Businessmirror september 29, 2017

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Friday, September 29, 2017 Vol. 12 No. 351

Fitch lauds BSP’s move to avert property bubble 20% I

By Bianca Cuaresma

The estimated real-estate financing share in total bank lending in the country

“Recent moves to enhance oversight of property lending and project finance in the Philippines could make Continued on A2

The antidote to smuggling

Dr. Jesus Lim Arranza

Make Sense Part Two

The other forms of smuggling

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or the second part of my series on smuggling, I will discuss the other forms of smuggling within the country, even as the nation’s attention stays glued to the ongoing Senate hearings on the P6.4 billion worth of illegal drugs that slipped through Customs gates in May this year and the millions of pesos in grease money (tara) being paid to some corrupt officials of the Bureau of Customs (BOC) by smugglers.

Continued on A11

PRICES OF PROCESSED MEAT SEEN RISING BY AS MUCH AS 6%THIS CHRISTMAS SEASON

By Jasper Emmanuel Y. Arcalas

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he Philippine Association of Meat Processors Inc. (Pampi) said prices of some processed-meat products this Christmas season may increase by as much as 6 percent, as raw materials sourced abroad are still expensive due to tight global supply, compounded by the peso depreciation. “ The meat supply is stable and, at this time of the year, the [raw] materials for the Christmas season are here already and are in the production line already.

But our cost has gone up because of the exchange rate, which has deteriorated by almost 10 percent year on year,” said Pampi Vice President Jerome D. Ong, who is also the president of CDO Foodsphere Inc. “For canned goods and hot dogs [there might be] very minimal [increase of about] zero to 3 percent, perhaps. But for hams, it could be a 5-percent to 6-percent increase.

This is because the global prices of

Puno to Duterte: Anti-dynasty law before federalism

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ONG: “There’s always a natural momentum for prices to go up, and it’s really hard to force it down. Hopefully, by early next year, it goes down some more, but we do not see it going back to old level [of $400].”

@jearcalas

pork has gone up, plus the [weaker] foreign exchange,” Ong added.

Despite the resumption of imports from some European countries, Ong said the global price of mechanically deboned meat ( M DM ) i s st i l l h ig her than usual, as world supply continue to be thin. MDM is another raw material used by meat processors in making hot dogs and canned goods. “[MDM price] doubled [this year] but has since stabilized, but it has not come back to original levels.

It’s back to about $650 per metric ton, which is still expensive. There are new countries or markets that would open, then we have to compete with them,” he said.

See “Processed meat,” A2

PESO exchange rates n US 50.9690

business news source of the year

P25.00 nationwide | 5 sections 30 pages | 7 days a week

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nternational credit watcher Fitch Ratings gave the Bangko Sentral ng Pilipinas’s (BSP) newly strengthened rules on the monitoring of property lending and project finance a thumbs up, saying the recently approved regulation will help boost the country’s loan growth.

2016 ejap journalism awards

Shojiro Sakoda (from left), Isuzu Philippines Corp. (IPC) executive vice president; Kazushi Okawa, Mitsubishi Corp. Japan executive vice president and Group CEO Machinery; Hajime Koso, IPC president; Masanori Katayama, Isuzu Motors Ltd. president; Fernando Zobel de Ayala, Ayala Corp. president and COO; and Helen Dy, House of Investments CEO and chairman, lead the celebration of IPC’s 20th anniversary at the World Trade Center on September 27, which coincided with the unveiling of a new range of light to heavy-duty trucks.

Isuzu Philippines launches new truck variants Story & photo

by Ronald de los Reyes

I

suzu Philippines Corp. (IPC) celebrated its 20th anniversary on September 27 at the World Trade Center in Pasay City. The famous Japanese king of diesel

engines also unveiled a new range of light, medium and heavy-duty trucks, which are powered by the Blue Power engine series.

IPC President and CEO Hajime Koso said they are confident that the overhauled engine range will further boost sales across the

board. “We are hoping, yet we are confident, that the Philippines will continue to patronize the brand with these substantial changes that we have introduced. We believe that these game changers are surely to hit it big in the local automotive industry.”

etired Chief Justice Reynato S. Puno on Thursday argued that the government, before turning the Philippines into a federal state, must enact an anti-dynasty law to lessen the chances of political monopoly in provinces.

According to Puno, the Duterte administration should enact first a law prohibiting political dynasty.

This, he said, is necessary so as to weaken dynasties that might take advantage of federalism, which intends to decentralize the Metro Manila-based national government and distribute wealth and power to provincial units.

“The solution is quite simple.

You just define what is a political dynasty,” Puno said. “In the proposed new Constitution, this particular problem has become complicated because the 1987 Constitution did not define what is a political dynasty. The present Constitution left it to Congress to make the definition.”

Political dynasties are prohibited under Article 2, Section 26 of the Constitution. However, legislators have failed to pass a law

n japan 0.4518 n UK 68.2475 n HK 6.5267 n CHINA 7.6732 n singapore 37.4965 n australia 40.0005 n EU 59.8682 n SAUDI arabia 13.5918

Continued on A2

Source: BSP (28 September 2017 )

BMReports BusinessMirror

A2 Friday, September 29, 2017

Fitch lauds BSP’s move to avert property bubble Continued from A1

it easier to spot pockets of excess in these high-growth sectors,“ Fitch Ratings said in its recent report.

But while lauding the BSP’s move to rein in real-estate lending, Fitch highlighted that the Philippines remains far from experiencing a property bubble.

Earlier this month the Monetary Board approved enhancements to the prudential reporting requirements in an effort to strengthen its oversight of banks’ real estate and project-finance exposures.

According to the Central Bank, the reportorial enhancements form part of its so-called macroprudential toolkit and are being deployed

to sharpen the monetary authority’s assessment of banking-system exposures to the property sector.

Under the new guidelines, banks are asked to report detailed information on their real-estate loans to buyers of mid- and high-end housing units, in addition to socialized and low-cost housing.

Also, covered banks shall now report commercial real-estate loans as to the underlying commercial project being financed, such as residential units, office buildings, malls and factory or plant facilities.

Fitch noted that real-estate loans, which account for just over 20 percent of total bank lending, have risen by 21 percent on average over the last four years.

Ramp controllers. . . have no objection to being retired to give way to fresh blood managing our ramp control system.”

“However, in order to maintain the professionalism and integrity of the system, we would like to point out that the International Civil Aviation Organization has mandated that ramp controllers, like regular air-traffic controllers [ATC], should possess valid licenses.”

The B usiness M irror got in touch with Octavio Lina, Naia 3 terminal manager to inquire if their new recruits have licenses.

Lina replied by text message, saying: “I will talk with the CATC, [regarding] license of the new ramp controllers, not air-traffic controllers.”

He confirmed it was the CATC that conducted the training, “like what they are doing with ATC. The GM [General Manager Ed Monreal] and Deputy General Manager Jim Sydiongco of the Caap knew about this.”

Ramp control became a necessity after the Naia expanded its terminals to four passenger terminals.

Ramo said during the martial-law years, there was no ramp control since only the Manila Tower has jurisdictions over all airplanes landing, taking off and taxiing within the Naia complex.

At that time, because of the growing restlessness among student activists, Malacañang decided to assign a platoon of Marines to guard facilities from prospective saboteurs. These include the Manila Tower, Area Control Center and Approach Control Center.

Also guarded were communication and navigational facilities.

Then chief of Manila Tower, Florante Magdamo, found out that the Marines guarding the Tower were receiving

Continued from A12

higher salary than them. Arguing that the air controllers were doing risky jobs on a 24/7 basis, compared to the Marines, who simply sleep all day at the Tower facilities, Magdamo asked for parity in salary between the air controllers and the Marines.

However, the Manila International Airport (MIA) manager then, Eduardo Carrascoso, denied the request.

Ramo said that Magdamo, in retaliation, closed the Manila Tower and operations were paralyzed temporarily.

Carrascoso then appointed his assistant, former ATC Jimmy Cruz, to remedy the impending crisis.

In turn, Cruz recruited Ramo, who had just returned from the Middle East to be the chief of the new Terminal I ramp control. In the following years, because of the growing air traffic and the increase number of passenger terminals, more ramp controls were established.

“The ramp controllers were deployed because the scattered passenger terminals are no longer visible from the control tower, which used to direct airplanes to specific parking bays,” Ramo said.

“Because of the complexity of the Naia airport layout today, ramp controllers became a necessity,” Ramo added, saying that their job is to direct airplanes to initiate engine start-up and to point to specific parking bays.

At the same time, he said, the increase in traffic volume also made the ramp controllers an important cog in airport operation.

“Before they even start their engines, pilots have to call the ramp controllers to ask permission to start engine, otherwise, they would be wasting fuel while waiting in line for takeoff,” Ramo added.

Project finance is also seen to take off with the current administration’s infrastructureoverhaul agenda.

“Greater monitoring of these lending activities has been hampered by limitations in system-wide data, and the new initiatives could help to address this, especially if more information is made available publicly,” Fitch said.

“Closer Central Bank scrutiny may make banks more cautious in lending to these sectors, but it does not amount to regulatory tightening to curb growth,” it added.

The credit watcher noted that motor-vehicle loans continued to grow strongly, despite being subjected to similar measures since 2015. Motor-vehicle finance ex-

He said ramp controllers even direct pilots when to be “pushed back” from their parking slots by means of heavy tow trucks. Once the engines have started, ramp controllers guide the pilot toward the taxiway.

“Once on the entrance to the taxiway, that would be the time that ramp controllers hand over the pilot to the ground controller at the Manila Tower for taxi instructions toward the active runway,” he added.

“Once the pilot is ready to take to the air, the aerodrome controller issues the clearance for takeoff,” Ramo clarified.

On the other hand, ramp controllers also direct incoming flights that need to navigate the various taxiways to reach their specific parking slots.

Last year the Manila Tower handled 280,000 landing and takeoff (runway events), an average of 767 aircraft a day. That was about 63 runway events per hour during a 12-hour peak period, or an average of 33 events per hour for 24 hours, according to Rudy Boctot, the president of an air-traffic association.

More flights could have been handled, but the aviation authorities limited them to not more than 40 events per hour for safety considerations, “The International Civil Aviation Organization projected that the 280,000 a year would double in the next five years. But our capacity has not improved. We need to address several related problems, such as airport efficiency, the continued exodus of air-traffic controllers and the need to train more of them,” Boctot stressed.

“Presently, there are 700 air controllers nationwide, assisted by some 100 nonATC at the communication facility.”

Today there are about 48 licensed ramp controllers distributed across the four Naia passenger terminals. Of these, more than half are 70 years old.

panded by 24 percent year-on-year in June 2017.

While Fitch said that continued strong loan growth could potentially raise the risk of a credit bubble, the level of expansion remains at the safe level per its assessment.

“On the positive side, credit growth does not so far appear to be fueling asset bubbles. Property price inflation, for example, has been moderate, averaging around 4 percent a year from first quarter of 2014 to first quarter of 2017, according to the BSP’s house price index,” Fitch noted.

Experts partly blame the deregulation of housing finance in the United States for the property bubble in 2008, subsequently causing the global financial crisis.

Puno to Duterte: Anti-dynasty law before federalism Continued from A1

complementing the provision due to difficulty in defining what is a political dynasty.

“To me, that is a sine qua non [essential] condition because you will be giving sovereign powers to the states.

And the states should not be run by a monopoly, whether it’s a political monopoly or an economic monopoly,” Puno said.

In spite of this, the former head of Judiciary said he is still throwing his support to the government’s campaign to transition to a federal state. He noted that it is just about time to rewrite the Constitution and implement a new form of government because the status quo has failed to benefit the majority of people.

“Indeed, this outdated, if not erroneous, allocation of powers has earned us a lot of democratic deficits. And this has resulted in the continuing categorization of the Philippines as a failing democracy,” Puno said. Elijah Felice E. Rosales

China statement belies conspiracy in shabu raid–ex-BOC official

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hina’s strongly worded statement confirming the bilateral cooperation with the Philippines in retrieving the shipment of 604 kilos of metha mphet a m ine hyd roc h lor ide, or shabu, to the country in May exonerated former customs officials accused of conspiracy with importers of the illegal drugs, a former Bureau of Customs (BOC) executive said.

Retired Col. Neil Anthony Estrella, former chief of the BOC Customs Intelligence and Investigation Ser vice, said China’s condemnation in its statement of “false news” in the Philippines concerning the recovery of illegal drugs should remove doubts as to the alleged collusion of the accused ex-BOC officials.

The statement, he added, also disproved the conspiracy theory expounded by the Philippine Drug Enforcement Agency (PDEA) in its complaint before the Department of Justice.

Estrella and his team were responsible for the recovery of the illegal drugs from a warehouse in Valenzuela, following a tip from a Chinese customs official. Subsequent to the successful operation, his team was commended by the Chinese customs and the BOC for its prompt action.

Ironically, the PDEA charged Estrella, along with former Customs Commissioner Nicanor E. Faeldon and several others, with conspiracy to import illegal drugs for not immediately coordinating the retrieval operation with the PDEA and after they were implicated by customs “fixer” Mark Taguba II as alleged recipients of the tara system at the BOC. Estrella and other BOC officials have repeatedly denied the charges.

