Businessmirror september 13, 2017 by BusinessMirror

BMReports

State moves to hasten recovery of hospitals, health-care sector By Jovee Marie N. dela Cruz @joveemarie & Claudeth Mocon-Ciriaco | Correspondent

HILE there is no love lost between President Duterte and Akbayan Sen. Risa Hontiveros-Baraquel, the latter thanked the Executive branch’s top honcho for signing Republic Act (RA) 10932 that she authored. However, RA 10932, or the strengthened anti-hospital deposit law, has left people like Rustico Jimenez squirming in his seat. Jimenez, president of the Private Hospitals Association of the Philippines (PHAP), said the law has placed hospitals between a rock

This file photo shows the façade of the Pasig City General Hospital. According to Health Secretary Paulyn Jean B. Rosell-Ubial, bed capacity in Metro Manila hospitals remain a challenge as 800 patients compete for one bed. Lawmakers believe this problem could be resolve if more noncash benefits and more money, e.g., higher hazard pay, goes to the pockets of health staff operating hospitals. NonoY Lacza

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Conclusion

and a hard place. The law ensures there are severe penalties if hospitals decline to provide services to patients who cannot pay a deposit prior to receiving treatment. “You have to treat them, but they will not be able to pay us,” Jimenez said. Jimenez, who practices internal medicine at Medical Center Parañaque in Parañaque City, said most of these patients usually are in the lower-income group. “Especially in our areas around Manila Bay, there are a lot of informal settlers and these are the cases that are hard to treat.” But he believes hospitals should not turn away patients, especially those needing emergency treatment, because they can’t pay. Continued on A2

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Wednesday, September 13, 2017 Vol. 12 No. 335

PHL’s mobile-data speeds ‘well below’ global average

By Lorenz S. Marasigan

@lorenzmarasigan

OBILE-data speeds in the Philippines remained far below the global average during the first six months of the year, despite efforts from local operators to improve the country’s standing through network improvements, data fromt wireless coverage mapping platform Open Signal showed.

In its brief report on the state of the Internet in the Philippines, the London-based crowdsourcing company said average speeds of 3G and 4G in the country “remained slow, well bellow” the global average speeds for the two mobile connections.

Compared to the global average of 16.2 Mbps for 4G, Smart Communications Inc.’s LTE speed was at 10.6 Mbps, while that of Globe Telecom Inc.’s was at around 8 Mbps. On 3G, both ended the first half with roughly 2.5 Mbps in download speeds, a little less than half of the

global 3G average of 4.4 Mbps. Sought for comment, experts said the report is reflective of the current state of the Internet in the Philippines, noting that it continued to lag behind Asean peers in terms of speed and availability. “Open Signal, which collects

d ata f rom reg u l ar consumer sm a r t- phones u nder nor m a l usage conditions, has been consistent in pointing out two things: that there is minimal improvement, if any, in the quality of the Philippines’s mobile broadband; and that the Philippines has one of the slowest broadband speeds in the region,” Better Broadband Alliance Convener Mary Grace Mirandilla-Santos told the BusinessMirror.

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The linkages between migration and development

16.2 Mbps The global average speed for 4G compared to Smart’s 10.6 Mbps and Globe’s 8 Mbps

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Teddy Locsin Jr.

free fire Philippine statement delivered by Ambassador Teddy Locsin Jr. at the Trusteeship Council Chamber, United Nations Headquarters, New York, on July 24, 2017.

uring negotiations for the 2030 Agenda, we fought strongly for the recognition of the positive contribution of migrants to inclusive growth and sustainable development and, frankly and flat out, to our consumptiondriven economy. The absence of a specific Sustainable Development Goal on migration might be said to highlight the crosscutting nature or wide beneficial ramifications of migration to both home and destination countries. We don’t like to think of it as oversight. We like to think that migration is so deeply embedded in, or linked to all of the 17 SDGs, that there is no need for a category of their own. Continued on A10

See “Mobile-data,” A2

Tan: No PAL stake sale until it returns to profit

GROUNDED Tropical Depression Maring grounded several flights on Tuesday, leaving thousands of passengers stranded in different airports. Related story on A12. ALYSA SALEN

WHO OWNS NAYONG PILIPINO?

PAL, Pagcor face off over construction of Naia 2 annex By Recto Mercene

@rectomercene

egacy carrier Philippine Airlines (PAL) and staterun Philippine Amusement and Gaming Corp. (Pagcor) are currently at loggerheads over the lease of a portion of Nayong Pilipino in Pasay City, which PAL wants to develop. PAL said it has the right to develop a 10-hectare lot inside the former Nayong Pilipino complex, located along Manila International

Airport (MIA) Road in Pasay, across the Civil Aviation Authority of the Philippines. The flag carrier plans to build a P20-billion ($400-million) annex to the Ninoy Aquino International Airport (Naia) which is adjacent to Terminal 2. PAL’s proposed Naia 2 annex is designed to handle 12 million to 15 million passengers per year and would be able to serve 12 to 17 wide-bodied and single-aisle jets. It will also include multilevel parking for 1,000 vehicles,

PESO exchange rates n US 50.7630

a new cargo terminal and ground service facilities. PAL President Jaime J. Bautista has said that, once the project is approved by the government, the groundbreaking is targeted for February 2018, completion of construction by December 2020 and start of operations in July 2021. The new facility will then be used for international flights and Terminal 2 will be used for domestic flights. In a statement, the gaming in-

dustry regulator said PAL has been only leasing the 10-hectare property from Pagcor and does not have a right to use it for any purpose other than as “an aircraft parking ramp/ apron facility”, as stipulated under the contract. “Hence, it is prohibited from using the leased premises for any other business or purpose [including the construction of a new terminal] without prior written consent from Pagcor,” the regulator said. See “Naia 2 annex,” A2

illionaire Lucio Tan said he plans to return his group’s Philippine Airlines Inc. to profit before selling a stake, two weeks after the carrier’s president disclosed that talks with a strategic investor were likely to produce a deal by the end of the year. PAL Holdings Inc., the carrier’s parent, booked a net loss of P501 million ($9.8 million) in the second quarter after reporting a P1.13-billion deficit in the previous quarter, as higher fuel costs and aircraft lease charges boosted expenses. Tan, chairman of the LT Group Inc. conglomerate, spoke in an interview in Manila on September 7, and didn’t elaborate on the airline’s plans to return to profit. “I will not sell unless it earns money,” said Tan, 83. “Airlines are a very competitive business.” Tan, the Philippines’s secondrichest person, is vowing to revive profit at the carrier amid an increase in tourist arrivals in the country. Philippine Airlines (PAL) has been acquiring new planes and expanding destinations and flight frequencies as rising income among Filipinos boosts travel. “While PAL needs to get back to

TAN: “I am old. My wish now is for an easy, easy life.”

profitability, one thing that makes it attractive for investors is Philippine tourism is picking up, giving the airlines an earnings growth driver,” said Manny Cruz, an analyst at Asiasec Equities Inc.

Tourism surge

Tourist arrivals in the Philippines rose 13 percent in the first half of the year to 3.36 million, according to tourism department data. The LT Group chairman is seeking a strategic partner for the airline after buying San Miguel Corp.’s stake in 2014, taking control of the venture, PAL Holdings President Jaime Bautista said on August 30. The airline has been in talks with a strategic foreign investor and wants to close the deal by the year’s end.

n japan 0.4692 n UK 66.9462 n HK 6.4973 n CHINA 7.8229 n singapore 37.8546 n australia 40.8896 n EU 61.0222 n SAUDI arabia 13.5365

See “Tan,” A12

Source: BSP (As of 11 September 2017 )

A2 Wednesday, September 13, 2017

BMReports BusinessMirror

State moves to hasten recovery of hospitals, health-care sector Continued from A1

Support institutions

JIMENEZ said even if some patients are covered by health-maintenance organizations or HMOs, their health-insurance cards have limited coverage. “Most of [our patients] are employees [of] call centers and they are covered with cards, but the cards have only limited access,” he said. “So at the end of the day, there are still a lot of pocket that should be shouldered. And that is the problem with our patients, so again, we try to lower the cost so that the bill of the patient will be smaller.” Jimenez said they suggest to the patient, if he or she is still in the hospital, to go the Philippine Charity Sweepstakes Office (PCSO) “because they can get funds there [however] limited”. RA 10932 has mandated the PCSO to provide medical assistance for the basic emergency-care needs of poor and marginalized groups. The law has also mandated the Philippine Health Insurance Corp. to reimburse the hospital or clinic for the cost of basic, emergency care and transportation services given to poor and indigent patients.

Proposed bills

A bill sitting in the Lower House seeks to further prop up the health-insurance coverage of patients. House Bill (HB) 5784, or the Universal Health Coverage bill, seeks to amend RA 7875 or the National Health Insurance Act of 1995. HB 5784 seeks to ensure that “every Filipino citizen shall be provided access to a comprehensive set of health services the cost of which will not cause financial hardship.”

Mobile-data. . . Continued from A1

Winthrop Y. Yu, who chairs the Internet Society of the Philippines, added that the report provides hard evidence to his group’s claim that Internet speeds in the Philippines are inferior when compared to its neighbors. “What is important is to view these reports against other countries in the region, and over time. Crowd-sourced data that measure actual speeds to end-user devices —not servers—still provide the most realistic measurements,” he said. Developed countries like South Korea, Hungary, the Netherlands, Norway and Singapore topped the speed tests sourced by Open Signal during the said period. The Philippines was at the bottom 10 of the 75 countries found in the Open Signal 4G speed report.

Green shoots of recovery

But the report also noted green shoots of recovery, at least when it comes to availability. Globe led in 4G availability, with a 62.6-percent availability. “Both operators, however, saw sizable improvements in their availability scores since the spring. Smart’s availability jumped 12 percentage points in our measurements, while Globe’s availability increased more than 7 percentage points,” it noted. Globe and Smart are in the middle of their three-year network modernization programs, which started when they coacquired the

The measure said inpatient-health services shall be made available at zero copayment for the noncontributor y group and for those who opt for basic accommodation, and at fixed coinsurance rates for all who opt for higher types of accommodation, while outpatient health services shall be made available at zero copayment in public facilities and fixed coinsurance in private facilities. The bill seeks to automatically include every Filipino in a National Health Security Program (NHSP) and giving them entitlement to all benefits therein. Members of the program will be categorized as contributory, or those who are gainfully employed, and noncontributory, referring to indigents, senior citizens and others to be identified by the Department of Social Welfare and Development.

Providing subsidy

ACCORDING to the bill, the NHSP shall serve as a means for the healthy to help pay for the care of the sick and for those who can afford medical care to subsidize those who cannot. HB 5784 also mandates that within three years from its effectivity as a law, every Filipino shall have a guaranteed primary care provider. Within two years, a Philippine Health Security Corp. will implement a comprehensive outpatient benefit, including outpatient-drug benefit, in accordance with the recommendations of a Health Technology Assessment Council. HB 5784 also seeks the creation of a National Health Security Fund that will get funding from contributions from the NHSP, national government allocation and healthassistance funds from the PCSO, the Philippine Amusement and Gaming Corp. and local telco assets of budding telco operator San Miguel Corp. Smart Spokesman Ramon R. Isberto said these signs of improvement may be attributable to the continued rollout of new cell sites and the modernization of the existing, amid the availability of new frequencies. “Internet speeds on mobile have been steadily improving because we have been rolling out LTE to more areas. In this matter, Smart is leading the way,”he said. Isberto noted, however, that in order for more people to enjoy the services better, they must also upgrade to handsets capable of running on more frequencies, like the 700-megahertz (MHz) band. “We also need to point out that it’s not enough to roll out the network. We also need to get more people to start using LTE handset, especially those that use the 700-Mhz frequency and can handle carrier aggregation. That’s one reason speeds are higher in other countries. More people have handsets that can handle low band and carrier aggregation,” Isberto said. The two telcos have been eyeing the 700 MHz for years before they finally decided to copurchase the telco subsidiary of San Miguel for P70 billion to get their hands on the thenunused frequency band. Before the said deal, the two telcos launched a series of campaigns, claiming that the 700-MHz band is one of the keys to unlocking the potentials of mobile Internet in the Philippines. For her part, Globe Spokesperson Yolanda C. Crisanto said the improvements in the state of mobile data in the Philippines will continue,

government units (LGUs). Another key feature of HB 5784 is the mandating of income retention for all government health facilities. The bill authorizes Department of Health (DOH)-retained hospitals, specialty hospitals and hospitals run by LGUs to utilize 100 percent of their income to enhance their capacity and improve the quality of their services. HB5784 also assigns the DOH to supervise the whole health system by setting standards for the implementation of the NHSP.

prescribed in RA 7305, or the Magna Carta of Public Health workers. According to RA 73056, “the ratio of health staff to patient load shall be such as to reasonably effect a sustained delivery of quality health care at all times without overworking the public health worker and over extending his/her duty and service.”

Oppressive

WHILE the capacity to pay is a problem besetting patients, the country’s health sector is also beset with the problem of bed capacity, especially in hospitals that can forego, to a certain extent, revenue. Health Secretary Paulyn Jean B. RosellUbial recently told lawmakers that bed population remains to be one of the challenges in government hospitals, as 800 people compete for one hospital bed. This ratio, to note, is in Metro Manila alone. Ubial said at least 42,000 hospital beds are required to help Filipinos needing medical assistance. According to the head of the DOH, majority of government hospitals are overoccupied by 150 percent up to 250 percent. Outside Metro Manila, the problem is exacerbated by the lack of doctors. Ubial cited the Autonomous Region in Muslim Mindanao (ARMM), where the doctor-patient ratio is 1:4,200. But according to HB 5092 filed by Reps. Edward Maceda and John Marvin C. Servo of Manila, government and private hospitals are mandated to maintain the standard nurse-patient ratio set by the DOH and as

THE proposed bills filed in the lower house reflect this logic: supporting health staff would result to better health care. There’s HB 4340 filed by Rep. Gus Tambunting of Parañaque that seeks to give importance and recognition to health workers who continue to perform their duties under hazardous working conditions by providing equal treatment in the giving of hazard pay. The logic in supporting health staff for better provision of quality health care is something that Jimenez said seems to have been lost in RA 10932, which only increased penalties or, at best, threatens severe sanctions on hospital operators. Under the new law, a presumption of liability shall arise against the hospital, medical clinic, and the official, medical practitioner, or employee involved in the event of death, permanent disability, serious impairment of the health condition of the patient-complainant, or in the case of a pregnant woman, permanent injury or loss of her unborn child as a result of the denial of his or her admission to the health facility. Jimenez said the PHAP plans to file a petition against RA 10932. “Why do we need to have this kind of law, which is too oppressive?”Jimenez said, adding RA 10932 will only cause bankruptcy in small hospitals, especially in the provinces.

as the private sector has committed billions of pesos to make good use of the assets acquired from San Miguel. “As you know the Philippines has just started using the 700-MHz spectrum after a year that the co-use agreement has been signed. It is important to note that only after a year we have made great strides in improving our mobile and fixed Internet speed. This trend will continue, given our commitment to our customers,” she said. Although, without the government efforts in the build-up of information and communications technology (ICT) infrastructure, some areas in the Philippines will continue to remain outside the Internet map. “However, the ICT infrastructure build has to happen soonest, so we call on the government to address the permitting issues and hasten the implementation of the National Broadband Plan,” she added.

not improved the actual Internet experience of the majority of Philippine Internet users,” Yu said. Mirandilla-Santos, who is also an independent ICT researcher, said more than network improvements from existing operators, the government must move to bring in “disruptive reforms”. “If the government is serious in making real change in Philippine Internet, it needs to change the status quo. It’s time for disruptive reforms that would bring in the much-needed competition and that would create the space for more players to enter the market, innovate and compete,” she said. The Philippine Competition Commission has been championing a better competitive environment in the local telco industry, but has since hit a setback, when an injunction case was filed against its review of the P70-billion megadeal among Globe, Smart and San Miguel.

