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Friday, September 15, 2017 Vol. 12 No. 337

Major reforms required for 9% GDP growth–JFC

By Cai U. Ordinario

@cuo_bm

usinessmen belonging to the Joint Foreign Chambers (JFC) on Thursday identified reforms that must be undertaken by the Duterte administration to grow GDP by 9 percent and achieve the goals of its 10-point socioeconomic agenda. The JFC’s recommendations are contained in its publication, titled “Arangkada Philippines and the 10-Point Socioeconomic Agenda of the Duterte Administration”,

which was presented during a forum held in Pasay City. “Despite the impressive progress, in comparison to its other major Asean neighbors, the Phil-

ippines still lags behind in terms of overall competitiveness,” the report read. Citing the most recent data from the World Economic Forum (WEF)

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The antidote to smuggling Dr. Jesus Lim Arranza

6.4 percent The expansion in Philippine GDP in the first semester Global Competitiveness Report, the Arangkada publication noted that the Philippines rated considerably lower than Malaysia, Thailand and Indonesia, and only slightly ahead of Vietnam. “The unfortunate 10-place drop from 47 in 2015 to 57 in the 2016 WEF competitiveness ranking underlines the need to both sustain improvements and increase efforts

Make Sense First part of a series on the ills of smuggling and how to prevent it.

or the past several weeks, the nation’s attention stayed glued to the Senate hearings on smuggling at the Bureau of Customs (BOC) and the over P6.4 billion worth of drugs that were smuggled into the country through the supposedly secured gates of the BOC. Smugglers have gone so brazen with their illegal activities that they no longer drop their smuggled goods at the country’s unguarded shores at night under the cover of darkness, but anytime, at the very doorstep of the BOC. With the collusion between some corrupt Customs officials and unscrupulous brokers and importers, smuggling continues to be a social and economic scourge in the country that is affecting the Filipinos’ social and economic lives. Continued on A11

See “GDP growth,” A2

MMDA chief eyes 2-day number-coding scheme anew By Claudeth Mocon-Ciriaco Correspondent

ALU-TUCP: ₧21 wage hike for Metro Manila approved By Elijah Felice E. Rosales

etropolitan Manila Development Authority (MMDA) Chairman Danilo D. Lim intends to revive a proposal to implement a two-day number-coding scheme instead of the existing one-day coding system to solve the heavy traffic situation in the metropolis. Lim, who was the guest at the BusinessMirror Coffee Club Forum on Thursday, said he will again propose to Metro Manila mayors the expanded numbercoding scheme, a plan he earlier abandoned after receiving numerous adverse reactions. He got the idea when he attended the budget hearing in Congress on Tuesday. “W hen I attended the MMDA bud get hea r i ng i n Cong ress t he ot he r d ay, some of t he cong ressmen were actua l ly advocating that we revise our number-coding scheme,” Lim said, adding that the congressmen specifically obser ved the great volume of vehicles in the

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he government on Thursday approved a P21 wage hike for workers in Metro Manila after three months of evaluating wage-hike petitions, according to a labor group. In a statement, the Associated Labor Unions-Trade Union Con-

gress of the Philippines (ALUTUCP) reported that the Regional Tripartite Wages and Productivity Board-National Capital Region (RTWPB-NCR) has green lighted the increase for Metro Manila minimum-wage earners. “The wage board [on Thursday] announced a P21 daily wage increase on top of the existing See “Wage hike,” A2

Grounded jets, in-flight food fuel MacroAsia stock’s 400% gain

Metropolitan Manila Development Authority (MMDA) Chairman Danilo D. Lim (center) details the initiatives that the MMDA is implementing to improve the traffic condition in Metro Manila at the BusinessMirror Coffee Club Forum on Thursday, as D. Edgard A. Cabangon (left), chairman of the Aliw Media Group, and Benjamin V. Ramos, president of the BusinessMirror, listen intently. NONIE REYES

major thoroughfares. Lim said the cong ressmen even sug gested t he numbercoding scheme be implemented two days or three days a week. “I

PESO exchange rates n US 50.9670

told them that I have to take this up to the Metro Mayors Council [MMC]. [We at] MMDA cannot do t his on our ow n. If t hey approve it, then we can have

that [expanded number-coding scheme],” he said, stressing that the MMC is the policy-making body of the MMDA. See “MMDA,” A2

rounded planes are helping a Philippine stock fly. Behind the fivefold increase in MacroAsia Corp. shares this year is a venture’s expanded jet service and maintenance business. The company is the top performer among the 274 equities listed on the Philippine Stock Exchange, with its market value approaching $300 million. More gains may lie ahead.

Part of billionaire Lucio Tan’s empire that includes Philippine Airlines Inc., Manila-based MacroAsia expects its other businesses—airline catering and baggage handling—will also benefit as the government attracts international travelers by improving the nation’s roads and airports. Profits will increase at least 20 percent a year, it says, after more than doubling in 2017.

See “Grounded jets,” A2

n japan 0.4614 n UK 67.3427 n HK 6.5235 n CHINA 7.7875 n singapore 37.7477 n australia 40.6921 n EU 60.5896 n SAUDI arabia 13.5905

Source: BSP (14 September 2017 )

BMReports BusinessMirror

A2 Friday, September 15, 2017

www.businessmirror.com.ph

Pernia rejects draft RFINL for being ‘too puny’

By Cai U. Ordinario

@cuo_bm

he Duterte administration wants to adopt a more aggressive stance when it comes to reducing the country’s Regular Foreign Investment Negative List (RFINL), according to the National Economic and Development Authority (Neda). On the sidelines of Arangkada Pilipinas Forum 2017, Socioeconomic Planning Secretary Ernesto M. Pernia said he wants to allow 100-percent foreign ownership in certain sectors. While he declined to name these sectors, Pernia has already made known his position on the need to

MMDA. . .

liberalize sectors, such as public utilities, the media and the practice of professions, such as teaching. “[We want more] aggressive liberalization.... They have shown me a draft, and I find it too puny in terms of the changes, you know. I want a more aggressive [list] and we have to be on a par with the other Asean

Continued from A1

Lim floated the idea in June, but public-transport groups and motorists rejected it. “I did that to get the reaction, their sentiments, the feedback of our kababayan [countrymen]. Since then we have not talked about this in the Metro Mayors Council meeting,” Lim said. However, Lim will bring the proposal up to the MMC again next month, “since Rep. [Danilo] Suarez [of the Third District of Quezon] brought that up, I committed to him that I will bring it up to the council meeting”. He also appealed to the motorists to make a little sacrifice. “’We do complain [of the traffic congestion], but when we make a move to reduce the number of vehicles to ease up traffic, we don’t want to make that sacrifice.” The MMDA chief noted that

GDP growth. . .

to move ahead of the competition, which is not standing still in their own efforts to attract more investment,” the report added. The JFC said it outlined numerous recommendations for boosting the economy, increasing competition and improving the investment climate, infrastructure building, rural development, investing in human-capital development and strengthening the implementation of the reproductive-health law. The group also called for promoting science and technology, developing creative industries, promoting manufacturing and strengthening the poverty alleviation and social-protection program. “The government should adopt

there are more than 30 percent of the country’s vehicle volume are sharing less than 5 percent of the national road network. There are around 2.6 million registered vehicles in Metro Manila. Under the current numbercod i ng sc heme, veh ic les a re banned just once a week: vehicles with license plates ending in 1 and 2 are banned on Monday; those ending in 3 and 4 on Tuesday; those ending in 5 and 6 on Wednesday; those ending in 7 and 8 on Thursday; and those ending in 9 and 0 on Friday.

Christmas season

Lim is also set to meet with mall owners and operators today (September 15) to discuss traffic-mitigation measures throughout the holiday season. He said the agency

Continued from A1

policies to double the GDP growth rate to 9 percent. This has to be supported by a clear long-term industry policy,” the Arangkada report read. This clear long-term industry policy, the JFC said, will allow the Philippines to also increase its earnings from merchandise exports by 15 percent annually and hit the $100-billion mark. European Chamber of Commerce of the Philippines President Guenter Taus said for the longest time factories were only doing assembly work. When it comes to manufacturing, Taus added the countries that have strong industries are South Korea, Japan, the United States and EU. The manufacturing sector has

countries,” Pernia said. “There are many things in there; they are not increasing it by 40-percent to 60-percent equity. [But] I said bring it up to 100 percent for certain areas,” he added. Pernia said this was the reason the revised version of the RFINL was not discussed in the Neda Board meeting on Tuesday evening. However, he assured that the revised version will be presented in the next Neda Board meeting. Pernia also said this will ensure that the President will be able to issue an executive order (EO) on the matter. Neda Undersecretary Rosemarie Edillon told the BusinessMirror on Thursday that the new EO only has to do with the administration’s agenda for reform. The EO will be released to instruct agencies to liberalize sectors that they regulate. This means that the EO will mandate agencies to

PERNIA: “[We want more] aggressive liberalization.... They have shown me a draft, and I find it too puny in terms of the changes.”

actively seek amendments to existing laws that further the liberalization of industries and professions. “Actually, the EO is an agenda for reform. It provides the marching orders for the concerned agencies to work toward the easing of foreign-equity restrictions of certain sectors,” Edillon said via SMS. Earlier, Pernia said once the Neda Board approves the new list, the President can already issue the needed EOs to allow more foreigners and foreign investments to practice their profession and do business in the country.

will start its preparations for the expected holiday rush when traffic flow in the metropolis are expected to be heavy. The MMDA noted that malls and similar commercial establishments are traffic generators during the holidays, so there is a need to come up with “effective and sustainable measures to provide convenience to the public”. He said there are around 36 malls on Edsa and monstrous traffic is expected because Filipinos are flocking to shopping malls and markets. Some of the plans, he added, is to revive the designated 17 routes as Shopper’s Lane, or formerly Mabuhay Lanes, to aid motorists in avoiding heavy traffic. The Shopper’s Lane will be the alternate route to shorten the travel time of motorists by avoiding Edsa. The MMDA official said the local government units are the ones

in charge of the secondary roads where the Shopper’s Lane will be located, so they should be active in maintaining the area and clearing the obstructions. As to the mall operators and owners, the agency plans to implement anew several traffic-alleviating schemes that the agency implemented last year, like conducting sales during weekends only from 12:01 a.m. of Saturday to 11:59 p.m. on Sunday. He added that they will ask the mall owners to have additional manpower to avoid queuing of vehicles of customers.

created 5 million to 7 million jobs in these countries. In order to “create” a manufacturing sector, Taus said the government needs to support small and medium enterprises to enable them to manufacture and deliver goods. “If you look at $25 billion or $30 billion in export in the electronics sector and look at the related import figures, you will be shocked. Everything we actually do here, what we keep here is labor because all the rest is import, and what we export is a semifinished good, not the finished product,” Taus added. American Chamber of Commerce senior adviser John D. Forbes said this is linked to the recommendations from the last Sulong Pilipinas summit, which urged the government to focus on the country’s competitive advantages.

