Businessmirror september 27, 2016

“But I don’t think the charge was only to give the crowd some blood.... No. I think [prosecutors] must have thought charges were warranted.” —Phil Turner, a Chicago-based defense attorney, after prosecutors in Tulsa, Oklahoma, charged a white police officer with first-degree manslaughter in the shooting death of an unarmed black motorist. AP

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“I found a change in his personality. His mind was not the same. He had become bad and I don’t know what caused it but I informed the FBI about it.”—Mohammad Rahami, father of suspected New York City bomber Ahmad Khan Rahami, about how his son changed after visiting Afghanistan and Pakistan in 2013. AP

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Tuesday, September 27, 2016 Vol. 11 No. 353

OWNERS OF IMPOUNDED VEHICLES NEED TO BRING THEIR OWN MECHANICS

Impounding of smoke belchers starts in Oct T By Jonathan L. Mayuga

@jonlmayuga

he National Anti-Environmental Crime Task Force (NAECTF) will start impounding smokebelching vehicles next month as part of the campaign for better air quality in Metro Manila.

To do this, Environment Undersecretary and concurrent NAECTF chief Arturo T. Valdez told the BusinessMirror that they are now looking for a bigger impounding area. “We will be needing at least 10 hectares before we start the

INSIDE

WHY SO MANY BUSINESS LEADERS ARE TIPTOEING AROUND DONALD TRUMP BusinessMirror

analysis, ideas and commentary from

E1 Tuesday, September 27, 2016

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RepubLiCan presidential candidate donald Trump speaks at a campaign event at JetCenters of Colorado in Colorado Springs, September 17, 2016. damon WInter/ tHe neW york tImeS

N conversations over the past several months with chief executives and other business leaders, the discussion invariably turns to the presidential election. And with few exceptions, at some point, most of the executives say something critical, even derogatory, about Donald Trump—but it is quickly followed by, “I could never say that on the record.”

Almost as quickly, I ask why. The answer is almost universal: fear. Which brings us to Reid Hoffman, co-founder of LinkedIn and celebrated venture capital investor who had one of the first stakes in both Facebook and Airbnb. Unlike many of his peers, Hoffman has taken to publicly decrying Trump. Last week, he pledged to donate $5 million to a veterans’ group if Trump released his tax returns before the last presidential debate in October. And now he has gone so far as to release a card game, “Trumped Up Cards: The World’s Biggest Deck” that pokes fun at Trump. The website that sells the game describes it as “a multiplayer card game where players need really big hands to win.” The game, which is modeled after “Apples to Apples” or “Cards Against Humanity,” includes a free pass called, “Play the women card” and uses the tagline: “This is a game, democracy isn’t.” The box, in tiny print, says, “Made in China, just like Trump-branded ties, dress shirts, suits, cuff links, eyeglasses, pens, lamps, mirrors, salad bowls, body soap and teddy bears.” But Hoffman said he almost didn’t

make his political views—and the card game—so public because he worried, as did his family and friends (who originally counseled him against it), that he might become a target for Trump and his Twitter account. “People are fearful that, especially in a circumstance where he might be in a position of extreme power as a potential presidential candidate, that that would be used in a retaliatory way, that would be used in a vengeful way,” Hoffman told me in an interview. “Everyone gets worried about being attacked, and part of the logic and mechanics of bullies is that they cause people to be fearful that they’ll be singled out and attacked.” Hoffman continued: “It’s the same thing like on school grounds, when people won’t go help the kid who is being bullied because they’re worried that the bully will focus on them.” Hoffman articulated a view that is often whispered within the business community—among those who are voting against Trump—but rarely spoken aloud. I have talked to some of the top executives of the Fortune 500 companies in recent months, and I’d be hardpressed to name one who didn’t at least

Linkedin founder Reid Garrett Hoffman (left) and CeO Jeff Weiner (right), just before ringing the opening bell of the new York Stock exchange May 19, 2011, during the initial public offering of the company. Stan Honda/agence France-PreSSe/getty ImageS

is there’s a culture in America that business leadership is to be apolitical. It’s like Michael Jordan’s comment, ‘Republicans buy Nikes too.’” (Jordan was quoted as saying that in Second Coming, the 1995 Sam Smith book about the athlete, about why he sought to avoid taking political positions publicly. Smith cited one of Jordan’s friends as the source.) Another reason for reticence in the business community, Hoffman said: “It’s fear for themselves, or fear they’re attentive to bringing their communities into it.” While these undercurrents are always there during big elections, they seem more pronounced than usual during this ferociously contentious cycle. “I feel sympathetic to the folks, compassionate to the folks who fall silent in that fear,” Hoffman said, who then proceeded to issue a call to arms. “I think the only thing I would say is that precisely when you feel that fear, it’s precisely the time where if you aspire to be a courageous leader that fear is a signal to you that you should step forward.” After all, if those who can afford to make their voices heard do not do so, who will? “If you are in a position of power and in a position of being able to make a difference and you are feeling fearful, think what everyone else is feeling,” Hoffman said. All these sentiments dovetail with the reactions Hoffman said he had received about his card game. “I’ve had a number of Republicans actually think it was terrifically funny,” he said, explaining that he had asked some of them to provide promotional quotes about the game. “I’m hopeful maybe in the next week or two I might be able to persuade a couple of them, but thus far all of my requests to my friends for public quotes have been demurred— maybe out of fear of retaliation.”

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roll his or her eyes when Trump’s name was mentioned. Technology companies are afraid Trump might criticize their approach to privacy, as he did with Apple. Wall Street banks worry he might seek to break them up. Health-care companies are nervous that he might attack them over pricing. Multinationals are worried about trade. All of these are valid issues on the campaign trail— but with Trump, unlike other politicians, the criticism seems more personal and vitriolic. “I’ve had a whole bunch of those kinds of concerns from people around

me,” Hoffman said. “People who have legitimate concerns about, ‘Would LinkedIn become a target for Trump’s ire and attacks? Would he make Second Amendment jokes about your friends and family?’” That is not to say that all chief executives have remained silent this election season. A new survey I wrote about several weeks ago in this column showed just how influential those political positions can be, even if they are simply a signal to others. Chief executives like Howard Schultz of Starbucks, who has endorsed Hillary Clinton, have said positive

things about the candidate they support—without going negative on the other candidate. However, only a handful of executives—mostly retired ones or entrepreneurs who work for themselves (think Mark Cuban, who has come out against Trump, or Kenneth Langone, who has castigated Clinton) or those who seem to have been granted a special status (think Warren Buffett, a Trump foe) have been openly critical of either side. Hoffman said he had a theory for the silence. “There’s two sets of things that cause people to be quiet,” he said. “One

groups over the past few weeks, and that leaders and members of these groups were warned of the consequence of being apprehended for smoke belching. The campaign will cover both private- and public-utility vehicles, Valdez said. The environment undersecretary added that they are still Continued on A2

PASSING OF AN ERA Arnold Palmer, 87

This April 15, 2015, photo from the Arkibong Bayan web site shows activists demanding the release of political prisoners. By Alladin S. Diega Correspondent

C1

Timely boost to recovery of disaster areas The Entrepreneur

T

Part Two

HOSE were the last three years of a dictator. Those were the best of time for Bernardo B. Itucal Jr.—until he was arrested. Itucal entered the activism scene relatively late, when then-President

PESO exchange rates n US 47.9400

Ferdinand E. Marcos’s power was already waning. However, for someone who just finished secondary school that time, his own baptism of fire came early on. Shortly after finishing high school, Itucal was hired by the Department of Health in 1983 as a general maintenance worker, where his father was a regular government employee.

Manny B. Villar

F

or many people who were far from areas devastated by natural calamities, the tragedies in Bohol and in Tacloban about three years ago may now be faint memories.

Continued on A10

Weaker currency no longer economic elixir it once was

A

e1

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However, for many of the survivors of the 7.2-magnitude earthquake that hit Bohol on October 15, 2013, and Supertyphoon Yolanda, which devastated Tacloban and other parts of Leyte and Samar on November 8 of the same year, the suffering—not just the memories of lost loved ones—continues to this day.

Amid hardships in jail, political prisoners seek hope under Duterte administration

Why So Many Business Leaders Are Tiptoeing Around Donald Trump By Andrew Ross Sorkin

crackdown on erring motor-vehicle owners,” Valdez said. Upon the instruction of Environment Secretary Regina Paz L. Lopez, he said, the NAECTF is now preparing to launch the intensified campaign. Meetings, he added, have been conducted with various transport

Before we release… we will make sure the vehicles are roadworthy.” —Valdez

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I

“You shouldn’t expect it to be released. I’m not going to jeopardize the investigation.”—Charlotte-Mecklenburg Police Chief Kerr Putney, as authorities in North Carolina’s largest city said releasing the footage of Keith Lamont Scott’s killing by a police officer could undermine the investigation. AP

At the early morning of August 21 that year, Itucal was surprised to learn that many of his fellow workers filed leaves of absence to join a protest rally. He was told an important political figure was killed, at the orders of the sitting president that time, many believed. He joined that protest action Continued on A2

weaker currency, once the cure-all for ailing economies around the world, isn’t the panacea it once was. Just look at Japan, where the yen plunged 28 percent in the two years through 2014, yet net exports to America still fell by 10 percent in the span. Or at the United Kingdom, where the pound’s 19-percent tumble in the two years through 2009 couldn’t stave off a 26-percent decline in shipments to the US. In fact, since the turn of the century, the ability of exchange-rate movements to affect trade and growth in major economies has fallen by more than half, according to Goldman Sachs Group Inc. The findings suggest that weaker currencies may not provide much assistance to officials in countries like Japan and the UK, which are relying on unprecedented easy-money policies to help boost tenuous growth and inflation. On the flip side, the data also indicate that concerns US growth will be derailed as rising interest rates drive investors into the dollar are also overblown. A shift in the structure of advanced-economy trade to less priceelastic goods and services, combined with the prolonged effects of the finan-

cial crisis, have stunted the sensitivity of trade volumes relative to global exchange rates, according to Goldman Sachs analysts led by Jari Stehn. “If you’re a central banker, yes, you’re paying attention to currency levels, but the more-developed market economies aren’t reacting to currency debasing policies like they used to,” said Philippe Bonnefoy, the founder of Switzerland-based hedge fund Eleuthera Capital AG. “The impact has been diluted.” Global central banks have cut policy rates 667 times since 2008, according to Bank of America Corp. During that period, the dollar’s 10 main peers have fallen 14 percent. Yet, Group-of-Eight economies have grown an average of just 1 percent, according to data compiled by Bloomberg. Since the late 1990s, a 10-percent inflation-adjusted depreciation in currencies of 23 advanced economies boosted net exports by just 0.6 percent of GDP, according to Goldman Sachs. That compares with 1.3 percent of GDP in the two decades prior. US trade with all nations slipped to $3.7 trillion in 2015, from $3.9 trillion in 2014, according to data compiled by Bloomberg. See “Currency,” A12

n japan 0.47450 n UK 62.1734 n HK 6.1815 n CHINA 7.1876 n singapore 35.2785 n australia 36.4728 n EU 53.8510 n SAUDI arabia 12.7813

Source: BSP (26 September 2016 )

A2 Tuesday, September 27, 2016

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Amid hardships in jail, political prisoners seek hope under Duterte administration Continued from A1

and the following street demonstrations calling for justice to the assassination of Benigno S. Aquino III. After joining co-workers for several times in similar protest activities, Itucal joined the Samahan ng Kabataang Nagkakaisa (SKL, the association of united youth). The SKL was the Caloocan City chapter of the militant League of Filipino Students (LFS).

United youth

ACCORDING to Itucal, the LFS that time not only organized schoolbased young people but also community-based and out-of-school of youth. He said the SKL was organized mainly to divert their attention from using illegal drugs. “Drug addiction is not a recent phenomenon,” Itucal said. “During my younger years, young people use a variety of cough syrup.”

He added that those who can afford buy marijuana and valium, now known as Diazepam and a sleep inducer but is addictive if abused. The SKL was later transformed into Kadena (chain), a communitybased national union of youth organizations led by the LFS. It was under these organizations that Itucal sustained his activism throughout the remaining years of Marcos and until the late dictator was toppled by a popular revolt. Itucal’s participation in anti-government activities continued even after Corazon C. Aquino became the country’s first woman president. Ironically, while Itucal evaded capture during the years considered darkest by many, it was during the liberal government of Mrs. Aquino when he was captured, tortured and imprisoned.

Torture

ALTHOUGH considered more conventional, Itucal said his experience

was no less a painful torture. He was subjected to water therapy, where two military personnel were ordered to stand on his body facing opposite directions. One was pouring water over his nostril, while the other is making sure his lower body would be incapable of doing anything. To inflict more pain, the water was later laced with chili pepper. According to Itucal, it was then he realized hell was real. After his release, he undertook some research and found the active ingredient of chili pepper, capsaicin, produces burning sensation upon contact on human tissue. It was that ingredient that slowly traveled to the inner linings of my nostrils, almost bypassing the blood brain barrier, according to Itucal. “The pain was indescribable,” he said in Tagalog. The worst part of it was that he was not even asked a single ques-

tion or made to confess anything about his “political work.” It was as if torture had become “a given” or a “norm” to any political activist captured, Itucal said. On the other hand, it was also the time when political activists were starting to be charged with regular “criminal offenses” when political activism ceased to be illegal after Ramos declared communism no longer unlawful. “If there are no actual criminal offenses, then the police or arresting officer would invariably plant evidence to effect a charge,” Itucal said.

Recapture

ITUCAL was imprisoned for five years on a charge of two cases of murder. The cases did not prosper for lack of substance and evidence, he said. Itucal recalled that after Mrs. Aquino took power, high profile

political prisoners from the Communist Party of Philippines (CPP) were freed. One of them was Jose Maria Sison, who is now exchanging tirades with President Duterte. Mrs. Aquino also initiated peace talks with the communist rebels but negotiations bogged down and ultimately failed. According to Itucal, talks stopped after police and military shot at protesting farmers near Malacanan and led to the death of 13. T his is now know n as the Mendiola Massacre. Activists who remained in the country were recaptured, including those still actively resisting the political system. Itucal was one of them.

