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BENT ON REGAINING Passage of 8 economic PHL EDUCATION-HUB STATUS bills tops PCCI ‘wish list’ T

F

By Cai U. Ordinario & Catherine N. Pillas

@cuo_bm

@c_pillas29

ilipino businessmen on Thursday bared their updated “wish list,” topped by the immediate passage of eight priority economic bills and the swift issuance of presidential proclamations for economic zones.

10

The number of initiatives the Philippine Chamber of Commerce and Industry wants the government to undertake As this developed, Socioeconomic Planning Secretary Ernesto M. Pernia said Chinese firms have Continued on A2

Metro condos selling like hotcakes amid rising cost

By Roderick L. Abad

H

FLIGHT EXERCISE Men in hazmat and firefighting suits perform lifesaving actions beside a dummy plane during the 2017 Crash and Rescue Exercise (CREx) at the Manila International Airport Authority (Miaa) compound. The CREx is held in compliance with the requirements of the International Civil Aviation Organization. It has an end in view of putting to test the effectiveness of the Miaa in responding to emergencies involving aircraft. NONIE REYES

Cimatu wants ‘too little’ mining excise tax hiked

By Elijah Felice E. Rosales

M

@alyasjah

ining companies, beware. The government is eyeing to increase excise taxes on mining as part of the Duterte administration’s

campaign to maximize profit from the sector.

In a news briefing on Thursday, Environment Secretary Roy A. Cimatu said he is pushing for a significant hike in the excise taxes imposed on mining companies. He Continued on A2

PESO exchange rates n US 51.3870

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OUSING demand in Metro Manila will continue to rise, as foreign investors from Southeast Asia, China and the Middle East infuse more capital into the Philippines, according to real-estate service provider Santos Knight Frank (SKF).

SKF Chairman and CEO Rick Santos said investors from Japan, China and South Korea particularly expressed their interest in the local condominium projects.

“Investor-driven demand continues to bolster the local condominium sales market, as average monthly take-up rates continue to exhibit double-digit figures,” he noted. “The residential market is dominated by middle income and high-end projects.”

Based on SKF’s research on the inventory of actively marketed vertical housing projects in the metropolis, residential condominium units have aggregated to 176,731 as of the second quarter of 2017.

SKF Senior Director for Research and Consultancy Jan Custodio said Quezon City accounted for 51,150 units, followed by Makati at 43,724; Ortigas, which includes parts of Mandaluyong, Pasig and San Juan, at 26,980; Bay Area in Pasay City, 25,771; Taguig City, 25,178; and Alabang in Muntinlupa, 3,928.

During the period, he bared that 6,248 units have been turned over to the buyers. Around 4,005 condo units have been launched across Metro Manila in the first half of the year.

As to the indicative average monthly take-up rates as of the second quarter, the Bay Area sold around 70 units; Makati, 16 units; Quezon City, 14 units; Taguig, 14 units; Ortigas, 13 units; and Alabang, 10 units, Custodio shared.

Selling prices, he added, have also improved, with Taguig City having the highest asking cost of P85,000 to P350,000 per square meter for each condo unit across all categories, followed by Makati City, See “Condos,” A2

he Philippines is keen on regaining its education-hub status—now held by Malaysia—in the region through the liberalization of the education sector in the upcoming amendments to the Regular Foreign Investment Negative List (RFINL), according to the National Economic and Development Authority (Neda).

Socioeconomic Planning Secretary Ernesto M. Pernia said the “aggressive” draft RFINL has been forwarded by the Neda to the Office of the President, which is currently reviewing the proposal.

“That is the objective. We should recover that position [education hub],” Pernia said. “[The RFINL is] still being looked into by the Office of the President.”

In another forum this week, Hal Hill, professor emeritus of Southeast Asian Economies in the Arndt Corden Department of Economics, Crawford School of the Australian National University, said reforming the education

sector in the country is crucial.

Hill added the country’s educational advantage is shrinking and other countries are catching up.

He said the Philippines initially had a “historical head start” in education, mainly due to the widespread use of the English language in the country. “ The Philippines initially was expected to become the regional hub for higher education, that is the internationalization of higher education, and the Philippines has played a role in that. But it probably would have taken a much larger role if it had been more open in a sense,” Hill added.

“Ironically, Malaysia, which doesn’t have such a strong education base than the Philippines, has become the hub because they opened up more quickly. That’s another challenge, I think the Philippines will still be able to play that game if it will move quicker,” he said.

See “PHL,” A2

Neda, AIIB want to see Pasig River rehab on list of 75 flagship projects

T

he National Economic and Development Authority (Neda) is keen on including the rehabilitation of the Pasig River, estimated to cost $4 billion, on the administration’s list of gamechanging projects.

On the sidelines of the Philippine Business Conference on Thursday, Socioeconomic Planning Secretary Ernesto M. Pernia said the list of 75 flagship projects is “not set in stone” and can still be changed by the administration.

The list, he added, will still be proposed to the Investment Coordination Committee (ICC). Once it is approved, it will be endorsed to the Neda Board for approval.

“I think it should be given priority because it’s not just an economic project, it’s also an environmental and social project; so the benefits are multifaceted, compared with

Pernia: “I think it should be given priority because it’s not just an economic project, it’s also an environmental and social project; so the benefits are multifaceted.”

the other physical infrastructure projects that are really more physical and economic in orientation,” Pernia told reporters. “I will raise it tomorrow [Friday]. We have an ICC meeting, I can raise it. In fact, Mr. [Rolando] Macasaet already mentioned that to [Finance] Secretary [Carlos G.] Dominguez; it’s just a matter of following it up.” Macasaet is the Asian Infrastructure Investment Bank (AIIB) alternative director for the Philippines.

See “Neda,” A2

n japan 0.4551 n UK 67.8668 n HK 6.5806 n CHINA 7.7541 n singapore 37.8820 n australia 40.3080 n EU 60.5750 n SAUDI arabia 13.7024

Source: BSP (19 October 2017 )

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A2 Friday, October 20, 2017

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Passage of 8 economic bills tops PCCI ‘wish list’ Duterte, Trump set Continued from A1

expressed keen interest in putting up industrial economic zones in the Philippines.

The Philippine Chamber of Commerce and Industry (PCCI) presented its list of 10 initiatives that it wants the government to undertake during its 43rd Philippine Business Conference & Expo held in Manila on October 18 and 19.

The PCCI called on the House of Representatives and the Senate for the enactment into law of these priority legislative measures: ■ Tax Reform for Acceleration and Inclusion (TRAIN) Act; ■ Public Service Act (PSA); ■ Act creating Regional Investment and Infrastructure Corporation of Central Luzon; ■ Amendment of the Local Government Code; ■ Expanded Anti-Red Tape Act; ■ Customs Amnesty Act; ■ Estate Tax Amnesty; and ■ Granting Amnesty on All Unpaid Internal Revenue Taxes Imposed by the National Government for Taxable Year 2015 and Prior Years.

It added: “The national government must fast-track the presidential proclamation of economic-zone applications already approved by the Department of Trade and Industry [DTI] to create more economic opportunities, especially in the regions.”

“This economic-zone resolution is quite pressing. These projects go

Neda. . .

through a process, and right now the process is posing a concern among those who invested in the Philippine Economic Zone Authority [Peza] ecozone,” PCCI President George T. Barcelon told reporters at the sidelines of the annual business conference.

Peza, the investment promotion authority tasked to authorize and build ecozones in the country, said in July that Executive Secretary Salvador C. Medialdea has yet to act on 46 applications for ecozones.

The agency’s founding law, the Special Economic Zone Act of 1995, mandates that proposed economic zones that have hurdled approval at the Peza board level still has to wait for a presidential proclamation.

Despite this, two Chinese firms are keen on setting up special ecozones, Pernia told reporters at the sidelines of the conference. “I think they’re looking at Central Luzon, in the Clark area.”

Pernia added the firms relayed its expression of interest during the recent road show attended by economic managers in Shanghai, China.

He said these industrial economic zones will cater to firms engaged in the manufacture of high-end electronic products.

However, Pernia said there is no timetable set for the evaluation and approval of their proposal, since discussion on the matter is still ongoing between the economic team and the firms.

Continued from A1

In the second session of the conference on Thursday, Macasaet “challenged” the Duterte administration and the business sector, through the Philippine Chamber of Commerce and Industry (PCCI), to take on the rehabilitation of the Pasig River. Macasaet said the rehabilitation of the Pasig River could cost around P200 billion, or $4 billion. If the government proposes this to the AIIB, Macasaet said he is willing to endorse the project to the AIIB board.

He noted that the AIIB, as an institution, favors “lean, clean and green” infrastructure investments, so there is a good chance the AIIB can finance the project.

“We will be able to regulate the city’s temperature. We will have the best real-estate prices along the banks. We can have walkways, parks.

We can improve the quality of life of our people.

It is a matter of national pride if we can rehabilitate the Pasig River,” Macasaet said.

For their part, Jin Yuan, commercial counselor at the Chinese Embassy in Manila, said since the Beijing is already constructing two bridges crossing the Pasig River, the government may be willing to work with the AIIB on the project.

Yuan sees the need to undertake the project since no less than President Duterte has lamented the sordid state of the Pasig River.

However, Yuan said if Chinese funding will be used for the rehabilitation of the entire 25-kilometer stretch of the Pasig River, their resources may be limited for such an undertaking.

“As I know, Pasig River is very large, across

Allowing the entry of foreign firms, such as those engaged in electronics manufacturing, is seen as a good sign by the economic team, especially in terms of increasing the country’s foreign direct investments (FDI).

In another forum, former dean of the University of the Philippines School of Economics Ramon Clarete said the Philippines continues to trail behind its Southeast Asian neighbors in terms of FDI. Clarete said the country’s FDI have already reached $4 billion, which is significantly higher than the $2-billion FDI recorded in the 1990s.

“In terms of foreign direct investments, we are in the bottom still. We had gains since 2012 and FDI had been rising to about $4 billion, but the latest news is we probably would end up with less than $1 billion this year. I hope it doesn’t slide down back to the level seen in the 1990s,” he said.

The country’s cumulative FDI between 1970 and 2013, Clarete added, only amounted to $41.9 billion, the lowest in the Asean-5.

Malaysia has the highest FDI stock of $146.7 billion between 1970 and 2013, followed by Thailand with $139.5 billion; Indonesia, $128.4 billion; and Vietnam, $81.8 billion.

Other initiatives

The PCCI is also asking the Bureau of Internal Revenue and local government units (LGUs) to review, simplify and streamline

Metro Manila and 25 kilometers. So if the whole river, we [will] have [a] limitation. [It] will be quite expensive. Now we are waiting for FS [feasibility study] to be completed and the Chinese government is very willing to work with AIIB to carry on this very important project,” Yuan said.

In 2012 the Pasig River Rehabilitation Commission (PRRC) said rehabilitating at least six canals or esteros leading to the Pasig River will cost a total of P173.26 million.

Then-PRRC Chairman Regina Paz L. Lopez said the rehabilitation of Estero de Aviles will amount to P16.15 million; Estero de Uli-Uli, P24.1 million; Estero de Quiapo, P30.18 million; Estero de San Sebastian, P14.35 million; Estero de Sampaloc, P44.27 million; and Estero de Valencia, P44.2 million.

A study commissioned by the PRRC back then showed that roughly, the total benefits in the next 20 years to residents could reach up to P23.94 billion, while the local government stands to benefit a total of P1.36 billion in taxes.

Lopez said benefits to residents include total land value, which could reach P22.45 billion in the next 20 years; some P218.4 million in savings from temporary flooding relocation; P270.86 million in recreational value; and P998.27 million in health savings.

For the government, Lopez said in the next 20 years, the government could generate some P561.33 million in land taxes and around P801.9 million in real-property tax for buildings.

“Excluding the costs of relocation and costs of other agencies, the total costs incurred by the PRRC, KBPIP [Kapit Bisig para sa Ilog Pasig], DPWH [Department of Public Works and Highways] is already P164 million. This does not include yet the costs of other agencies. Includ-

processes, requirements and fees in business registrations, licenses and closures.

To boost the agriculture sector, the PCCI called on the Department of Agriculture and the DTI to fully implement the Agribusiness Support for Promotion and Investment in Regional Expo (Aspire) nationwide.

Under Aspire, the PCCI said the government must identify the priority commodities of the regions that would be given assistance and interventions through the use of geo mapping/tagging and make the information available to the private sector.

The group said a database and market profiling that would be readily accessible to farmers, producers and end-uers and a centralized monitoring mechanism that would document compliance and accomplishment of Aspire deliverables must be created.

The national government and the Department of Education was urged to strengthen health and nutrition program in public elementary schools and to “give more impetus” to the K to 12 program by making available industryrelevant facilities.

The PCCI also asked the DTI and the Department of Transportation to issue a joint department order on publishing international shipping fees and other charges in order for traders, importers and exporters to choose which shipping lines offer fair and reasonable rate.

ing the maintenance cost of about P2 million a year and further development costs, the total costs may reach P300 million for the duration of 20 years,” the PRRC stated in a presentation.

Manila’s Pasig River continues to play an important social, cultural, historical and political role in the nation’s capital. Its restoration, which began with the Pasig River Rehabilitation Program in 1989, aims to reverse the effects of years of negligence, uncontrolled development and unabated pollution.

In 1999 a presidential mandate established the PRRC, with the clear goal of restoring Pasig River from a biologically dead river to Class “C” level—that can sustain life—by 2014.

Cai U. Ordinario

PHL. . .

Continued from A1

Data showed educational-attainment rates of people aged 25 to 54 years old in the Philippines was at 98.3 percent for primary; 75.9 percent for secondary; and 29.3 percent for tertiary education.

Compared to other countries in the Asia Pacific, the Philippines only ranks third in terms of educational attainment in primary school; fifth in secondary; and second in tertiary education.

The top country in primary education is Lao PDR at 100 percent. In secondary and tertiary education, South Korea is the leader at 98.5 percent and 43.9 percent, respectively.

“The education story is one of an advantage. Of course that’s the key reason it’s been so successful.

But the Philippines’s education advantage has been shrinking,” Hill said.

Earlier, Pernia said apart from the plan to allow increased foreign equity in telecommunication and the proposal to remove public utilities from the RFINL, it seeks to allow more foreign professors to teach in the country.

Pernia said foreign professors are not allowed to teach in private and public universities.

This becomes a problem especially in the case of Filipino-American professors. He said these professor’s credentials make them qualified to teach in the Philippines. But because of the restriction, they cannot teach and must renounce their American citizenship before they do.

“We have so many scientists in the US who have done groundbreaking scientific research and have patents. But, they have dual citizenship and they cannot be given an item in the university because of this.

They have to renounce their American citizenship to get an item,” Pernia said.

The Neda is tasked to review and revise the country’s RFINL, which contains restrictions on foreign investments and the practice of professions based on the Constitution and Philippine laws.

The RFINL contains investment areas/activities where foreign equity participation is limited by mandate of the Constitution and specific laws. It also consists of investment areas/activities where foreign equity participation is limited for reasons of defense, security, risk to public health and morals and protection of small- and medium-sized domestic market enterprises. Cai U. Ordinario

to meet in November

P

resident Duterte is set to have a one-on-one meeting with his United States counterpart Donald J. Trump in November to strengthen what appears to be a love-and-hate relationship between the Philippines and the US, according to Manila’s top diplomat.