Forbes added, however, the industry road maps have not identified specific commodities or products that the Philippines can concentrate on. While a 9-percent GDP growth and a double-digit export growth has not been recorded in nearly 10 years, Socioeconomic Planning Secretary Ernesto M. Pernia said these are “doable targets” for the Philippines. The highest GDP growth registered by the Philippines in nearly 40 years is 7.6 percent, while the highest export growth in 10 years was posted in 2010 at 33.98 percent. “A higher growth is always an ambition, and we all want to grow the economy faster, exports, investments, so [there’s] nothing wrong with that. This is why they are using the word arangkada, because it’s really quantum jumps, quantum leaps,” Pernia said at the sidelines of forum. “[These targets are] feasible, especially when we remove the restrictions on foreign investment and the negative list,” he added. Philippine Association of Multinational Companies Regional Headquarters Inc. Director Safdar Quraeshi said agriculture is a “clear competitive advantage” for the country. However, Quraeshi added many agribusinesses do not have access to shared machineries, solar technology and other innovations. He said the government must extend incentives to these agri f ir ms while encourag ing the growth and development of companies belonging to the businessprocess outsourcing sector. In the January-to-June period, the economy grew by 6.4 percent, slower than the 7 percent posted in the same period last year. GDP expanded by 6.5 percent in the second quarter on the back of strong manufacturing growth, trade, and real estate, renting and business activities.

No-contact app

Lim also disclosed that the agency is upgrading its system on the NoContact Apprehension Policy. The MMDA has partnered with the Department of Science and Technology (DOST) to strengthen the implementation of the policy

These include allowing foreign professors to teach in various universities in the Philippines. Currently, private and public universities cannot hire foreign faculty members. This becomes a problem, especially in the case of Filipino-American professors, who, based on their credentials, are qualified to teach in the Philippines. But before they can teach here, they have to renounce their American citizenship. “The reason our universities are not highly rated—its only UP [University of the Philippines] that’s rated—is we don’t allow foreign professors to teach and be paid, get an item that is already standard in other countries,” Pernia said. The Neda is tasked to review and revise the country’s RFINL, which contains restrictions on foreign investments and the practice of professions based on the constitution and Philippine laws.

The RFINL contains investme nt a re a s/ac t iv it ies where foreign-equity participation is limited by mandate of the Constitution and specific laws. It also consists of investment areas/activities where foreign- equity participation is limited for reasons of defense, security, risk to public health and morals, and protection of small- and medium-sized domestic market enterprises. The amendment of the list is headed by the Neda Secretariat, as provided for under Section 8 of Republic Act 7042, or the Foreign Investments Act of 1991, which states that amendments may be made upon the recommendation of the secretar y of national defense or the secretar y of health, or the secretar y of education, endorsed by the Neda, approved by the President , a nd promu lgated by a Presidential Proclamation.

using the technology developed by De La Salle University (DLSU) students. The DOST gave the engineering students of the DLSU a P4-million grant. A technology-based application dubbed as CATCH ALL, or Contactless Apprehension of Traffic Violators on 24-hours Basis, All Vehicle Detection System, was earlier 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 traffic-violation identification. Lim stated that the 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. The agency and the DOST will also put up outdoor LED screen for its 24-hour notification system with traffic violation information system, which includes car profile, plate number, violation, date and time of violation, for a more transparent apprehension. “With the CATCH ALL technology, we can easily identify erring motorists in real time without obstruction of traffic flow, but still ensures that the violators are still being caught and penalized,” Lim stressed. The no-contact apprehension was implemented by MMDA through Metro Manila Council Resolution 16-01, Series of 2016, to apprehend moving violations, such as loading/unloading in prohibited zone, disregarding traffic sign and reckless driving, among others.

Grounded jets. . . “MacroAsia could be a potential threebagger even at the current level,”said Jonathan Ravelas, chief market strategist at BDO Unibank Inc., referring to a threefold increase. “Imagine how high the stock would go once government delivers on infrastructure and tourist traffic takes off.”The Philippines has set a $170 billion, five-year infrastructure program, funded in part by tax changes that will raise new revenue while cutting personal taxes. Congress has yet to approve the first part of the plan and any delay in actual construction is an added risk. “MacroAsia is a bet on Philippine tourism,” President Joseph Chua said in an interview on Monday. The company is planning to join Philippine Airlines’s effort to build a new terminal at Manila’s international airport. It

Wage hike. . .

Continued from A1

“will grow the pie for everyone,” said Chua, a son-in-law of the billionaire. Chua said another expansion is also in the works at Lufthansa Technik Philippines Inc., which last year added the ability to repair grounded Boeing Co.’s B777 jets in addition to working on Airbus SE’s A380. MacroAsia owns 49 percent of the venture that was set up in 2000; Lufthansa Technik AG controls the rest. MacroAsia’s share in the business will account for 65 percent of profit this year, CFO Amador Sendin said, adding net income in 2017 will probably increase almost threefold to P1.12 billion ($22 million). A weaker peso, near an 11-year low against the dollar, will help boost profit as more than three fourths of the company’s revenue is in the US currency, Sendin said. Bloomberg News

Continued from A1

P491 daily minimum wage for more than 6 million minimum-waged workers in 17 cities and municipalities in Metro Manila,” the statement read. Due to the new wage-hike order, the ALU-TUCP said minimum wage in Metro Manila will become P512 effective in October. The BusinessMirror tried to confirm this report from the RTWPB-NCR and the Department of Labor and Employment. However, efforts of the BusinessMirror to verify the new wage-hike order were not met with appropriate response from the two agencies. According to the ALU-TUCP, the P21- wage hike is not enough for minimum-wage earners to cope up with the rising prices of goods and increasing costs of services. “P21 is only 4.27 percent of the current P491, so it obviously did not lift workers out of poverty. Workers who helped built a high economic growth of 6.9-percent average GDP do not deserve this very small amount,” ALU-TUCP Spokesman Alan A. Tanjusay said.

“We have no other choice but to come and ask President Duterte to grant our long-standing request to him to provide a P500 monthly [conditional cash transfer]-like cash voucher subsidy to minimum-waged workers who helped build our high economic growth,” Tanjusay added. According to the ALU-TUCP, the proposal for a P500 monthly subsidy was submitted to the President in April. The labor group said the cash voucher, if granted, will be used by minimumwage earners for purchasing rice, groceries and medicines. The P21-wage hike is far less than what the ALU-TUCP petitioned in the wage board. The TUCP, for one, pushed for an across-the-board wage-hike increase of P259, while the ALU P184 and the Association of Minimum Wage Earners-Philippine Trade and General Workers Organization P175. The ALU-TUCP has two representatives in the wage board, namely, Angelita D. Señorin of the TUCP and lawyer Herman N. Pascua Jr. of the ALU.

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Congress told: Go slow on filing of impeach cases By Catherine N. Pillas

@c_pillas29

he Makati Business Club (MBC) is cautioning against the “unfettered” filing of impeachment cases against government officials, saying the impeachment process should not be used as a tool to silence opposition. In a news statement released on Thursday, the MBC expressed “deep concern” on the spate of impeachment complaints against high-ranking government officials, indicating the series of filings is undermining the democratic principle of the process. “We believe that the impeachment process engraved in the Constitution must not be invoked arbitrarily to persecute and silence individuals with opposing views nor to undermine independent institutions, the bulwark of our nation’s democracy,” the business group said. On Wednesday the House of Representatives Justice Committee found the impeachment complaint filed by lawyer Larry G. Gadon against Chief Justice Maria Lourdes A. Sereno as sufficient in form and substance. This is one of two complaints filed against Sereno. Earlier in the year, the same panel in the Lower House junked two impeachment complaints filed against President Duterte by Party-list Rep. Gary Alejano of Magdalo. Last month impeachment raps were also filed by former Rep. Jacinto Paras of Negros Oriental against Commission on Elections Chairman Andres D. Bautista, citing his alleged failure to disclose his bank accounts, investments and properties in his statement of assets, liabilities and net worth. The Volunteers Against Crime and Corruption (VACC) is said to be keen on filing an impeachment complaint as well against Ombudsman Conchita Carpio-Morales next week. The free-wheeling filing of impeachment complaints may not only shift focus on a reform-oriented legislative agenda, but may serve to dampen foreign investors’ sentiment in the country, as well, the business group noted. “Undoubtedly, impeachment cases will also negatively affect investors’ perception to the economic and political stability of our country. As such, we respectfully remind Congress to be judicious in applying this ultimate accountability tool and to treat this as a weapon of last resort, as our Constitution intends it to be,” the MBC statement read.

Editor: Vittorio V. Vitug • Friday, September 15, 2017 A3

DFA notes ‘incomplete’ UNHRC report on Duterte’s antidrugs war

By Recto Mercene

@rectomercene

he Philippines on Thursday took to task United Nations High Commissioner for Human Rights Zeid Ra’ad Al Hussein for having “severely mischaracterized” the situation in the Philippines in his report to the Human Rights Council (UNHRC).

Foreign Secretary Alan Peter S. Cayetano and Philippine Deputy Permanent Representative Maria Teresa Almojuela separately called out the commissioner for criticizing the Philippine government’s humanrights record, saying his report on the conduct of antidrug operations was deliberate misinformation. “The Philippines has provided the Human Rights Council with all the facts regarding the campaign against illegal drugs in our report to the Third Cycle of the Universal Periodic Review [UPR] in May 2017,” Cayetano said. “The commissioner’s report would have been balanced and accurate had he considered the information that we provided, instead of just relying on

uncorroborated information,” he said. The UNHRC has urged President Duterte to uphold the international human-rights obligations of the Philippines, as he expressed “grave concern” over the state leader’s “open support for a shoot-to-kill policy” against drug suspects. During his opening statement at the 36th session of the UNHRC held in Geneva on September 11, Zeid said he was appalled by Duterte’s “lack of respect for due process rights of all Filipinos”, citing the President’s repeated pronouncements that he would not punish policemen who would kill drug suspects resisting arrest. The UNHRC, an intergovernmental body that consists of 47 member-states,

is responsible for the promotion and protection of all human-rights worldwide. Zeid addressed the UN council to present human rights issues in 40 countries, including the Philippines. “In the Philippines I continue to be gravely concerned by the President’s open support for a shoot-to-kill policy regarding suspects, as well as by the apparent absence of credible investigations into reports of thousands of extrajudicial killings [EJK], and the failure to prosecute any perpetrator,” Zeid told the UN assembly. “The recent killing of a schoolboy who was dragged into an alley and shot in the head by…policemen [in plainclothes] on August 16 was described by the Minister of Justice as ‘an isolated case’. However, suspicion of extrajudicial killings has now become so widespread that the initials EJK have reportedly become a verb in some communities—as in ‘he was EJKed’,” he added. Cayetano, likewise, reiterated the commitment of the Philippines to continue constructively engaging the UN Human Rights Council. “The Philippines has actively participated in the Universal Periodic Review process, and was one of the first countries to undergo the review in 2008, having championed the establishment of the UPR process under the UN Human Rights Council Mecha-

nism,” Cayetano stated. According to the secretary, the report he provided during the UPR Periodic Review emphasized Duterte’s directive to fight the drug problem by all means that the law allows. “The anti-illegal-drug campaign should follow approved protocols to ensure the protection of human rights, and that any erring law-enforcement agent would be investigated and prosecuted to the full extent of the law,” said the secretary, who led the Philippine delegation to the Third Cycle of the UPR in Geneva and presented the country report. In Geneva Almojuela responded to the commissioner’s report, stating that “the practice of making highly biased and sweeping generalizations, without due consideration of the facts on the ground, has no place in the Human Rights Council.” “Like any country, the Philippines cannot and does not assert that it manages the challenges to human rights in a perfect manner, but the Philippine government, more than any party here, seeks justice and dignity for all Filipino people,” she said. In her statement, Almojuela underscored that the Philippines “is a democratic country that strongly adheres to the rule of law, with well-established and institutionalized human rights, policies and programs.”

