region, as migration is expected to increase with the regional economic integration. The Asean Economic Community, which was launched in 2015, aims to promote the free mobility of professionals and skilled workers within the region. The report said barriers, such as costly and lengthy recruitment processes, restrictive quotas on the number of foreign workers allowed in a country, and rigid employment policies constrain workers’ employment options and impact their welfare. “No matter where workers wish to migrate in Asean, they face mobility costs several times the annual average wage. Improvements in the migration process can ease these costs on prospective migrants, and help countries respond better to their labor market needs,” said Mauro Testaverde, World Bank economist for the Social Protection and Jobs Global Practice and the lead author of the report. The report noted the impact of labor mobility on the region’s economies can be significant, as migration could provide individuals from lower-income countries with the opportunity to increase their incomes. About $62 billion in remittances were sent to Asean countries in 2015.

PSA lists PHL’s top trade partners in 1st semester

By Cai U. Ordinario

@llectura

he Energy Regulatory Commission (ERC) is soliciting comments on the newly released draft rules governing the monitoring and reporting process of bill deposits. A bill deposit, equivalent to the estimated billing for one month, is collected from customers of distribution utilities (DUs). It is intended to guarantee the payment of electricity bills for new and/or additional service and from disconnected consumers who were previously not subject to bill deposit. After a year and every year thereafter, whenever the actual average monthly bills are more or less 10 percent of the initial bill deposit, such deposit shall be increased or decreased to approximate said billing. The bill deposit could be refunded to the consumers within one month from the termination of service provided all bills have been paid. A customer who has paid his electric bills on or before due date for three consecutive years may demand for the full refund of the deposit even prior to the termination of his service. An application must be filed with the concerned DU, which must refund the deposit within one month

from receipt of such application. The bill deposit earns interest. The five-page draft circular states “the interests on bill deposit shall be credited yearly to the bills of the customers. Thus, within six months from date of effectivity of these rules, all DUs shall issue a statement of account to their consumers showing the total amount of bill deposit and the accrued interest.” The ERC is also requiring the DUs to “reflect the bill deposit and the corresponding interests as a separate line item on the electricity bills using the phrase “bill deposit”. If the DU fails to credit the interest to the electric bill, the accrued interest shall be added to the principal amount of the bill deposit and the same shall earn interest, compounded on the basis of the prevailing interest rate for savings account of the Land Bank of the Philippines on the first working day of the year. Once these rules become effective, the DU shall inform its consumers within its franchise area of the issuance of these rules. The DU should also maintain and develop in its web site a consumer information disclosing all terms and conditions on bill deposits. It must also submit to the ERC a periodic report on or before December 31 of every year regarding details of the total amount of bill deposit col-

Data showed total trade with China reached $11.355 billion, or 15 percent of the total trade; followed by Japan with $10.768 billion, or 14.2 percent; and the US with $8.021 billion, or 10.6 percent. The PSA, however, said the Philippines had the widest trade; deficit with China, indicating Manila’s imports to Beijing are higher than its exports. “Export receipts from China stood at $3.308 billion, while payment for imports was valued at $8.048 billion, resulting to a $4.74billion trade deficit,” the PSA said. Data showed the country’s main exports to China are electronic products at $1.993 billion, or 60.3 percent, of the country’s exports to China. Other manufactured goods followed with total receipt of $291.22

lected, including interest earned and the amount credited or refunded to its customers. Earlier, Energy Secretary Alfonso G. Cusi said he would asked the ERC to require all DUs and electric cooperatives (ECs) to regularly inform customers of their bill deposit, whether payables or refunds. “These must be reflected in the monthly electricity bill of their customers,” said Cusi, as he cited that there are cases wherein the DU would ask the customer to show proof of the deposit made. “The burden of proof is not with the customer. To avoid this, the electricity bill of a customer should show the amount of deposit he or she made so that when they opt for a refund, the proof is already there,” the energy chief said. Cusi also pointed out that this is meant to raise awareness among consumers of their right to be informed. The Manila Electric Co. (Meralco), for its part, said it fully supports Cusi’s call for transparency in the electricity bill. “We continue to comply with ERC rules on the updating of customers deposit. Currently, as far as the meter deposits are concerned, these have been returned to active customers and we are in the process of returning the meter deposit of remaining terminated accounts.”

BOI honors outstanding Filipino firms, MSMEs

he Board of Investments (BOI) has recognized outstanding large enterprises, as well as micro, small and medium enterprises (MSMEs), during the 2017 Guinogulan Awards. This is the first time for the investment-promotion agency to recognize BOI-registered enterprises for their significant contribution in improving the economic environment of the country. The country’s oldest palm-oil company, Kenram Palmoil Industries Inc. (KPII), bagged the Business Excellence Award for the Most Outstanding Business Enterprise. The BOI said Kenram’s investments have significantly impacted communities, particularly in Mindanao, through its inclusive

business model. The Sultan Kudarat-based palm oil and kernel producer services about 810 individual palm growers and cooperatives farming 16,500 hectares in the Soccksargen region and Maguindanao. Kenram also extends financial support and agronomic assistance to encourage oil-palm farming. The first Guinogulan Award for Large Enterprises is the Razon family’s International Container Terminal Services Inc. (ICTSI), operator of Manila International Container Terminal. The Filipino port operator has been expanding in different parts of the world, now with facilities in Argentina, Australia, Brazil, China, Colombia, Congo, Croatia, Ecuador, Georgia, Honduras, Indonesia,

@cuo_bm

hina, Japan and the United States were the Philippines’s top trade partners in the first semester of 2017, according to the Philippine Statistics Authority (PSA).

ERC collates feedback on bill-deposit draft rules By Lenie Lectura

A9 Editors: Vittorio V. Vitug and Max V. de Leon • Thursday, October 12, 2017 A4

Iran, Madagascar, Mexico, Nigeria, Pakistan and Poland. ICTSI has 8,000 employees worldwide as of 2016. The BOI has recognized Kenneth Cobonpue’s company, Interior Crafts of the Islands Inc. (ICII), as Guinogulan Award for Medium Enterprise. ICII has introduced innovative techniques in furniture while combining natural and synthetic materials. Its impeccable craftsmanship made ICII a world-renowned producer and designer of quality furniture. From 80 employees in 1986, Cobonpue’s business now hires 320 workers. A Christmas and holiday décor maker in Pasay City was awarded by the BOI as outstanding small enterprise. PNA

million, or 8.8 percent of the total. In terms of imports, data showed electronic products was also the Philippines’s top import from China worth $1.651 billion, or 20.5 percent, of the country’s total imports. The country also imported iron and steel, which reached $1.25 billion, or a share of 15.5 percent, of total imports. “I believe that the trade deficit with China was brought about by the importation of many capital goods and raw materials from China for the infra program of the government,” University of Asia and the Pacific School of Economics Dean Cid Terosa told the BusinessMirror. “While the short-run effect isn’t favorable, in the long run the Philippines will benefit in the form of better infrastructure and

related facilities,” he added. Meanwhile, PSA data showed exports to Japan reached $5.378 billion, while imports amounted to $5.391 billion. This resulted in a trade deficit of $13.33 million. Data showed 27.2 percent, or $1.460 billion of the Philippines’s total exports to Japan consisted of electronic products; while $886.11 million, or 16.5 percent of the total, was accounted for by woodcrafts and furniture. The PSA said the majority of the imported products from Japan were also electronic products billed at $2.004 billion, or 37.2 percent; followed by transport equipment with $759.57 million, or 14.1 percent. In addition, exports to the US were valued at $4.571 billion, while payment for imports totaled to $3.45 billion, reflecting a trade surplus of $1.12 billion. The majority of the country’s exports consisted of electronic products worth $1.956 billion, or 42.8 percent of the total exports to the US, and articles of apparel and clothing accessories with $428.62 million, or 9.4 percent, share of the total. Data showed imports from the US were electronic products with payment worth $1.165 billion, or 33.8 percent of the total. Imports

of animal feeds ranked second and was valued at $383.17 million, or 11.1 percent of the total. “The country’s top 10 trading partners contributed a total trade worth $58.434 billion, which was 77.3 percent of the total external trade in January to June 2017,” the PSA said. This was composed of a total export receipt of $23.976 billion, or 76.6 percent of the total exports, and a total import bill of $34.458 billion, or 77.8 percent of the total imports. The PSA added this translated to an unfavorable balance of trade-in goods, which amounted to $10.483 billion. In terms of economic blocs, the Philippines’s top trade partners are Asean members with a total trade of $16.379 billion, or 21.7 percent of the country’s total trade. Exports to Asean member-countries were valued at $4.704 billion, while imports were worth $11.675 billion. This, however, generated a trade deficit of $6.971 billion. The PSA said that among Asean countries, Singapore was the country’s top trade with a total trade accounting for $4.64 billion, or a 28.3-percent share of the Asean total trade.

Agriculture/Commodities

A10 Thursday, October 12, 2017 • Editor: Jennifer A. Ng

BusinessMirror

www.businessmirror.com.ph

Feed millers urged to cut wheat, corn imports

Bloomberg

By Jasper Emmanuel Y. Arcalas

@jearcalas

he Department of Agriculture (DA) is urging feed millers to reduce their purchases of imported feed wheat and corn so farmers would be encouraged to plant more corn.

A g r icu lture Secretar y Emmanuel F. Piñol said he will also ask feed millers to buy local corn to help prop up the farmgate price of the grain and boost farmers’ income.

“If the feed millers will be pat r iot ic enoug h to pat ronize local corn, then we can encourage our farmers to plant more,” Piñol told reporters in a recent interview.

“We are calling on local feed millers to consider the procurement of local corn over imported corn. Maybe there’s a difference in price, with locally produced ones being slightly higher, but it will contribute to greater progress and prosperity in the countryside,” he added. The DA chief said he would meet with representatives of the feed milling sector next week. “I would appeal to their sense of patriotism. How much would they lose if they buy local corn instead of imports? If they would do it, they will help address poverty in the countryside.” Earlier, Philippine Maize Federation Inc. (Philmaize) President Roger V. Navarro said the recent

decline in the farm-gate price of yellow corn, particularly in Regions 2 and 3, may also be attributed to the recent importation of corn and feed wheat. “Around 250,000 metric tons [MT] of corn and almost 2 million metric tons [MMT] of feed wheat were recently imported,” he said. “This dampened the farm-gate price of yellow corn.” Yellow corn and feed wheat are used as raw materials in manufacturing animal feeds. Citing data from the Bureau of Customs, the Philippine Association of Feed Millers Inc. earlier said the Philippines imported some 2.6 MMT of milling wheat in 2016, 4 percent higher than the 2.5 MMT recorded in 2015. Earlier, Philmaize said favorable weather conditions will drive corn production this year to reach 7.6 MMT, 5.26 percent higher than the 2016 record of 7.22 MMT, according to the Philmaize. Philmaize President Roger V. Navarro said corn production would have been higher if some farmers did not shift to planting other crops, such as pineapple and cacao, because of low corn prices. The Philippine Statistics Authority (PSA) had projected that corn output for 2017 would reach 8.01 MMT. “[The forecast] is not attainable. The best the sector can do is around 7.6 MMT,” Navarro said. Last year’s corn output of 7.22 MMT was 4 percent lower than the 7.52 MMT produced in 2015, data from the PSA showed.

California vintners inspect grapes, check buildings after wildfires

ONOMA, California—Worried California vintners surveyed the damage to their vineyards and wineries on Tuesday as wildfires sweep through counties whose famous names have become synonymous with fine food and drink. At the Gundlach Bundschu in Sonoma County, workers were not sure the grapes above the winery survived a second night of fires that have destroyed at least two wineries and damaged more. “We haven’t been able to go up and assess the vine damage,” said Katie Bundschu, vice president of sales. “We’re in the process of salvaging what we can.” Speedy, wind-driven wildfires that continued to burn on Tuesday came as workers in Napa and Sonoma counties were picking and processing ripe grapes to make chardonnay, merlot and other wines that have made the region a global hot spot. Millions of locals and out of staters flock to

the counties every year to sample wine, sit in mud baths and soak in the region’s natural beauty. At least five wineries belonging to members have had “complete losses” in facilities, with another nine reporting some damage, said Michael Honig, board chairman of the Napa Valley Vintners trade association and president of Honig Vineyard & Winery. He said the group has not heard from all members, especially those in the most vulnerable parts of the valley. “We don’t have a good idea of how the vineyards have been impacted,” he said. “The silver lining, if there is one to this fire, this situation, is that most of us have brought in 90 percent of our crop for 2017, so the vast majority of the crops have been picked.” Most of the remaining fruit, he said, are thicker-skinned cabernet sauvignon grapes that won’t be affected by smoke. Bundschu, a sixth-generation vintner, recounted a scary Monday

Volume of imported dairy purchased in H1 down 8.8%–NDA

he country’s dairy imports in the first half of the year declined by 8.8 percent to 1.265 million metric tons-liquid milk equivalent (MMT-LME), from 1.387 MMT-LME last year, according to the National Dairy Authority (NDA). In terms of value, however, figures from the NDA showed that the country’s milk imports during the January-to-June period rose by nearly 20 percent to P22.641 billion, from P18.911 billion a year ago. NDA Administrator Marilyn B. Mabale told the BusinessMirror that payments rose because imported milk became more expensive. “Based on our data, [the price] of imported milk powder rose by almost 30 percent.” Skimmed-milk powder was the top milk product imported by the Philippines during the period. Imports reached 586,330 metric tons (MT)-LME, valued at $179.23 million, according to NDA data. However, the volume was 17.52 percent lower than the 710,890 MT-LME imported in 2016. Data from the NDA showed that the bulk of the country’s dairy imports came from New Zealand,

which accounted for 31.38 percent, followed by the United States. Dairy imports from New Zealand during the six-month period reached 65,280 MT, valued at $195.21 million, while those imported from the US reached 48,240 MT. NDA data also showed the country’s outbound shipments of dairy products in the first half declined by 81.68 percent to 21,150 MTLME, from the 115,430 MT-LME registered in 2016. Export receipts from milk products also declined by 77.16 percent to $11.69 million, from $51.19 million recorded in the first half of 2016. Milk and cream products accounted for the bulk of country’s total dairy exports, or about 97.91 percent, according to NDA data. The figure was 77.16 percent lower than the $51.19 million exported in the previous year. Malaysia remained as the top impor ter of Phi lippine dair y products, accounting for 26.40 percent of the exports share. Malaysia bought 5,584.26 MT-LME of dairy products, valued $1.826 million. Jasper Emmanuel Y. Arcalas