‘Change the status quo’

Govt. . .

Beds, doctors

But while for the two telcos these improvements are already laudable, experts believe that there could have been more development, given that the two operators fought hard to convince Filipinos that the key to improving the quality of the Internet in the Philippines is the unused San Miguel frequencies. “There will always be improvements in technology; these improvements will naturally result in increases in Internet speeds over time. Even with the very limited deployment and use of advanced LTE, the Philippines has shown poor performance on LTE-only studies; and more important, has

Continued from A12

economy,” Pernia said in a statement. Pernia stressed that one way to enhance the impact of the heavy infrastructure spending on the labor market is to tap the domestic economy’s w technical and blue-collar workers for the government’s infrastructure projects and programs. He added that, aside from the BBB, the continued implementation of the K to 12 Program will increase the productivity of the country’s future work force. Increased access to technical and vocational education training programs will also help laborers upgrade their skills and find more employment options. Further, the displacement of workers in the education sector will be mitigated by the more vigorous information dissemination of the K to 12 Adjustment Measure Program of the government. The labor force participation rate, according to the Neda, was lower by 2.6 percentage points, dropping to 60.6 percent in July 2017. The decline was attributed to significant downturn in the female labor force participation rate to 45.5 percent for the period, from 49 percent a year ago. The number of permanent employment further declined, shedding 663,000 jobs across industries, but more severely in agriculture (66 percent) and services (28.4 percent). Short-term employment, on the other hand, increased, with the bulk of it coming from the industry, particularly in construction and manufacturing.

Naia 2 annex. . .

www.businessmirror.com.ph

Continued from A1

Pagcor said PAL was only paying a monthly rental fee of P40 per square meter for the 10-hectare lot, and the carrier’s contract is due to expire on July 11, 2033. The property was sold by the Philippine Reclamation Authority (PRA) to Pagcor on May 12, 2009. Pagcor said the current management’s review of the lease contract with PAL showed that the “lessor is not yet the absolute and registered owner of the property”. “Therefore, since Pagcor has no absolute authority to lease out the property, PAL does not acquire any right to the possession of enjoyment thereof, notwithstanding the contract of lease executed between the two parties,” it said. “The previous board caused the acceptance of P21 million as down payment from PAL but later issued an order to Pagcor’s Treasury Department not to accept the lease payment from PAL since it deemed the lease price of P40 per square meter was grossly disadvantageous to the government,” Pagcor added. The issue arose when PAL, on September 7, revived its proposal for the Naia Terminal 2 annex, which will be built on a 16-hectare area that includes the now-defunct Philippine Village Hotel, the former Nayong Pilipino complex and the Pagcor property. Pagcor said it has requested the Office of the Solicitor General to issue a legal opinion on the matter. But PAL President and CEO Jaime J. Bautista said: “The existing contract between PAL and Pagcor is legal, valid and binding based on the terms negotiated and finalized by both parties three years ago.” PAL said the claim by Pagcor that it was “not yet the absolute and registered owner of the property”, was inconsistent with covenants under the contract signed in 2014. Bautista added the company submitted an unsolicited proposal to build a P20-billion passenger terminal at Nayong Pilipino complex. On July 30, 2014, it entered into a contract of lease in good faith with Pagcor covering the said property at P40 per square meter, effective until July 11, 2033. PAL said it paid an advance rental and security deposit equivalent to five months’ rental, or P24 million.

Nayong Pilipino’s history

MIAA General Manager Ed Monreal provided the BusinessMirror copies of its transaction with the Nayong Pilipino Foundation (NPF) in an attempt by the premier airport to get back portions of the property for its proposed new cargo terminal. On May 20, 2011, then-Miaa General Manager Jose Angel Honrado wrote Malacañang, pleading to get back Nayong Pilipino. He said he wanted to establish a New International Cargo Terminal in the area. Honrado cited the growing need for more cargo space supported by a feasibility study by the Ministry of Economy Trade and Industry of Japan, and endorsed by the Department of Trade and Industry. Honrado said the nine existing cargo terminals, which could handle half a million tons annually, would be insufficient in 2035, when cargo volume would have grown to a high of 1.3 million tons annually. The Miaa also dismissed the complaint of the NPF that the premier airport should be at least 50 kilometers away from the central business districts of Makati and Fort Bonifacio. “While we acknowledge that major airports today should be located at the far outskirts of cities, the travel time to get there should also be considered. Transport infrastructure facilities, such as improved roads and/or fast railway system, should be provided to decrease the travel time to acceptable standard,” it said. The Miaa also disparaged the “urban forest” that Nayong Pilipino has become through the years. The agency said the forest “is not favorable, especially if these forests are just beside the runway and becomes the breeding grounds for birds that are basically hazardous to aircraft in flight.” Bird strikes are common among commercial and general airplanes taking off on runway 13-31. Bodies of dead birds could be found on the runway and taxiways, victims of bird strikes from airplanes. The roosting fowls on Nayong Pilipino would sometimes suddenly fly, alarmed by the noise of propeller engines and then running smack into the fuselage, wings, or propellers of airplanes. On September 29, 2011, then-President Benigno S. Aquino III signed Executive Order (EO) 58 and ordered the NPF “to transfer its remaining 22.3 hectares in Pasay City to the Manila International Airport Authority”. The executive director of NPF, Apolonio B. Anota Jr., did not take the EO 58 sitting down. On October 17, 2011, he wrote Malacañang to say that the transfer of Nayong Pilipino to the Miaa would impact on the government’s environmental conservation policy. “The transfer of 22.3 hectares of Nayong Pilipino land to the Miaa will mean cutting down of the 2,800 grown trees aged 40 years old, disregarding the declared policy of the government

on forest conservation,” Anota’s letter read. Anota said Nayong Pilipino in Pasay is a marshland and has water underneath the soil surface. He added that there are five lagoons with an area of 4.8 hectares with underground springs carved from this marshland and should be left untouched and maintained as ecotourism prospect. “Marsh by nature does not provide firm foundation and cannot support heavy buildings like an international cargo terminal,” he said, adding that massive pilings for foundation “will not guarantee that buildings on marshland will not sink.” “The Folk Arts Theater, Manila International Film Festival and at least a high-rise building under construction in Manila Bay reclamation are sinking,” Anota said. According to Anota, the NPF plans to set up an orchid propagation program “that will ‘orchidize’ Intramuros, Luneta and the Cultural Center of the Philippines”. He added that building over the marshes would prevent the water runoff from the runways 13-31 during rainy seasons to go nowhere. This would result in flooding. “The flooding will also affect thousands of residents in Maricaban, Malibay, Pildira-Villamor areas, Multinational Village, Moonwalk Village, Doña Soledad Avenue and Airport subdivision in Parañaque City,” Anota said. “Nayong Pilipino still exists as a corporation and has not been dissolved,” he added. The NPF’s lengthy appeal to President Aquino was signed by Anota and NPF Chairman Grace P. Quevedo Pangasagan. On December 20, 2011, in reply to the NPF argument, the government’s corporate counsel (GCC), Raoul C. Creencia, wrote to Eduardo V. de Mesa, then chief presidential legal counsel, to say that EO 58“appears to be confiscatory”and that NPF “stands to be deprived of its property without due process of law”. Creencia said the NPF and the GCC are willing to meet de Mesa to resolve and expedite the concerns raised by the NPF. The BusinessMirror was unable to find out what transpired during their meeting or whether it was held at all. Former First Lady Imelda Marcos is cited by Miaa documents as having initiated the construction of the Nayong Pilipino. On May 21, 1960, the NPF was formed, and initially registered with the Securities and Exchange Commission (SEC) as a nonstock, nonprofit institution. On November 6, 1972, NPF was formalized as a government-owned and -controlled corporation by virtue of Presidential Decree (PD) 37. It was also at that time that Mrs. Marcos conceived the “Philippine Village” with the help of a committee of Filipino planners and architects “to promote Philippine art and culture”. Subsequently, on December 16, 1991, under EO 497, the NPF was made an attached agency of the Department of Tourism (DOT) for policy coordination. The Pasay Park operations of the Nayong Pilipino ceased in 2002, while Nayong Pilipino sa Clark Expo, established at the Clark Expo Site in 2006, made NPF its manager and operator. In 2007 President Gloria MacapagalArroyo signed EO 615 that mandated the transfer of the Pasay Park to the 15-hectare property of the Philippine Reclamation Authority area in Parañaque, and the transfer of the 15 hectares of the NPF property to the Philippine Reclamation Authority. EO 58 followed in 2011, instructing the NPF to transfer its remaining 22.3 hectares in Pasay City to the Miaa. The site of the original Nayong Pilipino was beside the domestic airport runway 13-31, which was then under the Civil Aeronautics Administration (CAA), the forerunner of the Civil Aviation Authority of the Philippines. The CAA at that time administers a total land area of 110 hectares, encompassing the Manila International Airport and all the runways and taxiways, parking aprons and movement areas. Included are portions of what should have been the site of a second international runway now occupied by a subdivision. On November 6, 1972, President Ferdinand E. Marcos issued PD 37, ordering the CAA to surrender 46 hectares, through a deed of conveyance, to the NPF. In 1972 the MIA is but a department of the CAA, until it became an independent government agency, the Manila International Airport Authority, in 1982. Marcos’s decree stipulates that the title to the land ceded to the NPF “shall not be transferred by the grantee [NPF] to another party without prior authorization of the President of the Philippines, or mortgage it.” In case the NPF ceases to exist or dissolved, or ceases to need the land for any reason, the 46 hectares shall revert to the national government. In May 2009 Pagcor acquired 15 hectares of the 46 property, after it entered a contract to sell with the PRA. At present, parks in operation under the foundation are Nayong Pilipino Clark Expo and Nayong Pilipino Rizal.

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Lacson firms up case vs Faeldon, other erring Customs personnel By Butch Fernandez

@butchfBM

en. Panfilo M. Lacson Sr. disclosed his office is firming up a graft case set to be filed against resigned Customs chief Nicanor E. Faeldon and other still-unnamed Bureau of Customs (BOC) personnel linked to corrupt activities, which came to light after a container van carrying a P6 billion worth of shabu shipment from China was allowed to pass through Customs without inspection. Lacson confirmed on Tuesday that his legal staff had already completed the documentation of the graft case and is now working to finalize the formal complaint that “I will lodge before the Office of the Ombudsman against Faeldon and some other Customs personnel.” Asked if it includes the 600 kilos worth of shabu smuggled from China, the senator sidestepped the question, saying only that, “[We have] completed documentation and is just finalizing the complaint.” Lacson also declined to confirm if the so-called tara system of collecting bribes to facilitate release of cargoes from Customs was also cited in his prepared complaint against rampant corruption at the BOC, which the senator earlier exposed in a privilege speech at the Senate. “Let’s put it this way. We have already gathered substantial evidence,” Lacson said, adding, “We are just finalizing it.” Soon after it is finalized, Lacson said, his office will refer the case for filing at the Office of the Ombudsman. Lacson did not mention Faeldon by name, but he indicated that the case he is set to file will likely include the resigned Customs chief who voluntarily submitted himself on Monday for detention at the Senate after Faeldon was cited in contempt for refusing to appear before Sen. Richard J. Gordon’s blue-ribbon committee inquiry on corruption at Customs and the P6-billion shabu shipment.

Editor: Vittorio V. Vitug • Wednesday, September 13, 2017 A3

Duterte warns communists: You’re next

By Elijah Felice E. Rosales

@alyasjah

he communist-led New People’s Army (NPA) was warned to brace for military offensives by President Duterte on Monday night, saying the rebels will be the next target of the government once the conflict in Marawi City, Lanao del Sur, has ended.

In his third visit to government troops in Marawi City, Duterte told soldiers to prepare for another war after they finish their duty in the municipality, as the government will target next

NPA rebels, which he accused of insincerity in the peace table. “Our next project will be the Left. There will be no more talks with them, because I don’t want to any-

more,” the President said. Duterte added he will no longer engage the communists in the peace table, unless they declare a cease-fire. The National Democratic Front (NDF), the negotiating arm of the communists, has insisted reforms must be agreed upon and signed first before a ceasefire is declared. “No more cease-fire with the communists. If they want to negotiate, they must declare a cease-fire first,” the Chief Executive said. “But, I say, if NPA rebels kill a soldier or a police, I will delay the peace talks for one month. If they kill another one, I will delay it for another month, and so on and so on,” he added. Peace negotiations with the NDF collapsed in May after the Communist Party of the Philippines ordered

its armed wing, the NPA, to heighten offensives and accelerate recruitment in response to the martial-law declaration in Mindanao. Government chief negotiator and Labor Secretary Silvestre H. Bello III held backchannel talks with NDF chief negotiator Fidel V. Agcaoili in an attempt to resume peace negotiations. It was decided that the fifth round of peace talks be conducted in August. However, the government panel was forced to withdraw again after the NPA in early-August attacked and killed government troops, which saw the death of at least five of Duterte’s security men. Angered, the President directed the government panel to abandon peace negotiations with the NDF until the environment is once more conducive for peace talks.

New DOST app boosts MMDA’s no-contact apprehension policy By Claudeth Mocon-Ciriaco Correspondent

he Metropolitan Manila Development Authority (MMDA) has partnered with the Department of Science and Technology (DOST) to strengthen the implementation of the

no-contact apprehension policy. A technology-based application, dubbed as Catch All, or Contactless Apprehension of Traffic Violators on 24-hours Basis, All Vehicle Detection System, was developed by the DOST. Under the Catch All system, all types of vehicles and violations will

be detected via its smart camera video capture. The system will display the vehicle’s detection and tracking, profiling, plate localization and plate-character recognition for more detailed trafficviolation identification. MMDA Chairman Danilo D. Lim

stated that the said system will be implemented in the whole stretch of Edsa for pilot-testing next month. “Edsa is the busiest major thoroughfare along the Metro, so we want to increase the mobility there with the help of the Catch All technology,” the MMDA chief added.

Economy

A4 Wednesday, September 13, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

Manufacturing output down 1.1% in July–PSA

he growth in consumer spending in the last quarter of the year will also boost the Philippines’s manufacturing output, according to the National Economic and Development Authority (Neda). Based on the Monthly Integrated Survey of Selected Industries (Missi), the country’s manufacturing output declined by 1.1 percent in July 2017, from a growth of 6.8 percent in the previous month and 12.1 percent last year. “We expect higher manufacturing outputs in the coming months as we expect an increase in consumer demand during the [Christmas] holidays, translating to higher production in volume and sales,” Socioeconomic Planning Secretary Ernesto M. Pernia said. Pernia said the strong macroeconomic fundamentals, acceleration of infrastructure development projects and increased investment will fur-

ther provide additional support to manufacturing growth. He said, however, there is a need to expand existing manufacturing enterprises and attract foreign and local investments in the countryside to sustain manufacturing growth. “We need to expand our production capacity to take advantage of strong domestic demand and benefits from free-trade agreements. In line with this, efforts must be given to accelerate the implementation of infrastructure projects and enhance the quality and costeffectiveness of manufacturingrelated services to ensure sustained growth,” Pernia said. Meanwhile, the Philippine Statistics Authority (PSA) said the average capacity-utilization rate in July 2017 for the manufacturing sector was recorded at 83.7 percent.