Economy

A4 Friday, September 15, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon

Economic team slates Japan trip for BBB infra program By Rea Cu

@ReaCuBM

conomic managers of the Duterte administration are scheduled to visit Japan by the end of the month to discuss with the Japanese government on how to fast-track the processing and implementation of projects, and to meet with potential investors as well, the Department of Finance said. The team is expected to be in Tokyo on September 25 and 26 to discuss with Japanese officials ways of speeding up the implementation of the Duterte administration’s flagship infrastructure projects for possible funding by Japan, and separately brief potential investors on the vibrant prospects for the Philippine economy. The meeting in Tokyo of the Philippines-Japan High-Level Committee on Infrastructure and Economic Co-operation, will be the third dialogue to be called since the first was held in also Tokyo in March this year. Finance Secretary Carlos G. Dominguez III said that the third high-level committee meeting will focus on ways to speed up the processing and implementation of the timelines of the flagship infrastructure projects that are being eyed for possible Japanese financing. “We want to discuss with them how we can fast-track the process of implementing the projects,” Dominguez said. The economic managers will be meeting with Hiroto Izumi, a special advisor to Japanese Prime Minister Shinzo Abe, who heads the Japan

side of the high-level committee, along with officials from the Japan ministries of Finance, Foreign Affairs, Trade and Industry, Economy and of Land, Infrastructure, Transport and Tourism; and officials from the Japan International Cooperation Agency (Jica) and Japan Bank for International Cooperation. While in the economic road show, Dominguez is expected to tell investors about the Duterte administration’s plans to sustain the economy’s growth rate at 7 percent or higher over the medium term through its ambitious “Build, Build, Build” program. In July Socioeconomic Planning Secretary Ernesto M. Pernia of the National Economic and Development Authority, announced an indicative list of projects with an estimated total cost of P315.4 billion that were pipelined for possible Japanese financing. The projects include: the Malitubog- Maridagao Irrigation Project Phase II; Metro Manila Subway Project Phase I; Malolos-Clark Railway Project; Cavite Industrial Area Flood Management Project; Dalton Pass East Alignment Alternative Road Project; Road Network Development Project in conflict-affected areas in Mindanao; Circumferential Road 3 Missing Link Project; and the Pasig Marikina Channel Improvement Project Phase IV. Abe, during his visit to Davao City in January 2017, committed a total of ¥1 trillion in official development assistance and investments to the Philippines for the next five years.

DENR’s Cimatu backs global call to eliminate hydrofluorocarbons

nvironment Secretary Roy A. Cimatu has called on the air-conditioning and refrigeration sector to support the gradual phasedown of hydrofluorocarbons (HFCs). HFCs are powerful greenhouse gases (GHG) that contribute to global warming. The Philippines is joining the celebration of the International Day for the Preservation of the Ozone Layer on September 16. Incidentally, the day also marks the 30th anniversary of the signing of the landmark Montreal Protocol on Substances that Deplete the Ozone. The gains from the Montreal Protocol, particularly the phaseout of several ozone-depleting substances (ODS), are being threatened by the use of HFCs as alternative refrigerants, Cimatu said in a news statement issued on Thursday. “HFCs are not ODS, but are potent GHG, which can have high globalwarming potentials and are rapidly increasing in the atmosphere," Cimatu warned. “Without any mechanism to control HFCs, it is predicted that its

emissions could negate the climate benefits achieved by the Montreal Protocol,” he added. Commonly used in refrigerators and air-conditioning systems, the HFCs are called “super greenhouse gases” with a warming effect that can be several thousand times greater than carbon dioxide. HFCs were developed after the phaseout of the ozone-depleting chlorofluorocarbons and hydrochlorofluorocarbons required by the Montreal Protocol in 1987. The climate benefit of reducing HFC emissions has been widely recognized, leading to an amendment of the Montreal Protocol, known as the Kigali Amendment, calling for developed countries to start to phase down HFCs by 2019, and in developing countries, including the Philippines, to follow with a freeze by 2024. Adopted on October 15, 2016, in Rwanda, and expected to enter into force on January 1, 2019, the Kigali Amendment aims to avoid nearly half a degree Celsius of warming by the end of the century. Jonathan L. Mayuga

BusinessMirror

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Investment pledges rose 38.4% in 1st 8 months of 2017–BOI

By Catherine N. Pillas

@c_pillas29

nvestment pledges registered at the Board of Investments (BOI) reached P325.8 billion in the first eight months of the year, up by 38.4 percent, from P235.4 billion in the same period last year.

In a news statement issued on Thursday, the country’s major investment-promotion agency said the 38.4-percent increase translates to approvals of 299 projects in the January-to-August period. Foreseen employment generated from January to August 2017 increased by 49 percent. Last year there were 42, 214 workers seen to be employed by investment approvals, compared to 62,803

workers this year. Trade Secretary and BOI Chairman Ramon M. Lopez said in a statement the investment figure could exceed the target with investors exploring opportunities in energy, infrastructure and agribusiness. “Investors are banking on the construction boom as a result of the “Build, Build, Build” infrastructure program of the government and, to sustain this, they are also looking at

299 The total number of projects approved in the January-toAugust period

the energy requirements to get this done,” he said. Among the biggest projects approved for August were: The P14.6-billion wind-energy project of Currimao Solar Energy Corp. in Rizal; The P12.5-billion cement production of South Western Cement Corp. in Cebu; and The P777-million biomass-energy plant of VS Gripal Power Corp. in Nueva Ecija.

The P763.2-million low-cost housing project of 8990 Housing Development Corp. in Davao City and the P 623.5-million e-commerce project of Global Fashion Group rounded out the five biggest projects. Trade Undersecretary and BOI Managing Head Ceferino S. Rodolfo added the agency, with the P325-billion haul year-to-date, have already achieved 65 percent of its P500billion target. Construction and public-private partnership registered projects amounted to P127.7 billion during the January-to-August period, which is a 300-percent surge from the same period in 2016. The realestate sector remained robust with P72.8 billion, up by 113 percent, from P34.1 billion last year. Manufacturing investments continued on an upward trend with P36 billion in project approvals, up by 74 percent, compared to the same period last year.

2 Metro Manila bridge projects to break ground in Q4–DBM

he Department of Budget and Management (DBM) on Thursday said a number of infrastructure projects approved by the National Economic and Development Authority (Neda) under the Duterte administration will start to break ground by the fourth quarter of the year. Budget Secretar y Benjamin E . Diok no sa id a mong t hese projects that will commence implementation are the BinondoIntramuros bridge and the Estrella-Pantaleon bridge. These bridge projects, he added, will help ease traffic congestion in Metro Manila. “ S ome of t he m [proje c t s] will be started [in the] fourth quarter of this year. We'll be g rou ndbrea k ing t he br idges, for example, and some projects, but most of them will be started next year,” Diokno told financial reporters at the sidelines of the Arangkada Philippines Forum 2017 at the Marriott Grand Ballroom on Thursday. The two bridge projects are funded by grants from the Chinese government, with the combined amount of P97 billion. When asked if the government would wait for the approval of the Comprehensive Tax Reform Program before starting the infrastructure projects approved by Neda, Diokno pointed out that it will go as planned. “No, we won’t wait for the tax reform,” he added. In terms of the labor force that will be needed for the infrastructure buildup planned by the government under the Duterte

Bread watch

A baker bids his time off to allow oven-fresh bread to cool down after baking. The recent rise in the price of imported wheat has triggered a spike in the price of bread. NONIE REYES

administration, the budget chief said an “overwhelming” number of workers and laborers will be needed for the implementation of all the projects. “Luckily, we will not do it all at one time, so it's going to be an Scurve as I said. We have enough time to prepare for that. I think we have 1.2 million people to join the labor force every year,” he said. He added that graduating students will be joining the labor force, as well as overseas Filipino

workers who are coming back in the country, among others, can be tapped to support the government’s “Build, Build, Build ” (BBB) program. According to Diokno, the ambitious BBB program directly addresses the fourth point of the 10-point socioeconomic agenda, which seeks accelerate annual infrastructure spending to account for 5 percent of GDP with public-private partnerships playing a key role. “The present poor state of in-

frastructure reflects decades of neglect and misallocation of public resources,” Diokno said. Infrastr ucture spending is projected to increase from 5.4 percent to 7.3 percent of GDP from 2017 to 2022. Such increase will be accommodated through an expansion of fiscal space, with the fiscal deficit to be increased from 2 percent to 3 percent of the country's GDP, coupled with tax policy and administrative reforms. Rea Cu

Foreign chambers to PHL: Do better in curbing crime, violence

he Joint Foreign Chambers (JFC) is hoping to see the Philippines do better in reducing business costs incurred due to high incidence of crime and violence. The foreign chambers, in their Sixth Annual Arangkada Anniversary Assessment report, cited data from the latest World Economic Forum’s (WEF) Global Competitiveness Report, indicating that the Philippines continues to be at the bottom of reducing “business costs of crime and violence”. According to the Arangkada report, citing data from the 2016-2017 WEF document, the Philippines was the near bottom among Asean-6 economies in shielding business

from incurring costs due to crime and violence. The private-public government office tasked to monitor the country’s overall competitiveness, the National Competitiveness Council (NCC), said the country’s rating has been consistent in previous reports, and it is up to the country’s law-enforcement bodies to improve on it. “On the part of business, there’s very little we can do about it. Essentially, it’s a law-enforcement question. An indicator of this rising cost related to crime and violence is the number of private security groups being hired. People are investing on these, and so the cost of doing business is going

up for them,” NCC Private Sector Cochairman Guillermo M. Luz said. The business costs of crime and violence is just one among 140 total indicators that determines the country’s overall competitiveness, and yet the significance of the ranking weighs substantially from the perspective of the public, Luz noted. “The weight [on the overall index] is not big but in people’s minds it can be important. If that is the perception that stays in people’s minds, it’s not good, regardless of the weight it has on the entire index,” Luz said. The 2016-2017 WEF report states the Philippines got a ranking of 110 out of 138

economies on the sub-indicator of business costs of crime and violence, a downgrade from the previous year’s 92nd ranking from 140 economies. The year before, the Philippines’s ranking was at 77th spot out of 144 countries. On the part of JFC, this declining performance can be credited to a number of factors, including the long-standing conflict between communist rebels and the government, and the historically higher-thanaverage crime and murder rates in the country compared to the rest of Asia. The report also states the ongoing Marawi crisis, and the bloody antidrug campaign of the President coupled with extra-

judicial killings by assassins as contributing to a less-secure image of the Philippines as an investment destination. While foreign businesses declined to answer if the recent spike in violence in the country is likely to increase the business costs of crime and violence, they affirmed that peace and order remain a prerequisite for higher investments. “Once the peace and order has been contained, we will make sure we bring investments there in farming and technology, but you can’t put carriage before the horse. Terrorism is present every where in the world... One thing is a fact: We will not grow at a pace we would like to see if

we can’t contain the peace and order situation,” European Chamber of Commerce in the Philippines President Guenter Taus said. Bruce Winton, president of the American Chamber of Commerce in the Philippines, added, the effect of crime and violence on adding costs varies per industry and per sector. The Arangkada Report issued 12 recommendations on reducing the cost of business related to crime and violence, including pursuing meaningful implementation of the government’s agreement with the Moro Islamic Liberation Front, and launching a program to combat criminality, illegal drugs and corruption. Catherine N. Pillas

