Businessmirror september 27, 2017

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Wednesday, September 27, 2017 Vol. 12 No. 349

Tweaks in procurement law needed to end Filipino bias RA 9184 M By Cai U. Ordinario

Tax on SSBs contradicts competition law–Arranza By Catherine N. Pillas

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omestic manufacturers have asked the Philippine Competition Commission (PCC) to look into the possible effects of the proposed sugary drinks tax on the industry’s competition landscape, particularly citing the Senate version that divides sweetened beverages into different tax brackets. The Senate version of the Tax Reform for Acceleration and Inclusion (TRAIN) bill, aside from lowering the House-proposed tax rate on sugar-sweetened beverages (SSBs), aims to put differentiated tax rates on sugary drinks, depending on the type of sweetener used. According to Jesus L. Arranza, chairman of the Federation of Philippine Industries (FPI), having a two-tier or multitier tax system would create market segmentation. “Since you’re not taxing all beverages but only those consumed by the poor, it has the effect of a ‘two-tier’ system; that will affect the market share of companies catering to the poor and those to

ARRANZA: “Market segmentation should be caused by free-market forces, not by law.”

the rich. One group will have an advantage over the other. Is that not going against the anticompetition act?” Arranza said in a news briefing on Tuesday. In the House of Representatives’ version, an excise tax of P10 is proposed to be levied on SSBs on perliter volume capacity. The Senate version, on the other hand, proposes a P10-per-liter volume capacity on SSBs using purely high-fructose corn syrup, P5 per liter on drinks using purely caloric sweeteners and P3 on beverages using mostly noncaloric sweeteners. Two years after implementation, beverages using purely caloric sweeteners will be taxed at a rate of P0.05 per gram of sugar. The two other categories will stay the same.

PESO exchange rates n US 50.6290

See “Tax,” A2

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Christians standing up for Christianity–the only way Teddy Locsin Jr.

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ultilateral lenders are now working with the government in harmonizing the country’s procurement procedures with international standards to allow more foreign participation, especially for massive infrastructure projects that require the latest technologies to speed up and improve implementation.

Asian Development Bank (ADB) Philippines Office Country Specialist Joven Balbosa told report-

2016 ejap journalism awards

ers that International Competitive Bidding (ICB) and international best practices are needed to ac-

The Government Procurement Reform Act that regulates the state’s procurement activities

free fire Speech delivered by Ambassador Teodoro Lopez Locsin Jr. at the panel discussion with the Holy See and Institute of Cultural Diplomacy sponsored by Hungary.

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cess “global technologies” that will make the construction of various projects more efficient. “You got these large projects like tunneling, you know, flood management for Metro Manila, not just pumping stations. These require new global technology.

HE universally shared sense of equality, said Martha Nussbaum in The New Religious Intolerance, is the ­foundation of human interaction, be it one of comity, cooperation and even conflict—if conflict is to be kept within some bounds of decency as dictated by the laws of war. A devout Catholic, Corazon Aquino, my country’s liberator, told the UN General Assembly that “There are many ways to govern people but only one way to treat them, and that is with decency.”

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BMReports

Despite ‘complex’ regulation, PHL tax system seen effective By Rea Cu

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In the same year, marketing and financial assistance resulted in an increase in exports amounting to $61.80 billion, from $38.44 billion in 2009, through the government’s use of funds for trade promotions through trade events for local and international products. According to the NTRC, the publication on where taxpayers’ money go will be updated by next year. “We are yet to update the publication to see if there has been a difference between the old administration and the new expenditure pattern,” the NTRC added.

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Conclusion

HE st ate a sser t s t h at taxes paid by entities within the country’s borders are shored back to the economy in the form of improved government social services. The National Tax Research Center (NTRC), in its June 2015 publication entitled “Where does your tax money go?” justified more tax collections as doing so equates to greater elbow room for spending. According to the NTRC, the bulk of spending is for delivery of government services, which is accomplished through the bureaucracy. One component of the bureaucracy is the 42-year-old Metropolitan Manila Development Authority (MMDA). According to the NTRC, the MMDA used its allocation from the tax pie in 2014 for the declogging of drainage systems, dredging works, cleaning of manholes and

This file photo shows people walking by the Department of Finance (DOF) building on Roxas Boulevard, Manila. The DOF and its attached agency, the Bureau of Internal Revenue, need to upgrade their resources to help the government attain its tax-collection targets, according to Abrea Consulting Group President Raymond A. Abrea. ROY DOMINGO

hauling and disposal of garbage. The MMDA allotted P271 million for these services. The government said taxes were also used to provide potable water to rural folks in 878 local wa-

ter districts in 2014. In terms of power supply, the government has powered at least 36,052 barangays in 2014, from the 35,860 in 2009, through a Barangay Line Enhancement Program.

Complicated?

TAX experts in the country have pointed out that it is not the tax system that is complicated, but the rules and regulations that govern it. “The challenge is under the voluntary assessment system, which the Philippines has adopted, the BIR [Bureau of Internal Revenue] is highly dependent on the voluntary compliance of taxpayers,” Abrea

n japan 0.4532 n UK 68.1922 n HK 6.4794 n CHINA 7.6492 n singapore 37.4863 n australia 40.1690 n EU 59.9954 n SAUDI arabia 13.5014

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Source: BSP (26 September 2017 )

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Despite ‘complex’ regulation, PHL tax system seen effective Continued from A1

Consulting Group President Raymond A. Abrea said. According to the Tax Management Association of the Philippines (TMAP), the Philippine tax system is not complicated but a complex one, since it requires a number of requirements, and taxpayers need to comply with various compliance rules. “Currently, the tax collection in the Philippines has proven to be quite complex following the imposition of numerous requirements and multiple compliance rules,” TMAP President Malou P. Lim said. “These requirements are arduous, which can be considered as a big factor for the increase in the level of tax evasion in the Philippines.” A recent study by the World Bank ranked the Philippines 115th out of 190 countries in terms of the ease of tax paying. This means the country belongs

to the lower rung of territories where it’s difficult to pay taxes. “In fact, it was reported that the Philippines requires 28 tax payments within a year, and tax compliance takes about 185.6 hours per year,” the TMAP said. Among other things, the study also measured the ease of paying taxes across economies by assessing the time it takes for a medium-size company to prepare, file and pay its taxes; the number of taxes that a company has to pay; the method of payment; and the total tax liability as a percentage of commercial profits.

CTRP

THE Department of Finance (DOF) proposed the first package of its Comprehensive Tax Reform Package (CTRP), which aims to lower personal income-tax (PIT) rates and implement offsetting measures, to Congress in September last year. The proposals are being

discussed by the Upper House. Ta x re for m i s one of t he top priorities under the socioeconomic agenda of President Duterte when he assumed office in July last year. Package 1 of the CTRP aims to lower PIT rates from 32 percent to 25 percent over a two-year period. The rates do not apply to the so-called ultrarich to keep rates progressive. The original proposal exempts 4.7 million taxpayers with a net taxable income of P250,000 and below from paying income taxes. House Bill 4774, or the revised Package 1 of the CTRP, is expected to raise additional revenues for the government amounting to tP206.6 billion in the first year of implementation. Only with a sizable increase in revenues can t he gover nment meet its goal of drastically reducing poverty and transforming the country into an upper

middle-income economy in 2022, Finance Undersecretary Karl Kendrick T. Chua said. The additional revenues will be spent on infrastructure, human capital including education, health, lifelong training, and research and development and social protection for the poor and other vulnerable sectors.

Exemptions

THE package also includes lowering the rates for estate and donor’s taxes and expanding the valueadded tax (VAT) base. However, Package 1 of the CTRP retains the exemptions enjoyed by senior citizens and persons with disabilities, and adjusting automobile and fuel excise taxes. Estimated losses from the reduction of PIT rates is at P139.6 billion if approved this year and implemented in 2018. But the revenues from the offsetting measures to address the losses is projected to

DA, NFA ask Congress to allow export of corn Continued from A12

the NFA’s proposal to remove the need for certification before local rice and corn farmers could export their produce. “To establish rules and regulations governing the export of rice, corn and other grains and/or their substitutes and their by-products/ end-products and to collect fees and charges for such exportation at rates to be determined by council,” the DA position paper read, a copy of which was obtained by BusinessMirror. “In the exercise of this power,

the authority shall provide the guidelines for the exportation of rice and corn and other grains and/or their substitutes and their by-products/end-products by certified and licensed exporters,” the paper read.

‘Viable option’

Philippine Maize Federation Inc. (PhilMaize) President Roger V. Navarro told the BusinessMirror that the removal of the ban on exporting corn would open the world market to local farmers. “That’s a great development. We will have the option to export if the

price of corn in the international market is higher,” Navarro said. He said farmers could ship corn to Taiwan, South Korea, Indonesia and Malaysia. Easing the restrictions on exporting grains, Navarro said, would also boost the farm-gate price of corn. “The ability to export would be considered by traders in setting farm-gate price.” The PhilMaize chief said his group is considering the possibility of selling rice-corn blend here and abroad. Navarro said the rice-corn blend is popular in Middle Eastern countries.

He noted the rice-corn blend is packed with minerals and is suitable for diabetics as it has a lower glycemic index. Philippine Institute for Development Studies Senior Research Fellow Roehlano M. Briones said the export of corn would help regulate the domestic price of the grain during harvest. “It might help the local corn industry whenever there’s a surplus and when prices are depressed. The world market serves now as a viable outlet for corn farmers and traders,” Briones told the BusinessMirror.

PHL lags behind 3 Asean peers in competitiveness Continued from A12

business association is calling on Congress “to focus on passing priority bills identified by the business sector, especially the Comprehensive Tax Reform Program and not allow itself to be diverted by various political maneuvers like impeachment proceedings.” T his year’s A sean ran k ing is the second year in a row the Philippines slipped among other

economies in the bloc; the Philippines took the fifth spot among nine countries in 2015, then slid to the sixth spot in 2016. Perhaps contributing to this l ag ga rd overa l l per for m a nce among the Asean group is the country’s performance on transport-related indicators. Each of the pillars have a subset of indicators and, according to MBC Executive Director Peter V. Perfecto, the Philippines is dead-

last in almost all infrastructurerelated indicators. “The state of Philippine infrastructure is in dire need of attention and action,” Perfecto said. “While the quality of air-transport infrastructure was identified as one of the country’s greatest disadvantages [ranking 124th out of 137 countries], the quality of other infrastructure, such as roads and ports stand as big disadvantages, as well. In fact, we trail behind

our Asean neighbors in almost all measures of infrastructure.” He note d t he Ph i l ip pi nes ranked lowest in Asean in terms of “Quality of Overall Infrastructure”, in “Quality of Roads” and in “Quality of Air Transport Inf rastr ucture”. “Implementing the plans under the ‘Build Build Build’ program is critical for the effective functioning of a growing Philippine economy,” Perfecto said. Catherine N. Pillas

generate P162 billion. The initial loss from the reduction of PIT rates during the first hearing on the package at the Ways and Means Committee was at P159 billion, while initial net gains is seen at P200.7 billion. The revised plan also includes legislated administrative reforms in the DOF-attached agency the Bureau on Internal Revenue (BIR) and the Bureau of Customs. These reforms include improved fuel marking to prevent smuggling, the use of e-receipts, mandatory connection of the point-of-sale system to the BIR and the relaxation of bank-secrecy laws for investigating and combating tax fraud.

Compliance

ACCORDING to Abrea, “Voluntary compliance [with tax requirements] is entirely dependent on the understanding and willingness of taxpayers to comply and pay the right taxes.”

Tax. . .

He added there are efforts from the government in terms of improving the tax system of the country. He pointed out that the DOF and attached agency the BIR still needs better resources to attain tax-collection targets. Abrea said this was expressed by BIR Commissioner Caesar R. Dulay. “They lack resources to collect the huge revenue target of the government,” Abrea added. “They need more people and technology to ensure they assess and collect the right taxes without tolerating the corruption and inefficiency in our tax system.” The TMAP said that, with the CTRP, the government is a step closer to achieving its goal of reforming the country’s complicated tax system. “We recognize that the government is currently seeking to improve tax administration through the tax reform initiative,” Lim said.

