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Thursday, October 19, 2017 Vol. 13 No. 8
Balisacan bucks high rice tariffs in lieu of QR By Cai U. Ordinario
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@cuo_bm
hile the removal of the quantitative restriction (QR) on rice will promote greater competition in the country’s rice sector, Philippine Competition Commission (PCC) Chairman and former Socioeconomic Planning Secretary Arsenio M. Balisacan said replacing it with a high tariff rate could make food items more expensive.
The projected increase in rice prices if Congress approves a 400-percent bound tariff rate on the staple In an interview with the BusinessMirror on Wednesday, Balisacan said removing the QR on rice and converting this into tariffs is “a step toward the right direction,” as it would allow more players to compete in the rice sector. He added the creation of a fund that will help address farmers’s needs will also not be anticompetition if it will be channeled to the construction of farm infrastructure, Continued on A2
By Lorenz S. Marasigan @lorenzmarasigan
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How do you plan to deliver that value? In plotting your position in the market, you also need to define your operating model: the set of choices and practices defining how
MPROVING the state of the Internet in the Philippines—described as slow, expensive and congested—will require an investment of roughly $150 million, or P7.7 billion, from the government over the course of President Durterte’s term, quite a costly Band-Aid solution, but is seen to also help reduce costs in the long run. Eliseo M. Rio Jr., undersecretary at the Department of Information and Communications Technology (DICT), likened the quality of the Internet in the Philippines to the traffic congestion along major streets in Metro Manila, noting that this is caused by heavy mobile-data usage despite the limited capacities of networks. “The Philippine Internet is slow, expensive and congested,” he said. “It is because most of the Internet traffic is processed through mobile data, whose limited towers cannot accommodate high volumes of content.” In fact, Rio said, nine of 10 Filipinos use mobile data for their Internet-related needs, hence, causing congestion in network facilities. The Philippines has a shortfall of about 50,000 cell sites, as, according to the government official, the country needs roughly 67,000 cell sites to provide better quality Internet. To decongest the limited number of cell sites and towers for mobile data across the Philippines, Rio said more and more people should subscribe to
See “Entrepreneurs,” A12
Continued on A2
NORTHERN EXPOSURE Department of Tourism (DOT) Assistant Secretary Frederick M. Alegre (right) leads the 1st North Philippines Tourism Forum and Career Fair at the CAP Convention Center, Camp John Hay, Baguio City, with (from left) DOT Cordillera Administrative Region Regional Director Venus Tan, Baguio Rep. Mark Go, Hotel and Restaurant Association of Baguio President Anthony de Leon and other DOT officials from Regions 1, 2 and 3. MAU VICTA
A short guide to strategy for entrepreneurs
I
t sometimes appears that the traditional rules of business are being upended by today’s trends in technology, from big data and artificial intelligence to machine learning and crowdsourcing. These trends have transformed the world of business immeasurably. But they have not repealed the timeless rules of strategy. Yet, for too many entrepreneurs, strategy often seems to be an afterthought. My academic research shows that it is only when timeless tenets are applied that entrepreneurs can
sensibly plot strategy. What I offer here are the most basic questions that every successful business must answer. Entrepreneurs who design their business around these questions will have a leg up when it comes to crafting strategy. What value are you intending to create, and for whom? Customers buy products and services because they perceive value in them. The first step toward a successful strategy is to clarify how you plan to create value, and for whom. That means defining who your customers are. Your
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customers may be defined by any number of attributes—age, geography, interests or any number of other things. The next step is to define your value proposition. What are you offering? The best imaginable position is to offer a product that is highly valued and demanded by customers.
Rene E. Ofreneo
laborem exercens
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he present world capitalist order is characterized by deepening inequality amid economic growth, as well as increasing labor precarity amid fantastic bonuses given to the world’s CEOs. This, in summary, is the criticism of the trade unions and civil-society organizations (CSOs) worldwide against what they denounce as neo-liberal economic globalization. Oxfam International asserts that half of the world’s wealth is owned by just 1 percent of the world’s population, and that eight people have as much wealth as the bottom 50 percent of humanity. A powerful CSO ally, Pope Francis, minced no words in describing this scandalous global inequality: “savage capitalism.” Rising inequality can be seen in the consumption or expenditure patterns among income classes, particularly between the top 20 percent and the bottom 20 percent. A World Bank East Asia report in 2011 noted that in the Philippines, the top 20 percent outspend the bottom 20 percent by about nine times; in Cambodia, by about eight times; and in Thailand, by seven times. Continued on A11
PHL POLITICS TO BE OVERRUN BY POLITICAL DYNASTIES AS CORRECTIVE MEASURE HANGS
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he majority of local government units (LGUs) will “become dynastic” by 2040 if the lack of competition in Philippine politics persist, according to the dean of the Ateneo de Manila University (AdMU) School of Government. In a presentation, AdMU School of Government Dean Ronald U. Mendoza said around 70 percent of LGUs will be ruled by political families in a span of over 20 years. Mendoza added this is based on the current trend wherein “fat dynasties” have control over LGUs and even, at times, “eat into” the areas controlled by “thin dynasties.” “The logic is it’s sort of becoming tougher and tougher to go against them,” Mendoza told the BusinessMirror at the sidelines of a forum sponsored by the Philippine Institute for Development Studies (PIDS) and the Australian National University (ANU), in cooperation with the Philippine Competition Commission (PCC). “And when they’re expanding, they’re taking non-dynastic positions, or those that do not have political dynasties, and also thin dynasties. They eat into the positions where there are only two or three [family members],” he added.
MENDOZA: There were a lot of youth leaders in the 1960s, but why don’t we see that now? No one is given the opportunity to rise up and be the alternative.”
Mendoza said the Philippines is already running out of time in ending the reign of political dynasties through the passage of an anti-dynasty bill. The Philippines has failed to pass such a bill in the past 30 years, Mendoza said, because it is tantamount to “political suicide for half of Congress.” While he could not provide the timetable for ending political dynasties in the country, this must be addressed now so new blood and a new brand of leadership can take over the government. “Running out of time happens in the context of the sustained increase in political dynasties. If we have a rising middle class and if, hopefully, they are engaging, and we are able to reduce poverty more aggressively, poverty and inequality, then maybe these produce a Continued on A12
n japan 0.4572 n UK 67.6709 n HK 6.5692 n CHINA 7.7423 n singapore 37.8462 n australia 40.2291 n EU 60.3565 n SAUDI arabia 13.6767
Source: BSP (18 October 2017 )
A2 Thursday, October 19, 2017
BMReports BusinessMirror
Another vocal ‘defender’ of Duterte lands PCOO post By Elijah Felice E. Rosales
A
@alyasjah
nother vocal supporter of President Duterte has landed a senior post in the Presidential Communications and Operations Office (PCOO), this time with an undersecretary rank. The President has appointed Lorraine Marie T. Badoy as undersecretary of the PCOO. Badoy ser ved as assistant sec ret a r y of t he De pa r t ment of Social Welfare and Development (DSWD). Acting Social Welfare Secretary Emmanuel A. Leyco confirmed to the BusinessMirror the transfer of Badoy from the DSWD to the PCOO. “Yes,” Leyco said when asked if Badoy already joined the PCOO as undersecretary. Badoy is the second Duterte appointee in the PCOO who comes from a circle of vocal administration supporters in the social media. The President in May appointed entertainer-turnedblogger Margaux J. Uson as assistant secretary of the PCOO. Badoy is a dermatologist by profession who received her medical degree from the
University of the East Ramon Magsaysay Medical Center. Prior to her appointment in the PCOO, she was an assistant secretary of the DSWD under the leadership of rejected Social Welfare Secretary Judy M. Taguiwalo. Badoy is among a circle of Duterte supporters rabidly defending the President from critics in social media. In one occasion, she slammed the European Union (EU) for consistently calling out Duterte’s war on drugs, advising EU officials to just “engage in child porn.” Malacañang has yet to issue Badoy’s appointment papers. “This is in response to media queries regarding Assistant Secretary Lorraine Badoy’s move to the PCOO. Assistant Secretary Badoy has informed as officer in charge-secretary at the DSWD of this development and is now in the process of completing and turning over her responsibilities, which is expected to last until the end of the month. I thank assistant secretary Badoy for her contributions to the DSWD, and I am confident that she will be able to bring her effectiveness as a communicator to her new assignment as undersecretary at PCOO,” Leyco said.
Balisacan bucks high rice tariffs in lieu of QR Continued from A1
such as farm-to-market roads and irrigation facilities. “[The removal of the QR] will be in the spirit of the competition law. This QR limits participation in the market, but [removing it] now would make the sector competitive,” Balisacan said at the sidelines of a forum held in Pasig City. The forum was sponsored by the Philippine Institute for Development Studies and the Australian National University, in cooperation with the Philippine Competition Commission. If the rice tariff rate is set at a very high rate, Balisacan said Filipino consumers, particularly the poor, would suffer the most because a larger portion of their income is allocated for food items. “[A tariff of] 400 [percent] is almost like a sky-high protection,” he added. Currently, Balisacan said the tariff equivalent of the country’s QR is around 50 percent to 70 percent. With this “high” tariff, Balisacan
said the QR has made rice prices higher by 50 percent to 70 percent. In 2015 Ba lisacan a lready blamed high food prices for the 28.5-percent increase in poverty incidence among Filipinos in the first half of 2014, from 24.6 percent in January to June 2013 based on the Annual Poverty Indicators Survey. If the country will set an even higher tariff rate for rice, such as a bound rate of 400 percent prescribed in the substitute bill to amend Republic Act (RA) 8178, this could cause rice prices to go up by 200 percent to 300 percent. This means that, if a family earns P10,000 a month and spends P2,000 on rice, a 300-percent tariff would cause their spending on the staple to increase to P6,000. “Can you imagine how expensive food will become? If a family only earns P10,000 a month, and food prices go up, what will happen to their other needs? What will likely happen is that they will reduce their gross consumption, [which could lead to] malnutrition,” Balisacan said.
Former University of the Philippines School of Economics Dean Ramon Clarete said that, while he has yet to review the draft bill, setting a bound tariff rate of 400 percent is not advisable. He said the bound tariff rate is only applicable for shipments outside the minimum access volume (MAV). However, Clarete said, setting a bound tariff rate of 400 percent will “raise eyebrows” among the country’s trade partners. This could send the message that the Philippines is discouraging private firms in the country to import rice from other countries. “There’s really nothing against the WTO [World Trade Organization] in our tariff-quota system, but it can raise eyebrows if it’s 400 percent because that’s really saying ‘we don’t want our private sector to be importing.” So, I think it’s pretty much business as usual. I would have wished differently, but that’s against the politics of it,” Clarete told the BusinessMirror. He said there are many considerations when it comes to setting
Govt to invest ₧7.7B for free Wi-fi service in next 5 years Continued from A1
fixed line or wired data services. “Only 27 percent of our homes and establishment are connected via wired Internet, when it should be 100 percent, or at least more than 80 percent,” Rio said. But because the rollout of the service is limited by the length of fiberoptic cables around the country, the official said the government will invest in providing free Wi-fi services over a period of roughly five years.
“We will make more access points across the country. We are targeting around 5,000 access points this year, and, based on our budget, will have another 10,000 for next year, and that will go on. Before the end of the term of President Duterte, we will have around 250,000 access points,” he said. To do this, Rio said the government will subscribe to local Internet service providers for the first three years, connecting the service to its core network—similar to an Internet exchange—to weed
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out inappropriate usage. During this period, the government will also build cellular towers and deploy fiber-optic cables in different points in the Philippines, especially in the countryside. Each deployment of the access point would cost the government an initial investment of $600. The subscription for each will have a ceiling price of P12,000 per megabit per month. The access point has to have a capacity of 100 users, enjoying a speed of at least 4 Mbps.
“For the free Wi-fi service, we will be initially using existing lines of telcos and ISPs—that’s for three years. We also estimate that, within that period, the National Broadband Network will be constructed. So, by three years, we can migrate to our own network,” Rio said. Less than two months back, Duterte signed the free Internet access law, or Republic Act 10929, which provides for the deployment of free Internet access in public spaces, such as schools, transportation terminals, plazas, hospitals
and government offices. The law is expected to help bridge the so-called digital divide, which is basically a gap between those who have access to the Internet and those who don’t. Such a divide has resulted in striking gaps in three areas: education, information and communication and finance. “The free Wi-fi program is a shortterm solution to decongest the limited number of towers by building up access points through the government’s free Wi-fi law,” Rio said.
a tariff for rice, not only the rate but also the institutions involved in granting the MAV permits. The technical working group created by the House Committee on Agriculture and Food approved last week the substitute bill that would amend RA 8178, or the Agricultural Tariffication Act, the law that enabled the government to impose the rice QR since 1996. Under the substitute bill, a copy of which was obtained by the BusinessMirror, the Philippines will impose a 400-percent bound tariff rate on imported rice once the QR on the staple is abolished. The Philippines will impose a bound tariff rate of 35 percent for rice originating from the Asean region, regardless of its volume. Manila would also impose a 40-percent bound tariff most-favored nation (MFN) rate for in-quota rice imports from countries that do not belong to the Asean. A 400-percent bound tariff MFN rate shall apply for rice imports outside the MAV of 350,000 MT sourced from non-A sean member-countries.
PHL needs above 6% GDP growth up to 2040 to end poverty–expert Continued from A12
from the current rate of 4.64 percent, while labor productivity will improve 3.71 percent, from the current 0.32 percent. The country’s Gross National Income may increase by a multiple of 4.5 by 2040. This translates to a per-capita income of $11,000, already near the high-income status, from the current $3,500. In terms of poverty reduction, Clarete said strong GDP per-capita growth and reduction in the country’s Gini coefficient by 3 percent annually will allow the Philippines to eradicate poverty by 2031. However, if there is a weak GDP per-capita growth, and the Gini coefficient is reduced by 3 percent annually, poverty eradication will occur well into 2039. Gini coefficient is a measure of inequality. A Gini coefficient ranges from 0 to 1, with 0 indicating perfect income equality among families, while a value of 1 indicates absolute income inequality. “The impact of growth on poverty will depend on its robustness and how it is distributed,” Clarete said. “If strong growth is accompanied by reductions in inequality, we could eradicate poverty well before 2040.” Eradicating poverty is the overarching goa l of meeting the Sustainable Development Goals by 2030. The Philippines, along with over 190 countries, signed the 2030 Global Agenda in September 2015. In August 2017 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 on Thursday, 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 the end of 2018, four years ahead of 2022, the original target.
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Rebellion raps set vs Maute-IS sympathizer arrested in Taguig B Joel R. San Juan @jrsanjuan1573
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HE Nationa l Bureau of Invest igat ion (NBI) on Wed nesd ay a n nou nced the arrest of a Filipino woman believed to be involved in the recruitment of foreigners into the country for terrorist activities and spreading radical Islamic extremism through the use of the Internet and social media. The suspect, K aren Aizha Hamidon, 36, was presented to the media by Justice Secretary Vitaliano N. Aguirre II and NBI Director Dante Gierran. She was arrested at her residence in Taguig City following a search operation conducted by the NBICounter Terrorism Division on October 11. Aguirre said Hamidon will be facing 14 counts for violation of Article 138 of the Revised Penal Code (inciting to rebellion or insurrection) in relation to Section 6 of the Cybercrime Prevention Act of 2012 (Republic Act of 2012) before the Department of Justice. “Under the law, to prove conspiracy, you have to prove that there was an agreement to commit the crime of rebellion and rebellion was actually executed. But, in this case, I believe although she was not fighting with the Isis [Islamic State of Iraq and Syria] or Maute Group in Marawi, the action of the subject clearly denotes that she was in conspiracy with the rebels,” Aguirre said. “So, in my opinion, she should be charged not only of inciting to rebellion, but of the crime of rebellion itself. Because, under the law, under the jurisprudence, even if there is no proof of actual conspiracy the acts of the parties you would deduce that there was the same design, the same purpose that would be proof of the agreement, and so I believe she is part and parcel of this rebellion happening still in Marawi City,” Aguirre stated. Gierran noted that prior to her arrest, Hamido has been a person of interest to authorities since she gained international notoriety in the middle of 2016 for successfully recruiting several Indian nationals to come to the Philippines and join the radical Islamic extremist groups in Mindanao.
