Businessmirror october 20, 2016

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Thursday, October 20, 2016 Vol. 12 No. 8

‘Developers avoiding socialized housing’

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By Cai U. Ordinario

@cuo_bm

he government will have to shoulder on its own the shelter needs of the poorest 30 percent of Filipinos nationwide, as all of them cannot afford socialized housing, while private developers are shying away from these projects for being “unprofitable”.

inside

my roman holiday

₧450,000

The maximum cost of socialized-housing units that private developers deem as unprofitable, according to Robredo This is based on the report “Better, Greener, Smarter Cities in an Inclusive Philippines” presented

by Vice President Maria Leonor G. Robredo, the concurrent chairman of the Housing and Urban Continued on A2

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HOUSE APPROVES P3.35-T2017BUDGET AHEAD OF SCHEDULE

By Jovee Marie N. dela Cruz

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@joveemarie

he House of Representatives on Wednesday approved on third and final reading President Duterte’s proposed P3.35-trillion national budget for next year, weeks ahead of schedule.

Deputy Speaker and PDP-Laban Rep. Ferdinand L. Hernandez of South Cotabato said the lower chamber approved the proposed 2017 General Appropriations Act (GAA) with 243 affirmative votes, five negative and one abstention.

₧478.1B The projected budget deficit next year, or 3 percent of GDP

The 2017 GAA, or House Bill (HB) 3408, will be submitted to the Senate for its own deliberation.

Mr. Duterte earlier certified as urgent the proposed 2017 GAA, dubbed the “budget for real change”. It was scheduled to be approved when session resumes on November 7.

Congress goes on a Halloween break from October 19 to November 6.

Of the P3.35 trillion, 40.14 percent, or P1.34 trillion, will be for empowering human resources through See “Budget,” A2

life

Warmer ties with China to usher in infra ‘golden age’

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tom cruise keeps it real

PREPARING FOR LAWIN Weather forecaster Aldczar Aurelio closely monitors the track of Supertyphoon Lawin (international code name Haima) at the Philippine Atmospheric, Geophysical and Astronomical Services Station office in Quezon City. NONOY LACZA show

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DODGERS CAN DO THIS

COMP urges govt to focus campaign on small miners

sports

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By Jonathan L. Mayuga

A

@jonlmayuga

fter focusing on illegal dumps across the country, the Office of the Ombudsman vowed to actively go after officials of local government units (LGUs) and state agencies that abetted illegal mines—or those involving small miners— a move welcomed by mining’s big players belonging to the Chamber of Mines of the

PESO exchange rates n US 48.3670

Philippines (COMP).

The COMP said it supports President Duterte’s marching orders to clamp down on irresponsible mining, but, at the same time, expressed dismay over the tightening of screws that targeted large-scale miners that operate legally and responsibly.

Under the watch of Environment Secretary Regina Paz L. Lopez, the Department

RECIDORO: “Doing nothing to stop illegal mining can be considered dereliction of duty.”

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By Bianca Cuaresma

@BcuaresmaBM

otential friendlier ties between Manila and Beijing are expected to benefit the country, especially in terms of infrastructure opportunities, as Chinese construction firms and financing options become available to the Philippines.

Although the full extent of the investment deals may be “muted” by underlying political tensions, global think tank BMI Research said in a report that increase Chinese involvement in Philippine infrastructure will help close funding gaps in the Duterte administration’s “infrastructure-spending ambitions.”

President Duterte and his economic team have been vocal about ramping up infrastructure spending to address gaps and issues that could dampen sentiment and the long-term investability of the country.

In his recent pronouncements, the President has made it evident that he wants closer ties between the Philippines and China.

“We expect President Duterte’s tilt toward friendlier relations with China will provide a boost to the Philippines’s infrastructure industry, as Chinese construction and financing agreements help fulfill his plans for a ‘Golden Age of Infrastructure’ in the country,” the report read.

See “Warmer ties,” A2

Continued on A2

n japan 0.4657 n UK 59.4866 n HK 6.2337 n CHINA 7.1742 n singapore 34.9119 n australia 37.0588 n EU 53.1215 n SAUDI arabia 12.9006

Source: BSP (19 October 2016 )

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A2 Thursday, October 20, 2016

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‘Developers avoiding socialized housing’ Continued from A1

Development Coordinating Council (HUDCC), at the UN Habitat III in Quito, Ecuador.

The poorest-30 percent, also known as the Bottom 30, are composed of families earning an average of P146,984 to P231,134 a year, based on the 2012 Family Income and Expenditure Survey (FIES).

The HUDCC report stated that socialized housing in the Philippines, which includes building a house and buying land, costs a maximum of P450,000.

Budget. . .

“A na lysis shows t hat t his package appears to be generally affordable at the 30th percentile, or by about 70 percent of the urban households living in Metro Manila, but not by the bottom 30 percent, or those living in regions outside the NCR [National Capital Region],” the report stated.

The socialized-housing cost appears too high a price for the income of Filipinos in the Bottom 30, since more often than not, their expenses are higher or just slightly lower than their incomes.

Data showed that on average, the

Bottom 30 families spend a minimum of P156,081 to a maximum of P219,078 a year on various food and nonfood commodities.

In terms of spending, the majority, or 62.3 percent, of their expenses are made on food and only 20.6 percent are spent on housing and utilities, such as water, electricity, gas and other fuels.

“Private developers, for their pa r t , h ave t r ie d to pro v ide housing but unable, so far, to deliver, at the price and scale needed, since many of them consider housing for the urban poor

to be unprofitable. The majority of them also perceive they will be unable to build and sell houseand-lot packages for P450,000 [$9,575],” the report stated.

The cost of buying a house is also inaccessible for unemployed and underemployed individuals, as well as informal settlers in many urban areas nationwide.

Given this, the report stated that the government needs to create more innovative financing options for the poor, particularly urban informal settlers.

One of these approaches can

(ISFs) through the Social Housing Financing Corp. (SHFC). The SHFC is a government agency organized to undertake financing initiatives in social housing for the urban poor.

It provides financing through the Community Mortgage Program. Since 2001, more than 230,300 families have gained access to secure tenure through the program. Between 2001 and 2015, the Philippine government provided relocation and shelter security to a total of 550,560 families— spending between P203,000 to P310,000 per family.

COMP urges govt to focus campaign on small miners

Continued from A1

education, health care, social welfare and other social services.

About P923 billion, or 27.6 percent, will go to economic services to fix broken infrastructure network, boost agriculture and rural sector, as well as generate more jobs and livelihood.

For general public services and defense, the government will allocate 22 percent, or P729 billion, of its total budget.

The 2017 budget is higher by 11.6 percent than the current year’s national allocation of P3.002 trillion. As a percentage of GDP, the 2017 budget represents 20.4 percent, compared to this year’s 20.1 percent of GDP. The total revenue next year is expected to reach P2.48 trillion, or around 10 percent more than the government target to collect this year. It is equivalent to 15.6 percent of the GDP. The national government budget deficit next year is expected at 3 percent of GDP, or P478.1 billion. This shortfall will be funded through borrowings. The total borrowings in 2017 will reach P631.3 billion.

The GDP is expected to grow by 6.5 percent to 7.5 percent in 2017 through sustained expansion of the services and industry sectors, and the expected rebound of the agriculture sector.

By department and special-purpose allocations, the top 10 are the department of Education with P567.7 billion; Department of Public Works and Highways, with P458.6 billion; Department of Interior and Local Government, with P150 billion; Department of National Defense, with P134 billion; Department of Social Welfare and Development, with P129.9 billion; Department of Health, with P94 billion; State Universities and Colleges (SUCs), with P58.8 billion; Department of Transportation, with P55.4 billion; Department of Agriculture, with P45.2 billion; and Autonomous Region in Muslim Mindanao, with P41.7 billion.

In a statement, House Appropriations Chairman and National Unity Party Rep. Karlo B. Nograles of Davao City said the lower chamber has decided to restore the budget cuts made in the National Expenditure Program (NEP) against SUCs and government hospitals nationwide.

Nograles said his panel agreed to restore the budget cuts to avoid adverse effects to the country’s quality of education and the delivery of public health care.

“We are one in the belief that these SUCs and our government hospitals must be given utmost priority at all times. Quality education and quality health care are key public services that have a direct impact on our nation’s future,” Nograles said.

include housing microfinance and microenterprise finance. This can be a sustainable source of unleveraged finance for informal settlers.

“A capable and committed financial institution that caters to the development and end-user financing for informal settlers through a variety of appropriate and innovative lending instruments will be essential to scalingup the appropriate interventions,” the HUDCC said.

Currently, socialized housing finance is available only to legally organized informal-settler families

Continued from A1

DUTERTE IN CHINA President Duterte (right) prepares to leave from a shopping mall in Beijing, China, on Wednesday. This week’s visit to China by Mr. Duterte points toward a restoration of trust between the sides following recent tensions over their South China Sea territorial dispute, China’s official news agency said on Tuesday. Story on A4. AP Photo/Ng Han Guan

of Env ironment and Natura l Resources (DENR) has so far suspended 11 large-scale mining operations for failing environmental standards based on audit criteria involving environmental, social and biodiversity considerations, on top of the usual technical aspects of mining.

Interviewed by the BusinessMirror, COMP Vice President for L ega l a nd Pol ic y Ron a ld Recidoro said it is about time that the Ombudsman goes after illegal-mining operations.

He s a id , more i mpor t a nt , the Ombudsman should also go after officials of the government, both at the national and local levels, for conspiring with smallscale miners.

“Doing nothing to stop illegal mining can be considered dereliction of duty. Under the law, the government is mandated to stop illegal-mining operations,” Recidoro said.

The ongoing campaign of the DENR in enforcing Republic Act 9003, or the Ecological Solid Waste Management Act of 2000, targets LGUs that fail to close open dumps in their respective jurisdictions.

Officials from more than 30 LGUs have been charged for failing to close illegal dumps, so far.

In the case of illegal mining, be it large scale or small scale, Recidoro said LGUs are liable for failing to stop illegal mining.

LGUs headed by the provincial governor sit as members of the Provincial Mining Regulatory Board, which has jurisdiction over smallscale mining activities.

He said aside from local officials, the Ombudsman should go after DENR officials who are not doing their job to stop illegalmining operations.

The COMP had issued an official statement supporting Environmental Ombudsman Gerard Mosquera’s pronouncement to go after illegal mining after the campaign against illegal dump operations.

In its statement, the COMP said that mining should both be legal and responsible.

“It is not enough that we are legal. We must primarily be responsible miners. The chamber has always called for stricter measures in going against illegal miners, as these are the ones who do not contribute to the economy of the country and do the most damage to

Warmer ties. . .

Continued from A1

The President is now in China for a four-day state visit.

The think tank also said closer bilateral relations will benefit both the Philippines and China.

“China sees befriending the Philippines as a way of reducing American influence in Asia; while the Philippines seeks to gain access to China’s generous infrastructure investment packages, which peers in Southeast Asia are already

the environment,” Recidoro said.

Mosquera, in a report, said the Office of the Ombudsman will coordinate with the DENR in going after these illegal miners.

Lopez said the DENR, through the National Anti-Environmental Crime Task Force (NAECTF), will go after illegal small-scale mining activities, but, so far, none of the small-scale miners have been stopped.

There are an estimated 300,000 companies and ind iv idua ls engaged in illegal small-scale mining activities, which, the COMP said, should be held accountable for the environmental destruction in many areas.

Last week the NAECTF raided illegal quarry sites in Mount Banahaw, particularly on the side of Sariaya, Quezon.

The raid resulted in the arrest of more than 30 people and seizure of at least a dozen of pay-loaders, backhoes, cargo trucks and other heavy equipment, used by at least 20 different companies engaged in the illegal quarry operations in the area.

According to the COMP, they are holding on to the promise of Ombudsman Conchita Carpio-Morales to go after illegal mining, as she stressed the need for the government to address “environmental degradation by enterprising individuals.”

“Members of the Chamber are covered by a strict edict to safeguard our people, the country’s interests and the environment.

We will continue to adhere to the tenets of responsible mining and support efforts of the government to weed out the irresponsible miners, who conduct their business without regard for the law,” Recidoro stressed.

The Mining Act of 1995 provides “mining activities must always be guided by current best practices in environmental management committed to reducing the impacts of mining while efficiently and effectively protecting the environment.”

According to Recidoro, the mining industry remains to be the biggest contributor to the National Greening Program of the government, with 20 million trees planted from 2011 to 2014.

Data from the DENR’s Mines and Geosciences Bureau shows the mining industry’s contribution to reforestation efforts in the country has already covered an estimated 48,000 hectares. benefitting from,” the report read.

However, BMI Research said the downside risks to their outlook for the country attracting greater investment from China arise from “near-term political uncertainty.”

“Although Mr. Duterte has taken a less confrontational approach to the South China Sea dispute, there is the risk his position could change in future given his unorthodox political style and populist politics, which would then place into question any China-backed infrastructure projects in the pipeline,” the report read.