Free irrigation program seen benefiting more small farmers By Butch Fernandez @butchfBM

T The remains of burned bottles of wine are seen at the Signorello Estate winery in Napa, California on Tuesday. AP Photo/Eric Risberg

night in which the flames licked at the perimeter of the winery but were beaten back by firefighters. A century-old redwood barn and her grandmother’s 1919 home were spared. Gundlach Bundschu is the oldest family-run winery in California, started in 1858. She was eager to dispel reports that the winery had been destroyed, as was Nicholson Ranch winery, also in Sonoma County, which posted on Facebook that news of its demise was premature. “The winery was in the path of the fire but escaped being engulfed by the flames. We have some damage to fix. The wine is secure in

our cellars. We are cleaning up and hoping to have the power back on this week,” it said. Even wineries that were destroyed may survive. Melted and blackened wine bottles littered the ruined Signorello Estate winery in Napa Valley, but its vineyard looked untouched by flames. Spokesman Charlotte Milan said she could only confirm damage to the winery and a residence, explaining that workers had not been able to go on site. She said the estate’s 2015 reds and 2016 whites were stored off-site. The Paradise Ridge Winery in Sonoma County posted on Monday that it was “heartbroken” to announce that the facility had burned. About 12 percent of grapes grown in California are in Sonoma, Napa and surrounding counties, said Anita Oberholster, a cooperative extension specialist in enology at the University of California, Davis. But they are the highest value grapes that yield the most expensive wines, she said. She was optimistic that the fires will not affect the wines to come out of this year’s harvest. Smoke would have to be heavy and sustained to do much damage and even then, she said, the harm would be limited to the fruit, not the vines or soil. AP

he expansion of the proposed debt condonation and exemption for irrigation service fees (ISFs) would cover more small farmers, Sen. Sherwin T. Gatchalian said on Tuesday. Gatchalian, coauthor of the Senate version of the Free Irrigation Service to Small Farmers Act of 2017, or Senate Bill (SB) 1465, made the statement during the bicameral conference held on Tuesday to reconcile conflicting provisions between the Senate and House versions of the bill. “Small farmers are now two steps closer to being completely exempted from paying hefty dues imposed by the NIA [National Irrigation Adiminstration] on its National Irrigation System and Communal Irrigation System. Our poor farmers will benefit the most if this law is passed,” he said. Under the reconciled bill, the debts of small farmers with landholdings of 8 hectares, or below from unpaid ISFs, including past due accounts, interest, penalties and loans, will be condoned by the government. They will also be exempt from paying future irrigation fees. The version that originally passed the Senate limited this privilege to farmers with 5 hectares of land or less. “I believe 8 hectares is a fair compromise. As legislators, it is our duty to make sure all our local farmers have equitable access to opportunities and sustained productivity. We need to give more to our farmers who have less and are crippled by past dues,” the senator said. The General Appropriations

Gatchalian

Act of 2017 provides for a P2 billion subsidy to cover the ISFs collected by the NIA from farmers associations. This intervention paved the way for free irrigation services to Filipino farmers. The NIA is also responsible for ensuring the availability of vital irrigation services through continued construction, repair and maintenance of irrigation facilities. In March Gatchalian filed SB 1412, otherwise known as the Free Irrigation Services Act, which was later consolidated into SB 1465. The NIA said earlier it could not collect the P12.31 billion in ISFs from farmers who have refused to pay their debts after the government rolled out its free irrigation program. Although there’s no law yet that allows the provision of free irrigation, the NIA has stopped collecting ISFs since January 1 because there is already an order from President Duterte, according to NIA Administrator Ricardo R. Visayas. The NIA said it would seek an increase in the subsidy for the free irrigation program so it could expand its coverage.

Agriculture/Commodities BusinessMirror

www.businessmirror.com.ph

Thursday, October 12, 2017 A11

Solon bats for better pay, benefits for agri workers

By Jovee Marie N. dela Cruz @joveemarie

deputy speaker of the House of Representatives has recently filed a bill that seeks to provide agriculturaldevelopment workers with better compensation and additional benefits.

In House Bill (HB) 6329, Deputy Speaker Sharon Garin of Aambis-Owa said the proposed Magna Carta of Agricultural Development Workers would help accelerate the development and modernization of the country’s farm sector. “ W h ate ver a ssi st a nce t he government provides, it shall be for naught if these services are not properly delivered to the intended beneficiaries. At the forefront of these services are the local city/municipal/provincial agricultural-development workers that provide a bridge between farmers and the government,” HB 6329 read. “Recent trends, however, show

that most of these local positions are left vacant by local government units in an effort to save money, which result in a less efficient delivery of agricultural support,” it added. Garin said the bill seeks to strengthen the rights of agric u lt u r a l - d e ve lo pme nt wor kers and to give them additional benefits in terms of compensation, proper working hours and other var ious incentives and rewards. Under the bill, the Magna Carta of Agricultural Development Workers Committee shall be constituted under the Office of the President. It will be composed of the secretaries of the

departments of Agriculture (DA), Interior and Local Government, Labor and Employment and Budget and Management, commissioner of the Civil Service Commission, representative of the National Labor Relations Commission and representative from recognized national association of a g r ic u lt u r a l- de ve lopment workers. The Magna Carta proposes an incentives and rewards system, which shall be controlled by honorarium, incentive pay, performance bonus and other incentives that the DA and local government may create. Appropriate civil-service eligibilities, professional license and required education shall also be part of the qualification as an agricultural worker. Und e r H B 6 32 9, a g r i c u l t u r a l d e v e l o p m e nt w o r k e r s i nc lude a g r ic u lt u r a l te c h n i cians, agriculturists, aquaculturists, nutritionists, agricult ura l eng ineers, ag r icu lt ura l technologists and fisheries officers in the city, municipal and provincial levels. According to Garin, the Philippines is still a primarily agricultural country, with around 39.8 percent of the entire country’s labor force employed in any of the four agricultural subsectors, namely, farming, fisheries, livestock and forestry.

Securing land-tenure rights vital for the eradication of global hunger

ome—Considerable gains have been made in land-tenure governance in the past five years, but more must be done to improve the lives of billions of people—that was the message at a high-level event cohosted by the Food and Agriculture Organization (FAO) and the European Union (EU) to mark the fifth anniversary of guidelines to recognize and secure tenure rights. The Voluntary Guidelines on the Responsible Governance of Tenure promote secure tenure rights for land, fisheries and forests as a means of eradicating hunger and poverty, supporting sustainable development and enhancing the environment. “The guidelines have improved the lives of millions of people by recognizing, protecting and enhancing their legitimate tenure rights,” said FAO Director General José Graziano da Silva. “There are still many challenges.... First, private-sector engagement should be fostered in many countries. Second, more actions should be undertaken at local and grassroots levels and, third, equal gender participation must be further strengthened,” he added.

FAO Photo

“The EU is committed to support a responsible approach to governance of tenure and to protect the interest and needs of land users. This is a win-win for all, as good land governance helps responsible resource management, creates business opportunities and contributes to sustainable development,” said Neven Mimica, European Commissioner for International Cooperation and Development. In the five years since the Guidelines were endorsed, they have inspired policy and legal reforms in many countries, from Gabon to Guatemala, and have started to

make a difference to people’s lives. In Senegal the Guidelines have helped shape the National Land Policy that recognizes different forms of legitimate rights over land. Sierra Leone’s National Land Policy is largely based on the Guidelines. Kenya has enacted the Community Land Act that promotes standards laid out in the guidelines to bring about land reforms in communal areas. Colombia is using the Guidelines to address post-conflict landrelated issues and promote rural transformation through improved governance of tenure. FAO

TheBroa Electric cars yet to ride over

Business

A12 Thursday, October 12, 2017

By Catherine N. Pillas @c_pillas29 & Lenie Lectura @llectura

HILE India seems to rock on to Electric Avenue, the Philippines has yet to, in Eddie Grants’s words, “take it higher”. But many in the local electric-vehicle (EV) industry are optimistic on its faster adaptation, mainly in the public sphere. T he pl ayers, however, a re setting modest targets, as heav y cost of ownership of EVs, among others, remains a problem. T hat is, if one asks the Electric Vehicle Association of the Philippines (Evap). For Evap President Rommel Juan, the way forward for the nascent industry is sobering: the EV industry’s not slated for a boom but neither is it backsliding even with new setbacks. According to data obtained from the industry association, sales of electric vehicles (from members and nonmembers alike)

f rom beg inning of t heir op erations until end-2016 have amounted to some 11,000 units. The figure encompasses electric tricycles (4,260), electric bikes (3,803 units), electric scooters (654), electric jeepneys (134) and electric quad-bikes (three). The rest are from nonmembers. Juan said the figures ref lect the industry’s stance, as it receives wider support from the government through the Department of Transportation (DOTr). Likewise, there’s also a carrot: e xempt ion f rom t he gover nment’s tax-reform agenda.

Cost, meanwhile, is the inv isible stick.

Prohibitive

A pr im ary issue w ith ow ning EVs, in general, is still the prohibitive cost, according to Juan. “ T his is certainly the case in vehicles meant for public transportation,” he said. According to Juan, e-jeepneys (which are the battery electric type) cost on average P860,000 for the 17-seater type, while a 23-seater type costs P1.6 million. For e-tricycles, the picture is bleaker. Late last year the Department of Energy (DOE) shut down an e-trike project it entered into with the Asian Development Bank. The reason was for the lack of take-up among operators. The attendant cost and supply of supporting infrastructure (such as charging stations) and absence of after-sales support, added to the rationale of thenEnergy Secretary Alfonso G. Cusi to pull the plug on it. By then, Evap member B e m a c E l e c t r i c Tr a n s p or t a t ion Ph i l ippi nes a nd Japa n’s Uz u sh io Elec t r ic Co. Ltd. a lre a d y s e c u re d t he $3 0 - m i l l ion cont rac t to produce t he

i n it i a l t ra nc he of 3,0 0 0 u n it s of e -t r i kes. The program envisioned a total production of 100,000 units when it was started in 2013. But with the cancellation, the government will just procure the initial 3,000-unit pledge.

Setback

WITH the cancellation representing a setback for the industry, Juan said Evap is now focusing efforts on the e-jeepney as a bid in the public transportation space. E-tricycles can just be an alternative, he said. “We’re still working with the DOE, and they’re working hard to deploy the 3,000. There’s a hurdle really for tricycles because of the cost. But there’s a real need for jeepneys now and, in terms of cost, they’re competitive versus the new Euro 4 internal combustion engine [ICE] vehicles. We’re pushing now more on the jeepneys,” Juan added. Electric jeepneys are considered the precursor of e-vehicles. T he countr y star ted in 2008 w it h e-jeepneys t hat plied t he Green Route of Ma k at i C it y bac k in t he industr y’s incep tion. One of t he ma in reasons

for t he slow upta ke of EVs has been t he l ac k of suppor t ing c h a rg i ng i n f ra st r uc t u re, accord i n g to QE V Ph i l ip pi ne s Electromobi lit y Solutions and Consu lting Group Inc. To address this, QEV has set its sights to establish the first EV charging infrastructure network in the Philippines.

Win-win

THE bright star for the industr y shone on October 10, when listed oil firm Pilipinas Shell Pet roleu m Cor p. ( PSPC ) a nnounced that the first 100 pilot

sites of EV charging stations will be located in Metro Manila. “ T h e a g r e e m e nt c i t e s a n i n it i a l 10 0 p i l o t s it e s u s i n g P S P C ’s s t r at e g i c a l l y l o c at e d R e t a i l St at i o n s i n Me t r o M a n i l a a s E V c h a r g i n g p o s t s ,” said the oi l f ir m, refer r ing t o a m e mo r a n du m o f a g r e e me nt it sig ne d w it h QE V Ph i l i p p i n e s o n O c t o b e r 5 t o p ut u p t he f i r s t E V f a s t - c h a r g i n g infrastructure network in t h e c o u nt r y. QEV Phi lippines is a par tnership bet ween Spanish businessmen End i k a Aboitiz and

aderLook

sMirror

www.businessmirror.com.ph | Thursday, October 12, 2017 A13

humps on road to maturity with a backup electric motor is still considered an “electric vehicle”. T he Toyot a P r iu s, for e xample, is a hybrid as it is propelled by both an ICE and an electric motor but do not need to be plugged in to charge the batteries. Hybrid EV batteries are charged by the ICE or other propulsion source and during regenerative braking.

Exemptions Vecteezy.com

En r ique B a nue los. T he f i rst insta l lations of t he charg ing stations, Shel l sa id, w i l l occur in December. The charging posts will be supplied by Swiss multinational company ABB. The agreement was signed in the presence of Energy Secretary Alfonso G. Cusi along with Undersecretary Jess Posadas and A ssi st a nt Sec ret a r y Gera rdo Erguiza Jr. “You come up with a better, safer vehicle for the public,” Cusi said. “Drivers will earn more, so it’s a win-win for all.”

Proposal

JUAN considers tax exemptions as another boost in the arm of the e-vehicle industry. “There’s a Senate version being discussed now. It’s not yet passed, I know, but their version exempts electric vehicles and hybrid,” Juan said. “We’re happy with that.” With the legislative chamber’s sentiment now in their favor, the industry is vying for clearer provisions on possibly gray areas in the exemption clause, with the intent of extending fiscal and nonfiscal incentives on these. “DOF [Department of Finance]

Undersecretary [Karl Kendrick T.] Chua wrote to us asking for the expanded definition of electric vehicles,” Juan said. “We gave them a position paper and we want these categories spelled out in their version; the clearer, the better, so there are no misreadings.” T he position paper details the four types of EVs: battery evehicles (BEVs), plug-in hybrids, hybrids and fuel-cell EVs. The difference among these ty pes is the extent by which they’re powered by electric means, as a vehicle that still uses a standard internal combustion engine

HOWEVER, as charging and refueling stations are entitled to incentives under the Board of Investments’s Investment Priorities Plan, the manufacture itself of evehicles is not in the current plan. To this, the Evap is eyeing some leeway on relevant import valueadded tax, sales VAT and tariffs and duties, as well as non-fiscal incentives. This would be especially significant on the BEVs, as e-jeepneys fall into this category. A n y g o v e r n m e nt s u p p o r t w i l l be welcomed, sa id Juan, as t he DOTr puts toget her a prog ram t hat can breat he new life to t he EV industr y. T his is touted as t he PU V Moder nization Plan, a lter natively ca l led t he Eco -PU V prog ram.