Release

DURING the presidency of Fidel Ramos, Itucal was freed. Prior to his eventual freedom, several nongovernment organizations tirelessly helped him to make his

Impounding of smoke belchers starts in Oct negot iat ing w it h t he A r med Forces of the Philippines to allow them to use any of the camps outside Metro Manila as possible impounding area. One area being eyed by the NAECTF is an area in Tanay, Rizal. “We want to let the motorists know as a warning that we will start impounding their vehicles…[that] fail smoke-emission test,” he said. Checkpoints will be put up in strategic locations as part of the campaign. “To avoid the inconvenience and cost of having your vehicle impounded for smoke belching, we

encourage owners of public-utility and private vehicles to take measures,” Valdez, speaking mostly in Tagalog, told the BusinessMirror in an interview. Valdez said the NAECTF will charge owners of vehicles higher fees, from towing to impounding. “Once your vehicles are towed to the impounding area, you [vehicle owner] have to pay for towing, impounding fee and penalty. Before we release the vehicles, we will make sure that the vehicles are roadworthy. This means the owner of the vehicle must bring along a mechanic to the impounding area to fix the

vehicle,” he said. According to Valdez, unlike before, the campaign only calls for the removal of license plates. But the penalty this time around, he stressed, will be more severe, and there will be no letup. Despite its promised positive effect, the use of cleaner fuel seems to have failed to improve air quality in Metro Manila, according to the Coalition of Clean Air Advocates of the Philippines (CCAAP). The CCAAP said this is mainly because of most vehicles plying Metro Manila roads are not properly maintained.

According to the DENR, 80 percent of the air pollution in Metro Manila comes from mobile sources (motor vehicles), while only 20 percent comes from industries and other sources. Last year, to help reduce air pollution from motor vehicles, the DENR and the Department of Energy (DOE) issued a joint resolution prescribing the use of Euro 4 fuel. While gasoline stations in Metro Manila have complied with the joint order imposing them to sell only Euro 4-standard fuels, it appears that air pollution did not improve at all.

Mike Aragon, senior vice president for communications and public relations of CCAAP, said corrupt practices at the Land Transportation Office (LTO) and accredited private emission testing centers, plus the poor implementation of the smoke-belching law, are to be blamed. The CCAAP has been coordinating with the DENR-Environmental Management Bureau (EMB) and various national government agencies (NGA) for the implementation of the Clean Air Act. “Metro Manila’s air quality remains below international stan-

imprisonment more bearable, and provided him all legal assistance and representations. Some of these groups included the Task Force Detainees of the Philippines (TFDP) and Balay Rehabilitation Center (Balay). After being freed In 1993, Itucal joined the TFDP as a volunteer and helped in preparing documents for all victims and survivors of Marcos’s Martial Law. With many of the Martial Law victims able to file compensation from some of the funds recovered from Marcos’s ill-gotten wealth, Itucal joined Balay early this year. The group’s members and volunteers, like Itucal, still work to represent political detainees at the many levels of the country’s complex justice and penal system. Citing data from Balay, Itucal said there about 450 to 500 political prisoners still languishing in various jails nationwide. To be concluded

Continued from a1

dard,” Aragon said. Aragon added that the average total suspended particulates (TSP) readings in Metro Manila’s air quality monitoring station show pollution level at varying degrees from 120 to 140 microgram per normal cubic to meter (ug/Ncm). This is way above the international standard of 90 ug/Ncm, or “safe” level. Next month, if the plan pushes through, the NAECTF will start to impound smoke-belching vehicles or vehicles that emit too much smoke. “The NAECTF is preparing for the intensified campaign against smoke belchers. The plan is to take them off the streets of Metro Manila,” Aragon said. Republic Act 8749, or the Clean Air Act, mandates that no motor vehicle in the country can be registered by the LTO unless they undergo and pass the mandatory motor-vehicle emission test. “Due to the corrupt practice of no show or nonappearance motorvehicle emission-testing at the private emission, testing centers and public LTO emission-testing centers, deadly smoke-belching motor vehicles continue to ply Metro Manila’s roads,” he said. Worse, Aragon added, roadside antismoke-belching operations (Asbo), which is supposed to ensure that there will be no more smoke belchers allowed in the streets of Metro Manila, failed to do what they are supposed to do, again because of corruption, Aragon said. Recently, the Department of Transportation (DOTr) came up with an Department Order (DO 2016-017 that will take effect on October 1, which reverts back to the DOTr the power of the LTO to authorize and monitor the motorvehicle emission-testing centers in the country. Hopefully, Aragon said this will address the problem at the level of the motor-vehicle registration. The next step, he said, is to start enforcing the antismokebelching law. According to the CCAAP, air pollution is a major crime against the environment and people. “Air pollution kills. It causes deadly respiratory and cardiovascular diseases, and contributes to global warming that leads to climate change. The Philippines belongs to the top most vulnerable list of countries in the planet that is gravely affected by climate change,” Aragon said.

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Senate readies safeguards for big-ticket projects to ease

Tuesday, September 27, 2016

Business groups vow to support Duterte admin’s war on drugs By Catherine N. Pillas @c_pillas29

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Taylor Weidman/Bloomberg

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By Butch Fernandez

@butchfBM

he Senate is firming up safeguards against potential conflict of interests among major players tasked to undertake multibillion-peso traffic-reduction projects set to be fast-tracked under the emergency powers Congress is crafting for President Duterte.

Sen. Grace Poe, who chairs the Senate hearings on the Palace-proposed emergency powers to address the crippling traffic problem, assured on Monday “adequate preventive provisions” will be incorporated in the emergency powers bill being finalized for plenary consideration. “ Yes,” Poe sa id, c it ing st r ict compliance by the Department of Transportation (DOTr) w ith t he Freedom of Infor mat ion ( FOI ) orde r a l low i ng publ ic access to gover nment record s,

w he n a s k e d a b out ado pt i n g sa feg u a rd s aga inst m isuse of emergenc y powers in ca r r y ing out big-ticket projects likely to be e xempted f rom st r ict bidd ing r u les requ ired in ot her publ ic work s projects. “First, we intend to include in the [emergency powers] bill an FOI provision that will require the DOTr to publish its contracts and dealings with private entities not just upon completion of the contract, but even during the negotiation stage,” she added.

The senator said they are also enlisting lawmakers to reinforce emergency project monitors. “There will be a congressional oversight committee that will ensure anomalies are not committed before, during and after the procurement process, among others,” Poe said. She told the BusinessMirror that “these matters would be looked into and finalized as we hammer out the committee report” on the emergency powers bill. “All applicable and appropriate provisions to avoid or prevent conflicts of interest will be put in place,” Poe said. In a separate interview, Sen. Miguel F. Zubiri confirmed that senators are making sure that compliance with the FOI’s strict provisions on transparency in

government projects are being included in the emergency powers to be granted to President Duterte. He said the transparency provisions will also cover existing provisions on public biddings. “We will also strengthen the mode of checking compliance with rules on public works projects,” Zubiri added. The potential conf lict of interest issue was earlier raised by House Minority Leader Danilo Suarez against Transportation Secretary Arthur P. Tugade and his undersecretar y Noel K intanar, as Suarez disclosed that Tugade and Suarez were “former executives of the contractors” involved in a common-station project for the Metro Rail Transit and Light Railway Transit.

There will be a congressional oversight committee that will ensure anomalies are not committed before, during and after the procurement process.”—Poe

Joint oil exploration with China eyed

By Orly Guirao | Correspondent

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INGAYEN, Pangasinan—A joint-oil exploration project with China within the disputed sea territories is highly possible, a former ambassador who helped craft the Philippine Foreign Service Act of 1991, told journalists at a breakfast forum here over the weekend. Apolinario Lozada, who served as permanent representative of the Philippines to the United Nations during the tail-end years of the Marcos regime and in the first two years of President Corazon Aquino, said a joint oil-drilling venture in southern Philippines will pave the way for the normalization of relations with the People’s Republic of China which he described as in “deep freeze” since 2012. He said oil reserves in the United States, particularly in Texas, and those of the Russians in Siberia, have not been actively moved out to the world market, even with China’s frenzied need for the commodity. “ We have not in actua lit y ‘walked the talk’ as there is very

minimal movement forward in the other aspects of our relations,” Lozada said, as he noted the country’s diplomatic ties with China “have been reduced mainly to cultural-exchange programs.” The intensified island-building activities by the Chinese, he said, can be interpreted that China will not respect any ruling by the Arbitral Tribunal or any other agency of the United Nations. The UN tribunal ruling denied China’s nine-dash line territorial claim in the South China Sea (SCS) “should not be automatically expected to change the situation in the SCS,” Lozada said. However, he expressed optimism the special diplomatic mission to China headed by former President Fidel V. Ramos, who was designated by President Duterte as his personal envoy, will ease up the conflict soon. Lozada said an ad hoc group of experts on foreign relations has been formed and will start meeting this week to study “options and prerogatives” to bolster moves for the normalization of diplomatic relations with China.

Lozada was tapped by Ramos to spearhead the ad-hoc group composed mostly of young career foreign-service officers, diplomacy experts from academe and business leaders. Asked what steps are to be taken to strengthen ties with the Chinese, Lozada who once chaired the House committee on foreign affairs as congressman of the fifth District of Negros Occidental, recommended a more specific foreign-policy direction, possibly an initiative towards strengthening trade ties with that country, must be worked out soonest. “While the Constitution empowers the President to spell out the government’s foreign policy, such document of diplomacy should reflect on the welfare of the Filipino people,” Lozada said. The three pillars of the country’s foreign policy, Lozada said, were laid down under the Philippine Foreign Service Act of 1991, namely, enhancement of national security, promotion and attainment of economic security and protection of the rights and welfare and interest of Filipinos overseas.

“From these pillars, newly elected presidents of our country should be guided on how to formulate the independent foreign policy thrusts and initiatives that he [the President] would implement,” said Lozada, a master degree holder in international development and security at the Development Academy of the Philippines (DAP). “We have to pursue our diplomatic thrusts in the context of strengthening our relations with our traditional partners and aggressively seek new partners who can provide economic and financial comfort for our country and people and not only pursue strategic and political security alliances,” Lozada said. “It’s heart-warming that the Duterte administration has started to sit down and talk to China. The Ramos mission, therefore, is a great step forward in strengthening bilateral relations with China and we all hope that all the problems encountered in the last six years will be resolved, if not, at least warmed and the ‘deep freeze’ relationship will be defrosted,” the former envoy said.

A3

wo major Philippine business groups said they will fully supp or t P res ide nt D ute r te’s ongoing campaign against drugs, criminality and corruption even as the country faces closer scrutiny from the inter nationa l communit y. The Federation of Philippine Industries (FPI) on Monday voiced support for the campaign to stamp out drug activity in the country after the Philippine Chamber of Commerce and Industry (PCCI) vowed to back the Duterte administration’s fight against drugs and crime last week. “FPI, representing the voice of the manufacturers and producers in the country, expresses its full support for the government’s unrelenting campaign against illegal drugs, criminality and corruption,” the group said in a statement. FPI a lso dismissed the increasing scr utiny being faced by t he Ph i l ippi nes f rom Wester n cou nt r ies, such as the European Union and the United States, due to the increase in the number of people being killed following the government’s roll out of its antidrug campaign. “We understand the concerns of those challenging the declaration, especially in

terms of the protection of our inherent rights under the Constitution. Their sentiments are our concerns, as well,” the group said. “But ruthlessness has to be addressed with equally unrelenting and strong enforcement of the law. Otherwise, we will allow ruthlessness and lawlessness to rule the country,” it added. The PCCI issued the same pronouncement in a news conference to announce that the 42nd Philippine Business Conference and Expo will be held in October. PCCI honorary Vice Chairman Sergio R. Ortiz-Luis Jr. voiced full support for the war against drugs, and downplayed the alleged extrajudicial killings. “We have declared a war on drugs. I think we’re going to win this, and there will be collateral damage. Unless we accept that fact, then we’re not going to win. I think we’re doing well and in a lot of ways it may be overdone.” Ortiz-Luis Jr. added that the war on drugs will likely have “little effect” on foreign direct investments as the fight against crime and corruption sends a “positive signal” to potential investors. PCCI Chairman emeritus Francis Chua echoed the sentiment of Ortiz-Luis, saying President Duterte’s “strongman rule” is a source of inspiration for other Asean countries.

September inflation to remain tame–BSP By Bianca Cuaresma @BcuaresmaBM

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he average increase in consumer prices this month will not likely breach 2 percent—the low-end of the government’s target range for September—as the rates of key food and utility items remain subdued. In his monthly forecast of inflation numbers, Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco, Jr. said on Monday September inflation could settle between 1.6 percent and 2.4 percent “ We obser ved lower power rates in Meralco [Manila Electric Co.]-serviced areas and lower domestic diesel and kerosene prices. In addition, prices of selected basic commodities are covered by the price freeze implemented by the DTI [Department of Trade and Industry],” Tetangco told reporters. His forecast could have been lower, if not for offsetting factors seen in the prices of select items in the consumer price index (CPI) basket. “However, we also noted a slight price uptick in rice and higher domestic LPG [liquedfied Pertoleum Gas] prices along with the weaker peso, which could cause some upward price pressures,” Tetangco said. Inflation has been consistently below 2 percent since January. Tetangco said in the Monetary Board’s meeting last week that inflation is likely to settle below their target range for 2016 and rise toward the midpoint of the target range in 2017 and 2018. In particular, BSP Deputy Governor Diwa C. Guinigundo said they have downgraded anew their inflation forecast for 2016 to 1.7 percent, from 1.8 percent. The factors behind the lowerthan-earlier-expected inf lation

average for the year include the lower actual August inf lation rate, the slower economic activity in the third quarter of the year as election spending wanes and as rainy season sets in and some delays in the ex pected power rate adjustments.

For 2017 and 2018, the BSP’s expectations remain unchanged at 2.9 percent and 2.6 percent, respectively. In contrast, the BSP said overa l l ba lance of r isks surrounding the inflation outlook is tilted to the upside next year—with pending petitions for adjustments along with the proposed adjustments in excisetax rates of petroleum products and the potential second-round effects on transport fares. With these inf lation movements, Tetangco said the BSP can adjust policy rates if inf lation trends should swings be strong and potentially disrupt economic stabilit y. “ The BSP stands ready to implement necessary policy actions to maintain price stability conducive to balanced and sustainable economic growth,” he said.