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China’s steel mills run at full tilt as output hits new peak

TEEL production in China chalked up a fresh monthly record as mills in the world ’s top supplier increase output to profit from a rally in prices to six-year highs before government-ordered pollution curbs are implemented. Crude-steel output climbed to 74.59 million metric tons last month, surpassing the previous peak of 74.02 million in July, and up from 68.57 million in August 2016, according to the statistics bureau on Thursday. While that’s an all-time high for the month, daily output was less than the record in June. Production surged 5.6 percent to 566.4 million tons in the first eight months, also a record. Steel prices have been supercharged this year in the country that accounts for half of global output. A crackdown on illegal mills shuttered some supply, boosting the remaining producers, while demand has been underpinned by significant statebacked stimulus. Investors are also eyeing signals that the government will press ahead with antipollution curbs over winter. “Steel mills have boosted output as profit margins are good,” said Helen Lau, an analyst at Argonaut Securities (Asia) Ltd. in Hong Kong. “Production cuts won’t set in until September or October, so steelmakers are churning out as much as they can in the meantime.” Spot reinforcement bar in China, a benchmark product used in construction, hit 4,396 yuan a ton

early this month, the highest level since October 2011. Prices have gained 30 percent this year. Steel output may drop in coming months as Asia’s top economy presses ahead with supply-side reforms. Hebei province, the center of China’s mammoth steel industry, has plans that’ll allow for winter output cuts of as much as 50 percent to reduce pollution. Citigroup Inc. has estimated daily production could shrink 8 percent because of the environmental crackdown.

Clean-air push

MILLS do have some alternatives, according to Barclays Plc. They include overreporting idle capacity, which results in fewer operating plants being cut, and using more high-grade iron ore to boost yields, the bank said on August 29, predicting the cleanair push will only affect 2 percent of total production. Ultimately, it boils down to profitability, as furnaces will keep producing if margins remain robust, according to Argonaut’s Lau. China’s steel output will probably rise to 841 million tons this year from 808 million in 2016, Lau said. In contrast to steel, China cut aluminum production for a second month in August from a record as smelters shut plants, amid a government campaign to eliminate illegal capacity. Primary output fell 1.7 percent on month to 2.64 million tons, and was down from 2.93 million in June, according to bureau data. Bloomberg News

Defense chief says US must keep all parts of nuclear force

INOT AIR FORCE BASE, North Dakota—Defense Secretary Jim Mattis on Wednesday said he has become convinced that the United States must keep all three parts of its nuclear force, rather than eliminate one, as he once suggested. Some argue that ground-based missiles may no longer be necessary to America’s policy of deterrence, and the Trump administration has been reviewing the military’s nuclear posture. Mattis has called the submarine-based component “sacrosanct” and has said it is necessary to retain the ability to fire nuclear weapons from planes. Together, those three prongs constitute what the military calls its nuclear triad. Before he took over in January as President Donald J. Trump’s Pentagon chief, Mattis had suggested that long-range, si lo based weapons, known as intercontinental ballistic missiles, might be expendable. “I’ve questioned the triad,” Mattis told reporters flying with him to Minot Air Force Base, a nuclear base in northwestern North Dakota. He said his view has changed. “I cannot solve the deterrent problem reducing it from a triad. If I want to send the most compelling message, I have been persuaded that the triad in its framework is the right way to go,” Mattis said. Mattis has previously indicated this evolution in thinking, but his statements on Wednesday were emphatic. The key to avoiding nuclear war, he said, is maintaining a nuclear arsenal sufficient to convince a potential enemy that attacking the US with a nuclear weapon would be suicidal. “You want the enemy to look at it and say, this is impossible to take out in a first strike, and the [US] retaliation is such that we don’t want to do it,” he said. “That’s how a deterrent works.” Thus, the US will keep nuclear missile submarines, land-based nuclear missiles and nuclearcapable aircraft, he indicated.

Bad deal

MATTIS also said the Trump administration is reviewing the value of the New Start treaty negotiated with Russia by the Obama administration in 2010. The treaty, already in effect, requires reductions by both sides to a maximum of 1,550 strategic nuclear warheads by February. “We’re still engaged in determining whether it’s a good idea,” Mattis said, adding that the question is linked to adherence by others to separate but related arms treaties. That was an apparent reference to US allegations that Russia is violating the Intermediate-range Nuclear Forces treaty from 1987. Mattis declined to discuss the matter further, except to say the administration is not considering withdrawing from New Start. Trump has criticized New Start as a bad deal for America. Mattis’s trip was scheduled before the recent series of North Korean nuclear and missile tests. But those test were giving Mattis a chance to highlight what the Air Force promotes as an alwaysready fleet of land-based missiles and B-52 bombers equipped to deliver nuclear devastation to nearly any point on the globe in short order.

Nuclear arsenal

T HE Mi not ba se is home to more than 100 land-based nuclear missiles, as well as nuclear bomb-carr ying aircraft. After arriving at Minot, Mattis was f lown by Huey helicopter to a “missile-alert facility” and taken underground to a Minuteman launch-control capsule. He spoke to a missile-launch crew on duty, including 2nd Lt. Tia Hewuse, who later told reporters that she expressed to Mattis her pride in serving as part of the nation’s nuclear deterrent. “It’s what keeps our enemies at bay,” she said. Mattis also was touring a Minot facility where nuclear warheads are stored, and visiting with a B-52 bomber unit. AP

Friday, September 15, 2017

Saudi crackdown on dissent wins backing from top religious body

AUDI Arabia’s top religious body and media publicly supported the arrests of prominent clerics and activists who, in the past, have criticized the monarchy, after the government announced it had neutralized a threat from Saudis working for “foreign powers.” The apparent crackdown on potential dissenters, some with ties to the brand of political Islam that Saudi rulers have long opposed, comes at a time of growing speculation that King Salman will abdicate in favor of his already powerful son, Crown Prince Mohammed bin Salman. Given the absolute powers enjoyed by Saudi r u lers, any succession is sensitive. But that would especially be the case now with the 32-year-old prince promoting unprecedented economic change, at the same time as pursuing a more aggressive foreign policy that includes the war in Yemen and the boycott of Gulf neighbor Qatar. In a statement posted on Twitter on Wednesday, the Council of Senior Scholars declared there was “no place for political or ideological parties” in a nation “ based on the book of God and the guidance of his messenger.” Saudi newspapers accused those arrested of being aligned with the Muslim Brotherhood, an Islamist organization that several Gulf monarchies have designated as a terrorist group.

Among those detained by Saudi authorities are clerics Salman alOudah and Awad al-Qarni—who are both independent of the official religious establishment—as well as a well-known poet, Ziad bin Nahit, Islamic studies professor Mustafa Al Hassan and businessman Essam Al Zamil, according to Twitter posts and interviews with activists, relatives and friends.

‘Foreign powers’

BLOOMBERG was unable to independently verify their detention. Jamal Khashoggi, a Saudi commentator and former government adviser, said on Twitter that Saudi citizens aren’t yet fully aware of the prevailing “atmosphere of detention and intimidation.” After news of the arrests surfaced, the state security presidency said it had “neutralized and arrested” Saudis working for “the benefit of foreign powers” against the security of the kingdom. It didn’t identify who had been held. The government’s Center for International Communications and the Saudi Human Rights Commission didn’t immediately respond to requests for comment.

A sweep of this scale would represent a significant rounding up of conservative scholars and activists likely to be resistant to some of the changes featured in the Saudi reform push, according to analysts. “It’s hard not to call it a crackdown,” said James Dorsey, a senior fellow for the Middle East and North Africa at Singapore’s Nanyang Technological University, adding he didn’t want to speculate on the timing of the move. Existing Saudi restrictions on expressing criticism already make “pushing through economic and social reforms that are likely to spark debate—if not opposition—more risky,” he said.

Reform plan

SAUDI authorities have denied K ing Salman is about to step down but that hasn’t stopped t he s p e c u l at ion . Ne w Yor kbased Eurasia Group wrote in a report last week that the Royal Court was planning for Prince Mohammed ’s ascension. At least two of those detained expressed hope for a solution to the more than three month Gulf standoff with Qatar, which Saudi Arabia and its allies accuse of supporting of terrorism and sustaining links to the Muslim Brotherhood. Al Zamil has in the past posted comments on Twitter that were critical of elements of the government’s reform plan, which is designed to reduce the kingdom’s reliance on oil. More impor t a nt for m a ny Saudis, authorities have cut energ y and utility subsidies and want citizens to seek employment opportunities in the pri-

vate sector, instead of relying on government jobs. Al-Oudah, who has more than 14 million Tw itter followers, was jailed in the 1990s for advocating the Islamic militancy espoused by al-Qaeda. After he was released from prison, the religious scholar didn’t publicly comment on political Islam, though in March 2013, he published a letter online, saying rulers must take steps to stamp out political and business corruption and warned of risks when religious and political symbols lose their value.

‘Bad news’

SAUDI papers have joined in. Okaz and Al Watan accused those detained of being supporters of the Muslim Brotherhood and working for Qatari intelligence. One of the men arrested was “one of the most famous faces of the Muslim Brotherhood” who played a “hidden role” in preparing the youth “to lead demonstrations and protests in Gulf countries, especially in Saudi Arabia,” Okaz said. According to Theodore Karasik, a senior adviser at Gulf State Analytics in Washington, D.C., the crackdown could be related to problems the crown prince is facing at home and abroad. T h e r e ’s t h e w a r a g a i n s t Hout hi rebels in Yemen and “the impasse with Qatar. Domestically, there is resistance to his economic and social agenda from different corners of society,” Karasik said. Bad news will likely bring a reaction, he said by email, “and there is a lot of bad news.” Bloomberg News

Bloc ‘bouncing back’ after crisis-hit decade–EU chief

RUSSELS—The European Union is in a healthier economic state than it’s been for more than a decade and is ready to move on from Brexit, the bloc’s top official said on Wednesday. Addressing lawmakers at the European Parliament, Commission President Jean-Claude Juncker said the EU is “bouncing back” after a tough decade that’s seen much of the 28-country mired in an economic crisis and Britain vote to leave. “The wind is back in Europe’s sail,” he said in an upbeat hourlong annual “State of the European Union” address in Strasbourg, France. Juncker, whose commission proposes EU legislation and polices the bloc’s laws, said the EU is into its fifth year of economic recovery, with unemployment at a nine-year low. “Let us make the most of the momentum, catch the wind in our sails,” he added. “Europe can deliver for its citizens where and when it matters.” Since the global financial crisis first bared its teeth a decade ago, the EU project has been dealt a series of blows, most notably with Britain’s decision last year to leave. It’s also had to contend with a series of crises afflicting the countries—currently 19— that use the euro as their currency. However, the euro zone crisis appears to have abated somewhat and Greece is set to end its bailout era next summer.