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Thursday, October 20, 2016 A3

Excise tax on sweetened drinks may create more harm than good–BIAP

By Jovee Marie N. dela Cruz

A

@joveemarie

S the House Committee on Ways and Means started its hearing on a measure imposing excise tax on sugar sweetened beverages (SSBs), the Beverage Industry Association of the Philippines (BIAP) on Wednesday called for “nondiscriminatory” tax proposals on its beverage products.

This, after the Department of Finance (DOF) and government health agencies backed the proposal to impose tax on sweetened beverages.

During the lower chamber’s hearing, Joan Sumpio of the BIAP urged lawmakers to further study the impact of the proposal to the Filipino people.

“The BIAP supports the Duterte administration’s tax-reform efforts through fair and nondiscriminatory tax measures that would have broadbased positive impact for the country. However, some tax proposals have to be studied further to ensure that these would create more good than harm, particularly the current plans to levy a tax on sugar-sweetened beverages, such as House Bills 292, 3720 and 4005, all filed [in] the 17th Congress,” Sumpio told lawmakers.

Casualties

While the bills on taxing sweetened beverages purportedly seek to curb the risk of developing obesity and other health-related problems, Sumpio, however, said the proposed taxes would only serve to unduly burden “those who can least afford such an increase, while achieving nothing of real significance to address the health angle it purports to target.”

“It is important to note that the beverages that will be affected by the proposed tax are those consumed by the majority of Filipinos, particularly those in the lower socioeconomic classes,” she said.

Sumpio, citing the latest Family Income and Expenditure Survey of the Philippine Statistics Authority, said close to 40 percent of the income of an average family is spent on food and nonalcoholic beverages.

“Items like coffee, juice and soft drinks will become more expensive for ordinary Filipino consumers, and any upward adjustment in prices of these beverages would impact their purchasing power,” Sumpio added.

Any tax proposals on sweetened beverages, he said, will not generate the additional revenue promised.

“BIAP member-firms employ over 30,000 workers, and for each direct job in a BIAP member-firm, an additional six to 10 other people are employed in secondary, support or allied services. It would lead to job losses within the beverage industry and, in turn, among small- and medium-sized retailers who sell sweetened beverages,” she said.

“Worse, it would likely fall short in terms of revenues raised due to industry job losses and foregone retail sales. Most important, these house bills would not solve the Philippine obesity and diabetes challenge,” Sumpio added.

Culprit

Also, the BIAP official said obesity and diabetes are multifactorial, as these are triggered by personal choices and is, therefore, not directly caused by a single factor, much less a single type of food or drink.

“A typical Filipino meal, based on the 2013 National Nutrition Survey of the Food and Nutrition Research Institute, consists mainly of the staple rice and food that are high in fat. This constitutes the lion’s share of calorie intake,” Sumpio said.

“Sweetened beverages are not a regular fixture in many Filipinos’ daily meals. In fact, sugar and syrup represent less than 2 percent of the daily caloric intake in a typical Filipino diet. Singling out sweetened beverages as the sole cause, and taxing these beverages then will not be an effective deterrent to fight the obesity and diabetes challenge in the country,” she added.

Moreover, the BIAP official said discrimination against sweetened beverages without regard to the other food and beverage components of a people’s diet will negatively affect the future of the beverage industry and allied industries, such as sugar, packaging, marketing and advertising sectors.

“Consequently, a stagnant growth in any of these industries would lead to economic slowdown and imperil the jobs and livelihoods of millions of stakeholders,” she said.

The players

The Beverage Industry Association of the Philippines is the umbrella organization of firms engaged in the manufacture, distribution, marketing and selling of beverages in the country. BIAP counts as members some of the country’s top corporations, such as Pepsi Cola Products Philippines Inc., Coca-Coca Philippines, Coca-Cola Femsa Philippines, San Miguel Corp., Mondelez Philippines, Universal Robina Corp., Asia Brewery, Nestlé Philippines, Liwayway Corp., Kopiko, Del Monte Philippines, Asiawide Refreshment Corp. and Zest-O Corp.

For his part, Finance Undersecretary Karl Kendrick Chua said the finance department is fully supporting the proposal, as it is eyeing the bill as one of the offsetting measures to make up the foregone revenues from the comprehensive tax-reform package. “We fully support the bill to increase excise tax on sugar-sweetened beverages,” Chua said.

In House Bill (HB) 292, Partido Demokratiko Pilipino-Laban Reps. Horacio Suansing Jr. of Sultan Kudarat and Estrellita Suansing of Nueva Ecija said their bills seeks to impose an excise tax of P10 on sugar-sweetened beverage per liter of volume capacity to generate additional revenues for the government and promote public health and wellness.

HB 292 seeks to impose an excise tax on sugar-sweetened beverages by inserting a new Section 150-A in the National Internal Revenue Code of 1997, as amended. The new Section 150-A, titled Sugar Sweetened Beverages, provides, “There shall be levied, assessed and collected on sugarsweetened beverages per liter of volume capacity an excise tax of P10. The rate of tax imposed under this section shall be increased by 4 percent every year thereafter effective on January 1, 2017, through Revenue Regulations issued by the secretary of finance.”

Categories

The bill defines sugar-sweetened beverage as “a nonalcoholic beverage that contains caloric sweeteners/added sugar or artificial/noncaloric sweetener.

It may be in liquid or solid mixture, syrup or concentrates that are added to water or other liquids to make a drink.”

Sugar-sweetened beverages include a) soft drinks, soda, pop and soda pop, which are nonalcoholic, flavored, carbonated or noncarbonated beverages; b) fruit drinks, punches or ades, which are sweetened beverages consisting of diluted fruit juice; c) sports drinks, which are beverages designed to help athletes rehydrate, as well as replenish electrolytes, sugar and other nutrients; d) sweetened tea and coffee drinks, which are teas and coffees to which caloric and noncaloric sweeteners have been added; e) energy drinks,

which are carbonated drinks that contain large amounts of caffeine, sugar and other ingredients, such as vitamins, amino acids and herbal stimulants; and f) all nonalcoholic beverages that are ready-to-drink and in powder form with

added natural or artificial sugar. The bill excludes the following from the scope of the Act: 100-percent natural-fruit juices; 100-percent natural-vegetable juices; yogurt and fruitflavored yogurt beverages with pure fruit and vegetable juice

or concentrate; meal-replacement beverages (medical food), as well as weight-loss product; and all milk products, infant formula and milk alternatives, such as soy milk or almond milk, including flavored milk, such as chocolate milk.

A4 Thursday, October 20, 2016

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Duterte’s China visit watched for shift to Beijing

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alks this week between President Duterte and his Chinese counterpart Xi Jinping will be closely scrutinized for signs of how seriously the new Philippine leader intends to pursue a shift away from Washington and toward Beijing, a move that could have a major impact on regional power dynamics.

Mr. Duterte’s elevation to the presidency three-and-a-half months ago has already turned relations between Washington and Manila on their head.

His courtship of Beijing could create further disruptions, given the prospect of a long-standing US treaty ally lining up with Washington’s key rival for influence in Asia.

President Duterte was greeted by Foreign Minister Wang Yi on arrival at Beijing’s main airport on Tuesday evening. He was set to meet on Thursday with Xi, Premier Li Keqiang and third-ranking official Zhang Dejiang, the head of the legislature.

“This is a historic visit and presents an opportunity for relations between China and the Philippines to restart on a fresh, more positive footing,” Wang told reporters earlier on Tuesday. Mr. Duterte was due to return home on Friday.

Under President Duterte’s predecessor, Benigno S. Aquino III, the decades-old US-Philippine alliance had flourished. A quarter-century after a wave of anti-US nationalism forced the closure of American military bases in the Philippines, Manila was poised to allow more access for US forces to counter an assertive China—an important boost for President Barack Obama’s “pivot” placing more emphasis on the

Asia Pacific.

Those gains now hang in the balance, although the Obama administration says it would welcome a reduction in the China-Philippine tensions that had spiraled over the disputed South China Sea, increasing the risk of a military conflict that could embroil the US, which has a mutual defense treaty with the Philippines.

“The prospect of the Philippines pulling out of a long stretch of very tense relations with Beijing is a desirable one,” Daniel Russel, top US diplomat for East Asia, told reporters in Washington last week.

Although the US and China are often portrayed as great powers vying for the loyalty of small nations in Asia, neither side wants a confrontation. But there’s uncertainty in Washington about where the talks between Mr. Duterte and Xi will lead.

In an interview last week with China’s state broadcaster, President Duterte said he wasn’t looking to sever the historical connection with the US “No, I am not breaking away. I just want to be friendly with everybody,” the President said in the interview, which was broadcast by CCTV on Wednesday.

The US says it supports dialogue on territorial issues, so long as the Philippines sticks by a July ruling from an in-

ternational tribunal in a case brought

by Aquino’s administration that found that China’s sweeping claims in the South China Sea were invalid under a United Nations treaty.

“I do not believe that public opinion in the Philippines or the national interest of the Philippines would support the relinquishing of Philippine rights, territory or sovereignty, and I can’t imagine that is President Duterte’s intention,” Russel said.

If Manila were to sideline that ruling in reaching an accommodation with Beijing—perhaps, with the prospect of increased access to fisheries or some other economic benefit— it would undermine what has been a sustained US diplomatic effort to get the world to respect the tribunal ruling and for China to adhere to international law in seas crucial for trade.

The US advocacy for freedom of navigation and peaceful resolution of disputes has been a pillar of Obama’s outreach into Southeast Asia, where nations have looked to Washington to bolster its presence to counter China’s assertive behavior. The planned rotation of US forces at five Philippine military bases, agreed by Aquino, was viewed as essential to that effort.

But Mr. Duterte’s outbursts against the US have put in doubt future military cooperation. He has said the Philippines is stopping joint military exercises and that he opposes joint patrols with the US Navy in the South China Sea. He has also said he wants US counterterrorism troops out of his country’s south and has criticized Obama and the US ambassador in Manila in crude terms for condemning his bloody extrajudicial crackdown on drug dealers and users.

Administration officials say the US commitment to the alliance remains “ironclad” and that they have gotten no official notification

IN this September 7 file photo, Chinese Prime Minister Li Keqiang (left) and President Duterte link arms during the Asean Plus Three Summit in Vientiane, Laos.

The prospect of the Philippines pulling out of a long stretch of very tense relations with Beijing is a desirable one.”—Russel about the removal of US military assets and personnel.

Chineseofficialshaverefrainedfrom commenting on President Duterte’s domestic program and say they expect Mr. Duterte’s visit to help build trust and place the territorial dispute back on their preferred bilateral track.

President Duterte has said he merely wants to obtain renewed access for

Filipino fishermen to Scarborough Shoal, which China seized in 2012.

Both sides have played up the economic benefits of improved relations, with scores of Philippine business leaders accompany ing Mr. Duterte and China considering financing billions of dollars in infrastructure projects.

Beijing would be happy to shelve

the issue altogether, focusing instead on economic exchanges, Chinese government-backed scholars say.

“In general, the talks between Duterte and the Chinese leaders will focus on economic aid to the Philippines and the Chinese leaders will continue to stick to the dual-track thought in handling the South China Sea issue,” said Li Jinming, professor at the Institute for South China Sea Studies, Xiamen University.

The dual-track describes China’s approach of dealing with territorial disputes on a bilateral basis while negotiating a code of conduct to avoid confrontations with the 10-member Association of Southeast Asian Nations. AP

GDP growth likely slowed to 6.5 percent in third quarter

By Cai U. Ordinario

T

@cuo_bm

he country’s economic growth probably eased to 6.5 percent in the third quarter of the year despite the improvement in employment data, according to a local think tank.

In its Market Call report, the First Metro Investment Corp.-University of Asia and the Pacific (FMIC-UA&P) Capital Market Research said “erratic movements” in overseas Filipino workers (OFWs) remittances and weak exports pulled down the country’s GDP growth in the Julyto-September period.

GDP growth in the second quarter of the year reached 7 percent due largely to election spending.

“Employment numbers in July and continued high growth in Durable Goods imports provide much confidence for a strong performance in [the third quarter]. However, the erratic movements in OFW remittances and continued weakness in exports may pull growth closer to 6.5 percent,” FMIC-UA&P Capital Market Research said.

The think tank said the peso equivalent of the remittances sent

by Filipinos abroad posted a 4-percent decline in the third quarter.

This, FMIC-UA&P Capital Market Research said, points to the decline in the amount of dollars sent

by OFWs. The slowdown in remittances may be due to the preference of employers in the Middle East for younger workers. This may impact on the older OFWs in the region.

It can be noted that the largest concentration of OFWs is in the Middle East. This means most of the remittances received by families come from this region.

“The holiday season and the continued depreciation of the peso will likely boost the dollar and peso values of cash remittances in late Q3 [third quarter] and in Q4 [fourth quarter],”

the think tank said.

Apart from OFW remittances, the report noted that the lackluster performance of the export sector may have continued in the third quarter.

