Businessmirror september 18, 2017 by BusinessMirror

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QC Real-Property Tax By Alladin S. Diega | Correspondent

doctor almost went into shock. It was just past 17 days of a new year and the physician sat upright from his chair after seeing the assessed value of his property in Quezon City at P5 million. It was only Continued on A2 P500,000 the last time he checked.

This September 15 photo shows towering buildings that continues to rise in the heart of Quezon City. Quezon City administrator Aldrin C. Cuña said the fair market values on properties in the city were not adjusted for the last 21 years. NONIE REYES

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Monday, September 18, 2017 Vol. 12 No. 340

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ecuring right-of-way (ROW), which is typically a contractual responsibility of the government, is seen being one of the main reasons for delay in completing publicprivate partnership (PPP) projects. Determining the scope, allocating the responsibility and appreciating the necessity of ROW are critical in PPPs and PPP contracts. ROW defined. Dictionary.com defines ROW as a “right of passage, as over another’s land”, or the “strip of land acquired for use by a railroad for tracks”.

Neda Undersecretary for Planning and Policy Rosemarie G. Edillon told reporters recently that the “unemployment insurance” could consist of contributions from employers Continued on A2

Continued on A15

BBB program seen to spur growth of real-estate sector

See “Investment,” A16

PPP Lead

The number of jobless Filipinos as of July

Investment pledges down by nearly 55% in Q2–PSA oreign investment pledges contracted by almost 55 percent in the April-to-June period, according to the latest data from the Philippine Statistics Authority (PSA). PSA data showed total foreign investments approved by the country’s seven investment-promotion agencies (IPAs) amounted to only P18.2 billion in the second quarter, from P40.4 billion in the same period last year. There was also a 38.4-percent contraction in approved investments in the first six months of the year to P41 billion in 2017, from P66.6 billion in 2016. “Approved foreign investments represent investment commitments and pledges by foreigners regardless of the percentage of ownership of the ordinary shares, which may be realized in the near future while foreign direct investments [FDI] refer to actual foreign investments generated, with the foreign investors owning 10 percent or more of the ordinary shares,” the PSA said.

Dissecting PPP contracts #7: Right-of-way

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he government is keen on setting up a fund for jobless employees to help tide them over while they’re looking for another job, according to the National Economic and Development Authority (Neda).

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Govt to create fund for jobless workers 2.37M T By Cai U. Ordinario

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INTEGRATED TOLL COLLECTION This September 17 photo shows the smooth flow of traffic at the South Luzon Expressway. The agreement among operators of various expressways in Luzon to integrate their toll-collection systems is expected to make travel more hasslefree for motorists. NONIE REYES

‘Wage hike won’t offset impact of tax reforms’ By Elijah Felice E. Rosales

@alyasjah

wage hike of P21 might provide relief for workers in the short run, but soon enough, its value will diminish un-

PESO exchange rates n US 51.1430

der the proposed tax program of the Duterte administration, according to experts. Like calm before the storm, experts said the P21 wage hike for workers in Metro Manila will suffice for now, but will be ren-

dered futile in the face of the Tax Reform for Acceleration and Inclusion (TR AIN). The TR AIN is the first package of the administration’s comprehensive taxreform program. See “Wage hike,” A16

@ReaCuBM

he infrastructure buildup that will be undertaken by the Duterte administration under the “Build, Build, Build” (BBB) program would boost the local real-estate sector as more Filipinos would be encouraged to purchase property. According to Colliers International Philippines Valuations and Advisory Director Paul Vincent Ramirez, the promised infrastructure buildup could further open new areas where real-estate properties can be built. “The planned infrastructure projects nationwide, if implemented, will unlock the potential in different areas across the country,” Ramirez told the BusinessMirror. He added that continuous remittances from overseas Filipino workers (OFWs) would boost the residential sector, while the business-process outsourcing (BPO) sector will take-up available spaces

The number of flagship infrastructure projects under the BBB program in business districts. “Residential take-up still continues to be strong and is keeping pace with the previous year. For the office market, BPO, gaming and traditional office locators are the key drivers. While OFW remittances will still help prop up the residential sector,” he added. In Metro Manila Ramirez said the office market will be driven by a mix of tenants, previously dominated by BPOs, including gaming and traditional office locators, as these are taking up more of the available office spaces. See “BBB,” A16

n japan 0.4640 n UK 68.5265 n HK 6.5459 n CHINA 7.8033 n singapore 37.9794 n australia 40.9400 n EU 60.9625 n SAUDI arabia 13.6374

Source: BSP (15 September 2017 )

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A2 Monday, September 18, 2017

Govt to create fund for jobless workers Continued from a1

and the government. Its creation, however, can remove the severance pay for workers. Edillon said this is acceptable to some employers’ groups. “We’ve had some consultations before with some employers’ groups; they may be amenable to the removal of the severance pay. The problem with severance pay is when, finally, businesses have to close down, or retrench workers, they still need to spend for severance pay which increases their losses,” Edillon said. “With the unemployment insurance, from day one, employers are already building up the fund. So during an economic downturn, that fund can be tapped,” she added. Edillon said the Philippines can take a cue from Vietnam, which has an existing unemployment insurance consisting of contributions from the government and employers. Vietnam’s jobless fund, she said, complemented efforts of its own versions of the Social Security System, the Public Employment Service Office and the Technical Education

and Skills Development Authority to assist unemployed Vietnamese workers. Edillon said the creation of an “unemployment insurance fund”, based on Vietnam’s experience, allowed the country to significantly cut its jobless rate. She said Vietnam’s unemployment rate slowed to only 2 percent compared to the Philippines’s 5.5-percent unemployment rate for 2016. She said the unemployment insurance fund made hiring and firing easier because employers did not have to worry about severance pay and workers know they have a safety net they can access in case they lose their jobs. “The ultimate objective is really to make, to free up your labor market from all these restrictions. We think the [unemployment insurance] actually provides a win-win [solution]. [It is] flexible for the employer and, at the same time, secure for the employee, in terms of their income,” Edillon said. “[What’s important is] not job security, its

income security.” If this will be adopted in the Philippines, Edillon said a law needs to be crafted to create the fund which can be lodged with the SSS. This will also require amendments to the Labor Code. Currently, the Neda is looking for sponsors to push this bill at the House of Representatives and the Senate. Despite the slight uptick in the number of unemployed Filipinos in July, the national government remains confident it will still meet its target of creating 1.1 million jobs this year, according to the Neda. At the sidelines of the budget hearing on Tuesday, Socioeconomic Planning Secretary Ernesto M. Pernia told reporters the new entrants in the labor force caused the uptick in unemployment rate. The number of jobless Filipinos in July rose to 2.37 million from 2.33 million a year ago. This translated to an unemployment rate of 5.6 percent in July, higher than the 5.4 percent recorded in the same period last year.

QC Real-Property Tax Continued from A1

The doctor wasn’t the only one complaining—some Quezon City residents did on online social-networking platforms, saying their property taxes recently went to the roof. For Quezon City Administrator Aldrin Cuña, the adjustment was long expected. Some Quezon City residents who own prime lots along Edsa have land assessed values of only P5,000 per square meter, while their counterparts in Caloocan and Makati cities have their properties assessed from P55,000 up to P80,000 per square meter. Cuña said unbelievable as it may seem this is simply a result of fair market values on properties not being adjusted in the city for the last 21 years. According to Cuña, as the P5,000per-square-meter land value is unrealistic, and no property owner in that area will transact at this rate, any purchase of land in the area would have been amounting from P50,000 per square meter to P80,000 per square meter. But the tax from these transactions would have been very minimal because the legal basis would be the old P5,000 value, resulting to a the huge loss of revenue for the local government, he explained. Early last year, the Commission on Audit, the Department of Finance (DOF) and the Department of Interior and Local Government (DILG) informed Quezon City that the adjustment is long overdue. In its Joint Memorandum Circular 2010-01, the DOF and DILG have enjoined local chief executives to adhere to the provisions of the Local Government Code (LGC). Section 219 of the LGC provides that the provincial, city or municipal assessors of the municipalities within Metro Manila shall undertake a general revision of real-property assessments within two years after the effectivity of the LGC (which was 1991) and every three years thereafter. However, the implementation for the ordinance approving the revised schedule of fair market value for land, buildings and other structures situated in Quezon City were put on hold in April, after the Supreme Court issued a temporary restraining order.

Zonal value of land

UNDER Title 2 of Republic Act (RA) 7160, otherwise known as the LGC, real-property tax (RPT) refers to the tax on real-property imposed by the local government unit. The code explains that the RPT for any given year “shall accrue on the first day of January, and the date after shall constitute as lien on the property which shall be superior to any other lien, mortgage, or encumbrance of any kind and shall be extinguished only upon payment of the delinquent tax.” The phrase simply means that the local government is given legal claim to the real property of a delinquent taxpayer and which when remained unpaid for a certain time is subject to foreclosure and will be sold in the market for the government to get its tax due.

No agency. . . Continued from A16

INTERTROPICAL CONVERGENCE ZONE AFFECTING SOUTHERN MINDANAO (As of 4:00 AM - September 17, 2017)

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[restored the cuts], these offices cannot function without budgets,” the senator said in a radio interview, adding she does not foresee any deadlock with the House on the issue. She added: “I assure you there will be no government agency with no budget. I am not saying their proposed budget will be approved as submitted but I assure them they will have a budget [because] who can operate with no budget?” The senator said they expect the House-approved version of the 2018 budget bill to be transmitted to the Senate by September 21, “otherwise it will be delayed”. Meanwhile, the public outcry of the Commission on Human Rights (CHR) over its slashed budget notwithstanding, the House of Representatives maintained its decision to give the constitutional body a P1,000 budget for next year. House Committee on Appropriations Chairman Karlo Alexei Nograles of Davao City said the lower chamber

A zonal value refers to the value of land per square meter depending on its classification and which is imposed by the city. The value is fixed and adjusted from time to time by the Bureau of Internal Revenue (BIR). RA 8424, otherwise known as the Tax Reform Act of 1997, authorized the BIR to divide the country into different zones or area and determine for internal revenue-tax purposes the fair market value of properties in a given area. The BIR determines the value upon consultation both from private and public sectors.

First attempts

IN the case of Quezon City, the first attempt to fix zonal values via the DOF, prior to the enactment of RA 8424, was Department Order (DO) 43-90, or a threeyear period from 1990 to 1993. This was followed by DO 29-93, which took effect in June 1993 to August 1996. Another adjustment schedule was implemented in 1998 and 2014. However, the schedule of adjustment does not necessarily mean an automatic price adjustment for zonal value. For instance, when former Finance Secretary Cesar V. Purisima adjusted the zonal value in Quezon City last year, he said “[it] remained unchanged for the last 14 years,” which would mean that the last actual adjustment of value was in 2002. With or without zonal value adjustments, however, the value of land in Quezon City has been increasing unrestrained for the last several decades. A case in point for instance can be made with a quick look at the data from the BIR. The data, available online, reveals that the zonal value of lots in Tierra Bella, a prime residential subdivision in Barangay Culiat along Tandang Sora Avenue, was only at P1,750 per square meter in 1990. In 1993 it went up to P2,700, and again in 1998 to P7,500. From 2012 to 2014, up to the year before Purisima’s order, a lot in Tierra Bella is valued at P10,000 per square meter.

Barangay Culiat

INTERESTINGLY, in 1987 Tierra Bella was still nonexistent. Likewise, the land classification in the area is only two: residential and commercial residential. The most expensive lot per square meter at that time is only at P1,500, along the Don Mariano Marcos Avenue. The land in Teachers’ Village was the cheapest at P500 per square meter. All the remaining land is classified as government property. After 30 years, the cheapest lot in Barangay Culiat is now at P7,500 per square meter, in Saint Dominic IV Subdivision along Tandang Sora Avenue. The most expensive, classified as condominium commercial, is P45,000 per square meter, also along Tandang Sora Avenue. The cheapest lot in Quezon City in terms of valuation can be found in the most interior streets of Barangay San Bartolome, Novaliches, valued at P3,250 per square meter. To be continued

“cannot touch”any more the budget for the commission. “Those [decisions] are untouchables for me,” Nograles said. For his part, Rep. Alfredo Benitez of Negros Occidental, head of the Visayan bloc, said the move of the lower chamber to reduce the budget of CHR to P1,000 was more of a political statement. “[It] aimed to show disapproval over the selective investigations conducted by the CHR. I firmly believe that we should preserve the institution and, instead, seek the removal of officials who clearly failed to perform their duties,” Benitez said. The lower chamber is expected to approve on third and final reading the P3.7-trillion national budget or the proposed 2018 General Appropriations Act (GAA) this week. After the House and Senate approve the proposed GAA in their respective chambers, a bicameral conference meeting will be held to reconcile the differences between the two versions of the national budget. According to Nograles, the lower chamber will also stand to reduce the funding of the CHR during the bicameral meeting for the 2018 GAA with the

Senate. The bicameral body is expected to meet in November. “[However] I think they can use contingency funds to be able to augment operations [including the salary of workers],” Nograles said. Earlier, Speaker Pantaleon D. Alvarez said the CHR’s budget will be realigned to fund the implementation of the Universal Access to Quality Tertiary Education Act. Apart from the CHR, the lower chamber also cut the National Commission for Indigenous People and the Energy Regulatory Commission’s 2018 budget to P1,000 each, from P1.187-billion and P350.95 million, respectively. “Those [P1,000 each budget of the three offices] were moved and approved in plenary. I cannot anymore amend that,” Nograles said. Nograles added the 2018 budget of National Commission on Indigenous Peoples and Energy Regulatory Commission will also be realigned for the implementation of the free-college education. He said the government needs P16 billion to P30 billion to finance the free-college education of students. With reports from Jovee Marie

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PHL urges North Korea to stop missile tests that threaten region’s security

By Recto Mercene

@rectomercene

he Philippines last Sunday repeated its call for the Democratic People’s Republic of Korea (DPRK) to stop its provocations and head back to the negotiating table after Pyongyang sent another ballistic missile toward Japan.

“We again call on the DPRK to cease its provocative and highly dangerous actions that threaten the peace, stability and security of the region,” Foreign Secretary Alan Peter S. Cayetano said in a statement issued in New York, where he will attend the 72nd Session of the United Nations General Assembly (UNGA). “DPRK must put a stop to these tests and to start talks instead,” Cayetano said as he reiterated Manila’s call for dialogue. He said the missile launches not only undermine efforts toward a peaceful resolution of issues in the Korean Peninsula but also exacerbate an already tense situation there. North Korea last Friday launched another missile over Japan, after threatening to “sink” the country and turn the US “into ashes and darkness”. The missile—which was fired from Sunan, just north of Pyongyang, last

Friday morning at 6.57 a.m. Japan time (21.57 GMT Thursday)—flew over the northern Japanese island of Hokkaido before landing, 20 minutes after launch, in the Pacific Ocean, some 2,200 kilometers east of Cape Erimo. Last Friday’s launch was the longestever such flight carried out by the rogue regime, which travelled 3,700km to 800km further than the previous launch over Japan in August. Experts believed it was likely to be another Hwasong-12 missile, as used in the August test. Cayetano urged the DPRK to “abide by the relevant United Nations Security Council [UNSC] resolutions, as the Philippines remains committed to complying with the same”. Cayetano said he will be consulting with fellow Asean Foreign Ministers in New York on what the Asean can do to help reduce tension in the Korean Peninsula.

The Asean Foreign Ministers are scheduled to meet next week in New York, and are expected to have a dialogue with UN Secretary-General Antonio Guterres at the sidelines of the UNGA. “Of course, we are also concerned about the safety of the 242,000 Filipinos in Japan who may be impacted by these provocative acts,” Cayetano said. “Our Embassy in Tokyo and Consulate General in Osaka are closely monitoring the situation and are regularly providing updates to the Filipino community,” he added. “Our kababayan in Japan must closely monitor the Embassy’s announcements and to update information on their whereabouts and contact details with the Embassy or consulate general,” he said. Last Friday’s launch is the third such incident involving Japan, following a similar missile test on August 29, which also ended with a splashdown in the Pacific Ocean, while the first occurred back in 1998. This marks the 13th DPRK ballisticmissile test for 2017 alone, and comes on the heels of the adoption of UNSC Resolution 2375 (2017) on September 11, which strengthened sanctions against DPRK in light of their sixth nucleardetonation test a day earlier.

Editor: Vittorio V. Vitug • Monday, September 18, 2017 A3

Duterte ‘not averse to idea of new peace talks with NDF’ By Elijah Felice E. Rosales

@alyasjah

fter a period of pessimism on the prospect of peace with communist rebels, the government over the weekend hinted its desire to return to the peace table with the National Democratic Front (NDF). In a speech last Saturday, President Duterte said he is still open with the idea of resuming the stalled fifth round of peace talks with the NDF. However, the President told communist rebels to take it easy not only on the resumption of talks but also on the demand for reforms. “Let’s talk about that intensively. Do not be in a hurry because we have been fighting for the last 50 years, and you just cannot ignore that period of violence and killings on both sides,” Duterte said. “The fact alone that I cannot operate by myself would indicate that there is something more to be done, that there is more than what meets the eye. There are things which [have] to be done, [and] we have to clear it with the [House] Speaker and the Senate President,” he added. “Now, if you want to resume the talks, I am not averse to the idea, but let me sort out first the other branches of the government,” the President said. Duterte was in Davao City to meet with SPO2 George C. Rupinta, a former prisoner of war of the New People’s Army (NPA). The President thanked the NPA for releasing Rupinta safe and sound, recognizing the act as a “humanitarian gesture” on the side of the communist rebels. Negotiations with the NDF in May were suspended after the Communist Party of the Philippines issued an order to the NPA, its armed wing, to heighten offensives and accelerate recruitment. The directive was in response to the

martial-law declaration in Mindanao. The rift was further severed when communist rebels in August attacked a convoy of the Presidential Security Group (PSG) in Arakan, Cotabato. Five PSG units and a militiaman were killed in the ambush, prompting Duterte to instruct the government panel to cease from negotiating with the NDF until the NPA stops attacking military operatives in Mindanao. Taking a cue from his superior’s remarks, Presidential Spokesman Ernesto C. Abella last Sunday said all the President ever wanted is “sustainable and lasting peace”. “In spite of the President’s firm position to protect the nation from violence and terrorism, his fundamental goal is sustainable and lasting peace, which, in this case, begins with addressing the social injustice as the historical root of conflict,” Abella added. So, does that mean the stalled fifth round of peace talks will resume anytime soon? “To resume talks necessitates President Duterte to consult first with the members of his secur it y cluster, consider ing the many lives lost, civilian and government property destroyed before returning to the negotiating table with the [NDF]. The President, likewise, has to confer with the other branches of the government regarding matters [requiring] their consent or approval,” Abella said. Duterte’s remarks came days after the left has cut its alliance with the government, highlighted by the decision of the Makabayan bloc, the seven-member coalition of militant lawmakers, to leave the House majority. The left is also scheduled to stage a massive demonstration on Thursday to protest the spate of killings under the Duterte administration.

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A4 Monday, September 18, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon

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‘Economic diversification to shield peso from uncertainties’

According to Finance Undersecretary Gil S. Beltran, the Philippine peso was among Asian currencies, that appreciated eight years before the global financial crisis in 2008. In his economic bulletin on Asian currencies which cited Bloomberg and Asian Development Bank (ADB) data, the currencies of 12 Asian economies appreciated by 9.3 percent from December 2000 to December 2007. Beltran said the currencies that appreciated the most were the Korean won at 26 percent; Thai baht, 22.1 percent; the Singapore dollar, 16.9 percent; the Philippine peso, 16.8 percent; Indian rupee, 15.7 percent; and the Malaysian ringgit, 12.9 percent.