In a c h a nce i nter v iew on Wednesday night, Foreign Affairs Secretary Alan Peter S. Cayetano said his department is arranging a bilateral meeting between the President and Trump. Both leaders are scheduled to attend the Asia-Pacific Economic Cooperation (Apec) and Asean summits. “ The schedule of President Trump was just finalized recently.

I was in Washington when certain consultations were done, and he did decide to go to both Apec and Asean [summits],” Cayetano said.

“So, having said all of that, t he re a re no w co ord i n at ion

where they [Duterte and Trump] are going to sit down and talk: whether it’s in Vietnam or here,” Cayetano added.

Vietnam is hosting this year’s Apec summit, while the Philippines is concluding its chairmanship of the Asean by hosting the region’s 31st convention.

Although “the schedules are still all very complicated,” Cayetano said he is certain the President and Trump are going to meet in November. “Definitely, we want it, they want it,” the top diplomat said. “I’m sure they’ll be able to speak because our relationship with the US is very important. [On top of that,] President Trump and President Duterte like each other.”

Asked what issues will the two leaders most likely discuss, Cayetano said human rights and Duterte’s war on drugs are certainly on top of the list, among other issues.

Elijah Felice E. Rosales

Cimatu wants ‘too little’ mining excise tax hiked Continued from A1

added this is in line with President Duterte’s instruction to him to study options on how the country can fully benefit from mining.

“Absolutely, yes, kailangan [it is needed],” Cimatu said when asked if he is in favor of increasing excise taxes on mining. Mining companies are mandated to pay 2-percent excise tax to the government based on the gross value of ores and minerals.

As to how much increase the government is eyeing to impose, Cimatu did not give a clear answer, but said some proponents placed it at 5 percent. “Well, there was this study before, there were some proponents before [who want] to increase the 2 percent to 5 percent.”

However, these proposals were not welcomed by mining companies, saying a 5-percent excise tax is just too much, according to Cimatu. “These are the things that we have to plan properly, how much financial and so forth and so on.

But the 2-percent excise tax seems too little,” Cimatu said in English and Filipino.

“There is no absolute value for the increase, yet. I think I will be bringing this to the MICC [Mining Industry Coordinating Council] as part of a policy recommendation later,” Cimatu added.

The environment chief also said he is looking into “other options or modalities in getting what is inside the bowels of the Earth, aside from open-pit mining,” as directed by the President during their Cabinet meeting on September 4.

“He also instructed me not to allow mining in watersheds and to require mining companies to plant trees in barren areas within the

Condos. . .

Continued from A1

from P82,000 to P342,000; Ortigas, from P57,900 to P190,000; Alabang, from P65,600 to P183,200; Bay A rea, f rom P117,200 to P175,200; and Quezon City, from P56,200 to P160,000.

Custodio sees the growing investor base, countrywide portfolio expansions and strong growth potential of emerging business centers as the trends in the residential market today.

These are all evident now in Metro Manila, which, according to Santos, is a rapidly rising megacity.

“The level of development in Metro Manila over the last decade

company concession, which are not utilized for mining,” Cimatu said. He added the President is not totally against open-pit mining and is even willing to give mining companies some elbow room to apply reforms.

“Mining companies will be given that elbow room [as] he [Duterte] said this in the Cabinet meeting.

But, eventually, at some point in the future, open-pit mining will have to return, or turn, to more environmentally accepted methods,” Cimatu added.

As to the mining operations ordered shut down by former Environment Secretary Regina Paz L. Lopez, Cimatu said he is scheduled to meet the members of the MICC on October 24 to receive and discuss the recommendations of the mining audit.

As environment chief, Cimatu sits as cochairman of the MICC. He, however, declared that he would vote on matters that will decide the fate of the suspended mining operations. “But I will hear their arguments for me also to be guided.”

On the other hand, Cimatu said he has yet to make a stand on the plan to mandate mining companies to acquire legislative franchises before they can operate. “I said I will wait for the bill about the franchise, about the mechanics of that.”

“My bottom line is that it should define the wish of the President for responsible mining; make sure that the proper taxes will be given. Also, if ever, we have to process our minerals here to have a better revenue for the country because, as of now, the mining industry is only contributing about less than 1 percent of the GDP,” Cimatu said. has been unprecedented and reflects on the accelerated expansion of the property market,” the Chairman and CEO of SKF said.

He likened the Philippines’s capital city today to Hong Kong or Singapore 30 years ago.

“With a population of more than 25 million, the Greater Manila Area has more people than Hong Kong [7.3 million] and Singapore [5.6 million] combined,” he stressed.

Looking forward, he said the Philippine real-estate market will sustain its momentum, with about 2 million sq m of residential space that will come online by 2019, when population reaches 13.2 million and per-capita income increases to P500,000, or $10,000.

The Nation BusinessMirror

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Editor: Vittorio V. Vitug • Friday, October 20, 2017 A3

Central Luzon police shift focus on jueteng after ‘tokhang’ freeze

C

By Ashley Manabat | Correspondent

ITY OF SAN FERNANDO— Following the formal freeze of the “Oplan Tokhang” last week, the National Police (PNP) in this region have now set their sights on illegal gambling.

Some 21 persons in Pampanga and Bulacan were arrested on Wednesday by intensified police operations in a fresh crackdown against illegal gambling, particularly jueteng, in Central Luzon.

Chief Supt. Amador Corpuz, director of the Police Regional Office 3 (PRO3) based in Camp Olivas here, said after the police operations: “The government is losing more than P3 billion [a year] in terms of revenues due to illegal gambling in the countryside, and we are working hard to stamp out the prohibited numbers game.”

Corpuz added, “Now that the mandate against illegal drugs was already in the hands of the Philippine Drug Enforcement Agency, the police have to concentrate on other crimes and illegal activities, including gambling.”

Corpuz identified those arrested in Bulacan and Pampanga as Jocelyn Manabat, 37, alias Madam Josie; Long Valencia, 33; both from Barangay San Juan, San Ildefonso, Bulacan; Marvin Villegas, 32; Analyn Tecson,

₧3B The estimated yearly loss in government revenues from illegal-gambling operations in the regions

36; and Roland Gamboa, 61, all from San Miguel, Bulacan.

Pablo de la Cruz, 43; Ernesto Caruyan, 35; Mario Estiller, 51; Romeo Laurente, 62; Reche Perez, 40; Jose Noel Umpig, 51, all from Candaba, Pampanga. Aldrin Alarcon, 29; Ryan Parungao, 28; Emiliano Vergara, 59; Vicente Mananaquil, 49; Rodrigo de la Cruz, 55; Ricardo Gutierrez, 46; Alexander Bunag, 42; Wilson Gonzales, 41; Jerome de Asis, 34, all from San Ildefonso, Bulacan.

Seized from the suspects were illegal gambling paraphernalia, loose

coins and bills in different denominations from bet collection.

The suspects were brought to different police units in Bulacan and Pampanga where they are being processed before being sent to jail.

Charges of violation of the Comprehensive Illegal Gambling Act are being readied against them.

As this developed, the Zambales PNP, in coordination with the Philippine Charity Sweepstakes Office (PCSO), raided an illegal-gambling den identified as “Peryahan ng Bayan,” in Barangay Pagasa, Olongapo City, leading to the arrest of the employees of Globaltech Mobile Online Corp., an unauthorized small-town lottery (STL) operator.

PCSO General Manager A lexander Balutan expressed his gratitude to the Criminal Investigation Detection Group (CIDG)Zambales for their campaign against illegal gambling.

“We cannot thank CIDG-Zambales enough for moving promptly on the complaint of our Zambales branch manager Pierre Ferrer.

Their efficiency is a big help in increasing the charity funds of the government,” Balutan said in a news statement.

Globaltech was granted a oneyear authorization to operate the Peryahan ng Bayan in 2014, but PCSO, under the Duterte’s administration, terminated the deed of authorization because of Globaltech’s continued and repeated refusal to remit the share of the government.

Meanwhile, Corpuz said more arrests of illegal-gambling personalities will follow.

Faeldon, former BOC officials seek dismissal of drug-smuggling raps

By Joel R. San Juan @jrsanjuan1573

F

ORMER Bureau of Customs (BOC) Commissioner Nicanor E. Faeldon on Thursday sought the dismissal of the criminal charges filed against him and several others, before the Department of Justice (DOJ), for allegedly conspiring to smuggle into the country a shabu shipment worth P6.4 billion in May. During preliminary investigation on the complaint filed by the Philippine Drug Enforcement Agency (PDEA) on Thursday, Faeldon submitted a 27page counteraffidavit denying the allegations hurled against him.

Faeldon branded the complaint, filed by Norman Balquiedra, chief of the PDEA’s Seaport Interdiction Unit, as “ludicrious, laughable and baseless.”

He also questioned the authority of Balquiedra to represent the PDEA in the complaint, considering his failure to attach a written authorization from the agency’s director general to lodge the complaint.

“The lack of written authorization is not curable by mere amendment of the complaint, but shall be a cause for the dismissal of the complaint without prejudice,” Faeldon said.

“Accordingly, since this Balquiedra was not authorized by the PDEA to file this complaint, then it is considered as not filed and ineffectual, and as a necessary consequence, is dismissable due to lack of jurisdiction,” he added.

Faeldon explained that Balquiedra even failed to allege in his complaint that he was present during the commission of the supposed crimes being attributed to him and the other respondents.

“His allegations being mere imaginations or, worse, hallucinations, are

wholly insufficient to sustain the view of herein respondent’s culpability, even remotely or indirectly, as his imagination cannot be considered as proceeding from his personal knowledge…,” the former BOC chief said.

Faeldon also noted that Balquiedra also failed to provide documentary and testimonial evidence to support the complaint.

“From the foregoing, it is clear that the facts and circumstances could never engender a belief in a reasonable mind that I am in any way responsible for the alleged offenses. With this, it is a matter of necessity that this criminal complaint be dismissed for total absence of probable cause.”

The PDEA is seeking the indictment of Faeldon and his co-respondents for alleged conspiracy to import illegal drugs and protecting or coddling of drug traffickers under Republic Act (RA) 9165; obstruction of justice under Presidential Decree 1829 by “harboring or concealing, or facilitating the escape” of the persons behind the shabu shipment; negligence and tolerance under Article 208 of the Revised Penal Code; and violation of Section 3 of RA 3019 (Anti-Graft and Corrupt Practices Act) for allegedly “causing any undue injury to any party, including the government, or giving any private party any unwarranted benefits, advantage or preference in the discharge of his official administrative or judicial functions through manifest partiality, evident bad faith or gross inexcusable negligence.”

Faeldon filed his counteraffidavit following the decision of the threeman panel of prosecutors to deny his motion to dismiss the complaint on the ground of lack of jurisdiction.

The panel, headed by Assis-

tant State Prosecutor Aristotle Reyes, noted that it has been the position of the justice department that it has jurisdiction to conduct preliminary investigation for offenses covered by RA 9165, otherwise known as the Comprehensive Dangerous Drugs Act of 2002, even if the offender is a public officer with salary grade 27.

The rationale behind this, according to the panel, are the provisions in RA 9165 that confer exclusive jurisdiction to the regional trial court over drug cases regardless of the position of the offender public officer.

“Again, it does not mention that cases against these government officials shall be filed before the Sandiganbayan, but instead, imposes the maximum penalty for the unlawful acts committed,” the resolution stated.

In assailing the DOJ’s jurisdiction over the drug case, Faeldon insisted that it is the Ombudsman and not the DOJ which has jurisdiction to conduct a preliminary investigation into the drug case filed against him and several others.

Faeldon cited as basis the Sandiganbayan law, which holds that for an official to be under the DOJ’s jurisdiction, the following requisites must exists: 1. the public officer or employee occupies the position corresponding to salary grade 27; and 2. the crime is committed by the public officer or employee in relation to his office.

Faeldon noted that he has a salary grade of 30.

But, the panel noted that the DOJ denied on February 14 a similar motion filed by Sen. Leila M. de Lima in connection with the prison drug-trade case filed against her.

Three ASG bandits surrender in Basilan

By Rene Acosta @reneacostaBM

A

relative of slain Islamic State leader Isnilon Hapilon and two members of the Abu Sayyaf Group (ASG) under top leaders Furuji Indama and Nurhasan Jamiri surrendered to the government, as combat operations are being intensified in Basilan.

Ben Salina Sapilin, alias Ben, a cousin of Hapilon, and two others identified as Rami Ben Sapilin and Muhamadendeng, yielded to soldiers at Barangay Macalang, Albarka, Basilan, on Tuesday.

Surrendered by the group were an M-16 rifle, a Garand rifle and an M-79 rifle.

Rami Ben Sapilin, alias Attik is a follower of Nurhasan Jamiri, while Muhamadendeng, alias Aburayhad, is a follower of Furudji Indama.

The three yielded to members of the Army’s 74th Infantry Battalion, according to Col. Juvymax Uy, commander of the Joint Task Force Basilan.

“Sapilin and his companions are currently in the custody of the 74IB for the debriefing to be facilitated by our intelligence units,” he added.

For this year, a total of 124 ASG members have already surrendered to government forces. Of this, 68 yielded in Basilan, 33 in Sulu, 21 in Tawi-Tawi and two in Zamboanga City.

“Our Joint Task Forces will continue to sustain their security operations to bring about the eventual defeat of the Abu Sayyaf operating in the ZamBaSulTa area,” said Lieutenant General Carlito Galvez, Jr., commander of the Western Mindanao Command.

“With the neutralization of the Abu Sayyaf leader Isnilon Hapilon, we believe more of the bandits will surrender and return to the folds of law in the coming days,” he added.

T.R.O. halts R.E.S. application, renewal–ERC

By Lenie Lectura

T

@llectura

he Energy Regulatory Commission (ERC) has been unable to process pending applications for new retail electricity supplier (RES) licenses, as well as applications for renewal, since a temporary restraining order (TRO) on the retail competition and open access (RCOA) system took effect.

“The issuance of the said TRO has put on hold operational matters of the RCOA, such as the issuance of licenses in favor of RES and the lowering of the threshold for contestability. These are integral to the mandate of the ERC in promoting competition, and ensuring customer choice pursuant to the provisions of the Epira,” the ERC said.

RCOA, in a nutshell, allows consumers to source power from a licensed RES to encourage competition in the generation and supply sector.

The Supreme Court (SC) issued on February 21 a TRO against a Department of Energy (DOE) circular and ERC resolutions days before these were supposed to take effect.

The mandatory switching of consumers with an average peak consumption of 750 kilowatts (kW) to 999 kW, which should have taken effect on June 26 was among the rules that were halted by the SC. But the mandatory switching of power users consuming an average of at least 1 megawatt (MW) per month is already in effect. Its implementation took effect on December 26, 2016, more than a month prior to the issuance of the TRO. “This situation effectively bars the entry of new players in the electric-power industry. To date, there are 14 license applications, seven of which are new applications, while the other seven are applications for

renewal,” the ERC cited.

The seven new applications are from Solar Philippines Retail Electricity Inc., Green Energy Supply Solutions Inc., Green Core Geothermal Inc., Megawattsolutions Inc., Trademaster Symbior Rooftop Inc., Energy Trading Management Corp. and Asia Pacific Energy Corp.