Estrella said Taguba’s pay-off accusations against him and his team have been proven false by the fact that they successfully interdicted the drugs shipment handled by Taguba. Also, Estrella and his men subsequently initiated criminal charges against Taguba and his Chinese associate with the National Bureau of Investigation (NBI) for drugs smuggling.

“These false reports have been going around to destroy us with one purpose: to protect the guilty,

Processed meat. . .

“There’s always a natural momentum for prices to go up, and it’s really hard to force it down. Hopefully, by early next year, it goes down some more, but we do not see it going back to old level [of $400],” he added.

Industry players said the price of MDM doubled to as much as $800 per MT in the first quarter. This is due to the closure of Philippine borders to poultry products, including MDM, from most European countries where there are avian-influenza (AI) outbreaks.

Meat processors source most of their raw materials, such as MDM, from Europe.

In July Pampi told the B usiness M ir ror that the government’s decision to ban meat imports from Brazil could result inasmuch as a 15-percent increase in the retail price of some processed-meat products sold locally. Brazil is another top source of raw materials by meat processors, especially MDM. Pampi noted that time that the retail price of hot dogs could go up by 10 percent to 15 percent, while canned goods that are MDM-based, such as meat loaf, beef loaf and luncheon meat, could increase by as much as 10 percent.

Meat Importers and Traders Association (Mita) President Jesus C. Cham said local meat processors are currently having a hard time importing their raw materials from cheaper sources

www.businessmirror.com.ph

Continued from A1

to mitigate possible price increase in their products. “[The] peso is weak while Euro is strong. So [it becomes more expensive] to source materials from Europe right now. [Furthermore,] Brazil is still banned, so there’s no source of MDM. [The global price of MDM] is still very dicey,” Cham said in a recent interview with reporters. “The market is interrelated. Like the North America sees that the euro is strong, so they know European prices are high, then they will bring their prices up also; it is market driven.”

Meanwhile, the high price of raw meat, such as pork liempo (belly), may continue, as supply remain thin even as the Christmas season draws nearer, according to Cham.

“The sales seem weak and, if you are going to look at the price of pork belly, it is still expensive. And even in the restaurants there is little supply of belly,” he said.

“These are more expensive than previous years. Global prices are up and peso is weak,” he added.

Industry sources told the BusinessMirror that the local hog production is still suffering from the effects of porcine epidemic diarrhea (PED), resulting in thinner domestic pork supply.

The PED reportedly killed thousands of piglets earlier this year.

The Mita chief said they have received reports that the price of meat in Europe has started to soften, but

including Mark Taguba, at the expense of those of us in customs law enforcement who did our jobs. China has specifically condemned these false reports in its statement,” Estrella said. “The PDEA has no case against us.”

Estrella f latly denied Taguba’s bribery allegations against him and his team. “If this was true, then we would not have raided and seized his drug shipment, and later on brought him and his Chinese partner to the NBI, where we also filed a complaint affidavit against him.”

In a statement released by the Chinese embassy in Manila on Tuesday, China expressed dismay over “false reports” here, saying “powerful facts” concerning a series of successful cooperation between the two countries in curbing illegal drugs were being compromised.

It said such cooperation was in line with the international practice of intelligence sharing and joint working, which must be praised all over the world.

It added that it was unfair to point to China as the source of the illegal drugs.

“These false reports have a negative effect on deepening China-Philippines cooperation in drug control; will hold back elimination of drug problem, the two countries’ relations and the fundamental interests of the people in our region,” the China statement further said.

The statement added that because of good cooperation between the two customs agencies, the whole process of retrieving the illegal drugs took only less than four hours.

“This kind of law-enforcement cooperation efficiency ensures the success of this action and shall be praised no matter where in the world,” the China statement said. “The action prevents drug getting into the Philippines, and fully proves the two countries’ law-enforcement agency has strong determination to fight against drug smuggling, action without hesitation and efficient cooperation spirit.”

Estrella said the embassy statement should put to rest speculations that they were in cahoots with Taguba and company. he noted that it might be too late to decrease the price of local pork.

“We are hearing that there is softening of prices in Europe. But it’s pretty late when they get here, they will get here by December,” Cham said.

“Prices have been high this year.

At this time there is a little softening of prices, but it is also because the exporters know the importers have stopped buying because it is not going to arrive in time for Christmas,” Cham added.

Cham is doubtful that the demand for meat, particularly for pork belly, may increase as Christmas draws nearer, citing the unusual “weaker” sales early into the “ber months”.

“September sales seem weak.

So, the experience previously had been that Christmas sales were no longer [increasing] during ber months. Christmas sales only start after the 15th of December,” he said.

“And if products remain expensive then [consumers] are going to hold back. They might just do a one-time big-time shopping or reduce their consumption or switch to some other stuff that are cheaper.”

The government has earlier encouraged importers to bring in more imported pork to stabilize local prices by cutting the tariff.

In April the Department of Agriculture approved the special importation of 7 million kilograms of pork slapped with a 30-percent tariff instead of the usual 40 percent. This covers only prime cuts of pork and not other parts, such as offal.

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Editor: Vittorio V. Vitug • Friday, September 29, 2017 A3

Senators push remedial law against ‘fake news’

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By Butch Fernandez

@butchfBM

HE Senate Committee on Public Information is poised to open an inquiry triggered by a “fake news” report claiming seven senators refused to sign a resolution condemning the wave of “senseless killings” under the Duterte administration.

“We reiterate our call to pass a law

Rebirth

Newly promoted Maj. Gen. Rolando Joselito Bautista, commander of the Philippine Army’s 1st Infantry (Tabak) Division, teaches the children of Marawi City evacuees on the basics of vegetable farming. Aside from the mission to flush out the IS-inspired Maute terrorists who laid siege in the city, Bautista is overseeing the completion of a “green” community that would soon be handed over to evacuees temporarily sheltered in different evacuation centers. With Bautista is Tarlac Heritage Foundation cofounder Dra. Isa Cojuangco-Suntay who initiated the project.

Photo Courtesy of 1st Tabak Division

PNP sets LIFT program launch for illegal-drugs users, dependents

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aying it is more inclined to the rehabilitation­—and not extermination—of drug users, the National Police (PNP) said on Thursday it will be launching a progressive community-based recovery and wellness program for drug dependents who have voluntarily submitted themselves to authorities during “Oplan Tokhang” operations.

Codenamed as Life After Tokhang or “LIFT”, the program is the PNP’s novel approach in assisting drug dependents in their recovery and wellness efforts under the government’s overall rehabilitation program.

Director Noel Constantino, PNP Director for Police Community Relations (DPCR), said the LIFT program complements the drug rehabilitation and treatment program of the Department of Health (DOH). “We have a moral responsibility to assist and facilitate complete recovery of these drug offenders,” Constantino said.

“Drug rehabilitation and treatment requires a holistic follow-on recovery program to prevent relapse,” he added.

Since July 1, 2016, up to June 30, 2017, the PNP said that, a total of 1,309,776 drug personalities, both users and traffickers, have voluntarily yielded to the PNP during Oplan Tokhang operations nationwide. Tokhang has been criticized and blamed for alleged drug-related extrajudicial killings.

PNP Spokesman Chief Supt. Dionardo Carlos said the PNP will also be working with non-governmental organizations (NGOs), whose advocacy is fighting illegal drugs for its program.

“Consultations are under way to finalize an agreement between the PNP and the NGO Life Rispondé Foundation Corp. to set into motion the PNP LIFT program for drug users,” he said.

Rispondé Foundation is a duly-registered non-stock and nonprofit foundation that has been successfully conducting community-based rehabilitation and outpatient recovery programs for drug users.

Through its partnership with government agencies, Rispondé has successfully delivered programs, such as the Baguio Emergency Response to Addiction, Bontoc Emergency Response to Addiction, Sablan Emergency Response to Add iction, Naturopathic Addiction Re-

covery Programs and Life Management Programs.

Rene Acosta

Sereno to House: Allow my lawyer to question impeachment witnesses

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upreme Court (SC) Chief Justice Maria Lourdes Sereno on Thursday asked the House Committee on Justice to allow her legal team to confront and cross-examine witnesses on the impeachment complaint lodged against her.

In a letter submitted by her lawyers to the House justice panel, Sereno said rules of the lower chamber allow her or her camp to conduct “examination” and “cross-examination” of witnesses during the determination of probable cause under the impeachment proceedings.

“In sum, we humbly submit that under House rules, persons who would testify during the hearing would not be considered mere ‘resource persons’ who would be questioned solely by committee members. Those persons would be full-fledged witnesses, who would

be examined by a proponent, and cross-examined by an opponent,” she said.

The justice committee, chaired by Rep. Reynaldo V. Umali of the Second District of Oriental Mindoro, is set to determine next week the groundsandprobablecauseoftheimpeachment complaint filed against the Chief Justice.

However, Umali said House impeachment rules do not allow that the respondent will be represented by lawyers. “We are not depriving anyone of his or her right to confront witnesses. If she wants to confront witnesses, she can confront them personally, subject to the decision of the body politic,” Umali said.

According to Umali, Sereno’s possible cross-examination of the witnesses are still subject to the approval of lawmakers.

Jovee Marie N. dela Cruz

Legal cannabis use gets DOH support

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he Department of Health (DOH) on Wednesday said it agrees with the House of Representatives Health Committee’s approval of the bill that seeks to legalize and regulate the medical use of cannabis or marijuana.

“We agree to making it available for restricted and highly regulated medical use, like what we have for morphine and other highly addictive drugs,” Health Secretary Dr. Paulyn Jean B. Rosell-Ubial said in a text message to reporters.

House Bill 180, or the proposed Philippine Compassionate Medical Cannabis Act, was unanimously approved by the House Committee on Health on Tuesday after consulting patients, advocacy groups, health-care practitioners and experts in the regulation of controlled

substances for medical use.

The bill was authored by Rep. Rodolfo Albano III of the First District of Isabela.

Under the bill, the use of marijuana to treat debilitating medical conditions would be allowed only for medication purposes.

The bill seeks to establish Medical Cannabis Compassionate Centers that would be licensed by the DOH and based in DOH-retained hospitals, specialt y hospitals and pr ivate ter t i a r y hospit a ls. T hese centers are eyed to “sell, supply and dispense cannabis to qualified patients or their caregivers through a pharmacist with an S3 license issued by the Philippine Drug Enforcement Agency.” PNA

that will put an end to the proliferation of false information amid the recent social-media post attacking seven of our fellow senators for allegedly refusing to sign Senate Resolution 518 urging the government to stop extrajudicial killings, especially of our children,” Sen. Joel Villanueva said on Thursday.

In a news statement, Villanueva asserted that “the epidemic of malicious fake news, especially online, should not be taken lightly”.

He prodded fellow lawmakers to action, saying “it is time to tackle Senate Bill 1492, or the Anti-Fake News Bill, to promote responsible use of social media and other platforms.”

“Hence, we will ask the Senate Committee on Public Information and Mass Media, chaired by Sen. Grace Poe, to include our bill when the committee holds an inquiry on the said malicious post,” he added.

Apart from Senate President Aquilino Pimentel III and Sen. Gregorio Honasan, other senators who were not listed as signatories of Resolution 518 were Majority Leader Vicente C. Sotto III, Richard J. Gordon, Cynthia Villar, Miguel Zubiri and Manuel Paquiao.

“We did not refuse to sign,” Villar protested, insisting the document was not shown to them.

Sotto suggested that he will move to expand the upcoming “fake news” inquiry to include “misuse of freedom of expression by people who do not have the courage to make themselves known” in reference to unidentified bloggers behind the attacks against the seven senators.

“We are ready to accept criticism

but not from anonymous sources,” Sotto said, even as he lamented what appears to be “a deliberate attempt to keep out other senators from signing the resolution.”

Sotto took the floor at Wednesday’s session to manifest his protest, saying that, while he had “no problem with the resolution...I take offense on how this resolution is being projected in the social media.”

Sotto said his attention was called by his grandson to an article about the resolution with the headline blaring “Seven senators did not sign” instead of reporting “16 senators filed a resolution and did not sign.”

“I am one of those mentioned. I have never seen the shadow of this resolution. [How can they say I did not sign? So obviously, this looks like fake news.... We are being called ‘Malacañang dogs’. Whoever is behind this, we need to know. We should unmask those destroying the Senate institution. Nobody asked me to sign the resolution, it did not even pass my office,” he said.

I am one of those mentioned. I have never seen the shadow of this resolution. How can they say I did not sign? So obviously, this looks like fake news.... We are being called ‘Malacañang dogs’. Whoever is behind this, we need to know. We should unmask those destroying the Senate institution.

Nobody asked me to sign the resolution, it did not even pass my office.”­—Sotto

Economy

A4 Friday, September 29, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

Busan to DOTr’s Chavez: Shut up

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By Lorenz S. Marasigan

@lorenzmarasigan

IGHTING and finger-pointing on who is to blame on the Metro Rail Transit (MRT) Line 3 mess is both counterproductive for and perilous to commuters, the facility’s maintenance provider said on Thursday.

Busan Universal Rail Inc. Spokesman Charles Perfecto A. Mercado said Transportation Undersecretary for Rails Cesar B. Chavez should stop “bickering and issuing misleading information against its company’s performance”, warning that such are “counterproductive and may imperil the service line”.