After nine years, when countries started to recover from the global financial crisis, Asian currencies depreciated by 14.6 percent. With the exception of the Singapore dollar and the Thai baht, the currencies that strengthened were among those that depreciated the most. Beltran noted that the Indian rupee depreciated by 62.1 percent; Indonesian rupiah, 35.4 percent; Malaysian ringgit, 27.2 percent; Philippine peso, 21.9 percent; and the Korean won, 20.7 percent. “Currency movements in Asia are a complex product of external and internal economic factors. But in the case of movements from 2008 to 2017, these are mostly accounted for by

BLOOMBERG

he Department of Finance (DOF) said the Philippines should not rely too much on remittances and the businessprocessing outsourcing (BPO) industry to prevent the peso from depreciating too much whenever there are uncertainties in advanced economies.

external factors, mainly the Fed [the Federal Reserve] System QE [quantitative easing] policy,” Beltran said. According to Beltran, regression results showed that the Fed’s QE policy accounted mostly for currency

movements from 2008 to 2013, with domestic inflation accounting for less than 10 percent. Compared to other Asian currencies, the Hong Kong dollar depreciated by only 0.1 percent from 2007

to September 2017, while the Taiwan dollar appreciated by 7.4 percent in the same period. Significant diversification of the economy, as in the case of Taiwan and Hong Kong, would insulate the

Philippines from adverse impact of external factors, Beltran said. “This [economic diversification] is what the Philippines aims to achieve in the medium term,” he added. Remittances and BPO receipts together account for around $50billion inflows annually, which boost the country’s external payments position. Last year remittances reached around $26 billion, which accounted for 10 percent of the country’s GDP. Earlier, Finance Secretary Carlos G. Dominguez III said the government would not intervene in the foreign-exchange market despite the weakening of the peso against the greenback. Dominguez also said the peso’s decline was not a cause for alarm as the economy has become more resilient against the adverse impact of a weakening currency. He said a weak peso benefits more Filipinos, particularly the families of those working abroad and those employed in BPOs. The DBCC earlier adjusted its foreign-exchange assumption for the years 2018 to 2022 to P48 to P51 per dollar, due to the resumption of the Fed’s monetary-policy tightening, which could put more pressure on the peso. Rea Cu

Tap PDMF to check House panel summons officials, contractors to Yolanda housing-project hearing viability of PPP T projects, LGUs told By Jovee Marie N. dela Cruz

@joveemarie

vice chairman of the House Committee on Appropriations last Sunday urged local government units (LGUs) to tap P2.58-billion Project Development and Monitoring Facility (PDMF) for public-private partnership (PPP) projects. Rep. Luis Ray Villafuerte of Camarines Sur said the P2.58billion PDMF managed by the PPP Center has now become even more relevant for LGUs as business conglomerates, like the Ayala Group and the First Metro Investment Corp. (FMIC), have started scouting projects outside Metro Manila to take part in the Duterte administration’s planned “golden age of infrastructure”. Villafuerte, citing reports, said big firms, which, among others, also include the Gotianun-led Cyberzone Properties Inc., have now trained their sights on big-ticket infrastructure projects in the provinces to seize business opportunities offered by the government’s massive infrastructure program. He said the 2.58-billion fund can be used by LGUs to check the viability of, and efficiently prepare and monitor their largescale development projects undertaken via PPP mode. Villafurerte added the national government has encouraged LGUs to tap the PDMF’s revolving facility to fund the prefeasibility and feasibility studies, project structuring, preparation of bid documents and project monitoring for their proposed PPP initiatives, which, he said, are all crucial in ensuring the success of infra projects at the local government level. “These major infrastructure projects implemented in partnership with the private sector would transform LGUs into engines of economic growth, which is the only way to disperse investments, create enough jobs and spur inclusive growth in the regions,” he said. “It will also open opportunities for private firms in search of new business locations and thereby foster a better environment for investments outside Metro Manila and other major urban centers,” said Villafuerte, who is also vice chairman of the House Committee on Local Government. Villafuerte is the main author of House Bill 5805, which seeks to strengthen the PPP mode of financing large-scale government projects by expanding the composition of the PPP Board. He said his bill aims to strengthen the PPP mode of financing projects, he had also proposed that the PDMF be extensively used to provide financial and technical support for LGUs during the preparation and monitoring phases of their respective projects. Villafuerte said the PDMF offers LGUs world-class consultancy services from firms such as BDO Llp. of the United Kingdom, KPMG Service Pte. Ltd. of Singapore, McKinsey & Co. (Philippines), CPCS Transcom of Canada, International Technical Assistance Consultants, SL of Spain and Deloitte Touche Tohmatsu India Llp. He added his proposed law seeks to accelerate public infrastructure development by strengthening the PPP institutional framework; provide financial and technical support through PDMF; optimize project risks and obtain government support and expand the PPP contractual arrangements. It also seeks to provide for transparent and competitive bidding; set standard contents and implementation of PPP projects for transparency, consistency and predictability; and grant incentives to PPP projects. The bill updates the build-operate-transfer law by including joint ventures, operations and maintenance contracts, and the supply-and-operate mode, which allow the private sector to supply and operate an infrastructure facility, in the list of contractual arrangements that the government may undertake in implementing PPP projects.

he chairman of the House Committee on Housing and Ur b a n D e v e l o p m e nt s a i d government officials and contractors linked to the construction of Yolanda housing projects have been summoned to attend the continuation of the lower chamber’s probe on the project’s implementation. Rep. Alfredo B. Benitez of Negros Occidental, the panel chairman, said officials of the National Housing Authority (NHA); JC Tayag, who won the bidding for the Yolanda housing project; and new whistleblowers are expected to appear on Monday to answer several questions related to the implementation of housing relocation and resettlement projects for those affected by Supertyphoon Yolanda.

Benitez said material used for the construction units were “substandard”, “subcontractors has ordered 10-millimeter steel rods for P115 each but rusty 8-mm steel rods worth P70 arrived.” The government has earmarked P75 billion for the implementation of a housing and resettlement program for Yolanda victims. However, four years after Yolanda devastated communities in Eastern Visayas, Benitez revealed that only 23,414 of the projected 205,128 housing units under the government’s resettlement program for the typhoon victims are being occupied. He said substandard construction of Yolanda housing projects is the main reason the occupancy rate is low with a meager 11.4 percent. “Among

MRT 3 maintenance provider bats for system audit of rail line By Lorenz S. Marasigan @lorenzmarasigan

NVESTIGATING the root cause of the glitches and service interruptions that plague the Metro Rail Transit (MRT) Line 3 would yield only one answer, which according to its maintenance provider, is the “inherent flaws” in the facility’s design. Busan Universal Rail Inc. made this statement amid its call for a system audit of the rail line, which has been seeing several service interruptions and passenger unloading incidents over the past few years. To make its plea formal, the company submitted to MRT 3 General Manager Rodolfo Garcia a letter pressing for the said system review. The said probe, according to the Busan’s letter, would only “confirm that the MRT 3 design flaws are the primary reason for the recurring service interruptions of the system”. Citing records from 2000, Busan claimed that it has been maintaining the system properly, noting that it has lessened the number of glitches from 2015’s recorded 2,776 issues to about 992 in mid-June 2017. “With the original system flaws compounded by overloading and excessive vibrations and poor track condition that lead to failure of electronic, electrical and mechanical parts of the MRT 3 system and has resulted in the continuing occurence of glitches

and stoppages,” Busan said. Charles Perfecto A. Mercado, the company’s legal counsel, said his group is “open to an extensive system audit to once and for all produce an in-depth factual report of the current status of the system as opposed to putting all the blame to the maintenance contractor”. He previously made the call for the system audit to Department of Transportation Undersecretary for Rails Cesar B. Chavez, who, he said, did not take any action on the matter. The BusinessMirror sought for Chavez’s comment, but he has yet to reply as of press time. Chavez has repeatedly said he has recommended the termination of the government’s contract with Busan for failing to maintain the system properly. MRT Holdings Inc. Chairman Robert John L. Sobrepeña has also belied the claims of Busan, saying that its accusations are “ridiculous”. Sobrepeña’s group owns the rail facility. It is being operated by the government through a build-leasetransfer agreement signed roughly two decades ago. The MRT 3 has been a huge problem for the government for over half a decade now due to congestion relating to operations and maintenance issues. Several proposals to rehabilitate and improve the train line have been offered to the government, but to date, these proposals have yet to be acted upon.

the issues in resettlement areas for Yolanda victims [that the committee has identified] include size of housing is inadequate, structure is substandard quality, lack of livelihood opportunities in resettlement sites, lack of potable water supply in resettlement sites and lack of power line in the area,” Benitez said. Citing the report of the NHA as of February, Benitez said that out of the projected 205,128 housing units under the government’s resettlement program for the victims of Yolanda, only 67,754 units, or 37 percent, were actually constructed, with only 23,414 units, or 11 percent, being occupied. Meanwhile, he said 74,286 units are currently under construction. “Four years has passed, only 23,414

housing units are occupied—a mere 11.4 percent. This is based on NHA figures. Thirty-three percent has been completed and total of 73,286 units are ongoing construction.” Rep. Ben P. Evardone of Eastern Samar, who filed a resolution investigating the slow implementation of Yolanda housing projects, said years after Yolanda, the people have anxiously observed the snail-paced implementation of the resettlement projects for the victims, as well as those living in danger zones. “Procurement policies, land acquisition issues and the many permits and clearances needed to start certain projects have been cited as among the primary reasons that slow down the implementation of the resettlement projects,” Evardone added. Jovee Marie N. dela Cruz

Implementation of Asean-wide self-certification scheme for exporters seen to start next year

embers of the Asean are targeting to implement next year the self-certification scheme, which allows exporters to selfdeclare their goods without securing a certificate of origin. Trade Secretary Ramon M. Lopez, who chaired the recent Asean Economic Ministers (AEM) Meeting, said they were working to deliver the Aseanwide Self-Certification Scheme by the 31st Asean Summit in November. “The implementation of the SelfCertification Scheme is aimed at facilitating intra-Asean trade, reduce costs and time of doing business…,” he said. Lopez added such certification requires a declaration from a certified exporter that a product meets the rules of origin under the Asean Trade in Goods Agreement (Atiga). The manufacturers and exporters will no longer be required to obtain or secure a Certification of Origin Form D from the Bureau of Customs and its branch offices around the country. The Atiga consolidates all commitments related to trade in goods and facilitates trade by simplifying processes and procedures, thereby reducing transaction time and cost of doing business. The Asean-wide self-certification scheme is among the 10 out of 11 Philippine economic priority deliverables the country successfully secured during the 49th AEM. Lopez further said such priority deliverables would “lead to enabling policies to allow greater maximization of opportunities, particularly for micro, small and medium enter-

prises in the region”. To increase trade and investments, he said other deliverables include Focused and Strategic Action Agenda on Investment, substantial conclusion of the Asean Trade in Services Agreement, adoption of the Asean Seamless Trade Facilitation Indicators, review mechanism for Asean Economic Community (AEC) and operationalization of the Asean roll-on, roll-off (Davao-Bitung-General Santos route). To integrate MSMEs in global value chains, the Philippines successfully secured the endorsement of the Asean Inclusive Business Fr a me work , m a i n st rea m i ng of Women Economic Entrepreneurship in AEC and adoption of the Asean Work Programme on E-commerce 2017 to 2025. It also secured the Asean Declaration on Innovation meant to develop an innovation-driven economy. For the 11th Philippine economic priority deliverables, ministers endorsed the key elements paper for the Regional Comprehensive Economic Partnership (RCEP) that “would guide negotiations towards significant outcomes and give momentum towards substantial conclusions in future negotiations”. RCEP aims to link Asean, an economic powerhouse with a market of 600 million people, to its six partnercountries, creating a bigger market of 3.5 billion people. These partner countries are Australia, China, India, Japan, South Korea and New Zealand, with which Asean has free-trade agreements. Philexport News & Features

Agriculture/Commodities BusinessMirror

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Editor: Jennifer A. Ng • Monday, September 18, 2017

PHL to import cattle from Brazil in 2018 DA sends 12 MT of chicken to soldiers in Marawi

he Depar tment of A g r iculture (DA) has shipped nearly 12 metric tons (MT) of dressed chicken to soldiers and policemen who are currently fighting terrorists in Marawi City. Agriculture Secretary Emmanuel F. Piñol said the first shipment of about 11,874 kilograms, or 11.87 MT, of frozen dressed chicken intended for consumption by soldiers and policemen in Marawi City arrived on September 16 in Tagoloan, Misamis Oriental. “As promised, soldiers and policemen received the first shipment of dressed chicken from President Duterte who wanted to provide the fighting men and women better food while in combat,” Piñol said in a Facebook post. “It was also planned to be part of a strategy to provide additional market for broilers which suffered a drop in demand because of the recent bird-flu outbreak in Pampanga,” he added. Piñol said the 12-MT dressed chicken was donated by Jonathan Suy of Ana’s Breeder Farm Inc., which owns the Farmers Fresh Chicken brand.

“A total of 2.4 MT of frozen broiler chicken are currently being delivered directly to Marawi City from Tagoloan, Misamis Oriental, as facilitated and coordinated by the DA office in Region 10 under Director Carlene Collado,” he said. The DA chief said there would be five more deliveries of frozen dressed chicken totaling about 2 MT to 3 MT, as requested by the troops in Marawi. “There will be additional deliveries of chicken until the soldiers and policemen have completed their task in Marawi City.” Piñol said the DA had earlier planned to provide dressed chicken to Marawi evacuees but this was opposed by some Maranao leaders “who said giving chicken coming from bird flu-affected areas was an insult to them.” “This was, of course, an unfounded claim because all of the chicken in the bird flu-affected areas were actually killed and disposed of,” he said. “Due to the opposition of some Maranao leaders, it was decided that the supply will only be given to soldiers and policemen,” he added. Jasper Emmanuel Y. Arcalas

By Jasper Emmanuel Y. Arcalas

@jearcalas

he Department of Agriculture (DA) has allocated P1 billion for the importation of cattle from Brazil next year to boost Philippine dairy production, according to Agriculture Secretary Emmanuel F. Piñol.

Piñol told the BusinessMirror that the DA’s allocation for its cattle importation program is included in its approved budget of P60.6 billion for 2018. “The number of heifers the DA will import will depend on the price per head. The department plans to engage local government units [LGUs], particularly the provincial government of Batangas, to partner with us,” he said. “LGUs could build the livestock sheds and the funds could be sourced from the Philippine Rural Development Project [PRDP] I-Reap component, which is the slow-moving component of PRDP,” Piñol added. The DA chief said he will visit Brazil in December right after

the World Trade Organization’s 11th Ministerial Conference in Argentina. Earlier, Brazil ’s Minister of Agriculture, Livestock and Supply Blairo Maggi said his government remains keen on selling Girolando cattle to the Philippines. “Brazil is still interested in selling cattle to the Philippines, in fact, we recently sent back questionnaires to the Philippines and we are expecting that the Philippines will send a mission here to fine-tune remaining issues,” Maggi told foreign journalists in a news briefing in São Paulo, Brazil, on August 28. Maggi said Brazil is also open to exporting other genetic materials as well as other breeds

Ifpri urges govt to invest more in agricultural R&D

he International Food Policy Research Institute (Ifpri) said rural economies would grow if the government will pour investments into agricultural research and development (R&D), labor-intensive manufacturing and services and land distribution. Kevin Chen, Ifpri research fellow at the Southeast Asian Regional Center for Graduate Study and Research in Agriculture’s (Searca) Asean Transformation and Market Integration (ATMI) program, made this statement during an inception program of Searca. Chen also said policies like those adopted by China will play a huge role in rapidly lifting rural areas in the Philippines out of poverty. “The design and implementation of institutions, policies and investments [in countries] have influenced the path and speed of rural transformation and...poverty reduction. Land reform, rural investments and sectoral policies have been decisive,” he said. China’s rural-development success, according to Chen, is particularly attributable to the following: n Land redistribution in 1982, market reform, trade liberalization;

n Huge investment in infrastructure; n Rapid structural transformation—investments in manufacturing and services through decentralization, foreign direct investments and regional competition; and n Substantial agricultural R&D.

‘One Asean’

The “one Asean” dream through market integration was conceived as a result of the 2007-2008 food crisis when rice prices shot up to more than $1,000 per ton. Asean membernations adopted the Integrated Food Security and Strategic Plan of Action (SPA) on Food Security, which now covers 2015-2020. ATMI aims to integrate small farmers into bigger business systems called value chain, which involves a series of business activities—from farming to processing, marketing and distribution. It will make them competitive as numerous small farmers’ production is consolidated into one bigger supply bulk. The role of small farmers to rural economic growth is tremendous as small farmers tending 1 hectare to 2 hectares make up 85 percent of all land holdings and those hold-

ing less than 0.5 hectare make up 70 percent. These suffer the most from poverty and hunger. With rural transformation, poverty in Asean’s developing countries has been successfully reduced from 71 percent in 1981 to 15 percent in 2011 (based on purchasing power). Based on $1.25 a day poverty yardstick, poverty rate in Asean was cut to 40 percent in 2011, from 91 percent in 1981. Chen said agricultural transformation involves the simultaneous development of the processing industry (including food processing) and services sectors (logistics, marketing) through “value chain development”. The stages of transformation are: development of the wholesale/ logistics segment as public and private sectors and foreign institutions pour investments; processing booms as small and medium enterprises thrive from grain mills and dairy, meat, fish and produce processing and large-scale plants also develop from consolidation due to improved policies; increase in private retailers due to the e-commerce boom. As an end goal, integration as envisioned in ATMI is considered successful when agriculture diminishes

to just one of the many major sectors of the economy. Transformation happens as a country progresses from agriculture-based economy, to pretransition, transition to urbanization and developed stage. Unfortunately, there are factors that hinder rural farm growth called the “Paradox of East Asia Paradigm” of Zhang. This is a situation where a developing country shifts from labor surplus to rural hollowing or when the labor force migrates or moves to cities— leaving the provinces with no people who will tend farms. Farmlands are abandoned further as importation of farm goods strip farmers of incentives of higher prices for their farm products. The paradox also involves shifting from comparative advantage to import dependence. As population increases, farms are divided and become smaller for farmers to achieve economies of scale. The solution is land reform. Population explosion is worsened as people change diet to Western style—consuming more dairy and animal products from previously a diet of root crops and fruits-vegetables.

Responsible Farming III: Antibiotics in food

make reference again to my recent columns regarding the excessive use of antibiotics in animal husbandry, poultry farming and aquaculture in the Philippines and many countries around the world, including the United States. More than 70 percent of medically important antibiotics in the US are sold for livestock use. Scientists have warned that the routine use of antibiotics to promote growth and prevent illness in healthy farm animals contributes to the rise of dangerous antibiotic-resistant superbug infections, which kill at least 23,000 Americans each year and pose a significant threat to global health. Unfortunately, the situation in the Philippines is similar: 80 percent of Filipinos are already antibiotic resistant, according to the Department of Health (DOH). I mentioned previously that Tyson, one of KFC’s suppliers in the US, set a goal in April 2015 to eliminate the use of human antibiotics from its broiler flocks, or those raised for meat, by the end

Henry J. Schumacher

europe Beat of September. It is good to see that McDonald’s Corp. said the other day it would begin curbing the use of the high-value human antibiotics in its global chicken supply in 2018, as the fast-food giant joins a broad effort to battle dangerous superbugs. McDonald’s, in a policy statement, said it is working on antibiotic plans for other meats, dairy cows and laying hens. McDonald’s is requiring suppliers of chicken meat to begin phasing out the use of antibiotics defined by the World Health Organization as “highest priority critically important antimicrobials” (HPCIA) to human medicine. In January 2018 HPCIAs will be

gone from McDonald’s chickens in Brazil, Canada, Japan, South Korea, the US and Europe. By the end of 2019, suppliers in Australia and Russia will be added. Suppliers in all other markets will comply by 2027. Does the Philippines fall under the 2027 deadline? Given the fact that 80 percent of Filipinos are antibiotic resistant, this problem needs to be addressed Now, by supervising the raising of chicken and hogs. In my view it is super urgent that all agri-food stakeholders in the Philippines get together to discussed in more detail steps to be taken and deadlines to be met between the private sector (the complete supply chain) and the government (Department of Agriculture, DOH and Food and Drug Administration). It is understood that these drastic changes cannot be effected within a short period of time, as the Tyson/KFC/ McDonald’s examples shows. But every revolution starts with the first step. The Philippines certainly cannot wait until 2027.

And we don’t have to wait. The Philippines already has an excellent example: the Philippine poultry farm, Pamora, is offering free-range chicken and eggs, and states: “All natural chicken with no hormones, chemicals and antibiotics”. Pamora further states: “Pamora chicken are grown 81 days for optimum quality. Eight-percent total fat content with real chicken taste.” Pamora Farm, a FilipinoEuropean joint venture, started to raise free-range chicken in the year 2000. The company’s production of dressed free-range chicken began in mid-2002 with a monthly capacity of 200 broilers. Today monthly capacity has reached 3,000 broilers and still increasing due to markets demand for quality free-range chicken meat. All that needs to be done is to build on Pamora’s expertise and set deadlines for reducing medically important antibiotics from the country’s meat supply. For more information, contact Schumacher@mcasia.org.

From Wikimedia Commons

of cattle, such as those for meat production. “Brazil has a number of markets which are open for slaughter cattle and open for breeding not just for [live] cows but also genetic materials,” Maggi said. “Brazil has this interest and each mission we carried out we present our portfolio to show our interests to send our livestock overseas.” The importation of Girolando cattle from Brazil is part of the DA’s plan to ramp up local milk production to meet at least 10 percent of annual domestic requirement by 2022 and reduce the country’s reliance on imports. Girolando, a breed which is a cross between the Brazilian Gyr and Holstein cattle, is ideal for milk and meat production in tropical climates, according to Piñol. “The long-neglected dairy and livestock sectors will receive a boost when the DA starts a fiveyear master plan to empower backyard hog raisers, increase the national cattle population and raise milk production from 1 percent to 10 percent of the national requirement starting 2018,” Piñol said earlier. “The five-year road map for livestock and dairy, which is now being crafted by the DA, will bring together all of the agencies under

the department and focus their resources on the declared targets,” he added. Under the road map, identified participating villages or towns will be designated as community multiplier farms, which will be owned and managed by a group of farmers, according to Piñol. Last year the country’s local milk production grew 3.78 percent to 21,160 metric tons (MT), from 20,390 MT recorded in 2015, according to the latest report of the National Dairy Administration (NDA). The NDA, an attached agency of the DA, attributed the expansion to the increase in the number of the milk-producing herd. Despite this, however, the share of local milk output to the country’s total supply shrank while that of imports went up. The Philippines bought a total of 65,600 MT of ready-todrink liquid milk from abroad last year, 53.77 percent higher than the 42,660 MT imported in 2015. On an annual basis, government data showed that Philippine dairy imports expanded by 54 percent to 2.77 million MT in 2016. Dairy products are currently the Philippines’s third-largest agricultural import after wheat and soybean meal.