The multiagency project is spearheaded by the DOTr, with the manufacturing component expertise provided by the Department of Trade and Industry; the Bureau of Product Standards (BPS) of the DTI was tasked to dictate the technical guidelines of t he moder n, eco -f r iend ly “Filipino PUV ”. The BPS already issued the tec h n ic a l g u ide l i nes for t he modern PUV, ambitiously targeting for a completely modern and sustainable “green” transportation: engine that can accommod ate Euro 4 f uel, has a seating capacity of at least 22 passengers, a service door and emergency exit, and even equipped with a GPS system, w ireless Inter net connection and dash camera. The BPS released standards for four types of e-PUVs, depending if the vehicle is for longor short-distance journeys.

Prospects

WHILE the majority of the supply of units for PUV modernization program will still be taken up by the standard ICE vehicles, the industry is eyeing at least 5 percent of the expected demand.

“To give a rough target, the industry is expecting at least 5 percent of the total PUV modernization demand, or 5 percent of the 200,000 units of jeepneys that the DOTr wants to be replaced,” Juan said. For the units that will be using the e-vehicle platform, a different set of technical guidelines will be released by the BPS. Aside from eyeing 5 percent of the 200,000 unit estimate, Evap is keeping mum on prospects. R ight now it is awaiting the route rationalization plan of the DOTr, which w ill identif y specific routes that EVS may ser v ice. “The DOTr agreed that once the plan is done, we’ll talk to them and they will suggest where the e-vehicles can be deployed,” Juan added. “E-jeepneys are more suited for shorter routes [as] these can’t run for long distances.” In terms of the supporting infrastructure, the prospects are brighter, as well. Juan sa id par t of t he technica l g uidelines being draf ted is identif y ing t he specif ics of t he charg ing system so t hese can be presented to interested suppliers.

AseanThursday

A14 Thursday, October 12, 2017 • Editor: Max V. de Leon

BusinessMirror

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Homes just aren’t that affordable, central bank tells Malaysians

alaysia’s central bank has a response to those saying it needs to do more to spur home loans: Houses simply aren’t affordable.

Bank Negara Malaysia has created a web site packed with data aimed at debunking the “myth” that access to financing was deterring home ownership, showing that loan approvals for key cities are near 70 percent or higher. The central bank has resisted calls to loosen mortgage lending, instead, saying the property industry should boost efforts to cut costs and accelerate supply. Rising home prices have added to the grievances of Malaysians grappling with the cost of living since a goods-and-services tax started two years ago, and as the government removes subsidies on daily items, including petrol and sugar. That’s made affordable housing a key voter issue for Prime Minister Najib Razak ahead of a general election that must be held by mid-2018. “It’s a tricky situation,” said Wan Saiful Wan Jan, CEO of the Institute for Democracy and Economic Affairs in Kuala Lumpur. “I don’t think it’s right to say that there’s no problem with financing. But lending rules have to be both strict and balanced at the same time, otherwise we’ll have more nonperforming loans and that is not good for anyone in the country.” The median house price in Malaysia was 4.4 times the median annual household income in latest available data, making the housing market “seriously unaffordable” compared to global standards, according to a 2015 report by staterun Khazanah Research Institute.

The report classed an affordable market as one with a median multiple of three times. That still makes Malaysia cheaper than many other markets, with affordable housing in key cities something of a rarity in the 21st century. In the latest Demographia study, Kuala Lumpur had the eighth-best housing affordability out of 18 metropolitan regions around the globe, with Hong Kong homes costing 19 times income and Beijing 14.5 times. Malaysia’s central bank is seeking to strike a balance: its housing web site aims to show transparency in the market, while the lender also stands firm on stricter financing rules introduced since 2010 to curb speculation, as well as measures to promote responsible lending, amid elevated consumer debt. Household debt as a proportion of GDP fell to 88.4 percent last year, from 89.1 percent. It’s still one of the region’s highest and the nation needs to be careful of such levels, central bank Gov. Muhammad Ibrahim said in July. The central bank has left bor-

rowing costs unchanged at 3 percent since July last year. Just 20 percent of new Malaysian housing launches in the first quarter were priced below 250,000 ringgit ($59,000), down from 33 percent between 2010 and 2014, according to the central bank’s Housing Watch web site. The bulk of new homes cost between 250,000 ringgit and 500,000 ringgit. The median annual household income is estimated at around 63,000 ringgit. “It is an issue of not having enough income and houses being too expensive,” Muhammad told a conference in August, reiterating that “the problem is not about access to credit” and the lender “must have the courage to say it loudly and clearly to the public”. Only about half of people living in Kuala Lumpur own a home, while nationwide the number was 72.5 percent at the last census in 2010. Demand is set to rise: The median age of Malaysia’s 31.7 million people is 28 years and the nation’s urban population is growing at an average 4 percent a year, among the fastest

pace in East Asia, according to the World Bank. Najib has pledged to focus on boosting living standards when he tables next year’s spending plan in parliament this month. He may announce an increase in the number of affordable homes built by statelinked companies, tax relief for private developers and subsidies for affordable home buyers, RHB Research Institute Sdn. said last month.

Filling the gap

Banks are being “prudent and responsible” in providing finance to buyers, an association of Malaysia commercial lenders said in a statement this week. It was seeking to refute claims by developers that house buyers are finding it harder to obtain a housing loan and that approval times are increasing. Developers should instead be looking at their own industry, Paul Selvaraj said, secretary-general of the Federation of Malaysian Consumers Associations. “The focus should be on building houses which people can afford, not building expensive houses and

Indonesia set to test demand for Komodo bonds

f India’s experience of selling local-currency notes in the overseas market is anything to go by, Indonesia’s plan to issue Komodo bonds may not be all plain sailing. The sovereign is mulling a sale of offshore rupiah-denominated bonds, and three state-owned infrastructure companies are considering issuance in coming months. A narrow investor base and fluctuations in the rupiah may be concerns for investors in these new notes, which

By Recto Mercene @rectomercene

63,00 ringgit The estimated median annual household income in Malaysia, while the bulk of new homes cost between 250,000 ringgit and 500,000 ringgit

Asean officials preparing draft documents for Manila meet

President Joko Widodo has named after Komodo dragons, the big lizards found in eastern Indonesia. Some foreign funds say the bonds would give good exposure to Indonesia, where the prospects for economic growth and the fiscal situation are improving, as long as they’re compensated enough. In India the first Masala bond sale took almost a year since the central bank approved the new issuance as issuers were reluctant to pay a premium for overseas borrowing in rupees. “I can see the merit in the government wanting to try this, as it makes sense to try and harness local currency from the global markets,” said Adam McCabe, head of Asian fixed income at Aberdeen Standard Investment in Singapore, who already invests in sovereign and company rupiah debt onshore. But liquidity is “quite a substantial concern,” he said. He added yields would need to be 25 to 50 basis points higher than local corporate notes for him to be interested in buying Komodo bonds. After trading in a fairly narrow range for most of the year, Indonesia’s currency has fallen 2.3 percent over the past month, while one-month implied volatility reached a seven-month high at the end of September. Foreign funds have pulled a net $815 million from Indonesian bonds in

October through Monday, after 10 straight months of inflows and have been net sellers of local stocks for 29 days in a row through Tuesday. Demand is still likely to be “quite robust”, despite the rupiah’s recent drop, because economic expansion is on a gradual upswing, said Raphael Mok, a Singapore-based senior analyst at BMI Research, a unit of Fitch Ratings. Indonesia’s external and fiscal positions have strengthened considerably over the past few years, he said. PT Jasa Marga, a toll-road operator, has said it plans to offer Komodo bonds as soon as next month. Construction company PT Wijaya Karya said it wants to sell the notes this year, while electricity utility PT Perusahaan Listrik Negara is aiming for the first quarter of 2018. These time frames may be optimistic. Bank Indonesia Assistant Gov. Dody Budi Waluyo said last Friday the central bank was supportive but wanted to study the impact on the exchange rate. The Financial Services Authority is drafting a rule to allow offshore rupiah bonds, Deputy Commissioner Nurhaida said by text message on Monday. Woon Khien Chia, a Singapore-based fund manager at Nikko Asset Management Ltd, said: “We would consider investing in these securities, if and when they come to the market. It’s good that the government is making an attempt to diversify its funding base.” The notes, especially in the case of a sovereign issue, will probably be included in global indexes and they should be tax free, she added. Brad Gibson, a fund manager at AllianceBernstein LP in Hong Kong, said it would be “opportunistic at best” and the yield would need to be around 25 basis points higher than similar five-year local notes to make up for the lack of liquidity. It would be good to see policy-makers in any market “spending more time developing transparency, liquidity and depth in their domestic markets”, before launching local currency offshore debt Ken Hu, chief investment officer at Invesco Hong Kong Ltd. “The economic-reform momentum of the country is still very strong,” Hu said, adding he’s bullish on Indonesia, along with India and China. “On the other hand, I would suffer from the liquidity because such bonds would have less liquidity than the onshore government bonds.” Bloomberg News

then trying to push them, and then complaining that the banks are not giving loans,” he said. “The reason people are having problems getting loans is because the houses are not affordable. It’s beyond their repayment” ability, he added. Some developers are slowly starting to fill the demand. Mah Sing Group Bhd., the nation’s third largest, is selling apartments within 5 kilometers from Kuala Lumpur’s center with prices starting from 328,000 ringgit for a 650-squarefoot unit. That’s within the maximum price a family on the city’s median income could afford. The problem is set to become a bigger one over time. There is currently a shortage of 960,000 units of affordable housing in Malaysia, with the number projected to reach 1 million units by 2020, according to the central bank’s estimates. “It’s a very important issue for Najib to address,” Wan Saiful said. “I’m just really wondering what more can Najib do other than provide heavy subsidies, at a level that maybe even the government cannot afford to do.” Bloomberg News

enior Southeast Asian officials are now in the final stretch of preparations for the 31st Asean Summit and Related Meetings in November in Manila. The Department of Foreign Affairs has convened the Joint Consultative Meeting (JCM) at the Philippine International Convention Center for a three-day meeting that began on Wednesday to deliberate on the proposed outcome documents to be adopted or issued by the Asean Leaders during their Manila Summit. Foreign Affairs Undersecretary Enrique A. Manalo chairs the meeting, which will also consider the logistical preparations for the Summit. The JCM is a cross-sector body composed of senior officials from the ministries in charge of foreign affairs, economy and sociocultural affairs of the Asean member-states. Manalo is joined by Social Welfare Undersecretary Florita R. Villar, Trade Assistant Secretary Anna Maria Diaz-Robeniol and Philippine Permanent Representative to Asean, Ambassador Elizabeth Buensuceso. After the JCM, the Asean foreign affairs officials will meet with their counterparts from China, Japan and the South Korea under the Asean Plus Three Senior Officials Meeting. They will also meet with the senior officials of the East Asia Summit, which includes Australia, China, India, Japan, New Zealand, South Korea, Russian Federation and the United States. The meetings will discuss preparations, including the outcome documents, for the 20th Asean Plus Three Summit and 12th East Asia Summit in November.

Thai premier says elections to be held in November 2018

hailand’s long wait for a return to democracy is set to end after the leader of the country’s military government said elections will be held in November 2018. An exact date for the poll will be determined around June next year, Prime Minister Prayuth ChanOcha told reporters in Bangkok on Tuesday. “This gives a clearer picture,” he said. “Political parties and politicians should remain calm.” Former army chief Prayuth seized power in Thailand in May 2014 after a period of political unrest, pledging to restore stability and bring back representative government, but the timeline for polls remained hazy until today’s comments. The vote will be held under a military-backed constitution, the nation’s 20th, a document that critics say gives appointed soldiers, judges and bureaucrats the power to stifle elected politicians. Former Prime Minister Abhisit Vejjajiva said in August that Thailand faces the risk of discord between appointed senators and elected representatives under the provisions of the latest charter. The current stretch of military rule is one of the longest since the 1970s, in a country with a history of coups since the end of absolute monarchy in 1932. In the years before the most recent army takeover, fissures in Thai society triggered sometimes violent clashes between urban royalists and rural backers of exiled former leader Thaksin Shinawatra.

Political risk

Thaksin’s sister, former Prime Minister Yingluck Shinawatra, fled Thailand in August before being sentenced in absentia to five years in jail in a negligence case she said was politically motivated. While a return to democracy runs the risk of exposing underlying tensions, and putting the spotlight on the country’s history of elections followed by coups, investors appear sanguine. The benchmark SET index of stocks erased losses following Prayuth’s comments on the poll, which came during the lunchtime break in trading. The index advanced 0.9 percent at the close in Bangkok. The baht appreciated 0.4 percent to 33.253 per dollar as of 4:45 p.m. local time. The yield on the 2.125-percent government bonds due December 2026 fell 1 basis point to 2.298 percent. “This is a positive shock to the markets and the economy,” said Tim Leelahaphan, Bangkok-based economist at Standard Chartered Bank. “Normally election year is a good year for the economy, with lots of poll activities going on. I think this will support baht strength.” The currency is the strongest performer this year in an Asian basket tracked by Bloomberg, strengthening 7.8 percent on a substantial current-account surplus and a net inflow of about $8.5 billion into Thai bonds. The confirmation of the November 2018 timeline is positive news and may help the stock market to sustain a higher price-to-earnings ratio, said Pornthep Jubandhu, a senior investment strategist SCB Securities Co. in Bangkok. Bloomberg News

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Catalan leader stakes claim to independence, then delays it

ARCELONA, Spain—Catalan separatists on Tuesday signed what they called a declaration of independence from Spain to cheers and applause in the regional parliament. Catalonia’s president said he would delay implementing it for several weeks to give dialogue a chance. Spain, however, called an emergency Cabinet meeting for Wednesday morning and gave little indication it is willing to talk. In his highly anticipated speech, Regional President Carles Puigdemont said the landslide victory in a disputed October 1 referendum gave his government the grounds to implement its long-held desire to break century-old ties with Spain. But he proposed that the regional parliament “suspend the effects of the independence declaration to commence a dialogue, not only for reducing tension but for reaching an accord on a solution to go forward with the demands of the Catalan people.” “We have to listen to the voices that have asked us to give a chance for dialogue with the Spanish state,” Puigdemont said. The central government in Madrid responded that it did not accept the declaration of independence by the separatists and did not consider the referendum or its

results to be valid. Spanish Deputy Prime Minister Soraya Saenz de Santamaria said an emergency Cabinet meeting had been called for Wednesday. The Catalan leader “doesn’t know where he is, where he is going and with whom he wants to go,” she said. Saenz de Santamaria said the government couldn’t accept the Catalan government’s validation of its referendum law because it is suspended by the Constitutional Court, or the results of the October 1 vote because it was illegal and void of guarantees. She said Puigdemont had put Catalonia “in the greatest level of uncertainty seen yet.” One of the government’s options at the Wednesday meeting could be to set about applying Article 155 of the Constitution, which allows the central government to take some or total control of any of its 17 regions that don’t comply with their legal obligations.