While the think tank said exports may recover, the recovery will be slow. FMIC-UA&P Capital Market Research, however, said exports may post a positive growth in the third quarter.

The growth of the country’s exports will depend on the growth of the United States economy, as well as the depreciation of the peso against the dollar.

FMIC-UA&P Capital Market Research said the growth of the economy in the first semester created 1.8 million jobs as of July.

The think tank said this augurs well for consumption growth in the second semester, given that the country’s unemployment rate fell to 5.4 percent in July, the lowest since 2005.

Around 61.5 percent of workers received wages and salaries, while 31.2 percent owned a business.

“This represents a 154-percent increase from the year-ago net new jobs of 0.74 million, and hugely surpassed the 1 million job target of the past two administrations. On a monthly basis, this is quite close to the number of jobs being created recently by the US economy, which is more than 15 times larger than the Philippine economy,” the think tank said.

In the Labor Force Survey (LFS) for July, the employment rate rose to 94.6 percent to reach 41 million employed Filipinos nationwide.

The services sector remained the top employment contributor with a share of 55.3 percent of the total employed. The industry sector accounted for 17.8 percent of the total employed in July, driven largely by strong growth in manufacturing and construction.

Global Gateway topping-off ceremony in Clark

Guests and officials of Global Gateway Development Corp. (GGDC) perform the topping-off ceremony for One West and Two West Towers, QUAD I at the Global Gateway Logistics City in Clark, Pampanga, on Tuesday. Photo shows Noel Manankil (from left) officer in charge of Clark Development Corp.; Rick Santos, chairman and CEO of CB Richard Ellis; Evan McBride, chief investment officer of GGDC; Michael V. Russell, president of GGDC; Malcolm Lai, managing director of Barings Private Equity Asia; Jamie Kim, investment manager of Asia Debt Management Hong Kong Ltd.; Alex Cauguiran president and CEO of Clark International Airport Corp.; Mark Williams, CEO of GGDC; and Bobby Castillo, president and CEO of EEI Corp.

House committee OKs concurrent resolution on Con-ass

By Jovee Marie N. dela Cruz @joveemarie

T

HE House Committee on Constitutional Amendments on Wednesday approved a concurrent resolution calling on the Congress to constitute itself as a constituent assembly (Con-ass) and jump-start the country’s shift to a federal form of government.

Voting 32-7-3, Liberal Party Rep. Roger G. Mercado of Southern Leyte, chairman of the House Committee on Constitutional Amendments, said members of the panel have

agreed to use Con-ass as mode of amending the Constitution.

“This panel approves [the] concurrent resolution calling for Congress of the Philippines to constitute itself into a constituent assembly for the purpose of proposing amendments to, or revisions of, the 1987 Constitution,” he said.

Under the concurrent resolution, the Constitution is the fundamental and paramount law that provides the framework of governance, as well as the instrument of the people to secure rights and promote the common welfare.

“A constituent assembly is the preferred mode under the present circumstances, since it would be more expeditious, open and the cheapest mode in introducing amendments to the Constitution,” the resolution said.

It added recent events show that it is imperative that constitutional reforms be introduced in the present Constitution for it to be responsive to the exigencies of the times, saying it also find justification on the need to provide a long-term solution to the decades-old conflict in Mindanao and to spur economic regional devel-

opment in the countryside, among other much needed socioeconomic and political reforms.

“The clamor and sentiment from a broad cross-section of society seeking a review of certain provisions in the 29-year-old 1987 Constitution, to make it more attuned and responsive to the demands of the present conditions and economic realties has not only been sustained, but affirmed with the overwhelming votes of a Duterte presidency who won on the platform of a shift from a unitary to a federal form of government, among others,” the resolution said.

Asean

BusinessMirror

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A competitive business environment–in Asean and in the Philippines Asean-EU Perspective

HENRY J. SCHUMACHER

I

N addition to market access, the ease of doing business in a jurisdiction is also a decisive factor for investors. According to the Global Competitiveness Index 2015-2016, the Philippines ranked 47th out of 140 countries, while in the World Bank Doing Business Report 2016, it ranked 103rd out of 189.

Global Asean Member Competitiveness States Index 2015-2016 rankings

2 Singapore

18 Malaysia

32 Thailand

37 Indonesia

47 Philippines

56 Vietnam

83 Lao PDR

90 Cambodia

131 Myanmar

*No information available for Brunei Darussalam Source: World Economic Forum (2015).

The Global Competitiveness Report 2015-2016, Global rankings.

WB Doing Business 2016 rankings

Asean Member States

1 18 49 84 90 103 109 127 134

Singapore Malaysia Thailand Brunei Darussalam Vietnam Philippines Indonesia Cambodia Lao PDR

167

Myanmar

Source: World Bank (2015).

Doing Business 2016, Global rankings.

This ranking demonstrates that the Philippine business environment, despite positive developments in recent years, still remains challenging. This not only serves as a barrier to entry but also encourages entrepreneurs and start-up investors to stay “underground.” Creating a competitive business environment will not just benefit foreign investors, it will also support increased efficiency and productivity for all, create a transparent business environment and a level playing field that will benefit every Filipino, from exporters, to micro, small and medium enterprises, to consumers. To be sure, the creation of export processing zones under the Philippine Economic Zone Authority (Peza), considered as one of the best practices, fostered a competitive and attractive investment environment for foreign investors that the World Bank Doing Business Report does not take into account. Still, the ease of doing business in the Philippines can be further improved. It is good to see that this issue is high on the agenda of the Duterte administration.

Implementation of the Philippine Competition Law

After decades of advocacy, the Philippines finally enacted on July 21, 2015, a landmark legislation in the area of fair trade, the competition law. The law sets a legislative framework to ensure fair market competition, in line with international standards and best practices. It seeks to enhance economic efficiency and promote free and fair competition in trade, industry and all commercial economic activities; establish a national competition policy; prevent economic concentration controlling the production, distribution, trade, or industry that will unduly stifle competition; penalize all forms of anticompetitive agreements, abuse of dominant position and anticompetitive mergers and acquisitions, with the objective of protecting consumer welfare and advancing domestic and international trade and economic development.

Pursuant to the law, a Philippine Competition Commission was constituted, composed of a chairman and four commissioners. To their credit, the commission promulgated the implementing rules and regulations within a few months from its constitution. Both the law and the implementing rules draw from the more developed European Union competition law. However, actual implementation and effectiveness of the law remains to be seen.

In May of this year Philippine Long Distance Telephone Co. (PLDT) and Globe Telecom, dubbed as the telecommunications duopoly of the Philippines, were able to acquire San Miguel Corp.’s (SMC) Vega Telecom Inc., the potential third player in the market. The acquisition, which has a transaction value of P61.9 billion, was made while the commission was about to finalize the implementing rules and regulations. This deal created doubts as to whether the government was, indeed, serious with its anticompetitive policy, given that the purchase of SMC’s spectrum was approved by the National Telecommunications Commission. If such an acquisition, which clearly falls within the ambit of the competition law, could be easily carried out with the approvals of the two government bodies that could have scrutinized and prevented it, the question of whether the law will be implemented in its full force becomes critical. It is essential that some of the acquisitions under the telco deal will be reversed and that some of the spectrum frequencies are made available to potential third, fourth or fifth players who will not be found in the voice sector but will create the environment good for the Filipinos at large in the data sector.

The enactment of the Philippine competition law is a milestone in terms of establishing a level playing field and addressing anticompetitive practices that have long affected Filipino consumers, especially in retail and telecommunications. The provisions against anticompetitive conduct and abuse of dominant position coupled with the approval requirements for mergers and acquisitions having a transaction value above P1 billion should ideally be able to curb anticompetitive conduct, as well as put an end to monopolies/duopolies/oligopolies. If implemented successfully, the law has the potential to revolutionize the Philippine market and open saturated sectors to new competition. The benefits on the Filipino consumer will be considerable as increased market competition invariably leads to the delivery of higher quality goods and services at more competitive prices. The application of principles of fair competition in sectors, which, until now, have been difficult for new market entries to compete in, will increase the attractiveness and investment potential for foreign investors and new domestic investors to enter.

On the other hand, if the law is either selectively implemented or honored more in circumvention rather than in application, then it will only reinforce the perception that whether there is a competition law or not, the Philippine economy will always be dominated by a few oligarchs, to the huge disadvantage of the public.

Editor: Max V. de Leon • Thursday, October 20, 2016 A5

Singapore’s $24-B wipeout eats into its shipyard base 29.7% C

ustomers have dwindled by the week at Indian Masala Hut, a curry stall in Singapore’s shipyard heartland. Manager K. Muralidoss blames the slump in oilrig building that led to the elimination of thousands of jobs, many held by workers from India and Bangladesh.

“The lunchtime crowd has more than halved,” Muralidoss says, surveying the almost-empty Benoi Road food court, where only four of 12 hawker stalls were open one afternoon last week. As recently as September, he was busy filling orders from companies trying to sate hungry laborers working overtime.

“That has come down quite a bit because there are fewer projects being worked on.”

More than $400 billion of proposed energy projects worldwide have been delayed since mid-2014 and pushed into 2017 and beyond, according to consulting firm Wood Mackenzie Ltd. In Singapore, the global center for oil-rig construction for decades, the slowdown contributed to the economy contracting the most in four years in the third quarter.

BP Plc. abandoned oil exploration off the Great Australian Bight, it said last week, five years after beginning a search for resources in one of the world’s last frontier regions. BP had previously estimated the drilling program would cost more than A$1 billion ($769 million).

Decisions like this ripple through Singapore’s oil-and-gas services industry, from Keppel Corp. and Sembcorp Marine Ltd., the world’s biggest builders of oil rigs, to companies supplying anchors, chains and other components, to the eateries feeding an offshore engineering work force that tripled over a decade to peak at more than 90,000.

More than two years of tumbling oil prices have wiped more than $24 billion from the market value

of Keppel, Sembcorp Marine and Singapore’s other listed oil-services companies—or about two-thirds of their pre-July 2014 capitalization.

Since then, at least 25,000 jobs have been axed and one company, Swiber Holdings Ltd., has defaulted.

“We’ll see more failures within the oil services sector,” said Song Seng Wun, regional economist with CIMB Private Banking in Singapore, in a telephone interview. “Stronger companies, like Keppel Corp. and Sembcorp Marine, will survive and take advantage of opportunities.

They have deeper pockets.”

Output in the marine and offshore engineering sector fell 29.7 percent in the first eight months of this year, the worst-performing industry in Singapore, according to data from the country’s Economic Development Board.

“The down-cycles in a few industries like the offshore and marine industries, and the fact that falling oil and commodity prices have dampened demand in the region around us,” Tharman Shanmugaratnam, Singapore’s deputy prime minister, said at a company’s media event in the city-state on Wednesday. “But those are short term factors, those are cyclical factors.”

Keppel shares rose 0.4 percent to S$5.37 as of 2:01 p.m. in Singapore, and Sembcorp Marine fell 1.5 percent to S$1.32. Singapore’s Straits Times Index climbed 0.2 percent. The shares have fallen 18 percent and 25 percent, respectively, this year.

Profit at Keppel, which reports third-quarter earnings on Thursday, is forecast to slump to the lowest in

as lower costs kick in and companies continue to grapple with weaker finances because of crude’s slump, the International Energy Agency said last month.

The percentage drop in Singapore’s marine and offshore engineering sector output in the first eight months of the year

a decade in 2016. Sembcorp, which posted a 69 percent drop in first-half profit, is slated to report on October 25. Both companies declined to comment on whether more job cuts are likely amid a decline in rig orders, citing a preearnings blackout period.

The Keppel Offshore & Marine Ltd. unit has shrunk its work force by about 11,000 and subcontractor headcount by some 8,600 since 2015, CEO Chow Yew Yuen said in July. The company has trimmed overheads to maintain a gross operating margin at around 13 percent, he said.

Keppel, which began as a local ship repair yard in the 1960s, said it had won more than S$460 million ($332 million) of orders this year when it reported first-half earnings on July 21. Its net order book at the end of June was S$4.3 billion, excluding orders from Brazil, the lowest since at least 2005. The order book has declined every year since peaking at S$14.2 billion in 2013.

Down cycles

Sembcorp Marine is building a megashipyard that will give it broader capabilities in building gas-storage tanks and offshoreproduction units, CFO Tan Cheng Tat said in July. The company has experienced “several down-cycles and built a strong core to weather the elements,” according to a presentation.

Sembcorp Marine had won about S$320 million of work and its order book stood at S$9.2 billion as of July 28, when the company announced first-half earnings. That’s the lowest order backlog since 2011.

The oil industry may cut spending for a third straight year in 2017

Shrinking GDP

That’s hurting Singapore’s economy. Its GDP fell an annualized 4.1 percent in the third quarter from the previous three months, the Ministry of Trade and Industry said in a statement on Friday. Manufacturing contracted at an annualized rate of 17.4 percent—the worst quarteron-quarter pullback since the third quarter of 2012.