Banking&Finance

Monday, September 18, 2017 • Editor: Jun B. Vallecera

BusinessMirror

news@businessmirror.com.ph

Foreign debt less than a fourth of local output–BSP China names entities pursuing government infrastructure programs

By Bianca Cuaresma

@BcuaresmaBM

he country’s debt stock remained at a “comfortable” level in the second quarter as this fell further from the previous quarter. The debt stock the past 10 years, for example, steadily fell from 44.5 percent of local output, or the GDP, in 2007 to only 23.5 percent of GDP as of latest, the Bangko Sentral ng Pilipinas (BSP) said last Friday.

External debt, in essence all types of borrowings by residents from non-Filipino sources, stood at $72.5 billion as of end-June this year, a decrease by $1.3 billion, or 1.8 percent, from the $73.8 billion at end-March. According to the BSP, the decline in the country’s outstanding external debt resulted from net repayments mostly by the private sector of $1.2 billion and an increase in residents’ investments in Philippine debt papers issued offshore of another $110 million. On a year-on-year basis, the debt stock dropped by $5.2 billion, or 6.7 percent, from $77.7 billion a year ago. With this development, the BSP said the current level of external debt remains

“at comfortable levels” as the gross international reserves are sufficient to cover 5.6 times the country’s short-term external debt under original maturity. The external-debt ratio also continued to improve, now at 19.5 percent, from 20 percent in the first quarter. The ratio is computed by getting the outstanding external debt as a percentage of the country’s gross national income (GNI). The lower the ratio, the bigger the improvement on the economy. The report also show the country remaining heavily biased toward loans with medium- to long-term tenor, as medium- to long-term debts accounted for 79.9 percent of total external debt for the period.

“This means the foreign-exchange requirements for debt payments are well spread out and, thus, manageable,” the Central Bank said. Debt-accounts with medium- to longterm tenors are those with maturities longer than one year. The BSP said the average maturity of medium- to long-tenor accounts stood at 17.9 years as of end-June 2017. In terms of borrower debt profile, public-sector borrowings have a longer average term of 23.7 years compared to only 8.1 years for the private sector. Short-term liabilities accounted for the remaining 20.1-percent balance of the debt stock. This consisted of bank liabilities, trade credits and other nonbank liabilities. The bulk of the country’s external debt were in two major currencies, with US dollar debt making up 62.8 percent of the total debt, while the Japanese yen comprised 12.8 percent of the country’s external debt.

India’s forex reserves poised to top $400 billion for first time ever

ndia’s foreign-exchange reserves rose past $400 billion for the first time ever, strengthening policy-makers’ buffers ahead of an expected reduction in US stimulus. The stockpile stood at $400.7 billion September 8, the Reserve Bank of India (RBI) said in a release last Friday. With the Federal Reserve (the Fed) set to shrink its balance sheet—details of which could be announced next week—the holdings may help the rupee withstand any volatility even if global funds turn away from India’s slowing economy. “We expect portfolio inflows to slow in the coming months,” said Radhika Rao, an economist at DBS Bank Ltd. in Singapore. She predicts India’s current-account deficit will double to 1.4 percent of GDP in the year through March 2018. That’s still far lower than the unprecedented 4.8 percent of GDP touched in

2013, when the Fed had first signaled intent to curb its massive bond-buying program. Those “taper tantrums” triggered a sharp slide in the rupee and reserves depleted to around $275 billion, as the central bank struggled to buoy the currency. India’s holdings are about $376 billion now if stripped of gold, enough to pay for about a year of imports. The pace of reserve accretion has been one of the strongest within Asia in the past 12 months, according to analysts at Morgan Stanley, creating a challenge for the central bank, which has been intervening and mopping up the inflows. The RBI last month cut interest rates to the lowest in seven years to boost flagging growth. At the same time, it has been absorbing surplus funds in the banking system to keep price pressures under control. Inflation has been rising

sharply from record lows, and the central bank wants it to stay near the 4-percent mid-point of its target range. The rise in foreign-exchange reserves comes as yield-hungry global investors take advantage of high real rates of interest and a rupee that has gained more than 6 percent this year against the dollar. That may change in the months ahead as accelerating inflation in India erodes returns. Foreign holdings of rupee debt have risen by just 20.9 billion rupees ($326 million) so far in September and August’s 126-billion-rupee inflow was the smallest in six months, as investors have used up almost all of their eligible quotas to buy Indian bonds. In the freer equity market, overseas investors have withdrawn $810 million this month, extending last month’s $1.7-billion outflow.

Dominguez said once the Chinese companies or contractors were found qualified, legitimate and in good standing, NIA and MWSS will immediately commence the procurement process and undertake limited competitive bidding among the mentioned Chinese companies and contractors following applicable procedures and documents under Republic Act 9184, or the Government Procurement Reform Law. E a rl ier, of f ic i a l s est i m ated pro spective loans from China could hit P140 billion. In October 2016 Chinese President Xi Jin Ping pledged more or less $9 billion in loan commitments for the Philippines in the form of official development assistance, as well as commercial loans. Manila and Beijing cited progress on two bridge projects funded by China, which include the Binondo-Intramuros Bridge and the Estrella-Pantaleon Bridge. The Binondo-Intramuros bridge will cost P4.6 billion, while the Estrella-Pantaleon Bridge will cost another P1.36 billion. The two are among the 12 bridges that the government is planning to span the Pasig river. Public Works Secretary Mark A. Villar and other concerned agencies are undertaking the necessar y preparations to meet the target of holding the groundbreaking rites for the bridge projects by November in time for the visit to Manila of Chinese Premier Li Keqiang to attend the 20th Asean-China Summit. Rea Cu

hina has identified the entities that will pursue the P2.7-billion Chico River irrigation project to its full completion, according to the Department of Finance (DOF). Beijing has similarly identified the Chinese companies that will push the Kaliwa Dam project and help bring water to Metro Manila from nearby Rizal province. According to Finance Secretary Carlos G. Dominguez III, the first batch of projects under Chinese financing include the Chico River Pump Irrigation Project in Cagayan and Kalinga provinces, as well as the New Centennial Water Source-Kaliwa Dam Project in Rizal province. The governments of the Philippines and China previously agreed to a “tiedloan” funding scheme in which China will submit candidate bidders to the government in exchange for its financial support. “For the Kaliwa dam, its China Energy Engineering Co. Ltd., PowerChina Ltd., Consortium of Guangdong Foreign Construction Co. Ltd. and Guangdong Yuantian Engineering Co. Ltd.,” Dominguez told financial reporters. Dominguez said the National Irrigation Administration (NIA) and the Metropolitan Waterworks and Sewerage System (MWSS) are conducting due diligence among the six recommended Chinese companies. “For the Chico River [project], it’s going to be China CAMC Engineering Co. Ltd., China Geo-Engineering Corp. and Qingdao Municipal Construction Group Co. Ltd.,” he added.

Case clippings

By Justice S J Ranada Jr.

COMMON CARRIERS–fraud and negligence Fraud includes “inducement thru insidious machination”. In turn, insidious machination refers to such deceitful strategy or such plan with an evil purpose. On the other hand, bad faith does not merely pertain to bad judgment or negligence but relates to dishonest purpose and a deliberate doing of a wrongful act. Bad faith involves “breach of a known duty thru some motive or interest or ill will that partakes of the nature of fraud”. GDarines v. Quinones 02 Aug 2016

GR 206468 Del Castillo, J

Perspectives

Rethinking insurers’ strategies and structures in the digital age

echnology brings a new range of threats to both tangible (e.g. property) and intangible (e.g. reputation) assets, many of which are not covered by established insurance policies, leaving organizations of all types dangerously exposed to the impact of cyber perils. Cyber insurance, as it has historically been defined, has focused primarily on digital assets, such as customer data. However, with the scale, frequency and impact of cyber-incidents increasing, many traditional insurance lines, like home, property, energy and aviation, are transitioning by proxy to cyber insurance. Our discussions with industry experts support this trend and predict that the c yber-insurance sector is undergoing several waves of development to expand from digital assets to encompass physical assets, as well as other asset classes, such as reputaåtion, intellectual property and business interruption. The faster the insurers can unravel

the complexity of modeling and pricing these risks, the quicker they can seize a share of this exciting, expanding market, which could be worth more than $10 billion of global premiums by 2020. This represents a significant opportunity, but also a big challenge for insurers, who need to move their cover from products to managing risks, preventing incidents and responding to incidents. Insurance companies are creating teams that focus on cyberinsurance risks, but we recommend that they should adapt their organizational structures to ensure that cyber is integrated into everything they do, possibly creating stand-alone cyberinsurance centers of excellence that bring together cyber-risk modeling, crisis management and digital platforms. Ultimately, as customers start seeing value in integrated solutions to protect against cyber incidents across all asset types, insurance companies might consider shifting their department structures away from a focus on assets (e.g. property, motor, aviation)

to a focus on perils (e.g. cyber terrorism), thereby challenging the status quo of traditional insurance.

In today’s digital world, almost all insurance lines are impacted by cyber

Technology has become an integral part of our lives, with emerging innovations like artificial intelligence, the Internet of things, robotics and augmented and virtual reality impacting homes, workplaces, transportation and leisure. This is creating new levels of emobility, automation, smart buildings and even smart cities. But these developments bring new threats, and the insurance industry is playing catch-up to keep pace with the rapid rise of cyber risks. According to research from Allianz, annual worldwide losses attributable to cybercrime are close to $500 billion—a figure set to quadruple to more than $2.1 trillion by 2019. Yet, yearly global cyber premiums are estimated at just $2.5 billion— a mere 1 percent of total commercial premiums, (and this modest figure only

represents cover for a narrow range of risks—mainly digital assets). Furthermore, it is estimated that 60 percent of Fortune 500 companies currently lack any insurance against cyber incidents, primarily due to a lack of cover currently available for many types of cyber risk. While cover is low, cyber risk is undeniably a major concern for business. In KPMG’s 2016 Global CEO Outlook, chief executives cite cyber security as the number one risk facing their companies. However, they also recognize that there is more work to be done in this area, with 72 percent of CEOs not feeling fully prepared for a cyber event. The types of cyber attacks against businesses vary from sector to sector and are constantly evolving. For example, the financial-services sector finds itself a focus for organized cybercrime, and retail is increasingly being targeted. Ransomware and distributed denial—ofservice attacks are increasingly used against businesses with health care, and the media and entertainment particularly targeted. Meanwhile,

the public sector and telecommunications sectors are highly susceptible to espionage-focused cyber attacks. Traditional insurance players are increasingly realizing that cyber risk is much more than a data breach. As the following diagram shows, digital technology has introduced a wide range of additional threats that impact existing insurance cover, where hackers and/or system failures can cause physical damage, accidents and theft. Such a trend offers cyber insurers the chance to take market share from established players. The article “Rethinking insurers’ strategies and structures in the digital age” by Paul Merrey, KPMG, in UK was taken from KPMG’s publication, entitled “Seizing the cyber insurance opportunity”. R.G. Manabat & Co., a Philippine partnership and a member-firm of the KPMG network of independent member-firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. For more information on KPMG in the Philippines, you may visit www.kpmg.com.ph.

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The World BusinessMirror

Tax cuts quiet once-deafening GOP call for fiscal discipline

ASHINGTON—Republicans spooked world markets in their ardor to cut spending when Democrat Barack Obama was in the White House. Now, with Republican President Donald J. Trump pressing for politically popular tax cuts and billions more for the military, few in the GOP are complaining about the nation’s soaring debt. The tea partyers and other conservatives who seized control of the House in 2010 have morphed into Ronald Reagan-style supply-siders while the GOP’s numerous Pentagon pals run roughshod over the few holdouts. Tax cuts in the works could add hundreds of billions of dollars to the debt while bipartisan pressure for more money for defense, infrastructure and domestic agencies could mean almost $100 billion in additional spending next year alone. The bottom line: The $20-trillion national debt promises to spiral ever higher with Republicans controlling both Congress and the White House. “Republicans gave up on caring about deficits long ago,” bemoaned Republican Sen. Rand Paul of Kentucky, who was elected in the 2010 tea party class. It’s a far cry from the Newt Gingrich-led GOP revolution that stormed Washington two decades ago with a mandate to balance the budget and cut taxes at the same time. Or even from Republicans of 2001, who enthusiastically cut taxes under President George W. Bush, but only at a moment when the government was flush with money. Now, deficits are back with a vengeance. Medicare and Social Security are drawing closer to insolvency. Fiscal hawks and watchdogs like the Congressional Budget Office warn that the debt is eventually going to drag the economy down. But like Obama and Bush before him, Trump isn’t talking about deficits. Neither much are voters. “Voters, frankly, after these huge deficits, are saying, ‘Well, how much do deficits really matter?’” said former Sen. Rick Santorum, RepublicanPennsylvania, a two-time presidential candidate. “We’re not Greece yet, right?” Topping the immediate agenda, however, is a debt-financed drive to overhaul the tax system. Top Capitol Hill Republicans, such as House Speaker Paul Ryan of Wisconsin and Senate Majority Leader Mitch McConnell of Kentucky had promised for months that a tax overhaul would not add to the deficit, with rate cuts financed by closing loopholes and other steps. Instead, Republicans are talking about tax cuts whose costs to the debt—still under negotiation— would be justified by assumptions of greater economic growth. “We want pro-growth tax reform that will get the economy going, that will get people back to work, that will give middle-income taxpayers a tax cut and that will put American businesses in a better competitive playing field so that we keep American businesses in America,” Ryan said in an AP Newsmakers interview this past

week. “That’s more important than anything else.” He backed off months of promises that the Republicans’ tax plan won’t add to the nation’s ballooning deficit. The GOP moves could justify $800 billion or so in tax cuts over 10 years, but the administration is pressing behind the scenes to push the envelope well beyond that range. “They’re starting to talk about tax cuts instead of tax reform,” said former Sen. John Sununu, Republican-New Hampshire. “When people are desperate to find legislation that they can pass, they tend to take the easy path.” Among the few deficit hawk holdouts is Sen. Bob Corker, RepublicanTennessee, a key vote on the Senate Budget Committee, who’s been pumping the brakes on taxes, a stand that’s earned him face-to-face meetings with both Treasury Secretary Steven Mnuchin and Trump himself. Corker says he believes in some adjustments but doesn’t want to “let this just be party time that just takes us no place but massive deficits down the road.” Trump’s election has GOP military hawks pressing to shovel enormous amounts of money into the Pentagon—about $90 billion over the stringent spending limits set by the hard-won 2011 deficit control effort. Republican demands for spending cuts as the price of lifting the government’s debt limit and averting a market-rattling default on US obligations pushed negotiations perilously close to a market crisis that summer. The unpopular leftover from the 2011 agreement are those spending limits, which if violated would be enforced by across-the-board spending cuts. Republicans want to scrap them, at least for military money. “There’s so much pressure on our side for additional defense spending,” said Rep. Tom Cole, RepublicanOklahoma. “Believe me, there’s more defense hawks than budget hawks in the Republican conference right now.” But it takes Democratic help to lift the limits and, their price, unsurprisingly, is more money for domestic programs. That leaves GOP deficit hawks frustrated. They’ve won, for now, a $200-billion package of spending cuts as part of the House budget resolution, which has stalled after committee approval this summer. The Senate hasn’t acted yet, but no one in that chamber is taking the lead in pressing for a companion package of cuts. Conservatives demanding that spending cuts accompany any extension of the government’s borrowing ability were undercut by Trump, who agreed last week to add temporary borrowing approval to a must-pass Harvey relief bill. Anger over Trump’s debt bargain, though, has conservatives vowing that issues of spending and deficits won’t be kicked to the curb for long. “It’s not going to be shoved aside much longer because this [debt limit] deal last week...has got people all riled up, and justifiably so,” longtime GOP Rep. Joe Barton of Texas said. “We’ll be ready next time.” AP

Editor: Lyn Resurreccion • Monday, September 18, 2017 A7

World leaders face crises in N. Korea, Myanmar at UN

People watch a launching of a Hwasong-12 strategic ballistic rocket aired on a public TV screen at the Pyongyang Train Station in Pyongyang, North Korea, on September 16. North Korean leader Kim Jong Un said his country is nearing its goal of “equilibrium” in military force with the United States, as the United Nations Security Council strongly condemned the North’s “highly provocative” ballistic-missile launch over Japan last Friday. AP/Jon Chol Jin

NITED NATIONS—Facing an escalating nuclear threat from North Korea and the mass flight of minority Muslims from Myanmar, world leaders gather at the United Nations starting on Monday to tackle these and other tough challenges—from the spread of terrorism to a warming planet.

The spotlight will be on US President Donald J. Trump and France’s new leader, Emmanuel Macron, who will both be making their first appearance at the General Assembly. They will be joined by more than 100 heads of state and government, including Zimbabwe’s President Robert Mugabe, one of Africa’s longestserving leaders who is said to be bringing a 70-member entourage. While Trump’s speeches and meetings will be closely followed, it will be North Korea, which Secretary-General Antonio Guterres calls “the most dangerous crisis that we face today,” that will be most carefully watched. No official event addressing Pyongyang’s relentless campaign to develop nuclear weapons capable of hitting the United States is on the UN agenda, but it is expected to be the No. 1 issue for most leaders. Not far behind will be the plight of Myanmar’s Rohingya Muslims, victims of what Guterres calls a campaign of ethnic cleansing that has driven nearly 400,000 to flee to

Bangladesh in the past three weeks. The Security Council, in its first statement on Myanmar in nine years, condemned the violence and called for immediate steps to end it. British Foreign Secretary Boris Johnson is hosting a closed meeting on the crisis on Monday, and the Organization of Islamic Cooperation’s contact group on the Rohingyas is scheduled to meet on Tuesday. Guterres said leaders would also be focusing on a third major threat—climate change. The number of natural disasters has nearly quadrupled, and he pointed to unprecedented weather events in recent weeks from Texas, Florida and the Caribbean to Bangladesh, India, Nepal and Sierra Leone. While Trump has announced that the US will pull out of the 2015 Paris Climate Agreement, Macron will be hosting a meeting on Tuesday to spur its implementation. And a late addition to the hundreds of official meetings and side events during the ministerial week is a high-level session on Monday on the devastation

400,000 The estimated number of Rohingya Muslims from Myanmar who fled to Bangladesh

caused by Hurricane Irma. Several terrorism-related events are on the agenda. Macron is holding a meeting on Monday with leaders of five African nations—Mali, Mauritania, Niger, Burkina Faso and Chad—that are putting together a 5,000-strong force to fight the growing threat from extremists in the vast Sahel region. A side event on Wednesday on “Preventing Terrorist Use of the Internet” will be attended by senior representatives of major socialmedia companies. Cohosts Britain, France and Italy said a global response is needed “to make the online space a hostile environment for terrorists.” Trump has accused Iran of supporting terrorists and is threatening to rip up the 2015 deal to rein in its nuclear program. With a US decision due in October, ministers from the six parties to the agreement are expected to meet next week. The five others strongly support the deal. Trump has also been critical of the UN and has promised to cut the US contribution to its budget, which is the largest. So some diplomats were surprised that the US would sponsor an event on Monday on reforming the 193-member world body. Trump and Guterres will speak, and the US has asked all countries

UK biz men to May: Seek 3-year Brexit transition period

ritish business leaders urged Prime Minister Theresa May to seek a threeyear transitional period after Brexit, warning that failure to secure more time would jeopardize “our collective prosperity.” In a letter organized by the Confederation of British Industry, executives from 120 businesses with more than 1 million employees again warned of a socalled cliff edge in which Britain leaves the European Union (EU) in March 2019 without a new trade deal or enough time for companies to adjust.