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Singha earmarks 4.8B baht for Southeast Asian hub

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ingha Corp., the distributor of Singha beer, has allocated 4.8 billion baht to build an integrated food industrial estate in Ang Thong province, aimed to become a food hub in Asean. The move is part of a diversification plan to increase revenue from nonalcoholic beverages and food, Executive Vice President Chutinan Bhirombhakdi said. Of the total budget, 4 billion baht will be used to develop the World Food Valley Thailand project, an industrial estate for food manufacturing on 1,200 rai with a watertreatment site on 800 rai in Chaiyo district, Ang Thong. An additional 800 million baht has already been spent on building Singha’s own power plant in the area. The construction of the food industrial estate will come in three phases and take about three to five years to complete, starting from this year. Singha Corp. has signed a memorandum of understanding with various state agencies, including the National Food Institute, the Industry Ministry, the SME Development Bank and the Office of Small and Medium Enterprises Promotion for the World Food Valley Thailand project to become an integrated food industrial estate. The World Food Valley project will also provide integrated food industrial development, import safe and high-quality raw materials and other manufacturing components. The company is now in talks with the government to invite the Board of Investment, Commerce Ministry and other agencies to provide support to the food industry supply chain. It will provide a test and analysis service, food-quality certification, help connect with financial institutions, provide coaching techniques and give advice to strengthen the

4B baht

The Singha’s budget for the development of its World Food Valley Thailand facility capabilities of food operators. Food and Drug Administration procedures, patent registration and others will also be available. Local and overseas food companies of all sizes are expected to purchase land and build factories on the estate. The World Food Valley Thailand project will respond to the government’s policy to promote competitiveness in the world market and become a top 5 food exporter within 20 years. A 115-megawatt cogeneration and biogas-power plant has already been built, as well as a rice mill and a rice bran oil factory in the area. They will soon launch a brand of rice bran cooking oil. Singha Group’s Singha Asia Holding bought Masan Group, a leading distribution company for consumer products and beer company in Vietnam last year, and will distribute Masan products in Thailand soon. Currently, food business generates about 20 percent of the group’s total sales, with the expectation that it will rise to 35 percent over the next three years. Singha Group has five businesses, including beer, food and beverages, energy, real estate and logistics. Beer and real estate contribute major sales. Currently, there are about 100 companies under Singha Group, eight of which are involved in the food business. MCT

Duterte’s foreign-policy risks alienating trading partners

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he foreign policy of the Duterte administration risks alienating its major economic partners and creating an “unwelcoming” environment to foreign investors, according to a private think tank. Dindo Manhit, president of Stratbase-ADR Institute (ADRi) for Strategic and International Studies, said President Duterte’s “independent” foreign policy seems to realign the Philippines’s friendship with other countries. “While the President’s mandate to define the country’s approach to foreign relations is unassailable, the administration should, nevertheless, reconsider its strategy in terms of potentially alienating established economic and security partners. The Philippines should maintain its good relations with trusted friends and pursue constructive relations with all of its neighbors, in both word and deed,” Manhit said. He said a foreign policy should be guided by three principles. “First, a country’s approach must defend the country’s fundamental interests. These include the security and integrity of our territory, the health of our economy and the protection of Filipino citizens abroad. Second, it must seek to achieve its goals while espousing national and universal values, such as upholding our commitments and complying with or enforcing international law,” he said. “Third and important for a lessdeveloped country, it must strive for all of the above in the most efficient or least costly manner,” Manhit added. Manhit said in light of the three principles, independence alone is not sufficient for a sound foreign policy. He said the government’s 10-point economic agenda may be put at risk, given the current policy. “An unwelcoming atmosphere in the Philippines could easily dampen the country’s economic relationships. In the United States, as elsewhere,

private investors have reportedly grown skittish about the Philippines’s prospects. The US economy is the Philippines’s largest source of private investment and second-largest export market after Japan,” he said. “Unfortunately, in President Duterte’s case, the term ‘independent’ appears to be shorthand for pushing the United States away and pulling China closer. Although his spokesmen and secretaries would issue follow-up statements to clarify the President’s meaning, these do little to mask his sentiments on the Philippines-US relationship,” he said. The think tank said the country can pursue its independence without squandering its hard-earned, advantageous relationships with other countries. “The government’s new stance must be calibrated to ensure that it does not compromise the administration’s 10-point plan and the Philippines’s overall economic security,” it said. It added that the government’s warming up with China signal a quick break from the United States is unfortunate. “It is one thing for the administration to downplay the Arbitral Tribunal’s favorable ruling, out of a fear of possible retribution. It is another thing entirely to halt patrols with the United States and limit them to a minimal 12-nauticalmile-distance—far less than the full 200-nautical mile spread of the country’s exclusive economic zone,” it said. “By taking such drastic steps, the administration gives the impression of swinging wildly and insincerely instead of taking smaller, but more meaningful steps toward friendly relations,” ADRi said. Manhit said being careful with pronouncements and calibrated with government actions will send a more meaningful signal not only to China, but also to all of the Philippines’s international partners. “Such care will help the President and his team achieve the Philippines’s foreign policy objectives,” he said. MCT

Editor: Max V. de Leon • Tuesday, September 27, 2016 A5

Thailand ends exports slump

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hailand exports rose for the first time in five months in August, following a surge in vehicle shipments, according to data from the Ministry of Commerce.

Exports gained 6.5 percent in August from a year earlier, compared to a median estimate of a 1-percent contraction in a Bloomberg survey of 14 economists Automobiles, which make up 12 percent of total exports, climbed 40.4 percent in August from a year earlier Industrial exports rose 9 percent, led by auto, steel and semiconductor sectors Thailand posted a

trade surplus of $2.13 billion in August, compared with $1.2 billion in the previous month.

Big picture

Thailand is Southeast Asia’s vehicle-production hub, producing about 2 million automobiles in the past 12 months, representing about half the regional total, according

2M

in July because of technical issues, Deputy Commerce Minister Suvit Maesincee said.

Other details

The number of vehicles produced by Thailand in the past 12 months

to research from Bloomberg Intelligence. That’s helping to support an economy that’s been hit by sliding global demand and weak consumer sentiment. Part of the surge in vehicle exports last month was due to $370 million of shipments that the customs department failed to book

The Ministry of Commerce sees exports likely posting zero expansion to a contraction of 1 percent. Exports were up 14.9 percent to the US, 11.8 percent to the European Union and 5.7 percent to Japan. Deputy director general for Ministry of Commerce’s trade policy and strategy office told reporters the “export situation is expected to improve for the rest of this year as exports of oil-related products and commodity products are likely to get better in line with recovering oil prices.” Bloomberg News

ASEAN ENERGY SUMMIT The region’s energy leaders link arms during the 34th Asean Ministers on Energy Meeting at the Myanmar International Convention Center in Naypyitaw, Myanmar, on September 21. AP

Tudor closes trading Ex-Thai PM Yingluck should pay $1-B fine, committee says desk in Singapore amid global cuts F

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udor Investment Corp., the $11-billion hedge fund founded by billionaire Paul Tudor Jones, has closed its Singapore trading desk as part of a global shake-up, according to people familiar with the matter. The firm still has staff in Singapore focusing on quantitative research, and continues to add such developers, said one of the people, who requested anonymity because the move hasn’t been publicly disclosed. Tudor had employed about 10 people in Singapore before it closed the trading desk, said the person, who declined to say how many people remain in the office. Tudor dismissed 15 percent of its work force last month while accelerating its focus on quantitative research, as hedge funds have struggled to navigate markets since the global financial crisis. Quant funds, some of which have outperformed human traders after correctly anticipating market shocks, such as Brexit, are gaining in popularity even as traditional hedge funds have suffered the biggest investor redemptions this year since 2009. Separately, Goldman Sachs Group Inc. plans to cut about a quarter of its investment-banking jobs in Asia, excluding Japan, because of a slump in deal-making in the region, according to a person with knowledge of the matter. The New York-based bank plans to make the cutback of about 75 jobs in the region later this year, the person said, asking not to be identified because the matter is confidential. Among the industry’s oldest hedge-fund managers, Greenwich, Connecticut-based Tudor cut jobs after clients pulled more than $2 billion this year amid lackluster returns. The cuts were focused on money managers that had posted losses or failed to post profit, people familiar with the matter said last month. Tudor’s main fund lost 3.2 percent this year through September 9, according to an investor document. A spokesman for Tudor declined to comment on the cuts. Tudor has hired scientists and mathematicians, some with doctorates, to help money managers with trading. Jones has told colleagues that his firm needs to get up to speed with newer technologies, people with knowledge of the matter said last month. The moves at Tudor comes even as other funds are expanding in Asia as they seek the prospect of better returns outside developed markets. Brevan Howard Asset Management, Caxton Associates and Balyasny Asset Management have incorporated units in Singapore this year, according to filings with the Accounting and Corporate Regulatory Authority. Bloomberg News

ormer Thailand Prime Minister Yingluck Shinawatra, whose government was ousted in a military coup in 2014, should be fined about 35 billion baht ($1 billion) for overseeing a program to buy rice from farmers above market rates, a stateappointed committee recommended. The proposed pen- Yingluck Shinawatra alty amounts to about 20 percent of the 178 billion baht that the rice-purchase programs in 2012 and 2013 cost the country, Manas Jamveha, director general of the Comptroller General’s Department, told reporters on Saturday. The committee appointed to look into the issue ruled it was an abuse of power and that Yingluck was negligent in overseeing the program while she was in power, said Manas, the commitee’s chairman. A report will be submitted to the Prime Minister’s Office and the Ministry of Finance, which are both responsible for claiming damages from Yingluck before the case expires next February, Manas said. The office of National Anti-Corruption Commission or another related agency will decide who is responsible for the remaining damages, he said. Junta leader and Prime Minister Prayuth Chan-Ocha said the government has to proceed with the case in accordance to the law and before it expires.

‘Treated equally’

“Everyone is treated equally,” Prayuth told reporters on Sunday. “I didn’t rush the

process. The process is stated in the law.” Yingluck’s Pheu Thai Party has asked the National Council for Peace and Order to reconsider procedures that allow the government to sue for compensation on losses from the rice-purchase program and to revoke the use of special powers under the constitution, according to a statement to the council dated on September 25. The case has been filed to the Supreme Court and “it is inappropriate for leaders to lead the society into making conclusions before the court has announced its ruling,” the party said in the statement. Yingluck’s party won elections in 2011 in part by appealing to millions of rice farmers with a plan to buy crops at inflated prices. She said the program would help reduce inequality, while her opponents say it encouraged corruption. After Yingluck’s government was ousted in a May 2014 coup, she was impeached and banned from politics for five years by the junta’s legislature for alleged graft in the rice-purchasing program. She is the sister of former premier Thaksin Shinawatra. Bloomberg News

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A6 Tuesday, September 27, 2016 • Editor: Lyn Resurreccion

Clinton, Trump buff foreign policy bona fides on debate eve

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EW YORK—Hillary Clinton and Donald Trump were meeting separately with Israeli Prime Minister Benjamin Netanyahu on Sunday, giving each candidate fresh foreign policy talking points on the eve of their first presidential debate. Clinton met on Sunday evening with Netanyahu for less than an hour in Manhattan, according to Clinton campaign officials. Her meeting came after Trump sat down with the prime minister at his residence in Trump Tower in the morning, Israeli and Trump campaign officials said. Reporters were barred from covering either meeting. Clinton’s campaign said in a statement that the two had an “indepth conversation.” She stressed that “a strong and secure Israel is vital to the United States” and “reaffirmed unwavering commitment” to the relationship. According to her campaign, Clinton stressed her support for the 10year, $38-billion military aid package signed between the two countries earlier in the month and opposition to efforts to boycott Israel. They also discussed Iran, the conflict in Syria and other regional challenges, including her support for a two-state solution to the Israel-Palestinian conflict negotiated by the two parties—not an outside organization, like the United Nations Security Council. Trump and Netanyahu discussed “at length” Israel’s use of a fence to help secure its borders, an example Trump frequently cites when he’s talking about the wall he wants to build between the US and Mexico. “Trump recognized that Israel and its citizens have suffered far too long on the front lines of Islamic terrorism,” the campaign said in a statement. “He agreed with Prime Minister Netanyahu that the Israeli people want a just and lasting peace with their neighbors, but that peace will only come when the Palestinians renounce hatred and violence and accept Israel as a Jewish State.” The meeting was designed to put Israel on good footing with the next US president. The Israeli leader has sought to project neutrality this time after perceptions arose that he favored Mitt Romney over President Barack Obama in 2012. But it also served to showcase the candidates’ expertise in foreign policy in the shadow of their first debate on Monday, six weeks before Election Day. Clinton, a former senator and secretary of state, often says Trump does not know enough about the world and lacks the temperament to be president. Trump has argued that he has extensive experience with foreign policy through his career as a business executive and blames Clinton for many of the nation’s stumbles in foreign policy. Meanwhile, the candidates deployed their top supporters to the Sunday shows to take early jabs at their opponents and lower expectations for a showdown expected to draw 75 million viewers—many of them disenchanted with both candidates, the least-popular presidential hopefuls in history. Facts and who will determine them during the 90-minute debate seemed to be a top concern of the campaigns’ strategists, given Trump’s habit of saying things that are untrue and the public’s general distrust of Clinton. Robby Mook, Clinton’s campaign manager, told ABC’s This Week that he is concerned Trump will continue his habit of sometimes saying things that aren’t true and still get a passing grade. He called on moderator Lester Holt to correct any inaccuracies made by the candidates. But Trump’s campaign manager, Kellyanne Conway, said it’s not the job of debate moderators to fact-check. AP

Humberto de la Calle (center), head of Colombia’s government peace negotiation team, accompanied by some of his team members, poses for a photo with children after giving them a copy of the Colombian peace agreement during a concert in Carmen de Bolivar, Colombia, on Sunday. Colombia’s government and the Revolutionary Armed Forces of Colombia are set to sign a peace agreement to end over 50 years of conflict, in Cartagena, on Monday. AP/Fernando Vergara

Colombia to sign historic peace deal

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ARTAGENA, Colombia— Colombia will take a big step toward emerging from its long nightmare of bloody violence on Monday, when the government and the country’s largest rebel movement sign a peace accord that emerged from four hard years of negotiations. The significance of the deal can’t be overstated: Colombia’s five-decade conflict, partly fueled by the nation’s cocaine trade, has killed more than 220,000 people and driven 8 million from their homes. Underlining the importance of the day, the pact is being signed by Colombian President Juan Manuel Santos and by the top commander of the Revolutionary Armed Forces of Colombia, or FARC, a rebel fighter known by the alias Timochenko. Fifteen Latin American

presidents, UN Secretary-General Ban Ki-moon and US Secretary of State John Kerry are scheduled to witness the signing in the colonial Caribbean city of Cartagena. The ceremony late on Monday afternoon will be charged with symbolism. The more than 2,500 guests have been invited to wear white as a sign of peace, and Santos will put his signature on the 297page accord with a pen made from a recycled shell used in combat. The signing won’t close the

deal, though. Colombians are being given the final say on endorsing or rejecting the accord in an October 2 referendum. Opinion polls point to an almost-certain victory for the “yes” vote, but some analysts warn that a closer-than-expected finish or low voter turnout could bode poorly for the many challenges the country faces implementing the ambitious accord. Among the biggest and most controversial steps will be judging the war crimes of guerrillas, as well as state actors. Under terms of the accord, rebels who lay down their weapons and confess their abuses will be spared jail time and allowed to provide reparations to their victims by carrying out development work in areas hit hard by the conflict. The government has also committed itself to addressing unequal land distribution, which has been a long-standing FARC demand harkening back to its roots as a peasant army in 1964, and the administration agreed

to work with the guerrillas to provide alternative development to tens of thousands of families that depend on the cocaine trade. Only if the accord passes the referendum will the FARC’s roughly 7,000 fighters begin moving to 28 designated zones where over the next six months they are to turn over their weapons to UNsponsored observers.