According to Arranza, citing Nielsen data, the highest consumers of juices, soft drinks and powdered juice are from the D class. This means that the tax measure is anti-poor. Eighty-four percent of the retail landscape is also comprised of sarisari stores, which are the primary purveyors of these prepackaged sweetened drinks. The FPI, a group of domestic manufacturers, said the implementation of the tax measure will cause a 40-percent to 60-percent sales slump among sari-sari stores, brought about by the 25 percent to 50-percent price increase of daily commodities. The group is also concerned about the TRAIN’s effect on competition. Arranza cited the case of coffee retail chains, whose products will not be covered by the SSB tax, as their beverages are not prepackaged or do not contain manufacturer-added sweeteners. He said there should be a uniform implementation of taxes. “Market segmentation should be caused by free-market forces not by law.”

“I think it’s about time for the PCC to speak out on the issue and come out with its opinion,” Arranza noted. The Department of Finance highlighted in recent interviews that the proposed tax on SSBs is more of a health measure than a revenue-raising bill. Finance Undersecretary Karl Kendrick T. Chua reasoned that SSBs are mostly empty calories that have little or no nutritional value, but are relatively affordable and easily accessible, especially to children and the poor, which is why Filipinos consume more of these products. Moreover, the finance official said that as SSBs are nonessential food items and a nongood, the excise tax is not regressive. By taxing the entire spectrum of people’s consumption of nonessential goods, consumption of healthier and essential items would increase. But Arranza said the government should also look into the food intake of all Filipinos, as it could be barking up the wrong tree by singling out SSBs as the cause of the rising cases of obesity. For instances, he said Filipinos consume too much white rice, which causes blood-sugar levels to rise rapidly.

House panel. . .

qu a l i f y i ng pat ient s a nd v iolate confidentiality shall be punished accordingly.

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The bill mandates the secretary of the Department of Health to lead the formulation of regulations to implement the act. The secretary shall also issue registered identification cards to qualified patients after a careful review of their required documents. It also provides for the establishment of the Medical Cannabis Compassionate Center (MCCC), which refers to any entity registered with the DOH and licensed to acquire, possess, cultivate, manufacture, deliver, transfer, transport, sell, supply and dispense cannabis, devices or related supplies and educational materials to registered qualifying patients. The MCCC shall guarantee the appropriate dispensation of cannabis and shall not release more than the prescribed dosage for one month to a registered qualified patient or designated caregiver. It shall maintain internal confidential record of each entry, which includes information on the date and time the cannabis was dispensed, the amount of cannabis being dispensed and on whether it was dispensed directly to the patient or to the designated caregiver. A registered MCCC or Medical Cannabis Safety Compliance Facility, shall implement appropriate security measures to deter and prevent the theft of cannabis and unauthorized entrance into areas containing cannabis. Persons who d iscr iminate

Antihazing law

Meanwhile, the House Justice Subcommittee on Prosecutorial Reforms on Tuesday approved HB 3467 prohibiting all forms of hazing and regulating the initiation rites of fraternities, sororities and other organizations. According to Rep. Bernadette Herrera-Dy, author of the bill, hazing has been, and continues to present, a serious problem in the Philippines and in other countries in the world, including Indonesia, Russia, India and the United States. She said the government should act to correct such ubiquitous and institutionalized activity as hazing has become. Herrera-Dy’s bill makes all hazing illegal, instead of just regulating hazing, with penalties ranging from fines to life imprisonment, depending on the seriousness of the hazing incident, and makes any crimes committed by the victim as a result of the hazing attached to the perpetrator. Importantly, the bill also expands the definition of hazing beyond just incidences related to gaining membership in an organization. The bill also expands the definition of hazing to cover psychological injuries in addition to physical suffering, as well as beyond just incidences related to gaining membership in an organization. It will be transmitted to the mother committee for deliberations. Jovee Marie N. dela Cruz

Economy

A4 Wednesday, September 27, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon

Senate OKs ₧750-M disaster fund for power co-ops on 3rd reading By Lenie Lectura

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@llectura

awmakers have recently approved a P750-million emergency fund for electric cooperatives (ECs). The Senate unanimously approved on third and final reading the Electric Cooperative Emergency and Resiliency Fund Act of 2017 (Senate Bill [SB] 1461), which allocates P750 million to the National Electrification Administration (NEA) to fund the disasterrehabilitation efforts of ECs. “Electric cooperatives carry the heavy burden of restoring electricity as quickly as possible after every storm, earthquake or other calamity that hits their coverage areas. We should make sure that electric co-ops have the resources to rapidly and efficiently respond to the needs of our countrymen during those trying times,” said Sen. Sherwin T. Gatchalian, the chairman of the Senate Energy Committee and principal sponsor of SB 1461. Gatchalian noted that ECs have been at the tail end of the government’s priority list for postcatastrophe rehabilitation assistance. “Electric cooperatives

have been put on a tough spot for their incapacity to turn the power back on after calamity strikes. This measure will address the lack of disasterresponse funding and, hopefully, empower electric cooperatives to act in a speedy and efficient manner,” he said. The Electric Cooperative Emergency and Resiliency Fund Act of 2017 assigns the NEA as administrator of the P750million fund, which will be allocated for the exclusive use of ECs for immediate restoration of electricity and rehabilitation of infrastructure damaged by natural disasters. To access the emergency financial assistance, ECs are required to prepare and submit a comprehensive and integrated disaster management program, which includes a vulnerability risk assessment, an emergencyresponse plan and a resiliencycompliance plan. “Electric cooperatives must be ready at all times to turn the lights back on in the homes of disaster survivors, who already have to worry about the economic and housing conditions of their families after natural calamities hit their communities,” Gatchalian said.

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Palace ends Subic ‘power play’, appoints Eisma as SBMA chairman-administrator

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By Henry Empeño | Correspondent

UBIC BAY FREEPORT— Malacañang has put a stop to the long-simmering leadership conflict at the Subic Bay Metropolitan Authority (SBMA) by revoking an Arroyo-era order that split the powers and duties of the chairman-administrator and naming one official to head the Subic agency.

President Duterte on Monday appointed SBM A Administrator Wilma T. Eisma as chairman and administrator of the Subic authority for a term expiring on June 30, 2022. Duterte appointed Eisma to the consolidated position under Executive Order (EO) 42, which he also signed on Monday. The new EO expressly repealed EO 340, signed in 2004 by thenPresident Gloria Macapagal-Arroyo, which essentially split the powers and duties of the highest position in the Subic agency. Section 3 of EO 42 provides for the appointment by the President of “the administrator of the SBMA, who shall be the ex-officio

EO 42 The Palace order that consolidated the positions of the chairman and administrator of the SBMA, effectively revoking EO 340 that split the two positions

chairman of the SBMA board.” Eisma was sworn into office in Malacañang on Tuesday by Deputy Executive Secretary Menardo Guevarra. As SBMA chief, Eisma now has the power to execute, administer and implement policies and measures approved and adopted by the SBMA board. She will also directly

administer and supervise the operations and day-to-day business activities of the SBMA. As stipulated under EO 42, Eisma also has been empowered to manage, appoint, transfer, remove, suspend or discipline any employee of the SBMA. She will also function as the representative of the agency in all its dealings with private entities and other government agencies. Permits, certificates, authorizations and other official documents of the SBMA will also not be valid unless signed by Eisma. Contracts, agreements and other instruments affecting the interests of the agency will also be executed by Eisma on behalf of the SBMA. With the presidential order, former SBMA Chairman Martin Diño was left without a post in the agency. He and Eisma were at loggerheads due to an apparent conflict of functions. Eisma, a lawyer and former SBMA volunteer, becomes the first woman to hold the chairmanadministrator post at the SBMA, which manages the Subic Bay Freeport Zone. She was first appointed SBMA administrator in December 2016, two months after Malacañang named former Volunteers Against Crime and Corruption official Diño as SBMA chairman. However, Diño’s issuance in May of an administrative order that interfered and encroached upon the duties of the administrator, as well

as on the oversight functions of the SBMA board of directors. The conf lict sparked an investigation by the House of Representative on EO 340, with the lawmakers pointing out that the SBMA administrator was originally the sole appointee under Republic Act 7227. Last month, in a hearing conducted by the House Committee on Bases Conversion, Guevarra said they have recommended to President Duterte the repeal of EO 340 to ease the tension in the SBMA, hence the issuance of EO 42. The new EO also noted that EO 340 “has created confusion with regard to the scope of authority, powers, functions and duties of the chairman of the SBMA board and the administrator of the SBMA that has adversely affected the operations of the SBMA, as well as the numerous investors and locators” in the Subic Bay Freeport. The Palace decision to keep just one top SBMA official was immediately hailed by Subic investors, community leaders and SBMA employees, who had earlier urged Malacañang to resolve the conflict and prevent further confusion among Subic stakeholders. Business locators in Subic, as well as local government units in Zambales and Bataan, had earlier urged Malacañang to intervene in the conflict, and called for the appointment of a capable administrator-chairman to head the SBMA. With Elijah Felice E. Rosales

Taiwan products, services take center stage in Pasay City expo

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ORE than 170 top manufacturers and suppliers from Taiwan will be coming to the Philippines on Friday to introduce to the local market over 4,500 quality products and services during the Taiwan Expo 2017 at the SMX Convention Center, Mall of Asia Complex in Pasay City. “ The showcase of Taiwanese products and applications comes at an opportune time and amid calls for increase investments and creation of employment opportunities by presenting a bigger and better event,” Taiwan Association Inc. Philippines Secretary-General Robert Huang said during the event’s media launch in Intramuros, Manila, on Tuesday. Themed “Experience Taiwan! Technology, Culture and Tourism”, the expo will emphasize six main aspects: green technology, agricultural technology, e-commerce serv-

ice, Taiwan excellence, medical technique and talent exchange, which will highlight Taiwan’s technological development in the industries, as well as educational sources and advances in Taiwan. Designed based on current industry developments and market needs, the exhibition will host eight themed pavilions: City Marketing, InnoTech, Health & Lifestyle, Agricultural Tech, Study in Taiwan, Culture & Tourism, General Support and the Taiwan Association Philippines. The event will also feature other activities, such as business matchmaking, industry forum, cultural performances and outdoor programs, to be held at SM Mall of Asia. According to Taiwan External Trade Development Council (Taitra) Deputy Executive Director Philip Huang, these events will serve as a platform for “long-term and mutually

beneficial relations” between the two countries. “Taiwan and the Philippines have very close relationship in many areas. The Philippines is our 10thlargest trading partner, and we are the 12th-largest foreign investor in the Philippines,” he said, while citing that Taiwan’s total investment in the Philippines reached $2.3 billion last year. “Moreover, there are more than 144,000 overseas Filipino workers in Taiwan. They’re still the largest foreign workers in Taiwan,” he added. Through the upcoming event, the deputy executive director of Taitra noted that Taiwan hopes to forge a deeper bond with the Philippines, particularly in economic, talent and cultural exchanges. Until October 1, Taiwan Expo 2017 will be open from 10 a.m. to 6 p.m. Admission is free. Roderick L. Abad

Smokers group lauds Duterte’s smoking rules under EO 26

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roYosi, a consumer advocacy group, has applauded President Duterte for striking a balance between the rights of smokers and nonsmokers in coming out with his Executive Order (EO) 26, which establishes new rules on smoking in indoor or enclosed places. Guesting at the weekly Kapihan sa Maynila at the Manila Hotel, Anton Israel, ProYosi president, expressed his group’s support to Duterte’s call for smoke-free environments in public and enclosed spaces while still allowing the practice outdoors and in open areas. “We are in no way questioning the essence of the EO. We just want to uphold our rights as smokers,” Israel said. Even the Department of Health (DOH) clarified the public confusion surrounding the implementation of the EO affirming that there is no total smoking ban in the Philippines. “The EO only provides for the

establishment of smoke-free environments in public places and public conveyances,” Dr. Cora Flores, DOH representative, explained during the same forum. According to ProYosi, the EO in effect now is consistent with the existing Tobacco Regulation Act of 2003 (Republic Act 9211), which only restricts smoking in indoor or enclosed areas and allows for smoking in open areas like al-fresco dining spaces or outside of restaurants, open parking spaces and streets. “ProYosi stands by our advocacy and that is to respect the rights of smokers. Particularly in EO 26, we just want fairness and transparency in the implementation of new smoking rules. There is no absolute smoking ban. I don’t know where that came from,” he added. Israel expressed hopes the misinformation on EO 26 would be clarified and corrected, even as he appealed to local government units

(LGUs) to avoid the “exaggerated” interpretation and enforcement of the EO. While nonsmokers have the right not to be in the presence of cigarette smoke, the DOH also acknowledges that smoking is a behavior that may not go away. “We are not saying that we are banning smokers from enjoying their right to smoke. But, of course, do it in a responsible way that the people will not be harmed with smoking,” Flores added. ProYosi observed that, in some cases, local ordinances are stricter and go beyond the intent and letter of the law, while enforcement tends to be excessive, citing the cases of Makati, Taguig and Muntinlupa cities. Israel lauded the moves of certain LGUs that opted for a fairer interpretation of the EO, acknowledging the impact to the local hospitality sector, retail trade and even tourism.