Signatories included representatives of Centrica Plc., Zurich Insurance Group Ltd., Johnson and Johnson, and Harrods. “Our businesses need to make decisions now about investment and employment that will affect economic growth and jobs in the future,” according to the letter. “Continuing uncertainty will adversely affect communities, employees, firms and our nations in the future.” While May’s Cabinet seems to have struck an agreement to push for a transition, there remains disagreement over how

long it should run. Chancellor of the Exchequer Philip Hammond has sided with business in suggesting three years, while others such as Foreign Secretary Boris Johnson and Trade Secretary Liam Fox are reported to favor a shorter timeframe. May is set to update her Brexit strategy next Friday in a speech in Florence, Italy, days after Hammond recommended a “status quo” transition. “Until transitional arrangements can be agreed and trade discussed the risk of ‘no deal’

remains real and has to be planned for, with inevitable consequences for jobs and growth on both sides,” the business leaders wrote. EU leaders have said they are open to discussing trade and a transition, but first want to resolve differences over citizens’ rights, a financial settlement and Ireland’s border. Only after “sufficient progress” has been made on those topics are they willing to open trade talks, with doubts growing that the milestone will be reached in October as once hoped. Bloomberg News

U.K. Prime Minister Theresa May Bloomberg

to sign a declaration on UN reforms. Over 100 have added their names, but Russia’s UN Ambassador Vassily Nebenzia said last Friday that “we are not sure we will sign this declaration.” He added that, while “lots of ideas contained in this document are important and look similar to what the secretary-general proposes,” UN reforms should result from negotiations among all countries instead of from “a declaration of like-minded countries.” The Security Council is holding a high-level meeting on Wednesday on UN peacekeeping operations, which cost nearly $8 billion a year. The US, which pays over 28 percent of the peacekeeping budget, is reviewing all the missions in an effort to cut costs and make them more effective. While there are many side events on other global hotspots from Central African Republic and South Sudan to Libya, Mali and Somalia, the ministerial meeting will also see sessions on achieving UN goals for 2030 to end extreme poverty and preserve the planet, women’s economic empowerment, migration and conflict prevention—a top priority of the secretary-general. Germany’s UN Ambassador Christoph Heusgen said the most important thing about the General Assembly ministerial session, which officially begins on Tuesday and ends on September 25, is the opportunity for leaders to talk one-on-one or get together in groups. “I think this is indeed the Super Bowl,” he added. “If it didn’t exist, one had to create this opportunity so that can people can talk to each other.” AP

Monday, September 18, 2017

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US coastal growth continues despite past storms

ising sea levels and fierce storms have failed to stop relentless population growth along US coasts in recent years, a new Associated Press (AP) analysis shows. The latest punishing hurricanes scored bull’s-eyes on two of the country’s fastest growing regions: coastal Texas around Houston and resort areas of southwest Florida. Nothing seems to curb America’s appetite for life near the sea, especially in the warmer climates of the South. Coastal development destroys natural barriers—such as islands and wetlands—promotes erosion and flooding and positions more buildings and people in the path of future destruction, according to researchers and policy advisers who study hurricanes. “History gives us a lesson, but we don’t always learn from it,” said Graham Tobin, a disaster researcher at the University of South Florida in Tampa. That city took a glancing hit from Hurricane Irma—one of the most intense US hurricanes in years—but suffered less flooding and damage than some other parts of the state. In 2005 coastal communities took heed of more than 1,800 deaths and $108 billion in damages from Hurricane Katrina, one of the worst disasters in US history. Images of New Orleans under water elicited solemn resolutions that such a thing should never happen again—until Superstorm Sandy inundated lower Manhattan in 2012. Last year Hurricane Matthew spread more deaths, flooding and blackouts across Florida, Georgia and the Carolinas. From 2010 to 2016 major hurricanes and tropical storms are blamed

5.6%

The average percentage growth in population of coastline counties in US since 2010, while inland counties gained just 4 percent. for more than 280 deaths and $100 billion in damages, according to data from the federal National Centers for Environmental Information. Harvey, another historically big hurricane, flooded sections of Houston in recent weeks. Four counties around Houston, where growth has been buoyed by the oil business, took the full force of the storm. The population of those counties expanded by 12 percent from 2010 to 2016, to a total of 5.3 million people, the AP analysis shows. During the same years, two of Florida’s fastest-growing coastline counties—retirement-friendly Lee and Manatee, both south of Tampa— welcomed 16 percent more people. That area took a second direct hit from Irma after it made first landfall in the Florida Keys, where damage was far more devastating. Overall growth of 10 percent in

Hurricane Jose threatens New York

urricane Jose may threaten New York City and other areas of the East Coast by next week, according to the National Hurricane Center (NHC), while Norma is aiming for Mexico’s Baja California and a new system gathers strength in the Caribbean as a busy tropical weather season bores on. Jose was about 465 miles (750 kilometers) south-southeast of Cape Hatteras, North Carolina, after redeveloping into a Category 1 hurricane late Friday. Jose’s path could put it near New Jersey and New York by Wednesday morning, although it may weaken to a tropical storm again by then, the center said. The storm may add to an already devastating 2017 Atlantic hurricane season, coming just after Hurricane Harvey inundated Texas and Hurricane Irma raked Florida’s west coast, leaving dozens of people dead and upending energy and agriculture markets. In 2012 Superstorm Sandy created about $70 billion of damage after hitting the New York metropolitan region. As of 11 p.m. New York time, Jose was moving northward at 7 miles per hour with maximum sustained winds of 80 mph. Jose is forecast to remain a hurricane through Monday night, the center said. Data from an Air Force Reserve aircraft indicate that Jose has increased in size, the NHC said. This widens the band of hurricane-force and tropical stormforce winds extending toward the coast.

Rip currents

Life-threatening rip currents are expected along parts of the US East Coast, and tropical storm watches may be needed for portions of the area from North Carolina to New England during the next day or two, according to the advisory, the 47th so far about the longlived weather system. Jose could affect five refineries along the East Coast that are able to process about 1.1 million barrels a day of oil,

Bloomberg data showed. If it continues toward New York City, Jose could disrupt vessels carrying crude oil, petrochemicals and refined products along the Atlantic seaboard, “particularly those making deliveries to New York Harbor,” Shunondo Basu, a Bloomberg New Energy Finance meteorologist and natural gas analyst in New York, said last Friday. Still, some forecasters see Jose staying far enough offshore to avoid any major impact to the US The hurricane center’s margin of error for a storm five days out is about 225 miles, on average. AccuWeather Inc. sees the storm tracking close enough to the coast— within 200 miles—to produce heavy seas and gusty winds, as well as to deliver rain to coastal areas early in the week. Landfall in New England during the middle of the week can’t be ruled out, senior meteorologist Dan Pydynowski said in a statement. If landfall were to occur, the most likely location would be far eastern Long Island or southeastern New England, especially Cape Cod.

Beach erosion

There’s a 50-percent chance of tropical storm-force winds for Nantucket, Massachusetts, by Thursday, said Jeff Masters, cofounder of Weather Underground in Ann Arbor, Michigan. If Jose continues on its path, the most immediate impact could be high surf and considerable beach erosion along the shores of the mid-Atlantic and New England coasts, Masters said. Norma, meanwhile, has weakened to a tropical storm as it heads north toward Mexico’s Baja California peninsula. As of 11.30 p.m. New York time, the storm was about 185 miles south of the popular tourist designation, Cabo San Lucas. Tropical-storm warnings and watches are in effect, with heavy rain likely and maximum sustained winds of about 65 mph. Gradual weakening is expected for the next 48 hours, the advisory said. Bloomberg News

In this September 13 photo, debris surround a destroyed structure in the aftermath of Hurricane Irma in Big Pine Key, Florida. AP/Alan Diaz

Texas Gulf counties and 9 percent along Florida’s coasts during the same period was surpassed only by South Carolina. Its seaside population, led by the Myrtle Beach area of Horry County, ballooned by more than 13 percent. Nationally, coastline counties grew an average of 5.6 percent since 2010, while inland counties gained just 4 percent. This recent trend tracks with decades of development along US coasts. Between 1960 and 2008, the national coastline population rose by 84 percent, compared with 64 percent inland, according to the Census Bureau. Cindy Gerstner, a retiree from the inland mountains of upstate New York, moved to a new home in January in Dunedin, Florida, west of Tampa. The ranch house sits on a flood plain three blocks from a sound off the Gulf of Mexico. She was told it hadn’t flooded in 20 years—and

she wasn’t worried anyway. “I never gave it a thought,” she said during a visit back to New York as Irma raked Florida. “I always wanted to live down there. I always thought people who lived in California on earthquake faults were foolish.” Her enthusiasm for her new home was undiminished by Irma, which broke her fence and knocked out power but left her house dry. In Horry County, where 19-percent growth has led all of South Carolina coastline counties, Irma caused only minor coastal flooding. The county’s low property taxes are made possible by rapid development and tourism fees, allowing retirees from the North and Midwest to live more cheaply. Ironically, punishing hurricanes farther south in recent years has pushed some Northerners known locally as “half-backers” to return halfway home from Florida and to resettle in coastal South Carolina.

Add the area’s moderate weather, appealing golf courses, and long white strands—the county is home to Myrtle Beach—and maybe no one can slow development there. “I don’t see how you do it,” said Johnny Vaught, vice chairman of the county council. “The only thing you can do is modulate it, so developments are well designed.” Strong building codes with elevation and drainage requirements, careful emergency preparations and a good network of roads for evacuation help make the area more resilient to big storms, the Council Chairman Mark Lazarus said. Such measures give people “a sense of comfort,” said Laura Crowther, CEO of the local Coastal Carolina Association of Realtors. Risk researchers say more is needed. “We’re getting better at emergency response,” said Tobin at the University of South Florida. “We’re not so good at long-term control of urban

development in hazardous areas.” The Federal Emergency Management Agency helps recovery efforts with community relief and floodinsurance payments. The agency did not immediately respond to a request for comment. It provides community grants for projects aimed at avoiding future losses. Some projects elevate properties, build flood barriers or strengthen roofs and windows against high winds. Others purchase properties subject to repeated damage and allow owners to move. But coastline communities face more storm threats in the future. Global warming from humangenerated greenhouse gases is melting polar ice and elevating sea levels at an increasing pace, according to the National Oceanic and Atmospheric Administration. That amplifies storm surges and other flooding. Also, some climate models used by scientists predict stronger, more frequent hurricanes as another effect of global warming in coming decades. “There will be some real challenges for coastal towns,” predicted Jamie Kruse, director of the Center for Natural Hazards Research at East Carolina University in Greenville, North Carolina. “We’ll see some of these homes that are part of their tax base becoming unlivable.” Hazard researchers said they see nothing in the near term to reverse the trend toward bigger storm losses. As a stopgap, communities should cease building new high-rises on the oceanfront, said Robert Young, director of the Program for the Study of Developed Shorelines at Western Carolina University in Cullowhee, North Carolina. He said big changes probably will not happen unless multiple giant storms overwhelm federal and state budgets. “The reason why this development still continues is that people are making money doing it,” he said. “Communities are still increasing their tax base—and that’s what politicians like.” AP

California legislators approve ‘sanctuary state’ bill

ACRAMENTO, California— California lawmakers approved a “sanctuary state” bill last Saturday that would put new restrictions on interactions between local law-enforcement and federalimmigration authorities, drawing the ire of federal officials who argued the legislation prioritizes politics over public safety. The bill, known as Senate Bill (SB) 54, is intended to bolster the state’s immigrant protections, which are already among the toughest in the nation. The legislation will now be considered by Gov. Jerry Brown, who announced his support after the top state Senate leader agreed to water down the bill and preserve authority for jail and prison officials to cooperate with immigration officers in many cases. The legislation is the latest effort by Democratic lawmakers in California, home to an estimated 2.3 million immigrants without legal authorization, to create barriers to President Donald J. Trump’s campaign pledge to step up deportation efforts. They’ve also approved money for legal assistance and college scholarships for people living illegally in the US, and made it harder for businesses and government agencies to disclose people’s immigration status. California lawmakers are debating the measure as the US Congress considers offering legal status to young immigrants whose parents brought them into the country illegally or overstayed their visas. “This comes as a relief that there are some legislators that are really listening,” said Pablo Alvarado, executive director of the National Day Laborer Organizing Network.

A student walks past a tip sheet for Deferred Action for Childhood Arrivals recipients who fear deportation that is taped to a window on the University of California, Berkeley campus in Berkeley, California. Colleges and universities nationwide are stepping up efforts to help the students who are often called “Dreamers,” after the Trump administration announced plans last week to end that federal program protecting immigrants brought to the US illegally as children. AP/Jocelyn Gecker

The measure cleared the Legislature with support only from Democrats over the objection of Republicans who say it will protect criminals and make it harder for law enforcement to keep people safe. Senate President Pro Tem Kevin de Leon, Democrat-Los Angeles, introduced SB 54 shortly after Trump’s election to cut off most interactions between federal-immigration agents and local police and sheriff’s officers. Following sharp dissent from lawenforcement officials and Brown’s intervention, it was scaled back significantly. The final version prohibits lawenforcement officials from asking about a person’s immigration status or participating in immigrationenforcement efforts. It also prohibits law-enforcement officials from

being deputized as immigration agents or arresting people on civil immigration warrants. Police and sheriff’s officials, including jail officers, will still be able to work with federal-immigration authorities if a person has been convicted of one of some 800 crimes, mostly felonies and misdemeanors that can be charged as felonies. But they’ll be barred from transferring immigrants to federal authorities if their rap sheet includes only minor offenses. Immigration advocates generally applauded the latest version, even with de Leon’s concessions. For them, the bill delivers a rare victory during Trump’s presidency, preserving some protections for people in the country illegally and adding others. The bill will prevent local police from becoming “cogs in the Trump

deportation machine,” de Leon said. California police chiefs dropped their opposition but sheriffs, who run jails where the biggest impacts will be felt, remain opposed. Los Angeles County Sheriff Jim McDonnell, who opposed initial versions of the bill, drawing protests outside his office, said he was pleased the approved legislation would still allow federal immigration agents to have access to the nation’s largest jail system. “While not perfect, SB 54 kept intact our ability to maintain partnerships with federal law-enforcement officials who help us in the fight against gangs, drugs and human trafficking,” McDonnell added. The changes did not mollify US Immigration and Customs Enforcement Acting Director Thomas Homan, who said the bill will deliberately destruct immigration laws and will “make California communities less safe.” “By passing this bill, California politicians have chosen to prioritize politics over public safety,” Homan said in a statement. “Disturbingly, the legislation serves to codify a dangerous policy that deliberately obstructs our country’s immigration laws and shelters serious criminal alien offenders.” As lawmakers considered the bill last Friday, another high-profile killing in San Francisco spotlighted the sanctuary issue. Immigration and Customs Enforcement disclosed that two weeks ago, before 18-yearold Erick Garcia-Pineda was a murder suspect, the San Francisco Sheriff’s Department denied a request to hold him until federal authorities could take him into custody for deportation proceedings. AP

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Monday, September 18, 2017

UK arrests man in train attack; searches house

HE police arrested an 18-yearold man in the departure area of the port at Dover last Saturday and searched a house near London in connection with last Friday’s detonation of an improvised bomb on a tube train that wounded at least 29 people. The UK threat level remained at critical.

The man detained in Dover was held under a section of the UK Terrorism Act, the Metropolitan Police said in a statement. He has since been transferred to a police station in London. Dover’s port is the main ferry link between the UK and France. Over 12 million passengers, as well as millions of cars and trucks, passed through the port in 2016. Officers last Saturday evacuated residents in a section of Sunbury-onThames in Surrey, about 15 miles (24 kilometers) southwest of London, as they searched a home as “a precautionary measure” after the arrest, according to a statement. That search “will take some time,” Neil Basu, the Metropolitan Police’s senior national coordinator for counterterrorism policy, said in a statement. “We are keeping an open mind around whether more than one person is responsible for the attack, and we are still pursuing numerous lines of inquiry and at a great pace.” The Police have identified 121 witnesses so far and have spoken to 100 of them already. Officers continue to trawl through hours of closed-circuit television footage and videos and photographs sent by

121 The number of witnesses the police have identified

members of the public, Basu addd.

‘Significant arrest’

“This is a very significant arrest,” Home Secretary Amber Rudd said in a televised interview last Saturday after a meeting of the government’s crisis response committee. “The police have made very good progress, but the operation is ongoing.” The UK terror-threat level was raised to the highest level, signaling further attacks may be imminent, Prime Minister Theresa May said late Friday, as police hunted for suspects who set off the improvised bomb at the Parsons Green station at about 8:20 a.m., causing what witnesses described as a fireball. The joint terrorism-analysis center’s assessment “is that further at-

Police forensic officers enter a property in Sunbury-on-Thames, southwest London, as part of the investigation into last Friday’s Parsons Green bombing, on September 16. British police made what they called a “significant” arrest last Saturday in southern England, and searched a property in Sunbury-on-Thames as the manhunt for suspects continues following the partially exploded bomb attack on the London subway. Jonathan Brady/PA via AP

tacks may be imminent,” May said in a recorded statement. May added earlier that the device was “intended to cause serious harm.” Sky News broadcast images of a small fire in a bucket and Lidl shopping bag with wires protruding and said the device, which had a timer, had probably failed to detonate fully.

‘Remain vigilant’

“The public should remain vigilant as our staff, officers and partners continue to work through this complex investigation,” Basu said in the statement announcing the arrest. Troops have been deployed as part

of an operation to free up some 1,000 armed police so they can protect transport hubs and events. “The police investigation is ongoing, and there will still be significant activity today and over the days ahead,” London Mayor Sadiq Khan said in a statement. “London will never be intimidated by terrorism.”

Trump storm

United States President Donald J. Trump said on Friday on Twitter that the “loser terrorist” was “in the sights of Scotland Yard,” a reference to the headquarters of London’s

Hamas accepts Fatah B reconciliation demands

Metropolitan Police Service. May complained directly to him when Trump called to offer condolences, according to a UK government official familiar with the conversation. She was more measured in a pooled broadcast interview earlier: “I never think it’s helpful for anyone to speculate on what’s an ongoing investigation.” Rudd said last Saturday it was “much too early” to say whether the man in custody was known to the authorities. In an apparent US leak, CBS reported that the explosives were consistent with those used in an-

other recent attack. The US and UK have close intelligence-sharing ties and the UK has publicly criticized US leaks of police intelligence after previous attacks. The attack is the fifth this year in the UK, and Londoners are growing accustomed to the sight of armed police patrolling the transport network. Police said last Thursday that terrorism-related arrests had risen 68 percent over the past year. Earlier this year assailants with vans and knives attacked passersby on Westminster Bridge and London Bridge in two separate strikes, and a van was driven into worshippers outside a mosque in Finsbury Park. A suicide bomber attacked a concert venue in Manchester in May, killing more than 20 people including children and mothers. The terrorthreat level was raised to critical after that attack and lowered four days later to severe, meaning an attack is considered highly likely but not imminent. Most of the attacks have been claimed or praised by the jihadist group Islamic State. Last Friday, the Amaq news outlet said the London explosion had been carried out by a “group following the Islamic State.” After the explosion at Parsons Green station in southwest London, passengers were caught in a stampede as they tried to flee. Ambulances rushed people to hospital, although the injuries weren’t lifethreatening with most suffering what police called “flash burns” to their faces, hands and hair. “ There was a massive f lash and flame that went up the side of the train, then an acrid chemical smell, then a big stampede,” Chris Wildish, a witness, told Sky News. “The crush for the stairs was pretty heavy.” Bloomberg News

Iraq may use force if Kurdish referendum turns violent

AMALLAH, West Bank— The Hamas militant group last Sunday said it has accepted key conditions demanded by its rival, President Mahmoud Abbas, including nationwide elections in the West Bank and Gaza Strip, to clear the way for a reconciliation deal after a 10-year rift that has left the Palestinians divided between two governments. In a statement issued overnight, Hamas said it was “responding to the generous Egyptian efforts, which reflect the Egyptian desire to end the split and achieve reconciliation, and based on our desire to achieve national unity.” Hamas added it had dissolved a contentious administrative committee that runs Gaza, invited Abbas’ government to return to Gaza and was ready to hold new elections. The announcement came after separate talks by Hamas and Fatah delegations with Egyptian intelligence officials in Cairo in recent days. Egypt relayed Fatah demands to Hamas that as a first step, it must dissolve the administrative committee, its de facto government in Gaza, and allow the unity government to take charge. “We accepted that as a sign of our good will toward reconciliation,” Hamas official Hussam Badran told The Associated Press. “The administrative committee is now dissolved, and the government can come to Gaza today to assume its responsibilities and duties,” he said. Abbas’s Fatah movement last Sunday welcomed a pledge by its Hamas rivals to accept key conditions for ending a decade-old Palestinian political and territorial split, but said it wants to see vows implemented before making the next move. Repeated attempts at reconciliation have failed since the militant

Palestinian President Mahmoud Abbas gestures as he speaks during a news conference at the Elysee Palace in Paris on September 19, 2014. AP/Michel Euler

Hamas drove forces loyal to Abbas from the Gaza Strip in 2007, a year after defeating Fatah in parliament elections. The takeover led to rival governments, with Hamas controlling Gaza and Abbas in charge of autonomous enclaves in the Israelioccupied West Bank. Hamas, however, has been greatly weakened by an Israeli and Egyptian blockade, three wars with Israel and international isolation. Gaza’s economy is in tatters and residents of the territory have electricity for only a few hours a day. Egypt recently invited top Hamas officials to Cairo for reconciliation discussions, and last week, Abbas sent a delegation of representatives to Egypt as well. Despite last Sunday’s announcement, any reconciliation deal faces many obstacles. The deal was not clear whether Hamas is ready to place its security forces under Abbas’ control—a key sticking point that has scuttled past reconciliation attempts. There also was no comment from Abbas’s government. It also was not immediate clear

how Egypt’s latest effort aligns with its previous tacit support for a separate Gaza power-sharing deal between Hamas and Mohammed Dahlan, an exiled former Abbas aide-turned-rival. Mahmoud Aloul, the No. 2 in Fatah, told the Voice of Palestine radio that “this is encouraging news.” However, he cautioned that “we want to see that happening on the ground before we move to the next step.” Still, there were no assurances that this deal would succeed where others failed. In previous deals, including one brokered by Egypt in 2011, both sides professed willingness to reconcile, but ultimately balked at giving up power in their respective territories. A key sticking point in the past was Hamas’ refusal to place its security forces in Gaza under the control of an Abbas-led unity government. It also was not clear how Egypt’s latest effort aligns with its previous tacit support for a separate Gaza power-sharing deal between Hamas and Mohammed Dahlan, an exiled former Abbas aide-turned-rival. AP