Gierran added that suspect was sought by Philippine authorities since she is the wife of Mohammad Jaafar Maguid, alias Tokboy and Abu Sharifa, the former leader of the Ansar Khalifa Philippines (AKP), a group responsible for the September 2016 Davao City night-market bombing in collaboration with the Maute Group. The group was also behind the failed attempt to bomb the US Embassy in Manila in December 2016. Maguid was killed by the police in January 2017 in Sarangani. “Hamidon is also under investigation by other foreign intelligence agencies for her possible links to international terrorist financing and her spreading radical Islamic propaganda,” Gierran added. Based on information gathered by authorities, Hamidon posted on various public groups in social-media application Telegram statements calling on Muslims to come to the Philippines and join the fight against the government forces in Marawi City in order to establish a province of the Isis. Authorities also confiscated cell phones, laptops, tablets and other electronic devices being used by the suspect for her illegal online activities. After forensic examinations on her cell phone, an additional 296 posts of the same message promoting rebellion in Marawi City were discovered. In her social-media application Telegram on the day she was arrested, she posted the following messages: “The soldiers of Taghut are desperate to defeat the Muhajireen of the Islamic State of Marawi City…but Wallahi they won’t be successful. They won’t be able to defeat the force of Dawlah because Allah [Azza wa Jaal is on their side].” She added: “That is why the Dawlah is once again inviting all our ikhwaanil Muslimeen in all parts of the Philippines and around the world to support our Muhajireen of East Asia. Let us go to Marawi, in Mindanao, to join the war against the conquerors of the soldiers of Tawagheet.” Aguirre said rebellion charges would also be filed by the NBI against Hamidon in connection with 296 social-media posts calling on foreign and local Muslims to join the fight against government forces in Marawi.
Transport execs elated over Naia’s delisting from worst airports list
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ransportation officials have welcomed the exclusion of the Ninoy Aquino International Airport (Naia) from the list of the worst airports in the world. “Work, work, work lang. While it is good that we are not listed among the worst, let us work even harder to be included among the best,” Transportation Secretary Arthur P. Tugade said in a news statement issued on Wednesday, as he welcomed the latest survey of The Guide To Sleeping In Airports, which now showed that the Naia is no longer included in the top 20 worst airports in the globe. “We should be careful that we do not backslide. The show must go on—and better!” he added. Tugade said that this development is just the beginning of more improvements, as he reminded Department of Transportation employees not to be complacent, as there are many things yet to be done and improved at the Naia. Manila International Airport Authority General Manager Ed Monreal, for his part, said such feat is a “fruit of their hard work.” “The bigger challenge is to maintain or even surpass our achievement,” he added. To recall, the survey included the
Naia among the world’s worst airports in 2016, when it placed fifth among the worst due to the bullet planting and extortion incidents during the first half of that year. It was addressed by the second semester of the same year. The Naia started earning the title in 2013, and continued on until 2013. By 2014, it placed fourth in the worst airports in the world. The following year, it got removed from the list, but was still touted as the eighth worst airport in Asia. A mong the reforms implemented in the Naia during the Duterte administration were the restriction on general aviation to prioritize commercial flights and reduce flight delays; the imposition of the five-minute rule to reduce flight delays and instill discipline among airlines; and the construction of rapid-exit taxiways to allow an aircraft to leave the runway at higher speed and increase flight movements. Meanwhile, four Philippine airports once again joined the list of the top 25 best airports in Asia for this year. They are Iloilo International Airport, Mactan-Cebu International Airport, Clark International Airport and the Davao International Airport. PNA, Lorenz Marasigan, Recto Mercene
Editor: Vittorio V. Vitug • Thursday, October 19, 2017 A3
Duterte to jeepney drivers: Support modernization or face consequences By Elijah Felice E. Rosales
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@alyasjah
alacañang on Wednesday urged jeepney drivers and operators to contribute to the development of the jeepney-modernization program, rather than holding strikes and protests that are allegedly based only on “ideological influences.”
Presidential Spokesman Ernesto C. Abella said it would be better if drivers and operators take part in government efforts to improve the Public Utility Vehicle Modernization Program (PUVMP), which aims to phase out old jeepneys and replace these with modernized units that the government claims to be more efficient and environment-friendly. “With the Public Utility Vehicle Modernization Program, everybody benefits—from drivers, operators and, most especially, the millions of commuters,” Abella said. He added this is the reason President Duterte is so eager to roll out the PUVMP. In a speech on Tuesday night, the President said he does not care even if drivers and operators, including their families, starve, as long as the PUVMP is implemented.
“Mahirap kayo? Magtiis kayo sa hirap at gutom, wala akong pakialam [You are poor? Then suffer in poverty and hunger, for all I care],” Duterte told drivers and operators. The President also said he will have old jeepneys towed away if, by January 1, 2018, they are still operating in the streets. “Sumunod kayo because January 1, ’pag may makita ako diyan mga jeep ninyo na walang rehistro, hindi narehistro, luma, guguyurin ko ’yan sa harap ninyo [You abide by the program because by January 1, if I still see your old and unregistered jeepneys operating, I will order that towed away in front of you],” Duterte added. According to Abella, the President gave drivers and operators a tongue-lashing because of his “fervid support of modernization.” “The President’s fervid support
of modernization goes back to the attempts of previous administrations…to do the same…[but] had been thwarted due to similar ideologically based transport strikes and protests,” Abella said. However, unlike previous administrations, the Duterte administration is not willing to meet halfway with drivers and operators, the Palace official said. “This is the message of the President’s speech [on Tuesday night]. It underscores the national leadership’s strong political will and decisive stance to initiate reform in the public transportation sector,” Abella said. Instead of holding strikes and protests, Abella added, transport groups should engage the government in the negotiating table. “The government is open to more healthy dialogue, discussion and responsible engagements with transport groups that wish to learn and contribute to the development of the PUVMP,” Abella said. “This is a wide window of opportunity for everyone—drivers, the operators, the riding public. The public needs to discern that some ideological influences can derail the greater good,” the Palace official added. Duterte tagged transport group Pagkakaisa ng mga Samahan ng Tsuper at Opereytor Nationwide (Piston), human-rights group Karapatan and labor group Kilusang Mayo Uno as legal fronts of the communist movement.
Piston was responsible for heading the two-day nationwide transport strike in opposition to the PUVMP. Although government officials belittled the effect of the strike, it was strong enough to force Malacañang to suspend classes at all levels and government work nationwide on Monday and Tuesday. Due to the suspensions, Piston claimed the strike was a victory.
“The President’s fervid support of modernization goes back to the attempts of previous administrations… to do the same… [but] had been thwarted due to similar ideologically based transport strikes and protests.” —Abella
Military continues operation Lawmakers sense cover-up, to clear Marawi of ‘straggler’ eye tougher antihazing law By Butch Fernandez @butchfBM
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A female soldier holds the hand of a Maranao lass temporarily residing at the Bahay Pagasa, a temporary housing facility to some 50 families in Barangay Bito Buadi Itowa in Marawi City. NONIE REYES
By Rene Acosta @reneacostaBM
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he military will continue its operation in Marawi City despite Tuesday’s declaration of President Duterte that it has been liberated from the clutches of the Islamic State (IS)-Maute Group and is ready for rehabilitation. Armed Forces Chief of Staff Gen. Eduardo M. Año said on Wednesday that the assault will push on with the hope of rescuing the remaining 18 hostages and neutralizing the remaining fighters of the IS-Maute following the death of their leaders Isnilon Hapilon and Omar Maute on Monday. “There were stragglers that were still left, and they are the subjects of our manhunt [operations]. There are also 18 hostages that are needed to be rescued,” said Año, believing the captives were just inside buildings. “They were just afraid to come out,” he said, although believing the risks against the hostages were no longer that strong as the remaining terrorists were already on the run following the death of their two leaders. According to Año, the terrorists, whom the military called as
stragglers following the killings of their leaders, still include Malaysian financier Dr. Mahmud Ahmad and about eight Malaysians and Indonesian jihadists. The chief of staff said the ISMaute members were already cornered at the pier area, almost beside the Lanao Lake. “This is just about 1 hectare. It only has buildings and structures, that is why we need to be careful, but this place is already small. In fact, hunting them would just have been a police matter, but just the same, we will not abandon it,” Año said. “We will make sure that we will get the remaining Maute-IS here, and we are also issuing calls that they should surrender. The only way to get out alive is to surrender,” he added. Año said the Marawi fighting underscored the need to continue acquiring equipment that enhances the capability of soldiers, especially ground forces, since modern-day warfare is no longer in the hinterlands but on city streets. The battle, he added, the military with sniper rifles with better scopes and sights. Año also mentioned the important role played by armored vehicles.
enate probers have noted an apparent obsession in a Facebook chat among Aegis Juris fraternity members with concealing information instead of manning up for the fatal hazing of University of Santo Tomas (UST) law student Horacio Castillo III, or showing sympathy to his family. At the resumption of the public order committee hearings into the case, Sen. Panfilo M. Lacson Sr. moved to cite in contempt alleged frat leader Arvin Balag for giving evasive answers and asked him and other frat members to undergo DNA tests to determine who were present at the scene of the initiation rites held at the frat house near the UST campus. Testifying before the committee, Manila Police Chief Joel Coronel exposed the incriminating FB chat thread and vowed to submit the authenticated evidence at the next hearing to back charges for obstruction of justice against the UST fratmen. Amid repeated invocation of the right against self-incrimination, senators were told that, while frat leaders issued instructions to let the police investigation take its course, Aegis Juris members were instructed to “deny it.” Sen. Sherwin T. Gatchalian noted that the frat members’ refusal to testify on what they know lead probers to suspect “all of them were involved in hitting Atio [Castillo] with a paddle during the initiation rites.” When asked to give DNA samples to establish who were at the scene of the deadly hazing rites, senators noted only Jason Rabinas and one other fratman agreed, indicating they were not present at Castillo’s initiation. At one point, Sen. Grace Poe advised Balag, alleged Aegis Juris GP or Grand Perfectus, to man up as “you are doing an injustice to yourself.” Poe also slammed the “code of silence” of Aegis Juris fraternity members, citing the fratmen’s refusal to
fully cooperate with Senate probers, lamenting this was an injustice to the family of Casillo. She, likewise, cited Aegis Juris president Balag in contempt for continued refusal to at least confirm whether or not he was a member of the fraternity that carried out initiation rites that killed Castillo last month. Moreover, Poe warned that even the university, the UST itself, can be included in the fatal hazing case, and suggested that its law school dean, Nilo Divina, an Aegis Juris fratman himself, should “inhibit and take a leave of absence” while the case is being investigated. But Divina told senators he already “came to the conclusion that I cannot abandon my students.” Poe asserted, however, that “nobody is indispensable.” The senator suggested the UST board should consider putting Divina on leave as law dean. “You might not have had a direct hand in what happened, but you loom large and there is really a conflict here. You waited from noon to 6 p.m. before attending to the student and delayed informing the parents of the victim. It is best to step aside,” Poe added. In turn, Divina told Poe that, “I thought about that but I need to attend to my students.” He added: “I know we abolished paddling [frat neophytes].” “I presumed there was no hazing,” Divina said. This prompted Poe to retort that “you should have investigated.” But Divina replied “there was no ground to do it.” The law dean added, however, that a UST panel had already imposed a six-month suspension for all those involved in the fatal hazing rites. Fratman Ralph Trianga, who briefly went to the US after the incident but came back to face probers, confirmed the six-month suspension. He, however, invoked his right against self incrimination when asked if he owned the vehicle used to bring the hazing victim to the Chinese General Hospital were Castillo was declared dead on arrival.
Economy
A4 Thursday, October 19, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon
BusinessMirror
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NTC backs bill to reclassify broadband as ‘basic service’ By Jovee Marie N. dela Cruz
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@joveemarie
he National Telecommunications Commission (NTC) has backed the passage of a bill that would classify broadband access as a “basic service.”
In a position paper, NTC Commissioner Gamaliel A. Cordoba said the passage of House Bill (HB) 5337 may just compel telecommunications companies (telcos) to provide faster Internet-connection speeds under the pain of heavy administrative fines. “We express our wholehearted appreciation for the proposed amendments [to the law] contained in House Bill 5337, specifically in the areas of expanded responsibilities of the NTC, immunity from civil suit, reclassification of Internet/broadband as a basic service and specific rights for end-users,” Cordoba said. The bill is still pending before the House Committee on Information and Communications Technology. “The commission enthusiastically supports the good intentions of the bill [or the proposed Act Expanding the Powers of the NTC and Classifying Internet Service, including Broadband Service, as a Basic Telecommunications Service],” Cordoba said. The principal author of the bill, Makati City Rep. Luis Campos Jr., in a news statement, said his proposal of-
fers a solution to the country’s persistently slow, inefficient and expensive Internet access by fully empowering the NTC to regulate the service. “Telecommunications companies in the Philippines are raking in billions and billions of profits from their telecommunication products including SMS and Internet services,” he said. However, the lawmaker added the quality of Internet connections rendered by the telcos is in a “sad and pathetic state.” Despite the high cost of the services, he said, the Internet connections and signals are slow and unstable. Currently, Campos said the 22-year-old Philippine Public Telecommunications Policy law treats Internet access as a “value-added service” rather than a basic service, and suppliers are relatively free to provide services on their own terms. The HB 5337 redefines Internet access as “a basic telecommunications service within the jurisdiction and regulatory power of the NTC.” Under the bill, the NTC may command telecommunications firms to deliver escalating Internet-connection speeds within prescribed dead-
lines, or risk paying up to P100,000 in daily fines that could last up to 500 days, or reach up to P50 million, for every instance of noncompliance. The bill also grants the NTC and its officers immunity from civil suits with respect to any directives they may issue to ensure the performance of time-bound Internetaccess upgrades. “[It is] the duty of the State to protect the interest of consumers, including Internet users, promote their general welfare and to establish standards of conduct for business and industry, including the telecommunications sector,” the bill stated. Moreover, Campos said the United Nations Human Rights Council has declared that all people have a right to Internet access in order to fully enjoy other fundamental liberties, such as the rights to information, education and free expression. The lawmaker, however, lamented that the Philippines’s Internet connection speed has been rated the slowest in Asia Pacific by Akamai Technologies Inc. Citing on Akamai’s State of the Internet Connectivity Report as of the first quarter of 2017, Campos said the Philippines’s 5.5-Mbps average connection speed pales when compared to Thailand’s 16.0 Mbps, Vietnam’s 9.5 Mbps, Malaysia’s 8.9 Mbps and Indonesia’s 7.2 Mbps. Worldwide, South Korea has the fastest average connection speed at 28.6 Mbps, while Paraguay has the slowest at 1.4 Mbps. Mbps is short for megabits per second—a measure of network transmission or data-transfer speed.