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Editor: Jennifer A. Ng • Wednesday, September 27, 2017

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Meat processors see double-digit growth By Jasper Emmanuel Y. Arcalas

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@jearcalas

he local meat-processing industry will continue to post double-digit growth as the hike in the income of Filipinos will allow them to buy more food items, according to the Philippine Association of Meat Processors Inc. (Pampi). Pampi Vice President Jerome D. Ong said the industry is growing steadily by at least 10 percent and may even expand by more than 12 percent as the Philippines’s percapita GDP nears the $3,500 mark. “Right now the meat industry is growing by 10 percent to 11 percent already. You see that growth rate being sustained or may even exceed 12 percent because Philippine percapita GDP is now at $3,100 in real terms,” Ong told reporters in an interview on the sidelines of Pampi’s 28th anniversary celebration held recently in Pasay City. “There is this so-called inflection point, or tipping point, recognized by most global economies. The figure is $3,500 per-capita GDP. At that point, many countries started to grow even more rapidly,” he added. Based on initial estimates, Ong said sales of the local meatprocessing industry have already

reached P300 billion. “There is a need to validate this figure because P300 billion in sales will mean that the daily consumption of processed meat by Filipinos amounts to only P8.20 per day, an unbelievably low amount,” he added. Ong noted that despite the growth in the country’s per-capita GDP, the Filipinos’ per-capita meat consumption remains relatively low compared to its Southeast Asian neighbors. “I think per-capita consumption in the Philippines is around 30 kilograms, while that of our Asean neighbors are at 50 kg to 60 kg. Per-capita consumption in the West is around 90 kg to 110 kg,” he said. “So that is an upside. The increase in the country’s population and the growing income of Filipinos will translate to higher demand for protein,” Ong added. The Pampi official said the industry must be given access to

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sources of good-quality meat so companies can maintain the affordability of processed-meat products. “Our prices for the past five to eight years have remained quite flat and it is because of favorable exchange rate and availability of raw materials. So, I think, we are doing a decent job [in making our products affordable],” said Ong, who is also president of CDO Foodsphere Inc. This, despite the fact that the

spread of avian influenza (AI) outbreaks in European countries has affected their operations in recent months, according to Ong. Meat processors source most of their raw materials, such as mechanically deboned meat (MDM), from Europe. “[MDM] concerns continue to prevail, and further aggravated by AI outbreaks in areas where we source our MDM,” he said. Industry players said the price of

MDM doubled to as much as $800 per metric ton (MT) in the first quarter. This is due to the closure of Philippine borders to poultry products from most European countries where there are AI outbreaks. While the Philippines has reopened its market to MDM from the Netherlands, Ong said the price of MDM has not gone down significantly. “The price of MDM is still high. It has gone back to

around $650 per MT.” “Hopefully, by early next year, it goes down some more but we do not see it going back to old level [of $400],” Ong added. Philippine meat consumption this year could reach 29.641 kg per capita, higher than the 29.181 kg per capita recorded last year, data from the Organisation for Economic Co-operation and Development showed.

Govt told to reveal rehab China postpones food-import controls after global outcry plan for Laguna de Bay B

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militant group on Tuesday called on the Department of Agriculture (DA) to disclose the details of its plan to rehabilitate the Laguna de Bay. The Pambansang Lakas ng Kilusang Mamamalakaya ng Pilipinas (Pamalakaya) said the public deserves to know the details of the Hungarian government’s plan for the Laguna de Bay and its reason for granting the Philippines a P30billion loan. In a statement, Fernando Hicap, national coordinator of Pamalakaya, expressed his skepticism over the report that the DA will secure the P30-billion loan where the bulk of the total amount, or about P20 billion, will be allocated for the rehabilitation of Laguna de Bay. The remaining P10 billion will be invested in a rubber plant in Mindanao. Hicap said any development project in Laguna de Bay should spare fishing communities. He noted that the government always blames the pollution of the lake to the residents and fishing communities. “While we are open and welcome to support the rehabilitation plan, we first need to see and study its components,” Hicap said. “We fear that the cleanup drive would mean clearing out of fishing and urban-poor communities because, until now, the fishermen

and urban-poor residents are being blamed as the top polluter in the lake,” he added. Hicap warned Agriculture Secretary Emmanuel F. Piñol that the demolition of fishing communities will be met with “strong opposition and resistance from residents of Laguna de Bay”. Pamalakaya noted that the Laguna de Bay is currently deteriorating due to several factors, including the proliferation of corporate-owned fish pens that use chemical-based feeds, the dumping of toxic waste from thousands of factories and establishments situated along the lake, and the existence of the Napindan Hydraulic Control Structure, which blocks the entry of saltwater into the lake. The Laguna de Bay, the country’s largest freshwater lake, is also the biggest aquaculture hub in the country, with over 13,000 hectares of its 90,000 hectares surface area being utilized to raise bangus (milk fish) and tilapia. The estimated annual fish output from fish-cage and fish-pen operations in 2015 was recorded at 62,915.91 metric tons (MT), according to the Philippine Statistics Authority (PSA). This is twice the 36,185.29 MT of fish caught in open waters during the same period. Jonathan L. Mayuga

EIJING — China has delayed enforcing sweeping new controls on food imports following complaints by the United States, Europe and other trading partners that they would disrupt billions of dollars in trade. Ru les requ ir ing eac h food shipment to have an inspection certificate from a foreign government were due to take effect on Sunday. But Beijing has decided to grant a transitional period of two years following comments by other governments, according to a document submitted to the World Trade Organization (WTO) on Monday and seen by The Associated Press. It gave no details, but the delay might help avert concerns that shipments of meat, fruit, dairy and other products could be disrupted, hurting thousands of farmers and food processors who look to China as a key growth market. The dispute added to trade tensions with the United States and Europe, which complain that lowpriced exports of Chinese steel and aluminum are hurting foreign competitors and threatening jobs. The food rules prompted unusually broad opposition. Governments said little in public, but a coalition including the US, European Union, Japan, Australia and Argentina lobbied Beijing to scale back the requirement. They urged China to follow global practice and apply it only to high-risk food. Some officials suggested Bei-

jing was trying to restrict imports in violation of its market-opening promises. Foreign suppliers complain Beijing already uses safety rules in ways that hamper access for beef and other goods. “According to the complaints and application received, we hereby decide to provide a transitional period of two years,” said the document submitted to the WTO by the Administration for Quality Supervision, Inspection and Quarantine (AQSIQ ) of China. AQSIQ , t he m a i n C h i nese product quality agency, did not respond to questions submitted by fax and e-mail about what would happen during the transitional period. The inspection rules follow an avalanche of scandals over Chinese suppliers caught selling tainted milk and other shoddy or counterfeit food. Western officials said they appeared to be meant to shift responsibility away from AQSIQ, which Chinese consumers often blame for safety failures. This month Beijing banned impor ts of soft cheese, such as brie and camembert, that it said contained the wrong types of bacteria. European officials complained the ban was unfair because the regulators permitted sales of similar cheeses produced in China using the same bacteria. The dispute added to complaints that Beijing is reducing market access for goods ranging

PSA conducts survey on acceptability of brown rice-cracker sandwich

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he Philippine Statistics Authority (PSA) said it has conducted a survey that will determine whether consumers would welcome an ice cream-sandwich product containing brown rice. The survey was undertaken by the Philippine Rice Research Institute (PhilRice), an attached agency of the Department of Agriculture (DA). The PhilRice is currently looking for ways to improve the in-

come of small farmers. “The objective of the survey is to determine consumer awareness toward an ice cream-sandwich product, product usage and purchase behavior toward other similar products, consumer acceptability and preferences for the brow n r ice-cracker sandwich, and their willingness to buy the product,” the PSA said in a statement. The PSA said a total of 100 re-

spondents aged 15 to 30 were selected to participate in the survey held from September 21 to 25 in Nueva Ecija. The data items collected include the fol low ing: sociodemographic data of respondents, level of awareness toward any ice cream-sandwich, usage and purc hase behav ior toward of f rozen-food desser t s/sn ac k s, willingness to buy the product and sensitivity to price change,

and substitution rate for brown rice-cracker sandwich. The PSA said the results of the survey will be released in March 2018. The survey was reviewed and cleared for conduct under the Statistical Survey Review Clearance System (SSRCS), a mechanism being implemented by the PSA by virtue of Rule 28 of Implementing Rules and Regulations (IRR) of Republic Act 10625.

from medical technology to farmrelated biotech. Beijing made concessions, including allowing governments to certify food as fit for human consumption instead of confirming it met Chinese quality standards. Still, the latest draft submitted to the WTO said the rules would apply to items, including dried fruit, cocoa and spices, that foreign officials said don’t require such intensive inspection. The depth of the US concern

was ref lected in Washington’s decision to take part at a time when President Donald J. Trump had downplayed trade disputes to gain Beijing’s support in dealing with North Korea. US officials have since stepped up criticism of Chinese trade policy. European officials complained the regulations appeared to be intended to shield Chinese suppliers from competition and allow Beijing to block imports from individual countries if it chose. AP

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Banking&Finance BusinessMirror

Wednesday, September 27, 2017 • Editor: Jun B. Vallecera

news@businessmirror.com.ph

Business, foreign chambers umbrella group cautions Congress on impeachment powers

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ne of the biggest umbrella groups advocating much-needed reforms in the Philippine justice system, particularly those that impact the business sector, has urged Congress to exercise its impeachment powers under the Constitution “with great prudence, probity and transparency”. In a statement, the private-sector umbrella group Judicial Reform Initiative (JRI) raised its grave concerns against “the growing use—or threat—of impeachment proceedings in Congress against a number of the Philippines’s

highest ranking and prominent government leaders, including the President, the Vice President, the Chief Justice, the Ombudsman and the Commission on Elections [Comelec] Chairman” who are protected under the Constitution “be-

A very sad fish story

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he World Wildlife Fund and the United Nations agree that 70 percent of the world’s oceans have been fished to the limit. The World Fish Center concurs fish have been hunted 30 percent above its ability to replenish. Fishing is done with wanton abandon everywhere—with little protection to the habitat and very few no-fishing zones. There is so much demand for fish that countries have subsidized their fishing fleet. There are just too many boats chasing after too few fish. Do we already have a dwindling supply of fish in the world? In the Philippines the Bureau of Fisheries and Aquatic Resources (BFAR) confirms that 10 of the 13 so-called fishing grounds in the Philippines are overfished. Less discussed is the competition for the same fish posed by whales, dolphins and porpoises. And, lest we forget, there is China, which have more than a billion mouths to feed. You see, the tension at the West Philippine Sea is not just about oil underneath the seabed, although there potentially are billions of barrels of the resources there, but, more important, the fish. In that area alone, China has 3.7 million workers in the fishing industry that forces many other nations scampering for safety in mortal fear of China. The worst thing about it, according to a study conducted by the University of Miami, is that the man-made islands in the West Philippine Sea has caused the destruction of 16,200 hectares of coral reefs that act as sanctuary for fish and other marine life. But China’s humongous demand for fish is best illustrated by the size of its overseas fishing fleet numbering 2,600 ships employing some 14 million workers and whose reach extend as far as the seawaters of Africa. This is not surprising, as China is said bruited to consume 34 percent of the world’s fish supply. The growing scarcity, and thus the rising price of fish, is true in many Asian nations where having fish on the table is a luxury for many of their poor. In certain places, meat has become less expensive than fish. So severe is the lack of fresh fish that, in highly populated countries like Indonesia and the Philippines, canned sardines or tuna are a daily fare on many dining tables. According to the BFAR, there already were close to 69,000 fishing boats here, mostly small, weighing 3 gross tons or less. The popular catch are the tulingan, dilis, galunggong, tamban and tambakon. The dwindling fish supply punishes the poor fisherfolk the most. The 15-kilometer permissible fishing grounds is often dominated by big-time trawl fishers who bribe local officials to grant them permits to fish with abandon even in restricted areas. Thus, half the fish supply is dominated by the 1 percent owned by big-time fish operators. In the 1970s the fisherfolk could easily catch 20 kilos of fish per day but reduced today to a mere 4.76 kilos a day. Ten years back, a father-and-son team could earn P1,000 a day and still have some fish left to bring home. Today, he does not only borrow for his working capital