AGHDAD—Iraq is prepared to intervene militarily if the Kurdish region’s planned independence referendum results in violence, Prime Minister Haider al-Abadi told The Associated Press in an exclusive interview last Saturday. If the Iraqi population is “threatened by the use of force outside the law, then we will intervene militarily,” he said. Iraq’s Kurdish region plans to hold the referendum on support for independence from Iraq on September 25 in three governorates that make up their autonomous region, and in disputed areas controlled by Kurdish forces but which are claimed by Baghdad. “If you challenge the Constitution, and if you challenge the borders of Iraq and the borders of the region, this is a public invitation to the countries in the region to violate Iraqi borders as well, which is a very dangerous escalation,” alAbadi said. The leaders of Iraq’s Kurdish region have said they hope the referendum will push Baghdad to come to the negotiating table and create a path for independence. However, al-Abadi said such negotiations would likely be complicated by the referendum vote. “It will make it harder and more difficult,” he added, but saidd, “I will never close the door to negotiations. Negotiations are always possible.” Iraq’s Kurds have come under increasing pressure to call off the vote from regional powers and the United States, a key ally, as well as Baghdad. In a statement released late Friday night the White House called for the Kurdish region to abandon the referendum “and enter into serious and sustained dialogue with Baghdad.” “Holding the referendum in disputed areas is particularly provocative and destabilizing,” the statement read. Tensions between Irbil and Bagh-

dad have flared in the lead-up to the September 25 vote. Masoud Barzani, the president of Iraq’s autonomous Kurdish region, has repeatedly threatened violence if Iraqi military or Shiite militias attempt to move into disputed territories that are now under the control of Kurdish fighters known as Peshmerga, specifically the oilrich city of Kirkuk. “It’s chaotic there,” Muhammad Mahdi al-Bayati, a senior leader of Iraq’s mostly Shiite fighters known as the popular mobilization forces, said earlier this week, describing Kirkuk in the lead up to the vote. Al-Bayati’s forces—sanctioned by Baghdad, but many with close ties to Iran—are deployed around Kirkuk as well as other disputed territories in Iraq’s north. “Everyone is under pressure,” he said, explaining that he feared a rogue group of fighters could trigger larger clashes. “Anything could be the spark that burns it all down.” Al-Abadi added he is focused on legal responses to the Kurdish referendum on independence. Earlier last week Iraq’s parliament rejected the referendum in a vote boycotted by Kurdish lawmakers. Iraq’s Kurds have long held a dream of statehood. Brutally oppressed under Saddam Hussein, whose military in the 1980s killed at least 50,000 of them, many with chemical weapons, Iraq’s Kurds established a regional government in 1992 after the US enforced a no-fly zone across the north following the Gulf War. After the 2003 US-led invasion ousted Saddam, the region secured constitutional recognition of its autonomy, but remained part of the Iraqi state. When asked if he would ever accept an independent Kurdistan, AlAbadi said, “It’s not up to me, this is a constitutional” matter. “If [Iraq’s Kurds] want to go along that road, they should work toward amending the Constitution,” al-Abadi added. “In that case

we have to go all the way through parliament and a referendum to the whole Iraqi people. “For them to call for only the Kurds to vote, I think this is a hostile move toward the whole of the Iraqi population,” he said. Al-Abadi began his term as prime minister after Mosul had fallen to Islamic State (IS), plunging Iraq into the deepest political and security crisis since the sectarian bloodshed that followed the 2003 US-led invasion. Over the past three years, Iraqi forces have slowly clawed back territory from the extremist group and al-Abadi has used the battlefield victories to garner public support. In July Iraqi forces retook Mosul and effectively shattered IS’s selfdeclared territorial caliphate. However, the military successes have come at great cost. In the fight for Mosul alone between 970 and 1,260 civilians were killed and more than twice as many members of Iraq’s security forces lost their lives, al-Abadi told the AP last Saturday. Despite territorial losses, IS continues to carry out insurgency-style attacks in Iraq. Last Thursday an attack claimed by IS at a checkpoint and restaurant in southern Iraq left more than 80 killed and 93 wounded. Years of war have left more than 3 million people displaced. Cities, towns and villages retaken from IS lie in ruins and the forces made powerful by the arms and training that flooded Iraq to fight the extremists are now attempting to leverage that influence. Al-Abadi said he’s confident the security and economic situation in Iraq will continue to improve. Regarding his ambitious package of political and economic reforms initially introduced in 2015, alAbadi said, “I think we’ve achieved some,” but added, “It will take time.” Despite the challenges ahead, alAbadi repeated a call for Iraqis who fled the country over the past three years, to return home. AP

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Nato concerned about Russia’s transparency on military games B

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Iraq PM: Half of detained IS families are Turkish

Belarusian army vehicles drive during the war games at an undisclosed location in Belarus. Russia and Belarus began major war games last Thursday, an operation involving thousands of troops, tanks and aircraft on the North Atlantic Treaty Organization’s eastern edge practicing how to hunt down and destroy armed spies, among other maneuvers. Vayar Military Agency photo via AP

IRANA, Albania—A senior North Atlantic Treaty Organization (Nato) official says there’s reason to be concerned about the large-scale Zapad 2017 military maneuvers being conducted now by Russia and Belarus, since they could be seen as “a serious preparation for big war.”

Gen. Petr Pavel, head of the Nato’s Military Committee, told the Associated Press in an interview last Saturday that the Nato is increasing efforts to reestablish the militaryto-military communications with Russia to avoid any “unintended consequences of potential incidents during the exercise.” The defense chiefs of Nato member-countries were holding their annual conference this year in the Albanian capital of Tirana to discuss fighting terrorism, the situation in the Western Balkans and the new US strategy on Afghanistan.

The Zapad war games, being conducted this year mostly in Belarus, run until September 20 and reportedly involve 5,500 Russian and 7,200 Belarusian troops. Despite assurances from Moscow that “the Nato is not considered as an enemy” and that “the exercise is not aimed at the Nato,” Pavel said Russians have not been transparent about the facts of the exercises. He says the number of troops in the exercises—which the Russians say is about 12,700—could actually be between 70,000 to 100,000. “All together, what we see is a

100,000 The maximum estimated number of troops in the military exercises being held by Russia and Belarus

serious preparation for big war,” he told The Associated Press. “When we only look at the exercise that is presented by Russia, there should be no worry. But, when we look it in the big picture, we have to be worried, because Russia was not transparent.” Two weeks ago Pavel met in person with the Russian military’s General Staff, Gen. Valery Gerasimov. The Supreme Allied Commander for Europe, Gen. Curtis Scaparrotti, had a phone call with Gerasimov at the beginning of Zapad 2017. Pavel said it was “mainly focused on transparency and risk reduction and avoidance of unintended consequences of potential incidents.” “We have high concentration of troops in the Baltics. We have a high concentration of troops in the Black

Sea and potential for an incident may be quite high because of a human mistake, because of a technology failure,” Pavel said. “We have to be sure that such an unintended incident will not escalate into conflict.” The Military Committee offers consensus-based advice on how the alliance can best meet global security challenges. Stability and security in the Western Balkan countries was also discussed during the conference. Pavel said trouble in the region could come from radicalism, organized crime, migration, economic problems or the “malign influence from Russia.” “We do not compete with Russia for the Western Balkans. We are primarily focused on the Balkans being stable and secure,” he added. He also said there was no plan for reducing troops in Kosovo or setting a time length for their presence. Some 4,500 troops from 31 countries have been deployed in Kosovo since June 1999, after Nato’s 78-day air campaign to stop a deadly Serbian crackdown against ethnic Albanian separatists. Kosovo declared independence from Serbia in 2008, but Serbia has not recognized it. AP

Japan’s leader Abe seen poised to call snap general election

apanese Prime Minister Shinzo Abe may hold a snap general election next month, local media reported, a move that would allow him to seize on opposition disarray and growing support for his handling of the North Korea crisis. Abe appears increasingly inclined to call an election amid a recovery in public support following a spate of scandals, public broadcaster NHK reported, without saying where it obtained the information. He’ll make a decision after talks with senior Liberal Democratic Party (LDP) and government officials and may announce the move as early as September 28 when parliament reopens, according to NHK. A vote is most likely to be held on October 29, the Sankei newspaper reported. An NHK poll last week showed that support for Abe’s ruling coalition climbed 5 points to 44 percent from a month earlier, with approval exceeding disapproval for the first time in three months. A snap election may speed up the formation of a new national political party linked to Tokyo Gov. Yuriko Koike to face Abe’s LDP, according to NHK, citing comments by lawmaker Masaru Wakasa. North Korea’s recent spate of missile tests has unnerved Japanese voters and more than two-thirds of respondents to the NHK poll approve of Abe’s strong line on the isolated

at the reopening of parliament on September 28 it could be “good timing.” With North Korea continuing to launch missiles, Japan’s peace and security are being threatened,” Ishikawa said. “If parliament intends to continue with vacuous scandal attacks, rather than discussing security, we must draw a line under that.”

Party skeptics

Abe

Bloomberg

nation. The main opposition, Democratic Party, appears to be unraveling with the resignation of several members since a new leader was voted in earlier this month. “The Democratic Party is in terrible shape, so there is no opposition to Abe,” Robert Dujarric, director of the Institute of Contemporary Asian Studies at Temple University’s Japan campus in Tokyo, said by e-mail. “Crises, such as that on the Korean Peninsula, are generally good for incumbents. You can look like you’re in charge.”

Abe’s call

Koichi Hagiuda, a senior LDP executive, said on Fuji Television last Sunday morning that, while a decision to call a snap election rests with Abe, the party has to be ready for a vote at any time. A spokesman for the prime minister’s office said that dissolving parliament for an election is the sole prerogative of the prime minister. A general election must be held by the end of 2018. Akimasa Ishikawa, an LDP backbencher, said if Abe decides to call an election

Even so, some members of Abe’s party are more skeptical. One senior official, who asked not to be identified because the discussions are private, said a snap election may be a gamble because the ruling coalition could lose its two-thirds majority. This could slow the debate on changing the pacifist Constitution to make clear the legitimacy of the nation’s armed forces, the official added. “There is also a real chance that a snap election would lead to his undoing,” said Koichi Nakano, a professor of political science at Sophia University in Tokyo. “Calling a premature election more than a year ahead of the end of the term is purely on the basis of self-interested political calculation.” Abe suffered a heavy defeat in an election for the local Tokyo assembly in July at the hands of a new party formed by Koike. This was blamed on cronyism scandals that tarnished Abe’s image. Koike’s Tomin First (Tokyo Residents First) party has yet to create a strong national base. Bloomberg News

AGHDAD—Turkish nationals make up half of the hundreds of families being held in a camp near Mosul for suspected links to the Islamic State (IS) group, Iraqi Prime Minister Haider al-Abadi said in an exclusive interview with The Associated Press last Saturday. The Iraqi leader also confirmed that the German teenage girl found in Mosul last month is still being held in a Baghdad prison and may face the death penalty. At the camp near Mosul, Iraqi forces are holding 1,333 women and children who surrendered to Kurdish forces. The families handed themselves over after an Iraqi offensive drove the extremist group from the northern town of Tal Afar, near Mosul at the end of August. Many of those detained at the camp are not guilty of any crime, al-Abadi said and his government is “in full communication” with their home countries to “find a way to hand them over.” So far, al-Abadi said, Iraq has repatriated fewer than 100 people. “But we are working very hard to accelerate this. It is not in our interest to keep families and children inside our country when their countries are prepared to take them,” he added. Sixteen-year-old Linda W. ran away last summer from her hometown of Pulsnitz in eastern Germany after communicating with extremists from the IS group online. She was found in the basement of a home in Mosul’s Old City by Iraqi forces, arrested and brought to Baghdad. Iraqi intelligence officials told the AP the girl allegedly worked with the IS group’s police force. Al-Abadi said Iraq’s judiciary would decide if the teen will face the death penalty. “You know, teenagers, under certain laws, they are accountable for their actions, especially if the act is a criminal activity when it

amounts to killing innocent people,” Al-Abadi added. The German teen is being held in a prison at Baghdad's airport together with other foreign women found in Mosul, including citizens from Belgium, France, Syria and Iran. Hundreds more non-Iraqi women with IS links and suspected of carrying out terrorist attacks are being held at a prison in the Mosul area, Iraqi officials told the AP earlier this week. Also this week, Baghdad’s central criminal court sentenced a Russian national to death by hanging for his membership in the IS group. The individual was tried under Iraq’s antiterrorism law and confessed to carrying out “terrorist operations” against Iraqi security forces since 2015, said Abdul-Sattar Bayrkdar, spokesman for Iraq’s supreme judicial council. Iraqi has repeatedly faced criticism for its use of the death penalty. Iraq consistently ranks among the top countries in the world in numbers of executions. When al-Abadi attempted to fasttrack death sentences in 2016, the United Nations warned the move would likely result in “gross, irreversible miscarriages of justice...given the weaknesses of the Iraqi justice system,” according to a statement from UN High Commissioner for Human Rights Zeid Ra’ad Al Hussein. Tens of thousands of foreigners traveled to Iraq and Syria to live in the IS group’s self-styled Islamic caliphate. As the territory under IS control has rapidly shrunk over the past two years, Iraqi forces have arrested and detained thousands of men, women and children for suspected IS links. Iraqi forces retook the country’s second-largest city of Mosul from the extremists in July, leaving only scattered pockets of IS-held territory in Iraq. AP

Children flee, fight amid Congo’s growing violence

AKAR, Senegal—Congo’s Kasai region is the latest deadly hot spot in the vast Central African country that has had violent rebellions for decades. Once again, children are among the most vulnerable victims. Well over 1 million people have fled the fighting that began a year ago when Congo’s military killed the regional tribal leader of the Kamwina Nsapu militia. More than 3,300 people in the region have died, according to estimates by the Catholic church. The United Nations has counted more than 80 mass graves. Across the once-peaceful region, children are forced to take up weapons, either recruited by militias or to defend their homes. Children make up more than half of the displaced people, said Yvon Edoumou, spokesman for the UN humanitarian office in Congo. “We see families who say they are fleeing because militias were going into their villages, and, most of the time, we have one mother and two to four young kids, even toddlers and babies in their arms,” Edoumou said. “The men are almost nowhere to be seen. So children are taking a very heavy toll from all this violence.” Children in the Kasai region are being forced to endure horrific ordeals, such as abuse and recruitment into militia groups, the United Nations Children’s Fund (Unicef) says, with more than 850,000 left without basic services. One 12-year-old told the agency he escaped from a militia group where he was a combatant. Now in a UN-backed safe house, he is trying to deal with the trauma. “I was given things to swallow. Afterward, they took a machete and hit me three times on the chest. Next they gave me plastic bags to swallow,

saying that if I concentrate on something, I can become it,” he said. “After that, they hurt me all over to show that even if I am attacked, I can’t be hurt. In the end, they gave me a knife and stick to go and fight.” He said he decided to leave “because promises weren’t kept. Also, lots of people had been killed.” The boy wants to return to his family and go to school but faces the risk of stigma and violent reprisals. About 440,000 children in the Kasai region could not complete their schooling last year, largely due to the violence and insecurity, the Unicef says. It has launched a campaign to get 150,000 children back into school. Another boy, 16-year-old Edouard, was taking exams when the fighting reached his hometown. His school is among the 400 that the Unicef says have been attacked. “There was the noise of gunfire. We had never experienced that in our lives. When we heard it for the first time, we were scared and we ran,” he told the agency. He added he lived in the forest with his family, surviving on leaves and edible roots. With so many lives affected, the UN and other humanitarian organizations have been trying to gain a footing in the remote and impoverished Kasai region. And security concerns soared after the murder of two UN experts in March. The biggest needs are water, food and medicine, particularly for children, Edoumou said. But funding is low. A $64.5-million UN request for support is not even halfway funded, he added. Both Congolese and the international community are watching in dismay as the initial fighting between government forces and militias has shifted and made the region even more precarious. AP

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Malaysia police arrest 7 boys linked to deadly school fire

UALA LUMPUR, Malaysia—Malaysian police said last Saturday they have arrested seven boys suspected of intentionally starting a fire at an Islamic boarding school that killed 23 people because students there had teased them. Kuala Lumpur police chief Amar Singh said the boys, aged 11 to 18, were rounded up since Friday night after they were identified in closedcircuit television footage from a neighboring building that showed them near the school the night of the fire. The predawn blaze last Thursday at a three-story tahfiz school, where Muslim boys study and memorize the Quran, blocked the lone exit to the dormitory on the top floor, trapping students behind barred windows. Two adults and 21 students, aged between 6 and 17, were killed. “From our investigation, the motive behind the mischief was due to a misunderstanding after the suspects and some tahfiz students mocked each other a few days before the fire,” Singh said at a televised news conference. Singh added 6 of the 7 suspects tested positive for drugs. Two of them had been detained before, one on charges of vehicle theft, another for rioting, he said. He added it is believed that two cooking gas tanks were brought up to the top floor and used to start the fire, which spread rapidly and took firefighters an hour to extinguish. Singh said the seven are all school dropouts and will be under police remand for a week. He added the case has been classified as murder and mischief by fire. Singh said the school is also being investigated for flouting building safety rules. Officials have said the school was

operating without a fire-safety permit and license, and that a dividing wall was illegally built on the top floor that blocked the victims from a second exit. Firefighters and witnesses have described scenes of horror—first of boys screaming for help behind barred windows as neighbors watched helplessly, and later of burned bodies huddled in corners of the room. Officials initially said they suspected the fire was caused by an electrical short circuit but later said this wasn’t the case. The charred bodies were released last Friday to family members after being identified through DNA testing and buried the same day. Hundreds of relatives and well-wishers mourned as bodies of 11 boys, wrapped in white shrouds, were lowered into the graves in a cemetery outside Kuala Lumpur. In another cemetery near Kuala Lumpur, two siblings and their cousin were laid to rest in the same grave, while others were taken to their hometowns. The burials were sponsored and arranged by state Islamic authorities. The fire has renewed calls for better regulation of religious schools, mostly privately run and not supervised by the Education Ministry because they come under the purview of state religious authorities. Local media reported there are more than 500 registered tahfiz schools nationwide but many more are believed to be unregistered. Data from the Fire Department showed that 1,083 fires struck religious schools in the past two years, of which 211 were burned to the ground. The worst disaster occurred in 1989 when 27 female students at an Islamic school in Kedah state died when fire gutted the school and eight wooden hostels. AP

Typhoon Doksuri batters central Vietnam, killing 4

Vietnamese villagers move a fishing boat on shore in northern Thanh Hoa province, Vietnam, on September 14. AP

ANOI, Vietnam—Typhoon Doksuri (local code name: Maring) slammed into central Vietnam last Friday, killing four people and injuring 10 others as heavy rains and strong winds ripped off roofs and knocked over many electricity poles. Blackouts were widespread and technicians tried to restore power. Flooding was reported in some villages. Packing maximum sustained winds of 135 kilometers per hour (kph), the typhoon made landfall in Ha Tinh province, pounding six coastal districts and destroying the roofs of 62,500 houses, disaster official Ngo Duc Hoi said. In the neighboring province of Quang Binh, farther south, a man fell to his death when he tried to reinforce his house and an elderly man fell to the ground in his yard and died of head injuries, disaster official Nguyen Duc Toan said. Ten other people were injured by falling trees or debris, he added. Another 50,000 homes were damaged. Disaster official Tran Xuan Binh

in Nghe An province, north of Ha Tinh, said an 83-year-old woman died after being hit by falling debris, while in Thua Thien Hue province, south of Quang Binh, a man was swept away and died in a swollen river. The typhoon had gusts of up to 185 kph. Doksuri swept through the Philippines last Tuesday as a lesspowerful tropical depression, killing at least four people and leaving another six missing. The Vietnam Disaster Management Authority said as of early Friday, 79,000 villagers in highrisk areas in five central provinces had been evacuated and another 210,000 were to be moved to safety ahead of the typhoon. Forecasters also warned of flash floods and landslides in some parts of the country’s northern and central regions. The typhoon was expected to weaken before dissipating in northern Lao PDR early Saturday. Vietnam, a country of 93 million people, is prone to floods and storms that kill hundreds of people each year. AP

Editor: Max V. de Leon • Monday, September 18, 2017 A11

Bangladesh restricts Rohingya refugees, starts immunization

A Rohingya Muslim, who crossed over from Myanmar into Bangladesh, walks toward the nearest refugee camps carrying his belongings at Teknaf, Bangladesh, on September 16. United Nations agencies say an estimated 409,000 Rohingya Muslims have fled to Bangladesh since August 25, when deadly attacks by a Rohingya insurgent group on police posts prompted Myanmar’s military to launch “clearance operations” in Rakhine state. AP

OX’S BAZAR, Bangladesh— Bangladeshi authorities last Sunday took steps to restrict the movement of Muslim Rohingya refugees fleeing violence in Myanmar into crowded border camps and started immunizing tens of thousands of children against diseases.

Bangladesh has been overwhelmed with more than 400,000 Rohingya who fled their homes in the last three weeks, amid a crisis the United Nations describes as ethnic cleansing. Prime Minister Sheikh Hasina, wo lambasted Myanmar for “atrocities” during a visit to border camps last week, left Dhaka to address the annual UN gathering in New York. Abdus Salam, the top government administrator in the Cox’s Bazar district hospital, said that some 150,000 children will be immunized over seven days for measles, rubella and polio. The UN says there are some 240,000 children living in dire conditions. “There are a lot of weak and malnourished children among the new arrivals,” United Nations Children’s Fund representative in Bangladesh, Edouard Beigbeder, said in an e-mail.