The PSA said 60 percent, or 12, of the 20 major industries operated at 80 percent and above capacityutilization rates. “The proportion of establishments that operated at full capacity [90 percent to 100 percent] was recorded at almost one-fourth of the total number of establishments [24.8 percent] in July 2017,” the PSA said. “About 55.3 percent of the total establishments operated at 70-percent to 89-percent capacity while almost one-fifth of the total establishments [19.9 percent] operated below 70-percent capacity,” it added. Missi is a report that monitors the production, net sales, inventories and capacity utilization of selected manufacturing establishments to provide flash indicators on the performance of the manufacturing sector. Cai U. Ordinario

Taiwanese firm offers ‘better’ option in gold-ore processing

company based in Taiwan is offering high-yielding, nontoxic leaching chemical solution as an alternative to mercury and cyanide, toxic heavy metals, which are commonly used for gold recovery. The leaching chemical solution, Green Power 860 (GP-860), is a product patented in the United States, Japan and Taiwan. It is an awardwinning noncyanide product recognized during the Invention & New Productions Exposition 2014. Distributed exclusively in the Philippines by Philippines Xe Ye Industry Ltd., a company founded in 2016, GP-860 is a competitively advantageous and responsible

gold-recovery chemical. The chemical gold stripper is created by UWin Nanotech, a Taiwanese eco-friendly metal-stripping solution provider. UWin Nanotech is a subsidiary of Xin Ye International Co. Ltd. Philippinex Xe Ye Industry Ltd. that has a manufacturing plant in Valenzuela City. Philippines Xin Ye Industry Ltd. Inc. said GP-860 is a safe, environment-friendly and a very efficient alternative to the usual gold-leaching cyanide, aqua regia and mercury. In a news statement, Philippines Xin Ye Industry Ltd. Executive Vice President Yu-Sheng Liao said the product has been tested by

the Mines and Geosciences Bureau and passed laboratory testing and analysis by private laboratory company Intertek Philippines. Using GP-860, mining companies will have a 95-percent gold-recovery rate, higher than the industry standard of 55-percent gold recovery during processing of ores, he added. “There is a big clamor for responsible mining practices in the Philippines. Even the big mining companies attempt to uphold the proper standards and safety regulations related to the mining industry,” Liao also told reporters during the recent Mining Philippines 2017 International Conference and Exhibition. Jonathan L. Mayuga

news@businessmirror.com.ph

Asean trade pacts, holiday spending to boost Q4 export-import growth

By Cai U. Ordinario

@cuo_bm

rade agreements in the Asean region and the forthcoming holiday season are likely to boost the country’s trade performance in the last quarter of the year, according to the National Economic and Development Authority (Neda). Socioeconomic Planning Secretary Ernesto M. Pernia said the Asean Economic Community agreed to prioritize trade in goods and trade facilitation, which could boost the country’s chances of increasing its export and import growth. The country’s total trade recorded a 2.3-percent growth in July 2017, higher than the previous month’s 1.5-percent growth. The Philippines trade deficit was also lower at $1.65 billion in July 2017, from the $2.37 billion posted in the same period last year. “For the region, this means a chance to double intra-Asean trade by 2025. For the Philippines, this means strengthened economic ties with our neighbors and a chance to deepen our partnerships,” Pernia said. One such agreement is the Regional Comprehensive Economic Partnership (RCEP) agreement, which, once approved, can account for 60.5 percent of the country’s trade. Asean accounts for 21.7 percent of the Philippines’s total trade.

RCEP includes the 10 Asean member-states and six free-trade agreement partners, which include China, Korea, Japan, Australia, New Zealand and India. “This partnership may facilitate more exchange of goods and ser vices, attract investments, create more jobs and improve the standard of living,” Pernia said. University of Asia and the Pacific (UA&P) School of Economics Dean Cid Terosa agreed, saying the expected increase in the growth of the global economy will also spillover to the Philippines.

I believe that the trade performance will be better moving in the last quarter of the year. The strength of consumer demand worldwide in the last quarter of the year will propel trade growth.” —Terosa

CA upholds cut in taxi-fare rates By Joel R. San Juan

The last quarter of the year is also seen as the strongest quarter for economic growth for the Philippines mainly due to holiday spending. This is a key component in the economy, which remains a consumption-driven one. “I believe that the trade performance will be better moving in the last quarter of the year. The strength of consumer demand worldwide in the last quarter of the year will propel trade growth,” Terosa said. Merchandise trade grew to $12.2 billion, with a 10.4-percent exports growth offsetting the 3.2-percent decline in imports. Total trade from January to July 2017 grew to $87.8 billion, or 10.3 percent, compared with the same period last year. For July, remarkable growth rates in exports were observed in Hong Kong (26.2 percent), Thailand (24.2 percent), South Korea (31.8 percent), Malaysia (31.6 percent) and Vietnam (16.4 percent). For the same period, imports coming from the Asean region grew 8.5 percent, led by Indonesia (44.3 percent) and Vietnam (50.8 percent).

@jrsanjuan1573

HE Court of Appeals (CA) has junked the petition filed by an organization of taxi drivers seeking to stop the Land Transportation Franchising and Regulatory Board (LTFRB) from implementing its 2016 decision lowering the flag-down rate of taxi fare from P40 to P30. In a five-page resolution penned by Associate Justice Maria Filomena Singh, the CA’s Thirteenth Division held that the petition for certiorari with prayer for a temporary restraining order and/or preliminary injunction filed by the Fair Organization of Taxi Drivers of the Philippines Inc. and Alliance of National Urban Poor Organizations Assembly Inc. should be dismissed for failure to comply with its directive to correct the defects in the petition. The CA noted that the assailed consolidated decision issued by the LTFRB on March 8, 2016, attached to the petition is a mere photocopy of the supposed certified true copy of the decision; petitioners failed to attach copies of the pleadings and documents relevant and pertinent to the petition; and petitioners failed to state what government-issued IDs were presented before the notary public, who notarized the verification and certification on nonforum shopping as valid proof of their identities. “To date, however, the petitioners have not submitted their compliance to remedy the foregoing defects despite having been required to do so twice,” the CA said. In its March 2016 decision, the LTFRB granted the petition filed by Rep. Manuel Iway of the First District of Negros Oriental, seeking to adjust taxi-fare rates due to the continued drop of fuel prices. The LTFRB set the permanent flag-down rate of taxi fare nationwide, except for Cordillera Administrative Region (CAR), to P30 and P3.50 for every succeeding 500 meters and P3.50 for the waiting time per 90 seconds. On the other hand, the permanent flag-down rate of airport taxis nationwide, except for CAR, to P30 and P2 for every succeeding 400 meters and P2 for the waiting time per 60 seconds. The permanent flag-down rate of taxis in CAR was set to P30 and P2 for every succeeding 400 meters and P2 for the waiting time per 60 seconds. The CA held that, under Rule 46, Section 3 of the Rules of Civil Procedure, failure to comply with the requirements for filing a petition shall be sufficient ground for the dismissal of the petition.

Self-regulation, dialogues keys in vaping industry

elf-regulation, adherence to high manufacturing standards and quality of imported products are key factors in the success of the e-cigarette industry in the Philippines, representatives of the Philippine vaping community recently told their counterparts in New Delhi, India. Edward Gatchalian, President of Philippine E-liquids Manufacturers Association (Pema), shared their Philippine experience during a business-to-business meeting of manufacturers of e-cigarettes, liquids, equipment, battery and accessories on September 9, where he emphasized the need to raise public awareness of their issues and work with the government to secure reasonable regulation. Pema is an active member of the umbrella Philippine E-cigarette Industry Association (Pecia). “Elevating the level of discourse on e-cigarettes by presenting scientific evidence from independent studies and experts is crucial to our survival. We believe that disseminating accurate and scientifically vetted evidence is the only answer to the lies, fear mongering and propaganda churned out by groups opposed to e-cigarettes. Policy-makers, public health experts and the general public, particularly smokers, need to know about the growing body of scientific evidence showing e-cigarettes are overwhelmingly less harmful than conventional cigarettes and can help smokers quit,” Gatchalian said. Gatchalian added smokers should be able to have the option to choose products that are potentially less harmful, and government regulation should be able to encourage this. An expert independent evidence review by Public Health England concluded that e-cigarettes are around 95 percent less harmful than smoking and that e-cigarettes may be contributing to falling smoking rates among adults and young people in the UK. The Public Health England review found that almost all of the 2.6 million adults using e-cigarettes in Great Britain are current or ex-smokers, most of whom are using the devices to help them quit smoking or to prevent them from going back to cigarettes. It also provides reassurance that very few adults and young people who have never smoked are becoming regular e-cigarette users (less than 1 percent in each group). Public Health England is an operationally autonomous executive agency of the UK Department of Health.

Agriculture/Commodities

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Rice inventory declined to 2.02 MMT in August

he country’s rice inventory as of August 1 declined by 3.38 percent to 2.028 million metric tons (MMT), from 2.098 MMT recorded a year ago, according to the latest report of the Philippine Statistics Authority (PSA). Despite the decline, the PSA said total rice inventory during the period would be enough to supply the rice-consumption requirement of Filipinos for 60 days. “Stocks in the households would be enough for 22 days, those in commercial warehouses for 34 days and those in NFA depositories for three days,” the PSA said in its monthly report, titled “Rice and Corn Stocks Inventory August 2017”, published on September 11. Of the rice inventory as of August 1, the PSA said 36.9 percent were with the households, 57.74 percent were in commercial warehouses and 5.36 percent were in NFA depositories. About 69 percent of NFA stocks consisted of imported rice. PSA data showed that NFA stocks during the period reached 108,690 MT, while commercial warehouses accounted for 1.170 MMT. Households accounted for 748,340 MT. “Compared with the previous year, rice stocks in households and in commercial warehouses grew by 8.56 and 88.38 percent, respectively,” the report read. “However, stocks in the NFA depositories dropped by 86.21 percent,” it added. On a monthly basis, rice stocks across all sectors were lower compared to the July record. The PSA said stocks in the households went down by 24.78 percent, while stocks held by commercial warehouses declined 2.26 percent. Rice stocks in NFA depositories fell by nearly 30 percent month-on-month. PSA data showed that the NFA’s rice stockpile of 108,690 MT was the lowest held by the food agency since February 1996, when inventory reached 140,600 MT. Data from the government statistical agency also showed that the 2.028-MMT inventory was the lowest since October 2016, when national stockpile hit 2.286 MMT. The government periodically monitors rice inventory to determine whether it would need to import the staple to boost local stocks. PSA data also showed that total corn-stock inventory more than doubled to 696,460 MT, from last year’s record of 40,140 MT. However, the corn-stock inventory as of August 1 was 1.88 percent lower than the 683,620 MT recorded in July. The PSA said the bulk of corn-stock inventory in August, or 87.29 percent, was in commercial warehouses, while households accounted for 11.99 percent. NFA depositories accounted for only 0.72 percent. Corn stocks in commercial warehouses amounted to 607,960 MT, 83,480 MT in households and 5,540 MT in NFA warehouses. “Corn stocks in all sectors increased compared with their levels the previous year. Stocks in the households grew by 107.99 percent, in commercial warehouses by 118.81 percent, and in NFA depositories by 4,638.68 percent,” the report read. “Month-on-month, corn stocks in the households increased by 28.80 percent. On the other hand, commercial warehouses and in NFA depositories decreased by 0.87 percent, and 9.36 percent, respectively,” it added. Jasper Emmanuel Y. Arcalas

BusinessMirror

Editor: Jennifer A. Ng • Wednesday, September 13, 2017 A5

Farm-gate price of chicken slowly recovering—BAI

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By Jasper Emmanuel Y. Arcalas

@jearcalas

he live weight price of chicken has started to recover, but poultry growers, particularly those in areas struck by bird flu, have yet to reload their flocks, according to the Bureau of Animal Industry (BAI).

Manolette Gaerlan of the BAI Livestock Group said the prevailing farm-gate price of broiler chicken as of September 11 was at P51 per kilogram, 36 percent higher than the P37.50 per kg recorded a week ago. Gaerlan said, however, that the recovery of the farm-gate price of chicken is “slower than expected”. “The demand for broiler chicken has started to pick up, that’s why farm-gate

price has started to increase. However, the pace of increase is not that fast. But at least, demand for chicken is slowly coming back,” Gaerlan told the BusinessMirror. “Poultry growers have adopted a waitand-see attitude when it comes to the birdflu issue to make sure that they will not incur losses again. They are awaiting the final results of government procedures and want to find out if the Philippines

is already bird flu-free,” she added. What’s compounding the broiler supply situation, Gaerlan said, is the so-called third quarter syndrome, which pertains to slower chicken production during the July-to-September period due to extreme weather conditions. “Changing weather conditions during the third quarter make chickens more prone to sickness,” she said. Figures from the BAI also showed that the price of dressed chicken has also gone up to P130/kg from last week’s average of P110/kg, according to Gaerlan. As poultry growers remained hesitant to reload their flocks, Gaerlan said the price of day-old chicks went down below its normal average farm-gate price. She said the farm-gate price of day-old chicks as of September 11 settled at P15 per kg, 40 percent lower than the usual P25 to P27 per kilogram. “The price of day-old chicks is low because there are no takers,” Gerlan said. Data from the BAI also showed that the price of pork at the retail level

remained at P240 per kg at the height of the bird-flu outbreak. Gaerlan said this indicates that the outbreak did not result in a dramatic shift in the meat consumption of Filipinos. “Perhaps, there was a shift in demand, but the shift was not that high enough to make an impact on pork prices. Besides, pork is expensive compared to chicken,” she said. “There is about P100 difference in the retail price of chicken and pork, so why will you shift to pork? That P100 difference is onerous for consumers,” Gaerlan added. Earlier, United Broilers Raiser Association (Ubra) President Elias Jose Inciong made an assurance that the country has ample supply of dressed chicken for the holidays. Inciong said the farm-gate price of broiler started to recover after the Department of Agriculture (DA) lifted the ban on the shipment of poultry products from Luzon to other parts of the country. The farm-gate price of broiler chicken fell to P15 per kg, after the government confirmed that bird flu struck poultry farms in Central Luzon. “The DA may have announced that the crisis is over, but the impact of the bird flu on our operations is still there. Perhaps, when we get rid of the inventory that was not sold in the past weeks then the flow of trade may normalize,” he said in a news briefing on September 5. The BAI, an attached agency of the Department of Agriculture, said sentinel birds would only be released in affected farms after the cleaning and disinfected process has been completed and the prescribed rest period has been observed. BAI Animal Disease and Control Division chief Arlene Vytiaco told the BusinessMirror that the cleaning and disinfection process in all the AIaffected farms are still ongoing. After the cleaning and disinfection process, poultry growers have to wait 14 days for the final sanitation process. A 21-day rest period would also be observed before sentinel birds are released in farms. BAI will then monitor the sentinel birds for 35 days and will conduct five laboratory tests on samples to determine whether the birds are free from AI.