The slowdown in the oil, gas and shipping industries is the worst in more than 50 years, said Mike Sim, executive chairman of Sinwa Ltd., which provides ropes, anchor chains, components and specialized equipment to the offshore and marine business.

“Just as we thought the industry had seen the worst of the shipping downturn, the drastic fall in oil prices and its devastating effect on the entire offshore industry has served as a double whammy,” Sim said in an e-mailed response to questions.

Many oil-and-gas shipping companies are facing difficulties as they go through “massive cost-cutting,” Sim said. “We may see more consolidation or privatization in the market if this continues.”

Swiber, the Singapore-based firm that roiled the local bond market when it defaulted in August, has been put under judicial management while it reorganizes debt. At least eight companies in the shipping and oil-and-gas services industry, including Rickmers Maritime and Marco Polo Marine Ltd., are seeking leniency from creditors on their debt load.

“It’s a difficult time, but the challenges aren’t insurmountable,” said Terence Fan, an associate professor of strategic management at the Singapore Management University’s Lee Kong Chian School of Business.

“They could use this downturn as an opportunity to realign, rationalize and upgrade their capabilities now that they have a bit of breathing time.”

Bloomberg News

Thailand to monitor Thais abroad for criticism of monarchy

T

hailand’s government said on Tuesday it will monitor the social-media activities of Thais abroad to see if they are posting insulting comments about the monarchy, which are punishable by stiff prison sentences, following the death of King Bhumibol Adulyadej last week.

Justice Minister Paiboon Kumchaya told reporters that his ministry is cooperating with police intelligence, the Foreign Ministry and the Ministry of Digital Economy to monitor social-media comments on the monarchy by Thais abroad.

He acknowledged that the government will not be able to act against Thais who criticize the monarchy if they are outside Thai jurisdiction. But he urged Thais in the country not to distribute offending material that originates from abroad because that act would be considered illegal.

Thailand has a strict law against insulting the monarchy which the military government has used liberally in the last two years to jail people, despite international criticism and allegations it is used for political purposes.

On Sund ay a woma n was

Thai policemen stand guard the Grand Palace where the body of the late Thai King Bhumibol Adulyadej is enshrined in Bangkok, Thailand, on Tuesday. AP

arrested in the resort island of Phuket after residents alleged she had insulted the king. The police made her kneel before the king’s portrait in public with hundreds

of onlookers watching and jeering.

Asked about the case, Paiboon said “there’s nothing better than social measures” to prevent the monarchy from being maligned. He did

not elaborate, and it wasn’t clear if he was supporting public shaming.

Bhumibol’s death after a reign of 70 years has triggered an outpouring of grief from most Thais. AP

TheBroa

Business

A6 Thursday, October 20, 2016

PHL mulls OVER fu as transport exec H

By Recto S. Mercene

@rectomercene

OW do you solve a problem like Naia? Slowly, it seems, as solving the air-congestion woes at the Ninoy Aquino International Airport (Naia) would take some time, according to transportation officials.

Hence, the Duterte administration asked Secretary Arthur P. Tugade to appraise the Clark International Airport (CRK) as an alternative, beginning with creating it as a domestic flight hub.

This idea was forwarded to Philippine Airlines (PAL) and Cebu Pacific, the two largest carriers in terms of volume, for their comments. Both air carriers had given their side of the issue.

PAL Holdings Inc. President Jaime J. Bautista said the national flag carrier is considering the government’s suggestion to prevent further frustration for its passengers. Bautista said the airline usually gets the brunt of the blame for whatever issue arises when their airplanes gets delayed at CRK.

“Philippine Airlines is now studying the possibility of transferring its turbo-prop flights to [CRK], following a request from the Philippine government to consider the idea of transforming [CRK] into a hub for domestic flights in another effort to decongest [the Naia] in Manila,” Bautista was quoted as saying in Philippine Flight Network, claiming to be the leading source of airline and aviation news in the country.

“We are working on it,” Bautista said. “The reason why the government wants us to move some flights to Clark is because we want to decongest Manila to prevent inconvenience to the passengers.”

However, Bautista reaffirmed that not all its domestic flights would be transferred. The airline still needs to study the proposal further to assess the impact on passengers and operating costs before making any decisions, he added.

“We will work with them [authorities],” Bautista said. “We will present to them our position.”

However, Bautista added that the Philippine government needs to provide additional infrastructure prior to shifting additional flight operations to CRK.

Working from scratch

IN a telephone interview, PAL Spokesman Cielo Villaluna said the carrier would need a cateringservice provider, additional catering manpower, ground coordinator for transport by land and enough fuel supply.

“PAL is not transferring,” Villaluna said. “We will be practically starting new operations at Clark and we need all the things that we take for granted at the Naia to be present in CRK, as well.”

She added that operating separately in CRK would entail signing a new contract agreement and approved slotting schedule, while Pal plots new routing schedules, which they would market to customers.

“These are preparatory steps,” she told the BusinessMirror, adding that the actual challenge is transporting the passengers from CRK going out to anywhere in Luzon and those passengers coming into CRK to take their outbound flights.

PAL Holdings has a market capitalization of P128.16 billion.

Its stock traded between P5.16 and P5.45 on October 19.

Next gateway

ACCORDING to its web site, the government envisions CRK “as the next premier international gateway of the Philippines and the best services and logistics in the AsiaPacific region.”

The CRK is one of the biggest aviation complexes in Asia with two runways in parallel configuration that can easily be extended to 4 kilometers to accommodate newgeneration wide-bodied aircraft.

“The primary runway [Runway 02R/20L] has a length of 3,200 meters and a width of 61 meters,” CRK operator Clark International Airport Corp. (CIAC) said. The primary runway “is fully equipped with all navigational aids and lighting facilities and has a Category 1 rating for precision approach.”

“The secondary runway [Runway 02L/20R] has a length of 3,200 meters and a width of 45 meters,” the CIAC said. It admitted Runway 02L/20R “is not yet equipped with navigational aids and lighting facilities and is currently used for Visual Flight Rules [VFR] only.”

Aside from PAL, air carriers flying out of CRK at the moment are Cebu Pacific, Qatar Airways, United Arab Emirates, Dragon Air and Tiger Air.

Income decline

THE CIAC said in its 2015 annual report that its gross revenue rose

by P45.369 million, an increase of 8 percent, “which was due to the fairly reasonable growth in both the aeronautical and nonaeronautical revenues.”

“ Inter n at ion a l flights reflected there were more travelers flying in CRK compared to the previous year,” CIAC President Emigdio P. Tanjuatco III said in the report.

On May 6, 2015, South Korea’s budget carrier Jin Air officially launched its daily flights to CRK since operating four times weekly in 2011. The airline, which is a subsidiary and a lowcost carrier of South Korea’s flag carrier Korean Air, has also greatly contributed to the boost of passenger volume this year, he added.

Incheon, South Korea, and Hong Kong, SAR, topped the CRK’s market share in terms of destination at 23 percent each. These are followed by Doha, Qatar (20 percent), and Singapore (17 percent).

Cebu (5 percent) is the only domestic market in the configuration.

The annual report also revealed that international flights from CRK decreased to 5,709 in 2015 from 5,715 in 2014. More domestic flights were seen at CRK last year at 948, compared to only 936 in 2014.

However, passengers in international flights increased to 826,706 last year, compared to 786,809 passengers in the previous year. The low number of passengers in domestic flights last

year (41,824 compared to 90,948 in 2014) pulled down total passengers to 868,528 in 2015, compared to a total of 877,757 passengers in 2014.

And while gross revenue increased, the net income of CIAC declined by 36 percent, from P45.52 million in 2014 to P29.779 million in 2015.

“The decrease was basically due to the upward movement of the depreciation expense as an offshoot of the completion of the terminal expansion project

and the procurement of various airport and navigational aids equipment,” the CIAC said in its report. The government-owned and operated firm also pinned the decrease in net income to the “increase in the amount of the loan drawdown” in 2015, “which prompted the escalation of the interest expense.”

OTP improvement

VILLALUNA said the crucial CRK build—not transfer—is happening at a time when PAL registered a marked improvement in its On Time Performance (OTP) in September, after carrying out operational initiatives in support of the government’s call to ease air-traffic congestion.

These initiatives include the implementation of a revised flight schedule beginning September 1 and the adherence to flight-departure slot schedules, as mandated by aviation authorities.

Villaluna said implementing the revised flight schedule resulted in an average of 280 flights daily, from an average of 295 daily flights.

Another initiative is the enhancement of passenger-handling and groundhandling performance.

“PAL posted an 80.2-percent OTP for the second week of September, a marked increase from the same period last year, which was pegged at 73.8 percent,” Villaluna said.

The 80.2 percent reflects an uptick from the OTP of the first week of September, which was placed at 74 percent, she added.

PAL’s average OTP from January to August was 64.4 percent, according to Villaluna.

“While the airline strives to meet these goals, factors such as aircraft situations, weather and other operational exigencies will affect OTP targets periodically,” she added.

The Civil Aviation Authority of the Philippines (Caap) is strictly implementing the rule allowing a maximum of 40 flight movements per hour. This figure is the required combined number of takeoffs and landings hourly by air carriers operating at the Naia.

All requested

BUT PAL is not the only carrier that has been asked to transfer flights.

Tugade has told reporters that his agency plans to ask all airlines to transfer their turbo-prop flights to CRK, as the government works to decongest the Naia.

PAL is currently eyeing to acquire new turbo-prop aircraft next year to replace its existing fleet of aging regional aircraft.

The company plans to make a purchase between 2017 and 2018.

The flag carrier currently operates a fleet of nine Bombardier turbo-prop aircraft.

According to the Japan International Cooperation Agency, the Naia in Manila is expected to exceed its maximum handling capacity this year, when the airport is estimated to serve 37.78 million passengers.

However, the airport was only built to handle a capacity of 35 million passengers annually.

In response to Bautista’s call for additional infrastructure at CRK prior to transferring flights, President Duterte added that the government will study the possibility of enhancing road or rail access to the airport in Pampanga to help facilitate the transfer of domestic flights.

The President indicated that the use of CRK for domestic flights is only intended as a short-term measure, while the government studies construction of a brandnew airport near the Naia.

“I don’t know if we have the money to build an airport in Sangley,” Mr. Duterte said. “If investors will come in, then go, but for the meantime, we have to remedy the overcrowded sky of the Naia.”

General Aviation

THE government also plans to act on a previous recommendation to remove all cargo and private aircraft from the Naia in a further effort to decongest the airport.

Tugade said they plan to transfer the General Aviation (GenAv) to either Clark, Sangley Point in Cavite or Fernando Air Base. He said the Department of Transportation (DoTr) plans to issue notice to GenAv operators within his first 100 days in office.

Manila International Airport Authority (Miaa) General Manager Ed Monreal said the main impediment to transferring to CRK is the inadequacy of the current fuel supplier to meet the demands of increased number of airplanes at CRK.

aderLook uture of airports cs eye Clark

sMirror

www.businessmirror.com.ph | Thursday, October 20, 2016

“The current fuel supplier has a monopoly of aviation gas and he does not want any outsider to come into CRK because he has a contract with the authorities,” said Monreal, former country manager for Cathay Pacific.

He said Ramiro Villavicencio and some Australian partners put up a company to be the main aviation gas supplier at CRK at a time when there were very few airlines flying out of CRK sometime in the 1990s.

Fuel concerns

WHEN the Australian partners withdrew, Villavicencio bought all of the remaining shares, making him sole owner of Lubwell Corp., Monreal explained. He added that this happened when he was still Cathay Pacific country manager and chairman of the Airline Operators Council (AOC).

Monreal said he does not know whether Lubwell has a 20- or 50-year contract with the CIAC.

“That is why the 28 airplanes had to wait during the diversion,” Monreal said. “The fuel supplier was unable to meet the demand of so many airplanes at once.”

He was referring to an incident in July 2016, when 28 local and international aircraft with more than 3,000 passengers were not allowed to land at the Naia because of a large crack on the runway. They were all diverted to CRK and the airplanes had to wait several hours because the system takes hours to refuel each aircraft.

According to its web site, Q8 Aviation provides the fuel supplied by Lubwell to all airplanes operating in CRK, while the ground-handling services are provided by CRK Airport Support Services Corp. (CASSC) and Miascor, which also operates out of the Naia.

Lubwell, on the other hand, does not have a hydrant system where fuel in bulk are stored in huge depots and piped underground into the tarmac and come

out beside parked airplanes.

The company provides aviation gas by means of tankers, vehicles loaded with tons of fuel, which drive directly toward parked airplanes and pump fuel into the plane’s fuel tanks. This takes hours to accomplish.

Meeting demands

ASIDE from adequate fuel supply, Monreal said CRK should have enough ground-handling facilities, such as tow tugs or trucks, cargo loaders, conveyor loaders, food suppliers and many more.

Online reports said about 50 associated machines and equipment comprise a complete groundhandling equipment for an international-category airport and these provide more than triple the number of workers to operate these machines because an international airport does not close its operations.

Monreal said he would be glad if CRK would eventually operate as a full international airport because that would be complementary to the Naia in case of emergencies.