“If proper preventive measures are not taken, highly infectious diseases, especially measles, could even cause an outbreak.” Two preexisting Rohingya camps were already beyond capacity and the new arrivals were staying in schools or huddling in makeshift settlements with no toilets along roadsides and in open fields. The police were checking vehicles to prevent the Rohingya from spreading to nearby towns in an attempt to control a chaotic situation. “There is an instruction from the prime minister that we must treat Rohingya Muslims maintaining human rights,” said A.K.M. Iqbal Hossain, a police superintendent. “As many private and social organizations are coming and distributing relief, sometimes chaos breaks out.... You understand the scale of a humanitarian crisis here, it’s very difficult

to keep order, but we are doing so.” The refugees began pouring from Myanmar’s Rakhine state after a Rohingya insurgent group launched attacks on security posts on August 25, prompting Myanmar’s military to launch “clearance operations” to root out the rebels. Those fleeing have described indiscriminate attacks by security forces and Buddhist mobs. The Myanmar government says hundreds have died, mostly “terrorists”, and that 176 out of 471 Rohingya villages have been abandoned. Myanmar has insisted that Rohingya insurgents and fleeing villagers themselves are destroying own homes. It has offered no proof to back these charges. In a state hospital, a Rohingya man who identified himself as Rahmatullah was looking over his 10-year-old son recovering from a bullet that left a deep wound as it pierced his right leg. “Why did they shoot him? What’s his crime? He is just a child,” Rahmatullah said. “It was 9 in the morning and I was visiting my neighbor’s home at my Baagguna village when they came and started shooting indiscriminately.” He said he fled with 10 of his family members. “I started running for the hill, where I hid myself and later collected my son and others and left,” he said. Eric P. Schwartz, head of the United States-based charity Refugees International and a former

assistant secretary of state for population, refugees and migration, said he couldn’t recall seeing so much misery in the camps and called for international pressure on Myanmar to stop the violence. “The stories that we are hearing. I visited a hospital yesterday, children ages 1, 5, 10 suffered burn wounds, gunshot wounds and with human beings essentially treated like animals,” he said. He said the US should reimpose sanctions on Myanmar that were in place before it made transition from military to civilian rule. But officials in Washington have been careful not to undermine the weak civilian government of Nobel Peace laureate Aung San Suu Kyi, which took office last year, ending five decades of ruinous army rule. The military remains politically powerful and oversees security operations. On the first day of the immunization campaign last Saturday, doctors treated some 9,000 children for rubella and nearly 5,000 for polio. Salam said that basic and emergency health services were being provided through 36 medical camps with focus on children and women. “Many of them are suffering from diarrhea, dehydration and skin diseases. They are coming to hospitals with such complications,” he said. As the weather fluctuates in Cox’s Bazar between rains and sunny and humid days, many children are suffering from flu and risk pneumonia, he said. AP

Cambodia PM wants US Peace Corps out

HNOM PENH, Cambodia—Cambodia’s leader has escalated his feud with the United States, calling last Friday for US Peace Corps volunteers doing development work to be withdrawn. Prime Minister Hun Sen’s demand was part of an anti-American tirade in a speech to garment workers on the outskirts of the capital, Phnom Penh. It came a day after he told a pro-government newspaper that he will order the withdrawal of US military-led teams that search for the remains of Americans missing in action from the Vietnam War. The US government lists 48 Americans still unaccounted for in Cambodia. The Peace Corps began operating in Cambodia in 2006, mainly providing English-language teaching and health-care training. About 500 have done tours since then. “Better you withdrew your Peace Corps volunteers from Cambodia,” Hun Sen said in his speech. Washington’s relations with Hun Sen,

an autocrat who has held power for three decades, have never been warm. They took a sharp turn for the worse when the head of the main opposition group, the Cambodia National Rescue Party, was recently arrested and charged with treason and the US accused of colluding with him to overthrow the government. The September 3 arrest of Kem Sokha is one of a series of measures Hun Sen and his government have taken that are seen as an effort to weaken opposition ahead of next year’s general election. Other moves include closing an independent English-language newspaper and about a dozen radio stations that broadcast opposition voices or programming by the US government-financed Voice of America and Radio Free Asia. Radio Free Asia announced this week that it was shutting down its operations in Cambodia, though it would continue reporting about the country. Hun Sen stepped up his anti-American remarks this week after the US announced it was suspending issuing visas

to senior Cambodian foreign ministry officials and their families. The US said the visa suspension, instituted last Wednesday, was because Cambodia had refused or delayed accepting Cambodian nationals being deported by the US after being convicted of crimes. Cambodia’s foreign ministry said it just seeks to modify a 2002 agreement on the matter. Hun Sen also appeared to be angered that the US Embassy last Thursday issued a security message for US citizens, saying the recent political events may raise overall tensions, even though there are no specific threats. He declared in his Friday speech said there was no threat from the Islamic State group and wondered why the advisory was issued. “Do you plan to attack Cambodia with missiles, is that why you have called for American nationals to take good care?” he asked. “Are you seeking to scare the Cambodian people?” He warned US Ambassador William Heidt not to act as if he was Cambodia’s

parent. He also recalled Washington’s playing part in Cambodia’s tragic history, which saw the communist Khmer Rouge seizing power in the late-1970s and implementing brutal policies that left an estimated 1.7 million dead during four years in power. Earlier this week, Hun Sen said he wanted to keep history from repeating itself, referring to Cambodia’s 1970 military coup—purportedly backed by Washington—that plunged the country into civil war and eventual Khmer Rouge rule. Hun Sen and his supporters assert the US has been trying to undermine the government, promoting a “revolution” that would again plunge Cambodia into chaos. Last Friday Hun Sen recalled that Cambodia was heavily bombed by the US during the Vietnam War. “The experience of suffering in the past because of invasion by the American imperialists we have not yet forgotten. A lot of bombs and unexploded ordinance were left in our ground,” Hun Sen said. AP

Green Monday BusinessMirror

A12 Monday, September 18, 2017

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

Greenpeace, PRRC track plastic pollution in Pasig River, kick off Manila Bay cleanup

Pasig River 8th in top 20 polluting rivers

nvironment groups held a boat tour last week that showed the magnitude and trajectory of plastic waste from tributary San Juan River to the Pasig River’s mouth.

Abigail Aguilar (left), Greenpeace campaigner, and other campaigners hold the banner that reads “Ban single-use plastic” during the boat tour hosted by Greenpeace and the Pasig River Rehabilitation Commission to show the magnitude and trajectory of plastic waste from tributary San Juan River to the Pasig River’s mouth.

The tour, led by Greenpeace Philippines and the Pasig River Rehabilitation Commission (PRRC), highlighted the chokepoints and documented the pollution along the Pasig River and feeding into Manila Bay. The groups also released a Global Positioning System-equipped buoy to track the movement of marine debris, such as plastic waste, from Pasig River into open waters. The boat tour is a prelude to the Manila Bay beach clean-up and brand audit, organized by Greenpeace Philippines and its partners, to highlight the intensity of plastic pollution in Manila and identify the brands that are most responsible for plastic pollution. The clean-up and brand audit will be at Freedom Island, Parañaque City, from September 11 to 20. “We need to more thoroughly examine the state of our water bodies and underscore the impacts of prevailing practices, such as discarding single-use plastics into the Pasig R iver,

63,700 tons The volume of plastics Pasig River dumps into the ocean each year. which eventually contributes to pollution in Manila Bay,” said Abigail Aguilar, detox campaigner of Greenpeace Philippines. Aguilar added: “It’s urgent that we all understand that the root problem is the production and promotion of single-use packaging, when we should be developing more sustainable habits instead.” She said the pollution in our water bodies is also a manifestation of the “dismal implementation of the Ecological Solid Waste Management Act and the urgent need for a national law banning the use of single-use plastics altogether.” In a June 2017 report, the Pasig River was ranked eighth in the top 20 polluting rivers as predicted by the global river plastic inputs

Greenpeace Philippines and the Pasig River Rehabilitation Commission boat tour shows the magnitude and trajectory of plastic waste from tributary San Juan River to the Pasig River’s mouth that feeds into Manila Bay. Daniel Muller/Greenpeace

model. The study said the river dumps up to 63,700 tons of plastic into the ocean each year. San Juan River is a major river system in Metro Manila and tributary of the Pasig River. It traverses five cities, namely, Quezon City, San Juan City, Mandaluyong City, Pasig City and Manila City, all highly urbanized areas, which also suggests high generation of wastes. The accumulated volume of solid and liquid wastes from domestic, commercial and industrial establishments surrounding the 37.4-meter-wide river significantly contributed to its failing water quality. Greenpeace said Pasig River’s surrounding areas are prone to f looding due to siltation in San Juan River where most of the garbage f low f rom upstream Quezon City, collects further and travels down through San

Juan, Mandaluyong and Manila, and ending up in the Pasig. Despite being the shortest river of the three tributaries, San Juan River is consistently the most polluted main tributary of the Pasig River. A report from the PRRC showing the annual average water quality data from 2009-2016 indicates that the biochemical oxygen demand concentration in San Juan River frequently exceeds 100 milligram (mg) per liters, which seriously exceeds the required Class C standard of 7 mg per liters, Greenpeace said. PRRC has launched numerous projects to revive and develop the river and its tributaries. Its current initiative, the San Juan River Dredging Project, aims to increase the depth of the river through the removal of accumulated debris and contaminants and aims to improve the economic, environmental and

South Asia cities face $215B worth extreme rainfall risks

s global attention focused on hurricanes Harvey and Irma, more than 41 million people across South Asia battled floods and displacement. From Afghanistan in the west to Bangladesh in the east, floods could cost South Asia—home to a fourth of the world’s people—as much as $215 billion each year by 2030, according to the World Resources Institute’s (WRI) global flood analyzer launched in 2015. “Companies with operations on coasts, next to large rivers, on lowlying flood plains and in urban areas with poor drainage and sanitation are at greatest risk,” said Tom Hill, executive director, crisis and security consulting, at Control Risks in New Delhi. “More rain and extreme weather will not only hit businesses in South Asia but also global companies that source their products and raw materials from the region.” At least 1,200 died last month as water-swamped cities, like India’s financial capital Mumbai, its technology hub, Bengaluru, Bangladesh’s capital Dhaka, Pakistan’s financial heart, Karachi, as well as swathes of Nepal and India’s eastern states of Bihar and Assam. In the coming decade, devastating floods are expected to increase a s c h a n gi n g we a t h e r p a t te r n s worsen risks in the region, climate researchers say.

Already floods affect more than 9.5 million people in the region each year, with GDP worth $14.4 billion and $5.4 billion at risk in India and Bangladesh respectively, according to the WRI. In 2016 alone Asia reported losses worth $87 billion from 320 natural disaster events, the world’s biggest reinsurer Munich Re reports. Of this, $77 billion were uninsured losses.

Mounting losses

While villages are more directly hit by droughts, it is cities that bear the brunt of flood-related losses, Jatin Singh, CEO at private weather forecaster Skimmed Weather Services, said in a phone interview. Thirty-four people died when Mumbai experienced its worst floods in more than a decade on August 28 and August 29, with the hardest-hit areas reporting as much as 150 millimeters (6 inches) of rain within an hour, according to forecaster AccuWeather. On August 31 in Karachi, 23 people were killed when the city was swamped by 48 millimeters of rain. Meanwhile, two rounds of flooding in Bangladesh this year added to its import bill after the government was forced to bring in 1.5 million tons of rice after six years of self-sufficiency. Flooding accounted for 47 percent of all weather-related global disasters between 1995-2015, the

United Nation’s Office for Disaster Risk Reduction said in a report. Of the 2.3 billion people affected, 95 percent were in Asia. In a region that houses three of the world’s 10 mostpopulated countries—India, Pakistan and Bangladesh—the cost to lives and livelihoods adds up. Absence of resiliency planning by governments in public infrastructure projects, fuel supplies and electricitydistribution networks suggest that problems arising out of changing weather patterns are likely to continue to pose significant threats, according to Siddharth Goel, a senior analyst at Control Risks.

Urban sprawls

While companies in South Asia aren’t known to have realigned investment plans because of weather-related disruptions, more managers are trying to understand flood-related risks to cut losses, Goel said. Most of these are infrastructural risks, including electricity and technology backups for companies, costs of repairing dams, roads, embankments for governments and the provision of flood relief, said Arivudai Nambi Appadurai, senior researcher at WRI. Appadurai, who studied the 2015 floods caused by 17 days of continuous rains in his home town Chennai and this year’s floods near Nepal’s capital

Kathmandu, said planners need to adapt by changing the way cities build infrastructure. “How can we blame only climate change when our storm drains are clogged?” Appadurai said by phone from Chennai. “And all of these risks are exacerbated by the unplanned expansion of our urban sprawls.”

Investments, planning

Lack of city planning means about 130 million people, equal to the population of Japan, live in slums or informal settlements across South Asia, according to the World Bank. These settlements, which often house small- and medium-sized businesses like the Dharavi slums in Mumbai, suffer the worst flood damages. With almost 250 million more people expected to live in South Asian cities by 2030, investment in climate change-resilient urban infrastructure is gaining new urgency. India, Bangladesh and Nepal are currently investing more than $32 billion on building 78 water projects to combat flooding, according to BMI research. With once-in-a-100-year freak weather events now taking place every three to four years, policy-makers and central banks must factor in climate risks when formulating plans, said Raghuram Rajan, India’s former central banker, in an interview. Bloomberg News

health status of San Juan River through dredging activities. “I live in San Juan, so I see it every day suffering greatly from toxic pollution. Did you see bubbles of methane gas upwelling from the river? I fear not only for my health but for the health of my family and our community, so I am determined to lead the rehabilitation of San Juan River through the Pasig River Rehabilitation Commission,” PRRC Executive Director Jose Antonio E. Goitia said. “If we succeed in cleaning the San Juan River, then we also succeed in cleaning the Pasig River,” he added. The plight of the Pasig River mirrors the status of the world ’s oceans, with reports on plastic pollution in water bodies often looking very dim. The Philippines ranks third-worst polluter, with 1.88 million metric tons of mismanaged plastic

waste per year, with China as No. 1, followed by Indonesia, Thailand, Vietnam and Malaysia in the top 10 countries with mismanaged plastic waste, Greenpeace said in a news release. Except for China, these countries are all classified as developi ng econom ies, benef it i ng from economic growth, reduced poverty and improved quality of life. But this new found spending power has led to “exploding demand for consumer products that has not yet been met with a commensurate waste-management infrastructure.” “Manila is on the brink of crisis. If we continue dumping and trashing our waterways, and if big companies continue businessas-usual by producing single-use plastic, then it won’t be long before our oceans are no longer able to sustain life,” Aguilar said.

1st Maritime and Archipelagic Nation Awareness Month held in Malacañang

o “raise the level of awareness on our marine wealth and endowments, as well as the challenges and opportunities in harnessing the same as a critical first step,” Malacañang kicked off the country’s first-ever celebration of the Maritime and Archipelagic Nation Awareness (Mana) Month early this month in Malacañan Palace. “The word mana is of Austronesian origin, which means power, effectiveness and authority. On the other hand, mana in [Filipino] means heritage. Our seas are our mana of which we are heavenly blessed to possess,” said Executive Secretary Salvador C. Medialdea, who is also the National Coast Watch Council chairman. He also emphasized the importance of partnerships among marine and maritime stakeholders to advocate for the awareness of our distinctly sea-based heritage. Led by the National Coast Watch Council, through its secretariat led by Executive Director and Undersecretary Jose Luis Alano, plus global marine-conservation organization Oceana, the event featured a weeklong photo exhibit featuring the Philippine Rise, bolstered by talks and film screenings. Twenty images featuring a dazzling array of reef fish, colorful corals, algae and other marine life were on display at the Mabini Hall of Malacañan Palace. The images were taken during the May 2016 expedition to Benham Bank, the

shallowest portion of the Philippine Rise, a 24.4-million hectare undersea territory of the Philippines. It includes a 13-million hectare extended continental shelf, which was declared a part of the country’s territory in 2012. The 2016 expedition was led by government scientists from the Bureau of Fisheries and Aquatic Resources and University of the Philippines, technical divers from the Philippine Coast Guard and Philippine Navy, plus underwater videographers from Oceana. Marine scientists found a dazzling array of marine life, including areas with over 100-percent coral cover and even seaweed growing at improbable depths. In December 2016 196 State parties to the Convention on Biological Diversity adopted the Philippine R ise as an ecologically and biologically significant marine area and one of the only known spawning sites of the commercially valuable Pacific bluefin tuna. “We laud this significant celebration to raise the consciousness of every Filipino on the importance of protecting and preserving our oceans. We are Earth’s second-largest archipelago, and many Filipinos depend on the sea for food and livelihood. We all have a responsibility to protect our natural heritage such as the Philippine Rise, including the pristine Benham Bank,” Oceana Philippines Vice President lawyer Gloria Estenzo-Ramos said.

Biodiversity Monday BusinessMirror

Asean Champions of Biodiversity Media Category 2014

Monday, September 18, 2017 A13

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

Negros Island’s endemic babbler birds continue to decline–study T By Jonathan L. Mayuga

@jonlmayuga

he population of endemic babblers at the Mount Kanlaon Natural Park on Negros Island continues to drop owing to habitat loss and human-induced air pollution, a study published recently in the Sylvatrop Journal of the Ecosystems Research and Development Bureau (ERDB) of the Department of Environment and Natural Resources (DENR). Besides timber poaching and cutting of trees for firewood and charcoal production, the bird hunting, human-induced air pollution and conversion of forest to agricultural commodities are seriously threatening the bird population in the area. Mount Kanlaon Natural Park is a protected area covered by the National Integrated Protected Areas System Act. With a total area of 24,388 hectares—characterized by cool, dense forest—the park is home to a diverse wildlife, including wild boar, civet cat, leopard cat, spotted deer, and a variety of bird species. Mountaineers frequently trek Mount Kanlaon, which is an active volcano, because of its aesthetic beauty and the perfect place to commune with nature when on Negros Island. In Sylvatrop’s special issue with the Biodiversity Conservation Society of the Philippines, proponents of the study revealed both Negros babblers—the flametempled babbler (Dasycrotapha speciosa), which is endemic to Negros and Panay, and striped babbler (Stachyris nigrorum), which exclusively found on Negros, have been classified as endangered by the International Union for Conservation of Nature (IUCN). As of 2015, BirdLife International indicated that the population of flame-templed babbler

on Mount Kanlaon ranged from 2,500 to 9,999 individuals. This was greater than the 600 to 1,700 mature individuals for striped babbler, according to the report. The decrease in the population of the species, estimated from 50 percent to 90 percent, is believed to be continuing. “[We should] intensify regular forest monitoring on Mount Kanlaon; establish and revisit biodiversity-monitoring system for the population of babbler species,” according to Sylvatrop authors Andrew T. Reintar, Shaira Grace B. Pios and Dennis A. Warguez. They also pressed for conservation initiatives to start and create education materials to raise public awareness on the biodiversity threat. ERDB Director Dr. Henry A. Adornado, in a statement accompanying the published study by Growth Publishing for the DENR’s research and development unit, said the study increases understanding of the status of Philippine biodiversity. “ T hese efforts are a lig ned with ERDB’s mission to provide science-based information for the improvement of our environment. May this scientific information inspire us to work hard for the conservation of our rich flora and fauna,” Adornado said. Biodiversity protection promotes sustainable development

Flame-templed babbler Sylvatrop/Growth Publishing

of forests that are significant sources of food, timber and nontimber products and raw materials for manufacturing supplies, while generating livelihood for rural people, he added. “We need biodiversity for its invaluable ecosystem services, providing oxygen, food, clean water, fertile soil, medicines, shelter, protection from storms and floods, a stable climate and recreation,” according to the Earth Institute. Sought for reaction, Director Theresa Mundita S. Lim of the DENR’s Biodiversity Management Bureau said “the study highlights the need to protect the remaining habitats of our endangered birds. And not just for birds, but to benefit the communities, as well.” “More than just simply reforesting, it is important to protect and restore the vegetation that these birds are associated with, such as the forest fruits and the invertebrates they feed on,” Lim said in a telephone interview with the BusinessMirror last week. According to Lim, the presence of the birds ensures that the specialized ecosystems that support their survival continue to thrive and support the surrounding communities that are dependent on

the same ecosystem for ecosystem services, such as food security, water, livelihoods and even climatechange adaptation. “For a biodiversity-rich country, such as the Philippines, these results of scientific researches are important to further make this human-biodiversity link clearer to everyone,” she said. The IUCN recommended more sur veys in Panay and around Mount Silay and Mount Mandalagan in North Negros to locate other birds. It pushed for the establishment of the proposed Central Panay Mountains National Park and other key sites as the North Negros Forest Reserve. “This lowland forest species has a very small, severely fragmented and declining range. It is estimated that just 10 percent of remaining forest on the two islands lies within the elevation range suitable for this species,”the IUCN said. Reforestation is a solution to the birds’ threatened extinction. According to the study, “Tree density was found to be significant in the abundance of striped babbler; a decrease in tree density would mean an increase in the abundance of striped babbler.