Philippines, Malaysia keen on joint ventures for palm oil Macadamias to marigolds spark hope for Zimbabwe farm reboot By Catherine N. Pillas @c_pillas29

he Philippines and Malaysia discussed the possibility of setting up joint ventures for palm-oil plantations during the Asean Economic Ministers Meeting (AEM), according to the Department of Trade and Industry (DTI). AEM Chairman and Trade Secretary Ramon M. Lopez said the Philippines and Malaysia held bilateral meetings where travel-tax exemptions were also tackled. “We talked about the feasibility of pursuing joint ventures for oil plantation in the Philippines, and we’d like to pursue discussions therein. We can start with 200 hectares to 300 hectares and if that has potential, we can go into processing,” Lopez told reporters on Monday. The discussion on palm oil is a follow-up to President Duterte’s official visit to Malaysia last year, when investment opportunities were first broached. Aside from palm-oil investments, the Philippines and Malaysia are also targeting to strengthen their cooperation in tourism. According to Lopez, in a Philippine-Malaysia Business Council meeting, where Malaysian low-cost airline AirAsia was included, there were requests to waive the travel tax, which applies mostly to Philippine nationals. “There’s also a request, that we’re studying, to waive the P1,600 travel tax. This may seem small but it matters a lot for a budget airline known for offering low-ticket prices,” he said. “We were shown a feasibility study of the effect if the tax is waived. There’s a multiplier effect in terms of increase of tourists and the revenues foregone can easily be recovered by the amount of business in terms of more tourists,” Lopez added. The DTI chief said the government will discuss the possibility of scrapping the travel tax with Tourism Infrastructure and Enterprise Zone Authority, which collects it. Prominent Malaysian companies operating in the Philippines include Resorts World Hotel, Shangri-La Hotels, the Malayan Banking Corp., Mitra Energy Philippines and AlloyMtd (formerly MTD Capital Bhd), which recently upgraded the South Luzon Expressway.

alking through rows of macadamia trees on her farm in eastern Zimbabwe, Shalet Mutasa proudly displays a set of soil-quality results showing the fields’ conditions are improving. This will be her third harvest of the creamy white nuts after switching from less-profitable corn. Mutasa, who is in her mid-50s and was allocated the previously white-owned land by the government, is targeting 20 metric tons of production. That’s nearly double last year’s crop and a big jump from the half a ton she managed the first year. “It will be third-time lucky,’’ she said. “We initially grew maize but later realized the crop wasn’t rewarding financially,” she said, using another name for corn. The expansion of niche and export-oriented crops, like macadamias and flower seeds, may signal the sustained return of Zimbabwean farm products to international markets after a 16-year hiatus caused by the turmoil of the government’s land-reform program. In 2000 President Robert Mugabe’s supporters began an often-violent seizure of most of the country’s white-owned farmland.

Production slump

The program drew international condemnation of Zimbabwe’s government and slashed agricultural production, decimating foreign-exchange earnings from tobacco and turning the country from a corn exporter to an importer of its staple food. As a percentage of GDP, “Zimbabwe’s agricultural sector remains low at around 10 percent—obviously much lower than at the start of the 21st century,” Chantelle Matthee, an economist at NKC African Economics in Paarl, South Africa, said by e-mail. “Nevertheless, a large proportion of the population is currently dependent on agricultural activities, which is important for income generation.” In western Zimbabwe, Netsai Sibanda oversees almost 20 workers harvesting marigolds on her three-hectare farm. Sibanda, who also switched from a more traditional crop—in this case cotton—grows the flowers to extract

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seeds that she sells to a Dutch distributor, which ships them all over the world. Just two decades ago, Zimbabwe was the world’s sixthbiggest rose producer, sending the flowers to Europe from greenhouses and storage centers that were among the most advanced in Africa. The picture today is vastly different, as small-scale black farmers focus rather on flower seeds, using varieties and species that don’t require greenhouses or sophisticated irrigation systems. Zimbabwe’s economy has halved in size since 2000 and the country faces deepening unemployment, the collapse of basic services and a cash shortage after abandoning the Zimbabwean dollar in 2009 in favor a basket of currencies, including the US dollar and South Africa’s rand. The decline of farming output was a forerunner of the country’s economic collapse. About one in four Zimbabweans is dependent on some form of aid to feed themselves, according to the United Nations. Sibanda and her fellow growers in Gokwe are expected to produce as much as 6 tons of flower seeds, according to Charlene Mathonsi, a coordinator for Lion Farm, which

contracts the farmers. The crop is more attractive than cotton because prices are agreed upfront, Sibanda said. “Flowers are smart, they give life to the area,’’ she said in an interview. “When they saw what we were getting paid, now others want to go in and grow flowers.’’ While the flower seeds are shipped to the Netherlands before distribution all over the world, most of Zimbabwe’s macadamia exports are to China, said Lazarus Dhliwayo, a technical adviser to the growing association in Chipinge where Mutasa’s farm is located. The group, which includes large-and small-scale farmers, is targeting production of 15,000 tons of macadamias this year, compared with 8,000 tons in 2016, he said. Australia, South Africa and Kenya were the top producers of macadamias in 2015, according to data from the International Nut and Dried Fruit Council. Moses Mabvuu, a 66-year-old pensioner, planted 750 macadamia trees on his 3-hectare farm in 2014 and plans to add another 100 trees next year, he said. “It’s almost good-bye for growing maize,’’ Mabvuu said. Bloomberg News

A6 Wednesday, September 13, 2017

The World BusinessMirror

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

California governor agrees to immigrant protections

those already filed in a lawsuit last week by 15 other states and the District of Columbia. Attorney generals for the states of Maine, Maryland and Minnesota joined California’s lawsuit. More than 200,000 of the 800,000 participants in the Daca program live in California. The University of California has also filed a legal challenge to ending the program. Also on Monday Mexico Foreign Secretary Luis Videgaray said he and other Mexican diplomats are urging members of Congress to make the Daca program permanent and that he is not expecting an immediate influx of hundreds of thousands of young people back to Mexico. AP

James Allison

Robert Schreiber

US Immigrations and Customs Enforcement (ICE) had no immediate comment. California already has some of the most protective laws in the country for immigrants detained by law enforcement. The state has limited the ability of police to detain immigrants for federal deportation agents since 2014, and requires jailers to inform inmates if agents are trying to detain immigrants. Illinois recently passed even more protective legislation that bars law enforcement from detaining immigrants solely for deportation, said Shiu Ming Cheer, senior staff attorney at the National Immigration Law Center. A handful of cities including Chicago and San Francisco, meanwhile, are refusing to cooperate with new federal requirements for tougher immigration enforcement, prompting the Trump administration to threaten to withhold funding. Kern County Sheriff Donny Youngblood, a critic of the initial state bill, said sheriffs would be discussing the latest version on a call on Tuesday and declined to discuss the details. He noted that ICE generally seeks cooperation on people convicted of major crimes. Immigrant-rights groups held a noisy rally in the Capitol last week urging Brown and de Leon not to back off from the strict immigrant protections de Leon originally proposed in the wake of Donald J. Trump’s election as president. But the activists generally praised the com-

IN this September 1 file photo, Loyola Marymount University student and dreamer Maria Carolina Gomez joins a rally in support of the Deferred Action for Childhood Arrivals program, outside the Edward Roybal Federal Building in Los Angeles. AP

promise with Brown. “We hope that it will serve as a model for other states and encourage them to adopt similar protections,” said Jenny Pasquarella, immigrant-rights director for the American Civil Liberties Union of California. “This is where the dragnet is.” The legislative deal was announced the same day that California Attorney General Xavier Becerra said he’s filing a lawsuit over the Trump administration’s decision to phase out the Deferred Action for Childhood Arrivals (Daca) program, which protects young immigrants living in the US illegally from deportation. The lawsuit’s legal arguments largely mirror

ENEVA—More than 3 out of 4 of migrants aged 14-24 report being subjected to forced labor, sexual abuse and other forms of exploitation while attempting to cross the Mediterranean Sea from Libya to Italy, the United Nations’s children’s and migration agencies said in a report on Tuesday. Children from central and southern Africa face more abuse, including discrimination and racism, relative to young migrants from other places, United Nations Children’s Fund (Unicef) and the International Organization for Migration said in the report, “Harrowing Journeys.” Among its recommendations are for European Union authorities to set up “legal migration pathways” for children and youths to reach the continent and to seek alternatives to the detention of young people caught immigrating illegally. The report was based on accounts from some 22,000 migrants and refugees, about half of them children and youths. It says 77 percent of respondents between the ages 14 and 24 reported having experienced exploitation—defined as abuse or violence that benefits the perpetrator—that could take the form of sexual exploitation, captivity, forced labor, child marriage and violence and abuse. The UN migrant agency recently noted a sharp drop-off in crossings on the dangerous sea route between Libya and Italy, where nearly 2,400 people have died so far this year while making the attempt. The “central route,” as it is known, is by far the deadliest for migrants across the Mediterranean. “As we see a significant drop in the numbers of people on the move across the central Mediterranean, we cannot be lulled into believing that fewer children are at risk or fewer lives are being lost,” Unicef Spokesman Sarah Crow said. “We are concerned that ‘out of sight and out of mind’—in sometimes inaccessible areas—could mean that children and other refugees and migrants will suffer even more,” Crow said. “We may not always be able to hear their stories, and their perpetrators will go unpunished.” AP

ACRAMENTO, California—California Gov. Jerry Brown and the state Senate leader said on Monday they’ve agreed to changes in proposed legislation that would further restrict interactions between law-enforcement officers and federal immigration agents. The agreement came on the same day the state sued the Trump administration over its decision to end a program that shields young immigrants from deportation. Senate President Pro Tem Kevin de Leon, Democrat-Los Angeles, agreed to changes demanded by Brown following fierce opposition from sheriffs and other law-enforcement officials. The bill would still prohibit state and local police from asking about people’s immigration status or enforcing federal immigration laws. However, following Monday’s changes, it would preserve the ability of law officers to cooperate on federal task forces as long as the task force doesn’t specifically work on immigration enforcement. Police and jail officials would be able to notify United States immigration agents if they detain people with convictions for some 800 crimes, including serious felonies, battery, assault and sexual crimes. Immigration agents would still be allowed to interview immigrants in jail, and immigration agents would not be barred from accessing state databases. “This bill protects public safety and people who come to California to work hard and make this state a better place,” Brown said in a statement. Brown and de Leon reached their agreement in the last week of the legislative year. The Assembly and Senate must approve the measure by Friday or delay action until next year.

More than 3 of 4 Europe-bound youth migrants report abuse–U.N.

Two U.S. scientists awarded Balzan Prize for cancer research

ILAN—Two United States scientists, whose work has contributed to creating immunological treatments for cancer, are among the winners of this year’s Balzan Prizes, announced on Monday, recognizing scholarly and scientific achievements. James Allison of the University of Texas MD Anderson Cancer Center and Robert Schreiber of the Washington University School of Medicine were cited for their work on antibody treatments that has increased the survival of patients with metastatic melanoma. The Balzan Foundation awards two prizes in the sciences and two in the humanities each year, rotating specialties to highlight new or emerging areas of research and sustain fields that might be overlooked elsewhere. Recipients receive 750,000 Swiss francs ($790,000), half of which must be used for research, preferably by young scholars or scientists. Nobel Prize-winner Jules Hoffman, a presenter of the awards, said the work focusing on using the immune system to fight cancer, expanding from the traditional treatments of removal, radiation and chemotherapy, has already had success in 25 percent to 30 percent of melanoma patients in a study who had previously gone through the traditional battery of treatments.

It is now being developed for small-cell lung cancer and rectal cancer. Other winners are Belgian astrophysicist Michael Gillon, Germans Aleida and Jan Assmann and Indian economist Bina Agarwal. Gillon was cited for his work that has helped map new solar systems from the comfort of planet Earth, using robotic telescopes instead of much more costly satellites. The Assmanns are a married couple recognized for their work presenting collective memory “as a requirement for the formation of the identity of religious and political communities”. Agarwal, a professor at the University of Manchester, was recognized in the genderstudies category for her “heroic” work studying women’s contributions to agriculture in India. This year the Balzan Foundation also awarded a fifth prize, in international relations, which was deferred from last year after the committee failed to reach agreement on a winner. It went to Robert O. Keohane of the Woodrow Wilson School at Princeton University, best known for his influential 1984 book, After Hegemony: Cooperation and Discord in the World Political Economy. Prizes will be awarded in Bern, Switzerland, on November 17. AP

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

U.K. lawmakers back key Brexit bill; fight still looms

ONDON—British lawmakers voted a key Brexit bill past its first big hurdle in Parliament early Tuesday. But many legislators branded the bill a government power grab, and vowed to change it before it becomes law. After a debate that stretched past midnight, the House of Commons backed the European Union (Withdrawal) Bill by a vote of 326 to 290. That means lawmakers approve the bill in principle, but the government will now face attempts to amend it before a final vote later this year. A key plank in the Conservative government’s Brexit plans, the bill aims to convert thousands of EU laws and regulations into United Kingdom domestic laws on the day Britain leaves the bloc in March 2019. Prime Minister Theresa May said the measure provides “certainty and clarity” ahead of the divorce. Brexit Secretary David Davis said that without it, the UK faces “a chaotic exit from the European Union.” But the opposition says it would give the government dangerous new powers to amend laws without parliamentary scrutiny. Since Britain joined the EU in 1973, thousands of EU laws and regulations have come to operate in the UK, covering everything from environmental protection to employment rules.

Power grab

JUSTICE Secretary David Lidington told lawmakers that the bill is needed to ensure Britain has “a functioning and coherent statute book and regulatory system the day we leave.” It calls for incorporating all EU laws into UK statutes so they can then be kept, amended or scrapped by Britain’s Parliament. The government says that will fulfill the promise of anti-EU campaigners during last year’s referendum to “take back control” of the country from Brussels to London. Critics say the bill gives the government too much power, because it allows ministers to fix “deficiencies” in EU law without the parliamentary scrutiny usually needed to make or amend legislation. Such measures are often referred to as “Henry VIII powers” after the 16th-century king’s bid to legislate by proclamation. Opponents worry the government could use the powers to water down environmental standards, employment regulations or human-rights protections. Labour Party lawmaker Chris Bryant said the bill “pretends to bring back power to this country, but it actually represents the biggest peacetime power grab by the executive over the legislature, by the government over Parliament, in 100 years.” Members of Labour, the main opposition party, were ordered by their leader to vote against the bill. A few rebelled or abstained, wary of being seen as trying to frustrate voters’ decision to leave the EU.

Line-by-line scrutiny

PRO-EU lawmakers from the governing Conservatives largely backed the bill, saying they would try to amend it at the forthcoming committee stage. The government needs to pass the bill to keep its Brexit plans on track. It has been almost 15 months since Britain voted to leave the 28-nation bloc, and nearly six months since the government triggered the two-year countdown to exit. Since then, negotiations between Britain and the EU have made little progress on key issues, including the status of the IrelandNorthern Ireland border and the amount Britain must pay to settle its financial commitments to the bloc. May’s authority took a battering when she called a snap election in June, seeking to increase her majority in Parliament and strengthen her negotiating hand. The move backfired when voters stripped the Conservatives of their majority, leaving May reliant on support from a small Northern Ireland party to govern. Opposition lawmakers, backed by some Conservatives, say they will try to amend the bill at the next stage, when it receives lineby-line scrutiny before a final vote. Conservative lawmakers signaled that the government would likely agree to water down the contentious Henry VIII powers. Edward Leigh, a Conservative who backs Brexit, said the government should “be generous...accept some of the amendments” proposed by lawmakers. AP

The World BusinessMirror

Wednesday, September 13, 2017 A7

Cuba’s decrepit buildings no match for Hurricane Irma

AVANA—The historic but often decrepit buildings of Havana and other colonial Cuban cities couldn’t stand up to Hurricane Irma’s winds and rainfall, collapsing and killing seven people in one of the highest death tolls from the storm’s passage through the Caribbean.