“The daily barrage of finger-pointing, including the unjust and negative public pronouncements of Transportation Undersecretary for Railways Cesar Chavez against our company unduly alarms the public, specifically regular commuters who have no better alternative to taking the MRT 3,” he said.

Mercado added it was Chavez who has caused “undue injury” to the company by “unlawfully withholding due payments to it over the past 11 months.”

This amounts to roughly P4 million, a move that Chavez said stemmed from the absence of a certificate of origin and factory inspection report attached to the billing.

Chavez, along with two other officials, was charged with graft before the Ombudsman for withholding the said amount.

The transport official has also spoken to the media of the agency’s leaning toward the termination of Busan Rail’s contract for its “poor” upkeep of the train line.

“His personal crusade to announce in advance a supposed contract termination should be scrutinized, because Busan Rail has yet to receive any official notice thereof,” Mercado said.

Mercado also clarified that his group did not bill the Department of Transportation (DOTr) for spare part from an auto repair shop in Bangkal, calling Chavez’s statements as “fake news”.

Chavez earlier said that Busan Rail billed the transportation department for two vehicle logic units from a Bangkal auto repair shop.

Mercado said records show that Busan Rail required the supplier to withdraw the

items because the supplier could not provide documents that were being required by the MRT 3.

He added Busan Rail has, in no instance, made such a bill to the transportation agency for the reported amount of $4 million or P4 million.

“Obviously, the source of the false story only had the mischievous intention to sow misinformation,” Mercado said.

In another development, the transportation department has agreed to lower the speed of the MRT 3 in certain sections due to poor track conditions.

Last month and upon Busan Rail’s request, the MRT 3 management conducted a series of joint train rides and inspections to confirm the company’s “repeated reports” that train glitches are being caused by severe vibrations brought onto the MRT coaches by the decrepit condition of the rails”.

The daily barrage of finger-pointing, including the unjust and negative public pronouncements of Transportation Undersecretary for Railways Cesar Chavez against our company unduly alarms the public, specifically regular commuters who have no better alternative to taking the MRT 3.”­­—Mercado

news@businessmirror.com.ph

NGCP hoists yellow alert for Luzon grid on Thursday

By Lenie Lectura

@llectura

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he Luzon grid was placed on yellow alert once again on Thursday mainly due to unscheduled shutdown of power plants.

“Luzon grid is on yellow alert due to the unexpected shutdown of some power plants and high forecasted demand,” the National Grid Corp. of the Philippines (NGCP) said on Thursday.

The grid operator said the yellow-alert notice took effect from 11 a.m. to 12 noon and 2 to 3 p.m. Luzon’s available capacity stands at 10,473 megawatts (MW) as against a peak demand of 9,676 MW. The yellow alert was lifted by the NGCP at 2:30 p.m. on Thursday due to sufficient operating reserve and low actual system demand.

A yellow alert means there were not enough reserves to cover the largest running generating unit at the time, but does not necessarily lead to power outages.

There have been four instances of yellow alerts raised since August 30.

The Department of Energy (DOE), however, said a yellow-alert notice is not alarming.

“That is one thing we want to clarify…. A yellow alert is not a deficit in supply. It is only a signal that reserves are becoming smaller. The deficit is only on the reserves, not on the supply. The red alert is the one that should be alarming,” DOE Undersecretary Felix William B. Fuentebella clarified.

The yellow-alert notice came after incidence of forced and planned shutdown of power plants.

Those that are on planned outage are the Kalayaan 3, with 180 MW; Kalayaan 4, with 180 MW; and San Lorenzo 1, with 265 MW. The following power plants that suddenly went offline are three units of Ilijan B (600 MW), Limay 7 (60 MW), Makban 5 (55 MW) and Sual 2 (647 MW).

Fuentebella said the agency would call the attention of these power plants. “We will also audit them again,” he added. “Some plants’ capacity are derated, but it will only cover two hours in the morning and two hours in the afternoon. It’s basically thinning of reserves by about 150 MW from expected 624 MW required.

Meantime, the Manila Electric Co. (Meralco) said it has placed its Interrupt-

ible Load Program (ILP) on standby. “As part of our initiative to prepare in case this deteriorates further to a red-alert status, we informed participants under the ILP to be ready. As of 10 a.m., there is a total of 126 accounts with a load of 189.22 MW that have committed to deload, if necessary,” Meralco Spokesman Joe Zaldarriaga said.

Meralco Senior Vice President and Head of Utility Economics Lawrence Fernandez has expressed concern over the frequent incidence of yellow alerts.

“A yellow alert means there were not enough reserves to cover the largest running generating unit at the time,” Fernandez said. “We are concerned. Since August 30 there has been a once-a-week incidence of yellow alert. Our concern is that, while it has not led to red alerts, automatic load dropping [ALD] occurs when power plants trip. This means some of the customers lose electric service because of the tripping of some power plants,” the Meralco official said.

Fernandez commented that the yellow alerts and the triggering of the ALD mechanism signal the need for additional capacity in the Luzon grid. “We need new capacities,” he said, adding that as demand for power continues to increase, additional generation supply will be needed, both to meet new demand and to improve the reliability of the electric system.

“While new capacity had been coming in since 2016, the demand has also been growing. In the Meralco area alone, electricity consumption had grown almost 4 percent to date. This, despite having registered a robust growth of 8.1 percent in 2016, due to the effects of El Niño and elections-related spending,” Fernandez said.

Meralco President Oscar Reyes said there is a need to build up adequate capacity to address possible shortage in power supply because of rising demand.

“I think we don’t want to raise an alarm. It’s really just a realization that you’re better off with adequate capacity because it takes time to build. The yellow alerts are a reality. I think it just shows potential vulnerability of the entire system and you are better with adequate capacity. If we cut it too thinly, and there are a bit of delays, then we’re going into a situation as we move to 2019 to 2022,” he said.

Lapeña launches 3-dimensional x-rays at Naia in bid to curb airport smuggling

By Recto Mercene

T

@rectomercene

he Ninoy Aquino International Airport (Naia) has put on stream another layer of protection against the smuggling of drugs, guns, contraband and other high-value products.

The device, called Rapiscan x-ray machine, can provide a threedimensional view of pieces of luggage by subjecting it to an x-ray scan from the sides and from the top or bottom.

“Previous x-ray machines here at the Naia could only show a one-dimensional view of items inside the luggage, hence, it is often necessary to open the boxes and subject the content to another set of examinations,” said newly appointed Customs Commissioner Isidro S. Lapeña, who took over from controversial former Customs chief Nicanor E. Faeldon recently.

Lapeña said the previous x-ray machine will only show a horizontal line if a gun, like a caliber-45 pistol is, laid flat on the bottom of the luggage, compared with the Rapiscan units that can show the hot item from the side and from the top or bottom.

Lapeña, who inaugurated the x-ray machines to signal the start of its operations, said a total of 19 units costing P172 million would be assigned to the Naia passenger terminals.

So far, there are 10 brand-new units of fixed baggage x-ray scanners, seven handcarried x-ray scanners and two units of mobile x-ray scanners that would be installed at the Naia, and the rest would be in place before the end of the year.

“These are advance units. We will be able to improve the facilitation of

luggage and, at the same time, every box or bag would be subjected to thorough inspections,” he said.

Lapeña added the previous pronouncement of President Duterte not to open hand-carried bags and luggages of passengers would be followed with the installation of the new x-ray machines.

“The new scanners would be able to do the job of examining its piece of hand-carried items without physically opening them,” he said.

“This is a nonintrusive way of carrying out the presidential directive,” Lapeña said at the sidelines of the inauguration of the x-ray units.

“My marching orders from the President is to stop corruption and improve the revenue collections,” he said, adding, “when you do the right thing in assessment, then it will also address the entry of illegal items, including drugs.”

Lapeña said the Customs bureau was ordered by Duterte, through the finance department, to collect a monthly revenue of P50.1 billion.

“That’s our monthly target and I am optimistic I can achieve it so long as our Customs officials will be able to determine the correct valuation of goods coming into the country, especially with the removal of the tara system,” he said.

Tara is a fixed amount of bribe imposed by corrupt officials so that taxable items would be able to go through Customs.

Lapeña said the bulk of collectible taxes come from the Manila International Container Port, Port of Bataan and other ports around the country.

www.businessmirror.com.ph

The World BusinessMirror

Friday, September 29, 2017

A5

Trump tax plan benefits wealthy, including Trump

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ASHINGTON—The tax plan that the Trump administration outlined on Wednesday is a potentially huge windfall for the wealthiest Americans. It would not directly benefit the bottom third of the population. As for the middle class, the benefits appear to be modest.

The administration and its congressional allies are proposing to sharply reduce taxation of business income, primarily benefiting the small share of the population that owns the vast majority of corporate equity.

President Dona ld J. Tr ump sa id on Wed nesd ay t hat t he c ut s wou ld i nc re a s e i nve st ment and spur growth, creating broader prosperity. But experts say the upside is limited, not least because the economy is a lready ex panding.

The plan also would benefit Trump and other affluent Americans by eliminating the estate tax, which affects just a few thousand uberwealthy families each year, and the alternative minimum tax, a safety net designed to prevent tax evasion.

The precise effect on Trump cannot be ascertained because the president refuses to release his tax returns, but the few snippets of returns that have become public show one thing clearly: The alternative minimum tax has been unkind to Trump. In 2005 it forced him to pay $31 million in additional taxes.

Trump also has pledged repeatedly that the plan would reduce the taxes paid by middle-class families, but he has not provided enough details to evaluate that claim. While some households likely would get tax cuts, others could end up paying more.

The plan would not benefit lower-income households that do not pay federal income taxes.

The president is not proposing measures like a reduction in payroll ta xes, which are paid by a much larger share of workers, nor an increase in the earnedincome ta x credit, which would expand wage support for the working poor.

Indeed, to call the plan “tax reform” seems like a stretch— Trump himself told conservative

and evangelical leaders on Monday that it was more apt to refer to his plan as “tax cuts.” Trump’s proposal echoes the large tax cuts that former President Ronald Reagan, in 1981, and President George W. Bush, in 2001, passed in the first year of their terms, not the 1986 overhaul of the tax code that he often cites.

Like his Republican predecessors, Trump says cutting taxes will increase economic growth.

“It’s time to take care of our people, to rebuild our nation and to fight for our great American workers,” Trump told a crowd in Indianapolis, Indiana.

But the moment is very different. Reagan and Bush cut taxes during recessions. Trump is proposing to cut taxes during one of the longest economic expansions in United States history.

It is not clear that the economy can grow much faster; the Federal Reserve (the Fed) has warned that it will seek to offset any stimulus by raising interest rates.

At the time of the earlier cuts, the federal debt also was considerably smaller. The public portion of the debt equaled 24 percent of the GDP in 1981, and 31 percent in 2001. In June, the debt equaled 75 percent of economic output.

T he Trump administration insists that its tax cut will catalyze such an economic boom that money will flow into the federal coffers, and the debt will not rise.

The Reagan and Bush administrations made similar claims. The debt soared in both instances.

A not her issue: Bot h Bu sh and Reagan proposed to cut taxes when federal revenues had climbed unusually high as a share of the national economy.

Trump wants to cut taxes while revenues are close to an average level. Since 1981 federal revenue has averaged 17.1 percent of the nation’s GDP, while federal spending has averaged 20.3 percent.

Last year’s numbers were close to the long-term trend: Federal revenue was 17.5 percent of GDP; spending was 20.7 percent.

Martin Feldstein, a Harvard University economics professor and a longtime adv iser to Republican presidents, said the moment was not perfect, but t hat Tr ump shou ld nevertheless press ahead because the changes would be valuable.

“The debt is moving in the wrong direction,” Feldstein said. “But the tax reform is moving in the right direction.”

Proponents of the plan assert that the largest benefits are indirect. In particular, they argue that cutting corporate taxes will unleash economic growth.

Trump’s plan is more focused on business-tax cuts than the Reagan and Bush plans, and economists agree that this makes economic gains more likely.

T he key elements are large reductions in the tax rates for business income: to 20 percent for corporations, and to 25 percent for “pass-through” businesses, a broad category that includes everything from mom-andpop neighborhood shops to giant investment partnerships, law firms—and realestate developers. The plan also lets businesses immediately deduct the full cost of new investments.

“You’re going to get a boost in investment,” said William Gale, codirector of the nonpartisan Tax Policy Center.

“It’s hard to argue that there won’t be a positive effect.”

But Ga le added t hat there are reasons to think it would be modest. The most important is that the economy already is growing at a faster pace than the Fed considers sustainable.

“Economy roaring,” Trump tweeted on Wednesday.

A lso, interest rates are l o w, a n d n o n f i n a n c i a l companies are sitting on $1.8 4 tr i l l ion t hat t hey do not want to spend. “It’s not lack of f unds that’s stopping companies from investing,” Ga le said.

President Donald J. Trump while delivering an address about tax reform in the Farm Bureau Building at the Indiana State Fairgrounds in Indianapolis on September 27. Trump on Wednesday began a full-throttle push to slash taxes, proposing a politically challenging array of tax cuts for individuals and businesses that would constitute the most sweeping changes to the federal tax code in decades. Tom Brenner/The New York Times

New York Times News Service

China’s new silk road seen to spur electric cars in Europe

C

h i n a’ s ne w si l k road stretching into the heart of Europe may be what ultimately delivers more climatefriendly technologies like batteries and electric cars.