“If the Naia is closed for whatever reason, we could rely on CRK to take care of the airlines while the problem in Manila is being solved. On the other hand, if CRK closes because of accidents, bad weather or, God forbid, Mount Pinatubo erupts again, then the Naia would be more than happy to ac-

Clark to be a premier gateway to the Philippines, with capacity expansions envisioned to reach 14 million passengers by 1998.

The Bases Conversion and Development Authority crafted a master plan for the development of the airport, but unfortunately, the plan remained on paper and never materialized.

commodate all the carriers.”

Presently, Lubwell can more than sufficiently meet the demands of the airline locators in CRK, according to Onie Nakpil, chairman of the 40-member Association of Southeast Asian Nations-AOC.

Nakpil said some members of the group visited CRK recently on the invitation of CIAC President Alex Cauguiran, wanting to know their inputs, since all of the members are current managers of international air carriers flying out of the Naia or had been heads of the AOC before.

Cauguiran reportedly wanted to know from the group their valuable inputs because of their expertise.

Duterte: “I don’t know if we have the money to build an airport in Sangley. If investors will come in, then go, but for the meantime, we have to remedy the overcrowded sky of the Naia.”

Huge potential

TRANSPORTATION Undersecretary for Air and Airports Roberto C. Lim said the CRK has a huge potential as an airport, given that the area is being developed as an economic center in Central Luzon.

“Clark is developing as an economic regional center, a logistics center, with road and rail connectivity to Subic,” Lim said. “Clark airport will develop on its own.”

He added the DoTr is coordinating with the Department of Tourism to make Clark a tourism hub in the north.

The government is in the midst of developing a 9,450-hectare idle land within the Clark Freeport and Special Economic Zone as a green city, Lim explained.

When completed, the multibillion-peso green metropolis would be a mix of industrial, institutional and commercial areas.

Documents from the DoTr said the CIAC would apply “green technologies,” using renewable energy from sustainable sources by all facilities and buildings in the proposed city, “a place where one’s home, place of work and places of recreation are within walking or biking distances from each other.”

The Clark Green City project is expected to generate as much as P1.57 trillion in revenues every year, contribute at least a 4-percent share to the GDP and employ as many as 925,000, upon full completion of the development.

Lim said they expect this project would boost demand for air connectivity to CRK. Hence, the DoTr wants to develop the said

a7

PPP strategy

hub in anticipation of an expected surge in passenger volume in the coming years.

Never materialized

THE CRK is currently underutilized with about 870,000 passengers accommodated annually, way below its rated capacity of 4 million passengers per year, according to Lim.

“The general term design is there for 3 million passengers,” he said. “But we want to bring it to the original plan of 5-million passenger throughput.”

The airport in the north, formerly known as the Diosdado Macapagal International Airport, has two 3,200-meter parallel runways equipped with various navigational aids and lighting facilities, rated the highest for precision approach by the Federal Aviation Authority of the United States.

CRK is being envisioned to be the future primary international gateway of the Philippines once the Naia reaches its full capacity and when the main airport can no longer expand. It is being envisioned to be an aerotropolis—an aviation city— with businesses and industries moving in to the former US airfield.

Former President Fidel V. Ramos ordered the development of

LIM declined to give specifics on CRK’s second terminal, but said the airport will be expanded through the Public-Private Partnership (PPP) Program.

“The target for CRK is to place it under the PPP Program by next year,” he said.

The official added that CRK is the easiest means to decongest the Naia.

Just recently, the government had asked local carriers to move some of their flights to CRK in a bid to decongest the Naia.

“The department is asking local carriers to move domestic flights to CRK. Cebu Pacific is now selling more Cebu-Clark and ClarkIncheon flights. Philippine Airlines will also start Cebu and Davao flights out of Clark,” Lim said.

Furthermore, the government is also courting foreign carriers to fly to and out of CRK.

“We are asking foreign airlines to fly to CRK. A one-stop shop for overseas Filipino workers has been deployed to support more flights

by Qatar and Emirates,” he said.

The Aquino administration initially planned to build a railway line to CRK from Metro Manila.

Asked for updates, an undersecretary and a transportation spokesman were unresponsive to the BusinessMirror’s queries.

The plan was to integrate the said line to the planned NorthSouth Railway Project, which, according to a tentative timeline, will materialize by 2020.

With additional reports by Dennis D. Estopace and Lorenz S. Marasigan

LIM: “Clark is developing as an economic regional center, a logistics center, with road and rail connectivity to Subic. Clark airport will develop on its own.”

MONREAL: “If Naia is closed for whatever reason, we could rely on CRK to take care of the airlines while the problem in Manila is being solved. On the other hand, if CRK closes because of accidents, bad weather or, God forbid, Mount Pinatubo erupts again, then the Naia would be more than happy to accommodate all the carriers.”

A8

Thursday, October 20, 2016 • Editor: Lyn Resurreccion

The World BusinessMirror

www.businessmirror.com.ph

UN peacekeeping official to visit disputed W. Sahara

U

NITED NATIONS—The UN peacekeeping chief said on Tuesday he is heading to the disputed Western Sahara later this week to visit UN troops for the first time since Morocco expelled more than 70 UN civilian staffers in March to protest comments by Secretary-General Ban Ki-moon.

Herve Ladsous told a group of reporters after briefing the Security Council that he will visit Layoune, the largest city in Western Sahara, as well as camps for Sahrawi refugees in neighboring Tindouf, Algeria, and the Moroccan capital, Rabat.

He will be the highest-ranking UN official to visit the region since early March, when Ban used the word “occupation” in talking about Morocco’s involvement in Western Sahara during a visit to a refugee camp in Tindouf. That led to demonstrations against Ban in Morocco and the government’s decision to expel UN civilian workers.

Morocco annexed Western Sahara, a former Spanish colony, in 1975 and fought a local independence movement called the Polisario Front. The UN brokered a cease-fire in 1991 and established a peacekeeping mission known as Minurso to monitor it and help prepare a referendum on the territory’s future, which has never taken place.

CYCLE OF LIFE A North Korean woman rides her bicycle along the Taedong River on October 17 in Pyongyang, North Korea. The city of about 2.5 million people has block after block of densely concentrated high-rise residential buildings with open space in the city center that has large public plazas and parks where many monuments to the country’s leaders and war memorials can be found. AP

Retaken villages show Islamic State increasingly driven underground

B

ADANA, Iraq—This farming village east of Mosul was turned into a bunker during more than two years of Islamic State (IS) rule: A network of tunnels and cramped living quarters betrays an extremist group increasingly forced to operate underground by a punishing air campaign and mounting territorial losses.

Wrested from IS control on the first day of the offensive to retake Iraq’s second-largest city, Badana offers a glimpse of the battle ahead. Above ground, walls were shredded by air strikes and artillery, homes were stained black with soot and the buildings still standing had been looted.

Below ground, bags of fresh vegetables lay on the floor of a cooking area and a bowl of eggs sat beside a crude stove, suggesting the fighters managed to maintain supply lines

up until days before their defeat. “ T hey spent their lives in these tunnels,” said Tahseen Muhammed Sharif, a 35-year-old Kurdish fighter who said the Kurdish forces who drove the militants out of the village also found ammunition inside the tunnel network, which they seized.

“I can’t imagine living like this,” he added, sifting through kitchen refuse beside a pot of chickpeas still sitting on the stove. “There is a definite difference between us and

them—their behavior, it’s outside human behavior.”

A small unit of Iraqi Kurdish fighters tasked with holding the territory in and around Badana, were camped on Tuesday in a field behind a row of armored vehicles on the village’s edge. While free of IS fighters, the area remains littered with dozens of boobyt rapped e x plosives. Ku rd i sh fighters moving along the narrow village roads stuck to paths they had already used and walked in single file.

When Iraqi forces reach Mosul, Patrick Martin of the Institute for the Study of War in Washington said they should expect to see similar complex defenses like the tunnel networks and booby-trapped explosives in Badana, but on a much greater scale. “ T hey’re mak ing sure that whenever the operation to retake the city commences it will be extremely difficult for the security forces to do so,” Martin said, adding that while there are reports of some IS fighters fleeing Mosul, the group has also displayed a willingness to defend the city

by mobilizing car bombs, suicide bombers and building trenches.

When IS fighters moved into the territory around Mosul more than two years ago, the group attacked with convoys that traversed the open desert and held parades in the city center. Now, faced with punishing airstrikes by the US-led coalition, the fighters have been forced to change tactics, melting into civilian populations and building networks of tunnels under residential areas so they could move without being seen from above.

After a string of victories over the past year, Iraqi ground forces have pushed IS out of more than half the territory the group once held in Iraq, with close support from the US-led coalition. Now, with the launch of the campaign to retake Mosul, the extremists’ main stronghold, Iraqi forces are again operating under coalition air cover.

During the first day of the operation, the most complex for Iraq’s military since the withdrawal of US troops in 2011, Kurdish forces say they retook nine

villages and pushed the frontline back 8 kilometers (5 miles).

But like Badana, those villages were almost completely empty of civilians, allowing coalition warplanes to largely clear the territory from the air. In the center of the village on Tuesday, a group of Kurdish fighters gathered around the bodies of two IS militants killed in an airstrike a day earlier, some crouching down to snap selfies.

Lt. Col. Fariq Hama Faraj said he and his men celebrated their victory the day before and have since received orders that they will not advance any further in the Mosul fight.

“Our task is finished,” he said, adding that he doesn’t believe this will be the last time he fights the IS group.

“They will come back with a new name and they’ll be more extreme and more barbaric,” he said, ducking a downed power line as he walked through the ruined village back to his camp.

“If you look to the history of these organizations we see that each one is more extreme than the last.” AP

Where Zika struck hardest, Brazil mothers say further help needed

R

ECIFE, Brazil—As the sun dyes the early-mor ning sky a reddish hue, Angelica Pereira carries her 1-year-old daughter out of the tiny white house sitting on a dirt road where piles of garbage float in puddles.

The driver sent to fetch her and other mothers with babies disabled by the Zika virus is two hours late, which could mean less time with the therapists who help her daughter move rigid limbs and a floppy back.

While battling these logistical challenges, Pereira also struggles to find and afford expensive drugs that families must pay for because government health plans don’t cover them.

“We are always chasing something. We have to drop everything else, all our chores, our homes,” the 21-year-old said. “There are so many of us with children with special needs. [The government] is forgetting about that.”

Zika initially was known only to cause flu-like symptoms in some people. But a surge late last year

in cases of babies born with small heads in northeast Brazil set off worldwide alarm about the virus, which was later linked to a birth defect known as microcephaly.

When the connection was made, then-President Dilma Rousseff promised that affected families would get the help they needed.

Underfunded

WHILE the government has provided therapy and some financial assistance, mothers such as Pereira say it doesn’t come close to meeting their overwhelming needs caring for children with severe development delays.

Some families plan to sue the government to get more families with disabled children the $275 a month now currently provided to households earning less than $70 a month. They also want the government to pay for medication for babies with epilepsy, increasingly common in children whose mothers were infected with Zika during pregnancy.

“These are women in need of financial aid, who are from remote towns and are finding new problems every day with their children,” said attorney Viviane Guimaraes, who is helping several families enroll in a program for the disabled.

$95,000 The cost of lifetime medical expenses in Brazil for each child with microcephaly

State-run health care in Brazil is woefully underfunded, and patients often wait months for treatment. People who can afford get care through private health plans.

Jusikelly da Silva says she is desperate to get a brain scan for her 10-month-old Luhandra, who was sitting up and eating solid foods before a seizure several months ago left her virtually motionless.

Silva has tried for three months to get the radiology test and an appointment with a specialist.

“It’s horrible because I feel that the longer I wait for these exams, the worse it can get, and I won’t be able to take care of her,” Silva said.

Strained

MANY mothers end up borrowing money from relatives to pay for private hospitals and doctors for specialized treatment. Silva says that isn’t an option for her; just trying to buy baby formula is a struggle. She and her five children live on the $250 her husband earns each month working at a warehouse.

The health secretary for Recife state, Jailson Correia, says the city has yet to receive funds from the state or federal government for a special child development division. The plan is to create a group of pediatricians, child neurologists, social workers and physical, speech and occupational therapists who treat children

with congenital Zika syndrome.

Correia says the city has offered epilepsy drugs on a caseby-case basis because they are not provided through the public health plan, but that help won’t last forever.

“The city’s financial resources are already strained,” Correia told The Associated Press. “We need the state and federal levels to take a more active role.”

Federal officials didn’t respond to repeated requests for additional information about how they are responding to the crisis.

Fears

THE Zika crisis comes as Latin America’s largest nation weathers a two-year recession that has pushed inf lation and unemployment to over 10 percent.

A proposal under consideration

by Congress would cap public spending, raising fears about cuts for health and education.

Treating children with neurological problems is not cheap. AP

Morocco considers the mineral-rich region its “southern provinces” and has proposed wide-ranging autonomy, but the Polisario Front insists on self-determination through a referendum for the local population.