The applications for renewal were sought by Direct Services Inc., Ecozone Power Management Inc., GNPower Ltd. Co., PRISM Energy Inc., AdventEnergy Inc., Aboitiz Energy Solutions Inc. and Phinma Energy Corp.

The ERC said out of the seven applications for renewal license, five have already expired. The licenses of Aboitiz and Phinma, meanwhile, will expire on October 28 and November 18, respectively.

The regulator said it has received inquiries and letters of concern from the RES regarding the renewal of their licenses and the effect of the non-renewal of the same.

These RES contended that the nonissuance of a RES license would greatly affect their operations and, likewise, put the contestable customers (CCs) who they have effective contracts at a disadvantage.

Based on ERC data, a total number of 144 CCs, with total demand of 267.16 MW, stand to be affected and may be prejudiced by the nonrenewal of said licenses.

“In the absence of any safety nets available for these customers, in all probability, they could be subject to the imposition of the much higher supplier of last resort rate,” the ERC noted.

ERC said it is willing to comply with the TRO. However, the uncertainty and unrest in the electric industry caused by the wholesale non-implementation of the assailed issuances compelled it to seek refuge from the SC.

Economy

A4 Friday, October 20, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon

Japan chamber appeals for status quo on grant of Peza incentives

By Catherine N. Pillas @c_pillas29

J

apanese companies are appealing to Congress to maintain the current incentive scheme of the Philippine Export Zone Authority (Peza), saying the retention is pivotal to keep Japan’s foreign direct investment (FDI) inflow to the Philippines afloat.

Japanese Chamber of Commerce and Industry in the Philippines (JCCIP) President Hiroshi Shirashi also expressed support to the Senate version of the Tax Reform for Acceleration and Inclusion (TR AIN), which, he said, excludes any changes to incentives offered by Peza.

“I think Peza incentives are among the most important points [driving] Philippine-Japan trade and investment. JCCIP and Japan External Trade Representative Office [Jetro] are supporting TRAIN reform, but we wish to maintain Peza incentives,” Shirashi told reporters at the sidelines of the 43rd Philippine Business Conference and Expo held at the Manila Hotel.

I think Peza incentives are among the most important points [driving] PhilippineJapan trade and investment.

JCCIP and Jetro are supporting TRAIN reform, but we wish to maintain Peza incentives.”

—Shirashi

Speaking before the Philippine business community on Thursday, the organization head cited key elements that encourage Japanese investment: the incentives scheme, an open foreign investment environment and accommodation of more Japanese small and medium enterprises.

“Peza incentives are core competence of the Philippines, and it’s very important,” Shirashi said.

The JCCIP President added that with Vietnam’s labor cost seen rising in the next few years, the Philippines will need to hold on to its cost-efficient advantage.

However, even with the current incentive scheme in place, Japanese FDI to the Philippines, compared to other Asean countries, is rated as “modest.”

According to Jetro’s Global Trade and Investment Report 2017, Japan invested $20.6 billion in Asean in 2015.

From the $20.6 billion, the Philippines received $1.5 billion, compared to Singapore’s $6.7 billion, Thailand’s $3.9 billion, Indonesia’s $3.3 billion and Malaysia’s $2.8 billion.

FDI numbers in 2016 were better: the Philippines got $2.3 billion, besting Malaysia and Vietnam. Based on the report, Asean registered negative FDI inflow from Japan last year, or a $-6-billion divestment.

From the Philippines’s side, however, Japan has been the largest investor in over a decade, hauling in a cumulative investment amount of P12.4 billion from 2000 to 2016.

For trade, due to the Philippine-Japan Economic Partnership Agreement, the Philippines’s only free trade agreement in effect, overall trade grew by 50 percent from 2008 to 2014.

JCCIP membership is now at 850 members. In total, some 1,440 Japanese companies are operating in the Philippines, according to Jetro’s data.

BusinessMirror

www.businessmirror.com.ph

Neda sees higher Q3 GDP growth

H

By Cai U. Ordinario

@cuo_bm

igh government spending and export growth are expected to boost GDP growth in the third quarter of the year, according to the National Economic and Development Authority (Neda).

At the sidelines of the Philippine Business Conference on Thursday, Socioeconomic Planning Secretary Ernesto M. Pernia said growth could reach the midpoint of the 6.5-percent to 7.5-percent full-year target in the third quarter.

“The forecast is going to be better than the second quarter,” Pernia told reporters. “The outlook on the global economy has improved, so our exports are increasing and also government

spending has been increasing double digits.”

Pernia added that, with “milder” than expected typhoons, the agriculture sector is bound to post better growth in the July-to-September period this year.

“Typhoons have been rather mild, [the weather] has been rather clement, mild compared with previous years. So knock on wood, if we have this kind of weather disturbance, minor weather dis-

turbance, I think agriculture will also be performing better,” he said.

Total exports in the January-toAugust period reached $42.11 billion in 2017, a 13-percent growth from the $37.16 billion in 2016.

In July and August 2017, exports amounted to $10.82 billion. This is a 10.16-percent growth from the $9.82 billion posted in 2016.

In August alone, export earnings rose by 9.3 percent to $5.51 billion, from $5.04 billion in the same month of previous year.

Meanwhile, the Department of Budget and Management reported that national government spending increased 9 percent to P1.331 trillion in the first semester of the year.

In the second quarter of 2017, the government spent P715.5 billion, or 13.6 percent higher than P629.8 billion in the April-to-June period last year.

In June 2017 alone, government spending increased 22.6 percent to

T

The forecast is going to be better than the second quarter. The outlook on the global economy has improved, so our exports are increasing and also government spending has been increasing double digits.”—Pernia

PPA says holiday season port congestion unlikely this year

By Lorenz S. Marasigan @lorenzmarasigan

C Street bubbles

A street vendor fires his bubble gun “weapon” to catch the attention of potential buyers and customers infront of the National Shrine of Our Mother Perpetual Help in Baclaran. ALYSA SALEN

DENR firming up plan vs biopiracy, protect plant, animal resources with medicinal value

By Jonathan L. Mayuga

P270.7 billion, from P220.8 billion in the same period in 2016.

@jonlmayuga

he Department of Environment and Natural Resources (DENR) is eyeing to strengthen its existing policy against biopiracy to protect the country’s plant and animal genetic resources.

Director Theresa Mundita S. Lim of the DENR’s Biodiversity Management Bureau said Environment Secretary Roy A. Cimatu recently met with Rep. Josephine Y. Ramirez-Sato of the Lone District of Occidental Mindoro to craft a guideline on bioprospecting that will benefit the Philippines, including local communities, from the utilization of plant or animal genetic resources with high medicinal value.

Cimatu, she added, supports the development of a plant-based pharmaceutical industry by strengthening existing policies, particularly in the conduct of scientific research to tap the country’s important plant or animal genetic resources.

With its rich biodiversity, including unique species of plants traditionally used for curing various illnesses, Lim said the Philippines has a huge potential in becoming a major global supplier of high-value plant genetic resources for pharmaceutical industries.

Lim, however, said a huge investment is needed in bioprospecting.

“Having many players is encouraged because bioprospecting requires huge investment,” she said.

Bioprospecting is defined as the search for plant and animal species from which medicinal drugs and other commercially valuable compounds can be obtained.

One of the 17 megadiverse countries in

the world, the Philippines, which is also high in endemism, should protect its plant and animal resources against biopiracy, Lim added.

Lim said Sato has a pending bill in the House of Representatives on access and benefit sharing in the utilization of Philippine genetic resources.

“Congresswoman Sato has a pending bill in the House of Representative on access and sharing benefit,” she said, adding that the lady solon is one of the DENR’s “biodiversity legislative champions” in the lower house.

House Bill 2163, or An Act Instituting Reforms in Existing Policy on Access and Benefit-Sharing, from the Utilization of Philippine Genetic Resources and for other purposes, was filed on August 1, 2016.

The proposed measure is up for discussion soon by a technical working group for the purpose of refining the bill.

The proposed measure promotes the conduct of scientific research and facilitating speedier regulatory approvals from concerned government agencies.

It also puts in place a tracking mechanism to monitor the progress of scientific research until their commercialization.

Access and benefit sharing are being espoused by the bill support two important international treaties—the Convention on Biological Diversity and the Nagoya Protocol on Access and Benefit Sharing.

Lim said the DENR chief and the lady solon are eyeing to collaborate to come up with a stronger policy and guideline in the conduct of scientific research to ensure access and benefit, particularly for the local communities where the resources are found.

Ensuring benefit for the communities, Lim said, will encourage local communities to play an active role to protect and conserve such resources.

She, likewise, added the collaboration will hopefully mainstream biodiversity protection and conservation in the aspect of development in protected areas (PAs) and key biodiversity areas (KBAs).

There are 240 PAs and 228 KBAs in the Philippines. These areas are set aside for conservation to prevent the extinction of endangered plant and animal species.

The DENR has an ongoing program called Strengthening National Systems to Improve Governance and Management of Indigenous Peoples and Local Communities Conserved Areas and Territories (Philippine ICCA Project).

The project aims to strengthen the conservation, protection and management of key biodiversity sites in the Philippines by instituionalizing ICCA as a sustainable addition to the national PAs. IPs, according to Lim, have vast knowledge on plant-based cures, it being their traditional way of curing illnesses and diseases that have been passed on from generation to generation. Many IPs continue to use plants as medicines.

According to Lim, the public-private partnership scheme is one way of developing a plant-based pharmaceutical industry, but it will require the polishing of existing policies and guidelines in coordination with national government agencies, including the departments of Trade and Industry, Health and the Bureau of Food and Drugs.

ONGESTION at the Manila ports would be highly unlikely during the holiday season, with yard utilization expected to hover below the optimum level.

Philippine Ports Authority (PPA) General Manager Jay Daniel R. Santiago said yard utilization rate is expected to hover around 55 percent to 60 percent until after the Christmas season.

“With a combined average quay crane productivity of the three terminals at 26 moves per hour per crane, barring any major development, we can guarantee a congestion-free Manila ports at any given time,” he said.

Even the anticipated tight security measures brought about by the meeting of the Asean heads of states in the middle of November, which is expected to disrupt the vessel and transport delivery movements, is not expected to make a significant dent in congesting the Manila ports.

Also, the decision of the Bureau of Customs to temporarily shut down its Green Lane operations, as well as subjecting the majority of imported cargoes to inspection, is not expected to disrupt the smooth flow of goods to and from the terminals.

Currently, productivity at the Manila International Container Terminal (MICT), the Manila South Harbor (MSH) and the Manila North Port (MNP) continue to be strong and no slowdown is expected even with the Christmas rush.

Currently, the combined yard utilization at the two international Manila ports MICT and MSH is at 60.12 percent, or about 20 percent below the optimum level of 80 percent.

“It is also worthy to note that both terminals posted at least a 10percent increase in their respective productivity as of end-September, suggesting a fully functional Manila ports,” Santiago said.

The 60.12-percent utilization rate means that some 48,900 containers are inside terminal, while 32,600 container slots remain vacant.

“The premier domestic terminal, the MNP, has a yard utilization rate of 43.40 percent, giving the port enough elbow room for anticipated increase in demand at this point in time,” Santiago added.

To date, total container volume reached 4.609 million twenty-foot equivalent units (TEUs). The volume is higher by 8.84 percent compared to the 4.235 million TEUs handled in the same period last year.

Agriculture/Commodities BusinessMirror

www.businessmirror.com.ph

Editor: Jennifer A. Ng • Friday, October 20, 2017

A5

‘Special’ chicken imports not needed, Piñol says

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By Jasper Emmanuel Y. Arcalas @jearcalas

he Department of Agriculture (DA) is not keen on authorizing any special importation of chicken, as local output remains ample to meet the expected increase in demand during the holidays.

Agriculture Secretar y Emmanuel F. Piñol made the statement following his recent meeting with local meat importers, who asked him about his stance on the possibility of allowing the special importation of poultry. “[Last Tuesday] a group of importers asked me if they would be allowed to import chicken, and I told them I cannot stop them, but I am discouraging it. Now that the price of local chicken is low, there is no reason for us to import,” Piñol told reporters in an interview on Wednesday.

“They also asked about my view on importation and special im-

ports, and I told them this is the time for us to show patriotism.

I told that them there will be no special importation [as] there is no need for that,” he added.

Piñol clarified that the importers did not request for special importation but only queried him about his stance on it. His meeting with traders took place two months after the outbreak of avian influenza in some towns in Central Luzon. “[Traders] shou ld s y mpathize with local poultry raisers who are just starting to recover after the liveweight price of chicken fell drastically,” he

said. “Let us allow our poultry growers to earn even a little bit this December.”

The last time the DA permitted the special importation of chicken was in 2014. Piñol said in August that the government may allow it this year if local poultry supply would decline drastically due to the bird-flu outbreak.

Under the special importation scheme, traders could bring in imported chicken sans the special safeguard (SSG) duties.

However, additional tariffs and restrictions are slapped on imports that would come in at less than the trigger price of P93.9 per kilogram.

Under Republic Act 8800, which allows SSG on imports, only those brought in within the minimum access volume (MAV) are exempted from it.

However, it also stipulates it is the discretion of the department secretary if he would suspend the SSG for imports outside of the MAV or for special importations.

Latest data from the National Meat Inspection Service showed that the country’s chicken inventory, as of October 2, reached 39,037.91 metric tons (MT), 8.48 percent higher than the 35,986.12 MT recorded a year ago.

NEGROS FARMERS COMPLETE TRAINING Batch 143 of SM Foundation’s Farmers’ Training Program finished the

seasonlong dualtech training in Kabankalan, Negros Occidental. One hundred seventeen farmers, many of whom are also Pantawid Pamilyang Pilipino Program beneficiaries, were joined by SM Foundation officials, led by Assistant Vice President for Livelihood Cristie Angeles, its program partner Harbest Agribusiness Corp. President Arsenio Barcelona, representatives from the local government unit, the Department of Social Welfare and Development and the Department of Agriculture. The graduates were given a market tour at SM City Bacolod Supermarket prior to their graduation ceremony at the SMX Convention Center to familiarize them on how to become suppliers of the supermarket or how to supply accredited suppliers of SM Bacolod with quality produce. SM FOUNDATION

PHL ships 56,092 MT of sugar to United States

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he Philippines has exported an additional 56,092.25 metric tons (MT) of sugar to the United States at lower tariff rates under a preferential trading scheme.

However, data from the Sugar Regulatory Administration (SRA) showed that the volume was lower than the 61,154.49 MT in additional allocation granted by Washington to Manila for fiscal year 2017.

Philippine Sugar Millers Association Executive Director Francisco D. Varua told the BusinessMirror that the scarcity of “A” quedan-permit holders made it difficult for traders to fill up the entire volume.

“But it will not have any implications on our exports as the shortfall is only small,” Varua said.

The SRA also said the 56,092.25 MT was the only volume covered by the total verified “A” quedan permits.

Earlier, the SRA issued Sugar Order 6, which authorized the extension of the verification period for the quedan permits of “A” sugar, or those bound for the US, to August 11.

The SRA, a government-owned and -controlled corporation attached to the Department of Agriculture, noted that the Philippines has a carryover volume of 57,684 MT of “A” sugar after filling up the original quota of 136,188.54 MT. Data from the SRA obtained by the BusinessMirror showed that sugar millers and traders shipped the additional 56,092.25 MT in two vessels. The first boat, which contained 31,105.02 MT, is expected to arrive

in Washington by October 25. However, the second vessel, which held 24,987.23 MT, left for the US only last week.