The trade route known in Beijing as the Belt and Road Initiative is spurring $1 trillion of investment on rail, highways and ports linking Europe and Asia.

C h i n a’s re ne w a ble - e nerg y companies already are using the initiative to open new markets in southern Asia, the Middle East and Africa, according to Bloomberg New Energy Finance.

Aust r ia n e xec ut ives gat hered outside Vienna to discuss the future of energ y are banking on similar market-making effects in Europe. They anticipate the scale of manufacturing f rom China and qu ic ker market access through the Belt and Road links to drive down the costs of electric cars and energ y- stora ge tec h nolog ies in Europe.

“It’s not a question of if but when, because it’s happening,” Verbund AG CEO Wolfgang Anzengruber said on Wednesday at a green-energ y conference in the sma ll A lpine tow n of Fuschl, Austria. “If China says it, it is so.”

China’s market-making role in Europe extends beyond developing electric vehicles and is striking at the heart of traditional European businesses, according to Wolfgang Hesoun, CEO of Siemens AG’s Austrian

unit, which employs 2,500 workers making trains and trolleys. “ The best ideas come from outside,” Ramon Vullings told the energy executives gathered in Austria.

The Dutch consultant said he traveled China’s ancient silk road for one-and-a-half years in a bid to bring back new ideas to help Europe’s companies deal with transition to renewables.

Eu ro p e a n compa n ie s w i l l only be able to challenge Chinese companies by developing “ locally oriented ” supply chains that cultivate customer loyalty, Hesoun said at the event a day after Siemens merged its rail unit with A lstom SA. Similarly, just how quickly European companies can develop things like the lithium-ion batteries—used in electric cars and grid-balancing systems— depends on how much demand there is for those things consumers in China at the other end of the Belt and Road.

Automa kers who employ 300,000 in Austria—and supply German giants Volkswagen AG and Daimler AG—are looking for ways to use electric cars to tap into China’s market of 1.4 billion people.

“We need to start developing these technologies because, if we don’t, others will,” World Energy Institute Secretary-General Christoph Frei said, adding that China’s huge market is leading the green-energy shift.

Bloomberg News

Iran: Tougher inspections of nuke program in 6 years

I

r a n ’ s fo re i g n m i n i s te r s a i d t h e country is willing to formally accept a tougher nuclear-inspection regime in six years, while continuing to rule out any renegotiation of a 2015 agreement United States President Donald J. Trump has called an “embarrassment” and “the worst deal ever.”

“If Congress behaves, in six years from now, we will be ratifying the Additional Protocol, the most intrusive inspection regime that is available,” Mohammad Javad Zarif said on Wednesday in an interview with Charlie Rose at the Asia Society in New York. “We will become a party to the Additional Protocol, provided the US takes care of its responsibilities.”

Zarif was referring to a broader and more intrusive, but voluntary, inspection regime of nuclear facilities established by the International Atomic Energy Agency (IAEA). Iran previously signed, but never ratified, the Additional Protocol, and, while it was included as part of the 2015 nuclear accord, Iran’s government had not set a timeline for when it would be ratified.

Zarif ’s comments in New York came less than three weeks before Trump has to decide whether to “certify” Iran’s compliance with the nuclear accord, a measure required under US law every 90 days. While Trump twice previously signed off on a statement of compliance, he’s signaled he won’t do so when required to issue his decision October 15.

The notification to Congress, even i f Tru m p d e c l i n e s to ce r t i f y I ra n’s compliance, doesn’t necessarily mean the US is abandoning the accord. The Trump administration has found itself largely isolated in seeking to revise the nuclear deal, even by close European allies.

The IAEA has consistently said Iran is complying with the agreement, which the Trump administration considers flawed because it doesn’t address broader issues, including Tehran’s ballistic-missile program and support for Syrian President Bashar al-Assad, among other activities.

Bloomberg News

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Friday, September 29, 2017

The World BusinessMirror

www.businessmirror.com.ph

May’s difficulty burnishes Macron’s plan for Europe

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Women outside a mall in Riyadh, Saudi Arabia, on April 29, 2015. While women in Riyadh have celebrated the decision to allow women to drive, many rights campaigners have said much remains to be done. Built on an alliance between a royal family and the descendants of an ultraconservative Muslim cleric, Saudi Arabia has struggled throughout its history with how to reconcile modernization with loyalty to religious heritage. Tomas Munita/The New York Times

Saudis wonder what’s next after the king allows women to drive

I

STANBUL—Rights groups attacked it. Conservatives defended it.

Comedians sang about it. A king had vowed to end it, but died without doing so.

Then, in an announcement on state television, Saudi Arabia let its people, and the world, know on Tuesday that it was finally d ropping t he ban on lett ing women drive cars.

W hile the change does not take effect until next June, the announcement was so abrupt it stunned the country. Many Saudis took to social media on Wednesday to express their joy, or consternation, over the end of the driving ban and to debate what other relaxations might be on the way.

“It didn’t solve all the issues, but it made them one less,” said Muna Abusulayman, a Saudi television presenter. She called the change “one step closer to being a full citizen.”

For decades, the issue of women driving has been a key battlefield for the fight over the nature of the Saudi state and its future.

Built on an alliance between a roya l fami ly and t he descend ants of an u ltraconser vative Mu sl i m c ler ic , Saud i A rabi a has str ug gled t hroughout its histor y w it h how to reconci le moder nization w it h loya lt y to relig ious her itage.

That debate heated up as oil wealth enriched the state, bringing in unfamiliar customs and technologies like television, public education and automobiles.

Over time, competing camps dug in around women and the right to drive.

For liberals, the driving ban was a blot on the national brand that was hampering modernization and weakening the economy.

Conservatives, including powerful clerics employed by the state, t hought t hat a l low ing women to drive would be a crack in the dam that would allow secularism to flood in, washing away

the kingdom’s unique Islamic identity.

The royal decree announced on Tuesday handed victory in that battle to the reformers, who had gained an advantage in recent years because of demographics, economics and the country’s young leadership, analysts said.

Saudi leaders, who have been criticized for the war in Yemen, the blockade of Qatar and a range of human-rights issues, clearly hoped the step would help the kingdom’s reputation.

“There is no wrong time to do the right thing,” Prince Khalid bin Salman, the Saudi ambassador to Washington and a son of King Salman, told reporters after the change was announced.

The government also worked behind the scenes to control the message. At least eight prominent women’s activists received calls and text messages from Saudi security officials warning them not to tweet or speak to the news media about the issue, according to three Saudi activists.

They presumed the government did not want to give credit to activists for prompting the change and spoke on condition of anonymity so as not to jeopardize the women— or themselves.

Many women cheered the decision, calling it a final victory in a long campaign for social change.

Ma n a l a l- Sher i f, who wa s jailed for having posted videos of herself driving and who wrote a book about her activism, said her life had tracked the wider social changes in the kingdom.

Born into a poor conservative

family in Mecca, Sherif, now 38, was taught that women were to remain at home and that good Muslims were to avoid “infidels” who did not share their faith, she said by phone from Australia, where she now lives.

Her worldview changed when, as a university student in the Red Sea port city of Jiddah, she saw women who did not cover their faces in public and even had boyfriends, though covertly.

Then, she got a job with the state oil company, Saudi Arabian Oil Co. On its sprawling compound, women enjoy greater freedoms than elsewhere in the kingdom, including the ability to drive.

She said the status of women in Saudi Arabia had been used by the government over the years to placate conservatives.

“Our rights as women were always used in a political game, and that is what we wanted to stop,” she said. “That really kept the country behind.”

She credited King Salman and Crown Prince Mohammed bin Salman, another of the king’s sons, with making the decisions necessary for the kingdom to advance. “ T he government took the right decision,” she added. “Finally, they had the guts to say, ‘We were wrong.’”

It was difficult to immediately gauge reactions to the rescinded ban among more conservative Saudis. The government recently arrested more than two dozen people, including prominent clerics, some of whom had criticized government policies.

Three clerics employed by the government declined to comment when asked for their thoughts on the rescinded ban.

“Hahahahahahaha,” one responded on Whats App, offering no further comment.

Socia l med ia prov ided a glimpse. By midafternoon on Wednesday, the Arabic hashtag “The people reject women driving” had appeared on 335,000 tweets,

There is no wrong time to do the right thing.”—Prince Khalid

while the hashtag “The king is victorious for women driving” had appeared in only 33,700 tweets, according to Twitter.

But m a ny u s e r s u s e d t he hashtags to join discussions, e ven i f t he y d i sag reed w it h their message. Even longtime campaigners said they expected some resistance.

“We’re a religious country,” said Fawziah Al-Bakr, a professor who has been campaigning for the right to drive for nearly three decades.

But religion had nothing to do with the issue, she said, noting that women in other predominantly Muslim countries like Egypt, Sudan and Pakistan have been driving for a long time.

“All these women are Muslim and yet they are driving,” she added. “Not being able to drive has nothing to do with Islam.”

Previous reforms have been met w ith great resistance in t he k i ngdom. Con ser v at ives campaigned against the introduction of television, fearing it would fill Saudi homes with un-Islamic images.

Now many Saudi clerics have their own shows and are enthusiastic users of social media.

They also tried to prevent girls’ education. Now many of their daughters are studying in Saudi universities, and even in the United States.

For many Saudi women, gaining the right to drive is not the end of the struggle.

Many hope the government’s next step will be to lift its socalled “guardianship laws,” which require women to have the permission of a male “guardian” to get a passport, travel abroad or undergo certain medical procedures.

That could take time, but AbuSulayman, the television presenter, said the trajectory was clear.

About two thirds of the kingdom’s 22 million citizens are under 30, and they will grow up seeing women differently than their elders, she said. Many will not remember when women could not drive.

“I actually hate driving,” she added, laughing, but still planned to get a Saudi license.

New York Times News Service

mmanuel Macron says Europe must form a solid industrial union to compete with the United States and China. Theresa May says the UK will be better off facing global challenges alone.

Twenty-four hours of deals and disappointments this week suggest it’s Macron’s strategy that’s working out better so far.

Siemens AG of Germany and France’s A lstom SA announced late Tuesday that they’d agreed to merge their rail businesses, a decision hailed by the governments i n Pa r i s a nd B erl i n a s a landmark deal to create a European giant and counter Chinese competition.

Some three hours later, the US Commerce Department announced duties of 220 percent on Canadian transportation company Bombardier Inc.’s new jetliner over claims of subsidies.

T hat decision t hreatens jobs at the company’s Belfast plant, where more than 4,000 workers are employed, and showed May’s personal lobby ing of President Donald J. Trump had got her nowhere. By T hursday morning, British newspapers were warning of a “trade war” w ith the US. The contrast highlights the diverging fortunes of two European leaders heading in ver y different directions.

May’s much-trailed speech in Florence last week outlined her vision for Britain outside the European Union (EU).

Macron on Tuesday described a united Europe—minus the UK—ready to go toeto-toe with the US and China in economic terms.

“I think May and the UK are starting to realize that s m a l l c o u nt r i e s c a n g e t more ea si ly bu l l ied t h a n l a rge u n ion s,” sa id Gu ntram Wolff, director of the Bruegel think tank in Brussels. “Small countries could thrive more easily a few years ago, when the US and others were strongly supporting the global multilateral system— but with Trump and even an increasingly assertive China, this is changing.”

European alliances

The tie-up between A lstom and Siemens caps years of consolidation talk and raised hopes the new company could match European plane-maker A irbus SE, which emerged in the 1970s and went on to become the big gest competitor to the US giant Boeing Co. T h i s t i m e , i t ’s s t a t e owned behemoth rail behemoth CRRC Corp. that’s the target. CRRC was created from a 2015 merger and has twice the rail-business sales of the Siemens and Alstom units combined. Macron’s government won assurance on jobs before it agreed to back the deal. “ We are looking ahead, we have realized that a giant Chinese train company has emerged,” French Finance Minister Br uno Le Maire said on Wednesday, railing at his critics. “Go ahead and think that Europe must be div ided to fight the competition from the US and China. Along with the president, we believe we must be united, and the industrial union w ill be France and Europe’s strength.”

That European industrial

alliance took another step forward before May’s difficult day ended. Le Maire attended a Franco-Italian summit in Lyon where Macron thrashed out a deal that resolved months of wrangling and saw Italian naval contractor Fincantieri SpA take control of the French shipyard STX in Saint-Nazaire on the Atlantic coast.

“This deal is positive because it shows the French are seeking a higher level of intraEU cooperation,” said Carlo Alberto Carnevale Maffe, professor of business strategy at Milan’s Bocconi University.

“Macron needs the Italians for his European design.”

Diplomatic push

UniCredit SpA executives have also held discussions with German officials about a p ot e nt i a l com b i n at ion with Commerzbank AG once the lenders’ restructuring is complete. A combination of Italy’s biggest bank and Ger many’s second-largest wou ld c reate a n i n st it ution with European reach and more than €1.3 trillion ($1.5 trillion) of assets.

“There will be more European champions,” Le Maire said, before he headed off to the talks.