Resuming confrontation

THE Polisario Front’s foreign relations chief, Ould Salek, warned earlier this month that the group is closer to resuming confrontation with Morocco than to peace.

Salek accused France, which has close ties to Morocco, of blocking Security Council action on Western Sahara and urgently appealed to council members to hold the referendum on the territory’s future. He expressed hope that the United States and the other permanent council members—Russia, China and Britain—will do more than they have to ensure a referendum is held.

But Uruguay’s UN Ambassador Elbio Rosselli said there was “no outcome” from the closed council meeting, and expressed regret that members have been unable to agree on even simple statements on Western Sahara. “The political process is at a complete stalemate,” he said. “The parties are not talking.” AP

Senators: Loopholes allow for trafficking of tribal items

A

LBUQUERQUE, New Mexico —A diplomatic push for the return of Native American ceremonial objects from auction houses in Paris has been hampered by loopholes in US laws that authorities and lawmakers say prohibit the trafficking of the federally protected items domestically but don’t explicitly ban dealers from expor ting them to foreign markets.

The comments from US Sens. Tom Udall and Martin Heinrich, both New Mexico Democrats, came on Tuesday before a field hearing in Albuquerque, where tribal leaders and representatives of several federal agencies—including the US State, Interior and Justice departments— testified that a growing international market for ceremonial objects that include masks and shields has made it difficult for tribes to track and repatriate stolen items.

“They are not pieces of art. They are spiritual objects deeply important for tribal identity,” Udall said. “Theft not only robs the tribes of a sacred object, it robs them of a piece of their spiritual identity.”

Partnership with the French

FRENCH officials have told the Obama administration that they often are unable to intervene in numerous auction house sales of the items at the request of the US because American laws fall short of making it a crime to send the objects overseas, the senators said.

Both are cosponsors of legislation that would prohibit dealers from exporting the federally protected tribal items and double the prison time to 10 years for violating a statute that criminalizes stealing or unlawfully removing tribal objects from reservations. A US State Department official said French and American authorities will meet at the end of the month to discuss the issue.

“We have a very close partnership with the French,” Mark Taplin, a principal deputy assistant secretary within the US Department of States who testified at the field hearing told The Associated Press. “This is one of the relatively few areas where we need to work on finding an agreement.”

Collector’s perspective

THE Paris auctions have presented a diplomatic dilemma for years between the US and France. The upcoming bilateral talks between the two countries, and the proposed legislation come as Acoma Pueblo in western New Mexico awaits word on whether a ceremonial shield that was set for auction in May will be returned.

EVE auction house in Paris halted the planned sale of the shield after facing immense pressure from top US officials—including Interior Secretary Sally Jewell—and pueblo leaders, who produced an affidavit alleging the shield had been taken during a break-in from an elder’s Acoma Pueblo home.

The centuries-old village sits atop a mesa west of Albuquerque. AP

The World BusinessMirror

www.businessmirror.com.ph

Thursday, October 20, 2016

Obama admin steps up efforts to protect Puget Sound

briefs No terrorism link in brief Brussels hostage-taking BRUSSELS—A man has briefly held a group of people hostage in a supermarket in a Brussels suburb before surrendering to the police.

Nobody was injured and authorities say there was no indication of any terrorist motive. Brussels justice spokeswoman Ine Van Wymersch said on Tuesday night, “we have no indications that this would be a terror action.” Claude Inno, who was briefly taken hostage, called the man “a crazy person” who held several people before he started negotiating on the phone. AP

S

EATTLE—The Obama administration on Tuesday stepped up efforts to protect Puget Sound, including forming a new federal task force to identify priorities for restoring one of the nation’s largest estuaries.

2,100

The total acres of important habitat in three northwest Washington estuaries that could be restored if one $450 million project is authorized and funded by Congress

The task force of federal agencies will work with tribal governments and others to come up with an action plan to better coordinate programs focused on Puget Sound.

The federal action represents the latest in a string of efforts over the decades to tackle pressing environmental problems in the region, including dwindling salmon runs, water pollution and the rapid loss of wetlands and other wildlife habitat.

“We understand we have a critical role to play here in the Puget Sound in delivering on that commitment to the tribes and the communities around the Puget Sound,” said Christy Goldfuss, managing director of the White House Council on Environmental Quality, at a news conference in Seattle.

Goldfuss said nine federal agencies signed a memorandum of understanding aimed at strengthening coordination among them to work toward a healthy Puget Sound ecosystem. The federal action builds on decades of efforts from state, local, tribal and federal governments and is similar to recent federal efforts to protect other ecosystems including the Great Lakes and Chesapeake Bay, she said.

Coming up with a plan

GOLDFUSS was joined by Washington Gov. Jay Inslee, American Indian tribal leaders and US Reps.

Denny Heck and Derek Kilmer, who cofounded the Congressional Puget Sound Recovery Caucus.

“In order for us to reverse the tide of damage that’s been going on in Puget Sound, we’re going to need everybody,” said Leonard Forsman, chairman of the Suquamish Tribe, who talked about the importance of salmon to his and other tribes.

“And that includes not only the government agencies and the state agencies and the nonprofits, but we also need all the people who live here and are moving here.”

Others hailed the move as a significant step forward, saying it will give a much needed boost to state, local and tribal efforts. “What we can’t do alone as a state is get these huge projects done,” said Martha Kongsgaard, who chairs the Puget Sound Partnership’s Leadership Council.

The state Legislature created the partnership in 2007 to come up with a plan to protect Puget Sound.

What needs to be done

TODD Myers, with the Washington Policy Center and who serves on the partnership’s salmon recovery council, said federal agencies should work with the Puget Sound Partnership, which has identified what needs to be done, rather than create another task force.

“Rather than doing what we know needs to be done, adding another political process wastes time and resources from what we already know needs to be done,” Myers said.

The task force will include members from federal agencies, such the Navy, Homeland Security, Army Corps of Engineers, the National Oceanic and Atmospheric Administration and the Environmental Protection Agency. AP

A9

Autopsy: Woman found buried with chips, perfume and a note FAIRFIELD, Maine—The autopsy of a Maine woman found dead behind her in-laws’ home shows she was buried along with a bag of potato chips, a bottle of perfume and a note that took “an apologetic tone.” The Morning Sentinel reports the body of 34-year-old Valerie Tieman was found partially buried in a shallow grave behind her in-laws’ Fairfield home on September 20. The police say Tieman was shot in the head and neck by her husband, who then dumped her body not far from the home that the couple shared with his parents. AP

People read newspaper headlines, including stories on the Nigerian Chibok kidnapped girls, in Abuja, Nigeria, on October 18. Nigeria’s government is negotiating the release of another 83 of the Chibok schoolgirls taken in a mass abduction two-and-a-half years ago. AP

Chibok leader: 100-plus girls unwilling to leave Boko Haram

A

BUJA, Nigeria—Nigeria’s government is negotiating the release of another 83 of the Chibok schoolgirls taken in a mass abduction two-and-a-half years ago, but more than 100 others appear unwilling to leave their Boko Haram Islamic extremist captors, a community leader said on Tuesday.

The unwilling girls may have been radicalized by Boko Haram or are ashamed to return home because they were forced to marry extremists and have babies, chairman Pogu Bitrus of the Chibok Development Association told The Associated Press in a telephone interview.

Bitrus said the 21 Chibok girls freed last week in the first negotiated release between Nigeria’s government and Boko Haram should be educated abroad, because they will probably face stigma in Nigeria.

The girls and their parents were reunited on Sunday and are expected to meet with Nigeria’s President Muhammadu Buhari on Tuesday or Wednesday, Bitrus said. Buhari f lew to Germany on an official visit the day of the girls’ release.

US education

BUH AR I said on Monday his government is prepared to talk with Boko Haram as long as the extremists agree to involve organizations like the International Committee of the Red Cross, which was an intermediary in last week ’s release.

Some 276 schoolgirls were kidnapped from a school in northeastern Chibok in April 2014. Dozens escaped early on and at least half a dozen have died in captivity, according to the newly freed girls, Bitrus said.

All those who escaped on their own have left Chibok because, even though they were held only a few hours, they were labelled “Boko Haram wives” and taunted, he said.

At least 20 of the girls are being educated in the United States.

“We would prefer that they are

taken away from the community and this country because the stigmatization is going to affect them for the rest of their lives,” Bitrus said. “Even someone believed to have been abused by Boko Haram would be seen in a bad light.”

All Nigerian institutions and the freed girls’ communities and families must “stand strong” to “protect them from stigma, ostracization and rejection,” the UN special rapporteurs on the sale of children, on slavery and on the right to health said in a statement on Tuesday.

Choices given

ONE Chibok girl, Amina Ali Nkeki, escaped in May. Chibok Parents’ Association chairman Yakubu Nkeki said the young woman has been reunited with her freed classmates, all of whom are being treated by doctors, psychologists and trauma counselors at a hospital in Abuja, Nigeria’s capital, run by the Department of State Security, Nigeria’s secret service.

Human-rights advocates and the Bring Back Our Girls Movement have been asking if the girl is a detainee of the government and have been demanding she be allowed to return home, as she has requested.

One father of a newly freed girl, Emos Lawal, said his daughter was “praying that let the rest of them have the chance to come out.”

The freed girls have told their parents they were separated into two groups early on in their captivity, when Boko Haram commanders

gave them the choice of joining the extremists and embracing Islam, or becoming their slaves, Bitrus said.

The girls freed and those whose release is being negotiated, numbering 104, are believed to be in the group that rejected Islam and Boko Haram, he explained. The freed girls said they never saw the other girls again.

Reports denied

BITRUS said the freed girls were used as domestic workers and porters but were not sexually abused.

He said that was why only one girl in the freed group is carrying a baby, and her parents have confirmed that she was pregnant when she was kidnapped. An aid worker had told The Associated Press that he had seen the girls on their release and that all but three carried babies. Bitrus said that report was incorrect.

Previous negotiators in talks that failed also had corroborated that more than 100 of the girls did not want to return to their parents, Bitrus said.

Chibok is a small and conservative Christian enclave in mainly Muslim northern Nigeria, where many parents are involved in translating the Bible into local languages and belong to the Nigerian branch of the Elgin, Illinois-based Church of the Brethren.

Nigeria’s government has denied reports that the girls were swapped for four Boko Haram commanders, or that a large ransom was paid. AP

Judge: EPA must analyze jobs lost in coal industry

B

ECKLEY, West Virginia— T he US Env i ron ment a l Protection Agency (EPA) must begin evaluating how many power plants and coal mining jobs are lost because of air pollution regulations, an analysis it hasn’t done in decades, a federal judge in West Virginia on Monday ordered.

US District Judge John Preston Bailey ruled that the EPA is required by law to analyze the economic impact on a continuing basis when enforcing the Clean Air Act, the Register-Herald reported.

The EPA argued that analyzing job loss won’t change global energy

trends, Bailey wrote in his order.

Murray Energy Corp. brought the challenge years ago and was joined by most of the companies mining coal underground. Thirteen states support the suit, which blames the EPA for the coal industry’s declining fortunes.

Murray Energy and the coal industry heralded the ruling as a win for coal miners. The order gives the EPA two weeks to submit plans and schedules to comply with the jobs impact analysis requirements.

“The court properly rebuked EPA for representing that it sufficed for the agency to merely

predict impacts but it was under no duty to later verify the actual outcomes,” National Mining Association president and CEO Hal Quinn said in a statement.

Unclear

THE EPA said it was reviewing the decision. It’s unclear if the agency will appeal. EPA Administrator Gina McCarthy has said no administration has interpreted the law to require job impact analysis for rulemaking since 1977, the order said.

The most that the EPA does is “conduct proactive analysis of the employment effects of our

rulemaking actions,” but that has not included investigating power plant and mine closures and worker dislocations on an ongoing basis, the judge wrote.

The Sierra Club, an environmental advocacy group, said the coal industry’s lawsuit meant to “deflect attention from the real reasons for its decline, like bad business decisions and increased competition from cleaner, more affordable energy sources,” said Joanne Spalding, a lawyer for Sierra Club.

The group also pointed out that the ruling doesn’t undue any of EPA’s regulations. AP

Texas agency rejects Turkey’s complaint about school system AUSTIN, Texas—The Texas Education Agency has reviewed and rejected a complaint from Turkey alleging a charter school system engaged in employment discrimination and misused public funds. Harmony Public Schools has denied the Turkish government’s claims that the system has ties to a moderate Islamic cleric accused of inspiring a July military coup attempt. The Texas Education Agency says its review of Houstonbased Harmony determined that the complaint, filed in May, was unfounded and does not warrant further investigation. AP

Taiwanese woman, 72, killed in 1-car crash near Lake Tahoe GLENBROOK, Nevada—A 72-yearold Taiwanese woman who was visiting the United States on vacation, has died from injuries she suffered in a single-vehicle crash on US Highway 50 near Lake Tahoe.