Finex free enterprise Zoilo ‘Bingo’ Dejaresco III but takes longer and bring in fewer fish compared to a decade ago. There is plenty to blame for this tragedy, such as illegal methods like dynamite fishing, payao (which uses light to attract fish), trawlers and fishnets with holes less than 2 centimeters that catch even immature fish, while locals and even tourists who throw away their garbage everywhere contribute to the waste absorbed by the sea that makes it more acidic. A 1998 study proved that only 5 percent of our corals are totally free from bottles, plastics and other wrappers. This is a tragedy. Man is his own worst enemy in this regard. Imagine that while the Philippines has 10 million hectares of land suitable for agriculture, we have 220 million hectares of territorial waters and 17,000 kilometers of coastline. That should have made the Philippines a fish country with a developed aquaculture. Statistics disprove this. Consider that as of 2015, the Philippines exported only $473 million worth of fish compared to Vietnam’s $4.3 billion, Indonesia’s $2.7 billion and Thailand’s $1.7 billion. Why? And even with these export numbers, why are our fisherfolk one of the poorest of the poor in the country earning only P178 a day? And there are 1.7 million of them, laments Sen. and gentleman farmer Francis Pangilinan. He says we have the capability to become a “superpower” in the fishing and marine life industry. He does not understand the Philippines’s widespread poverty when France has developed its mollusk industry into a P32-billion enterprise, US lobster into a P42-billion industry and even Bangladeshi shrimp is worth $476 million in the market. How come that once again we are laggards in a country so rich in marine resources? The lack of financing, storage, manufacturing capabilities, packing prowess, environmental abuse, illegal fishing and lack of direction from the government have been cited as sources of the many problems we face. Until we get our act together and the government teams up with the private sector, we will always tell the same sad fish story. Foreign visitors often note our unexplained poverty and raise their eyebrows when they see how we are surrounded by many natural resources. (Bingo Dejaresco, a former banker, is a financial consultant media practitioner and book author. A life member of Finex, he is also the chairman of both the Professional Development and Broadcast Media committees, His views here, however, are personal and do not necessarily ref lect those of Finex. dejarescobingo@yahoo.com).

cause of the significance of their roles and the implications on our legal and justice system.” Not only will the “indiscriminate or ill-considered filings of impeachment proceedings against government officials distract those accused from the performance of their duties as public servants, as well as our Congress from its priority legislative agenda,” but will also be construed “as any serious indictment of our justice system could weaken the constitutionally protected independence of the Judiciary.” “Investors would risk capital only in countries where they have full confidence in the rule of law. Thus, any initiative which may be perceived as weakening the check and balance among the branches of government might shatter this confidence and negate our hardwon economic gains,” it added. JRI, thus, urged Congress to ensure that: “impeachments are undertaken only for patently substantive and culpable violations of the Constitution; and the process is transparent and reflects the highest standards of fairness and justice.” Comprised of leading business organizations, judicial advocacy groups and several foreign chambers, JRI was established

in 2012 by the Financial Executives Institute of the Philippines, the Institute of Corporate Directors, the Management Association of the Philippines, the Makati Business Club, the American Chamber of Commerce of the Philippines, the European Chamber of Commerce of the Philippines, the Canadian Chamber of Commerce of the Philippines, the Australia-New Zealand Chamber of Commerce of the Philippines and the Movement for Restoration of Peace & Order, among others. Other groups that have earlier aired similar statements include the Former Senior Government Officials (FSGO); the International Center for Innovation, Transformation and Excellence in Government; the Integrated Bar of the Philippines; the Philippine Bar Association; the Philippine Association of Law Schools; the Philippine Council of Evangelical Churches; and the UP Women’s Lawyers Circle Inc.

Investors would risk capital only in countries where they have full confidence in the rule of law. Thus, any initiative which may be perceived as weakening the check and balance among the branches of government might shatter this confidence and negate our hard-won economic gains.”—jri

Manila delegation heads BDO encourages for Beijing for econ road show clients to shift

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Cabinet-level delegation, led by Finance Secretary Carlos G. Dominguez III and other members of the economic team, will bring a three-day economic road show to China on Friday to pitch the government’s proposed renminbi-dominated Panda bond offering before potential investors. Dominguez, along with Executive Secretary Salvador C. Medialdea, Budget Secretary Benjamin E. Diokno, Transport Secretary Arthur P. Tugade, Public Works Secretary Mark A. Villar and Vivencio B. Dizon, president of the Bases Conversion and Development Authority (BCDA), will also meet with high-ranking Chinese officials to discuss the progress of the preparations for the Philippines’ infrastructure projects that would funded in part by official development assistance (ODA) loans from China. The delegation will meet with Chinese ministry officials on September 27 in Beijing and proceed the following day to Shanghai, China’s financial center, to generate support for the “Build, Build, Build” program of the Duterte administration. Dominguez said the economic team will also spearhead a “nondeal road show” to entice potential buyers of the Philippines’s Panda bond offering, tentatively scheduled in the last quarter of the year “depending on market conditions.” The nondeal road show will also be an opportunity to inform potential investors of the rosy outlook of the Philippine economy under the Duterte administration’s infrastructure buildup program. The government is planning to spend between P8 trillion and P9 trillion for infrastructure over the next five years. Based on National Economic and Development Authority estimates, the buildup is expected to generate 106,824 additional jobs this year alone; 823,696 jobs in 2018; 1,115,999 jobs in 2019; 1,228,963 jobs in 2020; 1,399,463 jobs in 2021; and 1,705,023 jobs in 2022. W h i le t he average spend i ng for

infrastructure in past administrations was 2.6 percent of the GDP, President Duterte plans to ramp this up to 5.32 percent of GDP this year alone with an infra budget of P847 billion. The government plans to gradually increase the public infrastructure budget to 1.2 trillion in 2018; 1.4 trillion in 2019; P1.5 trillion in 2020; P1.7 trillion in 2021; and P1.9 trillion in 2022. According to Dominguez, the infrastructure buildup will be funded by a combination of resources from its proposed Comprehensive Tax Reform Program (CTRP), foreign development aid and commercial loans. He said the first package of the CTRP— the Tax Reform for Acceleration and Inclusion Act now pending in Congress—will serve as the “cornerstone” of the funding for the ambitious infrastructure program. In March the Philippines and China signed agreements on the conduct of preliminary studies for two proposed big-ticket infrastructure projects in the Visayas and Mindanao during the visit of Chinese Vice Premier Wang Yang to Duterte’s home city of Davao. Dominguez and China Commerce Vice Minister Fu Ziying, who is also China’s International Trade Representative, formalized the agreement on the conduct of preliminary feasibility studies for the proposed Davao City Expressway and the Panay-Guimaras-Negros Island Bridges Project through an exchange of letters. Pernia and Fu also signed a six-year development program (SYDP) that “aims to steer and promote the stable and orderly development of economic cooperation between the two countries”. The SYDP also aims to “enlarge the scope and enhance the level of cooperation between, and drive sustainable and inclusive socioeconomic development in, the two countries,” according to the Department of Finance.

Case clippings

By Justice S J Ranada Jr.

PUBLIC OFFICERS–grave misconduct defined Grave misconduct is defined as the transgression of some established and definite rule of action, more particularly, unlawful behavior or gross negligence by a public officer coupled with the elements of corruption, willful intent to violate the law or to disregard established rules. Corruption, as an element of grave misconduct, consists in the official or employee’s act of unlawfully or wrongfully using his position to gain benefit for one’s self. PNB v. Dalmacio 05 Jul 2017

GR 202308 Tijam, J

to EMV-chip card

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DO Unibank is encouraging its retail clients who have yet to avail themselves of the EMVchip ATM debit card to obtain it immediately from their branch of account to earn the benefit of its fully EMV-certified ATM network. BDO started to make the EMVchip ATM debit cards available free of charge to its clients since the third quarter of 2016. However, quite a large number of clients still use the magnetic stripe-only ATM debit cards. For corporate or payroll clients, BDO will make the EMV-chip cards available at their respective humanresource offices by December 31. “Making the shift to the EMV-chip ATM debit card is one way to protect the clients from electronic fraud. It has enhanced security features, which include, among others, encryption locks and keys to authenticate the card and the cardholder’s transaction, protecting card data from being compromised,” said the bank Executive Vice President and Transaction Banking Head Edwin G. Reyes, adding, “We hope our customers would embrace this significant improvement being implemented by the entire banking industry.” The EMV-chip ATM debit cards complement the almost 4,000 BDO ATMs nationwide, which have already been made EMV-certified by the bank. BDO was the first bank in the industry to fully retrofit its ATM network to allow EMV-chip card transactions. BDO is a full-service universal bank, which provides a wide range of corporate and retail banking services. These services include traditional loan and deposit products, as well as treasury, trust banking, investment banking, private banking, rural banking, cash management, leasing and finance, remittance, insurance, retail cash cards and credit-card services. BDO has one of the largest distribution networks, with more than 1,100 operating branches and over 3,600 ATMs nationwide. It also has 26 overseas remittance and representative offices (including one full-service branch in Hong Kong) in Asia, Europe, North America and the Middle East. BDO ranked as the largest bank in terms of total assets, loans, deposits and trust funds under management based on published statements of condition as of December 31, 2016.

ExportUnlimited BusinessMirror

Editor: Efleda P. Campos • Wednesday, September 27, 2017 A9

PHL to showcase education DTI-Citem expects $62-M target services in Indonesian fair sales in Anuga with GSP+ edge By Maria Luz S. Medialdia Supervising TIDS, DTI-EMB

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N an effort to sustain the promotion of the Philippines as an excellent and cost-effective “Study Abroad” destination, the Department of Trade and IndustryExport Marketing Bureau (DTIEMB) will lead an Outbound Business Matching Mission (OBMM) to showcase education services in Indonesia during the World Education Expo Indonesia 2017 (WEEI) scheduled from September 12 to 17, at the Jakarta Convention Center. The delegation will be composed of representatives from leading Philippine universities and accredited institutions. The WEEI, a platform dedicated for students to find the right education in distinguished overseas institutions across the region and the world, is Indonesia’s biggest annual education expo. Likewise, it’s the country’s most universal education exhibition with institutions from over 20 countries participating. The event guarantees an audience of more than 10,000 students from over 150 national high schools and universities across four cities in Indonesia. “ T he Phi l ippine educat ion sector has much to offer to the Indonesian market and would bode well to strengthen the Philippines’s bilateral relations with Indonesia aside from maximizing the opportunities from the free-

trade agreements and the Asean market integration,” DTI Export Marketing Bureau Director Senen M. Perlada said. The OBMM, as part of the government’s agenda to explore opportunities brought about by regional and preferential trading agreements, aims to expand market access within existing and new trade partners, specifically on education service exports. It will highlight Philippine education offerings in both formal and vocational courses With Indonesia’s population of 250 million, it offers a lot of opportunities for Philippine education institutions to tap. Yearly, tens of thousands of Indonesian students choose to study abroad. The number continues to rise alongside a growing middle class. The interest has largely been made possible as students continue to become more fluent in English and other secondary languages. Given this, demand for better education and a good learning environment are the opportunities that the Philippines can take advantage of through this education expo. The Philippine participation in the WEEI will also highlight the visit in Indonesian schools where a venue will be provided for students’ career orientation. Additionally, conduct of pre-arranged one-to-one business matching meetings with Indonesian education institutions, consultants, students, parents and other interest-

PERLADA: “The Philippine education sector has much to offer to the Indonesian market and would bode well to strengthen the Philippines’s bilateral relations with Indonesia aside from maximizing the opportunities from the free-trade agreements and the Asean market integration.”

ed parties planning to form joint venture agreements, franchising and other forms of collaboration with the participating Philippine institutions will take place during the duration of the mission. The Philippine education showcase banks on the country’s reputation as an excellent choice for foreign students considering the Philippine schools’ quality courses, affordable tuition and cost of living, and a destination with cultural similarities within the region. English, as its primary medium of instruction, along with its inherent multicultural learning environment atmosphere with blended mix of fun and enjoyable stay in the country, is an advantage, as well. This initiative of DTI-EMB is supported by the Embassy of the Republic of the Philippines and the Commercial Section of the Embassy.