Catalan Regional President Carles Puigdemont signs an independence declaration document after a parliamentary session in Barcelona, Spain, on Tuesday. Puigdemont says he has a mandate to declare independence for the northeastern region, but proposes waiting “a few weeks” in order to facilitate a dialogue. AP/Manu Fernandez

This would begin with a Cabinet meeting and a warning to the regional government to fall into line. Then, the Senate could be called to approve the measure. Puigdemont also could be called in for questioning in court and possibly arrested. Following his speech, the Catalan leader was the first to sign the document titled “Declaration of the Representatives of Catalonia.” Dozens of other separatist lawmakers signed it after him. The signatories said the document was a full declaration of independence. Joan Barcelo, a researcher on political conflicts at Washington University in Saint Louis, said the

mixed messages sent by Puigdemont’s speech did little in his effort to rally international support. “It’s a mess and a mistake in political communication strategy,” Barcelo said. “He was trying not to burn bridges to dialogue, but he’s going to create doubts among his supporters.” In his remarks, Puigdemont was highly critical of the Spanish government’s response to the referendum and the violent police reaction that left hundreds injured on voting day, but said Catalans have nothing against Spain or Spaniards, and that they want to understand each other better. “We are not criminals, we are

not crazy, we are not pulling off a coup, we are not out of our minds. We are normal people who want to vote,” he said. Opposition leader Ines Arrimadas of the Ciutadans (Citizens) party slammed the speech. “This is a coup. Nobody has recognized the result of the referendum. Nobody in Europe supports what you have just done,” she said. “The majority of Catalans feels they are Catalans, Spanish and European.... We won’t let you break our hearts into bits,” Arrimadas said. Socialist leader Miquel Iceta also was highly critical. “You are proposing to suspend a declaration that hasn’t been made, that’s pretty tough,” he said with irony, adding that “you can’t claim a mandate from the October 1 vote...a vote that had no guarantees.” Puigdemont’s speech marked a critical point in a decadelong standoff between Catalan separatists and Spain’s central authorities. Security was tight in Barcelona and police cordoned off a park surrounding the legislative building. In Brussels European Council President Donald Tusk pleaded directly with the Catalan leadership ahead of the speech to choose dialogue rather than a divisive call for independence. “I ask you to respect in your intentions the constitutional order and not to announce a decision that would make such a dialogue impossible,” he said. Some 2.3 million Catalans—or

43 percent of the electorate in the northeastern region—voted in the referendum. Regional authorities say 90 percent were in favor and declared the results valid. Those who opposed the referendum had said they would boycott the vote. Rajoy’s government had repeatedly refused to grant Catalonia permission to hold a referendum on the grounds that it was unconstitutional, since it would only poll a portion of Spain’s 46 million residents. Catalonia’s separatists camp has grown in recent years, strengthened by Spain’s recent economic crisis and by Madrid’s rejection of attempts to increase self-rule in the region. T he political dead lock has plunged Spain into its deepest political crisis in more than four decades, since democratic rule was restored following the dictatorship of Gen. Francisco Franco. Thousands rallied in Barcelona’s streets and watched Puigdemont’s speech. For some, his move to not declare outright secession was disappointing. “I feel a little sad because now is not independence,” said 55-yearold Maria Gill. “We must wait a few weeks, a few weeks we must talk with the government of Spain.” Others took a more stoic approach. “Perhaps it isn’t the decisive declaration, declaring the republic and breaking away [from Spain] from today before any negotiation,” Oscar Baldes said. “But it’s a first step and that’s important.” AP

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For Trump, the reality show has never ended

ASHINGTON—Over the weekend, President Donald J. Trump was accused by a Republican senator of running the White House like a “reality show.” In the 48 hours that followed, this is how the president refuted the characterization.

He called out the offending senator for being short and sounding like “a fool.” He challenged his secretary of state to an IQ contest and insisted he would win. He celebrated the downfall of a critic who was suspended from her job. And his first wife and third wife waged a public war of words over who was really his first lady. Trump’s West Wing has always seemed to be the crossroads between cutthroat politics and television drama, presided over by a seasoned showman who has made a career of keeping the audience engaged and coming back for more. Obsessed by ratings and always on the hunt for new story lines, Trump leaves the characters on edge, none of them ever really certain whether they might soon be voted off the island. “Absolutely, I see those techniques playing out,” said Laurie Ouellette, a communications professor at the University of Minnesota, who has studied reality television extensively. “Reality TV is known for its humiliation tactics and its aggressive showmanship, and also the idea that either you’re in or you’re out, with momentum building to the final decision on who stays and who goes.” Among those on the in-or-out bubble in this week’s episode was Sen. Bob Corker of Tennessee, the frustrated Republican who described—and derided—the conversion of the White House into a virtual set for The Apprentice and, for good measure, expressed concern in a weekend interview with The New York Times that the president could stumble the country into a nuclear war.

Trump, who hosted The Apprentice on NBC for 14 seasons, dismissed Corker on Tuesday by mocking his height and suggesting he had somehow been conned. “The Failing @nytimes set Liddle’ Bob Corker up by recording his conversation,” Trump wrote. “Was made to sound a fool, and that’s what I am dealing with!” In labeling Corker “liddle,” the president was evidently returning to a theme. He considered Corker for secretary of state during the transition after last year’s election but was reported to have told associates that Corker, at 5-foot-7, was too short to be the nation’s top diplomat. Instead, Trump picked Rex W. Tillerson, who is several inches taller but whose own relationship with the president has deteriorated to the point that he was said to have called Trump a “moron.” Tillerson initially did not deny it, but later he had a spokesman insist that he did not say it. Trump chose to believe the denial, or at least said he did, but in an interview published on Tuesday, he insisted that even if it was true, he could prove that he was actually smarter than his secretary of state. “I think it’s fake news,” Trump told Forbes magazine. “But, if he did that, I guess we’ll have to compare IQ tests. And I can tell you who is going to win.” Trump later denied that he had demeaned his secretary of state. “I didn’t undercut anybody. I don’t believe in undercutting people,” he told reporters, in a comment that must have amused the many people he has undercut since taking office. Asked if

Sen. Bob Corker (right, Republican-Tennessee) introduces Donald J. Trump, then a candidate for president, at a campaign rally in Raleigh, North Carolina, on July 5, 2016. Corker, the chairman of the Senate Foreign Relations Committee, charged in an interview on October 8 that Trump was treating his office like “a reality show,” with reckless threats toward other countries that could set the nation “on the path to World War III.” Stephen Crowley/The New York Times

he still had confidence in Tillerson, Trump said, “Yes.” At the time, Trump was sitting next to Henry Kissinger, the former secretary of state who happened to be visiting the Oval Office on Tuesday. To be sure, Kissinger would hardly tower over Corker on the basketball court, but Trump, perhaps wisely, did not risk challenging the former diplomat to an IQ contest. After the meeting with Kissinger, the president headed to a lunch with Tillerson, who was joined by a mediator, Defense Secretary Jim Mattis. Sarah Huckabee Sanders, the White House press secretary, said they “had a great visit” and denied that Trump was serious about the IQ test. “He made a joke, nothing more than that,” she said. Trump was not joking when he took a shot earlier in the day at Jemele Hill, the ESPN host who has called him a white supremacist and was suspended on Monday

for suggesting a boycott of the Dallas Cowboys’ advertisers if the team punished players who protested racial injustice by kneeling during the national anthem. “With Jemele Hill at the mike, it is no wonder ESPN ratings have ‘tanked,’ in fact, tanked so badly it is the talk of the industry!” Trump wrote on Twitter. He made no mention of the other dust-up in his household. In an interview aired on Monday to promote her new memoir, Ivana Trump, his first wife, told ABC News that “I’m basically first Trump wife, OK? I’m first lady, OK?” That did not sit well with Melania Trump, his third wife and the actual first lady, who issued a retort through a spokesman dismissing what she called “attention-seeking and selfserving noise.” Andy Cohen, the creator of the Real Housewives reality television-show franchise, found that too rich. “This is actually happening,” he wrote on Twitter. “All the wives are fighting. Even I AM SPEECHLESS.” Trump’s gibe at Corker echoed his name-calling during the presidential campaign when he labeled Sen. Marco Rubio, Republican-Florida, “Little

Marco,” Sen. Ted Cruz, RepublicanTexas “Ly in’ Ted ” and the Democrat Party candidate Hillary Clinton “Crooked Hillary.” He has used belittling nicknames to diminish political foes since taking office, as well—think “Cryin’ Chuck” Schumer, “Psycho Joe” Scarborough and “Little Rocket Man” Kim Jong Un. It was not clear what Trump meant when he said The Times set up Corker by recording him. Angry that Corker had suggested he was an agent of “chaos,” Trump lashed out at the senator last Sunday by saying he “didn’t have the guts” to run for another term. A Times reporter then interviewed Corker by telephone and recorded the call with the senator’s knowledge and consent. Corker’s staff also recorded the call, and he said he wanted The Times to do the same. During the interview, Corker said Trump’s advisers were struggling to keep the president under control. “I know for a fact that every single day at the White House, it’s a situation of trying to contain him,” he said. He also said Trump’s reckless statements could put the country on a path “toward World War III.” Trump on Tuesday rejected the suggestion that he was risking a nuclear war. “We were on the wrong path before,” he said, presumably referring to North Korea. “All you have to do is take a look. If you look over the last 25 years through numerous administrations, we were on a path to a very big problem, a problem like this world has never seen. We’re on the right path right now, believe me.” But what a path. Ouellette, who has written or edited several books on reality television, including Better Living Through Reality T V, said Trump, the president, had gone even further than Trump the reality-show star ever did. “This has exceeded what would have been allowed on The Apprentice,” she said. “It’s almost a magnification. It’s like reality TV unleashed. Yes, he was good at it, but I always felt like he had to be reined in in order not to mess up the formula. Here, he doesn’t have that same sort of constraint.” New York Times News Service

Paltrow, Jolie join flood of claims against Weinstein

EW YORK—A flood of allegations poured in on Tuesday against Harvey Weinstein in on-the-record reports that detailed claims of sexual abuse and included testimonies from Gwyneth Paltrow and Angelina Jolie, further intensifying the already explosive collapse of the disgraced movie mogul. Three women accused Weinstein of raping them in a story published online by The New Yorker, including the Italian actress and filmmaker Asia Argento and a woman who was an aspiring actress in college when she caught Weinstein’s eye. A representative for the mogul vehemently denied the allegations in a statement to the magazine. In a follow-up to its earlier expose, The New York Times also reported on Tuesday that many other actresses have, in recent days, added to the chorus of accusations surrounding Weinstein. Paltrow described Weinstein’s attempt to lure her, then 22, into giving him a massage in a hotel room. The incident prompted her thenboyfriend Brad Pitt to angrily confront Weinstein at a film premiere. Both reports significantly ratcheted up the unfolding scandal surrounding Weinstein, who was fired last Sunday from the Weinstein Co. By the end of Tuesday, former President Barack Obama, Hillary Clinton, an array of movie stars and Weinstein’s own wife, Georgina Chapman, had issued statements condemning Weinstein’s alleged conduct. Chapman told People magazine she was leaving her husband after 10 years of marriage, citing Weinstein’s “unforgivable actions.”

The published stories thoroughly document the systematic harassment, abuse and intimidation of women—almost always young actresses trying to succeed in movies. Lucia Evans, then a senior at Middlebury College, said Weinstein forced her to perform oral sex on him in 2004 at the Miramax offices in Tribeca. She had been brought in for a casting meeting with Weinstein. Argento said Weinstein forcibly performed oral sex on her at the Cannes Film Festival in 1999. A third woman spoke anonymously. “I know he has crushed a lot of people before,” Argento told The New Yorker. “That’s why this story—in my case, it’s 20 years old, some of them are older— has never come out.” Attorneys for Weinstein, 65, did not immediately return messages on Tuesday. The New Yorker quoted Weinstein representative Sallie Hofmeister responding that “any allegations of nonconsensual sex are unequivocally denied by Mr. Weinstein.” “Mr. Weinstein has further confirmed that there were never any acts of retaliation against any women for refusing his advances. Mr. Weinstein obviously can’t speak to anonymous allegations but, with respect to any women who have made allegations on the record, Mr. Weinstein believes that all of these relationships were consensual,” said Hofmeister. “Mr. Weinstein has begun counseling, has listened to the community and is pursuing a better path. Mr. Weinstein is hoping that, if he makes enough progress, he will be given a second chance.” AP

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Brexit limbo for E.U. workers has Denmark Inc. saying ‘come here!’

f the United Kingdom can’t guarantee European citizens now working there that their lives will be unaffected by Brexit, then those people should look for jobs in Denmark. The Confederation of Danish Industry, which represents about 10,000 corporations, says now is the time to try to attract that demographic to the Scandinavian country and help deal with a severe labor shortage. “We can use a lot of the EU citizens currently working in the UK,” Steen Nielsen,

chief of labor policy at the Copenhagen-based confederation, said in a phone interview. “It’s pretty unclear what’s going to happen—the Brits don’t yet know what rules they’ll apply” to EU workers, he said. UK Prime Minister Theresa May has tried to reassure European citizens in Britain that they will still be welcome in the country after it leaves the union by the end of March 2019. But so far talks have stalled, with basic questions such as Britain’s EU budget obligations and citizens’ rights remaining unresolved.

According to Nielsen, Denmark needs to be proactive in its efforts to attract EU workers now caught in the Brexit crosshairs, because many other European countries are grappling with similar labor shortages and will also be making overtures. “There’s a tussle going on between countries to attract the right workers,” Nielsen said. He says that over the past 12 months, about 40 percent of the confederation’s members have had to abandon their efforts to find the right people to fill vacancies.