The Nevada Highway Patrol has identified the victim of Sunday’s fatal crash as Pao-Yi Tseng. She was a passenger in the back seat of a westbound Nissan Altima that her husband was driving when it crossed over the shoulder of the right side of the highway and hit a tree north of Glenbrook near the Douglas County line. AP

Pregnant manatee flown from Connecticut to Florida MYSTIC, Connecticut—A pregnant manatee that was rescued off Cape Cod has been f lown from Connecticut’s Mystic Aquarium to Florida. The 800-pound manatee is named Washburn after the island where she was rescued.

She was moved on Tuesday to SeaWorld in Orlando, where she’ll be cared for until she can be released back into the wild.

Manatees are mammals and are sometimes referred to as sea cows.

A spokesman for Mystic Aquarium says it’s very rare to see them as far north as New England. AP

Ex-U.S. Rep. Jesse Jackson Jr.’s spouse completes prison term CHICAGO—Authorities say the wife of former US Rep. Jesse Jackson Jr. has completed her prison sentence for filing false income-tax returns. Federal Bureau of Prisons Spokesman Justin Long says Sandi Jackson was released from home confinement on Tuesday. The former Chicago city councilwoman was moved from the Federal Prison Camp at Alderson, West Virginia, last month to complete the remainder of her yearlong sentence. Sandi Jackson reported to prison last October. AP

A10 Thursday, October 20, 2016 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Duterte’s China pivot to benefit PHL

P

resident Duterte’s state visit to China from October 18 to 21 is a closely watched event expected to repair, restore and normalize the thousand-yearold bond of friendship between the two countries.

When China rolls out the red carpet for him, it will signal the restoration of trust between Manila and Beijing, following recent tensions over their territorial dispute in the South China Sea—a positive step toward ending years of estrangement between two neighbors.

Mr. Duterte’s meeting with China’s top three leaders—President Xi Jinping, Premier Li Keqiang and Chairman Zhang Dejiang of the National People’s Congress—could alter Asia’s geopolitical equation. The President knows he has the power to redefine the Philippines’s strategic role in the rivalry between China and the United States in this part of the world.

“If China succeeds in peeling the Philippines away from the United States, it will be a major win in Beijing’s long-term campaign to weaken US alliances in the region,” said Andrew Shearer, a senior adviser at the Center for Strategic and International Studies in Washington. This raises the prospect that Washington faces frayed ties with a long-standing partner in Asia. Mr. Duterte can greatly diminish American influence in the region, if he decides to scrap an accord that gives the US access to Philippine military bases.

An Australian think tank, however, believes the President may have unwittingly given “a big gift” both to the US and China.

In his piece “Duterte changes the South China Sea tone,” Graeme Dobell—a journalist-fellow with the Canberra-based Australian Strategic Policy Institute—said President Duterte could have “changed the immediate tone of the South China Sea argument at an otherwise dangerous moment.” The arbitral decision at The Hague, the thinking goes, has thrown the South China Sea issue in a crisis mode. But the fresh opening Mr. Duterte is offering China will create an important pause in a dangerous chain of events. Dobell said, “The volatile President met a volatile moment in the South China Sea and actually brought the temperature down.”

Following The Hague decision, the US reportedly drew a red line around the Scarborough Shoal, which was seized by the Asian giant in 2012 after a standoff with the Philippine Navy. No less than US President Barack Obama has warned China of serious consequences if it started to build another base, at the time a not-so-improbable scenario, as political observers feared China’s reaction after its humiliation by The Hague Tribunal. They said China might spite the Philippines by building a new base on the Scarborough Shoal.

But Mr. Duterte’s state visit is possibly a game changer for Beijing. Experts believe the President’s state visit offers China two good prospects: The bilateral deal it has always sought in the South China Sea dispute and a weakening of the US alliance structure. If President Duterte forges a close friendship with Beijing, a likely scenario, this will send strong signals throughout the region, where robust economic relationships with China are vital for neighboring countries.

What is certain at the moment is the fact that President Duterte has a lot of business he wants to do with China. He has said he wants China to help finance a railway from Metro Manila to Mindanao. He also wants Filipino fishermen to regain access to Chinese-held disputed territories in the South China Sea. He is also pushing Beijing to let about 200,000 Filipinos, who are currently working illegally as domestic help on the mainland, to be granted legal status. A large contingent of Filipino businessmen accompanying the President also wants the Chinese to lift import bans on more than two dozen Philippine fruits, imposed by Beijing four years ago in retaliation against the Aquino administration for its South China Sea stance. Filipinos can’t wait to see what kind of goodie bag the President will bring home from his China trip.

Since 2005

BusinessMirror A broader look at today’s business

The Filipino stock exchange John Mangun

OUTSIDE THE BOX

T

he City of Paris is representative of France. Bangkok is Thailand. London helps show the two millennia history of the British Isles. Maybe part of the tourism “problem” is that Manila is “The Philippines,” perhaps, in name only.

Foreigners coming to the Philippines are almost immediately comfor table—not because of Starbucks and modern shopping malls—but that over 100 million earthlings are able to hold at least a basic conversation in English. With nearly every global brand found at the malls and on the shelves of the supermarkets, the Philippines seems “almost like home”. But we know that it is not.

But this familiarity works both ways. Because the McDonald’s hamburger in Sampaloc, Manila, or

sailing at 6 percent to 8 percent, an impressive sustained performance in the region.

Ariel F. Nepomuceno

Founder

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DECISION TIME

T. Anthony C. Cabangon Jun B. Vallecera

from the stockbroker to buy stocks.

That’s what I want to do.” “Well, your brother-in-law pays 8-percent interest or less on the margin loan. You will pay 18 percent, plus value-added tax. In other words, if you hold for one year, your portfolio has to go up 9 percent just to break-even on your margin loan interest. Does that make sense?”

The burgers may taste the same here in the Philippines, but the stock market is very different.

Over the next months, I will be doing seminars about trading and investing on the “Filipino Stock Exchange”. There are particular strategies and analyses that honestly will only work here under the local rules and conditions that would not work anywhere else. But this is the stock market that we trade, and you need to know the differences and how to take advantage of it.

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

The first 100 days and counting: The bigger picture

✝ Ambassador Antonio L. Cabangon Chua Publisher

Butuan City tastes the same as the burger in Chicago or New Jersey, we often tend to think that many things about the Philippines are the same as in the West. But we should know that it is not.

We have probably all seen stories when someone was driving and following the directions on his or her car’s GPS navigation system and drove into the river or down the railroad track. Stock trading in the West is about the same. Algorithmic or “black box” trading accounts for nearly 90 percent of

the trading volume on the New York Stock Exchange. Please read that sentence again.

Ninety percent of all transactions on the biggest stock market in the world are done by computers. There is absolutely no human involvement in the trade, except by the people who designed the parameters of when the computer should buy or sell.

It is possible—in my opinion— that the smartphone app Waze was designed by the same people who do black-box trading. Coming down Sucat Road to the South Luzon Expressway (Slex) and wanting to go to Makati, Waze always says the best route is using the West Service Road, not the Slex. If the Slex was overrun by hordes of bolo-carrying zombies, it would still be better than using the West Service Road. But Waze does not know that.

Too many of the questions I receive can only be answered with: “It never worked on any other stock market. Why would it work on the local stock market?” Then there is “My brother-in-law in the US uses margin trading, borrowing money

V

arious survey results released during the last two months have shown an upbeat, positive attitude among our countrymen about the current state of their lives under this new leadership.

The last Social Weather Stations (SWS) survey delivered a net satisfaction rating of +64 percent, classified as “very good,” barely three months into the Duterte presidency.

This net satisfaction rating was very good, both in urban and rural areas, and traverses across socioeconomic classes, too. On the other hand, another SWS self-rated poverty survey showed that only four in 10 Filipino families, which is 42 percent, or about 9.2 million Filipinos, consider themselves poor.

This positive perception is encouraging, as it can systematically inspire, motivate and drive citizens to work hand in hand with the government to achieve the kind of society we all are dreaming of—one that is economically prosperous and stable.

Strong economic fundamentals

The sound, resilient and consistent macroeconomic fundamentals of the country, coupled with the strong

domestic institutions that our economic managers have sustainably built in the past, can shield us from a very erratic global market.

However, there are news reports about investors’ negative sentiments. Though they are very commonplace not only in the midst of a new government, but even in between and at the end of such government, depending on crucial turning points brought about by policy shifts, new pronouncements and some unavoidable historical circumstances that impact on market perception, we have to validate and address such sentiments or even criticisms.

Inflation is kept in the range of 2 percent to 3 percent, while the dollar reserves are consistently maintained to cover at least three to six months of our imports. The annual $20-billion remittances from our overseas workers and residents keep us immune from regional or even global glitches. Meanwhile, our GDP is

Conflicting views

Reviews from within and outside are a healthy mix of approval and rejection of how we are journeying so far under President Duterte. A big yes goes to peace and order brought about by strengthening and solidifying the Philippine National Police and the Armed Forces of the Philippines to combat the illegal-drugs menace, insurgency, corruption, lawlessness and criminality. Despite some criticisms, our renewal of friendships with nontraditional allies heralds a new chapter in international relations.

Basic concerns

The economic management team, led by Finance Secretary Carlos G. Dominguez III, is manned by competent, dedicated and experienced leaders and public servants.

Diversity in the Duterte Cabinet is good, since it is a starting point for unifying divergent political and economic interests at the policymaking and implementation level.

The President himself is undoubtedly a “champion” of the impoverished and marginalized, putting him in a unique position to drive change where it matters.

The promising and hopeful indicators should be balanced with firm, practicable and sustainable action points that need to be done if only to

bring lasting change to our country.

The top concerns of the typical Filipino were revealed in a recent survey conducted by Pulse Asia, where 46 percent of 1,200 respondents echoed the need to address wages, more job creation, effects of inflation, corruption and reducing criminality.

Unfortunately, the Philippines was removed from the top third of the latest Global Competitiveness report. However, it was noted that there are serious discussions with the government on how to truly begin and implement structural reforms aimed at improving the Philippines’s competitiveness. Crucial would be changes in the bureaucracy, science and technology, and infrastructure.

More reforms

The private sector is also pushing for tax reforms and the removal of red tape in the various requirements needed to comply with regulations that deal with doing business. President Duterte’s overwhelming support for these initiatives was lauded by the business community. The hope is that this prevalent positive inertia and immense popularity of the President can be channeled to an institutionalized partnership between government, the private sector and the masang Pilipino to make things happen. No more ningas kugon.

It will be done.

So far, so good. This is what the majority of the Filipino populace is saying. Baby steps, but we will get there.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Payment under protest: Local business tax

The Lord hears and saves Msgr. Sabino A. Vengco Jr.

Alálaong Bagá

Atty. Ayesha Hania B. Guiling-Matanog

Tax Law for Business

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ocal government units (LGUs) are constitutionally granted the power to generate their own sources of revenues. This power necessarily includes devising procedures and remedies aimed at providing means for the effective and efficient collection of taxes. Such rules, however, which are enacted through local tax ordinances, should be made in accordance with the guidelines and limitations set by Congress through the Local Government Code (LGC) of 1991, and its amendments.

Controversies usually arise when there are differences between the guidelines provided in the LGC and in the local tax ordinance. One area where differences are usually encountered is with respect to the remedies available to taxpayers in contesting tax assessments issued

by LGUs. There is no doubt that under the LGC, when an LGU issues a notice of assessment, the concerned taxpayer may contest the assessment by filing a written protest within a prescribed number of days from the receipt of the assessment. The same rule had been incorporated in the local revenue codes of LGUs. The controversy lies on the requirement by some local revenue codes for the payment under protest, before said protest can be entertained. With respect to real-property taxes, this is not an issue since the LGC is explicit on this matter. To be specific, Section 252 of the said code provides that no protest shall be entertained unless the taxpayer first pays the tax. This is very specific to real property-tax assessment.

There is no similar provision insofar as local business-tax assessment is concerned. In the absence of a specific provision in the LGC, some LGUs have applied the same rule required in protesting real propertytax assessment. These local governments contend that since there is no prohibition in applying the rules in real property-tax assessment, the LGU is not prohibited from extending the same requirement in local business-tax assessment. To them, this is part of the power granted to the LGUs to devise means to accomplish tax collection in an effective manner. Hence, some local revenue codes include provision similar to real property-tax assessment requiring payment as a condition for the validity of a protest against local business-tax assessment.

This is one of the issues brought before the Court of Tax Appeals in C.T.A. AC 139, promulgated on

The controversy lies on the requirement by some local revenue codes for the payment under protest, before said protest can be entertained. With respect to real-property taxes, this is not an issue since the LGC is explicit on this matter. To be specific, Section 252 of the said code provides that no protest shall be entertained unless the taxpayer first pays the tax.

This is very specific to real propertytax assessment.

August 11. In this case, the city treasurer of Davao refused to act on the protest of the taxpayer assailing the assessment of deficiency local business taxes. The city treasurer did not act on the protest because there was no prior payment as required by the Revenue Code of the city. The court ruled that payment under protest is not required for local business taxes.