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HE export promotion arm of the Department of Trade and Industry (DTI) is set to further expand the trade relationship between the Philippines and the European Union (EU) as it leads a delegation of food exporters in Anuga from October 7 to 11 at the Koelnmesse in Cologne, Germany.

The Center for International Trade and Expositions and Missions (Citem) is set to feature the country’s export-competitive products from 19 food companies under the FoodPHILIPPINES industry brand. “The Philippines’s participation in Anuga is part of DTI’s overarching efforts to step up the export drive in EU member-states and take advantage of the Philippines’s zero tariff privileges under the EU’s current Generalized System of Preferences Plus, or GSP+, scheme,” Citem Executive Director Clayton Tugonon said. Known as the world’s largest and most important food and beverage fair, Anuga presents a combination of 10 specialized trade shows under one roof, showcasing the diverse product selection in the global food industry. This year around 160,000 visitors are expected to join the five-day event to check out the lat-

est and most innovative products from around 7,200 global exhibitors. In 2015 35 Philippine companies netted $67.7-million export sales in Anuga. For 2017, DTI-Citem is targeting $62 million. “Despite coming with a smaller delegation, we are not pulling any stops with our high export target. We have carefully selected 19 food companies that are primed for the European market, each capable of showcasing the best of what the Philippines have to offer,” Tugonon said. Aside from food-tasting activities, the Philippine delegation will also participate in business-matching activities during the event. The EU is ranked as the Philippines’s fourth-largest trading partner, third largest import source and fourth-largest export market. In 2016 the Philippines’s external

DTI pushes for global marketing of PHL game development

NDAA 2017: Globaltronics wants Filipino youth to ditch inaction, use apps

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By Gliceria N. Cademia

Trade and Industry Development Specialist, DTI-EMB

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HE Department of Trade and Industry’s (DTI) Export Marketing Bureau (EMB), in collaboration with the Game Development Association of the Philippines (GDAP), will conduct an Outbound Business Matching Mission (OBMM) for the game-development sector during the Philippines’s participation in the External Development Summit (XDS) from September 4 to 12 in Canada. XDS is the only annual, international games-industry event held in Canada, focused on external development for art, animation, audio, software engineering, quality assurance and localization. Following the success of the GDAP in its initial attempt to promote the game-development industry in the concluded Philippine business matching mission in Canada held in 2015, this OBMM in 2017 will be a continuing export promotion activity led by the DTI-EMB to sustain presence of Philippine companies in Canada. In 2015 the game-development industry generated a revenue of $80.5 billion and is expected to reach more than $100 billion by 2022. It is estimated to record a CAGR of 5 percent during this period. The video-game segments covering the online, tablet and mobile game is anticipated to register the highest growth rates. This segment is highly popular, with nearly 60 percent to 80 percent being outsourced. Research revealed game-development companies in North America, Europe and Japan continue to outsource the more labor-intensive functions of the value chain to the Philippines. With that, the country is considered an outsourcing option due to the low cost of labor and the availability of animation/ graphic-design platforms. Participants in the XDS 2017 represented a concentrated group of game developers, vendors, trade organizations and middleware providers working within external development, representing over 36 countries. Thus, this OBMM was expected to generate significant connections for the Philippine delegates who participate in XDS, which are into game development and animation outsourcing. Scheduled visits to game and animation production studios and colleges specializing in the game, art, animation and design, such as Sheridan College and Seneca International College in Canada, will be one of the component activities of the OBMM. The Philippine companies participating included Renderbee, Synergy88 Digital Inc., Pixel Mafia, Toon City, MORPH Animation, Toon City Academy, Indigo Entertainment, Pixel Mafia, Three Digital, Puppeteer Studios, Ingenuity Global Consulting Inc., Ingenuity Global Consulting Inc. ASI Studios Inc. and the Game Development Association of the Philippines. This OBMM is supported by the Philippine Trade and Investment Center in Canada with Senior Trade Commissioner Maria Roseni M. Alvaro who specifically provided assistance in the arrangements for visit in the studio and schools specializing in game and animation.

trade in goods with the EU states totaled $13.713 billion, or a 9.7-percent share of the country’s total trade, based on data from the Philippine Statistics Authority (PSA). Exports to the EU reached $6.97 billion, or 12.1 percent of the total export receipts, while imports were valued at $6.743 billion, or 8-percent share to total import, resulting to a balance of trade in goods (BOT-G) surplus of $227.74 million. Among the EU member-countries, Germany is the Philippines’s top trading partner with a total trade of $4.357 billion, or 31.8 percent of EU’s total trade. Revenue from export to Germany amounted to $2.329 billion while payments for imports were worth $2.028 billion, or a trade surplus of $301.32 million Within the EU, 90 percent of EU-Philippine trade is concentrated among eight EU member-states— Germany, France, the Netherlands, the United Kingdom, Italy, Spain, Belgium and Denmark. As of now, the Philippines is enjoying a special trade arrangement and incentives with European countries as one of the 30 countries listed under EU’s Generalized Scheme of Preferences. Under the EU GSP, developing countries can export goods with reduced tariffs entering the EU to stimulate economic growth and job creation in their economies. The Philippines avails itself of the zero preferential duties on 6,274 products going to EU states.

PHILIPPINE company representatives meet with their South Korean counterparts in business-to-business meetings in the Dessert and Snack Pavilion 2017 held at COEX, Seoul, South Korea, from August 15 to 21.

PHL joined dessert, snack pavilion in South Korea By Myrtle Faye L. Solina

Trade-Industry Development Specialist, DTI-EMB

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S a support to the Philippine food sector, in particular the dessert and snack industry, the Export Marketing Bureau (EMB) of the Department of Trade and Industry (DTI), in collaboration with the DTI Philippine Trade and Investment Center (PTIC)-Seoul, mounted export-related activities that included participation in the Dessert and Snack Pavilion 2017 held at COEX, Seoul, South Korea, business-to-business meetings and market intelligence from August 15 to 21. The total sales of the Filipino participants, both negotiated and retail, for the three-day event hit 312 percent of its target. Chief Trade and Industry Development Specialist Rose Marie Castillo of the EMB-Food and Agri-Marine Division said during the courtesy call at the Embassy of the Philippines in Seoul it was the first time the Philippines had joined the Dessert and Snack Pavilion. Castillo noted the activities of the outbound business-matching mission were aligned with the thrust of the Philippine Export Development Plan 2015-2017, particularly the designing of comprehensive packages of support for selected sectors and exploiting of opportunities presented by regional and preferential trading arrangements to expand market access within existing trade partners explore new trade partners and develop new export products. The activities under this mission collectively em-

bodied the aspiration of the Regional Interactive Platform for the Philippine Exporters Plus, i.e., to provide intensified, purposive, and practical assistance geared toward the internationalization of micro, small and medium enterprises. Raul Hernandez, Ambassador of the Philippines to the Republic of Korea, welcomed the Filipino participants at their office in Seoul during the latter’s courtesy call held on August 16. The delegation was composed of nine companies, namely, Aretei Foods Corp., Bahaghari Global Food Inc., Ilocos Food Products, La Carlota Food Enterprises, Magic Melt Foods Inc., Monde Nissin Corp., Philippine Food Asia Corp., Republic Biscuit Corp. and RPO Fine Foods Corp. Trade and Investments Promotion Group Undersecretary Nora K. Terrado and EMB Director Senen M. Perlada both expressed their appreciation to the unfailing support of Ambassador Hernandez and Commercial Attaché Emmanuel Ang of PTIC-Seoul. The Korean market for desserts has been expanding rapidly over the past years. The Republic of South Korea (ROK) is included in the top 25 trading partners of the Philippines, notching the eighth rank. In 2016 bilateral trade between the Philippines and ROK reached $7.72 billion. Philippine exports to ROK in 2016 was valued at $2.1 billion, from which $200 million constituted the food sector. Bulk of the traded goods of the Philippines was electronics for industries, as well as copper and petroleum.

HIS year’s National Digital Arts Awards (NDAA) gives a special focus on the Filipino youth’s talents in the digital-content industry. The rise of the digital age all over the world means there is a great demand for practitioners in the sectors of film and animation, visual arts and graphic design, digital games and apps, advertising content and production, and music and the performing arts. Speaking at the NDAA 2017 relaunch party on August 4, held at the Center for International Trade Expositions and Missions’s (Citem) HallOne, Globaltronics Vice President for Operations Lee Soriano said they are “developing the [Filipino] youth for the future”. Globaltronics, a digital signage advertiser in the Philippines, launched NDAA alongside Brand Guerrilla PH and Synergy 88 Digital. “I think it is only proper as a player in this industry that we also extend support to digital-arts practitioners,” Soriano said of Globaltronics’s role in bolstering the country’s digital industry through NDAA. He said he’s already seeing the youth’s competence in producing digital content, noting even high-school students can now create amazing stuff as long as they have and can utilize the appropriate technology equipment to support their art. Soriano said NDAA’s main goal is to “push the envelope further” and encourage youngsters to “go beyond their limits”. Globaltronics’s long-term vision is for NDAA to become the stepping stone of budding digital artists to establish international careers and help put the Philippines’s digital creative industry on the global map. Soriano believes talented individuals can even start their own little business in the comfort of their homes. He said influential names in the technology industry and how some of them—Bill Gates and Steve Jobs— started their careers in their house’s garage, only to become the founders of tech giants Microsoft and Apple, respectively, later on. Soriano advised Filipino youngsters with an eye and talent for digital creativity to “level up” and “power up” and don’t allow themselves to “just be there.” With NDAA’s support, these individuals can “reach for the stars” and pursue their creative ambitions. Competitions like NDAA also help young artists to hone their craft and learn from their mistakes. Eventually, these aspiring artists will be competitive enough to get lucrative results out of their skills and stand among renowned creatives in the industry. NDAA 2017 carries the #changeisherenow tagline, with the entries’ theme centering on the possible advancements the Philippines has attained by 2038. Soriano said that NDAA 2017’s contribution and advocacy is to get more recognition for the Philippines and create more job opportunities in digital content. The contest has three major categories: Digital Art in Print, Animation & Motion Graphics and Digital Games, and is open to both students and professionals.