220K The number of Colombians who were killed during the five-decade conflict between the government forces and rebel movement

The rebels were forced to the negotiating table after being pushed to the edge of Colombia’s vast jungles by a decadelong, US-backed military campaign that claimed

the lives of a number of its top commanders. Negotiations, which had been expected to take a few months, stretched over more than four years and had to overcome a number of crises, from the military’s killing of the FARC’s then top commander, known as Alfonso Cano, shortly after he authorized a secret backchannel with the government to the rebels’ capture of an army general who, until a few months ago, would have been a trophy prisoner. “What’s good about the fact that it lasted four years is that it was a very thorough process,” Nor weg i a n Foreig n Mi n ister Borge Brende told The Associated Press in an interview ahead of the ceremony. Norway and Cuba were cosponsors of the negotiation that began in Oslo in 2012 and then shifted to Havana. “The mind-set of everyone has changed,” Brende said. “I feel very genuinely that President Santos and Commander Timochenko want this to work and not go into the blame game.” AP

UK’s Prince William, Kate tour Vancouver sans kids

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ANCOUVER, British Columbia—Pr ince George and Princess Charlotte stayed behind with their nanny, as Britain’s Prince William and his wife, Kate, continued their tour of British Columbia on Sunday, a day after George left Canadian Prime Minister Justin Trudeau hanging on a high-five. The 3-year-old George made headlines in the United Kingdom when he, seemingly shy and overwhelmed, declined to high-five and then shake the hand of Trudeau during the arrival ceremony on Saturday at the airport in Victoria, British Columbia. The prime minister was among several dignitaries waiting on the tarmac to greet the royals when they emerged from their flight. Videos and photos of the interaction were shared widely by British media. The Mirror wrote: “Superstar politician Mr. Trudeau might have endeared himself to millions online through his outspoken feminism, support for diversity and willingness to embrace internet memes, but it seems to take more than that to impress Will and Kate’s eldest.” The Daily Mail shared a story with the headline: “Sorry, one doesn’t high-five with commoners.”

Canadian Prime Minister Justin Trudeau (center) kneels to talk to Prince George, as his father, Prince William, The Duke of Cambridge, speaks with Gov. Gen. David Johnston (right) and Kate, The Duchess of Cambridge, holds their daughter Princess Charlotte upon arrival in Victoria, British Columbia, on Saturday. Jonathan Hayward/The Canadian Press via AP

The kids are remaining in Victoria as their parents visit other parts of British Columbia and Western Canada until October 1 on their first official overseas trip as a family of four. On the

second day of their trip the British royal couple f lew on a f loat plane to Vancouver, where they were greeted at the waterfront by several hundred fans who gave them a raucous welcome.

Both spent time talking with people and appeared to be tr ying to shake hands with ever yone they could. K ate, with her hair down, was wearing a redand-white patterned dress by

the late British designer A lexander McQueen, red shoes and a red purse. The couple then stopped at an outreach center for women with drug and alcohol addictions who are pregnant or parenting. A staff member introduced them to a 5-year-old girl, who gave them teddy bears. “George would love this,” William said, as he accepted a teddy bear in a black vest. Charlotte, 1, is on her first overseas trip. George is on his second. Trudeau and his wife, Sophie Gregoi re Tr udeau , l ater met t he roya l couple outside t he Immig rant Ser v ices Societ y’s new Welcome House. William asked a refugee from Afghanistan about how the society had helped him, and the refugee replied that it helped him get into a technolog y course so he could learn new skills. Sy r i a n re f u ge e s w ho me t the royal couple said they wish more world leaders were as attentive to their country’s plight. Canada has welcomed more than 30,000 refugees since Trudeau became prime minister. “The message we hope they will deliver is to help people in need,” Alaa Almahameed said through an interpreter. AP

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www.businessmirror.com.ph | Tuesday, September 27, 2016

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Brexit leads 76% of Britain’s CEOs to consider moving

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he UK’s vote to leave the European Union (EU) has left more than three-quarters of CEOs saying they would consider moving their headquarters or operations outside Britain, according to a survey of 100 business leaders by the accountancy firm KPMG. Some 72 percent of the CEOs surveyed said they voted “Remain” in the June 23 Brexit referendum , KPMG said on Monday in an e-mailed statement. While 69 percent said they’re confident Britain’s economy will continue to grow over the next year, and 73 percent expressed confidence their companies will grow, 76 percent are mulling over some form of relocation. “C EOs a re reac t i ng to t he pre v a i l i ng u ncer t a i nt y w it h cont ingenc y pl anning ,” K PMG U K C h a i r m a n Si mon Col l i n s s a id i n a st atement. “O ver a h a l f be l ie ves t he U K ’s abi l it y to do bu s i ne s s w i l l b e d i s r upte d once we Bre x it a nd , t herefore, for m a ny C EOs, it i s i mpor t a nt t h at t he y pl a n d i f ferent scen a r ios to hed ge a ga i n st f ut u re d i sr upt ion.” The survey suggests Prime Minister Theresa May has work to do to retain businesses and jobs as the UK seeks a deal with the EU that curbs immigration while retaining the closest trading ties possible with the bloc’s 27 other members.

Before the referendum, the then-Chancellor of the Exchequer George Osborne said a vote to leave would endanger as many as 820,000 jobs.

Pound depreciation

While the pound has fallen by 13 percent against the US dollar since the vote, some of the direst prereferendum predictions have failed to come true, particularly about the economic outlook. Still, May has yet to trigger a formal exit, saying only she won’t begin the two-year process this year. “Policy-makers should be really concerned about a leaching of British business abroad and should engage with business early to understand what assurances they can offer and closely monitor any shifts overseas,” Collins said. “Contingency planning is just that—a form of insurance—but it must not become ‘plan A.’ Moving headquarters abroad is radical and hits the headlines but businesses could start shifting operations abroad with little public attention. We hear it time and time again that business needs certainty.” KPMG interviewed 100 UK CEOs of companies with annual sales of at least £100 million ($130 million) and at least 500 employees. The survey was carried out over four weeks from mid-July. Bloomberg News

Getting older is cruelest blow to global growth, ask Canada

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n older population is becoming the most powerful drag on Canada’s job market and growth prospects. And it’s also a reason the global economy may get stuck in an era of low interest rates and weak demand.

1.5% The percentage of decrease of Canada’s potential economic growth

Bank of Canada Governor Stephen Poloz gave a blunt speech last week, saying five decades of expansion powered by the Baby Boom generation is ending, and Canada’s potential economic growth has slowed to 1.5 percent. That pace is almost a full percentage point below the average gain in GDP over the last 35 years. For Canada, at least, business leaders should now count themselves lucky to earn a “pretty good return’’ of 4 percent like some companies in Asia, he said. You ng p e ople mu st t h i n k about working longer and saving more to fund the retirement their parents had, and governments must make tougher decisions on tax, trade and immigration policy in the hopes of salvaging marginal gains in future income growth, Poloz said.

“Those folks have been entering retirement for the past few years, and potential economic growth has been slowing as a direct result,’’ Poloz said last week in Quebec City. “We cannot just sit back and wait for these slow-moving forces to reverse.’’ The biggest gain in the population over the past 12 months has been the 55 years and older set, which rose almost six times more than the so-called prime age population aged 25 to 54. It’s a trend mirrored in most industrialized nations, such as Japan, where the central bank is struggling against deflation and anemic growth. Central banks around the world have set near-zero or negative interest rates aiming to regenerate inflation. Slow global growth hurts Canada’s trade-dependent economy by curbing exports of crude oil, machinery and minerals. The fading job market means the Bank of Canada’s 0.5-percent policy interest rate won’t need to rise as soon or as much in past economic recoveries to keep inflation in check. The so-called neutral rate that keeps the economy in balance could be as low as 0.75 percent now, from as high as 5.5 percent before the global financial crisis, Poloz said. “ The most important force pushing the neutral rate down has been a steady decline in the potential growth rate of the economy,’’ Poloz said. “In turn, this decline is being driven primarily by the aging of our population, which is slowing the rate of growth of the labor force.’’ Bloomberg News

California eyes unusual power source its gridlocked roads

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O S A N G E L E S —Al l t hose c ars on Ca l i f o r n i a’s f a m o u s l y g r i d l o c ke d highways could be doing more than just using energy—they could be producing it. The California Energy Commission is investing $2 million to study whether piezoelectric crystals can be used to produce electricity from the mechanical energy created by vehicles driving on roads. The commission is in the process of choosing a company or

university to take on small-scale field tests. It will study how the small crystals, which generate energy when compressed, could produce electricity for the grid if installed under asphalt. Scientists already know the technology works, but the state needs to figure out whether it can produce high returns without costing too much. Similar projects in other parts of the world have been discontinued. AP

Smartphone usage is very popular in China. Bloomberg News

Beijing looks for independent thinking as problems loom

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he southern Chinese manufacturing hub of Dongguan’s decision to lure elite workers with cash payments of up to $3,000 owed much to a think tank founded in late 2013 after President Xi Jinping urged a greater role for research houses in policy-making. Dong guan Talent Institute (DTI) submitted a report early last year to local officials that showed the region’s nascent robotics industry was craving new talent. Months later, measures were unveiled to attract top brains, including payments of 6,000 yuan for graduates and up to 20,000 yuan for doctoral students. “Local governments now ask for field research and advice before making policies,” said DTI director Chen Liang, who holds a PhD in history from the National University of Singapore. “In the past, some of them just decided things off the top of their heads.” While Xi’s administration has tightened censorship in the press and social media and increased oversight of academia, officials are simultaneously striving to enhance the quality of advice available to policy-makers. Yet to be seen is whether the hundreds of new think tanks prove able to shake up a sector that remains dominated by elite institutions ranging from Beijing’s Chinese Academy of Social Sciences to the Communist Party’s own school. There’s no shortage of weighty topics that need addressing, from the upgrade of China’s manufacturing to debt deleveraging and state-owned enterprise restructuring. Last year’s $5-trillion Chinese equit y-market meltdown also showed room for macro-policy improvement.

Voices needed

“The one-party system can be highly efficient, but once it makes a wrong decision, the losses can be huge,” said Wang Huiyao, founder and director of the Beijing-based Center for China and Globalization (CCG). “China needs think tanks, especially independent and private ones, more than any other country in the world.” It needs their voices to fill in the debate that’s missing in its internal system, he said. T he nation faces unprecedented challenges, as it restructures its economy away from old-line heav y manufacturing and toward consumption and ser vices. The central government itself bemoaned a lack of “institutionalized channels” for outside advice to penetrate policy-making, in a Januar y 2015 plan to boost the role of think tanks. There’s a pressing need for “ decision support,” it said. The think tank research center at the Shanghai Academy of Social Sciences, which releases a ranking every year, now monitors about 400 groups, up from 279 last year. Smaller institutions like DTI don’t make it onto its radar, suggesting an even greater expansion.

Independent advice?

While access to policy-makers in China’s one-party state is the ultimate test of a think tank’s

inf luence, such inf luence also has drawbacks. Dependency on funding from and approval of the government “might undermine their capabilities to produce independent advice,” according to Abigael Vasselier and Angela Stanzel, coauthors of a paper on Chinese think tanks. With all spheres of Chinese society subject to the Communist Party, independence on the part of think tanks will be limited, according to Steve Tsang, a professor of contemporary Chinese studies at the University of Nottingham in the UK. “Some may push the boundary a bit, but few will ever dare to go beyond what the Party will tolerate,” he said. Chen at DTI, who leads a seven-member team, agrees that over-reliance on government funding can’t make great think tanks. He’s also worried about those who are already in the game. “This sector is a bit fickle,” Chen said. “Too many people have jumped on the bandwagon, and few of them can really sit down and do real research.” An official from Dongguan’s talent coordination office confirmed it consulted with DTI when formulating the policy to attract experts to the city.

Information overload

As with other spheres—from solar power to the soccer industry— once the central government determines a priority, there’s a rush of activity that follows. Witness a proliferation of think tank research into Xi’s “One Belt, One Road [OBOR]” vision to deepen development and Chinese influence along the old Silk Road maritime and land routes. T he Inter nationa l Depar tment of the Central Committee of the communist party championed an “OBOR Think Tank Cooperation Alliance” in April, gathering about 60 official and

nonofficial research bodies. A key member wa s C hong ya ng Institute for Financial Studies, Renmin University of China, a privately funded entity established in January 2013. On their web site, more than 500 articles related to OBOR were available. Yet, there’s plenty of need for smaller-scale development planning, too, says Wang at CCG. In a country with more than 2,000 county-level governments, he estimates there could be 5,000 think tanks in years to come, twice as many as in the US. Wang’s institute earns about 40 percent of its income from adv ice for gover nment proj ects, while the remainder comes from publications, events and donations, he says. Its branch in Guangdong province in the south has worked with the local government to help roll out plans to boost the 3D printer industry.