Authorities said on Monday that three more people were killed by falling objects or drowning, pushing the death toll to 10 in Cuba, and at least 24 others in the Caribbean. It was Cuba’s worst hurricane death toll since 16 died in Hurricane Dennis in 2005. Most of Cuba’s grand old buildings were confiscated from the wealthy and distributed to the poor and middle classes after a 1959 revolution that promised housing, health care and education as universal rights. But with state salaries of about $25 a month and government agencies strapped for cash, most buildings have seen little maintenance in decades. Tropical rain and sea spray have chewed into unpainted facades and seeped through unpatched roofs. Trees have sprouted from balconies. Iron rebar has rusted, sloughing off chunks of powdery concrete. Damage wasn’t limited to Havana. More than 100 houses in a small town on Cuba’s coastline were destroyed in Matanzas Province when Irma swept through the area, leaving hundreds of people homeless. In every neighborhood, residents talk warily about the buildings that are one hurricane away from total collapse. That hurricane came last Saturday and Sunday as Irma ground up the northern coast, sending chest-high seawater six blocks into Central Havana and blasting the city with 60 miles-per-hour winds.

Bad shape

ON Galeano Street in Central Havana, a fourth-floor balcony dropped onto a bus, carrying Maria del Carmen Arregoitia Cardona and Yolendis Castillo Martínez, both 27. In the cities of Matanzas, Ciego de Avila and Camaguey, three men in their 50s and 60s died in building collapses. The government noted in a sternly worded news release that each “did not observe the behavior recom-

mended by Civil Defense.” On Animas Street in Central Havana, 51-year-old Walfrido Antonio Valdes Perez was caring for his older brother, Roydis, who worked as a florist until he was diagnosed with HIV. They lived on the second floor of building divided into 11 apartments, many of them divided by crude intermediate floors known as “barbeques.” After midnight, as wind whipped the neighborhood, a wall collapsed onto the roof of their building, crushing the two brothers to death. No one noticed until the next morning, when neighbors saw a foot sticking out of the rubble. “We felt something, but no one imagined the roof and barbeque had collapsed,” said homemaker Yudisleidis Mederos, 34. “These building are in really bad shape. Their room was the best one.” She and her neighbors remembered Roydis, 54, as a kind and helpful man who had become a virtual family member, helping care for their children, feed them and put them down for naps. Neighbors said they were ready to evacuate last Saturday but emergency officials never asked them to leave.

Shortages, looting

ON Monday they showed the cracks running through the walls of their building, water leaking through the halls and living spaces, naked metal beams and loose gas pipes and electric cables. “We’ve been trying to fix things for years. It’s a shame that maybe they’ll come now, only after two people have died,” said homemaker Laritza Penalver, 49. Havana was in recovery mode on Monday, with crews cleaning away thousands of fallen trees and electric restored to a handful of neighborhoods. Schools were closed until further notice. President Raul Castro issued

A MAN walks past debris caused by Hurricane Irma in Charlotte Amalie, Saint Thomas, US Virgin Islands, on September 10. The storm ravaged such lush resort islands as Saint Martin, Saint Barts, Saint Thomas, Barbuda and Anguilla. AP

a message to the nation that didn’t mention the deaths, but described damage to “housing, the electrical system and agriculture.” He also acknowledged destruction in the northern keys, where Cuba and foreign hotel management firms have built dozens of all-inclusive beach resorts in recent years. The Jardines del Rey airport serving the northern keys was destroyed, the Communist Party newspaper Granma reported, tweeting photos of a shattered terminal hall littered with debris. “The storm hit some of our principal tourist destinations but the damage will be repaired before the high season,” starting in November, Castro wrote. To the east, in the Leeward Islands known as the playground for the rich and famous, governments came under criticism for failing to respond quickly to the hurricane, which flattened many towns and turned lush, green hills to a brown stubble. Residents have reported food, water and medicine shortages, as well as looting.

Unprecedented catastrophe

BRITISH Foreign Secretary Boris Johnson defended his government’s response to what he called an “unprecedented catastrophe” and promised to increase funding for the relief ef-

fort. Britain sent a navy ship and almost 500 troops to the British Virgin Islands, Anguilla and the Turks and Caicos islands. The United States government said it was sending a flight on Monday to evacuate its citizens from Saint Martin, one of the hardest-hit islands where 10 people were killed. Evacuees were warned to expect long lines and no running water at the airport. A Royal Caribbean Cruise Line ship was expected to dock near Saint Martin to help in the aftermath, and a boat was bringing a 5-ton crane capable of unloading large shipping containers of aid. A French military ship was scheduled to arrive on Tuesday with materials for temporary housing. About 70 percent of the beds at the main hospital in the French portion of Saint Martin were severely damaged, and more than 100 people needing urgent medical care were evacuated. Eight of the territory’s 11 pharmacies were destroyed, and Guadeloupe was sending medication. French President Emmanuel Macron was scheduled to arrive in Saint Martin on Tuesday to bring aid and fend off criticism that he didn’t do enough to respond to the storm. The “whole government is mobilized” to help, Interior Minister Gerard Collomb said. AP

Hurricanes Harvey, Irma to slow U.S. economy but rebound should follow

ASHINGTON—With businesses disrupted, fuel and chemical refineries out of commission and consumers struggling to restore their lives, Hurricanes Harvey and Irma will likely pack a tough double-whammy for the United States economy. Nearly one-fifth of the nation’s oil-refining capacity has been shut down because of Harvey, and fuel production has dropped sharply as a result, according to Bank of America Merrill Lynch. Consumers will also spend less in the immediate aftermath of the storms. Even those ready to make purchases will face closed storefronts and dark restaurants. Irma will cause tourists to delay—and in many cases never take—trips to Florida’s beaches or Disney World. Chemical refineries have also been closed, reducing the production of plastics. Damage estimates from the two storms are still early, particularly for Irma. Hurricane Harvey will likely cost up to $108 billion, according to Bank of America Merrill Lynch, which would make it the second-mostexpensive hurricane after Katrina.

Economic toll M A R K Z andi, chief economist for Moody’s Analytics, estimates that Irma will cause $64 billion to $92 billion in damage.

While the economic toll pales beside the human costs, analysts estimate that the nation’s annualized growth rate will be one-half to one full percentage point slower in the July-to-September quarter than it would otherwise have been. But repair work, reconstruction and purchases of replacement cars and other goods should provide an offsetting boost later this year and in early-2018. “Construction activity will rocket in the affected areas,” predicted Ian Shepherdson, chief economist at Pantheon Macroeconomics. “Households’ spending on building materials, furniture, appliances and vehicles will all be much higher than otherwise would have been the case.” Catastrophic natural disasters often don’t depress the US economy in the long run. The destruction of property reduces the nation’s total wealth. But all the rebuilding and restoration work tends to stimulate economic growth in the following months. The rebuilding can take time. After Hurricane Katrina bashed New Orleans in 2005, it took seven months for home building permits in the city to return to their prehurricane levels, according to Goldman Sachs.

Harvey and Irma will slice growth in the July-to-September quarter by 0.8 percentage point to an annual rate of 2 percent. But they forecast a healthy rebound, with annualized economic activity 0.4 percentage point higher in the October-to-December quarter, 0.2 percentage point higher in the January-toMarch quarter next year and 0.4 percentage point higher in the April-to-June period. Irma has so far wreaked much less damage than initially feared, with Citi analyst James Naklicki estimating total costs could reach $50 billion, down from earlier estimate of as much as $150 billion. Still, more than 7 million people have lost power because of Irma, with most of them living in Florida. The state makes up about 5 percent of the US economy. Flooding from Irma could affect about $1.2 billion of the state’s crops, Bank of America Merrill Lynch estimates, and elevate food prices. With oil refineries along the Gulf Coast shut down, gas prices have jumped about 30 cents a gallon nationwide, on average, since Harvey made landfall in late-August. That will temporarily reduce Americans’ spending power because they will have less money to spend on other items.

Less money

Higher gas

ECONOMISTS at Goldman estimate that

THE impact of Harvey has been particularly

harsh in Houston, the nation’s fourth-largest city. The entire metro area accounts for about 3.2 percent of the nation’s economy. Higher gas costs will likely increase measures of inflation in the coming months, economists say, but the rise will likely be small and temporary. Housing costs could rise, too. The cost of lumber has already been rising because of the wildfires in the western US, said John Mothersole, an economist at IHS Markit. Hurricane-related repairs and rebuilding could push prices higher. Nearly 90 percent of US chemical-refinery capacity has been closed down, Mothersole said. That could make all sorts of plastics more expensive, including PVC pipes and other building materials. The Federal Reserve (the Fed), which adjusts interest rates to keep inflation in check, will likely discount any increase in prices. “The Fed is going to view this, correctly, as a transitory event,” Mothersole said. Still, Fed policy-makers may have a difficult time analyzing the broader underlying health of the economy because of the hurricane distortions. For example, the number of jobs added in September could be 20,000 to 100,000 lower because of storm disruptions, Goldman Sachs estimates. AP

Banking&Finance BusinessMirror

A8 Wednesday, September 13, 2017 • Editor: Jun B. Vallecera

Peso strength only temporary

By Bianca Cuaresma |

@BcuaresmaBM

he local currency’s newfound strength should prove shortlived, according to a private bank economist, as conditions turn less favorable in the coming weeks.

In a research note, ING Bank Manila Senior Economist Joey Cuyegkeng said seasonal factors and renewed interest in the US dollar could bear down on the peso over the near term no matter that its strength significantly recovered from weeks of trading in the 51-per-dollar territory. Data from the PDS Group showed

the peso once again trading at the 50-per-dollar level in recent days, completing Monday’s trade, for example, at 50.905 to a dollar. The peso earlier pushed past 51, its lowest since 2006. Cuyegkeng said, while the peso gained strength last week along with most Asian currencies, acquisition-

related inflows—along with higher August inflation and positive external developments—helped strengthen the peso in recent days. “We had anticipated acquisitionrelated capital inflows as deadlines approach…. Once acquisition-related inflows have been absorbed by the market, seasonally high import demand may again dominate and push the Philippine peso weaker as early as late next week or end of this month,” Cuyegkeng said. According to him, the demand for US dollars will return to dominate the market once the inflows have been absorbed and liquidity conditions normalize. One other local analyst also said capital goods imports needed to meet the government’s infrastructure buildup program have contributed to the recent slide in the value

of the local currency. Bangko Sentral ng Pilipinas (BSP) Governor Nestor A. Espenilla Jr. previously said the modest and gradual depreciation of the peso is a reflection of a “dynamic price-discovery process” formed on the back of strong and sustained imports growth as the economy continues to expand. Time and again Espenilla repeatedly expressed the BSP’s “readiness to intervene” and “neutralize the activity of speculators in the market” to smoothen excess volatilities in the foreign-exchange market. On Tuesday the BSP suspended check-clearing operations following the announcement of work suspension in government and private offices in Metro Manila, allowing both the stock and foreign-exchange markets to suspend trading, as well.

Asean banks MSME-enhancing financial innovation

anks and so-called financial technology firms (fintechs) prepare a two-year test of digital financial solutions that widen the markets of micro, small and medium enterprises (MSMEs) in countries grouped under the Asean With the support of the Asean Bankers Association (ABA), Association of Banks of Singapore (ABS) and Bankers Association of the Philippines (BAP), the International Finance Corp., which is a member of the World Bank Group and the Monetary Authority of Singapore, plan to develop a cloud-based data-sharing technology, along with computer applications, through applicationprogramming interfaces and the digital currency account system known as the blockchain. The initiative is under the Asean Financial Innovation Network that aims to connect financial

institutions and create cost-efficient financial services for underserved individuals, including entrepreneurs. According to a survey by the Organization for Economic Cooperation and Development in 2015, MSMEs claim they remain undercapitalized because of lack of access to and options for financial services, along with low financial literacy. MSMEs account for the largest group of businesses in the Asean, with 88.88 percent to 99.9 percent of total establishments in Asean countries. They also contribute 51.7 percent to 97.2 percent of total employment, 30 percent to 53 percent of national income and 29 percent of total exports in the region. Through the Fintech Marketplace Sandbox this year, results of the experiment will be continuously discussed by the bank organizations

North Korea hackers step up bitcoin attacks

orth Korea appears to be stepping up efforts to secure bitcoin and other cryptocurrencies, which could be used to avoid trade restrictions, including new sanctions approved by the United Nations Security Council. Hackers from Kim Jong Un’s regime are increasing their attacks on cryptocurrency exchanges in South Korea and related sites, according to a new report from security researcher FireEye Inc. They also breached an English-language bitcoin news web site and collected bitcoin ransom payments from global victims of the malware WannaCry, according to the researcher. Kim’s apparent interest in cryptocurrencies comes amid rising prices and popularity. The same factors that have driven their success—lack of state control and secretiveness—would make them useful fund-raising and moneylaundering tools for a man threatening to use nuclear weapons against the United States. With tightening sanctions and usage of cryptocurrencies broadening, security experts say North Korea’s embrace of digital cash will only increase. “We definitely see sanctions being

a big lever driving this sort of activity,” said Luke McNamara, a researcher at FireEye and author of the new report. “They probably see it as a very low-cost solution to bring in hard cash.” The 15-member Security Council on Monday approved sanctions aimed at punishing North Korea for its latest missile and nuclear tests. US officials said the new measures would cut the country’s textile exports by 90 percent, restricting its ability to get hard currency. So far this year FireEye has confirmed attacks on at least three South Korean exchanges, including one in May that was successful. Around the same time, local media reported that Seoulbased exchange Yapizon lost more than 3,800 bitcoins (worth about $15 million at current rates) due to theft, although FireEye said there are not clear indications of North Korean involvement. North Korea’s telecommunications ministry didn’t respond to an e-mailed request for comments. The country’s diplomats and official media have denied the country played any role in cyber attacks, including the hacking of Sony Pictures Entertainment in 2014.

Bloomberg News

and the central banks of Asean countries to also formulate policies for more streamlined processes of banking services. “These initiatives will enable banks to access a qualified pool of fintech firms providing various tools and services for banking connectivity and scalability which promotes efficiency and competitiveness. Everything is becoming digital and consumers are now expecting for real-time automated access to their banking services which is why financial institutions are constantly striving to improve and innovate to better serve the public,” BAP President Nestor Tan said. At a recent meeting for the sandbox, which is organized by the ABA, ABS and BAP, experts from multinational fintechs Percipient Partners, Intel, Apac Fidor AG, Microsoft Asia Pacific and IBM Phil-

ippines led the discussion. “Collaboration and cooperation are also needed to foster deeper understanding of risks, involving appreciation for financial-inclusion goals, and to gauge market experimentation,” Bangko Sentral ng Pilipinas Governor Nestor A. Espenilla Jr. said. Bank representatives from Cambodia, Lao PDR, Malaysia, Myanmar and Singapore also joined the discussion to promote innovation-led economic growth in the Asean as one of its six initiatives this year toward a united, cooperative, resilient and progressive Asean. “Asean financial industry’s continued vitality and success are dependent on member-banks that collaborate and embrace change and innovation for the benefit of the Asean Economic Community,” ABA Secretary-General Paul Gwee said. Kathryn T. Jose

Disasters highlight need for risk cover

he Philippine Insurers and Reinsurers Association (Pira) on Tuesday reiterated the need for risk cover, especially during the monsoon season when Filipinos are most exposed to various risks. According to the Pira, typhoons serve to highlight the importance of the nonlife-insurance industry as people confront the risks brought by inclement weather and realize the importance of risk protection. “Filipinos are fast becoming conscious of their vulnerabilities, no thanks to the spate of natural calamities that hit the country in recent years,” said the Pira, the umbrella organization of nonlife-insurance companies in the country. In the United States, for example, insurers there now process claims seen reaching $20 billion. In Mexico, which was hit by an 8.1-magnitude earthquake recently, the catastrophe-insurance program called Fonden, developed by the Mexican government years ago, is being utilized. This means the insurance sector is up on its feet quickly as it responds to major catastrophe. The Pira cited these examples to prove that insurance plays a vital role in financing the recovery following disastrous episodes.