Fascists, Nazis

WITH Britain due to leave the EU in March 2019, Juncker vowed that the bloc would take on no new members in the short term, and he dealt a blow to Turkey’s hopes of joining Europe’s rich club anytime soon. “Turkey has been moving away from the European Union in leaps

European Commission President Jean-Claude Juncker addresses the members of the European Parliament in Strasbourg, eastern France, to outline his reform plans for the European Union in the socalled State of the Union debate on September 13. AP

and bounds,” he said, criticizing Turkish President Recep Tayyip Erdogan and his government for arresting jour na lists and branding EU leaders “ fascists and Nazis.” “Journalists belong in editorial offices amid a heated debate, and not in prison,” he said. “I appeal today to the powers that be in Turkey: let our journalists go, and not just our journalists.” Ankara’s attitude, Juncker said, “rules out EU membership for Turkey in the foreseeable future.” As the Union comes to terms with losing one of its biggest member-states, Juncker called for EU leaders to meet in Romania the day after Britain leaves on March 29, 2019, to chart the bloc’s way forward as 27 member-states. Ju nc ker sa id t he meet i ng should be held on March 30 in the city of Sibiu, a picturesque city in Transylvania that was settled

centuries ago by ethnic Germans f rom Lu xembourg , Junc ker’s home country.

Blocking migrants

JUNCKER vowed that the EU “will move forward once Britain leaves,” saying that “Brexit is not everything. It’s not the future of Europe.” To cheering British lawmakers celebrating the country’s departure, Juncker said: “I think you will regret it quite soon.” With the EU under fire for policies perceived to be blocking migrants in dangerous and sordid detention centers in Libya, Juncker said “Europe has got a collective responsibility” to help improve conditions there. He told lawmakers that the EU must work closely with the United Nation’s refugee agency to ensure that this “scandalous situation” does not continue.

W hile he praised efforts that have shar ply reduced migrant f lows, he said Europe must continue to provide refuge to those f leeing persecution. Europe, he insisted, “ is not a for t re s s a nd mu s t ne ve r b e c o m e o n e .” He paid special tribute to Italy for its “tireless and noble work ” as it bears the brunt of rescuing and helping most of the migrants arriving on Europe’s shores. “ It a l y i s s a v i n g E u r o p e ’s honor in the Mediterranean,” Juncker said. Juncker also said he will propose the establishment of a panEuropean cybersecurity agency as online attacks around the world mount. “Cyber attacks are sometimes more dangerous for the stability of democracies and economies than guns and tanks,” he added. AP

A6 Friday, September 15, 2017

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Friday, September 15, 2017

This September 10 file photo shows people walking on Old Tampa Bay, in Tampa, Florida. Hurricane Irma’s devastating storm surge came with weird twists that scientists attribute to the storm’s girth, path and some geographic quirks. AP

Irma’s life and demise: Two weeks of destruction, fear

ASHINGTON—Irma, which flattened some Caribbean islands and enveloped nearly all of Florida in its fury, no longer exists. The open Atlantic’s most powerful hurricane on record finally sputtered out as an ordinary rainstorm over Ohio and Indiana.

Irma’s confirmed death toll is 61 and still rising, 38 in the Caribbean and 23 in the United States. In the US alone, nearly 7 million people were told to evacuate, and 13 million Floridians were left without power in hot, steamy weather. This storm grew so immensely powerful over warmer-than-normal Atlantic water that it devastated the first islands in its path. Its gargantuan size—two Hurricane Andrews could fit inside it— spread so much fear that people all over the Florida peninsula upended their lives to flee. “ This was a large, extremely d a ngerou s c at a st roph ic hu r r ic a ne,” Nat ion a l Hu r r ic a ne Center Spokesman and meteorologist Dennis Feltgen said on Wednesday, when he declared the storm over. Colorado State University hurricane researcher Phil Klotzbach put it simpler: “Irma was a beast.” Irma generated as much accumulated energy in a dozen days

as an entire six-month hurricane season would in an average year, Klotzbach calculated. Just 30 hours after it became a tropical storm on August 30, Irma was a major Category 3 hurricane. By September 4 it had intensified into a Category 4, with 210 kilometers-per-hour winds, and it wasn’t near done. It became a Category 5 storm the next day with top winds of nearly 300 kph, the highest ever recorded in the open Atlantic. Only one storm whirled faster— Hurricane Allen reached 305 kph in 1980 over the normally warm Gulf of Mexico—but Irma held its ferociously high speeds for 37 hours, a new global record for tropical cyclones. It beat Supertyphoon Haiyan, which also reached nearly 300 kph before killing more than 6,000 people in the Philippines. Irma ultimately spent 78 hours as a Category 5, the longest in 85 years for Atlantic hurricanes.

Irma’s entire path, from its birth off Africa to its death over the Ohio Valley, stayed within the cone of the probable track forecast by the National Hurricane Center. Irma claimed its first victim when it was still far off, sending a “monster wave” to drown a teenaged surfer in Barbados. Then it hit the Leeward Islands in full fury, sweeping a 2-year-old boy to his death after tearing the roof from his home. Irma bullied through much of the Caribbean—Antigua, Saint Martin, Saint Barts, Anguilla, the US and British Virgin Islands, Turks and Caicos, the Bahamas. It narrowly skirted Puerto Rico, Haiti and the Dominican Republic. It turned lush tropical playgrounds into blastedout landscapes, littered with splintered lumber, crumpled sheet metal and shattered lives. In Saint Martin, 15 people were killed. Irma was still a Category 5 when it raked Cuba’s coast, the first hurricane that size to hit the storm-prone island since 1924. At least 10 people died there, despite massive evacuations. And by moving briefly over land, it may have spared Florida a tougher punch. More important, the system slowed, delaying its turn north and steering its center over Florida’s west coast, which is less populated and less densely developed than the east. It also allowed dry air and high winds from the southwest to flow into Irma, taking a bite out of the storm and even tearing the southwest eyewall apart for a while.

Irma was more vulnerable, but by no means weak. A Category 4 storm with 210-kph winds when it slammed into Cudjoe Key, it tied for history’s seventh strongest hurricane to make US landfall, based on its central pressure. With Harvey’s swamping of Texas, this is the first year two Category 4 storms hit the US. The Keys were devastated. Federal officials estimated that a quarter of the homes were destroyed, and hardly any escaped damage. Roofs seemed peeled off by can-openers; power poles were nowhere to be seen. Irma was back over water as it closed in on mainland Florida, weakening still but spreading much wider—to more than 400 miles (640 km) in girth—whipping the entire peninsula with winds of 62 kph or more. It pushed its highest storm surge, 10 feet onto Florida’s southwestern coast, while causing some of its worst f looding in northeast Florida, Georgia and South Carolina, far from Irma’s center. Irma’s second US landfall was on Marco Island, near where Wilma hit in 2005. By then, Irma was a still-major Category 3, with 185 kph winds, but weakening fast. The worst of its fury somehow missed the Tampa Bay area, where homes were not nearly as flooded as those in faraway Jacksonville. Irma then sloshed through Georgia and Alabama as a tropical storm, blowing down tall trees and power lines, before dissipating on Tuesday over Tennessee and Ohio. AP

FEMA insurance chief: Harvey losses could top $11 billion

ASHINGTON—The head of the National Flood Insurance Program said on Wednesday early estimates show Hurricane Harvey will result in about $11 billion in payouts to insured homeowners, mostly in southeast Texas. That would likely put Harvey as the second costliest storm in the history of the federal insurance program, said Roy E. Wright, the Federal Emergency Management Agency’s (Fema) deputy associate administrator for insurance and mitigation. More than $16 billion was paid out after Hurricane Katrina in 2005. It is still too soon to estimate losses from Hurricane Irma, Wright added. But he predicted that the storm damage in Florida and other affected states could rival the nearly $9 billion paid out after Superstorm Sandy in 2012.

Even before the recent back-toback hurricanes, the federal floodinsurance program was about $25 billion in debt to the US Treasury. Wright said the program currently has enough cash to absorb the initial wave of payments to help homeowners get back on their feet but will need billions more within about a month. “Congress has never turned their back on a flood-insurance holder, and I cannot imagine them looking away now,” Wright added. “I am confident there will be no break in the flow of funds.” The Associated Press reported earlier this month that the total number of federal flood-insurance policies nationally dropped by about 10 percent over the last 5 years, to about 4.9 million. The drop came after Congress required a premium

hike in 2012, and about a half million homeowners elected to drop their coverage. As a result, scores of homes flooded by Harvey and Irma will not be covered by federal flood insurance. Those uninsured homeowners will likely have to seek grants and loans to rebuild. Wright said such federal emergency help should be seen as a life vest, but not the full protection offered by flood insurance. Wright said that, nationally, there are about 10 million residential structures, twice the number of properties currently covered, in areas that could potentially flood. That includes many homes that are outside 1-in100-year flood plains or that don’t have federally backed mortgages requiring flood insurance policies. Wright added uninsured homeowners around the country should

learn from what is happening in Houston and other flood-ravaged parts of the country and seriously weigh whether they should buy a policy. “Collectively, we need more people covered,” Wright said. “We have to get beyond this conversation about what I have to do and what I’m mandated to do, and put folks in an educated position by which they are making a back-pocket economic decision.” Wright added that, under current law, the Fema is not allowed to cancel policies covering waterfront or low-lying homes that have been flooded and rebuilt multiple times. In the wake of Harvey and Irma, he said the flood-insurance program will likely be refining its policies to allow the owners of such multipleloss homes to be bought out and moved to higher ground. AP

Friday, September 15, 2017

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Democrats say they have deal with Trump on young immigrants

Japanese Prime Minister Shinzo Abe (left) and Indian Prime Minister Narendra Modi hold hands during the groundbreaking ceremony for the high-speed rail project in Ahmadabad, India, on September 14. AP

High-speed train linking Modi’s native state launched during Abe

HMADABAD, India—India and Japan on Thursday launched work on a high-speed train in the western Indian state of Gujarat, during a visit by Japan’s Prime Minister Shinzo Abe.