Under the tariff-rate quota (TRQ) system of the US, sugar exporters must ship their allocations for fiscal year 2017 on or before October 31.

“We are worried about the last vessel, if it would be able to reach the US

by October 31. Washington will still allow our shipment to enter the US, but it will be charged against the new quota [for fiscal year 2018],” Varua said.

“We still have two weeks to go; normally it takes 20 days to ship sugar to the US if the weather is fair. I think there is still a very good chance that the vessel would reach the US by October 31,” he added.

Varua said port congestion delayed the shipment to the US, as the schedule for exporting sugar under the TRQ coincided with the cut-off for “D” sugar, or those bound for other markets. He said the SRA has set the deadline for shipping “D” sugar on November 30.

“Vessels bound to the US and the world market queued in our local ports.

There were congestions in ports in the Visayas, Cagayan de Oro and in Bacolod,” he said.

For fiscal year 2017, which ran from October 1, 2016 until September 30, the US granted the Philippines a total sugar quota of 197,355 MT. Sugar traders have earlier welcomed the additional quota, saying this would help reduce the country’s high inventory and stabilize prices. Jasper Emmanuel Y. Arcalas

‘Pesticide-free eggplants to benefit farmers, consumers’

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roducing pesticide-free eggplants in the Philippines is now possible, according to field-trial reports released for the first time by the Institute of Plant Breeding-University of the Philippines Los Baños (IPB-UPLB).

The IPB-UPLB field trial showed that Bacillus thuringiensis (Bt) eggplant exhibited “superior performance” in controlling the fruit and shoot borer (FSB). It involved testing of five open pollinated varieties engineered to produce from the bacterium Bt, a protein called “Cry1Ac.” Cry1Ac effectively functions as the insecticide that kills the moth FSB when ingested by the pest.

The experiments were done over three eggplant seasons from 20102012 in the Philippines’s biggest eggplant producer—Pangasinan. The province accounts for 18 percent of the country’s eggplant area and more than 30 percent of the country’s eggplant output.

An ability to stamp out FSB by up to 100 percent was observed in the Bt eggplant varieties tested on actual fields in barangays Paitan and

Santa Maria in Pangasinan. These are fields conventionally infested heavily by the FSB moth particularly during the dry season.

But IPB scientists did not use any lepidopteran (moth)-specific insecticide during the three trials—both for the Bt eggplant and the non-Bt eggplant.

All throughout three trials, the superior efficacy of Bt eggplant in stopping by virtually 100 percent infestation of FSB was observed in the three eggplant varieties tested— Dumaguete Long Purple, Mara, and Mamburao. All three varieties—unsprayed by insecticides—were planted both for Bt eggplant and non-Bt eggplant.

“These results demonstrate that Bt eggplant lines containing Cry1Ac event EE-1 provide outstanding control of FSB and can dramatically reduce the need for conventional insecticides,” said the IPB scientists, led

by Desiree M. Hautea.

“Bt eggplant lines demonstrated high levels of control of FSB shoot damage [98.6 percent to 100 percent] and fruit damage [98.1 percent to

99.7 percent] and reduced FSB larval infestation (95.8 percent to 99.3 percent) under the most severe pest pressure during Trial 2,” they added.

In contrast, the non-Bt eggplant suffered 41.58-percent FSB-damaged shoots, 93.08-percent damaged fruits and 16.15 larvae per plot per harvest.

Even when moth’s eggs have been found in the Bt eggplant fruits, the eggs did not survive to form viable fruit-boring insects.

“Under such severe pest pressure, the Bt eggplant lines showed less than 1 percent EFSB shoot damage, less than 2 percent fruit damage and fewer FSB larvae at less than 11 larva per plot per harvest,” the scientists said.

“Commercial production of Bt eggplant has great potential to reduce yield losses to FSB while dramatically reducing the reliance of growers on synthetic insecticides, reducing risks to the environment, to worker’s health and to the consumer,” they added.

The IPB Filipino breeders’ team also included Lourdes D. Taylo, Anna

Pauleen L. Masanga, Maria Luz J. Sison, Josefina O. Narciso, Reynaldo B. Quilloy and Randy A. Hautea. It had guest scientists from the Cornell University-New York, Frank A. Shotkoski and Anthony M.Shelton.

Their report was filed with the peer-reviewed Journal Public Library of Science (PLOS).

Farmers perennially spraying insecticide on eggplants have suffered from endless health complaints, such as redness of eyes, skin irritation such muscle pains and headaches due to the spray.

FSB has been most notorious for misshaping and destroying eggplant fruits.

Their most destructive damage are the holes, the tunnels they bore within the eggplant along with the frass (larval excrement) they leave in the fruit—making it dirtily unmarketable.

Insecticide spraying using profenofos, triazophos, chlorpyrifos, cypermethrin and malathion is the only resort of farmers. Manual removal of the pest or the damaged fruits and wilted shoots has been

found ineffective.

The use of arthropods and pheromone traps as biological control has been ineffective. Traditional breeding also failed in controlling FSB. But the control of pests through Cry1Ac expression into the eggplant through the introduction of the human-safe bacterium Bt has earlier been proven on cotton and corn.

It is the eggplant’s turn to be benefitted by the technology—consequently bringing cleaner, tunnelfree, pesticide-free eggplants for farmers and consumers.

“After more than 40 years, conventional breeding has not produced any commercial variety of eggplant conferring high level of resistance to the FSB. Therefore, efforts became focused on developing Bt eggplant that expresses the same Cry1Ac protein as the cotton,” the scientists said.

The success of the Bt technology in corn and cotton has been widely accepted globally by farmers. As of 2014 the Bt technology has been planted on 78.8 million hectares in 28 countries, “predominantly by resource-poor farmers.”

There’s so much pain in agriculture that traders are leaving

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he success of modern farmers has become the misery of traders at the world’s biggest agriculture merchants.

Profits are shrinking as years of bumper harvests sap volatility and trading opportunities, forcing companies to tighten their belts. Trading houses, such as Cofco International Ltd., have reorganized their agriculture units this year, leading to the departure of several business heads.

Some are leaving to test their luck elsewhere, while others have thrown in the towel and retired.

“The market has changed,” said Miroslaw Marciniak, a consultant at InfoGrain in Warsaw and a former grains trader. “The results aren’t what they used to be. That’s prompting firms to look to cut costs and make savings. There’s pressure, and not everyone can stand it.”

At least 40 senior managers and executives in agriculture left their positions at trading houses, such as Archer-Daniels-Midland Co., and Louis Dreyfus Co. this year, based on a tally of news stories published

by Bloomberg. While in many cases the positions have been refilled, it represents an unprecedented changing of the guard.

Agriculture accounts for almost half of all the job changes in commodities this year, compared with other businesses like oil, metals and gas and power, according to recruiter Commodity Appointments Ltd. While the reasons for the people moves are many—such as company cost cuts, disagreements over strategy or personal choices—they’ve occurred against a backdrop of tougher trading conditions. At the same time, better farm storage and more available market data means growers and consumers can make increasingly favorable deals at the expense of the top merchants.

Profit pressures

The industry, which for a century has been dominated by the “ABCD” quartet of ADM, Bunge Ltd., Cargill Inc. and Louis Dreyfus, has been forced to make wide-ranging changes. Firms turned to asset sales, trading in niche markets or even processing meat to generate more cash. Executives are putting more pressure on traders to deliver profits, and that’s becoming harder to do, Marciniak said.

The strain has contributed to big personnel shake-ups, among the latest being the departure of Louis Dreyfus’s global grains head and several traders in August. The exits were said to be partly due to clashes over strategy, with the firm wanting to focus on trading its physical grain assets, rather than proprietary buying and selling of paper contracts. Bloomberg News

A6

Friday, October 20, 2017

The World BusinessMirror

www.businessmirror.com.ph

Brexit blame game is a clash of styles W

Containers at a port in Japan

Bloomberg

Japan’s trade-recovery powers ahead with growth in September

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apanese exports grew by double digits for a third straight month in September, as a trade recovery underway this year showed no signs of letting up.

Ex por ts rose 14.1 percent from a year earlier (forecast 15 percent). Imports increased 12 percent (forecast 14.7 percent).

The trade surplus was ¥670.2 b i l l io n ($ 5. 9 b i l l io n) (fore cast ¥556.8 billion).

E x por ts of motors were a bi g cont r ibutor, r i s i ng 19.6 percent on dema nd for ra i lca r eng ines. Sh ipments of semiconductors and electronic pa r ts rose 12. 3 percent.

Key takeaways

R ecover ing global demand

14.1% The percentage increase in export of Japan from a year earlier

has driven growth in Japan’s exports, supporting the nation’s domestic economy. But Japan’s trade sur plus with the United States continues to irritate the

Trump administration.

In a repor t on foreig n-exchange policies released on October 17, the US Treasur y kept Japan on its monitoring list due in part to its goods surplus with the US, which Treasur y said was $69 bil lion over the four quar ters through June.

At the US-Japan bilateral economic talks earlier this week, US Vice President Mike Pence showed great interest in a trade deal with Japan, but currency was not discussed, according to a Japanese official.

Economist views

“The pace of growth isn’t speeding up, but the global economy’s doing well so it’s not sur prising that Japan’s exports are increasing,” said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute.

“Export growth is in the double digits, and volume is also

growing at around 5 percent, so trade is healthy,” said Toru Suehiro, senior market economist at Mizuho Securities Co. “I’m not too concerned about the US going for ward, but it’s difficult to see exports to China growing at the current pace for too long.”

“Ex ports of machines that ref lect the Chinese economy’s strength, and electronic parts that reflect Asia’s, are continuing to show strong demand,” Suehiro said.

Japan’s adjusted trade balance showed a surplus of ¥240.3 billion (forecast ¥309.2 billion).

Ex por ts to China, Japan’s largest trading par tner, rose 29.3 percent from a year earlier.

Those to the US rose 11.1 percent. Shipments to the European Union climbed 11.5 percent.

A lthough the va lue of imports rose, the volume slipped 0.3 percent. Bloomberg News

Rajoy stands firm on deadline to Catalonia

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pa nish P r i me Mi n ister Mar iano R ajoy has been ta l k ing for months of how he’ l l stop Cata lonia’s d r ive for i nde pendence. T he moment i s approaching when he may have to ac t. Rajoy has given Catalan President Carles Puigdemont until 10 a.m. on Thursday to renounce his claims to independence for Spa in’s big gest regional economy.

Anything less, and the central government will start the process of taking direct control of the regional administration under Article 155 of the Constitution, Deputy Prime Minister Soraya Saenz de Santamaria told lawmakers in Madrid on Wednesday.

Rajoy is due to arrive in Brussels for a summit of European Union leaders around midday.

“It seems clear that the government has accepted that it w ill have to inter vene in Cata lonia,” said Lluis Or r iols, a political scientist at Carlos III University in Madrid. “How exactly they go about doing that and what the consequences will be is still unknow n.”

The prime minister has been resisting pressure from hardliners inside and outside his party to use the so-called nuclear option in the 1978 Constitution for the first time ever, wary of driving Catalan moderates into the separatist camp. But all other efforts have, so far, failed to reassert the authority of Spanish law in the rebel region.

Puigdemont managed to pull off an il lega l referendum on October 1 despite a violent police crackdown and claimed the support of more than 2 million voters. Last week he suspended the drive to secession, appealing to Rajoy for negotiations. Now he’s ready to declare independence, his foreign-policy chief Raul Romeva said on Wednesday.

Even at this stage, Rajoy may soft pedal his response.

T he Soc i a l i st s i n Mad r id , who R ajoy h a s lobbied h a rd to bac k his ef for ts, are urg ing t he pr ime minister to ta ke a g radua l approach to any intervention in Catalonia, according to t hree people fami liar w it h t heir conversations.

Rather than an immediate raid to seize control of all regional institutions, the central government may opt to begin a more measured process of debate and seek to intervene in key pressure points, such as the regional police force, the people said.

Socialist Leader Pedro Sanchez told reporters in Brussels on Wednesday that he still hopes the Catalans will back down and avoid an intervention, Europa Press reported.

Company exodus

C ata lon i a’s bid to secede from Spain has thrown the country into turmoil, sparking mass demonstrations for and against independence on the streets of Barcelona and causing companies from Cai xaBank SA and Gas Natural SDG SA to move their legal headquarters out of the region.

Spain acknowledged the mounting economic cost of the conf lict earlier this week when it cut its economic growth forecast for 2018. Spa in’s benchmark stock index has lost

about 8 percent since reaching a 20 -mont h high in May as t he separatist push gat hered mo mentum. T he spread bet ween S p a i n ’s 10 - y e a r b o n d s a n d simi larly d ated Ger man bunds has w idened by 27 basis points since Ju ly.

Unless Puigdemont or Rajoy backs down at the last minute, Catalonia and Spain as a whole are headed for uncharted territory.

The stakes are high. Catalonia is a hub for tourism and industry including Volkswagen AG’s Seat unit that accounts for a fifth of Spain’s economic output.

The next step for Rajoy, if he decides to enact Article 155, is for the Spanish cabinet to rubber stamp his decision—the cabinet is due to hold its regular weekly meeting on Friday, while the prime minister attends the second day of European Union talks.

The cabinet then needs to submit the specific measures for approval by the Senate. Because it’s never been used before, there’s no clear roadmap to guide Rajoy as he plans his possible intervention in Catalonia. Bloomberg News

ith boozy briefings, shorts on hot days, a soccer shirt as a gift and as a little paperwork as possible, is it any wonder the British approach to Brexit talks raised eyebrows?

Rather than downplaying the gravity of the United Kingdom’s most complex foreign-policy maneuver since World War II, these small details highlight the clash of political cultures that’s pervaded 44 years of British membership in the European Union (EU). As leaders head to Brussels for a key EU summit, the first six months of two years of divorce negotiations have been as much about style as substance.

The British blame the EU for being intransigent, obsessed by rules and lax over media leaks and security. The Europeans accuse the UK contingent for not negotiating honestly and paying lip service to details. “ The British have never understood what it is to be in the EU,” said Andrew Duff, a former UK member of the European Parliament and now a visiting fellow at the European Policy Centre, a think tank advising on European integration. “They know it’s a club, but they’ve treated it like one of those awful clubs in London where you pay the membership fee and then behave as you please. That’s always poisoned the British approach.”

Different planets

One of the diplomats close to the talks said there is still a feeling the sides are on two different planets even after five rounds of monthly talks in Brussels and discussions between leaders.

It doesn’t mean that the UK and the EU will never get a deal to smooth Britain’s withdrawal from the bloc, but it does make things a lot more difficult. If they don’t understand the way each other works, the question is how can they see eye to eye on the myriad discussion points.

They range from big issues like the UK’s bill for already existing commitments and the rights of citizens, down to the minutiae of food labeling.

The UK wanted a much more fluid approach to how the negotiations were set up: talks in London and Brussels when they were required, with different people as and when needed and with the option of discussions in other capitals too. The EU insisted on formal monthly rounds at the European Commission and a single lead negotiator.