‘Shared Agenda’

“On economics issues, think tanks and government have a shared agenda in being credible, evidence-based and at least producing robust work,” said Kerry Brown, professor of Chinese Studies at King’s College, London. “On issues about domestic matters like rural conditions, social conditions, and so on, think tanks in China are the best placed and can offer very valuable work.” Meantime, overseas observers are starting to take note of the rise of China’s think tanks. Naoko Nemoto, who works at the Asian Development Bank’s own think tank in Tokyo, says her institute is considering inviting about nine Chinese research groups to their global summit next May, alongside names such as the Brookings Institution in Washington, and the Chatham House in London. “They are not just participants, sometimes they are taking the lead,” Nemoto said. Bloomberg News

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Tuesday, September 27, 2016 • Editor: Lyn Resurreccion

BusinessMirror

www.businessmirror.com.ph

Many forces want to free Mosul, but they have different motives

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Syrians inspect damaged buildings after airstrikes hit in Aleppo, Syria, on Saturday. Syrian government forces captured a rebel-held area on the edge of Aleppo on Saturday, tightening their siege on opposition-held neighborhoods in the northern city as an ongoing wave of air strikes destroyed more buildings. Syrian Civil Defense White Helmets via AP

US, UK: Russia committed barbarism, war crimes in Syria

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EIRUT—At least 26 civilians were killed in fresh government air strikes on the contested city of Aleppo, Syrian activists said on Sunday, as the United Nations Security Council convened an emergency meeting on the spiraling violence in Syria, but failed to take any action because of deep divisions between Russia and the Western powers. T he United States, Britain and France, who called the emergency meeting, heaped blame on Moscow for supporting the Syrian offensive, which UN envoy Staffan de Mistura called one of the worst of the five-and-ahalf-year war. When Syria’s UN Ambassador Bashar Ja’afari was called to speak in the council, the ambassadors of the three Western powers walked out in protest. They had demanded a halt to the Aleppo offensive and immediate council action, and their walkout demonstrated anger and frustration not only at Damascus but at Russia for backing close ally Bashar al-Assad’s military campaign, while talking about reviving a cessation of hostilities. “What Russia is sponsoring and doing is not counterterrorism, it’s barbarism,” US Ambassador Samantha Power said. “It’s apocalyptic what is being done in eastern Aleppo.” In London British Foreign Secretary Boris Johnson said Russia may have committed war crimes in Syria, as his government joined four other world powers in warning that patience with Moscow is wearing thin. “They are guilty of protracting this war and making it far more hideous, and yes, I think that when it comes to instances, such as the bombing of civilian targets, we should be looking at whether that targeting is in the knowledge that those are wholly innocent civilian targets,” Johnson said in an interview on BBC Sunday. “That is a war crime.” “The burden is on Russia to prove it is willing and able to take extraordinary steps to salvage diplomatic efforts,” France, Italy, Germany, the United Kingdom, and the US said in a statement. “Patience with Russia’s continued inability or unwillingness to adhere to its commitments is not unlimited,” the so-called Quint group

213 The number of civilians killed by air strikes and shelling on opposition areas in and around Aleppo since the USRussian brokered cease-fire collapsed on Monday evening

said. In Moscow a spokesoman for the foreign ministry accused the UK of similar war crimes in Iraq. Johnson said “that Russia is to blame for dragging out the civil war in Syria, and possibly, for war crimes in the form of air strikes on convoys with humanitarian aid,” Russian Foreign Ministry Spokesman Maria Zakharova said in a statement. “ That’s correct, aside for two words: instead of ‘Russia’ need to insert ‘UK,’ and instead of ‘Syria’— ‘Iraq’” At a meeting of the United Nations Security Council last week, Secretary of State John F. Kerry wagged his finger at Russian Foreign Minister Sergei Lavrov and said the Russians were living in a “parallel universe.” He said Russia and Syria should ground their aircraft, and he repeated the demand on Thursday. As the government offensive entered its fourth day on Sunday, medical workers and local officia ls repor ted air str ikes on neighborhoods throughout Aleppo’s rebel-held eastern districts. The Britain-based Syrian Observatory for Human Rights reported 26 civilians had been killed by 7:30 p.m. and said it expects the toll to rise. Ibrahim A lhaj of the Syrian Civil Defense search and rescue

outfit gave a higher toll, saying hospitals and rescuers had documented the deaths of 43 people so far on Sunday. T he Obser vator y, which relies on a net work of contacts i n side Sy r i a , sa id ea rl ier i n the day that 213 civ ilians had been k il led by air str ikes and shelling on opposition areas in and around A leppo since the US - R u s s i a n brok e re d ce a s e fire collapsed Monday evening. Hospitals are overwhelmed w it h c a su a lt ies a nd med ic a l workers are expecting many of the wounded to die from a lack of treatment, according to Mohammad Zein K handaqani, a member of the Medical Council, which oversees medical affairs in the city’s opposition quarters. “I’ve never seen so many people dying in one place,” he said from a hospital in the city. “It’s terrifying today. In less than one hour the Russian planes have killed more than 50 people and injured more than 200.” Conflicting casualty estimates are common in the aftermath of clashes and attacks in Syria. At the start of the Security Cou nc i l me e t i n g , U N e nvo y de Mistura said the offensive against eastern A leppo, where up to 275,000 people “ have been under a form of de facto siege for almost 20 days,” followed the US-led coalition’s bombing of Syrian troops, which Washington called a tragic mistake, and a deadly attack on a UN convoy c a r r y i ng desperate ly needed humanitarian aid. “But no incident, irrespective of whether it can be attributed, does justify what is going on in front of our own eyes: the unraveling of the cessation of hostilities and the simultaneous unleashing of unprecedented military violence affecting innocent civilians as well,” he said. He urged the United States and Russia “to go that extra mile to see if they can save their agreement of September 9 and do so at the eleventh hour.” He also urged the Security Council to press for a cessation of hostilities, weekly 48-hour pauses to deliver aid, and medical evacuations for several urgent cases in eastern Aleppo. De Mistura said Syrians and the international communit y are swiftly losing any remaining hope with Washington and Moscow “unless we salvage what was agreed on.” “All we can expect from Aleppo if the Syrian government is intent on retaking it is...a slow, grinding, street-by-street fight, over

the course of months, if not years, whereby the ancient city will be almost completely destroyed,” he warned. De Mistura reiterated that “a so-called military ‘solution’ or victory in Syria is impossible, including in Aleppo.” After the meeting ended, he told reporters: “Everything hangs in the balance right now.” And what happens next depends on the Russians and Americans, he said. Russia’s UN Ambassador Vitaly Churkin blamed Syria’s rebels for sabotaging the cease-fire agreement by using the lull to shore up their forces, and he accused the Western coalition of failing to separate the moderate factions it backs from “terrorist” groups especially the al-Qaeda-linked Fatah Sham Front. “In Syria hundreds of armed groups are being armed,” Churkin said. “The territory of the country is being bombed indiscriminately. Bringing a peace is almost an impossible task now.” But he made clear that Moscow hasn’t given up on a cessation of hostilities. “Of course, I would like this very much to be our aim, as well as the renewal of negotiations,” he said. Churkin stressed, however, that Russia first wants to see “a sincere desire” by the US coalition to separate the moderate opposition from the Fatah Sham Front. Power said the US knows “that Russia has consistently said one thing, and done the opposite.” But she said the US also believes it must do “everything in our power to find a way to halt the violence.” “That is why, even now, we will continue to look for any way possible to restore the cessation of hostilities,” Power said. W hile intra-Sy r ia negotiations remain the aim of the Western powers and Russia, a broad coalition of 33 Syrian rebel factions issued a statement on Sunday saying: “Negotiations under the present conditions are no longer useful and are meaningless.” The opposition groups said they won’t accept any Russian mediation, calling Moscow a “partner to the regime in the crimes against our people.” They also called on the government and Russian forces to halt air strikes and lift sieges on opposition areas where the UN estimates 600,000 Syrians are trapped. On the sidelines of the meeting, UN Secretary-General Ban Ki-moon urged an end to the offensive saying the bombs “are not busting bunkers, they are demolishing ordinary people looking for any last refuge of safety.” AP and Bloomberg News

AGHDAD—An unlikely array of forces is converging on the city of Mosul, lining up for a battle on the historic plains of northern Iraq that is likely to be decisive in the war against the Islamic State (IS) group. The tacit alliance—Iraqi troops alongside Shiite militiamen, Sunni Arab tribesmen, Kurdish fighters and US special forces—underscores the importance of this battle. Retaking Mosul, Iraq’s second-largest city, would effectively break the back of the militant group, ending their self-declared “caliphate,” at least in Iraq. But victory doesn’t mean an end to the conflict. In a post-IS Iraq, the enmities and rivalries among the players in the anti-IS coalition could easily erupt. The battle, expected near the end of the year, threatens to be long and grueling. If IS fighters dig in against an assault, they have hundreds of thousands of residents in the city as potential human shields. And as residents flee, they fuel the humanitarian crisis in Iraq’s Kurdish region around Mosul, where camps are already overcrowded with more than 1.6 million people displaced over the past two years. Humanitarian groups are rushing to prepare for potentially 1 million more who could be displaced by a Mosul assault. The biggest prize captured by the militants after they overran much of northern, western and central Iraq in the summer of 2014, Mosul has been vital for the IS group. The reserves in its banks provided a massive cash boost to the group, and the city’s infrastructure and resources helped IS as it set up its caliphate across Iraq and Syria. Mosul was the location chosen by IS leader Abu Bakr al-Baghdadi to make his first public appearance after declaring the caliphate, a triumphant sermon delivered at a historic mosque in the old city. For the past two years, much of the leadership seems to have operated from Mosul. If Mosul is retaken, it would be a nearly complete reversal of the jihadis’ 2014 sweep. The group would be left with only a few pockets of territory in Iraq. IS fighters have

already responded to battlefield losses by reverting to guerrillastyle tactics or retreating into neighboring Syria to defend the group’s territory there, which is also rapidly eroding. For weeks, the disparate forces have clawed back territory in Nineveh province, where Mosul is located, seizing villages and key supply lines. Still, the Iraqi military’s closest position is some 30 miles south of Mosul and there remain dozens of militant-held villages with civilian populations that the troops must take before reaching the city’s outskirts. Kurdish forces are closer, some within 10 miles of the city to the north and east. US-led coalition forces have sped up training for Iraqi troops and Kurdish fighters, condensing courses that once took more than two months into just four weeks. In July the Pentagon announced that 560 more US troops would deploy to Iraq to transform Qayara air base, south of Mosul, into a staging hub for the final assault. Still, Iraq’s military is thousands of soldiers short of the estimated 30,000 troops needed to launch the assault, and the existing forces are stretched thin trying to hold other recaptured territory, particularly in western Anbar province. Iraq’s “biggest challenge is generating the forces required to get to Mosul,” said Maj. Gen. Gary Volesky, the head of US ground forces in Iraq. “If you want to pull someone out of Anbar to go to Mosul, you’ve got to put somebody else there.” Iraq’s military fell apart when it fled Mosul in the face of the IS blitz two years ago, with a third of its troops melting away. In the ensuing months, it was revealed that tens of thousands of troops on the rolls did not exist: They were only names whose pay was pocketed by commanders. Since then, the military has been slowly rebuilding, while other armed forces, such as Shiite militias and Iraq’s Kurdish forces, have steadily grown in strength. The rivalries within the alliance are already starting to show and are likely to come to a head once IS falls. AP

Jordanian writer gunned down outside courthouse

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MMAN, Jordan—A prominent and outspoken Jordanian writer on Sunday was shot dead in front of the courthouse, where he had been on trial for posting a cartoon deemed offensive to Islam on social media. A Jordanian security official said the shooter was a former imam, or prayer leader, at a local mosque, and said the man had been motivated by his anger over the cartoon posted to Facebook by writer Nahed Hattar. The shooting was the latest in a string of deadly security lapses in Jordan. Witnesses and police said Hattar, 56, was preparing to enter the courthouse for a hearing when the gunman shot him at close range. “He was standing at a short distance of about 1 meter in front of Nahed on the stairs of the Supreme Court,” a witness told The Associated Press on condition of anonymity, fearing repercussions. The official Petra News Agency said Hattar was shot three times. The witness said the shooter, who was immediately arrested, was wearing a long grey robe and long bea rd c h a rac ter i st ic of conservative Muslims. Jordanian media, citing anonymous officials, identified the shooter as Riad Abdullah, 49, a former imam in northern Hashmi, a poor neighborhood in Amman. The reports said Abdullah

had recently returned from a trip abroad, but gave no further details. The security official declined to confirm the suspect’s name. But he said he had confessed to the shooting and claimed he had acted alone and had no connections to any militant group. Prosecutors charged the man with premeditated murder, committing a deadly terrorist act and possession of an unlicensed weapon. The suspect was detained for 15 days, while the case was referred to the State Security Court. The official, speaking on condition of anonymity because he was not authorized to speak to the media, said the suspect said he was motivated by the cartoon, which depicted a bearded man, smoking and in bed with two women, asking God to bring him wine and cashews. All physical depictions of God or the Prophet Muhammad, even respectful ones, are forbidden under mainstream Islamic tradition. Government spokesman Mohammad Momani condemned the killing as a “heinous crime.” “The government will strike with an iron hand all those who exploit this crime to broadcast speeches of hatred to our community,” he told the Petra agency. But supporters of Hattar said they held the government responsible for the shooting, accusing Prime Minister Hani al-Mulki of creating a hostile atmosphere that encouraged violence against the writer. AP

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India growing 8% a year, helping oil, gold demand

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ndia has become the center of the world’s oil-demand growth and the country’s economic growth will affect global commodities, Citigroup Inc. said in a research note. The world’s second-largest country by population after China will see its economy expand at about 8 percent a year through 2021, Citi researchers, including Ed Morse, said. The country’s working-age population will increase by 220 million over the next 20 years, and about 240 million people will move to cities. Urbanization and rising incomes will boost demand for transportation fuels, gold jewelry and electricity generation, while looser regulations should spur increased exports of iron ore into the market. India’s economy won’t copy China’s near-decade of double-digit economic growth that pushed oil prices into the $100-a-barrel range, but will be enough to impact global supply-and-demand balances of several commodities, Morse said. “While India is no China, the subcontinent’s largest economy is becoming the third-largest oil consumer and importer of oil, with a tangible impact on oil, coal and iron-ore markets, less so on metals,” Morse said. “As India’s base rises, so too should its global commodities’ impacts.” Citi expects 2016 to be the best in four years for commodity investments. The Bloomberg Commodity Index is up 7.4 percent this year. Oil, zinc, copper and soft commodities will be the best investments in

2017, with Brent crude seen averaging $60 a barrel, after ending this year around $50. Ind i a’s c r ude dem a nd h a s grown by 350,000 barrels a day this year, higher than China, as the country surpassed Japan to be the world’s third-largest oil buyer. Gasoline demand has risen 14 percent this year and should continue to increase at double-digit rates as car and motorcycle purchases climb, Morse said. Coal demand will grow between 6 percent and 8 percent a year through 2020, as the country tries to electrify more rural areas. Domestic production of coal for power will rise even faster, reducing imports, while a strong domestic steel-production outlook means the nation will have to increase metallurgical coal imports. Gold demand should remain high in the country, which accounts for almost a quarter of global demand for the precious metal, as falling unemployment and steady inflation spur buying of jewelry, coins and gold bonds, Citi said. Iron-ore exports will grow to 20 million tons a year, from 6 million tons in 2016, as the government reduces and eliminates export duties and companies restart mines. One commodity group that won’t see as much impact from India’s expansion is meat, according to Citi. India is home to more vegetarians than any other country, with more than half its 1.25 billion people identifying as partially vegetarian or vegan, according to Citi. Bloomberg News

German biz confidence rises to highest level since 2014

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erman business sentiment surged to the highest level in more than two years in September in a sign that corporate concerns are easing over the economic outlook and the consequences of Britain’s decision to leave the European Union, a report from the Munich-based Ifo institute showed on Monday.