A10 Wednesday, September 27, 2017 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Trimming the fat

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oultry growers in Central Luzon are facing the prospects of a bleak Christmas after farms in the region were struck by bird flu. Despite the pronouncement of the Department of Agriculture (DA) that the worst is over for the poultry sector, farmers remain hesitant to restock their farms. This decision to delay restocking has also affected other producers, such as corn farmers who complained on Monday that the farm-gate price of yellow corn has declined by more than 30 percent due to slower demand. While backyard poultry growers are starting to get back on their feet, their recovery has been slow. The price of live broilers remains below production cost, making it difficult for them to earn from raising chickens. The United Broiler Raisers Association said earlier that the farm-gate price of chicken in Central Luzon has yet to breach P65 per kilogram. For farmers to recoup their production cost and earn a little, the live weight price should reach at least P75 per kg. A few days after the government confirmed the outbreak of bird flu in San Luis, Pampanga, in August, the farm-gate price of broilers dropped to P15 per kg. Poultry growers lost a lot of money as consumers avoided eating chicken and eggs. However, the steep decline in the farm-gate price of broilers did not translate into cheaper dressed chicken, according to data from the Philippine Statistics Authority (PSA). In a survey it conducted last month, the PSA found that the price of dressed chicken declined in only two regions—the National Capital Region and Region 4. Data from the PSA showed that the price of dressed chicken in the third week of August went down by only P10 to P140 per kg, from the previous week’s record of P150 per kg. The PSA also noted that the demand for chicken egg remained stable, as prices did not decline significantly despite the discovery that the bird flu in Pampanga struck commercial layers. Despite the relative stability of chicken prices at the retail level, this did not benefit poultry growers themselves. That this also happened while backyard poultry growers in Central Luzon were brought to their knees by the bird-flu crisis makes it appalling. The DA should look into this as it bolsters the claim of farmers that only middlemen and traders benefit from their produce. While the law does not allow the government to put in place price controls, except during times of natural disasters, it must address the huge disparity between the price of food items at the farm gate and retail levels. Agriculture experts said the delivery of produce from the farm to various markets involves four layers, making a commodity more expensive. The DA has already taken “baby steps” to take middlemen and unscrupulous traders out of the picture by rolling out its Farmers and Fisherfolks outlets. Obviously, this is not enough. The DA should consider expanding or institutionalizing these outlets and conduct a comprehensive study as to how this problem could be addressed once and for all. Since 2005

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Art Amansec

All About Social Security Conclusion For this week, allow me to continue with the milestones of Social Security System (SSS) as presented by Jhoanna Lyn Garcia (senior communications analyst of the SSS Corporate Communications Department [CCD]) in her essay, titled “Ang SSS Noon Hanggang Ngayon: Kabalikat ng Miyembro Sa Anumang Hamon Ng Panahon” (as translated), the First Place Winner in the Essay Writing Contest of the SSS 60th Anniversary Celebration.

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998-2007. The increase in the funds of SSS continued, which resulted in the successive increase in benefits of members and pensioners, and the implementation of the Condonation Program, which gave a renewed hope, especially for the members with unpaid loans. The Flexi-Fund program for overseas Filipino workers (OFWs) was also implemented. In this decade, there were successive increases in contributions and monthly salary-credit ceiling, which extended the fund life of SSS. In 2007 SSS celebrated its 50th anniversary, which was attended by former President Gloria MacapagalArroyo. This period was considered by Mrs. Corazon de la Paz-Bernardo, former president and CEO of SSS, as one of a kind since the employees of SSS gave service beyond compare and worked hand in hand with the members in looking after the future of the institution. 2008-2017. In the past 10 years, there were times when the SSS

received harsh criticisms and condemnation from several groups, despite the efforts of SSS to provide proper benefits and services to its members. One of the most difficult problems encountered by SSS is the implementation of the P2,000 additional pension sought by some lawmakers and pensioners that will critically affect the fund life of SSS. It was not easy to achieve this dream, but with the cooperation between the SSS management, the Social Security Commission, employees and its members, there had been an agreement and resolution on said problem without compromising the hard-earned contributions of the members. Despite the challenges, SSS remains strong and continues to give

Life insurance and suicide

Lorenzo M. Lomibao Jr., Gerard S. Ramos Lyn B. Resurreccion, Efleda P. Campos Dennis D. Estopace

Online Editor Social Media Editor

Chairman of the Board & Ombudsman President VP-Finance VP Advertising Sales Advertising Sales Manager Group Circulation Manager

SSS milestones as seen by winning essayist

Dennis B. Funa

INSURANCE FORUM

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he World Health Organization’s Suicide Report in its Comprehensive Mental Health Action Plan 2013-2020 stated that almost 3,000 persons commit suicide daily. As of 2015, suicide was the ninth leading cause of death for Filipinos in the 20 to 24 age bracket. September 10 is the World Suicide Prevention Day, and, in the Philippines, the second week of September has been designated as the National Suicide Prevention Week by the Department of Health. For insurance companies, “Suicide risk remains extremely difficult for life underwriters to identify and nearly as impossible to predict, much less prevent”. An insurance company may be held liable in case of a suicide only after the passage of a certain period of time, in our case, two years after its issue under the Amended Insurance Code. Hence, if an insured commits suicide within a period

of two years after the issuance of the policy, the insurer shall not be liable. The two-year period is also called the “suicide-exemption period” or “suicide-exclusion period”. The suicide-exemption period varies among jurisdictions. In Japan

the job order or contractual employees, who are not covered by Government Service Insurance System, had been included in the SSS coverage. Another matter the SSS focused on in this decade is the coverage extended to the members of the informal sector through the AlkanSSSya program, wherein every informal sector group has an AlkanSSSya unit where they may put their daily contributions. At the end of the month, the amount saved by every member will be counted and if this is sufficient for the monthly contribution of P330, this will be paid to SSS and will be credited under the name of the self-employed member.

meaningful service in keeping with the times. Most of these transactions may be done online through the SSS web site. It is also easier to get information about SSS, and SSS has more branches that members can visit. Even OFWs can already easily access information about SSS. Aside from this, the members were also given the opportunity to save for the future through the Peso Fund Program—a program wherein a member’s savings earn. The accumulated contribution in the Peso Fund may be used as additional benefit upon retirement or in unexpected circumstances where funds are needed. During the past 10 years, SSS implemented a condonation program for four years (2010, 2011, 2012 and 2016) for the members and employers with unpaid obligations. Under said program, the SSS condoned the penalty for unpaid obligations. Many availed themselves of the program because aside from the restoration of “good standing status” of members, the benefits they will receive will not be reduced upon their retirement. Along with the increase in contribution from 10.4 percent up to 11 percent, and the monthly salary credit ceiling from P15,000 to P16,000 in 2014, there had also been an increase in the amount of funeral benefits, which now is between a minimum amount of P20,000 to a maximum amount of P40,000, depending on the number of contributions and credited years of service of the member. In this decade, the campaign against employers who are not remitting the contributions of their employers had been intensified and

Like a parent who takes care of and guides his children, SSS has fulfilled and is continuously fulfilling its duty to provide meaningful protection to its members in various forms and in times of need. In the past 60 years, SSS has proven that it is one with the millions of Filipino laborers in building their dreams in life—a future that is prepared for a life of uncertainties and full of challenges. In a few instances that SSS was faced with relentless criticisms and accusations on its capability to give efficient and effective public service, it stood up and rose above it all several times over in the field where it belongs. SSS has proven that there is no big or small member who may not be given the benefits due him or her, that the institution is not selective on whom to give proper protection to. When it comes to social security, all See “Amansec,” A11

the period is three years (beginning 2005). In Belgium it is one year. In Greece it is two years. In some jurisdictions, the suicide of the insured voids the insurance on the ground of public policy. The insurance company may agree to shorten the period (i.e., one year) in the policy. The two-year period is provided to lessen the possibility of one acquiring insurance with the deliberate intention of committing or in contemplation of suicide at a later time. Some have dubbed this as a “planned death”. However, a suicide committed in the state of insanity shall be compensable regardless of the date of commission. The rationale being that an insane person cannot possibly contemplate such an elaborate scheme of acquiring insurance with suicide as the ultimate objective. The two-year period cannot be made longer under Philippine laws. However, suicide can be made an excepted or insured peril (the suicide clause). It is interesting to note a study made in Australia, “Assessing the

Impact of Suicide Exclusion Periods on Life Insurance”, which noted that there are “more suicides detected for the first two years after the exclusion period”. It also recommended that the extension of the suicide-exclusion period to three years may prevent some “insurance-induced” suicides. According to Goldberg, “data from the Society of Actuaries in the US concludes there was a quadruple increase in suicides at the end of the exclusion period [typically two years in the US] and that during the exclusion period, a number of disguised suicides come through in higher accidental death rate”. The original provision on suicide was inserted as Section 180-A in Presidential Decree 1460 (Insurance Code of 1978) by Batasan Pambansa Building 874 on June 12, 1985. It is now Section 183 of the Amended Insurance Code. The Life Insurance Companies Association of the Philippines has objected to this law specifically making suicide committed in the state of insanity as compensable.

Meaningful protection

Opinion BusinessMirror

opinion@businessmirror.com.ph

Tax reform is never easy Transforming prisoners from ‘violators to cultivators’ Edgardo J. Angara

Michael Makabenta Alunan

on the contrary

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he experience of the Ilocos Sur provincial jail in rehabilitating prison inmates is not only worth telling and retelling, but must be replicated nationwide as it has emerged as a great model for others to follow, with its slogan: “From Violators to Cultivators”. I was with 50 agricultural journalists and information writers when we visited the jail’s Organic Vegetable Garden, which formed the educational tour portion of a seminar-workshop on Climate Change, Agriculture and Food Security issues mainly for the region’s writers, held last week in Bantay, Ilocos Sur, by the Philippine Agricultural Journalists Inc., where I am a director and five-time president over two decades back. From nauseam to museum. A few years back, the provincial jail was just housed at the back of the provincial capitol at the center of Vigan City, and thus became an eyesore and nuisance to Vigan as a tourist heritage site. And one could not control the noise made by the inmates, who are relatively free, ironically, to express their angst, regrets and frustrations in life, while inside the prison’s barbed-wire walls. And their voices were within hearing distance of court hearings and provincial board meetings at the capitol. The increasing number of inmates posed a problem as a bulging population was no longer healthy. Thus, the transfer to a 4,000-square-meter lot in Barangay Taleb in the adjoining town of Bantay was a welcome development. In place of the old jail rose the museum, which is now a Vigan tourist attraction, where Ilocos Sur showcases its rich history and heritage, cultural artifacts, etc. Low cost for Ilocos. Constructing new prison buildings cost a lot for Ilocos Sur, but the provincial government, now under Gov. Ryan Singson, realized that it could save on operations if the inmates could grow their own food. Thus, an organic farm was developed with the help of Agricultural Training Institute under Dr. Roger Evangelista, not really to achieve lower costs of operations, but to keep inmates preoccupied, generate earnings for themselves, and learn the skills they can take with them once they gain liberty. Resident agriculturist Tito Batin trained the inmates to greenhouse nursery and to various vegetable crop culture from tomatoes, pepper, pechay, plants as natural pest repellants and many more, including sitao (stringbeans) and patola (gourd), which elicited laughter owing to their sex-sounding undertones if translated to Ilocano. I also asked a “sili” question about hot pepper, and got “sili” remarks from fellow writers. Mushrooms, other rooms for improvement. Initially, 80 truckloads of garden soil and 30 truckloads of carbonized-rice hulls were brought in to fast-track the establishment of the organic farm, Batin said. Today, they now process their own carbonized-rice hulls, which they sell outside jail. Carbonized hulls, if mixed with wastes (biokitchen waste, animal wastes) for their nitrogen content, can serve as good organic fertilizers. The University of Northern

Amansec. . .

continued from A10

is fair. No one is given undue preference. No one is aggrieved. In facing another stage in public service, it is certain that more stones will be thrown at the SSS and there are more severe hindrances to overcome for it to be able to realize its sworn

Philippines also taught them how to prepare and grow mushrooms, which they produce in volume phase by phase, and potentially process mushroom burgers and other food products. Technical Education and Skills Development Authority also helped provide equipment for the livelihood project. Raymond Tabios, provincial warden, said that with 378 inmates, including 27 women, not all of them can become farming cultivators. Of course, other livelihood skills can be cultivated, which they did, like handicrafts from paper craft, plastic cutflowers, artistic bonsai trees made out of wires and beads, plastic bottle décors, miniature figurines, like kalesas, and many more the imagination can bring them. Nurture their future. “Our objectives are to eliminate their earlier criminal behavior, instill discipline and teach them to become productive citizens again,” Tabios said. People of Ilocos Sur, led by their governor, take pride in their jail not only because it has become a regular farm tourism site, but has been accredited since October 2016 as one of the learning sites in the region. And because inmates were determined to learn and help themselves, with some even able to send 11 kids and siblings to school from their jail farm earnings and their handicraft selling to tourist-visitors. As they have become trainers themselves, Singson was quoted to have said these inmates, once released, “won’t be called ex-convicts, but teachers instead”. Actually, most are detainees awaiting trials and final conviction, but because they are more determined and hopeful, they are “men of conviction” in its other meaning. Tabios also welcomes our proposals to form cooperative clusters among inmates and let them undergo, perhaps, incubation tie-ups with big brother cooperatives and non-governmental organizations. Local government can match their meager savings/earnings, which can further be leveraged by Bangko Sentral ng Pilipinas’s Credit Surety Fund, which has a facility for marginalized cooperatives that could match 10 times their equity at concessional rates, noncollaterized and payable in 10 years. Drug users as addicts, similar to addicts of cigarettes, liquor or gambling, are not heinous criminals, compared to many criminals at the Ilocos Sur jail, who are successfully being rehabilitated. Thus, drug users need not be gunned down but rehabilitated. Perhaps, rich cities, like Quezon City, can explore relocating their crowded jails through sister-city tie-ups with agricultural small towns in the provinces, not only to decongest the cities, but to nurture the future of their inmates, many of whom are innocent but poor, and could not afford bail or lawyers.