The EU picked former French Foreign Minister Michel Barnier, 66, to lead its side. He is a typical European “protocolaire,” said Duff, a technocrat who does things by the book, exactly the type of operator that British politicians don’t get. Barnier can’t make any concessions or move away from his rigid mandate without it being signed off by the governments of 27 member-states.

The UK government, meanwhile, has David Davis, 68, who has spent his political career rallying against exactly the type of inflexible—some UK officials say humorless—European bureaucrats that Barnier represents.

When the two men stand alongside each other in news conferences at the end of each negotiating round, Barnier is precise, stern and good on detail. Davis is more jocular and, according to some of his entourage, often would rather not be there.

“It’s cultural because the EU is a rules-based system, and it has a rules-based way to sort things out, it has to be like that,” said Richard Corbett, who was member of former EU President Herman Van Rompuy’s Cabinet and is now

a European lawmaker for the Labour Party. “In part it’s cultural, in part it’s procedural and in part it’s political. And the combination of those three things is lethal.”

Arsenal shirt

The divergent style of politics was evident when Brexit talks started in June. The EU published all its negotiating positions upfront. At first, the UK refused to set out its positions on anything to avoid showing its hand. UK negotiators were photographed turning up to their first session with barely a piece of paper between them. The EU delegation had piles.

Journalists were briefed in bars

by British diplomats over beer, while the EU called people into sterile conference rooms. One UK diplomat was advised not to show up for a meeting in his shorts on a hot summer day. Barnier is always impeccably turned out in made-to-measure suits.

The more relaxed attitude was summed up when Jeremy Corbyn, leader of the UK opposition Labour Party, visited Barnier. He gave the Frenchman a shirt from London soccer club Arsenal with “Barnier” on the back. Barnier has never said he’s big fan of the sport, though frequently references his love of hill walking. He gave Corbyn a vintage poster of his native mountainous Savoy region.

There are aspects of the way the EU conducts the negotiations that make the British think their counterparts are too laissez-faire.

The UK has seen that often things on the EU side don’t stay under wraps for long. The contents of a private dinner conversation between May and European Commission President Jean-Claude Juncker in Downing Street were leaked to the German press. Confidential EU documents and discussions in Brussels are frequently briefed to journalists.

There’s also security during the talks. The UK bans its negotiating team from going to certain restaurants in Brussels and often asks them to eat in its own ambassador’s residence so that conversations about the negotiations aren’t overheard.

‘Swashbuckling’

Since Britain finally joined the EU in 1973 after successive vetoes by French President Charles de Gaulle, it’s been mostly an uneasy alliance between London and Brussels, the capital of what many pro-Brexit politicians call the European “superstate.” There have been regular tales of how successive leaders went against protocol.

At a summit in Maastricht in 1991 that paved the way for much closer integration, leaders weren’t allowed any other officials in the negotiating room. In a tale now part of EU folklore, Prime Minister John Major had a diplomat hide under the table and pass him notes.

That diplomat John Kerr, went on to coauthor the Article 50 exit clause in the EU treaty that the UK became the first country to use to withdraw from the bloc following the Brexit referendum last year.

Corbett, the member of the European Parliament, gives another example of the British approach.

At a late-night EU summit in Brussels in 2013 when governments couldn’t agree on the size of the seven-year EU budget, Van Rompuy held a series of bilateral meetings with each leader to try to get a breakthrough, he said.

It was supposed to be a one-oneone meeting, but Prime Minister David Cameron was the only leader who insisted on taking officials with him to listen to the details, according to Corbett. “It was rather swashbuckling,” Corbett said.

“Cameron wanted to sort it out as a chat over coffee.” Bloomberg News

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Trump cools on Senate plan for health-care fix

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ASHINGTON—President Donald J. Trump on Wednesday backed away from his endorsement of a bipartisan Senate proposal to stabilize health-insurance markets, throwing the legislative effort into doubt even as the chief architect of the deal predicted that it would become law before the end of the year.

The latest actions by the White House confused Republicans on Capitol Hill and irked Democrats—but, in the end, their effect was not clear.

The effort to calm roiled insurance markets appears destined for a showdown in December, when supporters of the compromise, drafted by Sens. Lamar Alexander, Republican-Tennessee, and Patty Murray, Democrat-Washington, will have the most leverage.

The mixed signals began on Tuesday, when Trump appeared to give his blessing to the deal to restore subsidies to health insurers that he said days before he would cut off.

Alexander and Murray agreed on legislation that would continue federal payments to insurance companies through 2019 to reimburse them for discounts they are required to provide to millions of low-income people who have coverage under the Affordable Care Act, popularly known as Obamacare.

O n Wed nesd ay t he W h ite House sent a different message: “I am supportive of Lamar as a person & also of the process, but I can never support bailing out ins co’s [insurance companies] who have made a fortune w/ O’Care [Obamacare],” Trump wrote on Twitter.

The White House press secretary, Sarah Huckabee Sanders, said later that Trump did not support the deal in its current form but indicated that changes could win him over. “ We wa nt somet h i ng t h at doesn’t just bail out the insurance companies but actually provides relief for all Americans,” she said, adding that the deal was “a good step in the right direction.”

Republicans in Congress have hardly rushed to embrace the deal, but it has won endorsements from a handful of Republican senators, including Susan Collins of Maine, Bob Corker of Tennessee, John McCain of Arizona and Lisa Murkowski of Alaska.

“Congress has a responsibility to ensure that families in Tennessee and across our country who receive health insurance through the individual market do not continue to be burdened with rising premiums and fewer choices,” Corker said.

A nd an unavoid able f isca l deadline this year still offers an opportunity for lawmakers to demand that the subsidies be funded, regardless of the president’s position. Lawmakers need to pass a funding measure to keep the government open beyond December 8, and no bill can pass without Democratic votes.

At that point, supporters of

the Alexander-Murray measure could insist on its inclusion in any spending bill and threaten to shut down the government if they do not prevail. If Republican leaders relent, Trump’s veto of the health measure would effectively shutter the government.

Still, the uncertainty around the legislation grew on Wednesday. House Speaker Paul D. Ryan of Wisconsin, reflecting his most conservative members, came out against the deal.

“The speaker does not see anything that changes his view that the Senate should keep its focus on repeal and replace of Obamacare,” said Doug Andres, a spokesman for Ryan.

And the Senate Democratic leader, Sen. Chuck Schumer of New York, expressed frustration over a president who “keeps zigging and zagging, so it’s impossible to govern.”

“You never know from hour to hour what he thinks,” Schumer said. Sen. John Thune of South Dakota, the third-ranking Senate Republican, had predicted on Tuesday that Congress would “move fairly quickly” on the bipartisan proposal, but he revised t hat forecast on Wednesd ay.

For now, he said, the plan has “stalled out.”

“We’re kind of in a holding pattern,” he said, as Alexander tries to convince the president that the deal would benefit consumers, not insurance companies.

Sen. Orrin G. Hatch, Republican-Utah, the chairman of the powerful Finance Committee, said he disagreed with Alexander’s plan. “I think he’s trying to do a good thing, but it’s only temporary, and it leads us down a primrose path that we don’t want to go,” Hatch said.

Alexander, the chairman of the Senate Health Committee, said he received a telephone call on Wednesday from the president.

“He wanted to be encouraging about the bipartisan agreement that Sen. Murray and I announced yesterday,” Alexander said at a forum convened by A xios, a news web site.

Trump “intends to review it carefully to see if he wants to add anything to it,” Alexander said of the Senate plan.

In fact, Alexander and Murray had already moved to address concerns that restoring the payments to insurers could be viewed as providing them with a “bailout.” On Tuesday, Alexander said that their deal would contain “the strongest possible language” to ensure that the money provided for the subsidies would go to benefit consumers, not insurers.

The bill drafted by Alexander and Murray would provide “such sums as may be necessary” through 2019 for cost-sharing payments to insurers under the Affordable Care Act. State insurance regulators would have to certify that insurers use the money to provide “a direct financial benefit to consumers.”

New York Times News Service

Friday, October 20, 2017

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Chinese President Xi Jinping (center, front row) presides over the opening ceremony of the 19th Party Congress held at the Great Hall of the People in Beijing on October 18.

Xi on Wednesday urged a reinvigorated Communist Party to take on a more forceful role in society and economic development to better address “grim” challenges facing the country as he opened a twice-a-decade national congress. AP/Ng Han Guan

China’s growth momentum gives Xi platform to deliver on pledges

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obust factory output and consumer spending kept China’s economy humming in the third quarter, giving President Xi Jinping a firm footing to rein in excess capacity, curb pollution and shift to a more sustainable growth path.

GDP rose 6.8 percent in the third quarter from a year earlier, matching estimate in Bloomberg survey, after 6.9-percent growth in first half. Retail sales jumped 10.3 percent in September from a year earlier. Industrial production rose 6.6 percent last month.

Fixed-asset investment climbed 7.5 percent in first nine months of this year

Big picture

Enduring economic growth is a welcome tailwind for Communist Party leaders gathering in Beijing this week to map policy for the next five years, with Xi telling delegates that China is transitioning f rom a rapid-g row th model to one more focused on high-quality development.

The durability of the expansion will be tested after the conclave as leaders press on with their plans to tackle swelling debt, cut excess capacity and clean up pollution.

C h i n a w i l l cont i nue w it h its plan to deleverage and cut c apac it y, X i sa id du r i ng h i s

6.8%

The percentage of China’s GDP growth in the third quarter from a year earlier

speech at the tw ice-a-decade Communist Party Congress in Beijing, adding that the countr y will continue opening its doors to foreig n businesses, defend against systemic risks, s t re n g t he n f i n a n c i a l - s e c t o r regulation and better coordinate fiscal and monetary policy.

Economists in recent months have raised estimates for fullyear growth, projecting a 6.7-percent expansion that would match last year’s pace, the slowest in a quarter century.

Economist takeaways

“The growth outcome this year

should offer a window for President Xi to push reforms,” said Raymond Yeung, chief Greater China economist at Australia and New Zealand Banking Group Ltd. in Hong Kong. “A set of good numbers mirrors a slew of challenges, notably credit growth.”

“It’s more like a stable growth picture rather than a slowdown,” Cui Li, head of macro research at CCB International Holdings Ltd. in Hong Kong, said in a Bloomberg Television interview.

“Manufacturing is still under pressure. There are other areas in the economy that are still doing quite well. We still have quite a strong service sector, infrastructure is doing well. These areas are offsetting the weakness in the industrial sector.”

“Consumption is the stabilizing factor of the economy, and industr ia l out put actua l ly quickened in September, which was a lso ref lected in the PMI [purchasing managers index] read i ng ,” sa id Grace Ng , a n economist at JPMorgan Chase and Co. in Hong Kong.

“Growth in the fourth quarter could moderate a bit mainly due to possible slower investment but, in general, this year is quite stable. And the emphasis on quality, efficiency and sustainability in President X i Jinping’s party congress speech also would benefit China’s development in the long run.”

“External demand this year is quite solid, which supports growth, and consumption also is robust,” said Wen Bin, a resea rc her at C h ina Minsheng

Banking Cor p. in Beijing. “Investment slipped a bit, due to the campaigns to clean up overcapacity and environment, but in general China’s economy is showing good momentum.”

Bloomberg intelligence

“China’s economy moves into the final months of the year with growth remarkably robust,” Bloomberg Intelligence economists Tom Orlik and Fielding Chen, wrote in a report.

Even so, “the market’s focus on tighter policy and slower credit expansion as the main channel for reducing financial risks is likely off base. Given a reluctance to sacrifice GDP growth, the emphasis is more likely to be on write-offs of bad loans.”

Consumption, which includes some gover n ment s pend i ng , contributed 64.5 percent to GDP growth in the first nine months.

The economy expanded 1.7 percent from the prior quarter, matching forecasts. Quarteron-quarter growth for the first three months was revised to 1.4 percent from 1.3 percent, and revised to 1.8 percent from 1.7 percent for the second quarter, 10.97 million new jobs were created in the first nine months, putting the labor market on pace to meet the government’s full-year job-growth target of 11 million early, a spokesman for the statistics bureau said at a briefing in Beijing.

B l o o m b e r g I n t e l l i g e n c e ’s monthly GDP tracker rose to 7.19 percent in September.

Bloomberg News

Kobe Steel wins respite after Toyota, Honda clear aluminum parts

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oyota Motor Corp. cleared aluminum parts supplied

by Kobe Steel Ltd. of safety concerns, giving the embattled steelmaker a respite as companies around the world rush to check the safety of their products following revelations of data falsification.

Shares of Kobe Steel rose, erasing earlier losses, after Toyota said aluminum plates received directly from the steelmaker and from other suppliers met both internal and statutory standards.

The plates were used in parts

such as hoods and rear hatches, it said. Honda Motor Co. and Mazda Motor Corp. also gave an all-clear on aluminum parts supplied by Kobe. Japan’s biggest automaker is broadening its investigation beyond aluminum, to include copper tubes, steel wires and steel powder used in its vehicles, the company said.

American manufacturers, including automotive giants Ford Motor Co. and General Motors Co. and the nation’s biggest plane maker, Boeing Co., are among

some 500 companies worldwide affected by a supply chain tainted by admissions that Kobe falsified certifications on the strength and durability of metals going back to at least 2007.

A Kobe Steel executive said late Wednesday the company expects to issue a new safety-inspectionreport as early as next week.

The executive, who asked not to be named because the information is not public, also said there have not been any fresh reports of data irregularities.

Last Friday the company added nine items to its list of affected products, making 16, and said it was still checking the safety of five of them with customers.

It had already deemed the other four safe. The units implicated in the crisis make the steel, copper, aluminum and other materials that account for over half the company’s revenue.

US request

The US Department of Justice has asked for documents related

to the faked data, but the agency hasn’t set a timeline for Kobe’s submission and didn’t identify specific products in its request, the executive said. The Japanese company has said it will cooperate fully with US authorities.

Later Thursday Japan’s transport ministry will hold a meeting with department officials responsible for airplanes, automobiles, trains, marine vessels and construction, according to officials from the ministry, who asked not to be identified because

the meeting isn’t public. Japan’s third-biggest steelmaker reports second-quarter results on October 30, and has said it can’t yet quantify the impact of the scandal on its earnings. Shares are down almost 40 percent in Tokyo since the crisis began at the start of last week, although there haven’t been any reports of product recalls or specific safety concerns raised by its customers.

The stock gained 3.8 percent to 858 yen as of 12:58 p.m. in Tokyo.

Bloomberg News

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The World BusinessMirror

Friday, October 20, 2017

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FDA approves 2nd gene-altering cure for cancer

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he Food and Drug Administration (FDA) on Wednesday approved the second in a radically new class of treatments that genetically reboot a patient’s own immune cells to kill cancer.

The new therapy, Yescarta, made by Kite Pharma, was approved for adults with aggressive forms of a blood cancer, nonHodgkin lymphoma, who have undergone two regimens of chemotherapy that failed.

The treatment, considered a form of gene therapy, transforms the patient’s cells into what researchers call a “living drug” that attacks cancer cells.

It is part of the rapidly growing f ield of immunot herapy, which uses drugs or genetic tinkering to turbocharge the immune system to fight disease.

In some cases, the treatments have led to long remissions.

“The results are pretty remarkable,” said Dr. Frederick L. Locke, a specialist in blood cancers at the Moffitt Cancer Center in Tampa, Florida, and a leader of a study of

World’s first floating offshore wind farm begins operating

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he world’s first floating offshore wind farm started delivering electricity to the grid in the north of Scotland.