“It’s very relevant to look closer at those who don’t know what their future will look like in the UK,” he said. Scandinavian countries, such as Denmark, are wondering how to find the resources needed to sustain their famed welfare societies. In neighboring Sweden, even a record influx of immigrants has failed to ease a shortage of labor that now threatens to upend the country’s economic growth. The Danish central bank has long warned of bottlenecks in the labor market. The center-

right government of Prime Minister Lars Lokke Rasmussen is responding with proposed tax cuts to create more incentives for people to join the work force. (And to be sure, Denmark also wants to curtail EU migrant worker access to its welfare servicezs.) Nielsen says Denmark urgently needs everything from electricians to industrial technicians and metal workers. Besides targeting EU citizens whose lives have been made less certain by Brexit, he wants authorities to make it easier for businesses

to bring in skilled labor from outside Europe. (Current legislation places a floor on annual pay levels at which businesses can hire foreigners at just over 400,000 kroner, or roughly $63,000.) In a speech delivered in Manchester earlier this month, May said EU citizens living in Britain don’t need to worry about their future. “If you are a citizen of the EU who has made their life in this country I know you will feel unsettled and nervous,” she said in a speech now notorious for its litany of mishaps. Bloomberg News

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A18 A4 Thursday, October 12, 2017 • Editor: Efleda P. Campos

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PHL calls for sustainable use of intertidal wetlands

By Jonathan L. Mayuga

@jonlmayuga

he Philippines is pressing for the sustainable use of intertidal wetlands and other coastal habitats for the survival of migratory species.

In a statement, the Department of Environment and Natural Resources (DENR) said it has formally submitted to the Secretariat of the Convention on the Conservation of Migratory Species of Wild Animals (CMS) a draft resolution calling over 120 Range States to enhance efforts to conserve and promote intertidal wetlands. Intertidal wetlands and other coastal and estuarine habitats are critically important not only to migratory birds but also to cetaceans, dugongs, turtles and fish as areas for breeding, for staging during migration, molting or during other nonbreeding periods. The resolution will be put to a vote when parties to the CMS, a global treaty under the aegis of the United Nations Environment Program, gather in Manila from October 23 to 28 for the 12th Meeting

of the Conference of the Parties to the CMS, or COP12. Secretary Roy A. Cimatu lauded the Biodiversity Management Bureau (BMB) of the DENR and other stakeholders for putting together the draft resolution. For her pa r t , BMB D i rector Theresa Mundita S. Lim expressed hope the CMS event will strengthen the country’s linkages with other nations in protecting migratory species. “Since the Philippines is not a large or rich country, it is important that we form an alliance with other nations to protect migratory species,” Lim said. The draft resolution also urges nations to halt further approval of intertidal flat conversion until a full assessment of the economics of ecological services and identification needs for migratory species and other wildlife

can be completed. It also seeks to strengthen the relevant multilateral environmental agreements (MEAs) concerning

Flood master plan awaits public-works approval By Marcel Woo Correspondent

EBU CITY—A master plan that seeks to significantly address the flooding problem in Metro Cebu has been forwarded to the main office of the Department of Public Works and Highways (DPWH) for approval. Engr. Nonie Paylado, DPWH 7 Planning Division chief, said the Flood Control and Drainage System Master Plan for Metro Cebu, which took nearly one year to finalize, includes the major projects that will be implemented in Metro Cebu to address the flooding problem, especially in Cebu City. The DPWH Unified Project Management Office-Flood Control Management Cluster, in coordination with DPWH 7, Metro Cebu De-

velopment Coordinating Board and Woodfields Engineering Company, undertook a feasibility study focused on determining the causes of floods in Metro Cebu and formulated countermeasures to address the problem. The result of the feasibility study and the countermeasures were included in the master plan that now awaits the approval of the DPWH main office, Paylado said. Among the major projects mentioned in the master plan is the dredging and cleaning of the Subangdaku River, which often overflows during heavy downpour, causing flooding in several parts of the cities of Cebu and Mandaue. Once the master plan is approved, the recommendations and counter measures will be cascaded to local government units for implementation. Paylado expects the DPWH main

office to approve the master plan in the fourth quarter of this year. “The DPWH 7 has been implementing flood-control projects within Metro Cebu even without the master plan because the previous master plan was not implemented,” Paylado said. For this year, the DPWH 7 is implementing P3.7 billion worth of infrastructure projects that aim to reduce flooding in some areas in Central Visayas. Of the P3.7 billion, P420 million is being allocated for flood-control projects in Metro Cebu. In Cebu City, the DPWH Cebu City District is prioritizing the widening of rivers and creeks among its 42 flood-control projects for this year. The major areas of concern are along the Estero Parian in Barangay Tinago and the Mahiga Creek in Barangay Mabolo.

the coasts and wetlands, including the funding of scientific subsidiary bodies under MEAs. The resolution, likewise, seeks

to adequately cover coastal and intertidal flats in protected area systems to reduce the loss of these migratory species’ habi-

tats. Further, it aims to recognize and promote these protected areas that shall demonstrate effective management of ecosystems vital to the survival of migratory species and linked to community livelihoods and human well-being. Protected areas qualified as intertidal sites will be considered for nomination in World Heritage Sites, as well as Ramsar Sites. Also included in the resolution are initiatives and programs aimed at raising public awareness on the importance of intertidal wetlands and other associated habitats to people. With the Philippines hosting the world’s largest wildlife conference this year, Lim is hopeful that more Filipinos will become aware of protecting the diverse migratory species that pass through the country. “Most of the people are not aware of the importance of these migratory species to them,” Lim said. “This event is a good opportunity to highlight this.” According to Lim, the outcome of the event is expected to influence the legislative agenda of the CMS parties in protecting the migratory species through laws to be passed by each country.

SPI to develop 100-MW solar plant in Tarlac By Lenie Lectura

@llectura

unray Power Inc. (SPI) will develop a 100-megawatt (MW) solar-power project in Tarlac. SPI is 75-percent owned by Menlo Renewable Energy Corp., a wholly owned subsidiary of MRC Allied Inc. A solar energy-service contract for the development of the said power project within the Clark Green City in the Municipality of Bamban, Tarlac, was recently signed between SPI and the Department of Energy. MRC is diversifying into an energy company. It previously disclosed that it will be able “to develop, design, construct, operate, maintain, buy, acquire, sell, import and export renewable and clean

energy equipment, systems, power plants and technologies that produce electricity from renewable and clean energy resources, such as, but not limited to solar, wind, hydro, geothermal, biomass, liquefied natural gas and other clean and renewable energy sources.” As a diversified company, MRC has also been strengthening its structure. It has taken in former Energy Secretary Carlos Jericho L. Petilla as one of its board members. Last month, the company said it was eyeing to acquire a significant stake in six more renewableenergy (RE) developers, following the successful acquisition of a 15-percent stake in a 50-megawatt (MW) solar project in Leyte. “We are evaluating at least six more. They are all RE firms. We

are confident we can close one to two more before the year ends,” MRC Allied President Gladys Nalda said. The listed firm acquired a 15-percent stake in the 50-MW Sulu Electric Power and Light Philippines Inc. (Sepalco) Solar Project in Palo, Leyte for P255 million. “This will complete MRC Allied’s 200-MW target for 2017 and, since it’s an operational plant, we shall take an active role in the management of the power plant,” Nalda added. There are plans, she said, to increase its interest in Sepalco up to 51 percent. “We want a majority control of Sepalco. We made a commitment to help improve their financial operations so we can acquire a bigger stake,” Nalda said.

Cebu City No Negros Island Region? No problem DPWH speeds up work eyes ₧6.2-B on Great Wall of Leyte budget K T for 2018 By Claudeth Mocon-Ciriaco Correspondent

EBU CITY—The Cebu City government will operate in 2018 on a budget that is P1 billion lower than this year’s, based on the proposal of the city’s budget office. City Budget Officer Marietta Gumia said her office will submit a P6.2-billion budget for the city government next year to the City Council for deliberation. The 2018 proposed budget allocation is P1 billion lower than this year’s budget of P7.2 billion. The scaled-down budget is in line with Cebu City Mayor Tomas Osmeña’s “bare bones” budgeting approach. Gumia said the complete breakdown of the budget will be furnished to the council on October 16. Osmeña earlier said the priorities under next year’s budget will include garbage, peace and order and traffic. In the neighboring city of Talisay, Mayor Eduardo Gullas submitted the city’s proposed 2018 budget worth P1 billion to the City Council. The proposed budget is 25 percent higher compared to this year’s annual budget of P888 million. Bulk of the 2018 budget will go to maintenance and operating expenses, which get a P572-million allocation. Marcel Woo

abank alan City— True to its battlecry for development: “Padayon ang Progreso” (Continue the Progress), Kabankalan City is not worried at all about the abolition of the Negros Island Region (NIR). October 9 marked the effectivity of Executive Order 38 signed by President Duterte, abolishing the NIR. However, K abank a lan Cit y Mayor Isidro P. Zayco said economic development w il l continue in this souther n par t of the reg ion, adding that the cit y’s progress does not lie in the creation of NIR a lone. “As a matter of fact, with or without NIR, we will continue the progress that we have already made in Kabankalan,” Zayco said in an interview with the BusinessMirror. Should the NIR push through, Kabankalan City, converted into a component city on August 2, 1997, will be the island’s economic center. Zayco, however, admitted that Kabankalan can benefit from the NIR, as it was proposed that the center will be created in city, which will help attract big investments. “But, as what I have said, investments still continue to pour in despite the abolition of NIR,” he said, adding that the city is emerging as the fastest-growing economy in the

province of Negros Occidental. Over the years, the total income of the city has been steadily increasing, he added. For fiscal year 2018 the internal revenue allotment (IR A) of the city amounted to P1,001,169, 985, which is higher compared to the P931, 862, 221 IR A in 2017. The city’s economic growth serves to attract people from neighboring towns to bring their business transactions here. Since similar urban services are now offered in Kabankalan, many are opting to settle in the city rather than to travel to Bacolod. This cuts travel time by at least 50 percent, thereby saving on transportation costs. A robust number of establishments can be found in the city, offering various financial and commercial services. Zayco said there are major establishments that have branches in Kabankalan like PureGold, Citi Hardware, Jollibee and other fast-food companies. Other locators are CityMall and Gaisano United Robina Corp.Southern Negros Development Corp. Sugar Refinery. Likewise, there are 20 gasoline stations, 15 commercial banks, five hotels and some pension houses that can be found in the city. Zayco said they are also waiting for the installation of fiber optics to entice business-process outsourcing companies to operate in Kabankalan. Industries related to food

manufacturing, such as sugarcane and starch, have long been entrenched in the city. This is linked downstream to the rural population that supplies the raw materials for production. Modern central public market and satellite units facilitate trading within the city. “There are still other investors who expressed interest in opening their business here. Even Robinsons mall already bought a land here, so we will have another mall soon,” he said, stressing that what makes him happy about this economic development is the job opportunity it creates for Kabankalanons. “So, we address the unemployment of our people here as well,” he added. On Monday the NIR officially ended after its regional offices were closed for it was the deadline given by the Chief Executive to the regional directors to complete the transition process. With the abolition of NIR, the two provinces, along with the NIR regional offices, reverted to their previous regions—Negros Occidental to Western Visayas or Region 6, and Negros Oriental to Central Visayas or Region 7. The special bodies—Regional Development Council, Regional Peace and Order Council, Regional Disaster Risk Reduction and Management Council—created under the NIR merged with the two regions.

By Lorenz S. Marasigan

@lorenzmarasigan

he Department of Public Works and Highways (DPWH) is almost halfway through the fourth section of its road-heightening and tide-embankment project in Leyte, an official said on Wednesday. DPWH director Edgar B. Tabacon said the agency has completed 45 percent of the 7.8-kilometer Section 4 of the “Great Wall of Leyte” as of press time. The said section runs through coastal barangays of Tacloban City to Palo, Leyte. “The project implementation is on track, and we are working on the road-right-of-way (RROW) issues to speed up construction activities,” Tabacon said. The project has six phases, costing a total of P7.95 billion, stretching to 27.3 km of 4-meter high seawall structure. The whole project will be completed in 2020. Tabacon said the project is part of the government’s program on Rehabilitation and Recovery from Supertyphoon Yolanda. He added the technical working group that was formed for the project has been conducting a series of consultations with affected residents and other stakeholders in coordination with local government units. “We are always open for dialogue to address arising issues even if the project is already in full swing,” he said. Upon completion, the Great Wall of Leyte will help ensure the safety of coastal communities during typhoons or storm surges, protecting Yolandaaffected areas in Tacloban, Palo and Tanauan from future similar calamities. With its bike lane component, the wall is also seen providing tourism opportunities in the province, as it can showcase the view of the sunset, as well as mangrove forests along the coastal areas, thus generating economic benefits to local residents, Tabacon said.

The Regions BusinessMirror

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Thursday, October 12, 2017 A19

Mindanao road projects vital to govt counterinsurgency campaign–Army By Manuel T. Cayon

@awimailbox Mindanao Chief Bureau

AVAO CITY—A former antiterror unit commander here said the road projects in Mindanao are “very vital” in government’s counterinsurgency campaign, citing the ensuing economic activities in formerly unreachable areas.

Army Col. Erwin Bernard L. Neri said the road projects have made formerly difficult to reach places more accessible to tourists seeking natural attractions. Neri, the commander of the Army’s 1001st In-

Raw-food center established in Mimaropa State College

he Department of Health (DOH) and Mimaropa (Oriental/Occidental Mindoro, Marinduque, Romblon, Palawan and Marinduque) State College (MSC) recently signed a memorandum of agreement (MOA), making the state college the Center of Raw Food Plant-based Preparation and Training in the region. “We selected MSC since it’s the only institution of higher education in Mimaropa that offers courses related to food technology,” DOH Regional Director Eduardo C. Janairo said during the MOA signing held at the Marinduque State College in Boac, Marinduque. An initial fund of P3.2 million will be provided for the program. “The goal of eating raw food,” Janairo said, “is to obtain plenty of nutrients that our body needs.” “It is better able to prevent and fight diseases, especially chronic diseases and other illness,” he added. Janairo explained that there is a need to reposition the Nutrition Program of Mimaropa because it has been identified in the National Health Survey of 2013 and 2015 as the region with the highest number of underweight and stunted children. “We have agreed to work together in partnership to develop and establish the raw-food technology in the region, and it will start in the province of Marinduque,” he said. Under the MOA, the DOH regional office will provide direction, support and assistance to the MSC in the mobilization, organization and coordination for the establishment of the raw food plant-based preparation and training center for the region. A Raw Food Technology Task Force will be created, with membership coming from the National Nutrition Council, selected regional nutrition committee members and staff of DOH-Mimaropa. Janairo said the initial fund will be provided for the conduct of activities, procurement of logistics and supplies and contracting out this highly specialized technology to mainstream in the MSC curriculum and the general health-care service and delivery system. The MSC, in turn, will develop and establish a Center of Learning for Mimaropa region regarding raw food plant-based technologies, skills and competencies. The MSC will also provide trainings for individuals on selected areas to develop their skills on raw food plant-based preparation for general consumption and also for income generation. “We will involve all schools in the region, both public and private, with provision, selling and sustaining the presence and existence of raw food plant-based in their canteens for the consumption of Mimaropa students,” Janairo added.