Solon proposes creation of natl coffee board
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deput y speaker of the House of Representatives is pushing for the passage of a measure seeking to revitalize the coffee industry. In House Bill 6358, or the proposed the Coffee Industry Development Act, Party-list Rep. Sharon S. Garin of Aambis-Owa said her proposal will create the National Coffee Board (NCB) that will take charge of developing programs and instituting industry-wide improvements that will benefit coffee farmers, processors, traders, consumers and other industry partners. Under the bill, the NCB is expected to create and maintain a coffee industry road map that will outline the planned programs and projects to develop the industry on a national scale. It will also be tasked to provide technical assistance on planting systems and rehabilitation of farms, among others. The board shall be composed of secretary of the Department of Agriculture (DA) as chairman, secretary of the Department of Trade and Industry as vice chairman, secretaries of departments of Science and Technology and the Interior and Local Government, and one representative each from state of universities and colleges and league of municipalities, where coffee is primarily grown. The bill said the amount of P50 million shall be allocated from the special activities fund of the Office of the President or from any other
37,000 MT The estimated annual coffee harvest from 117,454 hectares of coffee plantations across the country, according to the PSA
sources that may be identified for the purpose of the operation and industry development. Thereafter, such sum required shall be included in the annual General Appropriations Act of the DA. According to Garin, the Philippines is one of the few countries that produces the four varieties of commercially viable coffee, namely, arabica, liberica (barako), excelsa and robusta. Climatic and soil conditions in the Philippines—from the lowland to mountain regions—make the country suitable for all four varieties. The lawmaker, citing the Philippine Statistics Authority (PSA), said an average of 37,000 metric tons (MT) of coffee are harvested annually from 117,454 hectares. However, she added domestic production has been declining by 3.5 percent annually over the past 10 years. “Among the factors that have contributed to the decline in national coffee production are the lack of productive trees, and poor farming methods,” she added.
Based on data from the International Coffee Organization, Garin said coffee consumption in the country increased by 8.8 percent from 2014 to 2015, an indication that Filipinos may have shifted from being moderate to heavy coffee drinkers. “For being a nation filled with coffee drinkers, it is saddening to know that the coffee industry, from coffee growers, processors and traders, is in such a sorry state,” Garin said. She added the Philippines used to be the world’s fourth-biggest coffee exporter until market conditions changed from 1989 to 2002, when the country’s output went down from 70,000 tons a year to just 23,000 tons. “Our local supply cannot fulfill the local demand and we have to import coffee just to meet it,” she said. Out of the 65,000 MT yearly consumption of coffee, Garin said only 30,000 MT come from local supply, while the rest is imported from countries, such as Indonesia and Vietnam. “We are a nation of coffee drinkers. It is an undeniable fact that coffee has become a staple beverage among Filipinos. From consumer drinks from your favorite coffeeshop chain, to high-class brews from specialty stores, to 3-in-1 coffee mixes sold by the packet, the demand for coffee bisects the class divides and coffee drinkers from all over the economic spectrum,” Garin added. Jovee Marie N. dela Cruz
CSOs reject House measure to lift ban on waste incineration for WTE projects By Jonathan L. Mayuga @jonlmayuga
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coalition of civil-society organizations (CSOs) has expressed alarm over a move in the House of Representatives to repeal a law that bans the use of incineration to pave the way for wasteto-energy (WTE) projects. In a news statement issued on Tuesday, the group calling itself the No Burn Pilipinas wants lawmakers to scrap House Bill 2286, which seeks to repeal the provision that bans waste incineration under Republic Act (RA) 8749, or the Clean Air Act and RA 9003, or the Ecological Solid Waste Management Act. No Burn Pilipinas is composed of over 50 CSOs that oppose waste incineration and WTE projects as a solution to the country’s looming garbage crisis. The Department of Environment and Natural Resources (DENR) and the National Solid Waste Management Commission (NSWMC) said the WTE initiative will “hit two birds with one stone” since it will solve not only the looming garbage crisis but also boost the country’s power or energy supply. The NSWMC has already put in place a guideline for the implementation of WTE, but a big hurdle to its implementation are laws that ban the use of incinerators. The group also criticized the DENR for promoting WTE which, it says, is not only “regressive”, but runs counter to the agency’s own mandate to ensure a healthy environment for all Filipinos. “Repealing the incineration ban is bad news for the environment, public health and local communities,” said Von Hernandez, global coordinator of the Break Free from Plastic Movement. “It represents a regressive move on the part of Congress, at a time when the planet is in dire need of genuine solutions to the climate and waste crisis. Worse, it presents a triple whammy for Filipinos as so-called WTE plants translate to higher elec-
tricity costs, higher waste-disposal fees and higher risks of cancer for host communities,” he said. Hernandez lamented that the DENR is paving the way for the resurgence of waste-incineration proposals in the country through WTE projects in the guise of pyrolysis or gasification technologies. “It is scandalous that the government agency mandated to implement our environmental laws is the same one working hard to undermine the spirit and intent of such laws,” he said. According to No Burn Pilipinas, burning waste has much health, environmental, social and economic consequences. Incinerators, threaten human health, pollute air, harm economies, contribute significantly to global warming and fuel an unsustainable system of consumption and wasting. Aileen Lucero, national coordinator of EcoWaste Coalition, for her part, said: “The push to revoke the incineration ban will undermine source segregation, recycling and other zero-waste strategies that conserve resources, avoid toxic pollution and generate livelihoods and jobs. Instead of overturning the prohibition on waste burning, Congress should, in fact, strengthen it by passing waste prevention and reduction measures complementing RA 9003, such as banning single-use plastic bags, disallowing recyclable and compostable materials in disposal facilities, curbing e-waste, and incentivizing innovations in wastemanagement sector.” The group said experiences around the world have also shown that WTE, through incineration, is the most expensive and most energy-intensive way to manage waste and generate electricity. Incinerators are capital intensive and are more expensive than coal and nuclear facilities. It cited a US Energy Information Administration report stating the projected capital cost of new waste-incinerator facilities is twice the cost of coal-fired power plants and 60 percent more than
the cost of nuclear-energy facilities. Waste-incinerator operations and maintenance costs are 10 times the cost for coal plants and four times the cost of nuclear plants. Lea Guerrero, climate and clean energy campaigner of the Global Alliance for Incinerator Alternatives, for her part, said incinerators are “a costly folly.” “Should these facilities be built in the Philippines, the budget will be in the tens of billions of pesos. There will also be massive increases in tipping fees by local government units [LGUs] who are already stretched for funds. Clearly, it’s a bad investment given that it’s also the wrong way to manage waste,” she said. Sonia Mendoza, chairman of Mother Earth Foundation said a better alternative remains the strict implementation of the garbage law. “Implementing zero-waste solutions is inexpensive and can be started immediately. If properly implemented, results can be seen in a few months as in the case of the city of San Fernando in Pampanga. We are calling on other LGUs to reject all incineration and WTE proposals, and instead pursue the zero-waste approach, starting with the strict implementation of RA 9003,” she said. The Philippines produces around 40,000 tons of garbage every day, with Metro Manila contributing 9,000 tons on a daily basis. The DENR and NSWMC have lamented the failure of LGU to enforce proper waste segregation at source, composting and disposal. The DENR, NSWMC and the Office of the Ombudsman have filed cases against officials of 50 LGUs and are preparing cases for officials of 100 LGUs for violation of RA 9003. NSWMC Secretariat Executive Director Eli Ildelfonso and DENR Undersecretary for Policy, Planning and International Affairs Jonas R. Leones said the WTE solution is just one of several options for LGUs given the circumstances of their failure to enforce the garbage law.
Agriculture/Commodities BusinessMirror
www.businessmirror.com.ph
Editor: Jennifer A. Ng • Thursday, October 19, 2017
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DA wants perks for firms buying local produce Rice output likely grew 13.9 percent in Q3–PSA P
A farmer harvests vegetables in Nueva Ecija. The Department of Agriculture is keen on giving incentives to firms that would purchase local farm products. NONIE REYES
By Jasper Emmanuel Y. Arcalas
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@jearcalas
he Department of Agriculture (DA) will ask Congress to enact a measure mandating the grant of incentives to businesses that would source agricultural products from Filipino farmers.
Agriculture Secretary Emmanuel F. Piñol said the plan to extend perks to manufacturers using local produce was hatched after the DA met with the Philippine Partnership for Sustainable Agriculture (PPSA), which floated the idea. “The government extends incentives to foreign investors, such as tax holiday. Why do we not give the same to local investors? For one, there are local investors who wish to use local raw materials,” Piñol told reporters in an interview on
Wednesday. He added that the grant of incentives to firms purchasing local produce would help increase agricultural productivity, as this could encourage farmers to plant more. During the meeting, Piñol said the PPSA had agreed to craft a proposal regarding the incentives that would be given to local firms and how these could be availed of. This proposal would be incorporated in the bill that will be drafted by the DA and presented to Congress be-
fore the end of the year. “The PPSA had agreed to look into the best practices in other countries, such as in Thailand, and perhaps adopt them,” Piñol said. “I have already asked the legal department of the DA to draft the bill.” He added the DA is eyeing Sens. Cynthia A. Villar, Loren B. Legarda and Francis N. Pangilinan, and Party-list Rep. Jose T. Panganiban Jr. of Anac-IP as sponsors of the bill. Earlier, Piñol urged feed millers to reduce their purchases of imported feed wheat and corn so farmers would be encouraged to plant more corn. He said he would appeal to feed millers to buy local corn to boost its farm-gate price. “If the feed millers will be patriotic enough to patronize local corn, then we can encourage our farmers to plant more,” he told reporters. “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,” Piñol added.
Agri journ contest on, special award for ‘water sustainability’ story
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he Philippine Agricultural Journalists Inc. (PAJ), the country’s second oldest professional media organization in the country, and San Miguel Corp. (SMC) have once more partnered to conduct the 2017 Binhi Awards for agricultural journalism. PAJ President and former Philippine Star business editor Roman Floresca thanked SMC President and COO Ramon S. Ang for his continuing support to the PAJ and Binhi Awards, which was first launched in 1978. “We sincerely express our deepest gratitude to the SMC and Ramon S. Ang for their continued support to the PAJ and Binhi Awards, as we continue to raise the bar of reportage of the country’s agricultural, fishery and agribusiness developments and breakthroughs,” Floresca said. On behalf of Ang, SMC Media Affairs Group Head Mary Jane Oconer Llanes said, “We at SMC has had the privilege to partner with the PAJ to encourage more journalists to write more inspiring stories on the Philippine countryside. We believe the Binhi Awards is an effective avenue to honor the efforts of our colleagues to share with
the general public the struggles, triumphs and breakthroughs of our farmers, fishers, countryside entrepreneurs. “In addition to the regular contest categories, this year we will grant a special award on the best ‘water sustainability’ story,” Llanes added. The story should delve on successful efforts of individuals or a community to employ water harvesting or conservation technologies for irrigation or potable water system, or other sustainable water projects. The winning entry will receive a P20,000 cash and a special prize from SMC. In all, the 2017 PAJ-SMC Binhi Awards features 17 individual and institutional contest categories, said contest chairperson Noel Reyes, PAJ vice president for internal affairs. The three major categories are the year’s best agricultural journalist-agri-beat reporter and environment journalist, where the first-second- and third-place winners will receive P50,000, P25,000 and P15,000 cash prizes, respectively. Contestants can also vie for other five minor individual categories, namely: agri news story agri feature story, environment
story, climate story and agri photojournalist of the year. Only one winner per category will be proclaimed, who will receive P20,000 cash prize and a trophy. The other nine institutional or group categories are agri or environment section of a national publication; agri or environment section of a regional or provincial newspaper; agri magazine; agri newsletter; national agri radio program; provincial or community agri radio program; national agri TV program; regional or provincial agri TV program; and agri info/advocacy and/or media campaign. Winners will each get P20,000 cash prize and a trophy. All entries should be published, shown, aired or implemented during the 12-month contest period, from November 1, 2016 to October 31, 2017, and submitted on or before December 15, 2017 to: The 2017 PAJSMC Binhi Awards Committee, c/o Filipino Inventors Society Producer Cooperative, Ground Floor, Delta Building, West Avenue corner Quezon Avenue, Quezon City. For contest requirements and inquiries, kindly call or text 09204889686 or visit the PAJ web site: www.pajofficial.com.
hilippine palay production in the third quarter likely rose by 13.9 percent to 3.38 million metric tons (MMT), from last year’s 2.97 MMT, according to the latest report of the Philippine Statistics Authority (PSA). The PSA’s latest palay output forecast for the July-to-September period was slightly higher than the 3.36 MMT it projected in August. Data from the PSA showed that harvest area in the third quarter likely expanded by 14.31 percent to 851,758 hectares, from the 745,140 hectares recorded last year. However, the PSA’s report, titled “Updates on July-September 2017 Palay and Corn” and published on October 18, showed that its latest forecast was lower than the 3.39 MMT it projected in July.
“The probable reduction in palay production may be attributed to rat infestation in Davao Sur and Cotabato; incidence of rice black bugs in Batangas, Davao Sur and Sultan Kudarat,” the report read. The PSA added that it revised its forecast following reports that there were lodging of palay in Isabela caused by Typhoon Jolina and flash floods in Sultan Kudarat, South Cotabato and North Cotabato. The report noted that about 297,190 hectares, or 34.19 percent, of the standing crop for the July-to-September period have been harvested. It added that around 1.602 million hectares, or 87.1 percent, of the farmers’ planting intentions for the fourth quarter have materialized.
“Of the [2.157 million] hectares standing palay crop, 26.1 percent were at vegetative stage; 55.5 percent at reproductive stage and 18.4 percent at maturing stage,” the PSA said. The expected increase in the country’s paddy-rice output this year prompted the United States Department of Agriculture’s Foreign Agricultural Service (FAS) to revise downward its projection for Philippine rice imports to 1.1 MMT, from 1.6 MMT. In its earlier Global Agriculture Information Network report, FAS said Philippine rice harvest area in marketing year 2016-2017 could expand to 4.705 million hectares, 2.28 percent bigger than the FAS’s previous forecast of 4.6 million hectares. Jasper Emmanuel Y. Arcalas
‘Praying to have business’: Workers hit hard by wildfires
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ONOMA, California—Outside one of the first shops to reopen for business on an empty central square in California wine country, clerk Rhiannon Lorenzini swept the sidewalks as the sky cleared of ash more than a week after the state’s deadliest group of wildfires ignited. In a wine region that normally draws more annual visitors than Disney World, Lorenzini waved to some of the few passersby: firefighters in fire trucks rolling through Sonoma’s normally thronged 19th-century plaza. The blazes have left many business owners and employees without
work or pay for nine days. “I’m really grateful to be back at work, safe. And praying to have business here,” Lorenzini said, as authorities began to lift evacuation orders this week and a utility restored power to more of the area, where fires have killed at least 41 people and destroyed thousands of homes and businesses. “I do have bills coming up that I have to pay,” said Lorenzini, who works at a home-goods store targeting visitors flocking to the more than 1,000 wineries in Sonoma and Napa counties. “You start to wonder how you’re going to take care of yourself.”
The fires upended business across wine country, forcing evacuations at some of the biggest employers, ranging from a sprawling state center for the disabled to department stores, hotels and wineries, shops and factories. Business communities were just returning on Tuesday to assess the effect on revenue and jobs. Wine-tourism companies said customers were canceling almost all scheduled visits. Some businesses launched fund-raisers for employees facing the prospect of long-term unemployment, including those who lost homes to the fires. AP
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TheBroa
Business
Thursday, October 17, 2017
PHL’s natural resources
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By Jonathan L. Mayuga
HE Philippines continues to experience remarkable economic growth since 2010 and is forecasted to grow faster than expected with the strong private sector’s confidence in the administration of President Rodrigo R. Duterte. Some business leaders feel that foreign investors are looking at the Philippines as the best investment hub in Southeast Asia. Is the Philippines on the right path to sustain its economic growth?
Rich biodiversity
WITH the country’s rich natural resources and biological diversity, economic growth is expected. The Philippines is one of the 17 megadiverse countries in the world. It is rich in land and water, two very important economic resources, which support agriculture and fisheries; richly endowed with minerals and other natural sources with huge potential for renewable energy. The country’s beautiful beaches, a good number of soaring mountains and vast forests with stunning landscapes, breath-taking rivers and waterfalls are ideal for ecotourism and natural resource-based economy, including the development of a plantbased pharmaceutical industry.