The Hywind project, built by Norwegian oil company Statoil ASA and Masdar Abu Dhabi Future Energy Co., has five turbines floating 25 kilometers off the coast of Peterhead, near Aberdeen. The project has a capacity of 30 megawatts and cost about £200 million ($263 million) to construct.

“This marks an exciting development for renewable energy in Scotland,” First Minister Nicola Sturgeon said. “Hywind will provide clean energy to over 20,000 homes and will help us meet our ambitious climate-change targets.”

Wind turbines have been installed on seabeds since the 1990s. Taking them offshore typically increases wind speeds and reduces complaints from neighbors, but it has also been limited to relatively shallow seas.

Floating turbines are expected to open the industry up to new markets like Japan, the United States west coast and Mediterranean, where seabeds drop off steeply from the coast.

“Hywind can be used for water depths up to 800 meters, thus, opening up areas that so far have been inaccessible for offshore wind,” said Irene Rummelhoff, executive vice president of the New Energy Solutions business area at Statoil.

Some of the energy generated by the turbines in the sea will be stored in batteries.

Statoil has installed one of its Batwind lithium devices, which can store 1 megawatt-hour of power. This will help steady the flow of power generated by the wind farm.

The cost of conventional offshore wind farms has been plummeting in recent years.

The United Kingdom’s latest renewableenergy auction saw prices drop to £57.50 per megawatt-hour, less than a third the cost of new nuclear in the UK Rummelhoff expects floating offshore wind to follow a similar trajectory.

“Statoil has an ambition to reduce the costs of energy from the Hywind floating wind farm from €40 to 60 per megawatthour by 2030,” she said in a statement.

“Knowing that up to 80 percent of the offshore wind resources are in deep waters, where traditional bottom fixed installations are not suitable, floating offshore wind is expected to play a significant role in the growth of offshore wind going forward.”

The Hywind project receives government support in the form of renewable obligation certificates (ROCs). It gets 3.5 ROCs, which currently adds up to about £140 per megawatt-hour, according to Statoil Spokesman Elin Isaksen. This is on top of the UK’s wholesale power price, which has averaged £48.75 per megawatt-hour over the past year. Bloomberg News

the new treatment. “We’re excited.

We think there are many patients who may need this therapy.”

He added, “These patients don’t have other options.”

About 3,500 people a year in the United States may be candidates for Yescarta. It is meant to be given once, infused into a vein, and must be manufactured individually for each patient. The cost will be $373,000.

The treatment was originally developed at the National Cancer Institute, by a team led by Dr. Steven Rosenberg. The institute entered an agreement with Kite in 2012, in which the company helped pay for research and received rights to commercialize the results.

Largely on the strength of the new drug and related research, the drug giant Gilead purchased

In an undated handout photo, cells taken from cancer patients are genetically engineered to fight cancer at a Kite processing facility. Kite Pharma via The New York Times

Kite in August, for $11.9 billion. “ Today marks another milestone in the development of a whole new scientific paradigm for the treatment of ser ious d i sea ses,” t he FDA com m i s sioner, Dr. Scott Gottlieb, said in a statement. “In just several decades, gene therapy has gone from being a promising concept to a practical solution to deadly and largely untreatable forms of cancer.”

Side effects can be life threatening, however. They include h i g h fe ve r s, c r a sh i n g blo o d pressure, lung congestion and

neurological problems. I n s ome c a s e s, p at ie nt s h ave re q u i re d t r e a t m e nt i n a n i nt e n s i v e c a r e u n it . I n t h e s t u d y t h at led to the approva l, t wo pat ie nt s d ie d f rom s id e e f fe c t s .

Do c tors h ave le a r ne d to m a n a g e t h e m b e t t e r, b ut it t a k e s training and ex per ience.

Partly for that reason, Yescarta, like the first cell-based cancer treatment, Kymriah, will be introduced gradua lly, and will be available only at centers where doctors and nurses have been trained in using it. “ Ten to 15 authorized institutions will

be ready to go at the time of the launch,” a spokesman for Kite, Christine Cassiano, said. “In 12 months, we expect to have 70 to 90. There’s a lot that goes into it, making sure each institution is ready to go.”

Companies have been racing to develop new forms of immunotherapy. Ky mr iah, made by Novartis, was approved in Aug ust for chi ldren and young adults w ith an ag gressive ty pe of acute leukemia. It w ill cost $475,000, but the company has said it w ill not charge patients who do not respond w ithin the first month after treatment.

Novartis is expected to ask the FDA to approve Kymriah for lymphoma and other blood cancers, as well, and may vary its price depending on how well it works for those diseases.

Kite also plans to seek approval for other blood cancers, but does not plan to vary Yescarta’s price, Cassiano said.

T he company a lso hopes that Yescarta w ill eventually be approved for earlier stages of ly mphoma, rather than being limited to patients w ith advanced disease who have been debilitated by multiple ty pes of chemotherapy that did not

work, said Dr. Dav id D. Chang, K ite’s chief medical officer and executive v ice president for research and development.

“This is the beginning of many developments in cell therapy in the next few years,” Chang said in an interview.

He added the FDA had “embraced” the concept of cell therapy, designating it a breakthrough and accelerating the approval process to speed its availability to cancer patients, many of whom do not have time to wait.

K ite and Novartis also hope to produce cell therapies for socalled solid tumors—like those of the lung, prostate, breast and colon—which account for about 90 percent of all deaths from cancer.

Before it was approved and named Yescarta, Kite’s treatment was known by other names: axicel, axicabtagene ciloleucel or KTE-C19.

The study that led to approval enrolled 111 patients at 22 hospitals; 101 of them received Yescarta. They had one of three diseases: diffuse large B -cell ly mphoma, primar y mediastinal B -cell ly mphoma or transformed follicular ly mphoma.

New York Times News Service

Uncertainty felt in Mideast as IS is defeated in Raqqa

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EIRUT—The Middle East may have turned a page w it h t he defeat of t he Islamic State (IS) group in its self-declared capital of Raqqa, but the future is looking even more tangled, and potentially as violent.

The downfall of a common enemy could open up cracks in temporary alliances created to fight the extremists, and rivalries for inf luence are now likely to take center stage.

Already, a multitude of players in the crowded theaters of Iraq and Syria are racing for the spoils of war. And while the group fights its last battles in what remains of its self-styled c a l iphate, world powers a nd smaller players alike are vying to create new facts on the ground.

Syrian army and allies

W ith the pivotal capture of east A leppo in late-2016, President Bashar al-Assad ’s government effectively neutralized its most threatening armed opposition, allowing it to train its full attention on IS. The priority was oil-rich eastern Syria, close to the Iraqi border, and with the backing of Russia and Iranian-sponsored Shiite militias, the Syrian army has made significant advances in the area.

Tehran wants to establish a land route from Iraq through Syria, all the way to Israel’s borders. Washington and Israel are wary of this expansion, and Israel has warned it will not tolerate a continued Iranian military presence in Syria.

This terrain is about to get increasingly muddied.

With the fall of Raqqa, the United States-backed Kurdishled militia known as the Syrian Democratic Forces (SDF) will turn its attention to Deir el-Zour province, where the race is on for control of its vital oil deposits and the border with Iraq.

The Kurdish fighters have battled IS in the northeastern part of Deir el-Zour, gaining control of at least four oil fields and one natural gas installation.

The rival forces are currently positioned at nearly the same distance from the largest oil field, al-Omar, which is still controlled by IS. Assad has, meanwhile, vowed to retake control of Raqqa at some point. For now, the city is to be administered by

In this May 9, 2015, photo, a Hezbollah fighter stands on a hill next to the group’s yellow flag in the mountainous region of Qalamoun, in Assal al-Ward, Syria. AP/Bassem Mroue

a local civil council supported by the US-backed SDF.

Kurdish forces and US support

Starting as a small self-defense unit in northern Syria, the main Kurdish-led militia has become Washington’s primary partner in Syria and is now a multiethnic force of Kurdish, Arab and Assyrian troops that boasts thousands of fighters.

This alliance was cemented by the common goal of fighting IS, which at one point charged into Kurdish-dominated areas.

The increasing US presence in the area also provided the Kurdish militia with international cover to push for their project of a federal system that would give them more autonomy.

The US, which maintains bases in northern Syria, as well as military advisers that support the SDF, insists that it is not in Syria for the long run. But Kurdish officials stress that the Americans must stay to protect the gains against IS. With the fight against IS winding down, cracks in the Arab-Kurdish alliance are likely to emerge as

issues of governance and reconstruction take center stage. Looking across the border, Syria’s Kurds are nervous as they see Washington’s support for their Iraqi Kurdish counterparts waver, amid a dispute with the Iraqi government in the wake of last month’s Kurdish independence vote.

Turkey

While Turkey initially intervened in Syria to support rebels fighting to topple Assad, it is now mainly focused on curbing Kurdish expansion and securing its long border.

Last year its troops captured a pocket of territory inside Syria to prevent a contiguous Kurdish hold along the frontier, and earlier this month, it sent troops and tanks into Syria’s northwestern Idlib province, in part to curb Kurdish expansion there.

Turkey considers the Kurdish force a terrorist organization, linked to its own homegrown Kurdish insurgency.

Ankara has been vehemently critical of US support for the Ku rd ish m i l it i a in t he f ight against IS and had suggested

that Turkey-backed forces liberate Raqqa. It opposes the prospect of the Kurdish-led SDF administering Raqqa, a predominantly Sunni Arab city.

Iraq’s faltering alliances

In Iraq Kurdish and Shiite forces are fighting over the spoils of the war against IS. Both Kurdish and Shiite militias were embedded with Iraq’s armed forces in the predominantly Sunni, north, where the Kurds had the opportunity to expand their authority to include massive oil fields in Kirkuk and other territories.

But Baghdad, w ith the help of the Shiite militias, rol led t ho s e g a i n s b ac k t h i s we e k and for now have established themselves as the paramount powers i n nor t her n I r aq — a de ve lopme nt t h at t h re aten s to engender Sunni discontent.

In Baghdad parties are competing for leadership of a postIS Iraq. Prime Minister Haider al-Abadi is offering a vision of a federal system, unified under the Iraqi flag. He has to be careful to ward off any challenges from

former Prime Minister Nouri alMaliki who remains popular with the country’s Shiite militias and hard-liners, many of whom want to see closer ties with Iran.

Internationally, Iran exerts the most influence on Iraqi politics, even though the US maintains a massive diplomatic presence and several thousand troops in the country. But ties between the Iraqi and Iranian economies are likely to pull Iraq further into Iran’s orbit, especially after the US military mission to defeat IS ends.

IS group

For now, the IS group’s biggest and most strategic presence is in and around Deir el-Zour and the border town of Boukamal. The group also still has pockets in Syria’s central province of Homs and near the capital, Damascus.

It is no longer the group’s ter r itor ia l reach, but its abilit y to conduct a low-level insurgenc y that is of concer n. IS still boasts an active social-media presence, and the US militar y estimates around 6,500 IS fighters remain in easter n Sy r ia and wester n Iraq. AP

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Banking&Finance BusinessMirror

Editor: Jun B. Vallecera • Friday, October 20, 2017

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Manila parametric-risk program fully ceded

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he Philippines has urged memberstates comprising the Asean to improve catastrophic reinsurance initiatives that will help communities across the region recover faster from the impact of natural disasters and adverse effects of climate change.

According to Finance Secretary Carlos G. Dominguez III, in its bid to improve disaster insurance in the country, the Philippines previously made available a P1-billion insurance fund under its Parametric Insurance Pilot project to 25 disaster-prone provinces in the country to help them act faster and respond better to the devastating impact of natural calamities.

Traditional indemnity insurance takes a long time to assess and process, but so-called parametric insurance has quick-disbursing payouts whose amounts depend on the estimated loss determined through

the Philippines’s Catastrophic Risk Model developed by the Department of Finance in 2014.

According to Finance Assistant Secretary Paola A. Alvarez, the project covers 25 local government units (LGUs) that include the provinces of Aurora, Cagayan, Camarines Norte, Camarines Sur, Catanduanes, Cebu, Davao del Sur, Davao Oriental, Dinagat Islands, Eastern Samar, Ilocos Norte, Ilocos Sur, Isabela, Laguna, Northern Samar, Pampanga, Quezon, Rizal, Sorsogon, Surigao del Norte, Surigao del Sur and Zambales.

The project is being implemented

Marcventures mining names new president

Y

ulo E. Perez will be the next president and CEO of Marcventures Mining and Development Cor p. (MMDC), a wholly ow ned subsidiary of Marcventures Holdings Inc. (MHI), effective upon his exit from his current engagement with Silangan Mindanao Mining Co. Inc. (SMMCI). He will replace Arsenio K. Sebial, who retired on September 30.

“With his depth of experience and track record, I expect Perez to help us solidify our current operations in MMDC and bring Marcventures to the next level, especially in the development onto commercial operations of our prospective nickel mine in Surigao and two Bauxite mines in Western Samar,” MHI President Isidro C. Alcantara Jr. said.

Perez is presently the president and COO of SMMCI. He has 37 years of experience managing mining operations here and abroad, including 11 years with PT INCO Indonesia (now called PT Vale Indonesia), one of the largest nickel laterite operations in the world.

with assistance from the World Bank.

Potential beneficiary-LGUs can avail of the insurance cover in the event of a catastrophic earthquake or typhoon from the Government Service Insurance System. Such cover is fully ceded to the international reinsurance market, minimizing risks for the government, according to Alvarez.

“Because the Bureau of Treasury is the policyholder, the funds will be mobilized faster to the first responders, namely the national government and the LGUs,” Alvarez said.

For disaster-specific premiums, P500 million of the fund will be allocated as follows: 79.2 percent for typhoons and 20.8 percent for earthquakes. The other P500 million will be province-specific and split equally among the 25 provinces at P20 million each.

Dominguez said the Philippines is also working on improving building standards to ensure that structures are climate-resilient, and is expediting the rehabilitation of existing irrigation systems while constructing new ones, particularly in the northern and southern parts of

DBM guarantees fully funded infrastructure buildup program

T

he Department of Budget and Management (DBM) said enough funds have been set aside to pursue 75 infrastructure projects under its “Build, Build, Build” (BBB) program.

According to Budget Secretary Benjamin E. Diokno, the government does not have problems funding the infrastructure projects as a result of the shift to a more expansionary fiscal policy.

“As far as the infrastructure is concerned, there will be no problem with the budget. We are pursuing what we call an expansionary fiscal policy. We have increased the deficit-to-GDP ceiling from 2 [percent] to 3 percent,” Diokno said at the 43rd Philippine Business Conference and Expo at Manila Hotel on Thursday.

Earlier, the Department of Finance (DOF) said of the 75 flagship projects, around half will be finished by 2022 when President Duterte completes his term.

According to Finance Secretary Carlos G. Dominguez III, 37 projects under the BBB program should be complete by 2022, or half of the total 75 flagship projects under the program. But, while only completing half, the remaining projects should still be ongoing as not all projects can be finished immediately.

The 37 flagship projects seen completed by 2022 include the Clark airport, the Clark-to-Manila railway, as well as the Mindanao railway.