May is betting that she’ll be able to secure trade accords with country like the US, Canada, Australia and Japan, which will allow Britain to prosper outside the EU. May has visited Washington, Tokyo and Ottawa and hosted Au st ra l i a n P r i me Minister Malcolm Turnbull in July to lay the groundwork for those deals, but she can’t negotiate in earnest until Britain leaves the EU in 2019.

The uncertainty is already deterring investors.

Not for beginners

The value of deals targeting UK companies dropped to $250 billion in the year after May took office compared to $291 billion in the previous 12 months, according to data compiled by Bloomberg, even as the slump in the pound m a d e B r it i s h c o mp a n ie s more attractive.

The Bombardier decision may be another sign of the tough battle she faces.

A l t h o u g h Tr u m p h a s promised a “ big and exciting deal ” between the US and the UK, the Bombardier decision in response to a complaint by Boeing Co. shows his Commerce Department officials are not tak ing such a benevolent approach as the UK looks to regain its footing after outsourcing trade talks to the EU for decades.

R at her t h a n foster i ng trade, Britain’s Defense Secretary, Michael Fallon, said Boeing’s complaint was a hostile act that put future British government work at risk.

For Adam Marshall, director general of the British Chambers of Commerce, the US is a difficult country to take on when you’re just starting out. “ The US trade representative is one of the bestoiled machines in the world when it comes to negotiating trade deals,” Marshall told Bloomberg Television back in August. “I wouldn’t want to go up against them, early on, when I’m just getting on my feet again as a country.”

Bloomberg News

The World BusinessMirror

Friday, September 29, 2017

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Modi’s $2.5-B power plan may stumble on ailing buyers

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he success of Prime Minister Narendra Modi’s ambitious plan to electrify all households in India by December 2018 faces a familiar hurdle: the money-losing state power retailers.

Modi earlier this week announced the government would spend 163.2 billion rupees ($2.5 billion) to provide electricity connections to every home in India by the end of next year, ahead of an earlier deadline of March 2019.

The bulk of the cost for providing equipment, such as power cables and electricity meters, to every poor household will be borne by the federal government and partly by the states and the power retailer. “ The key is not the scheme but the political will to allow

for commercial operations of discoms [distribution compan ies],” C L S A a n a ly st Bh a rat Parekh said in a report on Tuesday. “ The key issue is that after elect r if y ing t he household s, how much power will discoms supply and how will they recover the money.”

Several power retailers are losing money on selling electricity below cost, and turning them around is in the hands of the state governments, which have traditionally used cheap power to shore up popular support and advance their political

goals. Convincing states to allow profitable power tariffs will be Modi ’s biggest challenge in fulfilling the pledge that helped him rise to power in New Delhi in 2014. Modi is up for reelection in 2019. “ T he onus now lies w ith the states,” according to Debasish Mishra, a par tner at Deloitte Touche Tohmatsu Llp. in Mumbai. “ T he federa l gover nment is pay ing for connections, but the pur pose w i l l be defeated if the states fai l to supply reliable power to people. A nd for t h at to h ap p e n o p e r at ion a l autonomy of the distr ibution companies and timely payment of subsidies is a must.”

Discom losses

The announcement follows a 2015 proposal to reform power distribution, which sought to transfer three-quarters of utilities’ debt to their respective state governments. The utilities were set targets to bring down losses. As a result, total losses

of utilities that signed up for the plan dropped 21.5 percent from a year earlier to 403 billion rupees in the year ended March 31.

T here’s pressure on state gover nments to br i ng losses dow n even f ur ther. Star ting this f inancia l year, states w il l beg in shar ing a par t of the losses their retai lers ma ke, accord ing to t he pl a n to tur n around power d istr ibutors.

In the year end ing March, prov incia l gover nments w i l l ta ke over 5 percent of their retai lers’ losses in the prev ious year. T he state’s share of losses w i l l r ise each year, reaching up to 50 percent in the year end ing March 2021.

Years of selling electricity below cost has eroded discoms’ ability to invest in infrastructure, buy enough power from generators and repay bank debts. Power-generation

plants operate at just about half their capacity, unable to sell all the power they can produce. The powerfor-all plan could “act as a major stimulus for the ailing power sector in India, with demand revival,” Deutsche Bank analyst Abhishek Puri said in a September 26 report.

“Our analysis suggests that power demand could potentially grow by 20 percent to 35 percent from current levels in two years, if the government is able to meet its target, as against the tepid 15-percent cumulative growth in the past five years,” Puri said.

‘Actual supply’

Monday ’s announcement supplements an earlier program to invest 760 bil lion r upees in r ura l electr if ic at ion. Mod i ’s ad m i n ist rat ion embarked on t he plan in 2015,

beg inning w ith electr if y ing more than 18,000 unelectrified villages.

About 3,000 villages still remain to be electrified, which means creating the infrastructure to take electricity to villages, making sure at least 10 percent of the households and public buildings there have power connections. Taking electricit y to ever y home is the next phase of the plan.

Ret a i lers have coped w it h loss es b y l i m it i ng p ower sup pl ies to con su mers i n r u r a l a re a s, who a re he av i ly subsid i z e d , a nd se l l i n g more e x p e n s i ve e le c t r ic it y to i ndu st r i a l con su mers to he lp f u nd a pa r t of t he los ses. Eve n i f a l l r u r a l hou se hold s get p ower, ma k ing adequ ate ret ur ns on t heir i nvest me nt w i l l b e a c h a l le nge for ret a i lers g ive n t he low - u s a ge pat ter n . Bloomberg News

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Banking&Finance BusinessMirror

Friday, September 29, 2017 • Editor: Jun B. Vallecera

news@businessmirror.com.ph

PERC findings clearly baseless–Beltran

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By Rea Cu

@ReaCuBM

he Department of Finance (DOF) on Thursday dismissed the findings of a risk assessment institution highlighting the supposed alarming increase in the military and police budgets as nothing more than a figment of their twisted imagination.

According to Gil S. Beltran, who is also chief economist at the DOF, the latest report by Hong Kong-based Pol it ic a l a nd E conom ic R i s k C on sultancy Ltd. (PERC) and its assessment on political governance in select Asian economies does not deserve anyone’s attention.

He said the conclusion of its analysts was based on poor research, inconsistent judgment and ill-founded speculations.

The PERC gave the Philippines the lowest mark among 12 Asian economies in this regard, but Betran argued the grades it handed out in its report “reflect the personal opinion of PERC’s senior analysts rather than something that is based on quantifiable scientific evidence”.

“If these were so, then PERC’s analysts have failed to appreciate the basic facts on the ground and have failed miserably in their exercise of good judgment,” Beltran said.

Beltran added the PERC based its assessment of the Philippines on President Duterte’s declaration of martial law in Mindanao and the erroneous conclusion that the government’s increased public spending program was likely to beef up the military and the pol ice t ha n in add ressing pressing infrastructure deficiencies.

The PERC also said the military and the police are both seriously overextended already.

“If any, the budget of the military may never be greater than the budget allocation for education as per the 1987 Constitution.

The combined budget for the military and the police this year and the following year shows that it comprises less than 9 percent of total spending,” Beltran said.

As for the limited declaration of martial law in Mindanao, Beltran said t h is was a const it ut iona l response

to decisively deal with the threat of ISIS extremists, an action that was not done arbitrar i ly that was even upheld no less by Congress and the Supreme Court.

“The bigger picture, however, is that the President is making bold steps in coming up with a resolution of the Mindanao issue and achieve lasting peace in the island. He has initiated dialogues with the MILF [Moro Islamic Liberation Front] and MNLF [Moro National Liberation Front] groups but has taken a tough stance with the Abu Sayyaf and its Islamic State affiliates. PERC’s analysts have only taken a look at the latter but failed to see the bigger picture,” Beltran said.

In PERC’s vulnerability index, Thailand was rated 6.0, while the Philippines got only 3.32, largely because the former provided “stable and effect ive gover nment ” a nd faced “no credible challenge”.

“The idea of the Philippines under high vulnerability to radical political changes

IC alerted on alleged illegal foreign insurer operation T

Beltran

is but a figment in the imagination of PERC’s analysts who appear to have bias against the present government. PERC should not tarnish its credibility with ill-founded speculations, let alone poor research,” he said.

He also said the initatives of the Duterte administration to disrupt the status quo is consistent with the goal to foster inclusive growth for all Filipinos and develop the countryside.

According to the DOF, far from concentrating on amassing more political power, the President has instead given top priority to the political and economic enfranchisement of the people primarily through a massive spending program focused on infrastructure and social services.

“Furthermore, a series of tax-reform programs are being worked out with the Legislative body to fund these increased spending plans for inclusive development. They are never intended to increase the budget of the military and the police forces,” Beltran said.

Case clippings

By Justice S J Ranada Jr. CRIMINAL LAW–defense of insanity Where the separate psychiatric evaluations of the accused were taken three and four years after commission of the crime, the presumption of sanity is not overcome. An inquiry into the mental state of an accused should relate to the period immediately before or at the very moment the felony is committed. Hence, the results of such psychiatric tests cannot be relied upon to prove the accused’s mental condition when he committed the crime.

People v Racal 04 Sep 2017

GR 224886 Peralta, J

he Insurance Commission (IC) on Thursday confirmed receipt of a letter asking regulatory intervention in the case of alleged unauthorized operation by a foreign insurer in Philippine soil without the proper dispensation.

According to Insurance Commissioner Dennis B. Funa, its attention was called on the matter involving Marsh UK Philippines through a letter dated April 3, 2017.

The letter originated from the Bernas Law Offices on behalf of Prudential Guarantee and Assurance Inc (PGA), one of a number of nonlife insurance companies operating in the Philippines.

“PGA’s counsel requested the IC to conduct an investigation on the manner by which Marsh UK and Marsh Singapore conduct business in the Philippines,” Funa said.

Funa said the PGA request for the conduct of a probe on Marsh UK’s supposed illegal operations in the country is contained in its reply to the comment of Marsh Singapore.

“PGA’s request for a conduct of an evidentiary hearing to determine whether Marsh UK, Marsh Singapore and Marsh and Mclennan companies are indeed

doing business in the Philippines was made through a letter dated August 31, 2017, which is the reply of PGA to the comments of Marsh UK,” he said.

According to the IC, a request for an evidential hearing includes the determination of whether the license of Marsh Philippines to act as a resident agent of Marsh UK should be revoked for allegedly conspiring in the alleged illegal acts with Marsh UK. Funa said the matter would be threshed out in an appropriate proceeding following particular rules of procedure on administrative cases before the IC under Insurance Memorandum Circular 1-93.

“As of the moment, the commission cannot comment on the allegations of PGA against Marsh UK until and unless we have received and evaluated the evidence of both parties in support of their respective allegations. To do otherwise would constitute a prejudgment on the issues,” he said.

The IC, in the exercise of its administrative powers, can hear as well as decide cases for violation of the Amended Insurance Code and impose appropriate penalties, if warranted. Rea Cu

Goldman Sachs AM sees China dominance in dollar bonds rising

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hinese offshore dollar-bond issuance will reach as much as 80 percent of the Asia ex-Japan market in three to five years as buying support from the region grows and the country continues its reform drive, according to Goldman Sachs Asset Management LP. Issuers from China accounted for about 60 percent of dollar-denominated bonds priced in Asia, excluding Japan, so far this year, data compiled by Bloomberg show.

Sales will grow until they come more in line with China’s dominant status in regional equity markets and GDP, said Singaporebased Salman Niaz, executive director of emerging-market debt at Goldman Sachs Asset Management.

China’s “dollar-bond market share is not there yet,” Niaz said in an interview. “It is reasonable to expect that over the next three to five years, China would have a 70-percent to 80-percent share of the Asian dollar-bond market.”

Investors have gorged on a record $224 billion of bond offerings in Asia ex-Japan so far in 2017 as they search for yield, according to data compiled by Bloomberg.

Niaz expects issuance in the region to

be close to $200 billion next year, and said the local bid is a good sign for the market in the long run. Savings from China and Japan need to be deployed, he said, noting also that with their combined balance sheets, China’s five largest insurance companies “could buy the Asia market a few times over”.

The biggest uncertainty will be the reshuffle of China’s top leaders, he said.

Communist Party officials are weeks away from their twice-a-decade congress that is expected to help shape President Xi Jinping’s influence into the next decade. Still, it will likely continue its reform strategies around deleveraging, credit creation, the housing market and industries with excess capacity, Niaz said.

Ratings cut

S&P Global Ratings last week cut China’s sovereign credit assessment for the first time since 1999, and revised its outlook to stable from negative, citing the risks from soaring debt. The firm also warned this week the trend of tighter spreads on Asian bonds to near a decade low amid abundant liquidity may not last as global monetary stimulus will inevitably fade.

HSBC tops Asiamoney’s New Silk Road Finance Awards

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SBC has been named Best Overall International Bank for Belt and Road Initiative (BRI) in the inaugural Asiamoney New Silk Road Finance Awards, reflecting the bank’s commitment to being the leading financial partner to clients engaged in Belt and Road projects.

At an awards ceremony in Beijing earlier this week, Asiamoney also recognized HSBC as the: n Best Bank for BRI-Related Infrastructure Finance in Southeast Asia, n Best Bank for BRI-Related Infrastructure Finance in South Asia, n Best Bank for BRI-Related Finance in Central & Eastern Europe, and n Best International Bank for BRI in the Middle East & Africa.