Resource depletion
WITH the rapid rate of biodiversity loss, the need to protect and conserve the country’s rich biodiversity to step away from the brink of natural-resources depletion cannot be overemphasized. Aside from facing an uphill climb in terms of agricultural and fisheries production, the Philippines is also suffering from natural-resources depletion and is struggling to arrest the rapid rate of biodiversity loss. Forest degradation caused by destructive human activities, including agriculture, mining, logging, timber poaching and wildlife trafficking, remains a big challenge. The massive destruction of coastal and marine environment because of unsustainable fishing practices and pollution factored in aggravates the situation and paints a dim picture of the future of the Philippine economy. Where does biodiversity protection and conservation come in all these? At the BusinessMirror’s Coffee Club forum with the Aliw Media Group—which includes the Pilipino Mirror, dwIZ, CNN Philippines, Philippines Graphic and Locale— on October 12, the country’s top biodiversity official gave some insights on how biodiversity can help boost economic growth and ensure business sustainability.
Reforestation program
WITH half of its 30 million hectares of land classified as forest land, the Philippines was once thriving with high-value trees and lush forests. Logging, then a major economic activity, has contributed 12.5 percent to the country’s GDP in the 1970s. Since the 1990s, the government started to implement a national reforestation program to recover from natural-resources depletion. Today, the wood industry relies largely on wood supply from other countries. Home to plant and animal wildlife, the degradation of the country’s forests is one of the major drivers of biodiversity loss aside from the rampant illegal wildlife trade. To mitigate the impacts of climate change, the government in 2010 imposed a ban on the harvesting of trees from natural and residual forests. At the same time, from 2010 to 2016, it implemented the National Greening Program (NGP), which is
AT the roundtable discussion of the BusinessMirror Coffee Table Club held on October 12, Department of Environment and Natural Resources Biodiversity Management Bureau (DENR-BMB) Director Theresa Mundita Lim identified that businesses that rely on natural raw materials have more reasons to invest in biodiversity. ALYSA SALEN
being touted to have successfully reforested 1.5 million hectares of open, degraded and denuded forest. Under the program, fuel wood, high-value crops, fruits and native species were transplanted. The Duterte administration, for its part, implemented the P7.2billion Enhanced-National Greening Program (E-NGP) to reforest the country’s open, degraded and denuded forests to continue the program until 2028.
Poor investment
UNDERSCORING the importance of protecting the country’s environment and natural resources, Director Theresa Mundita S. Lim of the Biodiversity Management Bureau (BMB) said there is a need to increase public awareness and appreciation, encourage more investment through integration in businesses’ long-term plans and programs to make businesses “greener” and ensure business continuity in the face of climate change. The BMB, a staff bureau of the Department of Environment and Natural Resources (DENR), implements various biodiversity-related programs and projects, including the management of protected areas under the National Integrated Protected Areas System (Nipas) Act, a global strategy to protect endangered wildlife that are threatened with extinction. Lim said investment in biodiversity remains wanting, with the government’s limited resources and businesses’ poor appreciation of biodiversity. She said less than 1 percent of businesses in the country have integrated biodiversity in their longterm plans and programs. The official said the DENR has no accounting of biodiversity investment from the private sector and it only started last year, in partnership with the United Nations Environment Program (UNDP), a budgettagging process for biodiversity finance of various government agencies to help narrow the financing gap for biodiversity protection and conservation in the Philippines.
Financing gap
A UNDP-BACKED program called
Biodiversity Finance Initiative (BioFin) revealed that P334 billion or $7.4 billion is needed for biodiversity conservation in the Philippines over the next 13 years. The amount covers actions on forest, coastal and marine, inland wetlands, caves and cave systems, protected areas, invasive alien species, agrobiodiversity, access and benefit-sharing and urban biodiversity. Such investment is needed to ensure funding for the implementation of the Philippine Biosafety Strategy Action Plan (PBSAP) With such investment in biodiversity, we can expect a minimum return of $10 billion per year from fisheries, ecotourism and pharmaceuticals derived from genetic resources, according to UNDP Philippines Country Director Titon Mitra. Under the PBSAP, annual funding requirement is pegged at P24 billion until 2028, but current annual budget allocation by the government is only pegged at P5 billion, thereby leaving a yearly budget gap of P19 billion.
PA management
THE DENR is encouraging stronger protection and conservation measures through the protected area management under the Nipas. There are currently 240 protected areas (PAs), but only 13 of them are backed with legislation, while the rest are backed by Presidential Proclamations or Executive Orders. A bill that passed third and final reading in the Senate and approved by three committees in the House of Representatives, the Expanded National Integrated Protected Areas System (E-Nipas), aims to include more on the list of PAs. The Senate version is seeking to add 97 PAs, while the House version is seeking to add 94 PAs. Both proposed measures aim to impose a stiffer penalty and higher fines against violators. The House version is seeking to give tax perks to businesses for their donations specifically for the management of these PAs.
Budget woes
THE management of most of the PAs has poor funding, given that no specific funds are allocated un-
Forest degradation caused by destructive human activities, inc agriculture, mining, logging, tim poaching and wildlife trafficking remains a big challenge. der the DENR’s annual budget. Before, funds generated by these PAs go to the National Treasury. The budget-release process takes so much time, discouraging the PAs to actually seek fund for particular projects or programs. Last year, the Integrated Protected Areas Fund (Ipaf) Retention Law was enacted, allowing the PAs to retain 75 percent of the revenues they generate, which allows the Protected Area Management Board (PAMB) and the park managers under the Office of the Protected Area Superintendent (Opas) to swiftly implement rehabilitation and development programs. Lim said the old Ipaf law has put in place a system that ensures the use of such funds for PA management. “The bill itself outlines a process that is adopted under the previous RA [Republic Act, 7586] of the Integrated Protected Areas Fund. The checks and balances are there,” Lim said. “The government audits the money, including COA, and our agency monitors the fund.” The DENR-BMB is encouraging public-private partnership activities, including tourism-related programs or projects, to hurdle the PAs’ financial challenges. The DENR, Lim said, is launching a campaign to increase public awareness to boost appreciation about biodiversity, noting that many remained oblivious of the interconnectivity of plant and animal wildlife and the ecosystem.
Increasing awareness
ASKED about the level of awareness about biodiversity on a scale of 1 to 10, Lim rates the average Filipino gets a poor rating of 5. Lim said the DENR-BMB has ongoing programs to strengthen linkage with the traditional and social media. “One of our programs is the reason why we want to have better linkage with the media. We are also taking advantage of social media. We are creating our Facebook page and we are uploading on Youtube information [on biodiversity],” she said. “We also work with the schools through our Dalaw-Turo [teacher-visit] campaign and [our] Education Camp with teachers and students.” Relatedly, a promotional campaign on the upcoming Convention on the Conservation of Migratory Species of Wild Animals to be hosted by the Philippines from October 22 to 28 is also being pushed, wherein a renowned photographer and filmmaker will arrive to document and help promote Philippine biodiversity. “There will also be a film showing. We have invited students to participate in the conference, too,” she said. According to Lim, biodiversity is part of everyday life, which they intend to promote more through social media. The DENR-BMB is ambitiously targeting 100-percent awareness about biodiversity.
Biodiversity defined
LIM said increasing public awareness and enhancing the people’s appreciation of biodiversity is challenging. “It is really difficult. What is biodiversity? Can we eat biodiversity?” Lim said, narrating how people react when asked the question about biodiversity. He cites the difference in the old days when there was already a strong appreciation of biodiversity. The food people eat, the wide variety of fruits, even the wild boars and deer, are allowed before. “Our traditional medicines [are another example]. Where do we get all these medicines [but] from plants found in our forests. We lost track of those revenues,” she said. “We realize the benefit that we can generate from our biodiversity.” Lim said it is frustrating, however, when “the diversity of the food the people used to enjoy is vanishing.” “We keep on importing fruits but we do not realize that we have native fruits of our own. Now you see dragon fruits being propagated. We have native fruits. We want the people to realize that we are rich in terms of food derived from biodiversity,” she said.
Mining woes
ASKED about mining and its impact on biodiversity, Lim said Environment Secretary Roy A. Cimatu takes his cue from Mr. Duterte’s policy pronouncements. To recall, former DENR Chief Regina Paz L. Lopez has ordered
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near brink of depletion baseline information,” she said. “We have ongoing talks about that.”
Bioprospecting
ASIDE from being a potential source of raw materials, food, water and livelihood, the country’s forest is endowed with a diverse species of flora and fauna ideal for bioprospecting. Bioprospecting is defined as the search for plant and animal species from which medicinal drugs and other commercially valuable compounds can be obtained. In this endeavor, Lim underscored the importance of recognizing the unique resources that can be found only in the Philippines. People in the communities, she said, know their resources better than anyone else. “If we talk to the older people, we will realize how it was during their time. That there is this kind of species, which can be used to cure this [disease, they would say],” she said. “They were there when we still have many Philippine Eagles and the beaches are still wide and our marine ecosystem is still thriving with fish. We need to bring back our love for the environment and our natural resources.” She said there’s an impression from today’s generation that biodiversity is only about wildlife. “What do we get from wildlife, really? But, if we realize the interconnectivity, there we can bring back caring for our natural wealth.” Lim said because of the country’s high endemism, even other countries look at the Philippines with envy. “Like the tamaraw, if they become instinct, we lose them forever; it is gone,” she said. “We cannot find them in Indonesia. The younger generation should realize that. That is what we want to imbue.”
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Business integration
an audit of large-scale mining operations, which puts a premium on social, environmental and biodiversity considerations in mining operations. Mining has been blamed by various quarters for the massive destruction of forests that results in biodiversity loss. “Mining companies should take into account the biodiversity in their programs,” Lim said, citing Cimatu’s policy pronouncements. “We are now coordinating closely with the academy.” She added mining industries that are really serious should take into consideration biodiversity. “In other countries, we discovered that mining operations do not destroy all biodiversity. There are ways for a mining operation to avoid excessive extraction,” Lim explained. There is also a way [rehabilitation] wherein the topsoil should be returned.” According to her, it is important for mining companies to coordinate closely with the DENR-BMB to establish baseline information about the biodiversity to be affected by their operations. “Many times, they do not really know what important biodiversity species are there. Maybe they feel that because there’s an endangered species there that they would rather not report about it because it may become a reason to stop the project” she said. Lim said mining companies have nothing to fear. “Maybe we can help them
wherein these resources can still be propagated elsewhere and later returned to the area during rehabilitation,” Lim said.
Sustainability plan
LIM said in the next few weeks, the DENR-BMB will start working to develop a sustainability plan for biodiversity in mining areas. According to the official, the DENR-BMB is now closely coordinating with the Mines and Geosciences Bureau (MGB) to compel mining companies to do biodiversity assessment together with the BMB and its various conservation partners. She noted that the country has many identified key biodiversity areas. While she said there are ongoing environmental-impact studies being conducted by mining companies, it is important that when an area is identified as a key biodiversity area, an in-depth study should be conducted. “We want to make sure that the information on the studies is complete. There are mining areas that overlap in key biodiversity areas. We want to see what they have and what we can share,” she said, noting that the DENR-BMB has previous biodiversity studies in many areas. “More or less, we have an idea of what are the biodiversity in the area. There are species that can be found only in those areas. We want to make sure that during rehabilitation, these species will be returned,” she said. Lim said currently, the BMB
is working through the MGB, the agency that has jurisdiction or mandate over mining projects. She noted that the MGB, which is a line bureau, has specific sanctions that can be imposed for mining companies found violating environmental laws. “We are happy that Cimatu is encouraging active convergence,” she said. “It is about time that we worked together about this matter.”
Endemic species
BECAUSE the Philippines is rich in plant biodiversity, Lim said it is prudent to engage in bioprospecting to protect plants that may have pharmaceutical or medicinal value. “We are an archipelagic country, that is why we have island-endemic [species],” she noted. Once lost, these plant or animal species that are site endemics may be lost forever if unprotected. Since the Philippines is comprised of thousands of islands, Lim said biodiversity protection and conservation would have to be on a case-to-case basis. “It will take serious discussion. We cannot recommend offhand one strategy. There should be serious discussions [with mining companies],” Lim said. She added that the DENR has many serious conservation partners who are willing to provide help and assistance, again, insisting on the importance of establishing or creating baseline data before mining operation begins. “One island is important and unique. We should be able to have
WITH less than 1 percent of businesses actually integrating biodiversity into their long-term business plans and programs, Lim said businesses will endure the impact of natural-resources depletion in the long run. Lim noted that despite the global trend of biodiversity integration in businesses, an ongoing campaign of the DENR-BMB remains to receive recognition. She said the DENR continues to engage businesses to integrate biodiversity in their long-term plans and programs to ensure business continuity, especially in the face of climate change’s worst effects, like intensifying typhoons, widespread floods, drought and sea-level rise, to make businesses greener. “That is actually our objective. Eventually, for business to integrate biodiversity into their plans and programs. But I cannot say that this is already broadly recognized,” she said. Lim admitted that investing in biodiversity and integrating biodiversity into businesses’ long-term plans and programs would entail additional cost. Some companies, she said, are only after profits without realizing that investing in biodiversity has its benefits as it offers a return on investments other than potential tax perks. “Because if you invest in biodiversity, there’s additional capital. What we want to emphasize is in terms of sustainability, because of climate change, we want to make them realize especially if their business relies on natural raw materials, there’s wisdom,” she said. For instance, many of the natural raw materials, she said, come from the forest or the oceans. She said there are poor awareness and appreciation of biodiversity among businesses.
Perks zone
ACCORDING to Lim, current programs of the DENR-BMB recognize
biodiversity-friendly enterprise, wherein sourcing, processing, production and marketing aspects are evaluated using the lens of environment protection. Businesses may avail themselves of certain tax perks if they are found complying with certain standards. “For instance, in the cottage industry, if they get resources and protect the source such as in Santa Teresita, in Region 2, if they will not engage in excessive harvesting, then we can say they are engaging in the sustainable gathering of raw materials,” she said. “If they are protecting certain species, like one species of lizard that feeds on the paraga, a pandan-type of [herbal] plant, then they are helping protect the species that naturally disperse the seeds of the paraga.” Businesses that are classified as biodiversity-friendly are entitled to tax perks under the Wildlife Act. Under the proposed E-Nipas, tax perks will be for businesses that donate a certain amount of fund for the management of the PAs. She noted that there is also an allowable investment in multipleuse zones in PAs. According to Lim, some PAs are already inhabited. “What we really want to do is zone it to confine specific areas for specific activities so there will be minimal impact. The incentive there is the realization that ecosystem service is vital to their business,” she noted.
Other programs
OUTSIDE so-called PAs, the DENRBMB is pursuing stronger ties with local government units to manage Local Conservation Areas (LCAs). These are areas that have been set aside for conservation purposes through ordinances, with the local government taking the lead in implementing conservation and protection activities. LCAs include areas of high biological diversity or those vulnerable to climate change and geological hazards and locally significant areas with ecotourism potentials. The DENR is also implementing a program called “Strengthening National Systems to Improve Governance and Management of Indigenous Peoples and Local Communities in Conserved Areas and Territories.” Also called the Philippine ICCA Project, the program aims to strengthen the documentation of indigenous communities’ conservation areas (ICCA). Another objective is to enhance the capacities of IPs and popularize ICCAs in support of the country’s international commitments, particularly Target 11 of the Aichi Biodiversity Targets of the Convention on Biological Diversity (CBD). Aichi Target 11 states that “by 2020, at least 17 percent of terrestrial and inland water, and 10 percent of coastal and marine areas, especially areas of particular importance for biodiversity and ecosystem services, are conserved through effectively and equitably managed, ecologically representative and well-connected systems of protected areas and other effective area-based conservation measures, and integrated into the wider landscapes and seascapes.” The project is being implemented in 10 pilot ICCA sites with established ICCAs. These are in the provinces of Kalinga, Ifugao, Nueva Vizcaya, Aurora, Bataan, Palawan, Bukidnon, Agusan del Norte and North Cotabato. Specifically, these areas are identified to be rich in biodiversity, namely, Mount Taungay in Kalinga, Mount Polis in Tuwali, Ikalahan/Lakanguya Unified Ancestral Domain, Engongot Aurora Sector, Kanawan (Ayta Magbakon), Balabac ancestral waters (Molbog), Mount Kimangkil (Higaunon), Dinarawan (Mamanwa), Mount Apo (Obo Manobo). ICCAs may be sacred spaces or
ritual grounds. These include sacred forests and mountains, indigenous territories and cultural landscapes or seascapes. Other spaces are territories and migration routes of nomadic herders or mobile indigenous peoples, sustainably managed wetlands and fishing grounds and water bodies. Others could also be particularly sensitive ecological settings, such as sacred areas on the mountain and hilltops.