“It is in disasters that the importance of insurance is highlighted,” the Pira said in a statement. Earlier, the Pira said an average of 20 tropical weather disturbances enter the so-called Philippine area of responsibility each year. Of the total, approximately 10 become typhoons, of which around eight make landfall and around five will cause significant damage. “Unfortunately, despite the regular occurrence of natural calamities in our country, we are often caught unprepared,” said Pira Deputy Chairman Michael F. Rellosa. According to Rellosa, the first line of funding is the contingency fund managed by the National Disaster Risk Reduction and Management (NDRRM) fund. That fund had been slashed in half from P38.9 billion to only P15.8 billion this year. Only P5.77 billion remain as of end-March this year as P10 billion was spent for relief and recovery operations in response to typhoons Nona, Ferdie, Lawin and Nina, Rellosa said. “One major problem with the NDRRM funds is not just the shortage of funds but actually the use, or, more specifically, the nonusage of such funds,” Rellosa added. Rea Cu

news@businessmirror.com.ph

‘A La Juventud Filipina’

llow me to quote from Jose Rizal’s 1879 prizewinning work “A La Juventud Filipina” (To the Filipino Youth): “bella esperanza de la Patria mia” (fair hope of my fatherland). I consider this very relevant to the intransigent demand from lawmakers and other protagonists for contraception (and, eventually, abortion). The Philippines has been the target of a campaign to “manage population” as a national policy. Population explosion, as an argument for such a policy, is quite simply a fallacy. The Philippines is not overpopulated, though, admittedly, there is concentration of people in urban centers that are crowded with squatters, or to use the politically correct euphemism, informal settlers. The obvious solution is to decongest the urban centers by making the rural and outlying areas more progressive with opportunities to make a living. This, however, is not the topic of this article. As Rizal had already outlined that the youth is the hope of our country, I shall discuss the “demographic dividend”, which might be seen as a fresh reason for looking at fertility dynamics. Simply stated, the demographic dividend occurs when changes in birth rate result in a revised age distribution as for instance, a falling birth rate makes for a smaller population at young ages and for relatively more people in the adult age groups— who comprise the productive labor force. Such a situation improves the ratio of productive workers to child dependents in the population, and for a period of time, makes for faster economic growth and fewer burdens on families. In time, however, the age distribution changes again, as the large adult population moves into the older, less productive age brackets and is replaced by the smaller cohorts born during the fertility decline. When this occurs, the dependency ratio rises again, this time, involving the need to care for the elderly, rather than the need to care for the young. Thus one could propose that the government consider the demographic dividend a window of opportunity in its development as a nation. As faster rates of economic growth at the start occur when fertility rates decline, one cannot ignore the fact that, eventually, the dependent group reaches the productive labor force.

FINEX free enterprise Mercedes B. Suleik With fertility rates continuing to fall and the older generations having shorter life expectations, this demographic shift initiates the demographic dividend. This country’s large population of young workers with purchasing power provides the economy with the demographic dividends that are good for consumption and investments. This period in our country’s economic history, where a prominent portion of the population is of working age, results in greater purchasing power that can drive consumption, savings and investment. The Philippines should take advantage of the opportunity to enhance the key features of the economic life cycle. Policies should be put in place to take advantage of the demographic dividend, and ensure that they harness the low window of opportunity that we have and plan while our population is still young. During the course of the demographic dividend, four mechanisms that will benefit society may be delivered through: (1) increased labor supply—this benefit depends on the ability of the economy to absorb and productively employ the increased labor supply; (2) increase in savings—as the number of dependents fall, families can save more, and the increase in national savings rate increases the stock of capital and leads to higher productivity as capital in invested; (3) human capital—decreases in fertility rates result in fewer economic pressures at home, allowing parents to invest more resources per child, thus, leading to better health and educational outcomes, and finally; (4) increased domestic demand brought about by increasing GDP per capita. Harking back to the prophetic words of Jose Rizal, our youth is the fair hope of our nation. Let us, therefore, not be in a hurry to kill off our young, who, while at first are dependents, eventually grow to be our productive workers even as the older generation declines.

E-mail: merci.suleik@gmail.com

Case clippings

By Justice S J Ranada Jr. PUBLIC LANDS—road right-of-way A road right-of-way (RROW) can be considered as a property of the public dominion, which is outside the commerce of man, and cannot be the object of a contract, insofar as they may be the object except of repairs or improvements and other incidental matters. An RROW is considered as a property of public dominion, and cannot be registered in the name of private persons and be the subject of a Torrens Title. Hi-lon v. Commission 01 Aug 2017

GR 210669 Peralta, J

China’s lenders are leading a surge in overseas loans–McKinsey study

anks from China, Japan and Canada have overseen a surge in overseas lending since the financial crisis, helping to cushion a deep slide in cross-border capital flows, thanks especially to a retreat by European banks, according to the McKinsey Global Institute. While the stock of global foreign holdings—including loans, equities, bonds and foreign direct investment (FDI)—has remained about the same since 2007 at 183 percent of world GDP, gross flows of capital across borders have plunged 65 percent. Much of that has been due to European banks refocusing on their domestic markets as the euro crisis and new capital rules took hold, McKinsey said in a study on financial globalization.

Key exceptions have been banks in China and Japan, which have funded their countries’ companies abroad and, in Japan’s case, sought to escape low margins and scant lending opportunities at home. Canadian banks are another outlier having expanded their overseas operations mainly in the United States. “China’s leading banks demonstrated the largest relative increase in the share of foreign assets,” the McKinsey study said. The country “is gaining prominence in the global financial system”, ranking eighth in total foreign investment assets and liabilities in 2016, up from 16th in 2005. “It has significant room to further expand foreign investment.” Among the data on China, the McKinsey study dated last month found:

n Chinese banks’ stock of foreign assets climbed to 9 percent of their total by last year, from 2 percent in 2007, and exceeded $1 trillion by the end of 2016. n China’s value of total foreign assets and liabilities is equal to 101 percent of GDP, well below the 350percent average across advanced economies and also less than emerging markets, including Brazil, Mexico and Russia. Bank lending tends to be among the most volatile of flows, and its declining share of global cross-border capital has contributed to a greater level of stability, according to the analysis by McKinsey researchers, including Washingtonbased Susan Lund. A majority of crossborder investment is now in FDI and stocks, the group concluded.

“The financial system is more stable, but risks remain,” the researchers warned. “Capital flows —particularly foreign lending—remain volatile. Over 60 percent of countries experience a large decline, surge or reversal in foreign lending each year, creating volatility in exchange rates and economies.” The researchers flagged the “possibility that high equity values may manifest eventually as an unsustainable bubble”. World stock-market capitalization increased to 99 percent of GDP by last year, from 67 percent in 2011. McKinsey also cautioned that the growth of international financial hubs—defined as locations with foreign-investment assets and liabilities totaling more than 10 times their GDP, “may pose some risks”, given transpar-

ency challenges in some centers. High levels of leverage “could be hidden” and “pose a systemic risk”, McKinsey said. The following are other highlights of data from the report: n The total value of cross-border investment was $132 trillion in 2016; n Gross cross-border capital flows sank to $4.3 trillion in 2016 from $12.4 trillion in 2007; n For the first time in a decade, developing countries as a group are net recipients of capital; n Since 2007 69 percent of capital flows have come from FDI and equities, up from 36 percent from 2000-2007; n The global stock of FDI has increased by $16 trillion since 2007, with almost 45 percent of that due to funds pouring into financial hubs, such as

Singapore and the Netherlands; n Part of the FDI to these hubs is in the form of special-purpose entities that are essentially conduits for investing in other assets; n About 27 percent of global equities are owned by foreign investors, up from 17 percent in 2000; n Some 31 percent of bonds are held by foreign investors, up from 18 percent in 2000; n Advanced economies saw little change in bond ownership over the past decade, while the share in developing nations has jumped; n Cross-border debt purchases have fallen to $700 billion from $2.8 trillion in 2007, prompted in part by China and others buying less for their currency reserves. Bloomberg News

ExportUnlimited BusinessMirror

Editor: Efleda P. Campos • Wednesday, September 13, 2017 A9

PHL, Brunei see stronger halal-industry partnership By Raison D. Arobinto

Senior Trade-Industry Development Specialist Halal Section, DTI-EMB

HE Department of Trade and Industry-Export Marketing Bureau (DTI-EMB), together with the Zamboanga City Special Economic Zone Authority (Zambo ecozone), conducted a trade, investments and technical-assistance mission in Brunei Darussalam to seek stronger partnership with its counterpart in the country during the two-day official visit on August 14 and 15.

The mission was in consonance with the memorandum of understanding (MOU) between the two countries for cooperation on halal industry and halal export development and promotion signed during the state visit of Sultan Hassanil Bolkiah in Manila in April. Among the areas of cooperation where the Philippines and Brunei could build on include sourcing of materials for the manufacturing of halal products, exchanges of visits

between and study tours of personnel on subjects of mutual interest, exchange of professionals and technicians, and training of technical personnel, development of partnership in the investments and production of halal food, cosmetics and pharmaceuticals for the international market, halal market development and trade relations, promotion of private-sector participation and any other form of cooperation as jointly decided by the two countries.

EMB Director Senen M. Perlada, also head of the Philippine Halal Export Board Secretariat, sought for the creation of a joint committee primarily to put flesh to the MOU and provide action plans for its implementation. In particular, the two countries hope to share technical knowledge on their halal standards, identify interventions and action points relevant to existing market-access requirements and address relevant issues and concerns in this regard and establish linkages with the international halal-industry players and identify areas of cooperation and collaboration related to halal export development and promotion. Perlada said the joint committee could be anchored on the joint committee-bilateral cooperation (JCBC) between the Philippines and Brunei as the overarching synergy for all efforts of the both parties. “The Philippines is a good strategic partner for sourcing of raw materials,” Brunei Deputy Permanent Secretary Hjh Nor Ashikin Hj Johari of the Ministry of Foreign Affairs and Trade said during her meeting with the Philippine delegation on the first day of the official visit. She admitted that nearly 100 percent of Brunei’s beef meat is imported from Australia, adding that given the proximity of Brunei to the Philippines, the MOU could explore opportunities of having a partnership in this regard. For instance, the raw materials

BRUNEI Deputy Permanent Secretary Hjh Nor Ashikin Hj Johari (right) of the Ministry of Foreign Affairs and Trade welcomes Philippine Department of Trade and Industry (DTI) Assistant Secretary Abdulgani Macatoman (second from left) and DTI’s Export Marketing Bureau Director Senen M. Perlada (second from right) and the rest of the Philippine delegation. PE-BRUNEI

will be sourced from the Philippines and processed in Brunei using Brunei halal standards and will be used not only for domestic market, but also for export in other Islamic markets worldwide. DTI Assistant Secretary Abdulgani Macatoman, head of the Philippine delegation, asserted

that the Philippines would be a great value partner. “The Philippines has vast land, manpower and resources, which the two countries could mutually benefit from,” he said. Engr. El-Shal Sali of the Zambo ecozone underscored the potential role of the zone. He mentioned

about the 100-hectare land specifically dedicated for the halal hub in the region. He said the Zambo ecozone is the only port in the region with a freeport status, which gives an advantage for investments. He also said there are about 30 investors already in the area.

A10 Wednesday, September 13, 2017 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Freedom from bird flu requires vigilance

oing by the pronouncements of the Bureau of Animal Industry (BAI), the Philippines cannot yet claim that it is already free from the scourge that is avian influenza (AI) or bird flu. In fact, the countdown for the prescribed 90-day observation period required by the World Organization for Animal Health (OIE) before a country or region can claim that it is already free from bird flu has not even begun. Under OIE rules, the 90-day observation period will only begin right after the last infected farm has been cleaned and disinfected. According to an official of the BAI, poultry growers in affected areas in Pampanga and Nueva Ecija have yet to complete the cleaning and disinfection process. An official of the BAI estimated that it would take five more days to clean and disinfect all affected poultry farms. The entire process in managing the outbreak of bird flu prescribed in the government’s manual would require a minimum of 75 days. The first outbreak of highly pathogenic avian influenza (HPAI) in the Philippines has certainly brought a lot of costly lessons. The poultry industry in Central Luzon nearly collapsed because of the significant drop in demand for chicken, following the government’s confirmation that it was HPAI that struck poultry farms in the region. Firms exporting chicken had to put their shipments on hold, and it remains unclear when they would be able to again supply poultry products to foreign buyers. Countries that have banned poultry products from the Philippines would usually await the OIE’s confirmation before they lift restrictions. The government had to compensate poultry growers in bird flu-hit areas and spend for the culling of fowls. Poultry growers received P80 for each broiler, commercial layer, quail and duck culled. Consumers were also affected as they stayed away from chicken and opted for more expensive sources of protein. Fortunately, the BAI said there are no new outbreaks of AI in the affected provinces and nearby areas. Keeping the virus at bay requires close cooperation between the government and poultry growers. Regular dialogues between the Department of Agriculture and the private sector would pave the way for the implementation of proactive measures to ensure that there will be no new outbreaks of bird flu. Poultry growers and egg producers earlier made a pitch for “fair compensation”, one that is based on the fair market value of their flock. They said the government can follow the example of South Korea, which pegs the compensation on fair market value. Egg producers belonging to the Philippine Egg Board Association (Peba) and poultry growers from the United Broiler Raisers Association (Ubra) said the government can consider using production cost as basis for computing farmers’ compensation. Peba and Ubra said the offer of fair compensation would encourage poultry growers to immediately report suspicious bird deaths in their farms. Early reporting is key to managing bird-flu outbreaks. Poultry growers and egg producers said fair compensation, not regulation, would encourage early reporting. The government should consider this suggestion and find a way to make it possible. This could be less costly than regularly inspecting poultry farms. Since 2005

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Duterte charms SSS employees, members and pensioners Art Amansec

All About Social Security

or about an hour or so, President Duterte briefly bonded with the Social Security System (SSS) employees and some members and pensioners during the celebration of its foundation anniversary on September 6. The affair, where Duterte delivered a 20-minute extemporaneous speech, was held at the SSS main offices at East Avenue, Quezon City. The presidential presence was magical and memorable to the 500 or so members of the audience, led by the SSS commissioners and vice presidents and managers, who watched and listened to their idol. To SSS members and pensioners, his visit was a momentous occasion because he is the father of the P2,000 pension increase. Granting the pension increase was one of his campaign promises, and he fulfilled it in no time at all. Talking about how he approved the increase, he revealed that he okayed it after a two-hour debate in his January 2017 Cabinet meeting. It seemed that the proposal was meeting a rough sailing because the Cabinet members feared of a dangerous shortening of the lifespan of SSS funds, but he dispelled their fears by saying that we should trust the next generation, who will be competent enough to address any expected shortfall. The President said: “That’s why the most contentious moment in the Cabinet regarding the

SSS, when we were debating whether to allow the increase. At the end of the day, I stopped them all because we’re already arguing for two hours. “Sabi ko, ladies and gentlemen, this is my stand. We have a problem in our generation. “Then there is this computation about 2040, an aberration in the system…. We will solve the problem of our generation. Let tomorrow take care of itself. “Ang mga anak natin, may mga utak ’yan. Then how to continue is no longer our problem. “Bigyan mo ako ng computation hanggang 2040. Of course, may magobject talaga—the economics people—Sonny Dominguez, and I have to be very frank with you, si Pernia and si Diokno.... “But Dean Valdez wrote me a letter and said, ‘Ang bukas hindi atin, kanila na ’yan, and they will solve the problem by themselves.’” The rest is history. Right now, millions of SSS members are enjoying a P1,000 pension increase. The

To SSS members and pensioners, his visit was a momentous occasion because he is the father of the P2,000 pension increase. Granting the pension increase was one of his campaign promises and he fulfilled it in no time at all. Talking about how he approved the increase, he revealed that he approved it after a twohour debate in his January 2017 Cabinet meeting.

pensioners now have more money to spend on their medicines and other needs. The next P1,000, to complete the promised P2,000, will come four years or less from now, depending on the availability of funds. The President during his speech also revealed a secret, which he shared with the audience. While riding airplanes on Manila-Davao; Davao-Manila routes, as a student and then as incumbent Mayor, he said that the thought kept coming to his mind as he watched from the plane the view of the shanties and the subdivision houses below, that one day he would rule the country. The President said: “May gusto akong—I don’t know if it has happened to you—from time to time, Christmas vacation, semestral break, araw ng patay, umuuwi talaga kami to pay homage to the ancestors. “But in the so many flights na Davao-Manila, Manila-Davao, it could be…. Hindi naman thousands, hundreds, all these years.... Dumadaan ako ng Manila. And, sometimes, because it is too constricted

because we only have one airport, one radar and everything. Minsan umiikot ’yung eroplano. Would you believe it? Ito totoo talaga ito. “Tinignan ko, sabi ko: May feeling ako na I will one day rule this place. Nung naging mayor ako, sinabi ko doon sa asawa ko na may feeling ako na…. I have this eerie or queer feeling, whatever, na one day, I will rule this. “Sabi nila, ‘Gusto ko, pero minus the problem.’ Kita mo ’yang…. Makikita mo dito, squatters’ area, ang laki. Then you have this magandang subdivisions, then another corner, nandiyan na naman ’yung mahirap.” His message to the SSS officials and employees was brief but meaningful. “To the SSS management and personnel: You are in a unique position to directly impact the lives of our people through the service you provide. “Through the work that you do everyday, you manage and maintain a sound and viable Social Security System, which shall provide social justice and promote meaningful protection for members and their families against disability, sickness, maternity, old age, death and other contingencies resulting in the loss of income and financial burden. “May this occasion remind us that our work force is the backbone of our society, and their welfare is our primary concern. “Let us work together in empowering them so that they may help us in building the foundation of a brighter and more secure future, especially for the marginalized. “Happy anniversary, at mabuhay kayong lahat!”