Key points

Germany’s business climate index rose to 109.5, from a revised 106.3. That’s the highest since May 2014. Economists predicted a figure of 106.3. Gauges for current conditions rose to 114.7, and expectations increased to 104.5

Big picture

The figures come after the Bundesbank last week toned down its outlook for the German economy, saying it expected growth to slow in the third quarter.

A composite Purchasing Managers Index published on Friday dropped to a 16-month low, with the services sector almost stagnating. European Central Bank President Mario Draghi, who will visit the German parliament on Wednesday, has signaled that the country should use its “fiscal space” for stimulus.

Economist takeaways

“German confidence indicators are currently sending mixed and sometimes even opposing signals,” Carsten Brzeski, chief economist at ING-DiBa in Frankfurt, wrote in a note to clients. “All in all, disappointing hard data in July and falling soft data since the Brexit vote had provided further evidence that the German economy was losing momentum. Today’s Ifo index suggests that at least the Brexit fears have disappeared as quickly as they had emerged.” Bloomberg News

French president vows to shut down Calais camp this year

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ALAIS, France—The migrant camp in Calais must be fully dismantled by the end of the year, French President François Hollande said on Monday in an attempt to highlight the Socialist government’s efforts to tackle the issue ahead of next year’s presidential election. Hollande, who was visiting Calais for the first time since winning office in 2012, said the camp known as “the Jungle” is a “humanitarian emergency.” Authorities say about 7,000 people live in squalid conditions near the port of Calais hoping to get to Britain, but aid groups say the number is closer to 10,000. Hollande, who is eying a reelection bid, is facing harsh criticism from conservative and far-right rivals who see the camp as a symbol of his failure to deal with Europe’s migrants crisis. Former President Nicolas Sarkozy, who is competing to win the conservative primary, promised last week in Calais he would be able to solve the issue in a few months by reestablishing strict border controls all

around the country. France is a member of Europe’s passport free-travel zone, while Britain is not. In a speech to police forces securing the area, Hollande vowed to shut down the camp “with method and determination” so that new camps don’t appear near Calais or elsewhere across France. “We must guarantee a durable and effective sealing of the French-British border,” he said, insisting that British authorities must also do “their part.” The government announced plans in the summer to disperse Calais migrants into centers across France, where they will be able to apply for asylum. Hollande reaffirmed that plan on Saturday when he visited one of France’s 164 migrant reception centers in the central city of Tours. The government has not given a firm timeline. Reception centers will hold 40 to -50 people for up to four months while authorities study their cases. Migrants who don’t seek asylum will be deported. AP

Japanese Prime Minister Shinzo Abe delivers a speech during a meeting with high-ranked officers of the Japan Self-Defense Forces at the Defense Ministry in Tokyo on September 12. AP/Koji Sasahara

Abe is Japan’s longest-serving leader despite mixed record

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hinzo Abe has so far warded off the curse that has afflicted many a Japanese prime minister—a collapse in public support—despite presiding over a lackluster economy. He could yet become the longest-serving leader since World War II.

Senior ruling party lawmakers are working to allow Abe to extend his tenure. Already in power almost four years, a potential change in party rules could see him in office until at least 2021, as long as the Liberal Democratic Party (LDP) keeps winning elections. That’s even as Abe has failed to meet many of his own economicpolicy goals under the Abenomics banner—deflation remains hard to budge, a stronger yen is starting to hurt exporters, and his efforts to get more women into the work force have struggled amid a shortage of childcare and elderly care. The economy has shrunk in five of the 14 quarters since he took office. And he’s forged ahead with a bigger role for the military despite public unease in the strongly pacifist nation. But while populist winds spread through many developed nations and put established leaders under pressure, Abe has retained broad public confidence; his Cabinet approval ratings are a creditable 50 percent to 60 percent. There is a lack of convincing alternatives in his own party, and he’s been assisted by a weak opposition. The steady-as-she-goes mantra for Abe comes after a gaffe-prone first turn as prime minister almost a decade ago. While life isn’t necessarily much better for some people, a low jobless rate and decent corporate profits have meant it isn’t necessarily any worse. “People don’t have much reason to complain when it comes to the economy,” said Takuji Okubo, chief economist at Japan Macro Advisors. “I think that’s the most important backbone behind his popularity. People feel their jobs are secure.” Several surveys this month put voter approval at the highest level in two years, contrasting with the nose-diving popularity experienced by the previous six administrations, including Abe’s own first government. Under his leadership,

3% The percentage of overall unemployment in July, the lowest since 1995

the ruling coalition has won four straight national elections. Despite losing several ministers to scandal, Abe has generally kept control of his party. His policies of increasing the defense budget and loosening restrictions on the armed forces, while divisive, could help him on the domestic front amid friction with China and an increasingly belligerent North Korea. Abe has vowed to focus on reforming working practices in Japan during the new parliamentary session, seeking to narrow the gulf in pay between regular and nonregular workers and allow more people to combine their roles as carers with paid work. The LDP has also begun debate on changing a rule that limits party leaders to two straight three-year terms. It aims to make a decision in time for the party convention next year, enabling Abe to potentially stand for reelection when his six years are up in 2018. That could see him stay on beyond the 2020 Tokyo Olympics. The move came after Abe appointed Toshihiro Nikai, a vocal proponent of the extension, as his second-incommand in the party hierarchy. If Abe were to step down after the Olympics, he would have served almost nine years as prime minister—longer than anyone under the postwar political system. The LDP itself has been in power for most of the past 60 years.

“Whatever we think of Abenomics, we have to remember that the Japanese work force is basically on a full-employment basis right now,” said Jun Okumura, a visiting scholar at the Meiji Institute for Global Affairs.

‘Not hurting’

“Although the inflation target worries people who care about what the Bank of Japan does, in the meantime, inflation is not hurting people with fixed incomes and new graduates are finding it much easier to find jobs,” Okumura said. Employment for new graduates rose to 74.7 percent this year—the sixth consecutive rise—and overall unemployment fell to 3 percent in July, its lowest since 1995. Most voters seem little concerned by the sluggish pace of economic change. A survey published by the Yomiuri newspaper this month found only 33 percent of respondents said they thought Abe’s policies would improve the economy, while 55 percent said they expected no such improvement. Still, 62 percent supported his Cabinet—the highest level since 2014. A poll published by the Nikkei newspaper on Monday found support for Abe’s Cabinet had slipped 4 percentage points to 58 percent, with 38 percent saying they approved of his economic policies.

‘Still waiting’

T omo y o M atsushita , a 29-year-old employee at a trading firm, said she agreed with Abe’s agenda, but was yet to be convinced it was working. “I think Abenomics has a valuable goal,” she said. “But I’m still waiting for the economy to get better.” Longer leadership terms could provide stability, which would be beneficial, senior LDP lawmaker Hideki Makihara said in a recent interview with Bloomberg. He compared Japan with China, where presidents typically serve 10-year terms. Makihara, who is on the panel considering the changes, denied a shift in the rules would be made specifically for Abe. The LDP needs to tread carefully to avoid alienating some voters, who are cautious on whether Abe should stay on past 2018. The Yomiuri poll showed 48 percent of respondents favored an extension, while 43 percent were opposed. Other recent polls by Kyodo and the Mainichi newspaper found a majority were against the

rule change. Any downturn in the economy, which could be sparked by the strengthening yen, could also damage Abe’s popularity and his chances of staying on, according to Okubo, who attributes the current economic mood largely to luck and the Bank of Japan’s ultra-easy monetary policy. “I think the chances are 50/50 that he will stay on.” Meanwhile, Abe pledged on Monday to accelerate his mix of policies to prop up Japan’s economic recover y and speed up parliamentary approval of the Trans-Pacific Partnership (TPP) trade pact. In his policy statement opening the 66-day parliamentary session, Abe outlined an extra set of stimulus measures to help the economic recovery and spur more consumer and corporate spending. He aims to push through a supplementary budget within weeks to implement the measures in the package, which is worth ¥28 trillion ($2.8 billion). Abe reiterated that the global economy faces “major risks,” such as uncertainty over Britain’s exit from the European Union and the slowdown of emerging economies, including China, stressing the need to accelerate his Abenomics policy mix of fiscal stimulus and structural reforms. “We’ll further accelerate Abenomics and maximize the pace of moving out of deflation,” he said. Abe said the TPP is a key part of his growth policies, though he did not set a specific deadline for parliamentary approval of the trade pact, apparently amid uncertainty ahead of the US presidential election in November. He only hinted at a timing of TPP approval sometime later this year. “An early entry into force of the TPP will be a big chance and we will aim to quickly achieve a ¥1-trillion [$10-billion] target [of annual agricultural exports],” Abe said. He said he seeks to reach a basic economic partnership agreement with the European Union by the end of December, a target that Japan has previously set. Abe highlighted the economy in his address, while touching on his long-cherished but divisive political goal of revising Japan’s US occupation-era Constitution. He urged a national debate as a step to gain support for a revision, but mentioned the constitution only briefly at the end of his speech. Bloomberg News and AP

A10 Tuesday, September 27, 2016 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

The questions that Clinton and Trump should be asked

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he United States is still fighting a war in Afghanistan and has troops in Iraq, the Iranian nuclear deal remains controversial, the Islamic State is weakened but continues to be threatening, North Korea is launching missiles, Russia flaunts international norms and China has expansionary designs. It’s a dangerous world. Yet, in the US presidential election the foreign-policy debate chiefly involves insults and clichés. None of these issues will disappear by Inauguration Day; the press and public should pressure Donald Trump and Hillary Clinton to better define their views over the next six weeks. Based on suggestions from six top national security experts, Republicans and Democrats, here are some questions that should be answered. Let’s start with Clinton. She is more of a foreign-policy hawk than President Barack Obama. She voted for the Iraq War in 2003, spearheaded the 2011 Libyan intervention and unsuccessfully tried to get the US more involved in the Syrian civil war. Question: Libya is now a dysfunctional terrorist haven; Obama says the worst mistake of his presidency was failing to prepare for what happened after toppling Muammar Qaddafi. Do you disagree with the president, were you mistaken, and what have you learned? Question: How likely is it that all the parties in the Syrian crisis—the US, Russia, Saudi Arabia, Iran and Turkey—could cut a delicate deal: Bashar al-Assad remains in power for a while, then a transition government prepares for elections? If not, what other path is there for resolution? As secretary of state, Clinton said the Trans-Pacific Partnership (TPP) was the “gold standard” for trade deals and would bolster US security and economic interests in Asia. As a presidential candidate, facing the anti-free trade Bernie Sanders, she flipped. Question: Most of America’s important allies in Asia say the TPP is crucial to counter Chinese political and economic hegemony in the region. Why are they wrong? For Trump: The North Atlantic Treaty Organization (Nato) is the alliance between the US and 27 countries, including the three Baltic states: Lithuania, Latvia and Estonia. Article 5 of its charter explicitly states that an attack on one member should be considered an attack on all. Question: You have praised President Vladimir Putin, vowing to fashion better relations with Russia. But if, as he did in Crimea and eastern Ukraine, Putin intervened militarily in one of the Baltic states, would you favor invoking Nato’s Article 5 and sending forces to counter Russia? Question: Explain your concept of nuclear deterrence and how your willingness to have Japan, South Korea and Saudi Arabia acquire nuclear weapons enhance global security? In the 1968 election, candidate Richard Nixon claimed to have a “secret plan” to end the Vietnam War. He won the election and the war lasted six more years, with more than 21,000 Americans killed. Question: Secret plans usually are secret because they aren’t real. You have claimed to have a “fool-proof “ plan to defeat the Islamic State. Unless you specifically lay out a plan, that promise is as empty as Nixon’s secret plan for Vietnam. How would you eliminate the Islamic State and how quickly? Question to both candidates: Since Jimmy Carter’s Camp David summit, five different presidents have failed to make much progress on the Israeli-Palestinian conflict. What would you do differently, or should the US stay out? Question to both candidates: Top national security advisers are central to a president’s conduct of policy: Nixon had Henry Kissinger, Jimmy Carter had Zbigniew Brzezinski and George H.W. Bush had Brent Scowcroft. Could you name a few of your most important foreign-policy advisers? The stilted format makes it unlikely that a whole lot of information will be forthcoming at Monday night’s much hyped debate. But these questions should be pursued vigorously over the next 43 days. Bloomberg Editorial

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his is because the communities that bore the brunt of destruction have not fully recovered. Normalcy has become a slow and tedious journey.