GDP contribution
ALL the programs Lim mentioned aim to boost the country’s growth and development, she said. However, she noted that biodiversity’s contribution to the economy in terms of GDP remains unknown or unaccounted for. “Unfortunately, we need to coordinate with several sectors to be able to compute that. We are talking with the DOT [Department of Tourism]. Almost all of the tourism areas involve biodiversity. Beaches are number one. Around 7 percent is the contribution of the tourism sector to the GDP. But biodiversity contribution is not disaggregated. We also need to talk to the Department of Trade and Industry [DTI] in terms of accounting exports that can be attributed to biodiversity,” Lim said. There’s really a need to work with various government agencies to get the details and facts straight, she added.
Huge potential
ACCORDING to Lim, the country’s biodiversity has a lot of potential, citing the prospect of discovering new plant species and animal species with active ingredients that may be of pharmaceutical and medicinal value. She explained there’s only a need to give incentives to scientists who may want to conduct bioprospecting. These incentives are needed if we are to develop a plant-based pharmaceutical industry given the country’s potential in that aspect, Lim said. She believes other countries may help the Philippines in developing new products. “Of course, we recognize scientists for the discovery, for instance, of active ingredients for certain cures for certain diseases. Encouragement and incentives should be the role of other countries,” Lim said. “Sometimes, it is frustrating because when plant species are discovered, they [Filipino scientists] talk to foreign pharmaceutical industries. We have not come to a point when we give recognition and incentives to scientists doing research.”
Protective system
LIM said the DENR-BMB is currently looking at the traditional practices under the ICCA. “We support them to do their inventories of their resources and register that in recognition of their protection in that area. This is within the ancestral land,” she said. “The traditional system of protection is covered by the ICCA. We provide support for them to be recognized.” Lim said the Nagoya Protocol does not look only at the resource but also the traditional knowledge linked to that resource. For instance, leaves that are used for facial skin care, if that resource is developed, the communities protecting that resource will get a share of the benefits. Next year, Lim said about P25 million has been allocated for communities that are adopting biodiversity-friendly enterprises. The Philippines is the richest in the world in terms of biodiversity on a per unit basis. Yet poor appreciation of biodiversity, lack of investment, is resulting in a natural-resources depletion that leads to biodiversity loss faster than the discovery of their potential contribution to the economy.
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Banking&Finance
Thursday, October 19, 2017 • Editor: Jun B. Vallecera
BusinessMirror
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8-month public-sector spending up 9.8%
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ata on national government disbursements indicate spending in August alone grew by 13.9 percent and helped push spending from January to August by 9.8 percent. The growth in national government spending was seen to boost the government’s socioeconomic agenda and promote the swift delivery of public services. State spending totaled P201.6 billion in August, up from P177 billion last year. The growth of capital outlay paced the robust spending in August as it rose by 22.6 percent to reach P51.6 billion. Meanwhile, current operating expenditures increased by 10.3 percent to reach P149.9 billion. The year-to-date figures were to
remain firm as spending from January to August reached P1.78 trillion, a 9.8-percent expansion compared to the same period in 2016. This was driven by the expansion of capital outlays and current operating expenditures, which posted growth rates of 11.5 percent and 9.6 percent, respectively. Spending in August had a significant
Lost and then found, miracles happen
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y article today will be a bit different than usual, but I will still relate it somehow to associations. I am still in Washington, D.C., as of this writing, a day before two scheduled meetings. Both are meetings for two associations that I am involved with: the World Federation of Development Financing Institutions, where I am currently the secretary-general; and the Philippine Council of Associations and Association Executives (PCAAE), where I am the CEO and founder. The story I am going to tell you, however, is about my travel experience from Manila to Washington, D.C. As you know, travel time from the Philippines to the United States would normally take 24 hours, depending on which route you take. However, due to flight delays, it took me 30 hours to finally reach D.C. Along the course of my long trip, I lost two things: my Saint Mary medallion at the airport security check at the Ninoy Aquino International Airport 3 and my mobile phone in the shuttle van from Reagan Airport to my D.C. hotel. You could imagine how hard I prayed that I recover back these two vital possessions. The medallion was a gift from an association volunteer-trainee who said it is miraculous, while the mobile phone, as everyone nowadays knows, is already “part of our body.” To make the long story short, the good news is that I found them both, fortuitously. The shuttle company traced the van driver who returned my cell phone to me at the hotel. Coming back to my room happy that I got my phone back, lo and behold, I then found my medallion while unpacking my backpack. Miracles indeed do happen! So, while thinking of what to write for this column, it struck me to relate the two important personal things that I lost and then found to what associations deal with everyday. I likened the medallion and the mobile phone to faith in purpose and messaging of an association, respectively.
Association World Octavio Peralta Many associations today tend to deviate from their original purpose or reason for being. Most often, due to financial and human-resource pressures, associations undertake programs and activities that do not conform nor enhance their missions. A research conducted by the American Society of Association Executives called, The 7 Measures of Success: What Remarkable Associations Do That Others Don’t, lists that commitment to purpose is one of the seven attributes that makes an association successful. You can go back to my column of October 16, 2016, entitled “Emulating Remarkable Associations.” I mentioned in my October 12, column, entitled “Association Pain Points,” that associations, more often than not, are neglectful of communicating their work and advocacy to their constituencies. This, thus, hampers their ability to flourish and sustain their mission. One last side story that really made my day the following morning while having lunch in a Chinese fast-food chain here in D.C. The fortune cookie I got with my meal had a “prophecy piece of paper” that read: “There will always be delightful mysteries in your life.” Amen to that! The column contributor, Octavio Peralta, is concurrently the secretary-general of the Association of Development Financing Institutions in Asia and the Pacific and the CEO and founder of the PCAAE. The PCAAE is holding the Associations Summit 5 and the “Ang Susi” Awards 2017 on November 22 and 23 at the Philippine International Convention Center. E-mail inquiries@adfiap.org for more details.
Case clippings
By Justice S J Ranada Jr.
EMINENT DOMAIN–payment of interests The owner’s loss is not only his property but also its income-generating potential. Thus, when property is taken, full compensation for its value must immediately be paid to achieve a fair exchange for the property and the potential income lost. Thus, the rationale for imposing the interest is to compensate the landowner for the income he would have made had he been compensated at the time of taking. Transmission v. Oroville 01 Aug. 2017
GR 223366 Mendoza, J
boost from infrastructure and other capital expenditures as it surged by 18.1 percent, owing largely to the infrastructure projects of the Department of Public Works and Highways (DSWD) (road-improvement works; repair and rehabilitation, including flood-control projects; construction and improvement of pumping stations, dike and drainage systems, etc.) and capital outlay projects of the Department of Education (DepEd) (repair and rehabilitation of school facilities) and the Department of Health (DOH) (land outlays for health facilities and purchase of hospital equipment). Maintenance expenditures also grew by 18.4 percent on account of the operating requirements of DepEd schools and DOH hospitals nationwide, as well as the implementation of social protection programs by the DSWD. On the other hand, personnel services increased by 8.7 percent due to the higher base pay of civilian government employees by virtue of the second tranche implementation of Executive Order 201 s. 2016, and the increase in allowances of military and uniformed personnel. Some P426.7 billion of the P3.35-
trillion obligation program for fiscal year 2017 is still available for release to the line agencies for the remaining four months of the year. Of this amount, P236.8 bil lion refers to a l locations lodged in Special Purpose Funds. Most, if not all, of this amount is expected to be released before the end of the year to fulfill budgetary requirements in government subsidies, the release of performance-based bonus, among other purposes. Looking ahead, government spending were to remain robust in the near term. “Disbursements will continue to be buoyed by higher spending requirements of line agencies in the succeeding months given the acceleration of program or project implementation as we approach the year-end, especially so, with the one-year validity of the 2017 appropriations,” according to Budget Secretary Benjamin E. Diokno. “We are optimistic that we will approach our full-year target of P2.909 trillion and will continue to exert our best efforts to reach our goals. This administration is committed to address the persistent underspending issues, which have led to the slow delivery of public services in the past,” he added.
Seven-year T-bond rate barely moved
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he Bureau of the Treasury (BTr) sold all P15 billion in Treasury bonds (Tbonds) at auction on Wednesday when the seven-year rate moved lower by 0.5 basis points. According to National Treasurer Rosalia V. de Leon, the seven-year rate barely moved and this pleased the auction committee given the very liquid tone of the investing market. “Again, I think this shows that [liquidity] is still abundant, [that] they prefer to stay on the government securities [GS] side. Also, [they’re adopting a] wait and see [attitude)] on the next action of the Monetary Board in November,” de Leon told financial reporters. The auction received almost twice the amount in tenders amounting to P29.023 billion. A total P14.023 billion was rejected. As a result, the seven-year rate now stands at 4.390 percent for the reissued T-bonds that showed a slight 0.5 basis point increase from the previous rate of 4.395 percent. “We are very pleased with the results of the auction given the very strong subscription that we see, almost twice at P29 billion. Then, of course, the rate is lower than the coupon of 4.5 [percent],” she added. Rea Cu
The third age of entrepreneurship
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ome people see their 50s as a time to start slowing down, maybe cutting back their working hours. Others see it as the right time to take on a new challenge and start their own business. In fact, w ith many people enjoying good health and an active lifestyle far beyond traditional retirement age, it is an increasingly popular choice. In the United States, for example, an estimated one-quarter of all starts-ups are headed by people between the ages of 55 and 64, according to the2015 Kauffman Index, a nationwide study into business activity. The aspirations and attitudes of older entrepreneurs are often subtly different from those of younger entrepreneurs. For example:
flexibility over their hours and opportunities to work from home. Others are in it for the love of what they do, working on tasks they enjoy in a sector they feel passionate about. n They have a different style of
leadership
n Business owners over 50 value in-
Older business owners tend to be less concerned about raising their personal profile. Millennial entrepreneurs are several times more likely than over-50s to say that they started their business to become influential, according to our research. The fact that older entrepreneurs don’t need to prove themselves may be a strength. Secure in themselves, they recognize talent in others without feeling threatened by it. They tend to be comfortable delegating responsibility and building high-performing teams.
The most common reason older entrepreneurs give for starting their business is to be their own boss, according to research from HSBC Private Bank. Our Essence of Enterprise 2017 report (see box) suggests that some are looking to create a role that fits around their lifestyle, with
n They have enduring ambitions But it would be wrong to think older entrepreneurs want to take life easy. The majority who responded to our survey are focused on the future, on building their business and achieving their goals. Some c hoose to compete in cut-
dependence and flexibility above all
ting-edge, high-growth sectors. One in 10 su r veyed r u ns a st a r t-up in the technology sector. n Their experience is valuable Older entrepreneurs have a wealth of experience and wisdom, as well as the bumps and bruises accumulated over a career. While a few are starting out as entrepreneurs for the first time, many have set up and sold successful businesses in the past. They come equipped with a set of contacts that their younger counterparts would envy. If they need to raise finance, find partners or reach new markets, they know who to talk to. Over the next decade. I think it’s likely that we will see more and more people choose to become entrepreneurs later in life. Not everyone who tries will succeed, but those who do will be creating jobs and driving growth at the same time as achieving their ambitions. That will be hugely rewarding for them, and good news for the wider economy. Charlie Hoffman is Managing Director, HSBC Private Banking, London. He has more than 20 years’ experience working with business owners and their families.
MWSS cites Maynilad for enhanced water services
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tressing that prov iding sustainable water and efficient services to Metro Manila residents is a shared responsibility among stakeholders, Met ropol it a n Water work s and Sewerage System (MWSS) Administrator Rey naldo V. Velasco lauded Maynilad Water Services Inc. for its financial turnaround after 10 years of reprivatization in 2007. C it i n g a re p o r t f r o m M ay n i l a d President Ramoncito S. Fernandez at the recent First Korea Water International Water Week where Velasco shared with two concessionaires, along w ith Manila Water President Ferdinand M. de la Cruz, the MWSS chief said the overall efforts of service and ef f ic ienc y le ve l s of May n i l ad h ave dramatically improved. “Our customer base grew by 94 percent from about 678,000 in 2006 to over 1.3 million in 2016, covering 94 percent of our service area,” Fernandez said. “From 32 percent, our customers with 24-hour water supply increased to 98 percent. Those who receive their supply at an average pressure of 7 pound per square also increased from 45 percent to 100 percent. We have also brought down our average non revenue water level from 68 percent in 2006 to 29.9 percent by the end of last year,” Fernandez said in a well-applauded speech at the Korea conference. Fernandez added managing the West
concession in Metro Manila has been a challenge, notably from 1997 to 2006 when Maynilad was in bad shape that its previous private owners could not sustain operations when it suffered huge losses following the 1998 Asian financial crisis. When the concession was reprivatized in 2007, the new Maynilad owners faced the task of reviving a financially crippled company. “That was 10 years ago. Since then, Maynilad was able to swiftly get out of rehabilitation and implement a massive capital-expenditure program of P65.2 billion, or approximately $1.5 billion, at historical exchange rates,” Fernandez said. He also added what helped the turnaround was the water firm’s contin-
ued faith in the MWSS public-private partnership, despite the failure of its initial privatization. He said the men and women of Maynilad who persisted through its turbulent corporate histor y proved their strong dedication to public service. Fernandez said Maynilad is setting its sights on expanding to other areas of the Philippines, as there are currently some 15 million Filipinos who are still without access to water. “We want to replicate our success in other areas so that more people can enjoy improved water supply and sanitation,” he said. Fernandez added the partnership with the MWSS has benefited millions of Filipinos. “Our services have spurred economic activity, while our investments have generated thousands of jobs. More than a business, we see Maynilad as a vehicle for nation building. Because, by partnering with the government, we can use our resources to uplift the lives of our countrymen,” he said.
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Thursday, October 19, 2017
A9
Nafta negotiators extend talks, delaying its potential demise
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A S H I N G TO N — U n t i l Tu e s d ay the North American Free Trade Agreement (Nafta) looked like it might be headed for a quick demise. Now, it could be headed for a slow, painful one. The United States, Canada and Mexico said on Tuesday that they would extend Nafta negotiations into next year, with the parties citing “significant conceptual gaps” in how to rewrite the 1994 trade pact. N e g o t i ato r s, s t r u g g l i n g to f i n d agreement on some of the thorniest provisions of the trade deal, will take an extended break to consult with politicians and interest groups before convening again in Mexico City for the fifth round of talks in mid-November. The trade talks, which were supposed to wrap up by year-end, have now been extended into the first quarter of 2018, the parties said. The extension signals the potential demise of a trade pact that, while critical to North American commerce, has come under withering criticism from the Trump administration as a bad deal for US workers. Th e t h re e co u nt r i e s, w h i c h w i l l meet again on November 17, have been unable to reach agreement on a range of issues, including what percentage of a product should be made in the US and whether the trade pact should expire ever y five years. Finding agreement on the outstanding provisions will get even trickier in the coming months, as negotiations collide with political events in all three countries that will only harden each nation’s stance. The Mexican presidential race will begin in earnest leading up to a July 1 election, raising the risk that President Donald J. Trump’s proposals for revising Nafta will become a sensitive topic that Mexican candidates will shy away from supporting. In the US, legislation will expire in July that gives the Trump administration more extensive authority to negotiate trade deals and then submit them to Congress for a simple up or down vote, without amendments. Campaigning for midterm elections will also begin in the US while Canada will hold provincial elections. Given its current gridlock, Congress is unlikely to renew the legislation, called Trade Promotion Authority (TPA), Wilbur L. Ross Jr., the secretary of commerce, told a conference on October 11. “If we lose TPA, I don’t think you’ll ever see a deal done here,” Ross said. “In general terms, once you get much into next year, nobody is going to be able to get as big and complicated of a deal as this done.” Speaking to reporters on Tuesday after the fourth round of talks, Robert E. Lighthizer, the US chief trade negotiator, said the “end of the year was never a hard target” and that the previous timeline was putting too much pressure on the process, which requires consultation with Congress, labor unions and industry associations.