The bullet train will link Ahmadabad, the main commercial city in Indian Prime Minister Narendra Modi’s native state, to India’s financial capital of Mumbai. The 500-kilometer project will be financed by Japanese credit of $17 billion and is expected to be completed by 2022. The loan carries a nominal interest of 0.1

percent to be paid over the next 50 years. Abe and Modi also laid the foundation stone of an institute that will be set up in Gujarat’s Vadodara city to train around 4,000 people to run the high-speed train. Analysts say building the highspeed train will give a boost to infrastructure development in

Ind ia’s fast-g row ing wester n industrial region, contribute to economic growth and decongest crowded cities. “A strong India is in Japan’s interest and a strong Japan is in India’s interest,” Abe said soon after he and Modi pressed a button at the foundation laying ceremony for the high-speed train. Talks between Modi and Abe are expected to focus on security at a time when both countries share security concerns about a rising China. The two countries will also announce progress on an Asia-Africa growth initiative to pool Indian and Japanese efforts to strengthen infrastructure in African countries. Defense technology and cooperation in manufacture of military

hardware, including a possible breakthrough on the US-2 amphibious aircraft, and technology cooperation on making unmanned ground vehicles and robots will also figure in Thursday’s talks. T he t w o le a d e r s a re a l s o likely to consider progress in a civilian nuclear cooperation agreement between India and Japan, which was ratified and came into force in July. The countries are almost polar opposites. India’s chaotic cities and its youthful population contrast starkly with Japan’s orde rly so c iet y, i m m ac u l ate streets and mature economy. But those differences complement each other, and Abe and Modi re peated ly h ave emph a si z ed shared interests and values. AP

Fight on the right raises populist risk for Italy polls

IVISIONS on the Italian right are increasing the risk that a populist, euroskeptic government could take power after next year’s elections. Friction between 80-year-old former Prime Minister Silvio Berlusconi and Matteo Salvini of the Northern League has raised the prospect that Salvini might seek an alliance with the anti-establishment Five Star Movement rather than a more natural pact between ideological bedfellows. Polls suggest that could make Five Star’s Luigi Di Maio Italy’s next leader. “The election is shaping up to be one of Europe’s biggest risk stories because it could produce a hung parliament, or a populist majority,” Federico Santi, an analyst with Eurasia Group, said in an interview. “Five Star and the League refuse to acknowledge they might get together, but we see a 20-percent probability.” Salvini, 44, has already been making overtures to Five Star, telling newspaper La Repubblica in July that he can imagine a dialogue with the populists on “important issues”, such as honesty in politics, immigration and the fight against crime. Most critically for investors, both share an aversion to the euro, though they’ve tempered their rhetoric in recent weeks after

Marine Le Pen’s pledge to abandon the currency ultimately played badly in France’s election.

Investors calm

THE League holds its annual rally on Sunday in the small town of Pontida at the foot of the Italian Alps where the voluble Salvini will lead supporters—some dressed as medieval knights— celebrating a 12th-century alliance against the Holy Roman Emperor. They’ll also lambast today’s European Union. That’s one of his biggest disputes with Berlusconi. The mediamagnate-turned-politician will speak at a celebration of the EU’s achievements at a luxury spa resort in Fiuggi east of Rome a day earlier. Also appearing will be his long-time ally Antonio Tajani, president of the European Parliament, who Berlusconi sees as a potential prime minister. Although the League has trad it iona l ly bac ked Berlusconi governments since the 1990s, this year Salvini is staking his own claim to head up the Italian center-right. After Berlusconi insisted last week that Salvini should defer to Forza Italia, the newcomer retorted: “The numbers show that the League is the leading movement.”

Still, investors’ concerns about political risk in Italy have abated in recent weeks amid signs that the economy is strengthening. The difference in yield between Italian and German 10-year bonds has narrowed by about 12 basis points from an August peak to 162 points, compared with 213 points in April as Le Pen’s early showing in France fueled concerns of a populist backlash spreading through the currency union. The economy may grow by 1.5 percent this year if the current pace of growth is sustained, the Italian statistics institute said in August. That would be the fastest expansion since 2010.

Electoral math

NEXT year’s election looks challenging all the same. With no party looking likely to reach the 40-percent threshold that guarantees a majority in the lower chamber, Italy may need at least two of its main parties to cut a deal in order to form a government. Five Star and the ruling Democratic Party were in a statistical tie around 27 percent in an Ipsos poll published in newspaper Corriere della Sera on September 9, with Forza Italia and the League at about 15 percent each. Add in the Brothers of Italy, and the three

right-wing parties could muster about 35 percent between them. Berlusconi may end up playing the kingmaker if ex-premier Matteo Renzi, the Democratic Party leader whom he has supported in the past, wins the election, according to Eurasia’s Santi. For Loredana Federico, chief Italian economist at UniCredit SpA, a Five Star-led coalition including the League and Brothers of Italy is the least likely outcome. She argues that the mainstream parties may form a “government of national unity” if that’s necessary to break a stalemate. Di Maio, deputy speaker of the lower house, is set to be named Five Star’s candidate for the premiership on September 23 after an online vote. He said in an interview with Naples newspaper Il Mattino last month that for him— as a southerner—an electoral pact with Salvini was unthinkable, given his party’s historical antipathy to Italy’s poorer south. But he also said that if he needed support to become prime minister next year, he’d be open to talks with all parties. “We’d go to parliament, and we’d talk very clearly to the other forces,” he said. “Not to carve up jobs but on a program in the country’s interests.” Bloomberg News

ASHINGTON—The top House and Senate Democrats said on Wednesday they had reached agreement with President Donald J. Trump to protect thousands of younger immigrants from deportation and fund some border-security enhancements—not including Trump’s long-sought border wall. The agreement, the latest instance of Trump ditching his own party to make common cause with the opposition, was announced by Senate Democratic Leader Chuck Schumer and House Democratic Leader Nancy Pelosi following a White House dinner that Republican lawmakers weren’t invited to attend. It would enshrine protections for the nearly 800,000 immig rants brought i l lega l ly to this country as kids who had benefited from former President Barack Obama’s Deferred Action for Childhood Arrivals (Daca), program, which provided temporary work permits and shielded recipients from deportation. Trump ended the program earlier this month and gave Congress six months to come up with a legislative fix before the statuses of the so-called Dreamers begin to expire. “We agreed to enshrine the protections of Daca into law quickly and to work out a package of border security, excluding the wall, that’s acceptable to both sides,” Pelosi and Schumer said in a joint statement. White House Press Secretary Sarah Huckabee Sanders partially disputed their characterization, saying over Twitter that “excluding the wall was certainly not agreed to”. Either way, it was the second time in two weeks that Trump cut out Republicans to reach a deal with Pelosi and Schumer. A person briefed on the meeting, who demanded anonymity to discuss it, said the deal specifies bipartisan legislation called the DREAM Act that provides eventual citizenship for the young immigrants. House Republicans would normally rebel over such an approach, which many view as amnesty for law-breakers. It remains to be seen how conservatives’ loyalty to Trump will affect their response to a policy they would have opposed under other circumstances. The House’s foremost immigration hardliner, GOP Rep. Steve King of Iowa, made clear that he, for one, was not happy. Addressing Trump over Twitter, King wrote that if the reports

were true, “Trump base is blown up, destroyed, irreparable and disillusioned beyond repair. No promise is credible.” Earlier on Wednesday during a White House meeting with moderate House members from both parties, Trump had urged lawmakers to come up with a bipartisan solution for the Dreamers. “ We don’t w a nt to forget Daca,” Trump told the members at the meeting. “We want to see if we can do something in a bipartisan fashion so that we can solve the Daca problem and other immigration problems.” Foreshadowing what was to take place later that evening, Trump said he would be open to separating the wall issue from the question of the younger immigrants, as long as the wall got dealt with eventually. At Thursday night’s dinner, “the president was clear he would press for the wall but separate from this agreement,” said Pelosi Spokesman Drew Hammill. The apparent deal is the latest example of Trump’s sudden pivot to bipartisanship after months of railing against Democrats as “obstructionist.” He has also urged them to join him in overhauling the nation’s ta x code, among other priorities. Trump, who was deeply disappointed by Republicans’ failure to make good on years of promises to repeal “Obamacare,” infuriated many in his party last week when he reached a three-month deal with Schumer and Pelosi to raise the debt ceiling, keep the government running and speed relief to states affected by recent hurricanes. “More and more we’re trying to work things out together,” Trump explained on Wednesday, calling the development a “positive thing” for both parties. “If you look at some of the greatest legislation ever passed, it was done on a bipartisan manner. And so, that’s what we’re going to give a shot,” he said. The “Kumbaya” moment now appears to extend to the thorny issue of immigration, which has been vexing lawmakers for years. Funding for Trump’s promised wall had been thought to be a major point of contention between Republicans and Democrats as they attempted to forge a deal— yet by Thursday, Trump was apparently ready to deal even on that issue, the one that most defined his campaign for president last year. AP

More Americans delaying marriage past their twenties, new data show

ARRIAGE in America just isn’t what it used to be, and new data from the Census Bureau show just how much the nuptial picture has shifted. People are tying the knot later and having children outside of wedlock more often across demographic groups as well as later in life, the most recent Census American Community Survey data show. The treasure trove of demographic data, released annually, suggests that there is one group for which marriage has become more common: same-sex couples. As people push off marriage, they’re increasingly having babies outside of wedlock. As the chart above shows, the very poor are the most likely to have kids without getting married first, but births to single moms are rising across the income distribution. “Parenthood now precedes marriage for many women,” Census researchers noted in a report from earlier this year. That report noted that about 40 percent of all births occur outside of marriage. Interestingly, while black women have historically been far more likely to give birth outside of marriage, they’ve actually posted a small decline in

out-of-wedlock motherhood, while Hispanic and white women posted increases in out-of-marriage births between 2006 and 2016. The overall increase of childbirth outside of marriage could cost kids the benefits of stability and additional family income, said Isabel Sawhill, a senior fellow at the Brookings Institution in Washington. Children of married couples tend to perform better in school and earn more as adults. “The best antipoverty program by far is having a second earner, or a potential second earner, in the household,” Sawhill added. On the bright side, teen births remain on a sharp downtrend. In 2015 the number of women between the ages of 40 and 44 having babies exceeded the number between 15 and 19 years old for the first time, and held up in 2016 as the chart above shows. And while many Americans have been skipping marriage in favor of just living together, that isn’t true for same-sex couples. As you can see above, cohabitation has declined among this demographic, a trend that has coincided with gay marriage legalization across the US. Bloomberg News

A10 Friday, September 15, 2017 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

The Chinese/ Russian Union

magine a country that holds 20 percent of the global population spread out over 20 percent of the Earth’s landmass that stretches around 20 percent of the planet. You do not have to imagine it. Those numbers measure China combined with the Russia.