Claudeth Mocon-Ciriaco

fantry Brigade, said “constructing roads contribute much to help solve the insurgency problem” by allowing more tourists to visit far-flung areas, which creates employment to local residents. “The roads that the Army built are now crisscrossing the towns of Compostela Valley, giving access to many tourist destinations,” he said during the Comval Tourism Month Awarding and Culmination Day on September 29 in Tagum City. However, he said the activities of the New People’s Army in the region still pose a problem, although they remain manageable. Neri updated provincial officials on the state of se-

curity and peace and order in the province, where Engr. Edwin Ortiz of the provincial District Engineer’s Office also gave updates on the development in the Tourism Road Infrastructure Priority Projects. Meanwhile, the provincial government held training on construction works for former guerrilla fighters and former drug dependents who surrendered to the government. They were sent to a 20-day construction work on eight duplex housing units, equivalent to 16 housing units, in Barangay Pasian, Monkayo town, under the Aftercare Program for drug surrenderees and the Comprehensive Local Integration Program for guerrilla surrenderees. The construction training falls under the province’s

Operation Plan Liwanag on community-based rehabilitation sessions. Holcim Philippines was a partner of the provincial government in the undertaking, providing 400 bags of cement to the units to be constructed at the New Berjaya GK Village. The provincial government gave P100 daily allowance to the trainees. On the other hand, the province would require the 58,000 beneficiaries of the conditional cash transfer program to undergo Family Development Sessions. The recently formed Provincial Spiritual Development and Values Restoration Council would initiate the sessions.

Metro BusinessMirror

A20 Thursday, October 12, 2017

Editor: Efleda P. Campos • www.businessmirror.com.ph

Estrada to MPD: Start security training for cops to be deployed in Asean meet

By Rosabell C. Toledo | Correspondent

anila Mayor Joseph E. Estrada has directed the Manila Police District (MPD) to finalize the security measures for next month’s Asean summit, including the retraining of policemen assigned to secure world leaders and foreign delegates. Highlighting the importance of this gathering of prominent heads of states and VIPs, including United States President Donald J. Trump, Estrada considers the Asean conference as the biggest meeting to be hosted by the Philippines and the City of Manila. “Important issues will be discussed during this meeting of world leaders, so we have to do our part in ensuring that there will be zero

incidents during the conduct of Asean activities,” Estrada pointed out. In coordination with national and regional security and lawenforcement agencies, the Manila mayor reminded the MPD to see to it that its security measures are foolproof to guarantee the safety and security of all delegates and participants, as well as facilitate the uninterrupted conduct of all Asean activities.

19,000 The number of policemen that will secure the Asean meetings in November in Manila

MPD Director, Chief Supt. Joel Coronel, in an interview, said 2,500 policemen—half of the city police’s total armed strength—will be committed to the Asean event starting on the first week of November up to the Leaders’ Meeting from November 13 to 15. T he y w i l l be pa r t of t he 19,000 -strong police-security contingent belonging to Task Group Manila Shield, which was formed to secure the Asean summit from terrorist groups and criminal rings. Coronel said each unit is undergoing refresher training on area security, billet security, route security, communication

and civil-disturbance management. “As early as November 10, 11, 12, we will be putting in place our security plans. We will have massive security deployment,” Coronel bared. Most of the Asean meetings and events, according to Coronel, will be held at the Cultural Center of the Philippines Complex, especially at the Philippine International Convention Center. VIP convoys will also regularly pass through Roxas Boulevard and other major roads in the city. World leaders and foreign delegates will also be billeted in five big hotels in the city, namely Manila Hotel, Manila Diamond Hotel, New World Manila Bay Hotel, Pan Pacific and Century Park Sheraton, he added. C orone l a s s u re d t h at t he MPD’s security contingent will be in full defensive status 24/7, even as they have not received any threat alert from other security agencies regarding any possible

terrorist activity during this period. Addressing the public, Coronel warned that security will be extra tight, especially in and around the meeting venues and billeting areas of VIPs and delegates in Manila. “People with no official business will not be allowed to roam around these places. There will be strict checkpoints, road detours or rerouting, and it will cause a lot of inconvenience,” he said. Coronel advised the public that it would be wise to avoid these places. Aside from Trump, the prime ministers of Japan, Australia and Canada will also attend the Asean meeting, as well as the foreign minister of China. All in all, there will be 22 world leaders and heads of states who are expected to start arriving in the Philippines on November 8. United Nat ions Secretar yGeneral Antonio Guterres is also expected to participate in the summit to discuss the role of the regional bloc in the global fight against terrorism.

LBO eyed vs Faeldon, 11 others in ₧6.4-B shabu-smuggling case By Joel R. San Juan

@jrsanjuan1573

HE Department of Justice (DOJ) said on Wednesday that it is ready to issue a lookout bulletin order (LBO) to prevent the possible flight of former Customs commissioner Nicanor E. Faeldon and other former officials of the Bureau of Customs (BOC) who are facing drug charges before the agency in connection with the smuggling of a P6.4 billion worth of shabu shipment seized in May. Justice Secretary Vitaliano N. Aguirre II said the LBO will be issued to make sure Faeldon and the other respondents in the criminal charges filed by the Philippine Drug Enforcement Agency (PDEA) before the DOJ would not evade criminal proceedings. “Since the preliminary investigation is already ongoing, we will issue the LBO if the cases would be filed in court,” the DOJ chief said in an interview. An LBO will not automatically prevent the subjects from leaving the country, unlike a hold departure order (HDO) issued by trial courts, but it will require them to ask permission first from the DOJ before they could be allowed to leave the country. Should the DOJ find probable cause in the string of charges against the former BOC officials and file the case in court, Aguirre said prosecutors could then ask for issuance of the HDO. Aguirre issued the statement following the earlier warning of former Customs Investigation and Intelligence Service (CIIS) chief Neil Anthony Estrella, one of the respondents in the complaint, that they would not allow themselves to be jailed over the baseless charges and would rather go into hiding. Estrella, also a former member of Magdalo Group, however, clarified on Wednesday that they would not go into hiding and vowed to face the charges even in case they would be filed in court. “We have strong faith in our justice system and our government institutions involved in the administration of justice. We are confident that we will be cleared after the DOJ sifts through the

faulty complaint filed by the PDEA. We will not go into hiding, we will face our accusers in court if need be,” Estrella said. Estrella added his statement last week came from his deep emotional anguish for his men and himself, whose only involvement in the shabu-smuggling case was to have successfully interdicted and seized all the shabu following a tip from the China customsintelligence service. The CIIS coordinated with the PDEA and the National Bureau of Investigation in the seizure of the shabu and the arrest and identification of the personalities involved in the thwarted smuggle attempt. “We don’t have any knowledge how that shipment slipped into the country or how it was placed on the green lane where there is no need for inspection. The PDEA was part of the operation, they gave us a certificate of coordination that we are operating under them. The entire shabu shipment was seized, we preserved the chain of evidence and those involved were apprehended. So, why are those who were responsible for the seizure of the shipment and apprehension of the suspects now facing charges?” Estrella asked. In a 23-page complaint filed on September 18, the PDEA sought the indictment of Faeldon, Estrella and 10 other BOC officials for conspiracy to import illegal drugs and protecting or coddling of drug traffickers under Republic Act (RA) 9165 (Comprehensive Dangerous Drugs Act). The PDEA also accused Faeldon and the other BOC officers of obstruction of justice under Presidential Decree 1829 by “harboring or concealing, or facilitating the escape” of the persons behind the shabu shipment. Faeldon and other respondents were also accused of negligence and tolerance under Article 208 of the Revised Penal Code. The PDEA also filed charges of corrupt practices of public officers under Section 3 of RA 3019 (AntiGraft and Corrupt Practices Act) for allegedly “causing any undue injury to any party, including the government, or giving any private party any unwarranted benefits, advantage or preference in the dis-

charge of his official administrative or judicial functions through manifest partiality, etvident bad faith or gross inexcusable negligence.” The other respondents in the charge sheet are former importassessment ser v ices d irector Milo Maestrecampo; intelligence officers Joel Pinawin and Oliver Valiente; Manila International Container Port district collector lawyer Vincent Phillip Maronilla; Faeldon’s fianćee, lawyer Jeline Maree Magsuci; and BOC employees Alexandra Ventura, R a ndolph C aba n s a g , Den n i s Maniego, Dennis Cabildo and John Edillor.

Fresnedi cited for education initiatives By Roderick Abad

Contributor |

@rodrik_28

UNTINLUPA Mayor Jaime Fresnedi on Wednesday received the Model Local Chief Executive Award for his exemplary development projects in tertiary education. The Association of Local Colleges and Universities Commission on Accreditation (Alcucoa) and Commission on Higher Education conferred the accolade to the local chief executive during the 10th Alcucoa Annual Conference held at Heritage Hotel Manila in Pasay City. Councilor Stephanie Teves received the award on behalf of the city mayor. In an e-mail interview, Fresnedi told the BusinessMirror that such recognition serves as a validation of his leadership’s thrust to champion the development of Filipino youths as future leaders of the country. “I am honored to receive the citation from Alcucoa as we continue to innovate local tertiary education for Muntinlupeños. This award is not just an accolade of the city government but a feat of Muntinlupa students,” he said. “The recent award from Alcucoa serves not just a testament that we are heading toward the right direction in improving local education but also a challenge for us to ensure effective and efficient delivery of quality education for all,” he added. Elated by this recognition, the chief executive of Muntinlupa bared that the local government is committed to provide his constituents with more programs designed to promote academic excellence. This is by way of continuously investing in education through expanded scholarship program, which covers basic to tertiary education, including graduate studies and technology/vocational tracks. He added that they “encourage young learners to aspire for excellence by giving incentives to Muntinlupeño achievers”. In infrastructure projects, the city government has also been partnering with the Office of Congressman Ruffy Biazon and other agencies for construction of additional classrooms across the city.

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BMReports BusinessMirror

PHL has highest incidence of part-time work in Asean Continued from A1

engaged in industries that follow certain economic cycles, such as retail, agriculture, construction and tourism. “Basic protection is necessary for workers’ security and to uphold effective levels of established rights. Maintaining the balance between the need for labor flexibility and workers’ rights protection is a challenging issue, especially during the recent period of macroeconomic uncertainty,” the report read. Based on 2015 data provided by the Philippine Statistics Authority (PSA), there are 900,914 establishments in the Philippines. Of these, 99.5 percent (896,839) are micro, small and medium enterprises (MSMEs) and the remaining 0.5 percent (4,075) are large enterprises. MSMEs generated a total of 4,784,870 jobs in 2015 versus 2,981,819 for the large enterprises. This indicates that MSMEs contributed almost 61.6 percent of the total jobs generated by all types of business establishments that year. Of these, 29.4 percent were generated by micro enterprises, 25.3

percent by small enterprises and 6.8 percent by medium enterprises. By industry sector, MSMEs in the wholesale and retail trade; repair of motor vehicles and motorcycles generated the most number of jobs. Duterte, during the campaign period, rallied workers to his side when vowed to end illegal contractualization, or commonly known as endo. Duterte, months after assuming the presidency, asked the labor sector to submit a draft executive order (EO) to implement his promise. Up to now, however, the EO still gathering dust in the Palace, making labor groups lose hope that it would still be implemented. The ILO data showed that the percentage of total employees that work part-time in Myanmar, Vietnam, Indonesia and Malaysia was lower at 5.4 percent, 5.9 percent, 8.6 percent and 1.6 percent, respectively. Data showed, however, that compared to Asean countries, the percentage of total employees who go overtime, or work over 48 hours a week, is lowest in the Philippines at 18.6 percent.In Asean countries, like Myanmar, Vietnam,

Indonesia and Malaysia, the incidence is higher at 55.3 percent, 34.9 percent, 25.5 percent and 22 percent, respectively. The ILO said allowing workers to render less than 30 man-hours a week or more than 48 hours a week is a business strategy termed as “numerical flexibility”. “Numerical flexibility refers to a process through which firms adjust the volume of labor in terms of the number of workers or hours worked,” the ILO said in its report, titled “World Employment and Social Outlook 2017”. “This type of flexibility is particularly relevant for firms with an urgent requirement to reduce labor costs [arising from a need to engage in price competition] or other shortterm oriented strategies driven by external factors,” it added. But the ILO said relegating workers to part-time work is more common among developed economies compared to emerging economies like the Philippines. Data showed the mean share of employees working less than 30 hours per week is 21 percent in developed economies, compared to 7.8 percent in emerging economies.

ILO said firms in emerging economies are more likely to use overtime arrangements than firms in developed economies. The report stated that the mean share of employees working more than 48 hours per week is 18.3 percent in emerging economies, compared to 12.4 percent in developed economies. The ILO also said job dynamics among young firms in terms of full-time permanent employment have also weakened since the global financial crisis. The United Nations’s only tripartite agency said full-time permanent employment growth rate among young firms was on average 6.9 percentage points higher than for established firms during the precrisis period. But this declined to 5.5 percentage points in the postcrisis period. “This change reflects developments in the overall business environment, whereby new and younger firms have been shedding jobs at a much faster pace than before,” the ILO said. The report also noted that innovation is an “important source” of competitiveness and job creation

for enterprises. Innovative firms in general tend to be more productive, create more jobs, employ more educated workers and offer more training, as well as hire more female workers. The ILO said, however, innovation has led to more intensive use of temporary workers, particularly in firms with product and process innovation, and to higher concentration of women in temporary employment. For example, ILO said firms implementing product and process innovation tend to employ more temporary workers than non-innovators by over 75 percent. Trade and engagement in global supply chains are also important stimuli for job creation and productivity growth. As trade has stagnated in recent years, so too has trade-related employment. In 2016 37.3 percent of workers were employed in private formal exporting firms. This share is lower than the precrisis share of 38.6 percent. The report noted that trading firms have higher productivity and pay higher wages than those firms not engaged in trade.

Thursday, October 12, 2017 A21

Growth. . .