The $2-billion Gemas-Johor Bahru Double-Tracking Rail Project, part of the Kunming-Singapore Rail Link, was also awarded Best Overall Project/Initiative for BRI. HSBC was mandated as the principal bank to the project, providing comprehensive trade finance, cash management and foreign-exchange services.

Peter Wong, deputy chairman and chief executive of the Hongkong and Shanghai Banking Corp. Ltd., said: “We are proud to win this recognition from Asiamoney. HSBC’s universal banking model and global network means that we are uniquely positioned to meet all of our clients’ financial needs as they engage in Belt and Road-related business. We

believe the Belt and Road will create a wealth of opportunities for our clients and we look forward to providing them with outstanding services across financing, advisory, risk management and transaction banking.”

In its coverage of the award for Best Overall International Bank for BRI, Asiamoney said: “HSBC was undoubtedly a worthy winner this year. It has always straddled continents, starting life financing trade between Asia and Europe.

The bank has Belt and Road in its DNA. This pedigree has long been an advantage to HSBC, but it now looks more valuable than ever before.”

HSBC was also recognized at the ceremony for its leadership in offshore Renminbi (RMB) services, having been voted Best Overall Provider of Offshore RMB Products and Services in Asiamoney’s Offshore Poll 2017 for the sixth consecutive year. The bank also claimed a series of Asiamoney’s awards for banking in different Asian markets, including Best International Bank in China.

A full list of all the awards received by HSBC has been listed in the appendix below.

Asiamoney is part of GlobalCapital, a leading news, opinion and data service for people and institutions using and working in the international capital markets. Asiamoney was established in 1989.

Agriculture/Commodities BusinessMirror

news@businessmirror.com.ph

Editor: Jennifer A. Ng • Friday, September 29, 2017

A9

‘PHL needs more milkfish hatcheries’

By Jasper Emmanuel Y. Arcalas

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@jearcalas

he construction of more fishing hatcheries would boost milkfish production and reduce the country’s purchase of imported fry, according to an official of the Bureau of Fisheries and Aquatic Resources (Bfar).

Bfar focal person for milkfish Westly R. Rosario said the government should set aside P30 million to construct more fishing hatcheries if it wants to significantly cut the importation of milkfish fry.

Citing a UP study, Rosario said the country requires 1.5 billion fry annually, which are mostly sourced from Indonesia and Taiwan.

“The Philippines has only two to three fish hatcheries which produce some 30 million fry a year.

This means that most of what we have in the domestic market are imported,” he told reporters in an

interview on the sidelines of the European Chamber of Commerce of the Philippines’s agriculture forum on September 27.

“The problem with imported fry is that only about 20 percent matures. Meanwhile, those bred locally or produced in local hatcheries have an 80-percent survival rate,” Rosario added.

Rosario, who is also the chief of Bfar-National Integrated Fisheries Technology Development Center in Dapugan City, said some P30 million would be needed to construct at least 33 hatcheries to

boost local milkfish fry production. “[The Bfar] plans to put up satellite hatcheries, which cost less than P1 million. These would be distributed to select families. The hatchery would allow each family to earn P50,000 a month,” he said.

If his proposal is implemented, local milkfish production would increase significantly in three years. However, Bfar’s program, which seeks to boost milkfish output, was given a budget of only P3 million for next year.

Rosario also noted that milkfish produced by other Southeast Asian countries have begun to dominate the US market. “If you go around markets in the US, you will not anymore see milkfish from the Philippines. What they sell usually come from Malaysia, Vietnam, or Thailand”.

He said the government must support the aquaculture sector, given the decline in capture fisheries production.

Data from the Philippine Statistics Authority showed that the country’s milkfish production last year reached 402,660 metric tons (MT), slightly higher than the 392,740 MT recorded in 2015.

ComVal producers get new farm machines

By Manuel T. Cayon |

@awimailbox Mindanao Bureau Chief

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AVAO CITY—Farmers in Compostela Valley could avail themselves of more farm machines, after the Department of Agriculture and the provincial government turned over a batch of new equipment to the Provincial Agriculturist Office (Pagro) on Monday.

The provincial information office said 58 machines were given to the Pagro during a simple ceremony at the Capitol compound in Barangay Cabidianan, municipality of Nabunturan.

Among these were 10 hand tractors with a trailer each, 15 opensurface pumps, 18 power sprayers, six rice threshers and nine units of corn sheller-huskers.

Agriculture Regional Director Ricardo Oñate said the office wanted to provide one 10-wheeler hauling truck to the newly completed rice-processing centers in the municipalities of the province that

have large rice-production areas.

T he t ur nover of t he fa r m equipment was held right after the province received an award from the Civil Service Commission (CSC) for its iron-fortified rice (I-Rice) project.

T he CSC bestowed on t he prov ince the Pag-asa Awards held in Malacañang on September 20, where President Duterte handed the award to Gov. Jayvee Tyron L. Uy. Uy was joined by DOST-11 Regional Director Anthony Sales and Provincial Director Kenneth Barroga, and Dr. Imelda Agdeppa of the Department of Science and Technology Food and Nutrition Research Institute.

The iron fortification of rice for the consumption of provincial residents was started in 2013 “to address the problem of irondeficiency anemia among the schoolchildren”, the information office said.

Uy sponsored the ordinance back when he was still a member

of the Provincial Board.

“Currently, the iron-fortified rice is the official rice used for the Kusina ng Kalinga, a 120-day feeding program among wasted and severely wasted elementary schoolchildren of Compostela Valley,” the information office said.

The Compostela Valley I-Rice Team said it would sustain its promotion of the consumption of the fortified rice “through strong promotions system, consistent information dissemination and giving of incentives through loan and credit assistance to cooperatives”.

The governor also said the success of the project only proves that there is a need to become innovative in approaching problems in the community.

“There is a need for us to leave the traditional and start being creative in how we deal with problems in the community. Compostela Valley I-Rice addresses both the hunger and the anemia problem among schoolchildren. Its new, innovative and multitiered,” Uy said.

A10 Friday, September 29, 2017 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

‘Every man for himself’

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he end of World War II brought with it the end of colonization from Africa through the Middle East and on to India and Southeast Asia. These newly founded nations, from Morocco to the Philippines, shared little in common at independence except their histories as vassal states.

However, after they gained their freedom, nearly all have shared the fact that few have reached their economic potential in the past 70 years.

While it would seem preposterous to think that there was some sort of conspiracy from the West to keep the “Third-World” countries firmly in the Third World, it is interesting to look at an historical perspective.

Thirty years after the war, many of these nations were still struggling to find a successful political and economic path to follow. Like a young adult moving out from the parents’ house, bad decisions came with self-determination. What seemed like good ideas at the time, in hindsight were big mistakes.

President Manuel L. Quezon’s statement—made long before independence—that “I prefer a government run like hell by Filipinos to a government run like heaven by Americans” was the call for nationalism that echoed throughout the world. And that idea became a self-fulfilling prophecy around the globe.

While nations—like people—must take responsibility for personal choices and actions, there is an historical thread that cannot be discounted.

In the 1970s and 1980s many countries, like the Philippines, took on massive debt that did not achieve the promised leap to prosperity for all. All that easy money created massive government corruption that created problems, which, in some places, exist until today.

In the 1990s nations that had weathered the debt storm better than most were encouraged and helped to open up their financial sector to Western banks and private-sector loans from those banks. Those generous loans—at interest rates far below domestic levels—created currency exchange-rate problems that eventually brought down the economies of Thailand and South Korea, triggering the 1997 Asian Financial Crisis.

Ten years later, those same disastrous lending practices that were pushed on the Third World hit home in the West, bringing with them the global debt crisis and recession. Countries like the Philippines all suffered, but only briefly. However, the Western response to its own problem—central banks reducing interest rates and “money printing”— has created an uneven playing field for investment capital in favor of the First World. Western economic policies have exported trade wars, artificial prices for commodities like oil and foodstuff, and increased geopolitical tensions.

Why are the less-developed countries of Southeast Asia caught in the struggle for regional dominance between the two bullies of China and the United States? Why are the less-wealthy Eastern European nations literally the buffer zone between the saber rattling between “Rich Europe” and Russia?

What can countries like the Philippines do to be stronger? The answer is nothing, of course. The logical solution would be for smaller nations to band together. But as the Asean has illustrated, it is almost impossible to trust the neighbor that supposedly has your back. There are too many national interests that are in conflict with regional interests.

The reality is that as we move into the second decade of the 21st century, the inequality of power between the “have” and “have-less” nations will grow larger. A country and its leaders need to be aware of this and be ready to respond. As in the lifeboat from the sinking ship, ultimately it will come down to “it’s every man for himself”.

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Investigate now James Jimenez

spox

O

n Wednesday, the 27th of September 2017, a senator’s twitter account let loose with a series of quotes from the good legislator, bemoaning allegations made against him and an allied senator, suggesting that the time had come for the Senate to investigate “fake news.”

With all due respect, the time to investigate should have been when fake news was weaponized, for the purpose of undermining the credibility of elections, toward the end of March 2016. For those of you with short memories, that was during the run-up to the start of the monthlong period for overseas voting, for the 2016 National and Local Elections.

While fake news has been around for a long time, its deliberate and extremely well focused use to specifically spread distrust for the electoral process really started in earnest just before the 2016 polls. The people behind it latched on to the Supreme Court mandated use of “voting receipts” in connection with the automation of the vote counting—a feature of the vote-counting machines (VCMs) that the Commission on Elections (Comelec), along with many

election stakeholders, believed could be used to facilitate vote buying. As it turned out, however, vote buying would be the least of the Commission’s worries.

In case you’ve forgotten, voting receipts are print outs generated by the VCMs, after the voter inserts his ballot. The receipt contains a list of the candidates chosen by the voter, as read from the voter’s ballot. Around approximately the last week of March 2016, days before overseas voting was scheduled to begin, online articles dressed up to look like legitimate news reports started spreading the story that the voting receipts were showing errors—basically saying that people who voted for Candidate X were getting receipts saying that they voted for Candidate Y. These ginned up accounts were

not unexpected, and the Comelec promptly sought to address the rumors by issuing reassurances.

Things came to a head, however, when voting actually started and a shaky smartphone-shot video was immediately posted, showing a very agitated woman at an overseas voting post, complaining that her voting receipt did not reflect her vote for Candidate X. The complaint was soon sorted out—the woman had used a ballpoint pen to mark her ballot, despite being warned that using any writing instrument other than the official marker provided by the Comelec would probably be read incorrectly—but by then, the fake news had taken on a life of its own.

As the overseas voting period wore on, that woman’s claims were repeated over and over again, spawning various versions, the most popular of which went like this: An anonymous voter storms out of a voting center, straight into a waiting camera; the voter rants about vote switching, then storms off, never to be heard from again, having shown not a shred of proof.

Of course, no proof would ever be needed by the faithful who simply reposted, retweeted and, in general, just kept referencing the claims in comment boards and online forums.

As you can imagine, this fake news was impossible to comprehensively

Narrowing the gap for inclusive growth Alvin Ang

EAGLE WATCH

E

ntrepreneur magazine Philippines released a report on September 6 showing the industries where the 50 richest Filipinos make their income. Their numbers per sector are: real estate (27), food and beverage (21), utilities (20), financial services (19), leisure and hospitality (17), retail (16) and infrastructure (10). It is interesting to compare these figures to the actual engines of economic growth and sectoral employment composition.

First, in terms of GDP, manufacturing contributes the most, approximately 25 percent to total output. This is followed by wholesale and retail sector contributing 15 percent, followed by real estate 11 percent, transport 8 percent and finance 8 percent. Going into more detail in the GDP data, we find that the biggest contributor to manufacturing activities is actually food manufacturing. The apparent disconnect between the two data sets is that the richest are actually investing more in real estate, utilities and finance, among others;

sectors that are relatively not open to foreign investors and industries that do not have long and intensive value chains. Second, in terms of employment, we processed data from the Labor Force Statistics in the last five years. Here, we find that the largest source of employment is the agricultural sector, with about 24 percent of total employed. This is followed by wholesale and retail trade, employing about 20 percent.

Manufacturing and construction equally employ about 8 percent. The rest of the sectors employ less than 5 percent. In particular, finance

employs about 1.2 percent and real estate only 0.45 percent.

Putting together all three data sets would clearly show gaps between investments of the rich, GDP and employment. The employment structure is still largely dominated by agriculture, a sector wherein few of the richest invest—maybe indirectly through inputs for the food manufacturing. Nonetheless, the Forbes magazine listing shows that in Thailand and Indonesia, the top richest people have significant investments in agriculture. Also, it is observable that there is a small percentage of jobs in the real-estate sector where most of them invest the most. Even if this is combined with the construction sector, their total share to jobs will still be less than 10 percent. This difference in investment and development directions is contributing to worsening the gap between the rich and the poor in the country. Although poverty had gone down to 21 percent in 2015, from about 25 percent in 2012, this does not mean that the poor are gaining in the current growth spurt of the country due to rising inequality.

The government is aware of these challenges. They have put in place a number of initiatives to take advantage of the share of manufacturing,

monitor, much less to counteract. But as bad as it was during the overseas voting period, it was essentially just a dry run. As Election Day in the Philippines approached, the purveyors of fake news stepped up their game.