During the period from 1960 and 1989, relations between the two countries were extremely bad. At the height of the Sino-Soviet split, a seven-month long undeclared war was fought between the two over areas of their common border that was not fully resolved until 1991. Part of the battle was ideological as to the “best” form of communism. Since both systems failed, no winner was declared. Conspiracy theorists claim that the United States produced some incidents that created deep suspicions between China and the USSR. By the end of 1991, the Soviet Union ceased to exist. Deng Xiaoping was firmly in power over China as he instituted market reforms. By 1995 both countries had at least fledgling stock markets up and running. The past 10 years has marked a striking increase in positive relations between the two nations. This has accelerated since the global financial crisis began in 2008. There are still of course differing national interests between China and Russia that are sometimes in conflict. However, Russia has benefited from China’s financial and political backing in its disputes with both the US and Europe. China needs Russia to fulfill its “One Belt One Road Initiative”. This has been a clear example of “the whole is greater than the sum of the parts”, meaning the two nations combining forces and working together can wield more power and influence than they can separately. Rosneft is an integrated oil company majority owned by the government of Russia. As of 2016, Rosneft was the 51st-largest company in the world and effectively controls Russia’s oil production and refining. Rosneft also operates shipping pipeline and marketing companies. Essar Oil is an India-based company engaged in the exploration and production of oil and natural gas, refining of crude oil and marketing of petroleum products. In October 2016 Rosneft bought a 49-percent stake in Essar Oil and with Russian investment fund United Capital holding 24 percent of Essar, Rosneft effectively has complete control over Essar and ownership of India’s second-largest oil refinery. This gives Rosneft strong participation in India’s oil industry. This $13billion deal was the largest foreign investment in India. Enter the Chinese. Last week Rosneft announce the sale of 14 percent of the company to CEFC China Energy, a private Chinese conglomerate, for $9 billion. This is the first major buy-in of a Chinese company into the Russian oil and gas business. Rosneft and CEFC have a strong relationship, signing a huge deal for China to be able to buy Russian oil for several decades in the future. And China now has a direct foothold in the Indian oil market. India, that’s the country that China is engaged in with a fierce border dispute. These interlocking deals are a critical development in the worlds’ energy picture. But more than that is the continuing and increasing cooperation and union of the Russian Bear and the Chinese Dragon. We are probably seeing the greatest shift of geopolitical and economic power since the beginning of the 20th “American Century”. Since 2005

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No-frills James Jimenez

spox

arlier in the week, the House of Representatives finally passed a bill postponing the barangay and Sangguniang Kabataan (SK) elections, originally scheduled for the 23rd of October 2017. The bill seeks to reschedule the elections to May 2018, with incumbents staying on until their successors have been elected. While this development does not mean the elections have already been postponed—you need a law, signed by the President, for that to happen—it does move us closer to that outcome. After the House passed its version of the postponement bill, two main features of the Senate counterpart measure also received media—and thus, public—attention. It seems that there are two main differences between the two versions. The first has to do with the date to which the elections will be moved. The Senate wants the elections held in October 2018, not May. This proposal is being met with some concern since it puts the elections smack dab in the middle of the preparations for the 2019 National and Local Elections (NLE). NLEs are complicated affairs requiring management, coordination and resource mobilization on a large scale.

Holding the barangay and SK elections when the commission is supposed to be focused on getting ready for the NLE might be adding an unnecessary complication that could have negative repercussions downstream. The second difference between the House and the Senate versions is that, while the House has the incumbents on hold-over capacity until their successors are elected, the Senate would allow the replacement of incumbents by appointment. Inasmuch as the Senate clearly leans toward postponement as well, once these disagreements are sorted out, all that is needed for postponement to happen is the President’s

Employability issues Ser Percival K. Peña-Reyes

EAGLE WATCH

N interesting Facebook post has made the rounds of the Internet recently. An anonymous entry, this post dares to ask an eyebrow-raising question: “We’re more worried about the fact that Ateneo is a top university, so why aren’t its graduates getting snapped up like lechon at a fiesta?”

Its smug and self-entitled tone notwithstanding, this post does raise a valid concern regarding employability in general. It might be good to take stock of employability issues and reflect on how to deal with them. Basic economics defines production as the process of combining and processing inputs to create useful output. Together with land and capital, labor is a production input for which there is a market. Typically, in a market for goods and services, firms are sellers while households are buyers, but in a labor market, these roles get switched. Firms are the ones who demand labor from households that supply labor, and the price of labor is the wage rate.

Professor Mantz Yorke of Lancaster University defines employability as a set of achievements that make graduates more likely to gain employment and be successful in their chosen occupations, which would benefit themselves, the work force, the community and the economy. In large measure, employability pertains to the matching of workers’ skills, knowledge and personal attributes with industry needs. In its 2014 report on the subject, the World Economic Forum (WEF) notes that skills are critical assets for individuals, businesses and societies. The importance of skills becomes even more pronounced in a fastchanging, globalized environment.

signature—and there has never been any question about what the President wants. But this state of affairs— half-in, half-out, with only a little over a month to go—makes things complicated for election stakeholders, particularly candidates. For weeks now, my office has been receiving lots of calls from people planning to run for barangay or SK office. What they all have in common is the concern about when to start printing their campaign materials. Clearly, the government, through the Commission on Elections (Comelec), isn’t the only one who will be incurring costs to prepare for coming elections. I understand the situation these potential candidates and campaigners find themselves in. And sadly, I can offer very little in terms of advice—and what little advice I can give might even sound a little preachy or self-serving. To avoid spending money, Don’t. Barangay and SK elections are supposed to be low-cost affairs. There was even a time when printed campaign materials were prohibited. Over the years, this rule has been relaxed and tarps have been allowed. With so much uncertainty about whether the polls will proceed, now may be the time to go back to the lowcost, no-frills roots of the barangay and SK elections. Hand-written signs on sari-sari store-bought bond paper ought to be

enough. With creativity and imagination, you might even be able to make some standout campaign materials with less than that. More important, instead of relying on flashy tarps and noisy caravans, design a campaign that will have you talking to the voters directly. Woo them like politicians used to do: listen to them, hear them out and share your plans for the community. The barangay and SK elections should be about public service, after all, and not even the most expensive campaigns can guarantee that. If only those aspiring for barangay and SK office were to approach the coming campaign season with that frame of mind, then it won’t really matter to them—financially anyway—whether the elections are postponed definitively tomorrow or on the day before elections. Sadly, the same can’t be said for the Comelec. To date, more than 13 million ballots have been printed. At a cost of about P3 per ballot, that translates to a running total of more than P39 million; and that’s just for ballots. Financially, yes, the public treasure might be about to take a hit. But what can be done? There is no timetable for the Senate to come up with its version of the postponement bill. So, despite the House version being completed, the elections are still pushing through. For now, anyway.

Skills mismatch occurs when workers have either fewer or more skills than what jobs require. As the WEF explains, some mismatch is inevitable, as the labor market involves complex decisions by employers and workers and depends on many external factors. Nevertheless, high and persistent skills mismatch could be costly for employers, workers and society at large. A casual review of data reveals that employability issues can be observed not only in the Philippines but also in other countries. In a previous Eagle Watch article, Dr. Alvin P. Ang focused on the Philippines and cited data from the 2013-2014 Integrated Survey on Labor and Employment. Out of 753,000 job vacancies recorded from January 2013 to June 2014, about 128,000 were difficult to fill, and the most frequently cited reasons for difficulty in filling such vacancies were lack of competency/ skills (29.9 percent) lack of applicants (26 percent) and lack of experience (16.8 percent). According to Dr. Ang, the demand side continues to face challenges in absorbing graduates. While there is capacity to absorb more, quality remains a critical issue that needs to be addressed at the supply side. Indeed, there are strong indications

of a mismatch between what the education system produces and what industries need. Providing an international perspective, the WEF notes that imbalances between skills demand and supply are largely due to low basic skills in many developing and lowincome countries. While imbalances in the form of overqualification are prominent in advanced countries, underqualification is an issue in lowincome countries. Low educational attainment in these economies results in poor literacy and numeracy, low productivity growth and low potential for economic diversification. This lack of basic schooling is a major reason for skills shortages and skills gaps in the work force. In fact, based on recent trends, the goal of universal primary education could be missed by a wide margin. The gross enrollment rate in formal secondary schooling—the most effective path for young people to develop the foundational skills needed for work and life—was just 52 percent in low-income countries in 2010. Moreover, in the same year, 775 million adults could not read or write; half of them were in South and West Asia, and over a fifth in sub-Saharan Africa. See “Eagle Watch,” A11

Opinion BusinessMirror

opinion@businessmirror.com.ph

Friday, September 15, 2017 A11

The antidote to smuggling Because this Congress has slit my throat

and I cannot sing anymore

Dr. Jesus Lim Arranza

Tito Genova Valiente

annotations

Continued from A1

he government is estimated to be losing over P200 billion each year in foregone revenues due to smuggling. A huge amount of money that could have been used to build more roads, school buildings and hospitals, develop more livelihood projects and implement poverty-alleviation programs, but have gone, instead, to the pockets of smugglers and some corrupt customs officials. Corruption at the Bureau of Customs (BOC) has become endemic that President Duterte has ordered “zero tolerance” on corruption at the BOC. To enforce his zero-tolerance order on corruption at the BOC, Duterte named former Philippine Drug Enforcement Agency (PDEA) head, retired Gen. Isidro S. Lapeña to lead the BOC. A good pick for a Customs chief as Lapeña’s distinguished performance record as a soldier and PDEA chief could be the much-needed whiff of hope for the BOC. But Lapeña could be fighting a lonely battle against corruption and smuggling at the BOC. Thus, as an advocate against smuggling and all forms of illicit trade, as chairman of the Federation of Philippine Industries, and knowing that some provisions of the Tariffs and Customs Code of the Philippines (TCCP) are being exploited and abused by some corrupt Customs officials and unscrupulous traders in their illegal activities, here are some of my observations and recommendations to help address smuggling and the system of corruption at the BOC. As my humble contribution to the government’s efforts to curb smuggling, all these are based on my actual encounters as an antismuggling advocate and as head of an industry group that goes all-out in its war against smuggling and illicit trade. After all, as the old saying goes, “An ounce of prevention is worth a pound of cure.”

Smuggling and how it’s done

Smuggling, as defined under Section 3519 of the TCCP, “is an act of any person who shall fraudulently import or bring into the Philippines, or assist in so doing, contrary to law or shall receive, conceal, buy, sell or in any manner facilitate the transportation, concealment or sale of such article after importation, knowing the same to have been imported contrary to law. It includes the exportation of articles in a manner contrary to law. Articles subject to this paragraph shall be known as smuggled goods”. There are two types of smuggling —outright and technical. Outright smuggling is the type of smuggling that takes place in the isolated beaches of the archipelago with no import documents and includes “swing operations” in the port of entry. While technical smuggling, for its part, involves undervaluation, underdeclaration of the volume shipped, misdeclaration and misclassification of shipment.