Lighthizer described the hard process of renegotiating a substantially altered trade agreement that, he hoped, would capture support from businesses, labor groups, the president and both political par ties in Congress. “It is impor tant for the trading system that we end up establishing a solid majority for the kind of things we’re doing, and we not keep operating right on the fringe,” he said. “If we can do that, then this will truly will be historic agreement.” Negotiators for Mexico and Canada expressed frustration after the talks concluded. Chrystia Freeland, Canada’s minister of foreign affairs, said her country had seen “a series of unconventional p ro p o s a l s i n c r i t i c a l a re a s o f t h e negotiations that make our work much more challenging.” “We have seen proposals that would turn back the clock on 23 years of predictability, openness and collaboration under Nafta,” Freeland said. “This is troubling.” Ildefonso Guajardo, the Mexican secretary of the economy, said his country was still striving to bring constructive solutions and not end up “in a lose-loselose situation.” The demise of Nafta, a deal that has knit together the North American economy over the last quarter-century, would be a heavy blow to all three economies. A new study by Impac tecon, an American consulting firm, found that the US would lose 256,000 net jobs if it withdrew from Nafta, with the most severe impact on low-wage employment. Mexico would lose 951,000 net jobs, and Canada 125,000, the report projected. The outcome could also damage the North American security relationship, straining cooperation to combat moneylaundering, terrorism, the drug trade and undocumented migrants coming through Central America, the report said. The Trump administration came into office promising to scrap or overhaul trade deals like Nafta and the TransPacific Par tnership, and forge new bilateral deals in their stead. But, the Nafta talks illustrate that the Trump administration has found it easier to criticize trade deals than forge politically popular ways to amend them. The delay in talks into next year will give the US government time to tr y to resuscitate the 1994 trade pact. But it is still unclear how the US will move for ward with provisions that foreign par tners and the business community in the US consider to be nonstar ters. Those provisions include a five-year sunset clause that would cause Nafta to a u to m at i c a l l y ex p i re u n l e s s t h e three countries voted to continue it—a proposal that businesses say would inject so much uncertainty into the deal as to effectively nullify it. New York Times News Service
Judge temporarily halts new version of Trump’s travel ban
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resident D o n a l d J . Tr u m p’s attempts to block travelers from a handful of countries—most of them predominantly Muslim—from coming to the United States hit another legal snag on Tuesday, when a federal judge in Hawaii issued a nationwide order freezing most of Trump’s third travel ban the day before it was to take effect. At least for now, the judge’s order will prevent the Trump administration from stopping almost all travel to the US indefinitely from most of the countries named in the ban. The ban, now in its third iteration, was one of Trump’s earliest and most controversial decisions after taking office in January, and it has also been one of the most legally troubled. Both previous versions were ordered halted by federal district judges who said they violated the Constitution or exceeded the president’s authority, and those orders were upheld on appeal. The Supreme Court was scheduled to review the second version of the order when Trump issued the third. Given the litigation surrounding the travel bans, the Supreme Court seems likely to take an interest in the current version as well. Citing his campaign promises to
keep terrorists and criminals out of the country, Trump initially ordered an immediate suspension of travel from seven predominantly Muslim countries, a move that plunged airpor ts across the country into confusion and protest in January. That order was eventually blocked by a federal judge in Seattle. Trump’s second attempt narrowed the scope of the ban, but still struggled to survive judicial scrutiny; it was blocked in March by the same Hawaii judge who issued Tuesday’s order, Derrick K. Watson of US District Court in Honolulu. The third travel ban, Watson wrote on Tuesday, “suffers from precisely the same maladies as its predecessor.” Among those flaws, he wrote, was that the ban “plainly discriminates based on nationality” in a way that undercut “the founding principles of this Nation,” and that the government had not shown that the US’s national interests would be harmed by admitting travelers from the affected countries. The Trump administration swiftly denounced the judge’s order, saying that the latest travel restrictions were issued after an “extensive worldwide security review” by Homeland Security officials. New York Times News Service
Chinese President Xi Jinping (center), former Presidents Hu Jintao (left) and Jiang Zemin stand at the beginning of the opening session of China’s 19th Party Congress at the Great Hall of the People in Beijing, on October 18. AP/Mark Schiefelbein
Chinese Communist Party gathers in affirmation of Xi Jinping’s might
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EIJING—When Xi Jinping strode out in the Great Hall of the People five years ago as China’s new leader, his tight smile barely hid the atmosphere of smoldering crisis. The Communist Party elite had been battered by infighting and scandals involving power grabs, bribery and even murder. Military commanders and state security chieftains—the guardians of one-party rule—had grown grossly corrupt. Critics openly accused Xi’s predecessor, Hu Jintao, of dithering as popular ire spread. On Wednesday Xi opened another Communist Party congress, this time as the nation’s most powerful leader in decades, all but certain to receive a second five-year term. A nd, after spending his first t e r m t i g ht e n i n g c o nt rol o n societ y, he is e x pected to enshrine his authoritarian v ision for revitalizing the party—and perh aps posit ion h i m se l f a s ind ispensable to its sur v iva l. “Currently, conditions domestically and abroad are undergoing deep and complicated changes,” Xi told some 2,300 party delegates and other dignitaries assembled in the Great Hall. “Our country is in an important period of strategic opportunity in its development,” he said in a calm, steady voice. “The outlook is extremely bright, the challenges are also extremely grim.” In attendance were Xi’s two most recent predecessors as Chinese leader, Hu, and Jiang Zemin, who is 91. “Under Xi Jinping, the Chinese Communist Party is headed in the direction of strongman rule,” said David M. Lampton, the director of China studies at the Johns Hopkins School of Advanced International Studies and a longtime analyst of Chinese leaders. “The 19th Party Congress is more likely to look like a coronation than an institutionalized transition to a leader’s second term.” Since taking power in 1949, the party has reinvented itself at critical moments to survive—after Mao Zedong’s death and following the Tiananmen massacre, for example. Xi, 64, contends that it faces one of those moments now, even as it moves closer to surpassing its Soviet brethren as the longest-ruling Communist Party in history.
“Pa r t y leaders a lways feel peril close at hand, especially Xi, and that has not gone away,” said Deng Yuwen, a former editor w ith a Communist Par t y journal who now writes currentaffairs commentaries. “For him, this hard-line, centralized style of rule is the solution and must be consolidated.” W hile Mao promoted class struggle and Deng Xiaoping embraced pragmatic capitalism, Xi’s vision of the party’s rule centers on restoring China to greatness— what he calls the “China Dream”— and it draws on both the fervent dedication of Mao’s era and the glories of China’s traditional culture that Mao tried to destroy. In practice, that has meant a campaign to impose greater discipline in the party’s ranks, and political repression outside the party, including a crackdown on activists and more stringent media censorship, including on the Internet. One big question as the congress meets this week is whether Xi tries to claim an even bigger role than he already has in the nation’s future. If he follows the script for leadership successions that his predecessors have followed since the 1990s, Xi will promote some nextgeneration leaders, who would be waiting in the wings for him to retire in five years. Such figures could include Chen Min’er, the party secretary of Chongqing in southwest China, who was close to Xi when they were both provincial officials and enjoyed Xi’s conspicuous support. But Xi may instead open the way for holding onto power in some form beyond his second term as China’s president, which ends in 2023, the current term limit set by the nation’s Constitution.
One way he could do this would be to hold off in appointing any promising younger leaders to the Politburo Standing Committee, the party’s highest rung of power. Another would be to enable his ally and anti-corruption czar, Wang Qishan, to stay in the Standing Committee. At age 69, Wang has exceeded the age, 68, when an informal party rule says top officials should step down once the next party congress comes around. Keeping Wang on could set a precedent for Xi to buck the same rule at the end of his second term, when he will be 69 himself. Xi also appears likely to use this congress to mark his place in the party’s history by inscribing his ideas, and perhaps even his name, into the party’s Constitution, giving his policies a sheen of permanence. “He’s going to get the ideological canonization,” said Christopher K. Johnson, a China expert at the Center for Strategic and International Studies and a former analyst at the Central Intelligence Agency. “If you’re opposing him, that’s no longer just a disagreement with the individual party chief or Xi Jinping personally. Then you’re challenging the party line.” The weeklong congress will bring some 2,300 selected delegates to Beijing for a carefully choreographed celebration of Communist rule, complete with the pageantry of goose-stepping soldiers, fluttering red hammerand-sickle flags and the playing of “The Internationale.” Yet, despite the triumphant stagecraft, Xi remains driven by a fear that communist rule could collapse in China as it did in the Soviet Union unless the party maintains firm control over an increasingly wealthy and diverse society that now has over a third of the world’s billionaires. To do this, Xi has tightened his control over possible competing centers of power, including those billionaires and their businesses, the Internet, the military and other arms of state power, as well as over the 89 million members of the party itself.
The 19th Party Congress is more likely to look like a coronation than an institutionalized transition to a leader’s second term.” —Lampton
Xi’s opening report on Wednesday morning was crafted to sound a warning that the party cannot let down its guard, said analysts and party insiders who have followed preparations. Xi has also called for renewed commitment to what he calls “reform,” and did so again in his speech to the congress. But his notion of reform is unlikely to look much like previous bouts of economic liberalization that Deng and other leaders unleashed in the 1980s and 1990s. Back then, the party gradually embraced market forces, and then full-throated capitalism, pulling back some of its power over many sectors of the economy. Xi’s version of reform is pointed in the opposite direction: to invigorate party control. “He spent his first five years basically dismantling the old system, which he sees as too lax, too corrupt,” said Minxin Pei, a professor at Claremont McKenna College in California who studies Chinese politics. W hat Xi wants to build now, Pei added, is “a d iscipl inar y state.” He continued: “It disciplines everybody. It disciplines the party, it disciplines Chinese society. And to enforce discipline, you have to have a very powerful security state.” More than any other recent Chinese leader, Xi has cast himself as the salvation of both party and nation. He has also been dismissive of his recent predecessors, whom he implicitly blames for failing to act forcefully enough to ensure the party’s survival. Xi told the congress that his government had “solved many long-sta nd ing problems t hat had remained unresolved, and achieved many great feats that had been left undone.” For Xi, the fall of the Soviet Union is a warning of what will go wrong if China’s party succumbs to those dangers. “Why did the Soviet Union collapse?” Xi said to officials in 2013. “There was ideological chaos, the party apparatus at every level seemed ineffectual, the military was no longer under the leadership of the party.” Xi wants to ensure that the Chinese Communist Party stays in power long after it celebrates the centenary of its founding four years from now, and long after it overtakes the Communist Party of the Soviet Union in length of time in power, a milestone that by some measures it will cross next year. New York Times News Service
A10 Thursday, October 19, 2017 • Editor: Angel R. Calso
Opinion
BusinessMirror
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editorial
Marawi’s lessons
P
resident Duterte capped his seventh visit to Marawi City on Tuesday with this good news: “Ladies and gentlemen, I hereby declare Marawi City liberated from the terrorist influence that marks the beginning of rehabilitation.” The announcement came a day after government troops killed Isnilon Hapilon and Omar Maute, the leaders behind the siege, and rescued 17 hostages. It took five months for our troops to gain victory in the war that claimed the lives of more than a thousand people.
There are still a few terrorists left, and a few more hostages in a contained area that remains a battle zone. However, as Armed Forces chief General Eduardo M. Año said, the small number of the remaining enemy can now be considered a law-enforcement matter and does not constitute serious threat to hinder the succeeding phases of national government programs. Hopefully, the mopping-up operations against the remaining Maute-Islamic State of Iraq and Syria fighters will be finished soon so that the government can start assessing the damage, which will pave the way for reconstruction and rehabilitation. Nobody knows how long it will take to rebuild Marawi, and the wounds of the brutal war may not completely heal. The best we could do is to look at the ruins with a positive view: Take this chance as a great opportunity for the government to develop Marawi into a modern, resilient, sustainable and world-class city. In a recent interview with the BusinessMirror, urban planner and architect Felino Palafox Jr. presented a road map in rebuilding Marawi City. He said Marawi can be transformed into a modern city based on the Dubai model. Recalling his experience in Dubai when he was asked by Sultan Khalifa al Habtoor to design a master-planned community from vast desert lands, he said we can do the same in the war-ravaged city. “I think Marawi can be the center of peace and inclusivity in Mindanao—Unity in diversity and interfaith,” Palafox said. “We can build a smarter, safer, livable, resilient and walkable city and a modern city that will be inclusive, Islamic, international and interfaith.” If his company is involved in designing a master plan for a new Marawi, and he has his way, Palafox would like to preserve some of the ruins caused by the onslaught of terrorism to remind the people, not only from Marawi but as well as other Filipinos, the horrors and evils of urban terrorism. Government planners in other countries put premium in restoring their important landmarks, he said, citing the city planners of Rome, Warsaw, Hiroshima, Nagasaki and other cities that preserved important landmarks in their history. Warsaw, the capital of Poland, preserved the structures that serve as reminders of the brutality and horrors of fascism, such as the Nazi concentration camps. In Japan, the destruction of Hiroshima and Nagasaki became memorials to show the dreadfulness of World War II and the atomic bombs that devastated the two cities. Palafox has a good point. Preserving some of the ruins of war in Marawi City as a memorial will allow future generations of Filipinos to visit the place and learn from the horrible consequences of terrorism. In other countries, ruins are preserved because they carry important lessons and messages to the succeeding generations. We must preserve some of the Marawi ruins as a living museum of the destruction caused by terrorism and extremism. Since 2005
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The destructive body-count syndrome Cecilio T. Arillo
database
T
HIS month last year, I warned police authorities in my column (BusinessMirror, October 30) on the negative effect of the frightful body-count syndrome in its bloody antidrug campaign. Obviously, they just ignored my warning. As a consequence, no less than the entire Duterte administration is now unfairly reaping the blame for the syndrome now clearly blotched with too much inaccurate and unsubstantiated stories on the drug war in print, broadcast media and in the cyberspace, where the negative viral effects spread faster than sound. By body count, I mean the number of people killed, wounded, captured and had surrendered had been exploited by misguided politicians, the police and military and some irresponsible members of the media to measure the success of the government’s intensified antidrug campaign. This was compounded by publicity-seeking police officers who instinctively dramatized and trivialized their role by consciously posing with suspected drug lords, pushers, addicts and dead bodies for the TV screens in the hope of getting promoted or rewarded without realizing the ill-effect of too much media exposure. Even more reprehensible is their lack of concern on intractable issues that cannot be measured by mathematical quantification, such as the breakdown of morale and discipline; broken homes; how crimes are committed; bad prisons that breed
crimes; greedy and ambitious politicians resorting to criminal activities; and the damage to the country’s social, moral and ethical foundation, to cite only a few. The problem started when a bunch of anti-Duterte propagandists deliberately and willfully came up with an unqualified generalization of the number of people killed in the antidrug war by calling them victims of “extrajudicial killings,” a clever propaganda hyperbole designed to erode President Duterte’s success in regaining the streets from drug lords, pushers, addicts and other scum. For instance, the erroneous number of 7,000 killed in the drug war “has been raised further to 8,000 by no less than Vice President Leni Robredo’s legal adviser, former Akbayan Representative Ibarra Gutierrez,” according to a report from the Vera Files (VF), a media outfit known for high accuracy and fairness in vetting and reporting news stories. Here’s an extract of the enlightening VF story: “Robredo’s speech, where she mentions summary executions, was written immediately after her staff received the invitation from the United Nations Commission on Narcotic Drugs in February to speak about the implications of the war on drugs on human rights.