The videos they started putting out, attached to ostensibly legitimate news reports, became more sophisticated and varied, culminating in a video where a voter, speaking in a dialect, supposedly got a receipt that reflected vote switching. The “article” accompanying the video claimed that the voter said she voted for Candidate X but that the receipt showed a vote for Candidate Y instead. After having the video translated by a native speaker of the dialect the voter was speaking, however, the article was exposed as a blatant lie and that the woman was actually confirming that the receipt showed exactly who she had voted for.

Not that it mattered. By the time the accurate translation was reported out, the video had already gone viral and the scenario it peddled had already made its way into the speeches and rants of everyone who wanted the elections discredited.

Like the evils in Pandora’s box, the lies and fabrications of fake news can’t be recalled; the best that the victims can do is hope that the truth could, as advertised, actually set them free.

The time has come to investigate fake news? No kidding, Sherlock.

which could help increase more jobs.

The Department of Trade and Industry (DTI), in particular, had put in place a manufacturing resurgence program and through the Board of Investments, updated its Investment Priorities Plan. The National Competitiveness Council has institutionalized the Cities and Municipalities Competitiveness Initiative to improve local business competitiveness. This is basically improving the business climate to help entice the private sector to invest in these sectors where jobs are needed.

In addition, our being chair of Asean had put the small and medium enterprises (SMEs) in the center of our economic advocacy. Asean Integration should link our SMEs in our own local value chains into the regional value chains. Nonetheless, most of our local SMEs are behaving like our richest. Data from the DTI shows that bulk of SMEs are actually into wholesale and retail trade and accommodation and food services (combining for more than 60 percent) and manufacturing with about 13 percent. Most SMEs are in the services sectors, which are unlikely to create quality jobs leaving agriculture and manufacturing, which can actually help improve See “Eagle Watch,” A11

Opinion BusinessMirror

opinion@businessmirror.com.ph

Friday, September 29, 2017 A11

The antidote to smuggling The angel who could not understand justice Tito Genova Valiente

Dr. Jesus Lim Arranza Continued from A1

I

ndeed, smugglers have become so brazen with their illegal activities that, in connivance with their BOC contacts, their smuggling operations in the country have expanded from illegally importing goods to smuggling of materials from the locators of special economic zones (SEZs).

Such is the vulnerability of our Customs laws and rules to the illicit minds of some corrupt BOC officials and unscrupulous importers and Customs brokers that the government is estimated to be losing over P200 billion in revenues each year due to smuggling.

According to a study conducted by the University of Asia and the Pacific on the impact of illicit trade in eight of the country’s industry sectors that was commissioned by the Federation of Philippine Industries (FPI), from 2011 to 2015 the government lost over P900 billion in revenues to smuggling and other forms of illicit trade, including its multiplier effect, such as the reduction in the production volume of local manufacturers and disenfranchisement in the labor force.

Smuggling through SEZ

S.E.Z. are non-Customs territories, like Clark and Subic among others.

Therefore, the raw material importations of SEZ locator companies are tax-free, provided that the raw materials stay within the SEZ and reexported as finished products.

However, depending on the nationality of SEZ locator companies, some firms are allowed to sell a certain percentage of their importations to the domestic market, provided also, that its taxes are paid before these are taken out of the SEZ. And it is in this window where smuggling at SEZs takes place.

But how is smuggling done at SEZs? One is through underdeclaration. This smuggling scheme, which involves volume and weight, is most common in SEZs since values are of less concern to SEZ locators as its importations are tax free anyway.

Let me share a classic example of underdeclaration by a Subic locator, which I personally engaged as an anti-smuggling advocate and chairman of the Federation of Philippine Industries (FPI). We received reports that a Subic locator that manufactured industrial rags for its foreign clients was sneaking out of the Subic economic zone huge volumes of used clothing to the local ukak-ukay (used-clothing) market.

In our investigation, we discovered that in one of this locator’s shipment, the company underdeclared its importation of 22 metric tons of used clothing to only 10 metric tons.

Thus, the company was only accountable to reexport finished industrial rags that was equivalent to 10 metric

Eagle Watch. . . continued from A10

poverty better and, at the same time, improve inequality.

Thus, beyond government efforts, which still require more coordination and political will, there is also a need for the private sector to do its part.

The data about where the richest are investing are informing us that not all economic activities require policy initiatives of the government. Those who are benefiting greatly from the growth spurt (not only the middle class) should take the initiative to directly participate in generating more jobs and shifting the structure of the economy. It might be best to reconsider how agriculture can be a privatesector initiative no longer waiting for government support. If the best and the most efficient resources can be channeled to improving the different subsectors of agriculture, then a large

According to a study conducted by the University of Asia and the Pacific on the impact of illicit trade in eight of the country’s industry sectors that was commissioned by the Federation of Philippine Industries, from 2011 to 2015 the government lost over P900 billion in revenues to smuggling and other forms of illicit trade, including its multiplier effect, such as the reduction in the production volume of local manufacturers and disenfranchisement in the labor force. tons of imported used clothing.

The discovery of the underdeclaration confirmed the reports that this company was Illegally sneaking out huge volumes of used clothing to the local ukay-ukay market. The remaining 12 metric tons were being sold locally to ukay-ukay traders.

The growing number of ukay-ukay stores in the country is a clear indication that smuggling of used clothing continues with impunity, despite the existence of Republic Act 4653, or the law that prohibits the importation of used clothing in commercial quantities for health reasons and for the dignity of the nation.

This is also the reason FPI is strongly against allowing economic zones like Subic to be an international port of entry as, unlike Customs zones where it’s appropriately guarded and secured, SEZs, especially those in outlying areas, are ill-manned, except for a few Customs police to secure its gates. Under the law, a five-hectare property with agri-based manufacturing companies geared for export can already be declared a SEZ where factories located in the area can avail themselves of duty-free importation privileges.

Smuggling through Customs bonded warehouses

Customs bonded warehouses are storage facilities outside of SEZs. They cater to the storage requirements of companies that import raw materials to produce into finished for reexport. Thus, all the materials stored in bonded warehouses are tax free. And since Customs bonded warehouses are guarded by only a few Customs officials, smuggling can happen in these facilities. I will discuss how smuggling is done in these facilities in my next column, together with the other smuggling schemes. number of employed workers can see improvement in income and possibly create new initiatives for investments and training to happen. The work of foundations and civil society is limited in assisting these sectors, but if there is capital involved, there could be an opportunity to improve and narrow the inclusivity challenge.

Futhermore, it would be beneficial if investments will lead to include value chains in agriculture and in light manufacturing that are accessible to SMEs. The overseas Filipino workers and the business-process outsourcing workers have done their share in lifting the Philippine economy and moving the economic engine forward.

The new initiative to sustain economic growth to new heights and in achieving middle-income status will require that those who have the capital put them into productive and jobcreating pursuits in lagging and leftbehind sectors.

annotations

O

nce there was an angel named Guirrel. He was meek and mild as a being. He was soft-spoken and would not even raise his voice even when he was mouthing distorted facts.

This made him quite a likeable angel, with other angels mistaking his gentle ways for goodness. But goodness sake, he had great faults and major flaws. For one he could not tell what was wrong from what was right. He formed no strong opinion about many significant things. When some devils were able to trespass the boundaries between Heaven and Hell, he thought it was amusing.

There was something else about Guirrel that only two angels had clarified. These two angels were the Serene Angel and the Lilac Angel. The two, who were part of the domain of Guirrel, found out that he did not have any concept of Justice. How the two discovered this, was, in itself, less amusing. Guirrel did not mind being contradicted but he fumed when somebody disagreed with him and showed him intelligent proofs to prove the points of disagreement.

Soon Serene Angel and Lilac Angel found themselves banished to guard the lowest clouds of Heaven.

The Lord, of course, saw this act of Guirrel and the Good, Sweet Lord punished the erring angel to be relocated to Earth. It was not the only punishment, for Our Sweet Lord knew that if there was something that Guirrel was proud of, it was his lustrous black hair that barely touched his nape. The Lord commanded the air to strip Guirrel of his hair as he plunged to Earth. He would only regain his reentry to Heaven if his hair grew back to its silky, lus-

trous length. Now, the hair would only grow if he did a just act or render decisions full of justice. The Lord of Goodness was kind enough to edit the sentence: He would allow Guirrel to wear a wig created out of the hair shorn from the heads of convicts sentenced to die in the electric chair. It was a wig that had gravitas, in more ways than one.

On Earth, Guirrel saw many killings. He told himself: Ah, I can be just in my opinion about these killings.

He stumbled upon an interesting case about a boy who left his home and never told his grandmother he was going somewhere. Guirrel assumed the role of a policeman, who, when asked why the boy was shot, told the media persons that he was too handsome to live. As an angel he could see that the boy would be even more handsome in his adult years and that would be a problem for women who would fall for him.

Satisfied with this decision, Guirrel rushed to a bathroom with a huge mirror and checked if some hairs had grown. There was no growth at all.

Guirrel persisted. He saw more killings and he realized he was given a thousand opportunities to do acts of justice. He saw men riding motorcycles killing children, young men and women, and old men and women. He smiled when he saw a team slashed the throat of an old woman. Guirrel closed his eyes, looked up to Heaven and recited his decision: The woman was old enough and it was just right

that she should die.

Remember, Guirrel was born with no concept of justice. The Lord looked down sadly upon this Angel. The Lord thereupon commanded the Universe to remove Guirrel from the list of Angels. In his booming voice, for the Lord always spoke with thunder in his throat, he told Guirrel: You will forever be without hair and the only sign of humanity on your person are the hair of people sentenced wrongly to die. That will be the closest you can be to being a being.

Guirrel looked up to Heaven. It was a blank stare. He could not understand the sentence. He could not understand at all what justice was all about. The choir of Angels cried all at once at the aberration below them, looking up, with no humanity in those eyes.

Guirrel, it is said, lived on for a thousand years. He died in the Philippines because that was the only country who accepted him. The county was used to people who did not know the meaning of justice.

E-mail: titovaliente@yahoo.com.

Buy and give through Caritas Margins Expo 5 in Trinoma Rev. Fr. Antonio Cecilio T. Pascual

SERVANT LEADER

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aritas Margins recently opened the second leg of its Buy and Give Expo 5 at the Trinoma Activity Center in Trinoma Mall, Mindanao Avenue, Quezon City.

His Excellency Most Rev. Honesto Ongtoco, DD, Bishop of the Diocese of Cubao, led the blessing and opening of the three-day expo, together with Caritas Margins Program Manager Buddy Arcanghel, Segunda Mana Program Manager Barry Camique, as well as donors Ms. Emilie Cruz and Ms. Hortie Lim and Caritas Margins Executive Director Rev. Fr. Anton C.T. Pascual.

Let us all support the fifth Buy and Give Expo at Trinoma Mall to also help end poverty as it helps micro entrepreneurs develop and market their products. This can also help the funding of Caritas

Manila’s Youth Servant leadership program, which can make you be part of the ongoing “75 Days of Charity”.

The fifth Buy and Give Expo, which will run until today (Friday), September 29, features products from different marginalized community partners of Caritas Margins ranging from food, home and ladies accessories, personal-care products, artwork from resident inmates of penal communities cared by Caritas Restorative Justice Ministry and other gift items and décors presented on different hubs.

Caritas Margins will have the

third leg of Buy and Give Expo 5 at Market, Market in Taguig City, from October 5 to 7 and its fourth and final leg on December 1 at Glorietta.

Caritas Margins is a social enterprise that markets products of marginalized communities and micro enterprises in the country.

It also provides skills training to the urban-poor communities and marginalized sectors, as well as honing them to become social entrepreneurs.

Also made available are products of Segunda Mana which features artworks, preloved items, such as clothes, shoes, bags, toys, home and fashion accessories, at affordable prices. The Caritas Manila’s Segunda Mana advocates the 3Rs: reuse, reduce and recycle. These charity outlets, likewise, provide employment to almost 6.7-percent unemployed from the urban-poor sector and livelihood to families who make trading as their source of income.

“The church and its ministries don’t believe in dole-outs. Our mission is to give dignity to the less fortunate by giving opportunities

and skills training. Through these, they can improve their image of themselves, develop their skills and alleviate poverty in their communities,” Bishop Ongtioco said.

Proceeds of the expo are for the benefit of Caritas Manila’s flagship program, Youth Servant Leadership and Education Program (YSLEP), which supports more than 5,000 youth scholars nationwide.

Caritas Manila launched the 75 Days of Charity in solidarity with His Holiness Pope Francis’s announcement of World Day of the Poor in November. It runs from September 5, which is the International Day of Charity, up to the World Day of the Poor on November 19. This endeavor can be done by filling can of charities, supporting the Segunda Mana Donations-in-kind program and by supporting the educational sponsorship through Caritas Manila’s YSLEP.

To learn more about and to donate and support Caritas Manila’s programs for the poor, visit www. caritasmanila.org.ph or call DonorCare lines (+632) 563-9311, 564-0205, (+63) 999-7943455, (+63) 905-4285001, and (+63)929-8343857

How to identify threats and foil cyber attacks

By Nerish Vendivel

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usinesses are established for just one major reason: to generate profits. With the growth in popularity of online services, the theft of sensitive information has become one of the most common types of criminal activity on the Internet. Businesses generally agree that online breaches are seriously affecting their bottom line.