The Mindanao railway project, spanning Tagum, Davao

Mental health is national wealth

T

he world observed Mental Health Day on October 10.

It was apt that the Lower House approved House Bill 6452 or the Comprehensive Mental Health Act on second reading and earlier the Senate unanimously approved Senate Bill 1354, or the Philippine Mental Health Act, in May 2017 on third and final reading. Boy, does this country need that.

The Philippines is one of the few countries without a “mentalhealth policy.” Woe to us for according to the World Health Organization, the Philippines has 5.7 million with mental-health issues.

This is 5.3 percent of the total 100 million afflicted in the Western Pacific that, in turn, is parcel to some 300 million mentally impaired individuals around the world. Globally, 800,000 persons commit suicide every year. Consider this: the Philippines has only one psychiatrist for every 250,000 individuals compared to the ideal ratio of 1: 50,000.

Recall that Stephen Paddock, who committed the worst mass shooting in history in Las Vegas recently, is believed to be ideologically unattached and was only probably affected by an antianxiety depression medicine he was taking. This will reportedly make one either quiet but unfocused or aggressive and violent. The medicine was worse than the disease?

the archipelago, among other initiatives to mitigate the impact of erratic climate patterns resulting from global warming.

Dominguez told Alvarez to focus primarily on developing mechanisms that would make disasterprone areas in the country more resilient against calamities.

“We are working with the different Asean countries, as well as our different agencies, to improve the catastrophic reinsurance [programs], to improve the standards for construction of homes and buildings. We are working with [our] Department of Environment and Natural Resources and Department of Agriculture to mitigate the effects of climate change,” Dominguez said at a recent forum organized by the Center for Strategic and International Studies in Washington, D.C. Dominguez said the impact of climate change is now being increasingly felt in the Philippines, particularly in Mindanao, which used to be mostly typhoon-proof, but now appears to be on the path of many tropical storms that have occurred

Finex free enterprise Zoilo ‘Bingo’ Dejaresco III A month after major tragedies like Supertyphoon Yolanda and the big earthquakes, their victims always begin to show signs of postevent mental stresses. The legislative bills come at no better time.

For instance, the proposals make it mandatory for Filipinos to have access to the best available mental-health care from the government and define the rights of patients, family members, legal representatives and health-care professionals. The bills mandate the Department of Health to craft a national mental-health program in coordination with the stakeholders; the Philippine Health Insurance Corp. to make sure proper mental packages are available and for the Commission on Human Rights to inspect all mental institutions to determine proper “humane treatment” of mentally challenged individuals.

Once approved into law, the Act will force provincial, tertiary and regional hospitals to have mental-health services and man-

and Digos cities, requires a budget of P31.544 billion, the Clark International Airport Expansion (Phase I) needs a budget of P12.550 billion, and the Philippine National Railways North 1 project, which is a 38-kilometer masstransportation railway connecting Bulacan with the National Capital Region, needs a budget of P105.313 billion.

“Because of the ongoing tax reform, we expect additional fiscal space of around P500 billion a year in additional spending power. I don’t see any problem as far as the budget is concerned. Having said that, let me assure you that, despite the expansion in fiscal strategy, our debt-to-GDP ratio will continue to shrink from 40 [percent] to 37 percent,” he said.

Under the original DOF proposal, revenues totaling P157 billion will be gained from the reduction of personalincome tax, while implementing offsetting measures like the expansion of the taxpayer base, increasing the excise tax on fuel and automobile products, as well as lifting some exemptions on the value-added tax.

The government is optimistic the measure will be approved by both houses of Congress before the end of the year. The budget chief also said official development assistance was pledged to the Philippine government from both Japan and China worth around $9 billion each.

“Nine billion dollar for Japan, $9 billion for China, and it will be in stages. That’s part of the 75 projects that we already listed,” he added. Rea Cu

dates all local government units to upgrade existing hospitals with psychiatrists.

What has worsened this mental epidemic in the world apart from genes and the natural stress of life? A partial answer is too much use of social media.

A study funded by the University of Michigan shows that, while Facebook or social media in general can connect people to the farthest corners of the world, it can also make one “feel miserable” and help lower people’s life satisfaction.

This finding is supported by the Journal of Epidemiology, which says viewers tend to see “the best side” of someone’s life on social media: rich, successful, happy family, well-traveled and good looking (filtered selfies, for a start). Viewers would begin to negatively “suffer from comparison”.

Panorama Magazine’s Kathleena de la Rosa, a psychology lecturer at the Ateneo de Manila, has this to say: “In the olden days, people compared themselves to images they saw on TV and magazines. The comparison is unrealistic. Now, viewers compare themselves with people they know. And more is the pressure of not being able to match the standard of reality, of real people.

Dr. Brian Primack, on the other hand, disclosed that social media

has become a convenient platform to cyberbully people because the attackers are shielded by anonymity and have no physical contact with their victims. Cyberbullying leads to depression and even suicide for some of the victims.

What can be done? There is the medical route of taking, for instance, antidepression and antianxiety capsules. Failing that, there are psychiatrists who subject patients to “cognitive behavior therapy”. A newfangled way is the so-called neurofeedback route, where machines read the brain, images are analyzed, feedback is given to the brain to alter its neurons to change a certain negative way of thinking. (Try htt p://mindworks.com.ph w it h practitioners like Denise Celdran.)

It is time we erase the stigma on people with mental-health challenges, considering the disease affects 5.7 million out of some 100 million. A mentally healthy nation can, after all, still be wealthy nation, as well. Let’s do it!

Bingo Dejaresco, a former banker, is a financial consultant, media practitioner and book author. A life member of Finex, he is chairman of both the Professional Development and Broadcast Media committees. His views here, however, are personal and do not necessarily reflect those of Finex. dejarescobingo@yahoo.com.

recently in the country.

The adverse effect of climate change has led to flashfloods in Cagayan de Oro and Iligan, two of Mindanao’s highly urbanized cities; and also in the province of Bukidnon, a major food producer in southern Philippines.

“As you know, [in Mindanao] we never had typhoons there.

We had typhoons once every 70 years in Mindanao.

However, now we are obser v ing t hat, w it h c l imate change, the typhoons seem to be forming further south in the Pacific Ocean, which brings Northern Mindanao directly in the path of the typhoons,” he said. Rea Cu

A10 Friday, October 20, 2017 • Editor: Angel R. Calso

Opinion BusinessMirror

www.businessmirror.com.ph

editorial

Jeepneys: Out with the old

O

ver 50 years ago at the 1964 New York World’s Fair, a jeepney was exhibited at the Philippine Pavilion as a national image for the Philippines and Filipinos. It is likely that the jeepney shown in New York then would fit right in on the streets of Manila today. That is not shining proof of progress for the country during the past half-century.

While all of us have probably been moved around town on a jeepney, it is an outdated and ultimately undesirable form of transportation. Running mostly on diesel engines, they are polluting and inefficient for city transportation. Diesel engines are not the most suitable for low speed with short distance between stops. Passengers have little comfort and virtually no security or safety. While automobiles are required to have safety measures like seat belts, air bags, and protection from crashes, jeepneys are required to maybe have a working horn.

There is probably not a single jeepney plying the streets of Metro Manila can could pass even a fraction of safety necessities that every automobile must follow.

On the positive side, jeepneys are cheap to ride, convenient and, of course, ubiquitous. Probably no one ever went broke having to use a jeepney to get around but, on the other hand, no one ever got rich driving a jeepney. It is a “poor man’s” vehicle in every sense of the term.

But to even consider upgrading this form of transportation is apparently “anti-poor”. It seems that every effort and plan to modernize is anti-poor. We heard the same argument when dilapidated and broken old taxis were taken off the road. When point-to-point shuttle services were first established, these too were anti-poor, since they did not cater to the lowest economic groups. Maybe shopping malls and convenience stores are anti-poor, since they compete with sari-sari stores. Certainly, fast-food restaurants are anti-poor because they have probably put some carinderias out of business.

The argument from Bagong Alyansang Makabayan (Bayan) that “to have affordable, safe and high-quality transportation, the mass-transport system should be run by the state with the support of the industrial economy” could be applied to any sector. But history shows how well that did not work with both electricity and Metro Manila’s water supply.

Bayan says that the proposed “fleet-management system” that sets a minimum of 10 units per franchise will only allow big business to operate jeepneys, and that may be partially correct. But every one of those 10 units will require a driver that will have PhilHealth, SSS, 13-month pay and all the other benefits of a regular employee that most jeepney drivers currently do not have.

Bayan also states that “the Omnibus Franchising Guidelines would only bring displacement or loss of livelihood to thousands of drivers and operators in the name of profit.” Perhaps the new jeepneys will be operated by computers and not humans. Perhaps the “thousands of operators” are not seeking profit now and only own jeepneys as a public service, not to make money.

There are legitimate complaints against the proposed jeepney phaseout program that the government needs to address. Changes to the plan are necessary. However, many of the arguments raised to justify the recent transport strike are hollow. Let’s hear a better alternative than “government should own and operate transportation.” That is truly anti-poor.

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Keys to the kingdom James Jimenez

spox

I

N November 2008 the Supreme Court ruled that mandatory drug testing for all candidates for public office was unconstitutional. In Pimentel v. the Commission on Elections (GR 161658), the Court declared that neither Congress nor the Comelec could prescribe any additional qualifications for holding office, beyond what was specifically contained in the Constitution—citizenship, voter registration, literacy, age and residency. Needless to say, this was as uncontroversial as any decision could be, particularly in how clearly it upheld the primacy of the Constitution.

Two weeks shy of nine years later, however, it needs to be pointed out that the Pimentel decision sidestepped, what I believe, was—and remains—a crucial question: should drug users be allowed to run for, and occupy, public office?

There is absolutely no doubt in my mind that the answer ought to be no.

In the Comelec Resolution struck down by the Court in Pimentel, the poll body required drug-test results to be submitted together with their certificates of candidacy, arguing that “by requiring candidates to undergo mandatory drug test, the

public will know the quality of candidates they are electing, and they will be assured that only those who can serve with utmost responsibility, integrity, loyalty and efficiency would be elected.”

The Comelec’s premise, of course, was that people wouldn’t vote for a drug user. After all, even taking some exceptional cases into consideration, substance abuse and addiction hardly inspire confidence that the user can act with “responsibility, integrity, loyalty and efficiency.”

First off, the mere fact of drug use clearly signals a diminished

The firewall may break

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EAGLE WATCH

T

he Philippine economy has been protected by a firewall from being significantly affected by political events and noises for many years now. Despite confronting various issues involving corruption allegations, armed conflict and political scandals, the country’s economy remained unscathed. In fact, from the Arroyo to the Aquino administration, and until today, the Philippines has been enjoying an annual GDP growth ranging from 4.5 percent to 7 percent. The firewall serves a good purpose, since any economic downturn will hurt so many people, particularly the poor and near poor. But what exactly sustains the firewall? Are there certain political issues that can cause its collapse?

Rational economic agents use all available information in the economy to make choices. Consumers look at the prices of commodities to determine if they should buy a particular good or if they should just keep their money in their pockets. Stock traders evaluate the business outlook of firms to identify which stocks are most lucrative to invest in. The list goes on. News about political events are part of this information that agents process. As such, producers and consumers have already factored in all the political noises around them in their decision-making.

They consider such political occurrences as temporary, and thus adjust accordingly by incorporating this information in their expectations and actions.

Hence, when political instability generates a level of uncertainty so great that economic agents are unable to decide, the firewall that prevents political variables from adversely affecting economic variables begins to break. By raising the risks associated with economic decisions, uncertainty makes it costly for agents to act. Plans to consume or invest are thus put off until news

sense of responsibility, not to mention self-discipline. While I agree that most addicts should be considered victims of circumstance, I see no contradiction in considering their addiction a substantial risk to their ability to act in anyone’s best interest, let alone the best interest of the public. They shouldn’t be given up on, certainly; but neither should they be given the keys to the kingdom.

Similarly, drug addiction undercuts a person’s integrity and—in the specific case of public officials— their loyalty to laws and the public welfare. Leaving aside the question of the possibility that addicted individuals are essentially at the mercy of their chemical dependency, the fact remains that such a person would most probably prioritize feeding the need over everything else; ethics, compliance with laws and duty to the country included.

As for efficiency, the effects of drug use on a person’s functional abilities are simply too well-documented to ignore. For instance, crystal meth—shabu—causes acute anxiety, paranoia, severe mood swings, and unpredictable behavior, all of which have been repeatedly shown to have negative effects on a person’s decision-making. Even recreational use of cannabis might give

you pause. In the short term, puffing weed causes confusion, sleepiness and can cause anxiety, fear and panic. Long term, marijuana is known to cause impairment to memory, concentration and decision-making.

Considering how powerful elected officials tend to be, any impairment in the ability to think, and decide clearly and promptly, can have disproportionately large effects on the public welfare.

And then there are the physical effects, such as irregular heart rhythms, elevated blood pressure and significant weight loss.

Clearly, an elected official suffering from any one of these symptoms cannot be considered even remotely healthy.

Which brings me back to Pimentel v. Comelec. That decision was the right one. Neither Congress nor the Comelec ought to go beyond the parameters set by the Constitution.

But the reasons that led to that unconstitutional expansion of the qualifications of elected officials have largely been ignored since then, to the detriment of the nation. Time, therefore, to find a way to correct that oversight so that we don’t have to keep on just dealing with drug abusers in positions of power; so that we’re denying them that power in the first place.

The Philippine economy is fortunate to have a firewall, as it allows us to continue enjoying high growth rates. However, the state should be aware that this firewall can break, despite its being formidable in the beginning of the new administration. If this happens, all the economic benefits we are currently enjoying may dissipate in just a short time.

will eventually have grave repercussions on the economy. Fiscal and monetary policies that aim to raise revenues usually involve printing more money or increasing tax revenues. Thus, while populist projects are advocated in the interest of increasing social welfare, they inadvertently harm the economy, since the brunt of financing such programs are passed on to the public through higher prices and taxes.

On the other hand, intentionally altering the playing field to favor persons close to the administration (e.g., cronyism) diminishes productivity and discourages healthy competition. When institutions value connections more than merit or productive activity, people would have less motivation to improve their qualifications and output, and more incentive to seek political connections that they can benefit from. Altering the playing field to benefit particular persons or groups also impedes wealth creation. When businesses devote funds to obtain government favors, they expend resources that could have been allocated to productive activities. Moreover, such government favors usually involve rigging the market by erecting barriers to entry that restrict competition, or creating tariffs and quotas that protect domestic firms. These, in turn, decrease economic freedom.

See “Eagle Watch,” A11

of further developments circulate.

This reduces aggregate demand, as well as physical and human capital investment. A telltale sign of the gradual weakening of the firewall is a downward trend in foreign direct investments. Exacerbating this will be capital flight even coming from domestic investors. This can actually result in a herd mentality, which may affect important economic variables such as prices and the exchange rate.

Another channel through which the firewall might break is when populist decisions affect the country’s fiscal balance. When widescale populist projects are implemented without careful and thorough consideration of how these programs will be funded, government efforts to trim down resulting fiscal deficits

Opinion BusinessMirror

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Friday, October 20, 2017 A11

‘Drug dealers in lab coats’ The house on the sweetest, shortest avenue in the world Nicholas Kristof

Tito Genova Valiente

new york times

annotations

or decades, America has waged an ineffective war on drug pushers and drug lords, from Bronx street corners to Medellin, Colombia, regarding them as among the most contemptible specimens of humanity.

e used to live on what many people believe to be the shortest avenue in the world. I have written already about this home, but an aunt insists I should write more of the memories we have of our stay in that house.