Pyrrhic victory in Marawi Val A. Villanueva
Businesswise “No one will win the war. See, families only die; and birds won’t soar the sky and there’ll be no sun to shine.… The grass won’t grow the same, the moon won’t shine at night and there’s a losing fight. Nobody wins a war…”—Raheem DeVaughn
‘L
adies and gentlemen, I hereby declare Marawi City liberated from the terrorist influence that marks the beginning of rehabilitation,” President Duterte said on Tuesday on his seventh visit to Marawi City.
His resonating declaration was anchored on the deaths of Abu Sayyaf subleader Isnilon Hapilon and Maute Group leader Omar Maute from the relentless push of the Armed Forces of the Philippines (AFP) to clear the area of terrorists who have declared
allegiance to the Islamic State of Iraq and Syria (ISIS). Hapilon is touted to be the ISIS emir in Southeast Asia. He left his den in Basilan last year to join the Maute Group in Butig, Lanao del Sur, where Omar Maute and his brother Abdullah led a siege
“This is evident in her video message: ‘It is already February 2017, and the body count due to drug-related killings keeps growing.’” “At the time of speechwriting, the number of deaths in Oplan Double Barrel Alpha was nowhere near 7,000. “As of January 12, there had been 2,457 drug suspects killed in police operations, based on PNP [Philippine National Police] data furnished to Vera Files on January 23. On January 30 the PNP suspended its anti-illegal drug operations to cleanse its ranks after the kidnap-slay of Korean businessman Jee Ick-joo by rogue cops. “Since Project Tokhang resumed on March 6, a total of 2,345 antiillegal drug operations have been conducted resulting in 54 deaths, based on PNP data. “While it’s true that more than 8,000 have been killed since President Rodrigo Duterte waged a bloody war on drugs, not all these deaths are drug-related. “The breakdown: From July 1, 2016, to March 24, 2017, at least 2,609 drug suspects have been killed in what the PNP classifies as legitimate police operations under Oplan Double Barrel Alpha and its revived program, allegedly for resisting arrest. “As of March 21, there have been at least 6,299 reported deaths outside police operations. Of this number, 4,811 are tagged ‘not cleared,’ or what the police dub as DUIs [deaths under investigations]. “The remaining 1,488 cases have already been considered ‘cleared,’ which could mean at least one of the offenders has been identified, and he or she has been charged before the prosecutor with sufficient evidence. “Of the 6,299 reported deaths, 5,824 have been identified as homicide cases. Of this number, only 1,370
or 23.5 percent are considered drugrelated, while 894 or 15.4 percent are not. Police have yet to determine the motives of at least 3,560 homicide cases, which form the bulk. “Of 1,433 incidents filed in court, only 105, or 7.3 percent, are attributed to drugs, the rest are labeled non-drug related. “In total, the Duterte administration records 4,084 drug-related deaths: 1,475 drug-related killings outside police operations and 2,609 deaths under Oplan Double Barrel. “Philippine laws lack a standard definition of ‘summary execution.’ The UN defines it as the deprivation of life after some sort of legal proceedings, which falls short of national or international minimum procedural standards.” Imagine if there was no VF story, the erroneous and unsubstantiated reports, obviously meant to undermine the Duterte administration, would have continued to circulate to brainwash our people, particularly the country’s young adults or millennials, some of them often came up with their own biased and convoluted judgment. Take the experience of Vietnam when some misguided politicians, military generals and irresponsible journalists resorted to body count (number of enemies killed) that merely misled them into believing that the United States was winning the war in Vietnam. “Body count. That’s one of the more grisly aspects of the Vietnam War that the US military can’t seem to shed, no matter how hard it tries,” said the late Harry G. Summers Jr., the respected military specialist who wrote extensively about the Vietnam War and the Gulf War.
of Butig’s town center. As congratulatory messages poured in heralding our soldiers as heroes, credit grabbing marred what could at best be considered as the beginning of peace in this wartorn city. Pro-Duterte groups heaped praises on the president “for his resolute action in declaring martial law and his unwavering support to our armed forces.” They claimed that this victory “would not have happened if not for his leadership.” Interestingly enough, nowhere in the congratulatory message sent by the US Embassy to the Philippine Military was Duterte’s name mentioned. Victory? Nobody wins in a war. The economic cost and emotional and psychological trauma wrought by the war in Marawi are just too staggering. In August the military reported spending an estimated P3 billion in the Marawi war. Back then, the military had not yet made a definitive cost assessment. Defense
Secretary Delfin N. Lorenzana, however, said that P1.3 billion had already been spent for the army, with an estimated P2.5 billion for the air force and marines. More than the economic cost, people have been displaced, and families, bereaved. The rebuilding of Marawi may take years, and the wounds of war may not totally heal. The stench of the decaying bodies of soldiers, rebels and civilians is a grim reminder of a war that former President Fidel V. Ramos said could have been avoided. The five-month war, starting on May 23, caught the government offguard. It was a simple police operation to snare Hapilon, who was spotted in a safe house in Basak Malutlut, a barangay only several meters away from the military’s brigade headquarters in the area. Just a few weeks before, the government shrugged
To reach the writer, e-mail cecilio.arillo@ gmail.com.
See “Villanueva”, A11
Opinion
www.businessmirror.com.ph
BusinessMirror
The next steps on Iran’s nukes
Giving to Caesar what is God’s
P
resident Donald J. Trump’s decertification of the Iranian nuclear deal is a mistake. Yes, its supporters have exaggerated the agreement’s benefits—but on balance, the world is better off with it than without it. In the near term, the decertification doesn’t really change much. The deal will remain in effect while Congress considers re-imposing sanctions on Iran, in effect killing the pact. There is little indication that lawmakers from either party are eager to quash the agreement immediately. Doing so would be foolish: The US and its allies have already given up most of their required concessions, while Iran’s obligations won’t be fulfilled for years. Indeed, not even Trump wants to tear up the deal right now, instead asking lawmakers to establish a list of Iranian actions or “trigger points,” that could merit new sanctions down the line. The question, then, is whether it is possible to use the uncertainty Trump has created over the pact’s future as leverage to improve it. How would that work? First, the US would try to get Iran back to the table by ramping up sanctions unrelated to the nuclear deal but based on Iran’s record of sponsoring terrorism, violating human rights and testing illegal ballistic missiles. This could include designating the elite Islamic Revolutionary Guard Corps as a terrorist organization, which means corporations or banks that do business with it would be subject to harsh US penalties. The US could also add more punishments to Iranian airlines and other entities that funnel weapons and military advisers to Tehran’s proxy forces in the
Villanueva. . . continued from A10
off reports in a security summit in Singapore that around 1,200 ISIS operatives have been spotted in the Philippines. When the Marawi siege began, Indonesian Defense Minister General Ryamizard Ryacudu declared that ISIS members, fighting alongside local Moro rebels who have pledged allegiance to the radical group, include 40 from his country. The security summit warned of a probable full ISIS invasion of southern Philippines, and possibly of other parts of the country. Among the topics in the Singapore security conference was the fear that cities or places like Marawi could become a new base for the Islamic State groups, even as it is losing ground in the Middle East. In a TV interview, AFP Spokesman Maj. Gen. Restituto Padilla said that, despite Duterte’s declaration, the war in Marawi continues. “It will continue until armed elements are dealt with. But terrorists no longer have complete control. There are still a few more that are left, and a few more hostages that are still in the area that remains to be a battle area.” I hope that the military’s determination to completely clear the Southern Philippines of terrorists bears fruit. There is this growing fear that the death of the rebels’ two leaders could inspire more jihadists to seek martyrdom. To them, the death signifies the bravery and commitment of their leaders to die fighting for their cause. Requesting anonymity, a Muslim scholar whom I’ve spoken to said the seed of the jihadists’ longing to have a Caliphate here has been planted. “The ISIS-inspired rebellion is different from the ideology being espoused by the MILF [Moro Islamic Liberation Front] and the MNLF [Moro National Liberation Front]. The two large Muslim secessionist groups are after independence while the ISIS believes that pledging fidelity to the new Caliph is a duty for every Muslim, and those who fail or refuse to do so shall be deemed as apostates, and will be fought and struck down.” Declaring an Islamic Caliphate, he explained, means that limits and fences among Islamic countries are nulled: “There will be a single Islamic economic system and currency, and an army to defend it. It also means there will no longer be any subservience to any country, requiring the formation
region. It could threaten to quash a deal by Boeing Co. to sell $20 billion worth of planes to Iran’s commercial airlines. And it could enact stronger sanctions against the Iran-funded terrorist group Hezbollah. To get real concessions from Iran over its nuclear program, however, Washington will need the cooperation of the European nations that helped broker the deal. That will be difficult, since they all opposed the US decertification. At the same time, they acknowledge that the deal is not perfect. A stronger agreement isn’t hard to envision. It would include prolonging the 10- to 15-year period during which Iran is prevented from restarting various aspects of its nuclear program, reducing the number of centrifuges Iran is allowed to operate and ensuring that international inspectors truly have “anytimeanywhere” authority. Under the best-case scenario, Trump’s decertification will prod both Iran and the deal’s European partners to the negotiating table. If the agreement is working as well as they say, they will not want to lose it. The risk is that, in response to Trump’s decision, Iran will declare the accord null and void and restart its nuclear program. And if Europe fails to comply with the re-imposition of US sanctions, they will be far less effective. Decertification may also keep US companies out of legitimate business deals in Iran, leaving them free for European and other competitors. It’s hard to argue that the pact doesn’t need improvements. The question is whether Trump’s decision to decertify it will help bring them about.
Msgr. Sabino A. Vengco Jr.
Alálaong Bagá
I
N confrontation with his critics, Jesus answers the trapquestion: “Is it lawful to pay the census tax to Caesar or not?” (Matthew 22:15-21). For those really searching for the truth, honesty is needed to find the balance between the spiritual and social realms.
A deceitful question The question was put to Jesus with the intention of tripping Him. Two opposite camps united to catch Him in a dilemma and so neutralize Him. The followers of Herod were a faction favorable to the Roman imperial power, while the Pharisees were intransigent against the usurpation of power by the Romans. Jesus is lost whether He answers their question in the affirmative or in the negative. To answer “yes” is to oppose the popular sentiment against the tax as represented by the Pharisees and to side with the detested Roman collaborators, thus confirming His known friendly attitude toward tax collectors. To answer “no” is to invite the
denunciation by Herod’s partisans and to be in conflict with the Roman authorities. Jesus’ enemies thought they have him pinned down without escape by the horns of their dilemma. Apart from the hypocrisy and malice of the critics of Jesus, the question about taxes was a matter of conscience for many. Does the law of God allow us to make compromises with detestable forces or does it order us to refuse obedience to them? Without going as far as armed rebellion, is civil disobedience an open option for believers?
Give to Caesar what is Caesar’s
His enemies’ deceitful cleverness overlooked Jesus’ wisdom. Their
Dr. Rene E. Ofreneo
MacGraphics Carranz, San Miguel infrastructure forge exclusive ad partnership
San Miguel Corp. (SMC) Infrastructure has recently chosen MacGraphics Carranz (MGC) as the exclusive operator for out-of-home (OOH) advertising platforms in a host of new SMC-owned locations. The partnership agreement grants MGC sole rights to offer clients cost-effective outdoor advertising spaces to create awareness and drive brand purchases in major high-traffic locations, including the South Luzon Expressway, Skyway, Star tollways and the new Ninoy Aquino International Airport Expressway. The media agency’s initial plans include supplying tollway displays, bridgeway displays, tollgate posters, column banners and lamppost banners. To further enhance these platforms, MGC also plans to feature top-of-the line LEDs billboards, light boxes and other new outdoor technologies that allow for increased ad visibility and conversion. As one of the country’s top OOH providers, MGC provides clients with installation and dismantling of billboards, fabrication of signages and conceptualization of creative materials. For comments and suggestions, e-mail me at mvala.v@gmail.com.
readiness in producing the tax coin Jesus asked for indicated their use of it and their own acceptance of the financial advantages of the foreign administration. Holding up the coin Jesus questioned them, “Whose image is this and whose inscription?” To their reply “Caesar’s”, Jesus added: “Then repay to Caesar what belongs to Caesar.” Sidestepping the issue of the lawfulness of the tax, those who use the Roman coin should repay the Roman Caesar in kind. But Jesus raised the matter to another level when he further pointed out that neither to be neglected is giving “to God what belongs to God.” They discussed about tax in relation to God’s law; they should be concerned no less about repaying God with the good deeds they owe Him. But the trickery and self-deception go on. Some people today have twisted Jesus’ words as stating a law of compromise between duties to God and duties to temporal power, confining the sovereign power of God and Caesar’s temporal power to their respective domains, as in a separation of Church and state. There are those who want the total autonomy of political power, finding as intolerable any interference of religious faith. This would be the stand of politicians who abhor being
challenged regarding the morality of their actuations, and for whom religion should have nothing to do with politics, conveniently oblivious of the religious truths essential to our Constitution. Paradoxically, this is so when politics becomes a religion, an ideology that demands total submission from and total control of people: Caesar playing God. Alálaong bagá, the Church does not begrudge Caesar what is Caesar’s. But we must make sure to give back to God what is God’s. We are all bound to our duties toward God, always and everywhere. He alone can demand that we give back everything to Him, to God alone do we owe everything. Our duties to Caesar are in the light of this absolute: “for the Lord’s sake.” As Saint Peter wrote, “Be subject to every human institution for the Lord’s sake, whether it be to the king...or to the governor.... Give honor to all, love the community, fear God” (1 Peter 2:13-14:17). Saint Augustine later noted that if Caesar can only look for his image on the coin you use, God looks for His image in your very soul, in your deeds of love and fidelity. 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.
The race to the bottom: CSOs’ scorecard on globalization
Bloomberg View
of universities and factories to make Muslims a major power in all fields.” I believe that the government must forge a strong alliance with moderate Muslims—both the MILF and MNLF—to effect lasting peace in Mindanao. The passage of Bangsamoro basic law (BBL) could be a step in the right direction. For one, the Moro rebellion has been going on for decades and has not been quelled. Former President Joseph E. Estrada declared an all-out war against the MILF to no avail. The same problem, which tormented administrations before him, persists to this date, and the emergence of a new breed of Muslim jihadists has made the problem even worse. The Muslim scholar said that lasting peace can only be had if Muslims could be persuaded of the government’s sincerity in addressing their plight and recognizing their very existence. It’s not enough to liberate Marawi. The Muslim insurgency in Mindanao is far-reaching. The Abu Sayyaf is still a force to reckon with, along with other Moro armed groups that have been a major stumbling block to peace and economic development.
Thursday, October 19, 2017 A11
LABOREM EXERCENS Continued from A1
R
ising inequality can be seen in the consumption or expenditure patterns among income classes, particularly between the top 20 percent and the bottom 20 percent. A World Bank East Asia report in 2011 noted that in the Philippines the top 20 percent outspend the bottom 20 percent by about nine times, in Cambodia by about eight times and in Thailand by seven times.