In the Philippines, cyber threats have become major concerns of businesses. That’s the reason Forcepoint, one of the global leaders in cyber security, has decided to set up shop in Manila. According to Ben Tan, Forcepoint regional manager, the country’s cybersecurity market is still in its infancy. “Philippine companies must start adopting uncompromising systems that understand people’s behaviors and motivations as they interact with data and Internet protocol,”

he said. Tan added his company, which is headquartered in Austin, Texas, has the experience and technology to help businesses identify threats and foil cyber attacks. He said Forcepoint provides network security, cloud security and data and insider threat security.

Recently, the company fortified its cloud-security portfolio to empower security teams with behavior-driven controls that simplify protection of critical business data, including employee information. The average time to detect a breach, for instance, is 99 days with an average cost of $4 million. However, with the company’s new capabilities, it expects that by next year, 80 percent of endpoint protection platforms will include user activity-monitoring capabilities. This will help security teams of businesses by using entity behavior analytics.

“Approaching security through a human-centric lens helps organizations

better understand indicators of normal cyber behavior and quickly identify activity and operations, such as shadow IT [information technology], that pose the biggest risk,” said Kris Lamb, vice president and general manager of the Cloud Security business at Forcepoint. “As enterprises and government agencies shift their applications to SaaS and cloud IT models, they require intelligent systems that quickly spot anomalies, assess risk and facilitate rapid resolution to protect users and their data in an increasingly zero perimeter world.” The company, according to Tan, has started delivering new capabilities that assess the risk posed by file sharing and other cloud applications and protect against the loss of critical business data not stored on a corporate network. The new system analyses user behavior and characteristics of the application, such as the data, device and location being assessed. In other words,

threats facing enterprises and government agencies today can be thwarted through the company’s behavior analytics. Enterprises transitioning from delivering on-premise services to cloud-based services require protection from threats they never encountered before.

In health care, for example, physicians downloading patient files from their electronic health records system to personal cloud storage will raise their user risk ranking and enable quick response by the security team to revoke access and stop the attempted data export.

“The sad fact for enterprises today is that their own employees can be a major source of security risk, as malicious insiders look to take advantage of their unfettered access to an organization’s cloud apps to retrieve data,” Tan said. “Forcepoint ensures the safe and productive use of cloud apps across all users and endpoints.”

2nd Front Page BusinessMirror

A12 Friday, September 29, 2017

www.businessmirror.com.ph

Bring back national minimum wage, abolish ‘endo’–KMU

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By Ashley Manabat

@ashleymanabat

LARK FREEPORT—Labor group Kilu-sang Mayo Uno (KMU) called on the Duterte administration to set a national minimum wage, eliminate contractualization and reject the implementation of a compressed workweek.

Elmer C. Labor, KMU chairman, said a hearing on Republic Act (RA) 6727, or the wage rationalization law, revealed that the living wage in the Philippines reaches up to P1,000. “We are demanding to bring back the national minimumwage because KMU does not agree that beyond the National Capital Region [NCR], the minimum-wage rate is already different,” Labog said during the media forum “Balitaan” organized by the Capampangan in Media Inc., in cooperation with the Clark Development Corp., at the Bale Balita (House of News) here on Friday.

“In the United States workers are

paid by the hour. But here, workers are given a daily rate. Also, as you go farther from the NCR, the salary gets smaller,” he added.

Labog noted that the minimum wage in the NCR is P502 per day, while it is only P382 in Central Luzon. This disparity, he said, is due to RA 6727, which was enacted in 1989 when the Corazon Aquino administration pushed for the “regionalization” of wages. Labog said the government’s rationale was to attract more investors in the provinces where the cost of living is lower.

But that is not true anymore, he added. “The cost of fuel and electricity are higher in the provinces.

RA 6727 The law that allowed the “regionalization” of wages in the country

The purchasing power of a worker in Manila is about P500 if you buy a shirt at SM. But the same item costs the same in the provinces, which erodes the purchasing power of the provincial worker because they have lower wages.”

“Even here in Clark, the cost of living is higher than in Metro Manila,” he said. “Our study reveals that the cost of living is higher in tourism-oriented regions like Los Baños, Laguna.”

Labog added a bill mandating the return of the national minimum wage has already been filed at Congress. For private workers, he said the national minimum wage should be at least P750 a day while government workers should get a minimum of P16,000 a month.

Labog said these rates are just

half of the P1,119 daily living wage required by Filipino families, according to the findings of a study conducted by the Department of Labor and Employment (DOLE).

The amount was based on the inflation rate last year.

Abolish ‘endo’

Labog said the DOLE claims that some 60,000 contractual workers have already been regularized.

“But we are asking for the data on where they based their claim, but they cannot provide us any,” he said. Labog noted that the DOLE also said that some 12,000 PLDT workers need to be regularized.

He added President Duterte promised to end contractualization, or endo, but the practice is still being observed. But, instead of abolishing endo, the DOLE came up with Department Order (DO) 174, a new directive governing the implementation of contractualization.

“Essentially, it means all endo should stop, but employment agencies either cut the employment term of their workers or transfer them

Flights to and from Manila among world’s busiest

By Ma. Stella F. Arnaldo

@akosistellaBM Special to the BusinessMirror

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HE routes between Hong Kong and Manila, and Manila and Singapore are among the top 20 busiest nonstop international routes in the world.

The findings were revealed in a new research by RoutesOnline, a web portal for the annual gathering of Routes forums worldwide.

The three-day World Routes 2017 in Barcelona ended on Tuesday.

World Routes is the global forum, which gathers over 3,000 delegates from the airline industry, airports and other aviation concerns.

According to RoutesOnline research, 162,647 passengers flew between Hong Kong (HKG) and Manila (MNL) in July 2017, while 156,522 passengers flew between Manila and Singapore’s Changi Airport (SIN). Both were ranked 19th and 20th in terms of busiest international routes in July 2017, respectively. The HKG-MNL route in July flew 13 percent more passengers than in June, while the MNL-SIN route recorded a slight 1.5-percent rise in passengers.

The research also shows the base fare for t he HKG -MNL route was recorded at $93.14 in July 2017, down from $101.98 in June. Average base fare in July for MNL-SIN was $178.04, lower than $195.02 in June.

The busiest route in July 2017 was between HKG and Taipei (TPE), with a total of 451,801 passengers flying between both destinations and an average base fare of $94.25.

According to RoutesOnline, “ T h e b u s i e s t i nt e r n at i o n a l routes were calculated by using OAG to find the top 100 routes in the world by capacity in July 2017 and then ranking them by passenger statistics on Sabre.”

OAG, formerly the Official Aviation Guide of the Airways, is a global provider of digital flight information, while Sabre is a global technology provider focused on air travel.

RoutesOnline, likewise, determined that the “most expensive

to other companies,” he said.

Labog noted that DO 174 applied the main rule and its exemptions at the same time. “What is important is that the main rule should first be implemented before the exemptions should kick in. But what happened is that the exemptions were considered first.”

He said there are 24.4 million workers under the “flexible labor scheme”, of whom 63 percent are contractual, since the country’s total labor force is at 49 million.

Some 11.5 million are still jobless, based on IBON’s data in 2016, Labog added.

DO 174 does not really end the practice of contractualization, he said. Contractualization substantially reduced the regular workforce, he added.

Labog said the KMU is also against the passage of House Bill 6152 and Senate Bill 1571, which will mandate a compressed workweek. “We strongly oppose [a compressed workweek] because the scientific implementation of work in a 24-hour period should only be

FIELDING OF UNLICENSED RAMP CONTROLLERS AT NAIA ALARMS AIRLINES

By Recto Mercene @rectomercen

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UBM World Routes Brand Director Steven Small (from left), Mactan Cebu International Airport Authority General Manager Steve Dicdican, Tourism Secretary Wanda Corazon T. Teo, UBM Director of Aviation and Maritime Brands Andrew Williams and Tourism Undersecretary Benito C. Bengzon Jr. Photo courtesy of D.O.T.

route” in the top 20 was HKGBeijing (PEK), which is flown by Cathay Dragon, Air China, Cathay Pacific, China Southern Airlines and Hong Kong Airlines. The average base fare was $333.08. The cheapest base fare was $44.95 for the Palma de Mallorca (PMI)Dusseldorf (DUS) route, which is operated by low-cost carriers.

(Read the rest of the findings here http://ubm.io/2hvszEa ) Close to 500,000 airline seats bet ween the Philippines and other foreign destinations have been added this year, as government negotiators from the transportation and tourism sectors claimed success in enticing more international carriers to find out why exactly it’s more fun in the Philippines.

In a news statement, Tourism Secretary Wanda Corazon T. Teo said: “From January to December 2017, Philippine Airlines, Air Asia and foreign airlines like China Eastern, Sichuan, Xiamen

and Shenzhen will be bringing a total of 482,196 additional international air seats as a result of our aggressive air talks and negotiations last year.” She is currently in Barcelona attending World Routes 2017.

The tourism secretary is a key member of the Philippine government’s Air Negotiation Panel and the Air Consultation Panel. The Air Negotiation Panel is chaired by the foreign secretary, while the Air Consultation Panel is chaired by the transportation secretary.

Both panels have as members, the secretaries of trade and labor, as well as the executive director of the Civil Aeronautics Board.

The Depatment of Tourisim (DOT) chief, likewise, expressed pleasure over the announcement that Cebu would be hosting Routes Asia 2019. “We are very optimistic that we will witness the robust growth of Philippine aviation and tourism, especially in Central Visayas, with the huge opportunity

that comes from hosting Routes Asia 2019 in Cebu. We foresee significant gains similar to the results arising from having the same forum in Manila last year,” Teo enthused.

For his part, Mactan-Cebu International Airport Authority General Manager Steve Dicdican said: “We are extremely excited to host Routes Asia 2019, and we hope to exceed the expectations and give a record-breaking experience that will highlight the province’s charm and hospitality.”

Manila hosted Routes Asia in 2016; the event is the largest routes-development forum in the region, and brings together leading airlines, airports and their stakeholders to discuss air services to, from and within Asia.

One thousand two hundred international and local delegates, including representatives from regional tourism authorities and aviation data providers, attended routes Asia 2016.

eight hours. The 24-hour period is divided in three eights—eight hours work, eight hours rest and eight hours of the individuals’ own time, which is needed to maintain a healthy lifestyle,” he added.

A compressed workweek will mean a minimum of 12 hours of work, and that will eliminate the other eight-hour shift. This means that there will only be two 12-hour work shifts. “Around P1,300 will be lost if a compressed workweek is implemented. But, more than that, the principle of the eight-hour workweek will be compromised,” Labog said, adding that the International Labour Organisation convention in 1919 set the standard eight hours of work per day.

“Many workers argue that the compressed workweek is better because they will have two to three days off. But this is connected to low wages and, if the worker’s pay is not enough, he will have a tendency to look for other means, which will eat up the remaining hours intended for his family,” he added.

ome members of the Airline Operators Council (AOC) are alarmed by the decision of airport authorities to field new recruits as ramp controllers even if they are not duly licensed by the Civil Aviation Authority of the Philippines (Caap).

“This is alarming; the airlines’ priority is always safety,” said an AOC member who requested not to be named until a proper investigation is conducted.

The AOC came to know of the situation after news accounts said that the Ninoy Aquino International Airport (Naia) fielded 20 newly trained ramp controllers across the four airport passenger terminals to undergo more hands-on training.

It was reported that the new recruits have undergone a truncated schooling at the Civil Aviation Training Center (CATC), which is under the Caap. The new recruits were then given “certificates” as proof of their training.

Regular air traffic controllers usually have to participate in a nationwide competitive examination.

Out of the successful examinees, an initial batch of 50 are chosen for oral and other forms of tests, according to veteran air controller Eddie Caldoza.

He said successful participants are then allowed to attend academic training at the CATC, lasting for six months and, at the end of their schooling, those who cannot make the grade are booted out of school.

The initial number of trainees is further reduced to about 30.

This batch will then have to get a licensure examination, covering six subjects, ranging from civil air rules, meteorology, rules of the air, communications procedure, area control and aerodrome control.

For communications experts, another set of examinations with slightly different subjects is administered. The AOC member said they are

20 The number of newly trained ramp controllers that were assigned in the four Naia terminals

going to talk to the ramp controller group to find out if the new ramp controllers are now handling traffic.

“To us, that would seem like a violation, because they should possess a license first from the Caap before getting employed,” the source said, adding that, after a discussion with the ramp controllers, they would also discuss with the Naia authorities to clear things up.

The International Civil Aviation Organization requires licensed air traffic controllers for legal purposes.

The BusinessMirror gathered that the Naia, aware that several ramp controllers should have retired decades ago, has decided to train replacements, albeit on abridged schedule.

One of the ramp controllers, Alger Ramo, said they are drafting a letter, which they are going to send to the concerned air carriers, to explain the necessity of ramp controllers possessing a license.

He said in times of crisis like a strike, when there is a dire need for air traffic controllers, ramp controllers should be able to take the place of the absent experts.

This could not be done if ramp controllers are not licensed.

He added that newly hired ramp controllers are now receiving a salary of more than P20,000 a month, higher than the P16,000 veteran ramp controllers like him are receiving.

He showed a draft of the letter, which said: “The ramp controllers See “Ramp controllers,” A2