One reason our efforts have failed is we ignored the biggest drug pushers of all: US pharmaceutical companies.

Our policy was: You get 15 people hooked on opioids, and you’re a thug who deserves to rot in hell; you get 150,000 people hooked, and you’re a marketing genius who deserves a huge bonus.

Big Pharma should be writhing in embarrassment this week after The Washington Post and 60 Minutes reported that pharmaceutical lobbyists had manipulated Congress to hamstring the Drug Enforcement Administration (DEA).

But the abuse goes far beyond that: The industry systematically manipulated the entire country for 25 years, and its executives are responsible for many of the 64,000 deaths of Americans last year from drugs—more than the number of Americans who died in the Vietnam and Iraq wars combined.

The opioid crisis unfolded because greedy people—Latin drug lords and US pharma executives alike—lost their humanity when they saw the astounding profits that could be made.

It used to be in America that people became addicted to opioids through illegal drugs. In the 1960s, for example, 80 percent of Americans hooked on opioids began with heroin.

That has completely changed. Today, 75 percent of people with opioid addictions began with prescription painkillers. The slide starts not on a street corner, but in a doctor’s office.

That’s because pharmaceutical companies in the 1990s sought to promote opioid painkillers as new blockbuster drugs. Company executives accused doctors of often undertreating pain (there was something to this, but pharma executives contrived to turn it into a crisis that they could monetize). The companies backed front organizations like the American Pain Foundation, which purported to speak on behalf of suffering patients. These front organizations, as well as professionals sometimes funded by the pharmaceutical industry, heralded pain as the “fifth vital sign,” along with pulse, temperature, respiratory rate and blood pressure. The opioid promoters hailed opioids as “safe and effective,” and they particularly encouraged opioids for returning veterans—one reason so many veterans have suffered addictions.

Pharma companies spent heavily in advertising opioids—$14 million in medical journals in 2011 alone, almost triple what they had spent in 2001, and pitched them for a wide range of chronic pains, such as arthritis and back pain.

Companies even argued that signs of addiction were a reason to prescribe more opioids. Endo Pharmaceuticals

This aunt has just gone home from a long stay abroad. Much as we want to think so, she is not home for good.

She, however, stays longer each time she comes home.

What memories should I write about?

Memory is a tricky human consolation. It has no limits until forgetfulness sets in, or new perspectives parade to the fore.

This aunt was the beauty in the family and had several suitors. My grandmother never liked the idea.

When there were young boys visiting my aunt, my grandmother Emilia would spread a mat right in front of the embarrassed gentlemen-callers who had no option but to leave in haste.

This aunt of mine remembers many wonderful things in that house. Those were her memories.

I, however, have memories about her. One week, there were several visitors in our home, led by a prominent wife of the only doctor in the island where we were all born. The conversations were hushed and when we ventured near the women who almost whispered to each other, we were shooed away. One morning, I noticed that my aunt

F

Eagle Watch. . . continued from A10

Political events that erode trust and confidence in the government can also cause the firewall to collapse. If consumers believe that they can no longer rely on the government to function effectively or provide them their needed support, they will cut back on spending to create a larger cash safety net in preparation for a potential economic downturn. In extreme cases, distrust in the government may result in unrest and strikes, which can interfere with the normal operations of businesses, and reduce the number of hours worked by the employed population. The country had a glimpse of such political event when Ninoy Aquino was assassinated during Marcos’s time.

When political institutions continue to be eroded and/or destroyed such that it cannot function properly, it will affect government services.

When government services crumble,

distributed a book suggesting that when a patient showed strange behavior, “the clinician’s first response” should be to increase the dose of opioids.

Several of these examples come from a lawsuit by Ohio against major pharmaceutical companies, including Purdue, Teva, Cephalon, Johnson & Johnson and Janssen. A company affiliated with Purdue pleaded guilty of felony fraud in connection with its marketing of OxyContin, but none of its executives went to prison. Drug companies employed roughly the same strategy as streetcorner pushers: Get somebody hooked and business will take care of itself. So last year, Americans received 236 million opioid prescriptions—that’s about one bottle for every adult.

A Senate investigation found that one company, Insys Therapeutics, successfully redirected a powerful opioid called Subsys, meant for cancer pain, to patients without cancer. Sarah Fuller, a woman with neck and back pain, was prescribed Subsys by her doctor, who received payments from Insys.

Fuller died of an overdose of Subsys.

Meanwhile, Insys had the best-performing initial public offering in 2013, and revenue tripled in the next two years, the Senate report said. Likewise, the Sackler family, owner of the company that makes OxyContin, joined Forbes’s list of richest US in 2015, with $14 billion.

It’s maddening that the public narrative is still often about an opioid crisis fueled by the personal weakness and irresponsibility of users. No, it’s fueled primarily by the greed and irresponsibility of drug lords—including the kind who inhabit executive suites. The Washington Post quoted a former DEA official as referring to pharmaceutical company representatives as “drug dealers in lab coats.”

I was invited the other day to a gala honoring the CEO of one of these pharma companies for his moral leadership.

I wanted to throw up. Since 2000, more than 200,000 Americans have died from overdoses of prescription opioids—the consequence of a deliberate strategy to make money by ignoring public welfare.

Our pattern of opioid addiction points to a tragedy, driven by the greed of some of America’s leading companies and business executives, systematically manipulating doctors and patients and killing people on a scale that terrorists could never dream of.

There’s a lot of talk in the Trump administration about lifting regulations to free up the dynamism of corporations. Really? You want to see the consequences of unfettered pharma?

Go visit a cemetery.

there will be increased dissatisfaction, especially among the middle class. This can trigger massive protests, especially when other related and complementary issues crop up in the political arena.

The Philippine economy is fortunate to have a firewall as it allows us to continue enjoying high growth rates. However, the state should be aware that this firewall can break despite it being formidable in the beginning of the new administration. If this happens, all the economic benefits we are currently enjoying may dissipate in just a short time. The firewall has been built because of sound economic policy decisions but political events louder than mere noise may gradually crack it. The “writing on the wall” must be heeded. Eventually, when the state does not watch out, it may suddenly break.

Jessalaine M. Bacani is a dean of the School of Social Sciences and professor of Economics, Ateneo de Manila University and Research Associate, Eagle Watch respectively.

W

did not go to the colegio ran by nuns. Her eyes were all puffy and red. Three of her female friends came over in the afternoon. They left and came back and left again.

In the early evening, they, with my aunt, were all gathered on the porch at the entrance to our home. They were all crying. They would not hide their sadness anymore. My aunt left the next day at four in the morning for the island.

Later that summer, she got married at the age of 17. After years of marriage, she left for abroad.

Now that she is back, we talk about the old home but not about happiness. After all, happiness is again another human consolation that can either work magic or become grossly exaggerated at the expense of virtues, like fortitude. It can also be readily subverted by one’s notion of destiny.

When my aunt left that home, many more things happened around us. There was one night when the police in their khaki uniform arrived and announced to everyone that a prisoner had escaped the provincial jail and could be hiding in the vast cogon field right in front of our home.

Spotlights were set on the grassy

Now that she is back, we talk about the old home but not about happiness. After all, happiness is again another human consolation that can either work magic or become grossly exaggerated at the expense of virtues, like fortitude. It can also be readily subverted by one’s notion of destiny.

field. A huge carabao awakened from a rest from a farm nearby (in those years, our city was surrounded by farms and meadows) to trample the grassy area so the prisoner could be forced to appear. The whole night, the policemen stayed. The prisoner was never caught.

A cousin of our grandfather came one day with his daughter.

She was timid and always looked down when spoken to. She enrolled in the same old school ran by nuns which was attended by my aunt.

One day this young woman started to scream because she could not see. It was a blindness caused by hysteria. Her situation got worse when she had frequent attacks.

When sober, she would throw anything that was red—slippers, combs, shoes—out of the window onto the field covered with cogon, where owls lived and loudly announced their existence through their cries of omen at night.

The woman left our home as she was becoming a burden to the family. She was into drugs, we would be told later.

In October of early-1970s another aunt arrived with an exciting news. The whole day, the older women in the home whispered. At dinner time, the secret was out: we

would pray the Rosary and later contact the Holy Spirit. This aunt had with her what she called an Ouija board. It was a green cartolina with letters on it and several names of icons at the four corner.

Where she came from, the Holy Spirit was said to be most active. In our group, we encountered spirits that we would not even dare name.

The session after prayers was called a “contact.” Each night, we sought out information from the board.

Our nocturnal gathering would produce a directory of the souls of the dear departed as we asked the board who was in Heaven and who was in Purgatory. Our question stopped at those two destinations. The board, however, would volunteer information by moving and attempting to spell H..E..L.., and whereupon we would all let go of the board and start a flurry of prayers.

One day, our cousins, like our aunt, had to leave for college. The board was tucked in somewhere.

One Saturday, the 23rd of September, 1972, the radio kept playing instrumental music. No announcer’s voice could be heard. By 8 in the morning, we learned martial law had been declared. I was in college then and was with other students in an ROTC formation. The commandant asked us to leave and wait for further announcement. We said good-bye to each other, even to those who we never considered as friends.

That day, the shortest, sweetest avenue in the world had become the bravest, saddest street for men who will grow old and bitter in the coming years.

E-mail: titovaliente@yahoo.com.

Watch and enjoy to help Caritas Manila’s scholars Rev. Fr. Antonio Cecilio T. Pascual

SERVANT LEADER

A

S we’re midway through the “75 Days of Charity,” Caritas Manila offers exciting ways to be part of this endeavor.

I am pleased to invite the public to watch the musical, Chitty-Chitty-Bang-bang on November 12, 2 p.m. at the Newport Performing Arts Theater at Resorts World Manila and the block screening of Warner Bros. Pictures’s Justice League on Sunday, November 19, at 2 in the afternoon at TriNoma Cinema.

Chitty-Chitty-Bang-bang is based on Ian Fleming’s classic children novel, Chitty-Chitty-Bang-Bang: The Magical Car, which was written personally for his own son. The stage adaptation of the novel premiered in the West End at the London Palladium on April 16, 2002, with six new songs by the Sherman Brothers.

The musical will feature famous characters like the brilliant inventor Mr. Caractacus Potts, the strong but gentle Mr. Potts’s admirer Truly Scrumptious, Caractacus’s son and daughter Jeremy & Jemima Potts, as well as the tyrannical ruler of Vulgaria, Baron Bomburst, and the infamous Child catcher and Toymaker.

The November 19 performance

will be for the benefit of Caritas Manila’s Youth Servant and Leadership Program (YSLEP) scholars, which helps more than 5,000 youth scholars nationwide.

Meanwhile, Justice League is an upcoming American superhero film directed by Zack Snyder with screenplay by Chris Terrio and Joss Whedon. It is distributed by Warner Bros. Pictures and is based on the DC Comics superhero team of the same name.

The film features an ensemble cast, including Ben Affleck as Batman, Henry Cavill as the Superman, Gal Gadot as Wonder Woman, Jason Momoa as Aquaman, Ezra Miller as The Flash and many more.

The educational sponsorship through Caritas Manila’s YSLEP is one of ways to be part of the “75 Days of Charity” that runs from September 5, the International Day of Charity, up to the World Day of the Poor on November 19, 2017. It was launched by Caritas Manila in solidarity with His Holiness Pope Francis’s announcement of the first-ever World Day of the Poor in November.

The block screening is a fund-raising effort of Caritas Manila Alumni Scholars Association to also support the scholars of YSLEP. We are grateful that the alumni association of Caritas Manila will be having a block screening for one of the biggest films this year. At the same time, this will also be the first-ever performance of ChittyChitty-Bang-bang here in the Philippines and I am very happy that one of its show dates was given for the benefit of our scholars. To all faithful, grab this opportunity to enjoy and, at the same time, help and be part of the 75 donation days of charity.

Tickets for Chitty-Chitty-Bangbang will be available at Caritas Manila office on Jesus Street,

Nafta gets a welcome reprieve

G

ood news: The North American economy has been granted a stay of execution. Negotiations to revise the North American Free Trade Agreement (Nafta), which seemed close to collapse not so long ago, have been extended into next year. The US should use this pause to rethink its whole approach to the Nafta.

President Donald J. Trump has been consistent, if nothing else, in attacking Nafta both during his campaign and in office. His analysis of Nafta’s costs is all wrong—the deal has been a boon to the US and to North America as a whole.

That’s not to say that the

The Trump administration can change Nafta for the better, and take credit for doing so. But threatening to wreck the pact— a danger by no means dispelled by the talks’ extension—is a grave disservice to the US economy and its workers.

agreement can’t be improved and updated; it can be. The most obvious and easy way would be to incorporate elements of the abandoned Trans-Pacific Partnership into Nafta. Doing so would allow Trump to win Mexico’s and Canada’s agree-

ment, change and rebrand Nafta— and mark the new pact as a notable Trumpian achievement. Instead, the administration has underlined demands that are bad on their own terms and which Mexico and Canada will be hard-pressed to accept.

Trump wants to water down the pact’s dispute-settlement procedures, which are vital to assure the smaller economies that their interests won’t be trampled. He wants stronger local-content rules for Nafta trade, which would disrupt supply chains and discourage intra-regional trade. And he wants a sunset provision that would turn Nafta into a temporary arrangement liable to

Pandacan, Manila. For inquiries, you may call Caritas Manila’s hot lines 562-0020 to 22.

To avail yourself of the tickets for the block screening of DC’s Justice League, call the Caritas Manila’s hot lines 562-0023 to 25 local 23 or mobile number +63 998 9973704 and look for Mr. Eli Jacobe. Tickets for the movie will also be available in Radio Veritas at 162 West Avenue corner Edsa, Quezon City. You may call Veritas hot lines at 925-7932 to 39 local 111 and look for Ms. Maricar Fariñas.

The educational sponsorship through Caritas Manila’s YSLEP is one of ways to be part of the “75 Days of Charity” that runs from September 5, the International Day of Charity, up to the World Day of the Poor on November 19. It was launched by Caritas Manila in solidarity with His Holiness Pope Francis’s announcement of the first-ever World Day of the Poor in November.

To learn more, donate and support Caritas Manila’s programs for the poor, visit www.caritasmanila.org.ph or call DonorCare lines (+632) 5639311, 564-0205, (+63) 999-7943455, (+63) 9054285001, and (+63)929-8343857. Make it a habit to listen to Radio Veritas 846 in the AM band, or through live streaming at www.veritas846.ph and follow its twitter and instragram accounts @veritasph and YouTube at veritas846.ph. For comments, e-mail veritas846pr@gmail.com.

end at short notice, rather than the settled and predictable trading system that it is.

Canada and Mexico, as expected, appear to have balked at these demands. The resulting delay doesn’t help companies impatient for clarity, which is a needless cost in its own right. Nevertheless, it’s good that the talks, and Nafta itself, have not yet hit a wall.

The administration can change Nafta for the better, and take credit for doing so. But threatening to wreck the pact—a danger by no means dispelled by the talks’ extension—is a grave disservice to the US economy and its workers. Bloomberg View