Rising inequality can also be seen in the declining share of wages in GDP. In Building a Sustainable Future with Decent Work in Asia (2011), the International Labor Organization reported that “Wage growth is lagging behind labor productivity growth, and the share of wages in national GDP is declining throughout the region”. The decline is most dramatic in China, with the All-China Federation of Trade Unions (ACFTU) officially estimating the decline of the wage income share vis-à-vis the GDP to be 20 percent since the liberalization or globalization of the economy. Such disproportionate sharing of income has contributed to the waves of labor disputes in China, which are rarely reported in Philippine media. The skewed distribution of jobs and incomes is most vividly reflected in the production and marketing of goods done by Factory Asia. The latter refers to the global value chain (GVC) set up by multinational corporations in different Asian countries to take advantage of cheap Asian labor. While Asia is a beneficiary in terms of jobs, its share of wages is woefully low. This is best illustrated in the case of iPod, which is designed and marketed by the Americans and assembled by Taiwanese-owned factories in China (see Table 1). As documented by the US Congressional Research Services, an iPod sold in 2006 at the American market at $299 gave American companies $163, parts suppliers from other Asian countries $132 and only $4 to Chinese workers doing assembly work. The foregoing pattern of iPod wage distribution is a global one, meaning the same pattern obtains in various GVCs established by transnational corporations (TNCs) in different globalized industries. Trade unions and CSOs call this growth pattern a “race to the bottom.” The race means global capital moves in and out of countries in search of the cheapest, malleable and productive labor. In this race, TNCs and big national firms tend to ignore global labor,
social and environmental standards in the pursuit of global profitmaking activities.
The trade unions and CSOs also blame the Race to the Bottom for the global financial crisis. Under neo-liberal globalization, those engaged in Factory Asia put their excess capital and profits into speculative businesses, including the imagined future values of commodities and the bundles of so-called collaterized debt obligations, or CDOs. Super profits extracted by the few in their Factory Asia and GVCs were invested, Ponzistyle, in hedging funds. Eventually, financialization led to huge bubbles, which burst into a full-blown global financial crisis from 2007 to 2010. The Race to the Bottom is one major reason there are huge imbalances in the global supply of goods and the global demand for the same. The global “overproduction” of goods, especially those produced by the TNCs under their Factory Asia
Table 1. iPod earnings and jobs in US, China and other countries, 2006 Jobs US engineers & professionals US non-professionals US production
Number of employees Total Earnings (in US$ million) 6,101 US$M 525.2 7,789 219.2 30 1.4
China engineers & professionals China non-professionals China production Other foreign engineers & professionals Other foreign non-professionals Other foreign production
555 0 11,715 3,265 4,892 7,445
5.6 0 18.0 126.0 (Japan, SKorea) 96.5 72.3 (Japan, SKorea)
Source: Rising Economic Powers and the Global Economy: Trends and Issues for Congress, by R. Ahearn, 2011, US Congressional Research Services. Trade union organizers blame the race to the bottom as one reason there is a terrible weakening of the labor movement almost everywhere. Global capital is able to fly in and out of deregulated national markets in search for the cheapest production platforms, which include union-free EPZs. The race even pits host countries against each other in their frenzied drive to attract global capital. Hence, the race to the bottom means sacrificing global and national labor, social and environmental standards in order to win foreign investment. Some companies are also allowed to undertake excessive or extended outsourcing (sub-sub-sub-subcontracting) just to avoid the regularization of workers and save on labor cost by maintaining a pool of cheap replaceable workers. Exhibit A: In Subic Hanjin has a large shipbuilding and repair yard covering over 300 hectares. Since its operations, over 50 construction workers had reportedly died due to poor health and safety working conditions. However, Hanjin has evaded responsibility for their deaths by claiming that all these workers were hired and employed by independent contractors, not by Hanjin.
in China and other countries, finds the market narrowing because of the global “under-consumption” of the same goods, because the workers and farmers producing these goods have declining wages and incomes under an unequal and unjust global sharing of wages and profits. In short, the crisis of overproduction has a twin: the crisis of under-consumption. The race to the bottom also adversely affects the domestic producers of the individual countries. Factory Asia and neo-liberal globalization ignore the role in job and wealth creation of other sectors of society, such as the domestic industry, domestic agriculture, local artisans and producers, farmers and fisherfolk and the so-called producers of “non-tradeables”, such as the selfcontained indigenous peoples, who are not active participants in the globalization processes. These actors in the economy are marginalized under the neo-liberal growth model, which emphasises, in a dogmatic manner, global trade participation and wholesale economic liberalization as the only routes to growth and development. Even domestic agriculture and food sufficiency in support of local consumption
are sacrificed in the name of global trade opening. Thus, in the ensuing competition among the big corporations and the TNCs in globalized markets, the locals and the non-tradeables get clobbered or are simply sidelined. The huge expansion of the informal economy, which accounts for over half of the employed in the Philippines and Asia, is considered by the neo-liberals as a failure of the economy to deepen global integration. The reality is that the ranks of the informals have been swelling because the locals and the non-tradeables are unable to compete in the market dominated by the big players. They are also discriminated by economic programs that openly push for global and regional integration. In sum, trade unions and CSOs argue that financial crises and economic bubbles are likely to recur, and societies are likely to convulse due to deep social and economic divisions—if there are no bold major reforms at the global, regional and national levels. They find the G20 debates on the financial rules in the post-GFC period too narrow and limiting. What the world needs today is a just and transformative economic integration, which puts people at the center of every community building and national development program. A just and transformative economic integration requires a rebuilding of the Social Contract forged by tripartite social actors in the 1930s and 1940s (after World War II) in many countries. In the United States President Franklin Delano Roosevelt, facing a national crisis of survival, adopted a twin policy of social activism and Keynesian-style, spending to tame the 1929-1933 Great Depression. Apart from massive government pump priming and massive spending for social assistance for the poor, Roosevelt moved for the strengthening of unionism and collective bargaining. In Western Europe the foregoing Roosevelt programs were further strengthened through the institutionalization of a welfare state regime that provides universal social protection for the citizenry and gives utmost importance to the role of unions in industry and in society. A just and transformative economic integration also means an overhaul of the neo-liberal economic program and the adoption of new rules on global, regional and national economic arrangements. In brief, a new architecture of globalization, where people are at the center, should be developed. For the Philippines and other developing countries, this implies development planning that goes beyond the value chain framework of TNCs and neo-liberal economics.
2nd Front Page BusinessMirror
A12 Thursday, October 19, 2017
PHL needs above 6% GDP growth up to 2040 to end poverty–expert
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By Cai U. Ordinario
@cuo_bm
f the Philippines wants to eradicate poverty, it must post a GDP growth of at least 6 percent every year until 2040, according to a former dean of the University of the Philippines (UP) School of Economics. In a presentation on Wednesday, UP-based economist Ramon Clarete said this economic growth should be accompanied by a 5-percent annual increment in per-capita income over a period of 25 years. The Philippines has already improved its GDP growth to an average of 6.2 percent between 2010 and 2015. In 2016 GDP grew by 6.9 percent, and in the first semester of 2017, it expanded by 6.4 percent. “The challenge for us is really sustaining this particular grow th. I put some numbers there—at least 6 percent, percapita income growing at about 5 percent. We really have to curb dow n our population grow th and poverty will be eradicated in the next quarter of a century. There are hurdles to sustaining that particular growth,” Clarete said in a forum sponsored by the Philippine Institute for Development Studies and the Australian National University, in cooperation with the Philippine Competition Commission. Growing the economy, Clarete added, requires making food cheap and accessible for all, as well as boosting the country’s trade and investment growth. Clarete said that for one, rice remains expensive, not only for consumers, but also for farmers themselves. He said that, if the price of rice, the country’s staple, goes down, Filipinos will have a better chance of saving money. The poorest farmers, he noted, also suffer from expensive rice since they are consumers themselves. Data showed that this is largely
due to high trade costs. Clarete said trade costs in the Philippines are very high and, according to the United Nations Economic and Social Commission for Asia and the Pacific, is equivalent to 50 percent of world prices. The Philippines, Clarete added, spends about P36.25 billion a year for poor farmers, who are also penalized by high rice prices. “Industry and manufacturing are not really kicking because wage
$3,580 The country’s per-capita income as of 2016, still below the $4,036 to $12,475 range for upper middle-income economies
costs can be high when food costs are high; so we really need to do something about agriculture. Improve the productivity in agriculture to bring down food costs in order to put pressure and encourage investments in industry and manufacturing,” Clarete said. The main hurdle in improving agriculture productivity is agrarian reform, which is one restriction in land ownership in the Philippines. Apart from these, Clarete said hurdles include low public spending on social protection, education, infrastructure and health. However, Clarete made it clear that he was not in favor of the
recent “no-tuition policy” in state universities and college (SUCs). He said the money to be spent on this could have been used to improve vocational training or postgraduate studies for students. Clarete said the free tuition provided to SUCs is “just costly” and eventually make it difficult for public funding. This could lead to lower resources for other essential budget items. “I don’t like the current education policy where there is no tuition in SUCs. I would certainly increase investments in providing for well-deserving young students free education in the tertiary, even in the postgraduate level. Also continue the socialprotection policies in the past that would bring down the alienation of the poor,” Clarete told the BusinessMirror. If these hurdles in the economy will be addressed and growth will be sustained, Clarete said foreign direct investments will post a 10-percent growth annually Continued on A2
Qualitek Asian Group of Cos. CEO Martin Han (left) welcomes to the Philippines Hon. David Ige, governor of Hawaii, who is in town for a five-day trade mission. Han, an international businessman based in the Philippines but was raised and educated in Hawaii, pays a courtesy call on the governor.
Phl politics to be overrun by political dynasties as corrective measure hangs Continued from a1
counterweight,” Mendoza said. A d d r e s s i n g f at d y n a s t i e s mean improving income and inequality since, Mendoza added, political dynasties are common in poor provinces, such as in the case of the 22 Ampatuans, who hold elected positions in Mindanao, and the Ecleo family, who holds nine positions in the Dinagat islands. Mendoza said in areas where incomes are higher, such as in r ising and established urban centers, candidates who do not belong to any political family sometimes get elected. These were obser ved in the case of governors Grace Padaca of Isabela Province and Ed Panlilio in Pampanga. However, the lack of support for them after they get elected into office eventually cost
DEVELOPERS LOOKING INTO VIABILITY OF SELLING HOMES TO MILLENNIALS IN BPOs By Manuel T. Cayon @awimailbox Mindanao Bureau Chief
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AVAO CIT Y—A group of housing developers is keen on finding out how workers and agents in the business-process outsourcing (BPO) sector could become bankable in terms of the housing uptake. Sol Lagmay, a member of the board of directors of the regional chapter of the Subdivision and Housing Developers Association, said the group was conducting a study of how the sector could include the BPO workers among its clients “considering the lack of permanent work and security of tenure in that industry.” The call-center agents and the rest of the BPO personnel and workers “have the financial capacity but the nature of their work, which jumps from one company to another, and one BPO job to another, is a risk also to the housing sector,” Lagmay said, referring to amortizing units, which could last for 30 years. Being among the sectors whose personnel are awash with money, Lagmay said, “it should also be worthwhile for them to benefit from the housing opportunity.”
them the succeeding elections. Apart from higher incomes, Mendoza said breaking political dynasties means bringing down the cost of running for public office. The high cost of running for office serves as a disincentive for capable Filipinos to seek a public post. Mendoza said r unning for office in the Philippines starts in the hundreds of millions for certain local posts to the billions for national positions. The high cost of running for office also strengthens the hold of corruption in the Philippine local and national governments. “If you have stronger parties, if you are able to create a younger set of leaders, much more innovative, much more competitive; if the supply side is addressed, and
then there is a rising middle class, there will emerge youth leaders who can stay and not go abroad, who can eventually run for office. This is what we want to happen. There were a lot of youth leaders in the 1960s, but why don’t we see that now? No one is given the opportunity to rise up and be the alternative,” Mendoza added. In a 2015 Policy Note, PIDS senior research fellow Jose Ramon Albert and Mendoza said the 10 poorest provinces had poverty incidence of 43.49 percent to 67.31 percent and had an incidence of dynasties in political leadership of as low as 51.43 percent to as high as 59.47 percent. In 2012, the poorest province was Lanao del Sur, which had a poverty incidence of 67.31 percent and 59.47-percent incidence of dy-
nasties in political leadership. The second-poorest province was Eastern Samar with a poverty incidence of 55.43 percent and a 54.17-percent incidence of political dynasties. The least poor of the 10 poorest provinces were Northern Samar and Western Samar, which had a poverty include of 43.5 percent and 43.49 percent and a 52.61-percent and 51.43-percent incidence of political dynasties, respectively. Apart from having a link to poverty incidence, political dynasties weaken checks and balances in the government and the political system. The authors also said political dynasties “perpetuate personality-based politics” that focus on a candidate’s name rather than his or her credentials. Cai U. Ordinario
“One thing, however, is that these BPO workers, have spending priorities other than getting housing units this early phase of their working years,” she said. “Mostly millennials [those in the 16 to 29 years old bracket], they spend their money on gadgets.” Aside from the propensity to jump from one BPO company to another, Lagmay said workers also transfer from one province or city to another, where there are better opportunities. “It’s one study we are doing for them [BPO workers], to find out how they may also benefit from all these housing projects for Filipinos who need them,” she added. Pag-IBIG Fund CEO Acmad Rizaldy P. Moti said he sees a future wherein workers would be highly mobile so that “we may have to consider that people may prefer to rent than get housing units in fixed communities.” Moti said the public housing sector could consider constructing condominiums and tenements to suit the highly mobile nature of some occupations. Lagmay agreed and said housing developers may also consider “offering them rent-to-own units,” where the BPO workers may still continue paying the units they took out from the developers “even if they work far from these housing units.”
Villar: DPWH receives equipment from China for Marawi rehabilitation
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HAWAII GOVERNOR IN MANILA
www.businessmirror.com.ph
ublic Works Secretary Mark A. Villar announced the arrival of 47 sets of heavy equipment from China that will be used to speed up the recovery phase of Marawi City. The heavy equipment arrived at the Port of Iligan City this week. “Through China’s Emergency Humanitarian Assistance Program, we expect seven more equipment to arrive,” Villar noted. The sets of heavy equipment from China include: ■ Eight sets of excavators; ■ Sets of wheel loaders; ■ Sets of compactors; ■ Sets of track-type tractors; ■ Sets of bulldozers; ■ Sets of dump trucks; ■ Sets of cement mixers; ■ Unit of container van. The Department of Public Works and Highways (DPWH) has also accomplished site-development works for six areas of transitory houses for Marawi siege evacuees.
Entrepreneurs. . . to carry out the business. Designing the operating model means sorting out choices across the entire enterprise that need to work together. A successful operating model is more than just “how you make money;” it’s a set of decisions that together create more value than each would on its own. It’s about doing things that reinforce each other, creating a whole that’s more valuable than the sum of its parts. What is your competitive advantage—your source of uniqueness? Even if you’re delivering a great product that customers love, if competitors can easily copy you, economic theory suggests, they’ll drive your profits down to zero. There are many sources of competitive advantage, however, and they come in roughly two broad categories. Resource-based advantages
“The area, which has been developed by the DPWH in Barangay Sagongsongan, Marawi City, can accommodate 1,100 families,” Villar noted. “Road concreting will be completed by November this year,” he added. The DPWH is the lead agency for the Reconstruction Committee of the Task Force Bangon Marawi. “We have ordered all engineers concerned to prioritize the assessment of the area and make sure that all necessary procedures are taken cared of even before the on-ground rehabilitation starts,” Villar added. “Our priority is to make sure that roads and bridges are in place such that there is smooth access of Marawi and its nearby towns,” he added. Assistance to evacuation centers, such as improvement of roadways, installation of water-supply system, latrines, communal kitchens and other related matters, were consistently being provided and monitored by the DPWH.
Continued from A1
are based in unique assets that are valuable, rare, hard to imitate, durable and specific to your organization. Position-based advantages involve your role and position in your industry—things like scale and incumbency or network effects and early entry. Think about the resources you have that would be hardest for competitors to copy, as well as any advantages that your position confers. What would keep another company from replicating your operating model? As you design your business, you’ll want to go deeper into the field of strategy, to expand your theory of how you create and capture value. But don’t lose sight of these questions: They are the foundation of any business’s success. The New York Times News Service
Kevin J. Boudreau is an associate professor of entrepreneurship and innovation at Northeastern University.