The linkages between migration and development Teddy Locsin Jr.

Free fire Continued from A1

T the national level, migrants are also deeply integrated into our development plan. We know we cannot make growth more inclusive, lower poverty incidence, create more jobs, make individuals and communities more resilient, drive innovation and build greater trust in the government and in society1 if we do not address the needs and harness the potentials of our 10 million overseas Filipinos. And so we have, over the past 40 years, mainstreamed migration. We have developed laws, policies and programs that address all aspects and phases of migration, from labor and economic migration to migration in crises. We have implemented

a migrant-centered approach to the entire migration cycle, from preemployment, transit, on-site employment and eventual return and reintegration programs. But this is not solely a domestic issue. Bilateral and regional

At the national level, migrants are also deeply integrated into our development plan. We know we cannot make growth more inclusive, lower poverty incidence, create more jobs, make individuals and communities more resilient, drive innovation and build greater trust in the government and in society if we do not address the needs and harness the potentials of our 10 million overseas Filipinos.

frameworks are essential. In 2015 we advanced the migration agenda with the New York Declaration2. The Global Compact on Migration needs to do more. It must examine the barriers to maximizing the positive contributions of migrants, lay down actionable commitments, specific targets and put in place a governance and monitoring framework, and address the roles of local authorities. And

it must go beyond the perception that migrants contribute to development only through financial remittances and equally look at their “social” remittances. We call migrant workers partners in development. They are more. They are drivers of the progress we have achieved. Let us not leave them behind. 1 From President Duterte’s foreword to the Philippine Development Agenda 2017-2022: “Through this plan, we will empower the poor and marginalized, push for improved transparency and accountability in governance and fuel our economy. Specifically, we intend to make growth more inclusive by lowering poverty incidence in the rural areas, creating more jobs, making individuals and communities more resilient, driving innovation and building greater trust in the government and in society.” 2 New York Declaration on Migrants and Refugees, adopted on September 26, 2015.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Wednesday, September 13, 2017 A11

Reforms afoot to speed up The Ledac’s priority measures transport koop building Edgardo J. Angara

Michael Makabenta Alunan

on the contrary

here are still several policy bottlenecks preventing the faster conversion and registration of transportation associations into cooperatives, but, at least, consultations are now being done to simplify procedures in support of government’s public-utility vehicle modernization program. Surge in koops from jeepneys. Transportation Undersecretary Anneli Lontoc stressed the need for various reforms in the registration process of transport cooperatives as the Department of Transportation (DOTr) expects a surge in demand for cooperatives within the three-year transition period of the modernization program, which requires an industry consolidation, giving transport groups three choices—a corporation, consortium or a cooperative. Big bus operators are already structured as corporations, while small bus operators can merge into consortiums or joint ventures. Definitely, jeepney operators, who own only one to three units, with many as operator-driver themselves, have no choice but to go koop. Only a handful has five or more units. Koops are also a logical choice as Republic Act 9520, or the Cooperative Code of the Philippines, designed to empower marginalized sectors, provides koops with many privileges, from tax exemptions, duty-free importation, access to financing and for transport koops, preference in securing franchises, management of transport terminals, etc. CDA created own bottlenecks? Unfortunately, registering cooperatives is tedious as getting schedules for premembership seminars alone takes two to three months after the Cooperative Development Authority (CDA) idiomatically painted itself into a corner, or put itself in a regulatory straitjacket when CDA Chairman Orlando Ravanera issued Memorandum Circular 2017-02 on February 1, declaring only CDA can exclusively give these seminars. Previously, local government units (LGUs), with their Cooperative Development Offices (CDOs), were authorized to conduct these seminars as part of devolution, and reinforced further by former President Fidel V. Ramos’s Executive Order (EO) 96, mandating all LGUs to promote and register koops for the poor. EO 95 mandates all government offices to assist koops. CDA may be violating EO 96 by centralizing seminars. Worse, it has specified the frequency it conducts seminars “at once a month at the CDA Extension Office and once per quarter at CDA Field Offices”,

which leaves little flexibility. With this ruling being untenable, the Manila Extension Office holds weekly seminars, and plans to increase it to twice a week with the expected rising demand. Regulatory brakes slowing registration. Almost repeating what CDA does is the DOTr’s Office of Transport Cooperatives (OTC), which conducts almost the same seminar, called Cooperative Education and Transport Operations Seminar (Cetos), that is also difficult to schedule. As OTC does not have offices nationwide and has limited personnel, it wants its seminars held at its central office. CDA and OTC do not seem to harmonize their interpretations of rules, thus causing confusion. Some OTC personnel demand prior accreditation with OTC before registering with CDA, but how can one be accredited without becoming a koop first? CDA allows koop founding officers and members to echo the seminars to their members, while OTC demands every member undergoes Cetos seminars, which is difficult as OTC wants seminars held weekdays, during office hours, which are peak hours for drivers. Go developmental, not regulatory. CDA Director Abad Santos admits the existence of procedural bottlenecks and the need for institutional convergence with the DOTr. CDA Administrator Nelon Alindogan said, “The strength of the koop sector cannot just be ignored because of its huge contribution to the economy.” “As of 2015, the koop sector had a total membership base of about 15 million people, including their families, involving some 25,611 registered cooperatives, a combined asset base of P148.56 billion, and gross revenues of about P27.586 billion,” Alindogan said. In terms of employment, he added that the koop sector generated a total of 520,760 in direct employment, and 1.923 million in indirect jobs. On accusations koops are used by some individuals to evade taxes because of the koop’s tax-exemption privileges, he said, “This is not entirely true as the entire Koop sector paid a total of over P3.951 billion in taxes in 2015.” E-mail: mikealunan@yahoo.com.

he Legislative-Executive Development Advisory Council (Ledac) identified as priority 28 measures, 14 recommended as urgent, as follows: Unified National Identification System Act (national ID); security of tenure bill (end of contractualization/ endo); utilization of coconut-levy fund; comprehensive tax reform; National Transport Act to address transport traffic crisis; Budget Reform Act; National Land Use Act; rightsizing of the national government; amendments to the Anti-Cybercrime Act; amendments to theAgricultural Tariffication Act of 1996; amendments to the National Irrigation Administration charter regarding: Free Irrigation Act; amendments to Public Service Act; Ease of Doing Business/Fast Business Permit Act; and Government Procurement Reform Act amendments. There seems to be no general theme or strategic goal tying together these priority measures. Few

Binhi Micro-Crop Insurance Program Dennis B. Funa

INSURANCE FORUM

icro-finance institutions lend out to small farmers across the country. Their loan portfolio, however, is placed at risk whenever a devastating typhoon hits the country. Farmers, with destroyed crops, are not able to repay their loans when natural disasters occur. The overall viability of microlending institutions suffers as a result. But with micro-crop insurance in place, the operations of these credit institutions can continue to benefit our small farmers. The Philippines is very dependent on its agricultural sector, which employs more than one-third of its work force. And yet, it faces huge risks from natural calamities, foremost of which are typhoons. The Philippines has been ranked as the third-most disaster-prone country in the world with an average of 20 typhoons every year. Some of which are very devastating.

ome experts say targeting a national average rice yield level of 6 tons per hectare is too much for achieving self-sufficiency and that 4.5 tons per hectare would be enough. This is true if the country is only interested in achieving self-sufficiency per se, disregarding competition from imported rice. But in the context of Asean integration, we must produce rice at a competitive price so that we will be able to sell it in a common regional market. The Philippine rice industry is now facing a different scenario. Because of our commitment to the World Trade Organization, we need to replace our quantitative-restriction (QR) policy with its tariff equivalent. QR is a trade restriction placed on the amount of an item or service that can be imported

into a country. On the other hand, tariff refers to a tax levied on a commodity imported from another country. Along with this, there are now bills pending in the House of Representatives and the Senate to have the tariff policy fully implemented. Under a tariff regime, the government can no longer restrict the total amount of rice to be imported into the country. As a consequence, importers can bring in rice from abroad as long as they see it profitable after paying for transportation, insurance, port charges and, most especially, the tariffs or taxes imposed by the government. This will mean stiff competition between domestically produced and imported rice. If rice will be imported from an Asean member-country, like Thailand or Vietnam, the tariff will be 35 percent of the value. At this tariff level, the landed cost of white rice with

The Binhi Micro-Crop Insurance Program of CARD Pioneer Microinsurance Inc. is the country’s first and only micro-agricultural insurance product. Binhi is the Tagalog word for seed. It is a crop insurance at the micro level. The first phase of the project was an indemnity-based crop insurance, which was launched in October 2016. The second phase of the project will be an index-based

insurance product. It is available only, for the moment, to typhoonrelated damages to rice and corn plantations in selected provinces. Under the index-based insurance, the coverage amount can range from a minimum of P1,000 to P10,000. The premium can range from P16.67 to P1,000. The policy duration is from one month to six months. The product is designed to pay 100 percent if the damages sustained ranges from 80 percent to 100 percent. If the damage sustained ranges from 20 percent to 79 percent, the payment will be 50 percent of the policy amount. If the damage is 19 percent or below, no proceeds can be claimed. The program is currently on its pilot-testing phase. It is projected that the amounts involved will eventually be increased. This insurance program is mandatory for all agri-loan borrowers of Center for Agriculture and Rural Development (CARD) Mutual Benefit Association, the largest microfinance institution in the Philippines, and CARD Bank, a microfinance bank. It has over 2 million

Myanmar’s leader needs to lead

ung San Suu Kyi, Myanmar’s iconic leader, is sacrificing her moral authority for political expediency. By failing to speak out against repression—and, more broadly, by not doing enough to help her country grow and prosper—she risks losing both her power and her reputation. Suu Kyi, whose years leading the resistance to the Burmese junta earned her the Nobel Peace Prize, has dismayed former admirers by refusing to stop or even denounce what the United Nations calls “a textbook example of ethnic cleansing” in her own country. Ever since militant members of Myanmar’s Rohingya Muslim minority attacked police stations and an army camp last month, security forces and local Buddhist vigilantes appear to have launched a brutal campaign against them. Hundreds of Rohingya

The need for a competitive rice yield By Flordeliza Bordey

in the list directly address mass poverty or raise the quality of life of many Filipinos. Some may be

achieved administratively rather than through legislation. The strategic and long-lasting reform among the list, I believe, is the National Land Use Act, aimed at establishing a unified framework for land-use management. Current land use and management regime is nothing short of chaotic. Disposition and distribution of lands are entrusted to various agencies, including the Department of Environment and Natural Resources, the Department of Justice and the National Commission on Indigenous Peoples. Land-use policies are embodied in several laws, such as the Local Government Code, the Agricultural and Fisheries Modernization Act of 1997 and the Agrarian Reform Act. The lack of harmonization and coordination across the multiplicity of laws, regulations and governing bodies greatly hinders the country from using its finite lands in a sustainable manner.

25-percent broken grains in Manila coming from Thailand will be around P31 per kilo and P27 per kilo from Vietnam. This is based on a study of the Philippine Rice Research Institute in collaboration with the International Rice Research Institute. While this will be good for consumers, especially the poor, who spent about a third of their income on food, it will reduce the price of domestically produced rice. This will have a negative impact on the income of Filipino rice farmers, who, at present, only produce an average of less than 4 tons per hectare at a cost of P12 per kilo. If the landed cost of imported rice prevails in our wholesale market and that wholesalers, rice millers and paddy traders maintain their marketing margins, this will mean that a rice farmer, say in Nueva Ecija, will need to produce a kilo of paddy at around P8 to

This is reflected in the many comprehensive land use plans (CLUPs) of several local government units. A 2014 Philippine Institute for Development Studies study found that many CLUPs favored residential and commercial development. Very few included plans for productivityenhancing infrastructure or considered environmental conservation. A 2012 Human Development Network study emphasized that many CLUPs lacked long-term vision and did not take into account clear-cut strategies on achieving sustainable growth. A National Land Use Act will probably improve our landscape (and seascape and mountainscape). With millions more to feed and more homeless added to the ranks every year, we hope a national use and management framework of our finite land resources would emerge. E-mail: angara.ed@gmail.com, Facebook and Twitter: @edangara

farmer clients. Nonetheless, this model is precedent-setting and can be replicated by other institutions. This initiative is supported by the International Finance Corp. (IFC) of the World Bank Group. The IFC is the largest global development institution focused exclusively on the private sector in developing countries. Vijayasekar Kalavakonda and Utako Hanna Saoshiro, both senior financial sector specialists of the IFC, and based in Indonesia, have been working closely with the Insurance Commission on this project. The other supporters of this program include the Global Index Insurance Facility, a multidonor trust fund, which is also part of the World Bank Group’s Finance and Markets Global Practice. It is supported by the government of Canada. It is hoped that programs similar to this will, in time, benefit other micro-lending institutions. Lawyer Dennis B. Funa is the current insurance commissioner. Funa was appointed by President Duterte as the new insurance commissioner in December 2016. E-mail: dennisfuna@yahoo.com.

have been killed, and nearly 300,000 refugees have fled across the border to makeshift camps in Bangladesh. Suu Kyi, mindful of the near-universal loathing of the Rohingya among Myanmar’s other communities, has blasted global criticism of this crisis as fake news; officials have accused Rohingya of setting fire to their own villages. Critics, some of whom have called on the Nobel committee to strip Suu Kyi of her prize, are right to take her to task. Suu Kyi can’t single-handedly eradicate antiRohingya prejudice, nor does she control the stillpowerful Burmese military. But she could at least limit the army’s depredations by demanding that civilians be protected and that journalists and UN monitors be allowed into the affected area. Her government could send aid for the refugees rather than simply allow countries like Turkey to do so.