The Commission on Audit (COA), in a report that was released at the end of 2015, noted the slow pace of rehabilitation in the areas hit by the massive earthquake and super typhoon. In Bohol, for instance, the COA report said only 12 out of more than 1,000 rehabilitation projects were finished as of end-2014. The projects involved mainly the repair and reconstruction of infrastructure and government facilities. After the twin disasters, I stressed in my columns the need for active

participation of the private sector to help the survivors return more quickly to their normal lives. I urged, in particular, the big businesses in the disaster-hit areas to lead this effort by promptly reopening their stores or resuming operations. I personally visited the devastated communities, saw the hopelessness on the faces of the survivors, and recognized the positive impact of such a move on their minds so they could move forward with their lives. This came back to my mind when the Board of Investments (BOI)

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After the twin disasters, I stressed in my columns the need for active participation of the private sector to help the survivors return more quickly to their normal lives. I urged, in particular, the big businesses in the disaster-hit areas to lead this effort by promptly reopening their stores or resuming operations.

revived interest on disaster rehabilitation last month. In a memorandum released in August, the BOI said it had included 134 calamity-stricken cities and towns as “least developed areas” (LDA) in the government’s Investment Priorities Plan (IPP). The 134 cities and municipalities designated as LDAs are located in 14 provinces: Leyte (28 LDAs), Eastern Samar (four), Western Samar (four), Biliran (one), Southern Leyte (one), Iloilo (27) and Capiz (17). Inclusion in the IPP is designed to make the LDAs attractive to investors by offering incentives like tax deductions.

The economics/politics of fear

here are three kinds of fear beginning with things that deserve genuine caution. There are more than 43,000 different species of spiders and less than 30 are responsible for human deaths. But, do you know which are which?

The press and media have always been biased just like all of us with particular economic and political views that they have pushed on the public. However, since the 18th century there was always an element of pride in the press that it stood apart from both government and the people.

The second type of fear is that which is imaginary or overstated. A 2006 study in America found the odds of dying in a plane crash to be one in 11 million. By comparison, the odds of being involved in a shark attack are one in 3.1 million. You may be worrying about something that does not warrant your time. The third fear that we experience is manufactured. Think of Kris Aquino in Feng Shui or Alfred Hitchcock’s Psycho. However, we are now part of a grand strategy of manufactured fear to push a political and economic agenda. Of course, this sounds like some conspiracy theory from the pages of a Dan Brown novel. But things

bias in the “hell raising” of a particular agenda, the public received “the news,” which is expected to be factual and unbiased. This is not true in the 21st century. In the words of Financial Times Associate Editor Wolfgang Münchau, “Britain’s vote to leave the EU has been the most cataclysmic global political event this year so far” and a major blow to the political and economic establishment. Prior to the vote, one international media outfit surveyed 1,200 economists and business people and could not find a single one in favor of Brexit. Fifty-two percent of the voters did not believe that survey was unbiased. Since then, that same media group has published dozens of gloom-anddoom articles about Brexit. They

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are different today. The populist movement around the globe of people wanting to take back control of their governments and societies from the political elite and establishment is real and undeniable. The press and media have always been biased just like all of us with particular economic and political views that they have pushed on the public. However, since the 18th century there was always an element of pride in the press that it stood apart from both government and the people. The press exposed notable corruption in government and in the private sector. An anonymous person said: “It is a newspaper’s duty to print the news and raise hell.” But no matter the amount of

Under the BOI’s memorandum, projects located in the LDAs will be entitled to pioneer incentives and additional deduction from taxable income equivalent to 100 percent of expenses in the development of necessary and major infrastructure facilities. I agree that the program could help achieve the Duterte administration’s goal of recovery and rehabilitation of areas affected by calamities. I believe that encouraging investments in these areas is also in line with the government’s policy of developing industries in the provinces instead of in Metro Manila, so rural communities will receive a bigger share of economic growth. Metro Manila is already saturated, but the countryside offers a lot of space to host economic zones, commercial establishments and residential projects. This includes idle agricultural lands and other areas where local government units have determined to be better utilized for nonagricultural purposes.

For comments, e-mail mbv.secretariat@gmail. com or visit www.mannyvillar.com.ph.

wrote about the Philippine election too in an editorial “Change the Philippines Doesn’t Need”; “Like Donald Trump, to whom he’s often compared, the Philippines’ apparent president-elect Rodrigo Duterte won over voters with a crude and bombastic persona.” And who is comparing President Duterte to Donald Trump; the same press and media that criticize both. Voters were told global banks would abandon doing business in London if Brexit passed. Mr. Münchau: “Why should a lowincome earner in the UK worry that the City of London will lose its financial passport? These scare stories have added to a generalized loss of confidence in the economics profession and its reputation of independent judgment.” The people are rejecting what Münchau calls “Project Fear”. But the biggest loser is the credibility of those institutions—government, academia and press/media—that are the most critical to a thinking and free society. E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stockmarket information and technical analysis tools provided by the COL Financial Group Inc.

opinion@businessmirror.com.ph

Opinion

Will the cease-fire hold?

National issues and think tanks

BusinessMirror

Ernesto M. Hilario

ABOUT TOWN

Edgardo J. Angara

he good news is that, for the first time in many years, there have been no reports of armed clashes between the military and communist rebels belonging to the New People’s Army (NPA), as the temporary cease-fire separately declared by the government and the National Democratic Front at the resumption of peace talks in late August appears to be holding.

ver the weekend, I made a promise to myself to devote the remaining years of my life to three projects. The first is to strengthen and deepen the work I have already started in 2002, fighting malnutrition among Filipino children 5 years old and under—the Kalusugan ng Bata, Karunungan ng Bayan (K and K) school-feeding program that ceased operations in 2010, and the OMG (“Oh My Gulay!”) campaign in February 2011, which teaches elementary pupils to eat nutritious vegetables and fruits by involving them in planting and maintaining on-campus vegetable and fruit gardens.

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According to government chief negotiator and Labor Secretary Silvestre H. Bello III, this is “indicative of the sincerity of both parties in the process, which augurs well for peace.” He is also optimistic that a bilateral agreement will be reached when the next round of peace negotiations resumes from October 4 to 10 in Oslo, Norway. The resumption of the peace talks is considered “historic and unprecedented,” as the NPA reciprocated the government’s decision to release 22 detained NDF consultants who are now taking part in the ongoing peace talks. The two parties have agreed to submit drafts for the formal bilateral cease-fire agreement in the next round of peace talks in October. The two sides are now working on two agreements: one on social and economic reforms and another on political and constitutional reforms. Once these agreements are out of the way, then the two panels can hammer out a permanent cease-fire, a proposed amnesty proclamation for all listed detained members of the NDF, and the cessation of hostilities and disposition of forces. The question now is how long will the talks for ending the nearly 50-year-old communist insurgency take place. Answer: Maybe in one year, as the two sides have agreed to accelerate the peace process until a final peace agreement is signed. We are glad that the peace talks have resumed after a long hiatus, and that the peace process is proceeding smoothly. We hope that this will continue, as the war in the countryside has raged for nearly two generations.

House holds its horses

Banish the thought that we will see a marked improvement in the traffic situation in the months ahead. Why? Congress appears reluctant to give the Department of Transportation (DOTr) the emergency powers they have been requesting for them to solve Metro Manila’s traffic woes. The contemplated emergency powers would include, among others, easing the strict requirements on government procurement. The law says that all government

projects worth a certain amount must be subject to public bidding. It also lists down certain conditions under which government agencies can dispense with public bidding and enter into negotiated contracts with private suppliers or contractors. What may have prompted two House leaders to ask DOTr officials whether they serve the public interest or their own vested interest are the possible negotiated contracts for big-ticket transportation projects costing millions or even billions of pesos. House Minority Leader and Rep. Danilo Suarez of Quezon had pointed out that Transportation Secretary Arthur P. Tugade and Undersecretary Noel Kintanar were both former executives of the contractors involved in the common station project for the Metro Rail Transit (MRT) and Light Railway Transit (LRT) lines in Quezon City. “I have to be very straightforward with my concern,” Suarez said. “Tugade and Kintanar are from Ayala firms or have done business with the Ayalas. They might favor the Ayalas’ business interests. That’s not right.… We don’t want the emergency powers to be abused and misused,” he stressed. In the DOTr budget hearing on September 9, House Speaker Pantaleon D. Alvarez mentioned that Tugade is a former assistant vice president of Ayala Corp., while undersecretary for air operations Bobby Lim is a former country manager of the International Air Transport Association. “The budget of every department is for the interest of the Filipino people and not for the interest of some businessmen,” Alvarez said. A timely reminder, if you ask us, now that we have an administration that has promised to bear down hard not only on illegal drugs and other crimes but also against graft and corruption. If officials of the DOTr have a clear conflict of interest, delicadeza dictates that they inhibit themselves from pushing any infrastructure project, such as railways, that would benefit their former employers or their friends in the private sector.

E-mail: ernhil@yahoo.com.

A new measure of China’s vulnerability By Mark Whitehouse Bloomberg View

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here in the world might the next financial crisis start? If you believe a new measure of credit risk, China is the leading candidate. The 2008 financial crisis helped bring global leaders to the realization that they needed a better early-warning system. To that end, the Bank for International Settlements—a sort of central bankers’ central bank—has been publishing more data on money flows around the world. These include an indicator called the credit-to-GDP gap, which focuses on the amount of credit being provided to households and businesses as a share of GDP. The more the indicator rises above its longerterm trend in a given country, the more likely it is that borrowers are getting overextended—a situation

that tends to lead to defaults, banking troubles and broader slumps. In hindsight, the measure would have done a pretty good job of indicating trouble ahead of the most recent crises in the US and Europe. US credit peaked at about 12 percentage points above its long-term average in mid-2007, just as the subprime-mortgage boom turned to bust. The average gap in Greece, Italy, Portugal and Spain reached a high of 34 percentage points in early 2009, ahead of the European sovereigndebt disaster. Now, the indicators for the US and Europe are in negative territory —a reflection of struggles to restore growth while still working through the excesses of the previous boom. The credit gap in China, by contrast, is at its highest level since at least 1995 (the first year of the data series): As of March, it stood at more than 30 percentage points.

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After recently reading “Save The Children’s” Cost of Hunger report about the Philippines, I resolved to redouble my efforts at advocating for effective public policy on child nutrition, as the staggering malnutrition cost of the Philippines was P328 billion worth of economic losses in 2013 —equivalent to around 2.83 percent of GDP at the time. The second project is about saving

our seas—which includes advocating for more marine-protected areas and persuading local government officials to proclaim a temporary fishing ban within their overfished municipal waters, among other things. A recent United Nations Development Program study shows our marine coastal resources provide up to $556 million in goods and services. Our fishing industry em-

Tuesday, September 27, 2016 A11

ploys up to 1.4 million people, and supplies up to 2.6 percent of the world’s supply. In fact, Trade Secretary Ramon M. Lopez recently announced that the Philippines is now the European Union’s (EU) top supplier of tuna, on account of our inclusion in the EU-Generalized Scheme of Preferences+ scheme. The Philippines boasts a coastline of 36,289 kilometers long. The seas surrounding our 7,000 islands offer the 100 million Filipinos their future safety net, as it has always been in history and culture. Hence, this underscores the urgency of efforts to save our seas today. The third project is for our senior citizens. A 2015 University of the Philippines Population Institute study projected that the country’s senior population (60 years and above) will double in less than 10 years, from 6.8 percent in 2010 (around 6.2 million) to 10 percent in 2025 (roughly 12 million). The Commission on Population said in 2015 that, while Filipinos are generally living longer, they are not necessarily healthier—as our senior citizens are only partially reaping the benefit of better health care.

Global food demand to double Cecilio T. Arillo

database

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INGAPORE—Animal products will rise rapidly, as global food demand will double until mid-century, a study by the Potsdam Institute for Climate Impact Research (PIK) shows.

The study shared by PIK to Database said the development of future diets is not only crucial for food security and nutrition, but also for greenhouse-gas emissions from agriculture. Scientists at PIK, using a new simple and transparent tool, have investigated different scenarios for future calorie demand around the globe. Their results are visualized in an interactive online application, enabling interested parties to explore the future demand for plant and animal products per capita on a continental scale. “Long-ter m projections of global food demand are of major

importance when it comes to global food security, human nutrition or environmental pressures, like greenhouse-gas emissions from agricultural production,” lead author Susanne Rolinski said. “We provide the first statistical method that allows to robustly create long-term customized fooddemand scenarios,” Rolinski said. Researchers at PIK applied their new method to four acknowledged and common scenarios of global socioeconomic development. The new method can easily be used for upcoming scenarios. The PIK study indicates a strong

increase of global food demand until 2050 in all four scenarios. “Under continuous income growth, there are good prospects that widespread undernourishment will strongly decline until 2050,” second lead author Benjamin L. Bodirsky said. “But already today, unhealthy diets cause globally a higher mortality than undernutrition and hunger,” Bodirsky said. He said unhealthy diets, rich in red meat, sugar and processed foods are an important risk factor for many noncommunicable diseases, like diabetes II, cancer or coronary heart disease. “This risk factor may become even more prominent in the future, as many emerging economies are projected to rapidly increase their demand for animal-based products, Bodirsky pointed out. Also per-capita caloric demand, he said, is projected to increase in all world regions, either due to higher per-capita intake or due to an increase of food waste in households.

Agriculture’s major role

“From climate change to poverty, hunger or health, agriculture plays

They also remain among the poorest sectors of society, as the latest Department of Social Welfare and Development data showed that there were roughly a million senior citizens in poor households across the country in 2011. Such a situation demands urgent action. The three projects cover among the most serious social and economic challenges the country faces today—child malnutrition, mismanagement (if not destruction) of our marine resources and problems brought by our aging population. These are issues that demand the attention of our decision-makers. In some countries, these areas of vital research are conducted by think tanks and by serious research universities. Unfortunately, think tanks in the Philippines and research universities doing this type of research are rare. Through the Angara Centre for Law and Economics and the UP President Edgardo J. Angara (UPPEJA) Fellowship, we hope we could fill the gap and assist academics and researchers in pursuing the pressing policy studies.

E-mail: angara.ed@gmail.com.

a major role in shaping our future,” said Hermann Lotze-Campen, chairman of PIK research domain Climate Impacts and Vulnerabilities. “Our study shows on the one hand that in some regions, like Sub-Saharan Africa, undernourishment is likely to persist in the coming decades and requires a long-term engagement. At the same time, our results indicate the importance of returning to a healthy diet that benefits the climate and environment, as well as people’s health,” Lotze-Campen said. He said in some of the richest countries, the share of animal-based calories has already started to decline. The PIK food-demand model can be used to create long-term scenarios of household food consumption for all countries of the world. It is based on a statistical analysis of historical data on dietary patterns and income of 162 countries over 46 years. The scenarios can be customized to a specific storyline by applying different input data from the key indicators GDP and population growth. To reach the writer, e-mail cecilio.arillo@ gmail.com.