E-mail: mikealunan@yahoo.com

duty to take care of, protect and enrich the hard earned contributions of the members, as well as giving timely and appropriate service. But then again, like a parent, all the members can expect that the love and care of the SSS for its members will never fade. It will continue to serve its members for a long time. As long as there is an SSS member, the SSS will guarantee that his future is protected.

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N his new book, A Fine Mess, author T.R. Reid discusses how the United States can and should reform its complex tax system, by comparing it with other taxation systems from all over the world. Mostly, he writes about stories and lessons that the US could emulate. In turn, he documents the necessary struggles for any tax reform, not just to prevail, but also to endure.

One example Reid cites is New Zealand, with its efforts in lowering its income-tax rates while broadening its tax base in the 1980s. At the time, the Kiwi nation relied on a progressive income-tax schedule that imposed higher rates on the rich and lower ones on the poor. Like many countries, New Zealand at the time had a long list of exemptions and allowable deductions that, although had good intentions, ended up becoming the loopholes for many to circumvent tax obligations. By t he 198 0s, when New Zealand’s Labor Party won the

parliament, a massive effort was launched to remove all the exemptions, rebates, allowable deductions, special business allowances and agricultural subsidies that were in place—with the avowed goal of cutting the top income-tax rate in half and reducing other rates across the board. To make up for the lost revenue, the Finance Ministry proposed a goods and services tax, similar to the value added tax system we have in place, where virtually no exemptions were provided. Individual taxpayers and large businesses, including the accounting firms and tax consultants that

Wednesday, September 27, 2017 A11

helped both take advantage of New Zealand’s complex tax system, rose up against the Labor Party’s taxreform initiatives. Some decried the loss of the deductions that benefited them. Others said the lower income tax rate was a gift to New Zealand’s rich that would exacerbate inequality. Sir Graham Scott, then policy chief of New Zealand’s Finance Ministry, said to Reid in an interview that to every person who angrily complained about losing their cherished deduction, finance officials responded: “If you want to keep that deduction, we’ll have to raise the rates for everybody.” Scott added, “People understood the trade-off; you lose a deduction, but you get a simpler tax code and much lower rates.” Another example discussed in the book is the much-lauded tax on beverages with added sugar or high-calorie sweeteners imposed by Mexico in 2014. Reid wrote that backers worked to make the tax palatable by promising it would solve two problems simultaneously—the runaway obesity epidemic and the lack of clean drinking water across the country. Large cola companies fought bac k , spend ing hu nd red s of

millions of pesos lobbying against the proposal—mostly through paid ad campaigns. The supporters of the tax responded in similar fashion, releasing several TV commercials—one of which depicted doctors speaking with young children with diabetes. The latter’s TV commercials were partially funded by the charitable foundation of New York City Mayor Mike Bloomberg, who himself was an antisugar advocate. Eventually, those in favor prevailed—partially because, as The Guardian reported in 2015, 70 percent of a survey’s respondents said they would support the tax if it led to clean drinking fountains in all of Mexico’s schools. Noted French economist Thomas Piketty once wrote that taxation is not just a technical matter, but “preeminently a political and philosophical issue, perhaps the most important of all political issues”. Many may not think of taxation as an important issue, but it cuts across every swath of society. And that’s why tax reform can be very difficult. This is clear in T.R. Reid’s book. E-mail: angara.ed@gmail.com, Facebook and Twitter: @edangara

Christians standing up for Christianity–the only way Teddy Locsin Jr.

Free fire Continued from A1

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or that matter it is only with decency that one can disagree with others, even if it is to get them to listen; hopefully get them to agree to least abide by a rule of law that favored neither side; compulsion and violence won’t do it. It is only with decency that one religion can live beside other religions. Decency is the watchword of acceptable conduct. Nothing can be right if it is not polite. Religious intolerance is rude in the extreme; it is the pit of boorishness. Religious fanatics can have no seats at the table of civilization. They will chew their napkins and drink from fingerbowls. Men of confident faith have no problem being polite with, or even helpful to others of different faiths or none at all. When I defended the Korean Moonies from government harassment, they asked why they, who were Lutherans, are well treated in Catholic countries. I said because we are certain of our faith, of its verity and universality. So we never feel threatened by other beliefs. Only the insecure are violent. Nussbaum traces intolerance to fear. I do not. I trace it to the propensity for evil planted by man’s first disobedience. A moral imagination, said Martha Nussbaum in The Clash Within, is imperative if religions and any other strong persuasions are to coexist in the same place. A moral imagination is putting oneself in another’s shoes even if he or she holds beliefs diametrically opposed to one’s own. It is never allowing oneself to be the judge of one’s own cause; which is,

said John Rawls citing Locke, the first principle of justice. He explained this imperative as looking at the world behind a veil of ignorance that denies you the knowledge of where you actually stand and who you are; be it rich or poor, smart or less so, of one religion or political conviction or another—the majority’s or the minority’s. So you must be careful, Kant counseled, in adopting policies that may in the implementation be harmful to you. Think and act as if you may be a victim of what you think and do. Whatever you do, think of it as legislation applicable even to you. There is no argument worth the name that justifies religious intolerance. All rivers flow to the sea as all prayers go to God, Malraux said. To be sure, religions have, at one time or another, been intolerant and brutal in the extreme, be it Christianity against other faiths and among Christians—Catholics and Protestants. Or Muslim and apparently even Buddhism today. There is no political circumstance that permits an exception to the justly deserved condemnation of religious intolerance. But there are historical precedents that show civilizations attaining their peak by practicing

tolerance. To name only a few, that of Frederick II of the Kingdom of Sicily, and of Asoka and Akbar of the Hindu and Muslim empires of India. If you cannot accept these essential truths, the only recourse is a fight to the end or to defend what is yours by all the means at your command: a fight between all those of one religious or political persuasion and all those of other persuasions. And that is my contribution to this issue. When the Rohingya started fleeing in search of places of greater safety, the Philippine government offered unconditional asylum. In the event, none of them came over although we have a small Punjabi community doing quite well in our country. But the United Nations in Manila gave me the polite explanation that we are not in the route of their natural migration. Just the same, the UN fellow said, our offer prompted Muslim countries to open their doors. We completely overlooked the crying need for making the same offer to Yazidi and other Christian communities being murdered en masse in the Middle East, without a word of protest from Christian countries except Hungary. Every effort to finesse the outrage has been attempted, particularly in Western media, which did not react to the religious cleansing of Christians as it is doing in the case of Rohingya. It appears that the extermination of Middle Eastern Christians is the votive offering of Big Oil to their associates in the business. It is time therefore for other countries to follow Hungary’s lead, and step up to protect Christians abroad where they are degraded, sexually enslaved and traded, and butchered after use. The effort must carry the specific label: The Protection and Rescue of Christians in the Middle East. It will not do to carry on the campaign under the vague rubric

of religious tolerance. Such abstractions excite no passion. We are, first and foremost, Christians, like those butchered and raped under the prompting of the foulest of motivations—which is plain blood and sex lust—and in no wise religion. No religion or political cause worthy of the name can call for rape. Middle Eastern Christianity contains the roots of our religion; roots that haven’t been fully studied and explored in situ, in the life and religious practices of what is left of these communities. Unless they are saved, with their ancient practices and beliefs, we Christians shall be spiritually the poorer for it. Even now Catholic theology is plumbing other Christian practices that were closer to Christ in time and place. It is as if we had stood by and watched their crucifixions, literal today in many cases. We have to stop standing at the foot of the cross and take it down. Now is the time to stop being shy about standing up for what we are: Christians—as individuals, as communities, as kingdoms and republics, some of them among the great powers of the world. Perhaps nothing as grand as Martel at Tours or Don Juan at Lepanto but something; at least let us speak up as Christians for fellow Christians. It is not enough to sweep away the bleeding mess left by the lions in the arena, although we are speaking of nothing so noble but just hyenas here. If we do not speak up and act as Christians for others like ourselves, we send the signal to their tormentors that their victims, tied to stakes driven in the sand, are lunch for the lions; and that we shall merely watch in horror from the sun-drenched galleries of the amphitheaters of hell, until we ourselves sink to the depths of intolerance of those whose atrocities we merely decry, and whose twisted interpretation of a beautiful religion we condemn.

Merkel’s top challenge is building a new coalition

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ngela Merkel’s victory in last Sunday’s election gives her a fourth term as Germany’s chancellor and should be seen as a remarkable achievement—one that few would have predicted back in 2015, when her popularity slumped during the worst of the refugee crisis. Merkel’s resilience, based on a careful blend of principle and pragmatism, deserves to be celebrated. To be sure, this success is marred, and the future of German politics somewhat clouded, by the strength of support for the far-right, anti-immigrant Alternative for Germany (AfD). Yet, dealing with this newcomer to the national parliament is unlikely to be Merkel’s toughest challenge. Building and leading a new

kind of coalition government will be a greater test of Merkel’s abilities. Merkel ’s Christian Democratic Union/Christian Social Union won 33 percent of the vote, down from 41.5 percent in 2013. The Social Democrats, who’d been in coalition with the CDU/ CSU, were pounded too. Their share fell to just 20.5 percent—and, wounded by the experience, they’ve said they’ll now move into opposition. AfD’s 12.6 percent put them in third place, obliging Merkel to seek a new coalition with the right-of-center Free Democrats, on 10.7 percent, and the left-of-center Greens, on 8.9 percent. Forming a government could take weeks or even months. Support for the AfD is best seen as

a protest vote. The party managed to attract an unruly mix of first-time voters, conservatives abandoning the CDU/ CSU, and voters from eastern states under economic stress. Roughly onesixth of the party’s supporters switched from backing leftist parties in the past. Ideologically, they’re divided, and the splits widened in their moment of success. A politician of Merkel’s skill should be able to exploit this weakness. Uniting her new coalition will probably be harder. Granted, Germany’s economy is thriving: Unemployment has declined to 3.7 percent from over 11 percent in 2005, growth is healthy, and the government’s budget is in surplus. This was the core of Merkel’s case to the

electorate. Yet, areas of neglect demand attention, ranging from poor digital infrastructure to lack of competition in services. Building cross-party support for programs to address those issues won’t be easy. Germany’s role as a leader of the European Union poses an even greater challenge. Monetary union remains incomplete and closer cooperation on fiscal policy will be needed to ensure long-term stability. The Free Democrats, in particular, are skeptical of further integration and want a less centralized EU. Without the backing of the Social Democrats, it will be harder for Merkel to make the case for the larger fiscal transfers that a successful union will require. Bloomberg View

2nd Front Page BusinessMirror

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DA, NFA ask Congress W to allow export of corn

www.businessmirror.com.ph

PHL lags behind 3 Asean peers in competitiveness

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By Jasper Emmanuel Y. Arcalas

@jearcalas

he government is keen on allowing farmers to export corn and rice to boost their income after the quantitative restriction (QR) on rice is abolished by Congress via the amendment of a law that allowed its implementation.