Undervaluation

Undervaluation occurs when the importer declares the imported articles at less than its dutiable value. This is the most common type of technical smuggling and this became prevalent after the global valuation process of imported goods shifted from home consumption value to transaction value, as part of the World Trade Organization’s (WTO) trade facilitation program. However, the WTO has established six other alternative methods of determining the appropriate values of imported goods. My personal experience with the brazen abuse of transaction value by unscrupulous importers and some corrupt Customs officials was when I headed the Coconut Industry Investment Fund (CIIF), the group of government sequestered coconut-oil mills. CIIF was then importing palm oil from Indonesia and declared its value based on its acquisition cost at that time of $1.25 per kilogram. But another importer from Cebu who also imported palm oil from Indonesia during the same period declared the value his palm oil importations at only six US cents per kilo. And yet his palm-oil importations were getting through the Customs. The

value of palm-oil importations was later adjusted based on the prevailing price in the international market after I pursued a complaint against the Cebu based palm-oil importer and all those involved in it.

Underdeclaration

Underdeclaration is a form of technical smuggling where the importer declares its imported shipment at less than its dutiable weight, measurement and quantity. A good example of under-declaration is the case of a Subic-based importer of used clothing and manufacturer of rags for reexport, which we caught to have underdeclared the volume of its 20-metric-ton (MT) container van of imported used clothing to only 10 MT. We would, however, discover the reason that importer underdeclared the volume of its used clothing importation by 10 MT. As a locator of a freeport zone and reexporter of rags, the company’s importations of used clothing were duty free, provided that the company’s volume of importations would reconcile with its volume of reexported manufactured rags. But in the case of this Subic locator, since its declared volume of imported used clothing was only 10 MT, it would only be accountable for the 10 metric tons of used clothing it imported, supposedly to be manufactured and re-exported as rags. The other 10 MT of used clothing would eventually reach the local market as Ukay-ukay (used clothing), not only tax free, but in violation of the law against the importation of used clothing for home consumption, as well. Underdeclaration could also happen outside freeport zones. And this would mean less revenues for the government because of underdeclared volumes of importations.

Misclassification

Misclassification, for its part, occurs when the declaration does not conform to the correct and specific description of the imported articles corresponding to what is given in the Harmonize System (HS) codes of the TCCP. For instance, an importation of steel bars could be entered under a different tariff heading for steel products that would not only lower its tariff rate, but also avoid the required mandatory product standards. This type of smuggling would not only result in revenue loss for the government, but would also pose a risk to consumers as this would involve quality issues of imported commodities.

Misdeclaration

Misdeclaration happens when an importer does not use the correct description of the imported articles corresponding to what is provided in the HS codes of the TCCP. This is usually done to avoid import restrictions and to lower dutiable values. A good example of misdeclaration was the container van of imported onions from China, which we caught after getting suspicious of its declaration. How could have such stupidity of declaring hand tools in a refrigerated van skipped the watchful eyes of Customs officials? Smuggling could be a social and economic cancer that affects the lives of Filipinos. But there could still be hope for real reforms in the BOC. And, perhaps, this time under Lapeña, the BOC would be able to overcome its stigma of being branded as the place of “laki mata, liit kita; pikit mata, laki kita” (Big watchful eyes, small income; closed eyes, bigger income). For my next column, read more about the other forms of smuggling and how all these can be prevented.

ecause I speak in metaphors, I believe this Congress will never understand my column. But I speak for my readers who have been assuring me how my meditations on the perfect breakfast and the ultimate in coffee had made their day. That while I promise to continue writing about clouds and omens and destinies, these perorations are shelved for the moment. Let the songs wait on the wings. The article on tangos and why the dance always ends with the woman prostrate shall have its day. But for the moment, I cannot talk about songs and poetry. Something is happening around me and I feel I have no right to enjoy cups of coffee and warm toast, with Greek salad on the side. Civilization, with its notion of the rights of human beings, have been murdered and the murderers are walking free, with their rights ironically solid and intact. But my words are figures of speech and those in Congress shall never figure out the meaning of my discourse. Young boys and girls are being killed, even those who are related to the king, the last a sample of what this nation has become, a theater of the most absurd. Justice is reinterpreted in many ways, most of them in the guise of bringing control to this society. The truth is those who are in institutions of justice are out of control. If, for today, you are reading my rhapsody about a day that is to

come or a world going to its end, in language that charms, then I am living in another world, in another dimension. But I live in this world. You are, therefore, not reading a contemplation. You are reading a rage. Let us leave Congress, for that place has already lost its hope. Let us go to the Senate, to that august hall. Let that modifier stay. Our senators love words and they love to listen to their words. Many have the articulation of a bullfrog. One punches the air with words that never seem to hit their target. It is painful listening to him punch even as his fist of a conscience never knocks us out. In the Senate lives a comic. He can be fun sometimes over television when the reason for his being is to entertain. He is lucky, though, because in this nation, even politics is a domain for laughter. There are fans of his kind of politics and that is not funny. Bear with me, therefore, if you do not get to smile at my thoughts. I am not able to smile. I am not able to sing.

Okay, let me talk about Tango music. Quiero verte una vez mas. I want to see you once more. I want to see you once more, my beloved politicians, my dear leaders. I want to see you once more to ask what happened. When some one hundred plus of you voted to give a thousand to an office that takes care of those who cannot approach you, you must have sped off in your air-conditioned sport-utility vehicles. You must have been dressed in scented suits and starched shirts that day, the fashion reeking of solid purity as fashion can be—on the surface as an appearance. Quiero verte una vez mas. I want to see you one more time. I want to see you, my country once more. What happened to you? What happened to us? Decent friends see the killing but remain loyal to their king. Decent friends learn about people being killed and they blame the slain. So, Deo (Antazo), the essay on love that you have been asking me to write shall have to wait when love

has the right to live in our country. Perhaps, I can speak of poetry, after all, poetry and love are rage with rhythm. Yevgeny Yevtushenko has a poem called “Lies”. Listen to him: Telling lies to the young is wrong./ Proving to them that lies are true is wrong./Telling them that God’s in his heaven/and all’s well with the world is wrong./The young know what you mean. The young are people. Yevtushenko concludes by saying: Forgive no error you recognize,/ it will repeat itself, increase, and afterwards our pupils/will not forgive in us what we forgave. Perhaps, I can use a simpler story. Let me recall a children’s tale made by Jimple Borlagdan, fictionist, good poet and rock artist. In the story, frogs threaten to poison the water from where other animals drink unless they learn how to croak. The small birds and the ducks and other animals had to learn how to croak, or else the pond will be poisoned and they will not have anymore water to drink. Go figure that out.

E-mail: titovaliente@yahoo.com.

Students in rural areas can finance studies through hog raising

By Efren Amistad de Guzman

espite government efforts to make education more accessible to the youth, the number of elementary and highschool dropouts has been steadily increasing all over the country because of poverty. The general consent is that failure to complete basic education results in less opportunity to acquire better jobs or less opportunity to become entrepreneurs. As we wait for an effective dropout-intervention program, however, we can help students complete their basic education by teaching them some income-generating activities. For example, we can help them become hog raisers. With the country’s economy and population constantly growing, demand for food, including pork, will likewise increase. Rural families looking for an alternative source of income should consider swine raising, which can help them shoulder their children’s school expenses. Starting a small hog business at home does not require a big capital. Here are some tips on how to start a small backyard enterprise.

In choosing your first sow (female swine), look for well-developed udder or mammary gland with a minimum of six pairs of properly spaced functional teats. A sow with poor udder development is likely to have poor milking capacity. Make sure they do not have inverted teats. A long body is more desirable in sows because it provides more space for udder development. The body should have uniform width from front to rear. Good development on the ham, loin and shoulder is required of a breeding

animal. Make it a point to select the biggest animals among the litters. Female breeders should come from a litter of eight or more goodsized piglets with high survivability. Select vigorous and hardy pigs from a healthy litter in a herd raised under good swine sanitation. Masculinity, both in appearance and action, should predominate in the make-up of any boar. The primary sex organ should be clearly visible and well developed. Select only those boars whose testicles are equal in size. Generally, boars should be four to six months old at the time of selection. For this venture, hog houses must be constructed properly to insure maximum performance of the pigs. A good house may not improve the health condition of the animals but a poor one will certainly increase disease problems easily. For a backyard operation, cheap and locally available materials may be used, such as bamboo and nipa. Hog house should be constructed on

PPP Center supports the hybrid model MAIL

Eagle Watch. . . continued from A10

So, how can society deal with employability issues? Beyond economics, others have taken to psychology to convince the youth to purge themselves of tendencies for selfentitlement and to adopt a growth mind-set that would encourage them

This letter serves as our response to the article, “PPP Center highlights the many risks of hybrid mode in infra binge”, that was published by the BusinessMirror. In the opening paragraphs, the article stated: “Because it chose to shift its bias toward hybrid infrastructure deals, the government will have to bear higher risks in its infrastructure buildup, and may even end up defeated due to poor judgment.” This is an opinion of the writer. Furthermore, the following para-

to seek mentorship that would open doors to acquiring new skills. Indeed, these are helpful pieces of advice, but employability issues are likely to persist due to systemic imbalances, most notably in academe-industry linkages. Ultimately, systemic problems require systemic solutions, particularly in the form of investments in education. In its 2010 Philippine Skills

graph, “Thus said Public Private Partnership [PPP] Center Executive Director Ferdinand A. Pecson on Thursday, when he issued a statement hitting the supposed skewed interest in implementing much-needed infrastructure deals under the hybrid method” is an attempt to use my name to communicate an opinion that should have been owned by the writer. The statement being alluded to is nowhere found in the BusinessMirror article. We would like to categorically state that the PPP Center supports

Report, the World Bank has offered some general recommendations aimed at improving the responsiveness of the supply of skills to labormarket needs: 1) more international benchmarking of institutions and students; 2) strengthening generic/ life skills in the curricula of all education and training levels; 3) better articulation of the different pillars of the skill-supply system; 4) more

a slightly sloping and well-drained area so that it will not become too muddy and inconvenient to work in. Permanent hog houses should have concrete floors for easy cleaning and to minimize the occurrence of parasites and diseases. Concrete floors must not be too rough to cause foot and leg problems nor too smooth to be slippery when wet. Provide the pig house with the proper equipment, such as feeders and drinking troughs. Feeders and water troughs are best made of concrete, although other materials may be used. Some people use discarded automobile or truck tires cut in half. In bigger operations, farrowing stalls are important to reduce piglet mortality due to crushing of piglets. With their housing ready, all you need now is a little bit of patience, perseverance and some research, and you are ready to go. The author is Head Teacher 1 at Abulug National Rural and Vocational High School in Abulug, Cagayan.

the hybrid model. The PPP statement found in the web site, www.ppp.gov. ph, “Public Funds, ODA, PPP, Hybrid, which one?” is about having a careful analysis of each option before a choice is made. The PPP Center shall be working hand in hand with implementing agencies to ensure the success of the hybrid model. Ferdinand A. Pecson Undersecretary and Executive Director Public-Private Partnership Center flexibility in curriculum and academic decisions, with continuous private-sector participation; 5) closer linkages between postsecondary/ tertiary education and industries; and 6) better and more complete business and labor-force surveys. Ser Percival K. Peña-Reyes is a faculty member of the Ateneo de Manila University Economics Department.