The Syrian-Americans who stood up to Iran By Eli Lake | BloombergView

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ran’s president, Hassan Rouhani, has persuaded most Western elites that he is a moderate worthy of deference. Big-shot journalists respectfully interview him. Former senior US officials dine with him. European foreign ministries accommodate his pious sensibilities. President Barack Obama and his top advisers are no exception. They, too, go out of their way not to offend Rouhani, particularly since he agreed to the nuclear deal in 2015. Last week at the UN General Assembly, Obama and Secretary of State John Kerry did not call out Iran by name, as they did with Russia, for supporting the slaughter in Syria. And even though Iran’s president has declined Obama’s requests for a faceto-face meeting, the US president had kind words for Iran in his big speech at the UN on Tuesday. Two people who are not taken in by Rouhani’s charms are Zaher Sahloul and Yahya Basha. They are SyrianAmerican medical doctors who have devoted themselves to pleading with diplomats and world leaders to stop the killing in the place of their birth. Sahloul traveled to Aleppo in June and July to treat some victims of the Syrian war. On Tuesday last week Sahloul and Basha were invited to a meeting in New York with Rouhani for US Muslim leaders. It was the second meeting with Rouhani for the two doctors,

Abed Ayoub (left) and Zaher Sahloul, activists for Syrians. BLOOMBERG NEWS

and they decided to press Iran’s president on his country’s support for the man tormenting their fellow Syrians. Sahloul told me that when it was his turn to speak, he told Iran’s president about a 5-year-old boy named Ahmed. Between June 27 and July 1, Sahloul performed surgeries on Ahmed, who suffered shrapnel wounds in his spinal cord and left lung after his family’s home collapsed from a barrel bomb dropped by the Syrian air force. When Sahloul left Aleppo, Ahmed was alive, but on life support. The next day, the young boy’s heart stopped and he died. “I asked the president, as a Muslim, whether Hussein would be on the side of the people dropping the barrel bombs,” Sahloul told me. Hussein is the grandson of the prophet Mohammed and is the third imam

of the Shiite sect of Islam, which is practiced in Iran. Sahloul said Rouhani heard him out and then responded that Iran has no choice but to fight against terrorists, like the Islamic State. Later, as the meeting with US Muslim leaders was wrapping up, Basha tried to approach Rouhani in the hallway to press the Syria issue. Basha told me Rouhani just kept walking. The moral and spiritual case these doctors made to Iran’s president is undercut by Obama’s policy decisions. After all, the day after Sahloul and Basha met with Rouhani, the US approved licenses for Boeing and Airbus to sell planes to Iran Air. This is despite evidence the airline has helped supply the Syrian regime with military equipment and personnel for the war Obama says he

is trying to end. On Sunday evening, White House Deputy National Security Adviser Ben Rhodes is scheduled to address the annual meeting of the National Iranian American Council, which has lobbied since 2013 in Congress to burnish the image of Rouhani as a reformer who is fighting against his country’s hardliners. Sahloul understands Rouhani’s appeal on a certain level. “He is an excellent public-relations person for the Iranian regime,” Sahloul told me. “He hugs everyone, he smiles, the language he uses is not controversial in Muslim circles.” Many SyrianAmericans, though, see a menace behind that smile. Sahloul said when he first agreed to meet with Rouhani in 2014, others at his humanitarian organization protested. “Many of our board members say Rouhani is a war criminal and we should have no contact with him,” he said. But Sahloul sees it differently. He told me that it is now apparent in the final months of the Obama administration that the US has failed to diminish Iran’s support for Bashar al-Assad’s regime in Syria. “Clearly, our government, the US government, can’t influence the regime,” he said. “So I meet with Iranian leaders and ask them directly.” To say that Obama disappointed Sahloul in this respect is an understatement. “I think history will judge him as the president who had all the information and allowed a genocide in Syria,” he said.

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PESO, STOCKS SLIDE AS DUTERTE SCARES AWAY INVESTORS T

he peso sank to a seven-year low and stocks declined, as investors pulled money from the nation’s assets amid concerns about President Duterte’s policies. Global funds sold Philippine stocks for a 22nd straight day amid nervousness about the fallout from Mr. Duterte’s antidrug war and his outbursts against the US and the United Nations. Central bank Governor Amando M. Tetangco last week sought to soothe investors spooked by President Duterte’s rhetoric. The peso led a drop in developing-nation currencies along with the Turkish lira and South Korean won on Monday ahead of the US presidential debate and a meeting of oil producers this week. The peso’s decline is “mainly due to politics, with the Philippine President’s ongoing war on drug dealers and his intent to seem to alienate all of their major trading partners,” said Jeffrey Halley, a market strategist at Oanda Asia Pacific Pte. in Singapore. “Any rally would be quite short-lived in the peso this week just until the political situation clarifies a lot more. We also have the first US presidential debate coming up and I think it’s quite a big event that hasn’t really been priced by the market.” The peso tumbled 0.5 percent to 48.240 per dollar as of 1:40 p.m. in Manila, according to Bankers Association of the Philippines data compiled by Bloomberg. It reached 48.260 earlier, the weakest since September 2009, and has lost 3.9 percent over the past month, the worst performance in Asia. In about three months on the job, the Philippine leader has used expletives in talking about US President Barack Obama and vowed to end cooperation with the US military in both fighting terrorism and patrolling the disputed South China Sea. He’s moved to boost economic and defense ties with China and Russia. S&P Global Ratings warned last week of “rising uncertainties surrounding the stability, predictability and accountability” of the Duterte administration. It said the “stability and predictability of policy-making has diminished somewhat,” citing the president’s pronouncements on foreign policy and national security. The Philippine Stock Exchange index dropped 1 percent to 7,644.23, after rallying 2.3 percent last week, the most in more than two months. The yield on 10-year government bonds surged 37 basis points to 3.94 percent, the highest since midJuly, according to the midday fixing from Philippine Dealing and Exchange Corp. “The weakness in the region and political concerns are driving some investors to take profit,” said Rafael Palma Gil, a portfolio manager at Rizal Commercial Banking Corp. in Manila. S&P’s statement may have contributed to the slide in stocks, he said. International investors sold a net $5.6 million of Philippine shares on Friday, the 22nd straight day of outflows. They have pulled $350 million so far this month, the most in a year. Bloomberg News

Tourism receipts surged 14% in Jan-July, arrivals up 13.8% By Ma. Stella F. Arnaldo

@Pulitika2010 Special to the BusinessMirror

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HE country’s tourism sector earned some P149 billion from foreign visitors in the period of January to July. This represented a significant 14-percent gain from the same period last year, latest data from the Department of Tourism (DOT) show. On a monthly basis, the DOT said the month of February recorded the highest tourism receipts at P27.5 billion, as well as the biggest increase at 42.09 percent compared to February 2015. The cumulative arrivals for the period in review also showed how many tourists had fun in the Philippines. Some 3.54 million visitors arrived in the country from January to July, up 13.83 percent from the same period last year. Substantial growth in arrivals was recorded for China at 64.51 percent to 422,801 visitors, and Taiwan at 30.5 percent to 136,019 visitors. Singapore, Malaysia and Hong Kong, however, registered dips in arrivals by 1.09 percent, 7.3 percent and 1.71 percent for the seven-month period. Of the total arrivals, South Korea remained as the top source market for tourists for the period at 828,911, up 8.74 percent. However, the growth in the South Korean travelers slowed down from the 15.11-percent expansion recorded in January to July 2015. Asked to comment, Tourism Assistant Secretary Rolando Cañizal told the BusinessM irror there was “nothing in particular” that could be pinpointed as contributing to the slowdown. “There are really times that the growth rates are slower for certain periods,” he said. Other analysts averred, however, that

the slowdown could be attributed to the fact that many South Koreans have started living in the Philippines. The Ministry of Foreign Affairs in South Korea estimated that close to 90,000 of its citizens were living and working in the Philippines as of 2015. But Cañizal believes otherwise. He explained that “there are times when there are a lot of honeymooners and ESL [English as a Second Language] students” in the country, but the DOT has yet to compile data to support this notion. Other top source markets for tourists were the United States at 529,069 (up 9.96 percent); China at 422,801 (up 64.51 percent); Japan at 305,090 (up 9.4 percent); and Australia at 145,441 (up 5.97 percent). This was followed by Taiwan; Singapore, with 106,233 arrivals; Canada, with 103,970 (up 11.31 percent); the United Kingdom, with 103,853 (up 13.83 percent); Malaysia, with 84,319; and Hong Kong, with 72,190. India dislodged Germany as the 12th-largest source of tourists at 53,496, growing by 25.41 percent during the period of review. For his part, Tourism Spokesman and Assistant Secretary Frederick M. Alegre said of the latest tourism report: “The double-digit growths we are experiencing in visitor arrivals and tourism receipts indicate the foreign tourists’ continued confidence in the Philippines.” He added: “The peaceful transition of the government was pivotal not only in driving these numbers, but also in telling the whole world that the Philippines is, and remains, a safe place to travel for foreign visitors and Filipinos alike. As President Duterte addresses peace and order issues, and build more infrastructure to tourism destinations, we are confident that we will be able to double our visitor arrivals to 12 million in 2022.”

BREAKTHROUGH TEAM-UP Manuel V. Pangilinan (left), PLDT chairman and CEO, and Eugenio Lopez III, ABS-CBN chairman, hold the signed contracts for their partnership on the industryleading video-on-demand platform iWanTV. Nonie Reyes

MVP: Voyager to begin Asean journey in 2017

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By Lorenz S. Marasigan

@lorenzmarasigan

he regional expansion of digital-innovations company Voyager Innovations Inc. hinges on its success in the Philippines and—by the looks of it— the company will start embarking on a journey to another Southeast Asian country by 2017. Voyager Chairman Manuel V. Pangilinan said the digital-innovations arm of PLDT Inc. will hit critical mass by year-end, thus, allowing the company to expand its operations outside the Philippines. “We’re trying to ensure that we first hit critical mass here in the Philippines before we are able to expand overseas,” he told the BusinessMirror. “But the idea is really to expand it to other parts of Asia other than China.” Voyager and its digital financialservices arm PayMaya Philippines Inc. process about 25 percent of domestic remittance volume, which

Currency. . . Continued from A1

“The foreign-exchange markets have shown some out-sized moves in recent years, and most macroeconomic models suggest that these moves should have large effects on growth,” Stehn wrote in a note to clients.“The recent experience casts some doubt on this view. Exports have become less sensitive to exchangerate changes over time, while imports do not show a significant response to the exchange rate.” The yen was little changed at 101.01 per dollar as of 6:10 a.m. in London on Monday from Friday, while the pound rose 0.1 percent to $1.2981.

We’re trying to ensure that we first hit critical mass here in the Philippines before we are able to expand overseas.”—Pangilinan

roughly translates to P80 billion to P90 billion per year. “The volumes are growing quite fast. So the expansion can happen by next year. We still don’t have a ballpark figure on the capital, but we may have to increase it because during the initial year or two of any digital innovation, you incur losses as you try to build critical mass. So we have to calibrate that,” he said. He described competition in the Asean region as uneven. Still, he is confident that Voyager and PayMaya will be able to thrive in such an environment.

“Competition is uneven in developing Asean. I’m sure there are similar innovations, so in many respects we are trying to compete,” Pangilinan said. Voyager offers a suite of digital platforms through Voyager Business. Chief of these offerings is Freenet, the sponsored data platform of Voyager. Through Freenet, brands and enterprises can provide free access to their mobile apps or web sites to their customers without data charges for Smart, TNT and Sun subscribers. TackThis! Concierge, meanwhile, is a fully managed e-commerce service suite that makes it easy for brands to sell easily online. It helps businesses put up their online stores, manage payments and logistics platforms and digital marketing of products, so firms can focus on running their core businesses. L a rge enter pr ises, on t he

other hand, can take advantage of Takatack Rewards to digitally enable their rewards and incentives systems by providing an e-wallet to their employees, which they can spend on Takatack, one of the largest online marketplaces in the country today. Furthermore, PayMaya Business makes it easy and convenient for merchants to accept card payments both online and face-to-face. This is made possible by PayMaya Swipe and PayMaya Checkout, which are just some of the products under Voyager subsidiary PayMaya Philippines Inc. And to help brands reach their markets via mobile, Hatch offers a selection of rich mobile-marketing services, such as SMS+, mobile magazines, pop-up stores, zero-rating and customer surveys, among others, that can be deployed to the tens of millions of consumers in its mobile opt-in base.

Japan has stepped up its use of unconventional monetary tools, including negative rates and quantitative easing, to try to stimulate its economy since the election of Prime Minister Shinzo Abe in 2012. The central bank fine-tuned its stimulus polices last week to target the shape of the Japanese government bond yield curve rather than focus on expanding the money supply. Yet, the nation’s economy is forecast to expand just 0.6 percent in 2016. What’s more, the yen has gained 19 percent versus the dollar this year, showing that not only are the economic effects of currency depreciation waning, but the central bank’s ability to weaken the exchange rate is ebbing too.

“Currency rates can still play a significant role, but require companies and investors to believe that exchangerate changes are permanent rather than temporary,” said Mansoor Mohi-uddin, a Singapore-based strategist at Royal Bank of Scotland Group Plc. “Companies need to believe that central banks will keep exchange-rates weak before they change their investment patterns. If the central bank’s commitment is questioned, like in Japan, companies will not believe exchange rate weakness will continue.” While the 13-percent plunge in the pound since the UK voted to leave the European Union in June would traditionally be seen as cushion for the economy, the impact may be muted, according to

Timothy Graf, head of macro strategy for EMEA at State Street Global Markets. Forecasts in the latest Bloomberg monthly poll show that recent signs of strength haven’t dissuaded economists from the view that there will be a sharp cooling in growth in 2017. They see the pace slipping to just 0.7 percent, from 1.7 percent this year. That would be the worst performance since 2009, when the economy was last in recession. “It will be more like following the financial crisis where you did get a little bit of a bump, but it really wasn’t that appreciable,” Graf said from London. “You didn’t see any narrowing of the UK trade balances. It didn’t really change the balance of trade for the UK.”

Bloomberg News