This result strongly presses the fact that the species prefers midmontane and mossy forest.” It added thick undergrowth should be developed for flametempled babbler, which is an omnivore. It feeds and breeds in understory bushes, trees, vines and ferns. The IUCN said while conser vation sites have been identified, there has been no species management that successfully reintroduced the population, no awareness-education program and no action recovery plan or monitoring. It added that needed protection includes site protection and management, and habitat and natural-process restoration. Surveys in 1991 yielded tentative estimates of 22 flame-templed babbler per square kilometer on Mount Kanlaon, although only a few square kilometers of suitable forest remain. In 1987 this species was discovered on Panay Island and is also now known to dwell in five localities in the Panay central mountains, although “it appears very uncommon and/or has a very patchy distribution,” the IUCN report said. The babblers’ status was only

threatened as of 1988. The IUCN has a six-stage Red List classification from least concern to extinct in the wild. About 80 species of the babblers have already become extinct or critically endangered out of 678 recorded species and 206 endemics. As birds are easier to monitor, it becomes an indicator of the status of other animals. “The threatened extinction of bird species implies comparable losses in other groups and, hence, a major reduction in biodiversity,” the results published in the Sylvatrop journal said. The study also found out that flame-templed babbler was most likely to be found at lower elevations from 400 meters above sea level (masl) to 900 masl. On the other hand, the higher elevations were occupied by striped babbler or between 1,000 masl to1,800 masl. Also found in secondary lowland forest, mixed forest plantation and plantation was the lowland-forest dwelling flametempled babbler. The study that covered an expanse of the 44-km path between 400 masl and 800 masl, 22 flametempled babbler and no striped babbler were found. In the middle elevation, between 850 masl and1450 masl, five flame-templed babbler and 10 striped babbler were found. On the high elevation of between 1,450 masl and 1800 masl, four striped babbler and no flametempled babbler were found. Threats of tree cutting and charcoal production were numerous in Sitio Minoyan, Barangay Was, and Murcia, Negros Occidental. “Other threats, such as butterfly collection and snare traps, for medium-sized mammals are evident throughout Sitio Minoyan, Barangay Wasay, Murcia and Guintubdan, Barangay Ara-al, La Carlota City in Negros Occidental.” T he Sylvatrop authors also pressed for the study to be published in peer-reviewed journals so that the research results can be shared in the scientific community.

EU, ACB launch 5-year biodiversity-conservation project for Asean

he Biodiversity Conservation and Management of Protected Areas in Asean Project (BCAMP) grant agreement was recently signed by the European Union (EU) and the Asean Centre for Biodiversity (ACB). It was one of the highlights of activities during the inauguration of the new ACB building at the University of the Philippines Los Baños. Mattias Lentz, chargé d’affaires of the European Union Delegation to the Philippines, and law yer Roberto V. Oliva, ACB executive director, signed the grant agreement. T he f ive -yea r biod iversit y conservation project for Asean embraces a comprehensive and holistic approach in biodiversity conservation that cuts across site level, national and regional level of project-implementation framework. It aims to contribute to global sustainability by ensuring that the Asean’s rich biological diversity is conserved and sustainably managed toward enhancing

social, economic and environmental well-being invoking the attainment of the Aichi Biodiversity Targets—the framework that ACB aligned itself toward achieving biodiversity conservation in the Asean region. The BC AMP Project is a manifestation of EU ’s suppor t to biodiversit y and development i n t he re g ion . A ccord i ng to Lentz, “ T he European Union is a f ir m bel iever in t he promo tion of biodiversit y worldw ide, in t he A sean reg ion, and in t he Ph i l ippines in pa r t ic u l a r. “As you may know, an important chapter of the EU cooperation with other countries focuses on biodiversity. Biodiversity and development are c losely linked as biodiversity sustains development, and development impacts biodiversity.” Working on previous gains and laid-down systems in the Asean biodiversity conservation initiatives, BCAMP aims to enhance conservation of biodiversity and effective management

The European Union and Asean Centre for Biodiversity (ACB) sign the Biodiversity Conservation and Management of Protected Areas in Asean Project grant agreement recently. Signing the agreement are Mattias Lentz (seated, from left), chargé d’affaires of the EU Delegation to the Philippines, and lawyer Roberto V. Oliva, ACB executive director. Witnessing the signing are members of the ACB governing board Win Naing Thaw (from left), director, Nature and Wildlife Conservation, Ministry of Natural Resources and Environment, Myanmar; Vann Monyneath, chairman, Asean Senior Officials on Environment (ASOEN)-Cambodia; Wendy Yap, director, International Relations, National Biodiversity Centre, Singapore; Philippine Environment Secretary Roy A. Cimatu; Lonkham Atsanavong, chairman, ACB-Governing Board and chairman, ASOEN-Lao PDR; Clarissa C. Arida, director, Programme Development and Implementation Unit, ACB; Philippine Ambassador to Asean Elizabeth Buensuceso; Nguyen Thi Thanh Tram, deputy head-ASOEN Office, Vietnam; and Vongthep Arthakaivalvatee, deputy secretary-general of Asean Socio-Cultural Community.

of protected areas in Southeast A si a to ha lt or sig nif ica nt ly reduce biod iversit y loss. The project has three main components to achieve its goals and objectives. These components

include: site level interventions in selected and future Asean Heritage Parks (AHPs), enabling support at the national level and regional level intervention. For component one, BC A MP

aims to improve biodiversit y con s e r v at ion a nd p rot e c t e d area management through the AHP Programme. AHPs are protected areas of high conser vation importance, preser v ing in tota l a complete spectr um of representative ecosystems of the A sean reg ion. T hese areas are established to generate greater awareness, pride, appreciation, enjoyment a nd conser vat ion of A sea n’s r ich natura l her itage, through a regional network of representative protected areas, and to generate greater col laboration among A sean member states in preser v ing their shared natura l her itage. A HP is a f lagship ACB program. Component t wo emphasizes t he ma inst rea m ing of biod iversit y conser vat ion a nd pro t e c t e d a re a m a n a ge me nt i n development pl a ns a nd educat iona l system in A sea n by way of uti l izing developed scient if ic k nowledge as basis for biod iversit y conser vat ion.

Component three, on the other hand, capitalizes on the institutional strengthening of ACB as a regional mechanism that supports the Asean regional agenda on biodiversity conservation and protected area management for the 10 Asean member-states. “ACB has steadfastly comm it ted itsel f to biod iversit y conservation by being a pivotal mechanism for coordination and collaboration of joint programs and projects for the 10 Asean member-states. We sincerely acknowledge the help and support of the European Union for us to achieve more and serve better toward the fulfillment of our goal, which is to conserve and sustain Asean’s rich but threatened biological resources.” Oliva said. BC AMP is expected to run from 2017 to 2022, with the ACB as project implementing agency. The ceremonial signing was witnessed by EU delegates, members of the ACB governing board, Philippine government delegates and other dignitaries.

A14 Monday, September 18, 2017 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

No more US dollar?

or decades the Philippines has been a country where even the average person is aware of foreign currency-exchange rates. This is not common in most other nations.

Because of overseas Filipinos’s remittances, department stores, like SM, were happy to provide pesos to those who wanted to exchange Japanese yen, South Korean won, Saudi Arabian riyals, euros and, of course, the US dollar. Now with many Chinese tourists headed to the Philippines, the Chinese yuan has made it to the list of currencies being exchanged. However, it is the US dollar from which all currencies derive their “value”. The US dollar is the global “reserve currency”, or anchor currency for all the world’s government. Whether the government is democratic and stable or an absolute dictatorship, the US dollar is considered the final store of wealth. As in past times when a gold coin could be used to buy goods and services any place on Earth, the US dollar is almost universally accepted as the ultimate legal tender. Of all known central bank foreign-exchange reserves held by some 180 countries, the US dollar makes up about 65 percent of those holdings. The reason for this is that in 1972 global governments decided they would no longer exchange their currency for gold or silver but that those currencies would be “backed” by dollars. In other words, all national currencies would be exchangeable for US dollars. The reason this system has endured for more than 40 years is that the world’s most important commodity—crude oil—is priced in US dollars. But the system that keeps the US dollar as king is faltering. Other nations—most notably Russia and China—have for years been trying to move from using US dollars as a medium of exchange for trade. Those were challenges to the dominance of the dollar but not mortal threats. China has been doing all it can to use its yuan as the settlement currency for bilateral trade. While “everybody hates China”, its initiative to increase the transportation and trade infrastructure between the East and the West is not going to stop. Nor are nations from Germany to Indonesia going to stay out of the “One Belt One Road” projects no matter what they may say in public. Trade between Russia and China is settled in yuan or Russian rubles. Russia is accepting local currency from countries that it has trade for its oil products. Now, Venezuela will no longer sell its oil for dollars. Venezuela may be a godforsaken economic disaster of a socialist dictatorship, but it is also an important player in the economic proxy war of China and Russia against the US dollar. The US dollar will be the King Currency for some time. But the move to diminish the king’s power is going forward. This is not going to be an “assassination” with a new king—such as cryptocurrencies, precious metals or another currency—taking over. It will be a reduction of the power of the dollar and it is going to happen.

Education, economy and the environment Atty. Jose Ferdinand M. Rojas II

RISING SUN

Conclusion

ast Monday I started to enumerate four of the six principles to replace the six myths about the foundations of modern education. Environmental educator and founder of the Meadowcreek Project David Orr proposed the lists during his commencement speech for the graduating class at Arkansas College in 1990. The graduation address, What is Education For?, may have been delivered many years ago but the message is more relevant today.

I would like to continue today with Orr’s fifth principle, which draws from William Blake. It has to do with the importance of “minute particulars” and the power of examples over words. He said, “Students hear about global respon-

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sibility while being educated in institutions that often invest their financial weight in the most irresponsible things. The lessons being taught are those of hypocrisy and ultimately despair. Students learn, without anyone ever saying it, that

they are helpless to overcome the frightening gap between ideals and reality. What is desperately needed are faculty and administrators who provide role models of integrity, care, thoughtfulness and institutions that are capable of embodying ideals wholly and completely in all of their operations.” His last point is a proposal to improve the way students learn, because this is as important, actually, as the content of the syllabus. He stressed the importance of process in the way students learn. David Orr believes that lecture-type teaching tend to induce passivity, monologue, domination and artificiality. “Indoor classes create the illusion that learning only occurs inside four walls isolated from what students call, without apparent irony, the real world,” he said. The whole point is that students can be taught in many ways apart from the usual classroomtype lectures. It is important to review these

Atty. Lorna Patajo-Kapunan

legally speaking

he House of Representatives on September 6 passed on third and final reading the House Bill 5784, or An Act Providing For A Universal Health Coverage For Filipinos and Appropriating Funds Therefor, by an affirmative vote of 222, with seven members of the Makabayan bloc voting against. The bill seeks to provide universal health care (UHC) to all Filipinos consistent with the mandate of the State in Article II, Section 15 of the Constitution “to protect and promote the right to health of every Filipino and instill health consciousness among them”. The UHC bill further declares it the duty of the State to “adopt an integrated and comprehensive approach to health development and endeavor to provide every Filipino healthy living conditions and access to needed cost-effective and quality promotive, preventive, curative, rehabilitative and palliative health services, without suffering financial hardship when obtaining them” (Section 2). Under the UHC bill, the Philippine Health Insurance Corp. (PhilHealth) is reconstituted into the Philippine Health Security Corp. (PHSC) as it becomes the national purchaser of health services. UHC membership will be categorized into two: contributory, or those who pay, such as public and private workers; and noncontributory workers, or

those who give no contributions, such as indigents, or Filipino citizens whose income fall below the National Economic and Development Authority defined poverty threshold. Moreover, the UHC bill provides for the adoption and institutionalization of Health Technology Assessment (HTA) and the creation of the Health Technology Assessment Council (HTAC). HTA denotes any process of examining or reporting properties of a medical technology used in health care, including safety, efficacy, feasibility and indications for use; cost-effectiveness; as well as social, economic and ethical consequences, whether intended or unintended. The HTAC will serve as advisory body to the health secretary and the board of directors of the PHSC on the priority entitlements for universal health coverage. The UHC bill authorizes Department of Health (retained hospitals, specialty hospitals and local government units-hospitals to utilize 100 percent of their income to enhance

their capacity and improve the quality of their services. All members, whether primary or dependent, will be provided with a unique number and identification card that shall facilitate the identification, eligibility, verification and utilization recoding. It shall be recognized as a valid government ID card, but the absence of the ID card at the point of health services shall not prejudice the right of any member to avail themselves of the program benefits or medical services under the program (Section 18). The medical benefits can be primary, or secondary or tertiary level health care. It can be delivered faceto-face or remotely, through telecommunications and information technology. It includes drugs, vaccine, clinical and surgical procedure, preventive and promotive health services and traditional medicine (Section 4[9]). The UHC bill defines a “beneficiary” as any person entitled to health-insurance benefits under the bill (Section 4[b]) which includes “members” who belong to the contributory group or noncontributory group (whose premiums are fully subsidized by the national government) and whose premium contributions have been regularly paid to the National Health Security Program (Section 4 [z]). Dependents refer to the following: n The legitimate spouse who is not a member; n Unmarried and unemployed legitimate, legitimated, illegitimate, acknowledged children as appearing in the birth certificate, legally adopted or stepchildren below 21 years of age; n Children who are 21 years old

proposals from an environmental educator in the face of today’s fast-changing education and career landscape. As we enter a new phase in public tertiary education next school year, we should be concerned about the quality of teaching in our state-run institutions. The courses and course contents to be offered must enable our students to thrive in the changing world of work. nnn

ON August 31 the 1,200-meter Philippine Charity Sweepstakes Office Special Maiden Race (twoyear-old) Trial Race was held at the Metro Manila Turf Club in Batangas. Here are the finishers, in order of arrival: Talitha Koum (with jockey RG Fernandez), Bridge of’d River Kwai (with jockey JB Hernandez), Victorious Colt (with jockey JB Guce), Royal Signal (with jockey KB Abobo), Prosperity (with jockey MA Alvarez), Guenevere (with jockey RA Base) and Holy Rain (with jockey RO Niu). Congratulations to all!

or above but suffering from congenital disability, either physical or mental, or any disability acquired that renders them totally dependent on the member for support; n Parents of members who are 60 years old or above whose monthly income is below an amount to be determined by the PHSC in accordance with the guiding principles set forth in this Act; and n Parents of members with permanent disability that render them totally dependent on the member for subsistence. The Makabayan bloc, which rejected the UHC bill, claim that free health care and a unified public health care should be directly funded by the government through public hospitals. The bill allegedly pushes for the privatization and commercialization of the health-care system with the government turning into a “collector of contributions”, instead of a “primary funder” for public health care. The bill further reduces the funding of public hospitals, allowing private facilities to dominate the health-care system. The maintenance and other operating expenses of public hospitals would be removed and, instead, will rely entirely on PhilHealth (www.rappler.com). A counterpart measure, Senate Bill 1458 introduced by Sen. Joseph Victor G. Ejercito is pending in the Senate. As rightly pointed out by one of the principal authors of the UHC bill, Party-list Rep. Harry L. Roque of Kabayan, the UHC bill gives spirit to the right to health of all Filipinos. Certainly, this is one time that we can applaud Congress for finally doing its job—to legislate and not to investigate.

opinion@businessmirror.com.ph

Opinion

Solo flight

Dissecting PPP contracts #7: Right-of-way

BusinessMirror

By Alberto Agra

Siegfred Bueno Mison, Esq.

PPP Lead

THE PATRIOT

N Spanish, Soledad means solitude. There are some activities that are designed for more than one person, such as diving or golf. In the Army, we were trained to always have a buddy during patrols and combat operations. In relationships, the Bible, in 1 Corinthians 7:2, tells us that “each man should have his own wife, and each woman should have her own husband.” However, there have been times where being alone is a good thing. It can broaden our perspective, like when Moses, Elijah, Jacob and Jesus practiced solitude in the Bible. I know of a few real-life Soledads. Mon Soledad is a self-made businessman who is blessed with a lovely wife, Cristina, and three handsome sons, Martell, Raynall and Ram. Raynall was one of the first graduates of a newly revised training curriculum for immigration officers when I was in the Bureau of Immigration. He is now the alien control officer in Baguio City. Mon is the uncle of then-Councilor Shalani Soledad. Mon was technically single until he decided to get married only after these three boys were way past their adolescence. Saying that being “married” is just a status, Mon never felt “Soledad” during his unmarried years. In our most recent talk, he said the key to a successful couple is not material or ceremonial, as in wedding rings or a marriage certificate, but mental or emotional, as in commitment. Marriage does not necessarily lead to commitment, but commitment can lead to marriage. I have seen a few married couples that remain uncommitted. Some “wisely” end up divorced. Others choose to spend the rest of their lives miserably, married in paper, but divorced in practice. Being married can be wonderful, as in the case of Mon and Cristina. Author and blogger Katie Hendricks said a relationship can be like a garden whose benefits, such as “beauty, peace, tranquility, and safety”, allow true intimacy to grow. But to get to that garden and experience all of its benefits, Hendricks said couples need to unlock the door using a key called commitment. Hendricks said, “This beautiful garden of intimacy is not opened just because you are married. It’s opened because you are willing to do what it takes to keep it alive and growing.” In the case of Mon, he has consistently shown true commitment to his partner—though not yet his wife—by looking after her needs, paying attention to her wishes and doing what it takes to make her happy. During all the years Mon wasn’t married, he stayed committed by never thinking about separation or being with someone else. Mon never even took the relationship on a day-by-day basis. He was “all in” emotionally, although in paper he was not. I know of one beautiful lady in her mid-50s who has chosen to remain in solitude because of the fear of being hurt by another. She is

In love, commitment promotes trust and intimacy as it helps us “prevent our fears and past hurts from sabotaging our happiness”. In Genesis 2:18, the Bible says, “It is not good for the man to be alone. I will make a helper who is just right for him.” We were never designed to fly solo, even if you are a Soledad. afraid that if someone truly gets to know her, he may end up not liking her. Commitment unlocks the barriers to a healthy relationship as it makes us feel safe yet vulnerable, sharing our colorful past, our present day fears and our aspirations in the future. In the business setting, Philippine Airlines (PAL) has recently launched a 10-point commitment program to showcase PAL’s Buong Pusong Alaga. Among these 10 action verbs (connect, project, delight, update, communicate, engage, recap, listen, apologize and appreciate), one worth emphasizing is to communicate. We have to be clear in what we say, say what we mean, and never use hurtful words to the people we swore to stay committed to serve. PAL is committed to truly represent the Heart of the Filipino, as the current work force is being trained and indoctrinated how to nurture the key to any healthy relationship—that is, commitment. In PAL, or in any other business entity, the work force can stay committed by simply never thinking about being in some other company. Recruiting officers should look at those applicants with some “all in” mentality at the onset, although it will be difficult to assess a person’s commitment in any job interview. In business, the first step we need to do if we want to succeed in whatever goals we set for the company is to make all employees commit. Commitment will make us move together toward one direction and focus our efforts on one mission. In love, whether we are married, single, in a relationship or anywhere in between, commitment promotes trust and intimacy as it helps us “prevent our fears and past hurts from sabotaging our happiness”. In Genesis 2:18, the Bible says, “It is not good for the man to be alone. I will make a helper who is just right for him.” We were never designed to fly solo, even if you are a Soledad. For questions and comments, please e-mail me at sbmison@gmail.com.

Continued from A1

eed ROW. For infrastructure projects that traverse rows of private properties, access and permission must be obtained from the owners. Without ROW, there can be no such road, expressway, rail or power-interconnection project over or through private or public land. Public purpose. PPP projects and all government projects are intended for the public good. If government funds will be used for ROW purposes, then public purpose is a must for government funds cannot be used for private purposes. ROW is not free. When ROW is exercised, the parties to a PPP, and consumers and end-users benefit. Thus, the private owner who will be permanently disturbed or deprived of his or her land must be

echnology has a tremendous effect on everybody. In the Philippines, where eight out of 10 adults have a cell phone or digital device, we are living in an age of programs and apps. In school classrooms, teachers have discovered that technology can help address specific learning needs of their students. With the right program or app, for example, teachers can virtually guide students with reading and writing difficulties to improve their skills faster than the conventional way of teaching. That’s because they can now do research in a jiffy. With tons of information at their fingertips, teachers now heave modern teaching

tools with just a click of the mouse. With the full implementation of the K to 12 Program by the education department, programs and apps for Filipino kids are being developed. Pilot public and private schools, designed to accelerate student’s learning and empower teachers more, are now using digital solutions.

When ROW is exercised, the parties to a PPP, and consumers and end-users benefit. Thus, the private owner who will be permanently disturbed or deprived of his or her land must be compensated. Apart from legal easements, ROW over or through private land requires the “taker” to pay the owner.

transfer or build-transfer-operate arrangements, the private sector assumes these three functions including the financing and designing of the facility. What remains with or what is normally assumed by the government is providing for ROW. Suggested wording. Borrowing from the template prepared by Castalia Strategic Advisors, ROW may be worded as follows: “The agency [government] shall be: [1] responsible at its own cost and expense for obtaining all land rights and permanent rights-of-way xxx and required in order to build, rehabilitate, own and operate the facilities, including, without limitation,

What can the Asian profession learn from the 2016 Ifac Global SMP survey? Paul Thompson

DEBIT CREDIT Part One

he 2016 International Federation of Accountants (Ifac) Global SMP Survey asked practitioners from small- and medium-sized practices (SMSPs) across the globe about: their challenges, with a close look at the impact of technology, personnel and staffing issues; how various environmental factors may affect them over the next five years; their 2016 revenues and projected 2017 revenues; key performance indicators, namely, collection and employee utilization rations; and the consulting services they provide. It additionally reports on practitioners’ views on the impact of challenges faced by their small- and medium-sized entity clients. Some 5,060 respondents representing 164 countries completed the survey. This article provides a summary of the Asia results, selected comparisons with the global picture and potential implications of the findings for Asian professional accountancy organizations (PAOs). The second-largest groups of respondents to the survey were from Asia (28 percent), giving a large representative sample. Consequently, of the 164 participating countries, Asian countries featured prominently in the list ranking countries by respondents: China is first with 493; and India, second, with 417. Pakistan (95), Thailand (93), Malaysia (60) and Japan (50) were also in the top 25 countries. The Philippines had 29 respondents. The high response rate from Asia was partly due to the South Asian Federation of Accountants (Safa) and its member-organizations encouraging SMP members to participate.