And she could begin to lay out a narrative that sketches a path to integrating the Rohingya into Burmese society, while implementing the recommendations made by the Kofi Annan-led commission she herself appointed to look into their plight. She has practical, as well as moral, cause to act. Unless the military plans somehow to kill or expel the roughly 1 million Rohingya living in Myanmar, its scorched-Earth campaign is guaranteed only to breed further resentment. Meanwhile, the indiscriminate response is embittering Myanmar’s relations with Muslim nations from Turkey to Indonesia, and has made the Rohingya cause a rallying cry for Islamist extremists across Southeast Asia and beyond. To fight back, Suu Kyi needs to do more than speak out; she needs to lead more effectively than she’s done in the nearly year and a half since she

took power. When it comes to the economy in particular, her administration has been plagued by inefficiency and indecisiveness. Though reforms to laws governing investments and companies have begun to move forward, the direction of economic policy remains too murky. Regulations are as stifling as ever; too many policy decisions are delayed by micromanagement. Foreign investment in the last fiscal year shrunk more than 30 percent from the year before. Unless Suu Kyi’s government can reverse this situation and give young Burmese more hope in their economic prospects, they will provide alltoo-ready fodder for extremists on both sides of the Rohingya divide. A message of tolerance might be a hard sell right now. But if anyone in Myanmar has the power and (still) the authority to make it, it’s Aung San Suu Kyi. Bloomberg View

maintain his current profit margin. At an average cost of P48,000 per hectare, the Filipino farmer must produce a yield of around 6 tons to be competitive with Thai and Vietnamese farmers. Thus, targeting a yield of 6 tons per hectare with a production cost of P8 per kilo, supported by strategic government support, like costreducing technologies, free irrigation, fertilizer and seed subsidies and postharvest facilities in the medium term (until 2022), will make Filipino farmers competitive. Likewise, this will sustain the country’s rice industry in the long run. Beyond this period, more efficient marketing and production measures need to be pursued for the country to become more competitive. In less favorable areas where it is more difficult to increase rice yields and farmers incur higher produc-

tion costs, farmers are at higher risk of going out of the rice business. The government must provide safetynets, such as training on diversified farming systems and start-up production support so they will have an easier transition to more fruitful economic activities than rice. When this happens, the area planted to rice will shrink in the future. This means that those who remain in the rice industry must attain higher yields to feed the country. This gives impetus to the urgent need of modernizing Philippine agriculture that systematically links and manages the whole value chain from preproduction, production, processing, marketing and consumption. Modernization will continuously improve agricultural productivity and add value to all the players in the system, especially poor and marginalized farmers.

The main drivers in this transformation are programs propelled by science-based innovations, policy reforms, sound management and governance systems, a new breed of entrepreneurs, mobilized farming communities and market-oriented processing agro-based industries. In the aegis of Asean integration, the Philippines needs to maintain the profitability of rice production and make Filipino farmers competitive in a common regional market. If our farmers can produce enough rice for all Filipinos at competitive prices through modern agriculture, then the country will achieve our muchcherished dream of sustainable food self-sufficiency and security. The author is deputy executive Director of the Philippine Rice Research Institute, and member of the Coalition for Agriculture Modernization in the Philippines.

2nd Front Page BusinessMirror

A12 Wednesday, September 13, 2017

Govt still confident of turning around jobs data this year T

By Cai U. Ordinario

@cuo_bm

he government is confident that the slight swelling in the unemployment rate in the July 2017 round of the Labor Force Survey (LFS) can be remedied immediately, with the Duterte administration’s massive infrastructure program seen to trigger the creation of 1.1 million jobs this year.

Socioeconomic Planning Secretary Ernesto M. Pernia told reporters on Tuesday that the uptick in unemployment was only due to new entrants in the labor force. The number of jobless Filipinos in July 2017 increased to 2.37 million, from 2.33 million in July 2016. This translated to an unemployment rate of 5.6 percent in the July 2017 LFS round, higher than the 5.4 percent in the

same period last year. “There will be acceleration in the ‘Build, Build,Build’ [BBB] program,” Pernia said. “We are doing a lot of the unfinished, unimplemented [projects] in the previous administration, that’s why there was an increase in public spending.” National Economic and Development Authority (Neda) Undersecretary for Planning and Policy Rosemarie G. Edillon said agricul-

2.37M The number of jobless Filipinos in the July 2017 round of the Labor Force Survey, up from July 2016’s 2.33 million

ture jobs were also lost mainly due to Typhoon Gorio, which affected Northern Philippines. Edillon added that the stricter labor regulations, particularly in the government’s “no endo” or contractualization policy also affected the unemployment and underemployment data. The subsectors in services that recorded employment losses are consistent with the priority establishments and industries being closely watched by the government under the Department of Labor and Employment’s Labor Law Compliance System (LLCS). T he LLCS is a pro -worker reform started in 2013 to ensure employers’ compliance with a

comprehensive checklist of laws. “This negative impact, however, can be mitigated by an aggressive skills-building and employmentfacilitation program,” Edillon told the BusinessMirror. However, former Labor Undersecretary Rene E. Ofreneo said should the government fail to accelerate the implementation of the BBB infrastructure program, it will fall short of meeting its jobgeneration targets. Based on the BBB pipeline, 12 projects are scheduled to begin this year and next year, while eight other projects still do not have proposed start dates. Ofreneo said this risk, together with expectations that the global economy could slow toward the end of the year, endangers the government’s job targets. “The government is concerned over loss in employment and vows to improve the situation. For one, the BBB program, anchored on the PDP [Philippine Development Plan], is expected to open the roads for more jobs and generate significant activity in the domestic See “Govt,” A2

Floods, landslides spawned by Maring kill 3 children, shut down financial markets

By Rene Acosta

@reneacostaBM

orrential rains spurred by Tropical Depression Maring spawned landslides and severe flooding in Metro Manila and nearby provinces, killing at least three people and injuring at least two others, disaster and military officials reported on Tuesday. Financial markets were closed on Tuesday, along with government offices and schools. Currency, stocks and bonds trading were suspended after the Office of the President halted work in government offices, Bangko Sentral ng Pilipinas Governor Nestor A. Espenilla Jr. said. At least five domestic flights were canceled, according to the Manila International Airport Authority. Flood waters were waist-deep in some parts of Manila, blocking several traffic arteries, including the Epifanio de los Santos Avenue connecting the northern and southern parts of the city, according to the Metropolitan Manila Development Authority. With another typhoon moving closer to the northeastern Philippine coast, the current storm is forecast to land in Quezon or Aurora province north of the capital on Tuesday afternoon, the local weather bureau said. The Philippines, battered annually by an average of 20 cyclones that form over the Pacific Ocean, is among countries most vulnerable to climate change. Supertyphoon Haiyan (local code name Supertyphoon Yolanda), one of the strongest storms in the world to hit land, killed more than 6,000 people in 2013. Espenilla said there is an “automatic market suspension” if government offices were shut down before 9 a.m. The Philippine Stock Exchange and the Philippine Dealing & Exchange Corp. also issued advisories on suspension. The incessant heavy downpour, whipping up intermittent strong winds, also triggered power outages in Southern Luzon and generated heavy flooding in the provinces of Quezon, Batangas, Laguna and Cavite, trapping hundreds of residents inside their homes before they were rescued. In Quezon, a passenger bus was stranded

The heavy rains and flooding caused by Tropical Depression Maring failed to dampen the spirits of this family of four, who still crossed this flooded street in Manila with smiles on their faces. ALYSA SALEN on the road by floodwaters that turned a key highway connecting Metro Manila to the Bicol region into a temporary lake, but its 22 passengers were rescued by the Army’s 2nd Infantry Division, which has been turned into a massive rescue agency. The severe-weather condition forced Malacañang, upon the recommendation of Defense Secretary Delfin N. Lorenzana as chairman of the National Disaster Risk Reduction and Management Council (NDRRMC), to suspend work in government offices in the National Capital Region (NCR) and Central Luzon and in provinces south of Metro Manila. The Rizal Provincial Disaster Risk Reduction and Management Office said a landslide, triggered by the continued downpour, buried a shanty located near a creek at Hapay na Mangga, Barangay Doroles, Taytay, on Tuesday, killing siblings Justine, 14, and Jude Pondal, 17. Their mother, Dolores, also suffered a fractured left hand. In Lucena, Quezon, a 4-month-old baby died in a hospital after their home was pinned down by a concrete fence of the Mount Carmel Diocesan Hospital that caved in. The incident

also injured the father, Riniel Abas. In Silang, Cavite, a woman identified as Rossie Nasayao, a resident of Barangay Biluso that was flooded, was declared missing, said Maj. Gen. Roderick Parayno, commander of the 2nd Infantry Division. Parayno added a squad of soldiers on board a military truck, along with policemen and disaster officials from Quezon, also rescued passengers from a flood-stranded DLTB bus with plate number UYB-365 along the highway at Barangay Biga in the boundary of Pitogo and Gumaca, Quezon. The local military commander also belied reports of a reported landslide along the national highway in Atimonan, also in Quezon, but confirmed the flooding at Barangay San Isidro in the town where soldiers evacuated affected residents. In Batangas and Laguna, Parayno reported floodings in a number of barangays in several towns and municipalities in the two provinces, including a landslide at Barangay Wawa in Nasugbu, which was cleared by soldiers. Hundreds of families were evacuated by soldiers from Los Banos, Nagcarlan, in Laguna.

Reports also claimed 14 people were missing in Laguna due to a landslide, b u t t h e N D R R M C s a i d i t wa s s t i l l verifying the reports. Parayno said that, in Cavite, the strong and continued rain triggered floodings in the towns of Kawit, Ternate, Noveleta, General Emilio Aguinaldo, General Mariano Alvarez, Amadeo, General Trias and Silang, forcing them to evacuate hundreds of residents. He added several barangays also experienced power outages while landslides were recorded in Tagaytay City and in General Mariano Alvarez. Parayno said some key highways and bridges in Cavite were also flooded. In Metro Manila, which was under storm signal number 1, the NCR Police Office reported massive flooding in the metropolis, including in Manila and Quezon City. While Maring made a landfall at around 9 a.m. on Tuesday in Mauban, Quezon, Metro Manila and provinces in Central and Southern Luzon already experienced heavy rains beginning at 2 p.m. on Monday.

With Bloomberg News

www.businessmirror.com.ph

DUTERTE WANTS QUICK PASSAGE OF P3.767-T 2018 NATL BUDGET BILL By Jovee Marie N. dela Cruz @joveemarie

he House of Representatives on Tuesday approved on second reading President Rodrigo Duterte’s proposed 2018 P3.767 trillion national budget. Voting through viva voce, the lower chamber has passed the House Bill 6215 or the 2018 proposed General Appropriations Act after it was certified as urgent by the Palace. “[Despite the urgent certification of the budget will be passed] on third reading when it will already be printed with all the amendments, which will take a week or two,” Majority Leader Rodolfo C. Fariñas Jr. of Ilocos Norte said. The P3.767-trillion national budget will focus on education and the Duterte administration’s infrastructure program. The proposed 2018 budget represents a 12.4-percent increase against 2017’s P3.35-trillion budget. The projected fiscal program is expected to result in a deficit amounting to P524 billion, or 3 percent of the GDP.

partment of Environment and Natural Resources, P27.9 billion. Meanwhile, Duterte said the 2018 budget will focus on public infrastructure listed under the government’s “Build, Build, Build” program. He added the P3.767-trillion proposed budget is “a budget that reforms and transforms”. “My administration’s accelerated spending on infrastructure development is financially sound, since the benefits it will provide over the course of time will far exceed the cost of financing and building,” he said. “In all, we plan to spend a total of P8.1 trillion for infrastructure development from 2017 to 2022,” Duterte added. Under the accelerated infrastructure spending, the government aims to improve road transport to spur trade movement, air transport to impel air mobility, sea transport to boost port activity and rail transport to ease urban congestion. In a bid to reduce logistics costs in Mindanao, Duterte said the Mindanao Logistics Infrastructure Network will receive a 10.3-percent increase in funding, from P21.4 billion in 2017

My administration’s accelerated spending on infrastructure development is financially sound, since the benefits it will provide over the course of time will far exceed the cost of financing and building.”—Duterte Education will continue to receive the biggest appropriation at P691billion, or P41.7 billion more than its 2017 budget. As much as P1.097 trillion has been allocated for infrastructure, which is 29.5 percent, or P249.8 billion, higher than the 2017 allocation for public infrastructure. The depar tments of Public Works and Highways and Transportation (DoTr) have proposed budget of P643.3 billion and P73.8 billion, respectively. As for the budget allocation for other sectors, social services will have the biggest budget, amounting to P1.45 trillion, or 38.5 percent of the proposed national budget. The economic-services sector comes second with P1.15 trillion, 30.6 percent of the proposed budget. The budget for economic services in 2018 will increase by 25 percent, from the 2017 amount of P922 billion. The other agencies have the following budgetary allocations: Department of Interior and Local Government, P172.3 billion; Department of Health, P164.3 billion; Department of National Defense, P145 billion; Department of Social Welfare and Development, P138 billion; Department of Agriculture, P54.2 billion; Autonomous Region in Muslim Mindanao, P33.5 billion; and De-

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Tan, who also controls the biggest cigarette maker in the Philippines, had a net worth of $5.9 billion as of September 8, according to Bloomberg Billionaires Index. His wealth gained about 13 percent, or $651 million this year, boosted by a 39-percent advance in LT Group shares. The listed flagship is the holding company for his airline, banking, liquor, brewery, property and tobacco businesses.

‘Easy life’

The LT Group chairman is also preparing to hand over the reins to the conglomerate, saying he has a succession plan in place. He declined to say who would take the helm, or when they would take over. Michael

to P23.6 billion in 2018. “This amount will be used to improve linkage roads to key ports and production areas in Northern Mindanao, Southern Mindanao, Central Mindanao and Caraga,” Duterte said. Also, Duterte added the Aviation Infrastructure Program of the DOTr will obtain a 48.5-percent budget increase, from P6.8 billion in 2017 to P10.1 billion in 2018, “to maximize and expand existing airports and build new ones.” Duterte said the government provided some P2.7 billion for night-landing capabilities of the Clark International Airport to help decongest the Ninoy Aquino International Airport. Some P1.7 billion will also be allocated for the modernization of ports and harbors nationwide, including the Al-Bar k a Por ts Cluster in Al-Barka, Basilan; Volcano Island Port in Talisay, Batangas; and Agk awayan in Looc, Occidental Mindoro. Duterte added the government will also shell out P5.3 billion for maritime infrastructure program “to boost maritime-patrol capabilities”. On top of this, the rail-transport program will receive P26 billion under the 2018 budget proposal, of which P6.6 billion is allocated for the Mindanao Railway Project Phase 1.

Tan, his son and LT Group president, is among the likely successors, along with Lucio Tan Jr., the son who heads the group’s liquor maker Tanduay Distillers Inc. and builder Eton Properties Philippines Inc. Son-in-law Joseph Tan Chua is president of MacroAsia Corp., an aviation-support provider and a partner of Deutsche Lufthansa AG. “Tan is still relatively hands-on compared with the other tycoons of his generation,” said Paul Michael Angelo, analyst at Regina Capital in Manila. “But we shouldn’t see a major disruption on operations arising from succession, as Tan has put in place key executives and delegated key management functions.”Tan said he still gets up at 4 a.m. to play golf before a minimum eight-hour day running his conglomerate, “I am old,” Tan said. “My wish now is for an easy, easy life.” Bloomberg News