Continued from A1

In an Asian Development Blog, Park said the recent slowing down of economic growth in emerging markets have given rise to the “middle-income trap” debate. The middle-income trap is the term used to describe the slow transition of middle-income countries to high-income status. The World Bank said a middleincome country’s per-capita income ranges from a low of $1,006 and a high of $12,235. The wide range is reflected in the World Bank’s separation of middle-income countries as lower middle income or upper-middle income. A low middle-income country’s per-capita income is between $1,006 and $3,955, while upper-middle income is between $3,956 and $12,235. In August the National Economic and Development Authority said the Philippines could hit its target of becoming an upper middle-income country as early as next year. In a presentation before the Philippines-Singapore Business Council Conference, Socioeconomic Planning Secretary Ernesto M. Pernia said the country is on track to meet its economic targets. This can pave the way for increasing the country’s per-capita income to around $5,000 a year, from $3,580 annually as of 2016 by end of 2018, four years ahead of 2022, the original target. Increasing per-capita income will require the Philippine economy to grow by 50 percent during the plan period. Cai U. Ordinario

A22 Thursday, October 12, 2017 • Editor: Angel R. Calso

Opinion

BusinessMirror

editorial

Embracing the challenge

S we celebrate our 12th anniversary, we are happy to inform our readers, advertisers and supporters in the corporate world, academe and government that the BusinessMirror continues to lead the industry in offering informed perspectives, a broader look at issues and compelling stories. We consistently try to publish content that readers can’t find anywhere else. And, in the era of “fake news”, we will strengthen our advocacy for quality, integrity and distinguished journalism. In this anniversary issue, for example, we present a panorama of views from different sectors. John Mangun, our stock-market guru, predicts that the stock market will continue its upside trend for the next six to 12 months. His words: “I can say with high confidence that money is not yet ready to come out of the Philippine stock market and, therefore, price will continue to go higher. We are in the midst of a raging-bull market. There is no current investment that offers the profitable opportunities combined with instant liquidity as local stocks. That will eventually change.” Our correspondent in Davao said those he interviewed are confident that President Duterte will finish his term, and he will bring lasting peace in Mindanao. The consensus is that business and investments would be behind the President if the proper environment has been established. However, they offer a word of caution: “I don’t think he would still enjoy the same wide majority support from the Bangsamoro if they see the lack of direction of the Bangsamoro’s wish for self-governance.” They added even the promise of federalism is not fully understood by the Moro residents. Therefore, you can’t have their support if they think that federalism will not include their own aspirations. Our Congress reporters said lawmakers are currently swamped with urgent tasks. Aside from scrutinizing the 2018 national budget bill, lawmakers are in the middle of searching for ways to meet the massive requirements of rebuilding the terrorist-ravaged Marawi City and crafting the overall development framework required to support the stalled Bangsamoro peace process. Now come the impeachment proceedings against Chief Justice Maria Lourdes A. Sereno. Still, lawmakers have to deliberate and approve pending tax-reform measures and other urgent bills. Our anniversary issue includes positive developments on our defense partnership with the United States. The President said he will not abrogate our defense treaty with the US, a long-time ally and major trade partner. Read also about the Department of Energy, which is still in the middle of reforming the power industry, moving to address a stumbling block in the implementation of a landmark policy meant to give consumers the option to choose their own supplier of electricity. Our story on fake news reveals that, nearly a year after Facebook and Google launched offensives against fake news, they’re still inadvertently promoting it—often at the worst possible times. That’s because online services designed to engross users aren’t so easily retooled to promote greater accuracy. Online trolls, pranksters and malicious netizens are scheming to evade new controls as they’re rolled out. And, thanks to political polarization, the very notion of what constitutes a “credible” source of news is now a point of contention. In the 21st century, we know it’s far from easy to embrace the challenge to make the BusinessMirror a reputable publication, but we will continue serving the same quality offering as we have done in the last 12 years. To all our readers and advertisers, thank your for your undying support.

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The ‘guru’ reality John Mangun

OUTSIDE THE BOX

here are probably two things that a person should strive for in life. The first is becoming good, if not a genuine expert, at a particular skill or understanding of a topic. The second is to grow and become old. If you can do both of these, then you might have gained wisdom, knowledge combined with experience. Often, though, there is a problem gaining true wisdom. The customer goes to the shoemaker to have a pair of shoes made. Upon delivery, the customer is completely dissatisfied with the quality of the workmanship. The shoemaker answers that he has been making shoes for 30 years. The customer responds that it would appear that he has been making the same shoe for 30 years and has not learned anything new or improved his skills during that time. If you look at the contemporary icons of the stock market, you will note names like Marc Faber, Jack Bogle, Jim Rogers and Bill Gross.

Warren Buffett is not a stock-market player. He buys companies through the stock market that just happen to be listed. Note that Faber is 71, Bogle is 88, Gross has lived 73 years and Rogers will turn 75 in a week. Of course, I completely respect the ages of these men since I would have to call them kuya, not lolo. However, their attitude, concerns and perceptions of the market—while completely valid —are based on 50 years of experience, with the last 10 years being a lower priority. Marc Faber said this about the United States stock market: “This

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hurt by the CXO reports is, “Yeah, but look how rich I am!” That is a totally valid response because nobody makes money by predicting the market, but only by trading. However, nobody tells that to new investors. Every stock-market forecast should end with—“Of course, this is all nonsense that has almost nothing to do with the real world, but I have to say something for the press and media”. You are then faced with two problems following the gurus. Their analysis may be based on 40 years of experience in a world that no longer exists today. Stock- price bubbles do not pop in an environment where banks can borrow your money— through your deposit—at 2-percent or 3-percent interest to buy shares. Further, even the experts know that their general stock-market forecasts will mean absolutely nothing by tomorrow. The market is going to do what it wants to do, and an investor must react properly. It is not a “stock market”; it is a “market of stocks”. 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.

Updating clean air act and waste-management system

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will be worse since 1987” about the coming crash that is “only months away”. “Investor confidence in the US Federal Reserve is falling”. However, he said this during an interview with a British newspaper on April 14, 2014. The Dow Jones Industrial Average was at 16,450. The index is now 6,300 points, or 38 percent higher at 22,800. Was Faber’s analysis correct? Absolutely, in that he voiced valid concerns about the “bubble” in tech stock prices, a lack of confidence in the Federal Reserve and slow global economic growth. But his conclusion was not accurate. CXO Advisory Group is a USbased research service that assesses the accuracy of investment-services companies. In analyzing 6,582 forecasts for the US stock market offered publicly by 68 experts from 1998 through 2012, the average accuracy was 47 percent, with the higher being 68 percent. Faber comes in at 44 percent. Others like Elliot Wave guru Robert Prechter have 21-percent accuracy. Even S&P Outlook, with its army of stock-market experts, can only make accurate stock-market forecasts 48 percent of the time. The response from most of the gurus that have had their feelings

Cecilio T. Arillo

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HE House Committee on Ecology chaired by Rep. Estrellita Suansing of the First District of Nueva Ecija has approved the creation of a technical working group (TWG) out to amend the Clean Air Act of 1999 and the Solid Waste Management Act of 2000, which were found to be ineffective.

The TWG, to be headed by Rep. Carlos Cojuangco of the First District of Tarlac, will tackle a proposal by Rep. Carlito Marquez of the Lone District of Aklan under House Bill (HB) 2286 designed to repeal Section 20 of the Clean Air Act and some other provisions of the Solid Waste Management Act. In particular, the measure sought to address the urgent solid-waste issues in the country that lead to flooding, erosion, landslides, as well as other dangers on landfills and dumpsites affecting people living near them. The bill also intended to clarify the claim that waste incineration is harmful to the environment, and seeks to set up waste-to-energy (WTE) facilities in the country.

Marquez cited the need for a new definition to incineration beyond “simple burning”. Incineration, under the bill, is characterized as a “solid-waste treatment process employing high-temperature combustion equipment of not less than 800 degrees Celsius, for the conversion of solid-waste energy for heat and electricity production”. At a committee meeting, resource speakers from non-governmental organizations voiced their concern over emission of toxic or potentially toxic substances, such as dioxins, and the sustainability of waste incineration. A representative of the Healthcare Without Harm has expressed concern that incineration of medical waste increases operational

costs of medical facilities and that emissions may pose a threat to public health. Another from the Eco-waste Coalition cautioned that HB 2286 runs against the Stockholm Convention on Persistent Organic Pollutants, while Mother Earth Foundation championed zero-waste models as an alternative to managing waste. Citing figures from Japan and South Korea, Marquez said countries that employ WTE incineration have reported dioxin levels below the international standard. He argued that the average lifespan in these countries have been unaffected by WTE programs, adding that the measure does not undercut zero-waste models. “It is in my belief that if you ban incineration, you are also banning the new, modern technology of converting waste into energy,” Marquez said. Government agencies that expressed their support for the bill include the Department of Environment and Natural Resources, National Solid Waste Management, Quezon City Environmental Protection and Waste Management Department and Department of Science and Technology. The Climate Change Commission, however, decided not to comment on the bill until a study on emissions has been done.

Industr y associations were divided in their support for the bill. The Federation of Philippine Industries and the Pollution Control Association of the Philippines Inc. endorsed the proposal, though the latter believes that the public needs further education on how to efficiently utilize energy produced by WTE programs. Group Novotech Automation Corporation asserted that it does not need waste incineration, as it has nonburn technologies to address waste management. The Canadian Chamber of Commerce of the Philippines said it has no official position on the bill, though it noted that WTE has continued to grow steadily in Canada. Some observers who attended the meeting claimed that the existing Clean Air Act of 1999 and the Solid Waste Management Act of 2000 are obsolete laws requiring updating to answer the present realities in the country’s ecological needs. The air pollution alone in the metropolis has turned from bad to worse, and this is compounded not only by a lack of vigorous implementation of the law but by modern technological equipment to reduce pollution, the observers added. To reach the writer, e-mail cecilio.arillo@ gmail.com.

Opinion

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Your move, Mr. President! The misfit guest Msgr. Sabino A. Vengco Jr.

Val A. Villanueva

Businesswise Politics must uplift, not debase; bring out the best, not the worst; bridge gaps, not create distance; heal, not harm. Words create worlds. —Florin Hilbay (Solicitor General, 2014-2016)

hese words of wisdom come at the time when the country struggles to wake up from a bad dream in which blood and tears soak the streets.

President Duterte promised change and the 16 million people—mostly coming from the ranks of overseas Filipino workers, the middle class and those in the business-process outsourcing industry (BPO)—who elected him embraced his mantra to cleanse the country of illegal drugs, solve the traffic problem in three months, put an end to the endo system in business, stamp out corruption and accelerate economic development. More than a year under his term, the country is still mired in the same problems he says he’ll solve with dispatch. What we are now witnessing is the almost daily killings of suspected drug users and the seeming leniency to those who peddle these banned substances. What’s worrisome is that these problems have gotten worse than before. The world noticed and Duterte was advised to recalibrate his governance methods. But he won’t listen, because as he often says with conviction: “I listen to no one.” His governance is best defined by divisiveness. He’s overly sensitive to dissent and anyone who crosses his path will be dealt with trump up charges. Sen. Leila M. de Lima was put behind bars, Supreme Court Justice Maria Lourdes A. Sereno and Ombudsman Conchita Carpio-Morales are now facing impeachment before Congress, which composition is beholden to the President. But Duterte’s abrasive and uncouth actions and his brutal war on drugs are now slowly turning off the very people who elected him to office. The mercurial leader’s approval rating has dropped to its lowest level in his 16 months in office. His net satisfaction rating, likewise, fell 18 points to 48, according to a nationwide Social Weather Stations (SWS) survey in late-September. His net trust rating fell from 75 in June to only 60. He lost badly in poorer areas, long seen as his support base. As his approval rating nosedive, the Philippine economy goes down with it. The Bangko Sentral ng Pilipinas (BSP) records on the latest foreign direct investments (FDI) showed a momentous slowing down in new investments. The entry of new investments, not money ploughed into existing businesses, went down by 90.3 percent in the first six months of 2017—$141 million—compared to the same period last year—$1.448 billion. On Tuesday latest Central Bank record showed that the net inflow of job-creating FDI in the first seven months continued to fall behind year-ago levels, falling 16.5 percent to $3.9 billion. In July alone, FDIs declined by a faster 37.9 percent to $307 million, from $493 million in the same month last year, reversing the 182.7-percent year-on-year jump posted in June. To make matters worse, an international human-rights group and a mission of international parliamentarians and civil-society leaders have cautioned that the Philippines is likely to be sanctioned from the United Nations and European Union (EU) if it fails to halt the killing of suspects and permit an independent investigation of the President’s violent war on drugs. It is noteworthy that many EU countries have bilateral relations with us and Duterte’s policy is risking the country’s good relations with governments around the world. Also, parliamentarians affiliated the Progressive Alliance and the Party of European Socialists warned that the country may lose a preferential trade deal, which allows 6,200 of our products to enter

the European Union duty-free. The Generalized System of Preference Plus (GSP+) deal is under review and an EU report is expected in January. The GSP+ refers to the complete exclusion of tariffs on two-thirds of all product categories. The EU’s GSP affords developing countries, such as the Philippines, to pay less or no duties at all on their exports to the EU, giving these countries vibrant access to EU markets. Although the Department of Trade and Industry (DTI) has issued an assurance that Philippine exports can endure the aftermath of such a possibility, its long-term negative effects should not be ruled out. The danger is in the snowballing of sanctions, which will affect EU’s direct investments in the Philippines. This is not farfetched, considering how these countries strictly adhere to the rule of law. I cannot see any leeway for us to avoid such sanctions. For one, the President remains undeterred, and his bullheadedness is legendary. Also, his allies have closed ranks to protect at whatever cost Duterte and his governance. Combative against critics of the Duterte anti-drugs war, they often bring the fight straight to the gutter. What’s more troubling is those who have current businesses in the Philippines are likely to pull out, including large BPO companies that employ thousands of call-center agents. The migration is not limited to American and European companies. As I have written in my previous column, the Korean Chamber of Commerce of the Philippines had announced that several of its membercompanies involved in manufacturing are moving to Vietnam, naming peace and order issues, rising costs and difficulty in doing business in the Philippines as the reasons. The war on drugs has proved to be a bane and that wanton killings and disregard for the rule of law will not even exculpate the next generation from drug dependence and its hazards. It will fence it in to a life of poverty since the drug war will only lead the country to starvation by losing the investments it severely needs to push the economy onward. The Duterte administration is banking on its “Build, Build, Build” program, which it trumpets to be the “golden age of infrastructure”. But its funding remains suspect with even Socioeconomic Planning Secretary Ernesto M. Pernia declaring that it will only be the “bronze age” at best. The end of the year is just months away and from where I sit, projects that are to break ground this year, such as the 100-kilometer ClarkSubic railway; the 93-km TutubanClark (via Malolos) railway; Phase 1 of the Mindanao railway; the Tutuban-Bicol line (via Calamba); and the Light Rail Transit-Metro Rail Transit Common Station in North Edsa, a monorail to connect Bonifacio Global City and the Ninoy Aquino International Airport and a Bus Rapid Transit to traverse Edsa will not make it on time. Records show that the Department of Transportation only spent 18 percent of its budget so far, in effect accomplishing less than 20 percent of its planned programs. Where are we headed? The Duterte administration has four more years to effect meaningful changes. But I personally don’t see a change in the firebrand President’s flawed policies. For comments and suggestions, e-mail me at mvala.v@gmail.com.