Improving literacy with technology By Gena Time Tuppil

compensated. Apart from legal easements, ROW over or through private land requires the “taker” to pay the owner. While voluntary sale based on an agreed price is the ideal, the “taker” may seek relief from the courts by filing expropriation cases. Delay in negotiations and court proceedings are the real culprits. ROW in PPPs. PPP arrangements require the identification and delineation of roles and responsibilities. For example, in build-operate-

Monday, September 18, 2017 A15

Students can easily find on the Internet various apps that are useful in developing their reading skills, especially among younger students. These apps cover a range of literacy skills, including reading comprehension, phonics, composition, spelling, vocabulary and writing. Digital sharing of information, meanwhile, can help every student improve his or her knowledge and grasp of a particular subject. Facebook, notoriously known as the “gossip site”, however, is likewise being used to share fake news. Fortunately, this social-media site can be helpful to students if used the right way. For example, more and more high-school students are now using

The top 4 challenges faced by Asian respondents were serving clients operating internationally (48 percent), attracting new clients (48 percent), experiencing pressure to lower fees (44 percent) and differentiating from the competition (43 percent). These results differ from the global top 4 of attracting new clients (46 percent), keeping up with new regulations and standards (41 percent) experiencing pressure to lower fees (41 percent) and differentiating from competition (39 percent).

A majority (61 percent) of Asian respondents were either sole practitioners (26 percent) or practitioners from practices with two to five partners and staff (35 percent); most of these were a partner, sole proprietor, or owner; and 70 percent were male. The top 4 challenges faced by Asian respondents were serving clients operating internationally (48 percent), attracting new clients (48 percent), experiencing pressure to lower fees (44 percent) and differentiating from the competition (43 percent). These results differ from the global top 4 of attracting new clients (46 percent), keeping up with new regulations and standards (41 percent), experiencing pressure to lower fees (41 percent) and differentiating from competition (39 percent). Serving clients operating internationally was a significantly greater challenge for Asian SMPs than SMPs globally while keeping up with new regulations and standards

was a relatively lesser challenge for Asian SMPs than SMPs globally. This suggests PAOs may need to consider whether they are doing enough to assist SMPs in their endeavors to serve clients operating internationally. The survey addressed in more detail the impact of technology and personnel and staffing issues on SMPs. Regarding technology issues, the survey revealed variation between Asia and global results. Asian SMPs said advances in data analytics, including availability and use of big data (35 percent as a high/very high challenge) followed by achieving a digital, paperless environment (30 percent) and managing privacy and security risks (30 percent) were the technological issues having the most impact, as compared with investing in and staying current with software (38 percent) and achieving a digital, paperless environment (37 percent) for all global respondents. In relation to personnel and staffing issues, Asian SMPs considered finding and retaining qualified staff at all levels to have the greatest impact, with 47 percent and 44 percent, respectively, viewing the

their Facebook accounts to help their classmates who are having some difficulties in class. With Facebook, everyone’s work can be shared, for the benefit of all. There are so many educational apps that it has become difficult to know which ones are effective, and which ones are right for you. Some popular and useful apps for elementary and high-school students include: myHomework. This app is useful for students who have difficulty remembering their assignments and their deadlines. This free app enables you to monitor your class schedules and manages your assignments for all your lessons. You may

also input notes or reminders if you have a test coming or when an assignment is due. Dropbox. Dropbox keeps documents in a single and easy-to-access location, which is perfect for storing essays and various documents that fill up your files throughout your high-school years. It enables you to sync data files from different location. This is best used for storing assignments, essay drafts, photos, videos, etc., in a secure and protected location. In addition, Dropbox uses an online storage system, and that means all your files are safe from any untimely computer breakdown. Wolfram Alpha. Wolfram Alpha allows you to input any math

temporary rights-of-way to install and construct the facilities;  [2] make the project land available to the company in accordance with the phases xxx under a written lease, license, right of use or another form of express grant or disposition, as appropriate, and free from such liens as to ensure that the company can carry out the project and enforce the land rights against all third parties during the term of this agreement; and [3] ensure the establishment and operation of a road traffic management regime necessary to allow the company to discharge its obligations under this agreement.” For the private sector, “The company shall: [1] assist the agency, using reasonable efforts, to acquire temporary rights-of-way or construction easements which the company needs for the construction and operation of the facilities in addition to those that the agency may have obtained on or before the effective date; [2] be responsible for and bear the costs of the restoration, relocation and reconnection of any utility pipes, cables or other media which may be present on the project land;  xxx.”

impact as high/very high, almost identical to that of all respondents (45 percent and 41 percent, respectively). This suggests PAOs may need to consider whether they are doing enough to assist SMPs to attract and retain talent. Respondents rated eight environmental factors to assess the extent to which they believe each may impact their SMP over the next five years. The regulatory environment (56 percent as high/very high impact) and technological developments (52 percent) were viewed as having the highest potential impact for SMPs globally. This compares with Asia, where competition (49 percent) and regulatory environment (48 percent) topped the rankings. Technological developments (43 percent) were predicted to have a relatively lesser potential impact for Asian SMPs than globally, while competition was forecast to have a similar potential impact for both SMPs in Asia and SMPs globally. PAOs need to ask themselves whether they are doing enough, or have plans in place, to help their SMPs compete, especially with other professions, and prepare for changes in technology. Paul Thompson is European Federation of Accountants and Auditors director and a consultant dedicated to thought leadership and development of the global accountancy profession. From 2004 to 2016 Thompson worked for Ifac latterly as director, Global Accountancy Profession Support, a role that extended to overseeing the Ifac Global Knowledge Gateway, research and innovation, and activities in support of SMSP and professional accountants in business. He was a speaker during the Board of Accountancy sponsored SMP Summit in Makati City in May 2017. This column accepts contributions from accountants, especially articles that are of interest to the accountancy profession, in particular, and to the business community, in general. These can be e-mailed to boa.secretariat.@gmail.com.

question and will find the correct answer along with the formula for how it solves it. This is great as it allows you to check your answer as it teaches you how to solve the problem. Wolfram Alpha allows users to find the answers to problems for various subjects, including physics and music. App lists are becoming endless and so are the information on our gadgets. Being digitally literate comes with a lot of responsibility. Parents and teachers must constantly monitor and guide students for the proper use of today’s technology. The author is Teacher 3 at Villa Gracia Elementary School in Buguey, Cagayan.

2nd Front Page BusinessMirror

A16 Monday, September 18, 2017

www.businessmirror.com.ph

Power producers face tough times on oversupply, pricing

By Lenie Lectura

@llectura

OMPANIES engaged in power generation may face tougher times ahead on account of a foreseen capacity oversupply and tough pricing condition. AC Energy Holdings Inc., which has installed around 1,000 megawatts (MW) last year, said oversupply is “obviously good for customers and more challenging for suppliers”. “Current oversupply situation is part of a typical business cycle,” said AC Energy President John Eric Francia in response to questions sent via e-mail by the BusinessMirror. “I would expect this to be the case for the next three years to five years.” The Department of Energy (DOE) has set a power-capacity target of 43,765 megawatts (MW) by year 2040. “The 43,000 MW is parallel with the Ambisyon Natin [Our Ambition] 2040. As we will build the plants on a yearly basis, [that will be] dependent on the demand,” Energy Secretary Alfonso G. Cusi

43,765 MW The power-capacity target of the Department of Energy by 2040 said. “Up to 2022, we are forecasting about 12,000 MW of the 43,000 will be in that period. That’s because of the increase in infra building under ‘Build, Build, Build’.” The Duterte administration’s economic agenda, dubbed Dutertenomics, is mainly a program anchored on the rule of law and driven by a massive infrastructure spending, as captured by the slogan Build, Build, Build. “Hopefully, with Dutertenomics attracting the adequate level of private investments, we can reach our targeted additional power

capacity by year 2040 [of] 43,765 MW,” Cusi said.

Lower margins?

TO meet massive demand in the coming years, the Philippines should start building power plants annually starting this year, the energy chief said. While this is good news for consumers, power generators are worried that a possible oversupply could lead to lower margins. “Oversupply will affect all gencos [generation companies]. There will be idle capacity and may affect viability of some. In situations like this, building of new plants may slow down as well,” said Aboitiz Power Corp. President Antonio Moraza in a text message. “Prices are already very low, particularly in the Wesm [Wholesale Electricity Spot Market]; so margins are dropping.” The power firm, which targets 4,000 MW of net attributable capacity by 2020, is optimistic that business will go on amid a possible oversupply scenario in the power industry. “We are contracted so we continue to move on,” Moraza added. “However, there is nothing you can do with low margins. You just have to hang on.” The same goes for AC Energy. Francia agreed that locking

in a power-supply agreement would help address lower margins. Most of the country’s power producers prefer to seal a power contract with off-takers in a bid to be sure that the power generated from their new power plants would be sold. “AC Energy currently has a high percentage of contracted capacity, so the market impact to our business is quite limited,” Francia said, while adding that generators who are “long on power” should have a solid balance sheet during such period to withstand lower utilization and soft prices.

Continuous build

CONGLOMER ATE San Miguel Corp. (SMC), meanwhile, continues to build more power plants, some of these are without power contracts with off-takers. “For as long as I can sell it a cheaper price, then I am not worried. First, I will be able to help the country address its concern on the needed capacity. At the same time, cheap power price will help electric cooperatives and power distributors sell electricity at a lower price too. Eventually, it’s a win-win situation because the rend result would benefit consumers,”

o government agency will be defunded in the Senate version of the P3.767-trillion 2018 national budget, Sen. Loren B. Legarda assured over the weekend amid moves by the House of Representatives to slash the annual budget of three key agencies to P1,000 each. House leaders, justifying the move, said they were looking for funds for the free higher education law that President Duterte recently signed. “There will be no government agency without a budget,” Legarda, who chairs the Senate Finance Committee crafting the Senate version of the budget bill, said last Sunday, adding that, as far as the panel is concerned, “we already approved the budget”. At the same time, Legarda said the proposed P3-trillion budget bill can be funded without imposing new taxes. “The question is underspending,” the Finance Committee chairman pointed out. “We are very particular about underspending because the funds are there for public projects as requested by the agencies during the budget calls for departments to submit their spending programs.” Legarda confirmed the Senate Finance Committee had already restored the 2018 budgets of three agencies earlier reported to have been given P1,000 each in the House version, including the P643-million budget for the Commission on Human Rights, P360 million for the Energy Regulatory Commission and P1.88 billion for the National Commission on Indigenous Peoples. “As far as the Senate Finance committee is concerned, we already See “No agency,” A2

THE DOE, for its part, said it is also looking at the concerns of the power producers. “Suppliers look at it from different perspective,” Cusi said in an interview. “The DOE, as regulator, looks at all interest, especially the consumers.” Still, the energy chief added the agency is seriously looking at these oversupply concerns. “From how we see it, we have thin reserve thus we are experiencing yellow and red alerts and some power interruptions from time to time,” he said. “We have set our capacity build up based on the Neda’s [National Economic and Development Authority], GNP [Gross National Product] projection and infrastructure development. With sufficient supply and reserve, spike of prices can be averted,” Cusi explained.

Continued from A1

Legarda: “There will be no government agency without a budget.”

@butchfBM

Government concern

Wage hike. . .

No agency defunded in Senate –Legarda

By Butch Fernandez

said San Miguel President Ramon S. Ang in an earlier interview. SMC is currently the country’s biggest power producer—combining the force of its powerassets acquisition from the divestments undertaken by the government, as well as the greenfield projects it is currently bringing to completion phases.

LIFE LINE Filipinos returning from their respective work overseas fall in line on September 17 at the immigration counter of the Ninoy Aquino International Airport Terminal 1 in Parañaque City. Remittances from overseas Filipinos grew 8.7 percent in July, the Central Bank reported. The Bangko Sentral ng Pilipinas (BSP) said remittances reached $2.56 billion in July, up from $2.35 billion in the same month last year. BSP Deputy Governor Diwa C. Guinigundo said, from January to July, personal remittances went up 5.9 percent to $17.92 billion, from $16.92 billion in the same period last year. NONIE REYES

BBB. . .

Continued from A1

Earlier the country’s economic managers identified the 75 flagship infrastructure projects under the BBB program. The National Economic and Development Authority Board is planning to approve 18 more flagship infrastructure projects this year. According to Socioeconomic Planning Secretary Ernesto M. Pernia, out of the 75 flagship projects, 18 projects costing a total of P462.74 billion have been approved by the Neda Board since the President Duterte assumed office. For 2017 the government targets to spend P847 billion on infrastructure projects in all regions to meet the infrastructure spendingto-GDP ratio of 5.3 percent. Based on a report released by Colliers International in August, among the segments that will benefit from the government’s infrastructure thrust is property development. It added infrastructure implementation, with decentralization, will help spur the growth of

Investment. . . Continued from A1

The data covered approved investments from the Board of Investments (BOI), Clark Development Corporation, Philippine Economic Zone Authority and Subic Bay Metropolitan Authority (SBMA), as well as the Authority of the Freeport Area of Bataan (AFAB), BOI-Autonomous Region of Muslim Mindanao (ARMM) and Cagayan Economic

office, residential, retail, industrial and hotel and leisure segments. “Over the near to medium term, we see the Philippines sustaining robust growth on the back of the government’s infrastructure and decentralization push,” the report read. It added that the continued expansion of BPOs in Metro Manila will also help increase employment opportunities, which should boost demand for more worker-accommodation units in the country’s capital. Colliers International said a significant part of the $31 billion in remittances projected to be sent in by OFWs this year, will be set aside for Filipinos’s housing requirements. As for the reduction in estate taxes proposed by the Department of Finance (DOF), Ramirez said the flat rate of 6 percent may encourage more Filipinos to go through the process of transferring titles instead of avoiding it. “The issue with the current estate taxes is that some heirs of properties delay or forgo the transfer of ownership of the estate because of prohibitive estate taxes,” he added. The DOF, as part of its Comprehensive Tax Reform Program proposed a flat rate of 6 percent

on both donor’s and estate-tax rates, which currently range from 5 percent to 30 percent. “With the new scheme, this may encourage heirs to go through the process of title transfer. If the 6 percent is applied, transfer of property ownership will be more affordable, which will ease the financial burden of the bereaved families,” Ramirez said. This may then allow the government to have a more comprehensive data on title ownership, which will make properties more marketable. As long as there are no major increases in property-tax rates, the Philippine real-estate sector would remain stable, according to Ramirez. “If property taxes are consistently applied, and if there are no major increases, it neither hampers nor benefits the industry. It is an accepted fact that almost all property owners pay property taxes,” he said. The lowering of estate and donor’s taxes is among the features of House Bill 5636, or the Tax Reform Acceleration and Inclusion Act, that was approved on third and final reading on May 31 by the House of Representatives.

Zone Authority. The IPA that recorded the steepest decline in approved foreign investments was the SBMA at 98.4 percent. The agency that approved the most foreign investment in the second quarter was the AFAB, and was the only one that posted an expansion in approvals. Its foreign-investment approvals jumped by 258.2 percent to P279.2 million in the second quarter, from P78 million in the same period last year. Most of these investment pledges were made in manufacturing, which

received the largest amount of committed foreign investments. Investments for manufacturing stood at P6.7 billion, or a 36.7-percent share. The PSA said the top 3 prospective investing countries for the period were Japan, Singapore and the United States. Pledges from Japan amounted to P4.8 billion, or 26.4 percent of the total FI during the quarter, while Singapore and the US committed P2.4 billion and P2 billion, or 13 percent and 11 percent of the total approved FI, respectively.

Economist Maria Ella C. Oplas of the De La Salle University said the 4.2-percent wage increase is “good news” for workers because it is higher than the 3.1-percent inflation rate in August. “That is supposed to be good news because [the] capacity of individuals to buy is greater than the price increase,” Oplas told the BusinessMirror. “However, the [wage] increase will be diluted by the anticipated increase in prices because of the tax reforms that will affect the consumption pattern of individuals,”she added. The TRAIN intends to reduce personal income-tax rates and roll out offsetting measures, such as expanding the taxpayer base, limiting value-added tax (VAT) exemptions, increasing excise taxes on petroleum products and imposing a levy on sugar-sweetened beverages (SSBs). Oplas said the P21-wage hike will appear like a“consolation increase”for minimum-wage earners, as they will have to pay additional taxes once the TRAIN is enacted into law. “[The government should] allow people to make decisions as [to] what to buy. [It needs to] review the proposed tax reforms because an additional tax is a burden you force people to carry,” she added. “My point is, one way for people to survive their minimum wage is by [the] government to be more gracious in allowing them to have higher net take-homes. If [the] government is prudent in its spending and efficient in allocating resources, then there is no need for higher taxes,” Oplas said. A study by think tank IBON Foundation claimed the TRAIN will burden the poor more than the rich. According to the study, the poorest 60 percent of the population will pay more than the highest-income 40 percent due to additional VAT and taxes on petroleum products and SSBs. This is why IBON Foundation Executive Director Jose Enrique A. Africa is unimpressed by the P21-wage hike, saying it will be overwhelmed by additional taxes the poor will pay under the TRAIN. “Any wage hike is, of course, welcome for workers and employees struggling with so little as it is. The P21 hike is, as has been the case for decades, just too little,” Africa told the BusinessMirror. For the wage increase to make sense, Africa said the government should review the components of the TRAIN. “So the problem is that, while wages are already too low and eroded by inflation, the Duterte administration will even raise the prices of goods and services bought by the poor further by increasing consumption taxes”. “If anything, the government should even stop the lifting of VAT exemptions that [will] hit the poor, such as on low-cost housing and power; stop insisting on SSBs that’s burdensome on the poor; and hold the additional excise taxes on oil products. It’s better to raise revenues by

In fact, the DOE has identified ideal locations for new power plants to meet over 43,000 MW of projected supply needed until 2040 and to avoid transmission congestion in the process.

Lack or glut?

LATEST DOE data showed ideal locations to put up new power plants in Luzon are the National Capital Region and Bicol. For the Visayas, ideal sites are in Cebu, Bohol and Samar, and for Mindanao, these are Zamboanga Sibugay, Sultan Kudarat and Agusan del Sur. Factors considered in these locations are the availability of transmission facilities and the projected demand in those areas. Cusi pointed out that power supply in the country has been tight, with reserves falling below alert levels mostly on account of unplanned power-plant outages and increasing demand. While additional power plants are scheduled to be completed over the next few years, the question remains if these plants can come on line in time. “I have said it again and again. What problem do you prefer? Glut in power supply or lack of it?” the energy chief emphasized. greater taxes on the rich and superrich, many of whom are paying wages much less than what workers and employees contribute to their firms,” Africa added. Estimates by the IBON Foundation reported the poorest 60 percent, with a combined income of some P2 trillion, will pay P47 billion in additional taxes in 2018, while the highest income 40 percent, with a combined income of about P4.1 trillion, will pay P47.6 billion. The think tank concluded the TRAIN is regressive because the highest-income 40 percent will pay the same amount in additional taxes as the poorest 60 percent, in spite of the huge disparity between their incomes. It added the poor, most of which are minimum-wage earners, will not gain anything from the TRAIN, as they are already exempted from paying personal-income taxes. On top of this, Africa said the P21-wage hike, which will put the minimum wage at P475 for workers in the agriculture sector and P512 for workers in the nonagriculture sector, is far from the family living wage indicated by the IBON Foundation. The think tank in July claimed that a family of six needs at least P1,130 a day to live a decent and comfortable life. The Regional Tripartite Wages and Productivity Board-National Capital Region last Thursday issued a new wage-hike order increasing by P21 the minimum wage in Metro Manila. The P21-wage hike covers all minimum-wage earners in the region, regardless of position, designation or status of employment and irrespective of the method by which they are paid. However, the wage-hike order does not apply to domestic workers, persons in the personal service of another and workers of duly registered barangay microbusiness enterprises. The P21-wage hike is far less than what labor groups petitioned in June. The Association of Minimum Wage Earners and Advocates-Philippine Trade and General Workers Organization filed for an across-theboard wage increase of 175; the Associated Labor Unions (ALU), P184; and the Trade Union Congress of the Philippines (TUCP), P259. In a statement, the ALU-TUCP said it will no longer contest the new wage-hike order, but will ask President Duterte for additional government cash subsidy. The ALU-TUCP in April appealed to the President to provide minimumwage earners with a monthly subsidy of P500. “We will ask President Duterte again to grant our request to him to provide a P500-monthly subsidy, or a P16 a day, for all minimum-wage earners, not just in Metro Manila but to all workers nationwide, to augment workers’ purchasing power to cope with [the] 3.1-percent and rising inflation [rate] and surging cost of living,” ALU-TUCP Spokesman Alan A. Tanjusay said. Oplas said asking for a monthly subsidy is “too much” and is redundant with the dole-out conditional cash transfer (CCT) program of the government. “The more important questions are where will the government acquire budget for this and how will its logistics proceed. The monitoring and evaluation of the CCT is already problematic,” Oplas added.