The court reminded the basic rule that all ordinances should be in conformity with the law. Since payment under protest is not required under the LGC, a local ordinance cannot require such prior payment. In fact, the court held that the city of Davao should not supply additional requirements onerous to the taxpayer. The provision in the Revenue Code of Davao has no legal basis.

With this ruling, it is hoped that the issue will be finally put to rest.

Requiring payment under protest in contesting real property-tax assessment is acceptable and reasonable and with legal basis, but certainly not for local business-tax assessments.

The author is a junior associate of Du-Baladad and Associates Law Offices (BDB Law), a memberfirm of World Tax Services (WTS) Alliance.

The article is for general information only and is not intended, nor should be construed as a substitute for tax, legal or financial advice on any specific matter.

Applicability of this article to any actual or particular tax or legal issue should be supported, therefore, by a professional study or advice. If you have any comments or questions concerning the article, you may e-mail the author at ayesha.matanog@bdblaw.com. ph or call 403-2001 local 170.

The China pivot Val A. Villanueva

Businesswise

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ome businessmen intimated to BussinessWise that they are not about to celebrate yet the supposed economic bonanza that the Philippines is to receive from our neighbor, the People’s Republic of China.

President Duterte’s state visit to that country has, so far, resulted in a huge economic package commitment, which includes the $3-billion pledge of the state-owned infrastructure company China Railway Engineering Corp. (CREC) to help the Philippines improve its sorry infrastructure state.

It’s been touted by the Duterte administration that CREC will enter into a partnership with a local group to bid for large-scale infrastructure projects under the Public-Private Partnership Program, one of which is the planned Mindanao railway project. The project aims to connect

the cities of Cagayan de Oro, Iligan, Zamboanga, Butuan, Surigao, Davao and General Santos, which straddle a total of 2,000 kilometers. It’s been said that such a project is crucial in improving Mindanao’s interisland accessibility, linkages and seamless multimodal transport networks.

Aside from this, the country’s business delegation accompanying the President is in the thick of talks with its Chinese counterpart to forge business partnerships in various areas of interest.

But some businessmen are keeping a guarded view on this recent development. What gives? They ask.

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any are the troubles of His servants, but the Lord delivers the just from all of them (Psalm 34:2-3, 17-18, 19, 23).

When believers pray, the self-righteous can learn from the humble sinner about the absolute need of everyone for the divine mercy (Luke 18:9-14).

The Lord hears the cry of the poor Like a refrain for the messages of the readings, Psalm 34 starts off with the overflowing praise of God, proclaiming the appropriateness of blessing God at all times and with one’s whole being. The psalmist takes leave to glorify God as though in an assembly at worship where other lowly ones (the anawim), who trust and depend on the Lord, are gathered and can hear the doxology and be glad. The reason for glorifying God is because His eyes are on the just and His ears are open to their cry, while His face is against evildoers. God is the protector of the little ones who invoke Him sincerely.

Many may be the afflictions of good people, but when they cry for help, the Lord hears and delivers them out of all their troubles. He is near to the broken hearted and saves the crushed in spirit. What truly identifies the just man is his repentance and humble recourse to the Lord. A broken and contrite heart God will not despise (Psalm 51:17). The height of wisdom is to have recourse to the Lord always.

The Lord is near to those who have recourse to Him in faith, firm hope and charity, always ready to meet the needs of those who are faithful to Him. The Lord is never far from us, so we should not be

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unduly worried when untoward things happen to us.

The repentant sinner exalted

The gospel parable illustrates the stark contrast in the two different ways people understand themselves and accordingly behave. The Pharisee sees himself correctly as a paragon of propriety and exemplary conduct: not greedy or dishonest or adulterous, and generous in fasting and tithing. The tax collector sees himself for what he really is, a sinner who makes his own people suffer to make money for himself; he needs to beg for forgiveness. Correspondingly, the Pharisee stands up front and thanks God that he is “not like the rest of humanity” and disdains the sinful tax collector. The tax collector stands off at a distance, bowed down in reverence before God and beating his breast in repentance, simply entrusting his unworthiness to divine mercy.

The contrast between the two results in a surprising reversal according to Jesus that challenges the listeners to examine themselves. The Pharisee’s self-estimation is a selfexaltation evidently taking credit for his virtuous life and asserting superiority over others. His thanking God

Productivity won’t save the world

By Satyajit Das

is perfunctory; he is the center of his own prayer. On the other hand, the tax collector is so very aware that he is not what he should be before God and to his fellowmen, and so he prays in his indebtedness that his sins be expiated, be “covered over” by the divine mercy. The Pharisee, not asking for any, did not receive any justification from God; exalting himself, he is humbled. The tax collector, begging for mercy, went home justified: he humbled himself and is exalted.

Alálaong bagá, Jesus extols the humility and faith of the sinner who does not deny or excuse his sins, but abandons himself to God’s compassion. Such a lowly one looks only to God, unlike the self-righteous who looks only to himself and does not really feel the need for God’s help, but can only compliment himself for his comparative superiority over ordinary sinful beings. The lowly and the suffering are closer to God because in their need they turn to the Lord. As the psalmist knows, it is the Lord who redeems the lives of those who take refuge in Him.

Join me in meditating on the Word of God every Sunday, 5 to 6 a.m. on dwIZ 882, or by audio-streaming on www.dwiz882.com.

homas Malthus was wrong for one simple reason. Humans have survived his 1798 forecast that growing populations wouldn’t be able to feed themselves because innovation and productivity gains allowed them to produce more and more with the same amount of labor and capital: Irrigation, fertilizers, higher-yielding plant species and mechanization have enabled farmers to grow five to six times the amount of grain from the same piece of land as a century ago. The problem is that similar productivity gains may no longer be possible—or effective.

There’s general agreement about the factors that improve productivity. Investment in machinery and equipment increases production levels and quality.

Education and training improve worker skills. New products, technologies, organizational structures and work arrangements—in other words, innovation— raise efficiency. A healthy climate for entrepreneurship and competition encourages the creation of faster, smarter businesses.

Unfortunately, there’s also general agreement that productivity gains are flatlining. In advanced economies, productivity growth has fallen below 1 percent annually, significantly lower than the 3 percent to 4 percent common in postwar decades and even less than the 2 percent to 2.5 percent of the last decades of the 20th century. Similar trend

lines are beginning to appear in developing nations. Combined with stagnant or declining work forces, slowing productivity gains are a key factor suppressing growth worldwide.

What no one can agree on is why this is happening. Some economists think traditional measures designed for manufacturing-heavy economies simply aren’t detecting productivity gains in services, or the effect of newer, information-intensive technologies. There’s also a natural lag between the introduction of new technologies and their full effect. It may simply be too soon to see productivity improvements. Yet, such factors have always been present to some degree; they’d also have affected earlier productivity estimates. The real issues are more fundamental—and intractable.

Take the shift from manufacturing to services. The latter may not lend themselves to improvements as easily as industrial processes. They can’t all be automated. Many are local and not globally traded, and so don’t benefit from international supply chains. It’s hard to improve on certain personal services. A one-hour massage always takes one hour.

The nonroutine and nonrepetitive tasks involved in, say, health care and aged care, can’t easily be sped up.

The immense gains in education and skills over the last 50 years may not be repeatable. Rising costs have placed higher education beyond the reach of many. They’ve also forced graduates to start their working lives with significant debts, undercutting the attractiveness

of going to college. The rise in contract or part-time jobs has contributed to deskilling, since workers have little incentive to invest in training. A lack of retraining means that the skill levels of older workers—a rising share of the work force—quickly become dated.

Many “new” manufacturing technologies are already being extensively exploited. New energy technologies, such as fracking and renewables, aren’t breakthroughs comparable to the discovery of hydrocarbons or electricity itself; they require certain conditions, such as high oil prices, to be efficient.

Many biotech, information technology and financial innovations are focused on lifestyle, longevity, consumption and entertainment—all of which have limited productivity benefits.

In many ways and many places, it’s becoming harder to start and grow businesses. Regulations and class-action lawsuits have made doing business more complex and expensive. Anticompetitive behavior makes life tough for would-be disrupters, even in the technology sector. There’s now one major chipmaker (Intel), a few hardware makers, two dominant computer operating systems (Microsoft’s Windows and Apple), two dominant mobile operating systems (Android and iOS) and one major suite of business software (Microsoft’s Office). Cloud computing is the preserve of Amazon, Microsoft and Google. The Internet is dominated by Google (search), Amazon (e-commerce) and Facebook (social networks).

Among established companies, the frequently short tenures of chief executives and pressure to show shortterm results work against productivity gains. Financial engineering to boost share prices is favored over risky, longerterm initiatives, such as research and development or staff training.

And, finally, since 2008, unconventional monetary policies have clearly distorted the economy. Low interest rates have impeded the shift of capital from inefficient to more efficient enterprises or industries, allowing unproductive businesses to live on. This has left capital tied up in marginal firms and restricted the supply of credit to smaller, often more innovative companies.

Even if productivity growth could be revived, it’s not clear those gains would have as much of an impact on living standards as in the past. Simply being able to make more stuff isn’t terribly helpful in an era of excess capacity and also weak aggregate demand. Many innovations actually eliminate jobs and depress wages. They allow a few creators to capture large benefits but don’t aid the majority of the population.

A much-quoted study from Oxford University found that 47 percent of all jobs are threatened by automation. In 1967 Boeing employed 400 workers per each aircraft produced. By 2015, that number had dropped to 113 workers per aircraft, a decline of 72 percent. The company believes that the worker-to-aircraft ratio can be reduced another 60 percent in the next 20 years.

Will this supposed money infusion come with an attached string? Will these Philippines-China partnerships compensate for the possible pull-out of investments and aids from our traditional allies, the United States, Japan and the European Union (EU)?

Duterte has neither concealed nor denied his ideological roots, shaped largely by the Cold War era. This is clearly manifested by his Left-leaning pronouncements, such as the cutting of ties with the US and EU, which he accused of obstructing his war on drugs.

The COO of a large multinational company told BusinessWise that many foreign investors in the country are very much concerned about the sudden pivot in international alliances, which was decided by just a flick of Mr. Duterte’s fingers. He said this reckless diplomatic move has been devoid of consultations with various stakeholders who will be adversely affected. Many of them view the President as an irresponsible captain of a small rickety ship who is wrongly steering it to turbulent waters.

Why? China will never give up its claim that it owns nearly all the

waters of the West Philippine Sea, and has, in fact, stated countless times that it has “undisputed sovereignty” over the islands within its “nine-dash-line”. Recent studies also show the low regard that the Chinese have for the Philippines. Most of them, these studies assert, loathe Filipinos and consider them as insignificant beings. It also appears that it is only President Duterte and the country’s Communists who share an avowed affection for China.

An independent survey made by the Social Weather Station (SWS) revealed that the majority of Filipinos have more trust in the US than in China. It says a total of 76 percent of adult Filipinos have “much trust” in the US, while 13 percent are undecided, and the remainder have “little trust”. The final score from the results was a “very good” net trust rating of +66.

China, on the other hand, is regarded with “little trust” by 55 percent of Filipinos, while 19 percent are undecided. Only 22 percent have “much trust” in the Asian economic powerhouse, the poll results show.

In the SWS survey for the period September 24 to 27, 1,200 adult Fili-

pinos were polled, with a margin of error of plus or minus 3 percent.

The COO said that, if such were the case, Mr. Duterte is putting his personal bias over that of the people he has sworn to serve. Supreme Court Senior Associate Justice Antonio Carpio cautioned that the Philippines can lose the disputed Panatag Shoal (or Scarborough Shoal) if President Duterte concedes sovereignty over it in exchange for China’s incentives.

“If President Duterte concedes sovereignty, it is a culpable violation of the Constitution, a ground for impeachment,” he said, adding that “…the more important repercussion is, once Mr. Duterte concedes sovereignty, we can never recover it because China will never give it back…because even if the Philippine Supreme Court voids a possible concession by President Duterte, China will not be bound by the ruling of the Philippine Supreme Court.”

In concluding the interview with BusinessWise, the COO stated that, “If a nation does not respect our boundaries, how can they be trusted to be possible partners in joint development? The Philippines should, instead, take advantage of the favorable

ruling we got from the international court of arbitration to show China what we are made of as a nation.”

Already, a number of European companies have put off big-ticket manufacturing investments in the Philippines, which could have brought in thousands of jobs, according to the European Chamber of Commerce of the Philippines (ECCP). According to ECCP President Guenter Taus, “Investors are hesitant to invest due to uncertainties stemming from local risk factors. They said they’ll hold on to their investments until they see a clear foreign policy of the government.”

Henry Schumacher, senior adviser of the ECCP, voiced out the concern of some European investors.

“The comments the President makes are the kind of news they’re seeing,” he said. “So then they are asking: ‘Is our money going to be safe? Are our people going to be safe? Does it make sense to invest further in the Philippines?’”

Is our country’s investment future now hanging in the balance?

Bloomberg View

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For comments and suggestions, e-mail me at mvala.v@gmail.com

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