Alálaong Bagá

he disobedient son, then the greedy murderous caretakers and now the misfit guest (Matthew 22:1-14), all illustrate to us the fundamental rule that we shall be judged by our Lord on the basis of our deeds. Our life and practice must harmonize with our faith.

The wedding guests The example of the wedding feast, so common to every community of any time and clime, provided Jesus with a handy experience with which to visualize certain vital truths pertaining to the kingdom of heaven. The wedding banquet serves in the Old Testament as portraying the final salvation. The news of God’s reign is brought to the chosen people. Some who heard it welcomed it, but some others rejected it and so excluded themselves from God’s banquet. This simple and forthright original signification became embroidered later. The evangelist in his final redaction already had a full-blown allegorized version of the parable for his Christian community. The

groom, the king’s son, is our Lord Jesus Christ. Special people, the Jews, have been invited to the wedding celebration. Similar to the parable of the murderous caretakers, the groups of servants sent to insure their coming were the prophets first, then the Christian disciples and missionaries. The invited guests’ refusal and their preferred concerns, plus their maltreatment of the servants, dramatize the ferocious rejection of the Christian message on the part of the Jews. The burning of the city of the unworthy invited guests refers to the destruction of Jerusalem by the Romans in 70 AD.

The expanded list

Again similar to the parable of

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the murderous tenants where the vineyard would be entrusted to more worthy caretakers, here the wedding’s banquet hall would be filled with added guests. The sending of the servants into the main roads “to invite to the feast whomever” they encounter pictures the expansion of the Christian mission to include the gentiles. God’s design for the fulfillment of humankind cannot be thwarted by the intransigence of anyone. The joy of the wedding feast is there for the taking. Some may blindly refuse to have any of it, but the human need for it is undeniable out there in the streets where the good and the bad mingle in search of happiness. The invitation from above is universal; some may have received earlier notice than others, but no one is off-hand excluded and the invitation will eventually reach the others, too. To cover his own Christian community with the two-edged message of the parable, Matthew adds a postscript to the original with what could have at first circulated independently in the form of a moralizing second parable. Among Christians are likewise individuals caught up in worldly interests practically ignoring the call of the Gospel. Still, others, in some power-play of their own, both resist

‘Payable in the context of withholding’ Atty. Ronald S. Cubero

Tax Law for Business

N many countries, one of the most commonly used structural devices to prevent noncompliance of tax obligation is through the withholding of tax at source. This device requires payors of income to withhold tax from payments, thus depriving the payee of the opportunity not to pay tax. Through withholding, the government enforces payment of the income tax not directly from the person who receives the income and is, therefore, liable for it, but indirectly, by exacting its payment, before the income reaches his hands, from the person who is to pay it to him. (Soos, Piroska. SelfEmployed Evasion and Tax Withholding. 1991)

Historically, England introduced the principle of “taxation at source” when it reenacted the income tax in 1803 to prevent the gross frauds and evasions that had characterized the first income tax. Withholding was also an important feature of the Civil War income tax in the United States, introduced in 1862 to raise revenue for the Civil War. By the early 1940s, Canada, Australia and the United Kingdom had instituted withholding of tax on wages (Supra). In the modern context, however, withholding is widely used to collect the income tax. Withholding is favored as a collection scheme because it provides a convenient payment method to taxpayers and enables the government to collect

small amounts of tax efficiently. Withholding avoids the problem of inability to pay by collecting tax before taxpayers spend their income. Withholding also speeds up tax collection, insures a steady flow of funds to the treasury and increases total tax revenue because of earlier receipt of tax payments (Supra). In the domestic context, the Philippines introduced the expanded withholding tax system in 1978. Under this system, withholding applies to various types of income, including business income, obtained by resident individuals, domestic corporations and foreign corporations engaged in business in the Philippines. Broad as it is, the expanded withholding tax system applies only to persons and payments specifically

In the modern context, withholding is widely used to collect the income tax. Withholding is favored as a collection scheme because it provides a convenient payment method to taxpayers and enables the government to collect small amounts of tax efficiently. Withholding avoids the problem of inability to pay by collecting tax before taxpayers spend their income. mentioned in the regulations. Presently, revenue regulation (RR) 2-98 is the mother of all regulations under this system. It enumerated the scope of withholding, selection of withholding agents and the administration and enforcement. A common issue under this system pertains to time of withholding. Taxpayers and the Philippine Bureau of Internal Revenue (BIR) often argue as to when exactly the withholding of tax should be made. The regulation is explicit that the obligation of the payor to deduct and withhold tax arises at the time an income is paid or payable, whichever comes first. The term “payable” refers to the date the obligation becomes due, demandable or legally enforceable. The BIR insists in the latest Supreme Court (SC) Case (GR 201665) on this issue that the withholding commences at the date of execution of the contract and not from the date

the message and even try to throw a wrench into the proclamation of the Good News. But the case of one who carelessly appears at the wedding banquet without the appropriate attire points to those believers who do not take seriously the imperatives of a true Christian life while outwardly claiming in it. Alálaong bagá, the white festal garment for a wedding banquet may as well be in reference to the white baptismal dress, the outward sign of Christian dignity and identity. “Bring that dignity unstained into the everlasting life of heaven,” is said to the newly baptized. Not living up to that commitment produces nominal Christians who can be found in great number in every age. The condemnation of the misfit or incongruous guest is a certainty before the judgment throne of God. The same confrontation with the truth obtains in our approach to the banquet of the Eucharist. How many Catholics ostensibly sit at the banquet of the Lord without the festal garment of fidelity to the Gospel and instead mask a life of lies and violence? Join me in meditating on the Word of God every Sunday, from 5 to 6 a.m. on DWIZ 882, or by audio streaming on www.dwiz882.com.

of the first payment. To the contrary, however, the SC rejected the BIR’s position and held that based on the loan agreement, the liability for interest payment became due and demandable on the date of the first payment. The SC rejected also the BIR’s notion for the retroactive application of RR 12-01, which provides additional condition that the withholding of final tax commences “at the time the income payment is accrued or recorded as an expense or asset.” According to the SC, to allow a party to change his theory on appeal would be unfair to the other party and offensive to rules of fair play, justice and due process. All told, the SC decision interpreting the term “payable” in the context of withholding clearly manifests fairness in taxation that requires equality in the treatment of taxpayers. Put differently, taxpayers should be required to pay with the same frequency and should have the same choices about complying with their tax duty. The author is a senior associate of Du-Baladad and Associates Law Offices (BDB Law), a memberfirm of WTS Global. The article is for general information only and is not intended, nor should be construed as a substitute for tax, legal or financial advice on any specific matter. Applicability of this article to any actual or particular tax or legal issue should be supported, therefore, by a professional study or advice. If you have any comments or questions concerning the article, you may e-mail the author at ronald.cubero@ bdblaw.com.ph or call 403-2001 local 350.

Enhancing children’s social and emotional development

By Abigal T. Paguigan

he social and emotional development of children will determine their social and emotional health as adults. Parents and teachers should be aware that they play important roles in helping children understand and manage their personal feelings. In like manner, parents and teachers can also be effective models for children to emulate in their interaction with others. Parents need keen observation in raising their children, especially as their kids go through different phases of social and emotional development. It can be observed, for example, that 3- to 5-year old kids become less selfish than when they were just 2 years of age. Five-year-old kids also become less dependent on their parents, a sign that their own sense of identity is becoming stronger and more secure. At this age, children

are more aware of, and sensitive to, the feelings and actions of others. They will gradually stop competing with playmates, and will learn to cooperate when playing with friends. They will be capable of taking turns in games and sharing toys in small groups, even if they are not used to sharing their toys when they were younger. This period of childhood is the time when each child begins to learn skills needed to become a self-sufficient person. Each child has his or her own personality that determines every step of learning and development. Physically, this is also a time of tremendous growth. Older kids in middle school and high school have more complex social skills to learn, thanks to growing peer pressure and that awkward period called adolescence. It’s a time when they’re becoming more independent but also might start

to care a bit too much about what others think. To enhance your child’s social development, Lawrence Balter, a child psychologist and parenting expert, suggests the four strategies below. n Te a c h e m p a t h y : R u n through different scenarios by asking your child how other people might feel when certain things happen, and substitute different situations each time. n Explain personal space: Tell your child that it’s important for everyone to have some personal space to feel comfortable, and practice acceptable ways to interact with someone during playtime. n Practice social overtures: Teach kids the proper way to start a conversation, get someone’s attention, or join a group of kids who are already playing together. These are all situations that can be discussed and brainstormed at the dinner table,

or in the car on the way to school or activities. n Go over taking turns: Sit with your child for at least an hour a day and play with him/her to explain what it means to wait, take turns and share. Experts suggest that parents should encourage their kids to play with other children, whether it is on the playground at school, in a park, or on a sports team. Inviting peers over for play dates is also a good idea. Becoming model parents by doing what we teach is the best guide for them as they grow. What is important, however, is that kids are able to form meaningful bonds with others, can empathize and interact with others appropriately, and have the skills to adapt in uncomfortable situations. The author is Teacher 3 in Aguiguican Elementary School in Gattaran, Cagayan.

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Thursday, October 12, 2017 A24

HAUTE PROPERTY STYLISH AND LUXURIOUS DESIGNER BRANDS YOU CAN ACTUALLY LIVE IN AT CENTURY CITY MAKATI

The Business Center at The Milano Residences features iconic prints and bold colors of the Italian fashion house Versace.

The Grand Lobby of the Trump Tower

By Ryan Diño

IFTH Avenue in New York. Avenue des Champs Elysees in Paris. Causeway Bay in Hong Kong. These are just some of the most expensive shopping streets in the world where the most luxurious designer brands have set up shop to offer their finest wares. These exclusive shopping streets attest to the country’s purchasing power and economic viability, offering a world class retail experience for its residents and tourists. In recent years, the Philippines has welcomed a steady surge of international luxury brands as the economy continues to improve. And while the Philippines does not yet have a world-famous shopping destination to speak of, one particular destination in Makati takes the experience of world-class luxury to quite literally new heights. Century City is the epicenter of world-class, branded luxury living in the Philippines. Every nook and cranny of this 3.4-hectare mixed residential and commercial development is packed with some of the most exquisite architecture and interior design from all over the world – an international design mecca right here in the Philippines. With 11 international brand collaborations to date, Century Properties is the real estate developer behind some of the Philippines’ most exciting and remarkable properties, such as Azure Urban Resort Residences (featuring the country’s first man-made beach and beach club by Paris Hilton), Acqua Livingstone interior design by MISSONIHOME, and Acqua Iguazu yoo inspired by Starck, to name a few. When it comes to luxury, it’s all about the details. Here’s a peek into some of the finest details in Century City’s most iconic residential developments to date.

The Milano Residences

Interior Design by Versace Home Versace on the floor, on the ceiling, and on the walls. The iconic prints and bold colors of Italian fashion house Versace entice you as you enter the lobby of The Milano Residences. Elaborate tiling, ornate

sofas, and elegant chandeliers all add to the signature Versace touch. True to the design aesthetic of the Italian high fashion label, the lobby exudes confidence, power and elegance. But the lobby only offers a preview to the rest of the 52-storey building, which also features a Versace Home-designed pool and juice bar, gym and fitness center, library, conference room, residents lounge, among other stylish yet functional amenities. As the first residential tower designed by Versace Home in Southeast Asia, The Milano Residences is the address of choice for fashionable Makati.

Trump Tower Philippines

Featuring the best designer furniture Nothing says ‘ultimate lap of luxury’ than lounging in a leather Hermes couch. Let time trickle by in the very cozy and well-appointed library on the second floor with a well- curated selection of books and magazines. On the same floor, other amenities such as function room, conference room, and private movie room are all within easy access and also furnished with Hermes. Aside from the Parisian luxury label, the best of European design is further celebrated at the lobby with the concierge desk made from England Onyx marble, golden beige marble floors from Turkey, chandeliers by Lasvit from the Czech Republic and elegant Italian furniture by Minotti. At the upper floors, residents have their own gym, indoor lap pool, Jacuzzi, spa, steam room and sauna, salon and nail spa, taking high rise living to even grander heights.

The Medusa hologram and elaborate tiling at the Juice Bar of The Milano Residences are true to Versace’s signature touch.

Century Spire

Interior design by Armani/Casa With clean lines and rich, sophisticated textures, Armani/Casa will take the bored out of the boardroom as it brings its sleek and classic aesthetic to Century Spire, a mixed office and residential skyscraper soon to rise in Century City. From the lobby, auditorium with pre-function room, fine dining restaurant, food hall, pool, bar and library, all the amenities and

common areas within the office/ residential building will evoke the look and feel of the Armani brand. Residents also have the premium option to have their unit styled in true Armani fashion. Everything from the textiles, bathroom and kitchen fixtures, furniture, and decor will all be distinctly Armani as the Italian fashion and lifestyle powerhouse collaborated with topof-the-line home furnishing companies Dada Designer Kitchens,

Roca Bathrooms, and Rubelli Textiles Venice. Beyond the stately interiors, the building’s façade is equally bold and visually striking. With architecture by Daniel Libeskind, the same architect behind New York’s Ground Zero reconstruction and Berlin’s Jewish Museum, Century Spire’s iconic structure is defined by its crown of three interlocking segments shaped like a blooming flower. And to complete the experi-

ence, each designer building also comes with exclusive personalized services such as concierge service, valet parking, dry cleaning and laundry service, storage facilities, among others. Live a cut above the rest. Experience ultimate style and luxury by living in a world-class designer suite at Century City Makati. For information visit http://www. century-properties.com/ or call Century Properties at +63917 555 5274.

The best of furniture design is further celebrated in other amenities of Trump Tower such as its elegant and well-curated library and meeting room