The National Food Authority (NFA) and the Department of Agriculture (DA) asked lawmakers to include a provision in a bill amending Republic Act (RA) 8178, or the Agricultural Tariffication Act, that would remove the need for a certification of a surplus before farmers could export rice or corn. The provision will amend a cer-

tain section of Presidential Decree (PD) 4 that mandates the need for a certification of surplus production to allow the export of rice and corn, according to NFA Administrator Jason Laureano Y. Aquino. “The NFA also proposes to remove the need for a certification of excess in production and/or supply, from the [NFA] Council

after proper consultation with the Office of the President to undertake exportation of rice, corn and grains and/or their substitutes and/or by-products,” Aquino said in the NFA’s position paper, a copy of which was obtained by the BusinessMirror. The NFA’s position paper was submitted to the House Committee on Food and Agriculture chaired by Party-list Rep. Jose T. Panganiban of Anac-IP. The committee, through a technical working group (TWG), is currently reviewing a draft bill that would amend RA 8178. The initial working draft of the substitute bill amending RA 8178 indicated that the ban imposed on the country’s rice exports shall be lifted regardless of the level of domestic supply. “Consistent with the aim to enhance the industrial competitiveness of the local rice-farming industry, all laws, regulations and

issuances restricting or limiting the export of rice are hereby repealed, including, but not limited to, section 6 (A) (XIII) of PD 4, as amended”, the draft read. However, should there be a shortage in the supply of rice, whether actual or foreseen, the President shall have the authority to temporarily regulate the export of rice for a limited and specified period of time. Such power shall be exercised by the President upon the certification of shortage by the DA in consultation with all relevant agencies, according to the initial working draft. During the deliberations last September 19, the TWG adopted the proposal of the DA to also lift the export ban on corn in the draft bill amending RA 8178. In its position paper submitted to the House Committee on Food and Agriculture, the DA echoed Continued on A2

House panel OKs bill on medical use of marijuana

See “House panel,” A2

tr ies, t he on ly countr y w it h considerable decline in regional ranking,” the MBC said in a statement. Singapore remains as the most competitive in the region, despite its one-notch slide down to being third most competitive globally. The Lion City is now behind the United States in the global ranking. Outpacing the Philippines are Indonesia, Vietnam and Brunei Dar ussa lam; w it h f ive-notch gains each for Indonesia and Vietnam and a whopping 12-spot improvement for Brunei. MBC Chairman Edgar Chua expressed “tempered sentiments” at the mixed results but lauds the continuous drive for economic reforms. “It is good to see that we have maintained our overall competitiveness and even moved one notch higher,” Chua was quoted in the statement as saying. “However, as we implement changes to improve, other countries are doing the same. In fact, Vietnam and Brunei have overtaken us this year.” Chua added the MBC believes the country needs “to do much more at a much faster pace”. He said the Continued on A2

TAIPEI COMMITS FULL SUPPORT TO MANILA’S WAR VS. ILLEGAL DRUGS

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he House Committee on Health has approved the bill allowing the use of cannabis, or marijuana, for medical purposes. Meanwhile, the House Justice Subcommittee on Prosecutorial Reforms is ready to present the measure strengthening the antihazing law of 1995 to its mother committee for deliberations. In House Bill (HB) 180, Rep. Rodolfo T. Albano III of Isabela said his proposal seeks to provide compassionate and right of access to medical cannabis and expand research into its medicinal properties. The measure seeks to amend Republic Act (RA) 9165, or the Comprehensive Dangerous Drugs Act of 2002, which classifies marijuana, or cannabis, as a dangerous drug. Albano said HB 180 should not be deemed in any manner as advocating, authorizing, promoting or legally or socially accepting the use of cannabis, or marijuana, for any nonmedical use. He noted that, in the Philippines, thousands of patients suffering from serious and debilitating diseases would benefit from legalizing the medical use of cannabis. He stressed that the recorded use of cannabis as medicine goes back to about 2,500 to 10,000 years ago in traditional Chinese and Indian medicine. Recent studies, he said, show that cannabis has established effects on control of epileptic seizures, pain management in multiple sclerosis and arthritis, treatment of symptoms associated with Human immunodeficiency virus infection and acquired immune deficiency syndrome (HIV-AIDS) and palliative care in end-stage cancer treatment. “Potential medical effects based on clinical trials include prevention of cancer from spreading, management of anxiety, slows progression of Alzheimer’s disease and control of muscle spasms and tremors. Cannabis use in children with epilepsy and seizure disorders have been shown to be effective without the deleterious side effects of anti-epileptic medications,” Albano said.

HILE the Philippines inched up one spot in the Global Competitiveness Report 2017-2018 by the World Economic Forum (WEF), it has been downgraded among its peers in the Asean. T he Mak ati Business Club (MBC), the WEF’s partner institute in the country, said among the 12 pillars ranked in the annual survey, the Philippines registered considerable improvements in “Market Size”, “Labor Market Efficiency” and “Higher Education and Training”. The Philippines’s overall ranking improved from 57th last year to 56th this year. However, the Philippines’s h i g h e s t - r a n k i n g p i l l a r, t h e macroeconomic env ironment, dipped from the 20th spot in last year’s Competitiveness Report to 22nd place. Each of the pillars reflects a specific ranking among 137 economies, just like the overall country scores. Among Asean countries, the Philippines’s standing fell from the sixth spot from 2016 to eighth this year. “The Philippines has slid further down among Asean coun-

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TRADE FAIR Officials at the 32nd Negros Trade Fair highlighted the ringing of the bell that signaled the start of the celebrations with a toast. The event was headed by Catherine Cusi Lobatan, chairman of the Negros Trade Fair; Alberto Romulo, chairman of the board of the Development Bank of the Philippines; Camille Villar; Negros Occidental Gov. Alfredo G. Marañon Jr; Ina Gaston, president of the Association of Negros Producers; Bernard Vincent Dy, president of Ayala Land; and Jose Emmanuel Jalandoni, senior vice president of Ayala Land. FAYE PABLO

Tweaks in procurement law needed to end Filipino bias Continued from a1

Bringing that in requires changes in the economy. For example, the Procurement Act, perhaps it is time to look at it once again,” Balbosa said. The ADB and the World Bank, she disclosed, are currently working with the national government in harmonizing its procurement rules with international norms. In a document, the World Bank said the Philippine government does not subscribe to the globally accepted ICB. The bank said the country only uses national competitive bidding (NCB). NCBs are particularly used for contracts on farm-to-market roads, school buildings, community hospitals and health centers. The World Bank explained that while ICB and NCB are both open and transparent procurement processes, ICB requires advertising the procurements internationally and nationally, whereas NCB requires national advertising only. “In the case of the Philippines, however, the most common method is NCB because the nature and scope of contracts are unlikely to attract international competition and the advantages of ICB are outweighed by the administrative or financial burden involved,” the World Bank said. However, Section 4 of Republic Act (RA) 9184, or the Government Procurement Reform Act, stated that foreign entities may participate in the procurement of infrastructure projects, goods and consulting services. This was detailed in the Implementing Rules and Regulations (IRR), particularly Section 4, or the scope and application of the IRR, and Sections 23 and 24, which

pertain to the procurement of goods and infrastructure projects and consulting services, respectively. “Unless the Treaty or international or executive agreement expressly provides another or different procurement procedures and guidelines, RA 9184 and this IRR shall apply to foreign-funded procurement of goods, infrastructure projects, and consulting services by the GoP [Government of the Philippines],” the IRR stated. “As you move into large complex projects, you would get into issues of design, preparation, identification, and then terms of reference and crafting terms of reference, bids and awards and then monitoring later on, these are the next steps,” Balbosa said. In its Asian Development Outlook (ADO) 2017 Update, the ADB said the government’s massive infrastructure push will boost the country’s economic growth to 6.5 percent in 2017 and 6.7 percent in 2018. The ADB added that while inflation rose to 3.1 percent in the first eight months of the year, from 1.5 percent a year before, it remains within the Bangko Sentral ng Pilipinas target range of 2 percent to 4 percent. The Manila-based multilateral development bank forecasts inflation to slow to 3.2 percent from 3.5 percent for 2017, and to 3.5 percent from 3.7 percent for 2018. Apart from the public funds, the ADB said, however, that the “Build, Build, Build” program will require the timely implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) and increased private-sector funding.

The TRAIN, ADB Country Director for the Philippines Richard Bolt said, will be crucial in financing the infrastructure push of the government through 2018. ADB Philippine Country Office economist Aekapol Chongvilaivan also said the country will require some P160 billion to P180 billion for projects in the next three years alone. With this amount, he said, the country will also need the help of the private sector. Publicprivate partnerships (PPPs), Balbosa said, should be viewed from a long-term perspective. This, he said, is the reason the ADB, the Canadian and Australian governments assisted the PPP Center through the creation of the Project Development Monitoring Fund, which finances feasibility studies and the procurement of transactional advisers. The ADB believes that PPPs can help fill the infrastructure gap, not only in the Philippines, but also in the region. The ADB estimates that the infrastructure-financing gap reaches $500 billion annually. “While state funds currently finance 92 percent of the region’s infrastructure investment, some economies struggle to meet these needs, constrained by high fiscal deficits and deepening public debt,” the report stated. Doubling the ratio of PPP investment to GDP will add 0.1 percentage point to GDP growth per capita across the Asia and the Pacific. The report added that doubling PPP investment from 0.5 percent of GDP in 2015 to 1 percent could bring safe drinking water to 12 million people among the 300 million who currently lack it, and provide electricity to 14 million of the 400 million without.

aiwan has never been the source of illegal drugs entering the Philippines. Rather, Taiwan is the best partner for the Philippines to jointly combat illegal transnational drugs, Taipei said in a statement. “Taiwan fully supports the Philippines’s combat against transnational drug syndicates. Taiwan and the Philippines have been working together to fight against illegal drugs for years. Taiwan will continue to join hands with the Philippine relevant authorities to enhance cooperation to vigorously eliminate the transnational drug traffickings. In recent years, Taiwan and the Philippines have established cooperation mechanisms and systems for the two countries to fight against the illegal transnational drug trafficking. At present, Taiwan and the Philippines have signed ‘Mutual Legal Assistance Agreement between Teco (Taipei Economic and Cultural Office) and Meco (Manila Economic and Cultural Office) in criminal matters,’ ‘MOU (memorandum of understanding) between Teco and Meco on combatting transnational crimes,’ and ‘MOU on Cooperation of Anti-Illegal Drugs’. The interaction and exchange of visits of relevant agencies and the law-enforcement officers between Taiwan and the Philippines are frequent and cordial. So far, tangible results have been achieved on fighting transnational drug crimes. The Philippine authorities have publicly praised Taiwan on many occasions by indicating that ‘Taiwan is one of the best partners and friends for the Philippines to fight transnational drugs and crimes’. The achievements of the bilateral Philippines-Taiwan cooperation are marvelous in the recent three years. As a result of the joint efforts, the Philippine authorities have been able to root out 12 important cases resulting in the confiscation of over 1,000 kilograms of shabu [finished products], more than 8,000 kilograms

of semi-finished products and raw materials, 3 shabu laboratories, 1 distribution station and 6 shipments via the air cargo and sea container. The market value of the above seizures is more than NT $ 2 billion (equivalent to about P3.2 billion). The Philippine authorities have been grateful for Taiwan’s unreserved assistance and contribution in cracking down on the illegal drugs. To thank Taiwan’s contributions, the Philippine Drug Enforcement Agency (PDEA), the National Bureau of Investigation and the Philippine National Police have presented 10 Appreciation Plaques to Taiwan’s counterparts to express their gratitude. They have commended Taiwan’s staunch and strong support and cooperation in fighting against the drugs. Through various agreements and MOUs signed by Taiwan and the Philippines, the Philippine government’s antidrug policy has gradually attained the goal of crushing the illegal transnational drugs syndicates. Dr. Gary Song-Huann Lin, representative of Taiwan to the Philippines, has recently approached the relevant Philippine governmental agencies and the Senate to clarify that Taiwan has never been the source of illegal drugs and that, according to the available PDEA statistics, the majority of the drug is actually manufactured in the Philippines, not from overseas. He once again reiterated that, as a closest neighbor, Taiwan has the goodwill to work with the Philippine authorities to combat the transnational illegal drugs. He highlighted the need and the importance of joint efforts in fighting against the drugs in an era of global village and globalization facing Taiwan and the Philippines today. Lin’s above insightful points and remarks on Taiwan being an absolutely indispensable partner in the Philippines’s endeavour of fighting transnational drugs are very well received by the Philippines general public and the lawenforcement agencies.”